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[00:00:01] Good morning, everyone, and welcome to the second quarter of fiscal year 20 21 financial results, conference call. All participants will be in a listen. Only mode. Should you need assistance, please, in the conference specialist by pressing the star key, followed by zero. After today's presentation, there will be an opportunity to ask questions, to ask a question, you may press star, then one to which all your questions you may press star into, please. Also note, today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Joe Dorame with Lytham Partners. Sir, please go ahead.

[00:00:40] Thank you, Jamie. Good morning and thank you for joining us today to review the financial results of a bank for the second quarter of fiscal year. Twenty twenty one ended March 31st. Twenty twenty. Joining the call today are Tom Ferguson, chief executive Officer Phillips from interim chief financial officer, and David Knaack, senior vice president, marketing and marketing and communications and investor relations. After the conclusion of today's prepared remarks, will open the call for question and answer session. Please note there was a slide presentation for today's call, which can be found on the investor relations page under financial information at a dot com. Before we begin with prepared remarks, I'd like to remind everyone certain statements made by the management team of Azeez during this conference call constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of nineteen ninety five. Except for the statements of historical fact, this conference call may contain forward looking statements that involve risks and uncertainties, some of which are detailed from time to time. In documents filed by Azeez with the Securities and Exchange Commission, including the annual report on form 10K for the fiscal year ended February twenty nine twenty twenty. [00:01:58] Those risks and uncertainties include, but are not limited to changes in customer demand and response to products and services offered by the company, including demand by the power generation markets, electoral transmission and distribution markets, the industrial markets and the metal coatings markets, prices and raw material costs, including zinc and natural gas, which are used in the hot dip galvanizing process. Changes in the political stability and economic conditions of the various markets that serves foreign and domestic customer requested delays of shipments, acquisition opportunities, currency exchange rates, adequate financing and availability of experienced management and employees to implement the company's growth strategies. In addition, as customers and its operations could potentially be adversely impacted by the ongoing covid-19 pandemic, the company could give no assurance that such forward looking statements will prove to be correct. These statements are based on information as of the date hereof and assumes no obligation to update any forward looking statements whether a result of new information, future events or otherwise. Would that out of the way? Let me turn the call over to Tom Ferguson, chief executive officer of Tom.

