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spk04: Thank you for attending today's Ultra-Industrial Motion Second Quarter 2022 Second Results Conference Call. My name is Jason, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Ryan Flame with Sharon Merrow.
spk02: Thank you, and good morning, everyone, and welcome to the call today. To help you follow management's discussion on this call, they will be referencing slides that are posted to the ultramotion.com website under events and presentations in the investor relations section. Please turn to slide three. During the call, management will be making forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and investors must recognize that events could differ significantly from management's expectations. Please refer to the risks, uncertainties, and other factors described in the company's quarterly reports on Form 10-Q and annual report on Form 10-K, and in the company's other filings with the U.S. Securities and Exchange Commission. Except as required by applicable law, Altra Industrial Motion Corp. does not intend to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. On today's call, management will refer to non-GAAP diluted earnings per share, non-GAAP income from operations, non-GAAP net income, non-GAAP adjusted EBITDA, non-GAAP operating income margin, non-GAAP adjusted EBITDA margin, non-GAAP organic sales, non-GAAP gross margin, non-GAAP operating working capital, non-GAAP net debt, non-GAAP free cash flow, and non-GAAP adjusted free cash flow. These metrics exclude certain items discussed in our slide presentation and in our press release under the heading discussion of non-GAAP financial measures and any other items that management believes should be excluded when reviewing continuing operations. The reconciliations of ALTRA's non-GAAP measures to the comparable GAAP measures are available in the financial tables of the Q2 2022 financial results press release on ALTRA's website. Please turn now to slide four. With me today are Chief Executive Officer Carl Christensen and Chief Financial Officer Todd Patriaca. I'll now turn the call over to Carl.
spk07: Thank you, Ryan, and thank you for joining us today. We delivered another strong quarter as the Altra team once again did an exceptional job executing our long-term business strategy while mitigating near-term supply chain, labor, and inflation headwinds. Although economic signals point to increased uncertainty, we believe that the underlying health of both our company and our industry remain very strong. We continue to see pent-up demand and CapEx investments being made across many markets, including late cycle segments and automation, and we expect this to continue. We're confident that Altra is well positioned to navigate through this period as we have demonstrated in the past. We have a clear strategy, an exceptional team, a proven operational playbook, and a track record of driving growth, margin expansion, and strong cash flow through a range of market conditions. This confidence is reflected in our 2022 guidance, which we are updating as Todd will review in more detail later in the call. Please turn to slide five for highlights from the quarter. Our second quarter results reflect the resilience of our business model as we continue to transform Altra into a premier industrial company and technology leader in power transmission and motion control solutions. We delivered double-digit sales and earnings per share growth on a pro forma basis, which excludes the contributions of the JVS business that we divested on April 8th. Order rates remain strong across the markets we serve with a very strong book-to-bill ratio and this resulted in a record level backlog for the fifth consecutive quarter. Pricing and surcharge initiatives offset the effects of inflation in the quarter. We have implemented additional pricing actions to continue to protect margins and we will take further action if necessary. We believe inflation is moderating and that we will experience margin expansion when commodity costs and the associated surcharges we charge our customers return to more normal levels. Todd will explain how surcharges affected the margins in the quarter. During the quarter, we made great progress with the integration of our Nook acquisition, which added to our portfolio of highly engineered products. We are on track to achieve targeted synergies and are thrilled with the caliber of the people, systems, and technology that came with the acquisition. This is a testament to our ability to implement our M&A playbook to effectively identify, execute, and integrate high-value M&A opportunities. We closed on the JVS sale early in the quarter and used proceeds to pay down debt and further reduce our leverage. We ended the quarter with net leverage of 2.3 times net debt to adjusted EBITDA. at the low end of our targeted leverage range. We remain committed to maintaining a strong balance sheet and allocating our capital in a balanced and thoughtful manner that optimizes value for our shareholders. Our capital allocation priorities are unchanged and include investing in organic growth opportunities, pursuing ultra-like M&A, retaining a healthy balance sheet, and returning capital to our shareholders. Due to our confidence in our ability to generate cash, earlier in the year, we increased our dividend and our board of directors approved a $300 million share buyback program. Now turning to slide six for a review of the markets in more detail. Starting with factory automation and specialty machinery, which