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spk00: Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience.
spk04: Good morning, ladies and gentlemen.
spk00: And welcome to Advanced Drainage Systems' fourth quarter fiscal 2021 results conference call. My name is Crystal, and I am your operator for today's call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the presentation over to your host for today's call, Mr. Mike Higgins, Vice President of Corporate Strategy and Investor Relations. Sir, you may begin.
spk02: Good morning, everyone. Thanks for joining us today. With me here, I have Scott Barber, our President and CEO, and Scott Cottrell, our CFO. I would like also to remind you that we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors. including those discussed in our press release and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. Lastly, the press release we issued this morning is posted on the investor relations section of our website. A copy of the release has also been included in an 8K submitted to the SEC. We will make a replay of this conference call available via webcast on the company website. I'll now turn the call over to Scott Barber. Thanks, Mike. Good morning, everyone. Thank you for joining us on today's call. We delivered another quarter of record financial performance in the fourth quarter of fiscal 2021. Sales grew 20% year-over-year, driven by 21% residential sales growth and 11% non-residential sales growth, as we continued to execute at both ADS and Infiltrator in a favorable demand environment. The residential market remained strong. Both ADS and Infiltrator residential market sales grew over 20% in the fourth quarter, driven by favorable dynamics in new home construction, repair and remodel, and on-site septic, accelerated by our material conversion strategies at both businesses. Residential market sales have increased to 39% of our domestic sales as compared to 23% prior to the infiltrator acquisition. The market indicators show that home builders continue to acquire land for future development and that there's an overall shortage in available homes. which drives the front end new community development sales at ADS. And the onsite septic system sales and infiltrator are driven during the home completion stage. In addition, the repair remodel business remains robust. ADS participates in the repair remodel segment of the residential market through retail, which is about 40% of the legacy business's residential sales. Infiltrators repair remodel business in the residential on-site septic market accounts for roughly one-third of their business. Growth in our non-residential in-market was broad-based throughout the United States. We continue to benefit from growth in horizontal construction, such as warehouses, distribution centers, data centers, as well as the developments that follow the residential build-out. About two-thirds of our domestic allied product sales are in the non-residential market, where sales increased 13%, further giving us confidence in the underlying market strength. Sales in the agriculture market increased 50% this quarter, driven by strong demand as the spring selling season got off to a good start. The agriculture economy remains favorable, and we continue to benefit from the programs we put in place around organizational changes, new product introductions, and improving execution. We experience strong demand in the Midwest region, particularly in Minnesota, Ohio, Iowa, and Michigan. Further, we are expanding our presence in key strategic areas like Missouri and parts of the Southeast to drive increased market share. International sales also increased 49%, primarily driven by sales growth in our Canadian business, which nearly doubled compared to last year. Canada is doing well across both the construction and agriculture end markets, with similar trends to the United States. Additionally, this quarter, we continue to leverage our pipe manufacturing facilities in Mexico to help service the strong demand we experienced in the United States. Finally, Infiltrator continues to exceed expectations with 23% sales growth in the fourth quarter against a very tough comparison to the prior year and broad-based growth across the Infiltrator product portfolio. This includes double-digit growth in tanks and wheat field products with strong growth in Florida, Tennessee, Alabama, and Indiana, among other states. This was led by our material conversion strategy of displacing concrete septic tanks with plastic tanks and the economic advantages of septic chambers in leach field systems. The infiltrator business is benefiting from strong distribution presence in the southeast and midwest, as well as rapidly growing micropolitan areas, which typically lack the sewer infrastructure needed to support rapid housing development. Moving to profitability, we achieved record fourth quarter adjusted EBITDA during the period. Adjusted EBITDA margin increased 190 basis points. The increase in profitability in both businesses was driven by leverage from the strong sales growth, favorable pricing, as well as contributions from our operational productivity initiatives, which helped to offset inflationary costs. I'm very proud of our employees and management team at both ADS and Infiltrator for bringing Fiscal 2021 to a close with strong financial performance this quarter. I would like to highlight our Fiscal 2021 financial performance compared to the 2018 investor day plan now that we have finished out the year. We communicated a three-year plan in November 2018, about a year after I got to ADS, and I'm very pleased to have exceeded the targets we laid out. The ADS legacy business grew sales at a 7.7% CAGR, driven by the sales