Q1 2025 Astec Industries Inc Earnings Call
Hello, and welcome to the ASIC Industries' first quarter 2025 earnings call. As a reminder, this conference call is being recorded it is my pleasure to introduce your host Steve Anderson Senior Vice President of administration and Investor Relations.
Thank you good morning, everyone.
Speaker Change: Joining me on today's call are Yaacov Santa Barbara.
Speaker Change: Decorative officer, and Bryan Harris, our Chief Financial Officer and.
Speaker Change: Just a moment I'll turn the call over to Yaacov to provide his comments and then Brian will summarize our financial results.
Speaker Change: For your convenience a copy of our press release and presentation are posted on our website under the Investor Relations tab at Www Dot Aztec industries Dot com.
Speaker Change: Turning to slide two I'll remind you that our discussion. This morning may contain forward looking statements that relate to the future performance of the company at.
Speaker Change: These statements are intended to qualify for the safe Harbor liability established by the private Securities Litigation Reform Act.
Speaker Change: Such statements are not guarantees of future performance and are <unk>.
Speaker Change: Subject to certain risks uncertainties and assumptions.
Speaker Change: Factors that can influence our results are highlighted in today's financial news release and others are contained in our filings with the U S Securities Exchange and commission as usual, we ask that you familiarize yourself with those factors.
Speaker Change: In an effort to provide investors with additional information regarding the company's results. The company refers to various U S GAAP and non-GAAP financial measures, which management believes provide useful information to investors.
Speaker Change: These non-GAAP measures have no standardized meaning prescribed by U S. GAAP and are therefore unlikely to be comparable to the calculation of similar measures for other companies.
Speaker Change: Management does not intend these items to be considered in isolation or as a substitute for the related GAAP measures. A reconciliation of GAAP to non-GAAP results are included in our news release and the appendix of our slide presentation.
Yakov: And now turning to slide three I will turn the call over to Yakov.
Yakov: Thank you Steve Good morning, everyone and thank you for joining us.
Yakov: Today is a very exciting day for the <unk> family for annuities.
First our team delivered exceptional results for Q1.
Yakov: And second we are happy to announce we signed a definitive agreement to purchase <unk>.
Yakov: Data shows there is a market leading manufacturer of materials processing equipment and the related after market parts.
Yakov: Complementary crushing screening and separation markers.
Yakov: We will talk more about data source in a few minutes, but let me start on slide four by telling you more about our first quarter results.
I am pleased to report we experienced another strong quarter for net sales adjusted EBITDA and adjusted earnings per share.
This is in line with our plans to deliver consistency profitability and growth.
Yakov: Adjusted EBITDA of $35 2 million increased $16 3 million or 86, 2% over the first quarter of 2024.
Yakov: Adjusted EBITDA margin of 10, 7%.
Yakov: Increased 460 basis points and adjusted earnings per share were strong at 88 <unk>.
Yakov: Although our backlog of $402 6 million moderated sequentially by four 1% we were encouraged by improved implied orders.
Yakov: And our infrastructure solutions segment strong net sales for the quarter was primarily driven by capital equipment and healthy after market parts sales.
Yakov: We continued to see strong demand for asphalt and concrete plants, which was partially offset by softness in the demand for mobile paving and <unk> units.
Yakov: Capital equipment sales and no material solutions segment continued to be challenged by high interest rates and further dealer inventory destocking activity, while after market sales remained stable at healthy levels.
Yakov: We were encouraged by the sequential double digit improvements in all material solutions backlog and implied orders and we expect to see restocking activity resume in the second half of the year.
Yakov: Our order intake momentum continued in April.
Yakov: Free cash flow of $16 6 million was 116% of net income and was generated due to increased profitability and continued focus on working capital management.
Yakov: For the full year 2025, we are maintaining our expectations for adjusted EBITDA in the range of $105 million to $125 million.
Yakov: Excluding the impact of patents.
Yakov: On the topic of status. We all know this is a very fluid situation.
Yakov: I will share more details on <unk> on slide seven.
Yakov: On slide five we provide a brief update of the state of our industry.
Yakov: As you know Americas infrastructure is foundational to our national economy, global competitiveness and quality of life.
