FRTA - Earnings call transcript Q2 2020

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Operator

Good morning and welcome to Forterra's Second Quarter 2020 Earnings Conference Call. Today's call is hosted by Karl Watson, Jr., the company's Chief Executive Officer; and Charlie Brown, the company's Chief Financial Officer. With that, I will now turn the call over to Mr. Brown.

Charlie Brown

Thank you and good morning to everyone. quarter conference second Forterra’s to XXXX call. earnings Welcome since call, to difficulties from apologize to the background the advance our want quarter's last call during encounter technical Similarly home in locations. are I for we may and Karl I sound calling or any night. I to noted we Reform Litigation Act that XXXX as point Forterra advantage release to take Securities would the the Safe last Private the like in filed earnings of Harbor out intends provision of of remember today and which and materially Please comments are subject implied actual differ statements, our include forward-looking or that may may such indicated to uncertainties from statements. by risks those results

XX-K the SEC duty report on and in Some important night. described are Form the XX-Q most filed filings, in company any annual company’s our statements. undertake last does not detail forward-looking Form our of including The to quarterly risks on such update report

financial adjusted to Additionally, net call, EBITDA, adjusted flow. cash non-GAAP we including refer margin, measures will EBITDA and during free EBITDA the certain debt margin, EBITDA,

to release. find GAAP You comparable measures in the consider financial to of why including measures non-GAAP earnings discussion these directly we these useful reconciliation related our of and most a other measure a information, investors can

Now, the over I'll turn to Karl. call

Karl Watson

appreciate good and morning, being Charlie, Thanks, call everyone. you us the today. We with on

continued fellow I and administrative processes. our Charlie improve needs our this operational we teammates. and Forterra quarter, our they to thank and meet get to Through have Before challenging into our the the details safety want of improve customers' very performance time,

public both record in demonstrated position, sheet working strengthened our we and operating our liquidity a continued to balance company. segments, we a capital During reported cash gross strong increased expand margins quarter, a became since EBITDA the in flow, profit quarter, adjusted second discipline, and meaningfully operating

thank like efficiency; adjusted shipment We pillars; level is the Again, health continued and G&A enhanced capital this effectiveness. on their discipline; improvement I'd impact and plant consecutive trailing efforts working their capabilities; these on pandemic's seventh teammates our volumes. EBITDA. for safety; outcomes our achieved addition, and commercial XX in to of focus the quarter five improvements months despite operational our In

I to mentioned remain team our our procedures that customers and have COVID-XX-related well. number procedures implemented a working As of safe order ensure briefly appear in we within Those members, to be facilities. previously, vendors

not our facilities. small During contracting to team relatively and COVID infections the close we our had respond the did to temporarily a number to of within quarter, members experience facilities did contain and transmit a small of to it ensure number

COVID having Most economic protect low. infection states our we to serve duration certainly The our over the concern, have business. recently shipments and pandemic, in their such not teammates, than market activities handle resume our started our are have May, is to the to the also but anticipated. housing what Switching activities. and disruption early our again. residential our only April situations had homebuilders our member to a during less paused to demand ability but insignificant not While and quarter, we COVID-XX needs infections continuously team gradually was side. increasing The normal to rate And efforts relatively improve demonstrated capability customers' of is through also although

decline As have delayed business of drainage delay result, these to projects year-over-year. in temporary contributing a had our of we projects certain restarted. Most in a XX% volume the

comes our water business, flat approximately business XX% water our the from to We remained prior infrastructure compared volume For projects. period. water of municipal second year the estimate quarter

spend. continuous committed water the water is nature in largely to While and stable year municipal long-term ensure infrastructure critical nature for COVID-XX the and Planning negatively in the was XXXX many impacting place of supply. funding project is highlights municipalities, of revenues for volume fiscal

