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spk05: Good morning, everyone, and welcome to the Staris PLC first quarter 2023 conference call. All participants will be in a listen-only mode. Should you need assistance, please see a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ms. Julie Winter, VP of Investor Relations. Ms. Winter, please go ahead.
spk00: Thank you, Jamie, and good morning, everyone. As usual, speaking on today's call will be Mike Tuchich, our Senior Vice President and CFO, and Dan Crestio, our President and CEO. I do have a few words of caution before we open for comments from management. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission, or rebroadcast of this call without the express written consent of Staris is strictly prohibited. As much as statements made during this review are or may be considered forward-looking statements, many important factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation those risk factors described in Staris' securities filing. The company does not undertake to update or revise any forward-looking statements As a result of new information or future events or developments, Staris' SEC filings are available through the company and on our website. In addition, on today's call, non-GAAP financial measures, including adjusted earnings per diluted share, adjusted operating income, constant currency organic revenue growth, and free cash flow will be used. Additional information regarding these measures, including definitions, is available in today's release including reconciliations between GAAP and non-GAAP financial measures. Non-GAAP financial measures are presented during this call with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision making. With those questions, I will hand the call over to Mike.
spk06: Thank you, Julie, and good morning, everyone. It is once again my pleasure to be with you this morning to review the highlights of our first quarter performance. For the quarter, constant currency organic revenue increased 6%. Growth was driven by organic volume as well as 240 basis points of price. The net impact of acquisitions and divestitures added approximately $151 million to revenue in the quarter, which is broken down by segment in the press release tables. As a reminder, the renal divestiture will trim revenue by approximately $45 million per quarter through December. During the quarter, we anniversary the acquisition of Cantel Medical. Integration continues to go very well. We achieved approximately $20 million of cost synergies in the first quarter and are on track to achieve a total of approximately $50 million in fiscal year 2023. As anticipated, gross margin for the quarter decreased 150 basis points compared with the prior year to 45.1%. as pricing and favorable impact from acquisitions and divestitures were offset by lower productivity and higher material and labor costs. Material labor costs continued to be a headwind and totaled about $30 million in the quarter. Despite the decline in gross margin, operating margin held flat at 22.9% of revenue, compared with the first quarter of last year, as we did a nice job of controlling SG&A expenses. The adjusted effective tax rate in the quarter was 21%. That income in the quarter increased to $191.1 million and earnings per diluted share were $1.90. At the end of the first quarter, cash totaled approximately $316.3 million. We continue to focus on debt repayment as evidenced by our leverage ratio now being just below 2.3 times. Our focus on debt reduction continues to provide us great flexibility to make investments in growth capital expenditures and the capacity to pursue potential opportunities to expand our businesses. Capital expenditures totaled $115.9 million, while depreciation and amortization totaled $138.9 million in the quarter. Our first quarter spend on capital expenditures was higher than anticipated, primarily driven by the timing of investments within our AST segment. We still expect our full-year capital expenditures to be approximately $330 million. Free cash flow for the first quarter was $117.1 million, as we benefited from increased net income, including a reduction in costs associated with the Cantell Medical Acquisition, somewhat offset by higher capital expenditure spending. And finally, Last week, we announced our 17th annual dividend increase, which raised our dividend by 4 cents to 47 cents per quarter. With that, I'll turn the call over to Dan for his remarks.
