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spk06: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1-1.
spk01: Good morning, ladies and gentlemen. Welcome to the Hammond Power Solutions 2022 fourth quarter and year-end results conference call. Certain statements that will be discussed on this conference call will constitute forward-looking statements. The forward-looking information in statements included in the discussion or not guarantees a future performance that should not be unduly relied upon. Forward-looking statements will be based upon current expectations, estimates, and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risk uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information and statements. These factors include but are not limited to such things as the impact of general industry conditions, fluctuations of commodity prices, industry competition, availability of qualified personnel and management, stock market volatility, and timely cost-effective access to sufficient capital from internal and external sources. The risk just outlined should not be construed or exhaustive, although management of the company believes that the expectations reflected in such forward-looking statements are reasonable. It can give no assurance that such expectations will prove to have been correct. According lists should not place undue reliance upon any of the forward-looking information discussed in this call. I will now turn the call over to Bill Hammond, Chairman and CEO of Hammond Power. Please go ahead, Mr. Hammond.
spk00: Thank you, Operator, and good morning to everyone. Welcome to Hammond Power's fourth quarter and year-end financial results conference call. Joining me today is Richard Vollering, our Chief Financial Officer. For today's call, I'll start out with some high-level commentary on the year and our business. From there, I will hand it over to Richard for a review of our fourth quarter results and year-end financial highlights, after which I'll outline what we expect for 2023 before turning it over to any questions. The past three years have been the most challenging and uncertain time I have seen in my 45 years of being in the electrical industry. And despite all of the challenges we faced in 2022, Hammond Power Solutions performed admirably. In fact, we delivered the strongest financial performance of our 22 years of being a separate public company. I am very proud of our accomplishments and believe that three organizational capabilities in particular contributed to our success. And these are diversification, flexibility, and investment. Our advantage of broad diversification in terms of geography, channels, markets, and products helped to propel the biggest year over year of growth we have ever experienced. This robust growth came from a wide variety of markets including EV recharging, solar power generation, energy storage, data center expansions, oil and gas developments, mining equipment, silica chip manufacturing, as well as investments in public infrastructure like water treatment, hospitals, and public transit. Several new events also contributed to this growth momentum in 2022, which we expect will fuel continuing economic activity in the years ahead. The first one is the noticeable reshoring of certain manufacturing sectors to North America in light of increasing geopolitical uncertainty and risk. These include silica chip production, as well as batteries and other products related to manufacturing electric vehicles and their recharging systems. And an even bigger and unexpected boost to the U.S. economy came at the end of 2021 from the Infrastructure Investment and Jobs Act signed into law by President Biden, which has injected hundreds of billions of dollars into many sectors requiring transformers, including public transportation upgrades, clean water, the electric grid, renewable energy, and a nationwide network of EV recharging stations. While it is difficult to assess the direct impact on HPS, we believe this massive investment in infrastructure and electrification will lift our entire industry. Our biggest growth engine in terms of sales dollars in 2022 has been our US distributor channel, which serves many of these growing markets. In 2022, we expanded our distributor network by 280 new branches. And since 2020, we have added 989 new branches. Over the last six years, we have become the dominant dry transformer supplier to the U.S. distributor channel because of our broad portfolio of standard and custom products, the best training and support tools in our industry, superior stock availability from seven regional warehouses across the United States and our focus on building and maintaining strong personal relationships with our distributors. In addition to our distributor channel, an equally robust and important growth engine in 2022 was our OEM business. A combination of traditional as well as new OEM customers in Canada and the US serving sectors like data center power systems, oil and gas equipment, pipelines, mining, water treatment, energy storage, and electrical distribution systems experienced the biggest growth in over seven years with backlogs that stretch into 2024. During the year, we also expanded our sales organization based in Mexico to gradually give us the capabilities to serve dry transformer markets in Mexico, Central America and South America with the expectation of driving new sales growth of $30 million within the next five years. After three years of rebuilding our Indian management team and refocusing our business coming out of the pandemic on more profitable markets, we also delivered the best financial results we have ever seen in this rapidly developing country. Total sales almost doubled as we expanded our domestic business in industrial sectors like cement manufacturing, food and beverage, pharmaceuticals, steel production, marine power, hospitals, and solar power generation. We also expanded our export business in Bangladesh, Indonesia, Philippines, and the Pacific Islands. In addition, we enjoyed significant growth during our first full year of our most recent acquisition Mesta Electronics. We saw sales doubling due to the rapid expansion of silica chip production as well as electric battery manufacturing plants in the US. The active power filters that Mesta makes have also expanded our power quality products and capabilities that we sell both direct to OEMs as well as