[00:03:15] Thanks, Joe, and welcome to our second quarter fiscal twenty twenty one on each call and thank you for joining us this morning. Let me first start by saying that covid-19 is still very much front and center for all of us here at ABC and content. It continues to affect our results. Our top priorities continue to be ensuring employee health and safety, supporting our customers during these unprecedented times, finishing this fiscal year well, and positioning the company for fiscal year twenty twenty two, as well as Beaune as an essential infrastructure manufacturing company. All of our facilities remained open and extremely proud of the way our folks manage through this crisis during our first quarter, second quarter as well, and took care of each other and our customers during this pandemic. We are truly grateful for everyone's efforts to allow this to continue safe operation of our plants worldwide. We entered the second quarter in June, which is normally the final month of the seasonal spring turnaround season. Consequently, the quarter got off to a slow start. Historically, however, Q2 is sequentially lower for our Infrastructure Solutions segment. Under any circumstances, the metal coating segment navigated the economic uncertainty well. However, results in our galvanising business were impacted by several factors behind it, but I will cover these later. As a result, our second quarter consolidated sales decline thirteen point nine percent versus the second quarter. The prior year adjusted net income decreased sixteen point seven percent to 13 million or forty nine cents per diluted share. In light of the disruption caused by covid on our markets and some of our operations, we decided to accelerate elements of our long term strategic plan and initiate some strategic actions that will have longer term benefits. [00:05:03] Our medical segment experienced a wide range of challenges, plants, experienced disruptions from hurricanes in the Gulf to civil unrest in some cities, and some even had difficulty finding direct labor. Suffice it to say, it was a crazy summer. Sales totaled one hundred and seventeen million for the quarter as compared to one hundred twenty five million for the same quarter a year ago. I am particularly pleased with how our galvanizing team in particular was able to benefit from lower zinc costs during the quarter while maintaining above average industry pricing. These actions, coupled with our quality of workmanship and outstanding customer service, resulted in overall segment margins that were flat at twenty three percent, while our galvanizing margins in particular finished above twenty five percent. Additionally, the Metal Coatings team did a nice job of integrating the powder coating and plating operations and sales teams during the quarter. Many of our patty powder coating customers that had closed or reduced production because of covid began to place orders again. We remain committed to our strategic growth plan for the powder coating and plating business and driving meaningful margin improvement post covid-19 crisis. So much so that we chose to rename surface technologies to powder coating and plating to better represent our focus for that business. Because of the impact of covid on the oil and gas and petrochemical sectors, we made a difficult decision to classify some underutilized facilities as assets held for sale, as well as close a couple of sites and integrate their business into our other sites in the adjacent areas. [00:06:33] We also closed one plating site, relocated its operations to a nearby plant. We're excited by the progress the new integrated team is making and the speed at which they are moving. We believe the restructuring actions that are currently in process should provide approximately two million dollars in savings benefits and. Our Infrastructure Solutions segment segments, second quarter, fiscal 20 21 sales decreased by twenty two and a half percent to eighty six million, resulting in adjusted operating income of about three million as compared to about four million in the same quarter a year ago. As I mentioned previously, the decline in sales was a result of lack of refinery turnaround activity in June, lower China, high voltage bus shipments and lower overall demand for some of our electrical products and services, while our industrial platform shops were open and working and crews did begin deploying during the quarter. The summer is usually a period of weak activity in line with our strategy to reduce our participation in the US nuclear sector, a lower outlook for activity in the oil sector and in our desire to focus on core businesses. We initiated several restructuring actions in this segment. These include personnel actions and consolidations, deciding to divest some or businesses to buyers that are interested in investing and growing these businesses and empowering 2.5 million of inventory. We believe the third quarter will be sequentially better than Q2 of this year. [00:08:01] The turnaround activity remains constrained by covid travel restrictions and continued low demand for gasoline and jet fuel. Due to the prolonged uncertainty associated with the recent covid-19 pandemic, many of our end markets and delays by some of our customers due to election uncertainty were not able to accurately provide an update for the full year at this time. We can say that our third quarter will be nicely improved sequentially over the second quarter, but it is unlikely to generate earnings as we did in the strong third quarter of last year. Our low debt level, combined with our consistent ability to generate cash, gives us the confidence that we can manage both debt and liquidity satisfactorily throughout fiscal year twenty one as well as beyond. We hope to get back into a normal guidance cadence as we enter calendar year 20 21. And as we see customers returning to normal, business engagement levels are metal coatings, business is operating in a fairly normal level, although there are restrictions and disruptions in some of the cities and states we operate in. We're also experiencing additional expense as we work to keep our facilities clean and safe so our employees remain healthy and productive. We're confident that our businesses remain vital to improving and sustaining infrastructure. So we will use this time of global pandemic to position our core businesses to emerge stronger and better equipped to provide sustainable profitability going into the future. With that said, I'll turn it over to Philip Schlom.