Yakov: The <unk> 25 for the fourth chord for America's infrastructure provided by the American Society of Civil Engineers.
Yakov: <unk> the need for continued infrastructure investments.
Yakov: Before recent legislation like the 2021 infrastructure investment and jobs Act many of our infrastructure networks had been neglected for decades.
Yakov: According to the report Americas roads improves to a deep plus that IV in 2025 versus the writing of D. In 2021.
Yakov: Although signs of progress have been made the need for improvement to our roads is substantial.
Yakov: <unk> more than $4 1 million miles of public roadways form a vital network facilitating the movement of people.
Yakov: And goods.
Yakov: After that $4 1 million miles, 39% are in poor or mediocre condition.
Yakov: But he just received a good IFC.
Yakov: Many breaches are approaching or having exceeded the 50 year life. They were designed for.
Yakov: Of the 623000 bridges across the U S only 44% were deemed to be in a good condition.
Yakov: <unk>, 49% in fair condition, and 7% are in good condition.
Yakov: Continued maintenance and upgrades are as St. So for these bridges to withstand the higher traffic volumes and vehicle weights they need to support.
Yakov: As you know <unk> is a niche industry player focused on the off road sector.
Yakov: We have strong brand recognition in the infrastructure sector, which is largely comprised of aggregates and road and bridge construction.
Yakov: Needed improvements throughout infrastructure provide long term stable demand for our equipment after market parts and digital solutions.
Yakov: Slide six shows our booths at the 2025 world of asphalt AG One show in conference held last month in Central Louis Missouri.
Yakov: Meeting with customers and interacting with our employees are reminded me why I love working at <unk>.
Yakov: We have great products.
Yakov: Industry, changing technology and more importantly, the basic theme in the industry.
As I walk the show and looked at other providers.
Yakov: <unk> is well positioned to win.
Yakov: We also invite you to Mark your calendars for the 2026 Con Expo trade show to be held in Las Vegas, Nevada on March 32, 7% 2026.
Yakov: We are excited about the new products and technology, we will display at the show.
Yakov: On slide seven we show proactive actions, we are taking to mitigate the risk associated with the new tariff environment.
Yakov: One aspect procurement team is at acquiring suppliers to provide support for any price increases and we are actively negotiating all purchases.
Yakov: We have initiated additional pricing actions and will continue to assess the situation to predict margins.
Yakov: We continued to practice deal sourcing and Resourcing.
Yakov: We are managing supply chain alignment and will resort to the United States when feasible.
Yakov: We are continually managing our manufacturing footprint.
Yakov: As you know this is a dynamic situation that can change quickly, but domestic team is diligently tracking that.
Current and potential impact of the tariff environment.
Yakov: I'll also mention this is a great time to be an American manufacturer.
Yakov: On slide eight we show our backlog information.
Yakov: Overall, our backlog declined slightly on a sequential basis, but remained healthy supported by growth in implied orders.
Yakov: Current backlog levels and the infrastructure solutions segment are a combination of strong invoicing for asphalt and concrete plants.
Yakov: <unk> ordering equipment closer to desired shipment dates.
Yakov: And internal operational excellence efforts to increase facility throughput.
Yakov: That said, we have experienced some softness in orders for mobile paving products in the market for forestry products are currently slow.
Yakov: In all material solutions segment backlog grew $12 1 million or 10, 6% due to increased order activity.
Yakov: As noted in prior quarters, we expect demand for materials solutions products to pick up in the second half of the year.
Yakov: Our implied orders and book to both trains are showed on slide nine.
Yakov: We are pleased to report consolidated implied orders rose on a quarter over quarter and sequential basis.
Yakov: The infrastructure solutions segment continued to generate solid numbers.
Yakov: We were especially pleased with our <unk> solutions segment, which posted an increase in implied orders for the second consecutive quarter and posted a book to bill ratio of 113% for Q1.
Yakov: With that I will now turn the call over to Bryan to provide additional comments on our first quarter financial results.
Bryan: Thank you Yakov and good morning.
Yakov: Our consolidated financial results are highlighted on slide 11.
Yakov: The demand for Aztec capital equipment and aftermarket parts continued as net sales grew six 5% over the prior year first quarter and increased 2% for the trailing 12 months ended March 31 2025.