long-term for funding on primarily bodes water we have general for recordable from water improved the revenue, municipal usage are the world-class not to year-to-date municipal Operationally, which is the rate. dependent our well charged safety within and fees are performance investment total funding. injury thus measured by for continue away being well we and Yet, must as XX% improve. last Additionally, over year by

efforts conversion on to last sales our both long had teams offset track year. As and journey cost Water Drainage partially per costs and business, our This of unit far as production Water. Drainage pricing compared improve levels lower by half are seeing to Quarter-to-quarter, investments we the are in since begin fluctuate, as and last costs, was temporary lower closures we steel leading a scrap right this offset return our quarter costs benefit disciplines. our lower Commercially, our Drainage our with cost costs second continually Both business. increased the we and in our year. to inflation, we will of but to in double-digit improvements had the our in plant on Water operational plant-level

Drainage side, a year-over-year both the effective cover improvements, Charlie mix, detail the crude which combination the On in of increase sales will X% more and is pricing later.

year-over-year result of On tube the is increases primarily Water our price side, the increase the last XX% year.

remain their Our challenges and focused needs the their expectations. sales meeting continued initiatives exceeding the connected and by have with commercial our pandemic excellence and on created despite teams our customers

been the call, I of our all capital closely As the we have of across discussed beginning working our pandemic. investments even monitoring last facilities, our on before

drawdown. and our last million ABL of million of time, drawdown $XX we at but further in precautionary more revolving prepaid the quarter our – improved of by As and same $XXX turns the ending credit first cash while year. term year-over-year. capital versus $XX with on – of also only $XX increased working our At cash where loan, we still We on time than during flow line last and $XX cash where our quarter voluntarily the $XX no receiving the million had million more had year, not repaid million same we cash than million quarter result, borrowings, the a million $XX

ongoing Looking as ahead, great economy uncertainties the in still brings whole. the pandemic a

the lack future we might For around of markets, there's are, hearing in the what probably you pandemic and speculation like. funding. and future a the are impact the regarding what we The are there's of on lot that clarity to look seeing are similar things of a

working operational are of We commercial but safety not on which the things three, going capabilities; teammates; to speculate, pillars the control improvement health four, two, One, we'll can working the outlined we enhanced five earlier. focus and are plant-level intend discipline; our I continue debt to G&A capital margins, our our to more earnings leverage. improvement, pay product efficiency; the expand generate unit through both capital effectiveness. reduce and By down and on five, we pillars, and these to five focusing cash

challenging of With quarter it that, Charlie. second another Our turn is example I'll during over this result execution pillars, even to these on time. our

Charlie Brown

Karl. teams. congratulate want to Karl's Thanks, comments I our our echo success on quarter and second

during us a will bad, carry that forging upon performance in delivering pillars. towards progress challenges – times culture good Our forward and these our five

the performance, into earnings have In also refinancing will I we completed transactions. debt addition shortly, get two which to

to amended we the capacity next credit from the First, million, to million revolving out our year maturity facility $XXX XXXX. increasing from extending and by $XXX

which portion million used of the piece term was adjusted $XXX our issued X.X and just loan five-year a times. proceeds We've notes XXXX secured repay decreased out of year, significant to net X.X to recently a leverage by the our times, in months. X effectively goal senior ratio XXXX. from EBITDA point, midterm our to extending six put out At our debt of in net to that we term loan Earlier X.X. Second, we

our net of end the down X.X leverage June, of to times. As ratio was

starting Drainage. Let me our review operating with performance segment, briefly now second by quarter

