Q2 2025 HNI Corp Earnings Call
Thank you for standing by. My name is Carli and I will be your conference operator today.
At this time, I would like to welcome everyone to the hni corporation second quarter, fiscal 2025 results conference call.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.
If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again,
thank you. I would now like to turn the conference over to Mr. Matt. McCall, you may begin.
Matt McCall: Good morning. My name is Matt McCall. I'm vice president, investor relations and corporate development for h&i Corporation.
Speaker Change: Thank you for joining us to discuss our second quarter 2025 results.
Speaker Change: With me today are Jeff lingerer. Chairman president and CEO in V. VP Burger Executive Vice President and CFO.
Speaker Change: Copies of our financial news, release and non-gaap, reconciliations are posted on our website.
Speaker Change: Statements made during this call that are not strictly historical. Facts are forward-looking statements which are subject to known and unknown risk.
Actual results. Could interior differ materially.
Speaker Change: The financial news release posted on our website includes additional factors that could affect actual results.
The corporation assumes. No obligation to update any forward-looking statements made during the call. I am now pleased to turn the call over to Jeff launcher, Jeff.
Jeff: Good morning. Thank you for joining us.
Speaker Change: I'm going to divide my commentary today. Into 3 sections.
Speaker Change: First, I will provide some comments about our second quarter results.
Speaker Change: Non-gaap earnings per share increase, more than 40% year-over-year with solid Revenue growth in both segments.
Speaker Change: Next, I will discuss our expectations for the remainder of 2025.
Speaker Change: Our earnings Outlook has modestly increased from what we provided on our last quarter. Call.
Speaker Change: We continue to anticipate a fourth consecutive year of double-digit non-gaap earnings Improvement.
Speaker Change: And finally, I will provide additional detail about recent demand activity and how we see our markets playing out over the rest of the year.
Speaker Change: I've also discussed the confidence, we have in our strategies and an update on our elevated EPS growth visibility.
Following those highlights VP will provide additional color around our third quarter and updated full year outlook.
Speaker Change: It will also comment on our strong balance sheet.
Speaker Change: I will conclude with some closing comments before we open the call to your questions.
Speaker Change: Let's begin with a second quarter. Our strategies are working and our members delivered another, another excellent quarter.
Speaker Change: The benefits of our Diversified revenue streams and the merits of our customer first business model, continue to deliver strong shareholder value.
Speaker Change: For the quarter, we delivered non-gaap earnings per share of 1.111.
Speaker Change: The 41% year-over-year EPS growth was ahead of our internal expectations.
Speaker Change: Much of the earnings upside was driven by better than expected volume growth.
Speaker Change: Both segments generated year-over-year top-line growth in excess of 5%.
Speaker Change: With both modestly. Exceeding, the expected ranges we discussed on last quarter's conference call.
Speaker Change: Profitability in the second quarter was also strong.
Speaker Change: Consolidated, non-gaap gross margin expanded 90 basis points on a year-on-year basis to 42.9%.
Speaker Change: Our non-gaap, operating margin expanded 200 basis points year-over-year to 11%.
This even margin was the highest on record for the second quarter driven by the impact of volume growth along with our profit transformation, efforts and kii synergies.
In the workplace Furnishing segment organic, net sales, increase more than 8% year-over-year fueled by broad-based growth across the portfolio.
Speaker Change: we experienced noteworthy strength, in our contract brands with Revenue up, nearly 15% year-over-year,
Speaker Change: We also saw a return to growth in Our Brands focused on small and medium-sized businesses where Revenue was slightly up year-over-year.
Speaker Change: From a profitability perspective, workplace Furnishings non-gaap even margin expanded 120, basis points year-over-year to a strong 13.1%.
Speaker Change: Our profit transformation efforts in realization of Ki synergies. Continue to deliver benefits driving segment. Even margin to record second quarter levels.
Speaker Change: broadly, while there was some revenue and profit, pull forward activity driven by pricing actions, the impact during the quarter was modest,
Speaker Change: Finally in Residential Building Products, second quarter Revenue, increased more than 5% year-over-year.
