L.B. Foster Company

Welcome to the L.B. Foster Second Quarter 2021 Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-answer session. To ask a question during a session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Stephanie Listwalk, manager of investor relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to LB Foster's second quarter of 2021 earnings call. My name is Stephanie Listwalk, the company's investor relations manager. Our president and CEO, John Castle, and our Chief Financial Officer, Bill Tallman, will be presenting our second quarter operating results, market outlook, and business developments this morning. Bob Bauer, who recently stepped down as our CEO, and Jim Kempton, the company's corporate controller, are also joining us this morning. Bob will be making some opening comments, and then John will provide his perspective on the company's second quarter performance and will update you on significant business matters and market developments. Bill will then review the company's second quarter financial results. We will open the session up for questions at the conclusion of Bill's remarks. Today's slide presentation, along with our earnings release and financial disclosures, were posted on our website this morning and can be accessed on our investor relations page at lbfoster.com. Our comments this morning will follow the slides in the earnings presentation. Some statements we are making are forward-looking and represent our current view of markets and businesses today, including comments related to COVID-19. These forward-looking statements reflect our opinions only as of the date of this presentation, and we undertake no obligation to revise or publicly release the results of any revisions to these statements in light of new information, except as required by securities laws. For more detailed risks uncertainties, and assumptions relating to our forward-looking statements, please see the disclosures in our earnings release and presentation. We will also discuss non-GAAP financial metrics and encourage you to read our disclosures and reconciliation tables provided within today's earnings release and within our accompanying earnings presentation carefully as you consider these metrics. For the purpose of helping you understand the underlying performance of the company, we will be referring to adjusted EBITDA, adjusted net income, adjusted diluted EPS, net debt, and net leverage ratio during the presentation today. While we did not have any adjustments to EBITDA, net income, or diluted EPS during the second quarter of 2021, historic periods referred to in the presentation today have been adjusted. as reflected in the reconciliation tables included in the appendix to the earnings presentation. Additionally, in September of 2020, we announced the equity sale of our IOS Test and Inspection Services division. As a result of this divestiture, we have presented the Test and Inspection Services business as a discontinued operation in the second quarter financial statement, including within the earnings release and presentation, and have recast prior periods to reflect this change. The comments today will be focused on our results from continuing operations. So, with that, let me turn the call over to Bob for some opening remarks.

Thanks, Stephanie. Well, I have the pleasure of co-hosting the call this quarter for the last time as we announced my retirement last month, along with the appointment of John Castle as the company's next CEO, which took effect two weeks ago. As we noted in the press release when we announced the change, this appointment follows a well-planned and thorough succession planning process that the Board and I worked on for some time. And it turned out exactly as we hoped it would. I'm really pleased with the outcome because I'm leaving with a really good management team in place. And I know I can speak for the Board of Directors when I say that the company's development and succession planning process is regarded as one of the most important business processes and that we're all very pleased with how it's helping us develop the next generation of leaders across the entire company. John's been with the company for 18 years and over the course of that time has managed all of our factory operations and eventually managed all of our business groups before being appointed COO in 2019. He's very familiar with all areas of the company and at one time or another has interfaced with our key suppliers, business partners, and many of our customers. He doesn't really need my help as he takes on the added responsibility, but I'll be available to John whenever he needs me until the end of the year when I officially retire from the company. And until then, my goal is to help him and the management team in any way that I can. I know John's eager to meet those of you that he hasn't met already. And of course, we would be happy to schedule an introductory call with anyone that would like to do so. Just reach out to Stephanie if you'd like to do that. But before I hand it off to John for his comments on highlights of the second quarter, I just want to say it's been an honor and a privilege to serve as the company's CEO for nearly a decade. And I'll look forward in the future to rooting for the company's success from a shareholder point of view. So with that, I'm going to turn it over to John for his first earnings call.

