Prompt:
Human: Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call.
In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA.
I will begin with highlights for the quarter and David, Nick will follow up with additional operating detail.
Operating during a pandemic has been exceptionally challenging for both of our business segments.
Fortunately, VITAS and Roto-Rooter have shown incredible speed, flexibility, and focus to remain completely open and operate safely for the benefit of our patients, customers and employees.
I believe Chemed's operational and financial performance this past year is a testament to the success of these efforts.
Our VITAS Healthcare segment continues to be directly impacted by the pandemic.
Fortunately, the federal government, specifically HHS and CMS have been very supportive in terms of relaxing regulations, allowing the use of telehealth where appropriate and providing pragmatic flexibility in caring for our entire patient census.
The most complex issue facing VITAS over the past nine months has been the disruptive impact the pandemic has had on traditional hospice referral sources, which in turn has impacted our patient census patterns.
Fortunately, the portions of the healthcare continuum have not -- certain portions have normalized and hospital referral admissions have significantly improved from low-admission rates experienced early in the pandemic.
This is reflected in our second half of 2020 admission and census activity.
Our third and fourth quarter 2020 admissions increased 4.7% and 2.8% respectively.
Normally, two sequential quarters of solid admissions growth would result in an increase in average daily census.
However, despite the admissions growth, our average daily census declined 2.8% in the fourth quarter.
This decline in census is a direct result of disruption in senior housing, which includes nursing homes and assisted-living facilities.
Senior housing is an important referral network for the hospice industry, given the fact that over 90% of all half of those patients are over the age of 65.
Senior housing has seen a severe reduction in occupancy levels and continues to struggle even as hospitals and other key hospice referral sources have significantly recovered.
Hospice referred admissions typically account for 50% of VITAS' total admissions and a significant portion of these referrals have very short length of stays.
VITAS hospital referrals are returning to pre-pandemic levels.
This is reflected in hospital generated admissions increasing 6.2% and 7.4% in the third and fourth quarters, respectively.
Nursing home hospice patients represented 14.7% of our fourth quarter 2020 census, a decline of 310 basis points when compared to the prior year.
VITAS nursing home admissions decreased 22.6% in the third quarter of 2020 and declined 19.3% in the fourth quarter when compared to the equivalent prior year quarter.
Nursing home base patients are -- referred to hospice earlier into a terminal prognosis and statistically have a much greater probability of being in hospice more than 90 days.
This decline in nursing home admissions is a direct result of continued disruption in the senior housing occupancy.
According to data provided by the National Investment Center for Senior Housing & Care, COVID-19 continues to adversely affect senior housing occupancy, which reached another record low in October of 2020.
Median length of stay in the fourth quarter of 2020 was 14 days, two days less than the prior year.
This unusual decline in median length of stay is a result of a 7.4% increase in hospital referred admissions and a 19.3% decrease in nursing home admissions.
The combination of which has had a material impact on our median length of stay.
We anticipate improvement in senior housing admissions in the second half of 2021 as senior housing patient mix and aggregate occupancy returns to pre-pandemic levels.
Roto-Rooter operating results have been nothing short of exceptional during the pandemic.
Strong residential plumbing and drain cleaning demand has been more than adequate to compensate for weakness from our commercial customers.
The fourth quarter branch residential demand set all-time records.
Unit-by-unit residential revenue totaled $123 million in the quarter, an increase of 20.8% when compared to the prior-year quarter.
Fourth quarter 2020 unit-for-unit branch commercial demand did decline to 9.8% when compared with the fourth quarter of 2019.
This is a significant improvement when compared to the second quarter of 2020, which had commercial demand declining 29.1% and in the third quarter of 2020 with a commercial revenue decline of 11.6% when compared to the prior year.
Roto-Rooter generated fourth quarter 2020 revenue of $201 million, an increase of 10.2%.
Consolidated revenue in addition to Roto-Rooter branch operations, includes independent contractors, franchise fees and product sales, as well as the Oakland acquisition completed in July of 2019 and the HSW acquisition completed in September of 2019.
With that, I would like to turn this teleconference over to David.
VITAS' net revenue was $332 million in the fourth quarter of 2020, which is a decline of 2.3% when compared to the prior year period.
This revenue variance is comprised primarily of a 2.8% decline in days-of-care, a geographically weighted average Medicare reimbursement rate increase of approximately 2.4% and acuity mix shift, which then reduced the blended average Medicare rate increase approximately 255 basis points.
The combination of a lower Medicare Cap and a decrease in Medicaid net room and board pass-through increased revenue growth an additional 64 basis points in the quarter.
Our average revenue per patient per day in the fourth quarter of 2020 was $198.33, which including acuity mix shift is a 7 -- is 7 basis points below the prior-year period.
Reimbursement for routine homecare and high acuity care averaged $169.83 and $997.37, respectively.
During the quarter, high acuity days-of-care were 3.4% of our total days-of-care, which is 62 basis points less than the prior-year quarter.
In the fourth quarter of 2020, VITAS accrued $2.5 million in Medicare Cap billing limitations.
This compares to a $4.5 million Medicare Cap billing limitation in the fourth quarter of 2019.
Of VITAS' 30 Medicare provider numbers, 23 of these provider numbers currently have a Medicare Cap cushion of 10% or greater.
Four provider numbers have a cap cushion between 5% and 10%, one provider number has a cap cushion between 0 and 5%, and two of our provider numbers currently have a fiscal 2021 Medicare Cap billing limitation liability.
VITAS' fourth-quarter 2020 adjusted EBITDA, excluding Medicare Cap, totaled $78.7 million, which is an increase of 11.7%.
VITAS adjusted EBITDA margin, excluding Medicare Cap was 23.5% in the quarter, which is a 306 basis point improvement when compared to the prior-year period.
For Roto-Rooter, Roto-Rooter generated quarterly revenue of $201 million in the fourth quarter of 2020, an increase of $18.7 million or 10.2% over the prior-year quarter.
On a unit-for-unit basis, which excludes the Oakland and HSW acquisitions, completed in July of 2019 and in September of 2019, respectively, Roto-Rooter generated quarterly revenue of $183 million in the fourth quarter of 2020, which is an increase of 12.8% over the prior-year quarter.
Total branch commercial revenue in the quarter, excluding acquisitions, decreased 9.8%.
This aggregate commercial revenue decline consisted of drain cleaning revenue declining 11.6%, commercial plumbing and excavation declining 8.9%, and commercial water restoration increasing 1%.
Total branch residential revenue, excluding acquisitions increased 20.8% and this aggregate residential revenue growth consisted of residential drain cleaning increasing 17.1%, residential plumbing and excavation expanding 25.5% and our residential water restoration increasing 16.8%.
Now, let's turn to Chemed's full-year 2021 guidance.
Historically, Chemed earning guidance has been developed using previous year's key operating metrics, which are then modeled and projected out for the calendar year.
Critical within these projections is the understanding of traditional pattern correlations among key operating metrics.
Once we complete this phase of our projected operating results, we would then modify the projections for the timing of price increases, changing in commission structure, wages, marketing programs, and a variety of continuous improvement initiatives that our business segments plan on executing over the year.
This modeling exercise also takes into consideration anticipated industry and macroeconomic issues outside of management's control but are somewhat predictable in terms of timing and impact on our business segments' operating results.
With that said, our 2021 guidance should be taken with a recognition that pandemic will continue to materially disrupt all aspects of our healthcare system and general economy to such an extent that future rules, regulations and government mandates could materially impact our ability to achieve this guidance.
Statistically, our VITAS patients residing in senior housing are identified as hospice-appropriate earlier into their terminal prognosis and at a much greater probability of having a length of stay in excess of 90 days.
Hospice patients referred from hospitals, oncology practices and similar quarter referral sources are generally more acute and they have a significantly lower probability of length of stays 60 to 90 days.
According to data released by the National Investment for Senior Housing & Care, COVID-19 continues to adversely affect senior housing occupancy, which as Kevin mentioned earlier, had another record low in October of 2020.
This reduced occupancy in senior housing has had a corresponding reduction in VITAS nursing home admissions.
Nursing home patients represented 14.7% of the VITAS fourth quarter 2020 patient census, which is our 310 basis point reduction when compared to the prior-year quarter.
VITAS anticipates continued weak occupancy and corresponding weak referrals from senior housing for the first half of 2021.
This guidance anticipates senior housing will begin to normalize to pre-pandemic occupancy starting in the second half of the calendar year 2021.
Based upon the above discussion, VITAS' 2021 revenue prior to Medicare Cap is estimated to decline approximately 4% when compared to the prior year.
VITAS' average daily census in 2021 is estimated to decline approximately 5% and full-year adjusted EBITDA margin prior to Medicare Cap is estimated to be 19.4%.
And we are currently estimating $10 million for Medicare Cap billing limitations in calendar year 2021.
Roto-Rooter is forecasted to achieve 2021 revenue growth of approximately 5% to 6% and Roto-Rooter's adjusted EBITDA margin for 2021 is estimated to be 26%.
Based upon this discussion, the full year 2021 adjusted earnings per diluted share excluding non-cash expense for stock options, tax benefits from stock option exercises, cost related to litigation and other discrete items is estimated to be in the range of $17 to $17.50.
This 2021 guidance assumes an effective corporate tax rate and adjusted earnings of 24.7%.
And this compares to Chemed's 2020 reported adjusted earnings per diluted shares of $18.08.
In the fourth quarter, our average daily census was 18,718 patients, a decline of 2.8% over the prior year.