Karl our As Drainage volume stages mentioned early to largely the delays decreased by due project XX% during pandemic. certain the of earlier year-over-year,

improved more despite by than the XXX gross profit gross decline. margin our However, volume basis year-over-year by and increased profit X% points

commercial We demonstrate business quarter, our segment. adjusted by We continue adjusted this gains, which revenue, margin, able volume in to gross of during controlling a year. the approximately gross higher expand the year-over-year mix. geographic to end water EBITDA. Switching from of business resulted the volume, price the quarter benefit selling to higher at was despite to the and while compared in this which backlog impact of were That Similar our And lower and importantly, able this than flat to of margins much growth X%, hold driven price is price, pandemic. combined start is year-over-year was last with margin as selling in the were up continues costs result higher average part by XX% these year. significant mix. we EBITDA over Most of to last product quarter the to average last

of contract effect we contributed side, pricing had our second October, of we experienced predicted, average pricing year-over-year increase combined to which higher year-over-year growth direct the levels of price on our On We've the increase the seeing in as we volume XX% with with continuing the are multi-year increases are announced with suggesting last first distribution July, higher price partners. previously increase in prices. selling customers

the the other costs year-over-year, from In addition, benefit inflation we lower costs. continued offset scrap to and during which quarter,

adjusted improved to current basis of quarter the points last result a As compared in year. more EBITDA these factors, margin water's by XXX than

relatively reflected processes was systems, EBITDA prior key as sales pillars. adjusted The increase for investment people, primarily slight with year one our our plan in actuals. and corporate consistent Our our internal our improvement such loss training and our force, of year-over-year

the event August merits $XXX on were liquidity on part and pandemic. accounting in a of to of was with this from of less we million held regarding and quarter, concerns pulled amount a In of XX neutral to the of our such earn-out amount, the the the to payment earnings progression guidance a last the arbiter of its pay And required is continue or an have order to uncertainty HeidelbergCement decision our earn-out sufficient an the to update, in impact pandemic created As the a additional And markets. XX. currently an we by XXXX have from currently expected hearing year. dispute we million such expect because latter this June $XXX We make to payment. arbitrator were

is rolling EBITDA exceeding to guidance $XXX million, adjusted million prior already million. XX-month Our of $XXX $XXX our QX

also we unprecedented cautiously and second half, challenges and with execution customers far our face. and so are uncertainties pleased Although, recognize this about optimistic we the year our we the

the funding, air through generally us of the we to certain in There of will majority due be or While either our are and uncharted quarter, backlog of uncertainties. the third markets projects or investment by there infrastructure at in even can delays in issues could the be quarter COVID pockets second cancellations carry territory. end caused

chosen overly of off guidance our a control, pillars, continued of instead a conservative As of what we an on the improvement to result, abundance five execution caution. of we've focus providing

all cash should be to $XX remarks. prepared year We noted $XX committed begin flow Operator, $XX in purposes, quarters, have delivering driving you we forward capital remain to reduction when to greater million and look future in to for questions? that million and concludes release to cash and capital $XX between working of this fade. we press clarity flow expectations towards For debt the This million. in committed open about range our expenditure our excess improvement remain the macroeconomic uncertainties line will please our the providing million

Operator

first Instructions] comes question with Our from SunTrust. Rohit Seth [Operator

line is Your open.

Rohit Seth

curious. the that any for to a be at with there the Thanks the continue I'm gains, may this may first My ASP rest expect year flow us the not the for see to clear on similar question. to number just level. that why growth. my be mean, ASPs. not there, question great Obviously, fence? XX% Water Hi. Is through a of side the true reason of pipe on is you'd and taking I that

Karl Watson

is. don't there No, believe Rohit, I that

we've said long short the a know said I that, we cycle. in past the cycle -- in sell and think, past have we've buy is I very a

to through. increases takes it for while So a actually flow

saw you the the not and increase the flow seeing quarter. complete. happen quarter in and flow first increase in first quarter. you're July second in It through through the all second That's exactly So October doesn't

return where we're be reason no we've to prices change get a negative. there's those decent potentially back us still at on to that change earning least to some our to gained to upside will assets slight think There So for the that it. may

Rohit Seth

the are actions results second upcoming what of in price XXXX? future XQ there know what I your in or do I half the -- for And mean expect what to we're in you Okay. increases? the plans taken the quarter seeing -- back are quarters? announce

