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spk00: Good day and thank you for standing by. Welcome to the RANPAC Q1 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to David Murgill, Chief Financial Sustainability Officer and Secretary. Please go ahead.
spk05: Thank you and good morning, everyone. Before we begin, I'd like to remind you that we will discuss forward-looking statements as defined under the Private Security Mitigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our annual report on Form 10-K and our other filings of the SEC. Some of the statements and responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our action results to differ materially from these statements. Ramp Act assumes no obligation and does not intend to update any such forward-looking statements. You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today. The earnings release we issued this morning and the presentation for today's call are posted on the investor relations section of our website. A copy of the release has been included in a form 8K that we submitted to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website. For financial information that is presented on a non-GAAP basis, we've included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, shortly we'll be filing with the SEC our 10Q for the three months ending March 31st, 2021. The 10Q will be available through the SEC or on the investor relations section of our website. With me today I have Omar Asli, our Chairman and CEO, and Bill Drew, our CFO. Omar will summarize our first quarter results and Bill will provide some additional detail before opening up the call for questions. With that, I'll turn the call over to Omar.
spk03: Thank you, David. Good morning, everyone. As always, I hope everybody listening in and their families are staying healthy. 2021 is often a very good start for RAMPAC. The first quarter was a record quarter, driven by the continued robust demand for our products in Europe and Asia. Our team coordinated globally to serve our customers in these regions, and I'm incredibly impressed by the way our organization has come together. Once again, I must make a point to recognize, in particular, the hard work and contributions made by the RAMPAC employees who continue to show up every day to our manufacturing and converting facilities across the globe. Without them, we would not be able to place our equipment at a double-digit clip or achieve the outstanding top-line growth we saw in the first quarter. Our end users and customers rely on RAMPAC to keep their businesses running seamlessly and protect their goods, while at the same time signaling to the world that they are focused on the impact their supply chain has on the environment. RAMPAC team members take great pride in fulfilling these obligations and continue to go above and beyond to meet our customers' needs. I could not be more proud of our team. Throughout the pandemic, our utmost priority has been the health and safety of our employees and customers. we remain committed to following the advice of the CDC and other medical professionals around the globe to protect our team and customers. As we enter the vaccination phase, we are committed to helping our team members who choose to get vaccinated to do so with paid time off as needed. Just as COVID had its initial impact on the world at different times, so does the vaccine rollout as certain regions are further along in getting their populations vaccinated. We are monitoring this closely and taking a local and regional approach to expanding the abilities of our employees to ramp up business activity and return to slightly more normal rhythms. Because we put our employees' health and safety first, we're being cautious and will take a measured approach to bringing back groups of employees to the office, first in North America and then elsewhere as vaccination rates improve. As a company, we continue to be laser focused on execution and growing our business. We're implementing our growth strategies by adding technology, hiring talent, and improving our capabilities in key expansion areas. Our new products are gaining a lot of traction in all regions. And our retail rollout, which we paused in the spring of 2020, is off to a great start this year with solid adoption in a number of key retailers, both online and in-store. Our investment in ramp-back automation continues with building our team in North America with a particular focus on artificial intelligence and robotics. We are on offense in all areas of our business. I have previously said on numerous occasions that I believe we are still at the beginning of a sustainability and automation super cycle, and that ramp-back is making the investments needed to position ourselves for long-term success. From an operational and supply chain perspective, We're pleased to continue to report that operations at each of our global facilities continues uninterrupted. Like many other global businesses, we're navigating through longer lead times as ports remain backlogged, and shipping goods via boat, truck, or air has become more expensive. We're taking the necessary steps in our business to ensure we are meeting the needs of our customers and getting products to them when they need them. Commodity prices within protective packaging, whether resin or paper, have increased to start the year. So we are working with our suppliers as well as customers to ensure we are all being good partners in light of the current macro environment. Fortunately, the cost of competitive substrates like resin-based plastics has increased