Yakov: We were pleased to generate an adjusted EBITDA of $35 2 million in the first quarter, which compared to $18 9 million in the first quarter of last year.
Yakov: Adjusted EBITDA margin reached 10, 7%.
Yakov: 460 basis point increase over the prior year.
Adjusted EBITDA and adjusted EBITDA margins benefited from volume pricing and mix as evidenced by a 320 basis points increase in gross margin.
Yakov: Adjusted selling general and administrative expenses were relatively flat at approximately $63 million for the quarter, but improved by 130 basis points as a percentage of net sales.
Yakov: Q1, adjusted earnings per share of <unk> <unk>.
Yakov: Compared very favorably to 34.
Yakov: Earnings per share posted in Q1 2024.
Yakov: On a trailing 12 months basis, we increased net sales adjusted EBITDA adjusted EBITDA margin and adjusted earnings per share. This is in line with our commitment to provide consistency profitability and growth and shows the actions we have taken are gaining traction.
Yakov: Moving on to the infrastructure solutions segment shown on slide 12, we generated higher net sales for the quarter due to strong domestic capital equipment performance aftermarket parts were slightly lower in the first quarter, but remained at favorable levels.
Yakov: For the trailing 12 months net sales and infrastructure solutions increased 10, 7%.
Yakov: Segment operating adjusted EBITDA dollars and adjusted EBITDA margins were positively affected by volume pricing and operational excellence initiatives and expense management.
Yakov: Both posted solid increases on a quarter over quarter and trailing 12 months basis.
Yakov: The material solutions segment is shown on slide 13, as previously noted net sales for the quarter along with the trailing 12 months were negatively impacted by lower capital equipment sales, resulting from the influence of high interest rates and dealer Destocking.
Yakov: Aftermarket sales declined slightly but remained at healthy levels.
Yakov: Despite lower sales revenue, we have been able to control costs and achieve improved adjusted EBITDA margins.
Yakov: Moving on to the first quarter adjusted EBITDA Bridge on Slide 14, we were pleased to report adjusted EBITDA of $35 2 million, an increase of $16 3 million over the first quarter of 2024.
Yakov: Favorable volume and pricing were the primary drivers.
Yakov: Proactive one asked take procurement efforts helped to contain inflation and manufacturing efficiencies also contributed.
Yakov: Okay.
Yakov: On Slide 15, we show adjusted EBITDA of $128 $1 million on a trailing 12 month basis. This was an increase of $34 4 million or 36, 7% driven by increased volume pricing mix and expense management, partially offset by inflation.
Yakov: And manufacturing inefficiencies and other period costs.
On Slide 16, you can see we maintain a strong balance sheet with ample liquidity, we ended the quarter with cash and cash equivalents of $91 million available credit of $148 8 million for a total available liquidity of $238 9 million free.
Yakov: Cash flow in the quarter of $16 6 million was 116% of net income. These results were driven by profitable sales and sound working capital management.
Yaacov: I will now turn the call back to Yaacov.
Yaacov: Thank you Brian.
Yaacov: Turning to slide 17.
Yaacov: We are very pleased to announce we have entered into a definitive agreement to acquire data source.
Yaacov: This is our first step towards growth through a significant strategic acquisition.
Yaacov: Moving to slide 18, let me share our strategic rationale for adding <unk> <unk> family of products.
Yaacov: As you will see data source and aesthetic on a strong foot.
Yaacov: Data source provides market, leading process equipment, and Austin market thoughts and services.
Yaacov: They will strengthen our material solutions segment.
Yaacov: Our second data source have complementary portfolios of products and technologies that will provide a meaningful synergy opportunity.
Yaacov: As takes international footprint will be enhanced.
Yaacov: Our two companies are a strong cultural fit.
Yaacov: On Slide 19, you can see data source products and services aligned well with the Asti corrupted roads value chain.
Yaacov: Data <unk> has assembled same city old brands that will flourish under our strategic ownership.
This portfolio includes well known and respected brands that include Gunlock crushes.
Yaacov: Peninsula Iron works.
Yaacov: Hey, good either.
Yaacov: Pennsylvania, Crusher and Allergan.