through our distributor channel. This relatively small but well-managed company serves as an ideal acquisition model for HPS to pursue in the future in order to add tuck-in companies that will expand their penetration of new and adjacent businesses, diversifying our sales and markets even more. Moving on to Hammond's manufacturing capacity, our distributed manufacturing footprint of eight plants across Canada, the US and Mexico played a pivotal role in 2022 as it enabled the company to absorb unexpected growth. Adding to this platform near the end of 2021, we converted one of our plants in India to build a limited range of low voltage distribution transformers for North America. This now global footprint gave us tremendous flexibility in moving products and customer orders from one plant to another in order to meet delivery dates and to reduce our lead times. But even our increased capacity hasn't been enough to serve the surging sales and future opportunities that our strategies, channels and industry reputation are bringing us. During 2022, we increased our investment in new equipment to expand our capacities at existing plants in all four countries. We are seeing this positive momentum continuing over the rest of this decade and announced in December last year, a capital investment program to invest more than $40 million in 2023 and 2024 to further increase our capacities, including the expansions of two plants, one in the US and one in Mexico, as well as building an entirely new plant in Mexico, which will focus on small products, including power quality magnetics. Our strong balance sheet gives us this flexibility and ability to invest in our organic business, which is not only less risky, but also generates better returns on our capital. Lastly, and subsequent to the quarter, our board of directors announced a succession plan for me to move from the CEO role into an executive chairman role. After 22 years as the CEO, building the company that has been in my family for more than a century, it is time for me hand over the day-to-day decision-making process to a leader that will continue to build the company with the same commitment to innovation and to our customers that Hammond Power is known for. I am extremely proud of the extended Hammond family and what we have accomplished together and I look forward to working closely with the next generation of leaders as we shape the strategy that will allow the Hammond brand to continue to grow globally. I will now hand the call over to Richard to provide some details on our financial progress. Richard.
spk05: Thank you, Bill. I'll speak for a few moments about what all that activity meant for us financially. As Bill indicated, 2022 was a remarkable year for HBS, with all business units performing well on sales and profitability metrics. Our sales increased by 47% overall, mostly driven by price increases over the past two years, but also supported by strong organic growth, which we estimate to be in the 10% to 11% range. Sales in the US, Canada, and India increased by 45%, 42%, and 33% respectively. Our customer product and geographic diversity increased during the year with sales growth in Mexico and from our power quality products. We are particularly pleased with the growth of domestic business, with sales increasing to $14.5 million Canadian dollars in its first full year of operations with HBS. Total sales in the fourth quarter were $144 million, which was lower than $148 million in sales in the third quarter of 2022. This decline was mainly due to a significant international order for $7.6 million that was produced and shipped from India during the quarter but could not be recognized as a sale until it arrived at its destination. These sales will be recognized in the first quarter of 2023. We also lost two days of shipping due to an ERP upgrade in the last week of the year. Even without these limitations, we're beginning to see our operations reach capacity in several facilities. Bill mentioned our current efforts to increase capacity, and we are moving forward with them as quickly as possible. However, while capacity increases from adding staff and equipment in existing facilities should benefit us beginning in the second quarter of 2023, the additions that depend on adding and expanding factories will not be available before 2024. We saw our backlog increase by 117% versus the fourth quarter of 2022, a combination of pricing increases and . At this point, a portion of our production is booked well into the second quarter of 2023, with a few longer-term projects extending into 2024. Gross margins have been strong throughout the year. and we ended 2022 with an average gross margin of 29.6%. Most of this increase has been due to higher throughput in factories and a favorable product mix. Volatile material and freight costs were less of a concern in the latter half of the year as compared to previous quarters. Margins in the fourth quarter were exceptionally high at 34%, mainly due to inventory and other non-recurring adjustments, as well as a favorable product mix. EBITDA for the year was $69.7 million or 12.5% of sales versus $30.1 million or 8% of sales in 2021. The increase is due to higher gross margins combined with higher fixed overhead coverage. Met earnings in 2022 were $44.8 million or $3.79 per share versus $15.2 million or $1.29 per share in 2021. The higher sales volume, improved margins, and lower income tax expense all contributed to this. A recognition of certain tax assets and income tax recovery in some foreign jurisdictions contributed to the lower income tax expense. Capital expenditures during the year were approximately $9 million, which is up from approximately $6 million in 2021. The increase is mainly due to capital equipment additions in 2022 to support growth. We expect this capital expenditure to increase significantly in 2023 as a result of our already announced capital expenditure program. Cash from operations for the year were $33.5 million versus $20.4 million in 2021. And finally, our net cash position or cash minus operating line borrowings at the end of the year was approximately $22 million compared to $1.6 million in 2021. To close, I'd like to reiterate our pride in these strong results in a challenging but also very exciting year. Our recent earnings trend and strong balance sheet set us off nicely for the year ahead. Thank you. Over to you, Bill. Thank you, Richard.
