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Greetings, and welcome to the CSW Industrials Fiscal First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Adrianne Griffin, Vice President of Investor Relations and Treasurer. Thank you. Miss. Griffin, you may begin.

Thank you, Devin, and good morning, everyone. Joining me today are Joseph Armes, Chairman, Chief Executive Officer and President of CSW Industrials; and James Perry, Executive Vice President and Chief Financial Officer. We issued our earnings release, presentation and Form 10-Q prior to the markets opening today, which are available on the Investor portion of our website at www.cswindustrials.com. This call is being webcast and information on accessing the replay is included in the earnings release. During this call, we will make forward-looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results could materially differ, because of factors discussed today in our earnings release and the comments made during this call, as well as the risk factors identified in our annual report on Form 10-K, and other filings with the SEC. We do not undertake any duty to update any forward-looking statements. I will now turn the call over to Joe Armes.

Thank you, Adrianne. Good morning, and thank you for joining our fiscal first quarter conference call. In our fiscal first quarter, our team performed remarkably, delivering record revenue, record EBITDA, and record EPS. Today, we are proud to report, record revenue of $200 million, or 24% growth over the prior year period. Of the $39 million in total revenue growth, 78% was organic, with the remainder coming from the Shoemaker acquisition that we closed in December 2021. EBITDA reached a quarterly record of $50 million five zero, a 21% growth compared to the prior year period. Finally, record EPS was $1.88, a 26% growth rate over $1.49, as adjusted in the prior year period. We are particularly pleased with these comparative results in light of the extraordinary performance in the fiscal first quarter of last year. As you will recall, in last year's fiscal first quarter, we delivered growth in excess of 75% of revenue, and over 100% in EBITDA. While demand remains solid in the end markets we serve, I cannot overstate the importance of operational excellence in driving this performance. Drivers that led to our strong first quarter performance include. First, we protected our profitability, with disciplined pro actions offsetting ongoing inflation, primarily in raw materials and logistics. We will continue benefiting from our pricing initiatives consistent with the high-value nature of our products and our commitment to outstanding customer service. Second, our strategic investment in raw materials and inventory continued to allow us to meet the strong customer demand underlying our record revenue. While supply chain constraints moderated or even improved sequentially, inflation persists in specific materials and uncertainty remains in the logistics sector. Our supply chain team will continue to diligently monitor and react to evolving market dynamics to ensure that we are the single most reliable supplier to our customers. Third, acquisitions continue to contribute to our success, as we add complementary product categories in our existing end markets served. Shoemaker contributed $9 million of inorganic revenue growth in the second full quarter of our ownership. As we have discussed previously, our acquisition economics typically do not include cost synergies, due to the strength of our existing margin profile, and our compensation strategy, so we depend on operational excellence as an essential part of our success. In fact, in this fiscal first quarter our operating expenses as a percent of revenue were down over 200 basis points as compared to the same prior year period. In addition to consolidating TRUaire operations in director Seals just this April, our TRUaire and Shoemaker leadership teams continue to actively assess manufacturing and commercial synergies. Consistent with our growth strategy, we continue to evaluate our portfolio of opportunities and seek attractive bolt-on acquisitions in our existing end markets. Finally, I would like to acknowledge that, our team members are directly responsible for these results. At CSWI, having the best team members is a strategic advantage and our partnership with employees results in high productivity, creativity, excellence in customer service and collaboration. I would like to extend my thanks to each member of the CSWI team for their hard work and dedication to serving our customers and each other well. Transitioning to a discussion of our segments. Each of our three segments achieved record quarterly revenue. Our Contractor Solutions segment achieved record sales of $138 million a $27 million or 25% increase, including organic growth of $19 million. The strength of this segment lies in leveraging our distribution network and selling high-value products. Our TRUaire manufacturing facility in Vietnam returned to full production during the fiscal first quarter in line with our expectations. The steady production of shipping of grills, registers and diffusers coupled with recently stabilizing material and freight costs provides confidence in our ability to meet customer needs. Our Engineered Building Solutions segment continued to expand, reporting record revenue of $29 million an increase of 11%. During the past two years this team is intentionally focused on high-growth geographies and new product development supplemented by an enhanced go-to-market strategy. For a second consecutive quarter, this segment's backlog reached an all-time high as we were awarded jobs in multifamily residential, institutional and commercial categories. Increased quantity and quality of products within our backlog reflect our intentional curation of opportunities while the macro construction indices suggest solid growth potential. For calendar 2022, the American Institute of Architects is now predicting 9.1% growth in total nonresidential spending, which compares to their January prediction of 5.4% growth. Together, these provide a tailwind through our fiscal 2023 and into early fiscal 2024. Our Specialized Reliability Solutions segment, gained momentum and achieved record revenue of $36 million growth of $10 million or 40% as demand continued in all end-markets served, evidenced by incremental unit volumes and supported by the cumulative benefit of the pricing strategy we deployed last year. In fact, in the current period, Specialized Reliability Solutions' revenue exceeded its revenue in the same period two years ago which was our fiscal 2020 by 88% or nearly $17 million. We expect continued strength in this segment, albeit at a moderating growth rate as compared to these exceptional results. We are well positioned to win in our end markets and the demand for our products continues to be solid. Our team continues to demonstrate the ability to effectively manage despite a challenging operating environment. Our business model remains resilient, with ample opportunity to drive profitable growth and most importantly, to deliver long-term shareholder value. At this time, I'll turn the call over to James for a closer look at our results, and I will then conclude the prepared remarks with a strategic outlook and a sustainability update.

