Full Year 2023 Atkore Inc Earnings Call

Speaker 1: Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Atcore's fourth quarter and full year 2023 earnings conference call.

Good morning, My name is Krista and I'll be your conference operator today at this time I would like to welcome everyone to the <unk> fourth quarter and full year 2023 earnings conference call. All lines have been placed in a listen only mode. After the Speakers' remarks, there will be a question and answer session.

Speaker 1: All lines have been placed in a listen-only mode. After the speaker's remarks, there will be a question and answer session.

Speaker 1: If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. As a reminder, this conference is being recorded. Thank you. I would now like to turn the conference over to your host, John Deutzer, Vice President of Treasury and Investor Relations. Thank you. You may begin.

If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again Press Star One as a reminder, this conference is being recorded. Thank you I would now like to turn the conference over to your host John <unk>, Vice President of Treasury and Investor.

Really cenk. Thank you you may begin.

Speaker 2: Thank you and good morning everyone. I'm joined today by Bill Wahl, President and CEO , as well as David Johnson, Chief Financial Officer.

Thank you and good morning, everyone I'm joined today by Bill Waltz, President and CEO as well as David Johnson, Chief Financial Officer.

Speaker 2: We will take your questions after comments by Bill and David.

We will take your questions after comments by Bill and David.

Speaker 2: I would like to remind everyone that during this call we may make projections for forward-looking statements regarding future events for financial performance of the company.

I'd like to remind everyone that during this call we may make projections or forward looking statements regarding future events or financial performance of the company.

Speaker 2: Such statements involve risks and uncertainties, but the actual results may differ materially.

Such statements involve risks and uncertainties.

Actual results may differ materially.

Speaker 2: Please refer to our SEC filings in today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections for forward-looking statements.

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 forward looking statements. In addition, any referenced in our discussion today to EBITDA means adjusted EBITDA and any reference to EPS.

Speaker 2: In addition, any reference in our discussion today to EBITDA means adjusted EBITDA. And any reference to EPS or adjusted EPS means adjusted diluted earnings per share. Adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures.

Our adjusted EPS.

Adjusted diluted earnings per share adjusted EBITDA and adjusted diluted earnings per share are non-GAAP measures reconciliations of non-GAAP measures in our presentation of the most comparable GAAP measures are available in the appendix to today's presentation.

Speaker 2: Reconciliations of non-GAAP measures in a presentation of the most comparable GAAP measures are available in the appendix to today's presentation. With that, I'll.

With that I'll turn it over to Bill.

Speaker 3: Thanks, John , and good morning, everyone. Starting on slide three, I'm pleased to report that ACFOR again delivered strong operating results this year, and we remain confident in the future of our company. During our discussion today, we will discuss the quarterly and full year financials as we normally do, but we would also like to take this opportunity to review our strategic growth opportunities and provide some exciting updates regarding capital deployment.

Thanks, John and good morning, everyone.

On slide three I'm pleased to report that <unk> again delivered strong operating results. This year and we remain confident in the future of our company during our discussion today, we will discuss the quarterly and full year financial as we normally do but we will also like to take this opportunity.

To review, our strategic growth opportunities and provide some exciting updates regarding capital deployment.

Speaker 3: Let me start with a quick review of some of our highlights from the year.

We start with a quick review of some of our high.

From the year.

Speaker 3: Turning to slide four, 2023 was a great year for our force. We delivered financial results well ahead of our expectations and we made great progress on many of our strategic initiatives.

Turning to slide four.

2023 was a great year Frac four we delivered financial results well ahead of our expectation and we've made great progress on many of our strategic initiatives.

Speaker 3: We continue to be recognized as an employer of choice, and I believe that our talented team is a true advantage for our company. I'd like to take this moment to recognize them for their great work and everything they do to support our customers. Thank you.

We continue to be recognized as an employer of choice and I believe that our talented team as a group.

Dan each for our company.

I'd like to take this moment to recognize them for their great work in everything they do to support our customers.

Yeah.

Speaker 3: David and I are confident in our business and I'm pleased to report that we repurchase in a different $75 million in stock in the fourth quarter.

David and I are confident in our business and I'm pleased to report that we repurchased.

About $75 million back in the fourth quarter.

Speaker 3: Over the past 24 months, we have now repurchased over $990 million of our stock.

Over the past 24 months, we have now repurchased over $990 million of our stock.

Speaker 3: We are proud of our accomplishments, and we've worked diligently to evolve ACFOR into an industry leader. Now, I'll turn the call over to David to talk through the results from the fourth quarter and the full year.

We are proud of our accomplishments and we've worked diligently to evolve <unk> into an industry leader.

Now I'll turn the call over to David to talk through the results from the fourth quarter and full year.

Speaker 4: Thank you, Bill. Good morning, everyone. We will be taking a look at consolidated results on slide 5.

Thank you Bill and good morning, everyone.

This is Eric consolidated results on slide five.

Speaker 4: In the fourth quarter, NetSails declined 15% year-over-year to $870 million, and our adjusted EPS decreased 24% to $4.21.

In the fourth quarter net sales declined 15% year over year to $870 million.

Our adjusted EPS decreased 24%.

$4 in play.

Speaker 4: For the full year, we achieved $3.5 billion in revenue, and our adjusted EPS was $19.47.

For the full year, we achieved $3 $5 billion in revenue and our adjusted EPS of $19 47.

Speaker 4: Adjusted EBITDA for the full year was over $1 billion.

Adjusted EBITDA for the full year was over $1 billion.

Okay.

And our consolidated bridges.

Speaker 4: Volumes are positive in the quota and total probability was stronger than expected.

Volumes were positive in the quarter in total profitability with stronger than expected.

Speaker 4: Looking at the full year, that sales decreased by $395 million due to lower average billing prices.

Looking at the full year net sales decreased by $395 million due to lower average selling prices.

Speaker 4: As we have been discussing over the past several years, price normalization, primarily in our PBC business, started at the end of FY22, has continued through FY22.

As we have been discussing over the past several years price normalization, primarily in our PBC business.

At the end of FY 'twenty two.

Continued through FY2023.

Speaker 4: However, our profitability on both an adjusted EBITDA and EPS basis was much stronger than originally anticipated. We are extremely pleased with our overall financial performance.

However, our profitability on both the adjusted EBITDA and EPS basis.

Longer than originally anticipated.

We're extremely pleased with our overall financial performance.

Moving to slide seven and our segment results.

Speaker 4: Margins compressed in our electrical segment in the fourth quarter driven by continued price normalization in our PVC related product.

Largest compressed in our electrical segment in the fourth quarter driven by continued price normalization in our PVC related products. Nonetheless margins were better than expected and we were encouraged as the volumes in our PVC related products were flat on both a year over year and sequential basis.

Speaker 4: Nonetheless, margins were better than expected, and we were encouraged to see volumes in our PVC-related products work flat on both a year-over-year and sequential basis.

Speaker 4: The year-over-year volume declines in the quarter were in our ACPE and CABLE projects.

The year over year volume declines in the quarter were in our ADP and cable products.

Speaker 4: Shifting over to our S&I segment, volumes increased 18%.

Shifting over to our <unk> segment.

Volumes increased 18%.

Speaker 4: Net sales for this part of business declined due to lower average selling prices resulting from the year-over-year declines in raw material input costs and the impact from solar credits offsetting the strong volumes.

