Worthington Industries, Inc.

Q3 2023 Earnings Conference Call


spk_0: good afternoon and welcome to the worthington industries third quarter fiscal twenty twenty three earnings conference call all participants will be able to listen only until the question and answer session on the call this conference is being recorded at the request of the worthington industries if anyone objects you may disconnect at this time i know like to introduce markets roadie treasure and investor relations officer please go ahead
spk_1: beg you order the morning and welcome to worthington industries third quarter of fiscal twenty twenty three earnings call on or call today we have any rose where the kids president and chief executive officer and joe heck where the kids chief financial officer in addition we also had to atoms will become the cfl steel pressing business at we complete the plant business separation before you started it like remind everyone that certain statements made today are forward looking within the meaning of the nineteen ninety five private securities litigation reform act the statements are subject to risk and uncertainty is it could cause actual results to differ from those suggested we issued earnings release yesterday after the market close peter for to for more details on those factors a couples actual results to differ materially they've cause being recorded and a replay of made available later on our worthington industries dot com website this point i will turn the call over to joe for a discussion of the financial results
spk_2: like can marcus good morning everyone
spk_1: i've already started results and provide some additional color on the building products consumer products expendable energy solutions businesses and then him adams will go through steal results damage many of you know is currently the vice president strategy and corporate development for are still business and will be the chief financial officer for the steel company on the complete the plan separation of our business and cute three reported earnings of ninety four cents a share versus a dollar a letter in the prior quarter there were a few unique items impacting that quarterly results in putting the follow bean incurred pretax expensive six million dollars for ten cents per share related to the plant separation of are still processing business into the new of the company which we expect a complete by early known or two thousand and twenty four the us incurred modest restructuring and other non recurring gains and losses which have set during the quarter this compares to restructuring and permit charges of two cents per share in the prior year excluding these items regenerated earnings of a dollar for per share in the correct or compared to one dollar and thirteen cents per share in the prior year
spk_3: in addition
spk_1: three we're inventory holding aloft is estimated to be twenty seven million dollars for forty one cents per share compared him it's worth recording losses of twenty five million or thirty seven cents per share and que three two thousand twenty two consolidated net sales and a quarter of one point one billion decreased twenty percent from the prior year to the lower average selling prices and still practicing as still prices fell significantly compared to the prior year gross profit for the quarter increase likely to one hundred and forty four million dollars and are gross margin increase to thirteen percent from ten percent in two three at last year primarily due to improve spread the still practicing combined with a favorable mix and during products or just a and que three was ninety nine million dollars down from one hundred and twelve million and que three of last year are trailing twelve month just that he is now four hundred and forty three million dollars with respect to cash flows and our balance sheet casual from operations was one hundred eighty two million dollars and were and free cash flow was one hundred and fifty nine nine and the first three quarters of fiscal two thousand and twenty three it generated three hundred and twenty seven million dollars and free cash flows during the quarter we invested twenty three million on capital projects paid fifteen million and dividends and received sixty million dollars and dividends for unconsolidated jv as in the prior to quarters the dividends we received from unconsolidated jamie's exceeded the equity earnings as they're working capital levels of normalized allowing them to pay out earnings that we're not distributed in the prior fiscal year his career to date we have received dividends from unconsolidated jeebies tolling one hundred and ninety million dollars or balance sheet and the quality position on the death a quarter and of six hundred and ninety three million dollars decreased by five million dollars when sure that interest expense of six million dollars was down two million dollars a year by year i rarely due to higher interest income earned on our cash balances and to a lesser extent below
spk_4: our efforts votes
spk_1: the continued operate with low lepers levels and our net debt to trailing even to leverage ratio is under one talks the believe we very well positioned for the teacher with liquidity and then cute three with two hundred and sixty seven million dollars in cash and six hundred and seventy five million dollars and availability hundred revolving credit facilities nearly all of that cash is currently held in overnight aaa rated government money market funds yesterday the board declared a dividend of thirty one cents per share for the quarter stable in june of two thousand and twenty three
spk_5: not spend a few minutes on each of the business
