Q1 2025 Worthington Enterprises Inc Earnings Call
Speaker Change: Good afternoon and welcome to the Worthington Enterprise's first quarter fiscal 2025 earnings conference call. All participants will be able to listen only until the question and answer session of the call. This conference is being recorded at the request of Worthington Enterprise's. If anyone objects, you may disconnect at this time.
Operator: First Quarter Fiscal 2025 Earnings Conference Call.
Operator: All participants will be able to listen only until the question and answer session of the call.
Operator: This conference is being recorded at the request of Worthington Enterprises. If anyone objects, you may disconnect at this time.
Marcus Rogier: I'd now like to introduce Marcus Rogier, Treasurer and Investor Relations Officer. Mr. Rogier. You may begin.
Speaker Change: I'd now like to introduce Marcus Rogier, Treasurer and Investor Relations Officer, Mr. Rogier, you may begin.
Operator: Thank you, Rob.
Marcus Rogier: Good morning, everyone, and thank you for joining us for Worthington Enterprises. First Quarter Fiscal 2025 Earnings Call. On our call today, we have Andy Rose, Worthington's President and Chief Executive Officer, and Joe Hayek, Worthington's Chief Financial and Operations Officer.
Marcus Rogier: Thank you Rob. Good morning everyone and thank you for joining us for working to memorize this first quarter fiscal 2025 earnings call. On our call today we have Andy Rose, Woodley from President and Chief Executive Officer and Joe Hayek, Woodley from Chief Financial and Operations Officer.
Operator: 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. These statements are subject to risks and uncertainties that cause actual results to differ from those discussed. We issued our earnings release yesterday after the market closed. Please refer to it for more detail on those factors that cause actual results to differ from those to get it.
Speaker Change: Before we get started, I'd like to note that certain statements may today are forward-looking within the meaning of the 1995 private-steerized litigation performance. These statements say subject to risk and uncertainties that cause actors all to differ from those guesses.
Speaker Change: We issued our earnings release yesterday after the marked close. Please refer to it for more detail on those factors that cause extra results to differ from those to guess it.
Operator: In addition, our discussion today will include non-GAAP financial measures. A reconciliation of these measures, the most appropriate comparable gap measure, is included in the earnings press release, which is available on our Investor Relations website.
Speaker Change: In addition, our discussions today will include non-gap financial measures. A reconciliation of these measures, the most appropriate and terrible gap measures, is included in the earnings press release, which is available on our Investor Relations website.
Operator: Today's call is being recorded, and a replay will be made available later on our Worthington Enterprises.com website.
Speaker Change: Today's call is being recorded and a replay will be available later on our Ruralington Enterprise.com website.
Andy Rose: At this point, I will turn the call over to Andy for opening remarks. Thank you, Marcus, and good morning. I want to welcome you to Worthington Enterprises 2025 Disco First Quarter Earnings Call. Despite a tough environment of high interest rates and macroeconomic uncertainty, our team delivered another respectable quarter with adjusted EBITDA of 48 million and adjusted earnings per share of 50 cents versus 75 cents in the prior year. The two big drivers of the decline are clarity-trick down 8 million and the heating and cooking business in building products, which we see clear evidence that is at the bottom of its post-COVID-D stock cycle.
Speaker Change: This point, I will turn the call over to Andy for opening remarks.
Andy: Thank you Marcus in good morning.
Speaker Change: I want to welcome you to Woodington Center for Ayages.
Andy: 2025, the school first quarter earnings call. Despite its tough environment, the high interest rates and macroeconomic uncertainty, our team delivered another respectable quarter with a just an EBITDA 48 million and adjusted earnings for share of 50 cents versus 75 cents in the prior year.
Speaker Change: The two big drivers of this climb are Clark Dietrich down 8 million, and the heating and cooking business in building products, which we see clear evidence that is at the bottom of its post-COVID-D stocking site.
Andy Rose: Despite these challenges, we have a positive long-term outlook as the balance of our businesses remains steady with some markets improving year over year. The integration of our acquisition of Hexagon Regasco and the launch of our sustainable energy solutions joint venture with Hexagon Composites have both gone well. Overall, our strong balance sheet in the market-leading products and brands have us well positioned to take advantage of positive long-term secular trends in a more favorable interest rate backdrop as rates fall.
Speaker Change: Dispaces challenges, we have a positive, long-term outlook as the balance of our business's remains steady with some markets improving year over year.
Speaker Change: The integration of our acquisition of hexagon, regasco, and the launch of our sustainable energy solutions joining mentor with hexagon composites have both gone well.
Speaker Change: Overall, our strong balance sheet in market leading products and brands have us well-positioned to take advantage of positive long-term secular trends in a more favorable interest rate backdrop because rates fall.
Andy Rose: Three notable events during the quarter are worth highlighting. Earlier this month, we broke ground on a modernization project that our children with constant campus where we manufacture burns amatic and meg torch and torches in fuel cylinders. A new 58,000 square foot building and automated equipment will increase production efficiencies, building on our competitive advantage and helping ensure continued product quality and safety performance while allowing for future expansion. Second, Newsweek recognized Worthington Enterprises for two awards: America's Greatest Workplaces and the World's Most Trustworthy Companies. Worthington is one of 38 industrial products companies to earn the America's Greatest Workplaces distinction that recognizes compensation and benefits, training and career progression, work-life balance, and company culture.
Speaker Change: 3 notable events during the quarter were highlighting. Earlier this month, we broke ground on a modernization project at our children with constant campus, where we manufacture burns of madact and mags, torch, and torches and fuel cylinders.
Speaker Change: A new 58,000 square foot building and automated equipment will increase production efficiencies, building on our competitive advantage in helping ensure continued product quality and safety performance while allowing for future expansion.
Speaker Change: Second, Newsweek recognized Warthington Enterprises for two awards, America's greatest workplaces in the world's most trustworthy companies.
Wellington: Wellington is one of 38 industrial products companies to earn the America's greatest workplaces distinction that recognizes compensation and benefits, training and career progression, work life balance in company culture.
Andy Rose: and we were one of a thousand companies across 20 countries to earn recognition as the world's most trustworthy companies. Once again, our people first, performance-based culture is a true different year. Congratulations to our people who earn these honors every day with their hard work and dedication to our philosophy and the Golden Rule.
Wellington: and we were one of 1,000 companies across 20 countries to earn recognition as the world's most trustworthy companies.
