Q4 2021 Atkore Inc Earnings Call
Speaker 3: A big part of this is supporting the global drive to increase electrification. So let's talk about how ACOR fits.
Speaker 3: into this trend. So please turn to slide 12.
Speaker 3: In the recent years, there has been a significant shift toward the electrification of buildings and vehicles as we look to reduce greenhouse gas emissions. For example, according to a study from Princeton University and cited in the Wall Street Journal earlier this year, electrifying nearly all transport and buildings could contribute to doubling the amount of electricity used in the U.S. by 2050.
Speaker 3: As we expect these efforts to accelerate towards higher levels of electrification, we believe this will create further demand for new building construction and retrofitting, as well as the infrastructure needed to support this transition with projected growth in areas such as electrical vehicle charging stations. And there is regulatory pressure behind this as the world continues to take action to combat climate change.
Speaker 3: whether it's specific bills in the U.S. Congress or the recent U.N. Climate Change Conference, there are various initiatives around energy efficiency and electrification to reduce greenhouse gas emissions.
Speaker 3: This also extends to investments in alternative energy sources, like solar, where the buildout of infrastructure is continuing to expand.
Speaker 3: Further, as we've seen and experienced over the last year with the rise in video conferencing, telemedicine, and e-commerce, the world is becoming more connected.
Speaker 3: This continued increase in digital activities require more digital infrastructure and physical warehouses. Our conduits, fittings, metal framing, cable tray, and arbor cable products are quite literally what will connect these tailwinds to reality. We're excited not only to help our customers deliver on the sustainability targets, but to support the broader push for a more sustainable future for everyone.
Our financial performance of the company.
Such statements involve risks and uncertainties such that actual results may differ materially.
Speaker 3: I'll turn it over to David to provide more detail about electrification trends in our markets. David? Thanks, Bill.
Please refer to our SEC filings and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or.
Speaker 2: With the exception of our water and some security-related products, which have their own strong growth megatrends, our end markets are supported by the megatrends of electrification and digitization.
Forward looking statements.
In addition, any reference in our discussion today to EBITDA means adjusted EBITDA with that I'll turn it over to bill.
Speaker 2: In terms of non-residential new building construction, we're seeing particularly strong trends for data centers, warehouses, and healthcare. Data centers are also a key driver for our international business.
Thanks, John and good morning, everyone.
On slide three I'm pleased to report that Accor again delivered outstanding performance and record.
It's all in the fourth quarter and for the full fiscal year as we wrap up a truly amazing year. We also wanted to take some time in our discussion today to share some of our thoughts on the future looking forward into fiscal 2022, we are pleased to increase our expectations for adjusted EBITDA to a range.
Speaker 2: In residential, we have seen an increase in our exposure to the market primarily through our growing PVC conduit business, which is used outside of the home, but very important in the development of new home subdivisions.
$650 to $700 million. This is up considerably from the perspective, we shared back in August and we are confident in our ability to continue to execute despite the level of uncertainty in the macro economic environment as we look beyond 2021 were commit.
Speaker 2: We're also expecting solid demand growth from the renewable end markets and warehouses from our OEM customers.
Speaker 2: All this is to say that sales across the majority of our end markets and highly supported by these megatrends that will benefit Accor over long term.
<unk>, two or three kind of sub growth and believe we have the right strategy and capital deployment model to drive both near term and long term value creation, David will cover this in more detail, but we expect to deploy over $1 billion in cash over the next two to three years included within that amount.
Speaker 2: Moving to slide 14, I'd like to turn to our capital deployment strategy.
Speaker 2: Our objective is to leverage our strong position entering FY 2022 to make both organic and inorganic investments so we can further capitalize on the trends in the marketplace we've been discussing and drive enhanced growth across our business.
As a new $400 million share repurchase authorization that our board of directors approved this week.
Speaker 2: First, we're planning to make investments in digital tools and capabilities to improve our manufacturing processes and drive increased efficiency.
We'd also like to share some insights into how we are driving our ESG commitments along with highlighting the significant progress we made over the past few years beyond our own ESG efforts I'll also speak to how high court supports the global drive to increase electrification.
Speaker 2: We will also invest in new equipment to support the growing solar market.
Speaker 2: Second, we will continue to strategically engage our M&A pipeline to strengthen and expand our portfolio in current pie categories and those in near-adjacent markets.
As I hope you can tell we are very pleased with our performance this year, but we're even more excited about building a longtime franchise for the future. We are thankful for the hard work and dedication from our 4000 employees and we want to recognize each of them for their amazing contributions to this year and their focus.
Speaker 2: Third, we remain committed to returning capital to shareholders. As Bill mentioned, our board has recently approved a new two-year, $400 million buyback authorization program.
Speaker 2: This will give us ample capacity and flexibility to use funds directly for stock repurchases that are not allocated to either organic or inorganic growth investments.
On always surveying our customers as best we can with that I'll turn the call over to David to discuss the quarter.
Good morning, everyone turning to slide four.
Speaker 2: While we execute this strategy, we are still going to be disciplined in our approach and are committed to maintaining our gross debt to normalized adjusted EBITDA ratio at roughly two times or below.
Bill mentioned, we had record results in Q4, and we were up significantly compared to the prior year as well as the fourth quarter of 2019.
Speaker 2: Let's turn to slide 15 and take a more detailed look at our M&A criteria.
During the quarter, a few key highlights to mention.
The utility patent for our <unk> product.
Speaker 2: Accor has a proven ability to acquire, integrate, and successfully manage our portfolio. This starts with the way we approach identifying whether a company fits with Accor.
Repurchased $25 million and start to close out our previous share repurchase authorization and we contributed $18 million to bring our pension plans of over 95% funding status. This was amazing in to fiscal 2021.
Speaker 2: We think there are opportunities in the market to expand our M&A pipeline to consider companies of varying sizes as part of this strategy over the coming years, and we will continue to execute against it to strengthen our portfolio.
Moving to our consolidated results on slide five.
Net sales increased 93% year over year to $924 million.
Speaker 2: With that, I'll pass it back to Bill to discuss our commitment to ESG, Bill.
Adjusted EBITDA increased to $293 million.
Speaker 3: Thanks, David. Turning to slide 16, at Accor, sustainability is central to the strength, safety, and longevity of our business and is built into everything that we do. For reference, in FY21, we had 14 more sites commit to the Energy Star Challenge for industry, and we've made significant investments in order to help us further reduce our consumption of other natural resources moving forward.
