Q3 2024 Valmont Industries Inc Earnings Call

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Operator: As a reminder, this conference is being recorded.

Operator: As a reminder, this conference is being recorded.

As a reminder, this conference is being recorded.

Renee Campbell: I would now like to turn the conference over to your host, Renee Campbell, Senior Vice President, Investor Relations, and Treasurer. Thank you. You may begin.

Renee Campbell: I would now like to turn the conference over to your host, Renee Campbell, Senior Vice President, Investor Relations and Treasurer. Thank you. You may begin.

Speaker Change: I'd now like to turn the conference over to your host Renee Campbell Senior Vice President Investor Relations and Treasurer.

Renee Campbell: You may begin.

Renee Campbell: Thank you and good morning. Welcome to Valmont Industries' third quarter 2024 earnings call. With me today are Avner Applbaum, president and chief executive officer; Tom LaVorey, executive vice president and chief financial officer; and Tim Francis, chief accounting officer.

Renee Campbell: Thank you and good morning, welcome to Belmont Industries third quarter, 'twenty 'twenty four earnings call.

Renee Campbell: Thank you and good morning. Welcome to Valmont Industries third quarter 2024 earnings call. With me today are Avner Applbaum, President and Chief Executive Officer, Tom Liguori, Executive Vice President and Chief Financial Officer, and Tim Francis, Chief Accounting Officer.

Renee Campbell: With me today are Admiral Apple Baum, President and Chief Executive Officer.

Renee Campbell: Tom Mccourt, Chief Executive Vice President and Chief Financial Officer, and Tim Francis Chief Accounting Officer.

Avner Applbaum: This morning, Avner will provide a summary of our third quarter results, current market dynamics, and strategic priorities.

Avner Applbaum: This morning, Avner will provide a summary of our third quarter results, current market dynamics and strategic priorities.

Speaker Change: This morning, I'm here will provide a summary of our third quarter results current market dynamics, our strategic priority.

Tom Liguori: Tom will review our third quarter financial performance and provide our outlook for the year.

Tom LaVorey: Tom will review our third quarter financial performance and provider outlook for the year.

Speaker Change: Tom will review, our third quarter financial performance and provide our outlook for the year. This will be followed by Q&A.

Renee Campbell: This will be followed by Q&A.

Renee Campbell: This will be followed by Q&A.

Renee Campbell: A live webcast of the presentation will accompany today's call and is available for downloads from the webcast or on the investor's site at Valmont.com. A replay will be available on our website later this morning.

Renee Campbell: A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the investor's site at Valmont.com. A replay will be available on our website later this morning.

Speaker Change: A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the investors site at Belmont Dot com.

Speaker Change: Play will be available on our website later this morning.

Renee Campbell: Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion, is outlined on slide three of the presentation, and will be read in full at the end of today's call.

Renee Campbell: Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion, is outlined on slide three of the presentation, and will be read in full at the end of today's call.

Speaker Change: Please note that this call is subject to our disclosure on forward looking statements, which applies to today's discussion is outlined on slide three of the presentation and will be read in full at the end of today's call.

Renee Campbell: Finally, to stay updated with Valmont's latest news releases and information, please sign up for email alerts on our investors' site.

Renee Campbell: Finally, to stay updated with Valmont's latest news releases and information, please sign up for email alerts on our investor's site.

Speaker Change: Finally to stay updated with Belmont latest news releases and information. Please sign up for email alerts on our investors site. We also invite you to follow Belmont and our brand on the social media channel linked on our website.

Renee Campbell: We also invite you to follow Valmont and our brands on the social media channels linked on our website.

Renee Campbell: We also invite you to follow Valmont and our brand on the social media channel linked on our website.

Avner Applbaum: With that, I would now like to turn the call over to Avner. Thank you, Renee. Good morning, everyone. And thank you for joining us.

Avner Applbaum: With that, I would now like to turn the call over to Avner. Thank you, Renee. Good morning, everyone, and thank you for joining us.

Speaker Change: With that I would now like to turn the call over to Evan.

Evan: Thank you Renee.

Evan: Morning, everyone and thank you for joining us.

Avner Applbaum: I'd like to begin by extending our thoughts to everyone impacted by hurricanes, Holene, and Milton. Our top priority during events like this is always the safety and health of our employees. I relieved all our employees are safe, and I'm incredibly proud of our local leaders for providing resources and assistance where possible. Although a few of our facilities encountered brief interruptions, we do not expect any disruption to our overall operations in the fourth quarter. We're also focused on helping our customers recover from the hurricanes. Our infrastructure teams are working to help restore damaged structures and assess future needs.

Avner Applbaum: I'd like to begin by extending our thoughts to everyone impacted by Hurricanes Helene and Milton. Our top priority during events like this is always the safety and health of our employees. I'm relieved all our employees are safe and I'm incredibly proud of our local leaders for providing resources and assistance where possible. Although a few of our facilities encountered brief interruptions, we do not expect any disruption to our overall operations in the fourth quarter. We're also focused on helping our customers recover from the hurricane. Our infrastructure teams are working to help restore damaged structures and assess future needs.

Evan: I'd like to begin by extending our thoughts to everyone impacted by Hurricanes Helene and Milton.

Evan: Our top priority during events like this is always the safety and health of our employees.

Evan: I'm relieved.

Evan: Our employees are safe and I'm incredibly proud of our local leaders are providing resources and assistance where possible.

Evan: Although a few of our facilities encountered brief interruption would you not expect any disruption to our overall operation.

Evan: First quarter.

Evan: We're also focused on helping our customers recover from the hurricane.

Evan: Our infrastructure teams are working to help restore damage structures.

Evan: [noise] assess future needs.

Avner Applbaum: And our agriculture teams are assisting valley dealers to repair and replace damaged irrigation equipment. I'm proud of our team swift and compassionate response to local needs during this difficult time.

Avner Applbaum: And our agriculture teams are assisting valley dealers to repair and replace damaged irrigation equipment. I'm proud of our team's swift and compassionate response to local needs during this difficult time.

Evan: In our agriculture team are assisting valley dealers to repair and replace damaged irrigation equipment.

Evan: I'm proud of our team's Swift and compassionate response Hello comes during this difficult time.

Avner Applbaum: Now, turning to key messages on slide five. We delivered another quarter of solid performance through an operating profit and expanding operating margins year over year, despite lower sales. Our results were driven by effective commercial and operational execution, pricing discipline, and a fundamentally improved cost structure. This reflects our focus on key areas to enhance profitability and return on investor capital. We also generated strong operating cash flows of $225 million, further strengthening our balance. I want to extend my thanks to our global theme of more than 11,000 employees for their dedication and hard work in driving these accomplishments.

Evan: Now turning to key messages on slide five.

Avner Applbaum: Now, turning to key messages on slide five. we delivered another quarter of solid performance, growing operating profit and expanding operating margins year over year despite lower sales. Our results were driven by effective commercial and operational execution, pricing discipline, and a fundamentally improved cost structure. This reflects our focus on key areas to enhance profitability and return on invested capital. We also generated strong operating cash flows of $225 million, further strengthening our balance sheet. I want to extend my thanks to our global team of more than 11,000 employees for their dedication and hard work in driving these accomplishments.

Speaker Change: We delivered another quarter of solid performance growing operating profit and expanding operating margins year over year, Despite lower sales.

Speaker Change: Our results were driven by effective commercial and operational execution.

Speaker Change: Pricing discipline in a fundamentally improve its cost structure.

Speaker Change: This reflects our focus on key areas to enhance profitability.

Speaker Change: Return on invested capital.

Speaker Change: We also generated strong operating cash flows of $225 million further strengthening our balance sheet.

Speaker Change: I wanted to extend my thanks to our global team of more than 11000 employees for their dedication and hard work in driving these accomplishments.

Avner Applbaum: Their collective effort has been instrumental in not only delivering a successful quarter, but also laying the foundation for our future success.

Avner Applbaum: Their collective effort has been instrumental in not only delivering a successful quarter, but also laying the foundation for our future success.

Speaker Change: Their collective effort has been instrumental in not only delivering a successful quarter, but also laying the foundation for our future success.

Avner Applbaum: Building on that, I'm excited about the long-term outlook for our business. To drive growth, we've intentionally aligned with customers and markets positioned to benefit from multi-year secular mega trends, with strong competitive advantages, and a focus on customer-driven innovation. Our core businesses are well positioned to outpace market growth as these trends continue.

Speaker Change: Building on that I'm excited about the long term outlook for our business to drive growth, we've intentionally aligned with customers and markets positioned to benefit from multiyear secular mega trends with.

Avner Applbaum: Building on that, I'm excited about the long-term outlook for our business. to drive growth, we've intentionally aligned with customers and markets positioned to benefit from multi-year secular megatrends. with strong competitive advantages and a focus on customer-driven innovation, our core businesses are well positioned to outpace market growth as these trends continue.

Speaker Change: With strong competitive advantages.

Speaker Change: Our focus on customer driven innovation.

Speaker Change: Our core businesses are well positioned to outpace market growth as these trends continue.

Avner Applbaum: This quarter, we filled key roles on our executive leadership team through strategic hires and an internal promotion. This includes Tom, who joins us on today's call, and I will share more details shortly. We're making solid progress on our strategic priorities. We streamline their organization to be more efficient and productive while also structurally reducing our costs. We focus our go-to-market strategy on high-return opportunities, and we're effectively managing working capital to maximize cash flow to support our capital allocation framework. This continues to improve with mindset is creating a high performance culture, driving results, and increasing our OIC.

Speaker Change: This quarter, we felt the key roles in our executive leadership team through strategic hires and an internal promotion.

Avner Applbaum: This quarter, we filled key roles on our executive leadership team through strategic hires and an internal promotion. This includes Tom, who joins us on today's call, and I will share more details shortly. We're making solid progress on our strategic priority. We've streamlined the organization to be more efficient and productive, while also structurally reducing our costs. We focus our go-to-market strategy on high-return opportunities. And we're effectively managing working capital to maximize cash flow to support our capital allocation framework. This continuous improvement mindset is creating a high-performance culture, driving results, and increasing ROI. While I'm encouraged by the progress we've made on our strategy, there's still work to be done.

This includes Tom who joined US on today's call and I will share more details shortly.

Speaker Change: We're making solid progress on our strategic priorities.

Speaker Change: We streamlined the organization to be more efficient and productive while also structurally reducing our cost.

Speaker Change: We focus our go to market strategy and high return opportunities.

Speaker Change: We're effectively managing working capital to maximize cash flow to support our capital allocation framework.

Speaker Change: This continuous improvement mindset is creating a high performance culture driving results and increasing our Oh I see.

Avner Applbaum: While I'm encouraged by the progress we've made on our strategy, there's still work to be done. I'm energized by the strength of our leadership team and confidence in their ability to further advance its execution.

Speaker Change: While I'm encouraged by the progress we've made on our strategy, there's still work to be done I'm energized by the strength of our leadership team and confidence in their ability to further advance its execution.

Avner Applbaum: I'm energized by the strength of our leadership team and confident in their ability to further advance its execution.

Avner Applbaum: Turning to slide six for current market dynamics and long-term mega-trans for infrastructure business. Starting with utility, we were very pleased with the strong growth disorder on a prior year and sequential basis. Utility CapExpendIng has increased to meet growth expectations and is expected to remain elevated for many years. Key factors like electrification, industrial development, and the rapid expansion of data centers are driving the need to upgrade existing systems and invest in new capacity. At the same time, utilities are investing in resiliency to combat aging infrastructure and be better prepared for extreme weather. Some of our customers better withstood the challenges posed by the recent hurricanes, highlighting the continued importance of proactive grid investments.

Avner Applbaum: Turning to slide 6 for current market dynamics and long-term megatrends for infrastructure business. Starting with utility, we were very pleased with the strong growth this quarter on a prior year and sequential basis. Utility cap spending has increased to meet load growth expectation and is expected to remain elevated for many years. Key factors like electrification, industrial development, and the rapid expansion of data centers are driving the need to upgrade existing systems and invest in new capacities. At the same time, utilities are investing in resiliency to combat aging infrastructure and be better prepared for extreme weather. Some of our customers better withstood the challenges posed by the recent hurricanes, highlighting the continued importance of proactive grid investment.

Speaker Change: Turning to slide six for current market dynamics, and long term mega trends for infrastructure business.

Speaker Change: Starting with utility we were very pleased with the strong growth this quarter on a prior year and sequential basis.

Speaker Change: Utility Capex spending has increased to meet load growth expectation and is expected to remain elevated for many years.

Speaker Change: Key factors like electrification industrial development and the rapid expansion of data centers are driving the need to upgrade existing systems and invest in new capacity.

Speaker Change: At the same time utilities are investing in resiliency to combat ageing infrastructure.

It would be better prepared for extreme weather.

Speaker Change: Some of our customers better withstood the challenge is posed by the recent hurricanes highlighting the continued importance of proactive grid investments.

