Good day, and welcome to the Alamo Group Inc. Second Quarter 2024 conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's presentation, there will be an opportunity. Please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note that today's event is being recorded. I would now like to turn the conference over to Edward Rizzuti, Executive Vice President, Chief Legal Officer, and Secretary. Please go ahead, sir. Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact us at 212-827-3746, and we will send you a release and make sure you're on the company's distribution list. There will be a replay of the call, which will begin 1 hour after the call and run for 1 week. The replay can be accessed by dialing 1-877-344-7529 with the passcode 2514245. Additionally, the call is being webcast on the company's website at www.alamo-group.com, and a replay will be available for 60 days. On the line with me today are Jeff Leonard, President and Chief Executive Officer, and Agnes Kamps, Executive Vice President and Chief Financial Officer. Management will make some opening remarks, and then we will open up the line for your questions. During the call today, management may reference certain non-GAAP numbers in their remarks. Reconciliations of these non-GAAP results to applicable GAAP numbers are included in the attachments to our earnings release. Before turning the call over to Jeff, I would like to make a few comments about forward-looking statements. We will be making forward-looking statements today that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: adverse economic conditions which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency-related issues, geopolitical events, and other risk factors listed from time to time in the company's SEC reports. The company does not undertake any obligation to update the information contained herein. We speak only as of this date. I would now like to introduce Jeff Leonard. Jeff, please go ahead. Thank you, Ed. We want to thank everyone who's joined us on the conference call today and express our appreciation for your continued interest in Alamo Group. The second quarter shaped up largely in line with our expectations, marked by a strong performance from our Industrial Equipment Division and sustained market headwinds that continued to put pressure on the results from the Vegetation Management Division. I would now like to turn the call over to Agnes, who will take us through a review of our financial results for the first quarter. I will then provide additional comments on the results and say a few words about the outlook for the third quarter and the balance of 2024. Following our formal remarks, we look forward to taking your questions. Agnes? Thank you, Jeff. Good morning, everyone. Alamo Group's second quarter concluded largely as anticipated. We faced some challenges in the vegetation management market, and we completed the first set of actions to right-size the operation and position this division for improved performance. On the bright side, industrial equipment exhibits promising developments that underscore our strategic growth initiatives. Reviewing the second quarter of 2024, we are mindful that we are comparing it against the strongest quarter of 2023. Here are some figures that highlight our performance. Net sales were $416.3 million, a decrease of 5.5% versus second quarter 2023. This decline is due to continued headwinds in the forestry, tree care, and agricultural markets, which affected the results of the vegetation division, partially offset by the growth in the industrial division. Gross profit for the second quarter of 2024 was $108.2 million, 26% of net sales, compared to $118.1 million, 26.8% of net sales, during the same period in 2023. The decrease of $9.9 million was due to lower volume in the Vegetation Management Division and the five-week strike in the Industrial Equipment Division. SG&A expenses were $960,000 higher than the second quarter of 2023 due to the Royal Truck acquisition. Any inflationary impacts were offset by cost reductions. As a percentage of net sales, SG&A was 14.4%. As a result, operating income for the second quarter came in at $43.3 million, or 10.4% of net sales, compared to the second quarter last year of $54.4 million, or 12.3% of net sales. Interest expenses were $6.1 million, compared to $6.8 million in the second quarter of last year, primarily due to lower debt levels. The provision for income tax was $9.3 million, which is lower than the second quarter of 2023 of $10.5 million. The effective tax rate was 24.8%, an increase compared to 22.3% last year due to a different mix of U.S. and foreign income and the non-recurring tax refund in 2023. These results bring us a consolidated net income for the second quarter of $28.3 million, or $2.35 per diluted share. In the second quarter of 2023, consolidated net income was $36.4 million, or $3.03 per diluted share. The year-on-year deviation was due to the strike and lower revenue. A few words regarding our divisions. The Vegetation Management Division net sales were $211.5 million, representing a 9.1% decline versus second quarter 2023. While forestry, tree care, and agricultural markets are down, the governmental side of the business continues to show nice growth. Operating income for the vegetation management division was $60 million, or 7.6% of net sales, impacted by the lower revenue and unfilled costs. We will discuss our improvement actions later in the call. The industrial equipment division delivered growth of 14.2% compared to the second quarter of 2023, with net sales of $204.8 million. We