CSW Industrials, Inc.

or on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Alexa Huerta. Thank you. You may begin.

Thank you, Rob. Good morning, everyone, and welcome to the CSW Industrials Fiscal 2024 Fourth Quarter and Full Year Earnings Call. Joining me today is Joseph Arms, Chairman, Chief Executive Officer and President of CSW Industrials, and James Perry, Executive Vice President and Chief Financial Officer. We issued our earnings release, updated investor relations presentation, and Form 10-K prior to the market's opening today, all of which are available on the Investors portion of our website at www.cswindustrials.com. This call is being webcast, and information on accessing the replay is included in the earnings release. During this call, we will make forward-looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results could materially differ because of factors discussed today in our earnings release, in the comments made during this call, as well as the risk factors identified in our annual report on Form 10-K and other filings with the SEC. We do not undertake any duty to update any forward-looking statements. I will now turn the call over to Joe.

Thank you, Alexa. Good morning, everyone. Once again, it's my pleasure to report to you that our team has executed and outperformed the markets we serve. We achieved record results in both the fourth quarter and the full fiscal year, surpassing the healthy performance of the prior year. Earlier this morning, we reported record fourth quarter revenue EBITDA, and earnings per diluted share. We also delivered meaningful EBITDA margin expansion in the fiscal fourth quarter. CSWI has now delivered four consecutive quarters of record results and therefore also generated record full-year results in revenue of $793 million, or 4.6% growth, and an adjusted earnings per diluted share of $7.01, or 12.9 percent growth, and an adjusted EBITDA of $200 million, representing a robust 14.9 percent growth. For the full year, our adjusted EBITDA margin expanded by 220 basis points. We continued to deliver strong cash flow from the operations despite being in a quarter where we typically are building inventory for the start of the summer season, with a fiscal fourth quarter cash flow from operations of more than $22 million. Our gross profit margin has expanded this year primarily due to increased volumes, pricing initiatives, and reduced ocean and domestic freight in the first few quarters of the year. CSWI has achieved meaningful operating leverage and further expanded our best-in-class margins. We have invested in future growth that will outpace the markets we serve. In line with our capital allocation strategy of prioritizing capital investments based on their expected risk-adjusted returns, this year the company invested in capital expenditures, acquisitions, and returned cash to shareholders through dividends and share repurchases. We continue to seek both organic and inorganic investments and opportunities for growth with attractive returns that support our healthy margins. To fund our capital allocation strategy, we relied on our record cash flow from operations of 164 million, or 35 percent growth, during the full fiscal year of 2024. Our impressive cash flow allowed the company to again increase its most recent quarterly cash dividend that was paid on May 10th by 10.5%, making the 21st consecutive regular quarterly cash dividend. During the full fiscal year, the outstanding debt on our revolving credit facility decreased by $87 million as we paid down debt with our excess cash flow. Having balance sheet strength and robust cash flow gives us confidence to pursue business opportunities of any size. I am proud of the execution by each of our three business segments during the last quarter of the fiscal year. I will let James provide additional details around the performance of each segment during the quarter. But before I turn the call over to James, I would like to take a moment to thank our team for delivering top-line growth in every segment for the full fiscal year of 2024. Last year at this time, on our Q4 and year-end earnings call for fiscal 2023, we said we expected top-line growth in each business. And our teams have executed and delivered exactly that through volume and pricing during a year when some of our end markets were simply not growing. The resilience of our teams, the end markets we serve, and the enduring value of our products allow CSWI to continue to grow through the cycles in the overall market. Our model to deliver low-cost and high-value products to our customers continues to attract new customers for the company and allows us to report record financial results like we have today. At this time, I'll turn the call over to James for a closer look at our results, and then I will conclude our prepared remarks.