Speaker Change: Revenue from new construction channel. The new construction channel was up more than 4% and remodel retrofit sales grew over 7% both on a year-over-year basis.
Speaker Change: We delivered this Topline growth despite continued challenging housing market dynamics. As we are competing well and our internal growth Investments are beginning to bear fruit.
Speaker Change: Residential Building Products profitability was also strong in the quarter.
Speaker Change: Segment operating profit grew 20% year-over-year.
Speaker Change: And segment, operating margin expanded to 190 basis points from the same period of 2024 to a solid 15.7%.
Speaker Change: The consistently strong profit margins in this segment are evidence of the business's unmatched price point breath and channel reach along with the benefits of its vertically, integrated business model and overall operational agility.
Speaker Change: To summarize our Collective results.
Speaker Change: Our Revenue growth and profit Improvement demonstrate the strength of our strategies and our customer first business model.
Speaker Change: The resilience of our members and our proven ability to manage through varying macroeconomic conditions.
Speaker Change: That leads me to my comments about our outlook for the remainder of 2025.
Speaker Change: Our margin expansion efforts, and expectations for continued. Revenue growth will support ongoing year-over-year EPS Improvement as we move through the second half of the year,
Speaker Change: All while we continue to invest to drive future growth.
Speaker Change: In workplace furnishings.
Speaker Change: Orders grew in the quarter across all major office brands.
Speaker Change: We saw a return to order growth in the SMB space with orders up 3%.
Speaker Change: Our contract brands outperformed with orders growing 5% year-over-year.
Speaker Change: We're excluding Hospitality from the metric as the business experience and meaningful tariff related. Pause in activity during the quarter which was temp which has temporarily skewed results. I would I will discuss our positive outlook for the hospitality Market more in a moment.
Speaker Change: As was the case with revenue and profits, we, we did see some order pulled forward in the quarter.
Speaker Change: However, adjusted segment orders, which exclude hospitality and the impact of pull forward activity, we're still up for the quarter on a year-over-year basis.
Speaker Change: In addition to Total segment, backlog is up 5% year-over-year.
Speaker Change: That support our view of volume Improvement.
Speaker Change: While at the same time, we are increasingly focusing, our investments and driving Revenue. Growth in this segment.
Speaker Change: Moving to Residential Building Products orders in the second quarter decreased approximately 2% year-over-year.
Speaker Change: To the first quarter, we saw some order. Pull ahead in March which negatively impacted order growth in the month of April.
Speaker Change: However, as the impact of pull forward, activity abated year-over-year order Improvement returned in both May and June.
Speaker Change: Builder, sentiment continues to reflect the impacts of elevated. Interest rates ongoing, affordability, issues and weaker consumer confidence.
Speaker Change: And housing Trends have broadly followed Builder sentiment.
Speaker Change: Despite the current environment. However, we believe in the long term opportunities tied, to the housing market and in the strength of our Market leading positions and profitable operating model.
Speaker Change: This supports our ongoing level of investment.
Speaker Change: I will finish by making a few comments about our markets and provide additional detail around our elevated 2025 EPS growth visibility.
Speaker Change: Our last 2 earnings calls we highlighted in an increased focus on investing to drive growth in both segments.
Speaker Change: Our first half 2025 Revenue, strength and leading indicators provide added support for our growth initiatives.
As we look at our workplace Furnishing segment, we experienced solid revenue and Order growth. All major office brands
Speaker Change: SMB orders, rebounded and grew in the quarter. After a brief pause in late. 2024 and early 2025.
Speaker Change: We remain bullish about the fundamentals of this business.
We believe our strength in the SMB space and our broad price point breath to continue to be competitive differentiators.
Speaker Change: This is especially true as more cost-conscious customers and Brace price mixing across projects increasingly co-mingling SMB products in the contract settings.
Speaker Change: In our contract business, we expect growth to continue in the back half of 2025.
We see encouraging signs associated with larger projects, across all our key, verticals and saw customers return to a business as usual mentality.
