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spk_0: hello and welcome to the rbc bearings human on fiscal year twenty twenty three earning conference call at this time octave formulas and only mode a question and answer session will follow the formal presentation if anyone should require operator assistance please press start zero on your telephone keypad as a reminder this conferences be recorded it's my pleasure to turn the whole over the josh carol and the through relations pretty go ahead
spk_1: the operator good afternoon and thank you for joining us for rpc parents fiscal twenty twenty three first quarter earnings carpets go with me on the cold today is doctor michael j heart yet chairman president she began executive option daniel a barrage around director vice president and chief operating officer roberts open ice president and chief financial officer before beginning today call what remind you that some of the statements made today before it looking at are made under the pride security litigation against reform act of ninety nine effect axe results may differ materially from those for jacket or implied due to a variety of factors we refer you to rbc reef recent filings with the fcc for a more detailed discussion at the risk that could impact the company future operating results in financial condition the factors are also described in greater detail in the press release and on the company's website in addition the wrecking philly get in on get financial information included as part of the relief and is day along the company's website it that are melting the called a doctor harper
spk_2: oh my gosh and good morning all after up by by saying that that sales for the first quarter of fiscal twenty three were three hundred and fifty four point one million versus one fifty six point two million for the same period last year
spk_3: increase of one hundred and twenty six percent
spk_2: the the first quarter of twenty three sales of industrial products represented seventy two percent net sales aerospace products twenty eight percent gross margin for the quarter hundred and forty one point two million nine point nine percent of net sales compared to sixty three point eight million or forty point eight percent to the same period last year i just that operating income or sixty eight point three million nineteen point three percent of net sales compared to last year of twenty nine point nine million and nineteen point one percent respectively yeah pps was a gallon nine and new just a dps came here to dollars seventy nine and rob lowe explain this in more detail later in the car the core performance was very much in compliance with our expectations right in the middle of the fairway a little lower on revenues than our guidance as result that losing six to ten million dollars from the shutdown of are saying i tried china plant and some unusual missteps by a forward great manager adjusted even tougher was one hundred and hundred point seven million twenty eight point four percent of that failed compared to forty five point three million twenty nine percent net sales for the same period last year during the period we paid down debt by another one hundred and twenty five million and are free cash flow was fifty one point two million dollars we entered the first quarter with a strong industrial sector or components including industrial distribution food aggregate grain mining semiconductor machinery marine wind energy were strong and the outlook here is more to same for the next quarter
spk_3: bales of industrial products
spk_1: we're up by twenty two hundred and eighty six point eight percent from last year
spk_2: rbc organic growth for industrial products was up seventeen point three percent turning out to aerospace and defense the first quarter of the school twenty three net sales were up ten percent the revival in production at boeing is a welcome contributor as a group plans to increase rates on the next to over five hundred and six hundred ships and twenty three and twenty four respectively from three hundred and thirty today an airboat airbus pitcher a new pace of seven hundred and eight hundred ships for the a three twenty series over the same period today there are they ship them take a plan and producing six hundred ships this brings a new and welcome post covered volume to our factories many of which were designed and capitalized over the past half dozen years to efficiently produce products for these important aircraft mother as many of you already know rbc bearings was honored to receive the supply of the year award from boeing at their to can supply chain conference in los angeles we have been a supplier to boeing since the nineteen forties probably earlier and participate in every play model currently produced and a great many defense products oh and commercial aircraft is supported today by over eleven thousand suppliers released production of it going seven eighty seven model aircraft is an important milestone of and forth several ever plants produce many unique products with the plane and our content is substantial obviously we applauding the resumption of production of this aircraft and are busy now redoing clan