Thank you, Joe, and good morning, everyone. As Joe mentioned, during the full fiscal 2024 year, we delivered record revenue of $793 million, representing growth of 4.6 percent. $24 million of the growth was organic through increased volumes and pricing initiatives. The remaining $11 million of growth for the full year came from the acquisitions of CoverGuard, ACGuard, Falcon, and DustFree. Operating leverage on this revenue drove 15% growth in adjusted EBITDA, along with 220 basis points of margin expansion, and over 13% growth in adjusted earnings per diluted share. Our consolidated record revenue during the fiscal fourth quarter of 2024 was $211 million, an 8% increase when compared to the prior year period. This growth was half driven organically through increased unit bonds and pricing initiatives and half driven by inorganic growth from the newly acquired dust-free business. Consolidated gross profit in the fiscal fourth quarter was $94 million, representing nearly 10% growth over the prior year period. The gross profit margin improved by 80 basis 44.4 percent compared to 43.6 percent in the prior year period. Our consolidated EBITDA for the fourth quarter increased by $6 million to $56 million, or 13 percent growth, when compared to the prior year period. Our EBITDA margin improved by 130 basis points to 26.5 percent as compared to 25.2 percent in the prior year quarter, driven by gross margin expansion partially offset by incremental investments for future revenue growth. We will continue to strive for additional EBITDA leverage as we grow revenue and manage expenses, but we are very proud of our current EBITDA margins and we maintain our focus on growing the EBITDA dollars as revenues grow. Net income attributable to CSWI in the fiscal fourth quarter was $32 million, or $2.04 per diluted share. compared to $27 million, or $1.74 per diluted share, in the prior year period, representing growth of 17 percent. Our contractor solution segment, with $141 million in revenue, accounted for 66 percent of our consolidated revenue and delivered $7.3 million, or 5.4 percent total growth, as compared to the prior year quarter. Of the revenue growth in the quarter, $3.8 million, or 2.8%, was organic, while the remaining $3.5 million, or 2.6%, came from the newly acquired Dust Free business. The fourth quarter acquisition of Dust Free brings an extensive line of patented products for residential and commercial indoor air quality and HVAC applications to the company. Growth for the quarter was reported in the HVAC-R architecturally specified building products in general industrial end markets, and was a result of increased unit volumes. Segment EBITDA was $47.3 million, or 33% of revenue, compared to $42.7 million, or 32% of revenue, in the prior year period, as our impressive margin expansion continued. Our Specialized Reliability Solutions segment revenue increased 8% to 41.6% due to volume growth and pricing initiatives. Revenue growth in the quarter came from the general industrial, mining, and energy end markets. Higher oil prices supported energy demand and production during the quarter. The segment EBITDA and EBITDA margin of $8.2 million and 20% respectively in the fiscal fourth quarter were generally in line with the prior year period results. We have mentioned before that the targeted EBITDA margin for this business is 20%. We are proud that our team delivered this in the quarter. Our engineer building solution segment revenue increased to $30.1 million, a 20% increase as compared to $25 million in the prior year period. Project mix and our backlog continue to skew towards larger jobs, which may take years to turn to revenue. Bidding and booking trends remain solid. At the end of the fiscal fourth quarter, our book-to-bill ratio for the trading headquarters was approximately 1.1 to 1. Our sales team is focused on bidding on and booking institutional and multifamily projects with the highest quality developers. Segment EBITDA grew 98% to $6.2 million, or 20% EBITDA margin, compared to $3.1 million, and a 12% EBITDA margin in the prior year period. Like the SRS segment, we target a sustainable 20 percent EBITDA margin in this segment as well and are making progress on that goal. Transitioning to our strong balance sheeting cash flow, we ended our fiscal 2024 fourth quarter with $22 million of cash and reported fiscal fourth quarter cash flow from operations of $22 million compared to $37 million in the same quarter last year. For the current full fiscal year 2024, the company had a record cash flow from operations of $164 million for 35% growth compared to $121 million in the prior fiscal year. Our free cash flow, defined as cash flow from operations minus capital expenditures, was $17.5 million in the fiscal fourth quarter compared to $31.7 million in the same period a year ago. That resulted in free cash flow per share of $1.12 in the fiscal fourth quarter as compared to $2.04 in the same period a year ago. Our free cash flow for the full fiscal year was $147.8 million, as compared to $107.5 million in the same period a year ago. That resulted in free cash flow per share of $9.48 for fiscal 2024, as compared to $6.91 in the prior fiscal year. This impressive level of free cash flow fuels our capital allocation allowing us to invest in growth and enhance shareholder value. During the quarter, the outstanding debt on our revolving credit facility increased by $13 million due to the $27.9 million of cash consideration for the dust-free acquisition offset by our cash flows. The addition of dust-free to our portfolio allows CSWI the ability to offer industry-leading technology that addresses indoor air quality. We ended the fiscal fourth quarter with $166 million outstanding on our $500 million revolver. Our bank covenant leverage ratio at quarter end was 0.73 times, an improvement from 1.3 times at the end of fiscal 2023 due to our strong EBITDA growth and the $87 million paydown of our revolver during that period. As a reminder, the company has been the lowest tier of our revolver pricing grid since reporting our fiscal 2024 first quarter, reducing our interest rate spread and saving on interest expense. During the fiscal fourth quarter and the full fiscal 2024, the interest rate hedge for the first $100 million of borrowings under the revolver saved us approximately $400,000 and $1.5 million respectively in interest expense. Our effective tax rate for the fiscal fourth quarter was 23.8% on a GAAP basis. As we look out to fiscal 2025, we anticipate delivering full-year revenue growth as well as EBITDA and EPS growth with continued strong cash flow. With that, I'll now turn the call back to Joe for his closing remarks.