spk_1: and consumer products net sales and que three were one hundred and sixty three million up slightly from one hundred sixty two million a year ago the increase was driven by higher average selling prices which are partially offset by lower volumes just leave it for the consumer business was eighteen million dollars and he did margin was eleven percent compared to twenty seven million and sixteen and a half percent last year prior quarter created a very tough cop as price increases were implemented at the beginning of the quarter last year and resulted in record a bit read the current quarter with negatively impacted by higher input costs and other inflationary cost pressures we mentioned on our cue to earnings call the d stocking at our customers was largely been completed we saw strong sequential body growth of sixteen percent and even growth of four million dollars to potentially and consumer a team continues to do an excellent job serving our customers and delivering value added products on investing in innovation and new product development we're optimistic getting in the queue for which is usually a seasonally strong period for the consumer business noting products generated net sales at one hundred and fifty two million dollars and que three up fourteen percent from one hundred thirty three million in the prior quarter increase was driven by a capable product next and higher average selling prices which were partially offset by lower volumes that products generated adjusted a bit of fifty one million dollars in the order and he that margin was thirty three point nine percent compared to fifty million and thirty seven point three percent in two three of last year increase in eve it was primarily driven by improvements in are wholly owned businesses which the operating income increased by three million dollars or twenty nine percent year over year it it a little product mix and higher average selling prices increase was partially offset by slightly lower equity earnings contributions from a building products davies which combine contributed thirty eight million and que three or two million less than the prior year but party trick and way it continue to pick one very well that eric staal results and and markets said have been impacted by interest rates and economic uncertainty as with the consumer business and key to we mention that many of our customers and during products were stocking that we expected this trend to gradually improve we have started see this improvement and many of our product lines biomes increased by percent sequentially from two to a change and building products continue to do a good job executing am focusing on sustainable long term growth we believe that we will see a return to more seasonally normal volume levels in the coming quarters the tenable energy solutions that sales and que three of thirty two million were up slightly compared to thirty one million in the prior year given by higher average selling prices the business reporter that and adjusted a bit lost of the million dollars in the current were compared to a lot of three million dollars in the prayer for yeah pretty environment in europe continues to be challenging but our team is doing an excellent job leveraging the investments that we have made in capabilities and him facilities positioning that business very well as hydrogen and alternative fuel solutions are increasingly it up
spk_6: this point i will turn over to tim
spk_1: thanks joe in still processing that sealed of seven hundred and fifty seven million were down twenty eight percent from one point one billion in two three of last year primarily due to lower average selling prices in into three last year the market price for hot rolled steel averaged one thousand four hundred dollars per tonne wiling to three of this year the market price was just over seven hundred dollars proton resulting in a thirty percent decrease in her average selling price
spk_7: total township were down eight percent driven by seventeen and decrease in total volume due in part to the divestiture of our w p joint venture facility in jackson michigan excluding the impact of divestitures direct sale towns were up two percent while told times chip shipped were down nine percent direct field times made up fifty six percent of the mix in the current quarter compared to fifty one percent in two three of twenty twenty two from a demand perspective was see modest increases in automotive production but we experience some
spk_1: soft and construction which has been impacted by rising interest rates in the related slowdown in both residential and non residential construction into trees still processing reported adjusted ie bit of eight million which was up slightly from seven million in the prior year quarter also into three we had estimated inventory holding lots of twenty seven mil
spk_7: and or forty one cents per share compared to losses of twenty five million or thirty seven cents per share last year since deal prices bottomed in late calendar twenty twenty two they've increased by over five hundred and fifty dollars per time and as a result we anticipate we will swing to inventory holding gains in queue for they could more than offset losses of twenty seven million that we estimated for the current quarter are still team continues to do an excellent job and a fluid pricing and demand environment and as the world increasingly embraces ease and electrification or recent acquisitions position as well the game share in the rapidly growing market for like waiting and electrical steel emanations at this boy point i will turn it over the anti
spk_8: thank you damn good morning everyone
spk_1: or physical third quarter results were solid despite significant inventory holding losses from falling steel prices late twenty twenty two this trend has sense reversed itself was still prices rising swiftly by five hundred and fifty dollars per tonne during the crash course as expected the bottoming of skill prices along with depleted inventories that many of our customers lead to steady demand across our and markets while we cannot control the volatility of still prices are purchasing and price risk management teams do a great job minimizing exposure these fluctuations for both worthington and our customers