Which drove our adjusted EBITDA margin to 32% in the quarter, both up significantly versus the prior year.
Our adjusted EPS increased to $4 39.
Turning to slide six and our consolidated bridges.
Net sales increased by $446 million due.
Due to higher selling prices and the contributions from several of our recent acquisitions throughout.
Speaker 3: As the impact of climate change and other issues with natural resources continue to escalate, we know that ACOR and our product portfolio have an important role to play.
They are outstanding operational and commercial execution.
<unk> grew adjusted EBITDA by $195 million.
The profit growth was driven by our ability to overcome the impact from higher input costs supply chain disruptions and very tight labor market.
Speaker 3: As integral to what we do is who we are, and at Accor, we believe and know that diversity, equity, and inclusion, DEI, is vital to our colleagues' and our businesses' well-being. Over the past year, we've launched unconscious bias training and introduced DEI topics into our onboarding and immersion program, reflecting our ambition across all parts of our operation.
Labor continues to be our largest constraint that our entire team from human resources to marketing to operations is working together to develop creative solutions that enable us to continue to satisfy our customers as best we can.
Shifting to our segment results on slide seven.
Speaker 3: To that end, Accor prides itself on diversity at all levels of the organization, including the company's board of directors. As we look ahead, we remain committed to improving sustainability in our operations and continue to support our customers in reaching their own sustainability goals, which we believe will benefit not only our people, but the planet and society as a whole.
The electrical segment led our profit and margin improvement year over year with adjusted EBITDA of $192 million and.
And adjusted EBITDA margins above 40.
We experienced volume growth, both domestically and internationally, which increased our sales by $11 million in the quarter.
And our safety and infrastructure segment net sales increased by 78% from the prior year and adjusted EBITDA increased 70% to $29 million.
Speaker 3: Now let me pivot to slide 17 and our expectations for fiscal 2022. I touched on our outlook for the full year earlier or in the first few weeks of the start of the quarter. However, we have seen some reductions in labor constraints.
And now moving to our consolidated cash flow bridge on slide eight.
We generated $573 million in cash flow from operating activities in 2021, and we invested $64 million in capital expenditures, resulting in free cash flow of $508 million.
In the fourth quarter, we also repaid $27 million of our new term loan in order to satisfy our future required amortization payments.
Speaker 3: Looking forward to the full year, though, despite the uncertainty driven by the pandemic, supply chain, and labor availability, we expect to generate modest volume gains for the full year, but will be dependent on several factors within the value chain. In terms of profitability for the year, we believe the estimate of $650 to $700 million in adjusted EBITDA is reasonable at this time.
With all the work that we've done this year and over the past few years to strengthen our balance sheet. We are very happy with the position we're in today.
We look forward to using our balance sheet as a lever to help us to continue to grow.
With that I'll turn it back to bill.
Thanks, David turning to slide nine <unk> delivered record financial results in 2021, with approximately $2 $9 billion in sales and $898 million of adjusted EBITDA beyond the financials. One example that we are proud to highlight is that we just received a great play.
Speaker 3: However, if Q1 is stronger than expected and some of the favorable pricing trends that we are experiencing continue into the year, we could see earnings level in FY22 that are similar to FY21.
As to work certification in 2021.
Speaker 3: As always, we will be modifying our view and keeping you updated as the year unfolds.
We are privileged to have an incredibly talented team across our business and ensuring that accor is a place where they can be successful is an important focus and core to how we operate.
Speaker 3: To wrap up on slide 18, I just want to reiterate that we're firm believers in what we do here at Accor and see the inherent value in our offering.
It is their commitment and dedication that enabled us to deliver on our objectives for the year complete three acquisitions that strengthened our portfolio and received 19 patents for 11, new products that provide innovative solutions for our customers.
Speaker 3: Driven by the Accor business system, we will continue to be disciplined in operations and focused on strengthening our leadership position in our market.
Speaker 3: Looking ahead, we see a clear path to advance our business forward into the future, as guided by our three conduits of growth, new product innovation, focused product categories, and M&A.
One of these products is <unk>, which received the ECM product of the year Award and <unk> continues to be well received by customers and contractors, reducing labor costs and the time spent on the job and another award. We received was the energy Star Achiever status for our Phoenix site, which means the site.
Speaker 3: These multiple levers, supported by a strong financial foundation, will enable us to drive sustainable growth across the organization through both organic and inorganic investment.
Speaker 3: Before we turn it over to the operator for Q&A, I want to thank our incredibly talented team for all the work that we've done in 2021, and let everyone know how excited I am for 2022. With that, we'll turn it over to the operator to open up the line for questions.
Chi the 10% or greater improvement in energy efficiency within five years of joining the challenge sustainability, both in our operations and our products also remains a core focus and we're going to talk about that later in the call. While we are pleased with our performance in 2021, where it.
Speaker 4: At this time, I would like to remind everyone, in order to ask questions, press star, then the number 1 on your telephone.
Excited for what's to come and look forward to continue to execute our growth plans in 2022, turning to our full year 2020 to outlook on slide 10 for 2022, we expect adjusted EBITDA to be in the range of $650 to $700 million adjusted EPS from <unk>.
Speaker 4: We'll pause for just a moment to compile the Q&A foster.
Speaker 4: On Walsh, red credit screen, your line is open.
$9 20 to.
The $10 and net sales to be up in the mid single digits compared to 2021.
Speaker 5: Hi, good morning, everyone, and great quarter. Thanks, John .
As we look ahead to what we expect will be more normalized operating environment beyond fiscal 2022, we believe adjusted EBITDA level of approximately $600 million is right baseline estimate for the business and within that estimate we expect that M&A will be a key contributor for our growth going forward.
Speaker 5: I wanted to try to come at the pricing question as we look forward. So my back of the envelope math is something like maybe a high single digit percent is assumed for price in 2022, but if I just think about where we are, even if the quality of the product.
But now let's dive deeper into our growth strategy. So please turn to slide 11.
As we continue to position <unk> for long term success, we see three conduits to drive future growth, new product innovation focused product categories and M&A.
Speaker 5: uh... or maybe some of the investments that you're making the drive productivity so you're able to capture a higher
Starting with new product innovation. We believe this is key to our ability to remain on the leading edge of electrical and safety and infrastructure markets. We will continue to invest in the development of new products that deliver innovative solutions to our customers next is our focused product categories. We believe that there are.