[00:09:32] Thanks, Tom, for the second quarter of this year. Twenty twenty one, we reported sales of two hundred three point four dollars million, a decrease of thirty two point eight dollars million, or thirteen point nine percent lower than the second quarter sales and two hundred thirty six point two dollars million last year. Our earnings release and 10K reported due to the impact the Cauvin and certain restructuring and impairment charges, the company reported a net loss for the second quarter of fiscal twenty one of one point eight dollars million, or one hundred eleven point five percent lower than the prior year. Second quarter. As a result, reported diluted earnings per share was a loss of seven cents compared to EPS of fifty nine cents in the prior year, same quarter on an adjusted basis. Reflecting the impact of the impairments we took, the company's net income was thirteen million dollars forty nine cents per diluted share. In the current quarter, the company recorded a restructuring and impairment charges of eighteen point seven million fourteen point eight million net of associated tax benefits. As a result of the restructuring, we classified for operating facilities as assets held pursuant to operating locations or within the Infrastructure Solutions segment, and two are in. Our two other non operating locations are in the Metal Coatings segment. The impact of the impairments to the metal coatings segment operating income was eleven point three million and includes the loss of sale of Galva, our assets held for sale impairments and impairments related to closing facilities, the impact of the impairments to the infrastructure segment. [00:11:05] Operating income was seven point four million, including assets held for sale impairments and write down oil and gas tubing inventories. Q2 fiscal twenty one gross margins improved to twenty two point seven percent from twenty two point three percent on a year over year basis, primarily on continued strength in the metal coatings segment operating profit as reported for Q2 fiscal year twenty one point seven million, down from twenty two point two million dollars in the prior year. On an adjusted basis, operating income was nineteen point three million or nine and a half percent of sales, compared to nine point four percent in the prior year. Hit ten point eight ten basis point improvement over prior year. EBITA, as reported for Q2, was twelve million dollars. EBIT adjusted was thirty point seven dollars million, or down nine point two percent as compared to the second quarter of fiscal year twenty twenty. With much of the reduction being directly attributable to the economic impact and business disruption associated with covid pandemic year to date through the second quarter of fiscal twenty one, we reported sales of four hundred and sixteen point seven million dollars, a twenty point seven percent decrease in the strong prior year to date sales of five hundred and twenty five million dollars. Ninety percent of that decrease in sales occurred within the Infrastructure Solutions segment, where the company experienced the most prominent impacts of the pandemic fiscal year. [00:12:33] Twenty one year to date, net income for the second quarter, as reported, was three point eight dollars million, a decrease of thirty three point one million from the prior year to date. Results on an adjusted basis, taking into consideration the impairment related charges. Year to date, net income was eighteen and a half million dollars, or seventy one cents per diluted share of forty nine point three percent reduction from the prior year to date. Diluted EPS of a dollar forty one to provide highlights on the balance sheet and our liquidity position. Given the attention this has garnered as a result of the pandemic for the first half of the year, cash flow from operations was thirty two point two million, down six million or fifteen point seven percent from prior year. As a result of lower sales and net income generated by the business, free cash flow is twelve point nine million on a year to date basis. Current borrowings on a revolver in the second quarter, forty seven million at thirty one million or thirty nine point seven percent reduction from the seven eight million as of year end February. We invested nineteen point three dollars million in capital spending during the first half of the year, an increase of seventeen percent from the prior year. Today, capital spending of sixteen and a half million, we repurchased six point four dollars million of two hundred thousand shares of our stock during the quarter, an average price of just under thirty two dollars per share. [00:13:53] And we continue to announce and make dividend payments afloat for a period of time by the pandemic, we continue to actively pursue acquisition targets primarily in our metal coatings, businesses and some great news on the liquidity front. Last Friday, we finalized the refinancing and upsizing of our five point four two percent, one hundred twenty five million dollars senior secured notes that are set to mature in January of. We reentered the private placement market and borrowed one hundred fifty million for the combination of seven and 12 years. Senior secured notes in two tranches of 70 and 80 million, the fixed rates of two point seventy seven percent and three point one seven percent respectively for a blended rate of two point ninety eight percent. The new notes will find in December and January, December 20 20. In January 20. The company intends to use these proceeds to repay the notes maturing in January, as well as using the excess borrowings to reduce our revolving credit and to repurchase shares to reduce further dilution from employee stock plans. Lastly, like Tom, I'd like to thank our employees remaining committed during the difficult year following and demonstrating the company traits by which we all strive by. With that time, I'd like to turn it back to you.

[00:15:04] Thanks, Phillip. As they did on the previous earnings call, I wanted to close by sharing with you some key indicators that we continue to pay particular attention to for the opening segment. Fabrication activity remains solid in Q3 and we got off to a good start in September. Within our galvanising business, we are carefully tracking steel fabrication and construction activity. Zinc costs are relatively stable and the cost of zinc and our kettles continues to gradually decline from powder, coating and plating. We are primarily focused on getting back to normal production levels with both existing and new customers. We would like to see more activity from our aerospace customers within the Infrastructure Solutions segments industrial platform. We are seeing the fall turnaround activity improve, but not to the same level from last year, particularly in the US market. We're carefully monitoring the situation in the states with large refining capacities. Currently, we still have travel restrictions in some countries for the electrical group. We are carefully tracking proposal activity and expect bookings to continue to increase this quarter and beyond, which should provide sufficient backlog for many of our business units in the back half of the year. To me, lighting which make up some portion of our electrical grid, we continue to look for increased rig activity and have already taken significant realignment actions. Finally, for corporate, we have very good cash management processes and have further tightened our oversight on cash flow indicators and customer credit. Currently, we're not seeing any slowdown in customer payments. So post covid-19 crisis, or at least as it winds down, at some point, we remain committed to our growth strategy around Cotard's and achieving twenty one point twenty three percent operating margins, including an increased contribution from Patagonia and we believe galvanizing. [00:16:55] We tend to run to the high end, if not above the twenty three percent, while Patagonian plating should be able to consistently generate 15 to 20 percent. We believe the integration will allow the outstanding galvanizer resources to be brought to bear to increase sales penetration, drive operational efficiencies and leverage the seasonal business development resources. And we're already seeing the benefits of that for infrastructure solutions. We will continue to focus on our core businesses, seek to divest things that are not going to the future strategic interests. Most of our infrastructure be user experience and a relatively modest level of disruption to covid. And we were taking this opportunity to rightsize operations in alignment with expected demand post pandemic. We feel quite confident, in spite of covid and other disruptions about the actions we've already taken and the restructuring activities that are now underway. We intend to complete our restructuring actions quickly and effectively finish this fiscal year well and position our businesses to enter fiscal twenty twenty two with momentum. Finally, we remain active in the area of M&A, primarily in the activities that support our strategic growth initiatives. While pandemic related deal travel was still somewhat restricted during Q2, we do see improving conditions and have an active portfolio of opportunities to pursue and have our teams actually out in the field as we speak. We hope to close on anywhere from one to three galvanizing deals, the balance of this year. [00:18:24] And with that, we'll open it up to questions.