Speaker Change: We believe we are seeing the release of pent-up demand. As a focus on in-office, work continues to highlight, the need to refresh and reset spaces to adapt to the new ways work is done and the more people in office.
Speaker Change: As a result, pre-sale activity, orders and backlog were all up.
Speaker Change: Finally, I'll comment on our Hospitality business.
Speaker Change: As I mentioned, we saw a tariff related demand pause during the quarter.
Speaker Change: This business relies heavily on imported product primarily from Vietnam and China as a result many customers tap, the brakes on new projects as tariff uncertainty Spike.
Speaker Change: We have seen an improvement in activity and our pipeline has rebounded significantly. So while this business can be lumpy, we remain enthusiastic about hospitalities. Demand prospects as macro volatility subsides.
Speaker Change: Looking ahead. We believe we are particularly well positioned to benefit as the workplace Furnishings Market continues to improve.
Speaker Change: We have a portfolio of brands with unmatched product and pricing breadth and depth allowing us to meet any furniture. Need, a customer has
Speaker Change: We have products that work for customers, ranging from small businesses to the largest multinationals.
Speaker Change: Our Brands are distributed widely across geographies from tertiary markets to the top msas.
Speaker Change: And we can broadly meet the needs of workplaces schools, Healthcare facilities, and hotels.
Moving to Residential Building Products, we continue to believe in the position in the positive long-term Market fundamentals.
And we acknowledge a market-driven revenue recovery, will take time.
Speaker Change: We are however optimistic about our opportunities to increase Revenue through our growth initiatives.
Speaker Change: Specifically, we continue to invest in developing Market leading new products that offer customers more options and features.
Speaker Change: We are driving new programs to increase, homeowner and home buyer, awareness of their fireplace options. Ensuring our products are considered in all Remodel and new construction projects.
And we are strengthening our already strong relationships with Builders across the country, helping them deliver the best overall value to the homeowner.
Speaker Change: Encouragingly, we are driving growth in this segment while still being in the early days of each of these initiatives.
Speaker Change: And while we invest in growth, we will continue to deliver high margin results and strong profits in this business.
Speaker Change: Longer term, Single family, housing remains under supplied and demographics will support additional demand growth.
The results of our ongoing Investments which will enhance our connection to customers and build on our leading Brands will fortify our position of strength in the industry.
Finally, and importantly, we continue to have elevated earnings visibility this year. And next,
Speaker Change: Our, our outlook for 2025 continues to include full year Revenue growth in both segments.
in addition, our earnings per share Outlook moves modestly, higher
Speaker Change: We continue to have high visibility to significant profit growth driven by operational efficiencies.
Speaker Change: As a reminder, we have 2 initiatives underway in this area of Mexico and Ki synergies.
Speaker Change: In recent quarters we highlighted an expected benefit of 70 to 80 cents of additional EPS through 2026.
Speaker Change: To date. We have recognized the approximately 20 24 cents of eps benefit
Speaker Change: leaving 50 to 60 cents to be recognized over the next 18 months.
This is a modest increase from our previously, communicated range and continues to provide visibility.
Into a fifth consecutive year of double-digit, eps growth.
Speaker Change: I will now turn the call over to VP to discuss our outlook for the remainder of 2025 VP. Thanks Jeff. I'll start by discussing our outlook for revenue and profit beginning with the Top Line, third quarter revenue and workplace furnaces is expected to increase at a mid single-digit rate, year-over-year, organically
Including the impact of divestitures workplace. Furnishings revenues expected to increase at a low single digit pace.
The benefits of improving orders and backlog are expected to drive the revenue growth in the third quarter.
For Residential Building Products. Third quarter, net sales are projected to increase at a low single digit rate compared to the same period in 2024.
Speaker Change: Pricing actions are expected to be the primary driver of growth. However, for the second half overall, we continue to expect volume growth for this segment, we're projecting Revenue Improvement in 2025 without market growth.
Speaker Change: Shifting to our third quarter profit Outlook.
Speaker Change: Non-gaap earnings per share in the third quarter, are expected to increase slightly from 2024 levels.
