Prompt:
Human: Actual results may differ materially from those made or implied in such statements, which speak only as the date they are made and which we undertake no obligation to publicly update or revise.
Our Chairman and CEO, Clarence Smith, will now give you an update on our results, and then our President, Steve Burdette, will provide additional commentary about our business.
We're very pleased with the results of the first quarter and I'm encouraged with the continuing momentum that we're seeing with increased written sales, higher traffic and higher closing rates and average tickets.
Even though our undelivered backlog is up almost 4 times last year, our current incoming orders are continuing at the elevated pace we have seen since January.
We have not seen a slowing of orders or significantly higher cancellation rates even with the longer wait times for furniture.
While we do not know how long we will see these dramatic increases in incoming orders, we believe that the importance and the value of the home has risen dramatically in the past year.
We believe this trend will continue for 2021 because of the large backlog of orders, the very strong housing market, the government cash subsidies and the increased demand for furniture and other home related products.
We also believe that the elevated importance of home is a longer-term sustainable trend in America.
Our supply merchandising and distribution teams have been tirelessly working with our suppliers and shippers to bring in the product to fill orders and reduce our record backlog.
The delays in shipping challenges are well-known now, but they are well beyond anything that our industry has experienced.
We're planning to increase our inventories as the production and product flow improves and are investing in additional warehouse capacities in our distribution network.
We opened a new store in Myrtle Beach, South Carolina this past quarter.
And are excited to open a design-oriented store in the villages in Central Florida this summer.
We expect to open a third store in Northeast Austin, Texas later this year.
We believe there are a number of good additional markets that we can serve within our distribution footprint and are actively investigating and pursuing new store opportunities.
We're very excited about the rollout of a major new multimedia marketing campaign in May, which we believe will more clearly separate Havertys from our competitors and raise the bar on service, quality furniture and design.
We'll be sharing more on the campaign early next month.
I'd like to provide an update on our operations during the quarter, specifically, our supply chain efforts as well as our distribution, home delivery and service areas.
Our supply chain team faced many headwinds during the first quarter, which included availability of container capacity as we approach Chinese New Year was difficult.
Container freight costs were unreliable as we face pricing surcharges due to scarcity.
We experienced port delays, especially at LA on some of our inbound product of up to three weeks.
February's winter storm impact to our Dallas distribution center caused us to close receiving operations for one week.
The same storm impacted two of the main chemical manufacturers for our foam suppliers, which caused our upholstery and bedding vendors to see further delays in their production.
And finally, the Suez Canal situation caused some additional delays for products arriving in the early part of the second quarter.
Even with all these headwinds, we were able to receive approximately 10% more product in Q1 versus Q4.
We expect that we will be able to match or exceed the same flow of product in Q2.
We are still experiencing some delays with container availability in the early part of Q2.
However, we have been able to secure our new contracts with our freight carriers, which will bring stability to our freight cost.
Also, the flow of foam should resume back to normal production by the middle of May, which will be a big lift to the domestic production for upholstery and bedding in the back half of the quarter.
Our distribution, home delivery and service teams did a masterful job adjusting to the headwinds we faced within the quarter.
We had to close deliveries for all stores serviced by our DC in Dallas and our cross docks in Memphis in Cincinnati, for one week due to the same winter storm in February.
Our delivery schedules resumed back to normal the week after the storm.
Staffing remains our #1 concern in this area.
Extended unemployment benefits until September, along with the stimulus checks being distributed in December and March, have made it difficult to attract and retain talent in our warehouses and home delivery.
This challenge is not unique to our company as it is a challenge for many industries in this economy.
Overall, I'm very pleased with the results of our operations in the first quarter of this year.
I appreciate the efforts of the entire Havertys team as well as our vendor partners that made it happen.
And looking at our financial results for the quarter.
In the first quarter of 2021, delivered sales were $236.5 million, a 31.8% increase over the prior year quarter.
If you recall, our retail operations were closed in the last two weeks of the first quarter of 2020 due to the COVID-19 pandemic.
Total written sales for the first quarter of 2020 were up 54.5% over the prior year period.
Comparable store sales were up 11.5% over the prior year period.
This includes stores that were open for a full month in both periods, so March is excluded.
Our gross profit margin increased 160 basis points from 55.5% to 57.1% due to better merchandising, price and mix and less promotional activity during the quarter.
These improvements were partially offset by an increase in our LIFO reserve as we continue to see increased freight and product costs.
Selling, general and administrative expenses increased $12.2 million or 12.5% to $109.8 million, primarily due to increased sales activity.
However, as a percentage of sales, these costs declined 800 basis points to 46.4% from 54.4%.
As demonstrated in the past two quarters, our financial model has substantial operating leverage at these sales levels.
Income before income tax has increased $23.1 million to $25.4 million.
Our tax expense was $6 million in the first quarter of 2021, which resulted in an effective tax rate of 23.5%.
The primary difference in the effective rate and the statutory rate is due to the state income taxes and the tax benefit from vested stock awards.
Net income for the first quarter of 2021 was $19.4 million or $1.04 per diluted share on our common stock compared to net income of $1.8 million or $0.09 per share in the comparable quarter of last year.
Now looking at our balance sheet at the end of the first quarter, our inventories were $103.6 million, which was up $13.7 million over the December 31, 2020 balance and down $6.9 million versus the first quarter of last year's balance.
At the end of the first quarter, our customer deposits were $104.7 million, which was up $18.5 million from the December 31, 2020 balance, and up $78.6 million versus the Q1 2020 balance.
We ended the quarter with $210 million of cash and cash equivalents, and we have no funded debt on our balance sheet at the end of the first quarter of 2021.
Looking at some of the uses of our cash flow.
capex for the quarter was $4.7 million.
And we also paid $4 million of dividends during the first quarter of 2021.
During the first quarter, we did not purchase any common shares in our buyback program.
We currently have $16.8 million remaining under authorization for this program.
We expect our gross margins for 2021 to be between 56.5% and 57%.
We anticipate gross profit margins will be impacted by our current estimate of product and freight costs and changes in our LIFO reserve.
Our fixed and discretionary type SG&A expenses for 2021 are expected to be in the $265 million to $268 million range, a slight increase over our previous 2021 estimate due to rising benefit costs.
The variable type costs within SG&A for 2020 are expected to be in the range of 17.5% to 17.8%, a slight increase over the most recent quarter based on potential increases in selling and delivery costs.
Our planned capex for 2021 remains at $23 million, anticipated new replacement stores remodels and expansions account for $12.9 million, investments in our distribution network are expected to be $6.4 million, and investments in our information technology are expected to be approximately $3.7 million.
Our anticipated effective tax rate in 2021 is expected to be 24%.
This projection excludes the impact from vesting of stock awards and any potential new tax legislation.
This completes our commentary on the first quarter.
 Assistant:

Chosen response:
compname reports q1 earnings per share $1.04.
q1 earnings per share $1.04.
q1 sales rose 31.8 percent to $236.5 million.
q1 same store sales rose 11.5 percent.
expect gross profit margins for 2021 will be between 56.5% to 57.0%.


Prompt:
Human: Before beginning, let me cover the formalities.
Such factors are detailed in the company's SEC filings and last night's news release.
It cannot be recorded or rebroadcast without our express permission.
The purpose of the call is to review our First Quarter 2020 results detailed in our news release issued yesterday.
These numbers reflect the beginning of what we expect will be a gradual and steady recovery over the coming quarters as the world emerges from the economic effects of the pandemic and regains its confidence in air travel once again.
The results we reported in our news release, last night, represent a solid start to the year and were largely consistent with our expectations.
And we were more than pleased with how well we performed in controlling costs and delivering stronger margins.
Our Hexcel team has transformed this downturn in demand into an upturn in productivity, cash management, inventory control, and efficiency.
While we have a few more months of restructuring ahead of us, especially in Europe, which is on track, we are already realizing meaningful results from our rapid and robust response to the pandemic and its unprecedented effects on our business.
As we have previously communicated, we expect to reduce overhead costs by the middle of this year on an annual basis by approximately $150 million.
And I'm pleased to report a significant portion of those savings are reflected in our first-quarter results.
We expected that second half of 2020 and our first for this year would represent the troughs or the low point of the demand cycle resulting from COVID-19.
Now, with Q1 behind us and a clearer view ahead, we're even more convinced that our expectations were correct, which we continue to validate via regular customer interactions, including customer site visits where this can now be accomplished safely.
