Faro (FARO)

Michael Funari Sapphire Investor Relations
Michael Burger President and Chief Executive Officer
Allen Muhich Chief Financial Officer
Jim Ricchiuti Needham & Company
Andrew DeGasperi Berenberg
Richard Eastman Baird
Greg Palm Craig-Hallum Capital
Call transcript
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Good morning, everyone and welcome to the FARO Technologies First Quarter and Fiscal Year 2020 Earnings Call.

For opening remarks and introductions, I'll now turn the call over to Mike Funari at Sapphire Investor Relations. Please go ahead.

Michael Funari

Thank you and good morning. With me today from FARO are Michael Burger, Chief Executive Officer and Allen Muhich, Chief Financial Officer.

the of its XXXX. close, the results the quarter first after company financial released for Yesterday, www.faro.com. The for available at the press first related release are on and FARO's Form XX-Q website

results the is goal, In expect, anticipate, company It make differ ended order XX forward-looking company's the materially press similar will, that may statements course Form and can XX, results actual believe, may These the objective, plan, projected company's yesterday's March and this during you materially in words. the words, be December to better XXXX. in identified differ forward-looking statements. cause and Form XX-Q from results, for the XX-K to by intend, management are those in the and help may its that possible may call. statements set for forth continue, of Important potential, the quarter understand factors release such as ended actual year

call, the certain Generally Accepted will conference find GAAP including US or financial non-GAAP reconciliations non-GAAP During discuss Principles these release with to that In you regarding measures. financial are presented measures. additional will accordance Accounting today's measures, management press not in disclosures compare measures

measures the believes GAAP not of While in recognized with these provide non-GAAP relevant, operations. management financial investors core comparisons period-to-period

of performance in accordance prepared not However substitute for these considered be in financial should a with isolation a or measure as GAAP.

to Michael. like over I’d the call Now, to turn

Michael Burger

morning and Mike. Good our Thank to you, call. welcome

situation discussing all in. to a currently Before take moment to results, quarter we're address the our first like I'd living

been and the safety COVID-XX, to to world we implement of the necessary the of actions combat disruption customers. spread organizations our focused and the taking around plans countries to our minimize workforce, on While at to to FARO have ensure the work

remain recent industry, exception US critical mandate. currently granted The All has Singapore to FARO a and closure facilities an to open. government their infrastructure be deemed global has manufacturing of our us

both for operations. has remained in facility manufacturing open service and Our Germany customer

shipment We factory this and to will finished opportunity to supply In for discussions, are goods clear customer require the future active. a operations customer build At while unexpected initiatives highest inventory time, it and customers. that closures. our our used we as offset our logistics continue requirements, XD that level have maintaining measurement support this our chain many service is of teams meet means of the that remain to confident

their they However, and are adjust which times. trying own to uncertain impacted extent these customers our will need understand how still be the to to businesses in

delayed. have of not a meaningful have seen number we order projects seen large we cancellations, While being

Within the governments public needs the this and United placed Geographically, safety market we've pressing on purchasing given at approvals, virtual for has dramatically. slow fairly to come example, States public in India to slow being a in funding the March. began often seen standstill. business time more Europe requires which

However, activity to and our regions different to indications lead at to likely strength across China's recent levels conditions times to continuing point normalize. end magnitudes, time be have will and All weaknesses which markets, intermittent which and increased. affected

historically for note total accounted hit time period hard an should One is, particularly that market extended aerospace. FARO's revenue. aerospace X% be about I that of X% could of to for has

business a within of scenarios managing we aspects focused as which around preparing the company, demand action uncertainty, are may various this Given control on our plans our and emerge.