significantly. So overall, we are pleased with our competitive positioning and feel this is an environment where paper solutions are very attractive. While the near-term environment may be more volatile, I remain very constructive on our outlook and ability to grow our business. I am happy with the strong results of the first quarter as the team continued to execute and advance key ramp-back initiatives. For the quarter, consolidated net revenue on a constant currency basis increased 31.2% to $85 million, driven by robust demand for all protective packaging products as e-commerce has remained elevated and we have seen improvements in industrial activity globally. North America returned to growth as net revenue increased 3.7% year over year, with rafting leading the way. We continue to see strong adoption and trial activity of our newer products, as well as increased focus by end users of sustainability and automation offerings. Our enhanced commercial capabilities are getting traction in North America, And with the level of trial activity we have seen to start the year and the increased focus on environmentally friendly solutions, we feel that North America is very well positioned. I believe just like we did in Europe, North America will follow suit and we expect it to deliver meaningful growth for the rest of this year. Performance in Europe continues to be extremely strong with all applications up meaningfully year over year. Continuous e-commerce growth across almost all territories drove Voigtville performance with specific strength seen in the northern region of Europe, and in particular, the UK. We saw a continued rebound of industrial activity with the automotive and general manufacturing sectors in Germany, France, and Eastern Europe picking up momentum in the quarter. Wrapping continues to penetrate further in the region as our GEOMI products get solid traction in retail and ship from store. In Europe, sustainability is often highlighted by our end users as the reason for the switch from plastic-based, in-the-box packaging to paper applications. While we are extremely pleased with the sustainability tailwinds, we at GrandPak are always focused on delivering the top solution in the marketplace. We like to demonstrate to our customers how well we compete on speed, reliability, and cost, and rely on the sustainability of our products as the icing on the cake. In Asia Pacific, we had a very strong performance across the board, indicating a recovery in industrial and electronic market segments along the continued strength in e-commerce. Within the region, higher labor cost areas such as Australia, Japan, and South Korea took the lead in driving growth. In particular, Australia is experiencing significant growth driven by the switch to sustainable solutions and further development of e-commerce. Overall, we're very pleased with the level of activity in the region. We feel great about our ability to further penetrate the region as trial activity is robust and we have signed new distribution partners in Australia, Indonesia, and South Korea to help us expand our presence. In constant currency terms, adjusted EBITDA of $28 million was up 55% year over year due to higher sales volumes, relatively steady input costs, and greater operating leverage compared to last year. Those are the high-level points on our excellent start to the year. In summary, we continued our focus on safety of our employees, responded to strong demand, and continued to invest in future growth opportunities. With that, let me turn the call over to Bill, who will give you further details related to the quarter.
spk06: Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators. We'll also be filing our 10Q, which provides further information on RANPAC's operating results. Machine placement continued a steady increase as we placed over 3,000 machines in the quarter, up 12.9% year-over-year to more than 125,000 machines globally. Consistent with recent performance, cushioning systems grew 4.6%, while void-fill installed systems increased 13.5%. Wrapping continues its rapid expansion, growing 31.7% year-over-year, and is on the way to becoming a meaningful contributor to our top line. As Omar mentioned, overall net revenue for the company in the first quarter was up 31.2% year-over-year on a constant currency basis, driven by strong performance in Europe and APAC, as well as growth in North America. Net revenue for cushioning and void fill applications both increased more than 30% over the prior period, and wrapping continued its impressive growth, improving more than 41% year over year. On a constant currency basis, gross margin for the quarter was 41.3% compared to 42.3% in the prior year, with increased freight and production costs being the primary drivers of the slight pressure on margin. As Omar mentioned, freight costs globally are up due to rapidly ramping up of trade activity and congestion and shipping channels. While we do expect these trends to continue throughout 2021, we believe a portion of the pressure we experienced was transitory, as some of our paper suppliers in North America experienced unplanned downtime due to company-specific issues and severe weather in the southern U.S. in February, which impacted their operations. To offset this, we expedited sourcing from alternative suppliers within our network and incurred costs of moving paper among our different facilities. Additional production costs related to temporary labor, overtime, and higher operating expenses to support elevated volumes and manage through supply chain disruptions also impacted gross margin