[00:18:29] And ladies and gentlemen, at this time, we'll begin the question and answer session once again to ask a question. You may press star and then one using a touchstone telephone. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to withdraw your question. You may press star and two again, that is Star and then one to ask a question. We'll pause momentarily to assemble the roster. Our first question today comes from John Franzreb from Sidoti and Co. Please go ahead with your question.

[00:19:06] Good morning, gentlemen. I'd like to start with the comment you made about the hurricane season. Perhaps, Tom, you can compare and contrast the potential disruptions you've had in the quarter or currently having versus the relative opportunity or not of any reconstruction activity in the region.

[00:19:28] Yeah, it's kind of interesting that none of our facilities, thankfully hit head on. So we did have a lot of facility damage, but it did impact our customers and their ability to you know, they were already in some ways, particularly long ago, struggling with reduced demand on the oil and gas front. And some are struggling to get to keep people working. So I think we've experienced moderate disruption. It's hard to say what opportunities we're seeing that may come out of that. We have not seen tremendous damage from our customers directly. We could be refining petrochemical and things like that. So I'm going to guess, though, that that on balance, we're going to pick up of what we lost as well. And that's assuming we don't have any more failures, certainly deep into the season only.

[00:20:33] Ok. And you talked a little bit about the turnaround season of the fall and the spring. The fall being a little muted spring you're getting sounds like building activity a little earlier than you expected. Can you talk about why that's the case? Why do you think that might be the case?

[00:20:52] Yeah, I think on the refinery turnaround side of the US, we did as we talked last time, we weren't seeing the kind of activity that know expected that we're ready to come into what is hopefully a busy season. But we just all the not all, but a lot of that activity was already focused on the spring. And I think that just because the refineries, even though the price of oil has increased, we're still not to be in in in oil and gas with gasoline and that we see more planes flying. And they was the first day I looked out the window and saw all of the freeways jammed with traffic. So maybe they'll get better, but they just didn't have the demand in the summer to drive production. So now the good news for the spring is that we've already gotten some orders. We've gotten engineering orders for the spring. So are a challenge for the spring is going to be accessing all of the crap that we can possibly access and making sure we get our crews deployed to the best opportunities. We also have seen still countries with restricted travel internationally. So places like India and to some extent in parts of Asia, which restricts our ability to get people to vote, but even those that say we're going to as we get into the new year, we also think that spring, that would be a longer turnaround season than, you know, we often experience some longer and great and I apologize if I missed this, but the assets to be held for sale, there are two and in Middle Konings and two in our infrastructure.

[00:22:53] Which businesses, are they?

[00:22:59] We haven't we haven't we're not quite ready to announce that yet. We've got some internal communication and we're in we're under invasion in active negotiations. So it's I want to be careful not to violate those vendors. And but we will announce as soon as we possibly can. And they are active. They're nonpoor, and which gives you a little direction. And I just apologize for having to be so obtuse at this point.

[00:23:35] Well, how about maybe in the broader sense, what's the collective sales profile of those four businesses?