Keep in mind, however, the pandemic has triggered many challenges that the world has not yet fully overcome, and therefore, any substantial increases in build rates, air passenger demand, and even consumer spending remain uncertain.
For example, we anticipate that 2021 will continue to be impacted by pandemic headwinds, including inventory destocking, which we expect will wind down as we move through the second quarter and to be largely behind us as we move into the second half of the year.
Some tightness in our supply chain is always a risk, and even more so with the ever-present threat of pandemic-related slowdowns, shutdowns, and shortages.
The rollout of vaccines is encouraging in some countries, yet, unfortunately, slow in others.
Domestic travel in the US is showing signs of improvement and may boom by year-end.
While other countries are entering their second, third, or fourth lockdowns with minimal domestic flights.
International travel is still showing little sign of recovery.
So, for the aerospace industry, 2021 remains a transition period between the dramatic decline triggered by the pandemic and a return to strong growth in 2022.
We remain cautiously optimistic by both our demonstrated performance and the momentum we see building in the global economy as the air travel begins a gradual return to pre-pandemic levels.
Now, let me highlight some of the results.
First-quarter sales of $310 million were in line with our expectations.
Adjusted first-quarter earnings per share was a negative $0.10 compared to a positive $0.64 last year.
Throughout the pandemic, we have maintained a strong focus on cash, and in the first quarter, our free cash flow was a use of $6 million compared to a use of $19 million in Q1, 2020.
Despite significantly lower sales, we continue to tightly manage cash by controlling spending, which includes capital expenditures.
Liquidity at the end of the quarter was strong and included $82 million of cash and $536 million of revolver borrowing availability.
Overall, our balance sheet remains robust.
Turning to our three markets.
Aerospace sales of $147 million were down more than 59% compared to the first quarter of last year, which included sales before the effects of the pandemic began to dramatically impact Commercial Aerospace.
Sales were down significantly across all major platforms, which reflects pandemic induced build rate reductions by the aircraft OEMs and continued supply chain destocking.
While one quarter does not make a trend, we did see sequential sales growth in the first quarter for narrow bodies.
Admittedly, Boeing 737 MAX sales continue to be at a low level as the supply chain works through channel inventory.
This may take some time and will be uneven as inventory levels vary across the supply chain.
Sales to other Commercial Aerospace, which include regional and business aircraft, were down 48% compared to 2020.
Business Jets is the largest portion of this sector and while most business jet programs were down significantly year-over-year, there were a few select programs that increased modestly.
While not getting into program specifics, we are confident business jet demand will return over time, likely led by the small and mid-sized classes.
Space and Defense sales were basically flat year-over-year at $112 million.
We have content on over 100 space and defense programs and they fluctuate by quarter.
Our space business has been growing nicely over time, yet, paused in the first quarter with softer sales which was not usual.
We are -- not unusual.
We are beginning to benefit from the ramp in the CH-53K and we are pleased to see the growing international demand for this composite rich, heavy-lift helicopter.
We are encouraged with the initial outlook through proposed US defense spending, particularly as composite lightweighting [phonetic] supports the US military focus on longer-range aircraft and rotorcraft.
We expect to benefit from growth in Space and Defense throughout the year.
Total Industrial sales of $51 million in the first quarter were down more than 23% and 27% in constant currency.
Lower wind energy sales drove the decrease, yet were partially offset by stronger automotive sales, which may be an indication that consumer confidence is improving.
Wind energy sales, which is the largest submarket in Industrial, were down more than 40% compared to last year.
And reflects a previously reported softening in customer demand, as well as the closure of our wind blade prepreg production facility in North America, last November.
Wind energy remains a good business for Hexcel and Vestas continues to be a great customer.
Material manufacturing continues at our plants in Neumarkt, Austria; and Tianjin, China, as well as our continuing commitment to innovation in the wind energy market.
During the quarter, we announced our new HexPly XF Surface Treatment Technology that significantly reduces show manufacturing time during the wind blade production process.
It's a product that has had a successful track record in prepreg blades and now is adapted for infusion processes.
We also received type approval certification for our HexPly M9 [Phonetic] prepreg materials, which adds to our growing portfolio of prepreg processing options for marine applications.
To finish, I'd like to provide a slightly longer-term perspective.
As sales recover in 2022 and beyond, we expect to deliver strong incremental margins as utilization of existing capacity increases.
While we do not guide to incremental margins, what may be helpful is to review past sales levels and operating margin performance before the A350 reached peak rates.
Specifically, in the 2014 to 2015 timeframe Hexcel sales were in the range of $1.8 billion to $1.9 billion, with operating margins in the range of 17%.
And what is noteworthy is that the A350 production rate was ramping to five per month during these years.
We believe that we can return to these margin levels when we attain similar sales levels.
While our depreciation expense is now higher than during that prior time period, our focus is to more than offset this by efficiency improvements and our overhead cost reductions.
Our cost base will expand with growth, but what is incumbent on our management team is to be extremely disciplined in managing cost growth and ensuring the depreciation headwinds is more than off overcome.
To state this succinctly, we expect to achieve strong, mid-teens plus operating margins, with sales of approximately $1.8 billion to $1.9 billion, and we are targeting to exceed prior peak margins when we return to previous peak sales levels.
As a reminder, the year-over-year comparison will be in constant currency.
The majority of our sales are denominated in dollars.
However, our cost base is a mix of dollars, euros, and British pounds, as we have a significant manufacturing presence in Europe.
As a result, when the dollar strengthens against the euro and the pound, our sales translate lower while our costs also translate lower leading to a net benefit through our margin.
Accordingly, a weak dollar, as we are currently facing, is a headwind to our financial results.
We hedge this currency exposure over a 10-quarter horizon to protect our operating income.
Quarterly sales totaled $310.3 million.
The sales decrease year-over-year reflects production rate decreases by our Commercial Aerospace customers in response to the pandemic, combined with the continued Commercial Aerospace supply chain destocking.
Turning to our three markets.
Commercial Aerospace represented approximately 48% of the total first-quarter sales.
Commercial Aerospace sales of a $147.6 million, decreased 59.7% compared to the third quarter of 2020 as destocking continues to impact our sales.
We continue to expect destocking to wind down during the second quarter of 2021, consistent with what we have communicated during our fourth quarter 2020 earnings call.
We don't expect to generally be aligned with OEM production levels entering the second half of 2021, with destocking largely behind us and recognizing the beneficial impact of the cost takeout actions that we have implemented.
Space and Defense represented 36% of first-quarter sales and totaled $111.7 million, basically unchanged from the same period in 2020.
We remain bullish for the outlook for our Space and Defense business globally.
Industrial comprised 16% for first quarter 2021 sales.
Industrial sales totaled $51 million, decreasing 27.1% compared to the third quarter of 2020 on weaker wins and recreation market, partially offset by stronger automotive.
Wind energy represented approximately 50% for first quarter Industrial sales.
On a consolidated basis, gross margin for the first quarter was 17.1% compared to 26% in the first quarter of 2020.
The sequential gross margin improvement from the fourth quarter of 2020 had three drivers, including greater impact from our cost reduction actions, improved sales mix, and a few more carbon fiber lines coming back online as our production levels and inventory becomes appropriately realigned with demand.
We continue to temporarily idle select carbon fiber assets.
And as we bring further lines back into production over time to support this expected gradual and steady sales growth in future periods, this should help generate strong incremental margins.
First-quarter selling, general, and administrative expenses decreased 17% or $8 million in constant currency, year-over-year, as a result of headcount reductions and continued tight controls on discretionary spending.
Research and Technology expenses decreased 19.7% in constant currency.
The other expense category consisted primarily of severance costs in Europe.
We continue to target approximately $150 million of annualized overhead cost savings, including indirect labor.
As Nick said, a significant portion of these savings have been achieved and were reflected in our Q1 2021 results.
We expect that most of the remainder of this cost and take-outs will be achieved by the end of the second quarter of 2021.
Adjusted operating income in the first quarter was $1.9 million, which is the first positive operating income since the destocking began in earnest during the third quarter of 2020.
The year-over-year impact of exchange rates was negative by approximately 10 basis points.
Now turning to our two segments.
The Constant Materials segment represented 76% of total sales and generated a 3% operating margin or an adjusted operating margin of 8% compared to 19.9% adjusted operating margin in the prior-year period.
The Engineered Products segment, which is comprised of our structures and engineered core businesses represented 24% of total sales and generated a 6.4% operating margin or a 5.4% adjusted operating margin compared to 6.6% adjusted operating margin in the first quarter of 2020.