Avner Applbaum: Turning to our lighting and transportation business sells well over this quarter. While some of the decline was due to market factors and timing of projects, we also see clear opportunities to improve execution moving forward. On a positive note, order rates for our US transportation business are trending higher year-over-year, driven by DOT infrastructure investments. We expect this favorable trend to continue, further enhanced by IAGA funding.

Speaker Change: Turning to smart lighting and transportation business sales were lower this quarter.

Avner Applbaum: turning to our lighting and transportation business. Sales were lower this quarter. While some of the decline was due to market factors and timing of projects, we also see clear opportunities to improve execution moving forward. On a positive note, order rates for our U.S. transportation business are trending higher year-over-year, driven by DOT infrastructure investments. We expect this favorable trend to continue, further enhanced by IAJA funding.

Speaker Change: While some of this decline was due to market factors and.

Speaker Change: Timing of projects, we also see clear opportunities to improve execution moving forward.

Speaker Change: On a positive note order rates for our U S transportation business are trending higher year over year, driven by D O T infrastructure investments.

We expect this favorable trend to continue further enhanced by a J a Sunday.

Avner Applbaum: Turning to lighting. Our business historically lacks single-family housing starts by about 12 months. So while these markets remain soft in the near term, we expect our business to recover with the housing market rebound and continue suburban sprawl.

Avner Applbaum: turning to lighting. Our business historically lacked single-family housing starts by about 12 months. So while these markets remain soft in the near term, we expect our business to recover with a housing market rebound and continued suburban sprawl.

Speaker Change: Turning to lighting.

Speaker Change: Our business historically lacked single family housing starts by about 12 months.

Speaker Change: While these markets remain soft in the near term, we expect our business to recover with the housing market rebound and continued suburban sprawl.

Avner Applbaum: Turning to telecommunications, we were pleased to see sales growth this quarter. Wireless carriers have returned to more normal life spending levels, which are expected to remain above previous cycles. This signals steady demand as we look ahead to next year. Over the long term, the adoption of advanced technologies such as 5G and more connected devices will require a more robust network, where well positioned for growth both in the US and key markets abroad. In solar, sales were lower, partially due to this deselections of certain low-margin projects, which we announced last quarter. We're also seeing some near-term lumpiness as we adapt our strategy to market changes.

Avner Applbaum: Turning to telecommunications, we were pleased to see sales growth this quarter. Wireless carriers have returned to more normalized spending levels, which are expected to remain above previous cycles. This signals steady demand as we look ahead to next year. Over the long term, the adoption of advanced technologies such as 5G and more connected devices will require a more robust network. We're well positioned for growth both in the U.S. and key markets abroad.

Speaker Change: Turning to telecommunications, we were pleased to see sales growth. This quarter wireless carriers have returned to more normalized spending levels, which are expected to remain above previous cycles.

Speaker Change: This signals steady demand as we look ahead to next year.

Over the long term the adoption of advanced technologies, such as five G and more connected devices will require a more robust network.

We're well positioned for growth both in the U S and key markets abroad.

Avner Applbaum: In solar, sales were lower, partially due to this deselection of certain low-margin projects, which we announced last quarter. We're also seeing some near-term lumpiness as we adapt our strategy to market changes. Looking ahead, we're focused on selling our Solar Tracker solution where we're confident in our competitive advantages for distributed generation and select utility scale applications. Finally, our coatings business generally aligns with GDP trends of the regions we serve while supporting our internal production.

Speaker Change: And solar cells were lower partially due to the deselection of certain low margin projects, which we announced last quarter.

Speaker Change: We're also seeing some near term lumpiness as we adapt our strategy to market changes.

Avner Applbaum: Looking ahead, we're focused on selling our solar tracker solution, where we're confident in our competitive advantages for distributed generation and select utility scale applications. Finally, our coatings business generally aligns with GDP trend of the regions we serve while supporting our internal production.

Speaker Change: Looking ahead, we're focused on selling our solar tracker solution, where we're confident in our competitive advantages for distributed generation and select utility scale applications.

Speaker Change: Finally, our coatings business generally aligns with G. D P trend of the regions, we serve while supporting our internal production.

Avner Applbaum: Turning to slide 7 for current market dynamics and long-term mega trends for the agriculture business. North America sales were slightly lower. Last month, the USDA released an updated estimate for 2024 in their firm income, which continues to show a decline from 2023. They also forecast that current average crop prices will be lower than last year. Notably, corn prices have declined 37% over the past two years, and soybeans are down 24%, which continues to weigh on lower sentiment. Turning to international markets, firm income in Brazil remains under pressure due to lower soybean prices, but we were encouraged by an improvement in order entry compared to last year.

Avner Applbaum: Turning to slide 7 for current market dynamics and long-term mega-trends for the agriculture. North America's sales were slightly lower. Last month, the USDA released an updated estimate for 2024 net farm income, which continues to show a decline from 2023. They also forecast that current average crop prices will be lower than last year. Notably, corn prices have declined 37 percent over the past two years, and soybeans are down 24 percent, which continues to weigh on grower sentiment. Turning to international markets, farm income in Brazil remains under pressure due to lower soybean prices. but were encouraged by an improvement in order entry compared to last year.

Turning to slide seven for current market dynamics, and long term mega trends for the agricultural business.

Speaker Change: North America sales were slightly lower.

Speaker Change: Last month, the USDA released an updated estimates for 'twenty 'twenty four and net farm income, which continues to show a decline from 2023.

Speaker Change: They also forecast that current average crop prices will be lower than last year.

Notably corn prices have declined 37% over the past two years and soybeans are down 24%.

Speaker Change: Which continues to weigh on grower sentiment.

Speaker Change: Turning to international markets farm income in Brazil remains under pressure due to lower soybean prices.

Speaker Change: We're encouraged by an improvement in order entry compared to last year.

Avner Applbaum: Brazil remains a key component of our long-term growth strategy. Currently, only 10% of Brazil's agricultural land is irrigated, with the potential to expand nearly sixfold, unlocking significant opportunities for growth in the irrigation industry. Center Pivot offers a compelling return on investment, increasing profitability for growers, and creating growth opportunities for us. Our international projects are progressing well, especially in Egypt and the Middle East, with a robust pipeline ahead. Growing population and geopolitical tension have elevated concerns about food security, driving increased demand for these projects.

Avner Applbaum: Brazil remains a key component of our long-term growth strategy. Currently, only 10% of Brazil's agricultural land is irrigated, with the potential to expand nearly six-fold, unlocking significant opportunities for growth in the irrigation industry. CenterPivot offers a compelling return on investment, increasing profitability for growers, and creating growth opportunities for us. Our international projects are progressing well, especially in Egypt and the Middle East, with a robust pipeline ahead. Growing population and geopolitical tensions have elevated concerns about food security, driving increased demand for these projects.

Speaker Change: Brazil remains a key component of our long term growth strategy.

Speaker Change: Currently only 10% of Brazil's agricultural land is irrigated what's the potential to expand nearly six fold unlocking significant opportunities for growth in the irrigation industry.

Center pivot offers a compelling return on investment increasing profitability for growers and creating growth opportunities for us.

Our international projects are progressing well, especially in Egypt, and the middle East with a robust pipeline ahead.

Speaker Change: Growing population and geopolitical tensions have elevated concerns about food security driving increased demand for these projects.

Avner Applbaum: Turning to slide eight, I'm excited to announce the key additions to our executive leadership. Starting with Tom Ligori, was joined us at CFO. Tom brings over 30 years of finance experience, including previous CFO roles at AVENIT and Advanced Energy, where he successfully led global finance strategies that have drove growth, increased profitability, and improved working capital. I'm excited to partner with Tom as we work together to execute our strategy. I also want to take a moment to thank Francis for stepping in as interim CFO. Tim will continue to play a crucial role within our finance organization as Chief Accounting Officer.

Avner Applbaum: Turn it to slide eight. I'm excited to announce the key additions to our executive leadership. starting with Tom Liguori, who has joined us as CFO. Tom brings over 30 years of finance experience, including previous CFO roles at Avnet and Advanced Energy, where he successfully led global finance strategies that have drove growth, increased profitability, and improved working capital. I'm excited to partner with Tom as we work together to execute our strategy.

Speaker Change: Turning to slide eight.

Speaker Change: I'm excited to announce the key additions to our executive leadership team, starting with Tom Liguori, what joined Us as CFO.

Speaker Change: <unk> brings over 30 years of finance experience, including previous CFO roles at Avnet and advanced energy, where he successfully led global finance strategies that drove growth increased profitability and improved working capital.

Speaker Change: I'm excited to partner with time as we work together to execute our strategy.

Avner Applbaum: I also want to take a moment to thank Tim Francis for stepping in as Interim CFO. Tim will continue to play a crucial role within our finance organization as Chief Accounting Officer.

Speaker Change: I also wanted to take a moment to thank Tim Francis for stepping in as interim CFO, Tim will continue to play a crucial role within our finance organization.

Speaker Change: Chief Accounting officer.

Avner Applbaum: I'm also pleased to announce that Darryl Matthews has been appointed, group president of agriculture. Darryl is well regarded ag industry thought leader with experts in global markets and dealer channel management. His leadership at Trimble, where he played a key role in advancing agriculture technology, will be invaluable as we execute our strategy for industry-leading mechanized irrigation solutions.

Avner Applbaum: I'm also pleased to announce that Daryl Matthews has been appointed Group President of Agriculture. Daryl is a well-regarded ag industry thought leader with expertise in global markets and dealer channel management. His leadership at Trimble, where he played a key role in advancing agriculture technology, will be invaluable as we execute our strategy for industry-leading mechanized irrigation solutions.

Speaker Change: I'm also pleased to announce that Darryl Matthews has been appointing appointed group president of agriculture.

Speaker Change: <unk> well regarded act industry thought leader with expertise in global markets and dealer channel management.

Speaker Change: His leadership at Trimble, where he played a key role in advancing agricultural technology will be invaluable as we execute our strategy for industry, leading merchandise irrigation solutions.

Avner Applbaum: In addition, I'm excited to share the promotion of Jennifer Paisley, the Senior Vice President of Human Resources with over 20 years of HR experience, including seven years at Valmont. Jen has consistently demonstrated strong leadership and the deep alignment to our core values, making her the ideal choice to lead our HR function. With his appointments and the strength of our existing executive, we have the team in place to leave Valmont forward. Each decision has been intentional, ensuring we have the right talent in place to align with our strategic goals and uphold our culture.

Avner Applbaum: In addition, I'm excited to share the promotion of Jennifer Paisley, the Senior Vice President of Human Resources. With over 20 years of HR experience, including 7 years at Valmont, Jen has consistently demonstrated strong leadership and a deep alignment to our core values, making her the ideal choice to lead our HR function.

Speaker Change: In addition, I'm excited to share the promotion of Jennifer Paisley Senior Vice President of human resources.

Speaker Change: With over 20 years of HR experience, including seven years at Belmont.

Speaker Change: Chad has consistently demonstrated strong leadership and a deep alignment to our core values, making her the ideal choice to lead our HR function.

Avner Applbaum: With these appointments and the strength of our existing executive, we have the team in place to lead Valmont forward. Each decision has been intentional, ensuring we have the right talent in place to align with our strategic goals and uphold our culture.

Speaker Change: With these appointments and the strength of our existing executive we have the team in place to lead Belmont forward.

Speaker Change: Each decision has been intentional ensuring we have the right talent in place to align with our strategic goals and uphold our culture.

Avner Applbaum: To summarize, our long-term growth outlook for both infrastructure and agriculture remains strong, where well positioned and enduring markets with sustained multi-year demand drivers, with a sharp and strategic focus, we're ready to capitalize on growing infrastructure demand, which will enable us to further expand margins. In addition, we remain optimistic about our growth potential in our agriculture business as the market recovers to capture fruit future opportunities and continue delivering value to our shareholders.

Avner Applbaum: To summarize, our long-term growth outlook for both infrastructure and agriculture remains strong. We are well-positioned in enduring markets with sustained multi-year demand drivers. With a sharpened strategic focus, we're ready to capitalize on growing infrastructure demand, which will enable us to further expand margins. In addition, we remain optimistic about our growth potential in our agriculture business as the market recovers to capture future opportunities and continue delivering value to our shareholders.

Speaker Change: To summarize our long term growth outlooks for both infrastructure and agriculture remained strong.

Speaker Change: We're well positioned and enduring markets with sustained multiyear demand drivers.

Speaker Change: It's a search with a sharp and strategic focus we are ready to capitalize on growing infrastructure demand.

Speaker Change: Each will enable us to further expand margins.

Speaker Change: In addition, we remain optimistic about our growth potential in our agriculture business as the market recovers to capture fruit future opportunities and continue delivering value to our shareholders.