Speaker 5: price-cost spread as we go forward, just would really love to get kind of your thoughts around the sustainability of the ability of price.
Speaker 3: Yes, great question, John . And kind of beginning to your suppositions, I would say yes to all the above. We're in a higher price environment with supply demand constraints, and we are doing self-help with productivity automation, new products that, you know, are more value-add, and we have a better bundle in the one order, one delivery, one invoice. So lots of things going into that, and that's why if you just look in the rear view moment for a moment that we've driven from 327.
<unk> opportunities frac or to gain share and become a leader in key adjacent product categories by increasing cross selling opportunities across our product portfolio.
For example, customers continue to come back or for a meeting in steel and PVC conduit products. Both our strategy of one order one delivery one invoice we have the ability to bundle several products together and provide value as a one stop shop for our customers.
Speaker 3: $7 million, a record profit two years ago to $898, and the reason why we have raised our forecast that we gave last quarter to say 2022 would have been $500 to $550, now saying $650 to $700, so a pretty big increase.
Last but not least we remain focused on strategically pursuing M&A to that end, while <unk> has historically conducted smaller bolt on acquisitions. We believe there will be opportunities in the coming years for <unk> to strengthen our portfolio through acquisitions of varying size.
Speaker 3: and then it's still a dynamic environment and that's why we also want to be clear while we're pretty comfortable with delivering 650 to 700 depends on how the next several months play out there could be a pathway that we you know obviously internally we're
All of this is underpinned by what we consider the foundation of our strategy, making ongoing investments across our business to improve our market positioning and operational capabilities in order to enhance our customers' experience with accor.
Speaker 3: striving to repeat last year type of numbers, but that's way too soon. But then, John , I would also finally triangulate.
Now at the beginning of the call I mentioned that I was going to talk about sustainability at our core we're firm believers in the benefit.
Speaker 3: in our prepared remarks, that we said, hey, you know, eventually some of this price will go back. And therefore, as we drive productivity and new products in M&A, if I was an investor, I'd be thinking longer term, you know, as a normalized EBITDA around 600 million. So hopefully I use numbers and how we're thinking through it.
Operating sustainably and enabling our customers to do the same.
A big part of this is supporting the global drive to increase electrification.
So, let's talk about how <unk> fits squarely.
Andrew This trend so please turn to slide 12.
Speaker 5: you know that that's very helpful and then uh... you know obviously this this one billion of capital uh... to deploy that you talked about uh... you did mention that there could be some larger deals in the pipeline just
In the recent years, there has been a significant shift towards electrification of buildings and vehicles as we look to reduce greenhouse gas emissions. For example, according to a study from Princeton University and stated in the Wall Street Journal earlier this year electrifying nearly all transport and buildings.
Speaker 3: Can you give us any more color around actionability, size, just what that looks like? Obviously, it's been a creative lever for Accor. Yeah, it's really a creative lever, and we're doubling down. The only thing you may have overread, I probably did not want to allude or we did not want to allude whether or not there's specific deals in the pipeline. We always have a good, robust, literally over 100 deals. As much as, you know, if you reflect back three, four years ago, if we had a debt, you know, EBITDA ratio above three, there's only, as we're trying to work our debt down, only certain sized deals we can do. We're not looking for a whale or a large one, but when all of a sudden we're looking to deploy a billion dollars over the next couple of years, the freedom to go over 100 million, I'm just picking a number, is absolutely there. So that's what we want to allude to from there, whether it's a...
Could contribute to doubling the amount of electricity use in the U S. By 2050 as we expect these efforts to accelerate towards higher levels of electrification. We believe this will create further demand for new building construction and retrofitting as well as the infrastructure needed to support this transition with projected.
Both in areas such as electrical vehicle charging stations and there is regulatory pressure behind us as the world continues to take action to combat climate change, whether it's specific builds in the U S Congress or the recent U N climate change conference there are various initiatives around energy efficiency.
Speaker 3: $10 million deal, you know, enterprise value or $100 or $300 million if it's the right deal, that's strategic and synergistic and you're still debt responsible and we have the management bandwidth. And I was, you know, we're moving forward because to your point, it's exceptionally accretive for our shareholders or it has been. And it's really good for our customers. We, you know, deliver value to our customers. I firmly believe it's how we deliver value to our shareholders.
Terrific patient to reduce greenhouse gas emissions. This also extends to investments in alternative energy sources like solar where the build out of infrastructures continuing to expand further.
Further as we have seen and experienced over the last year with horizon video conferencing Tele medicine in E Commerce, the world is becoming more connected.
This continued increase in digital activities require more digital infrastructure and physical warehouses, our conduit fittings metal framing cable tray and Arbroath cable product are quite literally what will connect these tailwind to reality, we're excited not only to help our customers deliver on the sustainability targets.
Speaker 6: Great. I'll pass the baton. I appreciate you taking the questions. Yep. Thank you, John .
Speaker 4: Your next question comes from Chris Moore with CJS Securities. Your line is open.
Speaker 2: Hey, good morning, guys. Thanks for taking my questions. Good morning. Yeah, I just wanted to make, I wasn't sure if I heard it correctly. So in terms of volume growth for fiscal 22, it's mid-single digits is what you're looking for. Did I hear that correctly? Yes, that is correct. And Q1, like we said, is probably going to be a little bit lower than last year. A lot of that has to do with more of the labor availability in the construction market and some of the projects just taking longer than they typically would, Chris.
But to support their broader push for a more sustainable future for everyone.
I'll turn it over to David to provide more detail about electrification trends in our markets David.
Thanks, Bill turning to slide 13.
With the exception of our water and some security related products, which have their own strong growth Megatrends are end markets are supported by the megatrends of electrification and Digitization.
In terms of nonresidential new building construction.
Speaker 3: Yeah, if I can follow up, probably self-evident, Chris, but we believe, back to the mid-single digits, there's enough activity out there, Dodge is strong, architectural billing index is strong, the whole electrification digitization we want to walk through, we think it's mid-single digits, but right now, at the end contractor level, if they don't get other products or they don't get other labor in, just the demand cycle has elongated, but that may be good news for continued growth longer this way, so no issue and we're performing well.
Particularly strong trends for data centers warehouses and healthcare.
Lenders are also a key driver for our international business.
As bill alluded to in terms of the push to retrofit buildings. The repair remodel segment is benefiting from renovations of key through 12 schools in certain regions of the U S.