Speaker Change: Once again, our people first performance-based culture is a true different year. Congratulations to our people who've learned these honors every day with their hard work and dedication to our philosophy and the Golden Rule.
Andy Rose: Finally, yesterday we published our annual corporate citizenship and sustainability report detailing the company's commitment, management approach, and achievements focused on four categories. People first, process, and plan a sustainable products and responsible governance. We have taken significant strides in our first year as Worthington Enterprises to use sustainability as an enabler for success and are committed to achieving meaningful outcomes in collaboration with our customers, suppliers, and communities. Our culture, guided by our philosophy and the golden rule, and our focus on doing the right thing, make this effort a natural extension of who we already are as a company.
Speaker Change: Finally, yesterday we published our annual corporate citizenship and sustainability report detailing the company's commitment, management approach and achievements focused on four categories. People first, process and plan a sustainable product in responsible governance.
Speaker Change: We have to take in significant strides in our first year as Worthington Enterprises to use sustainability as an enabler for success and are committed to achieving meaningful outcomes in collaboration with our customer suppliers and communities.
Speaker Change: Our culture guided by our philosophy in the golden rule and our focus on doing the right thing, make this effort the natural extension of who we already are as a company.
Andy Rose: The Worthington business system of transformation, innovation, and M&A will enable us to achieve accelerated growth and earnings. Today, we are particularly focused on building a meaningful M&A pipeline and further enhancing our innovation capabilities so we can bring more and better products to market faster and incorporate sustainable technologies that will deliver significant value to our customers and make us a more valuable partner.
Speaker Change: The Wellington Business System of Transformation Innovations and M&A will enable us to achieve accelerated growth in earnings.
Speaker Change: Today, we are particularly focused on building to meaningful M&A pipeline and further enhancing our innovation capabilities.
Speaker Change: So we can bring more and better products to market faster and incorporate sustainable technologies that will deliver significant value to our customers and make it some more valuable partner. We are working hard to reunite our growth as Wellington enterprises and Joe will now walk you through the numbers.
Andy Rose: We are working hard to reignite our growth as Worthington Enterprises, and Joe will now walk you through the numbers.
Joe Hayek: Thank you.
Joe Hayek: Any morning, everyone. In Q1, reported gap earnings from continuing operations of 48 cents per share versus 54 cents in the prior year.
Joe: Thank you for your everyone.
Joe: Thank you very much for the journey to continue the operations of 48 cents per share for just 54 cents in the prior year. So we're a few unique items that impacted our quarterly results including the following.
Joe Hayek: The work used unique items that impacted our quarterly results, including the following. The current quarter was negatively impacted by restructuring charges of $1 million, or two cents per share. It was often the prior year quarter were negatively impacted by 21 cents a share due to several items. The largest being corporate costs that were eliminated at the time of separation, along with transaction costs related to the separation of our steel processing business, and one time charge related to the early extinguishment of our 2026 public ponds. Excluding these items, we generated adjusted earnings from continuing operations of 50 cents per share in the current quarter compared to 75 cents per share in Q1 last year.
Joe: The Kirk Quarters negatively impacted by a stress-stream charge of $1 million for two cents per share.
Joe: was also in the prior year for it over negatively affected by 21 sense of sharing due to several items. Larges being corporate costs that were eliminated at the time of separation, along with transaction cost related to the separation of our sealed processing business.
Joe: and one time charge related to the earliest foolishness of our 2020 6-Public Pants.
Joe: Scooting these items, we generated adjusted earnings, we continued operations of 50 cents per share in the current quarter compared to 75 cents per share in Q1 last year.
Joe Hayek: In addition, our Q1 results were negatively impacted by $2 million, or three cents a share, related to purchase accounting adjustments and costs associated with our acquisition of Hexagon Regasco. Consolidated net sales in the quarter of $257 million decreased 17.5% from $312 million in the prior year. The decrease was driven by the decontalitation of our former sustainable energy solution submit, which contributed $29 million in sales in the prior year quarter, combined with loan volumes and an unfavorable mix in building products.
Joe: In addition, our two-one results were negatively impacted by $2 million for three cents to share, related to purchasing counting adjustments and costs associated with our acquisition in the hexagon of Regasca.
Joe: The solid in next sales in the quarter of $250,000,000,000, C3, 17.5% from 312,000,000 in the prior year.
Joe: The decrease was driven by the decensalination of our former Sustainable Energy Solutions segment, which contributed to $29 million in sales in the prior year quarter, combined with low volumes and an unfavorable Nixon-building process, excluding the impact of the SDSD consolidation, sales would down 9%.
Joe Hayek: Excluding the impact of the SDS decontalitation, the sales were down 9%. A gross profit for the quarter decreased to $52 million compared to $70 million in the prior year quarter. During by lower sales, while gross margin actually increased approximately 200 basis points to 24.3% in the current quarter. Justin Yvita on Q1 was $48 million, down from $66 million in Q1 last year. Trailing 12 months of Justin Yvita is now $234 million, and our Trailing 12 months of Justin Yvita margin is 19.6%.
Joe: A gross profit for the quarter decreased to 62 million dollars to purchase 70 million in the prior year of quarter. During by lower sales, while gross margin actually increased approximately 200 basis points to 24.3% in the current quarter.
Speaker Change: Just a few times, Q1 was 48 million dollars down from 66 million in Q1 in the last year. Trailing 12 months to just a few times now, 230,000,000 dollars in our Trailing 12 months to just a few days, but that margin is 19.6%.
Speaker Change: Respect and cash flows in our balance sheet, cash flows from operations was 41 million in the quarter and free cash flows 32 million. During the quarter, we invested 10 million of capital projects, which included 5 million related to our previously mentioned facility modernization projects.
Joe Hayek: We recently mentioned facility modernization projects. We spent $89 million to close the hexagon regat swept position on June 3rd. We paid $8 million dividends. We spent $7 million to repurchase 150,000 shares of our common stock. We also received $12 million in the proceeds associated with selling 51% of former FCS segment as part of the formation of our JV with Hexagon. And we received $39 million in dividends from our unsolidated JV during the quarter, which represents a 110% cash conversion rate on that equity income. Looking at our balance sheet and liquidity position, weighted the quarter with $300 million of long-term funded debt carrying an average interest rate of 3.6% and $179 million of cash yielding around 5%.
Speaker Change: We spent 89 million dollars to close the hexagon, regardless of what positional June 3rd. We paid 8 million dollars in dividends, spent 7 million dollars to repurchase 150,000 shares of our kind of stock.
Speaker Change: We've also received 12 million of proceeds associated with selling 51%.
