Q2 2025 Quanex Building Products Corp Earnings Call
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Unknown Executive: Welcome to the second quarter 2025 Quanex Building Products Corporation earnings. at this time. Arnold After the speaker's presentation. will be a question.
Welcome to the second quarter 'twenty 'twenty five Quanex building products Corporation earnings Conference call.
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Scott Zuehlke: Please be advised that today's conference I would now like to hand the conference over to your speaker today, Scott Zuehlke, Senior Vice President, CFO, and Treasurer. Please go ahead. Thanks for joining the call this morning.
Speaker Change: Please be advised that today's conference is being recorded.
Speaker Change: I would now like to hand, the conference over to your speaker today Scott.
Speaker Change: Senior Vice President CFO and Treasurer. Please go ahead.
Speaker Change: Thanks for joining the call. This morning on the call with me today is George Wilson, our chairman President and CEO.
George Wilson: On the call with me today is George Wilson, our Chairman, President and CEO. This conference call will contain forward-looking statements and some discussion of non-GAAP measures. Forward-looking statements and guidance discussed on this call and in our earnings release are based on current expectations.
Speaker Change: This conference call will contain forward looking statements and some discussion of non-GAAP measures.
Speaker Change: We're looking statements and guidance discussed on this call and in our earnings release are based on current expectations.
Unknown Executive: Actual results or events may differ materially from such statements and guidance, and Quanex undertakes no obligation to update or revise any forward-looking statement to reflect new information or events.
Speaker Change: Actual results or events may differ materially from such statements and guidance and quanex undertakes no obligation to update or revise any forward looking statement to reflect new information or events.
Unknown Executive: For a more detailed description of our forward-looking statement disclaimer and a reconciliation of non-GAAP measures to the most directly comparable GAAP measures, please see our earnings release issued yesterday and posted to our website.
Speaker Change: For a more detailed description of our forward looking statement disclaimer and a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Please see our earnings release issued yesterday and posted to our website I will.
George Wilson: I'll now turn the call over to George for his prepared remarks. Thanks, Scott. And good morning to everyone joining the call. Overall, we are pleased with the results from our fiscal second quarter, as we did see the traditional seasonal uptick, and volumes were as expected, despite ongoing global macroeconomic uncertainty.
George: I'll now turn the call over to George for his prepared remarks.
George: Thanks, Scott and good morning to everyone joining the call.
George: Overall, we were pleased with the results from our fiscal second quarter as we did see the traditional seasonal uptick in volumes were as expected despite ongoing global macroeconomic uncertainties.
George Wilson: I'd like to start my commentary by providing an update on the status of the time and acquisition integration. We have been extremely pleased by both the depth and pace at which the integration has progressed. We have structured new operating segments, finalized and staffed our operational and commercial teams, and are in the process of finalizing the back office support teams that will service both of those groups. As a result of these efforts, and as announced in our earnings release, we now expect to realize cost synergies of approximately $45 million over time, which equates to a 50% increase compared to the original target.
George: I'd like to start my commentary by providing an update on the status of the time and acquisition integration.
We have been extremely pleased by both the depth and pace at which the integration has progressed, we have structured new operating segments finalized and staffed our operational and commercial teams and are in the process of finalizing the back office support teams that will service both of those groups.
George: As a result of these efforts and as announced in our earnings release, we now expect to realize cost synergies of approximately $45 million overtime, which equates to a 50% increase compared to the original target.
George Wilson: In fact, on a run rate basis, we now expect to achieve the original $30 million of cost synergy targets by early fiscal 2026. The newly formed operating segments are functioning well, and we feel that there still is a pathway to additional cost synergy. Operationally, our strength has always been around controlling what we can control, and that cultural trait is core and foundational to what we are building.
George: On a run rate basis, we now expect to achieve the original $30 million of cost synergy targets by early fiscal 2026.
George: The newly formed operating segments are functioning well and we feel that there still is a pathway to additional cost synergies.
George: Operationally, our strength has always been around controlling what we can control and that cultural trait is core and foundational to what we are building.
George Wilson: We're delighted with what the team has accomplished in the 10 months since the deal closed, and we look forward to keeping you updated on our continued operational progress.