programs we laid out in November 2018. We continue to execute our proven market share model, converting traditional materials to our plastic pipe products in the stormwater market to drive this outperformance. Our sales team is going after the significant growth opportunity for large-diameter HCP pipe, which has grown at a double-digit cager over the three-year period. We are focused on growth in key states, mainly Florida, Texas, and California, as well as additional priority states where we find attractive market opportunities. We continue to penetrate the allied product market through our existing portfolio, as well as through innovation and acquisitions. Allied product sales have also grown at a double-digit cager over the time period. Finally, our agriculture and Canada businesses performed above our expectations, both returning to strong growth. In the plan laid out in November 2018, we stated our intention to grow adjusted EBITDA margin to between 18% and 19%. The legacy ADS business finished fiscal 2021 with a margin of 24.3%, significantly outperforming our plan. That performance was driven by execution, top line growth, favorable material costs, fixed cost leverage, as well as improved efficiency in our supply chain, operations, and distribution. The improvement in profitability, as well as execution of our working capital initiatives, and the acquisition of Infiltrator drove the improvement in free cash flow conversion to 66% of adjusted EBITDA, significantly better than the 45% in fiscal 2018 and above our target of at least 50%. Our performance over the last three years, coupled with the acquisition of Infiltrator, changed the growth and financial profile of the company. The acquisition of Infiltrator was a great addition to our business. Through Infiltrator, we increased our exposure to the residential market, diversifying our in-market exposure, and gained a very high-quality management team, set of engineers, and operators who continue to execute the Infiltrator proven business model. We believe executing on the strategies and plans laid out in 2018 increases the value of our business, as evidenced by the significant increase in our stock price since issuing this plan in 2018. We will continue to focus on driving top-line growth, improving our profitability, and converting profitability to cash at a high rate, in turn creating additional value for our shareholders. We will continue to pursue these proven strategies and will issue our next three-year plan this fall at our next Investor Day. In summary, we did a great job executing this quarter and fiscal year and are pleased to continue our track record of generating above-market growth across our key end markets. In the past, we've shown our growth relative to the market. However, market statistics are a bit distorted right now due to the pandemic, making it more difficult to measure. That said, Regardless of how you measure the market growth or decline, we handily outperform the market, giving us confidence that our material conversion story is intact or even accelerating. Our success in growing above market is a function of our unique advantages. We continue to have success in gaining market and wallet share through our material conversion and water management strategies. We are more vectored to key states where construction activity remains high and are making focused bets in others where we see opportunities for growth. We are benefiting from broader market trends, including rapid growth in micropolitan areas and higher exposure to suburban development. And since the acquisition of Infiltrator, we are more exposed to the residential construction market, which now represents nearly 40% of sales. And within the non-residential market, we are also benefiting from our outsized exposure to horizontal construction, which was far more healthy than vertical construction this past year. In other words, we're an evolving and a stronger ADS today than any point in our history, and we look forward to the future. As we look to fiscal 2022, we will build on our strong market position, execution, and new levels of profitability. I want to thank our employees who were the bedrock of our success over this past year. We will stay focused on employee health and safety and on delivering the needs of our customers. We are well positioned to capitalize on market demand while continuing to generate above market growth through the execution of our material conversion and water management solution strategies. We remain focused as always on disciplined execution. With that, I'll turn it over to Scott Cottrell to further discuss the financial results. Thanks, Scott. On slide seven, we present our fourth quarter fiscal 2021 financial performance. I'll be brief on this slide as Scott covered a lot of the details already, but I do want to highlight a few key points. Our strong top-line revenue growth of 20% was driven by both volume and pricing, with strong growth across our ADS and infiltrator businesses, as well as in each of our segments, markets, and product applications. The demand environment for our products remain attractive, and we expect these dynamics to continue as we move forward into calendar 2021. The 31% growth in consolidated adjusted EBITDA was driven by strong top-line growth in addition to favorable pricing, operational efficiency initiatives, as well as our synergy programs. In addition, due to the strong results for fiscal 2021 and to reward the incredible service and dedication of our employees this past year, we decided to pay a one-time bonus to employees who are not part of our annual incentive compensation plans, resulting in approximately $4 million of additional compensation expense in the quarter. Our