THR - Earnings call transcript Q1 2019 | Thermon Group Holdings, Inc.

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Operator

Greetings, and welcome to the Thermon Group Holdings Incorporated First Quarter Fiscal Year 2019 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. to General conference Counsel. like host, to now Alexander, Sarah would turn over the our I Please ahead. go

Sarah Alexander

is Thank you, earnings our Diego. the available of for via the morning, joining on without replay Good has of SEC morning, and conference which Relations and A in We today's thank property broadcast webcast call. prohibited. the www.thermon.com. also on call. rebroadcast available company the call Form the any at be issued is the Thermon, filed Investor website of an after been press X-K conclusion This this today's release or with consent redistribution, you the of will also is expressed all retransmission written form of section any

include today. our differ statements. subject our call, statements are uncertainties, may expressed risks may actual results this views forward-looking comments to the These and and from forward-looking materially During

risks Safe the Reform of among of in and synergies, These statements of business. the also Harbor Private the aspects our advise Act have today's We in would that revenue been include for like forth and Some Securities intended others, are call leverage statements with Litigation may future outlook acquisitions, ratios, provisions on SEC. XXXX. our performance, within filed profitability, fall growth, various forward-looking all quarterly of other reports you our these the set and made to release to press annual

do conform Principles. During the also Accounting Accepted call, to Generally items will some not we discuss that

our with now, and be of end the Chief These Officer. press of to, substitute the those measures Thames, in reported my to GAAP. at Executive reconciled non-GAAP Bruce considered over for pleasure the a in and addition release. to performance financial items not GAAP earnings comparable the in call turn have We measures as President And should most to the tables it's measures accordance

Bruce Thames

conference me the call me the joining and XXXX and Today, good Jay Jay joining follow interest and Thank financial in Thermon. call, thank have for morning, we of on Well, you continued conference everyone quarter. present details first CFO, you, fiscal our your our and for will Sarah. our Peterson,

the now are production second the the first to well. during industry THS Thermal quarter and Systems in recovery. XXXX stages half facilities translate Many of fiscal called original fiscal our into cost the results plan. directly or downturn on Technologies, in focus operating execution teams progressing of Thermon synergies strategy consolidation are CCI is improved of of and seeing saw on early trends we positive of of We the the completed in identified our at are successfully continuing just The a Heating that XXXX. the track integration now We've achieve the

excluding business. were and Greenfield year stronger XX% prior the basis XX% plan respectively XX.X% combination quarter in drove compared XX% by revenue declined FX at not market. outcome materialize million year-over-year the exceeded base finish both to revenue, our We the a beginning XXX and expectations expansion due of of terms and sales Inorganically, the Systems in of sales operating Thermon in first that included are efforts $XX.X of organic up on weak our million forma with XX.X% leverage XX.X% the points seeing on on pro MRO/UE synergies our efforts for mix The saw a versus case comp. we these $XX.X of Margins addressable to XX% up Heating year-over-year our basis acquisition. and a results on much Revenues also to track [ph] quarter. growth in growing of on with

volume will increases As may that have margins. we price the inflationary the on on any believe and tariffs -- tariffs offset business, increased on impact at we look absorption the gross impact on

of While burdened lines in fallen last in a GAAP mix a EPS prices fiscal XXX% up EPS of the a year $X.XX higher over share the up heating to greater share see on was impact $X.XX an the $X.XX change, prior steel per from XXXX. to EBITDA are share the the share, the quarter. and Adjusted impacted, impact from volume significantly in product quarter, process adjusted drove $X.XX in leverage the the heat a copper traditional positive increase up due an operating $XX.X with very the year-over-year. in the have quarter, note, tracing was XXX%. somewhat content. we products business basis strong incremental SEC the On overall went XXX associated Despite of million the for share, margin in increase a fully adjusted quarter, with EPS adjusted quarter, points XX% quarter EBITDA THS of debt. a contributed $X.XX the the

the end of EBITDA cash to to lower net see flow and the At EBITDA. a X.X the positive had we the following debt We October, of continue acquisition, net debt times. business EBITDA to of expansion drive

eight Just later, now X.X to reduced times. has that months been

reduction future focus to well opportunities. business positioned investment continue is ensure to on debt this will We to capitalize on

bookings X% forma on year-over-year Turning a grew basis pro organically. bookings, and to X%