As Kevin discussed earlier, this decline in average daily census is a direct result of the disruptions across the entire healthcare system that impacted traditional admission patterns in the hospice since March.
While certain healthcare sectors have shown improvement in the admission patterns, referrals from senior housing, specifically nursing homes and assisted-living facilities, continue to be negatively impacted.
It is important to note, in the fourth quarter, we saw the sequential decline of senior housing segments, specifically nursing homes and ALFs moderate to actually show a slight improvement as compared to the 2020 third quarter total admissions for the senior housing segment.
ADC growth is expected to normalize in the second half of 2021 as we return to pre-pandemic referral patterns across all sectors of the healthcare industry.
In the fourth quarter of 2020, total admissions were 17,960, this is a 2.8% increase when compared to the fourth quarter of 2019.
In the fourth quarter, our home-based pre-admit admissions increased 9.2%.
Hospital-directed admissions expanded 7.4%.
Nursing home admins declined 19.3% and assisted-living facility admissions declined 14.7% when compared to the prior year quarter.
Average length of stay in the quarter was 97.2 days, this compares to 95.2 days in the fourth quarter of 2019 and 97.1 days in the third quarter of 2020.
Our median length of stay was 14 days in the quarter, which is two days less than the 16-day median in the fourth quarter of 2019 and equal to the third quarter of 2020.
Needless to say, 2020 was an unprecedented year where our organizational flexibility, leadership and commitment to our patients, their families, our referring healthcare partners, and one another was tested unlike anything we've ever experienced.
I couldn't be more proud of every VITAS team member who stepped up to these challenges to help provide access and incredible care, while producing these results for our shareholders.
Our entire team will continue to be out in the communities we serve, collaborating safely with our local healthcare partners to successfully identify and navigate patients and their families onto the hospice benefit during this unprecedented time.
I will now open this teleconference to questions.
 Assistant:

Chosen response:
sees fy 2021 adjusted earnings per share $17.00 to $17.50 excluding items.
qtrly vitas net patient revenue of $332 million, decline of 2.3%.
qtrly roto-rooter revenue of $201 million, an increase of 10.2%.
vitas anticipates continued weak occupancy and corresponding weak referrals from senior housing for first half of 2021.
anticipates senior housing occupancy will begin to normalize to pre-pandemic occupancy starting in second half of calendar year 2021.
roto-rooter is forecasted to achieve full-year 2021 revenue growth of 5% to 6%.
full-year 2021 adjusted earnings per diluted share is estimated to be in range of $17.00 to $17.50.


Prompt:
Human: Molly Langenstein, our CEO and president, also joins me today.
You should not unduly rely on these statements.
Our first-quarter results underscore the tremendous progress we are making in our turnaround strategy and the power of our three unique brands and being a digital-first, customer-led company.
The strong Q1 performance across all three brands was fueled by our significant improvement in product and marketing.
Our momentum started in Q4 2019, temporarily stalled by the pandemic, is now back on track to deliver meaningful growth in the years to come.
Total first-quarter sales grew 38% over last year, spurred by Soma's extraordinary sales growth of 65%, as well as fantastic customer response to Chico's and White House Black Market, which drove 31% growth in our apparel brand.
We delivered meaningful year-over-year gross margin and SG&A rates improvement, and our balance sheet is strong with ample cash and liquidity and strategically lean inventories.
We drove a much higher gross margin by dramatically reducing the number of promotional days.
Not only did Soma post a 65% sales growth over last year's first quarter, but comparable sales also grew a remarkable 39% over the first quarter of 2019.
Soma is well on its way to delivering an incremental 100 million in sales this year.
According to NPD research data, Soma outpaced the market leader in growth in bras, panties, and sleepwear, excluding sports bras, for the last 12 months.
These powerful results give us confidence that Soma will continue to take a meaningful share of the U.S. intimate apparel market and explode into a billion-dollar brand by 2025.
The business strategy put in place in Soma around inventory, products, marketing, and digital is working, and we have every confidence applying the same strategy as Chico's and White House Black Market will continue the apparel sales momentum.
Exciting things are happening at Chico's and White House Black Market and in the first quarter, the apparel brands posted faster sell-through rates and higher maintains margins than in 2019.
This is proof that our marketing efforts are increasingly more compelling and that our elevated products and styling are truly resonating with our customers.
Our first-quarter results underscore the tremendous progress we are making on the five strategic priorities that I shared last quarter.
Let me take a few minutes to update you on each.
Number one, continuing our ongoing digital transformation.
Over the last two years, we have successfully transformed into a seamless digital-first, customer-led model for all three of our brands, making major strategic investments in talent and technology.
These efforts are paying off as year-over-year first-quarter digital sales grew a very healthy 13.4%.
All three brands and digital sales grew year over year.
Customers using our proprietary digital tools, Style Connect and My Closet, are more engaged and have our highest conversion rate.
These tools fuel 10% sequential multi-channel customer growth, and these customers spend more than three times a single-channel customer.
Number two, further refining products through styling, fabric, and innovation.
At each of our brands, we are laser-focused on our customer and on continually elevating our product in order to increase our market share and drive results.
Innovation and creating comfortable beautiful solutions are core in the Soma brand.
Our products serve our customers' lifestyles and promote health, including a great night's sleep.
Aloe-infused Restore and Cool Nights are two great examples.
We continually innovate and introduce three new bras during the corner -- quarter, exceeding sales expectations.
In both our apparel brands, we've changed the styling of the products to more closely aligned with the customer.
We embrace the comfort culture and develop innovative fabrics and technology to provide comfort features, shifting her from sweat to fabric with ease.
We are very encouraged by what we are seeing.
At Chico's, she loves our core franchise bottom, woven, and knit top in new fabrics.
At White House Black Market, new elevated casual in denim and tops are popular as she is buying coordinating outfits.
And dresses are once again at the top of her list for both apparel brands.
Number three, driving a significant increase in customer engagement through digital storytelling.
Our enhanced marketing is driving brand awareness, generating traffic, and acquiring new customers through social media engagement and creative storytelling.
Newly acquired customers are being retained at a meaningfully higher rate than in fiscal 2019.
The year-over-year average age of new customers dropped 10 years at Chico's.
At Soma, the average age dropped eight years.
And at White House Black Market, the average age dropped slightly.
These stats reinforce the runway for all three brands.
At Soma, we are growing the customer base.
One in three new customers is under 34, resulting from our more inclusive branding and evolved product assortment.
Our brands use digital storytelling.
The use of social influencers, and building upon our organic social efforts, and wider-by communications are some of the ways we are working to elevate our marketing and reach new customers.
Our weekly Facebook Live events, for example, are driving significant engagement compared to industry benchmarks.
Number four, maintaining our operating and cost discipline.
Our biggest Q1 accomplishment was the strength in full-price sales and corresponding reduced promotions.
Our on-hand inventories are strategically lean, and receipts are disciplined.
On-hand inventory levels, which were down 29% versus last year's first quarter and down 21% compared to the first quarter of 2019, drove more full-price sales and generated a solid gross margin in the first quarter.
The density of products, improved products, and social proofing are driving a sense of urgency for customer purchasing.
These factors should continue to strengthen gross margin performance.
And number five, delivering higher productivity in our real estate portfolio.
Stores continue to be an integral part of our strategy because data shows that digital sales are higher in the markets where we have a retail presence.
We also will support store growth where the investments deliver profitable returns.
Soma is a great example of that.
We have successfully opened 30 Soma shop-in-shops inside Chico's stores.
These started opening in February, and we will have 47 open by mid-June.
These shop-in-shops are exceeding plan, driving brand awareness, and generating both store and digital sales in markets where Soma is not represented.
At the same time, we continue to rationalize and tighten our real estate portfolio for higher store profitability standards.
We will continue to shrink our store base to align with these standards, primarily as leases come due, lease kickouts are available, or buyouts make economic sense.
We have lease flexibility with nearly 60% of our leases coming up for renewal or kickout available over the next three years.
We anticipate closing 13% to 16% of our remaining store fleet over the next three years, with 40 to 45 of those closures occurring in fiscal '21.
Our stand-alone boutiques outperform those in regional enclosed malls by about seven percentage points.
Accordingly, the vast majority of closures are expected to be mall-based with the SKU toward Chico's and White House Black Market stores.
First-quarter net sales totaled $388 million, compared to $280 million last year.
This 38.4% increase reflects a 13.4% increase in digital sales, and recovery, and store sales, as our stores were temporally closed last year.
Looking at the first quarter compared to 2019, comparable sales decline 22%, with Soma up 39%, and the apparel brands down 33%.
Total company on-hand inventories for the first quarter compared to 2019 were down 21%, with Soma up 13% and the apparel brands down 35.3%, illustrating these strategic investments in Soma's growth and our turnaround strategy in apparel.
We reported a net loss of $8.9 billion, or $0.08 per diluted share, compared to a net loss of $178 million, or $1.55 per diluted share last year, which included the $35 million, or $1.17 per diluted share and significant after-tax noncash charges.
Our gross margin was 32.7%, compared to negative 4% last year.
The prior-year margin included the impact of significant noncash inventory write-offs and store asset impairments.
This year, we meaningfully expanded our margin rate as a result of disciplined inventory control, strategically reduced promotions, and more full-price selling.
SG&A expenses for the first quarter total $134 million, just a modest uptick from the first quarter last year but our stores were closed for approximately half of the quarter.
We have continued our cost discipline and reduction initiatives, generating lower SG&A expense dollars and rate than the first quarter of fiscal '19 and a sequential improvement in both dollars and rate over the fourth quarter of fiscal '20.