Thanks, Bob. Good morning, everybody. I'm very excited about the future of the company and honored to be chosen to succeed you as CEO. We have a great team of people at L.B. Foster, and for 18 years I've been here, I've had the pleasure to work alongside many of them, witnessing firsthand the teamwork and dedication that has had such a positive impact on the company's performance. I'm particularly excited about the opportunities I see for growth and a more concentrated focus on directing capital towards our top priorities. in the most attractive markets we serve. Over the course of the last year, I've sat in many investor meetings and had a chance to meet some of you. In the coming weeks and months, I'm looking forward to meeting more shareholders and discussing our plans going forward. Before I turn the call over to Bill Tallman to cover details on second quarter results, I want to cover some of the highlights and add some context to the market outlook commentary we have provided. This is the time of year we expect to see increases in sales, and we're pleased with the 33% sequential volume improvement from Q1, exceeding the forecast we provided on last quarter's call. This turned out to be a 9% sales increase over Q2 of last year and includes several positive developments. Among them are an 18.5% increase in rail segment sales with solid growth from our core rail products, significant increases in friction management products, And increases in field service have been very anxious to see, particularly in Europe, where service work is finally ramping up after many months of delays due to COVID restrictions. In addition, the fabricated steel and precast concrete business each grew at more than 20% over prior year as construction project backlog moved through the operations and new orders continued to come in, keeping our backlog for those two businesses well above this time last year. The strength of these two infrastructure solutions product divisions is not easily seen because of the weakness that we still have in our coatings and measurement business, where the year-over-year sales decline is offsetting this growth and has led to the infrastructure solution segment sales being essentially flat year-over-year. The strength across most of our businesses' lines have helped us get more backlog into the hands of our customers, but the total company backlog only declined by 19 million during the quarter, finishing at a healthy $253 million, which is 12% above this time last year. A couple of other interesting notes about our backlog. First, our precast concrete business is sitting at near record levels, up 33% over prior year. And second, our coatings and measurement business has more than doubled the low levels we had in the November through February timeframe. This is one positive sign for the coatings and measurement business. However, volume remains very low as pipeline projects continue to be deferred and we remain cautious with our outlook for this business. Our balance sheet continues to be very strong, and despite the significant increase in sales this quarter, we were able to effectively manage our working capital, resulting in net debt only increasing nominally. The operating cash use was less than $1 million for the quarter, despite needing to fund the $38 million sales volume increase. Our teams continue to do a great job managing working capital, and this has helped us keep our net debt at $33 million. Setting aside the pipeline market, we are seeing new infrastructure projects being planned. Investment in transportation and general infrastructure projects are moving forward. Railroads continue investing in operational improvements, and recent spending bills in the U.S. are providing additional support for our served markets. Europe, and more specifically, the United Kingdom, where our business is concentrated, still has room for improvement. The U.K. continues to struggle with policies and reopening and continued spread of the virus. and government restrictions continue to keep us from operating at full capacity. That opportunity for improvement, coupled with the recent easing of certain restrictions in the UK, leads us to believe that there's a favorable outlook for rail operations in Europe for the remainder of 2021. But this view is subject to change based upon any resumption or imposition of pandemic-related measures across the markets we serve. On the infrastructure solution side of the company, the precast concrete and fabricated steel business units continue to experience favorable market trends, with several of our plants operating near capacity levels. We also saw a modest level of recovery in certain pockets of coatings and measurements, but we still have a long way to go to get back to the pre-pandemic levels in this business unit. I also want to mention that we're encountering some challenges with inflation. Largely in materials we source for bridge products, in certain areas, where pressure on wages is emerging. We have taken pricing actions to mitigate the impact and expect to take more, but it may be difficult to offset all the pressure in the back half of the year, which may drive some erosion of margins in certain parts of the business. Although we typically see seasonality in business in the first quarter and a sizable uptick in revenue from Q1 to Q2, we believe that the substantial increase from first quarter to second quarter this year also represented the continued recovery from the effects of the pandemic on most of the businesses. While the increase in sales translated into incremental gross profit in the real segment, the weaknesses in the midstream energy continue to drag on our earnings. On slide 8, you can see the year-over-year results for infrastructure solutions. In particular, I want to draw your attention to a continued impact that the very low volume on our coatings and measurement business is having on gross profit margins. Well, we are pleased with the sequential improvement in gross profit for this business. Operating at very low volume levels is having a significant impact on the year-over-year performance. In fact, the decline in gross profit margins for the infrastructure solution segment is entirely due to the coatings and measurement weakness. This erosion of gross profit despite substantial increases in revenue both year-over-year and sequentially in the second quarter for precast concrete products and the fabricated steel products businesses. The impact of codings and measurement cascades to our bottom line results for the most part. Whether you're looking at Q2 or year-to-date six-month results, our EBITDA decline year-over-year is primarily due to the codings and measurement performance. With that as an overview, I'd like to turn the call over to Bill and let him cover the financials in more detail. We can take any questions once he concludes his remarks.