Net sales for this part of the business declined due to lower average selling prices, resulting from the year over year declines in raw material input costs.

And the impact from polar credits offsetting the strong volume gains.

Speaker 4: It's important to acknowledge that the declines in adjusted EBITDA and adjusted EBITDA margins include the recognition of the solar credit adjustment to cost of sale.

It is important to acknowledge that the declines in adjusted EBITDA and adjusted EBITDA margins include the recognition of the solar credit adjustment to cost of sales.

Speaker 4: Under the GTA method, earnings and margins would have been much stronger and closer to 14%.

Under the GTA method earnings and margins would have been much stronger and closer to 14%.

Speaker 4: As you may recall from our comments last quarter, we will be using this methodology in FY20.

As you may recall from our comments last quarter, we will be using the methodology in FY 'twenty four.

Speaker 4: Turning now to page 8, we want to review some of the volume trends for FY23 and our outlook for FY22.

Turning now to page eight we wanted to review some of the volume trends for FY 'twenty, three and our outlook for FY 'twenty four.

Speaker 4: In FY23, we achieved 3% volume growth, which was slightly below our expectations of mid-single-digit percentage growth for the year. During the fourth quarter, there was a clear slowdown in demand coming from the telecom industry, as the market and channel is working through elevated inventory levels and timing related to some of the government's stimulus funding.

In FY 'twenty, three we achieved 8% volume growth, which was slightly below our expectations of mid single digit percentage growth for the year.

During the fourth quarter, there was a clear slowdown in demand coming from the telecom industry as the market.

Working through elevated inventory levels and prior.

Related to some of the government stimulus funding.

Speaker 4: The slowdown caused an unanticipated impact of volume to our ACPE-related product.

The slowdown caused an unanticipated impacted volumes or ACP related products.

Speaker 4: In addition, the rampant production of our new facility at Indiana was behind our expectations, which led to slightly lower levels of shipments than we had anticipated.

In addition, the ramp in production of our new facility in Indiana was behind our expectations, which led to a slightly lower levels of shipments than we had anticipated.

Speaker 4: This being said, we are working through this production challenges and we expect sales for solar related products to double in FY24.

This being said we are working through this production challenges and we expect sales for solar related price to double in FY 'twenty four.

Speaker 4: This projected growth in our solar-related price is a key driver in our low double-digit growth expectations for the total enterprise in FY24.

This projected growth in our solar related products is a key driver in our low double digit growth expectation for the total enterprise in FY 'twenty four.

Speaker 4: This will be a large step up that we expect the capital investments that we've been making in Indiana and other parts of our organization to deliver for our business in FY20.

This will be a large step up that we expected capital investment that we've been making in Indiana in other parts of our organization to deliver required business in FY 'twenty four.

Speaker 4: In addition, our metal framing, table management, and construction services businesses are very well positioned to support the continued growth of global mega projects.

In addition, our metal framing cable management and construction services businesses are very well positioned to support the continued growth of global Mega projects.

Speaker 4: This part of our business grew double digits in FY23, and we expect continued high single digit growth this year.

As part of our business grew double digits in FY 'twenty, three and we expect continued high single digit growth this year.

Speaker 4: This team has done a tremendous job growing Acros presence with some of the most recognized companies in the world. Community members to participate in whatever solution

This team has done a tremendous job growing accurate president.

Most recognized companies in the world.

Turning now to our outlook on page nine.

Speaker 4: We anticipate net sales to grow in FY24, led by the low double-digit volume gains partially offsetting this growth, will be continued pricing normalization.

We anticipate net sales to grow in FY 'twenty four led by the low double digit volume gains partially offsetting this growth will be continued pricing normalization.

Speaker 4: which will lead to lower levels of adjusted EBITDA and adjusted EPA.

Which will lead to lower levels of adjusted EBITDA and adjusted EPS.

Speaker 4: And FY24, we will use the DDAM method of accounting related to the solar credit, which will bring our tax rate back toward our historical range in the mid-20s.

In FY 'twenty four.

The DDA and method of accounting related to this cohort credit, which will bring our tax rate back towards our historical range in the mid 20.

Speaker 4: We continue to see upside potential in our company and we're committed to returning at least $200 million in cash to shareholders through repurchase.

We continue to see upside potential in our company and we're committed to returning at least $200 million in cash to shareholders through repurchases.

Speaker 4: Moving to slide 10, we recognize there are a lot of moving parts between our performance in FY23 and our outlook for FY24.

Moving to slide 10, we recognize there are lot of moving parts between our performance in FY 'twenty, three and our outlook for FY 'twenty four.

Speaker 4: Therefore, we've outlined some of the critical components that impact the both nest tails and the dusted ibex.

Therefore, we've outlined some of the critical components and impacted both net sales and adjusted EBITDA.

Speaker 4: For example, we expect price versus cost to be a headwind of approximately $225 to $275 million on an adjusted EBITDA basis.

For example, we expect price cost to be a headwind of approximately $205 million to $275 million.

Adjusted EBITDA basis.

Speaker 4: Of that amount, we would estimate that nearly $175 million has already occurred when you look at lower margin levels exiting FY23 versus the start of the year.

Of that amount, we would estimate that nearly $175 million has already occurred when you look at lower margin levels exiting FY2023 versus the start of the year.

Speaker 4: At the midpoint, this would be approximately 500 million of the 585 million that we outlined last year as total price outperformance.

At the midpoint this would be approximately $500 million of the $585 million that we outlined last year at cobalt price outperformance.

Turning to slide 11.

Speaker 4: Despite these anticipated declines in FY24, we're extremely pleased with the structural transformation and improvements that we've achieved in the business since our IPF.

Despite these anticipated declines in FY 'twenty four we're extremely pleased with the truckload transformation agreements that we've achieved in the business since our IPO.

Speaker 4: Last year at this time, we started a historical bridge which broke down the different components in our sales and earnings since 2017.

Last year at this time, we figured that historical bridge broke down the different components in our sales and earnings in 2017.

Speaker 4: One year later, the sustainable pricing improvements that we discussed are still holding, and our estimates regarding pricing outperformance are in line with our expectations.

When you layer the sustainable pricing improvements that we discussed are still holding and our estimates regarding pricing outperformance or in line with our expectations.

Speaker 4: The diversity and strength of our product portfolio is a true competitive advantage. And we expect our long-term adjusted EBITDA margins will land in the range of 25%.

The diversity and strength of our product portfolio is a true competitive advantage and we expect our long term adjusted EBITDA margins will land in the range of 25%.

Speaker 4: Even at these lower levels versus our performance in the past three years, these margins would be equal or slightly better than best-in-class companies in the electrical industry.

Even at these lower levels versus our performance in the past three years, these margins would be equal or slightly better than best in class companies in the electrical industry.

Speaker 4: With that, I'm going to turn it back to Bill to give an update on our growth opportunity.

With that turn it back to bill to give an update on our growth opportunities.

Speaker 3: Thanks, David. Starting on slide 13, Accor is a differentiated company and a great investment opportunity. The financial and portfolio related achievements we've made since IPO, as well as the strong secular tailwinds and growth opportunities we have ahead of us, have positioned Accor well for continued success.

Thanks, David starting on Slide 13, <unk> is a differentiated company and a great investment opportunity that financial and portfolio related achievements, we've made since the IPO as well as the strong secular tailwind and growth opportunities. We have ahead of us at <unk>.

Or well for continued success.