in the quarter. Adjusted EBITDA grew 54.7% year-over-year due to increased sales and the benefit of operating leverage on our SG&A. Margin improved approximately 500 basis points, resulting in a margin of 32.9% compared to 27.9% in the prior year. Cash interest expense for the quarter was approximately $5.5 million, ensuring as the majority of our interest exposure on our USD tranches hedged. Capital expenditures from the quarter were $10.9 million, comprised largely of increased placement of converters, as well as investments in projects. As demand has been robust, especially with enwrapping and void fill, we've been actively growing our installed base throughout the year and placing converters across the globe. Lastly, our balance sheet remains strong. As communicated on a previous earnings call, we made an $8.2 million one-time exit payment to our lender in the first quarter, largely driving the decline in our cash position to $40.5 million as of March 31st. We also made the decision to increase investment in working capital to build inventory due to the momentum of the business and to reduce the risk of longer lead times in supply chains. The $45 million revolver is undrawn and fully available to us should we seek additional liquidity. I leveraged from a bank adjusted EBITDA standpoint of 3.5 times at the end of the quarter. As you may have seen, the SEC came out with a statement on April 12th, which introduced new interpretations of the accounting guidance to warrant structures that are common in special purpose acquisition corporations. The SEC's perspective is that some SPAC warrants should be presented as liabilities on the balance sheet and marked to market each period. As you will recall, we eliminated all warrants in our structure in September of 2020. We have done the analysis of the warrants that were previously present in our structure, and management's preliminary conclusion with the assistance of outside advisors is that the accounting impact is immaterial to our results in prior periods. This, of course, is subject to review by our auditors, which is currently underway. It is important to note, however, that if there are any potential changes, this change does not impact our financial performance results reported for 1Q21, and in previous periods would not impact any of our key operating metrics, any of our GAAP metrics above operating income, or any of our non-GAAP metrics. To the extent necessary, we'll update you in the 10Q on this file. With that, I'll turn it back over to Omar before we move on to questions.
spk03: Thank you, Bill. To summarize, I'm very happy with the exceptional first quarter results and the team's ability to manage to unprecedented demand in Europe and APAC for this time of year. I'm also happy with how we are navigating supply chain challenges across the globe without missing a beat. I think the results speak for themselves, and the team should be very proud of the strong start. That being said, it is only one quarter, and as I have shared with many of you in the past, we are more focused on achieving robust long-term growth rather than quarterly results to build shareholder value. With that long-term mindset and vision, we continue to capture the many tailwinds in our business, And although we do not want to update our annual guidance based on any one quarter, given our advocacy for long-term thinking, it is fair to say that our current expectations for the remainder of 2021 are very strong, and we expect to outperform our plan for the year. We remain enthusiastic given the positive macro environment and strong customer trends. But more importantly, we feel very confident about our ability as a company to deliver outcomes. That being said, the world is still experiencing many uncertainties, especially as it relates to the vaccine rollout, the pandemic and economic conditions. As a team, our continued expansion across the globe is paramount to our long-term vision, and we feel very good about the momentum of our business in all regions. Demand is robust for all of our key product lines, and we are getting good traction in our investment initiatives. Our brand building and stepped up digital marketing efforts are also taking hold and raising the awareness of the benefits of environmentally friendly protective packaging. Lastly, I hope you all saw our 2020 ESG Impact Report we published earlier this month. It provides new and updated performance metrics and context related to our environmental sustainability efforts, our commitment to our employees and communities, and corporate governance. We also laid out aggressive targets and commitments for the next decade, namely reduce our greenhouse gas emissions by 46%, source an aggregate paper supply consisting of at least 75% recycled paper, also source 25% of our total supply from post-consumer waste or alternative bulbs, and lastly, sell 100% of our paper products as FSC certified. Our pledge is to attain all these goals by 2030. Like all aspects of our business, we are committed to constant improvements on our ESG journey, and we will keep you updated as we hit these key milestones. With that, thank you again for joining our call. I'll now open it up to questions. Operator?
spk00: Thank you. At this time, if you would like to ask a question, simply press star 1 on your telephone keypad. Again, to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Greg Palm from Craig Hellum. Your line is now open.
spk01: Yeah, great. Thanks. Morning, Bill. Hey, Omar. Really good quarter here, so congrats on the results.
spk03: Thank you. Thank you, Greg. Good morning.