George: We're delighted with what the team has accomplished in the 10 months since the deal closed and we look forward to keeping you updated on our continued operational progress.
George Wilson: The second phase of integration is now beginning, and it will be based around four major themes. Go-To-Market and Geographic Expansion Strategy, Operational Footprint Optimization. New Product and Materials Development Current Product Line Portfolio Analysis Each one of these themes are more medium-term focused, but very much aligned to the profitable growth strategy that we outlined at our investor day in February. Our objective is to drive both above market growth and improve margin profile.
George: The second phase of integration is now beginning and it will be based around four major themes.
George: Go to market and geographic expansion strategy.
George: Operational footprint optimization new.
George: New product and materials development, and finally current product one portfolio analysis.
Each one of these themes are most are more medium term focused but very much aligned to the profitable growth strategy that we outlined at our Investor day in February.
George: Our objective is to drive growth above market growth and an improved margin profile.
George Wilson: Now, turning to the markets we serve in North America and Europe. In North America, volumes increased month-over-month throughout the second quarter, which gives us continued confidence in the normal seasonality pattern we have historically seen. We did see volume decline year over year in the second quarter, driven by low consumer confidence related to higher interest rates and tariff implications, but this was not surprising. As it relates to tariffs, there remains much uncertainty, which continues to be a headwind to the confidence level of our ultimate end consumers. Specifically, from a Quanex perspective, our team has done a great job of positioning us to minimize any tariff impacts by localizing supply chains where possible to mitigate both supply and cost risks.
George: Now turning to the markets, we serve in North America and Europe.
George: In North America volumes increased month over month throughout the second quarter, which gives us continued confidence in the normal seasonality pattern, we have historically seen.
We did see volume decline year over year in the second quarter, driven by low consumer confidence related to higher interest rates and tariff implications, but this was not surprising.
As it relates to tariffs there remains much uncertainty, which continues to be a headwind to the confidence level of our ultimate consumers.
George: Specifically from a <unk> perspective, our team has done a great job of positioning us to minimize any tariff impacts by localizing supply chains, where possible to mitigate both supply and cost risks.
George Wilson: We also continue to explore alternate supply sources and are constantly evaluating and monitoring potential shifts in demand. In situations where we were unable to avoid tariff impact, we have utilized surcharge pricing mechanisms to pass on most of the costs. Overall, approximately 22% of our total cost of goods sold is exposed to tariff risk. And breaking that down further, 13% of total COGS exposure is specific to Mexico and Canada. And since we are USMCA compliant, the tariff rate is essentially zero for those countries at the moment. Overall, we are confident in our ability to minimize any potential margin impact as it relates to tariffs.
George: We also continue to explore alternate alternate supply sources and are constantly evaluating and monitoring potential shifts in demand.
George: In situations, where we were unable to avoid tariff impact we've utilized surcharge pricing mechanisms to pass on most of the cost.
George: Overall, approximately 22% of our total cost of goods sold is exposed to tariff risk and breaking that down further 13% of total Cogs exposure specific to Mexico, and Canada and since we are U S. MCA compliant the tariff rate is essentially zero for those countries at the moment.
George: Overall, we are confident in our ability to minimize any potential margin impact as it relates to tariffs.
George Wilson: Looking at market conditions in Europe, consumer confidence continues to be negatively impacted by higher interest rates and conflicts in the Middle East and Ukraine. However, market share gains in both our vinyl extrusion and IG Spacer product lines have helped offset market weakness. Pricing continues to be pressured, but the Quanex team has done a great job of using operational performance to offset any price concessions.
Looking at market conditions in Europe consumer confidence continues to be negatively impacted by higher interest rates and conflicts in the middle East and Ukraine.
George: However market share gains in both our vinyl extrusion nrg's spacer product lines have helped offset market weakness.
George: Pricing continues to be pressured, but the quanex team has done a great job of using operational performance to offset any price concessions.
George Wilson: From a capital allocation perspective, we made the decision to take advantage of our low share price, and we repurchased approximately $23.5 million of our stock in the second quarter. We remain focused on maintaining a healthy balance sheet that continues to give us flexibility to execute on all of our strategic opportunities. For the remainder of this year, we will continue to prioritize debt repayment and investment in organic projects that enhance our margins, while opportunistically buying back shares when it makes sense to do so. We still have approximately $35.6 million authorized on our share repurchase program.
