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spk01: Good day and thank you for standing by. Welcome to the Badger Infrastructure Solutions 2022 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Trevor Carson, Vice President, Investor Relations and Corporate Development. Please go ahead.
spk09: Thank you, Operator, and good morning, everybody, and welcome to our third quarter 2022 earnings call. On the call with me this morning are Badger's President and CEO, Rob Blackenark, and Darren Yaworski, Badger's CFO. Badger's 2022 recording earnings release, MD&A, and financial statements were released after market closed yesterday and are available on the Investors section of our website, as well as on CDAR. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts, are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks, and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2021 AIF. Further, such statements speak only as of today's date and Badger does not undertake to update any such forward-looking statements. Now, I'll turn the call over to Bob.
spk07: Thanks, Trevor, and good morning, everyone, and thank you for joining our Q3 earnings call. I'm pleased and excited to be joining this call for the first time as Badger's President and CEO following a successful transition on October 1st. As always, we would like to start the call with a health and safety update. As evidenced by our revenue growth and building momentum in the business, we are confident that pandemic-related issues are largely behind us and the fourth quarter continues to progress without any pandemic-related issues. This is especially important as we begin November with a focus on enhancing utilization in our typical seasonally slower months. We are focused on continuing to improve upon our leading safety culture with a focus on making sure our team and clients make it home safely each and every day. Now on to the quarter. The improving market activity and customer demand trends experienced over the first half of 2022 continued throughout the third quarter. Coupled with operational and cost management efforts, we experienced meaningful year-over-year improvements in our operating leverage and margins. Overall, the third quarter was in line with our expectations. Year-over-year quarterly revenue grew by 20%, supported by balanced revenue growth across all of our operating regions. Similarly, all operating regions experienced positive operating performance resulting from increased pricing, improved fuel recovery, and cost controls. This resulted in better operating leverage as highlighted by our improved EBITDA margins. We anticipate that improving market conditions and customer demand trends will continue for the balance of the year. These trends are supported by improved macroeconomic conditions across the broader non-residential construction activity in the U.S. and in previously weak sectors such as oil and gas. Even though Badger has managed well through the recent inflationary environment, through better realized pricing, cost management efforts, and its fuel recovery program, we're still very focused on improving operational performance. Let's go a little deeper into the revenue trends. Revenue was up 20% from last year to 163 million, which continues to reflect the market recovery that we have seen since October of 21. Higher revenue and more consistent volume supported improvements in our operating leverage. All operating regions experienced year-over-year and sequential revenue growth and improving margins from higher revenue, higher truck utilization, stronger pricing, and cost controls. This resulted in a year-over-year improvement in adjusted EBITDA margins year after adjusting for the $2.4 million in Canadian employee wage subsidies that Badger received in the third quarter of 2021. The 21.6% adjusted EBITDA margin for the quarter understates our true performance as we have pre-invested in operational and strategic priorities, namely sales and marketing programs, to support future revenue growth to achieve our long-term strategic objectives. Regarding our free investments, we have hired, onboarded, and trained our new sales and marketing teams who continue to build momentum daily. Their primary focus, and by extension, our initial measure of success, will be to drive new customer opportunities in the fourth quarter to help lift the seasonal shoulders and drive more consistent volume over the course of the full year. This will have the added benefits of stabilizing margins, and addressing some of our operator retention and turnover headwinds in the colder, more seasonal months. We also continue to be excited about our asset utilization improvements. Q3 revenue per truck per month, or RPT, was approximately $47,000, which was up 24% versus last year and 16% sequentially from Q2. We ended the quarter with 1,370 non-destructive excavation units compared to 1,353 at the end of Q2, reflecting a net increase of 17 units. Our ability to manage available fleet in real time is a significant competitive advantage for Badger. As we position the fleet while constraining availability in some regions, we can drive utilization and higher pricing where we have good opportunity. Trucks are being added in markets that demonstrate strong revenue growth, high RBT, and strong asset utilization. As we have said in the past, improving our utilization has a material impact on how we manage retirements, how we think about the number of units needed to achieve our growth