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spk02: Hello, and welcome to the Hillenbrand Q1 Fiscal Year 2024 Earnings Call. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Sam Minesburg, Vice President, Investor Relations. Please go ahead, Sam.
spk04: Thank you, Operator. Good morning, everyone. Welcome to Hill & Brand's earnings call for our first quarter of fiscal year 2024. I'm joined by our President and CEO, Kim Ryan, and our Senior Vice President and CFO, Bob Van Hembergen. I'd like to direct your attention to the supplemental slides posted on our IR website that will be referenced on today's call. Turning to slide three, a reminder that our comments may contain certain forward-looking statements that are subject to the safe harbor provisions of the securities laws. These statements are not guarantees of future performance, and our actual results could differ materially. Also, during the course of this call, we will be discussing certain non-GAAP operating performance measures, including organic comparisons for our segments, which exclude the impacts from acquisitions, divestitures, and foreign currency exchange. Also, we will be discussing our results on a continuing operations basis, which excludes the discontinued operations of Batesville, which we divested in February of last year. I encourage you to review the appendix and slide three of the presentation, as well as our 10Q, which can be found on our website, for a deeper discussion of non-GAAP information, forward-looking statements, and the risk factors that could impact our actual results. With that, I'll now turn the call over to Kim.
spk00: Thank you, Sam, and good morning, everyone. Thanks for joining us on today's call. Our first quarter performance reflects the dynamic environment we continue to experience in certain parts of our business. Total revenue growth of 18% and adjusted earnings per share of 69 cents were in line with our expectations, led by strong performance from our recent FPM acquisition and our continued success in driving aftermarket expansion. We saw sequential and year-over-year order improvement within our APS segment, with solid demand for our leading technologies and systems serving the plastics and food processing industries. However, we experienced weaker than expected performance in our MTS segment with continued demand softness across most regions and end markets. Additionally, our cash flow was lower than expected due in part to softer orders within MTS and the continued push out of large project orders within APS and the corresponding customer advances which contributed to our leverage being slightly higher than expected while exiting the quarter. We're not pleased with this current level of performance So as we announced in our press release yesterday, we're responding by executing significant cost actions to optimize our MTS cost structure, including headcount reductions and footprint rationalization. We're confident these actions will not only strengthen our position within the current environment, but also ensure we're able to respond with higher levels of growth and profitability when demand recovers. We expect these actions will deliver annual run rate cost savings of $15 million with approximately 50% of that to be realized within the current fiscal year, which will help mitigate the demand headwinds within the MTS segment. Bob will discuss this further in a moment when he gives an update on our financial performance and outlook. I'll now provide a little more color on the end market dynamics we're seeing across both segments. Starting with MTS, as I mentioned, we continued to see a challenging demand environment in the quarter. with overall orders down both year over year and sequentially on the back of broad-based softness led by weakness in consumer goods and electronics. While we anticipated volumes to be down due to the lower starting backlog, performance came in below what we expected, particularly for orders and margin. We did close a few larger projects in January, but we've yet to see a meaningful improvement in the overall trajectory of market demand as customer investments remain pressured by elevated interest rates, low machine utilization, and uncertainty in consumer consumption patterns. We continue to focus on controllable factors inside the business as we navigate this difficult external environment, as evidenced by the meaningful cost actions we're taking. Now, turning to APS, starting with durable plastics. We were pleased with the healthy order demand for our large extrusion and material handling systems in Asia and the Middle East, though the timing of customer decisions continues to be lumpy. While global macroeconomic factors are a contributing factor to these delays, we've also seen the size of projects in both virgin plastics and recycling increase significantly, which in turn requires a longer relative quoting process. However, we also believe this trend is a competitive advantage for us, as our equipment systems are optimal solutions for high output requirements. Lastly, as we expected coming into the year, we're starting to see improved lead times both from our suppliers and as a result of HOM initiatives, which should allow us to convert our high backlog more efficiently going forward. Turning to food, we're excited to have FPM in the portfolio for a full quarter, as our teams remain energized as they execute integration plans and go to market as a leading global provider of food processing technologies and integrated solutions. The breadth of our geographic footprint and the technology offering enables us to be a world-class solutions provider across the applications we serve, including baked goods, pet foods, snacks, and cereals, and many more. We continue to see solid order patterns and customer quote activity across most key applications, and we remain excited by the growing pipeline of opportunities we see as a result of our enhanced portfolio. Our integration activities focused on both cost and commercial opportunities continues to progress as expected. While we certainly face a dynamic and often challenging macro environment, I remain confident in our ability to execute our objectives through the remainder of the year as we deploy the Hillman Brand operating model to drive synergy realization, productivity, and working capital initiatives across the enterprise. With that, I'll now turn the call over to Bob to provide more details on financial performance and outlook.