George: From a capital allocation perspective, we made the decision to take advantage of our low share price and we repurchased approximately $23 $5 million of our stock in the second quarter.
George: We remain focused on maintaining a healthy balance sheet that continues to give us flexibility to execute on all of our strategic opportunities.
George: For the remainder of this year, we will continue to prioritize debt repayment and investment in organic projects and enhance our margins, while opportunistically buying back shares when it makes sense to do so.
George: We still have approximately $35 $6 million authorized on our share repurchase program.
George Wilson: In summary, we are extremely pleased with the progress of the time and acquisition integration. The Quanex team continues to execute at a high level, which has resulted in excellent safety performance, as well as delivering better-than-anticipated synergies. The integration now begins to shift towards growth focused and customer value projects, which we believe will drive margin expansion and create opportunities in new markets. The team continues to control the controllable, and we will be well positioned to capitalize on opportunities as they arise.
George: In summary, we are extremely pleased with the progress of the time and acquisition integration.
George: <unk> team continues to execute at a high level, which has resulted in excellent safety performance as well as delivering better than anticipated synergies.
George: The integration now begins to shift towards growth focused and customer value projects, which we believe will drive margin expansion and create opportunities in new markets. The team continues to control the controllable and we will be well positioned to capitalize on opportunities as they arise.
Scott Zuehlke: I'll now turn the call over to Scott who will discuss our financial results in more detail. Thanks, George. On a consolidated basis, we reported net sales of $452.2 million during the second quarter of 2025, which represents an increase of approximately 70% compared to $266.2 million for the same period of 2024. The increase was primarily driven by the contribution from the time in acquisition that closed on August 1, 2024.
George: I'll now turn the call over to Scott, who will discuss our financial results in more detail.
Scott: Thanks George.
Scott: On a consolidated basis, we reported net sales of $452 2 million during the second quarter of 2025, which represents an increase of approximately 70% compared to $266 2 million for the same period of 2024.
George: The increase was primarily driven by the contribution from the time an acquisition that closed on August one 2024, excluding the timing contribution net sales would have declined by one 4% for the second quarter of 2025, largely due to lower volume in North America.
Scott Zuehlke: Excluding the time in contribution, net sales would have declined by 1.4% for the second quarter of 2025, largely due to lower volume in North America. We reported net income of $20.5 million, or $0.44 per diluted share, during the three months ended April 30, 2025, compared to net income of $15.4 million, or $0.46 per diluted share, during the three months ended April 30, 2024.
George: We reported net income of $20 5 million or <unk> 44 per diluted share. During the three months ended April 32025, compared to net income of $15 4 million or <unk> 46 per diluted share. During the three months ended April 32000, 2000 22024, sorry.
Scott Zuehlke: On an adjusted basis, net income was $27.9 million, or $0.60 per diluted share, during the second quarter of 2025, compared to $24 million, or $0.73 per diluted share, during the second quarter of 2025.
George: On an adjusted basis net income was $27 9 million or <unk> 60 per diluted share during the second quarter of 2025 compared to $24 million or <unk> 73 per diluted share during the second quarter of 2020 for the adjustments being made to EPS are as follows transaction advisory fee.
Scott Zuehlke: The adjustments being made to EDS are as follows, transaction advisory fees and reorg costs, restructuring charges related to severance and disposal of software, amortization expense related to intangible assets and attention settlement refund, and other net adjustments related to foreign currency transaction gain or loss and effective tax rate. On an adjusted basis, EBITDA for the quarter increased by 54.7% to $61.9 million, compared to $40 million during the same period of last year. The increase in net income and EBITDA for the three months ended April 30, 2025, was mostly attributable to the contribution from the time and acquisition combined with the realization of costs.
George: And reward costs restructuring charges related to severance and disposal of software.
George: Amortization expense related to intangible assets and a pension settlement refund and other net adjustments related to foreign currency transaction gain or loss effective tax rate.
George: Yes.