Our balance sheet remains very solid.
We ended the first quarter with over $102 million in cash and marketable securities.
And borrowings on our $300 million credit facility remain unchanged from the fiscal year at $149 million.
Our financial position liquidity continued to be bolstered by strong digital performance across all brands, improving retail store sales, and a significant leaner expense structure that better aligns cost with sales.
In addition, our balance sheet reflects a federal income tax receivable of approximately $55 million that we expect to realize in the summer of fiscal '21.
We anticipate building cash throughout fiscal '21.
Regarding first-quarter cash flows, cash used in operating activities was $4.4 million.
This use reflects the impact of more than $15 million in outflows or residual rental settlements for the fiscal '20 real estate rent abatement and reduction initiatives, as well as reductions in extended supply or payment terms implemented last year.
On a real estate front, in March, we launched phase two of our lease renegotiation process with A&G Real Estate Partners.
We have secured commitments from landlords of approximately $10 million of additional rent abatements and reductions.
The majority of which will be realized in fiscal '21.
This is an addition to the $65 million abatements and reductions negotiated last year.
On a cash basis, approximately $20 million of those savings are expected to be realized this year.
We expect to close up to a total of 330 stores from the beginning of fiscal '19 through the end of fiscal '23.
In the first quarter of fiscal '21, we closed nine stores and we ended the quarter with 1,293 boutiques.
Now, let me turn to our outlook.
We expect continued improving demand throughout the year for Chico's FAS, and we also realized there is economic uncertainty as we continue to emerge from the pandemic.
We do, however, believe it is appropriate to provide some high-level public expectations for fiscal 2021.
We expect a consolidated year-over-year net sales improvement in the 28% to 34% range, gross margin rate improvement of 18 to 20 percentage points over last year.
SG&A as a percent of sales down 500 to 600 basis points year over year and income tax expense of approximately $500,000.
We are committed to making all appropriate actions to improve performance and drive shareholder value, and we look forward to continuing to engage with our shareholders to discuss our progress.
Our turnaround is on track, and we are uniquely positioned to build on our first-quarter momentum, improve our operating performance, and generate shareholder value over the long term.
We have an exciting future ahead.
We will not be making further comments on the contents of their income statement or our shareholder conversations at this time.
With that, we can open up the call for Q&A.
 Assistant:

Chosen response:
compname says q1 loss per share $0.08.
q1 loss per share $0.08.
q1 sales $388 million versus $280.3 million.
not providing specific fiscal 2021 guidance at this time.
expects 2021 consolidated year-over-year net sales improvement between 28% to 34%.


Prompt:
Human: Before we begin, I'd like to review the Safe Harbor statements.
During the call today, we may also discuss non-GAAP financial measures.
Additionally, the content of this conference call may contain time-sensitive information that is accurate only as of the date of this earnings call.
We do not undertake and specifically disclaim any obligation to update or revise this information.
I will now turn the conference over to our President and Chief Executive Officer, Matthew Lambiase.
I'd like to start by saying that all the employees at Chimera are healthy and working remotely from home.
We implemented our contingency work plan in early March, and have not experienced any significant technology issues.
We all hope view and your family stay safe and healthy as well.
In the month of March, the COVID-19 pandemic created an environment of fear and extreme uncertainty resulting in near catastrophic conditions for the fixed income markets.
Many investors felt that the government mandated lockdowns would likely bring an economic recession and they sold their credit investments while reinvesting into safer risk-off assets such as T-Bills, U.S. Treasury notes and cash.
Credit-focused bond funds and ETFs saw record outflows forcing fund managers to sell their holdings into thin markets creating heightened volatility and market dislocations.
All sectors of the fixed income market, apart from U.S. treasuries, experienced sharp downward price movements.
So investors who use leverage as part of their strategies we're also forced to sell assets as they attempted to meet margin calls from their repo lenders.
Market conditions witnessed in March of 2020 were very similar to that experienced in the the 2008 crisis.
Yet, price movements were swift and occurred over a much shorter timeframe.
The Federal Reserve was quick to respond and on March 15, a Sunday night, they announced many initiatives to combat the worsening economic conditions.
The Federal funds rate was cut to 0%, new purchase plans for treasuries and agency mortgage-backed securities were implemented and funding programs like the TELS and commercial paper facility were revived from the 2008 Federal Reserve playbook.
The Fed's actions were largely helpful bringing order to many areas of fixed income market including agency mortgage-backed securities.
Liquidity programs for residential credit securities were not offered by the Federal Reserve and they continue to trade in a challenged fashion in the secondary markets.
Like the Fed, Congress also did its part by passing the CARES Act with the intent to help individuals most directly impacted by the COVID-19 pandemic.
The U.S. economy is vastly different today than where it was prior to the COVID-19 crisis.
The abrupt shutdown in the U.S. economy has swiftly created some of the worst economic problems since the Great Depression.
In these past six weeks, 30 million people have applied for unemployment benefits, a sharp contrast to the 3.5% unemployment rate that we had in February.
Many U.S. homeowners have decided to take advantage of newly created mortgage forbearance programs.
In the near term, the government initiatives, coupled with mortgage forbearance, will soften the immediate blow to the U.S. economy.
But these may have lasting negative impact on the housing and mortgage market, should they persist for an extended period.
Over the past several years, Chimera has taken a number of balance sheet initiatives that helped it in this difficult period to protect our book value to meet all the margin calls from our repo lenders and to pay our dividends.
Our agency mortgage-backed securities portfolio has always served dual purposes, primarily as a source of spread income, and secondarily as a source of liquidity rather than selling our higher yielding legacy assets.
This quarter, we sold our agency pass-through securities to pay down debt and further deleverage our overall portfolio.
We ended the first quarter at 2.2 times recourse leverage, down 35% from year-end.
Over the past decade, we've purchased or acquired approximately a $14 billion portfolio of legacy non-agency securities and season-low loan balance mortgages.
This portfolio is funded through securitization as well as repo leverage, but it has not been immune to downward price movements.
We've worked diligently to protect this portfolio, which has historically been a consistent driver of earnings for our company and makes Chimera's portfolio differentiated in the mortgage REIT industry.
We remain hopeful that at some point in the future, the pricing of these assets reverts to it's fundamental value, rather than the illiquid pricing we're currently experiencing.
A restarting of the economy should be a good first step in the process, which we believe could lead to an improvement in credit spreads and a recapturing of our lost book value experienced in the quarter.
In the last few months, we've been busy executing transactions on the liability side of our balance sheet.
In March, Chimera executed two mortgage securitizations, totaling $883 million.
We've arranged over $800 million of longer-term refocus over these for our credit assets and we executed $374 million of convertible debt, which further diversifies our liability and capital structure.
While pricing is never ideal in a crisis, we are heartened to be able to access the capital markets.
Looking forward, it's hard to have a clear view on how the U.S. economy is going to perform as it starts back up.
We are in uncharted waters with regard to the high unemployment and severe changes in social habits.
We would love to believe that we'll be back to a V-shape recovery, but it's most likely going to take longer and be difficult to get back to where we were in February.
The mortgage and housing market outlook will also be challenging in the very near term.
Mortgage forbearance stays at a high degree of uncertainty to mortgage credit and we will be cautious until we have more clarity on the forbearance duration and the totals in our portfolio.
Given all these complexities, earnings for the next few quarters will be difficult to predict until the economic conditions clarify.
We remain focused on maintaining liquidity, extending our financing terms, and keeping our credit portfolio intact.
We are navigating through a very turbulent period but we are very hopeful that the U.S. economy will recover and the mortgage market will return to more normal footing when the economy restarts and people get back to work.
The first quarter of 2020 was an extremely volatile period in the U.S. fixed income market.
The 10-year treasury note began the year at 1.92% and fell 125 basis points to end the first quarter with a yield of 0.67%.
The Federal Reserve cut its overnight lending rate by 150 basis points over a two-week period as part of its response to the COVID-19 pandemic.
The large drop in interest rates, sharp increase in rate volatility and investor flight to quality had a large imbalance of funds across most fixed income products.
Investors that utilized leverage were forced to sell their securities at low prices to meet margin calls on existing repo transactions.
Chimera was not immune.
In the first quarter, we utilized the combination of cash balances, unpledged [Phonetic] securities and outright sales of our agency assets as part of our overall liquidity management strategy.
Chimera has successfully met all margin calls to date.
Chimera's swift [Phonetic] funding strategy is multifaceted.
The primary objective has been and continues to be utilizing securitization to create long term funding for our credit assets.
At the end of the first quarter, we had nearly $8.5 billion of securitized debt outstanding.
Secondarily, we use repo financing on our retained assets, legacy non-agency securities, and loans.
We typically use longer repo maturity dates when financing these assets, which enables more effective counterparty and portfolio management.
And post quarter end, we added two new long term credit financing facilities totaling $800 million.
These facilities contain attractive features including a significant reduction of daily mark-to-market risk on our credit assets.
We successfully continued our loan securitization strategy this quarter and in March, we priced two deals with season reperforming loans from our warehouse.
CIM 2020-R1 has $391 million underlying loans with a weighted average coupon of 5% and a weighted average loan age of 158 months.
The average loan size in the R1 securitization was $123,000 and had an average FICO score of 613.
We sold $312 million senior securities with a 2.35% cost of debt.
Chimera retained a March 2023 calendar call option on the R1 securitization.