resources if a arise. arises, as to situations also which the to was have restructuring began robust potential underway maintain these strong sheet need activities, To options of impact navigate balance the feel at plan, We are time we COVID-XX. we and complement they well identified that fortunate additional that have a we to ensure the sufficient

million levels to as last we this we reduce revenue important and $XX time, can believe tighter our September it we organization said, manage EBITDA we $XX fluid quarter, enough is remain adjusted With quarterly nimble this and that as the to enter control, while through quarter. operating model investments breakeven key future. growth That actions million we announced an situation, expense making at key necessary the in in business the current same changes in the manage while time significant progress. our February, to necessary we improve balance initiatives. In the made between despite striking our will announced we've a taking several And how the steps between world

of one we sales customers owning our to sales to being We've collaboration greater the under sell go seen Further, full to other the geographies They're and interact about brought the the brought the opportunities team well alignment revised market has for the given working opportunity accounts product of environment we our responded Our together to strategy. sales leader. excited line. or breadth FARO's forefront. has team already global with as and how remote prospect current

things doubled. have in years, has efforts For adoption all demonstration despite FARO underutilized been invested based virtual, utilization nearly studios studios of our adoption. web Today, has of given that the force drive to

outstanding our training our We're web us based activities sessions a leverage increase difficult lining becoming ingrained which are us these expertise. there's effectively for our efficiently this in it more further of types go-to-market also culture, time and in having that the scalability that approach. silver customer helps turnout If to of product is

solutions-based software latest is enhancing a our recently of On an announced CAMX developing offering. the latest release which our and we initial suite product more iteration product step This front, towards software initial experience, directly needs, of an customers' organization develop process basis. our software offering which subscription everyday our their utilizing it addresses lowering on is a example outlay by marketing while a investment to the

of processes reduced globalize to we've improvements cost. yielding a at office and back our Finally, some are that significant worked centralize hard

expense QX success management than careful million lower first toward of million expense $XX.X progress $X was enabled lower million All combined quarter that with XXXX $X this XXXX. non-GAAP good our and our is model. of QX stated This operating than

more By last gaining believe we are FARO value the are model. we problems stronger, strategy. taking in solutions optimistic. needs. to term solutions an increase can with or emerge to business we of is deliver the enable As our customers a differentiation meet full trying software understanding effectively exceed goal that call, we near highly our financial global am more through a of scalable steps will increased the discussed I solve, our that these and Despite the products efficient challenges, our our to and

With of that, I'll quarter turn the to call over first for financial our an Allen overview results.

Allen Muhich

Michael you, everyone. good Thank morning and

first was revenue quarter the down of to compared XXXX. XX.X in First XX.X XX% when million million quarter

demand soft result in of order the continuing of and outs March. our a COVID-XX push As the start in markets, served saw we related environment

typical, and of up a in our our the given of while know were amount in you is the the conducted surprised with held of we team pleasantly to resulting circumstances. March, of the quarter most well close softer business in sales efforts meaningful that fairly final As month orders than business

all Product of sales primarily across as decreased which was the quarter. demand tracker decrease partially several a line to the served shipped million our offset were XX.X XX.X during product in compared result in market, large by metrology This markets, XXXX. million of our within QX deals

stream. QX Service of to revenue recurring the XX million XXXX, this to X of up nature demonstrate when revenue of million continues which was compared

with first New XXX.X order XXXX, quarter of compared million XX.X bookings as XXXX. XX% the of for first million quarter were for the down

products we negative that conference resulting we in to fourth modestly on were QX. received to Those in the bill. our in late shipped ship orders mentioned XXXX had unable quarter a in February QX I that book call of

around globe. business be Related quarter, the first in announced to paid severance in predominantly that employees in transformation million the XX.X actions charges affected we February, to were the non-recurring cash incurred for

with As the reminder, XX with a to we in to nearly of charges implementation our plan, two million quarters. expect incurred XX the XX million non-recurring incur associated in million total last

was affected margin gross in same gross with quarter of as overall prior XX.X% for fixed and adversely period. result reduced margin GAAP the first is XXXX, compared for of the was XX.X% cost reduction year The revenue, absorption. our margin which a non-GAAP gross XX.X% the

operating GAAP related million mentioned million expenses. acquisition charges, well were as XX.X of and and stock expenses X.X previously in amortization as intangible included restructuring the million approximately XX.X compensation

of as to as reduce run XX.X demand million company savings to the prudent Non-GAAP operating from as taken X.X than rate some cost month the benefited further current one QX related XXXX, our actions, environment. restructuring were given of spending, well of steps expenses lower million

loss as a XXXX the with first compared for income as of quarter environment. million lower of first XX.X operating operating XXXX the of quarter the result demand was of GAAP XXX,XXX for

Adjusted EBITDA was X.X million or X% of sales.