Thank you, James. To summarize, during the fourth fiscal quarter of 2024 and the full year, we posted record results across the board, highlighted by organic and inorganic revenue growth, expanded margins, and robust cash flow, and consummated the acquisition of Dust Free. Since going public in 2015, CSWI has grown our market cap over 700% to around $3.8 billion, while also delivering 720% total shareholder return. We are proud that we have the same number of shares outstanding today as when we went public. Fiscal 2024 was a record year for CSWI, and our revenue CAGR over the past five years is 18%, including both organic growth and growth through acquisitions, where we have invested over $600 million since fiscal 2016. As we begin fiscal 2025, we expect a year of revenue, EBITDA, and EPS growth, as James mentioned earlier. We also expect to continue our history of executing on acquisitions to complement our organic growth. As I look at our expectations for fiscal year 2025, we should see similar top-line growth as fiscal 2024 while maintaining our strong margin profile. Our goal is to make it as easy as possible to do business with CSWI and to be the partner of choice for our loyal customers. Earlier this month, our Contractor Solutions segment received the Vendor of the Year Award from Blue Hawk, an HVACR distributor cooperative with over 200 member owners. This award further demonstrates our commitment to our customers, and I'm extremely proud of the Contractor Solutions team for their continued achievements. Of note, this is the third major Vendor of the Year Award we have won over the last 18 months. At CSWI, we are committed to a culture of diversity, inclusion, and respect where we focus on recruiting and retaining great talent, offering rewarding careers, and recognizing team members who excel while providing the opportunity for a safe, secure, and dignified retirement. I could not be more proud to announce that CSWI has recently been certified as a great place to work for the second year in a row. This recognition is a testament to our team members embracing our focus on core values such as accountability, citizenship, teamwork, respect, integrity, stewardship, and excellence. How we succeed matters, and our success is shaped by the collaborative efforts of our team members. As always, I want to close by thanking all my colleagues here at CSWI who collectively own approximately 4% of CSWI through our employee stock ownership plan, as well as all of our shareholders for their continued interest in and support of our company. With that operator, we're now ready to take 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 1 on your telephone keypad. In confirmation tone, we'll 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 a participant choosing speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment, please, while we poll for questions. Our first question comes from John Tenhuan with CJS Securities. Please proceed with your question.

Hi, good morning. Thank you for taking my questions, and really nice quarter there. My first question, just regarding the quarter, this Q4 looked a lot like your historical Q1 and Q2 performances, just from a revenue and margin perspective. I was wondering, did you pull anything into the quarter or see anything that was more one-times in nature, maybe in the project-based businesses, or is this more of a base that you expect to build on going forward into your seasonally stronger summer quarters?