spk_5: we ran a balance book a business and hedge or purchases and our customers purchases were prudent
spk_7: we see this as a key competitive advantage of our business that helps minimize risks and benefits both our customers and our shareholders
spk_9: although many of our and markets have yet to experience material changes as a result of the federal reserve's continued rate hikes the impact on banks and finance companies is beginning to rear it's ugly head hopefully the impact on the overall economy will be muted
spk_1: higher rates are a potential headwind for commercial construction projects and auto financing but the one point three trillion of approved government investment spending from the inflation reduction act the chips and science act and the infrastructure investment in jobs act will certainly stimulate demand and likely benefit many of
spk_9: our businesses down the road
spk_1: a big thank you to our employees who continue to make it happen for our customers despite the continued volatility in supply chains commodity prices and more recently financial markets after to he or she awards and the best places to work in ip award last quarter worthington receive two more outstanding awards during this quarter we were named a john deere partner level supplier for the eleventh year in a row and temple steel was named the supplier award two thousand and twenty two by molly a leading man
spk_9: new thatcher of electric motors for he these
spk_7: our employees earn this recognition with their commitment and dedication to our customers suppliers and other stakeholders every day thank you and congratulations
spk_1: or worthington twenty twenty four plants separate into two distinct financially strong growth companies is progressing well once complete will have a market leading company with premier brands in fast growing attractive and markets and consumer products building products and sustainable energy poised to capitalize on t trends in sustainability each technology construction and outdoor living with higher margins and lower acid intensity this business should benefit from premium sector multiples
spk_9: worthington steal is and will continue to be a best in class value added steel processor with a unique capabilities that an excellent growth opportunities and automotive late waiting and electrical steel limitations
spk_7: position to take advantage of expanding opportunities in electrification sustainability and infrastructure spending
spk_8: in anticipation of the plan separation we have been strengthening our balance sheet by building cash so that both companies are positioned to have modest leverage and ample liquidity to drive their strategies
spk_7: once the separation is complete we are like to likely to continue with our historical balance capital allocation strategy both businesses will be run with our philosophy and go to rule principles and utilize the worthington business system for transformation innovation and acquisitions to drive growth and shareholder value
spk_1: we just finished our annual strategic presentations to the board of directors and i can say with confidence that the businesses are performing well and are very well positioned to deliver on our goal of making money for shareholders and increasing the value of their investments
spk_7: while we cannot control the economy the fed or the status of financial institutions we are financially strong and well equipped for whatever comes next to all of our customers suppliers employees shareholders and other stakeholders thank you for your continued partnership and we look forward to shared success in the coming months and years
spk_9: well now take questions
spk_0: thank you at this time i would like to remind everyone in order to ask the question press start on the number one on your telephone keypad or passer just a moment to compile the cuny roster or take our first question for martin angler at sea part research partners
spk_10: no good morning everyone
spk_11: more more
spk_12: i knew money and market season seasonal
spk_7: demand activity
spk_13: volumes new clearly demonstrated that when you running
spk_7: here but
spk_14: can you just got some of the positive than negative trend year on year approximately and market here
spk_1: exposure
spk_7: sure in the in the steel business we have seen some modest year we're growth in automotive
spk_1: and of little bit of a head when in the construction and market
spk_5: that transcends steel and also building products are building products are some areas where there was some your rear growth but the product lines that we have that are really geared towards residential construction ah saw a bit of had when
spk_11: i think that same thing is is true in the consumer business
spk_1: anything more specific when you think about like roger industrial agriculture
spk_5: yeah that means everything to an extent it will be impacted by interest rates act generally i think is is is fine and and showing a little bit of your your growth at the an industrial
spk_1: on a macro basis in the industrial
spk_15: a complex and certainly in in north america
spk_1: ah has here
spk_16: you know today as a bit as impacted by tech her as good as it is as finance but not immune to it
spk_11: oh
spk_1: the something
spk_13: what would be european union organizer likely from inventory
spk_7: lol
spk_17: likely a good in the current quarter and he goal posts and framework
spk_11: regarding what they might be yeah in this is kim of as we're looking at it now we have visibility out about three months we can look about a quarter out with think that the the games could more than offset the losses that we estimate of for this quarter to we estimated twenty seven million and we think it could put the other way and and
spk_18: white that entire mouth
spk_11: the helpful on the i could get a one other one here on business operations thus far even be a prior quarter the commentary to be that everything's going according to plan
spk_1: i'm leaving with reasonably well
