Q2 2024 Worthington Enterprises Inc Earnings Call
Good afternoon, and welcome to the Worthington Enterprises' second quarter fiscal 'twenty 'twenty four earnings conference call.
All participants will be in a listen only mode until the question and answer session of the call. This conference is being recorded at the request of Worthington enterprises.
Speaker Change: If anyone objects you may disconnect at this time.
Speaker Change: I'd now like to introduce Marcus Rosy Treasurer, and Investor Relations Officer, Mr. Rosy you may begin.
Marcus Rosy: Thank you Jay Al Good morning, everyone and welcome to Worthington Enterprises' second quarter fiscal 2024 earnings call.
Marcus Rosy: Results for our second quarter reflect the performance of the pre separation consolidated Worthington industries.
Marcus Rosy: Including the Worthington steel business, which became a standalone publicly traded company on December 1st.
Marcus Rosy: Given the recent separation today's prepared remarks will primarily focus on the consolidated results as well as the performance of the remaining business segments within Worthington enterprises.
Marcus Rosy: Including building products consumer products and sustainable energy solutions.
Where they can steal will be hosting their second quarter earnings call separately on Friday morning of this week at 830 a M.
Marcus Rosy: So we please ask that you hold any questions about the steel processing business until then.
Marcus Rosy: On our call today, we have Andy Rose Worthingtons, President and Chief Executive Officer, and Joe Hayek, Worthingtons, Chief financial and operations Officer.
Marcus Rosy: Before we get started I'd like to note that certain statements made today are forward looking within the meaning of the 1995 private Securities Litigation Reform Act.
Marcus Rosy: These statements are subject to risks and uncertainties that could cause actual results to differ from those suggested.
We issued our earnings release yesterday after the market close please refer to it for more detail on those factors that could cause actual results to differ materially.
Marcus Rosy: In addition, our discussion today will include non-GAAP financial measures a reconciliation of these measures with the most appropriate comparable GAAP measure is included in the earnings press release, which is available on our Investor Relations website.
Marcus Rosy: Lastly, today's call is being recorded and a replay will be made available later on our website.
Marcus Rosy: This point I'll turn the call over to Andy for opening remarks.
Andy: Thank you Marcus and good morning, everyone, what a year it has been.
Andy: I want to start the call by thanking our employees, who have gone above and beyond to make this separation successful.
Andy: Our people have stayed positive in the face of change and worked tirelessly to set both companies up for success I am confident that the work done by our teams to create Worthington steel and Worthington enterprises was best in class.
Andy: I also want to thank our customers for continuing to have confidence in Worthington steel and Worthington enterprises throughout this process both businesses performed well over the past 15 months and I know these two companies are better positioned for success today as two separate entities than when we began this journey back in 2022.
Andy: And finally I'd like to thank our board of directors for having confidence in our leadership team to not only make the decision to separate the companies, but to dig in and help navigate the journey. This was truly a team effort across many constituencies.
Andy: December 1st March the end of Worthington industries, but it really represents a new beginning we've taken one great company and created two great companies, both of which are well capitalized market, leading businesses poised for growth and value creation.
Andy: We will maintain the best of what has made US great over 68 years, our philosophy written down over 50 years ago by our founder will continue to shape, our culture decision, making and performance.
Andy: <unk> is based on the Golden rule, we treat our customers employees investors and suppliers as we would like to be treated.
Andy: The philosophy is first corporate goal for Worthington is to earn money for our shareholders and increase the value of their investment.
This is underpinned by a performance based culture.
Andy: And above all our belief and our most important asset our people.
Andy: We are excited about our future and Worthington and.
Enterprises and wish our friends at Worthington steel best of luck in their future endeavors, Joe you want to take us through the numbers sure.
Thank you Andy and good morning, everybody.
Joe Hayek: As a unique quarter for us and as Marcus mentioned, we will be reporting the earnings of Worthington industries as a consolidated entity.
Joe Hayek: I will go over those results then focus a bit more on the business units that now make up Huntington enterprises, and we would ask that any questions related to Huntington Steele be held for that team. We have the earnings call is scheduled for Friday morning.
Joe Hayek: In Q2, we reported consolidated earnings of 49, a share versus <unk> 33 per share in the prior year quarter. There were a few unique items that impacted our quarterly results, including the following.
Joe Hayek: We incurred pre tax expense of $22 million or <unk> 33 per share related to the separation of our steel processing business into a new public company, which was completed on December one.