Yeah, John, thanks. It's James. Appreciate your question and all the good work you do for the shareholder community. You know, I've mentioned a couple of things. If you dive into the 10K, you'll see a couple things as well. Our engineer and building solution segment sold a prior facility. They relocated to a larger facility this quarter. So we had kind of a one-time property gain. That was $1.2 million. Didn't hit revenue, but that would help their EBITDA a little bit. So that was a bit of a one-timer. You had some things going the other way in other segments, so that was relatively neutral. So we didn't call it out. You know, we don't do adjusted-type things very often. You'll recall at the end of Q3, our specialized reliability segment missed getting some product out at the end of December, and we were able to make that up on the last call. You'll remember in early February, we had already made that up. So they had a little better quarter than they might have as a result of that. That was more a catch-up than a pull-forward, though, so that was certainly not the case. And our contractor solution segment just continued to perform well. I mean, I think we see, and the OEMs have said it as well, that a lot of the destocking seems to be behind us now. Our customers ordered from us. You know, we have our usual price increase and promotional session as we go through our fiscal fourth quarter as everybody gets ready for the summer season. So their quarter, I think, was pretty normal. They did a really nice job getting things out the door by the end of the quarter. And I'd say overall, a pretty normal quarter, certainly on the top line. You know, it's hard to ever know what you expect quarter to quarter. You know, some things come in. But there weren't any big project pull-forwards to your point. We didn't necessarily, you know, pull anything dramatic from Q1 to into Q4. So I think, as we said, we expect to have top-line growth this next year, very healthy top-line growth. And our goal is to maintain these margins that our team's been putting forth for the last several quarters.

Got it. That's very helpful. And I was just wondering about that top-line growth guidance, or I guess the outlook of similar to, you know, 2020 – excuse me, the fiscal 24. What are the components of that? Could you kind of rank what you expect to be growing the fastest and the slowest, you know, among the segments or end markets that you're in?

Yeah, I don't think anything terribly unusual there. You know, it's a little early in the year to know where the end markets are going. You know, the residential HVAC space has been a bit of a headwind, and it's starting to turn a little bit. We've clearly outperformed that from the residential OEM HVAC perspective. So our team continues to do a really nice job there. It hasn't gotten real hot yet, but folks, of course, are gearing up for that, and it will. From a specialized reliability solution standpoint, the joint venture continues to ramp up. and our business is prepared for that. So we've got a little bit of an optimistic tailwind there. In engineering building solutions, they've built a really healthy backlog. You know, that book to build continued to stay in a really good place. There's some headwinds there in certain markets, as we all would expect some of the construction markets. But overall, again, you know, last year we had, you know, nearly 5% revenue growth. And we said, hopefully in line from an organic standpoint, I think we would expect that. And then We only had a couple months of the dust-free acquisition. We pointed out that was about $3.5 million, and that was just a couple of months. So you'll have a full year of that now. So that run rate would get you kind of a little bit higher from an inorganic perspective growth rate, given that dust-free has been a really nice addition to the portfolio already.

Fair enough. Thank you. And then last one, I'll jump back in queue, but just any thoughts to the margins going forward? You're expecting revenue growth. but maybe not so much margin expansion. And to your credit, you've done a great job on margins on a trailing basis. So I'm wondering, is there less upside to the margins as you see it today and kind of what might be holding you back if that's the case?

Yeah, John, I'll take that. You know, I think we set our goals to sustain the margins we have. These are best-in-class margins in all of our segments. That SRS segment has gotten to the 20% goal. Of course, we're going to continue to push and see where we can find some more margin points. EBS's goal is to get to 20%. They were there this quarter, aided a little bit by the gain I talked about, but nonetheless, even without that, it's still kind of a mid-to-high-teens business, and the goal there from the team is to hit 20% as well in the not-too-distant future. And then contractor solutions, with these kind of low-to-mid-30s margins, 33% margin, we have... group, you mirror now just tremendous margins. You know, the one thing we point out when we say the goal is to sustain this is, hey, we're very proud of the margins. As we grow the top line, the bottom line is going to grow, of course, from a dollar perspective. And that's the ultimate goal is to have dollars to reallocate, have strong cash flows, and invest in our growth. But, you know, we had some tailwinds on the pricing the last couple of years that we were able to increase. And as some of the costs came down, we held on to that pricing. So we were able to kind of improve our margins and get back to some of the pre-COVID-type margins, especially in contractor solutions, we're back there, even though cost of goods sold continue to be elevated in some of the places. While we've had some of that come back and we've held on to the pricing that's given us this bump, But, you know, this year was kind of a year of normal pricing increases and normal inflation so far it looks like. So to hang on to these type of margins and, of course, the goal is to maximize margins where we can as we hold on to cost. But we would expect to sustain these margins. And as we can eke out some basis points here and there, we're going to work hard to deliver that.