Thank you Joe and good morning everyone. Our consolidated revenue during fiscal first quarter 2023 was $200 million, a 24% increase as compared to the prior year period. Consolidated gross profit in the fiscal first quarter was $86 million, representing 25% growth with the incremental profit resulting primarily from the cumulative benefit of implemented pricing initiatives which continued during the fiscal first quarter, the Shoemaker acquisition and increased unit volumes. Gross profit margin was 43%, compared to 45% in the prior year period as adjusted to remove the $3.9 million purchase accounting effect related to the TRUaire acquisition. This margin decline primarily resulted from the timing impacts of material, and freight cost increases, and implemented pricing initiatives. I'll remind our audience that, we anticipated this trend within our cost of revenues and discussed it on our earnings call in May of this year. I'll note we did not make any adjustments to our reported earnings in the current fiscal quarter. Consolidated EBITDA, increased 21% to $50 million as compared to the prior year period, while consolidated EBITDA margin was approximately 25% in the current and prior year periods. Reported net income attributable to CSWI in the fiscal first quarter was $29 million or $1.88 per diluted share, compared to $21 million or $1.30 in the prior year period. In the prior year period, adjusted for approximately $3 million of TRUaire purchase accounting effect prior year adjusted net income and EPS were $23 million and $1.49, respectively. Our Contractor Solutions segment with $138 million of revenue accounted for 69% of our consolidated revenue and delivered $27 million or 25% total growth, as compared to the prior year quarter comprised of organic growth of $19 million and inorganic growth of $9 million from the Shoemaker acquisition. Organic growth resulted from the cumulative benefit built them in our pricing initiatives, partially offset by a slight decrease in unit volumes as compared to last year's exceptionally strong performance in the same quarter. As compared to the prior year period increased net revenue in the HVAC/R and architecturally specified building products end markets more than offset the net revenue decrease primarily in the plumbing end market. Segment EBITDA was $43 million or 31% of revenue compared to $39 million or 36% of revenue in the prior year period. The decline in margin primarily resulted from the timing impacts of material and freight cost increases and implement our pricing initiatives as I mentioned in my earlier remarks. Our Engineered Building Solutions segment EBITDA was $5 million a 17% margin. Bidding and booking trends remain strong. In fact, our fiscal first quarter bookings and backlog increased by approximately 74% and 14% respectively as compared to last year's first quarter. As of the end of the fiscal first quarter our book-to-bill ratio for the trailing eight quarters was 1.35x to one and as Joe mentioned in his opening remarks, we entered July with a record backlog in this segment. This entire organization is focused on converting our strong backlog into revenue growth and margin expansion. Our Specialized Reliability Solutions segment posted another very impressive quarter of organic revenue growth of $10 million or 40% due to incremental unit volumes, driven by improving end market dynamics and numerous price initiatives during the last year. Segment EBITDA and EBITDA margin were $7 million and 19% in the fiscal 2023 first quarter compared to $2 million and 9% in the prior year period. I would like to highlight that this quarter is the third consecutive quarter of mid-to-high teens EBITDA margin for this segment, in line with our expectations as capacity utilization increases, operational practices improve and input cost inflation moderates. Transitioning to the strength of our balance sheet, we ended the fiscal first quarter with $16 million of cash and reported cash flow from operations of $17 million compared to $19 million in the prior year period. As working capital use of cash primarily consisting of incremental, strategic inventory investments to support strong demand and higher accounts receivable due to higher revenues offset improved profit. The decision to hold more inventory over the last year has proven beneficial as we are better able to meet customer demand when at times our competitors cannot. At this time we expect our current levels of inventory to be sufficient throughout the remainder of this year and while the balance of inventory will fluctuate from quarter to quarter we don't currently anticipate the same level of incremental investment in inventory during the remainder of fiscal 2023. We ended the fiscal first quarter with $264 million outstanding on our revolver a $21 million increase compared to our fiscal year-end. Our leverage ratio as of quarter end was approximately 1.7x well within our stated range of 1x to 3x. As of the end of the fiscal first quarter we had liquidity of approximately $152 million through our cash on hand and $136 million of revolving borrowing capacity. As Joe mentioned in his opening remarks, our M&A strategy remains active and our capital allocation decisions remain focused on maximizing shareholder value on a risk-adjusted return basis. This disciplined approach favors our current platforms serving the same customers and end markets through our extensive distribution channels. The strength of our balance sheet provides ample capacity to [indiscernible] and quickly on acquisitions as opportunities arise. As part of our broad capital allocation strategy, we remain committed to opportunistic share repurchases guided by our intrinsic value model. During the fiscal first quarter the company repurchased 288,000 shares for an aggregate purchase price of $30.5 million under our current $100 million share repurchase authorization. Since inception of the current authorization and through July 31, 2022 CSWI has repurchased 462000 shares for an aggregate purchase price of $50 million. CSWI initiated our inaugural share repurchase close in fiscal 2018 and since that time has cumulatively returned $131 million to shareholders through the purchase of 1.9 million shares. We remain committed to strong free cash flow generation, through the working capital management and sufficient liquidity to support our strategic objectives. We expect our cash flow conversion metrics to return to historic norms by the end of this fiscal year. The company's effective tax rate for the fiscal first quarter was 24.5% on a GAAP basis. The company continues to expect a 25% to 27% tax rate for full fiscal 2023. As we look to the remainder of fiscal 2023, we continue to expect to have strong revenue growth across all three segments and at the consolidated level which when coupled with meaningful operating leverage will result in strong year-over-year EBITDA and EPS growth. We expect to benefit from continued stability in our raw material and freight costs. As we look at the cadence of earnings across the three remaining quarters of this fiscal year, we expect our second and fourth fiscal quarters as the strongest of the three remaining quarters, with the third quarter being our seasonally lowest quarter in all remaining quarters expected to be well in excess of the comparable prior year periods. We do not expect as much variability between quarters, as we've historically produced due to the acquired GRD businesses demonstrating less seasonality. As we look at our segments, we expect revenue growth in our Contractor Solutions segment to continue outpacing the categories we serve. Margins are in sharp focus as we manage through the variables that impact our business such as the stability of the supply chain and raw material costs. With the Engineered Building Solutions backlog at all-time highs, our team remains focused on execution and expects to outperform the construction end market, while producing solid margins. Our Specialized Reliability Solutions segment expects to continue delivering another year of strong top-line growth and improving margins. With that, I'll now turn the call back to Joe for closing remarks.

