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spk03: At this time, I would like to welcome everyone to the Chemours Company third quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press the star one. Thank you, Jonathan Locke, Senior Vice President and Chief Development Officer. You may begin your conference.
spk00: Thanks, Rob, and good morning, everybody. Welcome to the Chemours Company's third quarter 2022 earnings conference call. I'm joined today by Mark Newman, President and Chief Executive Officer, and Sameer Rauhan, Senior Vice President and Chief Financial Officer. Before we start, I'd like to remind you that comments made on this call, as well as in the supplemental information provided in our presentation and on our website, contains forward-looking statements that involve risks and uncertainties as described in Chemours' filings with the SEC. These forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events that may not be realized. Actual results may differ, and Chemours undertakes no duty to update any forward-looking statements as a result of future developments or new information. During the course of this call, Management will refer to certain non-GAAP financial measures that we believe are useful to investors evaluating the company's performance. A reconciliation of non-GAAP terms and adjustments are included in our release and at the end of our presentation. As a reminder, our prepared remarks, a full transcript, and an audio recording, plus our earnings deck, have been posted to our website alongside our earnings release. This morning's call will focus purely on Q&A. With that, I'll turn the call over to our CEO, Mark Newman. Mark? Thank you, Jonathan.
spk08: I hope everyone is doing well today and I appreciate you joining us. Despite increasing macroeconomic uncertainty, our quarterly performance showcases the strength of our structural growth strategy. We remain committed to improving the earnings power of TT through the cycle attaining secular growth in our TSS and APM businesses, and managing and resolving legacy liabilities while returning the majority of our free cash flow to shareholders. In the long run, we expect these four priorities to generate significant value for our shareholders. So with that operator, let's open it up for questions.
spk03: At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. And your first question comes from the line of Duffy Fisher from Goldman Sachs. Your line is open.
spk04: Yes, good morning, guys. Can you hear me? We can hear you.
spk12: Go ahead. Okay, great. So first question is just when you look at The magnitude of the slowdown you've seen so far, maybe compare that to 2019, the last time you guys had a TR2 slowdown. And at that point, you know, the portal wasn't fully developed. How would you expect, you know, basically the contract business versus the portal business to handle this slowdown vis-a-vis last time when I think your volumes were down kind of double the market if we go back to 2019? your price held in better than the market price. Can you juxtapose that period, you know, kind of with an infancy of your new program versus now that you've kind of matured it and what you think you'll see from it this time?
spk08: Yeah, hey, Duffy, that's a great question. Listen, in 2019, you know, that was more of a story of share loss as we were implementing TVS. You know, we've regained that share and then some, you know, with the implementation of type your value stabilization. So really what we're seeing, you know, in Q3 and as we go into Q4 is the combination of a lot slower demand. You know, as we said earlier in the year, about 80% or so of our business was contracted. and so we expect that ratio to stay roughly in line. It varies from quarter to quarter, but our contracted business is good, and obviously the value proposition with TVS is we respond to the market demand signals of our customers, and we're seeing that across the portfolio. As we said in our guide in September, we're really seeing this more so in Europe and in Asia, specifically in mainland China. And volumes and demand continue to do well in the Americas, North America and Latin America. So really what we're seeing is a response to much lower demand. And the way I kind of think about trying to compare it is, One is, you know, the demand has come off pretty significantly in a very fast way. And I think a number of the coding companies have alluded to that, especially as they look through to Q4. And we're responding to that by idling production. And we're also at the same time, you know, running through higher cost inputs that we bought early in the year through our P&L. So you have all of these things kind of coming together. I think You know, to compare periods, I would advise folks to look at, you know, sort of a rolling 12-month performance on our TIO2 business, which we expect to be much better with TVS, even with some of the high-cost inputs that, you know, we're running through in the next couple quarters.
spk12: Great. And then I think most of us can track unit margins, you know, price, and, you know, kind of current raw materials. But can you help us for the next couple of quarters, how much extra above market cogs are going to run through on a unit basis because of that high price stuff you bought earlier this year? Does that anniversary kind of into Q1? And then the other part that's a little bit tricky is as you ramp down your plants, how should we think about the incremental cost per unit from, you know, things like absorbed overhead or just kind of running at less than optimal operating rates?
spk08: So I'll ask Samir to comment here in a minute, but clearly, you know, we've been off of our target margin in TT and expect to be off in our second half more so as we adjust production to meet demand. You know, in our view, we would expect volumes to bottom somewhere between the end of Q4 and into Q1. And, you know, with that in mind, we'll adjust our production schedules accordingly you know, to better match demand with production. And clearly, as we come into year end, you know, we're focused on bringing down some of our own finished goods inventory from a cash perspective. So maybe with that, I'll ask Samir to comment.