Speaker Change: The former FCS segment has part of the formation of our JV with hexagon and we received 39 million dollars from our uncool-solid JV during the quarter which represents a 110% cash conversion rate on that equity income.
Speaker Change: I think it our balance sheet and liquidity position, we did a quarter with $300 million of lump term funded debt, carrying an average interest rate of 3.6% and $179 million of cash yielding around 5%.
Joe Hayek: Continue to operate with extremely low leverage, ending the quarter with the net debt to trailing Yvita leverage ratio of approximately a half a turn.
Speaker Change: Continued operate with extremely low beverage, ending the quarter with the net debt to trailing EBITDA on leverage ratio of approximately a half a turn, where well-positioned with ample liquidity including a $500 million un-drawn bank credit facility.
Joe Hayek: We're well positioned with ample liquidity, including a $500 million undrawn bank credit facility. Yesterday, the Worthington Enterprises board declared a dividend of 17 cents per share for the quarter, which is payable in December of 2024.
Speaker Change: Yesterday, and winning tonight a prize in the board, declared a dividend of 17 cents per share for the quarter, which is payable in December of 2024.
Joe Hayek: We'll now spend a few minutes on each of the businesses. In consumer products, net sales in Q1 of $118 million were essentially flat from a year ago, with volumes up slightly compared to the prior year. Jeff, that he was offered a consumer business with $18 million in adjusted EBITDA margin was 15.1% in Q1 compared to $14 million in 12.2% in Q1 of last year. A consumer team that continued to face headlines caught by general economic uncertainty impacting consumer spending across multiple product categories. Along with the decrease in existing in new home sales, which continues to depress repair a model activity that impacts our tools businesses.
Speaker Change: Woon out for a few minutes on each of the best of us.
Speaker Change: Thank you to my products, next sales, thank you one of 118 million, we're essentially flat from a year ago, with volumes up slightly compared to the prior year.
Speaker Change: Just at Egypt after the consumer business was 18 million dollars in a just at Egypt. Marching was 15.1% into one compared to 14 million and 12.2% into one of last year.
Speaker Change: Our consumer team has continued to face headlines caused by generally counter-counric uncertainty, impacting consumer spending across multiple product categories. Along with the decrease in existing and new home sales, which continues to depress repair and model activities that impact our tools businesses.
Joe Hayek: Despite concerns about the economy, we are encouraged by the year-to-year improvement in adjusted EBITDA, as well as the cultural improvements in volume and EBITDA margin. There's up 3.3% in 150 basis points, respectively, from Q4. We believe current volumes are reflected in the point of sale activities, and there's no material to stocking. Consumer business's well-position were growth as market conditions improved, as we continue to partner with the retail customers and deliver market-leading products that are central to our living activities, celebrations, and home improvement projects. Building products generated net sales of $140 million in Q1, down 16% from $166 million a year ago.
Speaker Change: Despite concerns about the economy, we aren't very excited, but you're the year improvement in a justice event, as well as sequential improvements in volume any of the top margins. There's up 3.3% and 150 basis points respectively from Q4.
Speaker Change: The believe current volumes are reflected with point of sale activities and there's no material to stop it.
Speaker Change: Consumer Businesses, well-positioned, for growth as mark conditions improved, as we continue to partner with the retail customers in the lower market-leading products that are essential to have the living activities, celebrations, and home improvement projects.
Speaker Change: Building products generated in that sales of $140 million in T1 down 16% from 1606 million a year ago.
Joe Hayek: The decrease was driven by low volumes, particularly in the heating and cooking space, and a less-fabulous product mix. It was a challenging quarter for building products as the business generated adjusted EBITDA of 40 million, and adjusted EBITDA margin was 28.4% compared to 60 million in 36% in Q1 of last year. The year-of-year decrease in the executive itself was largely driven by lower volumes and mix and the heating and cooking business combined with lower equity earnings, the Clark teacher. We believe that we stopping in the large heating tank business has largely run its course, which should help to mix in the heating business going into their seasonally strong or winter quarters.
Speaker Change: The decrease was driven by low lines, particularly in the key to the cooking space and the last favorite part of the day.
Speaker Change: It was a challenging quarter for building products as the business generated a just name of thought of 40 million and a just name of thought margin was 28.4% compared to 60 million and 36% in Q1 of last year.
Speaker Change: The year of the year of decreation in Jessica Davis, I was largely driven by lower volumes for Nick and the heating and cooking business combined with lower equity earnings to court teacher.
Speaker Change: We believe that we're stocking in the large seeding tank business as largely run its course, which should help the mix in the heating business going into their seasonally strong or winter quarters. Our teacher contributed 9 million in the corner compared to a very strong 17 million in the prior year.
Speaker Change: The researcher team has done a great job in navigating a choppy demand environment and marching compression caused by the sustained decline in steel prices, but we are starting to see some indications that co-practice backlogs are improving.
Joe Hayek: And margin compression caused by the sustained decline in steel prices, but we are starting to see some indication that contractors' backlogs are improving. Wade continued to deliver strong results with lower volumes and commercial being offset by relative strength in multiple other end markets. Wade contributed equity earnings of $28 million in the current quarter, down slightly from record equity earnings in the prior year. Additionally, at the start of the quarter, we completed the acquisition of Hexagon Regasco, which contributed to one sale of $16 million in adjusted even though two million, which included a million and a half dollars of purchase accounting and deal cost adjustments that we do not expect to repeat in future quarters.
Speaker Change: Way of continued to deliver strong results with low volumes and commercial being offset by relative strength in multiple other end markets.
Speaker Change: Clayton Tributed Equity earnings, 28 million dollars in the current quarter, down slightly from record equity earnings in the prior year.
Speaker Change: Initially, at the start of the quarter, we completed the acquisition of hexagonal gas, so, which contributed to one sale of $16 million in a just that even though two million, which included a million and a half dollars of purchasing to counting.
Speaker Change: and deal cost adjustments that we do not expect to repeat in future quarters. We're very happy to have hexagons, regasso teams as part of the working team.
Joe Hayek: We're very happy to have Hexagon Regasco team as part of the Worthington team.
Joe Hayek: Despite the continuing headwinds, the building products team continues to build on its actual reputation with customers, delivering value-added solutions and innovation across multiple values.
Speaker Change: Despite continuing headwinds, the building products seem continues to build on its solid reputation with customer delivering value added solutions and innovation across multiple value strips. At this point, we're happy to take any questions people might have.