Bill? Thanks, John, and good morning, everyone. I'll begin my review covering the second quarter results on slide 10 of our presentation. As John mentioned, we were anticipating a significant sequential increase in results, both from seasonality as well as further recovery from the pandemic. In line with those expectations, second quarter sales were $154.5 million, up $38.4 million, or 33% over the first quarter. Compared to last year, Q2 sales were up 13 million, or 9.2 percent. Despite the significant year-over-year increase in revenue, Q2 gross profit decreased 2 million, and the 16.9 percent gross profit margin was a 290 basis point decrease from last year's second quarter. This decrease was largely driven by the infrastructure solution segment, which I'll discuss in more detail shortly. Second quarter selling and administrative expenses increased year over year by $900,000, or 4.8%, to $19.8 million, with the increase primarily driven by higher professional fees. The higher professional fees were related to a comprehensive strategic review of the business completed during the second quarter under John's leadership. We'll be discussing the results of that work in future calls. Selling and administrative expenses as a percentage of sales decreased to 12.8% down 50 basis points from the prior year quarter. Second quarter net income from continuing operations was 2.9 million or 27 cents per diluted share compared to 7 million or 66 cents per diluted share last year. Adjusted net income from continuing operations for the quarter was also 2.9 million, or 27 cents per diluted share, compared to 6.5 million, or 61 cents per diluted share last year. Second quarter adjusted EBITDA totaled 8.3 million, a decrease of 4.6 million compared to last year, driven primarily by the decline in gross profit in the infrastructure solution segment, coupled with increases in selling and administrative expenses. I'll now cover our segment performance for the quarter reflected on slide number 11. Second quarter rail segment revenue increased 13.8 million year-over-year, with the increase primarily attributable to a significant increase in new rail deliveries and a substantial uptick in our European operations during the quarter, due to easing operating restrictions primarily in the UK. Infrastructure solutions revenue was down $900,000 with a decline wholly attributable to the coatings and measurement business, which continues to face a challenging economic environment in the midstream energy market due to excess pipeline capacity. Partially offsetting this decline was a substantial increase in revenue in both precast concrete and fabricated steel businesses. Revenues have increased in these businesses as demand has increased with greater activity levels among general infrastructure projects. It should be noted that the Boise, Idaho facility was fully operational in this year's second quarter. Last year, the facility was in its startup phase after relocation from Spokane, Washington. As a result, Second quarter revenues for this location more than doubled year over year. Rail segment gross profit increased 1.6 million year over year, driven by the strong sales volume across all of our rail business units. However, rail gross profit margin declined 130 basis points due to the significant revenue increase in our rail distribution business year over year. Infrastructure Solutions' gross profit declined $3.6 million from the prior year quarter, driven solely by the decline in revenues in the coatings and measurement business. Infrastructure Solutions' gross profit margin was down 520 basis points compared to last year's second quarter. Our results for the first half of 2021 are reflected on slide number 12. Year-to-date revenues were $270.6 million compared to $263.5 million last year, a $7.1 million increase, or 2.7%. Gross profit decreased $6.3 million from the prior year comparable period, and the 16.6% gross profit margin this year was a 290 basis point decrease from last year. I'll provide a little more color on the revenue and gross profit performance by segment in a moment. Selling and administrative expenses in the first half totaled $37.8 million, a $1.4 million decline, or 3.6%, with the decline primarily driven by a decrease in personnel-related costs, including travel-related expenses. Selling and administrative expenses as a percentage of net sales in the first half of 2021 decreased to 14%, down 90 basis points from last year's comparable period. Year-to-date net income from continuing operations was $1.6 million, or 15 cents per diluted share, compared to $7 million, or 66 cents per diluted share last year. Adjusted EBITDA totaled $11.1 million for the first half of 2021, a decrease of $6.6 million compared to the prior year period, driven primarily by the decline in gross profit in the infrastructure solution segment. Cash flows from operations were $6.8 million year-to-date compared to $8.1 million year-to-date last year. while capital expenditures declined to $2.2 million versus $5.7 million last year. Capital spending this year primarily relates to the expansion of our precast concrete business in Texas and expenditures for our ongoing SAP implementation as we continue to progress towards retiring two legacy ERP systems. We're still estimating total capital expenditures for 2021 in the $6 to $8 million range, highlighting our capital light business model. Circling back to the segment performance for the first half of 2021 on slide number 13, year-to-date rail sales increased 9.9 million, or 6.8%, with the sales increase primarily driven by more robust demand and favorable operating conditions in our primary rail markets this year. Year-to-date infrastructure solution sales decreased by 2.7 million, or 2.3 percent, with a decline attributable to the coatings and measurement business, with a year-over-year sales decline of 24.4 million. Both fabricated steel and precast concrete businesses had meaningful sales increases, totaling 16.0 million and 5.7 million, respectively. Rail segment gross profit increased by $2 million, or 7.1%, with the increase primarily driven by improved volumes in friction management and contract services product categories. Segment gross profit margin of 19% was unchanged year over year. Infrastructure solutions gross profit decreased by $8.2 million, or 34.6%. with a decrease primarily attributable to the decrease in sales volume in the coatings and measurement business, which accounted for the overall segment gross profit decline. This unit was also the primary driver of the 670 basis point gross profit margin decline. Turning to liquidity in our credit metrics on slide number 14, Total available funding capacity, which is defined as our available capacity under our