GAAP $X.XX Our or per loss was million share. net XX.X

of Our per $X.XX the XXXX non-GAAP QX earnings XXXX. in per net share share $X.XX loss to was XXX,XXX compared non-GAAP first for or quarter

We continue of XXX.X balance structure capital and to strong a with debt. a and million cash no maintain manage

the of generated cash, in outstanding quarter primarily we of million In XXXX, XX.X driven collections by first receivables.

that restructuring to tighter million revenue. will outlined to adjusted into our together visibility while achieve customers limited, from February, remained on we us XX confident demand Michael expense As environment are million XX mentioned, EBITDA with in controls enable breakeven of the efforts

This concludes there? be at of our to Are this remarks time and you prepared take pleased questions. your any we'd


[Operator Company. Instructions] from to ahead. go We'll Ricchiuti go first Needham Please Jim &

Jim Ricchiuti

morning. Good you. Thank Hi.

Michael Burger

Jim. Good morning

Jim Ricchiuti

just have the Allen, What to if given senses folks be roughly? the exposure does concerns in I'm or for able to by you thanks market. the represent automotive Yeah, Michael way, aerospace. the segment on color might of that the give wondering, some that us

Michael Burger

actual segment, We have number imagine the but front that, bigger it's aerospace me. publicly would haven't stated a don't bit I probably Jim. actually than of in an I

like coming to going relatively like I that I back but from in, the that does on still customers. looks and But involved quote, our had look on yeah, all track. they're and the demand Europe it concerned positive And will not say about of are market automotive some look to actually factories or So impact we're of we're like them. I'm recently China news we've end work particularly think projects some

So getting relatively – positive unlike we're news, that doesn't not which today. any indication aerospace, it's whatsoever of

Jim Ricchiuti

question, ties next actually Okay that into the and Michael.

some You delays. alluded to project

market, within business, you tough, any I First and color business. Thanks. on floor just is then month metrology safety that there are delays is some project understand bookings. of factory actually terms seeing of public think to you and any Where in public color safety the have? but factory but we quarter

Michael Burger

we've pricing few people as Well, it will quarter. call seen I we often project as close opportunities your opportunities very we've metrology answer within we potentially funnel, our think that seen relates the actually sales mentioned the first is that – track To our and identified very seen our have script, cancellations. what exist. delays are that around to project market, have we in And the which we question very the some funnel, strength the some diligently

I is saw we portion been we've the good that traction what of dealing looks lot funnel is because on and to Our growing, relatively know – But not new getting for or frankly is his the a tracker, with, but and the that's pushed primarily metrology. into don't in companies of it I mentioned a think it our out expect. lot And, think really and it continue quarter like us. Allen is first into actually which may that second quarter just

Jim Ricchiuti

queue. jump I'll Thank thanks. back Okay, you. in the

Michael Burger

you, Thank Jim.


Andrew ahead. Berenberg. with We Please will to DeGasperi next go go

Andrew DeGasperi

Good vertical is laser doing guess maybe morning my you you and highlighted perspective? public thanks Can know Ben how for metrology tell from I markets. the I protection first, construction maybe taking us scanner safety question. and the

Michael Burger

pretty very America Yeah, hit I construction the and Asia, in by – regionally were construction strong North industry at general followed in world, you in strong Europe. think very Europe, then we're, hard think we're where in if I the has look been in and we

think coming not in I in work that all We're United now, the obviously slowly. we're States. situation getting However to that is we're Europe back indications

strength our then I Europe, was by segments hit really of all hardest think in business the relatively virtue States. So United the COVID hard which hit by our and the market of by was probably of scanner followed

in is that that States work it and sites allowed to be construction going now is the talk proceed. will back is think Europe I to there United encouraging

safety I the think which is business. a public scanner participant in also

a going in stations think Europe. that's most America think government be a I longer police because certainly and certainly little don't North it's priority to around I just and

hit that hardest think the the back. I seeing construction was scanner the business coming business we're although is signs probably So

Andrew DeGasperi

customers the other that then of for releasing of know that I how helpful you mean, software subscription wondering terms type on CAMX received in serve? for have few any released rest verticals the I the have of and I weeks currently since do only any B, new year you've That's it's been the plans software release, and essentially a that. you just