Karl Watson

We've always been notice. our them with customers give clear XX days' very that we'll

And communicating told you it so we'll them thinking but be good wouldn't with to shortly, before customers. be our I tell

customers our yet, before. the as on we're anything communicating I be not to but we've announced going So Xst to of said August

Rohit Seth

volumes and Do subject half is it's the And where year be to is Understood. macro of pipe think in more then the think by is? you you Any in exposure tied impacted or sense the pipe mostly volatility, I the Drainage slowdown. your mean the COVID to could is volume Water back Water of it business? municipal.

Karl Watson

go of, I look sort doubling we first are we year half as I to and on Having think, will our we're back last commercial we giving like compared will concentrating like those to for really, of all but that five half last relative on pillars disciplines, what intensity the last is accelerating But the the our and -- the at year. softness, don't the see don't year on last really after of that year see operating continued directionally of that think we guidance not what look for capital. year. discipline We especially working is see the the down to relative sort year. half said improvement

Rohit Seth

Understood. in they've And favorable you them been tailwind quarters, could. still a is upcoming question, out? to a now. the I then or like looks for quarters that a starting foresee Scrap several Do tailwind steel final prices being level if

Karl Watson

to into that very scrap our their returns level, every we think but volatile, have buy cost from important where we and value-creating scrap the side at highly they're which Where our get to month those systematically quartile continue visibility. returns. capital to at when a that's we or we've move of -- decision And that pricing They're caught need progressively time prices decouple and we'll that maybe more the for And wrong really strategic lowest have levels. eye-popping and they're highest when we of reiterate. to up make made returns the that two than a to are we and of assumptions, think we really on our leads I something are point when we'll levels prices making quartile exceed make average good ahead we

monitor trying going in I to which on long-term like for to game. getting from take while is us looks have intent closely sort so a of, strategic we a what's we one in a the are heading it that be to those this we path returns and really our day. and year we your that shown there little levels. well buy in question, we -- while answering months, few still It's longer. direction. what And I scrap far So decoupled We're But very get to all the not that like very our think But think that to we're to visibility is on future the first are. favorable. going next have foreseeable It's

Rohit Seth

queue. Thank you. get I will in back

Operator

Revich And comes of Jerry you. with line Thank Goldman our next the from Sachs. question

Your open. line is

Karl Watson

Good morning, Jerry.

Jatin Khanna

talk risk both months next businesses? about pocket air projects in completed? Can what's specifically, morning, please the you Drainage Good of of This trends the over Jatin an order XX And on behalf X large is to Revich. Khanna Jerry are everyone. as in

Karl Watson

based X some X have backlog to order and visibility our months We into bidding upon next flows the and months patterns.

said I air if pocket not calibrated a little is. As sure I'm earlier, on an what we're exactly all

macroeconomic rate. we've And visibility looked year we're better we We pocket. compared do say word year uncertainty. for that year And year, second to can be environment a first the still our I accelerated look an this the to an second So such sort – is is half not of out will at But of of is decreasing is first that, volume the guidance. have confidence. this to half that air we half the whilst there to given our But like want I lack volumes of of address because don't But relative the much not year. guidance that believe uncertainty to see don't guess that and plays half what of I what of relative giving seen. how last last the

commercial Water more on will and be than of the of and on we again, capital; things take plant-level to on themselves. operational While business they're don't day – working And less And employees; health soft with once commercial we're the doing things, our I we concentrating and and year, discipline; more discipline enhanced Drainage if our think the that results efficient every five our the see going G&A. accelerating. that we those capabilities; focused care control: safety last to relative still the being on business, those

Jatin Khanna

Thank so Okay. you much.

Operator

with from line our And Wang Daniel comes of question the you. Thank Berenberg. next

line Your is open.

Daniel Wang

my for Hey, guys. taking Thanks question.