targets, and the appropriate level of invested capital. Our continued focus on fleet utilization also translates into improved labor utilization. We have sufficient operators to support our current fleet size and continue to recruit new operators to support anticipated additions to our fleet over the remainder of this year. Let's discuss our manufacturing. Badger manufactured 29 non-destructive excavation units in the third quarter and 66 units year-to-date in 2022 versus 4 and 17 units respectively for the same period in 2021. We are now forecasting to build approximately 115 non-destructive excavation units down slightly from our previous guidance and the retirement of approximately 80 units in 2022 consistent with the previously provided guidance on retirements. The lower billed total for the year is a result of numerous initiatives that have happened at our Red Deer Manufacturing Plant, which include the rollout of the MRP system and the consolidation of multiple facilities in Lake Q3 and Q4. We are confident we can achieve this revised target as we are currently manufacturing four to five trucks per week and it will not have any adverse impacts on our performance expectations for the balance of the year, given our ability to flex utilization and operating leverage. We are currently planning our build program for next year and will provide an update during our upcoming Q4 call, which is consistent with past practices. With our new manufacturing leader successfully onboarded, we expect to be running at peak efficiency next year, which will allow us to absorb our planned retirements and meet our growth needs without constraints. We remain comfortable with chassis and key component availability and do not expect to be impacted materially by supply chain disruptions based on the company's supplier relationships and inventory planning completed this year. Market indications suggest that non-destructive excavation equipment will be in high demand and more difficult to source over the next several years, which makes our market position and vertical integration that much more valuable. Unless there are additional geopolitical or macroeconomic disruptions, we see conditions to be favorable for continued progress in growing the business, improving operating leverage, and returning to historical margins as the recovery continues and we execute on our commercial strategy. I will now turn the call over to Darren to discuss our financial results.
spk03: Thanks, Rob, and good morning, everyone. Rob, congratulations on the new role. As Rob mentioned, our revenue in the quarter was $163 million, up 20% from the same quarter in 2021. As reported, gross profit margins improved to 27.4% compared to 27.3% in the third quarter of 2021. After adjusting for the $2.2 million in Canadian emergency wage subsidy programs for accused benefits that you received in the third quarter of 2021 and did not recur in the third quarter of 2022, our adjusted year-over-year gross margin improved 170 basis During the quarter, we continue to invest in sales and marketing capabilities to support future growth. These investments in our capabilities resulted in approximately 200 basis point reduction in gross margin in the quarter to grow revenue in future quarters. As a reminder, our sales and marketing expenses are included in our direct cost line of the P&L. R, as reported, adjusted EBITDA margin improved to 21.6% compared with 20.8% in the third quarter of 2021. Again, adjusting for the $2.4 million in Q's benefits received in the third quarter of 2021, which did not reoccur in the third quarter of 2022. As a result, our year-over-year adjusted EBITDA margins improved 250 basis points. During the quarter, we incurred one-time expenses related to the CEO transition and director onboarding, which were included in our G&A expenses. These one-time costs resulted in approximately 100 basis point reduction in adjusted dividend margin. Overall, the investment in our sales and marketing capabilities and the one-time G&A expenses resulted in approximately 300 basis point reduction in adjusted dividend margin for the quarter, which underscores a very strong year-over-year margin improvement more than we reported. As Rob mentioned earlier, we see the current quarter costs and sales and marketing capabilities as an investment to position Badger for growth in the North American non-destructive excavation industry. Now onto the balance sheet. Badger maintains a focus on ensuring the strength of its balance sheet and financial flexibility. We've continued to make meaningful progress in accounts receivable management, particularly in the collection of long-dated receivables. At the end of Q3, 77% of our receivable portfolio was aged less than 30 days, suggesting a stronger portfolio position than the DSOs of approximately 94 days, as reported in the quarter. We believe there's still room to improve in our DSOs, which we continue to work towards. We continue to maintain our $400 million Canadian committed credit facilities, which provides us ample liquidity and financial flexibility to fund both near-term and long-term growth and complementary capital allocation decisions. Finally, the Board has approved the quarterly cash dividend of $0.165 per share for the fiscal quarter ending 2022, with payment to be made on or about January 15, 2023, to all shareholders as a record on the close of business on December 31, 2022. I'd like to turn the call back over to Rob for final comments.