spk00: As I've said throughout this call, our industry is experiencing significant tailwinds which we expect to continue for the foreseeable future. As we look forward to over the next three years, we will be investing in our business to accommodate our existing backlog and to meet the growing demand for our products and services globally. With this increased capacity, we expect to add an additional throughput for $180 million in new revenue, allowing us to reset our three-year target to achieve three quarters of a billion dollars or $750 million in revenue by 2026 and have sight to reach a billion dollars in sales before the end of the decade. The fundamentals of our business are driven by demand from a broad range of end markets. As countries continually grow globally to electrify their economies to meet their climate commitments, we believe Hammond Power Solutions will play a significant role in this global transition. I will now hand the call over to the operator to take questions.
spk01: Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 1-1 again. One moment for our first question. Our first question comes from Matthew Lee with Canaccord. Your line is open.
spk03: Hey, morning, guys. Congrats on the great quarter. And Bill, congrats on your move to exec chair. I wanted to start with a housekeeping question on EBITDA. Obviously, margins were very strong in the quarter, but it sounds like there were some one-time impacts from inventory adjustments. Can you maybe help us quantify that impact and whether you see any recurrence going forward?
spk05: Yeah, absolutely, Matt. Yeah, so what I referred to just a few minutes ago was your impacts due to some non-recurring items at the end of the year. But before I get there, I'm just going to focus on the mix, because there were two elements that I referred to. One is just some adjustments, but also the mix. And we had a strong relative mix of induction heating sales. in the quarter and a lower relative index of the Indian sales in the quarter, which helped our margins. So I just want to make sure that's clear, first of all. The inventory adjustments that I referred to revolve around inventory research for fluctuation in input costs, which have been significant during the year, as we've been commenting on in prior crisis releases, and as well as the physical accounts at the end of the year. Now, if you're asking in order to understand As a point of reference for normalized gross margins, I would give you a range of 27.5% to 29.5%, and I think that's where we should be. And that's a bit lower than the full year 2023 number, but we believe we were operating in extremely volatile material input in high-manpower environments, and the pricing benefited from that during the year. And keeping that in mind, the market forces, especially the lower end of that range, would be for dogs' material costs and or increased competition.
spk03: That's helpful. So then maybe when you think about profitability for 2023, I know you've given us this margin now, but... Are you seeing continued easing on the cost front? And kind of relatedly, are you seeing opportunities for the price increases this year?
spk05: Yeah, I think things have kind of stabilized somewhat in the last half of the year, Matt. That isn't to say that everything has. I mean, there are still certain elements or input costs that we have that are still going up. But the big ones, as we've always talked about, are electrical steel and copper and aluminum. That seems to have stabilized a little bit from the beginning of the year. As for future price increases, we'll have to evaluate that on an ongoing basis. If we do have any, it will be more focused, I think, than the ones that we've had in the past.
spk03: Okay, great. And then in terms of backlog, just given how much you've seen growth in terms of your order, how much visibility do you have in your 2022 revenue right now?
spk05: Well, right now, one of the things I mentioned just previously is that The backlog for the most part is taking us well into the second quarter. So we have pretty good visibility out to the second quarter at this point. And then as Phil had mentioned, there are some projects that are stretching into 2024. And so, yeah, it's the back half of the year that we have at this point in time. It's not reflected in the backlog yet. So we don't have a lot of visibility there.