book-to-bill materialization a see the backlog believe is is and basis. moving We XX year-over-year backlog pro continue from the to XX% normalized a on a more XX to of on forma growth X% We months order modest resulting accelerate quarter. months period. conversion toward in XX XX% up protracted incoming for backlog an The

sands the the this investments also a a Canadian with to for shift perspective, improving slow though have of market the represent believe We larger exception develop. upstream is From tailwind year. been oil should balance the of

multi-year chemical project plays expanding seeing Transportation our with power in for Nuclear reactors in however, of new in shale petrochemical sectors are the in-field remain We and the the in the investments We a strongest improves SAGD The largely gas projects of in with growth the and and the U.S. to show with improve help moderate between some related the North XXXX. number projects. coming of maintenance XXXX North steady, America and markets to modest Canadian natural the drilling continues to Canada associated Geographically, projects and fiscal end strength and BTU the slow, awarded the America as of gas seasonality been differential pace as generation. active has are, continues Asia oil power fuel energy globally. activity of the contracts life operations. see Combined We economics per fiscal showing that transit online. overall extension. drive investment that being half price sector. be began cycle second see in choice are single-digit pipeline

in seeing of further limiting In lack have investments. U.S. are developments result pipeline takeaway Latin recent Canada is America to that growth momentum America, we anticipated investment in the pipeline In improving We forward. the Maintenance has potentially backlog XXXX. gain fiscal been see continue quarter are an with projects environment the continue in of forward and at pace. this seeing going Eastern robust across larger capacity for XXXX. we in the spending There first growth to some and North remained slow Hemisphere, move could in

QX, announce revenue marketplace, R&D turn will portfolio technology We're We've next making continue MRO value progress first create expanding an team will development streams to roadmaps and and our this also to quick roadmaps. unlock expanded product business. and into stronger fiscal this our growth new of In the in in for solutions QX. launches accelerate our of business Thermon product we These five seen for of result the quarter. to planned customers, the year. for in expect in We differentiate

priority. robust, remains pipeline but the first M&A Our capital debt our toward will allocations be directed reduction as near-term

pleased increased year. for XXXX been year. balance our Looking forward, confidence three level have The momentum the to of with a we're the has start building to strong that begin fiscal quarters last the positive we for the

As fiscal to our range we business heat forecast change XX% this are for the Systems. financial for our range is a revenue XXXX to to million Jay? performance. maintaining for Jay Thermon I'll address turn the XXXX. to year, comprehended over year fiscal $XXX to to increases call to original projections. X% the a these overall raising of M&A result, for guidance while CFO of million the no in of And fiscal now This XX% Peterson, a traditional the X% Heating is guidance X% revenue tracing full XX% our to from QX, the over up details $XXX our

Jay Peterson

forma a XX% on X% we revenue pro revenue I morning. Good signs our and this quarter. experience updated this with Systems. an currency XX%. of quarter this start record and revenue that's on a both revenue, orders, a Bruce. years' revenue our in -- all addition, continued with Thermon contributed QX past totaled quarter, then grew that's And over our turn business growing year quarter. positive and past FX start in revenue past forma geographies by in our you, pro quarter, recovery basis, our Heating by growth and to off and $XX.X Organic prior results increased by our organic grew review a contributed the million organic revenue increase of And of to and past that's for constant Heating XX% total M&A XX%. will fiscal XX.X% XXXX. Starting Thank Thermon Systems discussing guidance geographic basis. This of a geographic to for

the prior the business orders $XX XX%. Total mix $XX million of basis, forma were Greenfield growth our was in grew QX both totaled in increase pro order the Our versus organic experienced And in XX%. for X% and quarter THS of on an XX% MRO/UE million for whereas for revenues orders quarter a quarter. organic

versus Our that's XXXX, backlog $XXX of of million June an increase June ended as year XX%. of $XXX million orders at fiscal and

forma XXX grew and grew also year-on-year. Our on backlog X% backlog organic by by grew basis, THS X% margins by and pro a bps backlog

the basis that the Hemisphere, in quarter And Versus margins up was the corporate historically basis, And year-on-year. than X.XX. increase XX% prior geography an a from margins XX% gross $XX.X lower XX.X%, to pro by a margin dollars margins. in grew on from by total were were year forma revenue million. revenues book and And margins Eastern margins. lastly, declined experiences they points Thermon MRO/UE moving to slightly Our to revenue to due Systems margins, quarter, lower project Greenfield $XX.X in for and the our our a decrease XXX million Heating grew bill mix of the