This Improvement is expected to be driven by productivity benefits, and volume growth, which should be partially offset by increased investment levels.
In the third quarter, we expect operating margin in workplace Furnishings to expand modestly year-over-year driven by volume Improvement and continued profit transformational benefits, partially offset by increased investment.
Speaker Change: Residential Building Products operating margin is expected to compress modestly year-over-year in the third quarter.
Speaker Change: As a result of slightly lower volume and increased Investments. Again we we still are expecting overall non-gaap earnings per share in the third quarter to increase slightly from 2024 levels.
Speaker Change: Moving to the full year in workplace Furnishings. We expect year-over-year mid single-digit. Net sales growth excluding the benefit of an extra week in the fourth quarter.
Speaker Change: Our full year, volume expectations, move higher. However the overall segment sales Outlook is essentially unchanged as now we see lower projected price realization primarily related or driven by reduced impacts from tariffs.
In Residential Building Products, our Outlook improves slightly with net sales now, expected to grow at a mid single digit Pace again. After excluding the benefit of the extra week in the fourth quarter.
From an earnings perspective, our outlook for 2025 increases modestly with double-digit percent, EPS growth expected for the fourth straight year.
Speaker Change: I'll wrap up with a few comments on our balance sheet and cash flow.
Speaker Change: Quarter ending, gross, debt. Leverage was at 1.4 times as calculated in accordance with our debt agreements.
During the quarter, we continue to deploy cash through our long-standing quarterly dividend and through stock repurchases of nearly $40 million demonstrating, our continued confidence in our future earnings and cash flow generation.
Speaker Change: The combination of our strong balance sheet and consistent cash flow generation will continue to provide a high degree of financial flexibility and capacity for investment.
Speaker Change: Our Capital priorities. Remain reinvesting in the business paying dividends pursuing, share, BuyBacks and exploring m&a opportunities.
Jeff: I'll now turn the call back over to Jeff.
Speaker Change: Thanks VP.
Speaker Change: we remain focused on investing the drive Revenue growth and on expanding margins, we have multiple Avenues to drive growth and will continue to invest
Speaker Change: and we expect,
Speaker Change: To extend our track record of consecutive years of double-digit percent.
Speaker Change: EPS growth.
Speaker Change: And Beyond 2025, we are positioned for continued success.
We have elevated earnings growth visibility through 2026.
Speaker Change: Broad and diverse product and Market coverage and workplace furnishings.
Speaker Change: Market leading positions in Residential Building Products.
Speaker Change: And we continue to invest to drive growth.
All this is supported by our strong balance sheet and the ability to generate continued free, cash flow.
I want to thank each.
On another excellent quarter.
We will now open the call to your questions.
At this time, I would like to remind everyone in order to ask a question. Press star, then the number 1 on your telephone keypad,
we'll pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from Ruben Garner with benchmark.
Thank you. Good morning everyone.
Speaker Change: Uh, Jeff you started you, you referenced uh, I think modestly Inc, increasing your earnings Outlook a couple of times if I if I heard that right and and then you referenced the 50 to 60 cents over the next 18 months, um of visibility, being I I think you said higher than you expected. Can you elaborate on uh what's driving that increase visibility or that increased uh earnings Outlook.
Speaker Change: Yeah. I mean, I I think um, we continue to to get more confidence in how the, how our Network optimization and our Synergy work has has developed dear Reuben. So we're you know, based on our first half and and what we have in the, in the hopper we're able to uh,
To say with confidence that we think that's good of a drive, a modest increase uh on in the full year on Epps.
Speaker Change: From where we were at.
Speaker Change: Got it, got it. Excuse me. And then, um, the SMB business, uh, showing some signs of life. I, I guess is 1 way to put it does in the past. I think that's been a pretty good.
Speaker Change: Uh, barometer of just general sentiment Improvement. Does that does it feel different? This time was it, you know, maybe some things were, were not, uh, the trigger wasn't pulled earlier in the year with the Tariff Dynamics going on. And this is kind of some catch-up or, uh, do you think this is a sign of, maybe some acceleration to come in both sides of your office business?