represents about 15% of our business, Sales were very strong in Q2, up double digits both year over year and sequentially. We're seeing excellent demand in this market and expect continued strength in the second half of the fiscal year. We remain very optimistic about the long-term prospects of this market, which is driven by very attractive secular trends like global digitization, industrial IoT, supply chain management, and collaborative robotics. In turf and garden, ag and construction, which combined represents approximately 11% of our business, Q2 sales were up single digits year over year, led by strength in farm and ag with modest growth in construction and turf and garden. We're expecting turf and garden to start to slow in the second half of the year with continued strength from farm and ag. Longer term, this remains an attractive market play for us driven by trends like increased infrastructure spending and global population growth. Moving on to material handling, which represents about 8% of sales, and continued to perform well across all segments of the market, including conveyors, forklifts, and vertical lifting systems. Sales were up single digits year over year. We are very positive about our growth prospects in material handling as we leverage strong secular trends such as e-commerce, electrification, and warehousing efficiency improvements. Medical equipment, which is about 8% of our sales, is a very attractive long-term opportunity for Altra, driven by trends like aging population and the growth of non-invasive and robotic surgeries. Sales were down mid-single digits year over year and slightly lower sequentially as OEMs continued to rationalize inventory due to COVID surges this year. We remain positive about the outlook for this market in 2022, given the anticipated easing of COVID restrictions and a return to more normal levels of spending and investment. We also will have more favorable prior year comps as we progress through the year. Moving on to aerospace and defense, which combined is about 5% of sales. Sales were down slightly overall, with Commercial Arrow up low double digits. This strength was more than offset by lower defense sales. The improvement in Commercial Arrow is encouraging, and the defense outlook is positive as we head into Q3 with a strong backlog. Our A&D business is an important bottom line contributor with a very attractive margin profile, a strong competitive position, and high barriers to entry. Renewable energy, which represents about 4 percent of sales, was down double digits in Q2, primarily due to the continuation of lockdowns in China. This was slightly offset by a double-digit increase in sales to the oil and gas market. And finally, distribution, which represented approximately 28 percent of our sales in the quarter, was up double digits year over year as strong bookings momentum continued. Our sales in the distribution market track in line with the general industrial economy, and we anticipate a solid performance in this segment in the second half of the fiscal year. Turning to slide seven, as we manage through the day-to-day business activities, we remain focused on advancing our long-term strategy to optimize Altra's position as a premier industrial company. I would like to note a few strategic updates. On the organic growth side, we continue to leverage our ultra business system tools to win in high growth markets and align ultra with secular trends like the proliferation of digitization and automation, growth of aging populations, and the increasing importance of sustainability. In today's macro environment, we are seeing several of these trends take on growing prominence at unprecedented rates. and we are confident that Altra is in an enviable position to ride the wave as these take hold. As an example, during the quarter, we saw strong activity in the medical market with a multimillion-dollar order for a new customer in the home health care industry and also secured several prototype orders in the surgical hand tool and medical infusion system segments, which will generate approximately $5 million in future revenues at full fund rate. full-run production rates. On the M&A front, we remain focused on building the funnel to identify potential acquisition candidates that offer attractive market prospects and fit our defined and disciplined ultralight criteria. And finally, a key foundational enabler of our business strategy is ESG. As noted on our last call, earlier in the year we published our first sustainability report to provide more visibility on our ESG priorities and the progress we've been making. A top priority is to reduce the impact our business has on the environment. As a global industrial leader, we are committed to introducing innovative products to help our customers improve the sustainability of their equipment and processes while also implementing global energy management reduction strategies across the organization to help reduce our overall impact. We're in the early stages of establishing more robust data collection and reporting capabilities so that we can compile and assess critical greenhouse gases and energy consumption data across our global footprint. As you can appreciate, for a global manufacturer like Altra, this is a complex process, but it is one that we are committed to seeing through so that we can improve our transparency around this very important issue. We look forward to keeping you updated as we progress. With that, I'll turn the call to Todd to take you through our financial performance details and guidance update.