The tax benefit for the first quarter of 2021 was $7.5 million, which included a discrete tax benefit of $3.2 million from the revaluation of deferred tax liabilities related to a favorable US state tax law change.
The pandemic and consequent mix of results across the countries in which we operate is expected to continue to have an impact on the Company's overall effective tax rate throughout 2021.
Net cash used by operating activities was $1.2 million for the first quarter.
Working capital was a use of cash of $26.2 million in the quarter, primarily related to increased receivables as first-quarter sales were weighted toward the end of the quarter.
Capital expenditures on an accrual basis were $4 million in the first quarter of 2021 compared to $21.9 million for the prior-year period in 2020.
Capital expenditures continue to be tightly managed with a focus on improving existing asset efficiency and new technology flexibility.
Free cash flow for the first quarter of 2021 was negative $6.1 million compared to negative $18.6 million in the prior-year period, which reflects tight spending control on significantly lower sales.
In late January 2021, we announced the second amendment to our revolver, which we've structured to accommodate the temporary economic impact of the pandemic.
The amendment temporarily replaces the leverage covenant with a minimum liquidity covenant.
The minimum required liquidity is $250 million, which includes unrestricted cash, plus unutilized revolver-based [Phonetic] availability.
This minimum liquidity requirement is through and including March 31, 2022.
The facility terms then revert to the prior leverage covenant, effective April 1, with the first measurement of leverage to occur as of June 30, 2022.
Additionally, the amount of the revolver is reduced to $750 million from $1 billion, previously.
This amendment preserves our access to liquidity during this period of market transition and reinforces our strong relationship with our bank's indication.
We remain within all covenant conditions.
Our total liquidity at the end of the first quarter of 2021 was $618 million, consisting of $82 million of cash and an undrawn revolver balance of $536 million [Phonetic].
Our revolver matures in 2024 and our two senior notes mature in 2025 and [Technical Issues] purchase program remains suspended and is also restricted by the previously referenced revolver amendment.
Our Board continues to regularly evaluate capital allocation priorities.
As our earning release states, we are not providing financial guidance at this time, but I would like to reinforce and expand upon the information shared during our fourth quarter 2020 earnings call.
We continue to expect 2021 annual sales to be lower than 2020, in fact, largely in line with the current market consensus.
We expect the aerospace supply chain destocking to largely come to an end during the second quarter 2021.
While some destocking may continue into the second half in select instances, it should be offset by strengthening narrow-body sales.
Some additional restructuring costs are anticipated in the remaining quarters of 2021 but below the first-quarter level.
We expect the fiscal year 2021 adjusted operating margin percentage to be in the low single digits.
Capital expenditure in 2021 will continue to be managed very tightly and is expected to be at a similar level to 2020.
We expect to generate free cash flow in 2021 and further reduce debt levels.
The tax assumption is more contrary to normal, but we expect the underlying effective rate to be approximately 25% in 2021.
This change from prior rates was due to a change in the mix of jurisdictions where we generate income.
Over time, we expect the tax rates to return to pre-pandemic levels assuming no changes to existing tax rates in the major jurisdictions where we operate.
Our first-quarter results give us confidence in our outlook for a steady recovery throughout 2021.
We believe that the aerospace industry will realize some upticks in demand beginning in the second half.
And as it does, Hexcel is well-positioned to benefit from our leadership and much sought-after advanced lightweight composites from our strong customer relationships that have grown stronger throughout the pandemic, and from our continuous focus on continuous improvement through operational excellence.
This also is not the time to be shy about investment in R&T and we are continuing to realize a strong pull from our customers to further drive advancements in existing and new innovations that position us to win next-generation platforms.
Despite all the turmoil and challenges that arose in 2020, the great strengths and values of Hexcel remain as robust as ever.
We still have leading positions on the world's largest aerospace programs with our advanced composite materials and the broadest technology portfolio in our industry.
The great job our team has done puts us in a position to return to substantial growth once this pandemic is behind us.
Few companies are as efficient or as good at execution, or as committed to excellence as Hexcel.
Our people are the most resilient and talented group that I've ever known and I'm always proud to share with you their accomplishments every quarter.
For several years, Hexcel has been building capacity to meet extraordinary ramp-ups in demand.
So the chance to pause with our customers, over the past few months, has afforded us a unique opportunity to ensure that we are aligned with them and in the strongest position possible to meet the growing demand at hand.
Hexcel has never been more focused on its customers, innovation, and operational excellence.
We expect to emerge from these challenges as a leaner and stronger company and even better positioned for strong growth and return to shareholders.
 Assistant:

Chosen response:
compname reports q1 sales $310 mln.
q1 sales $310 million versus $541 million.
qtrly adjusted diluted net loss per common share $0.10.
continues to withhold financial guidance due to market uncertainties arising from global pandemic.
quarterly dividend remains temporarily suspended.
share repurchase program remains temporarily suspended.


Prompt:
Human: Before beginning, let me cover the formalities.
Such factors are detailed in the Company's SEC filings and last night's news release.
It cannot be recorded or rebroadcast without our express permission.
The purpose of the call is to review our second quarter 2021 results detailed in our news release issued yesterday.
The global COVID pandemic is far from over.
But with the growing availability of vaccinations, there is cautious yet positive momentum as domestic travel appears to be on the rebound and aircraft backlogs have started to grow again.
While there remains uncertainty ahead, our focus has shifted toward a return to growth.
All of us recognize that the past year and a half has been unprecedented.
The global pandemic required Hexcel to take aggressive and swift restructuring actions, which we did.
We also took advantage of the lower production levels to drive cost and efficiency improvements.
These efforts have positioned us to exit the pandemic more focused and more efficient for a strong rebound.
The way our team responded to the challenges has been phenomenal and as reflected in the results we reported in our news release last night.
Our robust start to the year continued into the second quarter with results in line with or slightly ahead of our expectations.
We achieved strong margin performance despite lower year-over-year sales as a result of a favorable margin mix from higher carbon fiber sales.
Combined with the efficiency improvements and reductions in our overhead costs, we were able to deliver $0.08 of adjusted earnings per share for the quarter.
If you remember back to the second quarter of 2020, we also reported $0.08 of adjusted EPS.
However, on sales, that were almost 17% higher in constant currency.
This demonstrates the cost controls actions that we took quickly in 2020 and that continue today are making a significant difference in the sustained value we offer to our shareholders.
As we anticipated last quarter, we believe inventory destocking is largely behind us as we move into the second half of the year.
Specifically, destocking for the A320 and 737 MAX are basically complete.
The widebody still have some inventory to burn through and we expect that will take a few more months to align with announced build rates.
We are encouraged that airlines such as United are placing orders with the commercial aerospace OEMs as revenue passenger kilometers continue to grow around the world.
Deliveries climbed in June for both Airbus and Boeing, which we believe is further evidence that we, along with our customers, are beginning to emerge from the effects of this pandemic-driven downturn.
However, while we anticipate gradual increases in build rates in the coming months, we recognize that it will take some time for rates to return to 2019 levels.
Even with vaccines restoring confidence in travel, there are uncertainties with additional variants of the COVID-19 virus spreading.
US air travel is steadily increasing, but still about 25% lower than before the pandemic.
European travel is improving.
However, the recovery is slower with flights remaining about 50% lower than pre-pandemic levels.
So while we see some encouraging signs and are planning for increased demand and a gradual recovery, we recognize that the effects of the pandemic on commercial aerospace and our business are likely to remain for some time.
Even so, we are very excited about the future and pride ourselves on our relentless drive for continuous improvement.
With that in mind, we have taken full advantage of this time to deepen our customer relationships, which had never been stronger, to further improve our processes and to build our broad portfolio and our commitment to continued innovation.
We announced in May that we are building a flagship center of excellence for research and technology in the US to support next generation developments in advanced composite technologies.
When it opens in 2022 at our Salt Lake City Campus, it will be our largest center for innovation and product development in North America and a showcase for our advanced composites technologies.
Eventually, about 150 scientists and other employees will work at the new center, including many of the experienced and talented R&T employees currently working in Dublin, California.
We will eventually sell the property in California, with the proceeds expected to fund a significant portion of our construction costs for the new center.
With about 100,000 square feet of laboratory and office space and the latest state-of-the-art testing equipment, it will allow us to expand our research to further develop new products and processes and provide an even greater opportunity for us to collaborate with our customers on the latest and advanced composites technologies to deliver innovative solutions and support future growth.
Design efforts are well underway and we expect to break ground in the fourth quarter of this year.