spk01: Thanks, Mark. And thanks, Tuffy, for the question. Look, as you kind of look at the cost side, Mark said, right, we are aligning our production with the demand in TT business. And that means a lot of things, right? First is The cost side, just from the running, then the operations should come down. And also we are working with our suppliers as well to see what makes the most sense ultimately to create value for both of us over the longer term. And we have started seeing some positives. And the smaller portion, but we started seeing some positives on that end. But from a timing perspective, as you're going to look at, look, I think these higher costs sitting in the inventory overall are going to probably run to through towards the end of the Q1, and we should start seeing the benefit as we're going to hit the quoting season in Q2.
spk12: Great.
spk04: Thank you, guys. Thanks, Duffy, and congrats on the new role, man.
spk03: Your next question comes from the line of Arun Viswanathan from RBC Capital Markets. Your line is open.
spk13: Great. Thanks for taking my question. Good morning. Just following up on the guidance, I guess, a little bit, it sounds like, you know, you were able to reiterate the full year. And so, I guess, given your comments just then on just now on TIO2, it sounds like more of that is coming from upside in TSS and APM. Could you just flush that out for us as well? Thanks.
spk08: Yeah. So, you know, TSS and APM are having a great year. And in fact, if you would snap the line at the end of September, and that would have been our year, we would have had record years already in these two businesses. So clearly our secular growth platforms are working. In TSS, you know, you'll see both price and volume year over year. as we continue the rollout of Optian, and we look at better marketing of our products globally. On APM, we have a lot of excitement around our growth story here, both in areas of advanced electronics like Semicon, with so much work being done on a US supply chain in this area, and globally, actually, with the demand for chips. And you'll have seen our recent announcements on hydrogen. And these businesses are growing at double-digit rates while we have some fade in our less strategic lines in the company. So the way I think about the company today is clearly TT is going through an adjustment as we deal with lower demand, but the team's really focused on the cost side and bringing our inventories into line here in the next couple of quarters. And on TSS and APM, we're singularly focused on achieving our growth. And so we've seen record quarters so far this year, and we would expect that growth to continue into 2023. So I think we're going through a bit of a transition where clearly our TSS and APM businesses are generating more earnings while we structurally adjust our TT business, uh, for the, for the demand. And, you know, that's reflected in our guide for the full year.
spk13: Okay. Thanks for that. And just as a follow-up then on ATM, um, you know, given that, uh, you know, we, we have been hearing some slowdown in, in electronics, uh, especially in China. Are you, are you seeing any of that? And, uh, You know, it sounds like you expect the strike to continue in 23. What makes the commercial business a little different maybe to mitigate that weakness?
spk08: So, listen, you know, I'd say certainly there's a lot going on on the Semicon infrastructure that's, you know, driving, you know, demand near term. And we see, you know, double-digit demand growth over the next several years in this area. So, You know, there might be some moderate slowing in terms of overall chips, but in terms of our book of business, you know, we had another record quarter in Q3. I'll maybe ask Sameer to make some additional comments.
spk01: Yeah, Arun, you see a lot on the consumer electronics side. So consumer electronics, yes, but that's a smaller portion for us. We are a lot heavier into the infrastructure side, as Mark said, and that's where, you know, once the project started, they typically get through. So the demand on that side stays pretty strong.
spk04: Thanks.
spk03: Your next question comes from the line of John McNulty from BMO Capital Markets. Your line is open.
spk10: Yeah, good morning. Thanks for taking my question. Maybe I can start out on the two specialty businesses. So the APM segment, I think all year long you've kind of spoken to your capacity constrained a bit, and yet the volume seemed to kind of get unlocked a bit this quarter. So I guess can you help us to understand that? And then for the TSS business, I know you've kind of said, hey, don't bake in these margins. They're kind of running pretty hot. You know, we've got some pretty high costs coming through the pipe in terms of raw materials. But other than the seasonal dip that we would normally see from, say, the first half to 3Q, it seems like they're hanging in pretty well. So I guess, can you help us to understand what's going on there and if we should be expecting a bit more of a dip as we kind of look, you know, into 4Q and into 2023?