Tom LaVorey: Now, I'll turn it over to Tom for our third quarter financial review and an updated 2024 outlook. Thank you, Abner, and thank you for having me as part of your team. Good morning, everyone. Overall, we are pleased with the financial results this quarter. Revenues were in line with expectations. Operating margins once again increased year-to-year as we were disciplined in pricing, exited lower margin businesses, and controlled our cost. Cashflow was a very healthy 225 million, and I want to congratulate the team on their hard work in this area. We know there is more we can and will do on revenue growth and operating margin expansion, so we believe our financial results show that we are on the right path.

Tom Liguori: Now I'll turn it over to Tom for our third quarter financial review and an updated 2024.

Speaker Change: Now I'll turn it over to Tom for our third quarter Financial review and an updated 2024 outlets.

Tom Liguori: Thank you, Avner. And thank you for having me as part of your team.

Tom: Thank you Avner and thank you for having me as part of your team.

Tom Liguori: Good morning, everyone. Overall, we are pleased with the financial results this quarter. Revenues were in line with expectations. Operating margins once again increased year over year as we were disciplined in pricing, exited lower margin businesses, and controlled our costs. Cashflow is a very healthy $225 million. And I want to congratulate the team on their hard work in this area. We know there is more we can and will do on revenue growth and operating margin expansion, though we believe our financial results show that we are on the right path.

Speaker Change: Good morning, everyone.

Tom: Overall, we are pleased with our financial results this quarter.

Tom: Revenues were in line with expectations.

Tom: Operating margins once again increased year over year as we were disciplined in pricing exited lower margin businesses and controlled our costs.

Tom: Cash flow was a very healthy $225 million.

Tom: I want to congratulate the team.

Tom: Their hard work in this area.

Tom: We know there is more we can and will do and revenue growth and operating margin expansion. So we believe our financial results show that we are on the right path.

Tom LaVorey: Turning to slide 10, my comments will focus on our actual third quarter results compared to last year's, which are at an adjusted basis, excluding non-recurring items. Next, sales of a billion decreased 2.9 percent compared to last year. By region, sales increased in our North America markets by 2.9 percent, largely due to growth in our utility and telecom business. International sales decline, primarily in agriculture due to lower sales in Brazil and also in our infrastructure segment, mostly due to lower solar sales. Our international businesses are very important to Valmont, and I want to thank our international team for controlling costs and managing cash flow during this period.

Tom: Turning to slide 10, my comments will focus on our actual third quarter results compared to last years, which are on an adjusted basis, excluding nonrecurring items.

Tom Liguori: Turning to slide 10, my comments will focus on our actual third quarter results compared to last year's, which are on an adjusted basis, excluding non-recurring ideas. Net sales of a billion decreased 2.9% compared to last year. By region, sales increased in our North America markets by 2.9%. largely due to growth in our utility and telecom business. International sales declined. primarily in agriculture due to lower sales in Brazil. and also in our infrastructure segment, mostly due to lower solar sales. Our international businesses are very important to Valmont. And I want to thank our international team for controlling costs and managing cash flow during this period.

Net sales of 1 billion decreased two 9% compared to last year.

Tom: By region sales increased in our North American markets by two 9%.

Tom: Largely due to growth in our utility and telecom businesses.

Tom: International sales declined.

Tom: Primarily in agriculture were due to lower sales in Brazil.

Tom: And also in our infrastructure segment, mostly due to lower solar sales are.

Tom: Our international businesses are very important to Belmond and wanted to thank our international team for controlling costs and managing cash flow during this period.

Tom LaVorey: Operating income increased 4.9 million to 125.7 million in the quarter. Operating margin improved a healthy 80 basis points to 12.3% of net sales. While our gross margins slightly declined due to lower margin international agriculture projects, the decline was more than offset by lower SG&A cost. Our team's efforts to control expenses and streamline the cost structure are having a favorable impact on our profitability. Learning for share of $4.11 with similar to last year. The benefit of improved operating income and a 4.2% lower share account from share repurchases was offset by foreign currency losses and a more normalized tax rate.

Tom Liguori: Operating income increased $4.9 million to $125.7 million in the quarter. Operating Margin improved a healthy 80 base 12.3% of net sales. While our gross margin slightly declined due to lower margin international agriculture projects. The decline was more than offset by lower SG&A costs. for team's efforts to control expense. and streamline the cost structure are having a favorable impact on our profitability. Earnings per share of $4.11 was similar to last The Benefit of Improved Operating Income and a 4.2% lower share count from share repurchase. was offset by foreign currency losses.

Tom: Operating income increased four 9 million to $125 7 million in the quarter.

Tom: Operating margin improved a healthy 80 basis points to 12, 3% of net sales.

Tom: While our gross margins slightly declined due to lower margin international agricultural projects.

Tom: Did you find was more than offset by lower SG&A costs.

Tom: Our team's efforts to control expenses and streamline the cost structure or having a favorable impact on our profitability.

Earnings per share of $4.11 was similar to last year.

Tom: The benefit of improved operating income and a 4.2% lower share count from share repurchases.

Tom: Offset by foreign currency losses and.

Tom Liguori: in a more normalized tax one-time tax benefits were recognized in 2020.

Tom: In a more normalized tax rate its one time tax benefits were recognized in 2023.

Tom LaVorey: As one time tax benefits were recognized in 2023.

Tom LaVorey: Turning to the segments of Slide 11. Infrastructure sales with 758.6 million increased slightly year after year. An operating income grew 14.5% to 123.7 million. Significant growth in utility and telecom was largely offset by lower sales in L&T and solar. Our utility business grew nearly 15% year by year to 342.4 million and now contributes a third of our revenues. Product makes continued to trend toward distribution, substation, and smaller transmission structures consistent with recent quarters. Averselling prices for utility products were higher year over year and contributed to higher operating margins. But we're all, we're extremely pleased with performance of this team.

Tom Liguori: Turning to the segments of slide 11. Infrastructure sales of $758.6 million increased slightly year over year. and operating income grew 14.5% to $123.7 million. Significant growth in utility and telecom was largely offset by lower sales in L&T and solar. Our utility business grew nearly 15% year over year to $342.4 million. and now contributes a third of our rate. Product mix continued to trend toward distribution, substation, and smaller transmission structures, consistent with recent quarter. Ever selling prices for utility products were higher year over year. contributed to higher operating margins. Overall, we are extremely pleased with the performance of this.

Tom: Turning to the segments on slide 11.

Tom: Infrastructure yourselves at $758 6 million increased slightly year over year.

And operating income grew 14, 5% to $123 7 million.

Tom: Significant growth in utility and telecom was largely offset by lower sales in LNG and sellers.

Tom: Our utility business grew nearly 15% year over year to $342 4 million.

Tom: And now contributes a third of our revenues.

Tom: Product mix continues to trend toward distribution substation smaller transmission structures consistent with recent quarters.

Tom: Average selling prices for utility products were higher year over year.

Tom: And contributed to higher operating margins.

Tom: Overall, we are extremely pleased with performance of this team.

Tom LaVorey: Lighting and transportation revenues of 229.2 million to climb 9.3% year over year. Ramnees were impacted by market softness and lighting, the strategic exit of some lower margin products, and transportation project timing. As Abner mentioned, we're encouraged by higher order rates in our transportation business and expect our lighting business to recover as the housing market rebounds. Coating revenues from relatively flat year over year. Both in North America was offset by lower sales in international markets. Our telecommunications business grew close to 8% year over year. While carriers' spending in North America rose mildly. Our initiatives to ensure we have the right inventory at the right place for quick turnaround of customer orders or paying off.

Tom Liguori: Lighting and transportation revenues of $229.2 million declined 9.3% year-over-year. Revenues were impacted by market softness and lighting. the strategic exit of some lower margin products. Transportation Project, Time. As Avner mentioned, we're encouraged by higher order rates in our transportation business. and expect our lighting business to recover as the housing market rebounds. Coding revenues from relatively flat year over year. Growth in North America was offset by lower sales in international markets. Our telecommunications business grew close to 8% year over year. While carrier spending in North America rose Our initiatives to ensure we have the right inventory at the right place for quick turnaround of customer orders are paying off.

Tom: Lighting and transportation revenues of $229 2 million declined nine 3% year over year.

Revenues for impacted by market softness in lighting.

Tom: The strategic exit of some lower margin products.

Tom: And transportation project timing.

Speaker Change: As Andrew mentioned, we're encouraged by higher order rates in our transportation business.

Speaker Change: Our lighting business to recover as the housing market rebounds.

Speaker Change: Coding revenues were relatively flat year over year.

Speaker Change: In North America was offset by lower sales in international markets.

Speaker Change: Our telecommunications business grew close to 8% year over year.

While carrier spending in North America Rose modestly.

Speaker Change: Initiatives to ensure we have the right inventory at the right place for quick turnaround with customer orders are paying off.

Tom LaVorey: Solar revenues to climb 21.3 million or 38.1% year. New Year. Due to large international utility scale project in 2023 that did not repeat this year, and our decision to exit lower margin projects. Our solar team is nearing completion of a product redesign for our Go Forward business. We expect solar revenues to remain at current levels through the first half of 2025 and show growth in the second half. Across the segment, pricing and mix were favorable. Infrastructure operating income increased to 123.7 million, or 16.3 percent of net sales, a 200 basis point improvement. This was driven by the growth in utility and telecom, improved pricing in most markets, lower SDA expenses, and lower steel costs.

Tom Liguori: Solar revenues declined 21.3 million, or 38.1% year-over-year. due to large international utility scale project in 2023 that did not repeat this year. and our decision to exit lower margin. Our solar team is nearing completion of a product redesign for our go forward business. We expect solar revenues to remain at current levels through the first half of 2025 and show growth in the second half. Across the segment, pricing and mix were favorable. Infrastructure operating income increased to $123.7 million, or 16.3% of net sales. A 200 Basis Point Improvement. This was driven by the growth in utility and telecom...

Speaker Change: Solar revenues declined $21 3 million or 38, 1% year over year.

Speaker Change: Two large international utility scale project in 'twenty, two 'twenty three that did not repeat this year.

Speaker Change: Our decision to exit lower margin projects.

Speaker Change: Our solar team is nearing completion of a product redesign for our go forward business.

Speaker Change: First solar revenues to remain at current levels through the first half of 2025.

Speaker Change: And show growth in the second half.

Speaker Change: Across the segment pricing and mix were favorable.

Speaker Change: Infrastructure operating income increased to $123 7 million or 16, 3% of net sales.

Speaker Change: 200 basis point improvement.

Speaker Change: This was driven by the growth in utility and telecom improved pricing in most markets.

Tom Liguori: Lower SG&A and lower steel.

Speaker Change: Lower SG&A expenses and lower steel costs.

Tom LaVorey: Moving to slide 12, agriculture sales of 265.3 million decreased to 11.1 percent year-to-year, and operating income decreased 25 percent to 28.9 million. In North America, irrigation equipment volumes were slightly lower, as continued soft demand in agriculture markets was partially offset by the increase in replacement sales, as a result of the Midwest storm events during the second quarter. Every irrigation selling price is for similar to last year. International sales decreased, primarily driven by lower sales in Brazil, as lower grain prices are impacting growers' buying decisions. This was partially offset by growth in the Amir region and the contribution from the HR product acquisition that was completed in the 3rd quarter 2023.

Tom Liguori: Moving to slide 12. Agricultural sales of $265.3 million decreased 11.1% year over year, and operating income decreased 25% to $28.9 million. In North America, irrigation equipment volumes were slightly lower. As continued soft demand in agriculture markets was partially offset by an increase in replacement sales as a result of the Midwest storm events during the second quarter. average irrigation selling prices for similar to last International sales primarily driven by lower cells in Brazil. as lower grain prices are impacting growers buying decision This was partially offset by growth in the EMEA region. and the contribution from the HR Products Acquisition.

Speaker Change: Moving to slide 12.

Speaker Change: Agricultural sales of $265 3 million decreased 11, 1% year over year and operating income decreased 25% to $28 9 million.

Speaker Change: In North America irrigation equipment volumes were slightly lower.

Speaker Change: There's continued soft demand in agriculture markets.

Speaker Change: Partially offset by an increase in replacement sales as a result of the Midwest storm events during the second quarter.

Speaker Change: Average irrigation selling prices for similar to last year.

Speaker Change: International sales decreased primarily driven by lower sales in Brazil.

Speaker Change: Lower grain prices are impacting growers buying decisions.

Speaker Change: This was partially offset by growth in the EMEA region.

Speaker Change: And the contribution from the HR products acquisition that.

Tom Liguori: that was completed in third quarter 2020. Agriculture operating income decreased to $28.9 million, or 11% of net sales, a 200 basis point decrease.

That was completed in third quarter 2023.

Tom LaVorey: Agriculture operating income decreased to 28.9 million, or 11 percent of net sales, a 200 basis point decline. The benefit of reduced SDA expenses was offset by the impact of lower volumes and a higher mix of project sales.