spk00: We do have a sizable backlog in place, but we also have a strong momentum of bookings that we believe will continue to the end of the year. So, again, we're expecting a pretty positive year.
spk03: Okay, thanks a lot. Thank you.
spk01: Okay, thanks, Matt. Thank you, Matt. One moment for our next question.
spk07: Our next question comes from Greg McDonald with Loderock Research.
spk01: Your line is open.
spk09: Thanks. Good morning, guys. How are you?
spk01: Good, thanks. Greg?
spk09: Good. And so, once again, also, I want to say congrats to Bill on the move. But, you know, and sometimes I roll my eyes when analysts say this stuff to management, but I think you guys deserve a lot of credit for the way that you've managed through the last couple of years. It's been pretty difficult, so bravo on that.
spk06: Thank you.
spk09: And keep that shift in the quarter. The other thing I want to mention is, I think it's a smart thing to give the long-term revenue ranges based on the capacity increase plans that you guys have. I think it's important in an environment like this. I think it's going to help you. So bravo on that one, too. The question I wanted to ask, guys, is mainly on the U.S. distribution channel. And I know it's kind of a broad question, but I think one of the question marks that a lot of investors have in their heads right now is, what the outlook is for the U S economy. And I don't expect you like anyone to be able to pinpoint this, but is there anything within the U S distribution channel communication to you at all that indicates that that sort of 10 to 11% volume component of revenue growth that you've talked about, that that is at risk at all. I know it's tough going into the second half of the year, but do you get a sense from their communication to you that there's any risk on that front?
spk00: Well, I've personally been involved in a couple of conferences early in the year with distributors in the United States, and there's been a number of other interactions since then. And our distributors, generally speaking, do not see at this point in time the economy slowing. As I mentioned, there's a sizable number of tailwinds. that are benefiting the electrical industry and hence our distributor channel. We believe that the infrastructure bill, for example, and the investment in green technology will continue even if some parts or some sectors of the US economy slow. Who knows what may happen next year? But at this point in time, there's very sizable backlogs in the industry, and there is an expectation that certainly this year will not see the kind of recession that some people are fearing. Now, again, I just want to reiterate, next year could be a different matter with the U.S. election, but I do believe that with the additional capacity in place that we are currently investing in, that we will have the ability to more aggressively increase our market share and to go after new distributors and adding new branches. And we do see opportunities with certain OEMs who are looking out into 24 and 25 in the area of data center expansion, as well as the resource sector that continues to be pretty strong. Not to mention, as I said, this trend of reshoring of manufacturing. And we see some significant investments, as I'm sure all of you read about. And again, silica chip manufacturing is something that is continuing to be very robust, not only for silica chips that go into computers, but also the devices and batteries that go into electric vehicles. So we believe that we have enough sectors and strategies that can help boost our business going forward, and certainly the US distributor channel remains, I would say, the biggest engine of growth for us going forward.
spk09: Okay, thanks, Bill, for that. And on the OEM side too, that's good color. You mentioned in the press release or in the comments that you've increased the U.S. distributive branches by over 900 since 2020. Is there an order of Maggie? You've still got growth there is what I'm hearing. Is there a loose reference point? Is that another 10% growth opportunity? Is it higher than that? What do you think the opportunity for greater growth in the distributor channel is?
spk00: Well, again, once we have the capacity in place, which will be towards the middle of this year, we believe that we can add, over the next 18 months, I would say more than 200 new branches. And again, some of these will be new distributors who are making a much larger commitment to Hammond than they currently are so again we believe that the runway is still there for continued growth and expansion of branches and distributors pardon me not only in the US but also Mexico because of the capacity constraints we have slowed the growth in Mexico relative to the opportunities that we see down there. But we believe that we can add 25 to 50 new distributors in Mexico and parts of Central America over the next 18 months. Again, when we've got the capacity in place to serve the customers with the kind of service that they expect and we obviously want to give them.
spk09: Great. That's helpful. Thank you. Last question I have is on the dividend. Nice dividend growth as well. Maybe not so surprising given how the company is doing itself, but almost 50% growth in that dividend over the last year. Can you give us a sense, I know the company doesn't have an official dividend policy, but can you give us any sense on how the management and the board thinks about the dividend vis-a-vis the company itself? Is it pretty standard, like looking at profitability? Looking at cash flow per share, are there other things that go into that?