In addition, we securitized CIM 2020-R2, which had a $492 million underlying loans with a weighted average coupon of 3.79% and a weighted average loan age of 161 months.
The average loan size in the R2 deal was $219,000 and had an average FICO of 690.
We sold $352 million senior securities with a 2.55% cost of debt.
In response to the significant drop in interest rates, increased price volatility and repo margin calls, this quarter, we sold our entire portfolio of $5.7 billion residential agency pass-throughs.
These pass-throughs were the most liquid and lowest yielding assets in our portfolio and have always been part of our strategy to meet our liquidity needs.
We also terminated all our agency hedge positions comprised of U.S. Treasury note futures and $4.1 billion notional balance on interest rate swaps.
The agency CMBS portfolio, which has taken us many years to accumulate, was retained.
As of the quarter end, this portfolio totaled $2.5 billion.
We continue to like the spread income generated by this portfolio and the superior convexity profile of Ginnie Mae project loans relative to residential agency pass-throughs.
These securities finance well in the repo markets and have some more rates and haircuts as traditional agency pass-throughs.
The unique [Indecipherable] explicit prepayment lockout and penalties are valuable security trades as interest rates fall.
After quarter end, spreads on agency CMBS began to tighten when the Fed began purchasing these assets as part of their quantitative easing program.
Portfolio activity this quarter has significantly reduced the company's risk exposure as measured by recourse leverage.
We ended the quarter at 2.2 times recourse leverage down from 3.4 times at year-end and 3.8 times at the end of the third quarter of 2019.
This represents a 35% reduction of recourse leverage over the last three months and 42% over the past six months.
It is important to note, due to current market conditions, our high-yield credit assets, which is the largest component of our portfolio, have been marked down in book value -- have been marked down in value, which has contributed to Chimera's lower book value this quarter.
Our ability to retain this portfolio enables the opportunity for security value increases over time as economy restarts and the country works its way through the current pandemic.
As we move forward to the current economic crisis, we remain cautiously optimistic.
We will continue to space out the repo maturities and seek longer tenure for our credit repo.
And as we get more visibility into the housing and mortgage economics resulting from the crisis, we will seek to deploy cash into new investment opportunities as we have for the past decade.
I'll review Chimera's financial highlights for the first quarter.
GAAP book value at the end of the first quarter was $12.45 per share.
Our GAAP net loss for the first quarter was $389 million or $2.08 per share.
On a core basis, net income for the first quarter was $106 million or $0.57 per share.
Economic net interest income for the first quarter was $151 million.
For the first quarter, the yield on average interest earning assets was 5.3%.
Our average cost of funds was 3% and our net interest spread was 2.3%.
Total leverage for the first quarter was 4.7 to 1, while recourse leverage ended the quarter at 2.2 to 1.
Expenses for the first quarter, excluding servicing fees and transaction expenses were $18.6 million, consistent with last quarter.
Given the current market environment, we wanted to provide additional information about liquidity.
We currently have approximately $650 million in cash and unencumbered assets.
This is after we paid both our preferred and common stock dividends totaling $111 million.
Also, in April, we closed a public convertible bond offering that raised $374 million.
We believe it's important to have ample liquidity in this market and we're happy that the capital markets were open for us to achieve this goal.
We will continue to monitor our liquidity and assess opportunities to increase liquidity and balance, supporting our current portfolio and finding new opportunities in the market.
 Assistant:

Chosen response:
compname reports q1 core earnings per share of $0.57.
q1 core earnings per share $0.57.
q1 gaap loss per share $2.08.


Prompt:
Human: Before we begin, I'd like to review the safe harbor statements.
During the call today, we may also discuss non-GAAP financial measures.
Additionally, the content of this conference call may contain time-sensitive information that is accurate only as of the date of this earnings call.
We do not undertake and specifically disclaim any obligation to update or revise this information.
I will now turn the conference over to our CEO and chief investment officer, Mohit Marria.
Joining me on the call today are Choudhary Yarlagadda, our president and chief operating officer; Rob Colligan, our chief financial officer; and Vic Falvo, our head of capital markets.
Before we begin, in November, we announced the retirement of Matt Lambiase.
Matt founded and led Chimera since 2007.
Under his leadership, Chimera grew to a $3.8 billion mortgage REIT and paid more than $5.2 billion in dividends to shareholders.
Matt was a great leader, friend and mentor for everyone in our company.
This quarter, Chimera continued its path of book value reappreciation.
Throughout the year, we worked diligently on the liability side of our balance sheet to enhance liquidity and strengthen our cash position.
These actions enabled us to retain our high-yielding credit portfolio and benefit from the improvements in asset prices that started in the second half of 2020.
Chimera's book value improved nearly 4% in the fourth quarter and over 16% at the middle of the year.
This improved book value, combined with the company's dividend policy, has generated a 6% economic return for the fourth quarter and a 22% economic return since June 30, 2020.
The housing market is robust across America.
The Federal Reserve has been very supportive of agency mortgage-backed securities with open market purchases for its own portfolio.
The Fed's purchases have helped lenders offer low mortgage rates to homeowners for new home purchases as well as lowering the cost of homeownership for those that desire to refinance.
The National Association of Realtors recently reported that in December, contract closing for existing homes increased with annualized pace of 6.76 million units.
This is the strongest pace we have seen since late 2006.
Housing inventories are low, demand is strong and mortgage rates are at all-time historic lows.
These are all indicators for continued performance in the housing and residential mortgage credit.
Chimera has a unique and differentiated residential credit portfolio among mortgage REITs.
At year-end, our GAAP investment portfolio included $12.6 billion of mortgage loans and $2.5 billion of non-agency RMBS.
Over 90% of the loans in non-agency securities on our balance sheet were originated prior to 2010.
With strong underlying housing fundamentals and the prospects of a post-pandemic economic recovery, we believe our seasoned mortgage portfolio of loans in non-agency RMBS is uniquely positioned to perform well.
The securitization market has demonstrated depth and resiliency in the past year and is a key component of our company's liability management.
Spreads on securitized mortgage loans widened as the pandemic began in the spring of 2020.
Subsequently, these spreads have grown tighter and closed the year at historically low levels.
Securitization enables us to finance our mortgage loans for longer term by transferring them from our loan warehouse into mortgage trust as we sell senior notes in each deal.
This process helps the company to accomplish a desired asset liability mix, while providing long-term nonrecourse financing.
For the full year, we sponsored seven reperforming loan securitizations, two prime jumbo securitizations, one agency eligible investor loan securitization and one non-performing loan securitization.
In total, Chimera sponsored $4.2 billion and 11 separate securitized deals for the calendar year 2020, and we retained $655 million in subordinate notes.
Securitization is Chimera's primary source of financing for our loan portfolio, and as of year-end, securitized debt represented more than 60% of Chimera's liabilities.
We firmly believe that retention of subordinate notes from Chimera-sponsored deals provides the best levered returns available in the market.
Secondarily, we utilized repo and other forms of secured financing for warehouse loans and subordinate notes as we seek to enhance our portfolio returns.
Since the onset of the pandemic, we have taken aggressive actions to reduce Chimera's financing risk by lengthening and strengthening our secured credit facilities.
At year-end, we have $3.2 billion of credit-related secured financings, which is 37% less than we were financing at the year-end 2019.
The average maturity of our credit-related financing is 15 months and $2 billion, or roughly two-thirds are either nonmark-to-market or limited mark-to-market.
In April, we issued convertible debt.
Concurrent with our offering, the company entered into a capped call transaction.
During the fourth quarter of 2020, we exercised a capped call option, and the company elected to receive a settlement of approximately 4.7 million shares for our common stock, which were then retired.
The retirement of these shares reduces the company's share count, benefiting the book value and future returns of our company.
Last night, our board of directors increased the size of our outstanding common stock repurchase authorization to 250 million.
This provides a valuable tool for our team as we evaluate the merits of new leverage investment opportunities related to the potential benefit of stock -- common stock repurchase.
Our balance sheet is strong, and we remain focused on delivering long-term value for shareholders.
Now, I would like to go through the fourth-quarter portfolio activity.
In October, we issued CIM 2020-R6, with $418 million of reperforming loans purchased in September.
The underlying loan from the deal had a weighted average coupon of 5.25% and a weighted average loan age of 164 months.
The average loan size in the R6 transaction was $102,000 and had an average LTV of 71%.
The average FICO score of the borrower was 638.
We sold 334 million senior securities from the deal and retained 84 million in subordinate notes, plus interest-only securities.
Our cost of debt for the CIM 2020-R6 was 2.19%, with an 80% advance rate.
In November, we issued CIM 2020-R7 and CIM 2020-NR1.
The R7 deal consisted of $653 million reperforming loans from the called CIM 2017-8 securitization.
The underlying loans in the deal had a weighted average coupon of 6.38% and a weighted average loan age of 172 months.
The average loan size in the R7 transaction was $81,000 and had an average LTV of 60%.
The average FICO score of the borrowers was 662.
We sold $552 million senior securities from the deal and retained $91 million in subordinated notes, plus interest-only securities.
Our cost of debt for the R7 deal was 2.22%, with an 86% advance rate.
The collateral for the NR1 securitization was $132 million of non-performing loans called from CIM 2017-8 deal.
The underlying loans had a weighted average coupon of 5.76% and a weighted average loan age of 170 months.
The average loan size was $100,000, had an 86 LTV and a 589 average FICO.
We sold $84 million notes, with a 4.49% cost of debt and a 64% advance rate.
Chimera retained $48 million of subordinate notes.