capacity to support the increase where you think friendships per month in twenty four months out as a planning groggy a word and our defense business the outlook here it's positive for new designs hardware and services he designed for the it's munitions aircraft and submarines with expanded mission profiles it's very active right now in it's it's a pretty exciting place to work our business supporting the construction of virginia in columbia ships continues to expand and we plan to add i'm at our manufacturing and test facilities over the next twenty four months to support these requirements for the next at least a dozen years more of this this aspect and future golf finally given the deployment of us made equipment to europe in the past month there's been a strong an issue of under way here for replenishment of you and for munitions as you can imagine
spk_4: we will be impacted by that
spk_2: regarding the second quarter we're expecting failed to be between three hundred and fifty five and three hundred sixty minutes about million dollars i'm the the are here in that range is all about supply chain and now i'll turn the call over to rob from more detail on the financial performance
spk_5: thank you mike
spk_3: that's teenage for the first quarter of fiscal twenty twenty three was fifty five point eight million compared to thirty one point two million for the same period last year as a percentage of net sales as she was fifteen point eight percent for the first quarter of fiscal twenty twenty three compared to twenty percent for the same period last year
spk_1: other operating expenses for the first quarter of fiscal twenty twenty three total twenty point nine million compared to three point two million for the same period last year
spk_3: for the first quarter of fiscal twenty twenty three other operating expenses included seventeen point three million of amortization of intangible assets
spk_6: three point eight million costs associated with the dodge acquisition and your point you might have your income
spk_3: for the first quarter of fiscal twenty twenty two other operating expenses consisted primarily of two point six million of amortization of intangible assets and zero point six million of restructuring cost and other items operating income which sixty four point five million for the first quarter of fiscal twenty twenty three compared operating income of twenty nine point three million for the same period and she's got twenty twenty two on an adjusted basis operating income would have been sixty point three million for the first quarter of fiscal twenty twenty three compared to adjusted operating income of twenty nine point nine million for the first quarter
spk_6: earth is called twenty twenty two
spk_3: interest expense for the first quarter of fiscal twenty twenty three which fifteen point eight million including two point three million associated with the amortization of different financing fees
spk_6: this compares interest of zero point three million for the same period last year the year over year increase reflects edition of the term motility and a few notes utilize your dodge acquisition during fiscal twenty twenty two the first quarter of fiscal twenty twenty three the company reported net income of thirty seven point four million compared to net income of twenty four million to the same period last year
spk_3: on an adjusted net income was forty point two million for the first quarter of fiscal twenty twenty three compared to twenty four point three million for the same period last year net income available to common stock holders for the first quarter of fiscal twenty twenty three was thirty one point seven million compared to net income for twenty of twenty four million for the same period last year
spk_5: on an adjusted basis net income available to common stock holders for the first quarter of fiscal twenty twenty three was thirty four point five million compared to twenty four point three million for the same period last year
spk_3: that looted earnings per share with a dollar nine for the first quarter of fiscal twenty twenty three compared to ninety five cents for the same period last year
spk_6: on an adjusted basis that earnings per share for the first quarter was a dollar nineteen compared to adjusted elearning spurs share of ninety six cents for the same period last year starting this quarter future releases the reflecting newly defined adjusted earnings per share greek and months it's become clear to everyone to been all over the place and how they're considering earnings per share and we listen to feedback from our shareholders and we believe this new metric or best reflect the ongoing performance of our business
spk_3: clear in future periods we will no longer report cash or earnings per share or historical adjusted earnings per share which only considered foreign exchange discreet and other unusual tax matters and other non recurring are unusual items
spk_2: the new adjusted earnings per share will reflect adjustments for one time or unusual items foreign exchange the street and other you unusual tax matters
spk_3: amortization of em in a related intangible assets amortization of stock based compensation and amortization of deferred financing fees