Yaacov: Data products and services are used in soft rock.
Yaacov: <unk> and other minerals.
Yaacov: Turning on the recycling applications used in diversified end markets.
Yaacov: On slide 20, we show information highlighting the size and scope of data source.
Yaacov: The company has over $150 million in annual revenue.
Yaacov: Approximately 400 employees and a diverse network of manufacturing sales service engineering sites and channel partners.
Yaacov: Data source will be part of our material solutions segment and will strengthen our business through scale and product portfolio expansion.
Yaacov: Data source is develop market, leading position that are complementary to our crushing screening and separation applications.
Yaacov: Our globally integrated platform with end to end capabilities.
Yaacov: And attractive reoccurring aftermarket parts business.
Yaacov: Our portfolio of high performance industry, leading brands and a strong executive leadership team that will join us stick.
Yaacov: Additional points are shown on slide 21.
Yaacov: Off note over 50% of the company's 2024 revenue was derived from after market parts and components.
Yaacov: Equipment sales and rebuilds, but zane, 37% and 11% of sales respectively.
Yaacov: As you have heard me say over the past two years, we are passionate about providing after market parts for our customers.
Yaacov: We will continue to grow this business.
Yaacov: By geography data source is well balanced with 55% of revenues being in the United States and 45% generated in the rest of the world.
The addition of data source provides us attractive international growth opportunities.
Yaacov: <unk> also has diversified end markets.
Yaacov: General industrial products and services comprise approximately one third of revenue, while metals and mining and energy and power each account for approximately one quarter of revenues.
Yaacov: The remaining 15% of data source revenues are generated by forestry products.
Yaacov: On slide 22, we provide a transaction overview.
Yaacov: Let me summarize the key points.
Yaacov: The purchase price will be $245 million in cash on a cash free debt free basis.
Yaacov: The net purchase price offset approximately $15 million of tax benefits is expected to be $230 million.
Yaacov: The purchase price represents a <unk> 24, adjusted EBITDA multiple of five nine times adjusted for expected tax benefits and including run rate synergies.
Yaacov: Annual integration synergies of $10 million are expected to be recognized by the end of year two.
Yaacov: Additional upside is expected by cross selling products to existing and new customers.
Yaacov: We will finance the transaction with existing cash on the balance sheet and external financing in the form of a term loan a.
Yaacov: Initial net leverage is expected to be two times and between one and one and a half times by the end of 2026.
Yaacov: Our strong balance sheet allows for additional inorganic opportunities, while keeping leverage below two and a half times.
Yaacov: We expect adjusted EBITDA to be accretive from day, one with significant synergy opportunities.
Yaacov: Data source is expected to provide EBITDA margin expansion and improved free cash flow.
Yaacov: The closing is subject to customary regulatory considerations and closing conditions and we anticipate closing in the early part of Q3 2025.
Yaacov: Turning to slide 23, our <unk> investment highlights are summarized.
Yaacov: <unk> continues to be a trusted source of globally recognized brands and a high quality solution for our customers.
Yaacov: Customers continue to cautiously display favorable sentiment as they are encouraged by the level of activity and construction markets.
Yaacov: Likewise, we are encouraged by high level of after market sales, which validates equipment in the field is being used.
Yaacov: As previously discussed tariffs present, an element of uncertainty.
Yaacov: However, we are taking proactive measures to mitigate the impact.
Yaacov: We were also encouraged by the cautious customer optimism expressed at the recent world of asphalt AG, One show last months and attendance at our Booth was strong.
Yaacov: Our operational excellence efforts will continue to gain traction with many of the benefits yet to come.
Yaacov: Manufacturing and procurement efforts of driving efficiencies and we are seeing positive adjusted EBITDA range.
Yaacov: Our business has several growth drivers, including our exciting new product pipeline.
Yaacov: Growing recurring after market parts business.
Yaacov: Stability provided by multiyear federal and state funding for inter states and highways.
Yaacov: Expansion opportunities in current and future international markets.
Yaacov: And in organic growth opportunities that are strategically aligned to meet our financial criteria.
Yaacov: Our strong balance sheet provides ample liquidity to fund growth and manage liberties.
Yaacov: Light that by today's announcement to acquire data source.