Thank you, James. We have enjoyed an impressive start to our fiscal year with record revenue, EBITDA and EPS and growth in each of these metrics exceeding 20%. We have effectively mitigated inflation with disciplined price actions and our strong balance sheet provides flexibility for capital allocation that enhances shareholder value. During last quarter's call, we discussed our fiscal 2023 outlook reflecting upon our historical revenue CAGR and adjusted EBITDA margin from fiscal years 2017 through 2022. On the heels of such a strong fiscal first quarter, we now expect to outperform these metrics in fiscal 2023 and now expect total revenue growth to be in the high-teens and an adjusted EBITDA margin in excess of our historical average of 20.3%. I am confident in our team's ability to deliver on these heightened expectations. As broad economic concerns have come into focus, it's worth reiterating that CSWI has performed very well during economic downturns. Diversification is inherent in our business model given the breadth of the end markets we serve. We are relatively insulated from its cyclicality, as our consumable products are used either in maintenance, repair and replacement applications or to extend the reliability performance and life span of critical assets. We are poised to continue to outperform the end markets we serve. Over the past several quarters, we have provided examples of our commitment to ESG principles and corporate sustainability providing insights regarding four specific efforts in the social realm. First, our commitment to safety and a zero-incident workplace including publicly reporting our TRIR; second, the partnership with our employees for a safe secure and dignified retirement through our distinctive profit-sharing programs; third, our efforts to remain as an employer of choice to retain quality talent and maintain turnover rates lower than industry averages; and fourth, it's our community engagement such as our secondary education scholarship programs. Today, I am pleased to announce that we have updated the corporate sustainability portion of our CSWI website with two newly adopted policies. The first is our human rights policy, which affirms in writing our existing practices and commitment to respect internationally recognized human rights principles aimed at promoting and protecting human rights in all of the countries in which we operate. Additionally, we have published our environmental health and safety policy, which recognizes our corporate responsibility to protect the health and safety of our employees and the environment. CSWI's environmental stewardship efforts include; efficient use of resources, promoting sustainable consumption and minimizing the impact of our operations on the environment. We expect to publicly disclose information relating to environmental key performance metrics targets and progress in the future. I would also like to welcome Anne Motsenbocker who joined our Board of Directors in June. Anne brings extensive executive experience -- executive leadership experience and strong strategic financial acumen to the company's board game through serving in numerous executive leadership roles over a 36-year career with JPMorgan Chase. Through this experience and strengthens the Board's perspective on strategic growth for multinational corporations as well as risk management and operational excellence. Anne's appointment demonstrates our continued commitment to excellence, independence and diversity on our Board. My colleagues hear me say this often at CSWI, we must and we will succeed, but at CSWI, how we succeed matters. Achieving these outstanding first quarter results, represents the product of our commitment to be good stewards of your capital and our goal of delivering long-term shareholder value. As always, I'd like to close by thanking all of my colleagues and fellow shareholders here at CSWI who collectively own 4% of CSWI through our employee stock ownership plan as well as all of our other shareholders for our continued interest in and support of our company. With that, Devin, we're now ready to take questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jon Tanwanteng with CJS Securities. Please proceed with your question.