Joe Hayek: This compares to separation expenses of 14 cents a share incurred in the prior year quarter.
Joe Hayek: We may have some minor expenses related to the separation in Q3, but we believe that the majority of those expenses are behind us.
Joe Hayek: We recognized a pre tax gain of $3 million or four cents a share related to the divestiture of the Brazilian business of our cabs joint venture.
Joe Hayek: In the prior year.
Quarter benefited by <unk> <unk> per share primarily due to a gain on the divestiture of our Ws P joint venture, which was partially offset by expenses related to an earn out at level five.
Joe Hayek: Excluding these items, we generated earnings of <unk> 78 per share in the current quarter compared to 44, a share in Q2 of last year.
Joe Hayek: Furthermore, in Q2 estimated inventory holding losses in the steel processing business were <unk> 52 per share compared to inventory holding losses of 81, a share in Q2 of fiscal 'twenty three.
Finally, our consumer business recorded a charge of $3 million or <unk> per share in the quarter related to a voluntary recall on our balloon time many times.
Joe Hayek: Consolidated net sales in the quarter of $1 1 billion decreased seven 5% from the prior year, primarily due to lower average selling prices in steel processing combined with a shift in product mix, which was partially offset by higher volumes across most of our segments.
<unk> profit for the quarter increased to 124 million from $106 million in the prior year and our gross margin increased to 11, 4% from 9% primarily due to improved spreads in steel processing adjusted.
Joe Hayek: Adjusted EBITDA in Q2 was $81 million up from $64 million in Q2 of last year and our trailing 12 month adjusted EBITDA was $556 million.
Joe Hayek: With respect to cash flows and our balance sheet.
Joe Hayek: Cash flow from operations was $135 million in the quarter and free cash flow was $102 million.
Joe Hayek: During the quarter, we invested $33 million in capital projects spent $21 million for an acquisition within the steel processing segment and page $17 million in dividends.
Joe Hayek: Also received $39 million in dividends from our unconsolidated jv's during the quarter, a 93% cash conversion rate on that equity income.
Joe Hayek: Looking at our balance sheet and liquidity position funded debt at quarter end of $624 million was up $175 million sequentially due to the steel processing segment borrowing on our credit facility at the end of the quarter.
Joe Hayek: A portion of the borrowings by steel processing were used to pay a $150 million dividend to Wilmington enterprises immediately before the December 1st business separation.
Joe Hayek: Which we in turn used to retire our $150 million 2024 notes earlier this month.
Joe Hayek: Adjusting for both of those items Willington enterprises currently has approximately $300 million in debt outstanding averaging three 6% and maturing between 2029 and 2034.
Joe Hayek: We ended Q2 with approximately $216 million in cash, which incidentally is yielding over 5%.
Joe Hayek: Net interest expense of $2 million was down by $5 million, primarily due to the interest income we earned on our cash balances and to a lesser extent lower average debt levels.
Joe Hayek: We continue to operate with extremely low leverage ending the quarter with a net debt to trailing EBITDA leverage ratio of under one five times and our cash balance and undrawn $500 million revolver provide ample liquidity.
Joe Hayek: Yesterday, the Worthington Enterprises Board declared a dividend of <unk> 16 per share for the quarter, which is payable in March of 2024.
Okay.
Joe Hayek: I will now spend a few minutes on each of the businesses.
Joe Hayek: I won't go into any details on steel processing and would point you to our earnings release from yesterday afternoon for that segment level detail and encourage you to listen to the earnings call. The steel team will host on Friday morning.
Joe Hayek: Okay.
Consumer products net sales in Q2 were $148 million down 4% from $154 million a year ago.
The decrease was a result of lower average selling prices in our outdoor living business and an unfavorable product mix in our tools business adjust.
Joe Hayek: Adjusted EBIT for the consumer business was $10 million and adjusted EBIT margin was six 4% in Q2 compared to $13 million and eight 8% last year.
Joe Hayek: Tumors earnings during the quarter were negatively impacted by $3 million pre tax related to the voluntary recall, we initiated for a balloon time many times.
Joe Hayek: Excluding the impact of the recall adjusted EBIT and EBIT margin for the quarter would have been in line with the prior year quarter.
Joe Hayek: We did see a sequential improvement in adjusted EBIT compared to Q1, which is encouraging since volumes are typically down sequentially in our seasonally slower second quarter.
Joe Hayek: And consumer September was a down months, but October and November saw improved sequential sales.