spk_7: kids any other details you can turn on earth maybe one gone better than expected or perhaps and more challenging is are you know kind of them
spk_1: continue to me congress here
spk_7: yeah martin this is andy you know i would agree with your sentiment
spk_9: think we believe this has gone as well as could be expected up to this point your the next probably major milestone for us as we're getting ready to file of formed and with the fcc it will be confidential people won't be able to see that but that's and of the next major milestone
spk_1: you know one of the comments that i would make his you know we hired some outside expertise to kind of help us with the process here and while we are in control of making the decisions the process has been followed very well and i think it's been very effective your we've announced the first level of leadership we are closing in on being able to announce sort of i would say the the balance of leadership and other positions in most of our major functions and so we're excited about that were i'm not quite there yet but we're getting close and i know our employees are excited about of getting to the
spk_19: that milestone but you know we haven't what one of the things that i think you you fear in these situations is that when you dig into the process that you're gonna have the potential for a showstopper to arise and we have not had any of that
spk_20: you know it's been pretty methodical and where we run into roadblocks we've been able to sell those pretty quickly so as of now we feel good about the process where on time
spk_12: and on schedule for you know early twenty twenty four and you know will continue to push forward
spk_11: would you mentioned employees
spk_9: we're excited to be the
spk_1: what's on the no leadership the an intelligent to go through that on what's the overall sentiment of the folks in a week
spk_7: you know working the dated a year
spk_1: you know attitude announcers and then i imagine there's the up continued messaging around it and i guess what is their thoughts on it
spk_7: that we've we've actually spent a fair amount of time communicating and soliciting feedback from employees whether that through are you know quarterly employee meetings are employed councils we've also been doing a number of lunches with small group lunches with employees to solicit feedback and i would say
spk_1: for the most part i think folks understand why we're doing what we're doing they think it makes sense
spk_11: there's nobody that really likes uncertainty and so i think that if there is anxiety around the process it's more about what does that mean for me in our which company i'm gonna be and and you know but i will tell you that one of the things that i've learned in my fourteen years
spk_7: at worthington is we have an outstanding employee base and when people understand and believe in the direction you tube they will engage and drive the company forward and i think that's absolutely what's happened we have a lot of people that are doing their day a job and also working very hard on the worthington twenty twenty four project and bhavan it and in a one of the rewarding things about this is you know seeing people excel and step up
spk_1: in to new roles and and really help us accomplish this together so it's been you know i think it's been a pretty good process it hasn't been without you know a few speed bumps along the way but nothing major
spk_9: on and any issues with some trying to tell some of the fear more do
spk_1: like if you're moving people as silly as the result to that or anything abnormal on us and i have
spk_9: a typical true but i not been challenging in recent years just to fill seats in general
spk_7: yeah know there hasn't been any out what i would call outside of normal course turnover
spk_9: within the company that we've we've observed
spk_11: the only one of the things that does happen here when you stand up for a new separate public company is you need to populate that company with a number of positions that just don't exist in the business today so you know examples would be you know sort of the finance function public reporting function the legal function tax
spk_9: and so it creates opportunities for upward mobility for people which is nice to see you get people that have earned the right to step into those roles and
spk_0: he would they can do their so that's you know one of the rewarding things that does come from this process
spk_21: excellent i appreciate it another color and i'm like you're doing well and
spk_1: during all the work on x x from work on you that be separated know thanks we appreciate a month on of decks to catch his answer at b m l capital markets
spk_4: i think it for taking my question can you turn our and bit more about about the building and consumer products that's exactly what you're near tennis that patients are one comes from volume and margin
spk_21: til we don't really comment on a large in i will i will stay and it's events a question you know we saw sequential growth
spk_1: in cute three in coming off of that stocking
spk_4: and due to and que three tend to be no a little slower there and you for tends to be seasonally a bit stronger for both the consumer and the during products business so so we would we expect have your car sequential growth in in both of those businesses
spk_21: is this quarter
spk_0: of there and just one more on the dividends from the equity investments how should we think about them going for should they come more to the normalize historical novel
spk_22: yeah you're exactly right over time that shit approximate bree be pretty close to one hundred percent of what their equity earnings are we talked about this year ago those businesses are making a lot of money but had money tied up in working capital those working capital levels of normalized and so we're seeing outside dividends
spk_23: from our and without a to jv is and overtime we always anticipate that they will pretty much approximate what the earnings are that that the way those businesses are run but thank you very much