John, this is Joe. As you recall, because you've been with us for a long time, When we went public, you know, we had best-in-class margins, and we stated our goal was to grow meaningfully and maintain our margins. And we said if we did that, our shareholders would be rewarded. And we feel like that's played out well. Exactly the way we planned, the ups and downs on how we got there have been very, very different. Could have never predicted that. But I think that continues to be the strategy. I mean, it is a strong filter on acquisitions and other investments that we make that we have these kind of margins. And I think that adds to our disciplined approach on M&A. And I think that it's served us really, really well to have that kind of strategy. And I think we'll just continue doing the same.

No, you've done a great job. Thank you. I'll wait for the next opportunity. Thanks, John.

Our next question is from Julio Romero with Sidoti & Company. Please proceed with your question.

Thanks. Hey, good morning, Joe, James, and Alexa. Thanks very much for taking the questions. Maybe to start on the contractor solution segment, You know, very nice quarter here. Your prepared commentary sounds like you feel pretty good. You're through customer gestalking. Some of the HVAC OEMs have noted positive commentary surrounding residential HVAC demand. I think one major one called out low single-digit volume growth for the remainder of calendar 24. Is that kind of in line with what you folks are seeing at the moment?

Well, we've seen mixed projections. The industry-wide estimates going forward are much lower than that, but I do believe that in real time the OEM community seems to be a little more positive. So I would say mixed kind of backdrop for us, but against that, you know, our commitment is always to outgrow the market, and we think that will result in, you know, positive organic growth for us. And it will look similar to last year.

Understood. And I guess as we think about contractor solutions, positive organic growth, I guess it would be a mix of price and volume for fiscal 25?

Yes, yeah, we've already put our price increase through, you know, and that's the usual few percent. We're back to just kind of normal lowish single digits. And then we would expect volumes to grow as well. You know, then you have the acquisition tailwind from dust free, as I mentioned, getting into that indoor air quality market was important to us. So, yeah, so we see acquisition growth, unit volume growth, and then the tailwind or pricing all contributing to that top line growth.

Excellent. And then I guess just to delve into dust free a little bit, you know, indoor air quality is not a theme I – I believe I've heard you guys talk about too much in the past. Can you maybe speak to the indoor air quality opportunity? And are there other inorganic opportunities that are in line with that indoor air quality theme going forward?

There are, sure. And we can certainly dive into indoor air quality quite a bit. It's a topic that has been out there for a long time with filtration and some UV technology. But when COVID hit, it became a really big topic. And I'll give our contractor solutions team a lot of credit. Our first step was not to go out and make an acquisition when it really started to surge. Our step was to partner with Dust Free, who's a local company here just outside of Dallas. So our team being in Houston, it was convenient to do that. Our team had known the folks at Dust Free, which is a multi-generational company for a long time. So we licensed their product, and we became a master distributor for them, and we kind of learned the product category. We learned how it would sell through the channel. There's some OEM customer business there as well. It's not all the same distribution channel that we go through. There's some direct-to-OEM-type products as well. So our sales force learned that channel, learned to work with those folks in a little different way, and really understood the category. A lot of indoor air quality companies kind of had a surge, came back to earth, and didn't make it or haven't done much. Dust-free... has continued to be proven to be one of the winners in the category. So we had the opportunity to partner with the ownership team there and buy the company. And we took advantage of that opportunity earlier this year and a really nice transaction for that family that really built a great company. And good to have this as part of the CSW family now. So again, it's a product that's got a lot of different applications, again, through filtration and UV technology and some other things they're developing. So really proud to have that business. But it's a quality, it's a, its indoor air quality is a segment that we've talked about here and there because we've been licensing it. But now that it's part of who we are, we can look at growing that business organically, but also seeing bolt-on acquisitions as we always do when we enter a new category. You saw us do that when we bought TruAir four years ago. We bought TruAir. That was our entry to the GRD market. A year later, we added Shoemaker as a product portfolio. They gave us a little different geography and got us into the to the commercial segment as well. So, yeah, building on categories like that that we were already in has been a focus of our M&A DNA.

Perfect. And then just the last one for me is I'm sure it's probably somewhere in the 10K somewhere, but remind us what your HVAC sales stand as of today as a percentage of the overall business?

Let me pull that for you real quick. HVAC was 54% this last year, and it was 55% the year before, so it stayed pretty steady.

It stayed steady, but I assume with dust free, it'll probably trend.