ability to deliver in the face of a uniquely challenging year and a strong demand environment would not have been possible without their hard work and dedication. Moving to slide eight, we present our full year results. Revenue this year increased 19% to $1,983,000,000, coming in above the high end of our guidance range. This was the result of strong demand we experienced this year, growing double digits in both the domestic and international businesses. Our adjusted EBITDA increased $205 million to $567 million, driven by strong volume growth in both pipe and allied products, favorable pricing and material costs, and operational efficiency initiatives that offset inflationary cost pressures. Infiltrator contributed an additional $88 million, driven by strong volume growth, favorable price-cost performance, as well as continued benefits from our synergy programs. We also had the benefit of owning Infiltrator for the full year as compared to eight months in fiscal 2020. Finally, our adjusted EBITDA margin increased 700 basis points to 28.6% of company record. Moving to slide nine, our year-to-date free cash flow increased $134 million to $373 million as compared to $239 million in the prior year. These impressive free cash flow results were driven by our strong sales growth and profitability, as well as execution on our working capital initiatives. Our working capital decreased to approximately 18% of sales, down from 21% of sales last year. Further, our trailing 12-month leverage ratio is now 1.1 times. We ended the quarter in a favorable, very favorable liquidity position with $195 million of cash and $339 million available under our revolving credit facility, bringing our total liquidity to $534 million. And finally, on slide 10, we have our fiscal 2022 guidance. Based on our performance to date, order activity, backlog, and current market trends, We currently expect net sales to be in the range of $2,220,000,000 to $2,300,000,000, representing growth of 12% to 16% over this past year. And adjusted EBITDA to be in the range of $635,000,000 to $665,000,000, representing growth of 12% to 17% over this past year. As we looked at fiscal 2022, we are confident in the demand environment across our end markets. In our largest domestic market, non-residential, forward-looking indicators are robust, and our backlog of open orders are at the highest levels in recent memory. Our residential end market growth is also expected to remain strong, particularly in those key southern crescent states we are focused on, including Florida and Texas. In addition, our agricultural market remains robust with strength in crop pricing, driving investments in land productivity through better field drainage. And finally, the international outlook is turning more favorable, driven by our business in Canada, which is our largest international market. Our Mexican business has stabilized, and we will continue to leverage our Mexican manufacturing assets to help service the strong demand coming from the U.S., Lastly, the exports business is expected to rebound as COVID-19 restrictions continue to ease. This strong demand outlook gives us confidence in our revenue guidance. We have also executed several price increases since our third quarter call across all of our end markets at both ADS and Infiltrator. To date, our pricing actions are flowing through, and we will continue to closely monitor the situation to ensure we stay ahead of inflationary cost pressures. On the cost side, we are seeing inflationary pressure in materials, labor, and transportation, as well as some issues with labor availability. Within transportation, the third-party market availability is tight, and there is inflationary cost pressure on diesel, wages, and common carrier rates. In this type of inflationary cost environment, we are also able to control our transportation costs better than most due to our large internal fleet. and we are working to leverage such to offset the rising costs we are seeing through payload efficiency, route planning, and other programs to more efficiently serve our customers. While we expect EBITDA margins to be flat to slightly up this year, it is important to highlight that we expect the most pressure on our price-cost spreads to occur during the first half of our fiscal year. Bottom line, we believe our long-term growth and margin expansion ability remains intact, despite the near-term inflationary cost environment we will be dealing with this year. Given our strong balance sheet and leveraged position, strategic capital deployment remains one of our top priorities. We will continue to execute a balanced and disciplined capital deployment strategy, focusing on organic investments as our highest return, lowest risk option. In fiscal 2022, we plan to spend between $130 and $150 million on capital expenditures to support growth, recycling, innovation, productivity, and safety initiatives at both ADS and Infiltrator, basically doubling our commitment to CapEx year over year. In addition to organic investments, we continue to actively explore M&A opportunities that are aligned with our strategic vision. we are extremely excited about the M&A opportunities we are pursuing and see this as a key component of our capital deployment strategy in both the near term and longer term. In addition to investing in the business, through deploying capital organically and through M&A, we today announced a 22% increase in our quarterly dividend as well as a $250 million increase in our share repurchase program. We previously had $42 million available under this program, and the increase announced today brings the total authorization to $292 million. With that, I'll open the call for questions. Operator, please open the line.