credit facility plus our cash, was $81.6 million at quarter end, up from both the beginning of 2021 and June 30th of last year. Net debt was $33.1 million on June 30th, 2021, compared to $48.2 million on June 30th of 2020, a reduction of $15 million over the last 12 months. Our adjusted net leverage ratio for the trailing 12-month period was 1.3 as of June 30th, 2021. While our debt balance was up by $1.3 million during the quarter, we were very pleased that we were able to effectively manage our working capital and minimize the draw on our credit facility given the 33 percent sequential increase in revenue. Our working capital as a percentage of sales was 17.7 percent at quarter end versus 19.9 percent in last year's comparable period. Slide 15 provides some perspective on our leverage performance over time. Over the last several years, we've strengthened our balance sheet and our overall financial flexibility. These improvements coupled with our demonstrated ability to generate significant free cash flow positions us well to take advantage of the improving market conditions and business opportunities. We're anticipating further debt reduction during the second half of 2021 with the assumption that we'll continue to see a reasonable economic recovery with no significant restrictions related to the pandemic and continuing improvement in market conditions. We're still anticipating approximately $9 million in income tax refunds this year, with 500,000 received in the first half. We expect to receive 5.3 million in refunds in the third quarter, with the remainder to be received in the fourth quarter. However, with delays in IRS processing times, there is some uncertainty on the timing of the refunds expected. Assuming no significant delays in these refunds, Combined with the free cash flow that we typically generate, we should continue to drive down debt through the end of the year. We continue to assess opportunities for select bolt-on acquisitions in the rail technologies and precast concrete space. While it's unlikely we'll complete any significant acquisitions this year, We anticipate M&A activity will increase next year, assuming actionable, attractive targets aligned with our focused business platform strategy are identified. Slide 16 provides a breakdown of orders and revenue by segment over the last five quarters. In the second quarter, total orders were 138.6 million, compared to 133.9 million last year, with the increase driven by the infrastructure solution segment. Order activity was also up on a sequential basis, with new orders increasing by 2.9 million in the second quarter. Total orders in the second quarter were the highest level achieved since Q4 of 2019. Our book-to-bill ratios continue to trend favorably, with a consolidated book-to-bill ratio of 1.07 for the trailing 12-month period. Improvement in infrastructure solutions order activity in the second quarter was realized across all business units, including coatings and measurement, which finally saw some improvement in order activity both sequentially as well as year-over-year. However, I would caution that the activity was concentrated in select pockets of this business and at lower volumes and margins relative to historical performance. I'd also like to call your attention to the graph on the lower left-hand side where you can see the revenue and order trends for the rail segment. You'll note that order activity is largely in line with the average quarterly order volume over the last five quarters. But this quarter's significant increase in revenue stands out from the prior quarters. This is a primary driver of the decline in backlog we experienced in Q2, which is reflected on slide number 17. Referring to slide number 17, you'll note that the rail segment backlog decreased as compared to June 30th of 2020 and December 31st of 2020, both as a result of the significant increase in revenues during the second quarter. As we noted last quarter, we had been experiencing customer delays on certain projects in our backlog. Some of those projects finally moved forward and the pace of backlog conversion improved. I'd also note that the rail backlog remains above pre-pandemic levels, so it continues to be very healthy. Infrastructure backlog improved modestly during the quarter and remains robust. And as mentioned earlier, we saw an improvement in codings and measurement backlog, which more than doubled since December. The consolidated backlog stood at $253.2 million at the end of the second quarter, an increase of $28 million, or 12.4%, compared to a year ago. and $5 million, or 2%, during the first half of 2021. I'll conclude my comments with the market outlook summarized on slide number 18. Based on our strong backlog, less restrictive operating conditions, and stable to improving outlooks for our key end markets overall, we feel very well positioned for the second half of the year. While certain businesses focused on midstream energy market have shown some modest improvements, they are expected to remain relatively depressed for at least the remainder of the year. That being said, a continuation of the diminishing impact of the pandemic on most of our end markets should be favorable for us in the second half of the year. We are anticipating that precast concrete and fabricated steel businesses will continue to benefit from the current and anticipated infrastructure investment trends. And we are also optimistic about the outlook for our rail operations in the UK for the remainder of 2021, assuming no significant restrictions to operating conditions. We will be vigilant in actions designed to mitigate the impact of raw material inflation and supply chain disruptions where possible. However, we may experience some pockets of disruption and cost inflation, which could impact results in the second half. We continue to expect the benefit from an infrastructure spending bill if approved in the U.S. We typically see an uplift from such programs as they often direct spending towards the transportation, rail, and general infrastructure markets we serve. However, with the delays in Washington, the benefits would likely not be realized until after 2021. Finally, the outlook for our cash flow this year continues to remain strong. We're expecting significant tax refunds yet to come continued working capital discipline, and modest capital spending needs in line with our expectations, all of which bodes well for continued strong cash generation. So, in summary, we're pleased with our performance in 2021 thus far and excited about the opportunities for further improvement in our results through the balance of the year and beyond. Thank you for your attention. And I'll now turn it back over to the moderator for the question and answer session.