With that operator, we are now ready to take questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session. At this time I would like to remind everyone to ask a question. Please press the star button, followed by the number one on your telephone keypad.
Speaker Change: I'd like to withdraw your question. Please press star one again one moment. Please for your first question.
Speaker Change: Your first question comes from the line of Steve <unk> Sidoti. Please go ahead.
Speaker Change: Jaco, Brian I appreciate all the detail on the call.
Steve Sidoti: In fact, this morning, obviously second straight really strong quarter.
Got to ask why not raise guidance here given some of your commentary implied orders were good you said you expect to see better orders by the second half obviously margins are much better did you pull forward anything from from to Q or anything that would indicate why or why not raise here.
Speaker Change: Yeah, Steve just to answer the last part no we didn't pull anything forward.
Speaker Change: If you look at if you look at that range that we provided.
Speaker Change: It's still give some upside from the midpoint.
Speaker Change: About $15 million.
Speaker Change: I think the one thing that might be kept us from raising obviously there is some uncertainty around the status.
Speaker Change: From from two sides, one obviously from a from a cost point of view.
Speaker Change: The next one is customers just sitting on the sideline.
Speaker Change: For two or three months.
Speaker Change: See what the outcome of status will be so.
Speaker Change: But.
Speaker Change: With that aside I think a couple of things from our side.
Speaker Change: We have a really strong themes that thrives.
Speaker Change: This discussion for us right now.
Speaker Change: I feel that our team has been very proactive in terms of understanding the potential impact for us.
Looking at price adjustments.
Speaker Change: And then of course. This is this is basically the baseline to ebay's manufacturer.
Speaker Change: But there is still a little bit of uncertainty on how that will play out.
Speaker Change: Makes sense.
Speaker Change: Hi.
Speaker Change: How you are positioned now given the current tariffs that are in place.
Speaker Change: You pass through is it still reasonable to think there'll be a lag where your margins may may <unk>.
Speaker Change: Trend lower and then come back up.
Speaker Change: As you catch up on some yes.
Speaker Change: Equipment costs.
Speaker Change: Yeah, Yeah, Steve as I mentioned I think our team have learned a great deal.
Speaker Change: During <unk> and <unk>.
Speaker Change: We've got good internal models now to summarize.
Speaker Change: The effect of these things that we maybe didn't have during COVID-19.
Speaker Change: So.
Speaker Change: <unk>.
Speaker Change: Proactive when when the first data.
Speaker Change: Around we saw an artificial bump yet all steel pricing and we took immediate action on that.
Speaker Change: On things like box, they will be they will be.
Speaker Change: Most immediate flow through.
Speaker Change: If we see significant changes.
Speaker Change: So I feel I feel that his team has done a really good job here.
Speaker Change: Obviously, there is always risk is basically west.
Speaker Change: Having backlog that goes into two or three quarters in the future.
Speaker Change: Some of our equipment like our company bonds.
Speaker Change: We are giving the liberties.
Speaker Change: Well into the first part of next year.
Speaker Change: So we believe we've taken appropriate action, but.
Speaker Change: As you know, it's a highly fluid situation and.
Speaker Change: We've made significant increases announced here recently, obviously, we're going to have to be going.
Speaker Change: I think some more actions.
Speaker Change: Okay.
Speaker Change: I appreciate I appreciate the thoughts on that if I could turn to the acquisition you noted it'll fit within materials solutions, which is spend your you're more you're underperforming side can you indicate how Tara source has been performing and I know the end markets are different you have more geographic diversification and I certainly appreciate it's much higher.
Speaker Change: Here aftermarket exposure, but can you can you give us some indication on how Tara sources performed the last couple of years versus your legacy material solutions.
Speaker Change: Yes so.
Speaker Change: I just wanted to highlight one significant difference yet if you look at data source.
Speaker Change: Our portfolio they have a much smaller exposure to the mobile crushing and screening.
Speaker Change: A market that is typically.
Speaker Change: Equipment that goes through rental fleets and then convert so.
Speaker Change: Most of the products or borrow larger fixed installations.
Speaker Change: <unk>.
David: Thanks, David.
Speaker Change: Thanks.
Speaker Change: But what we've seen in.