Joe Hayek: The team in consumer has weathered the headwinds, they're facing quite well and we've taken the opportunity to lean in with our channel partners that led to some recent market share gains that we expect will add to our growth in calendar 2024.
Joe Hayek: We expect volumes and margins to gradually improve in our outdoor living business.
Joe Hayek: And we expect to return to more seasonally normal patterns across our portfolio in the coming quarters. The markets. We serve are robust and we are well positioned heading into calendar 2024.
Building products generated net sales of $123 million in Q2 down 13% from $142 million a year ago.
Joe Hayek: The decrease was driven by a less favorable product mix combined with lower average selling prices building.
Joe Hayek: Building products generated adjusted EBIT of $40 million in the quarter and adjusted EBIT margin was 32, 8% compared to $41 million and 29, 1% in Q2 of last year.
The fact that EBIT decreased by less than $1 million, while revenues were down almost $20 million is encouraging.
Joe Hayek: As a result of higher gross margins in our wholly owned businesses.
Joe Hayek: We are experiencing some destocking in our heating and cooling construction end markets, particularly in the large format propane business as our customers are right sizing inventories.
Joe Hayek: The weakness there was offset in Q2 by EBIT growth in most of our other end markets driven by some of the initiatives. We put in place months ago that are starting to have a positive impact.
Wave contributed equity earnings of $21 million in the quarter up from $19 million a year ago as their volumes increased and gross margins improved and that improvement was offset by a $2 million year over year decrease at Clark Dietrich, which continues to.
Joe Hayek: Performed very well and contributed $14 million in equity earnings for the quarter.
Joe Hayek: Both Wayne and Clark Dietrich are showing real resilience as they leverage opportunities related to infrastructure spending and their efforts and NPD and innovation.
Joe Hayek: And sustainable energy solutions net sales in Q2 of $28 million were down 28% or $11 million from the prior year, primarily due to lower volumes and an unfavorable product mix.
Joe Hayek: <unk> reported an adjusted EBIT loss of $3 million in the current quarter as volumes remained too low to absorb the fixed costs in the business as compared to adjusted EBIT of $1 million in Q2 of last year.
Joe Hayek: As we've discussed in prior quarters the economy in Europe remains challenged and growth in SCS as volumes will be impacted by how quickly the emerging hydrogen and CMG ecosystems develop.
Quoting activity and interest in our solutions remains high which gives us confidence in that business going forward.
Joe Hayek: As I mentioned earlier this is a unique quarter for us and it is the last quarter that we'll report our segments as Worthington industries.
In preparation for the separation. This fall we introduced a reconciliation for revenues and EBITDA Woodington enterprises Ah represents our best estimates for Brilinta in enterprises results on a pro forma standalone basis at the separation of our steel processing business been completed prior to the beginning of each period presented.
We believe this reconciliation will help provide increased transparency and insight into our quarterly results.
Looking at enterprises results for Q2 2024 in that same way pro forma adjusted EBITDA would have been $51 3 million versus $57 7 million a year ago.
For the trailing 12 months ended November 30th Enterprises pro forma adjusted EBITDA would have been $280 million the slight decline from the $287 million in trailing 12 months pro forma adjusted EBITDA as of August 31.
Joe Hayek: And our pro forma adjusted EBITDA margin was unchanged at 21%.
Joe Hayek: The above figures do include the $3 million charge related to the recall that I mentioned earlier.
Capex for Wilmington enterprises in the quarter was $12 million and the business segments 3 million of which was related to the onetime capex that we've discussed previously and we'll be spending the modernized two of our facilities. When it's in industries also had approximately $4 million in onetime capex related to it and other systems that enabled this.
Operations of our steel processing business.
Joe Hayek: At this point I will turn it back over to Andrew.
Andrew: Thanks, Joe.
Andrew: Now that the separation is complete at Worthington enterprises, we are laser focused on maximizing the long term growth potential of our consumer products building products and sustainable energy businesses.
Andrew: We are more focused strategic priorities as a designer and manufacturer of market, leading products and brands that enable people to live safer healthier and more expressive lives.
Andrew: We are a growth company with transformation acquisitions and innovation is our strategic enablers.
Andrew: We believe in innovation in everything we do.
Andrew: We expect to launch more new and enhanced products every year to better serve our customers.
We are a disciplined acquirer of market, leading niche businesses that will bolster our consumer and building products brands.
We transform our operations and use technology, both in our operations and increasingly in the products, we deliver to our customers.