spk_2: but the first for fiscal twenty twenty three his new adjusted earnings per share with a dollar seventy nine compared to a dollar twenty two per to the same period last year
spk_6: it's year over year improvement reflects the significant benefits provided by to dodge acquisition please refer to our press release wow this morning for the for for calculation
spk_5: burning a cash flow the company generated fifty nine million in cash from operating activities in the first quarter of fiscal twenty twenty three compared to fifty three point three million for the same period last year
spk_3: we made a strategic investment in our inventory during the current period which impact a dick operating cash generation capital expenditures were seven point nine million in the first quarter of fiscal twenty twenty three compared to three point four million for the same period last year
spk_6: you pay down one hundred and twenty five million on the term loan during the period leaving total debt of one point five six five billion as of the end of the period and cash on hand with one hundred and nineteen point six million
spk_2: finally i wanted to offer some brief details on the restatement of our ten k previously filed in may
spk_3: it's restatement arose out of the companies reexamination of the timing of the recognition of stock based compensation expenses associated with certain executive awards under us gap the recognition of compensation expense associated with these awards should have been accelerated you to certain clauses in the agreements associated with voluntary termination the result of these adjustments expense that would have previously been recorded and fiscal twenty twenty three in future years has been recorded in previous periods the impact and physical twenty twenty two with an additional nine million of pretext compensation expense the impact and fiscal twenty twenty one was a reduction in expense of three point two million and new guy can physical twenty twenty with an additional seven point four million a pretext computation expense
spk_6: importantly these adjustments relate to a non noncash expense item and impact the timing of the recognition rather than the overall amount of the compensation expense there was no impact or historical nine gap adjusted ebitda as we traditionally exclude stock based compensation from that measured
spk_2: as a result of these adjustments the total expense recognize and physical twenty twenty three is expected to be less than previously anticipated including a reduction of more than five million for the total for the rest of the fiscal year
spk_3: i would now like to turn the call back to the operator for the question and answer session
spk_0: thank you now be conducting your question and answer session if you'd like to be placed in the question to please press star one hundred telephone keypad a confirmation tone will indicate your line is in the question que you may press start to if he'd like to move your question from the queue for participants using speaker equipment to be be necessary to pick up your here and before pressing star one one moment please what we pull for question or press question today is coming from christina leg from organ failure line is now live
spk_7: hey good morning i guys running for i guess afternoon sorry
spk_8: i'm so so first congratulations on winning the boeing supply of the year award presumably boeing would want more of a supply chain to execute like you guys and to what degree that this recognition potentially unlock expansion of scope of work
spk_2: well we're you know where we're waiting to see how that the other play golf course being a bit down we were you know work were clearly sort of in the winner's circle in terms of new work coming from boeing and in in so we're we're we're we're working through bids on on other products on boeing years i guess it's well known that they have a lot of supply chain issues and suppliers that didn't make it through the code period for financial reasons or or or or on employment reasons or shortage of labor's in the and so they're looking to move to move work and and i think we're probably in a very good position to
spk_3: to achieve some a network
spk_2: it's too early to tell
spk_3: i'm look at look the ultimate
spk_2: benefit is going to be
spk_9: but i like that i like am we are
spk_8: that that's great and if i could do on a fall on caution on on dodge what when you look at rbc bearing historically you guys have performed and been very defensive across different play cause i mean looking back in the past ten years gross margins didn't get below thirty five percent and even going back to you know data posts i pl i mean gross margins never dipped below thirty percent given the unfair and macro backdrop are facing today can you provide more color and how dodge arm changes your the defense ability of your portfolio and how you'd expect them to perform in an industrial recession should we see one i mean with the sixty percent recurring revenue a dodge is it more or less defensible on
spk_10: top and bottom line vs rbc bearing on a legacy basis