Joe Hayek: At this point, we're happy to take any questions people might have. Thank you.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again.
Speaker Change: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 in your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star 1 again. Your first question comes to an line of
Catherine Thompson: Your first question comes from line of standby. Catherine Thompson from Thompson Research Group. Your line is open.
Speaker Change: Stand by!
Speaker Change: Catherine Thompson from Thompson Research Group, your line is open.
Catherine Thompson: Hi, thank you for taking my question today. One of the first questions on.
Catherine Thompson: Hi, thank you for taking my question today. One of the first on the good morning. Focus on getting more color on the Clark D-Crick, relative's weakness in the quarter.
Catherine Thompson: Good morning. Focus on getting more color on the Clark D trick relative weakness in the quarter. How much is due to more timing versus cancellation of projects?
Catherine Thompson: How much is due to the more timing versus cancellation projects and is there any just any additional color if there are regions or in-market stats have been a more sluggish versus others?
Catherine Thompson: Is there any additional color if there are regions or markets that have been more sluggish versus others?
Andy Rose: Hey, Catherine, this is Andy. I think overall their market is holding up pretty well. I mean, it has been a little bit choppy as Joe mentions, but generally speaking, the other thing that goes on in that space is when steel prices decline. You have an issue with contractors sort of holding off for lower prices, and the business has to actually wait for sort of steel prices to catch up. So there's a little bit of that margin compression going on right now. Yeah, I mean, it is a function of steel prices. Clark D trick being a big national company, oftentimes you'll buy the right.
Andy: Hey, Catherine, this is Andy. I think, overall, their market is holding up pretty well. I mean, it has been a little bit choppy as Joe mentioned, but generally speaking, the other thing that goes on in that space is when steel prices decline, you have.
Speaker Change: An issue with contractors sort of holding off for lower prices and the business has to actually wait for sort of steel prices to catch up. So there's a little bit of that margin compression going on right now.
Catherine Thompson: Yes, that's, I mean, it is a function of steel prices, quite strict being a big national.
Andy Rose: And so in the market, like we've been in the last year or so with prices declining pretty steadily, smaller regional competitors that are buying spot care ultimately buy. You'll have better two months after particular highs, and so you do see margin compression there, but yeah, Andy's right on. I think the main market isn't great, but it's relative with steady. And you see steel prices stabilized or actually rise, and that dynamic either a base or actually the versus itself.
Catherine Thompson: Company oftentimes you'll buy the head, right? And so in the market, I keep been in the last year or so.
Catherine Thompson: with practice declining, pretty steadily, smaller regional competitors that are buying spot, can't ultimately buy.
Catherine Thompson: You know, it's better two months after, part of the trip is by and so you do see the marching compression there, but the idea is, Andy's right on, I think that
Andy: The man-market isn't as great, but it's relatively steady.
Catherine Thompson: and you see steel prices, stabilize, or actually rise, and that dynamic either a base or actually the versus itself. And Catherine, your firm actually put out a note.
Andy Rose: And Catherine, your firm actually put out a notion that talked about the commercial outlook. And I think it was rather positive, saying that there's a number of large mega projects and government stimulus, and some other areas, data centers, where the short to medium term, maybe even longer term due to three year outlook is quite positive. And because Clark D trick is a national player, the largest player in the middle framing space, they will stand to benefit very well from that trim. Yeah, and that was kind of a tag on to the follow-up. Given the steel pricing, it's kind of too part with that, at least to voice going with inventory in the field.
Catherine Thompson: I thought about the commercial outlook and I think it was rather positive saying that there's a number of large mega projects in government stimulus.
Speaker Change: Some other areas, data centers where the short comedian term may be even longer term due to three year outlook is quite positive and because Clark Dietrich is a national player there will be largest player in the middle framing space, they will stand to benefit very well from the veteran.
Speaker Change: and that was kind of a tag onto the follow-up in given the steel pricing.
Speaker Change: is trying to part with that. It leads to voice going with inventory in the field.
Andy Rose: So is it what insight do you have in terms of inventory right now because you may need to be a little bit of catch-up? But then also, you know, how does Clark Detroit win with these mega projects? Thank you.
Speaker Change: What insight do you have in terms of inventories right now, because you're making me to be a little bit of catch-up. But then also, you'll have is Clarky Quinn with these mega projects. Thank you.
Andy Rose: Well, maybe I'll take the second question first, and then we can talk about the inventory. But the way that Clark Detroit wins is with the breadth of their product line, their national player, and their ability to do things that a number of their competitors can't. And just as one example, they can deliver full truckloads of steel to a job site in 24 hours. So, capabilities that they have, especially on these very large projects, they are very well positioned to win, and not only win the project, but also potentially even garner a little bit of a premium because of what they can do.
Speaker Change: Well, maybe I'll take the second question first, and then meet in the...
Speaker Change: Talk about inventories, but the way that Clark Dietrich Wins is with the breadth of their product line.
Speaker Change: They're a national player.
Speaker Change: and their ability to do things that a number of their competitors can't and just as one example they can deliver full truck loads of steel to a job site in 24 hours.
Speaker Change: Capabilities that they have, especially on these very large projects, they are very well positioned to win and not only win the project, but also potentially even garnered a little bit of a premium because of what they can do.
Andy Rose: And then inventory, I don't have a ton of insight in terms of what the inventory levels that their customers are off the top of my head. I don't know if you do. It's actually typically relatively low because so much of what they're doing is specific to a job that their distributor customers often are holding a lot of inventory. And it plays to, as Andy mentioned, some of their strengths, which is being able to get, you know, things where they need to go. Clark Detroit has some level inventory, but we're not overly concerned that it's gotten too heavy.
Speaker Change: i
Speaker Change: And then, you know, inventory, I don't have a ton of insight in terms of what the inventory levels that their customers are off the top of my head, I don't know if you do.
Speaker Change: and so much of what they're doing is specific to he job.
Speaker Change: that their distributor customers often are holding a lot of inventory.
Speaker Change: and it's quite a thing to mention that some of their strengths, which was being able to guess.
Speaker Change: You know, things where they need to go, that part is for cats.
Speaker Change: Right, some level of inventory, but we're not overly concerned that it's gotten too heavy.
Operator: Perfect.
Operator: Excellent.
Operator: Thanks so much.
Speaker Change: Perfect. I've seen it. Thanks so much.
Susan Maklari: Your next question comes from Alina Susan McClarry from Goldman Sachs. Your line is open. Thank you.
Speaker Change: Good!