That's the total. Contractor solutions, HVAC is the vast majority. Plumbing and electric being the other couple pieces, relatively small, HVAC is the vast majority. Keep in mind, again, You know, we categorize those things based on who we sell to. So there's some HVAC products that go to more plumbing distributors and vice versa. So, you know, it's not an exact science. But of the overall consolidated entity, the way we reported in the 10 case, 54% of the total, all of that, of course, being within contractors.

Yes, industry will be incremental to that. Absolutely.

Very good. Thanks very much. I'll hop back into Q. Thanks, Julio.

Our next question is from John Tanwanting with CJS Security. Please proceed with your question.

Hi, guys. Thanks for the follow-up. Just wanted to get an update on the M&A pipeline, what you're seeing out there, you know, what end markets look relatively more attractive today, and, you know, if you're seeing the opportunities of valuations change compared to, you know, the last quarter or two quarters that you've been in the market.

Sure. We see a strong, robust pipeline for our potential acquisitions, very pleased with the continuing kind of interest in partnering with us and the way the team identifies opportunities for us. So no shortfall there. We do feel like the backdrop has cooled off just a bit. It feels like maybe the sponsor community has been slower to bid on, you know, overbid on potential acquisitions, and so we're encouraged by that. Obviously, interest rates are up and it's more expensive, but That is, with our strong balance sheet and our cash flow, we think that's a better environment for us in a lot of ways because we can weather that storm much better than some others. So very pleased with the outlook, very pleased with the pipeline. We'd be very disappointed if we can't get something done this year.

Got it. And then lastly, just a little more drill down on the EBS segment. I was just wondering what the order is. trends have looked like. I know you've given the trailing eight quarters of book to bill, but in the last two quarters, if things have kept pace relatively with how things have trended over a longer time frame, just looking at ABI, it's been down for many quarters in a row now, and I'm wondering if that strength is sustainable. I know you guys are at the end of projects that are funded, but any insight into the real-time would be helpful.

Yeah, we see the same ABI results, and obviously that's been negative for a while. Our team's just done a really good job focused on the right projects. The backlog's been relatively flat the last couple of quarters, so at least we're keeping up with the revenues, which is important. So we've got a good, healthy backlog. Some of the projects have slowed down a bit, but as we've always said, the vast majority of our projects in the backlog are out of the ground and we're at the back end, so it takes a while. Some of the markets that were a little hotter a couple years ago, like Toronto, has slowed down a bit. That's just natural. Some parts of California have picked up, so you've seen things flip a little bit. You know, our Balco business has done really well. The Greco business has done really well. SmokeGuard's finding some new creative ways to use their products in different applications. So Scott and his team are really doing a nice job of seeing things. I would say that overall, you know, things are a little slower going from bidding to booking, but our team is out there seeing a lot of bids. Just that cycle to turn it into... The backlog is maybe taking a little longer, but they're still getting the job done. And across the board, they're finding, as I said, new applications and really focused on the right areas. You know, when one area slows down, another one tends to pick up a little bit in the construction market. And despite ABI being relatively negative, our team is just focused on the right markets and the right projects. And that's important. We really make sure before we book a project that we've invested a lot of time on the estimating to really cost out the project. But also, due to due diligence on the project itself, is it a high-quality project? Does it have financing? Those kind of things. So you don't see in our backlog projects that are kind of pie in the sky. You know, one may go away occasionally. That happens with any business. But overall, we are working with very high-quality customers and projects that expect to be completed.

John, the other thing I would add there is you've been an astute observer here, but, you know, the – the slowdown, if there is a slowdown, will be well telegraphed. You know, it shows up in biddings. It shows up in bookings. It shows up in backlog long before it shows up in revenue. So we kind of learned that through the pandemic. And at this point, you know, a lot of that backlog is now in the revenue phase. And that is, you know, going to be shown in the positive results we're seeing. But we'll have lots of warning if that market for us, if that segment turns downwards.

Understood. Thank you. Thanks, John.

Thanks, John. We have reached the end of the question and answer session. I'd now like to turn the call back over to management for closing comments.

Great, Rob. Thank you very much. We really appreciate everybody's interest in CSWI, eight and a half years, and really, really pleased with the results, really pleased with the performance of the team, and thank you for your interest, and I hope you'll continue to partner with us. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.