We come out with the fourth quarter, and we actually exceed our target of getting into FY ’19 run rate profitability. So, that’s a big, that’s a big checkmarks. During that fourth quarter so, about three months ago, we said that this first quarter was going to be slightly down to flat and it was going to, you know bust through the normal seasonality where you see the first quarter being sequentially down. And as you all know, we had a lot of people doubt us and say that you couldn’t do that. Well, we actually exceeded that number. And now we come in and say that the second quarter is going to be another impressive quarter, just like Q1 even though we’ll continue to do our planned maintenance even though its got two major holidays in there, we’re still going to operate at that level.
And then, what you’re getting to the new piece of information that we came out with today. We said that even after those two quarters, put those together and we’re going to do another 28% to 35% on top of that, it’s, it’s very impressive growth and that’s why we took the time Josh to talk to you about that some of these work centers are still not running at the rates that we know they can run at. That’s how we have line of sight to that second half. Again, we said, it wasn’t going to be back-end loaded, but we never said that we were going to get 50% in year one or four. And I think your question is that, that’s an awfully strong comment, we’ve heard — now does that mean that years two, three and four could be even more and is there some conservatism put in there.
You might have a point, maybe there probably, there probably is a little conservatism in there and we have the ability to even push that higher.
Josh Sullivan: That’s right. Good. No. Thank you. Thank you for that. And just one on the productivity side of that, you think Carpenter is doing anything different on the labor side and those works centers or do you think it’s just a natural factor of timing experienced that they’re getting better?
Tony Thene: I don’t know if we do anything differently. I mean we have to be very, I’ll use the word cautious right, because we are producing products that can never fail. A very high quality standards. So, we just don’t take chances, if an operator is not ready, they’re not ready. And we don’t push them to put them in a situation where we could sacrifice the quality of our product that’s just, that’s just unacceptable. I’ll give you a couple of numbers that are interesting. If you think about a new employee that’s been with us two years or less. And if you look at our SAO operation. Our plants range anywhere from 30% to 60% of our shop floor workers have been there two years or less. And our Dynamet facility, we have one facility that’s 50% are new in the last two years.
The other is almost 30%. That is a big influx of new employees highly qualified. I mean, the level of employee that we’re, that we’re attracting is very high, but it’s a complex, very sophisticated equipment that we’re going to make sure that they can operate it, number one, safely and always within the quality standards that we hold ourselves, doing that the industry requires. So, you’ve seen some nice improvement over the last couple of quarters. The good news is there’s still, there’s still more improvement to come. Hopefully that answers your question.
Josh Sullivan: Yes. Yes. Great, thank you. Congrats on the quarter. And thank you for the time.
Tony Thene: Thank you.
Operator: [Operator Instructions] The next question comes from Chris Olin with Northcoast Research. Please go ahead.
Chris Olin: Hi, good morning and congrats on the quarter, guys.
Tony Thene: Hi, Chris. Good morning.
Chris Olin: I was just wondering on the near term. Has there been any type of negative volume impact associated with the drop in the commodity nickel market? Just wondering, if some customers will delay orders. Are you seeing any of that because of the surcharges visibility or are we at a point where like the long-term behavior has kind of changed when your customers are worried about supply?
Tony Thene: I think, the ladder right and I think, I know we’re not having any customers delay orders because of where the nickel prices or where they think it’s going to go. I mean we have, we have all of our customers, trying to get into the order book earlier. Right? As you know we’ve closed the order book, a couple times. So, that comment that you just made in this type of environment does not, it’s never made, it’s never, it’s never discussed, that’s not a factor.
Chris Olin: Okay. I may have missed it, I apologize if I had, but I was just thinking about the pricing dynamics and your comments about the increases. I was just wondering if there are contract renewals on the horizon, yet? I can’t recall from the last quarter.
Tony Thene: Yes, there are. I mean over the last couple of years, obviously, by our results, you can tell that we’ve had contracts that have renewed and now you’re seeing that, that higher price come through and there are a couple more that are in the works as well. So, it seems like at any point in time, we have one or two that we’re, that we’re working through. And there’s a couple significant ones that we’re working through, as we speak.
Chris Olin: Is it safe to assume something like, you know, 20%, 30% renews price each year for the model?
Tony Thene: Let me make sure I understand your question. Are you saying that 20% or 30% of contracts renew every year?
Chris Olin: Yes. Will you renew at a higher price. So, I could put that in my–