Andrew: We believe in a balanced approach to profitably improving our ESG performance to benefit all stakeholders and we are enabling a lower carbon economy with our products and services as evidence. We recently released our fourth annual sustainability report and in conjunction we're awarded Newsweek America's most responsible.
Andrew: <unk> companies and greatest workplaces for diversity for 2024.
Andrew: And finally, we are good stewards of capital investing thoughtfully to deliver higher margins more free cash flow and higher returns.
Andrew: We are proud of our history and who we are today, but we know we will be defined in the future by our ability to leverage these capabilities to reward our employees our customers our suppliers and our shareholders.
Speaker Change: Thanks for your time today.
Speaker Change: We'll now take any questions related to the separation or Worthington enterprises.
Speaker Change: Thank you and if you have a question. Please press star one on your telephone keypad, if you wish to remove yourself from the queue simply press Star One again one moment. Please for your first question.
Speaker Change: Yeah.
Speaker Change: Your first question comes from the line of Phil Gibbs of Keybanc capital markets. Your line is open.
Phil Gibbs: Hey, good morning.
Phil Gibbs: Good morning, Phil.
Phil Gibbs: Congratulations we're here.
Phil Gibbs: Yes, Sir thank you.
Phil Gibbs: Lots lots lots to be proud of lots to look forward to and as Andy said lots of people.
In the building that we're in and all over our company deserve all the credit.
Speaker Change: Awesome congratulations.
Speaker Change: The construction markets last quarter, you had bifurcated between aftermarket and retrofit with ways hanging in there being solid and Clark Dietrich tapering off.
Speaker Change: Any update on that on that thought any further weakness in card defence backlog per se versus waives any any color you can provide there.
Speaker Change: We're just sticking with with Q2.
Speaker Change: Wave wave was up a couple of million dollars car T. J was was down a couple of million dollars bear in mind both of those companies are doing.
Speaker Change: Well wave is $65, 70% repair and remodel our future. It is a little bit more focused on on new.
Speaker Change: But if you look at the there are lots of different kind of construction market.
Speaker Change: <unk> and analysts that are out there.
Speaker Change: Some of them that we've looked at said that you know in November commercial was still down a bit but most of the other end markets.
Speaker Change: Both of these companies play in a variety of different end markets were actually up year over year, so not at all a market prognosticator, but with interest rates.
Speaker Change: Possibly being at a peak and people are getting a bit more optimistic about what 24 might look like relative to the fears that were out there in six months six months ago, we're pretty optimistic.
Speaker Change: Thank you and I'm not asking the direct question on Worthington steel, but how is the relationship between the company is going to be moving forward. Just in terms of steel procurement I know that was obviously something that was important to you all with the cylinders portfolio and.
Some of the other businesses.
Speaker Change: Yes, we have a long term purchase purchasing agreement with Worthington steel. So we will be one of their larger customers fill in.
Speaker Change: Obviously, they have to make money on the steel that we buy but we've been able to prove.
Speaker Change: Preserve a lot of the benefit that we get from having them having a close.
Speaker Change: Customer supplier relationship with them.
Speaker Change: Thank you and then just lastly, I know on the.
Speaker Change: Kind of Investor presentations from a couple of months ago, you had talked about.
Speaker Change: A decent amount of growth.
Speaker Change: Capex. The next couple of years for the business post.
Speaker Change: Separate.
Speaker Change: Can you update us on what Capex looks like over the next year or two on these growth projects and then really what you are targeting to accomplish with those investments. Thanks.
Speaker Change: Sure. So we have talked about.
Speaker Change: What we call kind of a one time facility modernization capex, it's two different facilities.
Speaker Change: It's roughly $80 million and it's intended.
Speaker Change: Modernize automate and make those facilities.
Speaker Change: Ready and able to continue to grow and.
Do exceptionally well for the next 20 to 30 years, the way that that will rollout in the Capex our run rate capex for the business. Excluding those two projects is going to be in kind of the mid thirties and roughly when you think about it is about 3% of sales.
Speaker Change: Those different than I think we called it out this quarter about $3 million in the quarter was was related to that and so if you exclude that $3 million that gives us that enterprises, you know roughly $9 million in the quarter was $8 million in Q1, so that $17 million for the first six months.
Speaker Change: <unk> right on that kind of mid thirties number that $80 million, depending on supply chains and other factors.
Speaker Change: Hello.
Speaker Change: Be underway in the next several months in earnest, but it'll probably take 18 to 24 months to flush all the way through and what we will do is we'll.
Speaker Change: Keep everybody posted on the spending on those projects and then the spending on all the other parts of the business.