spk01: So I guess first question on, you know, geographics, you know, Europe, APEC was clearly the standout again. And maybe, you know, I think I asked the same question last quarter, but what exactly are you seeing? in in those regions how much of the activity is driven by new customers versus entering new regions you talked about some new distribution partners but it's um the growth there is just incredible and and and then sort of vice versa you know north america still still lagging a bit in terms of growth but it sounds like you're still pretty confident that you'll see an acceleration this year so anyways a little bit of help on the geography differences would be great
spk03: Yeah, sure. So let me start with Europe. It is a mix of existing customers, obviously shipping more boxes in particular in the e-commerce area. It's definitely new customers and folks moving away from plastics to paper. Just to give you an idea, with new customers, 30% to 40% of them are telling us the main reason they switched. is around sustainability. And that number used to be less than 10% in Europe four years ago. So there is a clear trend that continues around sustainability and gaining market share. with some of these new customers. And then this past quarter, other than elevated e-commerce activity, we started seeing a pickup in industrial activity, some of the automotive players, some of the manufacturing guys, Nordic region, Germany, Netherlands, frankly, UK, you know, all contributed. In Asia Pacific, we are expanding geographically, so that's helping. We signed a few new distributors. That's also helping. But the big story is, frankly, countries like Australia, like Japan, like South Korea continue to embrace our products. And similar to Europe, it's a lot of e-commerce activity, but also activity around electronics, light manufacturing, light industrial guys. Our light cushioning product was pretty strong in many of those regions. And that trend we continue to feel is in the early innings, Greg. Lastly, on North America, and the reason why I am confident and I've been saying that publicly for a couple of months now, is all the leading indicators are trending the right way. Our belief is North America is a few years behind. Europe, and we're starting to see more and more accounts talk to us about sustainability. We see our trial activity. We see our pipeline. And just to give you something tangible, we also see the demand for our equipment. And what we're seeing in North America is we're accelerating the demand. The converters and equipment we thought we would need in Q4, we're accelerating that to Q3. What we thought we were going to need in Q3 in North America, we're accelerating that to Q2. So I think as the year progresses, you're going to see some nice growth from North America, which I believe is just a couple of years behind Europe. And over time, you'll see that activity pick up. So overall, a lot of strong demand across the board for our product. And we think you should expect some meaningful pickup in North America as the year goes on.
spk01: Great. Okay, that's helpful commentary. And, you know, I think we all sort of understand the sustainability factor here. I think what's also equally interesting recently is what's happened in With some of these substrate costs, which you alluded to, I think we've all kind of read about what's happened in the resin market and all the shortages that folks are seeing. I mean, is this a potential catalyst to convert more customers from plastic to paper? Any early signs that that's going on?
spk03: Absolutely. And the answer is that is a big catalyst, and there are good early signs, which is increasing our confidence. in sort of the rhythm and growth opportunity for our business for the rest of the year. Many resin-based competitors of ours have increased pricing a couple of times already. In some cases, many of them cannot secure supply and are telling customers it's going to take them a number of months and long lead time to fulfill demand. We're stepping into that. We're leaning forward hard. We're working operationally to make sure we can fulfill the demand for some of these new customers. The two key things that are helping us is, one, paper pricing is going up, but not as much as resin. And in many cases, that's helping us narrow the spread, if you will, the way it exists. And then secondarily, given all the supply chain, all the procurement, all the work we're doing from a manufacturing and ops standpoint, we are going to be using sort of our shorter lead time to meet demand that we think the customers out there want. So I expect that you will see continued market share shifts from plastic to paper in addition to sustainability reasons for some of these pricing as well as just availability and capacity reasons, Greg.
spk01: Yeah, okay. And then last one, I just want to clarify the comments around the guidance. So is the thought that, you know, based on what happened in Q1 and sort of what you see going forward, that you're, you know, we're drawing guidance or you're just not updating it? It clearly sounded like you're expecting to outperform what you laid out a couple months ago. So I just want to make sure we're all clear on exactly what you meant there.
spk03: Yes, absolutely. So look, the way we run the company, we have annual plans and we have three-year and multi-year plans as a management team that we're trying to target. We announced sort of our annual guidance last quarter. This quarter, clearly, you know, we performed very well. I don't want to be the company that keeps on updating guidance every quarter when we have an annual plan. I think we are comfortable saying, just to be crystal clear, in this year, in 2021, given the start for the year, given what we're seeing, given all the commentary and sort of the answers I provided to your questions, We believe we will meaningfully surpass our plan this year, but we don't want to be in the business of continuously updating guidance. We are really just focused on driving outcomes and delivering numbers.
spk01: Understood. All right. Thanks for all the color and best of luck going forward.