experienced continued strong demand for our industrial equipment across all groups. Operating income for this division was $27.3 million, or 13.3% of revenue, which is an improvement of $8 million and 284 basis points compared to second quarter 2023. Allow me to also summarize the first half of the year. Year-to-date net sales were $841.9 million, a small 1.2% decrease versus prior year. While the vegetation management division declined by 16%, the industrial equipment division grew by 21%. Gross profit was $219.8 million, or 26% of net sales, representing $10.8 million, or 94 basis points below prior year. SG&A expenses were $121.4 million, $1.9 million higher than the previous year due to the Royal Truck acquisition. Operating income was $90.3 million, or 10.7% of revenue, a decrease of $13.1 million and 141 basis points. Net income was $60.4 million, $9 million below prior year. Year-to-date net income includes restructuring costs of $1.7 million. The labor strike in the industrial division affected us by approximately $9 million in sales and a bit more than $3 million in profits. Let's review other financial items for the second quarter. Our balance sheet remains healthy. Working capital of $700 million increased compared to December 2023 due to higher cash and cash equivalents and the 21% growth in the industrial equipment division. Working capital in the Vegetation Management Division is decreasing in line with revenue, and specifically inventory reduction actions. Operating Cash Flow for the quarter was $34.3 million. In the second quarter, we reduced total debt by another $28 million. Total debt net of cash was $175 million versus $236 million in June 2023, which represents $16 million, or 26% reduction. We continue to focus on working capital and cash flow and expect our balance sheet to remain robust. Finally, Trailing 12-Month EBITDA ended at $236.6 million and holds over 14% of net sales. Looking ahead, as the vegetation markets remain weak, we will continue our improvement programs to protect our profitability and cash flow. The actions we have already taken, including reductions in force of 7% globally, are expected to result in $10 million in savings in 2024 net of additional restructuring costs. Jeff will discuss further details. To conclude, we are pleased that the board has approved a regular dividend of $0.26 per share for the second quarter of 2024. Thank you. I will now turn it back over to Jeff. Thank you, Agnes. I'd like to add my personal welcome to everyone who's joined us on the call this morning. The company's second quarter results, despite a few surprises, were broadly in line with our expectations given that our markets are moving at quite different paces at the moment. Net sales for the quarter reflected the recent divergence of momentum and activity between our industrial equipment and vegetation management segments. Consolidated net sales declined by 5.5% versus the same period of last year. Operating income was slightly in excess of $43 million, driven lower by the combined effects of the five-week strike at our Gradall facility, general weakness in vegetation management, and the associated impact on operational efficiency in several of the company's larger production facilities. Consolidated second quarter order bookings of $344 million were up 5.5% versus the same period last year. Industrial equipment orders were nicely higher, while orders for vegetation management equipment were essentially flat. Consolidated order backlog declined 14% compared to the second quarter of 2023, but still represents a very reasonable two-quarters of sales at the current pace. We were pleased that our balance sheet continued to strengthen during the quarter. Long-term debt net of cash is down more than 25% compared to the second quarter of 2023, and this positions us well to take advantage of the rising tide of acquisition opportunities we are seeing at the moment. Taking a deeper look at the industrial equipment segment, market activity across the governmental and industrial markets remained buoyant during the quarter. Net sales were 14% higher than in the second quarter of 2023 and established a new all-time record for this division. Profitability was also strong. Operating income rose nearly 45% compared to the second quarter of 2023, and EBITDA exceeded 16% for the quarter. These outstanding results were achieved despite the previously announced 5-week strike by unionized workers at the division's largest manufacturing plant in April and May. This work stoppage trimmed the division's second quarter net sales by nearly $9 million, with a more than $3 million associated reduction in operating income. It's worth noting that the new collective bargaining agreement in that facility spans 5 years and thus provides us with future stability and confidence to continue to invest in production modernization. Industrial equipment order bookings were similarly robust at nearly $194 million during the quarter, up more than 10% compared to the same period last year. The division ended the quarter with a very healthy order backlog of nearly $551 million, representing almost nine months of sales at the current pace, and thereby positioning this division to continue to provide solid growth and profitability well into 2025. Our sweeper and safety group led the way with solid baseline organic growth, further supported by a strong contribution from the Royal Truck business we acquired in the fourth quarter of last year. Our snow removal group also produced nice sales growth and improved profitability. This was a pleasant surprise as the second