Michael Burger

in look I them. to our involved I targeted give script, positive very Obviously, of like think so next you on. feedback from customers customers through as feedback was been mentioned CAMX And the it needed talking needed organization and worked to really has we is too version intimately the with our – early the what to in definition marketing

I your we're market software we updates. early general offerings. is the And continue bit think of And second it's the out you software about it's but as a encouraged. prolific question absolutely, very to to be a reception it, talk is will there, in suite answer to constant know, once our

we're And if treadmill, on so that that we're will. in mode, you

projects will that and I'm So don't believe to we software for going key have proud that that actually platforms we updated. a – other product are we And regard. key say or we're very to calendar new beat – busy miss that expect have be release actually, in I continue XXXX a we

I'm So remotely ability by still collaborate. work I'm, our encouraged to and

Andrew DeGasperi

probably maybe how to you're I – are I lot generally has relative previously obviously, – you – sales mean, little environment. just mean, a I I given that. current stage? sales from mean, like has of on this can virtual. the up approaching how following I'm doing But that the this changed is the how more process elaborate the – guess, that And a you Yeah. like, people

Michael Burger

everybody March more of to because think, it's, course. much that was from looked standard, we and dramatic the the probably of visiting Well, March, And companies think think figure clearly toward it's what rule. right. available, change, now started I is And – be to many facilities. began trying the third if in off yeah, Yes. Clearly, week out I of this frankly think us customers not actually basically mean, in the waving a I I I more exactly middle March, like much approachable. beginning

guys hey, that very me can customers because used sales know phones, So clearly our contact. et it think as writing as cell appointments think we which emails that and our it's bit or don't in we were people's have you who our our we has the that the be call but of we're our studios. that I studios can virtual or saying, of were So a do I diligent, to has – number cetera little doubled terms calling easy probably in as made we mentioned, are But and back? web I been of numbers demos, literally process labored. product in demos web have

demonstrations actually homes. sales of selling their able many be – enabled have we think I Also, our our people to do to in

some a so even YouTube approach. frankly, product a demonstrations. different response I finding and has these But that most where web-based success And doing think we're enabled on huge YouTube, the think I of a probably of is really we're lot training in with

And so it Andrew. dramatically changed has

earlier based cycle. that this And do is think us to have in it going things efficient, back makes able go the it normal, exciting do to of that when being tricks I demos I of believe lose much actually are web to think is what about bag not here. developing more we kind been we I sales

now says helps actually have rate. that the it success data We

figure is where were to tenacious going they're our mentioned, I'm of surprised this the that kind to are despite with we extremely But very and end we trying sales out up. where pleasantly proud of guys as and in. we're we're situation So Al

Andrew DeGasperi

That's very jump I'll in queue. Thanks. the helpful. back

Michael Burger

Thank Andrew. you,


Eastman We will go to with Richard Baird. next

Richard Eastman

Good morning. Yes.

Michael Burger

Richard. Hi,

Richard Eastman

and into color little talking about around revenue we on is around business, as thoughts weighted touched I North heavily questions, cadence metrology there we're maybe few morning, I'm head the you quarter second being tell maybe declines? kind think of and how into business it with towards the standard market as America could of us you the a possible curious did more bit metrology in here. that the construction Good the geographic EMEA, the when as well product. the you're industrial some EMEA

Michael Burger

looks think is from it's funny. regional sine effectively out negative My phase, waves. I Well, visual saw right. of waves this how of perspective sine a three We

you We're look kind was strength Pacific, big of I coming cycle and think, And so South in comfortable trough by was Europe seeing of first, Asia Asia Korea nothing if America North then certainly down saw second kind up and a and out the exceptions. that and we're and terms was if hard third. at Japan huge we China are So about followed where went that feel in firming with phase, some else, now we is, activities. forecasts beginning to of in the of two China's beginning.