Speaker Change: Agriculture operating income decreased to $28 9 million or 11% of net sales of 200 basis point decline.

Tom Liguori: The Banner Failure Reduced SG&A was offset by the impact of lower volumes and a higher mix of project systems. Turning to cash flows and liquidity on slide 13. Third quarter operating cash flows were a strong $225 million. bringing the year-to-date total to $379 million. We ended the quarter with approximately $200 million in cash. We expect cash flows to moderate in the fourth quarter, as our biannual bond interest payment is due, and we will be incurring additional CapEx as part of our capacity expansion program. During the quarter, we reduced borrowings on our revolving line of credit by $120 million.

Speaker Change: The benefit of reduced SG&A expenses was offset by the impact of lower volumes and a higher mix of project sales.

Tom LaVorey: Turning to cash flows and liquidity on slide 13. 3rd quarter operating cash flows were a strong 225 million, bringing the year-to-date total to 379 million. We ended the quarter with approximately 200 million in cash. We spent cash flows to moderate in the fourth quarter, as our biannual bond interest payment is due, and we will be incurring additional cap-backs as part of our capacity expansion program. During the quarter, we reduced borrowings on a revolving line of credit by 120 million, bringing the total year-to-date net reduction to 210 million. Net debt to adjusted EBITDA is now 1.2 times.

Speaker Change: Turning to cash flows and liquidity on slide 13.

Speaker Change: Third quarter operating cash flows were strong $225 million.

Speaker Change: Bringing the year to date total to $379 million.

Speaker Change: We ended the quarter with approximately $200 million in cash.

Speaker Change: We expect cash flows to moderate in the fourth quarter has a biannual bond interest payment is due.

Speaker Change: And we will be incurring additional capex as part of our capacity expansion program.

Speaker Change: During the quarter, we reduce borrowings on our revolving line of credit.

Speaker Change: $120 million.

Tom Liguori: bringing the total year-to-date net reduction to $210 million. Net debt to adjusted EBITDA is now 1.2 times. Our cash balances, available credit, and flexible balance sheet provides us ample liquidity to execute our capital allocation strategy.

Speaker Change: Bringing the total year to date net reduction to $210 million.

Speaker Change: Net debt to adjusted EBITDA is now at one two times.

Tom LaVorey: Our cash balances, available credit, due to flexible balance sheet, provides ample liquidity to execute our capital allocation strategy.

Speaker Change: Our cash balances available credit and flexible balance sheet provides us ample liquidity.

Speaker Change: Execute our capital allocation strategy.

Yeah.

Tom LaVorey: Turning to slide 14 for summary of capital deployment. Your-to-date capital spending was approximately 54 million. Our infrastructure operations team is making progress on capital projects to expand our production capacity. Our acquisition strategy is focused on opportunities that fit within our strategic priorities. Expand our market and product reach and contribute to earnings growth. We will be very selective in the M&A process to ensure a healthy ROIC and to create earnings. Returning cash to shareholders is a core foundation of our capital allocation. So far this year, we've returned 91 million of capital to shareholders through dividends and share repurchases.

Tom Liguori: Turning to slide 14 for a summary of capital deployment. Year-to-date capital spending was approximately $54 million. Our infrastructure operations team is making progress on capital projects to expand our production capacity. Our acquisition strategy is focused on opportunities that fit within our strategic priorities. Expand our market and product reach. contribute to earnings growth. We will be very selective in the M&A process to ensure a healthy ROIC. and Creative Earnings.

Speaker Change: Turning to slide 14 for a summary of capital deployment.

Speaker Change: Year to date capital spending was approximately $54 million.

Our infrastructure operations team is making progress on capital projects to expand our production capacity.

Speaker Change: Our acquisition strategy is focused on opportunities that fit within our strategic priorities.

Speaker Change: Spanned our market and product reach.

Speaker Change: You beat your earnings growth.

Speaker Change: We will be very selective in the M&A process to ensure a healthy rois.

Speaker Change: And accretive earnings.

Tom Liguori: Returning cash to shareholders is a core foundation of our capital allocation. So far this year, we've returned $91 million of capital to shareholders through dividends and share repayments. Over the past 12 months, that total reaches $283 million. Additionally, $81 million remains available under a board-approved repurchase program.

Speaker Change: Returning cash to shareholders is a core foundation of our capital allocation.

Speaker Change: So far this year, we've returned $91 million of capital to shareholders through dividends and share repurchases.

Tom LaVorey: Over the past 12 months, that total reaches 283 million. Additionally, 81 million remains available under board approved repurchase program.

Speaker Change: Over the past 12 months, the total reaches $283 million.

Speaker Change: Additionally, 81 million remains available under the board approved repurchase program.

Tom LaVorey: Turning to slide 15, our 2024 outlook remains unchanged. Full-year net sales are expected to decrease between 1.5% and 3.5% compared to last year. Turning to infrastructure, full-year net sales are expected to be between flat to up 1.5% compared to prior year. As mentioned last quarter, infrastructure gross margins in the second half of this year are expected to be lower than the first half. As steel costs become more aligned with contractual steel index pricing to our customers. In agriculture, full-year net sales are expected to be down between 10% and 15% compared to the prior year. As mentioned last quarter, the higher-makes of international projects, which have lower margins, will reduce fourth quarter of segment operating margins.

Tom Liguori: Turning to slide 15. Our 2024 outlook remains unchanged. Full year net sales are expected to decrease between 1.5% and 3.5% compared to last year. Turning to infrastructure, full-year net sales are expected to be between flat to up 1.5% compared to prior year. As mentioned last quarter, infrastructure growth margins in the second half of this year are expected to be lower than the first half. Steel costs become more aligned with the contractual steel index pricing to our customers. In agriculture, full year net sales are expected to be down between 10% and 15% compared to prior year.

Speaker Change: Turning to slide 15.

Speaker Change: Our 'twenty 'twenty four outlook remains unchanged.

Speaker Change: Full year net sales are expected to decrease between one 5% and three 5% compared to last year.

Speaker Change: Turning to infrastructure.

Speaker Change: Full year net sales are expected to be between flat to up 125% compared to prior year.

Speaker Change: As mentioned last quarter infrastructure gross margins in the second half of this year.

Speaker Change: In fact, it to be lower than the first half.

Speaker Change: Steel costs become more aligned with your contractual steel index pricing to our customers.

Speaker Change: In agriculture full year net sales are expected to be down between 10% and 15% compared to prior year.

Tom Liguori: As mentioned last quarter, the higher mix of international projects which have lower margins will reduce fourth quarter segment operating margins. Diluted earnings per share are expected to be in the range of $16.50. $17.30. In summary, our third quarter revenues were in line with expectations. Operating margins increased year-over-year due to our pricing discipline, exiting lower margin businesses, and controlling our costs. Cash flow is a very healthy $225 million. Our outlook for full year 2024 revenues and UPS are on We're pleased with our performance and are excited about our markets and opportunities in the years ahead.

Speaker Change: As mentioned last quarter, the higher mix of international projects, which have lower margins will reduce fourth quarter segment operating margins.

Tom LaVorey: Deluted earnings for share are expected to be in the range of $16.50 to $17.30. In summary, our third quarter revenues were aligned with the expectations. Operating margins increased year-to-year due to our pricing discipline, exit in lower margin businesses, and controlling our cost. Cash flow is a very healthy $25 million. Our outlook for full-year 2024 revenues and EPS are unchanged. We're pleased with our performance and are excited about our markets and opportunities in the years ahead.

Speaker Change: Diluted earnings per share are expected to be in the range of $16.50 to $17 30.

Speaker Change: In summary.

Speaker Change: Our third quarter revenues were in line with expectations.

Speaker Change: Operating margins increased year over year due to our pricing discipline exiting lower margin businesses and controlling our cost.

Speaker Change: Cash flow was a very healthy trend in $25 million.

Speaker Change: Our outlook for full year 2020 for revenues and EPS are unchanged.

Speaker Change: I'm pleased with our performance and are excited about our markets and opportunities in the years ahead.

Tom LaVorey: Lastly, I want to take a moment to say I am honored to be Chief Financial Officer of Valmont. Valmont has a rich history of being a market leader for strong financial performance. Our businesses help create vital infrastructure and increase agricultural productivity to feed the world. I can also say that I am excited about the secular growth trends in our industry and our opportunities to significantly grow our business over the next several years. I look forward to supporting Abner and working with the entire team to drive revenue growth and expand operating margins. Our focus will be on earning a healthy ROIC and providing our shareholders with reliable and predictable returns on their investment in our company.

Tom Liguori: Lastly, I want to take a moment to say I am honored to be Chief Financial Officer of Valmont. Valmont has a rich history of being a market leader in strong financial performance. Our businesses help create vital infrastructure and increase agricultural productivity to feed the world. I can honestly say that I am excited about the secular growth trends in our industry. and our opportunity to significantly grow our business over the next several years. I look forward to supporting Apple. and working with the entire team to drive revenue growth and expand operating margins. Our focus will be on earning a healthy ROIC and providing our shareholders with reliable and predictable returns on their investment in our company.

Speaker Change: Lastly, I wanted to take a moment to say I am honored to be chief financial officer of Alma.

Speaker Change: That mine has a rich history of being a market leader with strong financial performance.

Our business has helped trade vital infrastructure and increased agricultural productivity to feed the world.

Speaker Change: Can honestly say that I am excited about the secular growth trends in our industry.

Speaker Change: And our opportunity to significantly grow our business over the next several years.

I look forward to supporting after.

Speaker Change: I'm working with the entire team to drive revenue growth and expand operating margins.

Speaker Change: Our focus will be on earning a healthy rois C and providing our shareholders with reliable and predictable returns on their investment in our company.

Tom LaVorey: On a personal note, my wife Kristi and I have already relocated to Omaha, and we are thoroughly enjoying this community. I look forward to meeting many of you over the coming months and sharing our vision for the future of our company.

Tom Liguori: On a personal note, my wife Christy and I have already relocated to Omaha and we are thoroughly enjoying the community. I look forward to meeting many of you over the coming months and sharing our vision for the future of our company.

Speaker Change: On a personal note my wife, Kristina and I have already relocated to Omaha, and we are thoroughly enjoying their community.

Speaker Change: I look forward to meeting many of you over the coming months and sharing our vision for the future of our company.

Renee Campbell: We'll now turn the call back over to Renee. Renee?

Renee Campbell: We'll now turn the call back over to Renee. Renee? Thanks, Tom.

Speaker Change: I will now turn the call back over to Rene.

Renee Campbell: Thank you, Tom.

Speaker Change: Hey.

Operator: At this time, the operator will open up the call for questions. Thank you. At this time we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Rene: Thanks, Tom at this time, the operator will open up the call for questions.

Operator: At this time, the operator will open up the call for questions. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on the telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. To allow for as many questions as possible, please limit yourselves to one question and one follow-up.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from Mccann for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: To allow for as many questions as possible, please limit yourselves to one question and one follow-up.

Speaker Change: To allow for as many questions as possible. Please limit yourself to one question and one follow up thank you.

Operator: Thank you.

Christopher Moore: Our first question comes from the line of Chris Moore with C.J.S. Securities. Please proceed with your question.

Christopher Moore: Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question. Hey, good morning, guys. Thanks for taking a couple questions.

Speaker Change: Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.

Christopher Moore: Hey, good morning, guys. Thanks for talking a couple questions. Maybe we'll start with operating margins. So you know the goal is to approach mid-team operating margin over long-term. Margins were quite strong and 24, despite the soft revenue. You know it looks like steel pricing and the lower cost structure were two of the big drivers.

Chris Moore: Hey, good morning, guys. Thanks for taking a couple of questions. Maybe we'll start with operating margins. So you know the goal is to approach mid teen operating margin over the longer term.

Avner Applbaum: Maybe we'll start with operating margins. So, you know, the goal is to approach mid-teen operating margin over the longer term. Margins were quite strong in 24 despite the soft revenue. You know, it looks like steel pricing and the lower cost structure were two of the big drivers. If you assume no benefit from steel in 2025, are you going to need meaningful improvement in agriculture to maintain, you know, the same level of operating margins there, you know, close to 13%?

Chris Moore: Margins were quite strong in 'twenty four despite the soft revenue.

Chris Moore: It looks like steel pricing and the lower cost structure, where two of the big drivers I'm just if.

Christopher Moore: Just if you assume no benefit from steel in 2025, are you going to need meaningful improvement in agriculture to maintain the same level of operating margins there close to 13%?

Chris Moore: If you assume no benefit from steel 2025 are you going to need meaningful improvement in agriculture to maintain the same level of operating margins. There you know close to 30%.

Avner Applbaum: Chris, hey thank you.

Avner Applbaum: Chris, hey, thank you.

Chris Moore: Chris Hey, Thank you. This is a real I'll take the question.