We're excited to make this investment in innovation today to ensure our continued leadership tomorrow.
I look forward to inviting many of you to visit once the site opens toward the end of next year.
I recently completed touring all of our US locations to conduct site readiness reviews.
What I found during these site visits thrilled me.
Our workforce is engaged, focused and highly motivated for a return to growth.
The caliber of site leadership and the shop forward teams across our plants is truly outstanding.
I was shown numerous examples of increased productivity, significant process enhancements and a long list of continuous improvement projects our team has implemented across our manufacturing footprint during the pandemic to reduce costs, further enhance worker safety and job quality, and to position Hexcel to expand margins as growth returns.
The ability of the supply chain to ramp up remains a watch item for us and we are working very closely with our suppliers to successfully overcome any challenges that arise.
The same focus applies to our labor requirements, which I'm happy to say are growing once again.
At this point, we have been able to attract the labor we need.
Yet, we anticipate further challenges, which we'll address through robust recruitment, planning and continuing to stay in lockstep with our customers.
Now, let me highlight some of the results from the quarter.
Aerospace sales of $154 million were down almost 25% compared to the second quarter of last year.
Narrow-body demand is recovering quickly, with second quarter sales reaching their highest level since the first quarter of 2020.
Sales to Other Commercial Aerospace such as regional and business aircraft were down 27% compared to 2020.
Business jets is the largest portion of this sector and sales continue to recover, but remain lower year-over-year.
Space and defense sales were about $107 million, which represents relatively flat year-over-year performance, affected primarily by pandemic-related production delays.
As you know, we have significant content on both the Lockheed Martin F-35 and Sikorsky CH-53 K, with these platforms receiving new orders within the past month.
Both will continue to be strong programs for us, as well as the 100-plus other defense and space programs in this sector.
Industrial sales were about $60 million during the quarter, which was a 15% decline in constant currency.
Wind energy sales, which is the largest submarket in Industrial, declined 44%, which reflects ongoing softer demand, along with the previously reported closure of our wind blade prepreg production facility in North America last November.
In addition, solid sales in other industrial markets, including automotive and recreation, helped offset reduced wind energy sales during the quarter.
Throughout the pandemic, we have maintained a strong focus on cash and in the first half, our free cash flow was almost $30 million compared to just over $33 million for the first six months of 2020.
Sustainability is at the heart of Hexcel.
Innovating and producing modern lightweight advanced composite materials enabling the evolution of more aerodynamic, fuel-efficient aircraft producing significantly lower emissions than older generation aircraft.
More broadly, responsibility has been one of our four primary values for many years and it calls on us to strive to be good citizens in the communities in which we live and work.
We continue to build on our sustainability goals highlighted in our sustainability report first published several years ago and we are now excited to participate in the Carbon Disclosure Project or CDP.
Initially, the CDP report will be submitted selectively to some of our customers this year and we expect to share next year's submittal publicly.
We recognize that many of our investors evaluate our progress in relation to sustainability and especially, our ongoing work to reduce greenhouse gas emissions.
And you can be assured of our continued strong focus and actions on this topic.
As a reminder, the year-over-year comparisons are in constant currency.
The majority of our sales is denominated in dollars.
However, our cost base is a mix of dollars, euros and British pounds as we have a significant manufacturing presence in Europe.
As a result, when the dollar strengthens against the euro and the pound, our sales translate lower, while our costs also translate lower, leading to a net benefit to our margins.
Conversely, a weak dollar is a headwind to our financial results.
We hedge this currency exposure over a 10-quarter horizon to protect our operating income.
Quarterly sales totaled $320.3 million.
The sales decrease year-over-year reflects production rate decreases by our commercial aerospace customers in response to the pandemic, combined with the continued supply chain destocking.
You will recall that in the second quarter of 2020, OEM production rates were only beginning to be reduced midway through the quarter and the supply chain destocking had not yet begun to any great degree.
I say this is a reminder to consider when evaluating the year-over-year sales comparisons.
Turning to our three markets.
Commercial aerospace represented approximately 48% of total second-quarter sales.
Second quarter commercial Aerospace sales of $153,7 million decreased 24.8% compared to the second quarter of 2020 with destocking continued.
We believe the substantial destocking is now behind us as we enter the third quarter of 2021 and that our narrow-body production is generally aligned with OEM production rates.
However, our widebody sales are still facing some lingering supply chain adjustments that are expected to conclude by the end of the summer.
Space and defense represented 33% of the second quarter sales and totaled $106.9 million, decreasing 2.7% from the same period in 2020.
While the demand outlook remains favorable for composite secular growth to enhance performance and extend capabilities, quarter-to-quarter sales can fluctuate as we experienced in the second quarter.
Lockheed Martin has publicly commented the F-35 deliveries in 2021 will be lower than initial expectations on pandemic-induced disruptions, which impacts the supply chain and our deliveries.
Sales were also softer due to some short-term pandemic-related interruptions impacting other programs, including a number of space-orientated platforms with customers located outside of the United States.
Industrial comprised 19% of second quarter 2021 sales.
Industrial sales totaled $59.7 million, decreasing 15.1% compared to the second quarter of 2020.
Wind demand remained subdued, while other industrial markets, including automotive and recreation, witnessed growth in the second quarter of 2021.
Wind energy represented approximately 45% of second quarter industrial sales.
On a consolidated basis, gross margin for the second quarter was 19.3% compared to 14.5% in the second quarter of 2020.
The strengthening gross margin benefited in the quarter from a higher mix of carbon fiber sales and production.
Our margin recovery will not be completely smooth quarterly progression though, as it will be impacted at times by step-ups in the utilization of major assets such as precursor and carbon fiber lines.
Second quarter selling, general and administrative expenses increased 24.3% or $7 million in constant currency year-over-year.
Research and technology expenses decreased 3.2% in constant currency.
The other expense category consisted primarily of restructuring costs in Europe.
In terms of the year-over-year comparison of SG&A expenses, the second quarter of 2020 was artificially low as pandemic-induced restructuring actions related to non-recurring reductions in stock compensation accruals as well as a temporary implementation of salary reductions.
As a point of reference, second quarter 2021 SG&A expenses are lower by approximately 21% or $8.4 million compared to the pre-pandemic second quarter of 2019.
Our targeted $150 million of annualized overhead cost savings is being fundamentally achieved at the end of the second quarter.
As we now pivot to increasing sales and production levels, our focus will be to drive efficiencies and minimize the amount of cost as we can, while at the same time preparing for significant growth.
Adjusted operating income in the second quarter was $19.3 million, reflecting strong variable margin performance and robust overhead cost control.
The year-over-year impact of exchange rates was favorable by approximately 70 basis points.
Now, turning to our two segments.
The Composite Materials segment represented 75% of total sales and generated a 9.6% operating margin compared to 6.3% in the prior year period.
Adjusting for non-recurring costs, the adjusted composite materials operating margin in the current period was 10.7% compared to 8.9% in Q2 2020.
The Engineered Products segment, which is comprised of our structures and engineered core businesses, represented 25% of total sales and generated a 7.4% operating income margin or 7.6% adjusted operating margin compared to 2.6% adjusted operating margin in the second quarter of 2020.
The adjusted effective tax rate for the second quarter of 2021 was 18.8%.
The pandemic and consequent mix of results across the countries in which we operate is expected to continue to impact the Company's overall effective tax rate throughout 2021.
Net cash generated by operating activities was $38.9 million year-to-date.
Working capital was a use of $19.6 million year-to-date, primarily related -- primarily due to increased receivables.
Capital expenditures on an accrual basis was $3.8 million in the second quarter of 2021 compared to $11.5 million for the prior year period in 2020.
Capital expenditures continue to be tightly managed with a focus on improving existing asset efficiency and new technology flexibility.
Free cash flow for the second quarter of 2021 was $35.8 million compared to $51.8 billion in the prior year period.
Continued tight cost control and lower capital expenditures are supporting free cash flow generation.
Liquidity, at the end of the second quarter of 2021, consisted of $115 million of cash and an undrawn revolver balance of $543 million.
Our liquidity remains well above the bank covenant minimum of $250 million and we have no near-term debt maturities.
Our revolver matures in 2024 and our two senior notes mature in 2025 and 2027 respectively.
Our share repurchase program is restricted through March 31st 2022 by the revolver amendment executed in January 2021.
Dividends also remain suspended at the current time.
Our Board continues to regularly evaluate capital allocation priorities.
As our earning release states, we are not providing financial guidance at this time.