Speaker 3: Turning to slide 14, we have provided a view of our strong financial profile. Our balance sheet and cash flow give us a rock-solid foundation from which to grow.

Slide 14, we've provided a view of our strong financial profile, our balance sheet and cash flow gives us a rock solid foundation from which to grow.

Speaker 3: In addition, on slide 15, our products are genuinely all around you, and these are truly essential items for the electrical infrastructure needed in all types of construction.

In addition on slide 15, our products are generally all around you and these are truly a temporal item where the electrical infrastructure needed in all types of construction.

Speaker 3: In fact, when you look at our segment sales on slide 16, we estimate that over 90% of our sales are related to electrical infrastructure.

In fact, when you look at our segment sales on slide 16, we estimate that over 90% of our sales are related to electrical infrastructure.

Speaker 3: Three quarters of our sales are in our electrical segment, but a significant portion of our safety and infrastructure products are also directly related to electrical infrastructure. This is especially true when you think about our prefabrication devices and our solar files.

Quarters of our sales are in our electrical segment, but a significant portion of our safety and infrastructure products are also directly related to electrical infrastructure. This is especially true when you think about our pre fabrication devices and our forward buyback.

Speaker 3: Turning to slide 17, there are strong secular trends related to electrical infrastructure that we trust will support our markets for years to come. Underlying many of these trends are also a large government stimulus program, and with some of them, have a spending profile through the end of the decade. David has said this many times before, and even to several of you, and I could not agree more with him. The electrical industry is a great place to be.

Turning to slide 17, there are strong secular trends related electrical infrastructure that we trust, we will support our market per year to comp underlying many of these trends are also a large government stimulus programs and with some of them have a spending profile through the end of the decade David.

Before and even just temporal view and I could not agree more westbound electrical and to create a great place to be.

Speaker 3: Moving to slide 18, we remain focused on executing the conduits to growth that we've discussed at this time last year, which emphasize M&A, category expansion in this food and product innovation.

Moving to slide 18, we remain focused on executing the condos to grow that we've discussed at this time last year, which emphasize M&A category expansion.

And product innovation today, we wanted to provide an update on our key category expansion.

Speaker 3: Today, we wanted to provide an update on our key category expansion mixes, which are an important aspect of exit union our conduits to growth for years to come.

Which are an important aspect of executing our condos to grow for years to come.

Speaker 3: In FY24, we anticipate the investments that we made in Indiana will start to demonstrate considerable financial benefit.

In FY 'twenty four we anticipate the investment that we made in Indiana will start to demonstrate considerable financial benefits, we expect growth and benefits from our investment in our repo service Center and HPE will start to materialize in FY 'twenty five and beyond.

Speaker 3: We expect growth and benefits from our investments in our regional service centers and HBPE will start to materialize in FY25 and beyond.

Speaker 3: By 19, we wanted to highlight our new facility in Hobart, Indiana. This is really a great achievement for all of us, and I could not be more pleased with the team.

On slide 19, we wanted to highlight our new facility in Hobart, Indiana. This is really a great achievement for all of us and I could not be more pleased with the team.

Speaker 3: On slide 20, as mentioned before, we're expanding our service and distribution capabilities in Texas, and we are now planning to add additional service capabilities outside of the greater Atlanta region.

On slide 20 as mentioned before we're expanding our service and distribution capabilities in Texas and we are now planning that in a default service capabilities outside of the greater Atlanta region.

Speaker 3: Moving to slide 21, we're pleased with the integration and investments we've made in our HBPE-related acquisitions. This business is now operating cohesively as one unit, and we continue to drive the adoption of the ACOR business system throughout the network.

Moving to slide 21, we're pleased with the integration and investment we made in our HPE related acquisition.

<unk> business is now operating cohesively as one unit and we continue to drive the adoption of the <unk> business system throughout the network, yes, there are challenges.

Speaker 3: Yes, there are challenges as you heard about the industry and inventory. I mean, stimulus funding and so on. However, I'm confident in our team and the long term value this business will drive for our company.

For about the industry and inventory.

Funding and so all our ever I am confident in our team and the long term value. This business will drive for our company.

Speaker 3: we estimate that we're number two in the power and telecom part of the market, which is probably less than 20 percent of the overall HDP market when you think about other applications like oil and gas and water.

We estimate that we're number two in the power and telecom part of the market, which is probably less than 20% of the overall HDD market, we think about other applications like oil and gas and water.

Speaker 3: Actor is an outstanding company and a compelling investment opportunity. With our exceptionally strong balance sheet and diverse product portfolio, we are well positioned to deliver long term value for all of our stakeholders. With that, I'll turn it over to David to give some exciting updates about our capital deployment.

<unk> is an outstanding company and a compelling investment opportunity with our exceptionally strong balance sheet and deferred private portfolio, we are well positioned to deliver long term value for all of our stakeholders with that I'll turn it over to David to give some update about our capital deployment plan.

<unk>.

Speaker 4: Thanks, Bill. Yes, I'm excited to announce on slide 23 that our board has added plans for regular early dividends in our capital deployment model.

Thanks, Bill Yeah. So im excited enough on slide 23, our board has added plans for our regular quarterly dividend and our capital deployment model.

Speaker 4: The reduction of this dividend is supported by our strong performance over the past several years and our confidence in the future.

The introduction of this dividend is supported by our strong performance over the past several years and our confidence in the future.

Speaker 4: During the slide 24, our updated capital deployment plans reflect our intention to invest and grow our business while consistently returning cash to zero.

Turning to slide 24, our updated capital deployment plans reflect our intent to invest and grow our business, while consistently returning cash to shareholders.

Speaker 4: We're being quite selective in our approach to M&A as we continue to have a high level of confidence in our current business and demonstrated through the nearly $1 billion we've deployed to carry purchases over the past 24 months.

We're being quite selective in our approach to M&A.

To have a high level of confidence in our current business as demonstrated through the nearly $1 billion.

<unk> share repurchases over the past four months.

Months.

Speaker 4: Moving to slide 25, we anticipate elevated levels of capital expenses in FY24, similar to FY23, as we build out our RSD network that Bill mentioned, and continue to invest in our digital token capability.

Moving to slide 25, we anticipate elevated levels of capital expenditures in FY 'twenty for the more of the FY2023 as we build out our RSP network that Bill Mudd.

And continue to invest in our digital capabilities.

Speaker 4: Next on slide 26, looking back on the version of the slide we presented a year ago, something has changed for the positive and negative.

Next on slide 20.

Looking back on the version with slide we presented a year ago.

Change for the positive and negative.

Speaker 4: Despite these changes, we believe our growth investments and our capital deployment model support our ability to deliver further than $18 per share of adjusted EPS in FY25. With that, I'll turn it back to

These changes, we believe our growth investments and our capital deployment levels support our ability to deliver better than $18 per share of adjusted EPS in FY 'twenty five.

With that I'll turn it back to Bill on Slide 27.

Speaker 3: Thanks, David. And we are very pleased with what we've achieved over the past several years, and we're even more excited about the opportunities ahead. With our outstanding financial profile and differentiated product portfolios supported by strong secular trends, we are a compelling investment opportunity for anyone looking for a company with strong growth initiatives and a commitment to returning cash to shareholders.

Thanks, David and we are very pleased with what we've achieved over the past several years and we're even more excited about the opportunities ahead with our outstanding financial profile and differentiated product portfolio supported by strong secular trends, we are a compelling investment opportunity for anyone.