George: On an adjusted basis EBITDA for the quarter increased by 54, 7% to $61 9 million compared to $40 million during the same period of last year.
George: The increase in net income and EBITDA for the three months ended April 32025 was mostly attributable to the contribution from the time of acquisition combined with the realization of cost synergies.
Scott Zuehlke: Now for results by operating. We generated net sales of 151 million in our North American fenestration segment for the second quarter of 2025, a decrease of 5.5% compared to 159.8 million in the second quarter of 2024. We estimate that volumes in this segment declined by approximately 7% year over year, with pricing up approximately 1% versus Q2 of 2020.
George: Now for our results by operating segment.
George: We generated net sales of $151 million in our North American Fenestration segment for the second quarter of 2025, a decrease of five 5% compared to $159 8 million in the second quarter of 2024, we estimate that volumes in this segment declined by approximately 7% year over year.
George: With pricing up approximately 1% versus Q2 of 2020.
Scott Zuehlke: Adjusted EBITDA was $21.3 million in this segment for the second quarter, compared to $25.4 million in the second quarter of 2025. Our European Finistration Segment generated revenue of $61.3 million in the second quarter of 2025, which represents an increase of 8.3% compared to $56.5 million in the second quarter of 2024. After adjusting for foreign currency, revenue increased 7.9%. We estimate that volumes for the quarter were up approximately 9% year over year in this segment, with pricing down by approximately 1%.
George: Adjusted EBITDA was $21 $3 million in this segment for the second quarter compared to $25 4 million in the second quarter of 2024.
George: Our European Fenestration segment generated revenue of $61 3 million in the second quarter of 2025, which represents an increase of eight 3% compared to $56 5 million in the second quarter of 2024.
George: After adjusting for foreign currency revenue increased seven 9%.
George: We estimate that volumes for the quarter were up approximately 9% year over year in this segment with pricing down by approximately 1%.
Scott Zuehlke: Adjusted EBITDA increased slightly to $13.2 million in this segment for the quarter versus $13 million during the same period last year. We reported net sales of $51.2 million in our North American Cabinet Components segment during the second quarter of 2025, compared to $51.1 million for the same period of 2024. We estimate that volumes declined by approximately 3% and price increased by approximately 3% in this segment for the quarter. This price movement was largely related to index pricing tied to hardwood.
George: Adjusted EBITDA increased slightly to $13 2 million in this segment for the quarter versus $13 million during the same period last year.
George: We reported net sales of $51 2 million in our North American Cabinet components segment. During the second quarter of 2025 compared to $51 1 million for the same period of 2024, we.
George: We estimate the volumes declined by approximately 3% and price increased by approximately 3% in this segment for the quarter.
George: This price movement was largely related to index pricing tied to hardwood costs.
Scott Zuehlke: Suggested EBITDA was $3.1 million in this segment for the quarter, which compared to $3.4 million for the second quarter of 2024. The timing business reported net sales of 190.1 million for the second quarter of 2025.
George: Adjusted EBITDA was $3 $1 million in this segment for the quarter, which compared to $3 4 million for the second quarter of 2024.
Scott Zuehlke: The time and business reported net sales of $190 1 million for the second quarter of 2025.
Scott Zuehlke: Since we didn't own this business in the second quarter of 2024, there is no comp in the earnings release. However, we believe revenue is down approximately 2% in this segment in the second quarter of 2025, compared to the second quarter of 2024, mostly due to soft market demand in North America, which is consistent with what we saw in the legacy Quanex.
George: Since we didn't own this business in the second quarter of 2024, there is no comp in the earnings release. However, we believe revenue was down approximately 2% in this segment in the second quarter of 2025 compared to the second quarter of 2024, mostly due to soft market demand in North America, which is consistent with what we saw in the legacy quanex.
Scott Zuehlke: Adjusted EBITDA came in at $26.8 million for the quarter in this segment.
George: Business.
George: Adjusted EBITDA came in at $26 8 million for the quarter in this segment.