spk03: I appreciate it. Thank you, Greg.
spk00: Thank you. Moving on, your next question comes from the line of Stephanos Creep from CJS Securities. Your line is now open.
spk04: Omar and Bill, good morning and congrats on a great quarter. Good morning, Steph. Thank you very much. First, could you give us a sense of the revenue growth that was driven by, you know, new product offerings like cold chain and the new wrapping and that kind of stuff?
spk03: Sure. Bill, you want to take that?
spk06: Yeah, sure. Happy to. So, you know, wrapping, as you can see from the converted placement, right, that continues to grow meaningfully. We're also expanding, you know, our Giammi offering. That's getting great traction really globally. So, you know, if you take a look at the contributions from those products, you know, on the top line, you know, wrapping overall, I think, was up over 40%. on the top line. So fantastic performance there. And we think that there's a real big opportunity to take that and expand it into retail. You know, if you look on online, you can see the feedback that we're getting from a number of our new retail offerings, which is going quite well. So coming from a small base, of course, but.
spk03: And sorry, sorry, I I think, Bill, we're losing your line. Steph, what I would add also just on cold chain, since you were asking about that, we continue to invest in that area and grow. We have a number of customers. Frankly, the rhythm there is great. We are growing quite a bit. And what we've done in cold chain recently is we introduced some of our products. outside of the U.S., in particular in Europe, and plan on expanding that into some of our markets in Asia Pacific. So stay tuned on that one. But some of these new products in coal chain and in other areas, I think as the year progresses, should deliver some outsized returns for us.
spk04: That's great. Thank you. And then a final question. You know, with rising paper prices, you know, two years ago you saw some pull forward as customers increased their volumes. Are you experiencing that right now? Maybe, you know, how are volumes looking in April so far? Can you give us some more color on that?
spk03: I think what I will say is the strength of the beginning of the year continues. uh volumes and demand continue to be robust i don't think it's people pulling forward demand uh you know just given pricing the if you look at just what's happening even in the core the corrugated industry what's happening in e-commerce and with the reopening of some economies and industrial activity stuff there really is a search in demand for our products so it's not people just pulling it forward given pricing and we continue to see a lot customers shipping more boxes asking for more products and i expect in the near future those trends will continue that's great great color thank you and congrats again thanks a lot appreciate it your next question comes from the line of alexander leash from beringberg capital your line is now open
spk02: Morning guys and congrats on what was a very strong quarter. My first question is sort of around industrial end markets picking up. How much of a recovery was there versus pre-pandemic levels and how much more is left in the recovery in that particular end market?
spk03: Yeah, I don't think in the industrial channel we're seeing them quite at the level of pre-pandemic. I think what we've seen is a little bit of pent-up demand given the declines many of those companies and customers experienced in 2020. Obviously, towards the end of 2020, industrial activity started improving, and then what we saw is significant growth in the first quarter. So there was a little bit of pent-up demand, but we're not seeing industrial activity reach the levels of pre-pandemic. So I think we will continue to see some nice tailwinds with our customers there. And then in terms of just type of industries, it really depends by geography. So you saw light manufacturing out of Asia, electronics out of Asia pick up real momentum this past quarter. In Europe, it was more sort of in automotive. in some of the heavier machinery and industrial activity. In the U.S., you know, a lot of folks in sort of general manufacturing tools, in smaller appliances. So we're seeing things open up in a lot of different geographies. I think the tailwind, it's probably no different than what we're seeing in GDP. I think it's going to continue for a while until the world normalizes. but the level of industrial activity as of this moment still has not reached pre-pandemic levels, at least for our business.
spk02: Okay, great. Thanks for that. And as we sort of look out for the remainder of the year, what's your sort of capital allocation strategy, and are you looking to do any acquisitions at all?
spk03: Our main focus is meeting our customer demand. So we are investing in the business, in our supply chain to make sure we meet the demand, which right now, frankly, across the globe, is pretty strong, and as I said, in North America we expect it to ramp up meaningfully towards the end of the year. The other area that we're investing in is making sure we get our equipment and automated solutions ready for the second half of the year. You know, the demand there is really strong. You are not seeing that in the numbers because that's equipment we're going to deliver to customers in the second half of the year. But we are almost at capacity there already, given what customers are asking us to do. So that's our main focus. In addition to that, we are exploring a couple of, you know, what I would characterize as small tuck-in acquisitions that we think add to our solution, add to our technology, add to our team. And we're exploring some of these things between now and year end. And frankly, it's along the same lines that we've discussed historically, automation, cold chain. These are the opportunities where we continue to explore adding to our offering. But right now, priority one is meet customer demand given how strong it is and given our expectation for the rest of the year. And then priority two, add to our solutions to sort of expand our offering.