The R6, R7 and the NR1 deal were not rated by any of the rating agencies.
In December, we issued CIM 2020-J2, our second prime jumbo securitization for 2020.
The deal was rated by Moody's, Fitch and DBRS and had $327 million loans, with a weighted average coupon of 3.09% and a weighted average loan age of two months.
The average loan size was $912,000 and at an average FICO of 782 and an average LTV of 64%.
As we begin 2021, the housing market is booming, our mortgage portfolio continues to perform well, and we have ample cash position to make new investments.
Interest rates are at historic lows, and the securitization market is strong, with spreads on some classes near all-time tights.
This year, we will continue to seek ways to improve upon or lower our liability cost for securitized debt as well as the back-end financing of our retained securities from Chimera securitizations.
As of year-end, Chimera owns call rights from 7 billion in 16 previously issued same deals that are either currently callable or will become callable in 2021.
This provides a source of product to meet strong investor demand.
And lastly, our company's leverage is low.
As market conditions improve, we can increase our leverage either by growing assets, repurchasing equity or both.
Chimera is well positioned as we begin 2021.
We will use all the tools available to deliver the best risk-adjusted dividend to our shareholders.
I'll review Chimera's financial highlights for the fourth-quarter and full-year 2020.
GAAP book value at the end of the fourth quarter was $12.36 per share, and our economic return on GAAP book value was 6% based on the quarterly change in book value and the fourth-quarter dividend per common share.
GAAP net income for the fourth quarter was $129 million or $0.49 per share and $15 million or $0.07 for the full year.
On a core basis, net income for the fourth quarter was $72 million or $0.29 per share, and it was $334 million or $1.46 per share for the full year.
Economic net interest income for the fourth quarter was $117 million, and it was $513 million for the full year.
For the fourth quarter, the yield on average interest earning assets was 5.9%, our average cost of funds was 3.6% and our net interest spread was 2.3%.
Total leverage for the fourth quarter was 3.6 to 1, while recourse leverage ended the quarter at 1.2 to 1.
For the fourth quarter, our economic net interest return on equity was 12.5%, and our GAAP return on average equity was 15.8%.
Expenses for the fourth quarter, excluding servicing fees and transaction expenses, were $18 million, up slightly from last quarter.
 Assistant:

Chosen response:
compname posts q4 core earnings per share $0.29.
q4 core earnings per share $0.29.
q4 gaap earnings per share $0.49.
board of directors increases existing share repurchase authorization for up to $250 million.


Prompt:
Human: On the call today, Scott Buckhout, CIRCOR's president and CEO, and Abhishek Khandelwal, the company's chief financial officer.
The slides we'll be referring to today are available on CIRCOR's website at www.
These expectations are subject to known, and unknown risks, uncertainties, and other factors.
For a full discussion of these factors, the company advises you to review CIRCOR's Form 10-K, 10-Q, and other SEC filings.
The company's filings are available on its website at circor.com.
Actual results could differ materially from those anticipated, or implied by today's remarks.
These non-GAAP metrics exclude certain special charges and recoveries.
The CIRCOR Team has gone above and beyond to deliver essential products to our customers, while keeping each other safe, and maintaining business continuity.
CIRCOR delivered a strong second quarter, despite unprecedented macro challenges.
I'm proud of the portfolio transformation that we've executed over the last couple of years.
With the recent divestiture of distributed valves, we completed our shift out of upstream Oil & Gas and other commodity businesses.
As a result of this transformation, we've sharpened our focus on our core Mission Critical flow control platforms, and we positioned CIRCOR for strong future growth.
Our current portfolio of Mission Critical business is more diversified and less cyclical mitigating the impact of the broader economic environment.
In addition, our portfolio of products has differentiated technology and a strong market position that has enabled us to raise prices through the current downturn.
All of our factories are operating in line with customer demand.
As of today, we're absorbing some inefficiencies associated with safety protocols we put in place to ensure our employee's safety.
We continue to manage some COVID-19 related challenges on the supply chain side.
Beyond this, we're experiencing a limited direct disruption in operations from COVID-19.
Despite these challenges, the CIRCOR operating system is delivering improved operating performance across most metrics.
And finally, we're positioning CIRCOR to take advantage of a market recovery.
We remain on track to deliver on our commitment to launching 45 new products this year.
We continue to invest in front-end resources and strategic growth initiatives.
We're closely collaborating with suppliers and customers to ensure alignment as markets change.
Lastly, we continue to focus on deleveraging the balance sheet.
Now, I'd like to provide some highlights from the second quarter.
Please turn to Page 4.
We booked orders of $193 million with the book-to-bill ratio slightly over 1.0, and a backlog build of $7 million.
Sales came in at $186 million, down 14% organically, largely driven by industrial.
Aerospace & Defense this top-line remained robust through the quarter.
The adjusted operating margin was 8.5% down 210-basis-points from last year.
The margin decline was primarily driven by lower volume in industrial.
Despite lower revenue, we managed companywide detrimental to 22%, due to the aggressive cost and price actions we implemented earlier this year.
Our cost actions remain in line with the targets we laid out in our first-quarter earnings call, and our price actions across the company are coming in as expected.
Let's begin by reviewing our segment results.
All figures up from continuing operations and exclude divestitures.
Starting with industrial in Slide 5.
In Q2, Industrial segment orders were down 16% organically, due to COVID-19 impact on most industrial-end markets.
The Industrial segment had sales of $124 million, down 19% organically.
The majority of our end markets within industrial were challenged, due to the COVID-19 pandemic.
We saw the capital projects and customer maintenance delays to the quarter.
Our EOM margin was 10% representing a decline of 350-basis-points versus the prior year.
This was primarily driven by lower sales volume, and inefficiencies associated the need to maintain social distancing on the factory floor, among other safety policies, due to COVID-19.
The cost actions they've initiated at the end of 2019, coupled with further action stated the pandemic resulted in a drop-through 27% which is significantly lower than our contribution margin.
In Q2 in the Aerospace & Defense segment, we delivered orders of $77 million, down 18% organically, due to a difficult comparison.
Last year, we received a large Joint Strike Fighter order for $17 million.
While this year, we had the impact of COVID-19 on commercial Aerospace, although partially offset by the Virginia Class Submarine order for $9 million.
Aerospace & Defense had sales of $62 million, down 3% organically, due to COVID-19 impact on commercial Aerospace, and ongoing 737MAX delays.
This was partially offset by strong defense shipments, especially for the Virginia Class Submarine, and the Joint Strike Fighter programs.
The Aerospace & Defense operating margin was 21.1% up 500-basis-points.
The $2 million of lower revenue in the Aerospace & Defense team delivered $3 million of incremental operating income, driven by pricing, productivity, and cost actions.
Turning to Slide 7.
For Q2, the adjusted tax rate was 14.8%, due to foreign tax-rate differential, and higher R&D tax credits.
Looking at special items and restructuring charges, we recorded a total pre-tax charge of $17 million in the quarter.
The acquisition-related amortization & depreciation was a charge of $12 million.
Wanting professional fees were a charge of $4.6 million, attributable to last year's unsolicited tender offer, corporate governance actions, and other proxy related matters.
Interest expense for the quarter was $8 million, down $5 million, compared to the prior year.
This was a result of lower-debt balances and a federal interest rate of 25-basis-points.
Other income was at $2 million charge in the quarter primarily, due to foreign exchange losses, partially offset by pension income.
Corporate costs in the quarter were $9.7 million, higher than normal, primarily driven by a write-off of $1.8 million against a written asset from a previously divested business.
For Q3 and Q4, we expect the corporate cost run rate to be approximately $7 million per quarter.
Turning to Slide 8.
Our free cash flow from operations was negative $28 million in the second quarter, which is in line with the guidance provided during our first-quarter earnings call.
During the quarter, we disposed of our Distributor Valves business for a negative $8.25 million in cash.
The company also incurred approximately $10 million of cash disbursements associated with, last year's unsolicited tender offer to acquire the company, support for corporate governance changes, restructuring, investment, banking fees, and other professional services.
At the end of the second quarter, our net debt was $467 million, which was $205 million dollars lower than Q2, 2019.
As we mentioned in our Q1 quarterly call, we expect our Q3 free cash flow to be approximately break-even to slightly negative.
As we complete the final disbursements related to the exit of Distributed Valves and other restructuring expenses.
Q4 is expected to be a strong positive cash flow quarter, largely clean of transition, and restructuring expenses.
Now, I will hand it back over to Scott, to provide some color on our end markets, and outlook.
Now, I'll provide an overview of what we're seeing in our end markets, as well as some of the actions we're taking to manage through the pandemic.
Please turn to Page 9.
Let me start by recapping ou in-market exposure.
First, we've completely exited upstream Oil & Gas.
Looking at today's portfolio, approximately 46% of our revenue is General Industrial, 27% is Aerospace & Defense with defense approximately twice the size of commercial, and 27% as aftermarket sales and support.
I'd like to point out a few aspects of our current portfolio.
Our Aftermarket business is largely driven by Industrial and defense.
Aftermarket margins are higher than OEM margins.
Orders driven by our large global installed base are mitigating the impact of the broader economic decline.
Aftermarket is a strategic growth area for CIRCOR, and aftermarket growth investments will continue through 2020 and beyond.
We expect the defense to remain robust.
Our Defense team is winning new programs in next year's U.S. defense budget appears to be coming in at 2020 levels or slightly better.
In addition, we're seeing strong support from many of our larger defense platforms.