Speaker Change: Here, our next question comes from the line of Susan McClarry from Goldman Sachs, your line is open.
Susan Maklari: Good morning, everyone. Morning, Susan. Good morning.
Susan McClarry: Thank you, good morning, everyone.
Susan Maklari: My first question is just talking more broadly about the health of the consumer. You know, you mentioned that the volumes came in a little lighter relative to perhaps some expectations. Can you just talk across the business, especially in the consumer segment? What's your hearing from your retail partners, and how would you characterize the state of demand in the consumer as we head into the fall and the winter? Yeah. I think, you know, we saw some improvement in the consumer products business this quarter. And, you know, when you talk about the consumer, you have to kind of segment it a little bit between our products.
Speaker Change: More and 2nd question!
Susan McClarry: Good morning. My next question is just talking more broadly about the health of the consumer. You know, you mentioned that the volumes came in a little lighter relative to perhaps some expectations. Can you just talk across the business, especially in the consumer segment, what's your hearing from your retail partners and how you would characterize the state of demand and the consumers we head into the fall and the winter?
Susan McClarry: Yeah.
Speaker Change: I think, you know, we saw some improvements in the consumer products business this quarter. And, you know, when you talk about the consumer, you have to kind of...
Joe Hayek: The, you know, we have sort of three categories: outdoor living, celebrations, and tools. Tools is probably the one where it's the weakest, I would say, right now because of the well-known and well-publicized repair and remodel recession. But outside of that, I think the rest of our businesses are essentially, you know, selling at POS levels. So whatever work, whatever our business level is, sort of matches what's happening at POS. And it's obviously down from the COVID levels where we saw a significant increase, but it's back to more normalized levels. So I think for the most part, we're not seeing a ton of impacts there, but I don't know if you have anything different.
Speaker Change: segmented a little bit between our products, we have sort of three categories, outdoor living, celebrations and tools.
Speaker Change: and Tools is probably the one where it's the weakest I would say right now because the well-known and well-publicized repair and remodel recession. But outside of that, I think the rest of our businesses are essentially, you know.
Speaker Change: Selling at POS levels, so whatever, whatever our business level is, sort of matches what's happening at POS. And it's obviously down from the COVID levels where we saw significant increase, but it's back to more normalized levels. So I think for the most part we're not seeing a ton of impact there, but
Joe Hayek: Yeah, no, I think that's right. You know, when you hear consumer confidence and you think about that, that's definitely real. You know, a 50 basis point decline in interest rates. That's, I think it's a step in the right direction. And so, as interest rates decline, that worst case, that's a neutral for our consumer business. More likely case, it ultimately starts to influence people's mobility, right? People, people do repair remodel projects most frequently when they're getting ready to sell their house or when they first move into their house. And so that lower interest rates will be a good guy.
Speaker Change: I don't know, Joseph, you have any different. Yeah, no, I think that's right, you know, when, when we,
Joseph: You hear consumer confidence and you think about that, that's definitely real. You know, 50 basis points declined in interest rates.
Joseph: That's, I think, a step in the right direction, and so, as interest rates decline, that worst case, that's a neutral, for our consumer business, more likely case, it ultimately starts to influence.
Speaker Change: People's nobility, right? People do repair a model project most frequently when they're getting ready to sell their house when they first move into their house. And so that low interest rates will be a good guy. I think for a lot of reasons and certainly the will.
Joe Hayek: I think for a lot of reasons, and certainly the will benefit there. But the rest ultimately, I think, is really around, you know, we're operating kind of at levels that are lower than we were two or three years ago. But we've also kind of taken the opportunity to really work on some cost controls, which is why you see some of the margin expansion that we had in Q1, you know, on essentially flat lines.
Speaker Change: Phelophate there, but the rest ultimately I think is as any said is really around.
Speaker Change: You know, we're operating kind of fat.
Speaker Change: Levels that are lower than we were two or three years ago, but we've also taken the opportunity to really work on some post controls, which is why you see some of the margin expansions that we had in Q1, you know, on essentially flat lines.
Operator: Okay, that's that's helpful color.
Joe Hayek: And then can you also talk a bit about the price cost dynamics across both the consumer segment and the building product segment as the steel prices have come down. Any thoughts on how that's trending and where that could go over the next couple of quarters. Yeah, I mean, steel prices, obviously, as you well know, are very difficult to predict. And as a result, the way that we run a good portion of our business is that we try and fix prices for an extended period of time, so call it, you know, nine to twelve months out so that we don't have that uncertainty.
Speaker Change: Okay, that's that's helpful, color. And then you also talk a bit about the price cost Inaanix across both the consumer segment and the building product segment, as the steel hat steel prices have come down. Any thoughts on how that's trending and where that could go over the next couple quarters?
Speaker Change: Yeah, I mean, still price is obviously as you well know are very difficult to predict and as a result. In the way that we've run.
Speaker Change: A good portion of our business is that we try and fix prices for an extended period of time, so call it 9-12 months out, so that we don't have that uncertainty. Year over year, prices have come down, and so you see some of that benefit flowing through our numbers.
Joe Hayek: You know year-over-year prices have come down. And so you see some of that benefit flowing through our numbers. You know, right now, steel prices, I think, are relatively flat. But you know, things can change very quickly. Obviously, we got an election cycle coming up, and there's a lot of press around the large acquisition in the steel space with Nippon Steel trying to buy US deal. So things can change quickly, but I will tell you we have, you know, a partnership with our former steel processing business, and we believe they're the best in the world at securing steel.
Speaker Change: Right now, still prices, I think are relatively flat.
Speaker Change: But, you know, things can change very quickly. Obviously, we got an election cycle coming up and there's a lot of press around the large acquisition in the steel space with Nippon steel trying to buy US steel. So things can change quickly, but I will tell you we have.
Speaker Change: You know, a partnership with our former steel processing business and we believe they're the best in the world at securing steel and so I think we'll do well in any impact.
Joe Hayek: And so I think we'll do well in any environment.
Joe Hayek: Okay, and then can I make one more in which is the way TV was a really nice bright spot in the quarter. Can you just talk about what, you know, the dynamics you're seeing there and how you're thinking about the performance as you going to the calendar year end?
Speaker Change: Okay. And then, can I sneak one more in, which is the way to be was a really nice bright spot in the quarter. Can you just talk about what, you know, the dynamics you're seeing there and how you're thinking about the performance is to go into the calendar year end.