spk07: Thanks, Darren. So before we open it up for questions, let me summarize. Q3 demonstrated further progress in tightening up our operating discipline and pushing our margins closer to historical levels. Our opportunity to further drive operating leverage and asset utilization gives us confidence in achieving our long-term EBITDA targets. Activity levels continue to build momentum, and we are able to put our people to work effectively with better results. We are pleased by the continued improvement in market demand and revenue volumes in the third quarter, with revenue up by 20% year-over-year. Operating leverage benefited from revenue growth, higher utilization, cost management, and pricing, with results in the quarter meeting our expectations. Our view of the significant US and Canadian long-term opportunity for non-destructive excavation services and Badger's long-term growth prospects unchanged. We believe that the United States' focus on infrastructure supports solid demand for non-destructive excavation. Badger's proven business model, our operating scale and flexibility, diversification of end use in geographic markets, combined with our strong operating track record across all stages of the economic cycle, all support achieving our long-term growth aspirations. So with those comments, we'll turn it back to the operator to open it up for questions. Michelle?
spk01: As a reminder, to ask a question, please press star 1-1 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Daryl Young with TD Securities. Your line is now open.
spk06: Hey, good morning, everyone. Good morning, Daryl. First question is with respect to your commentary around the supply chain in the near term. how much inventory would you have and chassis would you have in order to deliver in 2023 when your production schedules, I'm assuming, will ramp up fairly considerably?
spk07: Yeah, so we actually, Darrell, pre-invested into the inventory. We have several folks on the call who might cover Other industrials, such as the truck Class 8 manufacturers, there's an emission year coming up, and we have pre-invested into those inventory levels, and we feel very comfortable through a good portion of the first two quarters of next year on having proper inventory levels to get underway with our build, and we've really done that pre-investment.
spk06: and feel very comfortable with that we feel very little risk in the first half of next year okay great um and then just when we think about the shoulder periods i think you mentioned that um the new sales initiatives should help um drive drive better operating leverage in the How should we think, though, about the labor situation and the ramp up for next year and where you're at in terms of the number of operators you have and whether there'll be headwinds to additional recruiting in those periods?
spk07: Yeah, so that's something we work on constantly here at Badger, making sure we have the proper labor levels in our locations, obviously with the proper truck levels. As we stated in the release and also our discussion just now, we feel comfortable with where we stand now to not only complete Q4, but going into Q1 with our current labor levels. As we're wrapping up our business planning for 2023, we are identifying the markets that we are going to continue to invest and drive and making sure that we are able to recruit into those markets. For us, it's not just moving the assets, but also making sure we have available labor. And right now, we're starting to see some of the CDL and commercial driver's license holder labor pool actually start to open up slightly. It's not totally improved, but it's slightly improving. where we have access to more operators, as well as we've made some new initiatives into some labor pools that we've never done before consistently, such as military recruiting, both in Canada, U.S., and several other initiatives. So we feel comfortable at this point, and that really is tied to what happens with CDL driver demand next year. But at this point, we feel comfortable.
spk06: Okay, great. Maybe just one last one on the language around recessionary conditions. I'm assuming that's more just a blanket kind of cover statement as opposed to any early indications that you're seeing any impact from a possible recessionary environment?
spk03: Yeah, that's correct, Errol. I think we're planning for doing our contingency planning for the event that it might happen. but we're not necessarily seeing any impact to our business today that would suggest that it's imminently impacting the business.
spk06: Okay, great. Thanks. I'll jump back in the queue.
spk01: Please stand by for our next question. Our next question comes from Michael Dalmet with Scotiabank. Your line is now open.
spk05: Hey, good morning, guys. A quick one, just a clarification. Darren, did you state that the pre-investment and sales compressed gross margins by 200 basis points, just making sure I understood that correctly?
spk03: That's correct. I think what we had decided that it would make sense for us to pre-invest, and it was 200 basis point impact on gross margins. Got it.
spk05: Okay, just a quick one to When do you expect to have the 200 basis points of the margin compression there related to the sales initiatives to normalize? I guess what I'm thinking is, given where the RVT is, which is pretty high, do you think you can get to that normalization without necessarily building more trucks, or is it really a matter of building more trucks?
spk07: Yeah, so, Michael, it's actually we view it as a combination. So as we have done this investment into sales and marketing, we're starting to realize how large the opportunity is. We shared some of this on Investor Day, but how large the opportunity is in front of us. And we're uncovering a lot of new areas that previously we had not done business with or some new customers we had not done business with. That's helping us drive the utilization, obviously, RPT on the current fleet that we have now and couple that with our build rate and build momentum, which, again, we gave pretty good clarity, very good clarity this quarter. We believe they actually work in combination that as the demand increases and pricing and utilization is there, and then we have the ability to bring in additional trucks, we believe we can continue to drive the business and improve. And those sales investments are what's allowing us to be able to have the run rate that we're seeing, and we feel comfortable with that.