spk00: As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pounder hash key. We kindly request that you ask one question and only one related follow-up. If you would like to ask additional questions, please press star 1 to be reentered into the queue. Your first question comes from the line of Mike Holleran with R.W. Baird.
spk02: Hey, good morning, everyone. So let's start on the pricing, the inflation side. So, you know, at the end there, Scott, you mentioned inflation. A handful of price increases across all your product categories. How are you seeing that layer in as you look through the year? How should we think about price cost by quarter? Probably a little tougher in the front half of the fiscal year, a little more balanced, maybe even slightly positive in the back. And how are you cumulatively thinking about what price cost looks like for the year? Yeah, Michael Scott here. So you're thinking about the right way. So our revenue guidance range up 12% to 16%. Think about that as more pricing than volume is the way I would talk to that for the full year. The other part on the phasing, I think it's really important for folks to understand, based on kind of what we're seeing, you know, have seen over the last couple months and recently, we look at the first half as being kind of that more narrow price-cost spread environment. We'll stay in front of it on a dollar perspective, but as we talk margins, we see that as kind of the tightest period. And then when you get to the second half, then that obviously eases up and leads us to our guidance of flat to up 30 basis points from a margin perspective for the year. So the first half will be the tightest part for us of our fiscal year. And then the follow-up is, can you put that in the context of how you think about margins over time here? It certainly felt like from Scott's original remarks that this is the new baseline that you think you can expand margins off of over time. You know, just help understand the levers as we sit here, even if inflation or the cost of the inputs remains at an elevated level. Good morning, Mike. This is Scott Barber. And I think the way we are thinking and working this is the game has changed a bit on us. really high inflation environment. So it's now about getting pricing, getting productivity, but mainly pricing to offset that inflation. And it becomes a dollar game. Get enough dollars to offset that. We'll try to get some SG&A leverage. And that'll be the game and the dials that we work here until kind of a rapid rise of inflation levels out. or begins to go back the other way. And then over the long term, the programs we've been working on around productivity, capital investment, operating the businesses better are still intact, and they're still going on underneath all of this messiness of inflation. And then we'll begin to be on this margin expansion again once the environment, I would say, kind of returns to normal or we get all the right things in place. And you feel very confident about that. That's also driving a lot of the capital spending that we're doing. And we spend a lot of our time and energy making sure we've got the right resources to execute on that kind of expansion. Thanks, Scott. Thanks, Scott. Appreciate it. All right. Thank you.
spk00: Your next question comes from the line of Matthew Bouley with Barclays.
spk02: Morning. Congrats on the results. Thanks for taking the questions. I wanted to ask, actually, on that last point there, Scott, just the CapEx and the big uptick this year. You know, you guys have sort of daylighted the past couple quarters around, you know, potential growth investment to come, you know, and clearly coming to fruition here. Could you just outline a little more of the specifics around where you're investing? What of your product categories needs additional capacity? and just maybe any elaboration around the amount of capacity you're adding in dollar terms or however you want to frame that. Thank you. Hey, Matt. Scott Cottrell here. Yeah, I'd say when you look at the two businesses right now, break it down between ADS and Infiltrator. We've talked about Infiltrator kind of in that reinvestment cycle, if you will, that they go through every three to five years. I'll start with demand. The demand that we're seeing across both businesses is significant. So as you look through the acceleration in investments, It's to stay in front of that, right? It's not that we're out of capacity or that we can't handle the growth. It's to make sure we can handle it efficiently and serve our customers as best we can and get our inventory health where it needs to be. So a lot of what you see on the infiltrator side is to support growth. By and large, that's the bulk of what we're spending on that side. On the ADS side of the house, again, that's still a big piece. of the increase that we're seeing year-over-year is to support that demand that's coming our way. Now, we're doing it, but lead times are moving out on us, and we need to kind of continue to stay in front of it and better serve our customers. So it's capacity and to support that demand and that growth that's coming our way. But I'd say also on our side, and we've talked about it, we've got a lot of productivity initiatives that are in