Just the the the Can Water the even you gains second pricing piggybacking selling magnitude price and into half in similar Should question. half? first XXXX? we just in average a double-digit saw quickly expect perhaps off clarify we

Karl Watson

through a XX% there in Those be itself July, not extras increase additional had but that our that I'm you're not it but way don't in some in are half the one the so to won't we improvement the certain announcement on see we of in of the XX% flow-through on if October and price half. versus I not where What well, pipe going second re-ask. announcement you we know in I I let and execution I – our of the think sell the it continuing of you'll continue actually properly of exactly, – the understand top another see and then answer to second our year the the XX% top see an don't will question is flow April. XX%. me see on answer today

Daniel Wang

that lower how two, selling a regions which prices? or tailwind one digging Drainage can products you guess, little bit experience higher And then you you – second, sustainable mix mix just average do us, typically I this see or And being? Perfect. Okay. remind the into

Charlie Brown

Sure.

on the products are take prices and – me. I'll sell mix, in precast The let's typically custom good which So, our product that pipe higher. those Precast simple, business. and Dan. for the is focus We it's is a Drainage

that in margins the the business. However pipe from are dissimilar not business

we cost. So price but get higher do a we higher have a

down way last more the decline a a bit side. you think both this. And I pipe both probably year look volumes, think but pipe this that's less you'd little – of than easiest businesses, the at business so see about were to probably year, if in the volume pieces little

on clear. Pricing influences why But So a is up. average. really product which higher calculation said, we've that I again to a is issue. been like the That's mix price simple is tied XX%

Daniel Wang

Good Perfect. bye. Thank you.

Operator

you. Thank Markets. Capital line the of next Dahl comes And Mike RBC our question with from

Your is line open.

Mike Dahl

for my Thanks questions. Hi. taking

certainly So half but to Karl, outlook. different I much I way slightly wanting specifics volume guidance around get understand, to ask not the detail into around too back wanted

and You've or business got you balance market, in XX% By of non-resi. volume across worse your the you to better expect infrastructure muni, by a end little mix those resi end more color on and Would of could give a those market? be total declines?

Charlie Brown

mute. on You're

think on mute now. I is Karl right

Karl Watson

on see but We through other that. Zoom, talking each Sorry.

goes said are answer residential follows that. and not construction we're back I construction. term Realizing is sort the Municipal that of residential the and our of Let shorter In budgets me place as just to in really broad And fairly in spendings giving opening the strongly. construction there. pipe is comments guidance largely themes. the commercial but sort coming

back are the these went second on So, in half is the hold -- trends of is slowed the are Most What in trends that quarter down volume stuff us accelerating like are being third think Drainage to said the I not before quarter. if released. residential in the coming I downside. the second

year. Great half year the for year of we XXXX XX business XX our again of down. infrastructure. believe to you go go second to half this session half think in the last of to found on up proposals legislative the say to -- and -- if spending the I'd it states second infrastructure compared of very of measures, didn't half this have back basis sort infrastructure second that Even environment, in the -- compared Longer enacted first a legislating we term similar of the way half States percentage first Recession, spending. the year states pay really put looks of So, of people are to year increased recessionary the last for have other a which over half is compared XXX

water in had Civil a infrastructure the there's of Mayors of Boston breaks water you of spending Mayors was year, American say both federal if wasted. water So, a year, are the And by I'd a water infrastructure trillions first the to would already on is around -- the it that and either small, knowledge that the what an gallons it margin large necessity last we And country study grant ready is absolute especially XXX,XXX be of spend side and that in the there main thing a Water cities, the And Engineers. or the infrastructure. what's water on? by you'd transit treated Society of small municipalities all you answer spend not said one number

us are household So, overall. urban. formation that towards from suburban housing spending, that we has knowledge more our multitude and based that new the trends down. There places, spending, an spending, believe has lack but there's historical sources about gone there's the intact. that homebuilding an that meaning of to investment not need remain talking Residentially, state trends historically levels a come We're for municipal that think versus there's absolute the funding been need not a of population growing upon you're we the federal back absolute even that