[00:23:42] You know, I think on the infrastructure side, we're looking at about 60 million in revenue, roughly. And really, you know, unfortunately, low margin business is low margin contributors. Or fortunately, if but we're hoping the businesses they go to and can invest and do better than we've done with as we've refocused, I think on the metal coated side, we're really talking about real estate for the most part, the plants that have been closed. And we're now selling real estate for sale for the most part. We have taken action on one of the closures, one of the galvanized plants, which it was just too much capacity in the area, and it was further impacted by some of the issues we talked about in the Gulf Coast. We were fortunate we were able to get really good seasoned employees to relocate to one of the other.

[00:24:45] So, OK, great. Thanks for taking my questions. I'll get back into the queue once again.

[00:24:55] If you would like to ask a question, please. Press star and then one to ask all your questions you may press star into. Our next question comes from Noelle Dilts from Stifel. Please go ahead with your question.

[00:25:09] Well, hi, good morning. I wanted to build on one question on the non non core business. As I know, you said there were low margin, but I guess they just wanted to confirm that they are contributing to operating margin. Right now, they're not a drag overall. Is that is that fair?

[00:25:28] That's fair.

[00:25:29] Ok, and then the second question that, again, is building on, John, is it's just could you tell us how many galvanizing facilities you're going to have, you know, after the closures, you know, given the closures that have occurred and the sales that you're planning?

[00:25:47] Well, we would like to think between the closures, divestitures or these disclosures and then the acquisitions will still be important.

[00:26:00] Ok, and then in terms of the acquisitions that you're pursuing. Are they in new geographies, could you help us to sort of understand the strategic rationale and what you're targeting to bring in what these deals?

[00:26:15] Yeah, we're looking to, you know, as you know from you know, it's pretty well. So we like to buy adjacent to where we already have facilities. And so this will move us hopefully further north, further northeast and. Yeah, so this would be a new geography that'll be incremental to what we're doing and not overlapping for the most part.

[00:26:43] Ok. And then I just wanted to touch on the rebranding of energy into infrastructure solutions and the strategy there. You know, so when you kind of talk about this idea of infrastructure solution, you know, I know you have a public presence there and in transmission and distribution, could you give us a little bit more of a feel for how you're thinking about that, you know, serving that infrastructure sector as we move towards.

[00:27:11] Yeah, good morning. Well, yeah, we have decided to rebrand it to really focus on those core markets of transmission, distribution and utility. We particularly like our enclosure's and switchgear business, continue to invest in that area. We think that, you know, it's an area of secular growth. The other area that we like is our welding solutions business. We've got a lot of great technology in that business and we've done a really good job there of expanding into other markets. They traditionally serve, just know, refining, and then they've moved away from nuclear and our into all sorts of other interesting markets now that we're bringing that technology to bear. So collectively, I think those two markets, you know, we really like and you'll continue to see us make moves there.

[00:28:09] Yeah, well, I want to add that I think in Welday Solutions, about 40 percent of their business is now non refinery related. So we've been able to transition away from most of the nuclear and replace a chunk of that refinery business with other markets and in the infrastructure sector. And the technology is really outstanding.

[00:28:38] Ok, great, that's helpful. And then finally, just on, you know, galvanizing and metal codings, I know you mentioned aerospace is still a little bit weaker, but any other verticals that you could call out in terms of particular strength or weakness in the quarter?

[00:28:56] You know, we've seen the truck and trailer has been improving, eggs improving, and wind solar has been really, really active. You know, this move to renewables and a lot of areas, this has been really big for us. And there's a lot of steel on those. And then we've seen the transmission that has been good as well.

[00:29:26] And our next question comes from the DeForest Hinman from Walthausen & Company and Co., please go with your question.

[00:29:35] Hi, thanks for taking my questions. Very nice. Transaction on the debt side. Private placement going out seven and 12 years is a lot further than we've been seeing. Some companies go out, but still maintaining a very attractive fixed rate. Can you just give us any color there in terms of covenants attached to that debt or. And the other thing we should be aware about that?

[00:30:09] Yeah, this is Philip. Now, we entered the market. You know, it's a good, stable rate environment. We entered the private placement market after 10 years of being outside that market and had a mix of new investors and existing investors join in on our on our deal. We were able to upsize. We had a tremendous amount of interest in our in our offering. So we were able to upsize. And we're also able to spread out some of our risk related to covenants. We were able to increase basket sizes and things like that with different covenants within our within our deal. So that really helps us as we look forward. So just so I was there and he wants to call out that Eve, the Covenant know our primary covenant, our leverage covenant is in line with our current credit facility at three, including the one that it was more the different covenants and baskets that we were able to stretch out on the acquisition baskets and dividend payment baskets, things like that.