spk08: So John, thanks for acknowledging these two great specialty businesses in our portfolio. You know, clearly TSS is, you know, we pointed to a seasonally week or Q4. So we want folks to make sure we understand that, you know, we sell less refrigerants in the middle of the winter. But other than that, you know, this is a multi-year secular growth business. On APM, You know, we have been, the team has done a really nice job under Denise's leadership of unlocking capacity in our highest value product lines and leveraging, you know, scarce inputs to really enhance our customer and product mix throughout the year. So a lot of work happening there. And then obviously behind that, you know, we've approved, some expansion investments that are going in that will really put these high growth businesses in overdrive starting in 24 and beyond. So I'd say the team's done a really nice job unlocking capacity on existing assets, biasing the mix, and that's really driven both variable margin and EBITDA margin. On TSS, you know, outside of the seasonality, that business continues to perform very well, both from a growth and a pricing perspective. Lots of innovation happening in this business as well. You will have read recently of the award that we received from AHR with respect to our Option XP41. So, you know, we continue to show that we can really drive earnings here based on the growth in Optian and our customer centricity in all markets around the world. Samaritan, if you have any additional comments.
spk01: Yeah, Mark, I think you covered all the points, but I think on the margin side, one of the other points I would make is as we're going to get into the Q4, we are going to see some of the raw material cost inflation again. as some of these things just kind of flow through the pipeline into the inventory. But I think in the Q4, we are going to see some of the impact. And also in Q4, the regional mix changes. So I just want to point to that as well, because as we exit the Northern Hemisphere and the business moves more towards a little bit heavier on the Southern Hemisphere side, the margins tend to be a little lower on that end, given the product mix. So you're going to see a little bit of that as you're going to move into Q4 as well.
spk10: Got it. Okay, now that's helpful. And then maybe I can just ask a follow-up on the on the titanium technologies platform um so i mean it looks like just the implied guidance when you kind of triangulate between apm and tss it kind of looks like you know tt is coming in you know with ebitda it's going to be two digits instead of three so somewhere in the i don't know 80 to 100 million range maybe even a little bit lighter than that in the fourth quarter um I guess how, when you get through the heavy cost that you have with the high cost ores and maybe running lighter for de-stocking, I guess, how big of a jump up can you get as you get into like the 2Q and 3Q next year? Like, I mean, can we see kind of a, is it relatively steep or is this something where you gradually grind higher? Because it does seem like TT is coming in at levels that admittedly we weren't sure we would see again.
spk08: Yeah, so again, John, I think your observation on the math is not far off. And I would just say our view is, you know, we want to do the right thing long term for the business by adjusting production schedules against demand. And clearly, you know, as Samir alluded to, we're still working through on the P&L, you know, higher cost inventory that we bought early in the year. So the focus of this team is to get this business back to our 25% target margin over time. That will take a little time from where we are today and certainly where we exit the year. But the team is singularly focused on achieving that. And clearly, we are going to have a couple of rough quarters here as we adjust production schedules. But if you look at the earnings over sort of a trailing 12-month basis, these are a lot better than prior lows that we've seen without TVS. The other point I would make is when I look at RTT business and the quality of our assets, the fact that we're tied to the U.S. energy supply versus European and our book of business on TVS, I feel like in terms of weathering the turbulence, we're well set up here versus some of our competitors. So I think you should put that in the mix as well.
spk04: Got it. Thanks very much for the call. I appreciate it.
spk03: Your next question comes from the line of Mike Leathead from Barclays. Your line is open.
spk11: Great. Thanks. Good morning, guys. I have a question I have. Morning. First question, I just kind of wanted to follow up on the last one, just on the implied 4Q earnings outlook. Can you maybe just walk through high level how you're thinking about the split between the segments? And then related to, again, the last question, maybe you can help us frame just kind of what might be seasonal or transitory, like that high cost COGS that are running through maybe over the next quarter or so versus maybe what we should expect carrying into the early part of next year, just given where the macro is.
spk08: So Mike, you know, we don't guide by segment or by quarter really. So I, what I'd say is, you know, our full year guide that we provided in September still stands and we expect to be within that guidance range. Uh, clearly I think we're acknowledging, uh, as we have in our materials that, you know, we're going through a bit of an adjustment on TT and really it's, it's trying to align our production schedules with, with demand. in a way that allows us to finish the year with better inventories on our own side. And we would expect this demand decline to bottom in the next couple of quarters, probably as we go into 1Q of next year. So we're going to have a couple of quarters here with TT where we're making these adjustments. By the way, this team was very focused when the market was very tight. on meeting customer needs, and we achieved very high delivery to promise. And I have no doubt that this team, being now more focused on the cost side, will make real progress as we go into next year.