Speaker Change: You know, that's a great question. Ruben. And and for you you've been around a bit as have a high and um I think it's a little, I think there's some of that. I also think it was more of a that business has been performing pretty well, the last couple of years and I think it was more of a lull in the in the Tariff impact. Like we said the end of last year, beginning of this year. So I don't know that it's a, it's a traditional pattern in that respect. Um,
Speaker Change: Because I say, you know, our contract business is is is you know, performing well right now. And so I I think it's really SMB returning, you know from that temporary kind of uh shock to the system and and getting back online uh, more so than it is kind of traditional goes in first comes out first uh mentality.
Speaker Change: Yeah Ruben I we talked last time you know 3 straight quarters of that Contracting about an average of 5%. We started to see that rebound early in the second quarter so I I I I think it's it's a sign of you know usually that goes in first and comes out comes out goes in first and then out. So
Speaker Change: Supports the the thoughts there.
Speaker Change: Got it. And then last 1 for me, on the residential side, um, even with the pull forward Dynamic, um, orders down, 2% is pretty, pretty good in this environment. Um, with with what we're seeing in new construction, in particular. Can you talk about where you think you're getting the outperformance? Is it more on the, on the new side is it is it, uh, some progress in in the RNR space anything? Um, you know, is it driven by the new products? Is it a combination of everything? Can you just kind of dive into that a little bit?
Speaker Change: Yeah, Ruben. I think we can probably both comment on this. I would say from my advantage point, um, we're really competing. Well, I mean, our teams are focused
Speaker Change: To take root. So that's I think what why we're able to kind of, you know, front run the, the the market dynamics, although they are still there, there's no doubt about it.
Speaker Change: Yeah, it adds to that. Oh, go ahead. You asked about which side of the market. It is in both sides, both new home and Remodel and if you look at permit activity through the first 4 or 5 months of the year, it's actually down yet. You know, we're showing Revenue up. So I think it's a sign of our, a bit of our unique model and the new construction side with own distribution. Uh as well as the initiatives that we're getting in place with dealers on the remodel side.
Speaker Change: Great. Thanks guys. Good luck. Going forward.
Speaker Change: Thanks.
Speaker Change: Your next question comes from. Greg burns with sidonian company.
Speaker Change: Good morning. Um, you give us some some color around.
Speaker Change: where the, the growth, what the growth Investments are on the
Speaker Change: The building products out of the business on the workplace financing side. Where where are you investing there? And you know maybe you could give us a little bit of color on the the growth Investments you're making there. Thank you.
Yeah Greg. Um so really that we've got a a couple things rolling 1 just just people capacity both on the external and internal uh
secondly, we're really trying to streamline the dealer experience simplify and streamline, the D our connectivity with dealers, um, you know, automating things, uh, to make it easier to do business with which, which really, we see is a bit of an unlock, and then new products we've been, we've got a lot of teams focused on increasing product cycle times, and getting products to Market
Speaker Change: Sooner, um, and being really focused on that. So those are, those are some examples of of, kind of what we're doing, kind of, you know, in-house so to speak to, to uh, you know, start to drive growth and we and I remind you that we we said, we were going to Pivot to growth. And that's, you know, we're going to continue to do that, and we're going to continue to make investments in these spaces.
Speaker Change: All right, great. And then uh, in terms of the, the margin profile on the the workplace
Business. Um, you know, impressive margin. This quarter, is there a Target Market margin range. You, you think that business should operate in? Um, is is there room? Uh, obviously it seems like with some of the Prophet initiatives you have. There's there's room for margin expansion but how should we think about maybe the the longer term margin range that you think that business can operate Within?
Speaker Change: Yeah, I think, you know, their Junk Balls here was about a 9 and a half percent business. We think there's between a 200 to 250 basis point, uh, Greg just based on the current initiatives that we've already talked about between the kii synergies and the Mexico ramp. Uh, and then obviously, we'll continue to have our normal productivity that we we drive in there annually to offset, you know, any inflation. So, uh, we still think there's a lot of, a lot of Runway there to push that thing towards a 12% return business.