[00:31:22] Ok. Very, very helpful position to the company. Very well going forward. And probably built into the next question on the M&A side, you talked about deals. It sounds like you want to try to get them closed. I think you said by the end of the year, is that your calendar year or fiscal year?

[00:31:44] Well, I'd like to get them done by the end of the calendar year, but given some of the travel things and stuff like that, it may be that we'll get one or two done in the calendar year and I hope we get three done by the end of the fiscal year. So.

[00:32:02] Ok, and can you help us understand the. What you're seeing in terms of outlay, I know we just read that the good that we got a lot of availability on the revolver, you know, ballpark in terms of cash outlay to get those deals done and any color you can provide on multiple range that you're seeing.

[00:32:26] Yeah. You know, these are these are traditional galvanizing deals. So they tend to be under 10 million each. In this case, there could be one larger, but that gives you a ballpark. And we tend to target five to seven times. And what I you know, the history of our galvanizer team is they tend to within the very quick integration and bring in their scale that they're usually able to improve that by at least within the first year.

[00:33:02] Ok, and then M&A on the sales side, can you give us any update in terms of what you think timing wise on some of those transactions? And then I know you have the NDAs and I respect that any color you could provide in terms of proceeds potentially from those transactions? And what were we do with those proceeds from that?

[00:33:31] Yeah, a couple of things there. We were trying to get these done as quickly as possible. We've been working on it for a little while and, you know, just somewhat restricted by travel. But now the focus is to get those done as quickly as possible. So my intent, assuming that we're successful, get them done before the end of this calendar year, which means we probably have to get them done before we get deep into the holidays. So proceeds are not going to be major or not anything that's going to move the needle to any great extent. What we are doing is getting out from under the capex that they draw the resources, they draw the, you know, just the various corporate functions that support them. And so we free up resources to focus on the growth side and focus on the core. And they will generate a little bit of cash.

[00:34:28] Ok. And then can you give us all an update on the capital allocation, focus post restructuring, and I know you're working on the deals you just discussed, but maybe more broadly as it relates to the dividend strategy going forward. Share repurchases and, you know, you bought some stock at somewhat lower valuations to offset the Russians. But, you know, has there been an updated discussion with the board about buybacks potentially more than offsetting pollution or actually looking to reduce the share count?

[00:35:11] You know, we've had discussions. We're not ready to really announce going beyond minimizing dilution or buying in in the dilution. But that is something we're continuing to focus on. We do deploy quite a bit of capex into, particularly our military's business, to keep it productive and efficient and continue to invest in things like DGSE. We did have the CapEx that will continue to deploy, particularly into WSI, for both their facilities and technology that I spoke up. We announced the dividend. We it's been a long time since we haven't paid a dividend. So each time we look at it and it might my well, we're looking at and I don't see any reason why we would withdraw it at this point. It's got a decent yield. And at this time and until we see a bigger acquisition, opportunities that would be attractive, we're probably going to continue to be committed to that. And then on the acquisition front, you know, it's just not given the cost of our debt. It's there's just not a huge drop of all the deals we talked about are just pretty easy to tuck in.

[00:36:43] I would just add this just more of a comment, you know, being able to turn out your dad the way you did with the private placement notes is a very positive development. I know you're working on getting that refinance. I think we were discussing that at the last call. But, you know, really locking in very attractive rates, you know, seven years and 12 years is kind of a game changer for you from a cost of capital perspective. I would believe you're already working on initial discussions with your revolver, but in an environment where you have clear, you know, cost of capital outlook out potentially five, six, seven years, you know, very low cost of debt, maybe not very large deals. It would seem that there would have to be a greater discussion on greater dividend payouts or share repurchases or a combination of both.

[00:37:51] Well, the good news is as we as we get this quarter ramped up, this is where we usually do or we're a little delayed on doing our strategic planning engagements. So we will be doing that over the next few weeks and we'll definitely take that into consideration.

[00:38:15] Once again, if you would like to ask a question, please, press star and then one to address all your questions, you may press star. On to our next question comes from Bill Baldwin from Baldwin Anthony Securities. Please go ahead with your question.