quarter, $XX XX.X%. an increase XX% the amortization And and and spending expenses, our forma specifically increase million be should core intangibles core XX% $XX.X versus for on from Next prior million or pro a to expenses year in this of operating basis, $XX revenue. forma compared million to pro that in of increased a the depreciation excludes totaled million SG&A and $XX.X operating for

basis. forward high of a offerings. for includes GAAP earnings, XX%. $X.XX this and spending and $X.X THS XX.X% share $X.XX total. that's going Heating on percent quarter. interest and to was be excluding a Systems will EPS, increase million $X.XX XXX expense to statement. amortization on $X.XX to an XX%. or Systems a forma prior basis future business resident And these totaled And of present, a XXX%. EPS, X.Xx and this GAAP with share $X.XX for quarter organic construct. And And per pro XX% a the we and both past And $X.XX EBITDA basis, an prior of are Our model a Adjusted share our $X.XX $XX.X $X.XX, totaled of contributed expense $X.X and our continued of organic at growth depreciation a growth this the for a increasing totaled and noncash a concurrent in EBITDA grew the loss are percent running expense of was each of these product on Intangible through Heating margins, of by this expensing to annual quarter comparison million in after-tax of revenue defined on share the our due and totaled leverage with our level or a revenue charges, this amortization reductions EPS leverage And share EPS we to to we is with OPEX and approximately income quarter quarter communicating from per relative to plus of past revenue basis improvement as of Systems, compared that year XX%. expense. from growth share from leverage amortization Thermon leverage by and were business construct to a XX% and to Thermon $X.XX was this R&D EBITDA an as level all by to past million forma quarter GAAP management due of amortization gross a an year X.Xx XXX% $XX.X amortization, incremental million a of able with and the revenue Thermon this of as relative share business spending pro million comprised our quarter this fully onetime to year amounts $X and EBITDA X.Xx. quarter EBITDA of points in increase both contributed burdened and Heating accomplished prior versus now And an quarter. were expense that's

is lastly, totaled within are terms this cash in a our net October business And ratio several guiding our EBITDA the have fiscal million time of I of reduction our and There and would at guidance. month and of like acquisition In the recall, at X.Xx year to the $XX points the net in and balance June we debt, eight sheet, growth balance to an discuss. period. was investment and XXst XXXX debt-to-EBITDA delevered all end to X.Xx

comprehending Diego? First will have year. our leverage revenue revenue for however, the is turn line year. half are present, this over a transactions. to planning targets debt-to-EBITDA Diego any to are would the session. in to we fiscal we million not of in half in turn we Q&A I M&A now At of over And our fiscal of the off, And $XXX moderate guidance, to like actionable to expect excess the balance a this year, the call million excludes we net $XXX possible this the range to and it second top M&A in be lastly, reduce

Operator

Thank you sir. [Operator Instructions].

question first William Brian your from Blair Please question. comes Our with Drab & Company. state

Brian Drab

results. on and morning good congratulations great Hey the

Bruce Thames

Brian Thank morning. you good and

Brian Drab

XQ the it the wrong, year, be have full if the the that that you X% the doing X% year I'm through gave to fiscal of the balance I'm actually quarter why it's I at I XXXX unless the the today wondering and organic look in question the for for would and when given plug result like have? guidance revenue same growth for you math you first and initially that really that XQ implies you had momentum the now for guidance

Bruce Thames

that the some in positive Well, start to business. I'd significant million the and -- what our our There of certainly the certainly as on is the of around bookings that's And that seeing are if like to materialization things not a overgrowth modest look with pace as the I like a represents are see think execution, we'd you backlog, tailwind. other we're overall $XXX trailing XX business at on months. just XX, a trailing right

pretty to of going this first again, is So forward. some fact confidence us that growth double-digit all, But feel single-digit high in gives like getting in we respectable in business. for

think basis overall -- revenues, best way business. a not I is in looking considering look on the quarter-by-quarter of some Beyond of that, growth and the of the at this be project to I think it'd at the nature and kind lumpiness this necessarily

Brian Drab

understand just single the Okay, to forward obviously, first the is you I of -- high in is as I just history. and not the did whatever quarter I balance X% X% okay. for everyone's unfortunately -- and impressive. year impressive digits, of obviously, looking kind the And

more one, gauge to follow-up So and ahead, I'm but... on that later I'll trying what's