Our Commercial business represents 8% of revenue, and less than half of it is driven by Boeing and Airbus commercial aircraft platforms.
The majority of the remaining commercial sales come from a long list of OEM platforms across business and regional aviation, Civil Helicopters, and Space programs.
Our Industrial business is very diversified by the end market.
Outside of downstream, Oil & Gas which represents 10% of revenue, no end-market represents more than 6% of revenue.
This offers significant diversification, reducing cyclicality, and our dependence on anyone end market.
Let's start with the industrial.
Orders overall in Q2 were down 16% organically.
During the second quarter of the Industrial business, we saw the impact of COVID-19 across most major end markets.
For market orders were down 23%, impacted by an overall slowdown in global manufacturing, as well as large project delays linked to the global reduction in capex.
We saw a capital project delays in Commercial Marine, Machinery Manufacturing, Chemical Processing, and Building & Construction end markets.
The impact on water and wastewater was relatively modest compared to other end markets.
consumer goods manufacturing sector.
The COVID-19 environment coupled with some customers shifting consumer goods manufacturing from China to the U.S. created a moderate increase in orders in this sector.
Aftermarket orders were down 8% organically in Q2.
Our global installed base combined with our dedicated Aftermarket Commercial team is mitigating the impact of steeper declines and for market capital projects.
The aftermarket weakness was most significant in Commercial Marine, due to lower utilization of Cruise ships, and offshore service vessels.
We're seeing pockets of growth in some areas like nuclear power in Asia and midstream Oil & Gas in Latin America.
Downstream order intake in the quarter was relatively low, due to delayed capital projects and maintenance turnarounds.
Refiners are minimizing short-term spending and reducing the scope of activities planned for the fall turnaround season.
Aftermarket backlog is expected to grow as we exit the year in preparation for the delayed maintenance activities from 2020, and layering on top of the already planned repair and maintenance work slated for 2021.
Boating activity remains strong for long cycle capital projects in growth markets.
For Industrial overall in Q3, the end-market outlook is similar to market levels in Q2.
We expect the impact of COVID-19 to drive a year-over-year decline in revenue of 18% to 28%.
We expect most OEM end markets in Q3 to remain at Q2 levels, due to ongoing capital expenditure reductions, and capital project delays.
On the aftermarket side, we're starting to see some improvements sequentially in Europe and Asia, as those markets recover from the COVID related downturn.
In North America, we expect Q3 revenue to be in line with Q2.
Regionally, the general industrial market is expected to decrease in Q3 versus the prior year in North America, Europe, and India.
However, we expect to see growth in China.
Our Aerospace & Defense segment delivered orders of $77 million in the quarter, driven by ongoing strength in Defense programs like the Joint Strike Fighter.
the US Naval Virginia Class Submarine, the CVN-80 aircraft carrier, and various missile programs.
Strengthened Defense orders offset weakness in commercial Aerospace orders which were down from the previous quarter, due to the impact of COVID-19 on production rates at Boeing and Airbus, and 737MAX.
Overall, we expect Q3 orders to decrease sequentially driven by the timing of Defense Program orders, and COVID related headwinds in the Commercial business.
For Aerospace & Defense and aggregate, we expect revenue to be up sequentially in Q3, but down 3% to 5% versus last year.
Commercial revenue is expected to be down approximately 30% to 40% versus last year, while the defense should be up 12% to 17%.
It's important to note that we're increasing prices on both sides of the business, Defense and Commercial Aerospace.
With carryover pricing from 2019, and new increases this year, we expect to net a 4% price increase in Q3.
The price increases are heavily weighted in the aftermarket.
Before I wrap up, I want to read [audio gap] out last summer and have continued to make strong progress.
While the pandemic has had a significant impact on our end markets, we've responded accordingly by accelerating, and expanding many aspects of the plan, particularly with respect to reducing structural cost, and leaning out the company.
[Audio gap] and the growth capacity of the company, despite the expanded reduction of structural cost.
Notably, we've increased our commitment to new products launched in 2020 to 45, up from 40 in the original plan.
And finally, the price remains an important part of our playbook, due to the mission-critical nature of our products, we've been able to raise prices this year in line with the original plan we committed to last year, despite the recent market disruption.
To summarize, we're taking the appropriate steps to navigate the current environment while continuing to execute on our strategic plan.
As the market continues to change, we'll continue to adapt to ensure we're positioned to succeed.
I'd like to close by once again [audio gap] the unwavering dedication to our customers.
They've been doing a remarkable job.
We remain committed to positioning CIRCOR for long-term growth, expanding margins, generating strong free cash flow, and deleveraging the company.
Now, Abhi and I would be happy to take your question.
 Assistant:

Chosen response:
q2 revenue $186 million versus refinitiv ibes estimate of $168.3 million.
qtrly orders of $193 million produced a book-to-bill ratio of 1.04 and backlog increase of $7 million.
remain on track to achieve $45 million 2020 cost reduction plan.


Prompt:
Human: I'm joined today by Scott Buckhout, CIRCOR's president and CEO; and Abhi Khandelwal, the company's chief financial officer.
These expectations are subject to known and unknown risks, uncertainties and other factors and actual results could differ materially from those anticipated or implied by today's remarks.
You can find a full discussion of these factors in CIRCOR's Form 10-K, 10-Qs and other SEC filings also located on our website.
CIRCOR delivered another strong quarter and executed well despite a challenging global supply chain environment.
We continue to see strong demand for our mission-critical products with year-to-date orders in backlog up 11% and 15%, respectively.
Notably, Industrial organic orders growth was 28% in the quarter and our Industrial backlog is up 30% year-to-date, well above pre-pandemic levels.
While aerospace and defense orders were down in the quarter due to timing, we're well positioned on growing commercial and defense programs and continue to launch new products for our customers.
Revenue in the quarter was up 2% organically with operating margin up 80 basis points year over year and 240 basis points sequentially.
EPS was up 39% versus last year.
It's important to note that revenue and earnings for the quarter were adversely impacted by supply chain disruptions that intensified through the last month of the quarter.
More specifically, we saw approximately $10 million of revenue pushed out of Q3 due to supplier input delays, logistics constraints and ongoing labor availability challenges.
This reduced our organic growth by roughly 5 points in the quarter.
Our teams are working to mitigate the impact of supply chain issues by qualifying alternate suppliers, reengineering product with higher-grade materials and expediting shipping in order to continue delivering to our customers as committed.
Looking forward, we expect these challenges to continue through the fourth quarter, resulting in a $15 million impact on revenue.
For the year, we expect approximately $25 million of revenue to push out of 2021.
This is reflected in our revised full year guidance, which Abhi will discuss later.
Our strategic priorities on people, growth acceleration, margin expansion and free cash flow continue to be our guiding principles.
I'll talk more about select accomplishments from Q3 later in the call.
Let's start with the financial highlights on Slide 3.
Organic orders of $194 million in the quarter were up 15% versus prior year.
We saw a strong year-over-year increase of 28% in industrial with growth in all regions.
Orders were down 10% in aerospace and defense due to the timing of large defense orders.
Organic revenue was $191 million, up 1% versus prior year.
Revenue came in approximately $10 million lower than expected as a result of the supply chain challenges that Scott mentioned upfront.
Adjusted operating income was $19 million or 10.1%, up 80 basis points from prior year and up 240 basis points from the previous quarter.
Finally, we delivered $0.50 of adjusted earnings per share, up 39% versus prior year and generated free cash flow of $7 million.
Moving to Slide 4.
Industrial organic orders were up 28% versus last year and down 9% sequentially.
Order growth was apparent across all regions, with particular strength in North America and EMEA.
Aftermarket orders were up 42% and our downstream aftermarket backlog is the highest it has been since 2017.
Our book-to-bill ratio for the quarter and year-to-date is 1.1%, an indication of continued end market demand.
Industrial organic revenue was up 3% versus last year and up 1% sequentially.
By region, we saw year-over-year strength in EMEA, China and India, partially offset by lower revenue in North America.
Despite the strong backlog from the first half, supply chain and logistic constraints became a bigger challenge than expected late in the quarter.
This adversely impacted revenue by $6 million or 5 points of organic growth.
Adjusted operating margin was 8.7%, up 80 basis points versus last year and up 70 basis points versus Q2.
Improvements were driven by productivity and continued value-based pricing up 2%, partially offset by higher inflation.
We expect further margin expansion in Q4.
Turning to Slide 5.
aerospace and defense orders were $54 million down 10% versus last year and flat sequentially.
Orders were lower versus prior year due to a large non-repeat defense order for the Dreadnought submarine in 2020.
The commercial aerospace recovery continues led by narrow-body programs.
We've seen sequential growth for the past three consecutive quarters.
Revenue was $61 million, down 2% year over year and up 2% from prior quarter.
Slightly lower revenue was primarily driven by lower defense OEM shipments, partially offset by recovery in commercial aerospace, up 10% and an improvement in defense aftermarket revenue, up 7%.
Similar to Industrial, aerospace and defense was also impacted by the global supply chain and logistic constraints, which negatively impacted the quarter by $4 million or six points of growth.
Finally, operating margin was 24.2% in the quarter, up 50 basis points year over year and up 430 basis points from Q2.
We were still able to expand margin in a challenging global environment through pricing actions, productivity and favorable defense program mix.
We expect margin in Q4 to be roughly in line with prior year.
Turning to Slide 6.
Free cash flow in the quarter was $7 million, an improvement versus prior year but lower than expected.
More specifically, we had planned for higher milestone collections on long-term projects that moved out of the quarter.