spk_24: thank you
spk_25: ahmed next to john tomatoes at johns missouri independent research
spk_23: thank you i am
spk_25: i'm so happy
spk_23: that you whether it almost thirteen hundred dollars on fallen off road she was maintain profitability
spk_26: the things weren't worse
spk_25: because that's on the order of a billion dollar notional owning loss
spk_24: could you just walk us through
spk_23: the secret sauce of how the damage was worse how much of the volume was tolling whether stuff
spk_4: futures contracts you probably
spk_1: didn't have excess inventory at the peak of the prices are would have been worse your inventory turnovers probably were very good
spk_5: now
spk_1: i want you to please take a victory lap and explain how you
spk_2: control thing so well in the worse still price downturn i hope we ever see
spk_4: well that thank god i don't think bird the the kind of looks like to take victory laps but you heard pieces of the answers i think in in a these remarks and and in terms of we we have historically ill taken advantage of what we feel is one of the
spk_1: our best assets which is which is our team that manages price risk
spk_25: and we have a balance but we can do things in the markets that can offer customers fix prices are are are different things and and we just we manage our inventories as as best we can our our inventory that so you're down
spk_27: this quarter from where they were
spk_23: year ago when steel prices were really get past their peak hour days numbers are in line and and feel pretty good but ultimately
spk_24: as he said we're we can't control various markets but we do understand markets i am and we do everything we possibly can to to take care of our customers but also to protect our own balance sheet and piano invalid for markets honestly it is it it's sometimes difficult to to navigate those things but it also creates opportunities for us because we are as sophisticated as good at what we do as as we are and allow us to potentially take share to offer customers things that others can't offer
spk_23: and ultimately the can consolidate our leadership position in a lot of heart
spk_28: thank you if i could ask another
spk_4: the november twenty eight
spk_5: business segment asset allocation
spk_1: was a billion eight for still processing a billion for for the other three segments
spk_23: and point two billion for other which i assume was corporate cash balances is it reasonable to expect the apportionment of dead in cash to split up to be proportional to the assets oh did not exactly the way that were thinking about it is that in the cash that we build that the debt that we have today is not portable per se now at least most of it but our our plan is to set up both companies to be successful john and and that will mean as a the indicated low leverage an ample liquidity know the details of that will be flushed out much closer to the actual sven but ah
spk_24: you know rest assured will we're going to feel pretty good not only with on both balance sheets but on on the dead relative to that businesses profitability
spk_23: thank you for your be patient was another question or two
spk_29: maybe the conventional wisdom and the demerger is it still prices are volatile and still processing might have a
spk_24: discounted valuation but the other businesses a premium separated from still processing
spk_23: as i look back at the history of the company there are many acquisitions into new areas
spk_24: and one of the strengths of worthington is one the acquisitions didn't work you
spk_23: made them schrenker go away really fast
spk_24: ah
spk_25: the consumer building products company probably has a bigger universe for potential acquisitions
spk_9: maybe that's a source of risk thinking back to custom cabs and energy storage tanks sir thirty forty years ago injection molding plastic and
spk_1: dashboards for cars and all these ideas that fell by the wayside
spk_9: ah could you tell us a little bit about the acquisition policies
spk_1: for the two companies and
spk_30: how you oh that risk
spk_7: yeah in the i think john you've hurt us talk about am in a is one of the three value drivers how we want to grow the business and that exists today and will be for both companies going forward i will tell you and in tim can comment on this
spk_9: if you'd like when i'm done
spk_7: for the steel company we've always believed that they are a natural consolidator of the still processing space and they will continue to look opportunistically to do that the but the great thing about where they are position today as with our laser welding business and with our electrical steel emanations business temple that we acquired
spk_1: by yourself go there are significant organic growth opportunities in that business that will require capital and so
spk_31: you know while they will continue to look to do emanate transactions i think they will be equally as many or more organic growth opportunities to expand and grow that business that's one of the things i am very excited about with the steel company is is it actually is very well positioned to be a growth business and
spk_32: an industry that really historically has not been so that's exciting
spk_7: with respect and new worthington you know that three business segments that we operate in consumer products building products and sustainable energy there are going to be acquisition opportunities you know i would suggest that we won't be doing you know what i would call major you know transform it of emanate in any of those segments what we will be doing is looking to buy attractive tucked in acquisitions that fit strategically with the product portfolio that we have that are
spk_24: either new brands or consolidation opportunities where we consolidate our leadership position in the markets that we operate in but i don't you know you reference cabs and