quarter is normally seasonally softer in that business. Finally, we were especially pleased that our vacuum truck and excavator group, despite the impact of the strike, produced positive sales growth and strong profitability. All in all, it was a very strong quarter for our Industrial Equipment Division in all respects, despite the setback of the lengthy strike. The company's Vegetation Management Division had a challenging second quarter as its forestry, tree care, and agricultural markets remained soft following the unprecedented surge of activity in the aftermath of the pandemic. Channel inventories remained elevated, although progress was made to reduce them. The division's second quarter net sales declined 19% compared to the second quarter of 2023, which significantly was the all-time historical quarterly sales peak for this division. The decline was most notable in its forestry and tree care and agricultural equipment groups. Solidly higher sales of mowers and associated equipment to governmental agencies were a bright spot for this division during the quarter. Although pricing exhibited sustained durability, lower sales adversely impacted efficiencies and compressed operating margin. Second quarter net income declined 55% compared to the same period of 2023 and resulted in EBITDA of just over 11% for the quarter. New orders worth $218 million were booked during the quarter, the same level as the second quarter last year. Sales of the division's flagship industrial wood grinders and chippers remained constrained by the combined impact of the persistent softness in housing and commercial construction, high channel inventories, and elevated interest rates. Higher interest rates and a slower start to the 2024 storm season also caused some of the large national tree care accounts to postpone expected fleet renewal and expansion orders. Orders for land clearing equipment were also soft during the quarter, following the exceptional surge of demand during the pandemic driven by the popular growth of rural lifestyles. Second quarter demand for the company's mowers and other agricultural equipment was flat in both the Americas and Europe due to declining farm incomes, soft commodity prices, and excess channel inventory. There are, however, a few modestly positive signs that the agricultural market is gradually improving. The Association of Equipment Manufacturers, or AEM, reported in June that dealer inventories of small, less than 40-horsepower tractors declined by 12%, while inventory of tractors greater than 40 horsepower but less than 100 horsepower declined 5% in the first six months of this year. Also, the persistent drought in many parts of North America is easing, and this bodes well for the harvest this year. To address the impact of the slowdown in vegetation management during the second quarter, we continue to take decisive actions to streamline our operations and reduce costs. Since the beginning of this year, we've reduced our global workforce by nearly 7%. In addition, we've initiated the consolidation of North American forestry and tree care equipment manufacturing into one facility, and we expect to complete this action by the end of the year. Part of the freed-up manufacturing capacity will be redeployed to the production of industrial products to meet the growing demand in that division. In addition, we're pursuing a divestiture of one of our smaller North American agricultural businesses. Finally, we're planning additional actions to consolidate agricultural equipment production in North America. We expect these actions to produce additional significant savings net of the associated restructuring costs in the remaining months of this year and the first quarter of 2025. Regarding the outlook for the third quarter and remainder of 2024, we believe that the market trends that we encountered in the second quarter are likely to persist, with our government and industrial markets demonstrating sustained strength and momentum, while markets for our Vegetation Management Equipment Division, including forestry, tree care, and agriculture, will remain under pressure. We do not anticipate the headwinds in vegetation management to meaningfully abate until channel inventories return to more normal levels and interest rate reductions are announced. Until then, we will continue to further adjust our capacities and cost structure while we collaborate closely with our dealers to motivate retail sales and thereby reduce inventory. On the other hand, we expect the Industrial Equipment Division to continue to produce solid results, solid sales growth, and further improvement in profitability for the remainder of 2024 at least. While the company's consolidated sales growth will remain under pressure for the remainder of the year, the efficiency improvements and cost reduction actions we have taken are expected to improve earnings in the third and fourth quarters. Looking farther ahead into 2025, we expect to return to stronger organic growth, more akin to what we've historically enjoyed. Supported by the restructuring actions we've taken and will continue to take in the second half of this year, we expect the company's sales and earnings to rebound solidly in 2025. Finally, given how active our M&A pipeline is at the moment, we are optimistic that we'll be able to leverage our strong balance sheet to accelerate inorganic growth as well. I would like to take this opportunity to thank our customers, dealers, suppliers, our dedicated employees, and all of our financial stakeholders for their continued support of the company. This concludes our prepared