In the same way.
Speaker Change: Okay.
Speaker Change: Thank you. Your next question comes from the line of Daniel Moore of CJS Securities. Your line is open.
Daniel Moore: Thank you good morning, thanks for taking the questions and congrats again.
Daniel Moore: A lot of times Dino.
Dino: Yes, absolutely you gave a lot of color on the segments, but maybe you can drill down a little bit consumer to start no revenue in Q1 was down 20%, but only down 4% this quarter and flat sequentially. So.
Dino: Maybe just talk about.
Dino: To what extent that business is impacted by inventory Destocking is that now largely behind us.
Dino: What are your expectations. It sounds like you expect to get back to growth with some share gains is that the case for the next two quarters or maybe take a little bit longer to inflect positively.
Dino: Yes.
Speaker Change: It's definitely that's calendar 2020 for the business for a stand, but youre right and I know that.
Speaker Change: We're not kind of unique right with the outdoor living focused and consumer focused.
Brands and companies had some real headwinds over the summer and we've talked about that right with the consumer being a bit more careful spending more time and money on experiences versus things in an outdoor activities.
But then also the summer weather.
Speaker Change: Didn't help matters, we did absolutely see that kind of moderate we talked about September.
Speaker Change: September really we think was the trough for <unk>.
Speaker Change: That leg of the.
Real pronounced headwinds so October and November got better for us.
Speaker Change: We're not totally through the woods right. It's the consumer is not back to spending the way that they were in 2021 and 2022, but we.
We do expect to see more seasonally normal trends for.
Speaker Change: For us in Q3 and into Q4 that typically means sequential growth. So we're looking forward to that and as we said to the team did a nice job of kind of being there and being real thought partners with their customers and so that led to some <unk>.
Speaker Change: Incremental share gains and some placement wins, which we think will be helpful as well.
Speaker Change: That's helpful certainly and switching gears to building products.
Speaker Change: Revenue for.
It still remains pressured wouldn't obviously, excluding the JV is because we don't count that revenue but.
Speaker Change: And then excluding Jv's profitability was a little bit softer.
Speaker Change: So it may be your outlook there.
Speaker Change: About <unk> of our teacher again, and we've but kind of the core.
Speaker Change: <unk> fully consolidated building products just talk about.
Speaker Change: Your visibility that you have in that business over the next couple of quarters and when you expect to maybe get back to sort of positive year over year growth.
Speaker Change: Sure so that business and we talked about this there was the large format propane tanks switches and things that would sit outside buildings or be used for construction projects or be used to heat homes.
Speaker Change: That's when.
Speaker Change: When we talk about mix right.
Speaker Change: More expensive products, which is why we talk about a negative mix in the revenue side of things.
Speaker Change: Saw some destocking there it started in Q1. It continued in Q2, and we expect that we will.
Moderate a bit and should we should be we think we'll be through that by the end of Q4.
Speaker Change: We'll certainly see some of it in Q3, but it ought to get to where it has historically been we think by the time, we get into the summer months and so.
Speaker Change: Feel good about that business just need to get through some of the inventory and a right sizing that our customers are going through the upside in building products really was you know being down less than $1 million all in some some really good work on expense management side. In addition to the gross margin side.
Speaker Change: Other end markets that were in there really picked up a lot of the slack and we expect and certainly hope that that type of activity will continue which gives us cause for optimism as we head into 2024.
Speaker Change: Very helpful.
Speaker Change: Just one more and I'll jump back out and it's more of a longer term sort of question.
Speaker Change: Clark Dietrich specifically.
Speaker Change: Obviously as we've talked about the last two years, so that business exceptionally strong relative to kind of historic levels of profitability and started to normalize a little bit.
Speaker Change: Talking about what's changed in that business over the past few years that gives you confidence that the contribution will remain well above sort of pre pandemic levels. Thanks again.
Speaker Change: Sure.
Clearly that business has changed in terms of its equity income contribution for us.
Speaker Change: They've done a terrific job of understanding who their customers are understanding what their customers really value.
Speaker Change: And Thats being full service, it's being thoughtful about the entire kind of ecosystem that their customers participate in not just delivering a load of steel, but helping to think about.
Speaker Change: How those.
Speaker Change: Connectors and how the other accessories that they sell are important how they can save contractors time.
Speaker Change: So.
Speaker Change: Yes, we do.
Speaker Change: And we've talked about this right. We don't we don't expect that those results will stay forever or grow forever from where they were in 2022, you know they moderated some in 2023, we've talked about the moderating.