Hi. Good morning, and thanks for taking my question. Congrats on a really nice quarter. My first one is on just the sequential thoughts. I was wondering if you could break down what you're looking on a volume and net pricing basis as we go into the second quarter. It looks like on the Engineered Building Products with the backlogs and momentum is picking up. I was wondering if you're seeing the same thing in the other two businesses as well?

Yes, Jon. Good morning. It's James, and thanks for the congrats and thanks for being on the call this morning. It's always hard to project volume a little bit as we looked at our first quarter in specialized reliability solutions, we are seeing unit growth and pricing growth we expect for that to continue. The tailwinds in that business are really strong. The performance there has been very good, so I think in that case unit volume up and pricing continuing to hold over the last years, we are still absorbing some of the impact of pricing initiatives in the last couple of quarters is there. Yes, to your point Engineered Building Solutions, as you all know, as you build backlog, it takes a while for that to come through, we're starting to see some of that. We are seeing some good demand in that space unit volume picking up, margins you're seeing in a nice place. I think this next quarter we see more continuance of that same theme. In Contractor Solutions, on the pricing side, obviously, again as we lap the year we'll continue to see the impact of nice pricing initiatives we've had in place and start to see some of that spread between pricing and cost. One thing that I mentioned a couple of times was the timing of cost and pricing. If you think about it, you bring something over in a container from Southeast Asia, it's a few months before that pricing works its way through, so as we've seen container pricing come down, as we've seen raw material pricing come down, those costs are now in inventory a few months later. So I think you're going to see that spread start to pick up and have some margin opportunity as the pricing has fully taken hold now. This quarter we did a couple of pricing initiatives in various product lines during the fiscal fourth quarter. In terms of units, a little early to say what this quarter looks like. Some of the product lines have a tailwind to them. There was a slight decrease in Q1. I think number one that business does have a backlog, there were some back orders product that we were waiting to get in and if some of that had come in just a couple of weeks earlier that may have been a slight increase so that can literally move a couple of percent here or there pretty easily. You have some geographies that were cooler in the first quarter, and you've seen a little pickup in temperature in the Northwest and the Northeast or in the second quarter and those are big markets for our mini split, and we have a lot of accessories in that menu split market that impact the unit volumes, and so that market's been a hair softer, so you have unit as well as some margin there in those products. As some of that as temperatures pick up, and if some of that mini-split installation picks up then that's a good tailwind for us as well, but overall, when you look at units we have in that business it's hard. There are so many SKUs. It's different than the OEMs unit to unit to some degree for us the SKUs can be so different, but I think we have opportunity to continue to see topline growth without question, how much of that is price versus volume will take each quarter at a time.