Speaker Change: Okay, great. Um and then just lastly, could you just remind me, what percent of the
Speaker Change: Of the the workplace business is SMB. Um, just
yeah. Great, 40 45%. So certainly it's still an important part here.
Speaker Change: Okay, great. Thank you.
Speaker Change: Your next question comes from Steve Ramsey with Thompson research group.
Hi, good morning. I wanted to think about the workplace comment on the co-mingling of SMB products in the contract settings. Can you maybe, uh, parse that out, add some Nuance to why that is happening and then put some context around that activity, as it's happening in 2025 versus the prior couple of years.
Speaker Change: And and it's afforded an opportunity to say, where they really, you know, where they want to, you know, go long and spend more where they want to maybe mix in. Um,
Speaker Change: You know, different price points and it's really just a, a, you know, a a shift in, in how that's being done. And, and so, that's where we see it coming in. And we just see we see dealers, we see customers being open to, you know, looking at, uh, different versions of what maybe they hadn't considered before. And, and, and, and that's where we're seeing it on a percent basis. I can't really tell you, um, you know, it's gone from X to Y. We just see it. We see it in, in, in pre-sale metrics, we see it flowing through based on what customers and what dealers, sell what products, and so that's why that that's kind of contextually, you know, how we see this developing and and and happening that that's, you know, the background for that for that color, commentary on that comment.
Speaker Change: Okay, that's interesting. I mean I would think you guys have an advantage to
Speaker Change: to play a part of that Trend given to you. You play strongly in both categories. So in interesting to hear that I think that I think that's right.
Speaker Change: Yeah. Okay. And then flipping to, to the the resi segment, this was touched on earlier, that, that the sales were strong orders in May and June were good, despite the environment do, do you attribute that to share gains or or maybe some comps, uh, help on the RNR side. But but how you would describe the outperformance?
Speaker Change: Yeah, I think part of it. You know, you got to break it apart here. Uh, Stephen on the new construction side, we think we're starting to see our initiatives come through when permits are down in our unit volumes are are better than that. That's a signal that we're expanding the market or taking share. So, I feel I feel that's happening and I think we've been talking about on the remodel side. Uh, there's been a lot of initiatives, uh, around, you know, dealer activity dealer activation more Improvement in the DIY space, or Home Improvement retail and we're getting more placement there. So it's kind of why we're saying we expect growth, regardless of what's happening with with the markets themselves. And and I also comment on the investment side, this is also where we're making, you know, longer term, incremental Investments, and similar areas that Jeff talked about in the workplace side with, you know, more people capacity and and adding to the selling models. So
Speaker Change: We think we're uniquely positioned now to perform the markets.
Speaker Change: Okay, great. And maybe to add on to that, on your vertically, integrated part of the resi segment where you have distribution, can you talk about how that is performing versus your external sales?
If you look at it from a unit standpoint Stephen we can see that, you know where we own distribution is performing. Well, uh it's it's absolute Delta compared to not only distributions hard because each Market's different and and where we own distribution, we're primarily the the main distributor. Uh, but we certainly think it's performing as good. Or, or if not better than independent,
That's great. And then 1 last 1 for me, strong EPS growth is good to see thinking about the inputs of operating cash flow generation and capex. Do you expect free cash flow growth year-over-year to be similar to the the earnings per share change? Or how how do you think about the the cash flow Dynamics in 2025? Yeah. What, what else? I'll answer that 2 ways 1. We we expect to, you know, maintain neutral on working capital with growth 2. We're going to take our cash flow generation up, probably 30 to 35 million dollars. And we talked about last quarter, 10 million of that because because of true volume growth. So now we're in the 200, and 210 million dollar range and another 25 to 30 million is going to be because of the new tax bill. So in the timing of, when we're going to pay stuff,
Speaker Change: So, so it's going to improve.
Speaker Change: Excellent, thank you.
David Macgregor: Your next question comes from David MacGregor with Longbow research.