remarks. We're now ready to take your questions, so Operator, please go ahead. Thank you. We will now begin the question and answer session. To ask a question, you may press Star, then 1 on your telephone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press Star, then 2. At this time, we will pause momentarily to assemble our roster. And today's first question comes from Chris Moore with CJS Securities. Please proceed. Hey, good morning, guys. Thanks for taking a couple of questions. Hi, Chris. Good morning. Good morning. Start with vegetation. As you've discussed, channel inventories still remain above optimal levels. Can you give any relative sense as to just how overstocked they are? You know, I don't have discrete data I can share with you on that, Chris, but the bigger problem actually isn't inventory of our products. It's generalized inventory of all products in agriculture. So obviously, we're a short liner in that space. And as the dealers come under pressure on their balance sheets, the pressure exerted on them by the bigger OEMs becomes more intense, and we gradually get squeezed, meaning we have less space in the overall inventory of the dealers. We believe, and we've been able to track through our AR accounts, that the inventory is down about 10%-15% at this point compared to the peak, but it's still got a long way to go. And obviously, the dealers are still trying to deflate their balance sheets. So that's my best estimate. That's the best I can share with you. That's fine. That's helpful. It seems almost likely at this point that we'll get maybe a small rate cut or two in the second half. Would it take a significant rate cut, or could one or two smaller cuts create a little momentum? Yeah. I think the signal of a rate cut is very important, Chris, and I'd like to add a couple of comments here. The part of the vegetation management that's struggling the most is actually forestry, not agriculture. And forestry came to a very sharp and sudden halt when interest rates rose. You can actually track it almost dollar for dollar. So I believe just the psychology of the first rate cut will start to restore momentum in forestry, and that's the biggest single challenge we have at the moment. So I do believe that first rate cut will start to see our results improve. I don't think it'll take a lot more than that because although there is an inventory overhang in forestry, it's not in these big machines. It tends to be in the smaller machines that are used for clearing land, as I commented on the call. But our big grinders and chippers, there really isn't much field inventory. Our dealers hold a demonstrator or two, but generally, those machines are built to order. So I think that first interest rate cut is very significant, and we might start to see that recovery in forestry probably in the fourth quarter. It depends on when the first rate cut happens. I'm being very cautious because a year ago, I thought we were going to see a rate cut coming. Remember, we were all talking about March, right? And here we are in August, and it's not there yet. So forgive me for hedging my bets a little bit there. All good. All good. Maybe just stay with Morbark for a second. So my rough math is, including parts and services, revenue was in the $300 million range last year. Is that close? Yeah, that's fairly close. Okay. This year, it's probably going to be closer to 200 than 300 from where you're sitting today? Correct. That's right. Got it. And just my last one. Vegetation operating margin, 7.6% in Q2. What would it take to approach a 10% operating margin second half of the year? Is that unrealistic, but you can expect some improvement from the 7.6? Well, a couple of things I would say, Chris. First of all, that 7.6% is net of corporate costs. And so as the division's sales fall, corporate costs become a bigger impact to them. That's simple math. From what we call operating margin, operating income in the parlance of the company, that's already north of 10% before the corporate costs that I mentioned. And that's not a bad spot. For years and years, this company targeted 10% operating margin, so it's not a bad place to be. But I would tell you that most of that division is already north of 10% net of corporate costs, with the exception of forestry and tree care. It's forestry and tree care that has really suffered, and you can imagine that's the largest facility we have at over 1 million sq ft just in the primary facility and 400,000 sq ft in the second. When the volume drops as significantly as it did, under absorption becomes an impact. The second comment I wanted to make is when you look at the global headcount numbers that we mentioned, the headcount reduction numbers, that's essentially all been in forestry and tree care, sorry, excuse me, across the Vegetation Management Division. So the cuts in that division are very, very significant at this point. And so the savings that Agnes signaled both in the press release and in her remarks will all fall into vegetation management. So as you think about your model, that $10 million in savings that we've signaled just for the remainder of this year, the last two quarters of this year, will all be in vegetation management. That's very helpful. I'll leave it there. Thanks, guys. Appreciate it, Chris. Our next question comes from Mike Shlisky with D.A. Davidson. Please proceed. Yes, good morning. Thanks for taking my questions. Hi, Mike. Hello there. I first wanted to clarify your last answer there, Jeff, about the cost savings. So first, you said the $10 million is a full year number or just a back half