Speaker Change: In.
Speaker Change: On the.
Speaker Change: The historical audited additional MH side.
Speaker Change: Yes.
Speaker Change: They have a significant part of the business or our Austin market thoughts on when you can see about 60, 63%.
Speaker Change: Is parts and service and that's also the majority of that gross margin comes from.
Speaker Change: Okay.
Speaker Change: These guys have AR symbols.
Our portfolio of legacy brands that I will say, maybe didn't fit with a previous owners and they've done a really good job to put them back on back on the map and now.
Speaker Change: The growth will.
Speaker Change: Will it come from.
Speaker Change: The huge installed fleet that they have.
Speaker Change: Yes.
Speaker Change: With our ability to support with our manufacturing around the world.
Speaker Change: We feel that these guys. These guys will perform really well.
Speaker Change: In the future for us.
Speaker Change: Right.
Speaker Change: Thanks Jackie.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Mig <unk> of Baird. Please go ahead.
Speaker Change: Thank you.
Mig <unk>: Just a quick clarification, making sure that I heard this correctly in your prepared remarks.
Mig <unk>: The guidance that you've reiterated today.
Mig <unk>: That excludes any impact from tariffs did did I heard that correctly.
Mig <unk>: That is correct at this point it's Amit.
Mig <unk>: Okay and.
Mig <unk>: Yeah.
Mig <unk>: I am a little bit confused in terms of kind of how you were talking about tariffs because.
Mig <unk>: We do know that there are some that are in place right steel tariffs are certainly in place we've seen.
Mig <unk>: Steel prices move higher and in the U S. As a result.
Mig <unk>: And.
Mig <unk>: I would imagine that within your supply chain there.
Mig <unk>: There are certain portions of it that are that are impacted right now by by the tariffs that are in place. So maybe reiterating previous question based on what you know today.
Mig <unk>: Is there a way to size the impact.
Mig <unk>: Recognizing that maybe that changes.
Mig <unk>: Three months from now.
Mig <unk>: Yes, absolutely.
Mig <unk>: And depending on the product.
Mig <unk>: Whats lipstick information that is available right now.
Mig <unk>: We modeled this that it could be anything in between.
Mig <unk>: More than 10% impact.
Mig <unk>: Ending on on exactly what product, we have now but it may be.
Mig <unk>: About a third of our product or our sales is from Boston.
Mig <unk>: And we are going to focus on.
Mig <unk>: It does.
Mig <unk>: So we saw that too.
Mig <unk>: <unk>.
Mig <unk>: Two.
Mig <unk>: Customers.
Mig <unk>: From from a U S from a steel point of view, we source all our steel in the U S. We don't import any steel and of course, there was a little bit of a bump on local steel prices. After the initial announcements.
Mig <unk>: Thats have moderated.
Mig <unk>: Quite a boats with dates.
Mig <unk>: Implement some price increasing.
Mig <unk>: Any early on too.
Mig <unk>: Take care of that.
Mig <unk>: And our procurement team was also really Kuwait to go out and do some forward buying on steel so.
Mig <unk>: Might see a little bit of bumping working capital here in the next quarter.
Mig <unk>: But we are well covered now.
Mig <unk>: Q2, and even <unk>.
Mig <unk>: Partially into Q3.
Mig <unk>: So yes, you're right. There is some there is some risk.
Mig <unk>: But once again.
Mig <unk>: I feel like we've been very quick to react to this.
Mig <unk>: <unk>.
Mig <unk>: I think the other thing is as we feel that we are well positioned as a U S manufacturer as you know a lot of our competitors.
Mig <unk>: Imports a lot of units due to states.
Mig <unk>: And they will obviously see different levels of status and what we are experiencing.
Mig <unk>: So when you are saying, 4% to 10% impact is that four 4% to 10% of sales or is it cogs.
Mig <unk>: Impact on margin what is that metric referred to.
Mig <unk>: Oh, yes, so it really just shows the exposure that they raised each we do nothing.
Mig <unk>: And obviously it's out.
Mig <unk>: Our ambition to do make that neutral so that's that.
Mig <unk>: The potential impact that has on Cogs.
Mig <unk>: If we do nothing.