David Macgregor: Yes, good morning everyone and uh, congratulations on the strong results. Um, I I apologize that. These questions have been. I apologize if these questions have been addressed. I have a little technology challenge getting on here, but, um, I guess I want to start off by just asking about workplace furnishings and specifically, the volume leverage. And, you know, I think the expectation had been that, you know, Kimbo and Mexico would drive volume. Leverage of the historical mid-30s level, but, you know, you're also seeing the negative price cost working against that. So can you just talk about how much improvement you're seeing in the absolute volume? Leverage? Uh, in workplace, Furnishings, if we were to separate out the price cost pressures
David Macgregor: Volume, but we should still think now that we're in the 35-, 40% in incremental with volume and, and we should expect to see that, but that's before we do our investments. And I think we've talked a lot about making sure. We we stay on our growth Investments and stay out in front of the selling models and capabilities, but
David Macgregor: 35 to 40% would be the incremental before Investments.
Speaker Change: Okay, good. And and, and I guess, so you're still seeing progress there, that gives you confidence in those numbers, that's great. Um, and I guess you, you'd also in the really discuss the savings from Kimball in Mexico, 24 cents for the first half, um, because with all the progress to date and the volume growth, how would you handicap the likelihood of upside to those numbers?
Speaker Change: I think I think Jeff signaled you know that there is a little bit of upside just based on us taking our our Outlook up. So we gave a range of 70 to 80 cents uh as we started to kick off those projects, I think it's fair to say we're leaning closer to the the 80 cents based on where we are and what's in flight. So uh, I would I would put us on the right side of that range and if it's not a little bit more,
Speaker Change: Okay, and then, just on the share, we purchase activity, 40 million in the quarter, kind of match the first quarter pace could, maybe should we be modeling kind of 150160 for the full year or was there something that you thought of as being maybe opportunistic in the first half? How should we be modeling that?
Speaker Change: Yeah I think the modeling is you know, how we're going to use our free cash flow. Uh but we reevaluate that David every quarter uh and that's going to be a quarter by quarter decision.
Speaker Change: Okay, perfect. Thank you very much.
Speaker Change: Thank you.
And your final question comes from Brian Gordon with water tower research.
Good morning, everyone. Uh, I also had some technical issues connecting, uh, earlier. So, uh, also, I'll apologize. Uh, if I, uh, if these questions have been asked before, um, I guess, my, my first question, uh, would be when you're talking with the large contract customers. How are they feeling about business conditions, and maybe more explicitly, how are they feeling about their capex decisions, going forward? Uh, and, you know, how would that differ, maybe from what you're seeing in the SMB side of the business?
Well, you know, I, I, I can't speak customer by customer on capex. What I can tell you though, is that I kind of said they're the mentality is, you know, we're, they're investing in. I use the term business as usual, which, you know, contextually means what we're seeing is they're they're moving out. Um, in our space they probably moved out in other, you know, other investment categories, depending on what business it it's been. But but on the, the in office and and the workflow and productivity
Speaker Change: they are viewing that as, you know,
Speaker Change: Business, as usual and we, they're making Investments. I think they're, you know, I think you use the term that, you know, the some people are coming off the sidelines if you will. And, and we don't see, we don't see a lot of hesitation there. Uh, most of these customers are in the game and wanting to move forward. And so, uh, we use the term, you know, kind of studying over the last couple years. Some customers were evaluating re-evaluating, and I think we're past that point now and people are deploying Capital to do to do projects to support, uh, their their in-office model, whatever it may be,
Speaker Change: Great. Thank you. Uh, second question uh, that I have uh today is is on the RVP side. Uh how how much of this is volume versus how much is pricing?
Speaker Change: Primarily.
primarily, uh,
The first half of the year it's probably 1/3 volume 2/3 price. Uh, but if and if you look at the full year, you'll see the volume kick in, uh, with more volume, you know, happen in the back half.
Speaker Change: Okay, great. Thank you very much.
Speaker Change: The Q&A session. I will now turn the conference back over to Mr. Lorinser, for closing remarks.
Lorinser: Appreciate everybody. Taking the time to join us today. Um, have a great day. Thanks so much.
Speaker Change: this concludes today's conference call, you may now disconnect