spk05: Yeah, we look at all those things, Greg. We take a long view of this as well, at least the board does. If you go back in time and you look at our dividend history, it's been steady different in growth and you know it's the dividends either stay the same or grown you know during the good years and during the not so good years and that's that's important so you know that's we don't see really any change to that at this point if I may add that we're trying to follow a balanced approach with the cash that we generate we see
spk00: a very positive momentum of growth here, which will require an investment in capacity as well as acquisitions going forward. So we're trying to find a good balance between dividends, which we understand are important, and at the same time, investing in our business and maybe keeping some powder dry in the event that there is a slowdown. or again, we have opportunities to make acquisitions. So we certainly believe in growing our dividend over time, and we'll continue to do that.
spk09: Sounds like a logical approach. Thank you very much, guys. I'll let some others jump in. Thank you, Greg. Thanks, Greg.
spk01: One moment for our next question.
spk07: Our next question comes from Jim Bowen with Acumen Capital.
spk01: Your line is open.
spk02: Good morning, guys. Thanks for taking my question. Just a couple from me. Good morning, Jim. Congrats again. Congrats again, Bill. Happy to see it. Maybe just give us an idea of who you might be looking for. What do you think the board's... you know, ideal candidate would look like to take over from you? Obviously it's been a family business for you. It's going to be a much larger company in the next few years. You know, is there an ideal candidate or characteristics that you could help us understand?
spk00: Well, we do have a list of characteristics that we want from this individual. And we'll see how successful we are because we are, I believe, sort of a unique situation with a unique culture. But, you know, I want to reiterate that I am not retiring. I will become the executive chair and I have a strong desire and passion for Hammond to be a great Canadian company that competes globally. That has always been my vision. I will remain the largest shareholder and maintain the same voting rights as before. I am certainly invested in the future of this company and I may be stepping away from the day-to-day to focus more on the long-term strategy with our board. And I certainly look forward to working closely with the next CEO and the leaders that we have to achieve that vision. The company has been in my family for more than 100 years. It is family to many of the employees that work here. There is a culture that was passed on from my grandfather with a singular focus on transformers and to be relentless with innovation and maintain our commitment to our customers. My ownership preserves our long-term thinking allows for a collective focus on the strategy where others may be distracted, that focus on quarterly results as opposed to long-term growth in sales and profits. And that allows us to gain market share. So we're going to be looking for ideally someone out of the electrical industry that has relationships and an understanding of how this industry works. but certainly is the proper culture fit to Hammond and to the behaviors that make us unique compared to other global electrical companies. So again, it's kind of a roundabout way of answering your question, but to a great extent, it's really up to the candidates that come forward, and certainly we've seen some big interest in wanting to potentially lead this company going forward. Because again, we've built, I believe, a very strong and positive brand in our industry, and we want to keep that going with the right leadership. But again, I just want to reiterate that in many ways I'm not retiring because I will remain for a period of time as executive chair and then obviously chairman of the board as well. So I am obviously most interested in keeping this positive momentum of growth going and to increasing the profits and the sales that will drive the share price going forward.
spk02: That's great Bill. You mentioned Mesta. Obviously, it's been a hugely successful tuck-in acquisition. It's turned into something quite substantial. Maybe just give us a flavor of other opportunities that you're exploring, whether it's particular markets geographically or particular product lines that you find attractive right now.
spk05: Sure. Jim, it's Richard. Geographically, we're focused for the most part on North America. And from a product perspective, our focus at the moment is building out our power quality business. So if we could find products or acquisitions that would fill that need, that would be the direction that we'd be looking in. Now, it's possible that there are certain products or technologies that are available in Europe that we could tap into and we'd be open to that but I would say primarily we're focused in North America for the time being.
spk00: We would like to diversify our business away from the transformer business. We certainly see continued runway and growth in the dry transformer business And of course we build oil transformers in India but we believe that again our strategy of diversification has Really allowed this company to grow and weather the ups and downs of the economy and geopolitical events that come at us so we certainly want to look at adjacent markets and and even products that we can sell through the distributor channel where we've got a strong brand. And that's why, as Richard mentioned, we believe that the power conversion and power quality areas are most attractive to us with similar technology and companies as the MESTA acquisition.