Joe Hayek: Yeah, I'll leave. You're right. We've had another terrific quarter. You know, volume splatzes to slightly down, you mean commercial, obviously, it's still soft and you know, that's kind of across the board, but relative strength in several other end markets. You know that the data center space is a small but growing part of way of portfolio there. Their acquisition of DCR was small, but get them a toe hold into the data center space and to the containment space, they will ultimately be able to get. DTR Moore looks at opportunities, and the same will be true because of the revenue and projects that DTR's on.
Speaker Change: Yeah, I lived with your right, I had another terrific order, you know, volume, splat system slightly down, I mean the commercial obviously is still.
Speaker Change: Soft in again the next.
Speaker Change: kind of across the board, but relative strength in several other end markets, you know that.
Speaker Change: The data center space is a small, the growing part of waste portfolio there, acquisition of GFTCR was.
Speaker Change: was small, but get them a toll-hold into the day or set of space into the containment space. Today we'll ultimately be able to get...
Speaker Change: DCR Moore looks at opportunities and the same will be true because of the kind of...
Joe Hayek: Wave will get more looks there, but healthcare education, some of those infrastructure projects continue to vote really well for their mix of pretty significantly weighted on repair model versus new has also voted well for them and they continue to really drive home their value proposition around having great products and having the availability but saving contractors money on labor as labor costs have continued to rise and labor has gotten more scarce. The fact that these contractors can use waste products and ultimately have that be less labor intensive is proving to be a real winning value proposition for them.
Speaker Change: Revenue and projects that DCRs on wave will get more looks there, but health care, education, some of those infrastructure projects continue to build really well for the wave there.
Speaker Change: Next up!
Speaker Change: Pretty!
Speaker Change: Significantly waited on repair and modeling versus new, you know, has also.
Speaker Change: for their men, and they continue.
Speaker Change: to really drive home their value proposition around having great products and having the availability, but saving contractors money on labor as labor products have continued to rise and labor has gotten more scarce.
Speaker Change: The fact that these contractors can use waste products and ultimately have that be less labor-intensive is proving to be a real winning value proposition for them.
Operator: Okay, thanks for taking all the questions. Good luck with everything. Thank you, thanks.
Speaker Change: Okay, thanks for taking all the questions, good luck with everything.
Brian McNamara: Your next question comes from a line of Brian McNamara from Canacore Genuity. Your line is open.
Speaker Change: Thank you, thanks.
Speaker Change: You are next question, comes from a line of Brian McNamara from Canacord Genuity. Your line is open.
Brian McNamara: Good morning, guys. Thanks for bringing more to questions.
Brian McNamara: So I'm curious; I mean, obviously, numbers came in well below, I guess, our expectations. What was the biggest surprise or dealt in the quarter relative to your expectations like 90 days ago?
Brian McNamara: Good morning, guys. Thanks for bringing more to questions.
Brian McNamara: I mean, obviously numbers came in well below, I guess, our expectations. What was the biggest surprise or dealt in the quarter relative to your expectations 90 days ago?
Andy Rose: Yeah, I'm not sure it's necessarily a huge surprise, Brian, but we've been expecting Clark Detrix margin to come down, and so we obviously saw that was probably the biggest driver of the decline year over year. And, you know, second was our heating business in building products, and I think that one maybe just surprised us a little bit in terms of the, you know, they've been in a destocking period for a while, and it's just lasted a little bit longer than we expected. Although you know I think you heard me and Joe both mention we feel like we're kind of through that now, and so we're seeing evidence that that market is definitely picking up. And so, you know, hopefully we're through it, you know, on the greener pastures.
Brian McNamara: [inaudible]
Speaker Change: Yeah, I'm not sure it's necessarily a huge surprise, Brian, but we've been expecting Clark Dietrichs.
Speaker Change: Marginne to come down, and so we obviously saw that was probably the biggest driver of the decline year over year, and you know, second was
Speaker Change: are heating, business in building products, and I think that one may be just surprised this a little bit in terms of, you know, they've been in a de-stocking period for a while, and it's just last at a little bit longer than we expected, although.
Speaker Change: You know, I think you heard me and Joe both mentioned we feel like we're kind of through that now and so
Joe: We're seeing evidence that that market is definitely picking up and so, you know, hopefully.
Andy Rose: Yeah, and I think Brian, you know there's the very large heating tanks, and then you know there are like the gas real tanks, and in the quarter there are a handful of things going on in that market, including, you know, a company that had, you know, 200,000 cylinders that kind of came into the market and ultimately was, I think, priced pretty aggressively. And so that revenues there for us were down, which ultimately colored the building products is that you have the whole your own businesses performance, and so that's something that we didn't see, you know, six months ago, but ultimately impacted the quarter.
Joe: worked through it, you know, on the greener pastures. Yeah, and I think Brian's a...
Brian McNamara: There's the very large heating tanks and then there are like the gas rail tanks and in the quarter, there are handful of things going on in that market including, you know, a company that has.
Brian McNamara: You know, 200,000 cylinders that kind of came into the market, and ultimately.
Brian McNamara: was, I think, priced pretty aggressively and so that revenues there for us were down, which ultimately colored the building products that you had the Holy Old Businesses performance. And so that's something that we didn't need.
Brian McNamara: See, you know, six months ago, but ultimately impacted the quarter. Yeah, that's the 20 pound gas growths on the tank.
Andy Rose: Yeah, that's the 20 pound gas real soul on their tank. And I guess the evidence you're seeing that gives you confidence that we're at the bottom of this kind of post-pandemic heating and cooking market is kind of that cell in kind of matching the cell through kind of thing with the customers. Yeah, and you know they're also moving into their seasonally strong period, right? The temperatures, you know, have been very warm, which impacts their business as well. But we're moving into the, you know, colder weather slowly but surely, it seems like. But we're getting there, and so that, in conjunction with just be stocking at our distributor customers, um, that's you know largely complete. Great.
Speaker Change: And I guess the evidence you're seeing that gives you confidence that we're at the bottom of this kind of post-pandemic Keating and cooking market is kind of that.
Speaker Change: Telling, kind of matching the cell through a kind of thing.
Speaker Change: with the costume.
Speaker Change: Yeah, and they're also moving into their seasonally strong period, right? The temperatures have been very warm, which impacts their business as well, but we're moving into the colder weather, slowly but surely it seems like we're getting there and so that in conjunction with just...
Speaker Change: Be Stopping at our distributor customers that largely can please.