However, I would like to reinforce and expand upon the financial outlook shared during the First Quarter 2021 Earnings Call.
We continue to expect 2021 annual sales to be lower than 2020 and below the current market consensus due to recent commercial aerospace production rate adjustments.
The remainder of our previously stated expectations remain largely unchanged, including some additional restructuring costs are anticipated in the remaining quarters of 2021 and are expected to be below first and second quarter levels.
We continue to expect the fiscal year 2021 adjusted operating margin percentage to be in the low single digits.
Capital expenditure in 2021 will continue to be managed closely and are expected for the full year to be at a similar level to 2020.
We expect to generate positive free cash flow in 2021 and further reduce debt levels.
We expect the effective tax rate to be approximately 25% in 2021.
Lastly, repeating some broad context from the first quarter's earning call in April, we continue to target strong mid-teens-plus operating margins once we achieve sales in the range of $1.8 million to $1.9 million [Phonetic] and we are targeting to exceed prior peak margins when we return to previous peak sales levels.
We believe the worst is behind us and we are cautiously optimistic of a continued and steady recovery during the remainder of 2021 that will propel us into 2022 when we expect a significant return to growth, which will extend into 2023 and beyond.
Without a doubt, some of this growth will come from pent-up demand for air travel.
Yet, much of it also comes from airlines ready to replace older, less efficient aircraft with more aerodynamic and fuel-efficient solutions as the world demands long-term reductions in greenhouse gas emissions.
No company has a broader or more vertically integrated portfolio of strong, durable and lightweight advanced composite solutions that lead to fewer emissions than Hexcel.
The market is demanding lighter, yet high-performing materials and we anticipate strong pull for our entire portfolio from carbon fiber to prepreg to engineering core for many years to come.
Additionally, no team is better prepared to meet a quick ramp up than our Hexcel team.
Over the past several months, while demand retracted, we planned for the inevitable rebound.
We have become more efficient, more cost effective and more competitive than ever.
Throughout the downturn, we have improved our processes to ensure that we continue making gains, especially in employee safety, quality and on-time delivery.
Certainly, there are risks ahead and especially so within the supply chain and the availability of raw materials and labor.
It comes down to staying focused and aligned with our customers and we intend to do just that.
I'm excited about the path ahead.
 Assistant:

Chosen response:
sees q2 adjusted earnings per share $0.08.
continues to withhold financial guidance.
compname reports q2 adjusted earnings per share $0.08.


Prompt:
Human: These risks include, but are not limited to, the impact of seasonality and weather, general economic conditions and the level of consumer spending, the company's ability to capitalize on opportunity, or grow its market share and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.
We have worked hard over the years to build the most experienced, industry-leading team, and I am very proud of their results.
Today, I would like to start by reviewing a few of our first quarter highlights.
Then, I will touch on how we are strategically approaching the important peak selling season, as well as discussing the meaningful opportunities in front of us to create growth and long-term shareholder value.
And finally, Mike will review the financial results in greater detail and provide some color on the balance of the year.
Let me start by reviewing the first quarter.
Our top priority continues to be the health and safety of our team, customers and community as we serve our customers boating needs.
We are pleased that our first quarter results greatly exceeded the very impressive results last year.
A year ago, we had very strong growth in the December quarter and set a record for revenue and earnings.
The MarineMax team significantly outperformed those results and raised the bar yet again.
We further strengthened our financial position during the quarter, while completing the very strategic acquisition of SkipperBud's, the largest acquisition for the company to date.
As we indicated on our last earnings call in October, we finished fiscal 2020 with the highest revenue and earnings in the company's history.
That momentum and industry demand has continued as shown by our results.
Our record results continue to demonstrate our team's ability to evaluate customers' needs, act quickly and implement the right changes in how we operate our business.
For the quarter we are particularly pleased with our continued solid performance in same-store sales, which increased over 20% which is on top of 24% same-store sales growth a year ago.
Importantly, our new unit growth was even stronger at 35%.
Furthermore in the quarter, we had meaningful growth across essentially all brand, categories and geographic region.
The marine industry continues to experience a significant acceleration in new customers.
This new foundational layer of customers to the boating lifestyle is comprised of the combination of new first-time buyers and people that decided to get back into boating, which should help support future growth as they migrate to larger or different types of products in the coming years.
Our team remains energized by the shift, and given our scale, we should continue to significantly benefit from this resurgence.
During the quarter we also leveraged our investments in technology, driving leads in marketing analytics, which is converting into sales.
We continue to make investments in world-class customer engagement tools that improve our teams' efficiency and effectiveness and help us to take share and lead the industry.
In the quarter, we added SkipperBud's and its affiliate Silver Seas Yacht to our family.
The acquisition added 20 locations, including 11 marina and storage operations.
We have successfully integrated the business and believe many opportunities exists to share best practices, brands and resources to drive even greater growth in the years to come.
From a profitability perspective, one of the best elements of the quarter was strong gross margin.
We benefited from increases in product margins, growth in our storage and service businesses, our asset light Fraser and Northrop & Johnson global charter businesses and our finance and insurance businesses.
Expanding our margins has been a long-term strategic focus and recent acquisitions have contributed to that strategy.
The combination of gross margin expansion and focused expense management resulted in considerable leverage and a record $1.04 of earnings per share for the quarter.
But, even more impressive is that we believe there is incremental growth ahead.
So now let me touch on how we are approaching the important peak selling season.
We are well positioned and prepared to serve our customers.
COVID had changed all aspects of customer expectations, including the historically important Boat Show.
Our team has adapted with greater digital capabilities and refocused marketing spend that leverages our stores and our online experience, generating exceptional results.
Beyond leaner industry inventory, we continue to invest in training and tools to ensure our team is able to pivot to continue to meet the needs of our customers digitally.
Our deep manufacturing relationships and nationwide shared inventory give us a competitive edge.
With the largest selling season ahead, we expect to build on a strong start to our fiscal year and deliver exceptional customer experiences.
Our strategy to create long-term shareholder value is focused on driving top line growth, operating leverage, disciplined capital management and building on our strong culture.
We continue to effectively execute on our multifaceted growth strategy, supported by our global market presence, premium brands, exceptional customer service and ongoing investments in technology.
Our focus on driving margins and improving costs continue to unlock significant leverage in our model.
Our performance illustrates the power of our business model, specifically our scale, premium locations, and cash flow generating capability.
MarineMax is a well-disciplined operator with a strong foundation from which to grow.
With that update, I will ask Mike to provide more detailed comments on the quarter.
For the quarter, revenue grew 35% to over $411 million due largely to same-store sales growth of 20%.
This exceptional growth was driven by even greater comparable new unit growth that exceeded 35%%.
While our AUP declined in the quarter from seasonally very strong sales of smaller product, the demand for larger product is also robust.
A big takeaway from our results this quarter is our ability to post very strong comps on top of already strong comps.
Our gross profit dollars increased over $43 million, while our gross margin rose 370 basis points to 30%.
Our record gross margin was due to a handful of factors.
Among these are improving margins on new and used boat sales, impressive service and storage performance of SkipperBud's, which has a long track record of performance in these categories, growth in our higher margin finance and insurance businesses, and growth in our brokerage business including our global Superyacht Services Organizations of Northrop & Johnson and Fraser Yachts.
We would note that the superyacht charter business has remained adversely impacted by travel bans around the globe.
Our higher margin businesses has been a focus of ours for some time, including our acquisition strategy, which is helping to drive these results.
Regarding SG&A, the majority of the increase was due to the increase in sales and the related commissions combined with the two mergers we have recently completed, SkipperBud's and Northrop & Johnson.
Interest expense dropped in the quarter due to lower interest rates and a sizable reduction in short-term borrowings given the cash we have generated.
Our operating leverage in the quarter was over 17% which drove very strong earnings growth setting another quarterly record with pre-tax earnings of almost $31 million.
Our record December quarter saw both net income and earnings per share more than double with earnings per share hitting $1.04, more than twice the level of last year's previous record.
Moving on to our balance sheet, we continue to build cash with about $121 million at quarter end versus $36 million a year ago.
Even after paying cash for both Northrop & Johnson in July and SkipperBud's, October 1.
As discussed last quarter, given the attractive interest rate environment, we explored and did secure mortgages on a portion of our sizable real estate portfolio.
Besides some slight rate arbitrage it further positions us to capitalize on opportunities as they develop.
Our inventory at quarter end was down 23% to $379 million.
However, excluding Skippers, our inventory is down closer to 36%.