Scott Zuehlke: Moving on to cash flow in the balance Cash provided by operating activities was $28.5 million for the second quarter of 2025, which compares to cash provided by operating activities of $33.1 million for the second quarter of 2024. Similar to Q1 of this year, Q2 was impacted by layering in the timing acquisition as the legacy timing business is very much a make-to-stock business and the legacy Quanex business is very much make-to-order. Free cash flow was $13.6 million for the quarter, but keep in mind that one-time items related to integration costs and achieving the cost synergies impact free cash flow.
George: Moving on to cash flow and the balance sheet cash provided by operating activities was $28 5 million for the second quarter of 2025, which compares to cash provided by operating activities of $33 1 million for the second quarter of 2024.
George: Similar to Q1 of this year Q2 was impacted by layering in the time an acquisition as the legacy <unk> business is very much a make to stock business and our legacy <unk> business is very much make to order.
George: Free cash flow was $13 6 million for the quarter, but keep in mind that onetime items related to integration costs and achieving the cost synergies impact free cash flow.
Scott Zuehlke: As a reminder, to acquire time in August of 2024, we borrowed a total of $770 million through a $500 million term loan A and drawing $270 million on our revolver. As of April 30, 2025, our leverage ratio of net debt to last 12 months adjusted EBITDA decreased 3.2 times. The leverage ratio for our quarterly debt covenant compliance was 2.7%. This debt covenant leverage ratio excludes real estate leases that are considered finance leases under U.S. GAAP and is calculated on a pro forma basis to include last 12 months adjusted EBITDA from the time in acquisition, $30 million of EBITDA for the original cost synergy target related to the acquisition, less cost synergies achieved, and cash only from domestic subsidiaries.
George: As a reminder to acquire time in August of 2024, we borrowed a total of $770 million through a $500 million term loan a and drawing $270 million on our revolver.
George: As of April 30th 2025, our leverage ratio of net debt to last 12 months adjusted EBITDA decreased three two times net leverage ratio ratio for our quarterly debt Covenant compliance was two seven times.
George: This debt covenant leverage ratio excludes real estate leases that are considered finance leases under U S. GAAP and is calculated on a pro forma basis to include last 12 month's adjusted EBITDA from the time of acquisition $30 million of EBITDA for the original cost synergy synergy target related to the acquisition.
George: Less cost synergies achieved and cash only from domestic subsidiaries.
Scott Zuehlke: The debt covenant leverage ratio would be 2.4 times if calculated using the full cash and cash equivalents amount on the balance sheet as of April 30, 2025, and adjusting for the cash used to repurchase our stock during the quarter.
George: The debt covenant leverage ratio would be two four times as calculated using the full cash and cash equivalents amount on the balance sheet as of April 32025, and adjusting for the cash used to repurchase our stock during the quarter.
Scott Zuehlke: As noted in our earnings release, based on year-to-date results combined with our operational execution, cost synergy realization, conversations with our customers, and recent demand trends, we are reaffirming net sales guidance of approximately $1.84 to $1.86 billion and adjusted EBITDA guidance of $270 to $280 million for fiscal 2025. From a cadence perspective, on a consolidated basis for the third quarter of this year versus the second quarter of this year, we expect revenue to be up 8 to 10 percent and we expect adjusted EBITDA margin expansion of 250 to 300 basis points.
George: As noted in our earnings release based on year to date results combined with our operational execution cost synergy realization conversations with our customers and recent demand trends. We are reaffirming net sales guidance of approximately $1 84 to $1 86 billion and adjusted EBITDA guidance of 200.
George: $70 million to $280 million for fiscal 2025.
George: From a cadence perspective on a consolidated basis for the third quarter of this year versus the second quarter of this year, we expect revenue to be up 8% to 10% and we expect adjusted EBITDA margin expansion of 250 to 300 basis points.
Scott Zuehlke: Lastly, the finance and accounting teams continue to work with our external auditors on re-segmenting the business and our goal is to report in the new operating segments this year, either Q3 or Q4.
George: Lastly, the finance and accounting teams continue to work with our external auditors on re segmenting the business and our goal is to report in the new operating segments. This year, either Q3 or Q4.
Unknown Executive: Operator, we are now ready to take questions. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name. If you have a question, please press star 11 again. Standby while we compile the queue.
George: Operator, we are now ready to take questions.