We will collect this cash in future quarters as we complete these projects.
We reduced our total debt by $23 million versus prior year and ended Q3 with $445 million of net debt.
Due to the lower earnings and cash outlook for the year, we now expect to improve our leverage by approximately 0.3 turns by the end of the year.
We will continue to use all free cash flow generated to delever.
Starting with fourth quarter guidance.
We expect revenue to be up 1% to 3% organically, which includes $15 million of delayed revenue out of the quarter due to continued global supply chain, logistics and labor challenges.
For Industrial, we expect orders in Q4 to be up more than 10% and revenue is expected to be up 3% to 6% with growth across most end markets.
In A&D, fourth quarter orders are expected to be up greater than 50% driven by large OEM defense programs.
Revenue, on the other hand, is expected to be flat to down 5%, with double-digit growth in commercial aerospace and defense aftermarket, offset by lower deliveries on defense programs.
We're expecting adjusted earnings per share of $0.60 to $0.65 in the fourth quarter with incremental and decremental margins of 30% to 35%.
Corporate cost is expected to increase by $1 million versus prior year.
Finally, we're planning for free cash flow of $10 million to $15 million in Q4 as we expect supply chain constraints will continue to impact our ability to complete in-process projects and collect milestone billings from customers.
As a result of the supply chain challenges late in Q3 and into Q4, we are revising our full year guidance.
Organic revenue is expected to be flat to down 2%, which reflects $25 million of revenue delayed out of the year.
Adjusted earnings per share of $1.69 to $1.74 is lower as a result of this reduction in volume and free cash flow is expected to be $4 million to $9 million.
Now, I'll hand it back to Scott to discuss our market outlook.
Let's get started with our Industrial outlook on Slide 8.
As Abhi mentioned, in the third quarter, we saw continued order strength across all Industrial regions, with year-to-date backlog exceeding pre-COVID levels.
In Q4, we expect another quarter of double-digit orders growth led by North America.
Virtually all end markets are expected to grow with commercial marine and downstream showing the largest year-over-year improvement.
On revenue, we expect modest improvement year over year with growth between 3% and 6%.
Our short-cycle products are expected to be up 6% to 9% overall, primarily driven by aftermarket growth between 8% and 11%.
Our longer-cycle end markets are expected to be roughly in line with last year.
Many of our midstream and downstream customers are prioritizing aftermarket projects in the near term and our OEM project pipeline and backlog remain strong.
In commercial marine, we expect to see growth as shipbuilding activity in Asia continues to recover from historically low levels.
Finally, pricing is expected to net roughly 2% and as pricing actions that were taken in Q2 and Q3 start to roll through our top and bottom line.
Moving to aerospace and defense.
Q3 orders were flat sequentially and down versus prior year, driven by a large non-repeat order in Q3 2020.
We expect a significant increase in Q4 orders.
The increase versus prior quarter and prior year is driven by large defense orders, continuing recovery in commercial aerospace and strong medical growth.
A&D revenue in the fourth quarter is expected to be flat to down 5% versus prior year, primarily due to supply chain constraints and the timing of shipments for large defense programs.
Defense revenue is expected to be down 10% to 15% with lower shipments on our OEM programs.
On the other hand, government orders for defense spares and MRO services picked up in the third quarter and we expect aftermarket revenue growth of 10% to 15%.
Commercial aerospace is expected to continue its recovery with 25% to 30% growth following three consecutive quarters of sequential orders growth.
Revenue from commercial air framers will be up 20% to 25% and mostly driven by the increased recovery in narrow-body aircraft production, most notably the A320.
Aftermarket revenue growth is expected to improve as aircraft utilization continues to increase.
Finally, pricing is expected to be a net benefit of 3% for defense and 4% for commercial.
I'd like to provide a third quarter update on our previously shared strategic priorities.
These priorities continue to guide what our team works on every day.
We're investing in growth.
We launched eight new products in Q3 and remain on track to deliver 45 new products by the end of 2021.
I'll share two exciting new products on the next slide.
Next, our teams continue to drive price increases in both Industrial and aerospace and defense to help offset growing inflation.
Many of these price increases are permanent and will help drive top and bottom-line growth going forward.
In Industrial, we increased prices or implemented surcharges on many of our product lines in Q2 and Q3.
This drove the incremental price we're showing in Q3 and Q4.
For A&D, we typically match the length of our customer contracts with our supplier contracts, which has helped us mitigate material inflation.
Additionally, we continue to use value-based pricing where appropriate, especially in the aftermarket.
To drive margin expansion, we're making key investments at two of our biggest industrial sites in the U.S. and Germany.
With new modern equipment and processes implemented, we expect to see an improvement in safety, quality and productivity.
We're making really good progress with our 80/20 initiative.
With this structured approach, we've built a meaningful pipeline of growth and simplification opportunities and have already used 80/20 to implement strategic price increases at our U.S. site.
Even more importantly, when talking to the teams, it's apparent that 80/20 is becoming a part of our culture and how we do business.
Before we move to Q&A, I want to highlight two new products we recently launched.
These products are particularly exciting because they show how CIRCOR is accelerating growth by leveraging our technical expertise into new growing markets where we do not currently play.
For the past several years, our team has been looking for opportunities to penetrate the green energy sector by leveraging our sealing technology and competence in designing and manufacturing products for high-pressure gas storage and transport applications.
The first set of products is for applications in the hydrogen market.
Hydrogen Isolation Valves and Modular Dome Regulators are critical components of the control system on hydrogen gas transportation trailers.
Our balanced isolation valve has very low leak rates at extreme temperatures and pressures and the Modular Dome Regulator developed and manufactured in India allows stable pressure control.
We're the first supplier to meet the latest EU transportation regulation on the balance valve and we're able to secure more than $1 million of initial orders so far in 2021.
The second new product I want to share is a switch module with kinetic sensors for landing gear position detectors on commercial aircraft.
Our switch module inside the aircraft wheel is engineered to detect the landing gear position and turn on the electric motor allowing the aircraft a taxi itself of no engine or towing.
This technology not only allows more efficient and safer ground transportation, but also contributes to reducing carbon emissions by burning less fuel.
Both of these new products showcase how we're accelerating growth through new product development and expanding our portfolio into new markets.
 Assistant:

Chosen response:
q3 adjusted earnings per share $0.50.
q3 revenue $191 million.
sees q4 adjusted earnings per share $0.60 to $0.65.
sees fy 2021 organic revenue to decrease by (2)% to (0)%.


Prompt:
Human: Slides for today's call are posted on our website and we invite you to follow along.
Participants are cautioned not to place undue reliance on these statements, which reflect management's opinions only as of today, August 5, 2020.
Information on potential factors and risks that could affect our actual results of operations is included in our SEC filings.
The Company undertakes no obligation to revise or publicly release the results of any revision to the statements made in today's call, other than through filings made concerning this reporting period.
In addition, today's discussion will include references to non-GAAP measures.
Clean Harbors believes that such information provides an additional measurement and consistent historical comparison of its performance.
Our Q2 performance underscores the versatility of our business model and our leadership role and emergency response.
Responding to crisis is an integral part of the job here at Clean Harbors.
It's in our DNA and that ability enabled us to jump into action late in Q1 and into Q2 with a wide-ranging response plan.
It began with setting strict safety protocols and gathering the proper equipment to protect our workforce.
We've been successfully at staying safe, the infection rate among our workforce remains well below the per capita rates of the U.S. and Canada.
Now let's turn to our high level overview for our Q2 results here on Slide 3.
In response to the recessionary environment caused by COVID-19, we implemented a comprehensive series of actions that included implementing a hiring, wage and travel freeze, temporarily closing nearly half our rerefining capacity, transitioning a majority of our non-field based employees to work-from-home, lowering our capital spending, reducing our overall cost structure to align with revenues, launching our COVID-19 emergency response service offering.
On the strength of these actions and improving market conditions, since we spoke with you in late April, we delivered a better than expected performance in Q2.
Revenues came in at $710 million, down 18% from prior year, with the bulk of that decline in our Safety-Kleen segment.
Our adjusted EBITDA was $135.5 million for the quarter, which included a total of $23.4 million from the CARES Act here in the U.S. and the Canadian Emergency Wage Subsidy or CEWS.
These programs enabled us to employ more workers than we would have otherwise been able to, with the pandemic related shutdowns.
Looking at our segment results beginning on Slide 4, Environmental Services revenues declined 12% from a year ago due to the COVID related slowdown across multiple lines of business, partly offset by incineration and decontamination work.
Adjusted EBITDA grew 17% as a result of our cost reduction efforts, a strong performance in our facilities, emergency response revenue and the two government programs which accounted for $13.3 million in this segment.
Emergency response work, whose margins tend to be above the corporate average, totalled $50 million in the quarter.
Our incineration utilization increased to 87% due to our healthy backlog coming into the quarter and steady streams from chemical customers.
Our mix of higher value waste enabled us to drive our average price per pound up 6% from Q2 of last year.
Our landfill volumes were down 24%, due to the deferral of some remediation and waste projects, but our base business remained stable, which drove our average price per ton, up 15% from a year ago.
Overall, a real terrific quarter for our Environmental Services segment.
Given expected investor interest, on Slide 5 we wanted to provide some additional details around our COVID-19 response work.
As of June 30th, we generated $60 million in revenue related to the virus.
As of today, we are now at more than 7,000 responses and this work has opened doors for us to new customer relationships.
Our jobs have varied from as small as -- from as a small as a armored vehicle clean out to as large as a NASCAR track.