spk06: Thanks, Kim. And good morning, everyone. Turning to our consolidated performance on slide five, we delivered revenue of $773 million, an increase of 18% compared to the prior year, primarily due to the acquisition of FPM. On an organic basis, revenues decreased 7% year-over-year, primarily driven by lower volume in MTS, which we largely anticipated due to the lower starting backlog coming into the year. Adjusted EBITDA of $114 million increased 13%. but decreased 14% organically, as lower volume and cost inflation more than offset favorable pricing, productivity, and product mix. We delivered adjusted EBITDA margin of 14.8%, a decrease of 60 basis points over the prior year. We reported gap net income of $18 million, down from $25 million in the prior year, as the impact of the FPM acquisition was offset by lower organic volume cost inflation, higher interest expense, a pension settlement charge, and a higher effective tax rate. Adjust earnings per share of 69 cents decreased one cent or 1%. Our adjusted effective tax rate in the quarter was 28.6% in line with expectations, but up 360 basis points compared to the prior year, primarily due to the non-repeat of the China technology tax incentive we received in Q1 last year. Our cash flow from operations represented a use of $24 million in the quarter, which was $18 million unfavorable compared to the prior year, primarily due to lower earnings and the timing of working capital requirements. Capital expenditures were $12 million in the quarter, and we returned approximately $16 million to shareholders through our quarterly dividend. Historically, Q1 is a lower relative cash flow quarter for Hill & Brand, but cash performance was below our expectations this quarter, in part due to software order performance. However, we maintain our expectation that cash conversion will be approximately 90% for fiscal 2024, which includes the impacts of restructuring and integration-related cash benefits that we expect to realize in the year. Our longer-term goal remains at 100% free cash flow conversion. Now moving to segment performance, starting on slide six. Revenue of $568 million increased 38% compared to the prior year, primarily driven by FPM. Organic revenue modestly decreased by 2% year over year, as lower capital volume was partially offset by higher aftermarket parts and service revenue. While revenue came in slightly below our initial expectations, primarily due to timing of some larger orders, we still see healthy levels of demand to support our full year organic growth. Adjusted EBITDA of $96 million increased 35% year-over-year, but decreased 3% organically, as lower volume and cost inflation more than offset favorable pricing, productivity, and product mix. We delivered adjusted EBITDA margin in the quarter of 16.9%, which was down 40 basis points over the prior year, primarily due to cost inflation and the dilutive effect of the recent acquisitions. As we've communicated, we expect to improve the acquisition margins towards historical APS segment levels over the next few years as we achieve synergies and deploy the Hillenbrand operating model to drive continuous improvement. Backlog of $1.9 billion increased 18% compared to the prior year, driven by FDM, but decreased 5% on an organic basis. Sequentially, backlog was up 3%. Now turning to MTS on slide seven, Revenue of $205 million decreased 16% year over year due to lower volume of injection molding and hot runner equipment. This was largely anticipated given the lower starting backlog entering the year, but we did see weaker than expected performance from our hot runner product line at the end of the quarter. Adjusted EBITDA of $32 million decreased 26% due to lower volume and cost inflation. Adjusted EBITDA margin of 15.7% decreased 200 basis points compared to the prior year, largely driven by the impact of lower volumes, particularly within our higher margin hot runner product line. As Kim highlighted, we're launching a restructuring program in our MTS segment in order to improve operational efficiency and optimize our cost structure for the current environment, while also ensuring we remain poised for growth once market conditions improve. We expect to incur a restructuring charge related to these actions of approximately $20 million in the year. of annualized run rate savings of approximately $15 million by 2025. We're estimating approximately 50% of the run rate savings to be achieved in the current year, which