spk03: Thank you, Carl, and good morning, everyone. As we did last quarter, we are presenting our financials on a reported and pro forma basis, which excludes the impact of the JVS business that we divested on April 8th. Please turn to slide 8. I'll start with a closer look at our top line performance. Total Q2 sales were up 1.9% compared to the prior year. On a pro forma basis, sales grew 12.7% year over year. In Q2 2022, overall organic sales growth was 3.1% compared with the second quarter of last year. Excluding the impact of JBS, organic sales were up 13.8% on a pro forma basis. Price contributed 390 basis points for the quarter, and FX had a negative effect of 400 basis points, both on a pro forma basis. Additionally, surcharges had a significant impact on revenues for the quarter, totaling approximately $25 million. These pass-through costs, however, had no impact on operating income. Orders remained strong during the quarter, and we exited the quarter with record backlog approaching nearly $950 million. Turning to our organic sales performance by geography, pro forma organic sales were up 20% in Europe, 8.2% in North America, and up 19.6% in Asia and the rest of the world. Turning to our segments, excluding the impact of FX, the PTT segments organic sales were up 10.6% year over year. Non-GAAP operating income for the segment was up 10.3% compared to Q2 2021. The non-GAAP operating income margin for PTT was 15.6%, an increase of 50 basis points compared to Q2 2021. The increase continues to demonstrate the resilience of our balanced portfolio of operating companies, as well as the success of our ongoing pricing efforts within the segment. The ANS segment's organic sales were down 3.8% year over year. On a pro forma basis, Second quarter sales for ANS increased 17.8% organically. Proforma non-GAAP operating income increased 11.9% compared to Q2 2021 as the segment continues to implement both pricing actions and surcharges to offset inflationary pressures. The non-GAAP operating income margin for ANS was 19.9% or 22% excluding the impact of surcharges which was an increase of 60 basis points compared to Q2 2021. Moving on to the overall company's operating performance, pro forma non-GAAP gross profit was 35.3% compared to 37.1% in Q2 2021. This decline is primarily due to surcharge initiatives used to offset inflationary pressures primarily around electronics and copper. Excluding the surcharge revenue of approximately $25 million, gross profit was 37.2%, an improvement of 10 basis points compared to Q2 2021. Pro forma non-GAAP operating income grew to $81.2 million compared to $73.3 million a year ago. Pro forma non-GAAP operating income margins are behind 30 basis points when compared to Q2 last year due to the zero margin surcharge initiatives. Dan Barahona- Excluding the impact of surcharges margins were 17.4% an increase of 60 basis points as a result of the continued pricing actions and strong operating execution. Dan Barahona- Our interest expense was down 28 and a half percent due to lower debt levels and more favorable pricing as a result of our November 2021 refinancing. Dan Barahona- Please turn to slide nine for a closer look at our balance sheet improvements and cash flow and liquidity. Non-GAAP adjusted free cash flow for the quarter was $34.3 million compared with $56 million in the year-ago quarter due to the continued, albeit lower than Q1, investments in inventory to support our strong underlying demand. Even though we saw a decrease in non-GAAP adjusted free cash flow compared to the prior year, we were pleased to see a stabilization in operating working capital as compared to the end of Q1 2022. David Wiltshire- Capital expenditures during the quarter total 12.8 million up 62% from the prior year quarter as we continue to invest in growth opportunities we finished the quarter with 192.9 million dollars of cash, please turn to slide 10. David Wiltshire- We ended the quarter with leverage of 2.3 times on a net debt basis without the ltm EBITDA from jbs leverage would be 2.5 times. We expect our leverage to fluctuate as JVS continues to roll out of our LTM EBITDA along with our future debt paydowns. Looking ahead, based on our current plans for debt paydowns and continued support of the dividend, we expect to exit 2022 with leverage of approximately 2 to 2.25 times on a net debt basis, well within the low end of our target range. Please turn to slide 11 for an update on our outlook for 2022. With a record setting first half of fiscal 2022 now behind us, we are excited to build off this progress as we work towards our full year financial targets. Although we removed approximately $194 million of annual revenue from our business with the JVS divestiture, our team's performance has ultra position to deliver full year sales equivalent to or higher than what we reported in 2021. That demonstrates excellent execution, strong demand, and the improved fundamentals of our transformed portfolio. While the macroeconomic environment remains uncertain, our results this quarter again demonstrate our ability to navigate that uncertainty by controlling what we can control. As we look to the balance of the year, we will continue to proactively