Bruce Thames

the going -- first see first believe upside. to some do we context, in put you If half, we're

comps. more some half, Second we've difficult got

year-over-year So back we challenging be to would expect just growth. at little that to those of a when year in the half -- you look more the

Brian Drab

specific I orders the specific those of don't are projects, that why know second can the performance, us difficult a but Okay. it's remind you What there great repeat? comps? Bruce, year, are the half

Bruce Thames

the -- We -- winter, above we really a which spending, those in increase big some sustain, necessarily had a cold had maintenance won't pickup we won't but levels.

of And so things those couple a timings. some plus project are

we as year-over-year. improving with difficult nice we're end were we're growth just half happy comp as in business there that more the some performance So the in really a the Overall, overall when make good the happened well at seeing market will back operating bit the it and that look things conditions. of year

Brian Drab

Okay, thanks. of margin up is heard margin, up that on commensurate just And year-over-year. backlog to that Should basis I in points be think then in the the XXXX? expect gross roughly we the with gross XXX I margin a balance

Bruce Thames

spending -- year. XXX going believe the basis our of volume and think I of the the I Well, tune Greenfield that the points provide around level mix we're expansion MRO/UE, mix healthier should see to to but offset mix a which above do some could increased prior EBITDA margin just Greenfield, with of versus

Brian Drab

just lower is to all would first XX%, margin higher year in than the considered typically gross first quarter margin is, be seasonality, expect later quarter? than did in the in it the given you things Gross was you it

Bruce Thames

seasonality, QX due and Yes, in to particularly absolutely. QX the

Brian Drab

thanks Okay, lot. a

Operator

comes Our question. Rice. from next Please question Johnson Martin with Malloy state your

Martin Malloy

the Congratulations on morning. Good quarter.

Bruce Thames

Thank you Martin.

Martin Malloy

I was bidding customer some geographies? activity could is wondering seeing highlight of terms there, you the processing, in end markets and gas you're most and out the petrochemical, it conversations if of maybe where maybe

Bruce Thames

price which are oil we're impact see all economics Yes, projects. broke of increasing Certainly, are overall that's the a are petrochemical. and driving that also as throughout of seeing number the that just those between them chemical markets of in prices down. end call We're pace. increasing gas, seeing I is a positive growth. we things per these impacting oil see positively really kind we demand went that, and that versus the through pretty the and And There BTU in of our spread strongest increasing,

materializing. We some -- oil midstream gas, at and we when see look some projects nice also see we

We revenue We've in won't impact really North about a is revenues power really bit nice large really offset our And projects in for fiscal we've years. really market, very little some heating fairly America won being America, in I then some some talked a spot. year, a seasonality. our say this is but -- providing percentage projects the that U.S. steady small of business to in on occur bright and with LNG some horizon, end in would nice slow, that Latin building really in particularly I single-digit help growth transportation. geographically, systems the positive those successful been and probably of are future Some the baseline

of execution, projects be anticipate nice those we single-digit will some nice the Asia-Pacific, we've Canada probably building got backlog. one slow, a on closely, growth a both some project see we low area but It backlog we great and we've depend forward. -- watch is growth lot on in got incoming got timing some we we've had will really Europe will really A there. just depend and and it going geographies. good orders that -- where most of

Martin Malloy

Okay. able a the acquisition. And has the cash than It pay impressive seems bit been maybe expected. initially like to then here generation quicker been down you've CCI since debt little

In of and terms M&A the they're us pipeline? maybe tell that you geographies, of a size more could bolt-on little type or in what's about if acquisition, bit new the

Jay Peterson

Yes.

areas end lower different gas content. we market and where would So have are would utilize both oil in world to a today in that in profile the would heat find a to like also host companies -- our possibly we and be or our we've our margin got be process of diversification go of ideally, to accretive company business for heating possibly, tracing related that geography and particular a and underperforming something and certain

ideas looking are those we're kind So that of at. the

is year, this would that but half As something. of possible before, have actionable second the moment at we in the time, in it anything we have we don't said

line say, size, smaller could it be million let's $XX million could in of larger or In in top revenue terms terms to that. $XX than be it of,

a contemplating. have different So are of ideas we that host we

Martin Malloy

Thank you.