spk02: Okay, great. That's very useful. Thank you.
spk03: Thanks, Alex.
spk00: Again, to ask a question, please press star 1 on your telephone keypad. To ask a question, simply press star 1 on your telephone keypad. Your next question comes from the line of Chris McGinnis from SIDOTE. Your line is now open.
spk07: Good morning. Thanks for taking my questions, and congrats on the quarter.
spk03: Thanks, Chris. Good morning.
spk07: I may have missed this, but was there any update on the automation side and just kind of what your process or thinking as we're on demand as they progress throughout the year for that product line? Thanks.
spk03: Bill, you want to take that?
spk06: The question was on automation, so I broke up a little bit on my line.
spk07: Yeah, just the expectations of how it progresses through the year.
spk06: Yeah, so no, we like what we're seeing on the automation side. The demand there is excellent. A lot of the conversations that we're having, especially with the high volume end users that we have, is centered on automation, right? How do they make their businesses more efficient? How do they reduce the number of folks at the end of the line to improve the health and safety of other employees that are in their facilities? So the demand there, I think, is really robust. And I think the feedback that we're getting on our product line is quite good as well. So we're very optimistic about automation and that being a real contributor to us, especially in the second half of the year when things open up a little bit more.
spk07: And just around North America, in the count of the confidence, are those the trials are ending, the periods, or the conversations that you're having are just improving as the economy opens up? And then, I guess, just what's the, you know, just the factor behind, you know, it's a few years behind where Europe is. You know, just the confidence that you're going to see that growth kind of come through to the North American market next year.
spk03: Yeah, sure. In terms of trial activity, it varies by account, size of account, nature of that account. So typically it could be anywhere from a month or two months to something that takes a few more months. And what I would say about our trial activity in North America and why I feel confident about sort of the rest of the year is it's really elevated across the board. So early stage trials are trials in some cases that closed, trials that are about to close. We continue to feel our successful percentage of closing is very high. And as these customers get onboarded, we deliver the equipment and they start ramping up. And sometimes it takes a few months for the ramp up in activity for these customers, you know, to have all their different warehouses and facilities as sort of paying customers. And that's what we're seeing. And we also monitor the demand on our equipment. And the demand on our equipment for the rest of the year is very robust. given this trial activity and the successful trials that we are closing. So we have quite a bit of data that is giving us that confidence, if you will, from the bottom-up standpoint, customer by customer, region by region in North America, and we feel good about that level of activity. We feel great about our sales organization. Now, top-down, when you're asking about sustainability and why do we think we're a few years behind Europe, honestly, When we have monitored the type of dialogue we've had with European customers around sustainability, I said four years ago, 10% of those new customers were saying sustainability was the key reason why they switched to RAMPAC. Today, it's about 30% or 40%. we are seeing similar pattern where the percentage today, it's still low in North America of people who are quoting sustainability as the main reason for talking to us. And we think that pattern will repeat itself as we expect more and more dialogue with customers around the sustainability topic. So it'll take some time. It may take, you know, the next whatever, 12 months to ramp up a lot more sustainability dialogue. But, you know, our team is engaged with our distributors, with our customers, with end users on all sorts of discussions around environmental impact, end-of-life recycling, sustainability. And that's why I feel the pattern we saw in Europe is going to repeat itself potentially here in the U.S.
spk07: Great. I really appreciate the commentary. Good luck in Q2.
spk03: Thanks very much. Appreciate it.
spk00: Again, if you wish to ask a question, please press star 1 on your telephone keypad. There are no further questions at this time. I would now like to hand it back over to Mr. Bilger for any closing remarks.
spk06: Great. Thank you. And thank you all for joining us today. We look forward to speaking with you again next quarter. Take care.
spk00: Ladies and gentlemen, this concludes today's conference call. Thank you so much for your participation in the Now Disconnect.
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