In residential we have seen an increase in our exposure to the market primarily through our growing PVC conduit business, which is used outside of the home, but very important in the development of new homes subdivisions.
Speaker 7: Got it. You referenced supply chain, so all the companies that we work with have gotten hurt badly recently. Can you maybe get a little more specific in terms of some of the things you're seeing on the supply chain that could cause challenge?
Also expecting solid demand growth from the renewable end markets and warehouses from our OEM customers.
All of this is to say that sales across the majority of our end markets and highly supported by these mega trends that will benefit <unk> over long term.
Speaker 3: Yeah. Well, for us, I'm not concerned with us. I mean, not that I want to overplay that. Something could always happen. But for today, almost all of our materials, they're longer lead times. So, therefore, we have to be more precise in what's called a SCIO process of forecasting and what inventory and when it's delivered and more flexible and make sure we have the labor. But we're performing well in almost all of those categories. Yes, we could use more employees like everybody else, but we're not the constraint, nor do I see ourselves in the future being a constraint. So, Chris, it's more, as I kind of mentioned with David's comment earlier, if you're just at a job site and do you have the products or a lot of products is, I think everybody knows, not ACOR, but come in for overseas. So, I think anybody realizes the issues with ports and getting products in. So, at the end of the day, even if our products are there and they don't have some other product, the job may get slowed down. And that's what...
Moving to slide 14, I'd like to turn to our capital deployment strategy.
Our objective is to leverage our strong position entering FY 2022 to make both organic and inorganic investments. So we can further capitalize on the trends in the marketplace, we've been discussing and drive enhanced growth across our businesses.
First we're planning to make investments in digital tools and capabilities to improve our manufacturing processes and drive increased efficiencies.
We will also invest in new equipment to support the growing solar market.
Second we will continue to strategically engage our M&A pipeline to strengthen and expand our portfolio in current product categories and those are near adjacent markets.
Third we remain committed to returning capital to shareholders as Bill mentioned, our board has recently approved a new two year $400 million buyback authorization program.
Speaker 3: all society, I think, is working through right now. But again, long-term trends, this is...
This will give us ample capacity and flexibility to use funds directly for stock repurchases.
Speaker 3: I would just say this is very positive on ABI, Dodge, if someone was to look at Dodge forecast, even by category for starts for next year, almost every category is up, you know, obviously some stronger than others. So.
Not allocated to either organic or inorganic growth investments.
While we execute this strategy, we are still going to be disciplined in our approach and are committed to maintaining our gross debt to normalized adjusted EBITDA ratio of roughly two times or below.
Speaker 2: We're optimistic going into the year. And, Chris, just one other comment is, you know, in general, we're not as labor-intensive as other companies. So, you know, when you look at our revenues, say around $3 billion or what have you, and you have 4,000 employees or less, I mean, we're fairly automated as it is, and our supply chain is domestic for the domestic market. So it's in region for the region. So it's really not as much of an impact directly to us. It's a secondary impact on, like Bill said, the construction market.
Let's turn to slide 15, and take a more detailed look at our M&A criteria.
<unk> has a proven ability to acquire integrate and successfully manage our portfolio. This starts with the way we approach identifying whether a company fits with our core.
We think there are opportunities in March to expand our M&A pipeline to consider companies of varying sizes as part of the strategy over the coming years, and we will continue to execute against it to strengthen our portfolio.
Speaker 7: Got it. Very, very helpful. I'll jump back in line. I appreciate it, guys. Cool. No, thank you, Chris. Thank you.
With that I'll pass it back to bill to discuss our commitment to ESG Phil.
Speaker 4: Your next question comes from Andy Kaplowitz with Seedy Group. Your line's open.
Thanks, David turning to slide 16 at our core sustainability is central to the strength safety and longevity of our business and is built into everything that we do.
Speaker 8: one and for the year it looks like you're saying that you'll normalize it even about close to 150 million per quarter after q1 and then stay that way which seems like
For reference in FY 'twenty, one we had 14 more sites commit to the energy Star Challenge for industry, and we've made significant investments in order to help us further reduce our consumption of other natural resources moving forward.
Speaker 8: the assumption behind the 600 million normalized EBITDA. So as we sit here today, is there anything that you've seen that tells you that the business will normalize quickly after Q1? Or could it be more of a gradual step down? And then with the understanding that 150 is way higher than you recorded pre-pandemic, it seems like.
As the impacts of climate change and other issues with natural resources continue to escalate, we know that <unk> and our product portfolio have an important role to play.
Speaker 8: you're suing large and electrical back in that sort of normalized.
As integral to what we do is who we are and in <unk>, We believe and know that diversity equity and inclusion dei is vital to our colleagues and our business as well being over the past year, we've launched unconscious bias training and introduce dei topics and to our.
Speaker 8: in the high 20% range eventually. Does that assume that basically you give most of the pricing gains back as inflation comes off? And what's the probability that some of the gains could be more sticky?
Speaker 7: Yeah, so, Indy, I'll start. David can jump in or help with stuff, but a couple of things. Internally...
Speaker 7: Our job, this is not a rocket scientist statement here, but our job is to keep the profits up, the price sticking as long as possible. Therefore, again, if anyone grounded themselves over the last five years before the pandemic, we were growing EBITDA margins, or excuse me, EBITDA at a compounded growth rate above 10%, and we've had a record of 327. Now we're saying 600 million as a number in the future, which is a whole step function. I mean, 2x.
Onboarding and immersion program, reflecting our ambition across all parts of our operations.
To that end Aqua prides itself on diversity at all levels of the organization, including the company's board of directors. As we look ahead, we remain committed to improving sustainability and our operations and continue to support our customers and reaching their own sustainability goals, which we believe will.
Speaker 3: To get that, we expect long-term to maintain some of this margin because of the value.
But not only our people, but the planet and society as a whole.
Now, let me pivot to slide 17, and our expectations for fiscal 2022, I touch on our outlook for the full year earlier or in the first few weeks of the start of the quarter.
Speaker 3: Um, and delivery, you know, new products, M and a. So a lot of things going into that 600 now short term. Um, we're hoping it's just you look and go. If it's still a step function from 300 million to 600 million this year.
However.
Shenzhen labor constraints internally.
And across the value chain limit some volumes in the quarter.
Speaker 3: $650 to $700 million and potentially a path to a higher number, you know, we're internally striving to get, can we repeat last year, that would be great because that would mean or could mean that even the following year, which we're not giving guidance on, could be higher than $600 million to your question, Andy. So we want to keep it up.