number? No, back half of this year. Back half only. Okay. No, that's run rate. Yeah, back half of this year. Okay. Okay. So then looking at 2025, can you maybe give us just to confirm what the annualized number would be? And could you make that a gross number? In other words, kind of picking out all the one-time costs of severance and so forth. You know, Mike, we anticipated somebody would ask us that question, and we're not ready to signal that yet because these actions are underway, and we still have employee notifications to do. So we walk a very fine line here in what we say further about the restructuring actions we're taking. I hope you can appreciate that. I will share more information with you when it becomes available. But as of today, I don't want to signal a number like that. We still have employee notifications in progress at various locations. Oh, okay. Sure. No problem. I was actually also curious about, I mean, hearing a lot about electrical infrastructure. There was a big hurricane in Texas. I'm sure you heard about that recently or experienced it. And these issues are not going away. There's been people who are not maintaining their power lines. They're not properly taking away branches from electrical infrastructure. It's causing fires. It's causing things to fall down during heavy winds. It's not a problem that's kind of, in theory, it's a problem that's a real issue today, and not just because of storms, but because of data centers and trying to keep those running on a consistent basis with their power supply. Have you gotten any new inquiries from utilities or data center players in trying to find ways to keep branches away over the last couple of months as those kinds of issues have been hitting the headlines more? You know, Mike, that's a very, very interesting and insightful question. And the straight answer is actually, no, we haven't, which is very surprising. I commented in my remarks on the call that normally the big national tree care accounts would be doing fleet renewals at this point, adding chippers into the fleet, particularly given the forecast for a very active storm season this year. I believe what's holding them back is interest rates. Obviously, these are sophisticated buyers. They buy a lot of equipment. They tend to buy a lot of identical equipment, large volumes of the same product to staff their fleets around North America. But I think they're just sophisticated enough that they know interest rates coming, and they can probably get a better price in a few months down the line. So I think they're gambling a little bit. But the simple answer to your question is no, we have not seen that. All right. Could you share with us the industrial truck supply, chassis supply? Have you gotten enough for what you need recently, or are you still waiting on a bunch of chassis for that business? No, we have excellent news on the chassis front, Mike. First of all, and very interestingly, we've seen an uptick in the electrified chassis for our M6 Electric Sweeper. We had a very pleasant surprise from our supplier in terms of the number of those chassis they'll be able to deliver to us in the back half of the year. It's still small numbers, but it's a more significant small number than it had been. That was a pleasant surprise. Also, we've been offered significant incremental chassis for the remainder of this year. And for 2025, it looks like we're going to get everything we asked for, and believe me, we asked for a lot. So in short, while the allocations aren't completely over, there doesn't seem to be any restriction from what I can see on chassis. Now, chassis mix still matters a little bit. There are large volumes of some chassis, and other chassis still remain constrained. What's happening is the large over-the-road hauling companies are cutting back their purchases, and that's freeing up capacity with chassis suppliers. They're trying to reallocate based on how many axles they have and the transmissions and so on, Mike. You can imagine how that plays. But we are very, very bullish about our supply chain situation for 2025 and for the back half of 2024 as well. Great. Thanks for that. One last one for me, and this is for Agnes. You haven't been at Alamo all that long, but can you give us your early thoughts as to what you've seen so far and what you might look to do or change in the financial operation or capital structure of the company or in the broader businesses out in the field? You know, it hasn't been a long time for me, but I feel like I have never not been here. So it's been really great a few months. You know, Alamo is set up very well. So from a capital structure perspective, we're very disciplined in terms of managing our funds, and we will continue investing in our operations. And Jeff alluded to that. So we have a number of capital projects that are approved and in the works to modernize our plants and to expand our capacity. We are committed to returning capital to our shareholders, so we're really happy about the dividend that's been approved just recently. And we'll continue managing our debt. I think we can reduce debt further and, of course, be ready for those acquisitions. We're already ready. So we're ready for the next one, and our balance sheet is pretty strong. In terms of operational excellence, there's a lot of collaboration between all of the management in our plants, and so that's very exciting. We have quite a lot going on at the moment. Yeah, Mike, I just add a color comment to that. Thank you. Just add a color comment to that. We had a very active discussion about that in the boardroom