Looking for a company with strong growth initiatives and our commitment to returning cash to shareholders I.

Speaker 3: I'm confident in the team, the strategy and processes we put in place to continue at four strong trajectories. With that, we'll turn it over to the operator to open the line for questions.

I am confident that aim to strategy and processes, we put in place to continue <unk> strong trajectory with that we'll turn it over to the operator to open the line for questions.

Speaker 1: At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A.

At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad will pause for a moment to compile the Q&A roster.

Speaker 1: Your first question comes from the line of Alex Regal from B Riley. Please go ahead. Your line is open.

Our first question comes from the line of Alex Rygiel from B. Riley. Please go ahead. Your line is open.

Yes.

Speaker 2: Thank you. Good morning, gentlemen, and very nice quarter and lots of really helpful slides here. So, thank you very much for that.

Thank you good morning, gentlemen, and very nice quarter and lots of really helpful. Slides here. So thank you very much for that.

Thanks, Alex good morning.

Speaker 2: first question here is, you know, kind of your visibility as it relates to both the solar market and the HDP market or the telecom market. How confident are you that, you know, you feel like you've got pretty good visibility as it relates to either existing inventory and how that's getting worked through the channel and then customer demand over the next call at 12 p.m.

Our first question here is.

Kind of your visibility as it relates to both.

Solar market and the <unk>.

HCP market or the telecom market.

<unk> are you on that.

You feel like you've got pretty good visibility as it relates to either.

Existing inventory and how thats getting worked through the channel.

Customer demand over the next call it 12 to 18 months.

Speaker 4: So this is David. I'll take the solar question and I just want to argue that it was part of the inflation

So Alex this is David I'll take the Solent question and then just one module as part of the <unk>.

Inflation reduction Act.

Speaker 4: with the incentives made for domestic manufacturing of torque tubes.

With the incentives made for domestic manufacturing of torque tubes that market essentially beginning last year doubled domestically, even if the amount of solar being deployed was the same so I think for that one we're very comfortable with where you have really good relationships with some.

Speaker 4: That market essentially, beginning last year, doubled domestically, even if the amount of solar being deployed was the same. So, I think for that one, we're very comfortable, but you have really good relationships with some of the large tracker OEMs.

The large tractor Oems.

Speaker 4: that that volume is there and continues to be there. Now our challenge is probably more on just production on that side of the business. Yeah, so just one other thought, Dave.

That volume is going to is there and continues to be there and our challenge is probably more on just production on that side of the business. Yes. So just one other thought on Davids.

Speaker 3: because of the IRA, just moving volume from China to the U.S. doubles the size of the market. So the market's exceptionally healthy. It's all about us and just getting factories up. And then for HDPE, that's a little bit more triangulation, but I think everybody from fiber optic public corporations, I won't call out individuals, but that are out there that have already announced their earnings and there's estimates on when.

Because of the IRI, just moving volume from China to the U S doubles, the size of the market. So markets exceptionally healthy it's all about us and just keeping factoring this out.

And then.

For HD P/e, that's a little bit more triangulation, but I think everybody from fiber optic public corporations I won't call out individuals, but that are out there that have already announced their earnings and their estimates.

Estimates on wind.

Speaker 3: the funding will get deployed to our competitors that are public that have announced.

The funding will get deployed to our competitors that are public that are announced to things like the fiber optic bead Association and so forth have all estimated their second half of next year, so from that to talking to customers, we're pretty optimistic again at 65 billion.

Speaker 3: to things like the fiber optic bead association and so forth have all estimated the second half of next year. So from that to talking to customers.

Speaker 3: we're pretty optimistic. Again, it's $65 billion of what's called B part of the IIJA, so it's a huge amount of funding. It's just a question of getting that quote-unquote shovel ready, taking longer than expected. But we're ready, and it's really what's going to help carry us this whole year 2021.

So whats called the part of the <unk>.

So it's a huge amount of funding is just a question of getting that quote unquote shovel ready taking longer than expected, but we're ready and it's really what's going to help carriers fiscal year 'twenty five and beyond.

Speaker 2: Very helpful. And as you know, some of maybe your smaller competitors figure out ways to digest the weaker pricing environment that that you've

Very helpful.

Some of them, maybe your smaller competitors.

Figure out ways to digest.

Weaker pricing environment that you have.

Speaker 5: worked through very, very well. Do you see even more attractive M&A targets developing from a pricing standpoint and whatnot from those private entities that are having trouble accessing capital?

Worked through very very well.

Do you see even more attractive M&A targets developing from a pricing standpoint, and whatnot from those private entities. They are having trouble accessing capital.

Speaker 3: Yeah, so two things. I'm going to answer your specific question and then go a little bit broader on M&A. Absolutely, yes. And we just had our board meeting and they had the same exact thought as you, you know, classically, this is a perfect time, you know, to potentially acquire and so forth. So we are out. We are working deals.

Yes, so two things I was I'm going to answer your specific question and then go a little bit broader on M&A.

<unk> and we just had our board meeting and they have the same exact argues classically. This is a perfect time.

To potentially acquire and so forth. So we are out we are working deals to the one chart that David did with capital deployment. The good news also with <unk> as we give our estimates for this year and reaffirm the $18 plus for next year.

Speaker 3: To the one chart that David did with capital deployment, the good news also with ACOR is we give our estimates for this year and reaffirm the $18 plus for next year.

Speaker 3: is there's so many organic opportunities where we're spending $200 million plus on capital that even without M&A, you're comfortable with the $18 EPS for next year. And our management is so focused on that, that we're not going to opportunistically just grab acquisitions for the sake of acquisition. But I think we've always been disciplined and will continue to be disciplined as we quite frankly absorb all the stuff of startup of factories.

Is there are so many organic opportunities, where we're spending $200 million plus loan capital that even without M&A you are comfortable with the $18 EPS for next year and our management. So focus on that that we're not going to opportunistically just grab acquisitions for the <unk>.

<unk> acquisition, but I think we've always been disciplined and we will continue to be disciplined as we quite frankly absorb all the stuff of startup of factories deploy capital for technology that regional service centers and so forth.

Speaker 3: deploying capital for technology, the regional service centers, and so forth.

Thank you very much nice quarter nice year.

Speaker 1: Your next question comes from the line of Dean Dre from RBC. Please go ahead. Your line is open.

Thank you.

Your next question comes from the line of Deane Dray from RBC. Please go ahead. Your line is open.

Thank you good morning, everyone.

Speaker 5: Hey, good morning, Dean. Good morning, Dean. Hey, can we go through pricing dynamics in the quarter and then, you know, the implications on the path to normalization that you talked about in the prepared remarks? So for the quarter, it, you know, pricing ended up being not down as much as we thought it would be, so better on pricing. And just that, how does that factor in lead times, what you're seeing in terms of competition, input, costs, and so forth?

Hey, good morning, Randy Hey, can we go through pricing dynamics in the quarter and then the implications on the path to normalization that you talked about in the prepared remarks. So.

For the quarter.

Reising ended up being.

Not down as much as we thought it would be better on pricing.

And just.

How does that factor in lead times, what youre seeing in terms of competition input costs and so forth.

Yeah, So Deane I think.

<unk>.

Speaker 3: Q4 was slightly better as we expected, and the whole year was slightly better. If you go back and David Raps correctly or you Dean on, you know, we started the year with around an $850 million EBITDA. So again, this was a strong year that beat.