We anticipate that demand for our services will eventually subside over time, but we do anticipate over $100 million of corporate work in 2020.
Moving to Slide 6.
Safety-Kleen revenue was down 30% due to a slowdown in both the branch and the SK Oil businesses, due to customer shutdowns.
The reduced demand for our core offerings as well as the drop in base oil demand and lower pricing.
Adjusted EBITDA declined 41% due to the lower revenue, pricing for our SK Oil products and costs associated with the temporary shuttering of our refineries, partly offset by cost reduction efforts and government assistance programs which totaled $8.3 million dollars for this segment in Q2.
Parts washer services were up 11% for the quarter and we collected 43 million gallons of waste oil, about two-thirds of our normal rate.
Given where we were at the end of April, we are pleased to see this segment bounce back over the course of the quarter.
Blended products and direct volumes on a percentage basis were in line with last year, but at a lower overall volume.
Most recently, demand for base oil has recovered some, to the point that we restarted our Kansas and the Bartow rerefineries in July.
The value of our base oil and blended products recovered somewhat over the course of Q2, however, with crude prices holding stable and vehicle miles driven remaining below traditional levels, we are proceeding cautiously before reopening any additional we rerefineries.
Turning to capital allocation on Slide 7.
Given the current environment, our strategy remains to focus on preserving cash to ensure we exit the pandemic in the best possible position.
As we highlighted on our last call, we're carefully controlling our capex spend here in 2020 and expect to be well below last year's level.
In terms of M&A and divestitures, we're not likely to be active on a near-term basis.
That said, we are confident that we will emerge from this downturn in a stronger financial position and operational position than some of our peers, which will allow us to be opportunistic.
In terms of our debt, we repaid half of the $150 million, that we tapped on our revolver in Q2.
And in late July, we repaid the other half, given our healthy cash position and how the company has performed.
Looking ahead to the remainder of 2020, we believe we have positioned ourselves well for the current economic environment.
Within multiple parts of our business, we've seen a measurable recovery from the lows we experienced in April.
Within Environmental Services, our facilities network is still seeing a steady flow of waste volumes.
We have not seen any meaningful decline from most of our large quantity generators, however, individual products, delays due to the virus remain common and we've seen slower production with some chemical customers.
While that may limit our high margin volumes in the coming months, we anticipate areas like our industrial services and others to ramp up in the back half of the year, as maintenance and disposal work can only be deferred for so long.
Within Safety-Kleen, entered Q3 on a positive trajectory with the summer driving seizing increasing demand for our services, but we will still remain below prior year levels.
We are monitoring the new shelter-in-place mandates closely, but to-date, the recent rise in COVID cases has not derailed the recovery in the SK branch business.
For SK Oil, we're raising our production volumes with the restarted plants now online.
We will continue to active manage our CFO rates to reflect the value of the waste oil and the collection services that we're providing.
In summary, our Q2 results demonstrated the resiliency of our business model.
Our crisis management capabilities and our front-line role in COVID decontamination.
Despite the economic uncertainties that remain, the actions that we've taken in responsive to the pandemic and our market leadership, gives us confidence that we can achieve our 2020 targets.
Let me mirror Alan's comments about how effectively our organization responded to the pandemic.
The work of our outstanding team is reflected into results we are sharing with you today.
In these unprecedented times, the Clean Harbors team stood up to the challenges presented by this crisis.
Personally, I couldn't be more proud of our organization.
Turning to Slide 9 and in our income statement, we delivered strong second quarter results in light of the pandemic.
Revenue declined 18% and we aggressively managed the cost structure of the business in response to the slowdown.
Those efforts, combined with the assistance we received from the two government programs, resulted in a 220 basis point improvement in gross margin.
As Alan highlighted, our EBITDA declined less than $15 million from a year ago, despite revenues being $159 million lower.
Our adjusted EBITDA margin for the quarter was 19.1%, which speaks to how effectively we reduced costs, managed overtime, closed rerefineries and locations and furloughed workers as needed.
Our SG&A performance also demonstrates our comprehensive cost reduction efforts.
Despite the fact that employee benefits including 401(k), are up significantly from a year ago, we lowered our SG&A expense by $20.1 million.
Of that total, $9.1 million was related to the impact of CARES and CEWS.
We flexed down our cost structure rapidly in the quarter, drastically cutting spending -- drastically cutting our spend in multiple areas such as travel and marketing.
We also benefited from meaningfully lower healthcare costs in the quarter, which helped offset some severance and bad debt expense.
As expected, depreciation and amortization in Q2 was down slightly to $72.5 million with only one small bolt-on acquisition in the trailing 12 months, we should continue to see this trend going forward.
For 2020, we expect depreciation and amortization in the range of $285 million to $295 million, which is slightly below last year.
Income from operations to a $60.2 million, down 18%, reflecting the lower revenue and gross profit.
EPS was $0.52 in Q2 versus $0.65 a year ago.
We emerged from the second quarter with our balance sheet in terrific shape.
Our cash and short-term marketable securities exceeds $500 million at June 30th.
That total includes $75 million of funds still drawn on our revolver that Alan referenced.
The entire $150 million, which we bought out of the abundance of caution, when the pandemic begin has now been fully repaid.
Given the COVID environment, our collection team keeps cash coming in the door from customers and our payables balance has shrunk with the lower revenue and associated costs.
After the full pay down of our revolver, our current and long-term debt obligations today sit at $1.56 billion.
Our weighted average cost of debt remains at an attractive 4%, with a healthy blend of fixed and variable debt.
We've actually lowered our leverage in Q2 from where it was at in Q1.
Leverage on a net debt basis now sits at 2.1 times for the trailing 12 months ended June 30th, which puts us in an excellent position financially.
Our net debt to EBITDA ratio is down over 15% from a year ago.
Turning to cash flows in Slide 11.
Cash from operations in Q2 was up 29% to $139.8 million.
Capex, net of disposals, was down 25% to $42 million, reflecting our COVID response plan to preserve capital.
The result was an adjusted free cash flow of $98.1 million, which is well ahead of prior year.
Given how our cash flow has trended, we are slightly raising our expectation for capex.
For the year, we're now targeting capex, net of disposals and the purchase of our headquarters in the range of $155 million to $175 million.
During the quarter, as planned, we did not repurchase any shares of stock and year-to-date repurchases stand at $17.3 million.
We will be cautious in our approach to any meaningful level of buybacks, until the markets are well into their recovery stage.
Moving to guidance on Slide 12, given how well our business has performed throughout the pandemic and based on current market expectations -- conditions, we are reestablishing 2020 guidance.
We now expect 2020 adjusted EBITDA in the range of $470 million to $500 million.
This is based on the assumption of a slight slowdown in our Environmental Services profitability from Q2 levels while the Safety-Kleen segment improved sequentially.
This guidance assumes that there will be continued localized outbreaks of the virus, but does not assume any kind of nationwide shelter-in-place like we saw in early Q2.
Looking at our guidance range from a quarterly perspective, we expect our adjusted EBITDA in the second half of the year to be evenly split between Q3 and Q4.
Here's how our full-year 2020 guidance translates from a segment perspective.
In Environmental Services, we expect adjusted EBITDA to be just slightly above 2019's level of $446 million.
Growth and profitability within incineration, contributions from the expected $100 million in decontamination work and comprehensive cost reduction initiatives will offset declines in profitability within industrial services, landfills, remediations, waste projects and other lines of business.
For Safety-Kleen, we anticipate adjusted EBITDA to decline approximately 20% from 2019's $282 million.
We expect the branch business to remain below pre-COVID levels in the back half as vehicle miles driven are still less than historical norms but well above Q2 levels.
At the same time, we expect SK Oil to rebound from a challenging second quarter as the base oil market improves from a difficult, April-May period and we continue to aggressively manage the front-end of our rerefining spend -- spread.
In our corporate segment, we expect negative adjusted EBITDA to be essentially flat from 2019's $188 million, due to increases in 401(k) severance and bad debt, largely offset by lower incentive compensation and cost savings.
Based on our current guidance and working capital assumptions, we expect 2020 adjusted free cash flow in the range of $200 million to $230 million.
Free cash flow is always hard to accurately predict due to the influence of working capital demands.
However, with our ability to defer all payroll tax payments from April to year-end, we should total $360 million[Phonetic].
It is likely that we will deliver free cash flow to shareholders, certainly north of $200 million.
In summary, while Q2 was not without its challenges, it proved to be a strong operational quarter for the business.
As Alan highlighted, we are a crisis response company at our core and we can thrive in these types of dynamic environments.
Looking ahead, we will pursue additional cost control initiatives for market conditions remain limited.
That said, we see the opportunity for some of our stalled lines of business to recover.
Some of our project and turnaround work, may ultimately push out until 2021, but we see enough opportunity in the market today to support our facilities network in the back half of the year.
Within Safety-Kleen, we expect a steady uptick in demand for our core branch services, while with -- meanwhile within SK Oil, we will continue to ramp up base and blended production.
And lastly, we remain focused on providing COVID decontamination services, as the race toward a vaccine continues.
 Assistant:

Chosen response:
compname reports q2 adj earnings per share of $0.52.
q2 adjusted earnings per share $0.52.
q2 revenue $710 million versus refinitiv ibes estimate of $698.9 million.
sees fy 2020 revenue about $100 million.
reestablishes 2020 adjusted ebitda and adjusted free cash flow guidance.
field services is on track for a strong 2020, with anticipated covid-related revenue of approximately $100 million for full year.