this week, various capital allocation alternatives. And while we're not ready to announce anything yet, it's an active discussion because we are getting to the point where the debt on our balance sheet is very manageable. And Jeff's answer to that is, "I plan to use that for M&A because our pipeline is looking particularly attractive right at the moment, both short-term and longer-term. Okay. Well, that's great color. Thank you, Agnes. Thank you, Jeff. I'll pass it along. Thank you. The next question is from Mig Dobre with Baird. Please proceed. Thank you. Thanks for taking the question, and good morning. I want to go back to the restructuring discussion. Hi. Just to make sure that I understand here. So you were saying $10 million worth of savings, and those are materializing in the second half of 2024. So what's the right way to think about it in terms of Q3 versus Q4? And I'm presuming that this is a year-over-year number in the way you're describing it. Is that the way to think about it? So let me start answering this. So we started these actions already in second quarter and before that. And so what we have so far is we've completed, I called it a first set of actions. And from this first set of actions, we'll have $10 million, maybe even a little bit over this year. Of that, we have a little bit already in second quarter, but we also had restructuring costs in second quarter. So when we look at the $10 million, that is really the impact in Q2 and Q3. We are working on more actions. So there are activities that will be going on in third quarter. We didn't announce that yet, so we can't talk very specifically about that. And we have a number of activities in our plans. So as we complete those actions and those are announced, we'll let you know what the full year and how that shapes up for 2025 as well. Mig, I think you were trying to ask something. I think I came up to here, but I just want to be very clear as to what this number means. When you're saying $10 million, is this a full-year run rate figure? Is this something that flows through the quarter? I mean, look, it has an impact in the way we're kind of modeling the quarters. That's why I'm asking. Yes. This is just the second-half impact. I would echo that as well. This is what we anticipate: an improvement just in the second half of 2024. Which will carry into 2025 then, at least into the front half of 2025. Of course. Unless we see a turn in the market and we need to start rehiring people. This is, at the moment, all people related. The impact, the financial impact of the facilities consolidations we're doing has not been seen, nor have we announced those separately. I hate to say there would be more information flowing as we get those actions underway. But at the moment, this is just due to the people. From a reporting standpoint, you are not adjusting out the restructuring costs associated with the savings. I'm curious as to why that is. Yeah. Well, frankly, it's because most of the costs of the actions actually were incurred in Q1, not Q2. And I think later on, we will begin to publish that. But you know us. That's not our tradition to use Adjusted EBITDA. We've just never done that. And I, frankly, don't like it very much. I don't mind sharing what the costs were in dollars, but I don't like constantly adjusting EBITDA. That's just not our style. You know us. We haven't done that in our history. That's just not who we are. Well, it would be helpful to know the costs because if those are not recurring, that sort of allows us to have a cleaner base internally on how we're thinking about incremental margins or decrementals. So if you can put that out, I think that would be helpful. Sure. I'm sure we can do that with you in a follow-up call at some point, Mike. Okay. I do want to go back to the discussion that we've been having for a couple of quarters now in terms of the backlog and vegetation management and what that implies for revenues going forward. If I look at your orders, your orders for the past, call it six months or so, have really been in this $150 million range, give or take. The backlog, obviously, is coming down. I guess my question to you is, if we do not see an inflection in orders in the second half of 2024 in vegetation, we remain in this range, let's call it $150-ish million range. At what point in time should we expect your revenue, so your production, to catch down to these orders? Should this happen in Q4, or do you think this is going to be more of a first half of 2025 occurrence? I think that's probably more of a first half of 2025 occurrence, Mig. A couple of things I can share with you in terms of additional detail. The bookings in forestry alone did tick up a little bit. We didn't signal a number, and I'm not going to, but they're actually up a bit, while the agricultural side continues to trend downward. Net-net, that's what you see in the numbers. Also, the 12-month Trailing order bookings for this division have been flat for the last almost 6 months. I think we either are or are very near rock bottom here. The final piece I can share with you is that in the second quarter, we had very few order cancellations at all, and we've had significant order cancellations in Q3, Q4, and Q1, Q3 and Q4 of 2023 and Q1 of 2024. So what you're seeing is sort of this firming up of the order book, which is a very positive sign. I think agriculture is going to be the more challenged in terms of order run rates than forestry. I'm anticipating, as I said earlier on the call, that with a little bit of help from interest rates, forestry is going to start to tick back up. As