Tom LaVorey: This is Ariel. I'll pick the question. So we're very pleased with our performance in 2024, expanding operating margins, getting closer to our overall goal of achieving close to mid-teens of operating margins. So we're very pleased with the performance we've done in many areas around our pricing leadership, our continuous improvement, driving the value to our customers, our overall great performance. Yes, we did have one-time tailwinds this year. Some of them are more one-time in nature. We did take some strategic actions around our pricing, purchasing steel. I mean, some of it was just the benefit of the steel deflation.

Avner Applbaum: This is Avner. I'll take the question. So, overall, we're very pleased with our performance in 2024, expanding operating margins, getting closer to our overall goal of achieving close to mid-teens of operating margins. So, we're very pleased with the performance we've done in many areas around our pricing leadership, our continuous improvement, driving the value to our customers. So, overall, great performance. Yes, we did have some one-time tailwinds this year. Some of them are more one-time in nature. We did take some strategic actions around our pricing, purchasing steel, and some of it was just the benefit of the steel deflation.

Chris Moore: So far we're very pleased with our performance in 'twenty to 'twenty four I expanding operating margins are getting closer to our overall goal of achieving a close to <unk>.

Chris Moore: <unk> made a mid teens operating margin. So we're very pleased with the performance we've done in many areas around our pricing leadership continuous improvement.

Driving the value to our customers. So overall great performance, yes, we did have some one time.

Chris Moore: Once this year some of them are more onetime in nature, we did take some strategic actions around our pricing our purchasing scale I mean, some of it was just the benefit of the the steel deflation. So we do have.

Avner Applbaum: So we do have some one-time benefits, and which will not occur in 2025.

Tom Liguori: So, we do have some one-time benefits, which will not occur in 2025. So, to answer your point, pleased with what we've done.

Chris Moore: Some one time benefits and which will not occur in 2025.

Tom LaVorey: So, to answer your point, please, with what we've done and Tom, maybe just want to add a little bit more color on kind of the impact of the one-timers this year. Yeah, well you know, first of all, Chris, I think we feel good about the operating margins going forward. You know we're going to have revenue growth; we're in good markets. We've controlled our SG&A cost, and we fully expect to, you know, have our SG&A cost increases be less than our revenue growth, so that will help our operating margins. We're expanding capacity in our plants. So, with more throughput, we'll have better efficiencies in our factories, and I think we're really pleased and proud of the team where they're disciplined in pricing that they have.

Chris Moore: So to answer your point plays we're pleased with what we've done.

Tom Liguori: And, Tom, maybe you just want to add a little bit more color on kind of the impact of the one-timers this year.

Speaker Change: And Tom maybe just wanted to add a little bit more color on kind of the impact of the one timers. This year, yeah, well first.

Tom Liguori: Yeah, well, you know, first of all, Chris, I think we feel good about the operating margins going forward. You know, we're going to have revenue growth. We're in good markets. We've controlled our SG&A cost, and we fully expect to have our SG&A cost increases be less than our revenue growth, so that'll help our operating margins. We're expanding capacity in our plants, so with more throughput, we'll have better efficiencies in our factories. And I think we're really pleased and proud of the team with their discipline in pricing that they have. As well as, you know, exiting lower-margin businesses has been maybe a painful process, but that's going to help our operating margins going forward.

First of all Chris I think we feel good about the operating margins going forward.

Tom: We're going to have revenue growth very good good markets, we've controlled our SG&A costs and we fully expect to have our SG&A cost increases would be less than our revenue growth. So that will help our operating margins were expanding capacity in our plants. So it was more throughput will have better efficiencies in our factories and people really.

Tom: Pleased and proud of the team with their disciplined in pricing that they have as well as you know.

Tom LaVorey: As well as you know, exiting lower margin businesses has been maybe a painful process, but that's going to help our operating margins going forward. So you know I think we feel we feel good going forward and you know near term yes we do have the headwinds from steel deflation and we do feel that this quarter maybe we're at the more normalized rate like we have a better matching of where our contract pricing is and steel costs and this quarter you know we have our higher mix of agriculture international projects which are which are at lower gross margins but what's important to understand is they have very they have healthy return on invested capital because we get advanced payment this less capital tied up so so overall you know positive sentiment on operating operating margins going forward.

Tom: Exiting lower margin businesses has been it's been maybe a painful process, but that that's going to help our operating margins going forward. So you know I think we feel we feel good going forward and you know near term, yes, we do have the headwinds from steel deflation and we do feel that this quarter maybe.

Tom Liguori: So, you know, I think we feel good going forward. And, you know, near-term, yes, we do have the headwinds from steel deflation. And we do feel that this quarter, maybe we're at the more normalized rate, like we have a better matching of where our contract pricing is in steel costs. And this quarter, we have a higher mix of agriculture international projects, which are at lower gross margins. But what's important to understand is they have healthy return on invested capital, because we get advanced payment. There's less capital tied up. So overall, you know, positive sentiment on operating margins going forward.

Tom: We were at the more normalized rate like we have a better matching of where contract pricing is in steel costs and this quarter. You know we have a higher mix of agri.

Tom: Agriculture International projects, which are which are at lower gross margins, but what's important to understand is they have very they have healthy return on invested capital because we get advanced payments, there's less capital tied up so.

Tom: So overall you know how.

Speaker Change: Positive sentiment.

Speaker Change: Operating margins going forward.

Christopher Moore: I very helpful appreciate that. Maybe just my last one. Notice my ad benefited from replacement sales driven by the severe weather events.

Unknown Executive: are very helpful.

Speaker Change: Very helpful. Appreciate that maybe.

Unknown Executive: maybe just my last one. North America Ag benefited, you know, from replacement sales driven by the severe weather events. Just trying to get a sense as to how much longer that benefit will carry over. Is that Q4 and into 25, where you're still going to see some positive impact from that?

Speaker Change: Maybe just my my last one.

Speaker Change: No no. Its my add benefit it's you know from replacement sales driven by the severe weather events.

Christopher Moore: Just trying to get a sense of how much longer that benefit will carry over. Is that Q4 and into 25 where you're still going to see some positive impact from that?

Speaker Change: Just trying to get a sense as to how much longer that benefit will carryover in Q4 and into twenty-five where you're still going to see some positive impact from that.

Avner Applbaum: Yeah, I thought I'll think that that as well. So overall we did have a strong storm season in the US, Midwest initially in the year and now in the Southeast. And overall we're very pleased with our ability to perform and respond very quickly to the growers and dealers, making sure they have, they can get their farms up and running as soon as possible.

Avner Applbaum: Yeah, I thought I'll take that that that as well. So overall, we did have strong storm season in in the in the US, Midwest initially in the year, and now in the southeast. And overall, we're very pleased with our ability to perform and respond very quickly to the growers and dealers making sure they have, they can get their farms up, up and running as soon as possible. So overall, we had we had some positive benefits. We haven't seen all the benefits yet from the storms on the southeast. So expecting to get some benefit from that.

Speaker Change: Yeah, Hi.

Speaker Change: I'll take that as well. So overall, we did have strong storm season.

Speaker Change: And indeed in the U S.

Speaker Change: Midwest initially in the year and now in the South East.

Speaker Change: Overall, we're very pleased with our ability to perform and respond very quickly to the growers and dealers, making sure. They have they can get their their farms up up and running as soon as possible. So overall, we had we had some positive benefits.

Avner Applbaum: So overall we had we had some positive benefits. We haven't seen all the benefits yet from the storms on the Southeast. So expecting to get some benefit from that. But overall we had we had a strong year, and as we go into next year, we're going to expect to have more of a normal idea as it relates to the storm. Got it. I appreciate it, guys.

Speaker Change: We haven't seen all the benefits yet from the storms in the south east So I'm expecting them to get some benefit from that but overall, we had we had a strong year and as we go into next year, where we're going to expect to have more of a normalized year as it relates to stores.

Avner Applbaum: But overall, we had we had a strong year. And as we go into next year, we're gonna expect to have more of a normal idea as it relates to storm. Got it.

Speaker Change: Yeah.

Speaker Change: Got it I appreciate it guys I'll leave it there.

Unknown Executive: I appreciate it, guys.

Unknown Executive: I will leave it there.

Christopher Moore: I will leave it there.

Operator: Thank you.

Unknown Executive: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Nathan Jones: Our next question comes from the line of Nathan Jones with Stiefel. Please proceed with your question.

Nathan Jones: Our next question comes from the line of Nathan Jones with Stevele. Please push you with your question. Good morning, everyone. I wanted to start off on the TD&F business up 15% and specifically I wanted to ask about a you majoring your prepared remarks that average selling prices and utility were higher year over year, which I found pleasantly surprising given that still prices have deflated. I would have expected to have negative pricing in that number. Can you talk about where the positive prices come from? I assume that that part of the transmission business that is covered by Master Service Agreements would have had to see negative pricing this quarter.

Nathan Jones: Good morning, everyone. I wanted to start off on the TD&S. Up 15%, and specifically I wanted to ask about a comment you made during your prepared remarks that average selling prices in utility were higher year over year, which I found pleasantly surprising given that steel prices have deflated. I would have expected to have negative pricing in that number. Can you talk about where the positive price is coming from? I assume that that part of the transmission business that is covered by master service agreements would have had to see negative pricing this quarter.

Speaker Change: Good morning, everyone.

Speaker Change: Right.

Nathan Jones: I wanted to start off on the the T. D N S business up 58% and specifically I wanted to ask about a comment you made during your prepared remarks that average selling prices in utility.

Nathan Jones: Hi year over year, which I found pleasantly surprising given that steel prices have deflated I would've expected to have negative pricing in that number.

Nathan Jones: Can you talk about where the positive projects coming from I assume that that part of the transmission business that is covered by master service agreements would've had to see negative pricing. This quarter. So just any more color you can give us on the impact with pricing, where it was positive where it was negative.

Tom Liguori: So just any more color you can give us on the impact of pricing, where it was positive, where it was negative, and what the overall volume Thank you, Nathan.

Nathan Jones: So just any more colleague can give us on the impact of pricing where it was positive, where it was negative, and what the overall volume price was.

Nathan Jones: And what the overall volume growth was.

Nathan Jones: Yeah.

Avner Applbaum: Thank you, Nathan. I'll pick that one. So overall very pleased with our TD&F performance in the quarter, being up 15%, so very strong performance in that aspect. As it relates specifically to pricing, it's been a very strong demand environment for us, and we've been taking deliberate actions to make sure we price to the value that we provide to our customers. And as our customers come to us and need us to help them provide solutions, we will make sure we price appropriately. Specifically in this quarter, what we've seen actually is that we had a large transmission project that ended in 2023. It was a project that we had for several years, and as that wound down in 2023, we've seen more distribution, substation going through our shops. And as we're pricing those, we're pricing them at a higher level, and that's where we've seen a lot of the benefit in our results.

Speaker Change: Thank you Nathan I'll take I'll take that one so overall, a very pleased with our <unk> performance in the quarter being up 15%, so very strong performance.

Avner Applbaum: I'll take that one. So overall, very pleased with our TD&S performance in the quarter being up 15%, so very strong performance in that aspect. As it relates specifically to pricing, it's been a very strong demand environment for us, and we've been taking deliberate actions to make sure we price to the value that we provide to our customers. And as our customers come to us and need us to help them provide solutions, we will make sure we price appropriately. Specifically in this quarter, what we've seen – actually, we had a large transmission. project that Ended in 2023, it was a project that we had for several years.

Speaker Change: In that aspect as it relates specifically to pricing it's been a very strong demand environment for us and we've been taking deliberate actions to make sure we price to the value that we provide to our customers and as our customers.

Speaker Change: Come to us and need us to help them provide solutions, we will make sure we are priced appropriately.

Speaker Change: Specifically in this quarter, what we've seen actually we had a large transmission.

Speaker Change: Project debt.

Speaker Change: And then in 'twenty two 'twenty three it was it was a project that we have for several years and as that are wound down in 2023, we've seen more distribution substation.

Tom Liguori: And as that wound down in 2023, we've seen more distribution, substation going through our shops. And as we're pricing those, we're pricing them at a higher level. And that's where we've seen a lot of the benefit in our results. Overall, I'd say it's more the smaller structures where we've priced the products at a higher level. Going into next year, we're going to probably see more of a normal mix of our products going through more transmission. Well, more of all products, but we'll see more transmission being a larger percentage of overall. So, yes, the steel deflation will have an impact on top line, not necessarily on our profitability, but that will impact us as we go into next year.

Speaker Change: Going through our through.

Speaker Change: Through our shops and as we're pricing those were pricing at a higher level and that's where we've seen a lot of the benefit.

And our and our results overall I'd say, it's more of the.