what I the place think they're and Japan to as goes down and kind do is it of shut over down to trying hard. and clearly relates kind of they're India all up frankly,

beginning exceptions, we're two – those in look with So Asia. to strength see Asia

that to Europe, have things releasing a but phases to it's sound and up. just customers. coming mid a we where to are companies And relates – frankly we're go to very back large Germany of and allowing is smell, customers, we just part to big is activities that are it's like that's small in the – size of work. As we sounds grouping smaller – We're that it beginning seeing also have large –

so us. good for And that's news

think I cycle out that they've it and ramp. like we're is the seeing looks they're where So in beginning to they're bottomed signs

still probably America the North think we're kind of bottom down probably to go and the on here. frankly, was I last –

along was back all a has I that don't of getting et we're and to to open signs cetera. are analogy normal. to trying bottom, we're to if we the use direct think that I by lot hearing think of I state a But bouncing up people businesses correlation as

larger smaller some the the I before Certainly businesses businesses. think back of will come

on impact will interesting. what so has that be And revenue

think, I you of ended if but and as as to with down reasons. fall and public If businesses, I construction add business probably safety in quarter then think I the for by that conversation this we hard, our some hard the scanner you Yeah. us despite public again, But why free obvious March the think surprised metrology really markets, will is size business up we hit, construction look largest went business. I Allen, pleasantly by in with was at And metrology these is our the a overlay and safety. argue where for three were having that and were effectively would followed color. not

Allen Muhich

steady thing remained would the you the is add of and The this history. with and that numbers in bookings relatively only can geographic mix I our see revenue

Michael's I waves, exactly And – and think and it balancing that they the we've so similar in happened ebb the out, flow quarter balanced within they're it to sine just traditionally of and right up terms we themselves where been. end as

Michael Burger

Yeah, I would I would change in you that how guess to mix. this going I and mix, imagine about But feel geography, that know Al. dramatically pretty that's don't QX,

Allen Muhich

correct, that's suspect, I yeah.

Richard Eastman

And then kind here, of your cadence again, to given rates some a and seeing of deferrals typical conversion and, revenue there. orders the we're

your in quarter thinking second this again, quarter FARO's be your confidence that you be a think. revenue second about So quarter you – second would I – what the when bottom? would mean, level planning, number second you're your know relatively your – is high revenue quarter

Michael Burger

asking. I should Yeah. be

Richard Eastman

ask you – me if Well,

Michael Burger

I ask mean, If you, I literally suicide. so. How's forward hope giving is of indication I I mean, kind that? now honestly, any certainly right

Richard Eastman

as That's fair. Yeah. Good well.

would to would but September? forward. casually mentioned – kind million revenue repeat a place you that XX of could kind your linking and a made think suggest comment you I going I'm EBITDA level – you timeline, breakeven XX though asking two, that If be level of by kind comment your in EBITDA that you I breakeven – Did of million these by level but just you be made the EBITDA You of or adjusted around had a around was

Michael Burger


Allen Muhich

we Yes, did it.

Richard Eastman

of pretty end and activities. feel most about that's cost timing restructuring September all the right by good And the of you'll All of for. that Okay. accounted having

Michael Burger

feathered think QX be Well, is Al QX. I it's what in and said going to through

think kind was the the of while And occurred, so motivations so that timing think that And had – looks – the had our right, knows exception, model we different, think I where to – what and were up do but write a been took actually the like. the regulatory the cost in lot right, actions have timing of everybody actions the a the taken, taken approvals, have that's of that. That February, of have restructuring, But clean lot I go objective in we've couldn't the conversation, we've – the our because P&L. planned. better was headcount been one that of occurred to Europe, needed more I it to which with fact is we've offs

That actually And should this end. so happen quarter during that'll affect.

think we the should a quarter, the I of so much into that we'll cleaner end were – be be And than quarter, P&L pretty lot QX. September coming the from at of we the this perspective end

Richard Eastman

and just – Okay,

Allen Muhich

determine you're of to capital. kind if add, modeling term expense is. be try certain norm and level the it's through last more than you'll we within want what not look that's quick I situation of an the is through long-term what and one that way this what managing manage deferring like. financial think one can with we and But end clear just mean components and And does operating our ultimately investments do Just going think and where level certain prudently less each deferring ourselves exactly that's expense and go that our articulated the believe short that that's this something don't through during through to again, we the new we expenses. of downtime we But your to you'll quarter, that find statements up

Good Okay. thought.