spk_2: yeah well you know you're not paying roughly eighty percent i'm rounding know of of doctors revenues are are are coming from and screw distributors and those industrial distributors pippi talk to any one of those industrial distributors
spk_3: they will tell you that fifty percent of their revenue is is what they call break fix revenue so there's something broken in one of the plants be servers and so very
spk_2: the supply the
spk_3: replacement part to add to that plan and so a heavy there's a heavy concentration of dodgers business is associated workers break fix component of the us infrastructure and that infrastructures aggregate it's grain nerds
spk_2: it's good what they call your unit handling and and so it it's it's very integrated into and to the us gdp so i think that gosh when you look at the guards revenues over over that same period there are lower beta revenues then rbc speakers rbc years his more direct oh yeah business so we might be supplying somebody like a caterpillar and you know depending upon what systems your your your supplying a chemical you can be up a lot you can be down a lot and dodged
spk_8: doesn't have that variability in their makeup
spk_3: that's great and an hour with bluff that variability in the top line presumably margins also would be more stable is that a fair assessment
spk_8: yeah i think it's a curse
spk_0: great i'm i'll pass it onto the next question thank you
spk_11: they can next question is coming from the border from keybank capital market your line is now live thanks
spk_3: rob thanks for the explanation on the new a just a dps i just to make sure i understand when you report to q will see a gap result and then the adjusted number the you will focus people to be comparable to the dollar seventy nine that you reference for this quarter that's exactly right does will be the only two to overflow
spk_12: like sorry next quarter do you expect consensus the to reflect more of that one seventy nine basis that would be will we would expect got it that's perfect i'm an asset industrial question maybe in a slightly different way
spk_2: when you think about the combined industrial business and how that will grow relative to the cycle enough just to to be more quantitative if if i pee or industrial production is plus five percent what would you expect your business to be up and then same question if ip were to be down five percent
spk_13: well i i i can i can tell you if ip were up five percent the am
spk_2: we would have difficulty
spk_3: supporting all the
spk_1: the order book your your book with would
spk_2: could be extremely demanding actually when it's when it's about three percent it's a it's very demanding five five percent know it's probably you know mergers with a purchase manager index of something like fifty five to fifty eight the new those that do those kind of track each other and in in those in those neighborhoods where is busy or is it can get
spk_12: oh when it goes negative five percent
spk_2: you're either i really don't want to think about good well i mean you you just went through it and in the pandemic right in and ip is running about five percent right now so it is the order book hard to keep up with as it stands today
spk_3: yeah okay notwithstanding the the order book is is it still outpacing our ability to deliver and that that mainly the supply chain thing we certainly have that the eternal playing capacity but we are we are having
spk_2: pickups
spk_14: particular dutch that not on the rbc side around the dutch side
spk_2: with supply chain matters and and that way the when we do it you know over the revenue guidance
spk_3: there's an incredible amount of work that goes into the calculus associated with you know getting to lose revenue numbers and i'm and so legally try to make them conservative
spk_2: i'm air but realistic and and so you know if there's is it there's some supply chain breakthroughs than know be a you know i'm a very pleasant you know revenue to you know surprised at the end of the quarter the supply chain problem is getting better
spk_3: and sweet and we bring on dec basically additional suppliers
spk_2: and in in in some cases we we convert somebody rb feet classic plant manufacturing to to to relieve some of the shortages that we have
spk_12: so on and that's it yeah that's working better as yours you as you introduce it and and work it and it matures
spk_2: i'm so i think i'd i'd but i do think it's gonna be with us for the rest this year
spk_15: gap for the revenue guide for to q how much did you factor in as an offset for supply chain
spk_11: well i know what the number is but i don't want to tell you okay
spk_16: it is it less than you back to then for your want you got no to thing
spk_11: okay
spk_0: and he expected revenue contribution will be up sequentially
spk_1: yeah i do got it i think our are passing along they can add question is coming from south weber from wells fargo security provided alive