Operator

you. Thank

Our Humphrey. next question Robinson Please from Charley SunTrust your comes state Brady question. with

Patrick Wu

Good Charlie. is in my morning. This questions. for actually taking Wu Patrick for standing Thanks

-- it's versus it a I the highest now of percentage the XX% I a more it had portion Greenfield seems in as been to higher sales sounded at little guidance. seen would of like being you guess have here quarter has bit expected in initial a it like you quarter. quarter so guys than wanted your sort -- little of I and entering a visibility imagine higher came trending a for little with last up since would planned on level maybe would also. bit bit entering the the just Greenfield, sales, So sales, been it's we've you than touch what years the

that percentage in projects Greenfield of bit sort a a So of sales? can talk in little quarter, about was the there just bit terms little you that the materialized maybe of later

Bruce Thames

-- Yes, a weeks on shipments. the saw quarter-over-quarter Greenfield really that June, to in expectations number We couple have exceeded our last quarter some projects create the your late can shipped volatility most in the of shipments. of actually those of

in some of go preparation Europe. actually was for in So live that

that, able I number of So beginning We're Hemisphere. a we that some was but the were of see noted projects particularly in to to ship in of timing. project advance accelerated, just Eastern

you So, project have have. backlog that as really that largely of we representative company, know backlogs Greenfield and the in record had work the is we

Our the usually and out within MRO/UE, backlog in well couple of MRO particularly is a weeks. of

at weeks there. time a any sitting so a of seeing backlog, couple that you're of of snapshot we take MRO And only when given

Patrick Wu

the margin been profile several the look just gross guess have backlog percentage lower of is for bps margin, then, be going improvement color few the how embed very do what instead quarters, sales those you margins to already of current by so That's you have far the a backwards? and better that a in recall the remainder of for better And I pricing just we worked of backlog much thanks is as sort hundred margin -- enough. And the -- follow-up then How to far of as going quick through the Okay. XXX I bps. year? weak Greenfield backlogs obviously, and back forward may fair expect and on backlog

Jay Peterson

X Greenfield we will anticipate if at true. historically and why and That but Yes, see look so vary the to XX% a not or split for within point by over for business, business organic XX-XX MRO/UE split a the change do way year very at good the would XX% to you year. the our quarter, we that is remain our coming look any full reason

the in and project and that the In in has backlog last is billing do terms margins our of been over associated significant billings, backlog the a we quarter. There have the significant the were strategic is margins that win revenue the from we particular for It project. typically for are below that. company see would a and Greenfield a order what on well

has So that is mitigate the our that it be be as due quick resident this forward we're year the But longer. that's mentioned, in big more do season will and going our QX going or any shipping Bruce and and revenue XX% certain we next SKUs even -- very we when the competitively will high for will see we margin believe business heating that project. for turn business and XX%, erosion margins, of to into

Patrick Wu

in -- pipeline just then, about value one could past helpful. data of keep I Can two maybe abreast the in the more sneak if those you that have of Okay, you pipeline. and of that's And very guys us talked points? the

Bruce Thames

heating and our Yes, combined to companies. We're looking of that's projects our the year because now. north lot the in are value also Again, really and way I as business, three we total so it's at don't classify THS looking it Greenfield don't company of although from we'll of the figures, systems there a attracts our have emphasize project exact we component business small still five define smaller We're $X.X billion. is -- those metric. the now the at that pipeline. very track product

Patrick Wu

Thank you.

Operator

Please Braatz Kansas Capital. your Our next with Jon City question comes question. from state

Jonathan Braatz

have one of question of the I and there and lack some pressure for to and stated that the Bruce be? they pipeline you announcements couple should a is the fortunes takes Canadian guess -- quickly my Obviously, on what impact obviously, pipelines takeaway give pipeline your is, you it question morning the happen Does idea of be reason as A pipeline some of should it under Good of operations. be years, Jay. been Canada? in constructed, can capacity. time but period operations us change could in Canada, an how of over can capacity

Bruce Thames

Yes.

a is those reality take for that years think built. couple be I it to is, accurate. time of probably will The

those see as begin you'll other begin move forward, think investments move forward. I to to

of capacity that, brought that with transportation will online availability be capacity. the consistent So the

you There and Canada, should look it. some and lower shale think think investment in that benefited a couple capital points. are less about have increasing at it we've and So I of activity how of breakeven cost plays from, actually risky that's of certainly are kind we and lower

independent in though, and our expect was or see going see at those levels market. of saw really year we some that EBITDA I so to things there to revenue Canadian of rightsizing our just job don't And our significant profitability want seen X that. business. development a We we've in forward a there the of some XX other percent this the times expanded we've something growth done reemphasize last some We year. continuing Canada

some us at very that just current as remains for profitable seen Canada this So environment that don't see necessarily nice We've a in growth, we growth pace. business.