spk05: Perfect. That makes sense. That's helpful. And then maybe, you know, look, if I look back to 2019, You know, there's still probably another 200 to 300 basis points to get. I mean, I guess it also speaks to the midpoint of your long-term guidance. So if I think about the direct costs now, excluding sales, so specifically labor, fuel, maintenance, branch costs as a percentage of revenue, which one of those today is generating kind of the highest drag to gross margins when compared to 2019?
spk03: Yeah, Michael, I'll probably point you back to the presentation that we provided at our yesterday presentation a couple of months ago. The branch, and we broke down direct cost into direct branch cost and branch support costs. So the direct branch costs, which would include all the things you've described, operator labor, M&R, fuel, those are back at the levels that are consistent with what we saw in 2019. The branch support costs are the areas in which we've been professionalizing the business and providing a little bit of pre-investment to support the growth in a more orderly, meaningful manner. Those are the costs that have actually been a bit of a drag to the business, but we don't necessarily drag on margin today, but I think to Rob's earlier point, the investment in sales and marketing usually takes, and Rob, you correct me on this, it's usually around six months until that sales professional starts hitting the stride and the levels that we want. So doing some of the investment today allows us to be able to push volume and flex operate and leverage the same quarters to come. That's exactly it.
spk05: So more time, more trucks. Okay, that makes a ton of sense, guys. All right, I'll leave it there. Thanks a lot. Thank you.
spk01: As a reminder, to ask a question, please press star 11 on your telephone. Please stand by for our next question. Our next question comes from Krista Friesen with CIBC. Your line is now open.
spk08: Hi, thanks for taking my question. I just wanted to ask on the demand that you're seeing if you can provide us with a little bit more granularity And if the demand is varying across your geographic areas, if there's anywhere that's lagging a bit, or if you're seeing a lot of strength somewhere.
spk07: Yeah, Chris, I'll take that one. So we're seeing solid demand across the entire organization. And if you look at specifically, we don't give guidance or we don't provide clarity down to the local level but regionally our eastern region of the company which is really the east coast of North America has been very strong and continues to lead the company in performance and and very very strong we're seeing as you if you think about some of our in customer markets and areas that are investing heavily in utilities and other infrastructure spend. Those areas, especially as it relates to the Sunbelt states, we're seeing a good, strong growth. And then lastly, we view it as some of our national accounts that We are uniquely qualified to cover. They are really embracing our program as it relates to large, complex projects that in the past we might have bid on a one-off basis. Now we're doing it collectively across the organization where if a national account had worked on a project in another area of Badger and Badger's territory, That previous work is now being shared with future projects and basically coordinating the project work across. The customers are gravitating toward that and appreciating it because it makes Badger's value proposition that much stronger. It's one consistent supplier across their whole footprint for work. But it really is, across the board, we've seen good strength, but probably the strongest in the East.
spk08: Okay, that's great. And then kind of on the same line of thought there, can you speak to how much of your business is being derived from the oil and gas industry? If you've seen a significant kick up in that or if it's been fairly steady?
spk03: So the pure oil and gas is probably about 6% of our revenue and it really hasn't changed, it hasn't really picked up at all. The overall energy sector, which would include storage and transportation, that being the pipes, is about 20% of our revenue, and that hasn't really materially picked up at all. We've seen probably more pickup in our utility space, construction space, transportation space. Energy hasn't been the big driver in our demand increase. But Rob, please jump in and share your thoughts as well.
spk07: Yeah, no. We haven't seen the level of work that we had seen previously. And to be fair, the company had purposefully, over some previous downturns of oil and gas, further diversified the customer base from being so oil and gas centric to that of oil and gas making up a representative portion of the company's revenue, but not where it is a heavy oil and gas-only concentration in many of our markets. Because of that diversification, we're not seeing the ups and downs of what happens in the oil and gas business across the business, and it's really smoothed out some of our revenue trends.
spk08: Great. Thanks. That makes a lot of sense, and I'll jump back in the queue.
spk07: Thanks, Krista.