Q4 was slightly better as we expected and the whole year with slightly better. If you go back and David Rach Cracker year on we started the year with around $850 million EBITDA. So again. This was a strong year that beat our expectations and guide analysts' expectations and guide this quarters.

Speaker 3: Our expectations and guide, analysts' expectations and guide, this quarter's, you know, that we just wrapped up, analysts' guide for UPS and EBITDA and so forth. And Pricey still remains.

We just wrapped up and the sky for EPS, and EBITDA, and so forth and pricing still remains good better than what we forecasted but I also one as David walked through in the prepared remarks, we continue to see PVC slowly go down so that's the part of the estimate.

Speaker 3: good, better than what we forecasted, but I also want, as David walked through in the prepared remarks, you know, we continue to see PBC slowly go down, so that's the part of the estimate as we go forward, but really the stuff that we presented in November a year ago is playing out other than slightly better than exactly to go, hey, over a two-year period, here's what we think we're going to keep because of our service, our regional service centers, the ability for one order, one delivery, one in...

As we go forward.

But really the stuff that we presented in November a year ago is playing out other than slightly better other than exactly to go hey over a two year period, Here's what we think we're going to keep because of our service our regional service centers.

<unk> for one order one delivery one invoice.

Speaker 3: Um, you know, we're going to keep some of the price, but we're also going to get back. So, and again.

We're going to keep some of the price, but we're also going to give back some and again PVC, we talk about because thats the biggest product from the price up when you have those dynamics across all of the other products with by the way some products I won't cost specifically, we see given up some price other ones, probably the strongest price either ever or.

Speaker 3: You know, we see given up some price, other ones, probably the strongest price either ever, or at least in the last year or two, and we just put price increases out on.

At least in the last year or two and we just put price increases out on I guess I can share on metal conduit yesterday here is steel cost go up we're raising our metal conduit prices. So.

Speaker 3: I guess I can share on metal conduit. Yesterday here is still cost go up. We're raising our metal conduit prices. So.

Speaker 4: I don't want to say business as usual because it's a headwind, but it's very much playing out like we estimated this time. And, Dean, remember, we always said that the volume in the PBC business obviously is a component of what drives some pricing elements.

I don't want to say business as usual because it's a headwind, but it's very much played out like we estimate at this time and then remember we always said that the volume in the PVC business. Obviously is a component of what drives some pricing element and in Q4, our PVC volumes were flat year over year, which was.

Speaker 4: And in Q4, our PVC volumes were flat year over year, which was certainly better, you know, we were trending better throughout the year, but we started pretty significantly down year over year. So I think that's a positive. Going into Q1, we have seasonality. That business probably has more seasonality than anybody, given that it does go into the ground, so on and so forth.

Certainly better we're trending better throughout the year, but we started pretty significantly down year over year. So I think that's a positive going into Q1, we have seasonality that business probably has more seasonality than anybody given though that does go into the ground. So on and so forth. So I think as bill mentioned pretty much.

Speaker 3: So I think, as Bill mentioned, pretty much in line, maybe slightly better than what we expected. And everything Dean, not part of your question, but what I'm excited about that the shareholders should be is the chart that we walked through where we're forecasting double digit organic growth, which to me was that in the.

In line, maybe slightly better than what we expanded and everything being a part of your question, but what I'm excited about that shareholders should be is the chart that we walk through where we're forecasting double digit organic growth, which to me was that in the dividend or two things there should be very positively received by our shareholders.

Speaker 3: are two things that should be very positively received by our shareholders.

Speaker 3: as we go forward. And that's the two things. In fairness, de-stocking happened last year, so we don't have that happening again.

As we go forward and Thats the two things in fairness Destocking happened last year. So we don't have that happening again.

Speaker 3: um you know in the market and then the fact that we are the self-help of all these different initiatives are starting to pay off here so that's really when we make this statement about you know we're excited about the future of act four these are some of the reasons for

And the market and then the fact that we are the self help of all these different initiatives are starting to pay off here. So that's really when we make the statement about we're excited about the future of <unk>. These are some of the reasons for that.

Speaker 5: That's all good to hear, and that's great color. And just a quick clarification on Alex's question regarding volume. If we were looking for mid-single-digit volume this quarter, you came in low single. How much of that, if you were to size the shortfall there, was the timing of the government stimulus and the telecom choppiness there? Does that account for all of it?

That's all good to hear and that's great color and just a quick clarification on Alex's question regarding volume. If we were looking for mid single digit volume. This quarter you came in low single.

How much of that if you were to size. The shortfall there was the timing of the government stimulus and the telecom.

Choppiness there is that does that account for all of it.

Speaker 4: Do you want to go? Yeah, I can handle. I would say for maybe half to maybe a little bit more than half was due to the HDPE environment. And then the other portion theme would be our slower than anticipated startup for our solar plant.

Do you want to go yes, I can I would say maybe half to maybe a little bit more than half was due to the HCP environment and then the other portion theme would be our slower than anticipated start up.

For our solar.

Plant.

Got it okay. So that one of the two.

Speaker 4: within our control, and the other one, as we mentioned, is probably a market that's gonna take a little bit to get back to where we are.

Within our control and the other one as we've mentioned is probably a market that's going to take a little bit to get get back to where we expect it to be alright that clarification is helpful. And then just last question for me is on cash flow was seasonally for your fiscal fourth quarter a bit light.

Speaker 6: All right, that clarification is helpful. And then just last question for me is, on cash flow, was seasonally for your fiscal fourth quarter a bit light? Just kind of take us through the dynamics there. And I also just want to give a shout out. Great to see you initiate the div.

Just kind of take us through the dynamics, there and I also just want to give a shout out great to see you initiate the dividend.

Speaker 4: All right. Thank you very much. You know, overall, for the full year, our operating cash flow is actually above last year, even though we were $300 million below last year. So I think that was very positive. The timing cue for this year, again, relates to the startup of

Alright, Thank you very much.

Overall for the full year, our operating cash flow is actually above last year, even though we were $300 million.

The EBITDA below last year. So I think that was very positive the timing Q4. This year again relates to the startup of thanks.

Speaker 4: in Indiana, where it's a little bit slower than we expected. So, we have the steel ready to go. So, we had a little bit higher elevated inventory levels probably in solar. And I would argue the same probably is the same in HDPE. Yep. That's

In Indiana, where it's a little bit slower than we expected. So we have the steel ready to go so we had a little bit higher elevated inventory levels, probably in solar and I would argue the same price.

Is the same and HDTV.

Yeah that clarifies thank you.

Youre welcome Thanks gene.

Speaker 1: Your next question comes from the line of Andy from Citigroup. Please go ahead. Your line is open. Hey, good morning everyone.

Your next question comes from the line of Andy Kaplowitz from Citigroup. Please go ahead. Your line is open hey, good morning.

Everyone.

Hey, good morning.

Speaker 7: Bill, maybe just a little more color into your markets. Just inventory of your products, I mean, I think you've talked about it being reasonably low in PVC and metal conduit, is still the case. Are you seeing any impact on larger projects, either non-res or res from the higher rates? I know you talked about stimulus and HDPE, but anything sort of more macro that you could talk about? And I think last quarter you mentioned you were having a strong July . Did you see any change in the cadence of your businesses as you went through Q4 and now here in Q1?