Tom LaVorey: Overall, I'd say it's more the smaller structures where we've priced the products at a higher level going into next year. We're going to probably see more of a normal mix of our products going through more transmission, but more of all products. But we'll see more transmission being a larger percentage of overall. So yes, the steel deflation will have an impact on top line, not necessarily on our profitability, but that will impact us as we go into next year. And Tom, maybe I just had a little bit of color on that aspect. Yeah, as Abner said, pricing was strong and really happy with the performance there.

Speaker Change: Smaller structures, where we've priced our product at a higher level going into next year, we're going to probably see more of a normal mix of our products going through more transmission, but more of all products, but we will see more transition being a larger percentage of.

Speaker Change: Overall, so yes, the steel deflation will have an impact on top line not necessarily on our profitability, but that will impact us as we go into next year and Tom maybe just add a little bit of color on that aspect yeah.

Tom Liguori: And Tom, maybe just add a little bit of color on that aspect.

Tom Liguori: Yeah. You know, as Avner said, pricing was strong and really happy with the performance there. You know, that said, like the steel deflation, it does lower like our revenue growth percentage. And the way to think of it is, you know, the steel deflation impacts infrastructure revenues right now about 1.5% of revenues. So think of like 1.5% of total infrastructure, $3 billion, it's roughly, you know, $45 million. That's how to think about it. Pricing is up. but the seal deflation impacts the growth rate. you know, the other impact of the steel deflation is that, you know, in the near term, it does affect our gross margin as we get steel pricing and steel cost in line.

Speaker Change: As I understand pricing pricing was strong and really happy with the performance. There you know that said like the steel deflation. It does lower like on a revenue growth percentage and the way to think of it is you know the steel deflation impacts infrastructure revenues right now about one.

Tom LaVorey: That said, like the steel deflation, it does lower our revenue growth percentage, and the way to think of it is, you know, the steel deflation impacts infrastructure revenues right now about 1.5% of revenue. So think of like 1.5% of total infrastructure, 3 billion, roughly, you know, 45 million. Then that's how to think about it. Pricing is up. but the steel deflation impacts the growth rate. You know the other impact of the steel deflation is that you know in the near term it does affect our growth margin as we get steel pricing and steel cost and line.

Speaker Change: 1.5% of revenues, so think of like when do they have a percent of total infrastructure 3 billion.

Speaker Change: It's roughly 45 million, that's how to think about it pricing is up.

Speaker Change: But the steel deflation impacts the growth rate.

Speaker Change: You know the other impact of the steel deflation is that.

Speaker Change: In the near term it does affect our gross margin as we get steel pricing and steel cost in line.

Tom Liguori: And the effect of that is Approximately 100 basis points of gross margin when you compare the first half to the second So, going forward, because we think things are more online, you know, I think it's reasonable for everybody to expect infrastructure gross margins. be more at the second half rates going into 2025.

Tom LaVorey: And the effect of that is approximately 100 basis points of growth margin when you compare the first half to the second half. So going forward because we think things are more in line, you know I think it's reasonable for everybody to expect infrastructure growth margins for more at the second half rates going into 2025. I guess the last thing we would add, you know, feedback from our sales team is the bid market, which remains strong, so that's a positive for us. So you can typically see while steel is deflating that I mean it's a headwind to the top line, tailwind to margins but it's a tailwind to income as you're seeing that deflation while the contracts catch up.

Speaker Change: And the effect of that is.

Speaker Change: Approximately 100 basis points of gross margin when you compare the first half to the second half so going forward because we think things are more in line.

Speaker Change: I think it's reasonable for everybody to expect infrastructure gross margins for <unk>.

Speaker Change: Be more at the second half.

Speaker Change: Rates going into 2025, I guess, the last thing we would add.

Tom Liguori: I guess the last thing we would add, you know, feedback from our sales team is the bid market remains strong. So that's a that's a positive. So you typically see while steel is deflating that I mean, it's a headwind to the top line, tailwind to margins, but it's a tailwind to income as you're seeing that deflation while the contracts catch up. Yeah, long term is it's not an impact on income in the near term. Because of the decline, it is an impact.

Speaker Change: The feedback from our.

Speaker Change: Sales team is the bid market remains strong.

Speaker Change: It's a positive for us.

Speaker Change: Do you typically say, whilst dailies deflating that I mean, it's a headwind to the top line tailwind to margins.

Speaker Change: How are we to income as you're saying that deflation while that contracts catch up.

Speaker Change: Yeah.

Tom LaVorey: Yeah, long term is it's not an impact on an income in the near term because of the decline; it is an impact at growth margin.

Speaker Change: Yeah long term is it's not an impact on income in the near term because of the decline it has an impact on gross margin.

Avner Applbaum: And then just the last one on TD. Yeah, just the last one on TD and SNS and the capacity. Expansions, can you talk about where you are with capacity, and I guess especially distribution and substation, and when that capacity is supposed to be online. Yeah, so overall that's been one of our major focuses on adding flexibility to our plan so we can do both transmission polls, distribution, substations, making sure we have our concrete, our steel. So that is that is a big focus on what we've been doing, and it's an ongoing process. We've already made significant improvements in some of our facilities in Mexico.

Unknown Executive: And then just the last one on KD, yeah, just the last one on KD and SNA.

Speaker Change: And then do you have any kind of offload on kidney yeah. Just the last one on C D and S N. The.

Avner Applbaum: The Capacity Expansions, can you talk about where you are with capacity and I guess especially distribution and substation and when that capacity is supposed to be available? Yeah, so overall, that's been one of our major focuses on adding flexibility to our plan so we can do both transmission poles, distribution, substations, making sure we have our concrete, our steel. So that is a big focus of what we've been doing, and it's an ongoing process. We've already made significant improvements in some of our facilities. In Mexico, we've had a focus on increasing our utility production. If you look at our Brennan facility, that is more on the lighting and transportation.

Speaker Change: Capacity expansion can you talk about where you are with capacity and I guess, especially distribution substation.

And when that capacity is supposed to be online.

Speaker Change: Yeah. So overall, that's been one of our major focus is on adding flexibility to our plan. So we can do both transmission pole distribution substations, making sure we have our concrete or steel so where we're at.

Speaker Change: Is that is a big focus of what we've been doing and it's an ongoing process. We've already made significant improvements in some of our facilities.

Speaker Change: In Mexico, we have had a focus on increasing our utility production. If you look at our brenham facility that is more on the lighting and transportation.

Avner Applbaum: We've had a focus on increasing our utility production. If you look at our Brennan facility, that is more on the lighting and transportation. We've taken actions both in Tulsa and in Mexico actually to increase our substations. And if we just give you one other specific example, if you look at our Fort Mead concrete facility out in Florida. We actually doubled our capacity there over the last several years. So we continue to invest in our in our facilities. Capital layout just your typical productivity lean. And we'll continue to increase capacity so we could support the strong demand that we're seeing in our infrastructure markets.

Speaker Change: We took actions both in Tulsa and in Mexico actually to increase our substation I don't know if you can just give you one other specific example, if you look at our Fort Meade concrete facility out in Florida, we actually doubled our capacity there over the last several years. So we continue to invest in our in our facilities.

Avner Applbaum: We've took actions both in Tulsa and in Mexico, actually, to increase our substation. And if I could just give you one other specific example, if you look at our Fort Meade concrete facility out in Florida, we actually doubled our capacity there over the last several years. So we continue to invest in our facilities, both in capital layout, just your typical productivity, lean. And we'll continue to increase capacity so we could support the strong demand that we're seeing in our infrastructure markets. It's a very good spot for us to be in, strong megatrends, driving demand, and we're increasing our capacity and flexibility to make sure we can address the demand.

Speaker Change: Capital.

Speaker Change: Al I, just your typical productivity lean.

And we will continue to increase capacity. So we could support the strong demand that we're seeing in our infrastructure market. So it's a very it's a very good spot for us to be in <unk>.

Avner Applbaum: It's a very good spot for us to be in strong mega trends driving demand, and we're increasing our capacity and flexibility to make sure we can address the demand.

Speaker Change: Strong mega trends driving demand and we're increasing our capacity and flexibility to make sure we can address the demand.

Nathan Jones: Thanks very much for taking my questions. Thank you.

Unknown Executive: Thanks very much for taking my question.

Speaker Change: Thanks, very much for taking my questions.

Unknown Executive: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Brent Thielman with D. A Davidson. Please proceed with your question.

Brent Thielman: Our next question comes from the line of Brent Thielman with DA Davidson. Please proceed with your question. Hey, great. Thanks. Good morning. You did comment in the presentation that that order rates in Brazil are improving over last year, despite a pretty significant revenue headwind this quarter in ag. Maybe how does that inform your view of that market over the short term or even into 2025? And should we, you know, not read too much into that? Should we still be cautious here? Just curious your thoughts around that. Good morning.

Brent Thielman: Our next question comes from the line of Brent Dealman with DA Davidson. Please proceed with your question. Hey, great. Thanks. Good morning. You did comment in the presentation that that order rates in Brazil are improving over last year despite a pretty significant revenue headwind. This quarter and ag maybe how does that inform review of that market over the short term or even into 2025. And should be either not read too much into that, should be still be cautious here, just curious to thoughts around that that. recent trend.

Speaker Change: Hey, great. Thanks, good morning.

You did comment in the presentation that the order rates in Brazil are improving over last year, despite a pretty significant revenue headwind.

Speaker Change: This quarter in AG.

Maybe how does that inform your view of that market over the short term or even into 2025.

Speaker Change: And she'd be either not read too much into that should be still be cautious here just curious your thoughts around that recent trend.

Avner Applbaum: Good morning.

Speaker Change: Oh, good morning, I'll I'll take that question overall the situation in Brazil, I mean, the farmers are being pressured right. If you look at if I look at the price of soybean today its below $10. So.

Avner Applbaum: I'll take that question. Overall, the situation in Brazil, I mean, the farmers are being pressured, right? If you look at the price of soybean today, it's below $10. So their profitability is being impacted. The sentiment is low. They're still profitable, but we should expect that condition to remain tough in the near future and going into 2025. We're positive on the increased order rates, but I would say the point you mentioned, cautious. Yeah, we should be cautious about how we think about the outlook. We're very pleased to see our order intake improving. We're the leader in that space in Brazil.

Avner Applbaum: I'll take that question. Overall, the situation in Brazil, I mean, the farmers are being pressured, right? If you look at the price of soybean today, it's below $10. So their profitability is being impacted. The sentiment is low. They're still conditioned to remain tough in the near future and going into 2025.

Speaker Change: There their profitability is being impacted.

Speaker Change: The the sentiment is low there still profitable, but it. It's we should expect that that condition to remain tough and in the near future and going into 2020 five.

Avner Applbaum: We're positive on the increased order rates, but I would say point you mentioned cautious. Yeah, we should be cautious about how we think about the outlook. We're very pleased to see our order intake improving. We have where the leader in that space in Brazil, the pivot provides a very strong value proposition to the growers. I mean, it will secure that they can get their two crops, not counting on rain with a pivot, the leaving at the third one. So overall, it won't help them drive profitability in the long term.

Speaker Change: We're positive on the increased order rates, but I would say your point you mentioned cautious yeah, we should be cautious about how we think about the outlook. We're very pleased to see our order.

Speaker Change: Order intake improving.

Speaker Change: We had oh, we're the leader in that space in Brazil.

Avner Applbaum: The pivot provides a very strong value proposition to the growers. I mean, it will secure that they can get their two crops, you know, not counting on rain. With a pivot, they'll even get the third one. So overall, it will help them drive profitability in the long term. So we're very bullish about the outlook for Brazil.

Pivot provides a very strong value proposition to the growers I mean, it will secure that they can get their two crops.

Speaker Change: Not counting on an rain with a pivotal even get the third one so overall it will help them drive profitability in the long term. So we're very bullish about the outlook for Brazil, but I would take a cautionary view on 2025, we'll have more details as we see how this quarter progressed.

Avner Applbaum: So we're very bullish about the outlook for Brazil, but I would take a cautionary view on 2025. We'll have more details as we see how this quarter progresses, but we're happy to see order intake improving in that market.

Avner Applbaum: But I would take a cautionary view on 2025. We'll have more details as we see how this quarter progresses, but we're happy to see the order intake improving in that market.

Speaker Change: We're happy to see the order intake are improving in that market.

Brent Thielman: Okay. Thanks, Abner. And then just on L&T, the revenue headwind sort of accelerated this quarter.

Brent Thielman: Okay, thanks, Avner.

Speaker Change: Okay. Thanks, and then just on L N T.

Unknown Executive: And then just on L&T, you know, the revenue headwinds sort of accelerated this quarter.

Speaker Change: Revenue headwind sort of accelerated this quarter and maybe if you could just refresh us when.

Avner Applbaum: Maybe if you could just refresh us, you know, when you lap some of these comparisons from exiting the lower margin products, and what's, what's reflective of true demand versus just some of these kind of product exit headwinds that you're experiencing? So when I look at the L&T, I mean, we had a tough quarter, and I would really pinpoint three areas that impacted our performance in L&T. It was the weakness in the residential lighting, it was timing of DOT projects, and it was flexibility in our plans to produce what we were hoping to produce to support our customers.