spk_22: i don't anticipate use you will see us venturing into businesses that are significantly different than what we're doing today just because the opportunity sat in consumer and building products is pretty substantial
spk_1: the
spk_9: from our perspective final any by can and can i add onto that andy yeah yeah yeah i'd get the i think eighty edited around on and we will be selected in the feel processing business unit going forward
spk_7: whoo and discipline and how we go about acquisitions but we've got lots of runway related to electric vehicles to the transformer market which temples also involved and ah the grid needs to be modernized and grown to be able to handle all these ie the that are being forecasted in the future so we think the futures pretty bright from an organic growth and
spk_9: tt capital perspective
spk_5: thank you finally just just explain we've gone through straight quarters without any share repurchases even though we ended
spk_9: february twenty eighth was almost five dollars a share in cash yeah i mean john as you know historically we have pursued what i refer to as a balance capital allocation approach we've been a dividend paying
spk_23: the company where we you know historically at least over the last ten or twelve years paid out around twenty five percent of our earnings we have complimented shareholder friendly activities with share repurchases we leaned and heavier when we think when we thought it made more sense that the valuation was more attractive
spk_0: and then we've you know balance that with growth through cutbacks and and emanate the reason we have not been buying stock in the last year has nothing to do with value we actually believe there's a tremendous amount of value right now and that's why we're pursuing the the worthington twenty four spin trans
spk_33: action however one of our priorities here is to make sure that when we do launch these two separate companies that they are very well capitalized to take advantage of the opportunities in front of them and we believe the opportunities are immense for both businesses so we want to start out with low leverage
spk_34: and lots of liquidity to sort of jump on those opportunities and and so that's why we've
spk_35: and focused on building cash at the i do think even though it a little frustrating because we do think there's a lot of value in our stock right now
spk_1: it's rewarding to see how much cash we actually have been able to generate during the past year so sad
spk_7: and a good thing for us thank you very much what take on ask questions on sale good at keeping
spk_1: big morning bill gomorrah
spk_5: the the the fight though this is a swing right so you're you're basically saying moving from a twenty five million dollar headwind do a twenty five million dollar tail on it's when they get that part straight and then as it relates to you're having risen aggressively and last several months you feel like there was
spk_1: any sort of pulford you may have seen in in the february quarter from that and is there any your potential margin challenges and the mansfield processing businesses from from the rise that we've seen
spk_4: the ability to send a couple things one based on what we know today
spk_35: in based on how fast fuel prices have risen we had twenty seven million dollars of estimated holding losses discourse oh yes we do plan to see that are we expect to see that flip to a positive this next quarter so yeah that's what we were trying to get across little bit early as far as pull ahead we thought that would happen we didn't see a lot of that so far
spk_36: because a lot of the school price increases were later to spot prices and and contract guys were saying you know with the contracts they had negotiated because we didn't really see a lot of pohlad
spk_4: in an appeal to your question is joe on consumer and during products your those input cause we try really hard to a hedge majority of those purchases
spk_1: and so the decline in steel prices at the end of last year and then the the rise
spk_4: the last several months they could shouldn't really have any and material
spk_1: negative impact on those prices is he going to be hope that over time we get to do better than we have been historically on those edges
spk_35: and then as it relates to not working capital this quarter with months most positive for you to detail and them feel price declines by tom or one is what is not working capital look like for you all just from source or use in and now the in the make order or as far as you can see
spk_9: he did a little bit other a lag as you know the balance sheet but the higher fuel prices will
spk_1: pick up some working capital
spk_9: the the outset the that honestly with que for and and que one typically being seasonally stronger is we should see higher volumes run it through the piano
spk_7: and the lastly anything from our from a high level that surprised you all
spk_9: good or bad and the and the federal court or are you gotta now look for not improved earnings by the and know you know supplies don't either way well to do what you were thinking few months ago and
spk_37: yeah maybe just one comment if you to history to take it month to month because of the inventories that had been depleted at our customers latter half of twenty twenty two the bottoming i'm still prices december was
spk_38: a little bit slow and that you know we anticipated the january and february would pick up
spk_0: but you never know for sure until it actually happens but that's exactly the way they played out and you know there is a debate going on around you know the impact of a lot of the noise in the financial markets around what that's going to mean for the economy and i think as of right now we we haven't seen a big impact on our business it's kind of and of return to normal seasonal patterns
spk_1: oh
spk_0: with you know a up maybe some changes driven by the the skill price volatility right when still prices decline a lot

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