Bill maybe just a little more color into your markets just inventory of your products I mean, I think you've talked about it being reasonably low in PVC and metal conduit is that still the case are you seeing any impact on larger projects either nonresident Reds from from the higher rates I know you said of a stimulus than http, but anything sort of.

A more macro that you could talk about and I think last quarter. You mentioned you are having a strong July July did you see any change in the cadence of your businesses. As you went through Q4 and now here into Q1.

Speaker 3: Yeah, so I'll start and then David may have to help me. It feels like years ago for the last quarter, but they go a different direction go.

Yes, So I'll start and then David May have to help me just feels like years ago for the last quarter our patient.

<unk>, maybe go a different direction.

Speaker 3: the large projects overall are really strong. I would even say, you know, if you look at any macro indicator, ABI, DODGE and so forth, the amount of large projects that are starting with some of the stimulus to go.

Large projects overall are really strong I would even say if you look at any macro indicator.

<unk> died and so forth the amount of large projects that are starting with some of the stimulus to go whether it's new factories going up wasn't chips data centers being driven by artificial intelligence and Thats just in the United States alone again, we do have a global presence here.

Speaker 3: Whether it's new, you know, factories going up, chips, data centers.

Speaker 3: being driven by artificial intelligence, and that's just in the United States, let alone, again, we do have a global presence here, really drives some of the optimism that we have with the forecast for double digit growth.

And really drive some of the optimism that we have with the forecast for double digit growth. So.

Speaker 3: So overall, we're optimistic on the markets going forward, especially with these large projects that we're involved in.

Overall, we are optimistic on the markets going forward, especially with these large projects that we're involved in.

Speaker 4: And then I don't recall anything specifically say July versus August . No, I don't think it's a pretty consistent, but I would also say, Andy, the other thing that we're really encouraged about is other players in our industry have announced quite a bit of capital investment, not for our products, but for other products that we would argue is slowing down just the volumes in the whole industry.

And then I don't recall anything specifically say July versus August so no I don't think it's a pretty consistent but I would also say and the other thing that we're really encouraged about is other players in our industry have announced quite a bit of capital investment thus far our products, but for other products that we would argue is slowing down just the volumes and the whole industry.

Speaker 4: So, the fact that they're investing hundreds of millions of dollars in capacity in the US to help expand the, the electrical capacity. I think that's a very big positive for us. David, maybe not this quarter.

So the fact that they are investing hundreds of millions of dollars in capacity in the U S to help expand the electrical capacity I think that's a very big positive for us.

David maybe not this quarter.

Year. This past this next year, so got it but just to be clear David Youre, not calling for some sort of a big inflection in PVC conduit volume, it's more easy comps or is there more of an inflection that you are calling for when you get the changing growth here in 'twenty four.

Speaker 7: Got it. But just to be clear, David, you're not calling for some sort of big inflection in PVC conduit volume. It's more easy comps or is there more of an inflection that you're calling for when you get the, you know, changing.

Speaker 4: No, I think it is more just one, we don't have the destocking year over year. And so we see some positive sequential vines there. I think you are starting to see continued investment in grid hardening, which I think is another positive. I mean, if we happen to have any slight increase in single family housing or anything like that, that would be helpful, but we're certainly not counting on that.

I think it is more just one we don't have the destocking year over year and so we see some positive sequential volumes. There I think you are starting to see continued investment in grid hardening and which I think is another positive.

We happen to have any slight increase in single family housing or anything like that that would be helpful. But we're certainly not counting on that and then we do have some new products, which we think our customers will like and so I think theres, a little bit of opportunity there yet or Andy I'll also take the same question from like Costa negative, but it's a positive to go.

Speaker 4: And then we do have some new products, which we think our customers will like. And so I think there's a little bit of opportunity.

Speaker 3: Yeah, or Andy, I'll also take the same question from the like call to negative, but it's a positive to go. The markets are there. In other words, the amount of construction backlog is within point two months plus or minus as high as it's ever been.

The markets are there in other words the amount of construction backlog is within two months plus or minus as high as it's ever been architectural billing index was slightly down but the amount. If you actually look into how many months of backlog. There's an architect have is still as strong as it's ever been so all of the volume is.

Speaker 3: architectural building index was slightly down, but the amount, if you actually look into how many months of backlog does an architect have is still as strong as it's ever been. So all the volume is there, let alone when we started getting more of the infrastructure from the IRA and so forth, the IIJ.

They're littered alone when we started getting more of the infrastructure from the IRS.

And so forth AI JA. So it's really becomes what are the limiting factors in it spend labor. So in some ways one could argue a little bit software labor market that we can get more people working construction will help and then it's other people's products like switch gear and so forth. So the more that they get to David's earlier point get out of their bag.

Speaker 3: So it really becomes, what are the limiting factors? And it's been labor, so in some ways, one could argue a little bit softer labor market that we can get more people working construction will help. And then it's other people's products like switchgear and so forth. So the more that they.

Speaker 3: get to David's earlier point, get out of their backlog, the quicker our products will flow. And then as David mentioned, yeah, I'd say we do have easier comps.

All the quicker our products will flow and then as David mentioned, yes, I'd say, we do have easier comps because we don't have the destock on oil so we get the factory up.

Speaker 3: Because we don't have the D stock going on. So we get the factory up. We get some of these projects moving ahead. We get our growth initiatives. We're optimistic as we go forward. Everything is trying to bring something new for these counties.

We get some of these projects moving ahead, we get our growth initiatives. We are optimistic as we go forward obviously.

Speaker 7: Great. And then I just wanted to focus on your guide for the 24 of 25 to 26 percent EBITDA margin. You know, it's obviously up significantly as you've showed us from mid to high teens pre-pandemic. Maybe a little more color on sort of it seems like you're saying, OK, you know, that's basically the trough. I want to sort of clarify that, you know, or at least that sort of new run rate going forward. And then if I look at that chart that you have.

Great and then.

Wanted to focus on your guide for the 24 or 25%, 26% EBITDA margin. It's obviously up significantly as you've showed us from mid to high teens pre pandemic, maybe a little more color on sort of it seems like youre, saying, okay. That's basically the trough I don't want to sort of clarify that or at least that sort of new run.

Run rate going forward and then if I look at that chart that you have you did say there is a down arrow for regarding potential future pricing normalization.

Speaker 7: You did say there's a down arrow for regarding potential future pricing normalization versus what you gave us last year around that bridge to 18 bucks plus. So is pricing normalization still you're going to retain $400 million or did something change there.

Versus what you gave us last year around that bridge to <unk>, plus so is pricing normalization still youre going to retain $400 million or did something change there.

Speaker 4: A very good question. You know, those arrows going from where we are to the 18 wasn't necessarily vis-a-vis versus what we said last time. It's more or less what we think the actual bridge will be. So, but with that, I mean, I think the only thing that that arrow recognizes is we did say 585 million in total.

Very good question universe those arrows.

Going from where we are to the <unk> wasn't necessarily vis vis versus what we said last time, it's more or less what we think the actual bridge will be so but with that.

I think the only thing that that Aero recognizes as we did say $585 million in total and if you're a mid point our current guide plus last year's actuals you'd be around 500, so we're giving ourselves a little bit of it.

Speaker 4: And if you midpoint our current guide plus last year's actuals, you'd be around 500. So we're giving ourselves a little bit of an area saying there could be some continuation in that.

Areas, saying, there could be some continuation in that last year FY.