address pricing, work to stay ahead of supply chain delays, and strive to leverage our strong customer relationships to outperform our competitors. All while leaning into trends like factory automation and robotics to help our industry navigate through the challenging landscape we are all facing. With that as background, our updated guidance for the full year 2022 is as follows. Including the JVS contribution in 2022, we expect annual sales in the range of $1.932 billion to $1.972 billion. Gap diluted EPS in the range of $2.33 to $2.42. Non-gap adjusted EPS in the range of $3.35 to $3.50. And non-gap adjusted EBITDA in the range of $388.5 million to $403.5 million. Excluding the JVS contribution in 2022, we expect annual sales in the range of $1.88 billion to $1.92 billion. Gap diluted EPS in the range of $2.31 to $2.40. Non-gap adjusted EPS in the range of $3.22 to $3.37. And non-gap adjusted EBITDA in the range of $378.7 million to $393.7 million. Notably, as I mentioned, we expect earnings to be equal or higher compared to the prior year despite the $194 million revenue reset Mike SanClements, related to the JVS divestiture for both guidance scenarios are depreciation and amortization guidance remains in the remain in the range of 95 to $100 million. Mike SanClements, And despite the economic backdrop, we do not expect to slow our capex investment and therefore our capital expenditure expectations remain in the range of 50 to 55 million. Mike SanClements, We are adjusting our normalized tax rate for the full year to be in the range of 22 to 24%. And we are lowering our adjusted non gap free cash flow range to 100 to 125 million to reflect our investment to support the strong demand we are experiencing and support growth activities. I would also like to note that, due to the difficulty in predicting we have not included surcharge revenues or the related costs in the second half of the year and our updated guidance. Since pass through costs and the related recovery would have no impact on operating income. Please turn to slide 12. To help everyone better understand the ongoing business, we have provided a comparison of the 2022 pro forma guidance versus the pro forma 2020 results. As you can see, we expect to deliver double digit adjusted EPS and adjusted EBITDA growth in 2022 while growing the top line at low double digits. This again is a strong demonstration of the underlying strength of our transformed portfolio and the power of the Ultra business system. Now please turn to slide 13. Similar to last quarter, we have included a 2021 pro forma results table by quarter and full year to assist you in your ongoing analysis of Ultra. With that, I'll now turn the call back to Carl before we take your questions.
spk07: Thank you, Todd. And please turn to slide 14. Looking ahead as we continue to manage near-term business dynamics, we remain guided by our strategy to optimize Ultra's position as a premier industrial company and deliver strong and sustainable returns for shareholders. I am as confident as ever that we have the right team, the right technology, and the right strategy to navigate through the business realities in front of us as we position Altra for future opportunities. As I noted at the outset of the call, the fundamentals of our business and the markets we serve are very healthy, and despite the general concerns about the economic environment, We remain committed to our long-term goals of 3% to 5% annual organic growth, 300 basis points of margin expansion, and free cash flow conversion greater than 100%. We appreciate your continued support. And with that, we would like to open the call up to questions. Jason?
spk04: If you'd like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered.
spk00: Our first question comes from Michael Halloran with Baird.
spk05: Hey, good morning, everyone. So the guided side of things, moving higher on the sales side, I heard, Todd, your comments, surcharge is not part of that move. How much of that uptick is price? How much is underlying demand? Or maybe just the ability to get backlog out the door maybe a little more quickly than you were thinking a quarter ago or so?
spk03: Yeah, so in the updated guides, first, We've taken it up for the year-to-date impact on the top line related to the surcharges and the actual results. For pricing, we will continue to get pricing in the same level that we've been seeing through the first part of the year. I think another important thing to note is FX is playing a significant headwind on the guidance. And just when you compare the guidance from where we were a quarter ago It's shifted 15 to 20 million just due to the changes in exchange rates. So we've been able to more than offset that headwind as a result of the demand. On a year-to-date basis, Mike, the volume demand, the true unit demand is just over 500 basis points on a year-to-date basis. And we expect that to continue at a similar pace through the remainder of the year based on our backlog.
spk05: So I guess maybe I should wear it like this. Is there any change to how you're thinking about the back half of the year today versus last quarter, excluding the FX piece and excluding the surcharge piece?