I said, the bookings have already done that, but I think the order backlog will start to tick up as well. Understood. That's helpful color. In your actions, though, in the way you're kind of right-sizing the labor force, is it fair to say that you are right-sizing towards something closer to this kind of $150-$160 million revenue per quarter for this segment? I'm not sure I would say we're right-sizing toward that, but we're still taking very extreme measures to protect the bottom line, Mig. I'm not sure what normal will be. I think this market will certainly rebound. I mean, this is not a traditional number at all. But what certainly got my attention were the dramatic moves that the big OEMs in agriculture have taken over the past, let's say, 2 months. You've been following them and reporting on them very, very nicely. Thank you. Which says to me the big Ag OEMs are expecting this downturn to be a little harsher and longer than, say, the more cyclic downturns of the past. That got my attention, and we are acting accordingly. So hence the restructuring in North American agriculture to consolidate production there for the long term. But I will say, at least one of the facilities that we are going to vacate, we are not planning to divest. We're going to mothball that facility and put it on care and maintenance so that if we see a resurgence of business, we can put that plant back into use very quickly. And as I said, another one of our facilities is going to be reconfigured to produce industrial products where we see overwhelming demand at the moment, particularly in vacuum trucks. So we need to set up some additional production capacity there. So I think we've got a well-thought-out plan here, Mig. I called the bottom once before, and you told me I was wrong, and unfortunately, you were right. So I'm being a little bit more cautious this time and just sort of defending where the bottom might finally be, so. No, I appreciate that. And everybody's crystal balls are a little hazy these days, so I certainly can relate to the challenge. But maybe one last question on vegetation management, really surrounding the decremental margins. In the first half, the decremental margins have been north of 40%. And with the combination of cost savings that you have coming in the back half and the incremental pressure that we're going to see on volumes, what's the right way to think about decremental margins? And maybe this is a question for Agnes. I mean, how do you have modeled it internally? A couple of things to think about is the restructuring costs that we have between Q1 and Q2 that will not repeat in Q3 and Q4. So we had reported $1.7 million year to date. And the $10 million that we've reported is pure savings, basically split between Q3 and Q4. What I can't tell you more yet is, and I will once we have more information, but what I can't tell you more yet is on the additional actions that we're taking in Q3. Yeah. Mig, let me add a little bit more color to that, if I might. In terms of pricing, we're not seeing a lot of pricing pressure in forestry, to be candid with you. We are seeing some pricing pressure in Ag, but it's not actually that significant. Pricing really doesn't matter when there's no demand to speak of. So the actual cost-price margin is holding up very well. In fact, it actually ticked up just a little bit. But the under absorption, the efficiency effects of this sudden reduction in demand are significant in this division because this division has large facilities. I said 1.4 million cubic feet of space in forestry and a smaller but similar number or a similarly significant number in agricultural equipment. So the restructuring actions to consolidate that capacity will eliminate significant under absorption. We started with people, but obviously, people don't take out the semi-fixed costs and facilities, the people related to material handling and maintaining the plants and so on. The only way you capture those costs is to mock all the facilities. So that's why the urgent need to consolidate production facilities, even beyond what we had anticipated in our strategic plan two years ago. Understood. Final question on industrial equipment. And I guess two parts here. First, the impact from the strike, very helpful in telling us the sales and operating income. Do you anticipate you're going to make that figure back in Q3, Q4? Is that lost business or just deferred business? And then the second part of the question on the margin front, really, really nice performance in Q2 despite the strike. So if that's the case, that you can actually make back some of this lost revenue, should we think about margins maybe getting closer to 15% exiting 2024? Thank you. I'll give Jeff's answer to that first. Well, I'm going to get back in a minute with a pencil here. I think the margins will continue to rise in the industrial division. Yes, that $3.5 million or so that we signaled, $3 million plus of operating income effect, that is one time. So yes, you should get that back. And I'm looking at the guy that runs that business right now, and he's shaking his head up and down in a positive way. Secondly, we do have good price advantage. As you know, in that space, we compete with reputable companies who also like to make money. I've said that many times, and I mean that to be complimentary toward them. Right now, there's very, very significant demand for all the products right across the portfolio in industrial. So the other thing that's happening is obviously the operating efficiencies there continue to improve. We are to the point now where effectively