Speaker 4: last year, FY 25, to get that 85 million or so, you know, obviously, Andy, we'll see as you're

<unk> 25 to get that $85 million or so obviously and you will see as year progresses.

Speaker 7: Got it. And then I just want to ask you about conduits of growth in the context of, you know, you mentioned the solar facility doubling. Are you past the sort of startup issues that you had there? And, you know, is it possible to size, when you look at 24, how much the conduits of growth are helping you, you know, sort of make your forecast on revenue?

Got it and then I just wanted to ask you about conduits of growth in the context of you mentioned the solar facility doubling.

Are you past the sort of startup issues that you had there and is it possible to size. When you look at 'twenty for how much the conduits of growth are helping you.

Make your forecast on revenue or EBITDA.

Speaker 3: Yeah, so we're still working through some of the startups, but we have that in our forecast for this quarter and expect as we go into the next calendar year.

Yes, so we're still working through some of the startups, but we have that in our forecast for this quarter and expect as we go into the next calendar year.

Speaker 3: to be having these things behind us. By the way, we're seeing, we get weekly, our leadership, our president and so forth, daily metrics, but David and I, weekly metrics. And we're seeing the pickup and we're seeing the, you know, hey, here's the next part being run and the turnover time and bringing on another shift of employees. So everything.

To be having these things behind us by the way, we're seeing we get weekly our leadership, our president and so forth daily metrics for David.

Equally metrics and we're seeing the pickup and received the.

Hey, Here's the next part being run in the turnover time in bringing on another shift of employees. So everything basically going as expected we are probably just way too optimistic.

Speaker 3: basically going as expected. We were probably just way too optimistic.

Speaker 3: call it July of the time it takes to start up a whole factory with the whole other workforce, but we're on schedule for that now. And then for the conduit to growth, Andy, I'm going to wing something, but I know David wants to probably speak to it, is the way I look at it is absolutely driving because we're forecasting double-digit growth organic next year. And pick whatever number, 2%, 3% for just what the markets naturally drive. So that extra growth, whether it is

Call. It July of the time it takes to startup a whole factory with all other workforce, but we're on schedule for that now and then for the conduits of growth Andy I'm going to win something but I know David once should probably speak to it is the way I look at it is absolutely driving because we're forecasting double digit growth organic next year and pick.

Whatever number two 3% for just what the markets on the naturally drives so that extra growth whether it is solar torque tubes, whether it is new product development, whether it is the service centers and beyond to drive that one order one delivery one invoice with comprehensive pricing products that's what's.

Speaker 3: solar torque tubes, whether it is new product development, whether it is the service centers and be able to drive that one order, one delivery, one invoice with, you know, comprehensive pricing of products. That's what's driving.

Driving.

Speaker 3: Accor and our optimism in the future to, you know, grow more than the market.

<unk> and our optimism in the future.

Grow more than the markets.

Speaker 4: Exactly, and I would add to the global mega projects are also, you know, part of that and now inside.

And I would add to the global Mega projects are also part of that and now on Slide 10, you can go through I think we did a couple of other things here I. Just wanted to mention is we did outline kind of FY2023 solar credits. So we can isolate that and then we gave you what we think the solar credit.

Speaker 4: And Andy, you can go through, I think, you know, we did a couple other things here. Just want to mention is we did outline kind of F. Y. 23 solar credits so that we can isolate that.

Speaker 4: And then we gave you what we think the solar credit will add to our bottom line for FY24. So we would look at that as more of like a normal year over year as the solar credits around. So you can model that FY25 or so on. But we do still have quite a bit of investment.

We will add to our bottom line for FY 2000, and for US. So we would look at that as more of like a normal year over year as the solar credits around so you can model that in FY 'twenty five or so on but we do still have quite a bit of an investment this year and again thats highlighted in digital.

Speaker 4: this year and again that's highlighted in digital and there are additional two regional service centers so on and so forth. Appreciate it.

The additional two regional service centers, so on and so forth.

I appreciate all the color guys.

Thank you Andy and his team.

Speaker 1: Your next question comes from the line of Chris Dankirk from Loop Capital. Please go ahead. Your line is open. Hey, morning guys. Thanks for taking the question.

Your next question comes from the line of Chris Dankert from Loop capital. Please go ahead. Your line is open.

Hey, good morning, guys. Thanks for taking the questions.

Good morning.

Speaker 8: Just to pull the thread on pricing a little bit more, perhaps, thanks for the color. And again, it's not what the expectation is on 24 and kind of some of the lingering impact on 25. Just when we're thinking about the actions taken to kind of fully reset price cost to that, you know, the 585 you've talked about in the past. Should we assume that those actions are fully complete this year and kind of the rollover impact that ripples into 25?

Just to pull the thread on pricing a little bit more perhaps thanks for the color and again just what the expectation is on 24 and kind of like some of that lingering impact on 25, just when we're thinking about the actions taken to kind of fully reset price cost to that 585, you talked about in the past should we assume that those actions are fully complete this year and just kind of the <unk>.

Rollover impact ripples into 'twenty five.

Speaker 4: Uh, probably I would say no. So, you know of our midpoint of our guide for price costs this year We said 250 essentially and we did the calculation at about 175 million of that was already Baked in whenever you figured that you exited the year lower than we began fy23 So that would suggest there's still a little bit more normalization. There's really no action that's just the amount of the way that the

And probably I would say so.

Our midpoint of our guide for price cost. This year, we spent $2 50 essentially.

Did the calculation of about $175 million of that was already baked in whenever you figure that you exited the year lower than we began FY2023 so that would suggest there is still a little bit more normalization theres really no action, which is the amount of the way that the.

Speaker 3: the market over time goes between volume and price and opportunities and what have you. We've seen a general decline down, probably a lot slower than we probably would have said three years ago. But yeah, which is a good thing from extra capital to be deployed or stock buyback. And then also, Chris, if your question was more 25 versus 24, our current thought process is this would mostly normalize in 24.

The market over time goes between volume and price and opportunities and what have you we've seen the <unk>.

General declined down probably a lot slower than we probably would have said three years ago, but yes, which is a good thing from extra capital will be deployed or stock buyback and then also Chris. If your question was more 25 versus <unk> 24. Our current thought process is this would mostly normalize in 'twenty four right now if you think.

Speaker 3: Now, if you think about it, if we gave slightly more price, let's say, in April of 24, from a comp perspective at the beginning of 25, you're still going to have some discussion about it. And that's where I would just go back and say, we've been

About if we gave slightly more price, let's say in April of 'twenty four from a comp perspective at the beginning of 'twenty five you're still going to have some discussion about it and that's where I would just go back and say we have been.

Speaker 3: My personal opinion, Mayzine will be able to look out three years, plug in 18 APS, explain pricing going down, explain what we're driving, and basically then on every forecast and or exceed most things. So, right now, everything looks to be playing out as we expect it to be, but there will be a little bit of price discussion even in next.

Personally amazing there'll be able to look out three years plug and <unk> explained pricing gone down explain what we're driving and basically being on every forecast <unk>.

Exceed most things so right now everything looks to be playing out as we expect it to be but there will be a little bit of price discussion even in next fiscal year.

Speaker 8: No, thanks for the color. And again, thank you for just the level of candidness. You've kind of approached that whole price cost conversation with. Um, and then when I think about growth into 24 here, how do we think about the impact of the large mega projects and kind of what's assumed in the guides? Should we be kind of assuming, you know, a stronger than seasonal back half, just given the timing of some of these projects?