I'll cover a bit more when I discuss our outlook for the remainder of the year. Backlog of $232 million decreased 31% compared to the prior year, but was flat sequentially. While order volumes had been relatively flat throughout fiscal 23, we saw a further dip in injection molding orders in the quarter. beyond what we had anticipated. As Kim mentioned, we did see a few large projects come through in January, but we do not yet believe this is necessarily a sign of broader improvement in the underlying market conditions. Now, turning to the balance sheet on slide eight, net debt at the end of the first quarter was $1.8 billion, and the net debt to adjust EBITDA ratio was 3.4. At quarter end, we have liquidity of approximately $650 million, including about $200 million in cash on hand and the remainder available under a revolving credit facility. While our ending leverage was up sequentially from 3.2, this was partially anticipated due to the regular seasonality of our cash flows. However, we did see additional unfavorability due to the lower than expected cash flow, as well as an unfavorable impact at the end of the quarter from current currency exchange. Now moving to our capital deployment priorities on slide 9. Our capital deployment priorities are unchanged as debt reduction remains our top priority. Given the Q1 performance and uncertainty in the pattern of orders and working capital requirements, we now expect to return to our preferred net leverage range of 1.7 to 2.7 by Q2 of fiscal 2025, slightly delayed from our previous goal of Q1 2025. We are aggressively pursuing additional costs and cash energies to accelerate our progress towards this timeframe. I'll wrap up with our outlook for the remainder of 2024 on slide 10. We are maintaining our total company guidance range for the fiscal year, but expect to be towards the lower end due to weaker MTS performance, partially offset by approximately $8 million in restructuring savings expected to be realized in the year. As a reminder, our guidance ranges for total Hillenbrand are $3.28 to $3.44 billion for revenue, $530 to $588 million for adjusted EBITDA, and $3.60 to $3.95 for adjusted EPS, reflecting solid organic growth in our APS segment and significant inorganic contribution from the FPM acquisition. For Q2, we are targeting adjusted earnings per share in the range of $0.71 to $0.76, which is relatively consistent to the prior year as the contribution of FPM and modest organic growth in APS is largely offset by a significant decline in MTS, as the prior year was a record quarter for MTS. Please review slide 10 for additional guidance assumptions. In summary, as we look forward to the balance of the year, we continue to see a solid pipeline of demand in our APS segment, and we're confident the cost actions we're taking will help mitigate the market challenges within our MTS segment. With that, I'll turn the call back over to Kim.
spk00: Thanks, Bob. Before taking questions, I'll end our presentation this morning with a few final remarks. We remain laser focused on deploying the Hillenbrand operating model to execute our integration and synergy plans, capitalize on innovation and other organic growth opportunities, improve our working capital metrics to drive cash flow and debt reduction, and take the appropriate actions to protect our margins. As we navigate this dynamic macro environment, I'm all the more convinced in the strategic actions we've taken over the last two years in transforming Hill & Brand to leverage our technological capabilities by expanding into higher growth, less cyclical end markets that are supported by long-term secular growth trends. We're well positioned for the future as our teams are energized to serve our customers with world-class solutions as a global leader of highly engineered process technologies and systems united by our purpose to shape what matters for tomorrow. We'll now open your line for questions.
spk02: Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Matt Somerville from DA Davidson. Your line is now live.
spk05: Thanks. A couple questions, maybe just starting with APS. Can you put a little bit more context around the funnel within that business, some of the key metrics you're tracking and how they look maybe versus a year or two ago, and if the order activity level you saw in Q1 is maybe an early indication that some of that log jam, if you will, may be moving in the right direction? And then I have a follow-up.