spk03: Yeah, I think the one thing is that, you know, we are seeing some stabilization in the costs. So, you know, we utilize surcharges more this quarter than we had previously because we believe that the areas that were impacted the most electronics and then copper was the second area we believe will moderate and are more transitory in nature. And, you know, we will continue to take permanent pricing actions where we believe, you know, the cost impact is more permanent in nature. That said, you know, if you layer in another 25, you know, million of surcharges in the back half of the year, then you would see, you know, similar growth as we've seen in the first half of the year around that 12%, 13% range on an overall basis. If you back out the 500 basis points of volume, The rest of it is going to be price and surcharges offset by FX.
spk05: Makes sense. And maybe just more color, Carl, then, from your perspective on why you're so confident in the underlying trends right now. Obviously, you highlighted some areas where you're seeing the CapEx coming through, the investments coming through. But what do you think underpins that? And maybe just some thoughts on the confidence level right now.
spk07: Yeah, sure. So the first thing is the backlog we have. We've got, you know, $950 million worth of backlog. That's, you know, nearly six months worth of backlog when typically we have about one quarter of backlog. And then the later cycle markets, you know, mining, we're seeing good incoming order rates and project work in oil and gas and steel. So some of those later cycle markets are And historically, once those investments in the CapEx in those industries starts, it usually runs for a little while. And then the other thing I would say anecdotally is just in industry discussions, I think most of the companies I've talked to have said that they do not plan to reduce their CapEx even if there is a general economic stabilization or decline, that it's going to be relatively short-lived and that they don't plan to reduce their CapEx spending. And then on top of that, you put the automation activity we're seeing as a result of the labor shortages, people trying to bring things back from overseas and not being able to find labor. There's a tremendous investment in automation. and robotics that's going to drive our business. So it's just good signs that we will see that even if there is a general economic decline, that our part of the industrial world could weather that storm pretty well. And then finally, we have a third-party economist that we utilize, and he does some customized work for us on the markets that we serve and what's going on and the forecast that we get from the data and the analytics that we do indicate that even if there is a decline, it would be short-lived and relatively minor. So several data points coming together pointing to the same conclusion. Great. Really appreciate it, Carl. Thanks, Todd. I don't know if it's worth, Mike, if you get the surcharge impact, but I think, Todd, year-to-date it's about $30 million.
spk03: Yeah, year-to-date it is about $30 million. For the quarter, it had about a 200 basis point impact on gross profit and about 100 basis point impact on OP and EBITDA margins as we just passed those costs through to our customers at zero margins.
spk07: And I'm really confident that when the commodity costs start to moderate, and they have already, we're starting to see it now, that we should see really nice margin expansion as those surcharges no longer have an impact on the margin. And we see cost reductions combined with the price increases that we put into effect. So I've got confidence in the margins and the cash flow also.
spk05: Great. Great. Thanks for the added color. Appreciate it, guys.
spk07: All right. Thanks, Mike. Thanks, Mike.
spk04: Our next question comes from Jeff Hammond with KeyBank. The line is now open.
spk06: Hey, guys. Just back on the surcharge dynamic, I'm just a little confused. Like, are you seeing input costs come down and those surcharges are rolling off, or we just don't know yet?
spk03: No. So on the electronic side, we made the decision to invest in the inventory, albeit at a much higher cost. We've put a combination of permanent pricing actions in place, as well as surcharge utilization now to offset those costs. And our expectation, as Carl said, as you know, capacity comes online in the electronic space and we start getting more normalized costs, the permanent price increases we put in place, you know, will more than offset, you know, any general increases they may have had when they returned to more normalized production. So we just, we've gotten to a point where, you know, we felt that we could not push that permanent pricing, you even further and felt that the surcharges were the right way to go due to the sort of transitory nature that we believe we're going to see on these electronics.
spk07: But in the guidance, Jeff, we don't have the surcharges built into either the top line or the cost side.
spk03: That's right, because it'll just be a flow-through.
spk07: It's just going to be a flow-through, and we do not know what they will be. So commodity costs, if you look at the copper... prices as an example, which there's substantial surcharges in there for copper. They're starting to come down, and we just pass them through. My guess is that we had $30 million in the first half. My guess is the surcharges we'll see in the back half will be in the $15 to $20 million range. But that's a wild-ass guess, if that's a technical term. Yeah.