Avner Applbaum: Maybe if you could just refresh us, when you lap some of these comparisons from exiting the lower margin products and what's reflective of true demand versus just some of these kind of product exit headwinds that you're experiencing this year. Yeah, so when I look at the L&T, I mean, we had a tough quarter. And I would really pinpoint a three areas that impacted our performance at L&T. It was the weakness in the residential lighting. It was timing of DOT projects, and it was flexibility in our plans to produce what we were hoping to produce to support our customers.

Speaker Change: When you lap.

Speaker Change: Some of these comparisons from exiting the lower margin products and what's what's reflective of true demand versus just some of these kind of product exit headwinds that you're experiencing this year.

Speaker Change: Yeah. So when I look at the LNG I mean, we had a tough quarter AR and I would really pinpoint, but three areas that impacted our performance.

Speaker Change: N T. It was the weakness in the residential lighting.

It was timing of D O T projects and it was a flexibility in our plans to produce what we are what we were hoping to produce to support our customers. So we have three one offs don't expect that to repeat at that at that magnitude and when you think of those drivers D. O T. Our order rate is continues to be.

Avner Applbaum: So we had three one-offs. Don't expect that to repeat at that magnitude. And when you think of those drivers, DOT, our order rate continues to be strong. That continues to be positive. That will be positive into 2025. You add the IIJA, that should continue to be solid.

Avner Applbaum: So we have three one-offs. Don't expect that to to repeat at that magnitude. And when you think of those drivers, DOT, our order rate continues to be strong. That continues to be positive. That will be positive into 2025. You add the IAGA; that should continue to be solid. The residential lighting, if you look at the single-family housing starts, and we typically have strong correlation, it's a 12-month lag for us. And if you look at the single-family housing starts in 2021, 2022, and 2023, we've seen the decline; it impacted our business. Very important, but what we're seeing this year in 2024, as we're seeing that increasing, and with our 12-month lag, we will see our residential lighting improving into 2024.

Speaker Change: Strong Ah that continues to be positive that will be positive into 2025, you add the I H E. H that should continue to be solid the residential lighting. If you look at the single family housing starts and we typically have strong correlation its a 12 month lag for us and if you look at the single family housing.

Avner Applbaum: The residential lighting, if you look at the single-family housing starts, and we typically have strong correlation. It's a 12-month lag for us. And if you look at the single-family housing starts in 2021, 2022, 2023, we've seen a decline. It impacted our business. Very encouraging what we're seeing this year in 2024 as we're seeing that increasing. And with our 12-month lag, we will see our residential lighting improving into 2024. And the points I made before around our flexibility, we're making good progress. So overall, the outlook for that business in L&T is positive for us going into next year.

Speaker Change: <unk> and 2021 2022 three we've seen a decline it impacted our business very encouraged by what we're seeing this year in 2024, as we're seeing that increasing them with our 12 month lag we will see our residential lighting improving into 'twenty 'twenty four and the points I made before around our flexibility.

Brent Thielman: And the point I made before around our flexibility, we're making good progress. So overall, the outlook for that business in L&T is positive for us going into next year.

Speaker Change: We're making good progress so overall the outlook for that business.

Speaker Change: In L. A N T. It's positive for us going into next year.

Speaker Change: Okay.

Unknown Executive: Thank you very much.

Speaker Change: Thank you very much.

Brian Drab: Thank you. Our next question comes in line of Brian Drab with William Blair. Please proceed with your question. Hi. Good morning. Thanks for taking my questions.

Brian Drab: Thank you. Our next question comes from the line of Brian Drab with William Blair. Please proceed.

Speaker Change: Thank you. Our next question comes from the line of Brian Drab with William Blair. Please proceed with your question.

Brian Drab: Hi, good morning. Thanks for taking my questions. I guess I was wondering if you could give a more specific update on what's happening in EMEA and specifically Egypt and where we are like percentage wise through the project, you know, second phase $85 million project there and how that whole macro environment or, you know, the economic environment in Egypt is affecting the timing, if at all.

Brian Drab: Hi, good morning, Thanks for taking my questions I guess.

Brian Drab: I guess I was wondering if you could give a more specific update on what's happening in EMEA and specifically Egypt. And where we are, like, percentage wise through the project, you know, second phase 85 millionth project there and how that whole macro environment or you know, the economic environment Egypt is affecting the timing of it all. Thank you for the question. Yes. So overall, we're very pleased with what we're seeing in Middle East Africa. If we talk about kind of the whole irrigation and we talk about how it's tough in some of these regions in North America and in Brazil, it is very strong in Middle East Africa different drivers for that area around food security population growth and so on.

Brian Drab: I was wondering if you could give a more specific update on what's happening in EMEA, specifically, Egypt, and where we are like percentage wise through the project the second phase $85 million.

Brian Drab: Project there.

Brian Drab: How that whole macro environment or the economic environment in Egypt is affecting the timing if at all.

Avner Applbaum: Thank you for the question. Yes, so overall, we're very pleased with what we're seeing in Middle East Africa. If we talk about kind of the whole irrigation and we talk about how it's tough in some of these regions in North America and in Brazil, it is very strong in Middle East Africa. Different drivers for that area around food security, population growth, and so on. So overall, the pipeline is very strong and we are executing well on these projects. Not impacting our business, we continue to perform well, continue to ship around these projects. Now we just, as a reminder, there's always timing with these projects based on logistics, timing of how the project is progressing.

Speaker Change: Thank you for the question Yeah. So overall, we're very pleased with what we're seeing in the Middle East Africa, We talk about kind of the whole irrigation and we talk about how it's how it's tough in some of these region in North America and in Brazil. It is very strong in Middle East Africa different drivers for for for <unk>.

Speaker Change: That area around food security population growth and so on.

Avner Applbaum: So overall the pipeline is very strong. And we are executing well on these projects, and right now that the situation in the Middle East has not impacting our business. We continue to perform well, continue to ship around these projects. Now we just, as a reminder, there's always timing with these projects based on logistics, timing of how the project is progressing. So we're seeing right now where it's doing well, going with a strong pipeline into 20 25, and very pleased with our execution and that part of the world.

Speaker Change: So overall the pipeline is very strong and we are executing well on these projects and right now the situation in the Middle East has.

Speaker Change: Not not impacting our business, we continued to perform well continue to ship around these projects that were just as a reminder, there's always timing with these projects based on our logistics timing of how the project is progressing right now where it's doing well going with this.

Avner Applbaum: Right now, it's doing well, going with a strong pipeline into 2025, and very pleased with our execution in that part of the world.

Speaker Change: <unk> pipeline into 2025 and are very pleased with our execution in that part of the world.

Avner Applbaum: Okay, thanks, Governor. And then my, my other question for now is, you know, you're forecasting the infrastructure business to be flat up to 1.5% for the year. What, what is the updated thought on volume growth or decline, you know, what is what the forecast for volume for 2024 at this point. For infrastructure, thanks.

Unknown Executive: Okay, thanks, Avner.

Speaker Change: Okay. Thanks, Avner and then my my other question for now is you know he you're forecasting the infrastructure business to be flat to up one 5% for the year, what what is the updated.

Avner Applbaum: And then my other question for now is, you know, you're forecasting the infrastructure business to be flat to up 1.5% for the year. What is the updated thought on volume growth or decline? You know, what's the forecast for volume for 2024 at this point? for Infrastructure.

Speaker Change: Thought on volume growth or decline if you know what.

Speaker Change: What is what is the forecast for volume for 2024 at this point.

Speaker Change: For infrastructure.

Avner Applbaum: Yeah, and so I'll let Tom get into those details. But you know, maybe just to kind of look at how we're how we're looking at those businesses as we're kind of looking into 2025. And then Tom can kind of go specifically into 2024. We're seeing very positive demand drivers around our infrastructure businesses. You know, if you look at those megatrends around grid electrification, data consumption, grid resiliency, the need for critical infrastructure, they're all having very strong, creating very strong demand drivers for our businesses. And when you look at utility, the demand continues to be very strong.

Speaker Change: Yeah, So I'll, let Tom get into those details, but you know it maybe just to kind of look at how we're how we're looking at that at those businesses as we're kind of looking into 2025, and then Tom can kind of go specifically into 2024.

Avner Applbaum: And so they, I'll let Tom get into those details, but you know, maybe just to kind of look at how we're looking at those businesses as we're kind of looking into 2025 and then Tom can kind of go specifically into 2024. We're, we're seeing very positive demand drivers around our infrastructure businesses. You know, if you look at those mega trends around critical electrification, data consumption, greater resiliency, and the need for critical infrastructure. They are all having very strong creating very strong demand drivers for our businesses. And when you look at utilities, the demand continues to be very strong.

Speaker Change: Or states, where we're seeing very positive.

Speaker Change: Demand drivers around our infrastructure businesses, if you look at.

Speaker Change: Those mega trends around grid, all electrification data consumption grid resiliency the need for critical infrastructure, they're all having a very strong trading is very strong demand drivers for our businesses and when you look at utility the demand continues to be.

Tom Liguori: It has been strong in 2024. And as we go into 2025, that should continue. I just talked about the L&T business, Lining and Transportation, we should see positive momentum in that area. Telecom, we've seen signs of recovery in that area, specifically in North America. So positive signs on that as well. So overall, the demand drivers for us are looking very, very positive for us.

Speaker Change: Very strong it has been strong in 2024 and as we go into 'twenty to 'twenty five that should continue I just talked about the LNG business lighting and transportation, we should see positive momentum in that area.

Tom LaVorey: It has been strong in 2024, and as we go into 2025, that should continue. I just talked about the LNT business, lighting, and transportation. We should see positive momentum in that area. Telecom, seeing signs of recovery in that area, specifically in North America, so positive sign on that as well. So overall, the demand drivers for us are looking very positive for us.

Speaker Change: <unk> seen signs of a recovery.

Speaker Change: And that area, specifically in North America, so positive sign on that as well. So overall the demand drivers for us are looking very very positive for us.

Tom Liguori: And Tom, maybe just add a few specifics of kind of what you're seeing.

Tom LaVorey: And Tom, maybe just a few specifics of kind of what you're seeing. Yeah, thanks. Yeah, TDMS, utility volumes are clearly up. Say the one area where our volumes are down: the solar, and that's, you know, exiting the lower margin businesses. Everything else is relatively, relatively flat.

Speaker Change: And Tom maybe just add a few specifics about kind of what you're saying.

Tom Liguori: Yeah, thanks, Shabner. Yeah, TDMS utility volumes are clearly up.

Tom: Thanks, Heather Yeah T D. N S utility volumes are clearly up say, the one area, where our volumes are down as solar in that it's you know exiting the lower margin businesses and everything else is.

Tom Liguori: Say the one area where our volumes are down is solar and that is, you know, exiting the lower margin businesses. Everything else is relatively, relatively flat.

Speaker Change: Relatively relatively flattish.

Brian Drab: Okay, thank you all. Thank you.

Unknown Executive: Okay, thank you all. Thank you.

Speaker Change: Okay. Thank you Paul.

Speaker Change: Thank you. Our next question comes from the line of Jon Braatz with Oppenheimer and company. Please proceed with your question good morning, everyone.

John Braatz: Our next question comes from the line of John Braatz with Oppenheimer & Company. Please proceed with your question.

John Bratz: Our next question comes from the line of John Bratz with Oppenheimer and Company. Please proceed with your question. Good morning, everyone. Avner, it's very, very dry out in the Midwest, and I know the farmers are finishing up their harvest, and I got to work on their finances by year and. But given the, given the drought that we're in, are you hearing anything? Or do you think that's a, if it continues in, in this, it continues this way that. There's some incremental upside to North American egg. This year, next year, if it continues to be dry and, and secondly, are you hearing anything yet from your dealers about the drought and, and somehow how their customers are thinking about the other capital spending for next year?

John Braatz: Good morning, everyone. Avner, it's very, very dry out in the Midwest and I know the farmers are finishing up their harvest and they've got to work on their finances by year end. Given, given the drought that we're in. Are you hearing anything or do you think that if it continues in this way that there's some incremental upside to North American Ag?

Speaker Change: Oh boy.

Speaker Change: Avner, it's it's it's very very dry out in the Midwest and on all the farmers are hum, finishing up their harvest.

Speaker Change: And you know I got to work on their finances for by year end, but.

Speaker Change: Given the given the drop that we're in.

Speaker Change: Are you hearing anything or do you think that's a if it continues in this continues this way that there was some incremental upside to north American egg Hum.

Avner Applbaum: This year and next year, if it continues to be dry, and secondly, are you hearing anything yet from your dealers about the drought and how their customers are thinking about their capital spending for next year?

Speaker Change: Oh this year and next year, if it continues to be dry and secondly are you hearing anything yet from your dealers.