spk00: Yeah, so I would say in the APS business, we have a very detailed funnel process that we have for each of the businesses. And especially given the duration of some of those quote processes, it's really critical that we have different milestones to make sure that we understand whether or not those are progressing. everything from what types of resources are we putting in, what types of resources are the customers putting in to move these quotes ahead. What I would say is that we continue to see a very, very positive demand for quotes and for work to be done in the regions that we had previously mentioned to you, those being in the Middle East, in China, in India, and have even continued to see some progression in other markets as we look forward to the remainder of the year in Europe and Africa and even some specific projects in North America. We remain very encouraged about the quoting pipeline that we have. We have seen a couple of orders crossover in early January. We kind of have a saying here, is it a dot, is it a line, is it a trend? At this point, I'd say it's a dot progressing to a line. So I think we are encouraged that we continue to see things moving ahead and moving through that pipeline in terms of how we assess orders. and the outlook that we have for generally most of the geographies we're doing business in, we continue to be very excited about what we see, both on the plastic side as well as on the food side. Because remember, although we've been very focused on cost synergies on food, we're also very focused on creating commercial opportunities across these businesses as well. So hopefully that addresses your questions, Matt.
spk05: Yeah, thanks. And then just as a follow-up, you mentioned or Bob mentioned that MTS experienced a little bit of an incremental dip in orders following, you know, a couple quarters, I thought, of stability. What end market geography kind of is driving that incremental dip? And then can you elaborate on the magnitude of headcount reduction you're looking at as well as how you are rationalizing the footprint within MTS. Thank you.
spk00: Yeah, I would say that we had anticipated, you know, we had seen several quarters of where we were pretty flat in terms of the order demand. So while we were hoping for an uptick, we had at least seen stability. We saw a little bit of a dip in the last quarter. specifically in the areas of consumer goods, electronics, some of those areas, which have typically been strong. And we have not seen the bounce back in China and North America that we might have anticipated at this point. You know, there continues to be a lot of fighting for volume in that space, both in the injection molding and the hot runner side of the business. So, That's one of the areas that has given us a little concern and has caused us to move ahead with some of the things that we needed to do from a cost standpoint. Keep in mind that as we go through this, we are always planning for the future. And so I would say that we are making decisions that are appropriately sized for the demand trends that we've seen. that are also taking into consideration where we expect the demand to return so that we can be prepared for that. This allows us to, you know, look at everything from creating flexibility in the way we manufacture our goods, leveraging partners, leveraging partners, some of our suppliers to help with volume as we would want that to return. So the magnitude of that ends up being in kind of the 5% of workforce type size. And then we anticipate there are a couple of opportunities for cost rationalization and simplification from a site perspective that we will also be engaging in. And keep in mind, we've got new eyes on that business. I think that we've got a lot of work that has been done over the last four months in collaboration with the leaders in that business, and all are agreed that these are appropriate actions to take that create an appropriate return, even though we've got some one-time charges associated with that, and that they will not hamper our flexibility to address volume as it comes back in this market, which it has always historically done.
spk05: Thanks, Kim. That was helpful. Appreciate it.
spk00: All right. Thanks, Matt.
spk02: Thank you. Next question today is coming from Daniel Moore from CGS Securities. Your line is now live. And as a reminder, that's star one to be placed in the question queue.
spk03: Thanks. Good morning, Kim. Good morning, Bob.
spk00: Good morning, Dan.
spk03: Dig a little deeper into the trends in APS. First, you mentioned some of the opportunities you're seeing in petrochem and plastics are on the large, you know, we're very large or larger side. Are those primarily Middle East? Just talk about sort of geography as well as the timeframe and, you know, what ultimate kind of margin profile of those slightly larger or atypically larger projects look like for you.
spk00: On the polyolefin side, I mean, there is some buyout associated with those projects, but those projects are in places that we've indicated before. They're Middle East, they're China, they're India, in terms of the really large polyolefin projects. And those are the places where we've been strong in quoting activity. We've been kind of waiting on order decisions. We expect over the next 12 months for those to continue to be strong. The margin profiles, we feel very good about our ability to create value in those, especially as we're able to create more than just individual pieces of equipment offerings. We're able to create full systems. We are able to create value for customers and for ourselves as we're able to optimize those systems into those lines. And given that a lot of the folks developing in those areas are multinational customers, Those are relationships that we feel very confident about in terms of being able to provide full solutions. So those are some of the areas that we're seeing on the big polyolefin jobs.
spk03: Very helpful. And on the food and pharma side, when you put all of the businesses together as you integrate them, If we think about sort of a pro forma, you know, order rates and pipeline or funnel this time, you know, relative to maybe 12 months ago, where would you say kind of we are overall year over year on a pro forma basis?