flight, right? Our Office of Excellence initiatives a lot of those are still early innings and we got to invest in tooling and molds and so forth to get that those assets where they need to be to be more efficient as we move product around the network or to start reducing the amount of moving around the network that our product does before it gets to the customer so you've got that and then automation we've talked about it but that downstream automation uh if you will is key within our businesses and again you know our network you have 48 plants in the u.s a lot of opportunity to get more efficient uh make it a safer place for our employees um so a lot of things that we're doing there and again we spent close to 80 million dollars this past year a big increase year of the year so we're getting in front of it and then the 150 is not insignificant but it is the best use and top priority of our capital deployment options and we know that uh so a big effort there and we're also investing in internal resources to make sure that we can deploy and accelerate that capex organically great now that that's really helpful color there um second one i wanted to ask on non-reds um because obviously for the past two quarters here I think your own non-res performance has been relatively decoupled from, I think, what a lot of us see as kind of the underlying non-res market. I'm curious what, if any, areas of your own business do you think there was some negative impact from the sluggish market over the past year? Because, you know, the question is going forward as we think about non-residential indicators inflecting positively, are there still areas of your own business that have yet to sort of rebound with the rest of the non-res market. Thank you. So this is Scott Barber, and I would answer that more geographically than product-wise, because we certainly had geographies. The Northeast and Northwest are good examples of that, that were not robust geographically. at all in the non-residential over the past 12 months. That said, they are rebounding pretty rapidly right now. So you're getting that pent-up demand impact from those regions, which are big regions for the ADS piece of the business. We might have had one allied product line that grew a little less than the others. because it was a little tougher for us to get in front of people in kind of a high-touch sales environment there. So we did see that in a couple of them. Now it's rebounded here as the pent-up demand in non-residential has popped, and we've been able to get out and see people and do that high-touch selling again. But we had some pockets. We definitely had some pockets, but not many. Not many. It was a pretty good year.
spk00: Your next question comes from the line of with Loop Capital Markets.
spk01: Thank you. Just to piggyback on the non-res question, just curious, just with respect to your observation that you've got record backlogs and, you know, seems like the backlogs have increased, you know, is the backlog something that you started to see really accelerate? in the fourth quarter or was it a function of it being hot and coming into COVID and then maybe you had a delay in servicing, you know, some projects or some regions and then, you know, we're just kind of seeing a catch up. So, you know, any color on the kind of how the backlog has been evolving would be helpful.
spk02: Scott Barber again. And our backlog did accelerate at both businesses over the past three months. both pretty robust. As Scott Cottrell said, our lead times have gone out a bit across our businesses because of that backlog increase, that rapid backlog increase. In certain regions, it's pent-up demand, a catch-up. I would put the Northeast and Northwest in that category. I think in other areas, like the Crescent, the Sunbelt, they kept going. You know, through the year, they're continuing to grow pretty rapidly and have contributed to that backlog increase. And I think it's all the same things you've been hearing. You know, people moving to the Sun Belt, people making the choices to live in, you know, different areas that are more favorable. We're seeing all those trends, and I think have been at the forefront of those. We're also seeing some catch-up in Texas, by the way, which has had a heck of a year. Hurricanes last fall, the winter apocalypse in February. It's raining like heck down there the last two days. Big COVID outbreak in Houston, which is a big market. So it's trying to bounce back pretty good also. And, you know, when a place like Texas gets going, it runs pretty hard. So all those factors are at play right now in kind of that acceleration of the backlog that you were hearing about and seeing in us.
spk01: Great, thanks for that. My final question is, I was hoping you could unpack some of the underlying assumptions behind your sales guidance a little bit more, or whether it's a little bit more granularity on price mix or expectations by segment and markets, and then also just around the seasonality. I think last year sales were a little bit closer to 50-50 front half versus back half. And I think historically you've had maybe about 55%, 57% of your sales in the front half of the year. So anything that we should be paying attention to as we model out the front half, back half.