spk_2: good afternoon case on i want to have the markings were actually better than what we're looking for both on a gross margin and either i'm arguing i'm just trying a understand yeah maybe where your actual a place cost perspectives on would you expect price cost to be getting better you know through the balance of the year are you on the positive side of that are just you know any framework he can give it's for real what you saw in the first quarter relative to expectations for the rest of the year thanks
spk_17: yeah well at you but i think i think price cost is is going to get better arm
spk_2: particularly as it as it relates to supply chain on have hepatitis cause the sales and rough numbers our our supply chain despite
spk_3: them and filters transportation expense in there
spk_2: i'm in in in the past quarter there's no airfreight from asia they're on their that that gone away and across the diesel there's seems to be
spk_3: moderating
spk_18: so the transportation expenses should come down and we see the prices are some of the basic commodities you know backing off
spk_3: so you're that that's telling us that damn
spk_2: that that girl that cost pressure could be relieved
spk_1: as time goes on ah we didn't see it relief at see any relief in the in the year first quarter
spk_19: and we're not planning for see any material relief in the second caller
spk_2: okay would you would you keep the price increase dispatcher
spk_3: but your push it through it even in a lower input costs
spk_2: environment
spk_1: well i mean with after you know evaluated product byproduct and account by account and and see where it all comes out you know it sir it's getting better are question it the answer
spk_2: we wouldn't we wouldn't but in some cases and and weekly probably back on and other cases and the and so it it's very tactical yeah okay let's just let for questioning on a eat mention out for a couple quarters adding pass the day on the arrows die i think i heard you can a reference adding some capacity on the defense side as well you just
spk_3: i'm putting timing around that it sounds like defense maybe a little bit further out they went when would you expect this extra capacity to start to help you
spk_2: well on the arrow tied we you know we don't have the added capacity i yell side in terms of cap x and that sort of thinkers because we we were you know at a gallop there before the end of a kid and we want to get sort of or look like we're going to get back into those clothes so it really adding a for adding manpower as the n and that you know that sir the they've got that easy to do but it's doable and so you have to go out and the can be and be creative about where you look for people can are you attract come to your company so on so that that and the aerospace and the industrial side that kind of answer to that question and the defense idea it's a little further out we have proposals in into
spk_1: into the am some of the defense agencies with regard to what we'd like to add color
spk_0: are we what we think should be added for
spk_1: hum
spk_20: capacity and
spk_2: they've been favorably received and it looks like cool will receive from funding that okay thank you get rich it thank you as a reminder that star one to be place in the question you or your question is coming from sam's to suffer from true security line and alive hey guys my boy that utopian i think you touch on it's a little bit regarding pricing but is there any particular aspect of supply chain mother be specific the departure rob bills were you get him out and cretin be times or maybe some pressure there and then kind of building often that again briefly touched on prior but regarding labour are you guys find any the he'll need they're bringing on to pass on that front one under labour side weekly we definitely will will have to add labor
spk_3: you know this this build up of the am seven eighty seven ah
spk_2: production volume is pretty significant for servers
spk_20: yeah there's no way that we're gonna be able to do that without adding labor
spk_2: and the but it's it's manageable manner amount of labor requirement so it's it from the second party your question was this material yeah just if you got your film any particular arm supply to pressure whether weather be we times or just pressure the weather's any particular parts raw materials we met to feeling that oh yeah on a raw materials of course it's titanium and you know titanium is always an issue and depending printing and lawyer who your some years you're working for arm you know it
spk_21: it down it can be it can be a challenge or can be very costly and
spk_2: and so there's there's various strategies that we can employ there and do have employed by
spk_21: i'm we can we can buy if we're supplying boeing we can buy titanium
spk_2: on a note from to suppliers at a negotiated price boeing head had negotiated with that supplier for people like us
spk_22: and i'm
spk_2: and encounters is absolutely no issue at all with the availability of again he got that covered
spk_4: so i will right
spk_2: l with regard to some steel no feminine some of the steals are pretty
spk_23: exotic i'm pretty sophisticated and the lead times and some of this feels are you know how a year fifty weeks
spk_0: some of it
spk_24: important steals are made by people who went bankrupt
spk_25: and ah
spk_26: are barely staying alive and them