As a reminder, to ask a question, you will need to press star 1 on your telephone. And to withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Alex Regal from B. Riley. You may begin.

Good morning, gentlemen. Thank you for taking my question.

Good morning, Alex.

A couple quick questions here. You mentioned that your precast concrete business was near capacity. Do you have any plans to expand capacity?

Alex, thanks for the question. John Castle here. We're continuing to look at those efforts. In fact, what we're doing is trying to get off our existing properties and set up some satellite facilities right now moving product into better geographic spaces for us.

Yeah, and Alex, I'd add to that. You know, we're currently in the process of investing in our facility down in Texas. And, you know, we're also, when you're looking at the operations, making sure that we've got the labor in place to support the volume that we've got. So we did have some minor disruption in the quarter. related to labor in the precast space. The activity in that business is very robust, and we're proactively managing that labor force to make sure that we can maximize the output.

When we think about the bigger picture as it relates to the second half of the year, and in particular as it relates to gross margin, you mentioned that there are some cost inflation that won't be fully offset by price increases. Are you suggesting that we should think about sort of gross margins comparable to Q levels in the second half of the year or slightly down?

I wouldn't say slightly down. That's not what we're seeing at the moment. I think it's appropriate to say that the current run rate in terms of gross margins, the single biggest driver that we see impacting overall gross margins is the weakness in the coatings and measurement business. We continue to highlight that as a key driver of our performance. And we don't really go into disclosing future gross profit, but we would expect to see any challenges on the inflation front to be offset by improvements that we see in other areas of the business, particularly the strength in the precast business, as well as improvements that we continue to see coming out of Europe.

Sure. And then turning over to the Cross London project, I believe you were going to add back a number of your team members in the month of June. Are those team members, are you back to 100% yet on that project? And if not, when might you be?

Yeah, Alex, we're about 75% right now. So that will continue through Q3 to get up to 100%. But it's steadily improving and increasing by the day right now.

Excellent. Thank you. I'll get back to you.

Thanks, Alex.

And once again, that's star 1 for questions, star 1. Our next question comes from Chris Sakai from Singular Research. You may begin.

Hi, good morning. Good morning, Chris. Just an overall question regarding the Delta variant. Are you seeing any headwinds there?

I wouldn't say specifically from a LB Foster operational point of view. I think just as the General market is we're watching the developments very closely. Uh, we, we are not having any operational impacts related to that. And I think, uh, you know, as many industries are, are, um, you know, figuring out how to navigate it, we're, we're watching its impact on the markets that we serve as well as potentially any potential impact on the company. I will say that we've been able to manage the impact of the pandemic pretty successfully over the last 12 to 18 months, and we feel confident in our ability to continue to manage it going forward.

Okay, great. And then on the coatings and measurement backlog increase, what's driving that, and do you see that increasing in the future?