Therefore, we expect volume to decline in Q1 by mid to maybe high single digits versus a year prior.
Looking forward to the full year, though despite the uncertainty driven by the pandemic supply chain and labor availability, we expect to generate modest volume gains for the full year, but it will be dependent on several factors within the value chain in terms of profitability for the year, we believe the estimate of 650.
Speaker 7: and keep as much value as long as possible but we also want to be as transparent and ground our investors that some of it potentially go back but even again 300 million to 600 we're going to keep some of it we think long term just like we've always gotten price over cost as we've added more value in the previous years. So hopefully I've weaved how we're thinking through in different numbers for this year previous years and going into the future.
To $700 million and adjusted EBITDA is reasonable at this time.
However, if Q1 is stronger than expected and some of the favorable pricing trends that we are experiencing continued into the year, we could see earnings level in FY 'twenty two that are similar to FY 'twenty one.
Speaker 8: Yeah, Bill, that's helpful. And then in the presentation, you mentioned in the breakdown of the 21 sales, I think you talked about sort of weaker market trends in retail and hotel. I think you started to see those markets pick up at this point. But when you're thinking about the mid-single-digit growth guide for the year in 22, are you assuming general recovery in all of your markets or data centers and warehouses still going faster than the rest of your markets? And then I assume you're not assuming any health in the infrastructure, Bill, yet in 22.
As always we will be modifying our view and keeping you updated as the year unfolds.
Wrapping up on slide 18, I, just want to reiterate that we're firm believers in what we do here at <unk> and see the inherent value in our offerings driven by the <unk> business system. We will continue to be disciplined in operations and focused on strengthening our leadership position in our markets.
Looking ahead, we see a clear path to advance our business forward into the future as guided by our three cantuta growth new product innovation focused product categories and M&A.
Speaker 3: Your, if I, succinct answer is absolutely yes to everything. I could repeat your answer back as a statement, but yes, Andy.
Speaker 8: Alright, easy enough. And then just on inventory, could you give us more color into where you think inventory is in the channel? For instance, last quarter I think you said PVC conduit lead times were in the 48-week range.
These multiple levers supported by a strong financial foundation will enable us to drive sustainable growth across the organization through both organic and inorganic investments.
Speaker 3: timeframe instead of more usual two or three weeks? Where are they now? And then have you seen any evidence that your distributors are overordering or thinking they need to get in line given the strong demand that's out there? Yeah, so I think inventories are probably similar to where they were before, maybe a little bit better. So giving an example to go if it was, and again it's hard to estimate because every distributor is trying to do different things, but if it typically was
Before we turn it over to the operator for Q&A I want to thank our incredibly talented team for all the work that we've done in 2021, and let everyone know how excited I am for 2022 with that we'll turn it over to the operator to open up the line for questions.
At this time I would like to remind everyone in order to ask question Press Star then the number one on your telephone.
Speaker 3: you had to order and have a lead time of a week and it went out to six to eight weeks now maybe four to six so that's where it is getting slightly back to normal but that's why again we're holding on to price because it's far from normal and then maybe a spring turns on and it could flip the other way so that's where it's hard to totally predict is it 650 million.
Sounds keypad.
For just a moment to compile the <unk>.
Your first question comes from John.
On <unk> with credit Suisse. Your line is open.
Speaker 7: your $700 million number or is it, you know, last year's 898 or where in between? Um, and, you know, we'll be able to update on January . So it's getting slightly better. Um,
Hi, good morning, everyone.
Great quarter.
Thanks, John.
Yes.
Wanted to try to come out.
Speaker 3: I don't see really any change in distributors stocking or anything they can't get the product now what some customers have to do is you have to order longer out so to go if you have a job in January anybody should be thinking I better get that order placed now to do it so it was a little bit of.
The pricing question as we look forward so my back of the envelope math.
Is something like maybe a high single digit.
Percent is assumed for for price in 2022.
If I just think about where we are even if quality of the product.
Speaker 2: not pre-ordering, but just planning for it's no longer a weak turnaround time. So, but we're managing through that and so is the economy as a whole. And one other comment, like the counter argument to someone buying ahead because they're worried about supply is that the general assumption is at some point in time, steel will...
Or maybe some of the investments that youre, making to drive productivity. So you are able to capture a higher.
Price cost spread as we go forward.
Speaker 7: moderate if not go down. So I think folks are also a little bit wary of buying too much ahead, certainly if it's steel oriented, because of the assumption that steel costs in the next near term, call it two quarters or so, are supposed to eventually start to tail off. Yes. And that, and as we've always explained, ours are pretty large products. So you're not going to put an extra three weeks of supply. You can't find the warehouse or the shipping channel. Yeah, especially now. Appreciate it, Gus.
Would really love to get kind of your thoughts around the sustainability of the ability of price.
Yes, great question, Jonathan kind of beginning to your supposition is I would say, yes to all of the above were at a higher price environment with supply demand constrained and we are doing self help with productivity automation and new products.
Our more value add and we have a better bundle and the one order one delivery one invoice so lots of things going into that.
And that's why if you just look in the rearview moment for a moment that you were you've driven from 302007.
Speaker 4: Again, if you would like to ask a question, press star then the number 1 on your telephone keypad. Your next question comes from Dean Bray with RBC Capital Markets. Your line is open.
$11 million of record profit two years ago to 898, and the reason why we have raised our forecast that we gave last quarter to say 2022 would have been $505 50, now, saying $650 to 700, So we're pretty.
Speaker 6: Thank you. Good morning, everyone. Hey, good morning, Dean. Hey, Ed, my congratulations. Hey, look, I know we've talked about this normalization theme here, and if we go back to August , we talked about fiscal 22 being the normalized period that we would enter, and obviously that's being pushed out here nicely. I mean, that's a high-quality problem. I found it really interesting that
Big increase.
And then it's still a dynamic environment and Thats why we also wanted to be clear, while we're pretty comfortable with delivering $6 50 to 700. It depends on how the next several months play out there could be a pathway that we obviously internally, we're striving to repeat last year type of numbers, but.
That's way too soon.
And John I would also finally triangulate.
In our prepared remarks that we said hey, eventually some of this price will go back and therefore, as we drive productivity and new products in M&A.
I was an investor I be thinking longer term nor.