spk11: Fair enough. And then secondly, the recent $200 million capacity expansion in Naceon, I was just hoping maybe you could give us a bit more color, just relative size of expansion, how far along that extends your ability to serve the market and if you're willing to give anything in terms of IRR or payback periods.
spk08: Yeah, I'll start with the last question. These are very high return projects, well in excess of our cost of capital. So these are great expansion projects to do. You know, we've said that we expect the electrolyzer and fuel cell membrane market to be somewhere between two and three billion dollars by 2030. And so this announced capacity, we would expect to come online late in 24, early 25. And based on a lot of the announced expansions, we'll be hitting the market in stride at a very good time. As I said earlier, when you look at the APM results, you're seeing the impact of that team liberating capacity on existing assets on high value markets like membranes. So, you know, that will continue through next year, actually through this new capacity coming online. But view this as a very significant increase in our membrane capacity consistent with our goal of continuing to have a very meaningful share and being a market leader in membranes.
spk04: Great. Thank you. Thank you.
spk03: Your next question comes from the line of Matthew Dale from Bank of America. Your line is open.
spk07: Morning. Is there any risk that you won't be able to bottleneck certain floral products? kind of given community pushback. I know the Wilmington Cape Fear piece and at least the press in that region hadn't been too positive as it relates to potential expansion in Fayetteville. So is that kind of the Nafion expansion? Is that happening elsewhere? Is there any reason why you maybe couldn't get that done?
spk08: As we see things today, Matt, we're quite confident that we will get it done. we continue to have very good engagement with the local DEQ and the local community. And so this de-bottlenecking is sort of within our permitted capacity today. So I wouldn't expect us to have any issues whatsoever.
spk07: Understood. And I know it's early, but if we think about price next year for TSS, or at least kind of the cadence as we move through the year, You'll have Option price concessions to auto OEMs. So I usually think about it starting as somewhat negative, but we have continued roll-through on the legacy HSC side that will keep price up, or should we think about it as flat? How does that look now, I guess?
spk08: So clearly we had, with the adoption of the AIM quotas earlier this year, we've had very good pricing activity consistent with a quota mechanism. We're not expecting that we would have the same kind of year-over-year price change that we saw going into the quota mechanism. Clearly, there's a step down as we go into 2024, which will provide a different market dynamic. But we expect this business to continue to have good pricing and good volume growth with the rollout of Optium. Samir?
spk01: Yeah, thanks, Mark. Matt, there's a couple of things I would add as you're going to think about the pricing and the mixes of the businesses, also the aftermarket side of the business. As the Option adoption happens and Option is expanding, we should see an expansion on the aftermarket side as well, which is a little better pricing and better margin for us. So that should be helpful as well as you're going to move forward.
spk04: Thank you.
spk03: Your next question comes from the line of Josh Spector from UBS. Your line is open.
spk12: Hey, guys. This is James Cannon on for Josh. Thanks for taking my question. I was just wondering if you could give some color on the volume declines in the titanium business, how much of that is on the contract or the flex business, and whether or not you're seeing any pressure or pushback on some of the negotiations there.
spk08: Yeah, so I'd say, as we have said, the majority or about 80% of our business is contracted. So I'd say with the volume decline, it's really reflecting the decline in demand of our contracted customers. As you saw in our release, prices remain relatively flat sequentially. And the way I kind of think about that is, you know, we continue to see good price activity on our contracted book, but clearly spot prices, which we have on our flex portal, you know, have come off from prior highs. So I would say that's the kind of volume price mix that you're seeing in the quarter.
spk01: Yeah, the only other point I would make, James, is as you go to think about the volume equation, I would think a little bit more from a regional perspective rather than from our channel perspective. As Mark said in his opening remarks and earlier as well, it's Europe and Asia is where we have seen the majority of the volume decline. North America is holding up, and Latin America has been a pretty good market for us as well.
spk04: Okay, great.
spk12: And then on the APM side, we talked about the capacity expansions there. If we were to assume the growth rates that you're seeing pan out, Could you quantify how much additional capacity could be needed by 2030?
spk08: Yeah, so certainly as it relates to membranes, this will serve our needs for the foreseeable future. As we look out from here today, You know, I think I've said this before previously, you know, we think a CapEx envelope for the whole company of somewhere between 400 and 450 is a pretty reasonable estimate to support our growth aspirations in all of our businesses, especially APM and TSS. And the significant capital expenditure we're making on, you know, best-in-class abatement technologies to achieve or corporate responsibility commitment of reducing floor organic compounds by 99.9%. So, you know, I think there's no worry in my mind that, you know, we'll get meaningfully outside this CapEx envelope across our three businesses as we move forward in time.