spk07: Thanks, Mike, and good morning, everyone. Thank you for taking the time to join us to hear more about our first quarter performance and our outlook for the rest of the year. As you heard from Mike, we had a solid start to our new fiscal year and continue to experience strong demand for our products and services. I will review the highlights of the quarter and then shift my commentary to our revised outlook. Healthcare constant currency organic revenue grew 4% in the quarter. Strong capital equipment and service growth was offset by an organic decline in consumables, which is largely attributable to the timing of orders against very strong comparisons in the prior year. Hospital capital spending remains very robust, as evidenced by our healthcare backlog which totaled over $500 million at the end of the quarter, and our orders for the quarter were 40% large project related. AST grew constant currency organic revenue 10% in the first quarter, as we continued to benefit from underlying demand from our core customers. Growth was somewhat limited by the timing of large capital shipments from our Mevex business unit, which can often be lumpy. Life Sciences also delivered 10% constant currency organic revenue growth in the quarter with strong capital equipment shipments and solid mid-single digit growth in our consumables business. Our dental segment grew low single digits constant currency year over year for the quarter as revenue was limited by supply chain challenges. Turning to our revised outlook, from a macro perspective, we have several things impacting our business. As you have heard from many of our peers, currency has moved significantly, and the forward rates continue to indicate headwinds for Steris in both revenue and profit for the remainder of the fiscal year. In addition, the supply chain environment has been limiting our ability to ship capital equipment. We believe approximately $35 million in capital equipment shipments were delayed in the first quarter. While procedure volumes continue to recover, particularly in the US, we are not seeing recovery as quickly as anticipated. The key variable for that recovery appears to be staffing availability at hospitals, which seems to be limiting their ability to catch up with the pent-up demand for procedures. Reflecting these challenges, we are adjusting our revenue outlook for the year. As reported, revenue is now expected to grow 9% and constant currency organic revenue is anticipated to be 10%. As you recall, we grew 13% last year, so double-digit constant currency organic growth on top of that is a significant goal, but one we believe is achievable due to the momentum in our business and strong capital equipment backlog. While we are not overly optimistic on supply chain improvements, we do see pockets of improvement there. The real key for us will be relief on parts, in particular electronic components. In many cases, components are needed to convert our significant work in progress inventory to finished goods so that they can be shipped to customers. As a result of anticipated easing in supply chain constraints, we expect revenue growth rates to increase at a faster pace in the second half of the year as compared to the first half. Factoring in these elements, our current expectations for earnings are $8.40 to $8.60 for the full fiscal year, a 15-cent decline from the prior outlook, with most of that decline due to foreign currency fluctuations. For the year, currency is now expected to reduce as-reported revenue by $100 million and adjusted EPS by approximately 10 cents. The primary drivers of this are the weak Euro and British Pound. Overall, our business continues to perform very well in this environment. The challenging environment we're in is no different for other companies. Foreign currency fluctuations are limiting both top and bottom line, supply chain disruptions are slowing our ability to ship capital equipment, and higher interest rates may negatively impact interest expense. Despite these macro challenges, Fiscal year 2023 is still expected to be another record year for Steris. Our teams and portfolios continue to come together to better meet the needs of our customers, and the breadth of our offering allowing us to take advantage of several significant trends in the industry by leveraging our relationships to cross-sell within business segments and deliver value to our customer. Thank you. That concludes our prepared remarks. I will hand the call over to Julie to start the Q&A.
spk00: Thanks, Mike and Dan, for your comments. Jamie, if you'll give the instructions, we can get started on Q&A.
spk05: Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then 1 using a touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and 2. Again, that is star and then 1 to ask a question. Our first question today comes from Mike Masson from Needham. Please go ahead with your question.
spk01: Hi, guys. This is Joseph Vaughn from Mike. I guess just first question around guidance. So you guys grew 6.3% in the quarter, looking at 10%. Can you maybe give some detail on, you know, what segments will be driving the acceleration there in the next few quarters? And, you know, if you can, maybe some of the pacing of that?
spk06: Yeah, obviously, you know, what hurt us this quarter is capital shipments due to supply chain constraints. Obviously, as you heard Dan talk about, you know, we do believe there are some pockets of strength that are out there. So we believe that capital shipments should continue to get released. Lower surgical volumes, we continue to believe we're about 95% of procedure volume free COVID. So those should continue to get better. And then, you know, the big headwind for us outside of just as reported revenue is FX, which is hurting both top and bottom line for us. As far as the year standpoint, you know, in May we talked about an EPS split of 45% first half, 55% second half. We believe we are still on track for that. And as you heard Dan talk about, revenue will grow and increase significantly. sequentially going forward with more of that growth happening in the back half of the year.
spk01: Okay, great. And then maybe just moving on to the backlogs, I guess two things to start out. Are you seeing any order cancellations or, you know, any risk that customers are turning to other competitors to meet the demand? I understand they may also be dealing with the exact same issues as you, but I guess maybe the second part on that, is there any risk that there's any artificial demand built into these backlogs, let's say from customers double ordering and then canceling the order that's not fulfilled or going with the company that can fulfill the order first?