spk02: Yeah, I think seasonality will be about where it's historically been. I wouldn't think about it any significantly different than that this year as you go into it. I think that might be getting too exact, if you will, if you go through it. I think on the revenue guidance, we're – we're not going to give it any more granularity than kind of where we're at. Obviously, we'll kind of, as we go through the year, kind of revise that as we see kind of where all the pricing ends up and everything else. But based on where we have line of sight today, this is kind of where we're at. In fact, you know, that 12% and 16% up on the top line, again, just think about it as more on that pricing side than on the volume side is kind of the best way to talk to it right now. Yeah, I think, Eric, if you think about the seasonality and that kind of shift this year, the factors that we don't think will take place, if you go back to Q3, remember lots of the country kind of restricted from COVID. As we got into our Q3, that opened up, right? And that kind of phenomenon probably isn't going to happen again. And then Q4 tends to be heavily reliant on weather, and it was pretty favorable this year. It was very favorable. Who knows what's going to happen next?
spk01: from a weather standpoint. Yep. No, it makes sense. Thanks for the help. Best of luck.
spk00: As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound or hash key. We kindly request that you ask one question and only one related follow-up. If you would like to ask additional questions, please press star 1 to be re-entered into the queue. Your next question comes from the line of Josh Puck-Skwinski from Morgan Stanley. Hey, good morning, guys.
spk02: Good morning. Just to dig in a little bit on price-cost here, or I guess kind of the commodity complex in general, are you guys seeing anything on the availability side that is giving you concern? I know that shortages are increasing. are kind of the center square in bingo these days. You know, residents get called out from time to time. Anything that you guys would flag there on that front? Yes and yes. We are, I think the best way to describe it, Josh, is, you know, in February and early March, you know, probably was our most impact. uh it gets better all the time and i would say we're down to managing very isolated but real you know resin problems uh on occasion uh it's very material and supplier specific right now versus pervasive in February and through March. But essentially, the winter apocalypse hit the Gulf. It took four to six weeks. By the time those plants started back up, the transportation got cleared, and then we were kind of then put us in the mode of managing spot stuff. And now as they try to catch up and restock their inventory and supply chains, you end up managing what would be spot shortages, not pervasive things where you can't run for three or four days. Now, through that, kind of running on my answer here, we pivoted to running more recycled in February and March. so that we could keep production going, not always exactly the mix of products we wanted, but we thought that was the right thing to do because we could go back and adjust our production schedules. And we're still doing some of that, but not near as much as we were in February. But I bring it up to highlight this really nice advantage we have. with this these recycling operations we have our visibility into that supply base of of bales and recycled material um and and it's both at ads and infiltrator that that this happens so a big work item for us to keep our eye on on that sucker got it and then just given that so much of the the top line It's sort of price-driven. Clearly, you guys have good pricing power. I understand a lot of it goes into offsetting that even on a dollar basis. But to the extent that a lot of what you just mentioned seem more supplier-related than necessarily just demand-related, presumably at some point in the not-too-distant future, we get a little bit of relief on the resin side. Do you think you hold that price? Do you think you'd give it back on a sort of a dollar-for-dollar basis? How does that evolve on the other side? I would imagine you guys are able to retain most of it outside of maybe some particularly acute situations. Yeah, we'll work to retain. We'll definitely work to retain and thread the needle. on continuing our market share gains and conversion from traditional materials to plastic materials at both Infiltrator and ADS. So we'll – that's how we'll do it. And we have a good history of doing it that way, and we'll continue to kind of work it along that strategy. Great. Thanks for the call. All right. Thank you.
spk00: At this time, I would like to turn the call back over to Chief Executive Officer Scott Barber for closing remarks.
spk02: All right. Thank you for your questions. We really appreciate them. And thank everyone for joining us today. We'll continue to focus on our health and safety of employees, as well as providing the essential stormwater management and onsite septic wastewater solutions to our customers. and the communities they serve. As we ramp up our fiscal 2022, we're focused on production to meet the strong demand across both the ABS and infiltrator businesses. We will continue executing our strategies in these fast-growing states throughout the southern crescent of the U.S., as well as mitigating inflationary pressure through favorable pricing and productivity initiatives. Thank you again to all our employees for their hard work And, again, thanks, everyone, for joining the call today. Operators, that concludes our call.
spk00: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
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