spk04: Okay, great. Thank you, guys.
spk03: Your next question comes from the line of Hasan Ahmed from Alembic Global Advisors. Your line is open.
spk05: Morning, Mark and Samir. You know, just wanted to revisit, you know, some of the comments you made about the volumes in TT. Look, you know, 8% sequential declines in volumes. And when I compare and contrast that to what I'm hearing from some of your competitors, arguably, you know, with European sort of bias, those volume declines sequentially are as high as 25%. So I'm just trying to understand if you could give me some color around what the market looks like right now, demand-wise, are you doing materially better than the broader market and the like?
spk08: Hassan, good morning. That's a great question. So clearly, when we look at our regional mix. We're probably more exposed to North America than some of our competitors who have a bigger exposure to Europe. And so to the earlier comment of seeing a pretty dramatic fall off in volumes in Europe and Asia, especially mainland China, I think that works into the equation. the other analysts have commented, clearly, you know, we would expect, you know, more dramatic volume declines going into Q4 to really adjust our production schedules, you know, to what we're seeing, again, in Europe and in Asia Pacific. So, you know, I kind of look at this over Q3 and Q4, you know, to sort of get more in line, you know, with where the market is. But clearly, our regional mix, is more biased to North America, one. And two, our production mix is also very biased to North America where I think we can benefit, for example, as natural gas prices and other input costs come down.
spk05: Very good. And as a follow-up, more on the lines of the overall portfolio, I mean, obviously, you guys, you know, continue to show us the growthy nature of the APM business, the TSS business. And, you know, fortunately or unfortunately, you know, again, the industry, yourselves included, have done a great job in, I guess, reducing the cyclicality within TT. But, you know, it's pretty clear that it remains there. So how are you thinking about the overall portfolio as it sits right now? I mean, is there some thought process of, maybe a broader split between the growthier side of the business and the more cyclical side?
spk08: Yeah, so Hassan, I would say I'm very focused and this leadership team is singularly focused on the four strategic priorities. And we think those four focus areas will generate significant shareholders return over time. This is a bit of a marathon, not a sprint. And clearly, you know, we remain focused despite sort of the near-term headwinds in TT on this longer-term strategy. So I think we've never said that there's any sort of deep commercial tie between our fluorine business and our TT business. So I think we've always been clear. But as it relates to any restructuring, clearly that's something that we would work on with our boards. at the appropriate time, but certainly no intention to move down that path today.
spk05: Very helpful, Mark. Thank you so much.
spk03: Your next question comes from the line of Vincent Andrews from Morgan Stanley. Your line is open.
spk02: Hey, guys. This is Will Tang on for Vincent. Thanks for taking my question here. So should we expect, I guess, TIO2 EBITDA margins to kind of remain below that 20% range as long as kind of overall market demand is relatively weak. And then I know you talked about your goal of getting back to kind of 25% EBITDA margins in the TT business. But, you know, outside of maybe, you know, pricing and volume recovery, what are the things that kind of need to happen in order to get there?
spk01: Yeah, well, just to me, I'll kick off. Essentially, as you're going to look at a margin, as Mark said, right, in a Q4 and as you're going to get through Q1, we'll get through the high-priced inventory that we have. So I think that once we get through that, we'll be in a much better position. But overall, from a margin perspective, yes, pricing, those things are left at the same time. We are aligning our production along with the demand as well. So that should be helpful in getting the margins in a better position as well. So I think that's the way you should look at it. Our goal is to get into the low to mid-20s over time, but that's, you know, it says you're going to give to the 23 guide will be giving you more some sort of view around what the margins may look like for 23.
spk02: Gotcha. Okay. And then I guess given the weaker TIO2 demand that we're seeing, what are you guys seeing kind of upstream in the ore market? Are you seeing a kind of significant amount of kind of further loosening in the S&D there?
spk01: Yeah, look, I mean, I think as I said earlier, right, we've been having very active dialogue with all of our suppliers, all the strategic suppliers with respect to aligning the production with the demand and what that means in terms of the cost for us as well, because ultimately we want to drive a long-term kind of a win-win situation for everyone. So, yes, we've started seeing some movement on that side as well, which is in the positive direction for us.
spk04: Got it. Thank you.
spk03: Your next question comes from the line of Lawrence Alexander from Jefferies. Your line is open.