Mig <unk>: But we've already as I mentioned.
Mig <unk>: Bulk will flow through as we get increases from suppliers.
Mig <unk>: We've already made some some adjustments due to steel.
Mig <unk>: We are we are watching as we know exactly.
Mig <unk>: What to do byproduct line.
Mig <unk>: If we see significant price changes from suppliers.
Mig <unk>: And the other thing is as you know we.
Mig <unk>: We are very focused we have a really good tracking process yet.
Mig <unk>: Because.
Mig <unk>: We are going to push our suppliers to be very clear.
Mig <unk>: Do show Us way or do they actually get the product from what is the effect on Dallas.
Mig <unk>: Before before we just accepts.
Mig <unk>: This increases.
Mig <unk>: And are you able to reprice your backlog.
Mig <unk>: No we are not but once again as I as I mentioned.
Bailey: Bailey proactive.
Bailey: So we feel that we are we are well covered this bond compared to what we have been.
Bailey: During COVID-19, especially now that.
Bailey: Our backlog is down to a more normal level of loss at one to one.
Bailey: So.
Bailey: I see.
Bailey: Yeah.
Bailey: The guidance excludes obviously all these effects so given the fact that it excludes the tariffs.
Bailey: It is interesting relative to Q1, the way Youre formulating the rest of the year.
Bailey: You have roughly 30% of your EBITDA at the midpoint generated in Q1, which is pretty rare you normally have less than that.
Speaker Change: Normally we would see this sort of cadence is in years in which things are getting tougher from a margin perspective. So I guess the way I would ask the question is if all these uncertainties are excluded from the guidance.
Speaker Change: How should we think about how you see the year progressing.
Speaker Change: In this outlook and maybe more specifically in infrastructure solutions, you started with 18% EBITDA margin.
Speaker Change: I am curious, how you think about that as the year progresses again.
Speaker Change: Excluding tariffs.
Speaker Change: Yeah, no good point.
Speaker Change: We actually we actually had that same discussion yesterday.
Speaker Change: We we know that these days, there's obviously a range here, we have a higher end of the range.
Speaker Change: <unk>.
Speaker Change: In Q2.
Speaker Change: U.
Speaker Change: Shape out to be strong obviously that will be the ideal time to to update guidance, we just felt that.
Speaker Change: With that uncertainty we have right now it was too early to raise the guidance.
Speaker Change: Final question for me just to be clear on the acquisition.
Speaker Change: Can you tell us what.
Speaker Change: Sort of year, one or maybe I should say trailing 2020 for EBITDA for four annual EBITDA for this business was taken out all the.
Speaker Change: Synergies and all the other stuff around the multiple.
Speaker Change: Thank you.
Speaker Change: Yes.
Speaker Change: Yes, probably now going to provide that.
Speaker Change: <unk> at this point, it's a little early.
Speaker Change: When we get to.
Speaker Change: Report Q2, and we closed the transaction, we will be updating our guidance for the full year to include.
Speaker Change: To include tariffs and.
Speaker Change: The number is at that point.
Speaker Change: Can probably back into it a little bit.
Speaker Change: At least to get a ballpark range.
Speaker Change: The from the numbers, we've disclosed that.
Speaker Change: Purchase price along with the synergies that we've identified.
Speaker Change: To fight and the tax step up benefit that we'll get but we're not going to provide a historical.
Speaker Change: EBITDA number at this stage.
Speaker Change: Now, we can do the math, but.
Speaker Change: I would rather hear from Houston, we make sure that's correct. Thank you Bill.
Speaker Change: Okay.
Speaker Change: There are no further questions at this time with that I will turn the call back over to Steve Anderson for closing remarks. Please go ahead.
Speaker Change: Thank you Bill we do appreciate your participation in our conference call. This morning, and thank you for your interest in <unk> as today's news release dates. This conference call has been recorded a replay of this conference call will be available through May 13.
Speaker Change: Recently bought an archived webcast will be available for 90 days, a transcript will be available under the Investor Relations section of the <unk> industries website within the next five business days.
Speaker Change: This concludes our call.
Speaker Change: If you have additional questions later I'll. Thank you all have a good day.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. We thank you for participating in assets you. Please disconnect your lines.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].