Speaker 3: Yeah, so no, I just think obviously, Dean, if we exceed any number we put up in this quarter is one fourth to add to the scoreboard, and then the only other reason I think that we alluded that way is we'll have more insight, especially during the winter months.
Normalized EBITDA and around 600 million, so hopefully I use numbers.
How we're thinking through it.
Yeah, No that's very helpful and then.
Obviously, this $1 billion of capital to deploy that you talked about.
Speaker 3: Does our competitors with a little bit lower seasonality take the backlog question that Andy just asked and go, hey, if lead times were four to six weeks, which are abnormally long compared to four days, do they catch it up to two or three weeks? And if that's the case, maybe they're a little bit more price sensitive. Because again, if we could hold the pricing we have in this quarter all year, then I would tell you, we'd probably repeat.
You did mention that there could be some larger deals in the pipeline just can you give us any more color around action ability size, just what that looks like obviously, it's been an accretive lever for accor.
Really accretive lever and we're doubling down to anything you may have over rate.
Did not wanted to allude or we do not want to allude, whether or not there is specific deals in the pipeline. We always have a good robust literally over 100 deals as much as if you reflect back three or four years ago, we had a debt.
Speaker 3: last year's profit. So that's the reason, Dean, of the leverage of what, how strong do our competitors get with the catching up going into the future again.
EBITDA ratio above three there's only as we're trying to work our debt down only certain size deals. We can do we're not looking for a well or a large one.
Speaker 3: to your earlier, I'm going to say supposition, we assume that this year would kind of be a normal year.
Speaker 3: we're now telling you this year will be stronger than normal. Good problem to have. We're also telling you that normal in the past was 500 to 5 50. Now it's, you know, we use the baseline at 600. So every type of metric we're giving is really a positive.
When all of a sudden we're looking to deploy a $1 billion over the next couple of years the freedom to go over $100 million Im just picking a number is absolutely. There. So that's what we wanted to allude to it from there whether it's <unk>.
$10 million deal enterprise value of 100 or $300 million, if it's the right deal that strategic and synergistic and still that responsible when we had the management bandwidth.
Speaker 3: from even August and obviously August was a one heck of a positive from a year ago. So at core is on a wall in my mind. Um, and we're investing heavily, you know, as David walked through from capital to.
We're moving forward because to your point, it's exceptionally accretive for our shareholders or it has been and it's really good for our customers.
Speaker 7: Somebody dug through our SG&A, we're definitely investing for the future here.
Deliver value to our customers.
Speaker 6: That's great to hear. And since pricing is such a swing factor and we saw north of 80 percent contribution, and I don't know how much precision you have, but I still want to ask the question is how you would parse out that plus 80 percent this quarter?
Firmly believe is how we deliver value to our shareholders.
Great I'll pass the Baton I appreciate you taking the questions. Yes. Thank you John.
Your next question comes from Chris Moore with CJS Securities. Your line is open.
Speaker 2: The you know, if there are bigger buckets of how much is passing through raw material price increases, another bucket is.
Hey, good morning, guys. Thanks for taking good morning questions. Good morning, Yeah, just wondering.
Sure if I heard it correctly so in terms of volume growth for for fiscal 'twenty two.
Speaker 2: you know, the influence of demand and supply constraints, frankly. And then look, there should be a third bucket about at cores value add at core business systems, the one invoice, all of that. But if we just use those three buckets.
Mid single digits is what you are looking forward to hear that correctly.
So it is correct in Q1 like we said, it's probably going to be a little bit lower than last year. A lot of that has to do with more of the labor availability and new construction market and some of the projects is taking longer than they typically would Chris.
Speaker 6: pass-through supply industry constraints and then the unique value-add for ADCOR. How would you parse that pricing out?
Yes, if I can follow up probably self evident Chris, but we believe back to the mid single digits. There is enough activity out there digest strong architectural billing index is strong the whole electrification digitization. We wanted walk through we think it's mid single digits, but right now at the end contractor level.
Speaker 2: So, Dean, this is David. I'll start and then let Bill probably clarify what I'm going to say. So, if you go to slide six and you look at our EBITDA bridge, you'll see our input cost changes went up $205 million for the quarter.
Speaker 2: So you could argue that that is the portion of the 391 that would be considered, you know, pass-through. So the differential between those two numbers, the margin that we, you know, added to the bottom line, you would then have to come to a decision of...
They don't get other products or they don't get other labor and just the demand cycle has elongated but that may be good news for continued growth longer this way so no issue and we're performing well.
Got it.
You referenced.
Supply chain. So other companies that we work with have gotten.
Speaker 7: due to delivery service, new products, and what have you, and I would say, Bill, I mean, it's all of the above. It's nice, Dean, and it's just right now the team with value props, delivery, the one order, one delivery, one invoice, and the good thing also, by the way, is the glass half full. It's not like we've totally squeezed the lemon on the opportunities with these things from digitization to the new products we talked about. So it's a little of everything, Dean, which is, again, I'm so excited about.
Hurt badly recently and can you maybe get a little more specific in terms of some of the things you're seeing on the supply chain that.
Could cause challenges later in the year.
Well for us I'm not concerned with us I mean, not that I want to overplay that something can always happen, but for today almost all of our materials. There are longer lead time. So therefore, we have to be more precise in what's called a SIOP process of forecasting and what inventory when it's delivered more flexible and make sure we had the labor, but we're performing well in almost.
Speaker 6: because it's not we're riding one factor here versus seven or eight things. Excellent. All right. I appreciate that call there. Just last question for me. And it looks like you might have updated your slides for the U.S. infrastructure bill.
All of those categories, yes, we could use more employees like everybody else, but we're not the constraint nor do I see ourselves in the future being a constraint.
So Chris is more as I kind of mentioned with David's comment earlier, if you just at a job site and do you have their products or a lot of products as I think everybody knows not accor, but to come in for overseas. So I think anybody realizes the issues with courts and getting products and so at the end of the day, even if our products are there and they.
Speaker 2: uh... making a reference to the charging stations where there's money being earmarked for uh... some a national network of those
Speaker 2: and then as well as grid hardening and you know the burying of power lines to prevent wildfires.
You don't have some other products that John maybe a slowdown in that week.
Speaker 2: Where and how might incrementally that create new demand for you that we might not have been talking about a year ago?
Our society I think is working through right now, but again long term trends. This is.