spk01: At this time, there are no further questions. I would now like to turn the conference back to Rob Blackadar for closing remarks.
spk07: Hey, Michelle. I think there's one that just popped in, or at least it's showing on our screen, Yuri. If you could open it up for Yuri, please, and then we'll close it out.
spk01: Yes.
spk07: Hey, Yuri. It's Rob and Darren and Trevor.
spk02: Hey, guys. Can you hear me okay? We got you now. Okay, sorry about that. Just on the, I know you haven't given guidance for next year, but, you know, just on the build rate, any hints on, you know, does the numbers start with a 1, a 2, a 3? Just trying to think about how we should be modeling next year, given that you had quite a few retirements that should be coming up for the year. So any help on that?
spk03: Maybe I'll take the retirement question first and then try and bypass your question on guidance, but sort of point you to where our current build rate is. On the retirement side, what we had disclosed previously was just looking at retirement using a 10-year timeframe, so 10 years out from the build program or the date in which the truck was put in service. We're looking at things differently now. I think the fleet strategy under Ron Brown and Rob's guidance, we're looking at each discrete asset, engine hours, the shape of the vehicle, the shape of the truck and whether or not it would make sense to invest in that truck to extend life. So our retirement towers, I think, are really going to make some strong efforts to be able to carve off some of the tops of those, specifically in 2023 and 2024 where the towers were the highest. With regards to our build program, as Rob mentioned, we don't provide guidance until Q4, but we don't see that 2023 would change much from the production levels that Rob mentioned in his comments. We're making around four to five per week. Rob, please, please jump in.
spk07: I think you covered it perfectly. I mean, you know, we're just, URI, for obvious reasons, we're just going to hold off on real specific items for 2023. We want to keep that in the same time frame as we've released it in the past. But you can look into the MD&A and press release as well as the comments we just made and start to model some things out. But I'm going to leave that with you. We're not ready to release that yet, Uri.
spk02: Okay. But you envision kind of continuing with that four to five a week?
spk07: Yeah, we're underway with that now. And again, we're not giving specific guidance. That's where we are now, and look, you can see what's happening with the demand in the business, our end markets, our utilization, and now we have a proper manufacturing leader who is starting to unlock the opportunity within that plant just now, and it looks pretty solid, but again, we're not going to We're not going to give specific guidance until next quarter.
spk02: Okay, understood. RPT in the quarter, I mean, I've kind of lost my bearings a little bit with RPT given the improved way you calculate it now, I'll add. Was that number as good as it appears on the surface? Do you see room for that in a seasonally strong quarter like Q3? Could that get into the 50s? Or is that as high as you think you can reasonably take it in a seasonal quarter?
spk03: Maybe, Uri, I'll take the first part of your question on the math and then Rob can take the second part on what we are to the possible. On the map, yes, we're including our operating partners in gross revenue, so there is a bit of an uptick from them being included. It's only around $3,000, so it isn't a material change to the overall RPT calculation as reported, and that the underlying asset utilization across the fleet has improved materially. Rob, you may want to talk a little bit about the part of the possible.
spk07: Yeah, so URI, the makeup of our calculation for RPT, as most everyone knows on the call, but is a makeup of our pricing, our volume, and our utilization. And the three of them tied together represent the RPT. and certainly there remains opportunity to continue to improve in each one of those areas. As Darren suggests, utilization is strong in certain markets, and across the board as a company, it's solid and strong, but the journey on our pricing continues, and obviously volume, and then as we introduce addition to all that new trucks to absorb some of the demand you can pretty quickly triangulate that there still is upside in it but I at this point we're hitting really solid numbers on our RPT compared to historical levels and I don't think there's anyone sitting at this table who could say you know like forecast where that could be until until we start to see the continued improvement in some of our pricing. But when you look at utilization, it's strong. It still is upside, but it's strong as well. So there's some upside, but I probably wouldn't get too exuberant on it.