Andy Rose: And then finally, I mean, have you seen any kind of mood change with your customers and building price? I think, you know, 90 days ago, maybe a 50-bit rate was kind of, you know, out of the expectation. You know, since the Fed announcement last week, any kind of mood change or more willingness to invest kind of thing? I think, I mean, the answer is yes, but I think it's this makes us feel better and we've entered a new part of the interest rate cycle. But I think they anticipate more cuts that might come, you know, whether it's 25 or 50 more basis points this year and whatever it is.
Speaker Change: And then finally, I mean, have you seen any kind of moon change with your customers in building process? I think, you know, 90 days ago, maybe a 50 dip rate cut was kind of, you know, out of the expectation, you know, since the Fed announcement last week any kind of moon change or more willingness to invest kind of thing.
Speaker Change: I think, yeah.
Speaker Change: I mean the interior is the F-but and I think it's...
Speaker Change: This makes us feel better and we've entered a new part of the interest rate cycle. But I think they anticipate more cuts that might come, you know, I've, whether it's 25 or 50 more basis points this year, whatever it is.
Andy Rose: But it certainly seems and feels like two are customers and to us that a year from now, you're going to be looking at interest rates that are lower than where we are today. And for a lot of our building product customers, sometimes what they're buying from us is, in fact, a cat-back. And so lower interest rates is going to help there quite a bit. But I don't think that 50 basis points flip the switch, and now everybody, you know, going to catch back up. But people have definitely, you know, appreciated the fact that capital will be very likely less expensive going forward than it was in the review.
Speaker Change: It certainly seems and feels like to our customers and to us that a year from now you're going to be looking at interest rates that are lower than where we are today and for a lot of our building product customers.
Speaker Change: Sometimes what they're buying from us is in fact a cap-ax and so lower interest rates. He's going to help there quite a bit. I don't think that...
Speaker Change: 50 basis points flip the switch and now everybody's going to get a catch back up, but people have definitely...
Speaker Change: You know, appreciate it the fact that.
Speaker Change: Capital will be very likely less expensive going forward than it was in the review.
Operator: Thanks, guys. Best of luck. Thank you, thank you.
Speaker Change: Thanks, guys, best of luck.
Dan Moore: Again, if you'd like to ask a question, it's star one on your telephone. Keep it. Your next question comes from a line of Dan Moore from C.J.S. Securities.
Speaker Change: Try to use things.
Speaker Change: Again, if you'd like to ask a question, it's star one on your telephone keypad. Your next question comes from a line of Dan Moore from CJS Securities. Your line is open.
Will: Your line is open. Hi, I'm Will on for Dan. Good morning, Will. On for Dan.
Dan Moore: Hi, we're going for Dan, morning, we're going for Dan, a lot of questions have been answered. So I just thought I would ask you, balance sheet remains arguably under capitalized relative to your cash generation, even after the hexagon acquisition. What are your priorities for capital development?
Joe Hayek: Hi, a lot of questions have been answered. So I just thought I would ask: your balance sheet remains arguably undercapitalized relative to your cash generation, even after the Hexley on acquisition. What are your priorities for capital development? And is M&A still your primary focus? Would you consider returning cash to shareholders, or would you prefer to continue to build liquidity for larger potential deals down the line? Thank you.
Speaker Change: and his M&A, still your primary focus, would you consider returning cash to shareholders or would you prefer to continue to build liquidity for larger potential deals down the line? Thank you.
Joe Hayek: Yeah, I think you kind of answered the question for us a little bit. You know, our top priority right now is building the M&A pipeline. And we've done a very good job of doing that. You know, the question now is just finding the right companies at the right price that are a good fit for our strategy. You know, would we consider pivoting in terms of capital allocation to share buy back? The answer is yes. I mean, right now obviously we're trying. We've got a very aggressive growth strategy, and we're trying to execute on that, and M&A is the top priority.
Speaker Change: Yeah, I think you've kind of answered the question for us a little bit, you know, our top priority right now is building the M&A pipeline and we've done a very good job of doing that, you know, the question now is just...
Speaker Change: Finding the right companies at the right price that are good fit for...
Speaker Change: for our strategy. You know, would we consider pivoting in terms of capital allocation to share by-back?
Speaker Change: The answer is yes, I mean, right now, obviously we've got a very aggressive growth strategy and we're trying to execute on that and M&A is the top priority, but, you know, if there were an opportunity, we would consider, we bought back some stock during the quarter, most likely to offset delusions.
Joe Hayek: But, you know, if there were an opportunity, we would consider it. We bought back some stock during the quarter, mostly to offset dilution. And we'll probably continue to do that.
Joe Hayek: But in terms of, you know, a massive share buyback, I think that would be an opportunistic situation.
Speaker Change: and we'll probably continue to do that, but in terms of a massive share by back, I think that would be an opportunistic situation.
Operator: All right.
Operator: That's all for me. Thank you for answering our questions. Thanks a lot.
Speaker Change: Alright, that's all for me. Thank you for answering our questions.
John Tomazos: And your next question comes from a line of John Tomazos from John Tomazos, very independent research. Your line is open.
Speaker Change: Thanks for watching.
Speaker Change: And your next question comes from a line of John Tomazos from John Tomazos, very independent research. Your line is open.
John Tomazos: Thank you. What are the terms of your building products? What fraction of it would you say is tied to housing as opposed to commercial construction? So a little bit of a mix on the wholly owned businesses are probably relatively close to 50-50, though with the bias on towards your maintenance, repair, remodel. Well, versus new, the JVs are almost no residential. In terms of your consumer strategy, it would appear since the pandemic, staples cost more globally: food, etc. My insurance premiums; they try to raise them 50% a year, and I cut back covered things like that.
John Tomazos: Thank you.
Marcus Rogier: and Joseph Hayek, Marcus Rogier, and Marcus Rogier.
John Tomazos: What fraction of it would you say is tied to housing as opposed to commercial construction?
Speaker Change: Little, little bit of a...
Speaker Change: I hope a mixed young, the wholly owned businesses are probably relatively close to 50-50, though with a bias on a towards human maintenance repair model versus new, the JVs are almost no residential.
Speaker Change: in terms of, um,
Speaker Change: You can swim our strategy.
Speaker Change: All right, it would appear since the pandemic.
Speaker Change: Staples, Cosmour, Globally
Speaker Change: Food, etc. My insurance premiums, they try to raise them 50% a year and I cut that cover things like that.