spk_1: and so some of that big planemakers and their subcontractors larger subcontractors are doing some extraordinary things to keep those people alive you know that it's always a concern
spk_5: rated you
spk_6: if they can have question is coming from go retrieve a woman sachs your line of my life hi good afternoon
spk_27: hi jojo
spk_3: yeah a few quick answer me a eight think i recall the live lot hanging chad aid on we were we were anticipating the first half both margin to be about a hundred basis points higher than were you exit ed pound pit bull twenty two it looks like that started a year ago the a little bit gonna what a bit slower than expected or or below the for que number he got still look back you know the first half pm to be about a hundred basis points higher
spk_26: guiding them the way we're looking at it
spk_28: over the course of year we should thirteen an improvement
spk_26: lumpy during the year i would expect a second quarter gross margins to look quite similar to the first
spk_1: and as still get or strongest course que for
spk_3: oh okay that's helpful and then i guess and i maybe they can of part that i know the you either have a lot of an international spy you're so he probably like watch some affected by attack than been a lot of other company that we cover but i'm just curious mpp an industrial organic growth number for this quarter i don't i didn't hear you guys give it earlier mean or calculating for like seventeen percent that is that a fuck come through in the quarter of you go point three
spk_6: and that's mainly okay
spk_3: okay great and then i'd i'd actually be curious to see here you know any trend that you're seeing in the business as you progress through the quarter obviously seventeen percent to the a the very healthy number
spk_1: the lot of concerns out there around ya industrial i can be flowing that any any thoughts around what you're saying that business of any trend that you thought into a quarter
spk_3: i think we have a few really good key markets that are doing well construction a mining semi on oil and gas and that same time i think we're we're starting to see some activity our synergy on on cross training dodgers sales team and rbc sales team and are so what is seventeen point three percent growth rate on dust to mainly in the us i mean and world will more than double
spk_29: if any of our competitors are not go for your beer with a quarter
spk_0: we're we're going up against
spk_30: across a depict the big markets dagger center
spk_31: construction of mindset be they kept caterpillars come up zoos or the world
spk_30: oil and gas semiconductor journal industrial distribution and just the without dodge or general industrial distribution business where it was up eleven point six percent and organically and are we in business of sept twenty one percent
spk_6: can i help or thank you
spk_5: they can next question is come from run abstain from bank of america your line of july
spk_30: yeah hate my good good afternoon good morning the couple quick
spk_6: financial questions so it is the plan to the still pay down three hundred million a debt this year
spk_32: the plan is to accomplish three hundred million a year four hundred kilos
spk_0: the acquisition that's right
spk_12: okay great super super and then you don't open the kind of came out really to be done to address the the material witness in the financial control
spk_6: get blurred taking internally we are reevaluating process in place regarding employment contracts and the relate to competition and will be adding additional controls regarding illegal accounting rules you had prior to the time of grant gotcha gotcha okay thank you
spk_12: they can or question is a follow up from the border from keybank capital market provided lot
spk_3: hey thanks guys
spk_33: was there anything outside of shanghai and supply chain the that impacted one key revenue well i was there any effect impact
spk_12: very minimal action impact during the during the period authors consider august
spk_34: european reached moved to a rich
spk_2: notes that my get on with your drivers
spk_35: okay
spk_3: can you remind me of anything changed around seasonality for three queue with dodge included i think historically typically steps down attach from to cuba for the ramp to the porky pig
spk_2: the same so you can expect that going to have the same holiday season so we apple things given christmas and to shortest amount of production days for both companies yeah okay and you know historically roles been really good at taking an analytical approach to things so as you look across your and markets and your existing customers do you see more value right now and going after more wallet share or and entering new markets because presumably the former has a higher returns than the ladder well you know i'm really have a lot of a lot of new products coming through the comments through the system
spk_36: i'm almost too many here