spk07: Yeah, Joseph, we don't see any... pattern at all in terms of order cancellation. And we continue to see new orders come in at a significantly strong rate. You know, a lot of these are projects that take longer term, and we've been able to prioritize those projects as they're ready to come online to make sure we can deliver for our customers. And then we're managing through the backlog, you know, as oftentimes customers' projects slip and others tend to get pulled forward. So we're managing our production to meet the demand of the customer and shift product where it needs to go when the customer needs it. It's just challenging right now because it's a bit hand-to-mouth at times with some of the electrical components. But no order cancellations have we seen at this point.
spk00: Don't forget we have Cantal in our backlog now. We didn't have Cantal in the backlog last year. That definitely is an uptick of about $60 million in the backlog number.
spk01: Okay, great. That's really helpful. And then, if I can, just a really quick one. I think you guys called out $30 million of increased costs from inflation. Is the $70 million for the year you guys cited on the last call still accurate?
spk06: Yes, we believe $70 for the year. So, if you remember last year, we were not impacted. We were impacted more heavily in the second half of the year than the first half of the year. So, The $30 million is the incremental piece. So $45 million last year of headwinds and $70 million this year is what we still believe.
spk01: Okay. Thank you guys so much.
spk06: Yep.
spk05: Our next question comes from Chris Cooley from Stevens. Please go ahead with your question.
spk02: Hey, good morning, everyone, and thanks for taking our question here this morning. I just wanted to start, if we could, on the backlog in your commentary around the supply chain issues. Could you help us think a little bit about how that backlog, both on the healthcare side but also on the life sciences front, pulls forward versus historical periods? I think you mentioned 40% was project-related in the current quarter in terms of the new order flow. trying to think about aging of that backlog a little bit here with these kind of supply chain disruptions that you just cited you don't expect to get better necessarily in the short run. If you could just provide some color around that, that'd be appreciated, and I've got a follow-up.
spk06: Yeah, Chris, this is Mike. In regards to backlog, as we've talked about for some time, we are getting nice order growth, but at the same point in time, our delays have probably more than doubled in what we typically would see for, especially around healthcare. And I'm talking more about the replacement cycles, not the project cycles. So typically we would have told you that we get an order in from a replacement standpoint, that order would be most likely filled within 90 to 120 days. So most likely in the quarter. That is probably doubled at this point in time. So that gives you some type of indication as to the lead times that we're expecting and we're talking to and telling our customers as we're taking the orders. I don't know, Dan, if you want to add to that.
spk07: Yeah, I would just add two things. Chris, one, we are able to build. We are building product every day. We are not losing manufacturing slots. We have a lot of WIP right now, though, of machines that are 99.7% complete that are awaiting the golden screw, if you will, to finish it off in terms of some electrical components. So as we get those components coming in, we'll be able to flush through a lot of backlog in a reasonable amount of time. It's just the timing of those components is still TBD in terms of how it lays out over the next couple quarters. But generally speaking, we're in a good position in terms of manufacturing.
spk02: I appreciate the color on that. And then if I could, just for my follow-up, can we maybe shift gears to – the AST franchise, and you cited a little bit higher than anticipated CapEx there in the quarter. Corporately, I'm just curious if you could give us some color there about the continued build-out of the company's capabilities, both domestically and abroad, in terms of X-ray, and when we could start to see some of that come online commercially, and if, in fact, as that does come online, how that may or may not affect the operating margin profile of the business. Thank you.
spk07: Sure, Chris. We had our first x-ray come online approximately a year ago in Venlo, Netherlands, and very successfully from an engineering perspective and very well received from a customer perspective, the facility is operating in significant positive margins within the first year of operation, which is not necessarily the norm, so doing quite well. The next... operation to come online, at least domestically, here will be in Libertyville, Chicago suburbs. And that's likely to be Q4 timeframe for us. So no material impact on the current fiscal year. And then we have other builds going on the west coast and east coast that will follow after the Libertyville operation comes online. And we have done significant expansions over the last 10 years or so. And the business has gotten large enough at this point that we really don't see any material dilution when we bring a plant online, whereas when the business was $200 million, that was not necessarily the story, but at $850 million, $900 million, we don't see that dilutive effect on EBIT when we bring up a new plant. And also keep in mind, a lot of these expansions are on existing infrastructure, so we already have a plant. and we're just adding additional warehouse and additional x-ray capabilities or EVM capabilities to the existing plants. So they tend not to have the same drain on cost perspective.