I illustrate this point to show how well our team has pivoted to selling in a lean inventory environment as proven by the very strong unit-driven same-store sales growth this quarter.
Looking at our liabilities, despite added borrowings for Skipper's inventory, short-term borrowings decreased $171 million due largely to a reduction in inventories and increase in cash generation with the contribution from the roughly $53 million of mortgages that are outstanding.
Customer deposits, while not the best predictor of near-term sales because they can be lumpy, due to the size of deposits and whether a trade is involved or not, nearly tripled in size due to the timing of large yacht orders and more robust sales along with the contribution from Skipper's for future sales.
Our current ratio stands at 1.74 and our total liabilities to tangible net worth ratio is 1.42, both of these are very impressive balance sheet metrics.
Our tangible net worth was $339 million or about $14.92 per share.
Our balance sheet has always been a formidable strategic advantage, and today more than ever, it continues to protect us in uncertain times, while providing the capital for expansion as opportunities arise.
Turning to guidance, the December quarter exceeded expectations and the industry trends remained strong.
The industry estimates for 2021 retail units are beginning to rise from the low-single digits to the mid-single digits.
Since we usually outperform the industry and grow our AUP on an annual basis, we now expect our annual same-store sales growth to be in the high single digits.
This is up from the mid-to-high single digits we guided to earlier in the year.
Given the strength in earnings in December, our guidance also assumes modest operating leverage improvement above our previous guidance.
This expectations assumes we reached the low end of our historical targeted leverage of 12% to 17% given we have the bulk of the year still in front of us along with continued uncertainty.
Accordingly, we are raising our earnings per share guidance to the range of $4 to $4.20 for 2021 from our earlier guidance of $3.70 to $3.90.
Our guidance excludes the impact from any potential acquisitions that we may complete.
As we progress through the year, we will provide updates as needed to our guidance.
Looking at the remainder of 2021, remember that our March quarter is the easiest comparison with our toughest comparisons in the more meaningful summer quarters of June and September.
Our guidance uses the share count of about 22.8 million shares and an effective tax rate of 26%.
Our tax rate for the December quarter was meaningfully better than this, due primarily to equity compensation deductions which are hard to predict and are not typically forecasted when we give guidance.
Turning to current trends, January will close with positive same-store sales and our backlog is meaningfully higher than last year.
As we have said, industry trends remain strong and we are generally outperforming these elevated levels.
We continue to feel good as we enter the important summer selling season that's early in the year and a lot of work remains.
MarineMax continues to benefit and capitalize on the surge in demand and the desire of consumers to find a safe recreational activity.
Our team's performance to start the fiscal year has shown continued excellent execution, even on top of very impressive same-store sales a year ago.
We are creating exceptional customer experiences through our team's services, products and technology.
Most exciting is that we see significant opportunity in our brand expansion and also our higher margin businesses.
With about 30 locations globally, we believe our superyacht services business have considerable upside including their charter business, which should contribute in a much larger manner.
We remain committed to the long-term financial strength of the company by driving cash flow growth.
Importantly, our acquisitions are integrated and contributing immediately to our business.
Looking forward, we are focused on building our strong team culture, we are focused on executing on our growth strategy and we are focused on creating long-term shareholder value.
 Assistant:

Chosen response:
raises fy earnings per share view to $4.00 to $4.20.
marinemax - revenue increased 35%, or over $107 million, to $411.5 million for quarter ended december 31, 2020 from $304.2 million in comparable period last year.
qtrly same-store sales growth exceeds 20% driven by 35% comparable new unit growth.
marinemax sees fy earnings per share of $4.00 to $4.20.
q1 earnings per share $1.04.


Prompt:
Human: These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K, quarterly reports on Form 10-Q and other SEC filings.
These risks could cause our actual results to differ materially from those expressed in or implied by our comments.
We closed on the acquisition of Apple Leisure Group on November 1, and we are collectively even more thrilled about the prospects for the combined company today than we were when we first announced our plans back in August.
As I reflect over the past several months during which I've gotten to know the ALG team much better, met with hotel owners and toured a number of stunning AMR collection resorts.
I'm energized and really excited about the bright future for ALG as a part of Hyatt.
The cultural fit between our two companies with a joint focus of care could not be better.
And the timing is proving to be very auspicious as leisure demand continues to be durable and a growing proportion of our segment mix.
We look forward to keeping you well informed on the progress of our integration efforts and performance of the ALG platform moving forward.
Turning to our results.
We are another quarter into the recovery and have again produced results that demonstrate the strength of our business and reinforce that we are emerging from this challenging period as a more agile and stronger company.
In the span of just two quarters, our quarterly adjusted EBITDA has improved $130 million, recovering to nearly 70% of 2019 levels in the third quarter.
We've worked tirelessly to evolve and reimagine aspects of our operating model and the financial results and our momentum demonstrate our progress.
Importantly, while we have been focused on preserving cash and managing expenses tightly, we've invested in areas that are driving growth, and we have not wavered from our long-term strategy.
With vaccination rates continuing to rise, travel restrictions around the world easing and borders reopening, I am as confident as I've ever been that we are on a path to full recovery.
I'm optimistic that the most recent trends in our business and also the important developments over the past quarter, including, of course, the acquisition of ALG demonstrates significant progress toward realizing the benefits of our long-term strategy.
Before diving deeper into the progress on our strategy, let's take a look at the latest business trends.
RevPAR in the third quarter continued to recover at a robust pace, accelerating nearly 30% compared to the second quarter and doubling RevPAR levels in the first quarter.
As discussed on our last earnings call, we experienced a wave of leisure demand during the summer with systemwide RevPAR eclipsing $100 in July, which was approximately 75% recovered as compared to 2019.
As we moved into August, RevPAR decelerated by approximately 10% as compared to July driven by seasonality, coupled with reimposed travel restrictions in certain markets related to the Delta variant.
However, this deceleration was short-lived.
Demand rebounded throughout September and has strengthened further as we move into the fourth quarter.
Absolute RevPAR in October is nearly as strong as July at $98.
What is encouraging is that the recovery has broadened, whereas our strength in July was primarily driven by resort locations, the improvement more recently has been from urban locations, which experienced RevPAR growth of 10% in October as compared to July.
From a segmentation perspective, Leisure Transient remains the top-performing segment.
Systemwide Leisure Transient revenue was at 96% of fully recovered levels in the third quarter, an incredible performance when considering the significant restrictions that were still prevalent in many parts of the world.
Strong leisure transient demand is proving to be far more than the summer surge as Leisure Transient revenue booked in October for all periods was over 20% ahead of 2019 levels.
Further, total transient revenue at our Americas resorts is pacing 25% ahead of 2019 levels for the last weeks of December.
At this pace, we anticipate the festive season could be one of the strongest we've ever experienced.
We've also been pleased with the progression of group and business transient demand.
While demand did not accelerate immediately following Labor Day due to the Delta variant, the upward momentum has been steady throughout September and October.
The rate of improvement in group during October has been particularly meaningful after seeing elevated levels of cancellations in August and early September due to the Delta variant.
Since that time, cancellations have receded while short-term group demand has strengthened.
Overall, systemwide group revenue jumped 16% in October as compared to September and is trending at 50% of fully recovered levels.
Group bookings for 2022 are also showing significant improvement.
In October, our leads for 2022 grew by 38% as compared to September, and we're now 10% ahead of 2019 levels for group business that is likely to book.
While group pace for 2022 is approximately 80% recovered, a bit weaker than what we reported last quarter.
The strong current level of group bookings, coupled with growing lead volume provides confidence that momentum will build as we head into 2022.
As for business transient, the recovery has been softer than group, but is still showing steady momentum with demand recovering to 46% of 2019 levels in October.
We continue to see stronger growth in our regional accounts as compared to our larger national accounts.
However, that gap is narrowing.
Our largest corporate accounts have grown by 50% since June and we continue to be encouraged by dialogue with our corporate customers who are returning to offices in bigger numbers with many planning on a more robust return to travel in 2022.
The recovery momentum has also expanded geographically.
One of the areas with the most pronounced improvements is Europe, which is now trending at roughly the same level as the United States after seeing RevPAR quadruple over the past five months.
We're also seeing occupancy of 70% in the Middle East, which is similar to 2019 levels, driven by very strong demand from the Dubai Expo, which kicked off in October and runs through March of 2022.
Lastly, occupancy in India, which was below 20% just a few months ago due to the Delta variant, is now trending at almost 60% as we exit October.