George: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
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George: These standby, while we compile the Q&A roster.
Adam Thalhimer: Our first question comes from... Adam Thalhimer with Thompson Davis, your line. Hey, good morning, guys. Nice quarter. Yeah, thanks. Thanks.
Speaker Change: Our first question comes from Adam Thalheimer with Thompson Davis Your line is open.
Adam Thalheimer: Hey, good morning, guys nice quarter.
George Wilson: Can you give a little more color on raising the synergy target from $30 million to $45 million? And I think you even said there was potential beyond that. Yeah, it's a combination of things that we've seen. Obviously, I'm very pleased about the new segments. And I think even as highlighted in previous calls that we felt once the new segments would be kind of running from an operational perspective, that new opportunities for cost take out and just being more efficient would bubble up and be able to be realized. And that's exactly what we've seen. They've been split between just more efficient and taking out headcount, being more streamlined in how we've built the organization, as well as some additional sourcing and purchasing synergies.
Speaker Change: Yes, Thanks Adam.
Speaker Change: Can you give a little more color on raising our synergy target from 30 million to $45 million and I think you even said there was potential beyond that.
Speaker Change: Yes, it's a combination of things that we're seeing obviously I'm very pleased about the new segments and I think even as highlighted in previous calls that we felt once the new segments would be kind of running from an operational perspective, new opportunities for cost takeout and just being.
Speaker Change: More efficient.
Speaker Change: Bubble up and be able to be realized and that's exactly what we've seen.
Speaker Change: They've been split between.
Speaker Change: Just more efficient and taking out head count being more streamlined and how we've built the organization as well as.
Speaker Change: Some additional sourcing and purchasing synergies.
George Wilson: As I mentioned in my script, we're still a little early on new revenue synergies that'll come as a result of the go-to and geographical strategy refinement. But kind of in summary, Adam, it's really just the new segments identifying and becoming very efficient in creating what we knew was going to be there. So, you know, I think that there is still some pathway going forward, too early to tell because again, we're fairly new into this, but again, it's just confidence on how well the teams are performing.
Speaker Change: As I mentioned in my script, we're still a little early on on new revenue synergies that are better.
Speaker Change: That will come as a result of the go to and geographical strategy refinement.
Speaker Change: But.
Speaker Change: Kind of in summary item, it's really just the new segments, identifying and becoming very efficient and creating what we knew was going to be there.
Speaker Change: So.
Speaker Change:
Speaker Change: I think that there is still some pathway going forward.
Speaker Change: Too early to tell because again, we're fairly new into this but.
Speaker Change: Again, it's just confidence on how well the teams are performing.
George Wilson: Okay, and then I wanted to flip the tariff issue and ask if that's actually given your domestic Manufacturing Footprint, if that's actually an opportunity for you guys, and if you're seeing bids related to customers looking to increase domestic sales. You know, we have I do think it is, I think how we've structured our supply chain, and all of the work that we've done that really started kind of coming out of COVID and into some of the global supply chain challenges has really benefited us. I think that that Footprint that we have that really capitalizes on serving our customers being geographically diverse it is starting to show some benefits as it relates to, I guess, supply chain risk mitigation for our customers.
Speaker Change: Okay, and then I wanted to flip the tariff issue and ask if that's.
Speaker Change: That's actually.
Speaker Change: Given your domestic manufacturing footprint, if that's actually a opportunity for you guys and if youre seeing bids related to customers looking to increase domestic sourcing.
Speaker Change: We have I do think it is I think how we've structured.
Speaker Change: Our supply chain and all of our work that we've done that really started kind of coming out of COVID-19 and into some of the global supply chain challenges has really benefited us.
Speaker Change: I think that that.
Speaker Change: Yeah.
Speaker Change: Foot print that we have that really capitalizes on serving our customers being geographically diverse.
Speaker Change: It is starting to.
Speaker Change: Sure some benefits as it relates to I guess supply chain risk mitigation for our customers.
George Wilson: We have seen some increases in quoting opportunities and have converted and been able to execute some spot purchases, more so on the cabinet segment. That's where we've seen it first because some of the cabinet market has relied a little heavier on international and Asian sourcing. So we have seen some opportunities and I think that will continue to present itself.