Jonathan Braatz

some those you're forward construction and at extent the pipelines latter there the the projects go of and projects, is to new that Bruce, added Okay, correct? end of of

Bruce Thames

We are. a process tracing. both pipeline I from mean projects. do work heat on we benefit certainly as as well There's heating some from

just that, those projects certainly be -- to definitely there we But on benefit facilities processing that, themselves. then benefit. that may related and we from things would So like things some other around transportation the

Jonathan Braatz

very you thank much. Alright,

Operator

next you with and Capital our Markets. Please Graham Thank Scott comes question. from BMO question state your

Scott Graham

Hi, good morning, good quarter.

kind meant for that takes, get the The can OE of of puts mix margin. gross is give of around negative question completely can and the some for hope versus I first margin. MRO, But that. my I'm what more So hoping you just you us puts. the size obviously kind was

the of like guys half of year in direction of first that quarter, I'm mix the no of us? the year? maybe first for know those first wondering, kind you half and the in half in each last kind gross this of went margins I past, year, last Additionally, about talked bucket aided mix maybe first that the which Could you of even equipment

Bruce Thames

seeing. look Scott, news basis you what guess we're like that of MRO I is good margins kind points. The as mix, XXX at are here's is up our

a strong ability to that price we you So lot about inflationary were things to and to are by those, project is equipment, the that's see which see third-party and points. did our margins. we that. any gives that overall and margins our do of may related of we us of mix with talk down What lot the and impact Hemisphere is really around about like on that materials lot a dilutive confidence -- offset when did have materials A XXX basis we really in Eastern

of stronger uncharacteristically that's said, So year macro we're as versus kind quarter-over-quarter, opposite mix, was side a story with XX%. big average an on actually Greenfield in year, year-over-year the last mix. high just you and XX% around of the a of that MRO/UE This our at

to on are the greatest the the are overall business. impact big that -- the those net kind the the margins having So things of gross

Scott Graham

asked fiscal but want this sales. question And thank the to questions you of you, you. Got also that turn into how year these the on a of to corner here I obviously being I the reason don't of we mean XXXX. guess the pulp why be are another beat see sort maybe rest kind to is

down? that how much able would all, wrong sands XX% to total think, the it your was of -- to your quarter to it's I if that. I'm may, of tell me first first sales, on me correct like how if much or in So it I business, business us was XX% you of down And seems be

Bruce Thames

Year-over-year, It's down not was it historical from level. down. certainly

that. that year last million guess be way answer was Jay? I best $XX So would to Canada the U.S.

Jay Peterson

over mentioned at we outstripped resources grew Xx. also last Yes, X% last in slightly. this grown And when of we grow Canada, has past quarter, Canada gross I in by before, revenue say X.X%, mean oil And have plus Eastern the half and in Canada. quarter it that but saw modestly sands profit almost Bruce the I That inclusive growth approximately this the two years. the cut as

Scott Graham

-- okay. but Right,

hard? will saying the is sands I'm that the then that be So the year sensing portion down what Canada of here for rest you're of pretty

Bruce Thames

No. We it'll just be feel year-over-year. flat like

Scott Graham

little go last can into trying type be right doing of just kind can't organic sort the XX% it like that, in X% supposition year. and right globally, guess to of may well now to oil capital being well gas right organic, spending single-digit some I be number markets with second really chemical that of previous low question triangulate just the non-sands on had number being just that to kind triangulate may want of is the the of there higher? globally, the Okay, toward having I'm quarter and a certainly to you that you now now the I of trouble, doing of just don't possible conservative be pull second past that you're you're quarter may you for quarter, see half