Speaker Change: How about the about the drought and in somehow and how their customers are thinking about other capital spending for next year.

Avner Applbaum: Thanks for the question. Yes, I agree. It's definitely very dry in the Midwest. We definitely see that. You know, if I kind of look at the farmer right now, and you look at, you know, corn, a little bit over $4, you look at the net farm income, the USDA projections around that, and just the sentiment. If you just look at the Produce Sentiment Survey, it's the lowest it's been over the last eight years. So the farmer sentiment is low. The farmer profitability is impacted. We do have some farmers are profitable, and some are not based on, you know, they lease, they own, and some other factors.

Speaker Change: Yeah. Thanks for the question, Yes, I agree it's a it's definitely very dry in the Midwest, we definitely see that.

Avner Applbaum: Thanks for the question. Yes, I agree. It's definitely very dry in the Midwest. We definitely see that. You know, but if I kind of look at the farmer right now and you look at, you know, corn, a little bit over four dollars, you'll look at the net farm income, the USDA projections around that. And just the, the sentiment. If you just look at the produce sentiment survey, it's for always it's been over the last eight years. So the farmer sentiment is low, that the farmer profitability is impacted. We do have some farmers who are profitable and some are not based on, you know, they, they, they lease, they own and some other factors.

Speaker Change:

Speaker Change: If I kind of look at that the farmer right now and you look at corn, a little bit over $4.

Speaker Change: You look at the net farm income the USDA projections around that.

Speaker Change: And just.

Speaker Change: The sentiment if you just look at that the produce sentiment survey, it's the lowest it's been over the last eight years. So the farmer sentiment is low there. They are farmer profitability is impacted we do have some farmers are profitable and some are not based on their stay they leased aon and some other factors.

Avner Applbaum: So I don't want to be too bullish right now about the farmers and the North America market. You know, usually at the end of the year, yes, we do see how they try to manage their financials. They'll go ahead, and they'll buy some equipment. We're watching it, right? I don't want to be too optimistic about that, just because they all had a hard, a difficult year. And we'll kind of see how it plays out. Also, when you look at the stocks-to-use ratio, it's still pretty high. So there's a lot of supply there, and the yield so far, the initial indications are that they're strong.

Avner Applbaum: So I don't want to be too bullish right now about the farmers and the North America market. You know, usually at the end of the year, yes, we do see, as they try to manage their financial, go ahead and they'll, they'll buy some equipment. We're, we're watching it, right? I don't, I don't want to be too optimistic about that just because they all had a hard, a difficult year. And we'll try to see how it plays out. Also, when you look at the stocks-to-use ratio, it's still pretty high. So there's, there's, there's, there's a lot of supply there.

So I don't Wanna be too bullish right now about the the farmers and the North America market.

Speaker Change: You know usually at the end of the year, Yes, we do see that they try to manage their financial well go ahead and do so don't buy some equipment.

Speaker Change: We're watching it right I I don't I don't want to be too optimistic about that just because they all had a hard or difficult here.

Speaker Change: And what.

Speaker Change: What kind of have to see how it plays out also when you look at the stocks to use ratio, it's still at pretty high. So there's there's there's there's a lot of our supply there and the yield so far but the initial indications are that there are strong so.

Avner Applbaum: And, and the yield so far, the initial indications are that they're strong. So, um, drought ultimately, we could, could have an impact, but right now, um, I wouldn't be too bullish about the, uh, environment here in the U.S.

Avner Applbaum: So drought ultimately could have an impact. But right now, I wouldn't be too bullish about the environment here in the U.S.

Speaker Change: Ultimately what could could have an impact, but right now I wouldn't be too bullish about the environment.

Speaker Change: Environment here in the U S and Tom would you like to add a point there sure and I mean, just to build on that you know if you're looking at this year versus 25. This year, we have strong storm sales and.

Tom Liguori: And Tom, would you like to add a point there?

Tom LaVorey: And, uh, time would you like to add a point there? And, I mean, just to build on that, you know, if you're looking at this year versus 25, this year, we have strong storm sales. And, you know, the egg team was telling me the storm sales in 2024, were about double what they've been on in historical average. So, you take out avenues, comments with, you know, sentiment may be down in North America. Storm sales, difficult predict, but, you know, we had a lot in 2024. You know, North America bag, maybe down in 2025, but we are seeing growth in the international.

Tom Liguori: Sure. And, I mean, just to build on that, you know, if you're looking at this year versus 2025, this year we have strong storm sales. know, the ag team was telling me the storm sales in 2024 were about double what they've been on a historical average. So you take Avner's comments with You know, sentiment may be being down in North America, storm sales, difficult to predict, but you know, we had a lot in 2024, you know, North America may be down in 2025, but we are seeing growth in the international.

Speaker Change: You know the AG team was telling me the storm sales in 'twenty 'twenty, four or about double of what they've been on a historical average. So if you take out avenues comments with.

Speaker Change: You know sentiment maybe being down in North America, So arm sales difficult predict but you know what.

Speaker Change: We had a lot in 2024.

With America, maybe down in 2025, but we are seeing growth in the international.

John Bratz: And, we'll see if that, um, sets or loses it to the positive territory. Okay. All right. Thank you very much, guys.

Unknown Executive: see if that offsets or boosts it to the positive. Okay. All right.

Speaker Change: Let's see if that offsets.

Speaker Change: Whose it into the positive territory.

Speaker Change: Okay, Alright, thank you very much guys.

Unknown Executive: Thank you very much, guys. Thank you.

Tom Hayes: Thank you. As a reminder, if you'd like to join the question, please press *1 on your terminal keypad. Our next question comes from the line of Tom Hayes with CL King and Associates. Please proceed with your question. Hey, good morning, everyone. Thanks for taking my question.

Speaker Change: Thank you as a reminder, if you'd like to join the question queue. Please press star one I'm just trying to keep up.

Operator: As a reminder, if you'd like to join the question queue, please press star 1 on your telephone.

Thomas Hayes: Our next question comes from the line of Tom Hayes with C.L. King and Associates. Please proceed with your question. Hey, good morning, everyone. Thanks for taking my question.

Speaker Change: Our next question comes from the line of Tom Hayes with C. L. King and Associates. Please proceed with your question.

Tom Hayes: Hey, good morning, everyone. Thanks for taking my question.

Thomas Hayes: Avner, I think you touched on it a little bit, but I'd be interested to see if you provide a little bit more color on really what you're seeing in the telecommunications area.

However, I think he touched on a little bit, but it'd be interesting to see if you could provide a little bit more color on really what youre seeing in the telecommunications area.

Avner Applbaum: I think you'd test down a little bit by being interested to see if you provide a little bit more color on really what you're seeing in the telecommunications area. We've, you talk to some other people in the markets, you know, getting kind of mixed results but certainly a nice quarter. You know what you're seeing in the market, as far as project activity and stuff like that. Thanks for the question. We're very pleased to see our telecommunications grow 8% after decline. And when you kind of follow in the North America, the carrier spend, they're, they're more to back to business as usual.

Avner Applbaum: We've you talked to some other people in the market seem to be getting kind of mixed results, but certainly you had a nice quarter, just wondering, you know, what you're seeing in the market as far as project activity and stuff like that. Thanks for the question. We're very pleased to see our telecom business grow 8% after decline. And when you kind of follow in North America, the carrier spend, they're more tipped back to business as usual. And, you know, ultimately, we're very bullish about that market in the long term. We still know that they need to build out the 5G connection.

Tom Hayes: You're talking to some other people that market seem to be getting kind of mixed results, but certainly you had a nice quarter, just wondering what youre seeing in the market as far as project activity and stuff like that.

Tom Hayes: Yeah.

Speaker Change: Thanks for the question we're.

Speaker Change: We're very pleased to see our telecom visits grow 8% after after a decline and when do you kind of following in North America. The carrier spend there are more type back to business as usual.

Speaker Change: And you know ultimately we're here.

Avner Applbaum: And, you know, ultimately, we're heard bullish about that market in the long term. We still know that they need to build out the 5G connection, and a lot of estimates have by the end of this decade. We'll have 85% of the population on 5G. So there's, there's, we believe they'll continue the momentum. I think we, we pretty much hit the floor there and we're expecting to grow, and as the carriers keep on focusing on building out the network, increasing coverage, their optimization, we're well positioned to support them anyway from our macro towers for a small cell that are the backbone of the 5G system, all the way through our components, our 10, our concealments.

Speaker Change: Bullish about that market in the long term, we still know that they need to build out the <unk> connection and.

Avner Applbaum: And a lot of estimates have by the end of this decade, we'll have 85% of the population on 5G. So there's, we believe they'll continue the momentum. I think we pretty much hit the floor there and we're expecting to grow. And as the carriers keep on focusing on building out the network, increasing coverage, their optimization, we're well positioned to support them any way from our macro towers to our small cell that are the backbone of the 5G system, all the way through our components, our PIM, our concealment. So we have a wide, a broad offering there that supports the carriers as they continue to build up the network.

Speaker Change: There are a lot of estimates have by by the end of this decade will have 85% of the population on 50. So there's there's so we believe they'll continue the momentum I think we pretty much hit the floor, there and we're expecting to grow and as the carriers keep on focusing on building out the network increasing coverage there.

Speaker Change: Our optimization, we're well positioned to support them anywhere from our macro towers to small cells that are the backbone of all of the five G system. All the way through our components are Pam or concealment. So we are we have a wide a broad offering there that supports the carriers as they.

Avner Applbaum: So we have a wide, a broad offering there that supports the carriers as they continue to build out the network. So feel pretty good about where the, where the telecom business is heading.

Speaker Change: Continue to build out the network, so feel pretty good about where where the where the the telecom business is heading I will point out that on the international side that there are a little bit behind the U S. It's more fragmented so there's opportunity for us and select the markets there that might take just a bit more time.

Avner Applbaum: So I feel pretty good about where the telecom business is heading.

Unknown Executive: I will point out that on the international side, that they're a little bit behind the U.S., that's more fragmented. So there's opportunity for us in selected markets there that might take just a bit more time. I appreciate the color. I'll go back in the queue. Thank you.

Avner Applbaum: I will point out that on the international side, that they're a little bit behind the OS that's more fragmented. So there's opportunity for us, and so like the market there, that might take just a bit more time.

Tom Hayes: I appreciate the color. I'll go back to the queue.

Speaker Change: I appreciate the color I'll get back in the queue. Okay.

Speaker Change: Okay.

Operator: Thank you.

Speaker Change: Thank you we have reached the end of the question and answer session. I will now turn the floor back over to Renee Campbell for closing comments.

Renee Campbell: We have reached the end of the question and answer session.

Renee Campbell: We have reached the end of the question and answer session.

Renee Campbell: I will now turn the floor back over to Renee Campbell for closing Thank you for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days.

Renee Campbell: I'll now turn the floor back over to Renee Campbell for closing comments. Thank you for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days.

Renee Campbell: Thank you for joining us today as mentioned today's call will be available for playback on our website or by phone for the next seven days, we look forward to speaking with you again next quarter.

Renee Campbell: We look forward to speaking with you again next quarter.

Renee Campbell: We look forward to speaking with you again next quarter.

Renee Campbell: These slides contain, and the accompanying oral discussion will contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that could cause the actual results of the company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the company and its subsidiaries, the overall market acceptance of such products and services, the integration of acquisitions and other factors disclosed in the company's periodic reports filed with the Securities and Exchange Commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product

Unknown Executive: These slides contain Andy, company or all discussion will contain forward-looking statements within the meeting of the Private Security Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that cause the actual results of the company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industry served by the company and its subsidiaries. The overall market acceptance of such products and services, the integration of acquisitions and other factors disclosed in the company's periodic reports, followed with the security's of exchange commission, as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, products.

Speaker Change: These slides contain any accompanying oral discussion will contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Speaker Change: These statements involve known and unknown risks uncertainties and other factors that could cause the actual results of the company to differ materially from the results expressed or implied by such statements, including general economic and business conditions conditions affecting the industry served by the company and its subsidiaries the overall market acceptance of such products and services.

Integration of acquisitions and other factors disclosed in the company's periodic reports filed with the Securities and Exchange Commission as well as future economic and market circumstances industry conditions Husky performance and financial results operating efficiencies availability and price of raw materials availability and market acceptance of new products product pricing domestic.

Speaker Change: And international competitive environments, geopolitical risks and actions and policy changes of domestic and foreign governments. Consequently, such forward looking statements should be regarded as the Companys current plans estimates and beliefs. The company does not undertake and specifically disclaims any obligation to publicly release the results of any revisions to these forward looking statements.

Speaker Change: Then maybe made to reflect any future events or circumstances. After the date of such statements.

Speaker Change: The occurrence of anticipated or unanticipated events. This concludes today's teleconference. We thank you for your participation and you may disconnect your lines at this time.