Speaker Change: We have seen some some increases in quoting opportunities.
Speaker Change: Converted and been able to execute some spot purchases more so.
Speaker Change: On the cabinet segment.
Speaker Change: And that's where we've seen it first because some of the cabinet.
Speaker Change: Market has relied a little heavily or on.
Speaker Change: International <unk> agent sourcing so we have seen some opportunities and I think that will continue to present itself.
Unknown Executive: Perfect.
Unknown Executive: I'll turn it over.
Unknown Executive: Thanks, guys.
Speaker Change: Perfect I'll turn it over thanks, guys. Thanks.
Unknown Executive: Thanks.
Speaker Change: Thanks, Adam.
Unknown Executive: Thank you.
Justin Mechetti: Our next question comes from Julio Romero with Sidonian Company. Your line is open. Good morning, this is Justin on for Julio. Morning. Good morning.
Speaker Change: Thank you. Our next question comes from Julio Romero with Sidoti <unk> Company. Your line is open.
Justin: Good morning, this is Justin on for Julio.
Speaker Change: Good morning, good morning.
George Wilson: Can you give us a little more meat on the bone as to where in the timing portfolio have you been able to realize cost synergies faster than originally expected? I think that the main bucket for the increase versus the original expectation George mentioned is is really on the procurement side. Once you get those two teams together and really start scrubbing all that data, there just ended up being more opportunity than originally estimated. And then across what we consider the corporate bucket, which is things like finance, internal audit, HR, IT, legal, all of the above, we're seeing higher realized and potentially realized synergies out of those groups than we did originally.
Speaker Change: Can you give us a little more meat on the bone as to where the timing portfolio have you been able to realize cost synergies faster than originally expected.
Speaker Change: I think the main buckets for the increase versus the original expectation. George mentioned is is really on the procurement side.
Speaker Change: Once you get those two teams together and really start scrubbing all of that data Theyre just ended up being more opportunity than originally estimated and then across what we consider the corporate bucket, which is things like finance internal audit HR. It legal all of the above we're seeing higher.
Speaker Change: Sure.
Speaker Change: Realized and potentially realize synergies out of those groups than we did originally.
Unknown Executive: Great. Thanks for the call there.
Speaker Change: Great. Thanks for the color there.
Scott Zuehlke: And then on guidance for DNA, is the 6.5 million in intangible asset amortization that was realized in 2Q a good go forward quarterly run rate? And what do you expect for the full year DNA both on a gap basis and an adjusted basis? Yeah, I think so what happened was for intangible amortization, I think 2Q is a pretty decent run rate. I think we originally got it to around $60 million for adjusted DNA for the year, which excludes intangible amortization. Still a good number. Great. Thanks. I'll turn it back now. Thank you. I'm showing no further questions at this time.
Speaker Change: And then on guidance for DNA is the $6 5 million in intangible asset amortization that was realized in <unk>.
Speaker Change: Good go forward quarterly run rate.
Speaker Change: And what do you expect for the full year DNA, both on a GAAP basis and an adjusted basis.
Speaker Change: Okay.
Speaker Change: Yes, I think so what happened was.
Speaker Change: For intangible amortization I think <unk> is a pretty decent run rate.
Speaker Change: I think we originally guided to around $60 million for adjusted D&A for the year, which excludes intangible amortization.
Speaker Change: Still a good number.
Speaker Change: Great. Thanks, I'll turn it back now.
Speaker Change: Alright.
Speaker Change: Thank you.
George Wilson: I would now like to turn it back to George Wilson for closing. Thank you for joining the call today. We look forward to providing you with another update when we report our Q3 earnings in September. Thank you.
Speaker Change: <unk> no further questions at this time I would now like to turn it back to George Wilson for closing remarks.
Speaker Change: Thank you for joining the call today, we look forward to providing you with another update when we report our Q3 earnings in September. Thank you.
Unknown Executive: This concludes today's conference. Thank you for participating. You may now disconnect.
Speaker Change: This concludes today's conference call.
Speaker Change: Thank you for participating you may now disconnect.
Speaker Change: Okay.
Unknown Executive: Thanks for watching!
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].