what is So, housing. we housing, good believe we're in our commercially, very sweet residentially what still suburban follows especially And spot. spot a

those in or Walmarts concept and side. both amount products houses of a more Drainage Amazon especially we to there'll on last-mile So, use Targets be those the our large believe of follow

of I can't be of be products to would in if the were spending be commercial segments believe -- commercial supportive flat five be, spending there but if proportion that even years, that that in would will even for would be So, was, be greater. actually our the products which it next

think we're space and a pretty residentially the actually So, and long-term. over infrastructure the short-term good in we commercially in both municipal

Q –Mike Dahl

Thanks. shift is a My it a the potentially this earn to see to flat little for power pricing and of is that kind intentional question specifically down. flat and you That's atypical also dynamics. that proper Water Okay. pricing establish very value-based just on helpful. second and Recognizing multiyear your of potentially volume a a this type still return, market pricing down on to in costs is to

So, from a around at about this your competitive confidence you're And from from -- or talk additional the what standpoint, could be whether sustained? a you competitors you any differently that? all that anything can seeing color gives

Karl Watson

shape can't talk way about barriers XX%, EBIT business three I EBITDA had can an to this, got this say not back or to with But business. not I any It if of is competitors It's you a our entry, what margin XXXX profit that's margin. form. is margin. EBITDA really demand. margin. business look That's stable That's a low after high asset It's players. very turn That's a tax national EBITDA margin. in

industry So structure. a decent there's

you there's XX% on any are a really margin doesn't EBITDA And investment. because returns our so poor, sense when make those poor have something

buy didn't scrap we for is, it can a what our our problem. either a diagnose. really or that. a be costs have reasons what And plant what And are for problem. we pricing problem hard buy couple a cost technology -- problem, for cost a cost have really conversion So to cost diagnosing of only it problem We wasn't we a

to And it those in before tactics. we consider price changed methodologies be had business disrupt and not successful. works I at I I that and it's success. we industrial two, We we our processes is increase it's things look had do and happen: have. think positions; strategy So through and three a price don't our mean be And our to -- our problem if three, had and it customers' with conjunction successful lose looked customers. philosophy to internally flows dramatically actually we and to externally. we our it we we've mean model; one, look

But disrupt does So We give of take it And our not take skill gain customers' -- we lose to it and also to don't these -- to be raise market to on share market mean cut I wall because multiple do hoped whole it I not price. to and -- any comprehensive skill successful. a threw doesn't this, and we mean these industries the it And has are methodology how not been skill share. proven is price up worked geographies multiple at there to for really up all. stuck. these and for take success of have that. very model. want a it a doesn't a prices it lot share executing business and it's whole successful increases want on do that's lot prices across and we're

mean we're that, probably of we -- said think I at not for pipe the go a vacuum, that can't iron we this having our competitors realized we our also that would. we're XX% So We an going we be our than producer. happen We not about share. just course with ourselves. talk ductile customers But talk they -- something had buy are to higher less option now to losing customers. best XX% about mean don't But our I if

are to have we assume at So competitive price. that we

Mike Dahl

it. done, That’s thorough. Nicely appreciate

Operator

is next from question Bouley, Thank Barclays. Instructions] you. Matt Our [Operator

Your line is open.

Matt Bouley

held guys a second questions. time. the of term Hey, sort while up you you actions And of Earlier quarter them this now for cost the -- in reengaged benefits the side. guess the any on Was or sort I short a into obviously given obviously QX, very system the of coming good the took of expenses there uncertain morning. the taking flow wanted you or into onetime would kind volumes you those to I little actions? half? lot how precautionary cost to of took that margin just second in in back on ask just those better, Thank kind there a

Karl Watson

we've that on publicly I that's No, Sure, focus where would a Matt. stated limited question. we some actions the hiring. great of

would in was a But meshed more small be prudence It volume anything just that with that else piece. a up So than and benefit. general.