underabsorption is approaching zero. We had significant underabsorption in the second quarter related to the strike. That obviously goes away. But we are to the point now where we need to expand facilities. So for example, we had previously announced a significant expansion of our facility in France that produces vacuum trucks. That's underway. A couple of our directors just went to inspect that a couple of days ago and see where we are with that. And as I said, we're going to reconfigure one of our vegetation management plants to produce industrial products, which we can do relatively quickly. That's a way to continue to employ people in that facility. So we are very bullish on industrial. I've said for a long time industrial could get to where it is now. That part of my prognostication came true. I think there is still operating margin expansion potential in this division. Appreciate it. Good luck. Thank you. Appreciate it, Mig. As a reminder, if you do have a question, please press star then one on your telephone keypad. The next question comes from Greg Burns with Sidoti & Company. Please proceed. Morning. The business. Good morning, Greg. Divested in ag. The business that you mentioned that you're divesting or did divest, what kind of financial impact might that have? And are you looking at other products or businesses that you might be looking to divest? Yeah. No, we really are not looking to divest other businesses at this point, Greg. And I can't say too much about this, except it's a very small part of the business. It's really not material to our financial results. So it's just one that's been lurking out there. It's a cleanup activity. But we saw an opportunity to take care of it now at this point in the cycle and are going to do that. But we do have very significant consolidation actions being planned and underway in the agricultural side of the business as well as in forestry and tree care. So those are the common. We will share the impact of those as we go. But again, those should not be revenue impacting. That should only impact operating margin in a favorable way. Okay. The strong demand on the industrial side of the business, what are the primary drivers there? Is there just more federal dollars flowing to municipalities and they're accelerating their upgrade cycles? Or how should we think about what's driving demand now and the durability of that demand? Greg, the municipal side of this isn't really showing significant growth. It's holding at a very high level is the way I like to describe it, which in an election year is a victory in and of itself. You typically can see pressure on these markets in an election year, particularly in the second quarter. And I've said that before publicly. So I think people know, at least I believe that to be the case. What is going on, though, is industrial demand for these products. So particularly vacuum truck rental fleets are getting renewed at a very significant rate. And then finally, we're gaining some market in some of these businesses. We've had very good take-up on our new range of products in our Sweeper Group. Particularly, our electrified products have been launched with great acceptance by the market. We've been pleased with that. And as I said, our vacuum truck demand is still rising, so we need to expand capacity there. So it's more the industrial side and contractor side of this that's showing the sharp uptick in demand at the moment. While governmental remains still growing, still growing at a nice rate, but sort of low single-digit growth in the governmental side right now. And in an election year, I'll take that all day long. What is the revenue split between industrial, municipal, and the industrial segment? Okay. I anticipated you might ask me that. So this time for a change, I'm actually prepared for that. If you give me just a second. Let's see. I can give it to you on a corporate level. Let's do it that way. That's probably better. When you look at the revenue of the company through the first half of this year, approximately 12% is from snow removal, approximately 14% is from sweepers and safety equipment, and approximately 22% or thereabouts is from vacuum trucks. And please don't press me to go farther. My general counsel has given me a cross-eyed look already, so. Okay. All right. Thanks. I'll leave it at that. At this time, we are showing no further questioners in the queue. This does conclude our question and answer session. I would now like to turn the conference over to the management team for any closing remarks. Okay. Thank you, Operator. Before closing the call today, I'd like to express my congratulations and deep gratitude to Mike Haberman, Executive Vice President of the Industrial Equipment Division, who retires this month after more than 37 years of exemplary service with our company. Mike is a very good friend and an exceptional business executive who navigated his division through several very challenging years during and immediately after the pandemic and all of the supply chain challenges that followed. I want to wish him a very well-deserved, long, healthy, and happy retirement. Mike is being succeeded by another extremely capable leader, Mr. Kevin Thomas, who has most recently been leading the Industrial Equipment Division's Excavator and Vacuum Truck Group, where he's produced outstanding results. We wish Kevin many years of continued success in this expanded leadership role. Thank you for joining us today. We look forward to speaking with you on our third quarter conference call in November 2024. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.