spk01: One moment for our next question. Our next question comes from Maxwell Carr with M Partners. Your line is open. Hi, Bill. Hi, Richard. How are you today?
spk04: Very well, thank you. I had a question pertaining to the India segment. This large order that we saw coming through at the end of the quarter, which is to be recognized in Q1, is that an outlier or is that a new relationship that's been developed? Could you add some color to that?
spk05: Yeah, it's... India's business operates a little bit differently. They do typically have larger projects. They make oil-filled transformers, as you know. Most of the projects that they have there serve the Southeast Asian market or India proper. In this case, the order had to go a little bit further, and it was a new customer, new term. It is a bit of an outlier, I would say, although projects of that magnitude, we'd be happy to get more of them.
spk00: And the firm that we're working with on that particular project has come back to us with several other projects to quote on. And so we believe that it's a relationship that we can nurture and will carry us further into parts of the Pacific Islands and the western coast of the United States. So we believe that there's an opportunity there, and we will do our best to try to nurture that, as I said, but at the same time, we are seeing opportunities in other parts of Asia that we also want to build upon As we, in addition to that, expand our domestic business in India, and very selectively though, because some markets are understandably more profitable than others, and that's one reason that we've been able to see a very positive turnaround in that business for us.
spk04: Perfect, thanks. And, you know, in terms of capacity from the Indian plant, are you guys running at capacity? Are you close to it? Or what's sort of the picture there for potential?
spk05: Yeah, we're very close to capacity right now, Max. So we started some projects in 2022, and they're carrying through to 2023. And some of that will come online in the second quarter, although you probably won't see the full impact of that until the back half of the year. And then we've got other projects that we can bring online into the back half of the year as well.
spk00: In India in particular, we're several years before we believe we'll reach a maximum capacity there.
spk04: Okay. And one last question for me would just be sort of on the gross margin again. So absolutely great gross margin this quarter. You know, you're mentioning somewhere between 27.5, 29.5. That's up a little bit from previous quarters. Do you see that coming within this range over the next couple of quarters, or is this sort of looking at more long-term?
spk05: No, I would say that's over the next few quarters. Longer term, it's really hard to say, Max, because... You know, these are, as we talked about, these are very exciting times in our industry. There's lots of investments, lots of demand, and it really depends on, you know, how long that continues on for. As Bill mentioned earlier, it's hard to say what that looks like in 2024. So I think the one thing I will say, though, is I think it's – you know, what you're seeing and, you know, particularly in the fourth quarter, I mean, we shouldn't base too many expectations on that. And I think longer term will probably be a little closer to sort of our long-term gross margins, which is in that kind of 28% range. And, you know, but we're doing things to the business to improve that, you know, as I mentioned, the MESTA business carries a higher gross margin. And if we can, you know, if we can continue to grow those particular businesses that, you that have higher levels of profitability, that will certainly help in the long run. Now, they're still relatively small parts of the overall business, but they will have an impact over time.
spk04: But that will take some time. Perfect. Well, thank you very much, gentlemen, and congratulations on building such a robust business.
spk05: Thank you, Max. Yeah, thank you, Max.
spk01: And I'm not showing any further questions this time. I'd like to turn the call back to Bill for any closing remarks.
spk00: Well, we're extremely proud of our results for 2022 and we're very proud of the business that we've built that we believe, as I've mentioned and Richard has mentioned, has a strong and positive runway going forward. We, despite the positive outlook on our business, we do tend to be conservative and I've been around this business a long time and seen a lot of recessions and know that they can certainly impact on our sales and profits and we're mindful of that and we're not only trying to build a resilient business here and one that can certainly perform well through a slowdown, but also one that gives us the ability to grow. even through these times and that's one reason that we have made the investments that we have and we're in the process of making further investments this year and next year to give us that ability to grow because again we believe that these are special times as the whole green technology area electrification of the world expansion of the grid, etc., have created very positive times for our industry and for Hammond Power Solutions. So, again, we're extremely proud of our performance last year. We're very positive about our performance this year, but we're trying to, again, be cautious and build a resilient business that will continue to grow to the end of the decade and belong and beyond, and so again, thank you for your time today and your interest, and hope everyone has a great day. Thank you so much.
spk08: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day. Thank you, Kevin.
spk06: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1.
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