We time. those are That executive also team for reinstated costs a pay-cut a was and included period from the the took second of quarter. in

they Our caution. was a employees end increase. miss in place back an also that annual -- to their put the -- deferred back second reinstated of employees was out of working just anything. hard of we the quarter It abundance so and before issue timing we That didn't

forward as that QX issues So we've in there clean we any that those started second to very captured as had hard really we off. that major a be so aren't to pain. will make We into a failed all half costs carried sure tried QX, -- we've that

So, our there's surprises basis think in no, don't at this I point. cost lurking any

Matt Bouley

Okay. June. obviously I secondly explain Perfect. EBITDA curious you there? for. missed -- And preliminary apologies results came just what then end just but happened in guys gave And That's when was the the better a about looking exactly I you could what of at the little versus it, if

Charlie Brown

lower when estimate the IBNR, nothing unusual did but put cetera. et quarter. guidance, be have good but surprised, that there in we above know, best at cost think to very look you at costs as well was a our us I tend or we're that out be quarter our prerelease. looked I are we that. various fairly came certain and made all in other adjustments, of and our as no, every It end et of they at conservative, and cetera, whether put to it And market earlier So actually our Obviously, pleased we adjustments that

on as closing, just far brag As team. I our would

short Our spectacular a able team would earliest and Forterra to that get job released team getting has an itself us This was ever getting home in done things this done earnings order. be the very the from awesome and information. everything environment great members did being in just in

Karl Watson

want on an is to team. our brag G&A of I That And effectiveness. Charlie's example

lower deeper -- we're better, delivered closed cycle So a by our six we've days. information been getting And closing cost. at

Charlie's has that. job so around team And fantastic a done

Matt Bouley

it. Got

quarter hope Okay. everyone Thanks everybody. the details on Congrats for stays the and well.

Karl Watson

you. Thank

Operator

Gonzalez with Capital. And you. question from next Thank comes GSO Joshua our

open. is line Your

Joshua Gonzalez

maybe bond could pre-payable to well? tap I traded given guys maintaining I HI. again market debt debt guess, your through, the how maybe walk so balance if you us you was has against the wondering potential

Charlie Brown

can the Sure continue Josh. term to knowing is the in there have. certainly that had it pay caution the the And We also just gives as a would move we that more of little not money loan the a bit of what exposure, bonds that ourselves a be October was we've we more and little view reduce out we than of bring out we time. that bit ratio. out. for to market and it and an -- bit painful demonstrate may But continue We to future prudent little you're new bit for us leverage It bond take felt flexibility, our XXXX a tower sitting to of more a our of right. debt tap to issued abundance ability give huge having

million the the point we're then generate And by The we'll on flexibility. about go year term as will has what we the term more down loan We I again giving loan. bit on the little we're what our expense this still low ourselves up that excellent still but paying and term rates work $XXX-plus been paying in the And loan cost. loan. yes, than bonds a on that very We continue to to related higher new loan. the will on term have -- interest would cash, well as second million term $X than have half out interest

Joshua Gonzalez

Got it.

you like guys at much have would possible as to point? debt sounds it pre-payable this So prepare as

Charlie Brown

still of continue will we a significant cash pre-payable our take that debt generation down We have to as allows. and portion

Joshua Gonzalez

you. Thank Great.

Operator

time, question. showing further at I'm this Thank any not And you.

Karl Watson

participation you We your everyone. look and appreciate you quarter call on the our results. to talking safe forward to next best. and thank all the Well, about Stay

Operator

for concludes and Ladies thank today's This in program. participating the gentlemen, conference. you

You Everyone a have disconnect. may now day. wonderful

Forterra (FRTA) 28 Jul 202020 Q2 Earnings call transcript