spk06: OK. So is this unique to certain businesses? You know, does it lean more to some of the ANS businesses? Because it seems to be a little more, you know, I wanted to ask about kind of variability. Okay. So the variability and margin 1Q to 2Q was, say that again? Sorry.
spk07: Oh, no, I was going to say the biggest surcharges are related to chips. And so we made a decision to, to buy chips on the open market. And in conjunction with our customers to make sure that they could get product, we made the decision to buy chips at exorbitant prices on the open market and then pass that on to the customers. And they were more than willing to do it so that they could get electronic drives and controls. And even in some of our actuator business, chips were short. And that helped us. We believe we gained some share there and were able to supply customers when other companies said, we aren't going to pay those exorbitant prices for chips. We went out on the open market and bought them. So we're passing that on. So that's the biggest wild card.
spk03: We just don't know what those costs might be and the appetite that the customers will have to take that. So it may slow, like Carl mentioned, and as things moderate. We have at least gotten some verbal confirmation that we should be getting our first allocation, hopefully, of some more normally priced chips. Not nearly what we would need for a year, but at least it indicates that there might be some availability coming online in the nearer term for us.
spk06: Right. Okay, so the variability and margin for ANS is really a function of these surcharges, because you were like... It's the surcharge. You went 21... Yeah. Okay. Yep. Okay. And then just, you know, it sounds like order...
spk07: I think the JVS business had an impact on the market also, right?
spk03: That's right. Taking out JVS.
spk07: Taking out JVS.
spk06: Okay. Do you have another question? Yeah. So the order trends through the quarter and into July have been generally pretty stable, right? Are you seeing any markets where there's kind of incremental deterioration?
spk07: I'd say in Turf and Garden, that business has done really well this year. We saw some deterioration there, but the reason is because they can't get engines. So they don't want to put a whole bunch of inventory in place and can't get the engines. So that one was explainable. We have deterioration in the China wind market. The European wind market is still pretty solid. I think we mentioned before that on the medical side, there was some inventory on the surgical power tools, but the incoming orders were really strong on that side. It was more shipments were pushed out a little bit, but the orders came in strong. I think if there was anything else, it was notably weak. I think that's
spk03: Right. The only other one was really defense. Uh, and that just gets kind of, it's kind of lumpy. We actually booked some really nice orders in, in Q2, uh, for, for future revenue. Uh, so still very, very comfortable with the defense space, still a very important market to us, but it's, it's got a little bit of lumpiness and is, uh, it showed in some declines in the quarter.
spk07: Yeah. And I'd say we see the normal seasonality for, you know, the summertime slows down a little bit. Um, So I would say I'm not panicking. I think we'll see, as I mentioned over the last couple calls, and I'm going to reiterate it again, I'm going to try not to panic myself when we see as our performance gets better and as lead times come down, customers are going to cut back inventory. We've built a lot of inventory to be able to get our performance, our operating performance better. I know our customers have, so I know we're going to see a decline as our performance gets better, but that's not going to be a result of end market demand. It's going to be a result of inventory management. I told my guys, expect me to panic because I will, but just remind me that it's not because of the end market demand. Now, there is a risk, Jeff, and I'll say this too, that we talk ourselves into something worse than what we have to, right? It seems like every time there is an economic decline, it's, it starts off by everybody convincing themselves that there's going to be an economic decline.
spk06: Yeah, that was my last question just on backlog. You know, I guess there's, there's two dynamics there where people still start to feel better and need less safety stock. So, you know, they order a little bit less and then you guys, maybe being able to catch up. Is your expectation that this is kind of peak backlog and you start to see some normalization in the second half?
spk07: Yeah, we've seen it stabilize. And we monitor also our past due backlog or late backlog. And the late backlog, we're just starting to chip away at it in some businesses. I'd say we're probably net neutral on that, but a couple businesses have made improvements, and our later cycle businesses, it's still growing a little bit.
spk06: Okay. Good call, guys. Thanks.
spk04: All right. Thanks, Jeff. Once again, if you would like to ask a question, please press star 1 on your telephone keypad.
spk00: There are no more questions, so I'll pass the call back over to the management team for closing remarks.
spk07: Okay. I'd just like to thank you all for joining us today, and we look forward to speaking with many of you in the weeks ahead. Thank you again for your time, and this concludes today's call.
spk00: That concludes the conference call. Thank you for your participation.
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