[00:38:29] Thank you. Good morning. Good morning. The couple areas here, Tom. Can you give us any color as to the kind of proposal activity or. Sales pipeline you're seeing in your domestic closure and switchgear businesses at this point in time?

[00:38:50] Yeah, it's improving and you know, we're seeing engineering firms and contractors come back to, you know, kind of I don't know if they're coming back to the office, but we're seeing more activity and we feel good about the outlook, the balance of this year and hopefully get some things in place. We've also taken the opportunity to continue to train and work on improving the professionalism of all our sales organizations during this time and feel good about our opportunity pipeline as well as our visibility and ability to drive value. So, yeah, we're feeling pretty good, super, super far.

[00:39:36] So that's like maybe we on the fiscal twenty two, a little bit of momentum going on. I'm hoping to head back out there. Area I wanted to cover. Just briefly, Tom, is your international area. I know you've had some ongoing projects with joint ventures and in the past business. Can you kind of bring us up to date as to where we stand on that on those projects at this point?

[00:40:06] You know, the high voltage business in China, there's a ton of activity. It tends to not be in our sweet spot. We are continuing to work on it on a joint venture partner over there that would allow us to handle it better with you know, from that side, we have seen activity for the high voltage both in domestically. And we did we do have things going on in Saudi Arabia as well. So, you know, it's kind of a mixed bag, but we see a lot of activity. It's just we're not we're not seeing a whole lot to get too excited. So we're using good discipline around that.

[00:40:56] Ok, so that's more of a long term situation. It is. It is in the Middle East. OK, and the second question internationally, do you see opportunity, time to take your enclosure and switchgear business into some international markets for, you know, that would probably require us to go acquire something.

[00:41:18] And right now that's just not on our on our radar. So in that will be one that we'll take your comments to heart and make sure we do have that discussion as we get into our strategic planning process.

[00:41:35] And lastly, domestically, Switchgear, and do you feel like you've got the facilities you need right now to conduct that business the way you want to air, you know, North America? Or do you see a need for some additional products and our locations to really flesh out that business for you?

[00:41:56] You know, I just took a tour of those facilities with some of our executive team, and we're really pleased with the progress our three closure sites have made. I only made it to one of the switchgear sites and the big one in Portland. The teams are really working well together. I think I've seen progress in their supply chain, their standard design, standardization, you know, things that they've had to do, working remotely, I mean, doing it apart instead of putting teams together. And, you know, I'm encouraged. I feel good with the five facilities we currently have. You know, this will always be an area as has happened in the last two deals. They will particularly when we acquired Lefteris, it was an opportunistic kind of thing. So, you know, it's an area we don't have anything on our radar screen right now. But if it gets something popped up, we'll take a look at it. The key right now is we have plenty of capacity. So and we like kind of the distribution of it. So because we're over on the East Coast, outside of Baltimore, we're in in Chattanooga with a large facility. We're in Missouri. We're in the southeast corner of Kansas, where we were up in Oshkosh, Wisconsin. So right now, we like our distribution, given where the activity is. And we haven't had to go chase a whole lot down in the Gulf Coast. So, you know, it's plenty of capacity and just need to see more opportunity. We feel good about our position.

[00:43:46] Very good. That's good color, appreciate it. And best of success.

[00:43:51] All right. Thanks, Bill. Ok, well, that's it.

[00:44:01] At this time, we've reached the end of the question and answer session. I'd like to turn the call back over to Mr. Ferguson for any closing remarks.

[00:44:08] All right. Thank you. All right. Thanks, everybody. We've had good discussions and we look forward to finishing a reasonable, reasonable third quarter and continue to let go of it. And elections and things like that settle. And then we will have completed a strategic planning process which was delayed while we saw how things get sorted themselves out. And we'll get back to that. So hopefully, by the time we get to this call for the third quarter, we'll be able to talk to you in more detail about what's now fully core. What's not clear? What is likely? Hopefully we'll have some announcements. We've seen some of the transactions we've talked about and then also talk to you about how the outlook is for metal coatings going forward and that kind of thing. So thank you for your time. Look forward to talking more over as this quarter plays out. Thank you.

[00:45:16] And ladies and gentlemen, that will conclude today's conference call, we do thank you for joining. You may now disconnect your lines.