Yeah, I would say that it's centered in certain parts of the codings and measurement business, more around the measurement side. And we've saw some nice orders come in and a little bit of an uptick there. In terms of it continuing, that's not something that we're currently anticipating any significant improvement in. I would say that the pipeline infrastructure Situation in the U.S. continues to be a headwind, and we're looking for any opportunities for improvement there, but at the moment, we're not seeing them.

Okay, great. And to go with coatings and measurements, would you ever consider divesting that business? And if so, when and what would it take?

Well, we certainly wouldn't divest it now. We think the business has a promising upside. There's, again, certain parts of the business that continue to be attractive, and we're also looking for opportunities to diversify the markets in which we participate. So I guess at the moment, we're really focused on improving the operational performance at the current level of the market demand and looking for the options that we have to expand the markets we participate in.

Okay, great. Thanks.

Thank you. Our next question will come from John Bear from Ascend Wealth Advisors. You may begin.

Thank you for taking my call and questions. And Bob, happy trails to you in the months ahead. Best wishes for a happy retirement. You did address the last questioner there on the coatings and measurement. I'm just wondering, given the headwinds with the energy markets, what other areas can you expand into? Water infrastructure, for example, obviously a huge problem in the southwestern U.S. and growing other areas. Is that something you're focused on?

John Castle here. Thanks for the question. I agree with the best wishes to Bob. He's one of the reasons that we continue to look at our portfolio. To kind of give you a broad brush, we've taken a deep dive in looking at the return on capital that we have and their ability to drive value and profit improvement across all of our businesses today. And, of course, energy is one of them that really jumps off the page. So on the Chemtech side, the measurement side, we absolutely have started to pivot. and reshape ourselves and much more in the energy, moving off energy into the water, water transmission, water metering business. That is also the case in our precast business. So instead of just modular buildings, we're also starting to move water through our concrete products that we're building. So we're always looking at opportunities moving into different spaces, different geographies, and water moving off energy is one of those we're doing today.

Is the precast, do you do conduit type products in? Conduit? Right, right. Yeah, the large diameter conduit pipeline.

We're in the manholes of moving water into the septic or sewer system type business today.

And then another question, given the improved cash flow and expected cash coming in on tax refunds and so forth. Any consideration or thought about either share buybacks or a possible modest dividend implementation, you know, maybe not necessarily coming quarter by year end, but is that something that you'd consider doing?

Yeah, John, this is Bill. We have pretty active dialogues in this area related to, you know, capital allocation and the overall capital structure. And as we mentioned on the call, we've completed a pretty significant strategic review of the business that we'll be sharing more information on in the coming quarters. And as part of that, we're looking at the capital structure of the business and given the cash that we expect to generate through the balance of the year and the different needs that we see in the future in alignment with that strategic roadmap, We'll be looking at capital structure and share buybacks and dividends could be a component of that overall implementation plan.

Very good. One last question is regarding the M&A landscape. Are there particular areas of the business that you're more focused on in the M&A, possible M&A or is it sort of more of an opportunistic, whatever comes along that fits the picture overall?

Really the first part of your statement. We really are honing in on what's core and non-core to the Elby Foster Company. And so acquisitions, be it bolt-ons or nice little tuck-ins, are in the rail space as well as the infrastructure side, and namely the precast concrete side of the business there.

Yeah, one of the things I'd like to also highlight there, John, is that we're looking specifically at the technology side of the rail space. So when you think about the different solutions that we offer to our customers when it comes to operating transit and freight rail systems more efficiently, more economical, and more environmentally friendly. Those are the technologies that we're really focused on when we're thinking about investments or acquisitions in the rail space. And it also includes the potential for acquisitions that may be overseas as we look to opportunities that exist outside the U.S.

Very good. Good luck third quarter and going forward. Appreciate your taking my questions.

Thanks for your interest. Thanks, John.

And once again, that's one for any questions. One moment for questions. And I'm currently showing no further questions in the queue. I'll turn it over to John Castle for any closing remarks.

Thank you, Victor. Again, I'd like to thank Bob Bauer for his nine and a half years with the company, the support and dedication, commitment to myself as well as the entire management team. You will be missed, and we wish you all the best in the next chapter of your life.

Thank you very much, John. Thank you to all the shareholders that have supported us over the years. It's been a great pleasure dealing with everybody out there.

And thanks for all of you for joining us. As I mentioned earlier in my comments, I'm very excited about the opportunity. I thank the directors and Bob for their support. And we're looking for shaping up a Q3 and getting back to you with the results of that in the coming months. So take care, be safe, and we'll talk to you soon. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.