When you add up the trends, both from a geographic and purpose of visit perspective, coupled with the most recent data on forward bookings, the underlying momentum in the business is clear, and it's consistent with our conviction that we are on a path to full recovery.
Turning to our long-term strategy.
As I mentioned earlier, we've been actively positioning Hyatt for the future with intense focus on advancing three pillars of our long-term strategy, namely: first, to maximize our core business; second, to integrate new growth platforms; and third, to optimize our capital deployment.
I cannot recall a quarter where we advanced our long-term strategy as much as we did in the third quarter of this year.
Let me start with the first pillar of our strategy, maximizing our core business as it underpins everything that we do.
We've been particularly focused on three key areas within this pillar to drive performance.
First, focusing on the high-end traveler going deeper into the segment, not extending outside the segment.
Second, driving more business to our direct channels through engagement supported by data and analytics.
And third, operating with excellence through agility and responsiveness to market dynamics.
Our progress in these areas is not only reflected in the third quarter financial results I commented on earlier, but is also demonstrated in the results of our core metrics as compared to the third quarter of 2019.
Several highlights include market share growth, stronger direct channel mix, a higher percentage of arrivals to our hotels from existing loyalty members and better comparable O&L margins as compared to the same period in 2019.
The ultimate test is investment by owners and our brands, which is best demonstrated through our net rooms growth and pipeline.
Our net rooms growth was 6.9% in the third quarter, again, leading the industry with notable openings, including the Thompson Hollywood, the Park Hyatt Toronto and the Hyatt Ziva Riviera Cancun.
And our pipeline at 103,000 rooms again expanded from the prior quarter, represents an industry-leading 41% of our existing property portfolio.
We were also able to achieve significant progress; with the second pillar of our long-term strategy, integrating new growth platforms through our acquisition of Apple Leisure Group, an exciting new asset-light growth platform for Hyatt.
ALG now as part of Hyatt, immediately doubles the number of resorts in our portfolio, increases our European footprint by more than 60% and positions us as the world's largest operator of hotels in the fast-growing luxury all-inclusive resort segment.
Further, we expect it to increase our systemwide stabilized leisure transient revenue mix to over [50%].
We also expect the ALG brands to drive accretive rooms well into the future similar to what we've achieved with our Two Roads Hospitality acquisition in 2018, which has been a significant driver of growth for Hyatt this year, including conversions and expansion of our pipeline.
In 2021, ALG through the AMR collection is expected to finish the year with net rooms growth of 35% with the addition of 31 hotels and approximately 8,500 rooms and taking the AMR collection to 101 hotels in total with 33,000 rooms by the end of 2021.
The ALG acquisition represents a brand-defining moment in Hyatt's more than 60-year history, much like the company's international expansion into Hong Kong or the launch of the Park Hyde brand.
We are now marking the beginning of a new chapter for Hyatt.
In addition to the exciting growth the acquisition represents for Hyatt, and the new experiences the ALG platform provides our guests.
The earnings base from ALG also allows us to make significant progress on the third pillar of our long-term strategy, which is to optimize our capital deployment.
We are very encouraged that ALG is on track to outperform its 2019 results in 2021, exceeding the expectations of our underwriting.
This earnings base allows us to execute an essential part of our capital strategy to unlock the value of our real estate assets by selling assets over time and prioritizing the reinvestment of proceeds into growth opportunities for Hyatt.
In August, at the same time, as the acquisition announcement, we committed to a $2 billion expansion of our asset disposition commitment.
The proceeds from these future asset sales will allow us to deleverage our balance sheet on an accelerated basis as we reduce the debt incurred to fund the ALG acquisition.
We've initiated this effort with two properties currently in the market and other active discussions underway.
We feel very confident in our ability to execute on this expanded asset disposition commitment.
We've realized over $3 billion in proceeds since our original announcement in 2017 at a very attractive multiple, and we have a high quality and a highly desirable asset base that remains on our balance sheet today.
As a reminder, the $3 billion commitment was in two parts, $1.5 billion in 2017 and an additional $1.5 billion in 2019.
During September, we completed the sale of two assets, the Hyatt Regency Lake Tahoe and Alila Ventana Big Sur, for approximately $500 million in gross proceeds and reached cumulatively over $3 billion in total gross proceeds from asset sales since 2017 at an average aggregate multiple of 17.4 times.
We retained long-term management agreements for both of the hotels that we recently disposed of and exceeded our disposition target well ahead of schedule.
In summary, we look forward to continuing our track record of realizing proceeds in excess of the valuation implied by the multiple for Hyatt and simultaneously transforming our earnings mix to an expected 80% fee-based proportion by the end of 2024.
Importantly, with the earnings from our ALG acquisition, coupled with fees driven by our industry-leading growth, we'll be able to achieve this progress while maintaining investment capacity for future opportunities.
Overall, I'm extremely pleased with the progress we are making toward our long-term strategy as we remain intently focused on executing the three key areas I've outlined as we position ourselves for the future.
Finally, I want to touch upon the owner's meeting we recently held a couple of weeks ago at the beautiful Hyatt Regency Huntington Beach Resort.
The attendance was as strong as it's ever been, and the energy from gathering in person was truly palpable.
I was struck by the collective optimism we share about the future and how our purpose of caring for people so they can be their best has resonated with and been felt by our owners during the most of year downturn this industry has ever experienced.
Their feedback centered on our attention to listening intently, focusing on the important issues and staying connected to their needs.
We have much to do to ensure we are attracting the best talent in a challenging labor environment, to ensure we're doing everything possible to drive market share and operating margins for our brands and owners, and to make sure our systems and services keep pace with quickly shifting trends in technology.
I left the meeting feeling energized at the progress we are making and the opportunities ahead to continue to deliver value to all of our constituents.
We made significant progress toward realizing the benefits of our long-term strategy.
And as the recovery continues to unfold, we have positioned Hyatt to emerge from this pandemic a stronger and more agile company.
Our view to sustainable demand in the future continues to sharpen and with each passing month, our conviction and our enthusiasm grows.
Joan, over to you.
Late yesterday, we reported a third quarter net income attributable to Hyatt of $120 million and a diluted earnings per share of $1.15 with our results favorably impacted by gains on the sale of real estate of $307 million.
Adjusted EBITDA was $110 million in the third quarter effectively doubling our adjusted EBITDA from the second quarter, again demonstrating our ability to translate improving demand into a strong increase in earnings.
In a RevPAR environment that is improving but still challenging, we were able to narrow our adjusted EBITDA decline to only 32% in the third quarter versus the same period in 2019, which is the same as our systemwide RevPAR decline of 32%.
Additionally, our adjusted EBITDA margin was 27.4% for the third quarter, an improvement of 50 basis points from the adjusted EBITDA margin of 26.9% we reported in the third quarter of 2019, serving as yet another marker of operating excellence in a lower demand environment.
Systemwide RevPAR was $94 in the third quarter, representing a 29% increase compared to second quarter.
Both occupancy and rate contributed to the sequential growth with occupancy improving by 700 basis points and rate growing by 12%.
The improvement in rate is especially notable as it reached 96% of 2019 levels on a systemwide basis.
Our base incentive and franchise fees totaled $96 million in third quarter reaching 71% of 2019 levels, with base and franchise fees more fully recovered than RevPAR as a result of our strong net rooms growth over the past two years.
Turning to our segment results.
Our management and franchising business delivered a combined adjusted EBITDA of $85 million, improving 33% from the second quarter.
The Americas segment accounted for the vast majority of the sequential growth and recovered to approximately 80% of 2019 segment adjusted EBITDA levels.
Hotels and resort locations were the primary driver of the recovery during the first two months of the quarter, with a more notable improvement from urban locations in September, driven by growing demand for business transient and group.
Our Europe, Africa, Middle East and Southwest Asia segment also experienced material improvement in the third quarter as it benefited from the easing of travel restrictions and reopening of borders across Europe.
Fees from our European hotels more than doubled from the prior quarter with France and Southern Europe leading the recovery.
The Asia Pacific segment did not see the same level of improvement as our other two segments and the recovery in this part of the world remains uneven.
Mainland China RevPAR had a strong start to the quarter trending 4% ahead of 2019 levels in July before dropping to less than 50% of 2019 levels in August due to reimposed travel restrictions.
Demand has improved since with RevPAR strengthening to 78% of 2019 levels in October.
Additionally, the recovery in Asia Pacific, excluding Mainland China, has progressed at a slower pace than other areas of the world as more stringent travel restrictions remain in place.