Thanks for the color and then again. Thank you for just the level of <unk> kind of approach that whole price cost conversation with.

And then when I think about growth into 2004 here, how do we think about the impact of the large mega projects and kind of what's assumed in the guidance should we be kind of assuming a stronger than seasonal back half just given the timing of some of these projects.

Speaker 3: Yeah, I'll jump right into that. Yes, there's a lot of projects without getting too specific on what customer, but we have, I mean, to compliment our team here, just an amazing job on relationships, seeing the value that we bring to them, brand names that are global, and in this case, they want global providers, so whether it's.

I will jump right into that yes, there's a water projects without getting too specific on wide customer, but we have I mean that complement our team here just an amazing job on relationship seen the value that we bring to them brand names that are global and in this case they went global provider. So.

Whether it's.

Speaker 3: Europe , United States, Middle East, wherever it is, we're hooked in. But at this stage, it's really with some of these large projects that we're real close on is getting the PO. Not that we don't have, pick a number, don't lock in on this number, but $100 million of ongoing global mega projects. There are other questions. The data centers and chip manufacturers are, in my opinion, exploding, or at least for us they are. But we will see a much larger impact in the second half of this upcoming fiscal year.

Europe, the United States Middle East wherever it is.

We're hoped in but at this stage, it's really with some of these large projects that we're real close on its getting the PEO and not that we don't have pick a number don't lock in December about $100 million.

Ongoing global Mega projects to earlier question the data centers and chip manufacturers are in my opinion.

Forward here at least for us they are.

But you will see a much larger impact in the second half of it.

This upcoming fiscal year from a year over year perspective.

Speaker 8: Got it. Makes sense. Well, thanks so much for the color and best of luck on 24 here, fellas.

Got it makes sense well. Thanks, so much for the color and best of luck on 24th year Fellows.

Thanks, Chris.

Speaker 1: Your next question comes from the line of Chris Moore from CJS Securities. Please go ahead. Your line is open.

Your next question comes from the line of Chris Moore from CJS Securities. Please go ahead. Your line is open.

Speaker 9: Hey, good morning, guys. Thanks for taking a couple of questions. Maybe we just get a little deeper. Good morning. The CapEx is going to be elevated again in fiscal 24. Talking about the 200 million range. Can you maybe talk a little bit further in terms of where you're focusing there?

Hey, good morning, guys. Thanks for taking a couple of questions maybe.

Maybe we just won't get a little deeper good morning into Capex is going to be elevated again in fiscal 'twenty for talking about $200 million range can you maybe talk a little bit further in terms of where you were.

Are you focusing there.

Speaker 4: Yeah, go ahead. I mean, essentially we still have some digital investments we're making. I think that they're adding and you can see some of our customers are pretty excited for some of our new capabilities. Our two new warehouses or regional service centers will be another piece of the capex. And then there is a little bit, you know, obviously the support to growth of mega projects and what have you, you do need to add some capacity in those areas. So I think generally speaking, Kristin would be the three.

Yes, David Yes.

Essentially we still have some digital investments we're making.

I think that they're adding and you can see from some of our customers are pretty excited for some of our new capabilities are two new warehouses, our regional service centers will be another piece of the Capex and then there is a little bit obviously to support the growth of Mega projects and what have you do need to add some capacity in those areas. So.

I think generally speaking Christina will be the three.

Speaker 9: Got it. I appreciate that. And on the HDPE side, obviously, you know, lots of talk about the telecom softness from...

Got it I appreciate that.

And on the <unk> side obviously.

Lots of talk about the telecom softness from <unk>.

Speaker 9: multiple avenues beyond that in terms of of the end market you're seeing uh you know kind of some thoughts there perhaps

Multiple avenues beyond that in terms of the end markets you are seeing.

Kind of some thoughts there perhaps.

Speaker 3: I think they're good. I mean, it was good with the following things, I would say low single digit growth in general.

I think they are good I mean, it was good with the following things I would say low single digit growth in general.

Speaker 3: not now us as a manufacturer, in fact, that's the end market, like what is being installed.

<unk> now us as the manufacturers to in fact, that's the end market like what is being installed.

Speaker 3: From there, we won't have some of the destocking that occurred earlier in our fiscal year. So therefore that.

From there we won't have some of the destocking that occurred earlier in our fiscal year. So therefore that will help at core so you've kind of almost did my own CEO bridge. So to speak to go how do you go from low single digit to double digit low double digit growth you have that headwind.

Speaker 3: will help ACORP, you know, as you kind of almost did my own CEO bridge, so to speak, to go, how do you go from low single-digit to double-digit, you know, low double-digit growth. You have that headwind of last year going away, so that's going to help. And then, as David and I mentioned, that you

Last year going away. So that's going to help and then as David and I mentioned that U S.

Speaker 3: Every investor should understand, but you won't see if you just looked at square feet or some other metric. Electrification, I think every one of our peers, no matter where you are in the electrical industry, this is going to be the best decade ever.

Investors should understand but you won't see if you just looked at square feet or some other metric is to electrification I think every one of our peers no matter, where you are in the electrical industry. This is going to be the best decade ever.

With just everything from PGD I think just yesterday in the Wall Street journal's re announced a thousand miles or some number around there are bearing electrical cables the grid hardening and in general the beads Act when it comes through just so many different things to go the intensity of a data center for the MRO electrical products that we will put it.

Into that would be more than what a hotel would cost to put up period any sort of like when you win one of these jobs.

Speaker 10: It's intense. So I think it's our conduit to growth, self-hope, on a really good, you know, just secular trends tailwind that we have that kind of bridges us from the markets up low single-digit to where we're aspiring to be low double-digit growth this year. Got it.

Intent, so I think it's at or kind of what's a growth self help on a really good.

Just secular trends tailwind that we have that kind of bridges us from their markets up low single digits.

<unk> were aspiring to be low double digit growth this year.

Got it very helpful. I'll leave it there thanks guys.

Thank you Chris Thank you Chris.

Speaker 1: This concludes the question and answer session. I would now like to turn the call back over to Bill Waltz for closing remarks.

This concludes the question and answer session I would now like to turn the call back over.

To Bill Waltz for closing remarks.

Speaker 3: Before we conclude, let me summarize my three key takeaways from today's discussion.

Before we conclude let me summarize my three key takeaways from today's discussion.

Speaker 3: First, fiscal 2023 was a very good year for ACORN.

First fiscal 2023 was a very good year crack whore.

Speaker 3: Second, we are well positioned to build our positive business momentum and have a strong outlook for fiscal year 2024.

Second we are well positioned to build on our positive business momentum and have a strong path look for fiscal year 2024.

Speaker 3: Third, our strategy will drive further value creation into the future as we continue to execute on our growth opportunities and deliver on our updated capital deployment model.

Third our strategy will drive further value creation into the future as we continue to execute on our growth opportunities and deliver on our updated capital deployment model.

Speaker 3: With that, thank you for your support and interest in our company, and we look forward to speaking with you during our next quarterly call. This concludes the call for today.

With that thank you for your support and interest in our company and we look forward to speaking with you during our next quarterly call. This concludes the call for today.

Speaker 1: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

This concludes today's conference call. Thank you for your participation and you may now disconnect.

Speaker 11: Please wait. The conference will begin shortly. The conference will begin shortly. Please wait. The conference will begin shortly.

Please wait the conference will begin shortly.

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