Richard Eastman

or And the question, qualified based a then that you little any that generating leads? sales the conversion sales around are more enough have about approaching confidence process, rates of web these the demos? you last process your just as Is just established thought that bit basically you process, the as talked web

Michael Burger

function application a investment works a over selling we web typically, Yes – the studios basically And much world. a are made normal founds engage so. very many a or done relatively the that is, demo – Yes, building number way in it teams if sense. the is years an customer. web the are suggests within through sales data and We a find will do see them when demonstration through on we where of a process try for. in house using be what an to product, product, and we higher. the rate their the then web demo physical actually of go that to do the our they that schedule web basically allows we that We've that with Opportunities demo that cycle, around have we And much of tool and yes. demo – sizable is that the demo that then conversion

was physical Now under circumstance. are today's In that normal site on demos the obviously, world, longer no doing possible.

have pulling rate. our frankly, to adoption – customers well things our and training multiple but of are as well as web So webinars us low access to over that had we've these all more we've studios years, as relatively enabled online as

of actually lining continue our those I I as that think that have norm the our objective It a these is lot said leads. the the least capabilities process. you've script, certainly of to helps asked. a that And as And a I as think methodology as closure doing us legitimized just fact I is here is it's company we I think silver or to it also, push with think I customers. of in the qualifying mean, the in new at methodology a

but going it's is new post look don't see don't normal what know we away COVID, like these things really So – going yet. the we to

us we're – we we're excited do to to I'm able But and capability and to love we're still the we're to of this have have really – still would facilities, the that. think go to by I fact our in able sell. kind going that So have customers

Richard Eastman

nice guess it's now. Got I have you, yeah, yeah, to right a

you. Thank Yeah. Okay.

Michael Burger

Thank you. You're welcome.

Richard Eastman

Thank you.


Needham we'll & And Ricchiuti go next [Operator to with Instructions] Jim Company.

Jim Ricchiuti

you're the relates could competitor us what in also remind you in to direction that web well in extent maybe just to some any this behavior wondering provide moved Just you you change a as how and seeing these to as and environment these studios, advantage? many if have Or competitors major competitive maybe feel have a in of the of recent might which years? of little bit this your extent maybe a

Michael Burger

of Well, in actually our competitors actually, I'm aware that. web studio. not heard invested I've having not

competitor inventory, from for I I to we're depleting is think that. seems what is and we're large to their down which factories hearing think us. one all close a And got that anecdotally, our have is their we've shut huge competitors over opportunity

As have studio XX believe up kind quality we've grassroots it – their enabled number home of to got our sales capability effect, studios, we pretty studio it's web has actually, studio, globally. number several have from professional so that but our gone dramatically of to a in relates And the a I as of and professional regional people we've XX.

Jim Ricchiuti

mean? on better little is little a this and make back strategy and bit a challenging it further I restructuring, happened. try a Got you before guess put obviously, to as front to strategy, much as together make guess step be of how positioned this Michael go-to-market saying, to and okay, appear does along – all take far go-to-market it, you in you more getting on this you're as execute this I but new this trying – this the I And does it is – I'm what

Michael Burger

we're – of had with them? has so and our and all expectations I reset I reset, who everybody it frankly, we how mean, virtually in us. to on to it world COVID deal with And the to makes their kind to focused did think deal and so the our so I think level I think easier how And right. now how it actually easier situation for now do it on customers? actually allowed field that because this customers We're has get makes to playing been deal have for all us.

owns we normal a And that customer. our entire concern sense, that in accounts, in point sales add have some we own that now portfolio, fact I contact we've while what of frankly and think, identified singular risk. the confusion identified and So now each are clearly could people clearly a and the who –

know solidify point who process. a and owns who account, have we think contact, actually FARO know will it's we it they of sync situation our and it actually streamlined and owns now I think single the I from that helps them the

I'm So fingers working. it’s I Jim think – encouraged very and crossed, I

Jim Ricchiuti

lot. Okay. a Thanks

Michael Burger

you, Thank Jim.

Allen Muhich

Thanks Jim.


go Greg We'll Instructions] Craig-Hallum Please go Capital. Palm [Operator ahead. with next to

Greg Palm

Hey, Yeah, are thanks. Michael, great, hey you Allen, hope well guys here.