spk02: Okay. Last one for me. Just when we think about the fourth quarter – and some of these costs that weighed on your gross margin. Are we still adding sales and marketing to more sales and marketing costs? Because I thought, Darren, on the last call, you said that all the investments in the business were done, and then you layered in 200 basis points more on direct costs. So how do we think about Q4 in terms of sequential change
spk07: So, Yuri, whenever we made the investment, we made that investment in sales and marketing. We announced our strategy in January, and I think we shared some of this at the Investor Day, but we introduced a new compensation program and started introducing new sales reps in some markets that had not had sales reps in the past or that were underpenetrated. larger markets. And we did that bringing in the headcount for selling heads in April through the end of Q3. And we are now at a point where we are underway with our Q4 and watching the revenue trends. But we are at this point on a Let's look at how the results come in in Q4 and Q1. And once we start to share what our vision of 2023 is, we'll make some decisions on additional headcount. But at this point, we are not continuing to go deeper on our cost in the sales and marketing. We actually want to start realizing the benefits of all the investment we've made. I don't know if you want to add anything on that.
spk03: Probably the only thing I would add is there's a bit of a timing difference. So the six-month wrap-up time for a sales professional to be fully carrying their his or her load was a good chunk of the margin reduction in Q3. With regards to the investment in the business, it was more related to G&A. So all of the largely all of the systems and capabilities that have been built. There's a little bit of stuff on the fringe, which gives me a tremendous amount of confidence that the $35 million G&A guidance that we gave at Investor Day is something that is a good number for 2023. So there's two components where there isn't, and with the work done on the manufacturing side and the MRP system, There isn't any kind of material investment we need to make in the business other than human capital and the professionalization of the sales force.
spk02: Okay. Thanks for squeezing me in at the end, guys.
spk07: No problem. I think there actually may be one more behind you, so thank you.
spk01: As a reminder, to ask a question, please press star 1-1 on your telephone. Please stand by for our next question. Our next question comes from Trevor Reynolds with Acumen Capital. Your line is now open.
spk04: Hey, guys. Apologies it was a little bit late getting on the call, so if this has already been touched on, we can touch base later. Just wondering on seasonality and early indications, I guess, and kind of the success or the impact of the national accounts strategy and kind of what you're seeing early in Q4.
spk07: I'll cover at high level, and if Darren wants to add something, he may. He is, I think, the biggest cheerleader of our national accounts program and a big fan of it. I will share with everyone on the call, and we went pretty deep on national accounts during Investor Day at the end of September there, Trevor. And our initial results from our investment across the wholesale spectrum is national accounts is actually yielding faster, quicker results, where Darren was referencing a moment ago the ramp-up time. of around six months for one of our local sales reps. Our national account customers, Trevor, it's almost as if they've been waiting for someone to come in and roll out a national accounts program within our business. And so that has shown very promising results. So that portion of the business we are very, very enthusiastic about. But obviously, we're not going to break apart how much volume we're doing in national accounts or what that improvement is. But we gave a couple of examples and some discussion points that Bobby Love shared during the investor day. And anyone who wants to kind of see that, they can take a quick peek at that deck or call Trevor or Trevor Carson, and Trevor can share that with them. Do you want to add anything? Oh, you know what? I apologize. I missed the seasonality reference as well. Your question regarding seasonality, it is our belief, we continue to believe that that national account business and that customer base will help us lift up those shoulder seasons and really offset the seasonality that the company's historically had. We don't know as we sit here and share on this call, we don't know what that will look like at this point because we've just made the investment about six, seven months ago. And as we see that investment unfold, we're very encouraged off of Q3. And like what we're seeing, we have to let it play out. And I don't know if you want to add anything else, Darren. Okay. So that's our quick thoughts on that.
spk04: It's reasonable to expect, though, that we will see some of that impact in Q4 and Q1.
spk07: That's what we are making the investment on. Again, we're in some pretty exciting territory as far as What we're seeing and the investment we've made in markets we're touching that we haven't touched before, and it would lead us to believe that the investment we've made is going to help lift those shoulder seasons, and that was the strategy we built. We, at this point, though, are underway with it. We obviously don't give guidance within our current quarter that we're in, or really talk much about that at all, but we're underway with the strategy, and we believe in the strategy. We're not backing off of it, let's put it that way.
spk04: All right, thanks for taking my question, guys. Thank you.
spk01: At this time, I am showing no further questions. I would now like to turn the conference back to Rob Blackadar for closing remarks.
spk07: Thanks. Thank you, Michelle. And thank you. On behalf of all of us here at Badger, thanks to our customers, employees, suppliers, and shareholders for your ongoing support that helps to drive Badger's success. Operator, you may end the call. Thank you.
spk01: This concludes today's conference call. Thank you for participating. You may now disconnect.
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