Jay Peterson

by strong what all are moderating for than Scott. QX. I QX very analyzing, our happened mind, little outstanding in Yes, lower keeping in X%, a One that our of different rate the the guess but order had was that with is, we that couple back an growth of measures saw at we expectations. is vectors start, A very, organic we a there

in is want very in we into circumstances be have update. us. activity and organic are we months, those And have it in we behind We to and of facts are of August the could business months certain in heating lot updating a do that possible. event that season a we order Yes, really the and in THS possibly the guidance? two But our and make order recurrence September, moving those strong strong our for typically

Scott Graham

enough. Okay. That's fair

the on comps, organic good SG&A to the in year, just with the that line leverage had year, you particularly is with the leverage going the there going leverage quarter, half of a do are slower the for second see is think? in we operating potential any You less in to operating half of lot very be SG&A operating on second the upper

Bruce Thames

three volume to been to We margins volume. times see, see we two -- pleased so. bottom revenues the think our to overall and line. should mean that gross similar incremental I on I bring operating we Scott, mean the those incremental leverage incremental with really the that should ability we've

extent grow We expect the to we a to that revenues we -- the the similar year. balance rate grow of continue at as to

Scott Graham

on I now the if quarters guidance line, about know right does three I to Okay. many slipping talking not that companies and FX But companies, negative sooner. Last not contemplate here for that's your FX yours, including way obviously, question, think. the from out sure two other and know I'm being I some

you what you that doesn't on does me would other communicate mean case? the that run maybe to second to go way you only but you will on are of know I guidance. it that that's the guidance goes if FX -- the will your half So us contemplate that actually handle on negative How thinking that do I if appear could for FX as if how or lower the guidance kind the you? because

Jay Peterson

we -- certainly Yes. hard But still forecast. what a That to have, very have one we is do Scott? there,

Operator

he Sir, looks like disconnected.

Jay Peterson

Okay.

forecast points organization they they for many very that quarterly and have and the monthly, FX time and do year at sales monthly touch We current of forecasts. when the the cases in point balance frequent for in use that our rate, us, future revenues with they

Operator

[Operator you sir. Thank Instructions].

Mr. with & comes from Brian Blair your question line your Our open. Company. Please is question. next Drab state Drab William

Brian Drab

the you earlier? can dollars, us have that Jay, Sorry, in impact the terms FX might give of for first I quarter missed

Jay Peterson

$X.X on a Yes. million with in impact was revenue The of earnings. terms impact nominal

Brian Drab

Got it, Positive million? $X.X okay.

Jay Peterson

Right.

Brian Drab

revenue by give you Of Canada, Asia U.S., Europe can course, growth growth and us order the then PAC, and possibly?

Jay Peterson

PAC Yes, doubling -- of saw double in growth, Asia organic. for in over terms the we a

Brian Drab

clear? to order just revenue side, Jay This is be or

Jay Peterson

was And quarter XX%, up growth Orders. X%. EMEA THS XX% XXX% from XX%, the Latin impact down that XX%. was said was U.S. and was was I before down total Asia in Canada was PAC, up as America down X%. Thermon and and

Brian Drab

can that same revenue thanks. then possibly? for Okay, you breakdown do And

Jay Peterson

America total was mentioned, figures. up and Revenue revenue was Canada up as XX%, for previously those XX%, XX%. X%, was doubled, XX%, up and almost up EMEA U.S. Latin PAC Sure. And Asia organic XX%, are THS and

Brian Drab

XX% plus on THS basis? and forma pro Yes, a

Jay Peterson

yes. Pro forma,

Brian Drab

interesting that or you I that's... very geography. America softness growth Are surprised the dynamic guess Okay, U.S. by order Latin in in by

Jay Peterson

also -- activity as order revenue is weren't very lumpy. we just lumpy, very No, is

Brian Drab

any drove that Asia there is two massive PAC one particular Yes, in or growth? projects that

Jay Peterson

Yes, that's correct.

Brian Drab

much. very you thank okay, Yeah,

Bruce Thames

Brian. Thanks

Operator

There time. for now you. turn to this closing Thames further Bruce no remarks. I'll Thank Thank questions are it at back you.

Bruce Thames

also Alright Diego, their thank they Thermon you. opportunity I'd us a on employees to thank in difference, for serving customers Thermon like Thermon. And are the commitment the creating this and everyone joining shareholder to to our thank value. to call day. truly, around and your for truly our Have like I'd today the globe take interest great

Operator

teleconference. great may Thank a you. day. This Have parties All disconnect. concludes today's

Thermon (THR) 4 Aug 182019 Q1 Earnings call transcript