spk06: Yeah, Dan. So obviously, you know, we didn't have FPM in our portfolio. portfolio a year ago, but when you look back at what they performed under that ownership and then obviously with our legacy food health and nutrition business and then Linksys, orders actually on a year-over-year basis came in pretty strong, specifically within food. And so we feel good about long-term investments, the long-term view of that business. We feel great about the short-term. that growth again in that business as we invested, you know, that food end market, we see that growing at GDP plus and everything we've seen here so far indicates that, you know, you know, we made the right decision in, in, uh, you know, in those investments.
spk00: Yeah, we feel, we, we do feel very, uh, I mean, I had an opportunity with the commercial teams on this, uh, Two weeks ago, I guess it was. It feels like forever, but we had an opportunity to listen to a report out from these teams two weeks ago on all the opportunities they're seeing across the portfolio. And really, when you think about what we've brought together here, the feeding, the additive ingredient handling, the pneumatic conveying, the multiple conversion steps, whether it's whether it's very high-end extrusion or less complex extrusion. The material handling, again, and the end of the line processing and the storage capabilities that we have through all of the assets that we acquired. This is really going to be an exciting portfolio to be able to offer into the marketplace. And we've got the addition of having the Schenck team join us, which has a lot of experience in managing the larger projects. So as we're able to work these projects into the market, we've got a ready and experienced team that can work hand in hand with us to be able to take these projects to fruition. And I can tell you the team is really thrilled about the opportunities they're seeing. And frankly, they are running as fast as we will let them on finding ways to collaborate together. And it's really invigorating to see.
spk03: Excellent. Just shifting gears to MTS, I guess two questions. First, do you have much visibility or line of sight as to when you may see kind of the bottom in terms of orders? I know that's a challenge given hot runner business is traditionally short cycle. And second, in the past it's been quite cyclical with hot runners in particular often rebounding sharply. Do you anticipate that could be the case again this time around, or has anything fundamentally changed that might make it a little bit more gradual? I guess what I'm trying to ask is, you know, has demand permanently shifted lower, or is there reason to believe that eventually, you know, we'll get back to the levels that we saw a couple of years ago?
spk00: Well, I think I'll just hit some macro trends in the market that I think will – I think are noteworthy. So as it pertains to kind of that demand bouncing back, I think that China has always been a very leading indicator of that. And that market has been a bit slower and has not bounced back as quickly as we would have anticipated. Parts of that are, I think, some uncertainty in the geopolitical environment. Parts of that are some customers, some manufacturers, making choices about, hey, do I want to have my entire footprint sitting in China or should I diversify my footprint into areas like India? As you know, we have locations in India which are offering the same types of capabilities and turnaround time, lead times, engineering capabilities to the customers that we serve in China. So we believe that we are well positioned to be able to catch that to catch that business as it moves into other geographies in Asia. So we do feel prepared for that, but I would say that there is some slowness in the final decisions being made about where that footprint will reside. And I would also say that, you know, given some of the slowness that has characterized this industry for, or this end market for the last period of time, I think there is a lot of, you know, there is a lot of volume that's trying to find a home. And so I think that does create a lot of pricing pressure, margin pressure at this time as people work to, you know, maintain coverage for their own fixed costs in an environment where the market is kind of undersized for the competitive footprint that sits there right now. And I'll turn it to Bob to hit some of the other points.
spk06: Yeah, I think you actually summarized it well, Kim. You know, Dan, you think about the MTS market overall in our view of the first quarter, things were actually pretty on par for the first couple of months. And then December is where we saw a bit deeper dip than what we anticipated. Now, January, we actually had a little bit of upside compared to what we thought, right? Now, we've been here before. And as Kim said, you know, those are dots, not a line or a trend yet. So, you know, you think about past cycles, the MTS cycles, then down, you know, call it five, six quarters is what that cycle looks like. And, you know, we've projected about eight in our guidance. And, you know, it is a short cycle business. So, you know, I think, you know, we're doing the right thing with the restructuring. You know, when the market does return, we feel confident that we can take advantage of our position, you know, even light of, you know, a reduced workforce.