spk06: But the goal this year, as has been the past couple years, about $100 million in total expansion capex for AST.
spk04: Appreciate that, Collar. Thank you.
spk05: Our next question comes from Matthew Mishan from KeyBank. Please go ahead with your question.
spk03: Hey, good morning and thanks for taking the questions. Just first on the change in organic growth from 11 to 10, I couldn't really tell, was that due simply to a slower than expected recovery in procedural volumes or was it also due to some expected push out of the backlog of healthcare capital equipment into the next fiscal year?
spk06: Matt, it's a little bit of both. We haven't broken out exactly, but it is definitely, both of those are impacting us on an organic standpoint.
spk03: And you guys had an organic growth decline in consumables in the first quarter. You know, was that expected or was that like a change you saw like in June around procedures? And what do you think changed versus your expectations? So you guided sort of mid to late May, so you had a pretty good view of what the procedural environment was like midway through the quarter.
spk07: Yeah, Matt, this is Dan. Procedures here in the U.S. were slightly below where they were in the first quarter of last year, according to all of our data that we have at Staris, but slightly. So I don't think that had a material effect on the consumable consumption or shipments. The issue is really we had a pretty strong quarter last year, I think, as there was some restocking going on in hospitals and some distributors. So I think it was just a matter of tough comps and timing, and I'm confident that will flush out in Q2. Okay.
spk03: And then just lastly on AST and sort of the change in organic growth from the last several quarters, so double-digit growth is still positive. Can you go back and explain what you were describing around the timing of some shipments and growth being limited by that, what that actually is, and do you expect that to be on your normal trajectory, your previous trajectory as you get through the next couple of quarters?
spk07: Yeah, so that related to some capital equipment shipments from our MEVX business unit, and those are typically e-beam accelerators and conveyance equipment control systems. And the issue is we don't recognize revenue until those things get fully installed and get through an FAT process, and then we recognize revenue. So the extent that we have some delays either on our end from a delivery perspective or more often it's the case it's the customer's is delayed on whatever construction or infrastructure they have to have in place for us to finish the project. So as a result, you know, a system can be a few million dollars or more even, five million, six million potentially. And if that slips from a recognition perspective from one quarter to the next, it's pretty material in terms of impacting growth rate, you know. So normally we had planned to ship close to nine or so million, and we shipped considerably less than that. I think had we moved the equipment the way we had originally planned, our organic growth rate, constant currency organic growth rate for AST would have been the mid-teens, comfortably where it's been in the past. But the equipment business is a little lumpy right now. And as you know, building anything, whether it's our customers or us, construction, things are not necessarily tied to a definitive schedule these days.
spk03: And just a quick follow-up to this. How much is CapEx, how much is capital equipment as a part of the AST business in a typical year?
spk07: It's small, about $30-ish million fall park out of the $8-something.
spk03: All right. Thank you.
spk05: Yep.
spk03: Thank you. Yep.
spk05: Our next question comes from Michael Pollard from Wolf Research. Please go ahead with your question.
spk08: Hey, good morning. Thank you for taking the questions. A follow-up on the adjustment to the organic growth outlook. I'm just curious why a point was the right number. Why not two? Why not three? Why not maintain the prior one? You know, like, philosophically, how you got there? How you feel about the adjustment? Is there risk? You know, where are the risks from here? Or do you feel like you have a very... proper set of inputs now. Any color on that helpful? Thank you.
spk07: Yeah, Mike, we talked a lot about it internally. And if not for the fact that we're sitting on this enormous backlog number, you know, it comes down to what's our confidence and our ability to execute and ship based on materials. And I think that, you know, things have changed pretty significantly even in the last few weeks around our line of sight of when we'll start getting consistent component deliveries that we need to finish out this equipment. You know, we have a little more confidence now that we'll be able to flush a lot of this out in the back half of the year. And we're already well prepared to do that. So that's what gave us the confidence to stay at 10%, you know. And then I do believe that despite where procedure rates are now, I don't see us getting back to pre-COVID levels during our fiscal year. But we do anticipate them to tick up a bit, barring there's no unforeseen new variant that shuts down hospitals again or something like that.