Speaker Change: <unk> in 2024, but long term, we're very bullish on that business they've got a great management team, we're very happy to be a part of that JV.
Speaker Change: Thank you and again, if you would like to ask a question press star and the number one on your telephone keypad. Your next question comes from the line of John Tumazos, John Tumazos very independent research. Your line is open.
John Tumazos: Congratulations on the nine new dollar combined value of the two companies enterprises trading at more than the whole.
Speaker Change: <unk> Worthington before you announced it well done.
Worthington: Thank you John Thanks, John.
Worthington: Question on <unk>.
Worthington: Quarterly dividends at <unk> or half of the old company dividend.
I was I thought that was very low.
Worthington: I was in.
Worthington: In the context.
Worthington: The balance.
Balance sheet allocation between the two companies were.
There is almost no net debt.
Worthington: And enterprises and you explained how there isn't very much capital spending needs.
Worthington: Relative to your cash flow.
Worthington: Sure.
Other company has.
Worthington: The preponderance of the net debt and the imminent capital needed to fund working capital because steel prices rose.
Worthington: So.
Worthington: In context.
Why isn't the dividend payment.
Worthington: Sure.
Worthington: Balance sheet is so good.
Worthington: And could you some people might be concerned.
Youre not confident in earnings.
Worthington: That's not really my worry my worry you can address.
Worthington: As the balance sheet is super strong and the dividend as well.
Worthington: Save up a half a billion or more firepower.
Worthington: For a transformational acquisition.
Or.
Worthington: Above average path for future acquisitions.
Every investment.
Worthington: I think there's a question in there somewhere John but I'm going to I'm going to take it taken attempt here, you're correct more blunt or you're going to make a corporate six change acquisition.
Worthington: To transform the company and that's why the dividends so low in the balance sheet. So good.
Speaker Change: Well, let me, let me start by saying you know the past year or so year and a half has been about working towards the separation and <unk>.
Speaker Change: <unk> seen us very purposefully delever the business, we were very focused on maintaining our investment grade credit rating.
And you're correct in that we certainly could pay a larger dividend I would tell you that you know historically, we've kind of revisited our dividend payout ratio in the June timeframe around that board meeting and so we go through strategic planning in the spring.
Speaker Change: Do our operating plans and kind of look at you know cash flow forecast and those types of things and that's where we make those decisions I will tell you. We do believe that M&A is going to be important part of our growth strategy.
Speaker Change: I don't.
Speaker Change: Expect that anytime soon we're going to do some transformational acquisition, that's going to double the size of the business. That's not historically, what we've done we've we've very much pursued kind of smaller tuck in acquisitions that week.
Speaker Change: Can get our arms around pretty easily and plug them into our our Worthington business system, which includes transformation innovation.
Speaker Change: And I think thats likely to be the strategy going forward. We we look at a lot of different types of companies. We look at a lot of different sizes of companies, but we've had a lot more success buying smaller tuck ins and really accelerating our growth. So that's.
Speaker Change: And that's kind of the plan right now and so I do think as.
Speaker Change: As the company continues to grow we have very high free cash flow for the business. So we can support higher dividends or potentially share buybacks, but you know.
Speaker Change: Right now our focus is less.
Get the company separated that's complete let the dust settle and let's refocus and then kind of figure out what makes the most sense in terms of capital allocation.
Speaker Change: If I could follow up with a very successful separation and the stock price.
Speaker Change: Enterprise is more than the old stock prices the old Worthington.
Speaker Change: Maybe in hindsight it was really discounted because of the steel volatility contained should we expect that to buybacks.
Speaker Change: Yes.
Speaker Change: Use of capital going forward stock price is so successful.
Speaker Change: Hey, John It's Joe.
John Tumazos: He said will ultimately determine the best capital allocation strategies for the business going forward.
John Tumazos: We've been balanced before we've been opportunistic when it comes to buyback but.
John Tumazos: It's still it will be an arrow in our quiver and ultimately the board and the management team will decide how best to deploy that.
Thank you.
Speaker Change: There are no further questions at this time I will now turn the call over back to Andy Rose for some closing remarks.
Andy Rose: Well. Thank you everyone for joining us today, it's a exciting time for us and I appreciate everybody's interest in Worthington enterprises, we wish everybody a terrific holiday season, a safe and happy new year, and we will look forward to speaking to you in 2024.
Speaker Change: Thanks, everybody.
Speaker Change: That concludes today's conference call you may now disconnect.