spk03: Helpful. Last one, and I'll jump out. Just, you know, obviously given the kind of lingering softness in MTS and Q2 guide being a little lighter than at least we'd expected, would you say the lower end of the full-year guidance range is more likely from an EBITDA and adjusted EPS perspective, or are the cost reduction actions you're taking enough to kind of balance it out and make the full-year picture more balanced relative to where you saw it coming into the year? Thanks again.
spk06: Yeah, sure. So we feel good about where APS sits within our guidance range at that midpoint, Dan. And on the MTS side, probably on the lower end, and as you recall, when we gave guidance a couple months ago, we did have a wider range just in case we didn't see that snapback. We were thinking of a modest recovery in MTS. We still think that's on the table, but again, Q1 is a little bit lower than what we anticipated. So we're expecting the lower end of the guide on the MTS piece, and obviously, you know, the average of APS and MTS would put us at the lower end of the overall guidance. And then on the restructuring, you know, that does embed the savings from the restructuring action. So, net-net, we're going to be at the lower end on MTS.
spk03: Understood. Thank you. Thank you again.
spk00: Great. Thanks, Dan.
spk02: Thank you. Our next question is coming from John Fronzeweb from Sidonian Company. Your line is now live.
spk01: Good morning, everyone. Good morning, John. Thanks for taking the question. Kim, in your response to the last question, you mentioned the pricing environment's gotten more challenging. I'm curious if that's limited to China, which had been the case, if I remember correctly, or has that spread to other geographies?
spk00: No, I think the geographies are, I think we're seeing that in a number of regions. I'll let Bob comment a little bit further on some of the details of that.
spk06: Yeah, I think that's right. So Kim and John, we're seeing pricing pressure really across all regions, particularly in MTS. So customers in North America are becoming certainly price sensitive and therefore we need to react to really maintain our share. Same thing in China, we're seeing aggressive discounting in that region as well. So anything about MTS, we're likely going to be less than 100% price cost covered. However, APS, we're going to be above 100%. And so net-net, pill and brand, we will be still price-cost favorable at the consolidated level.
spk01: Got it. Understood. And, Bob, I think you said in your prepared remarks that APS had some delayed shipments in the quarter. I'm curious, what was the magnitude of those shipment delays, and have they been shipped in the first quarter? I'm sorry, in the first quarter. Yeah.
spk06: Yeah, so just a little bit, just timing on some parts, quite honestly, John, so we can ship those larger orders. Those are about $5 million of an impact in the quarter, and yeah, those will go out in Q2. Got it.
spk01: And Kim, I'm curious about what your thoughts are on APS backlog. It's kind of elevated still. is it actually a hindrance at some point or are you incurring over time? You maybe might not have needed just maybe some thoughts on a higher level, but the APS backlog.
spk00: Yeah, I would, I would say that it's, it's, it's a bit, it's a bit elevated for what would be most optimal. Um, you know, when you've got a lot of backlog, you've got to touch and retouch things a couple more times than you would like. Um, But at this point, frankly, I'll take the orders and we'll work through the backlog and we'll continue to manage that. The team has – I would say that this is – when you look historically at the level of backlog that we would typically operate this business on, we are at an exceptionally elevated level to what we used to years ago. Sorry, I'm getting some feedback. What we used to do in terms of regular backlog level, I would say we're in the neighborhood of 50% to 75% higher than what we used to operate at. But lead times are longer from suppliers still. That's a factor. And the amount of large orders in the backlog has continued to increase over time. And I think that that's a direct reflection of the value proposition that we've been able to take into the marketplace, especially in that polyolefin arena. And I do think that the attractiveness of the portfolio and being able to be a systems provider in certain applications has a real attractiveness for customers. in having one vendor that really understands how to optimize all of that and bring it together for best performance in their manufacturing locations. And so a bit of that is a reflection of the fact that we don't just sell equipment. We do sell systems, and that has increased over the last couple of years. So a little higher than might be optimal, but, again, I'll take it every day.
spk01: Okay, manageable. Good to hear. Thank you for taking my questions.
spk00: Thanks, John.
spk02: Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Kim for any further closing comments.
spk00: Great. Thanks again for joining us on the call today. We appreciate your ownership and interest in Hillenbrand and look forward to talking to you all again in May when we report our fiscal second quarter results. Have a great day.
spk02: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation.
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