Michael Burger

Greg. Hi,

Greg Palm

which March. was commentary disruption. activity way a of but Any not A quarter on last pretty maybe I pre-COVID? part early significant sounds little the about sort to quantify the know the quarter, February, there's bit anecdotal sure pre-COVID any few weeks tracking order was versus trends, commentary. if of January, the how like of maybe I'm it

Michael Burger

everything I really, normal. pretty think was Not

marching I like toward know, the I through really of – as the a it we three the four saw what probably quarter. the you builds backlog we were think of quarter, is and the way our actually, last heavily through quarter quarter, and weeks weighted weeks we felt think positive

would is is March And to COVID I in so hit earnest, when when in it really the get began which week weird. argue probably first

in from and think first I certainly week home was working in down. from China started March home United I States we in the And the going the was working of and already March. Europe rest – think there began

yeah, we're we not as script, saw see softening, to seen we're said, I some opportunities. yeah, and going it. still is talking some in large our we buy What So customers, seeing we – began yeah, want to we to cancellations. in pushing our But have kind it of of this, need we

don't back work. when demand to know, yet. we're when when the be. We know to work, environment will know we don't just don't come what We We back coming

people Greg, the very do clear. has know we of so great, mean, we have – back around hey, that we and seeing not a less don't even – that's But we're smaller run bought. just this our so as be repeat typical this why so large than in a revenue rate scale. is we we normal run any don't And to visibility saying, kind business is coming it's our it guys reticent we're situation, know we've of that we're know reasonably in which you not already I going if year. not thing. it's thing, mentioned buy down not and I shutting to need this but in product – positive not been I script but happened There's going think make actually rates, to couple saying kind we're commitments That today

Greg Palm

pushed budgets? delayed sense. what versus do your that, customer reduced just in I you mean, out have you I sales sense force? talk your Yeah, any been out makes cancelled? how mean, has much to versus terms is as for all Around of or that feel

Michael Burger

to It's three we got No, Again, we've right. if XX,XXX quantify. customers year a you hard on cycle, don't. overlay,

hard of a it base. it's buckets because is quantify, customer it's so huge So diverse. And in to kind

customers of reason that think as so our is as that's in kind into sell markets, diverse reality three I the I this business it has a in thing probably because map, stable three been. – has our we situation, we because that's much group very been pretty And it think those but it's across positive big a XX% buckets. big

got good coverage. we've So

the probably and metrology the it's spread think first will just over come our base. I to is the of largest it be business largest customer back business because

by for And by governments construction allowing It's a think will start back lot construction And it's Certainly, last think then today. of the crews safety public I don't I to followed and which just because state back is firms I a think high noise be imminent. it's in again. online, world most construction Europe coming state, in Asia. talking of come architectural they're about I the priority on the already. that's as think

Greg Palm

that impact the implementation reductions look And Okay. negative to from you strategic whether performance, external, of supply and just how versus challenging the did that very the just macro can was – impact impacts, production maybe quarter that of anything issues quantify the clear, in be back anything you got there you first worse? any or was soft terms headcount chain that on see an plan or if was

Michael Burger

No, structure, organization think a selling taking restructuring don't operating away any implication because in I the have perspective, context don't on of operations company. opportunities positive from from indicator our think cost a I results, in QX – – probably or believe anything, an were they that our the than any walked of or if had we our ever better I miscue as think we're we I

building I very say he's – done will we in was aligned we in I'm a inventory basically so leader point fantastic addition operations on focused quarters the us by got in new the to of we much and basics. important encouraged kind the least And out job getting made of script, it's worth but invest really that a to QX, I also for think investment have goods. very to it finished a at and and

because the never into had happen factory raw a In to finished what's for that location. really other a know words, particular goods course, to particular going already materials a you converting we of or of lot

will think not ready. normalize, need things be be could a manufacturing to for well to surge straw short us. we actually that so bode Again as begin and do want in there. We to the we that demand very And be there

was slowing inventory. it kept used we to but busy actually we've and build kind a risk, of factories So our this

Greg Palm

Alright, Yeah, luck seems thing the good do. going the thanks prudent color forward. and like for to

Michael Burger

Thank you, sir. it. Appreciate

Allen Muhich

you. Thank


our our conclude may call. now and Q&A disconnect. We and does This participation session appreciate you your

Michael Burger

Thank you.