However, we remain optimistic that results will improve in the region as vaccination rates continue to rise allowing for restrictions to be eased.
Turning to our owned and leased hotels segment.
The business delivered $51 million of adjusted EBITDA for the third quarter representing an improvement of $39 million from the second quarter.
The performance was significantly ahead of expectation, driven by the ingenuity and responsiveness of our teams to market dynamics.
Owned and leased RevPAR was $117 for the third quarter, improving 39% from the second quarter with notable improvement from group revenue, which jumped 87% sequentially and accounted for over 28% of the room night mix.
We previously discussed how strong performance has been in our resorts during the quarter and it's important to highlight outperformance in some of our larger owned convention hotels as well.
In the third quarter, Hyatt Regency Orlando, Hyatt Regency Phoenix and Grand Hyatt San Antonio, collectively had a stronger EBITDA contribution in the third quarter of 2021 as compared to 2019.
This is quite notable considering group business accounted for approximately 70% of the rooms revenue mix for these hotels during the third quarter of 2019.
This year, these hotels were still able to generate a significant amount of group business, representing 57% of rooms revenue and we're also able to grow transient revenue nearly 30% above 2019 levels through creative tactics such as repositioning the hotels for families and other leisure business.
This is a great example of how we are evolving go-to-market sales strategies real time to meet the current demand profile and maximize performance of our owned and leased hotels.
Overall, excellent revenue management and strong operational execution have resulted in significant margin expansion for our owned and leased hotels.
Comparable operating margins were 20.3% in the third quarter, which is an improvement of 490 basis points relative to 2019 levels despite RevPAR that was only 75% recovered.
Open positions have also contributed to lower operating costs, and we continue to closely monitor the labor environment and are working hard to fill open positions.
The situation remains challenging, but we're making progress.
As we mentioned last quarter, we continue to see some pressure on wages, and our general managers have made significant adjustments based on competitive market factors and the challenge and our response varies by market.
I'd also like to provide an update on our liquidity and cash.
As of September 30, our total liquidity inclusive of cash, cash equivalents and short-term investments and combined with revolver borrowing capacity was approximately $4.3 billion compared with $3.2 billion as of June 30.
We received a USD254 million tax refund in July, $491 million of net proceeds from the sale of Hyatt Regency Lake Tahoe and Alila Ventana Big Sur, and raised $575 million in net proceeds from our equity offering in September.
We also repaid $250 million in senior notes that matured in August.
In October, we raised $1.75 billion of short-term 2- and 3-year fixed and floating rate notes at an approximate weighted average interest rate of 1.48%.
We used $750 million of those proceeds to refinance our 2022 short-term prepayable bonds and successfully reduced our interest costs by $12 million annually on the refinancing.
Our approximate total liquidity after the debt capital markets proceeds was $5.2 billion at the end of October.
On November 1, we closed on the acquisition of ALG and paid cash of $2.7 billion.
After the acquisition and as of today, our total liquidity position remains strong at approximately $2.6 billion, with $1.3 billion of cash, cash equivalents and short-term investments, and $1.3 billion available under the revolver.
Finally, I'd like to make a few additional comments regarding our 2021 outlook.
Consistent with our communication in the second quarter, we continue to expect adjusted SG&A to be in the approximate range of $240 million, excluding any bad debt expense or ALG integration costs.
We're still refining the ALG integration cost estimate but expected to be in the range of $5 million to $10 million for the full year of 2021 with $2 million of that amount already included in the third quarter adjusted SG&A.
It's important to note that these costs are nonrecurring and our plan does not include an extensive or costly integration of systems and processes.
We continue to expect capital expenditures for 2021 to be approximately $110 million exclusive of any impact from ALG.
We mentioned on our last call that we are pulling forward selected renovation projects to take advantage of the timing of lower displacement during the fourth quarter and therefore, our capital expenditures could actualize slightly higher if our materials and labor needs are secured before the end of the year.
Turning to net rooms growth.
We are reaffirming our expectation of rooms growth to be greater than 6% for the full year, exclusive of any impact from ALG.
There is some degree of uncertainty related to supply chain issues, which could push certain openings into the first quarter of 2022.
However, greater than 6% remains our best estimate at this time and we're pleased to be delivering another very strong year of net rooms growth.
As we turn to 2022, we look forward to sharing more on the progress of our ALG integration efforts, and we'll be providing more detailed disclosures on the ALG business on our next earnings call.
We're proud of the accomplishments we achieved to advance our long-term strategy and are excited about the value creation ALG brings to Hyatt and are even better positioned today to drive asset light growth than ever before.
 Assistant:

Chosen response:
q3 earnings per share $1.15.
qtrly net rooms growth of 6.9% compared to q3 of 2020.2021 capital expenditures are expected to be approximately $110 million.


Prompt:
Human: I'm joined today on the call by Marcelo Fischer, IDT's chief financial officer.
IDT delivered another strong quarter, including significant year-over-year increases in consolidated revenue, income from operations and EPS.
Consolidated revenue increased $16 million to $340 million.
It is our third consecutive quarter of year-over-year increases in revenue and our sixth consecutive quarter of year-over-year increases in revenue less direct cost of revenue.
Consolidated income from operations increased $11.6 million to $12.9 million this quarter, powered by a $9 million year-over-year increase in revenue less direct cost of revenue.
Consolidated SG&A expense, meanwhile, was substantially unchanged year over year.
We are successfully reducing the overhead in our traditional communications segment and redeploying those resources to support and accelerate the growth of our higher-margin businesses in the Fintech and net2phone-UCaaS segments.
Fully diluted earnings per share increased to $0.51 from $0.04 in the year-ago quarter.
The quarter's results were highlighted by year-over-year revenue expansion from our three higher-margin businesses, National Retail Solutions, BOSS Revolution Money Transfer and net2phone-UCaaS.
Within our Fintech segment, NRS added over 1,500 units to its POS terminal network this quarter.
In the year-ago quarter, we added less than 800 units.
We've picked up the pace of network expansion significantly.
At January 31, NRS had over 13,700 billable units in the network.
NRS' quarterly revenue increased by over 150% year over year to $5.2 million, led by growth in payment processing services and in digital out-of-home advertising sales.
Although we are in the early stages of monetizing both of these offerings, they helped to drive a 50-plus percent increase in revenue per POS terminal over the past year.
Also within Fintech, our BOSS Revolution Money Transfer service increased revenue 73% to $13.3 million.
We continue to build out our global disbursement network, and this quarter passed an important milestone, opening corridors to Southern Asia with the addition of Pakistan and Nepal.
Looking ahead, we are laying the groundwork for the first expansion of our origination market.
The reach of our disbursement network and significant transaction volumes into key destinations enable us to provide a highly competitive C2C service from a number of countries.
We expect to launch our expansion by offering BOSS Revolution Money Transfer in Canada and the U.K. in fiscal 2022.
In our net2phone-UCaaS segment, subscription revenue climbed 36% to $10.1 million.
Growth has been solid in all of our markets, the U.S., Canada, South America and Spain.
Our continued growth validates our geographic strategy but also reflects the accelerated rate at which we have been able to develop and deploy enhancements to the offering itself, most notably adding integrations with some leading CRMs and communications platform.
In the second quarter, we launched our integration with Slack, the leading channel-based messaging platform, building on previous integrations with and Microsoft Teams.
More recently, we launched a powerful integration with Salesforce, the world's largest CRM.
These integrations enable net2phone to approach higher seat count customers and position us to strengthen revenue without sacrificing growth.
The increase in sophistication of our feature set and adaptability of our offerings prompted CIO Review, a publication for technology leaders, to name net2phone as one of its top 20 companies providing transformative solutions for retail businesses.
In our traditional communications segment, aggregate adjusted EBITDA less capex increased to $18.2 million, $4.6 million more than in the year-ago quarter.
Strong year-over-year growth in international mobile top-up sales, in combination with stable BOSS Revolution calling revenue, more than offset a decline in carrier services revenues.
Looking beyond our established businesses to new opportunities, we are preparing to relaunch the BOSS Revolution mobile initiative.
Our initial MVNO effort in partnership with Sprint struggled but we are confident that this time around, we will do much better.
Across our businesses, the entrepreneurial spirit drives everything we do and will be a powerful source of value creation as we continue to build IDT.
 Assistant:

Chosen response:
compname announces quarterly net income per diluted share of $0.51.
idt corp - qtrly net income per diluted share of $0.51.
idt corp - qtrly revenue of $340 million.