spk14: Hi, good morning. This is Kevin Estek on for Lawrence. My first question is just I was wondering what your perspective is on inventory levels of your customers heading into winter compared to like normal levels. And my second question is, so if interest rates stay elevated, I guess wondering if at all how that affects and how you think about your margins required for expanding, for margins to expand in tier two.
spk08: Hey, Kevin. You know, I wouldn't say inventories are elevated across the board for sure, but if we just focus on TI02 for a moment, clearly the slowdown in Europe and China has been quite dramatic, and I think our end customers are adjusting their inventory levels accordingly. In the Americas, and especially North America, I'm of the view that inventory levels are in line with where our end customers want them. And in fact, I would say as we prepare for the coding season, there could be even some inventory bills in anticipation of a robust coding season. I just want to remind everybody that the US consumer remains very strong. So while we're seeing the impacts of, I would say, higher energy pricing on the European consumer and the COVID lockdowns in China, you know, we are seeing very robust North American customer activity and consumer activity. So, you know, our expectation is, you know, we haven't really seen any meaningful change in our North America book. And in fact, year over year, we're seeing growth still on a revenue basis. So I just want us to make sure we keep that in mind.
spk03: And your next question comes from the line of Roger Spitz from Bank of America. Your line is open.
spk09: Thank you, and good morning. I wonder if you would consider hiring a guest for the global CO2 industry, what you think 2022 growth or decline might be versus 2021, if you have any preliminary thoughts. what 2023 versus 2022 could look like, a snapback or what have you.
spk08: Roger, I read some of the analysts' reports in terms of the overall industry, and I suspect based on how weak the second half has been, there is some suggestion that we could be down a couple of percentages as an industry this year on volume. And as it relates to next year, obviously we'll start the year with a week of first half, but the projection for next year would really depend on sort of the overall global macro assumptions, which I think are still emerging.
spk09: Got it. And when you say in your remarks that you've idled TR2 capacity, can you give, you know, any sense of what percent of your total capacity? And just so I understand, When you idle capacity, are you taking down, idling some lines at plants versus, say, for a time, idling an entire plant, like saying, well, Asia is weak. Let's idle all of the Taiwan facility for a time.
spk08: So, Roger, we don't disclose that information. We consider that something that we want to keep close to the vest. But we have the flexibility – of taking down individual lines that are plants. As you know, our plants are quite large relative to our competitive set. When we idle a line, that could be equivalent to a competitor idling a plant given the size of our facilities. That should help you dimensionalize you know, when we say we're taking some idling, you know, one of our lines, you know, is quite significant.
spk01: And, Roger, just to add to that, as you kind of think about our plans, right, you know, as you kind of think about the flexibility with respect to the ore mix that we can use, so we can flex our capacity quite a bit and optimize our cost structure based on the market conditions with that strength of the technology as well.
spk09: Got it. And just one last one on this one. When you do idle a line at a facility, from a physical and cost standpoint, is it onerous or is it relatively easy and not terribly costly when you do that?
spk08: Roger, this is something our team knows how to do very well. So we, you know, I would say our TT team It's one thing they're really great at is manufacturing. And they know how to simultaneously bring a line down, take cost out of the system, but be ready to bring that line back up very quickly based on market demand. So think of this as a very flexible approach. Clearly, as we design type your value stabilization, we had in mind our manufacturing flexibility, both from an org and a line-loading perspective. And so we're just following our playbook, which has proved very successful over time.
spk09: Thank you very much for that. Appreciate it.
spk03: And there are no further questions at this time. Mr. Mark Newman, I turn the call back over to you for some final closing remarks.
spk08: Thank you, Rob, and thank you all for joining us today. You know, as I thought about the increasing demand uncertainty in the global macro environment. I'm very thankful for the high caliber team we have here at Chemours that's staying focused on meeting the needs of our customers and running our business as well. As we've covered today, we are going through some transitionary issues on TT as we adjust production to meet demand. But we're also very focused on capturing the full growth potential of TSS and APM. And we're doing that at a time when we're growing earnings year over year. We're generating a lot of cash. In fact, this will be the third year that we've generated over half a billion in free cash flow. And we sit with relatively low leverage. You know, we're ready for what's coming at us in the next couple quarters, whatever that may be. But I want you to understand that we all remain focused on our four key strategic priorities to create long-term shareholder value. And so I thank you again for your interest, and we'll be in touch.
spk03: This concludes today's conference call. Thank you for your participation. You may now disconnect.
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