Speaker 7: Yeah, so great question for a couple of things, Dean. To the question I think it was Andy asked, or he asked and we just said yes to, we did not build any infrastructure into these numbers. And so that we talked about electrical vehicle charging because we're working on it. But that's not like, oh, now that, you know, the government's passed a trillion dollar infrastructure, we just raised our forecast. So if anything hits in the next year, that could be upside to this. To your second part of your question, though, and by the way, I would wonder to get shovel ready, that may be a better factor for the next fiscal year, quite frankly. But that's my.
The most I would just say this is very positive on Abi Guy just some ways look at Dodge forecast even by category for starts for next year almost every categories, obviously, some stronger than others. So.
We're optimistic going into the year and Chris just one other comment is in general we're not as labor intensive as other companies. So when you look at our revenue save around $3 billion or what have you and you have 4000 employees or less.
We're fairly automated as it is in our supply chain is domestic for the domestic market. So it's in region for the region. So it's really not as much of an impact directly to us. It's a secondary impact on like Bill said the construction market.
Speaker 7: opinion. But your second part, the hardening of the grid.
Speaker 7: is, I think, a great secular trend for us. I'll give you two examples. You mentioned forest fires in California, and they are burying. Someone can look out at the utilities out there and the amount of money they've suggested to spend. Now, by the way, it's more than just buying PVC conduit to bury the lines, but it's a huge number. And I think we're well positioned to support that initiative as we take and put electrical lines.
Got it very helpful. I'll jump back in line I appreciate it guys.
Thank you Chris Thank you.
Your next question comes from Andy Kaplowitz with Citigroup. Your line is open.
Yeah.
Yeah.
Okay.
Q1, and for the year it looks like Youre, saying that you will normalize at EBITDA close to $150 million per quarter.
Speaker 7: above ground, below ground. Another perfect example, I'm not saying this will happen, but I listened to a speech just recently by a senator in Louisiana talking about how when Hurricane Ida went through, because of the great work over the last decade, the city of New Orleans did not flood because of the pumps and so forth. But
For Q1, and then stayed that way, which seems like the assumption behind the 600 million in normalized EBITDA as soon as we sit here today is there anything that you've seen that tells you that business would normalize quickly after Q1 or could it be more of a gradual step down and then with the understanding that 150 is way higher than your recorded pre pandemic. It seems like youre seeing marginal.
Speaker 7: The people in Louisiana were without power because all the electrical lines were above ground. So how do we harden our infrastructure and put those electrical lines underground so that our citizens in this great country...
Electrical back in that sort of normalized mid to high 20% range. Eventually does that assume that basically give most of the pricing gains back as inflation comes off and what's the probability that some of the gains can be more sticky.
Speaker 7: don't have to do with power outages. So again, there's so many different things, whether it's part of the infrastructure bill or just things that our society is going to do as a whole, that I think ACCOR really is, as we said in the prepared remarks, is the conduit to make these things happen.
Yes, so Andy I'll start David can jump in here helps who is stuff but a.
Couple of things.
Internally our job.
This is not a rocket scientist statement here, but our job is to keep the profits.
The price stickiness as long as possible. Therefore, again, if anyone grounded themselves over the last five years before the pandemic, we were growing EBITDA margins or excuse me EBITDA and a compounded growth rate above 10% and when you kind of a record of 327, now, we're saying $600 million.
Speaker 6: Great. Thanks for all the callers. Thanks, Dean.
Speaker 4: This concludes the question and answer session. I would now like to turn the call back to Bill Walsh for closing remarks.
Speaker 3: Before we conclude, let me summarize my three key takeaways from today's discussion.
Number in the future, which is a whole step function I mean to ask to get that we expect long term to maintain some of this margin because of the value.
Speaker 3: First, 2021 was an incredible year and we have a strong outlook for 2022 and beyond.
And delivery new products M&A, so a lot of things going into that 600 now short term.
Speaker 3: Second, we are focused on our three conduits of growth and implementing a strategy and capital deployment model to drive increased value creation for all of our stakeholders.
We're hoping it's just so you can go if it's still a step function from $300 million 600 million this year $650 to $700 million and potentially a path to a higher number we're internally striving to get can we repeat last year.
Speaker 3: Third, we will be ready to deploy our new $400 million stock repurchase authorization, and we will continue to look to return capital to shareholders with cash that is not being utilized to invest in the business or pursue M&A.
That would be great because that would mean or could mean that even to the <unk>.
Speaker 3: With that, thank you for your support and interest in ACOR, and we look forward to speaking with you during our next quarterly call. This concludes the call for today.
Following year, which were not giving guidance when it could be higher than 600 million to your question. Andy So we want to keep it up and keep as much value as long as possible, but we also want to be as transparent and ground are investors that some of it potentially go back, but even so again $300 million 600.
Speaker 4: This concludes today's conference call. You may now disconnect.
Speaker 9: Thanks for watching!
We're going to keep some of it we think long term just like we've always gone price over cost as we've added more value in the previous years. So hopefully we'd how we're thinking through in different numbers for this year or previous years going into the future.
Yeah. That's helpful and then in the presentation you mentioned the breakdown of the 21 sales I think you talked about sort of weaker market trends in retail.
Tao I assume you're starting to see those markets pick up at this point, but when you're thinking about the mid single digit growth guide for the year and 22 are you assuming general recovery in all of your markets are data centers and warehouses still growing faster than the rest of your markets and then I assume you're not assuming any help from the infrastructure bill yet in 2002.
Yes.
Thanks.
The answer is absolutely, yes to everything I could repeat your answer back as a statement, but yes Andy.
Alright easy enough and then just on inventory could you give us more color into where you think inventories in the channel for instance last quarter. I think you said PVC conduit lead times are in the 40 week time frames that are more usual two or three weeks, where they now and then have you seen any evidence that your distributors are over ordering or thinking need.
To get in line.
Given the strong demand that's out there, yes. So I think inventories are probably similar to where they were before maybe a little bit better. So give me. An example to go if it was and again, it's hard to estimate because every distributor is trying to do different things, but if it typically was you had to order and have a lead time of a week and it went out to <unk>.
Six to eight weeks now maybe four to six so that's where it is getting.
Slightly back to normal, but that's why again, we're holding on to price because it's far from normal and then maybe it's spring turns on them. It could flip the other way. So that's where it's hard to totally predict is at $650 million near $700 million number or is it last year's 898 or where in between.
We will be able to update you on January so it's getting slightly better.