spk08: On the backlog, my perception has been generally, you know, the mix of that, of healthcare equipment revenue ex-cantel is 50-50 kind of OR, SPD, ballpark. As you look at what's sitting in the backlog that needs to be finished and shipped, does it skew SPD or OR, or is it fairly balanced?
spk07: It's typically heavier on the SPD side because we tend to do more quicker turn business on the OR side. We have a lot of backlog in sterilizers and washers right now. It can't tell us all SPD. Yeah, it can't tell us well.
spk06: That $60 million that we're talking about is 100% SPD, basically.
spk08: Yep. Okay. That's what I suspected. I appreciate that. Um, on pricing, I believe the prior, uh, guidance for the full fiscal year included 200 bips year on year. Uh, Mike, I think he called out 240 basis points in the quarter. So just, you know, any, anything to call out in the quarter, why it was higher than the guide or has the expectation for pricing in the, in the guidance changed.
spk06: No, I would say that our pricing, 200 basis points of pricing for the year is still within our guidance. Every quarter could be a little bit different as typical, depending on the mix of the products and stuff like that. But the nice thing that we're getting, we actually are getting price across all of our segments for the first time in a long time. And obviously, as you guys know, we typically get less than 100 basis points of price. So we've done a nice job of increasing price. the pricing power that we have to offset, as everybody knows, the higher labor and material costs. And even then, we're not even offsetting it one for one yet.
spk08: Megan, do one last one on just how you're thinking about capital deployment. The balance sheet flexibility is starting to ramp back up. Historically, you've liked to do deals. I'm curious, kind of, is that – taking up a lot of time right now, or is M&A pipeline kind of relatively low activity?
spk07: No, we continue to look at and do even some small sort of bolt-on acquisitions, and we'll continue to do that over the next year or so. In terms of anything significant in size, right now we've got Plenty of work finishing the integration to Cantel and also working through getting products delivered to our customers. So even though we have the financial firepower to do that, we want to get the business running like it should be and continue to do so so that we can do potential other business development in the future. But for right now, we'll probably take a couple quarters off.
spk04: Thanks for the questions.
spk05: Our next question comes from Jason Bednar from Piper Sandler. Please go ahead with your question.
spk08: Hey, good morning. Thanks for taking the questions here. I wanted to go back to the procedure volume softness that you referenced. You know, Steris clearly isn't alone as a staffing issue. He's been hitting a lot of players here in MedTech. But I guess I wanted to take your temperature and your visibility regarding how much of this truly is staffing, which, you know, may recover more slowly versus, you know, something that might be a bit more transient, like higher than normal COVID infection rates that might be leading to things like procedure cancellations and possibly perpetuating the staffing challenges. So are there any maybe regional variances, too, that stood out, you know, just as these, you know, procedure volumes were coming in softer than you expected?
spk07: Yeah, look, it's complicated is what I would say. And And yes, there are unexplainable regional variances, too. We saw a significant more of a decline in the southeast than we did in the Midwest or northeast or west coast. So, yeah, I can't explain it, to be honest with you, in particular that. What I would say is the single biggest issue is staffing. And your question, did COVID uptick in June impact that in terms of cancellations or staff shortages? Probably. That probably explains that. a little bit of a percent or so decline versus what we saw in Q1 last year, but I'm guessing at this point. I truly believe it's staffing. Every single hospital CEO that we speak to, their single biggest challenge right now is staffing, and not just nursing. It's in general facilities staffing. It's in janitorial. It's in food service. There's a reason why you're looking at inpatient rates dropping significantly and outpatient rates going up significantly because the hospitals just don't have the staff to care for people that are inpatient.
spk08: Okay. Yep. Very, very clear. That's helpful. Uh, thanks. And then, um, on dental, uh, based on reports from others out there in your comments today, it sounds like challenges are just really just continuing across the dental market. But love to get your updated view on how you see your dental business doing as you get it back on track. How much can you do to help Steris maybe buck the trend of the broader market? And then is the sequential improvement operating margin for that segment that we saw here today or yesterday, is that sustainable in any timeline you're willing to put on when that segment gets to kind of the above corporate average target that you've laid out in the past?