spk_2: it in terms are you you can't you can't get behind all of you know and you have to have to pick a big winners and so right now is far as guys dodgers concern or sorting through you know what they have for product development which is expensive and which products how how much you are are there other developments how far along if the product technically and how far along are we in terms of understanding the market paid and you know what were a little in in terms of those products and next to proctors that we're going through right now with batch and i'm afraid it's keeping your excursion there's a there's a lot of there's a lot of them but it to cut their and and so i think in terms of bearing new products to the existing market channels it gave very very good recipe for success of life as it certainly your that applies to guide now rb fee on the other on the other hand hairs on you know to a large extent particularly in aerospace and defense is a completely different
spk_12: line up in terms of customers and in market channels and the in so we've we've kind of gone through the rbc your gender over the years and in know
spk_2: which ones are the are the ones for back and there and it's it's it's pretty much product introduction to existing markets on i think second secondarily to that is how do you how do you map across rpc across guard dodgers industrial markets so that you're actually you know picking up revenue by introducing
spk_12: new accounts to existing products
spk_6: so that you know those are the those are the two big waves on this tool that we're we're working on it
spk_3: and realistically how long does it take to effectively complete that mapping process is that years or quarters
spk_6: what we're quite work quite well i mean if you're it never ends steve it really never ends
spk_0: because there's always there's always more coming through but we're quite what far along on some of these programs in terms of in terms of dodgers program
spk_37: and and tender and so on in others are it initial stage at the end of their technical development but at the beginning of their market assessment so
spk_38: yeah i think i think we're going to have some good things to talk about
spk_37: right
spk_2: and just one more just looking into segments will aerospace always have intrinsically higher incremental margin than industrial or should they be even overtime
spk_37: they tend to be quite close over time
spk_34: you know how did you depend on that the period and what's going on
spk_2: if you look at history and really not that far apart i go next question is coming from peter gibbons heat for and then the global your life is no line
spk_3: i guys are in trouble get into the queue their arm
spk_37: yeah mike meet maybe just a start on on a shanghai plant is revenue white it is the plant reopened again as of you know the start of qq yeah it forget the has how can switch again their revenue back and then any would you can be willing do am quantify the impact of the other get called an unusual freight messed up in the corner
spk_2: yeah it was ill is that it the impact with somewhere between two and four million dollars
spk_35: okay okay and the the issues been sounds like a one time issue
spk_39: yeah you know it with it
spk_2: it's an unusual issue for for this particular forwarder and it hadn't happened in the past that anybody could remember and so we're we're getting involved with why it happened this time and what we can do to help and got it alka mathur apparent off i'm maybe our industrial dakota switch the metric a little bit from you know from ip in a path my keeps up yeah my a lot and yeah great one pm eyes your buck fifty five and we've seen a little bit of deceleration recently saw i'm i'm just wondering if we sit here in august of last year our month plus the other any signs of of deceleration in man that offer for your industrial and markets or is edge not really something that visible right now certainly her classic rb see where where definitely not saying it we're not seeing any just be celebration in in in gods it's their their business is lumpy and you know the local we look at the the market for day sir you know the aggregate and in the aggregate market i'm from from what our feel people are telling us
spk_3: there's no capacity left by aggregate producers there are a hundred percent their hundred percent for and we have now this infrastructure program coming through it's going to throw gasoline on the fire green is grained you know what's going on on the world with grain
spk_2: and so that the farmers are you know no running running their machinery and them and breaking things and needing replacement
spk_37: hum the our our food products have done really well accepted by the industry and that's a that's a growth leg for us that said in it's early stages and are we have we have been
spk_3: you know we have a lot of demand for these new products out of dodge that address
spk_37: the manufacture of food
spk_0: and and so you know we think that those markets or
spk_2: we are going to continue and we haven't seen we haven't seen them then let up on we had we have seen some backing off of on with a quality hundred handling as a result of amazon and cancelling
spk_13: i'm building one forty or fifty different warehouses
spk_0: i'm so there's been some backup there but that frankly that's probably going to expand our margins
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