I don't see really any change in distributor stocking or anything that you can't get the product now what some customers have to do is you have to order longer out. So to go if you have a job in January anybody.
Should be thinking I better get back order place now to do it. So it was a little bit of not preordering, but just planning for its no longer we turnaround time, so, but we're managing through that chose the economy as a whole.
One other comment Mike the counter argument to someone buying ahead, because they're worried about supply is that the general assumptions at some point in time steel will moderate if not go down. So I think folks are also a little bit wary of buying too much ahead, certainly if it still oriented because of the assumption that steel costs in.
The next near term call it two quarters or so as opposed to <unk>.
So they start to tail off.
And as we've always explain ours are pretty large product. So youre not going to put an extra three weeks of supply you can't find the warehouse through their shipping from now, especially now.
I appreciate it guys.
Thank you Andy.
Again, if you would like to ask a question Press Star then the number one on your telephone keypad. Your next question comes from Deane Dray with RBC capital markets. Your line is open.
Thank you good morning, everyone, Hey, good morning Deane.
Add my congratulations.
Look I know we've talked about this.
Normalization theme here.
If we go back to August we talked about fiscal 'twenty two being the normalized.
Period that would be to enter and obviously, that's being pushed out here nicely.
High quality problem.
I found it really interesting that you kind of suggested the first fiscal quarter of the first couple of months could kind of dictate what the year might be.
Is are there particular indicators that make the beginning of the year, especially important in terms of the trajectory for the fiscal year, maybe start there, yes. So now what you're seeing obviously dean if we exceed any number we put up in this quarter is one for it to add to the scoreboard and then the only other res.
And I think that we alluded that ways, we'll have more insight, especially during the winter months.
As our competitors with a little bit lower seasonality take the backlog question that Andy just asked and go Hey, if lead times were four to six weeks, which are abnormally long compared to four days do they catch it up to two or three weeks in and Thats. The case, maybe they're a little bit more price sensitive because again, if we could hold the pricing we have in this quarter.
<unk> all year, then I would tell you, we'd probably repeat last year's profit.
So that's the reason being is the leverage of what how stronger our competitors get with catching up going into the future again.
To your earlier I'm going to say some position we assume that this year would kind of be a normal year.
Our downtown for you this year will be stronger than normal good problem to have were also telling you. There is normal in the past was 500 to $5 50 now it's we use a baseline of 600. So every type of metric, we're giving is really a positive from even August and obviously August was one heck of a policy.
From a year ago. So <unk> is on a roll in my mind, and we're investing heavily as David walked through from capital to somebody dug through our SG&A, we're definitely investing for the future here.
That's great to hear and since pricing is such a swing factor and we saw north of 80% contribution and I don't know how much precision you have but I still want to ask the question is how you would parse out that plus 80% this quarter.
If there are bigger buckets of how much is passing through raw material price increases.
Other bucket is the influence of demand.
Supply constraints, frankly, and then look.
Could be a third bucket about at Core's value add at core business systems. The one invoice all of that but if we just use those three buckets.
Pass through.
Supply industry constraints and then.
Unique value add for AD or how would you parse that pricing out.
This is David I'll start and then.
Bill probably clarify what I mean.
So.
The slide six and you look at our EBITDA Bridge, you will see our input cost changes went up $205 million for the quarter. So you could argue that that is the portion of the 391 that would be considered pass through so the differential between those two numbers the margin that we.
Added to the bottom line.
Would then have to.
Come to decision of how much of that is due to delivery service new products and what have you and I would say bill I mean, it's all nearby song, it's nice Dean and its just right now the team.
With value props delivery, the one order one delivery one invoice and there's the good thing also by the way is the glass half full it's not like we've totally squeeze the lemon and on the opportunities with these things from Digitization to the new products, we talked about so it's a little of everything Dean which is again I'm. So excited about.
Because it's not we're writing one factor here versus 703 things.
Excellent alright, I appreciate that color there and just last question for me.
It looks like you might have updated your slides for the U S infrastructure Bill.
Making the reference to the charging stations, where there's money being earmarked for.
Our national network of those and then as well as grid hardening the bearing of power lines to move.
Event wildfires.
And how might incrementally that create new demand for you that we might not have been talking about a year ago. Yes. So great question for a couple of things beans to the question I think it was Andy Aster. He asked and we just said, yes, we did not build any infrastructure into these numbers and so that we talked about lunch.
Well vehicle charging because we were working on it but that's not like Oh now that.
The government passed a trillion dollar infrastructure, we just raised our forecast so if anything hits in the next year that could be upside to this.
To your second part of your question, though and by the way I would wonder to get shovel ready that may be better factor for the next fiscal year quite frankly, but that's my opinion.
Opinion.
But to your second part the hardening of the grid.
Is I think a great secular trend for us and I'll give you. Two examples you mentioned forest fires in California, and they are bearing some again broke out at the utilities out there and the amount of money. They suggested spend out by the way it's more than just Bonnie PVC conduit to Bury the lines, but it's a huge number and I.
We are well positioned to support that initiative as we taken put in electrical lines above ground below ground. Another perfect example, I'm not saying this will happen, but listening to a speech just recently by a center in Louisiana talking about how when hurricane Ida went through because of the great.
Work over the last decade.
City of New Orleans did not flood because of the pumps and so forth, but the people in Louisiana or without power because all the electrical lines were above ground. So how do we harden our infrastructure and put those electrical lines underground so that our citizens in this great country.
Don't have to do with power outages. So again theres. So many different things, whether it's part of the infrastructure Bill or just things that our society is going to do as a whole then I think <unk> really is as we said in the prepared remarks is the conduit to make these things happen.
Great. Thanks for all the color.
Thanks, Steve Thanks Dean.
This concludes the question and answer session I would now like to turn the call back to Bill Waltz for closing remarks.
Before we conclude let me summarize by three key takeaways from today's discussion.
First 2021 was an incredible year and we have a strong outlook for 2022 and beyond.
Second we are focused on our three conduits that growth in implementing our strategy and capital deployment model to drive increased value creation for all of our stakeholders.
Third we will be ready to deploy our new $400 million stock repurchase authorization and we will continue to look to return capital to shareholders with cash that is not being utilized to invest in the business or pursue M&A.
With that thank you for your support and interest in our core and we look forward to speaking with you during our next quarterly call. This concludes the call for today.
This concludes today's conference call you may now disconnect.
Okay.
Uh huh.
[music].
Yeah.
[music].