John Tomazos: I spend a month in Europe every summer, and where I go in Greece, the fishermen catch three kilo, three men on a boat, and they sell it for 20, 30 Euro a kilo, so they make 20 or 30 Euro a night. And it's hard work lift in the nets. It would seem like there's a strong argument that the consumer is strapped around the world, and maybe with global warming, agriculture is tougher and tougher, and food stays expensive.
Speaker Change: Um...
Speaker Change: I spent a month in Europe every summer.
Speaker Change: and where I go and grease the fishermen.
Speaker Change: Ahhhh...
Speaker Change: Catch three kilos, three men on a boat, and they sell it for 2030 euro kilos so they make 20 or 30 euro a night. And it's hard work lifting the nets.
Speaker Change: It would seem like there's a strong argument that the consumer is strapped.
Speaker Change: Around the world and maybe was global warming.
Speaker Change: Agriculture, suffering, suffering, food, stay expensive.
Andy Rose: So why pay large multiples to acquire consumer businesses, you pay 80 or 80 or 89 for Hexagon and there's 71 million of new goodwill and intangibles and why not sell one or two under performers or flat performers and buy back a little stock? So, so hexagon, regapso, right, is part of our building products group, but your point is well taken. But that is a, it's not a consumer non-durable, it's not an appliance, nor is it a trip, you know, overseas or to a nice hotel. And so we feel like our products, one, relatively speaking, aren't very expensive.
Speaker Change: So...
Speaker Change: Why pay?
Speaker Change: Large multiples to acquire consumer businesses.
Speaker Change: [inaudible]
Speaker Change: Hexagon, and there's 71 million a new Goodwill and Intangibles, and why not?
Speaker Change: So, one or two under performers or flat performers and buy back a little stock.
Speaker Change: So, actually going on in Rogapso, right, is part of our building products group, but your point is well taken, but that is a...
Speaker Change: Let's not a...
Speaker Change: I can super non-durable. It's not as appliance, you need to know or is it a trip.
Speaker Change: Overseas or two to a nice.
Speaker Change: Hotel, and so we feel like our products, one relatively speaking, are very expensive. We have to find them at Home Depot or Lose or Walmart too, oftentimes when people are in fact.
Andy Rose: If you find them at Home Depot or Lowe's or Walmart, two, oftentimes when people are in fact strapped, they might shy away from using some of our products or buying some of our products, but oftentimes also trade down from taking that trip to a hotel or two. If you do somewhere else on an airplane and go camping, or you and they might actually spend more time at home cooking out and doing things like that. So we like the way that our products are positioned relative to softness in an economy. COVID, people bought a lot of stuff, and then since then they've done a lot of experiences, right?
Speaker Change: Strafts, they might shy away from.
Speaker Change: Using some of our products, your buy from our products, but oftentimes they'll also trace down from taking that trip.
Speaker Change: To a hotel or to somewhere else on an airplane and go camping or you and they might actually spend more time at home Cooking out and doing things like that so we we like
Speaker Change #100: the way that our products are positioned and relative to softness in economy, I mean, yes, we talked about it.
Speaker Change #100: Covid people bought a lot of stuff and then since then they've...
Andy Rose: And I think you're starting to see that moderate some, but John Rhett is sure we're constantly, you know, thinking about what makes the most sense for us from a capital allocation perspective and, you know, if we can't find the right types of deals that are high margin, low acid intensity, with a good competitive advantage. Then we'll absolutely look to think about capital allocation differently, but now I think, I think for now we feel like, despite some of the headwinds that we've got in our businesses, that we're happy with our portfolio.
John Ress: Don't have a lot of experiences, right? And I think you're starting to see that moderate, so a bit. John Ress assured, wherever we're constantly, you know, thinking about.
John Ress: What makes the most sense for us from a capitalization perspective?
John Ress: You know, if we can't find...
John Ress: The right types of deals that are high margin, low asset intensity with a good competitive advantage. Then we'll absolutely look to think about capitalization differently. But I think for now we feel like despite some of the headwinds.
John Ress: that we've got in our businesses that we're happy with our portfolio.
John Tomazos: I can ask one more; the old Worthington Industries would buy back stock in half-million or million-share chunks. I know we're smaller with the merger. That was there a reason why you just put your toe in the water for 150,000 shares to the program start the last week of the quarter or something like that. Yeah, I mean, historically we believed we were very much undervalued, John, and that's why we went through the separation of the steel business. I think that that proved out. You know, we used to trade it.
John Ress: I can ask one more, the old working can industries would buy back stock and half million or million share of chunks.
John Ress: I know we're smaller with the demerger.
Speaker Change #102: That was there a reason why you just put you toe in the water for 150,000 shares to the program start the last week of the quarter or something like that.
Speaker Change #102: Yeah, I mean historically we believed we were very much undervalued John and that's why we went through the separation of the steel business and I think that proved out, you know, we used to trade it. Congratulations, World Dawn.
Andy Rose: Congratulations. 12 on. So, you know, now we're trading between 10 and 12 times EBITDA, which we think is an appropriate multiple for the return on capital and the margin profile that we have today. You know, as I mentioned earlier, our focus right now is building the business into kind of a world-class consumer and building products company and, you know, gaining some scale through M&A. That being said, you know, we may be opportunistic on the share repurchase front, but right now all we're doing is offsetting dilution. Yeah, which which John and 500,000. Thanks, John.
Speaker Change #102: So, you know, now we're trading between 10 and 12 times the betal, which we think is an appropriate multiple for the return on capital and the margin profile that we have today.
Speaker Change #102: You know.
Speaker Change #102: As I mentioned earlier, our focus right now is building the business into kind of a world-class consumer and building products company and you know.
Speaker Change #102: Gaming, some scale through M&A. That being said, you know, we may be opportunistic on the share-reported front, but right now all we're doing is offsetting delusion.
Speaker Change #102: Yeah, what's with Sean? Yeah, I think he's runnin' about again.
John: Thanks John.
Operator: And that concludes our question-and-answer session.
Andy Rose: I will now turn the call back over to Andy Rose for some final closing remarks. Yeah, thanks everyone. I just want to finish by saying we're proud of our people in the effort that they put forth every day, and we look forward to showcasing our ability to achieve both class growth in the coming years. Thanks. Thanks for that.
John: and that concludes our question and answer session. I will now turn the call back over to Andy Rose for some final closing remarks.
Andy Rose: Yeah, thanks everyone, just want to finish by saying we're proud of our people and the effort that they put forth every day and we look forward to showcasing our ability to achieve work class growth in the coming years. Thanks, thank you very much.
Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change #105: This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change #105: [inaudible]