spk07: Yeah, what I would say is, you know, dental, if not for the supply chain issues we had this quarter, would have had a really nice quarter in terms of growth. So if we didn't lose that business, that'll just flow through in the, you know, coming quarters in terms of demand. And so I think that'll sort itself out. In terms of the overall financial performance on the bottom line, you know, that is a process of continuous improvement, and it's something that we are going to work on every day, every month, every quarter, every year, but there's no magic wand to do this correctly. We'll continue to do what we need to do to strip out waste and cost, obviously look at price where it makes sense, and continue to innovate with new products so that we can bring high value to our customers.
spk08: Mike, just one more if I could, a bit of a housekeeping item. Sorry if I missed this, but can you help with the currency rates for the Euro pound and Canadian dollar that you're using in forecasting out the update 100 million in FX headwinds for this fiscal year? Thank you.
spk06: Yes, certainly. So we use the forward rates and we use them as of the end of June. The Euro is at $1.060. The pound is at 1.222. Those are both significantly lower than what we planned originally.
spk08: Yep, understood. Thank you.
spk06: Yep, you're welcome.
spk05: Once again, if you would like to ask a question, please press star and 1. Our next question comes from Dave Tricalli from JMP Securities. Please go ahead with your question.
spk09: Great, thanks. Maybe just a quick follow-up. So if we're looking at your performance in health care, and then your guidance, I think it was 4% this quarter. I mean, can you help us understand how you're able to grow, I guess, a lot faster if we're looking at flat-to-down procedures and maybe some improvement but not totally back to where we were pre-COVID? Is a mid-single-digit range, can you deliver that for the largest business for you?
spk07: Yeah, what I would say is, you know, over the last year or so, we've done a nice job of taking share in our, you know, recurring revenue businesses, our services business, our chemistries business, and GINCIs. And we expect that to continue and help offset some of the natural appreciation that we would have hoped to have seen in procedure rates. Now, the reason, though, that takes us from mid-single digits or mid-to-high single digits into, you know, much higher than that is the capital backlog we're sitting on right now. And we continue to bring in backlog and grow or maintain that backlog based on our order rates. So that's the reason why we think we can get a much higher growth rate on top out of health care is flushing through the backlog that we have at hand.
spk09: Got it. And maybe just a quick follow-up on AST. Obviously, it's delivered for you or you guys have executed well in terms of the growth profile. You know, how do you think of that looking out, you know, maybe even versus your 10% for the company? I mean, is that a mid-teens grower on a consistent basis looking forward?
spk07: Yeah, it's double digits, but it's not mid-teens. I think that, you know, I mean, it's done incredibly well over the last couple years in terms of mid-teen looking growth rates. But having been in that business for 25 years, that has not been the norm. for the life of the business. So I would expect it to normalize back towards double digits or slightly below at some point in the future. I think for the short term, we're going to maintain above double-digit growth.
spk04: Thank you.
spk05: And our next question is a follow-up from Chris Cooley from Stevens. Please go ahead with your follow-up.
spk02: Hey, thanks. Good afternoon. I appreciate you taking the follow-up question. I guess I'll get more than two in, like everybody else. The quick question on cash flow, you guys maintain cash flow guidance for the full year, but it sounds like there's obviously upward pressure on both net interest expense, probably a little bit higher working capital need. I just want to make sure I fully understand the puts and takes that you expect to see throughout the remainder of the year. It gives you confidence in your ability to hit that cash flow target that you previously established. Thanks so much.
spk06: Yeah, Chris, two things there. Our collections efforts have been strong, which is helping improve working capital. And then, as we've talked about for the last 25 minutes, the backlog. When we shift that backlog, we should get – improvement in inventory, which means it flows through to the receivable side. That's where we believe we have the ability to maintain our free cash flow projection at $675 million. Thanks.
spk04: Ladies and gentlemen, at this point, I'm showing no additional questions.
spk05: I'd like to turn the floor back over for any closing remarks.
spk00: Great. Thanks, Jamie, and thanks, everybody, for taking the time to join us this morning.
spk05: Ladies and gentlemen, that does conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.
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