Understood. It sounds like on the balance you're expecting sequential improvement though.

Yes.

Okay. Great. Just again to clarify on the volume decline in Contractor Solutions. You mentioned that was in plumbing it was all supply chain-related it wasn't demand or anything like that?

Yes, Jon, this is Joe. Yes, we think demand is holding up pretty well. As James said, we had backorders and so that would suggest that demand was a little bit higher than what the revenue might or what the unit volume might suggest, but we expect growth to moderate, there's no question about that, but no concerns around growth at this time.

Okay. Then just to touch on the share repurchases you saw in the quarter. I think that's nice to see. Should we take that as an indication that there are no near-term deals in the M&A pipeline, or is it you just have that much confident in your ability to have leverage in the right along that it was on the right choice at the moment?

Yes. It's absolutely the latter, Jon. I mean, we can do both. We can do the acquisitions and buy back our stock. We have this rigorous intrinsic value financial analysis that we do. Stock price was down and that accelerated our repurchase a bit and so we just really thought that was a great place on a risk-adjusted basis to invest our capital and in no way does that limit our ability to take advantage of acquisition opportunities.

Okay. Great. What are you seeing in the acquisition pipeline today in terms of valuation and just the industry that you're looking at?

Yes. I think that the acquisition pipeline is still strong. We have opportunities in front of us and haven't seen a meaningful change in valuation and so activity has not picked up because of a decline in valuation, but there are still opportunities out there that we're pursuing aggressively and we would expect to continue to add product line extensions throughout the fiscal year.

Okay. Great. Just one last one for me James. What do you think on interest expense for the rest of the year just given rising rates and use of capital?

Yes. You're going to see obviously some of that depends on the revolver balance and then some of that's going to depend on acquisition opportunities obviously. So it's hard to -- you've got to make your own assumption on that respect. We've got some internal forecast of course, but we forecast things along with the expected curve out there that rates continue to move up a little bit -- we're on a LIBOR-based grid. The leverage has stayed at a very attractive level on that grid for us. But in terms of interest rates, I think, if you plug in the normal interest rate curve you're seeing that gives you a part of the equation and then the other is going to be your own assumption on whether we pay down debt through cash flow or we're going to consume some of that cash flow and even some of the revolver based on acquisition opportunities that Joe talked about. Then the good thing for us right now is absent opportunities we have the opportunity to pay down debt. We're obviously looking for opportunities, but as EBITDA continues on this type of rate of growth and pace as we've talked about with the margins that we guided to and the high teens revenue growth that we guided to in the release and in Joe's comments we have the opportunity for -- while debt could creep up through acquisitions we have the opportunity for leverage to keep coming down because the EBITDA is so attractive now.

Got it. Thanks guys and great work.

Thanks, Jon.

Thanks, Jon.

Thank you. Our next question comes from the line of Julio Romero with Sidoti. Please proceed with your question.

Hey, good morning, everyone. I wanted to stay on the residential contractor solutions side. What are you seeing or hearing from your customers regarding inventory levels? I think you spoke about a little bit of a backlog in during the first quarter but just have you heard about any destocking risk at all from your customers?

Yeah, Good morning, Julio, it's James. Thanks for being on. Appreciate the support. Yes, I think we all read the same thing that like we did our customers have stocked up a little bit given the supply chain questions and just like we don't want to be out of something they don't want to be out of something if it's needed in the field. So you saw some stocking up on their balance sheet as we did the same thing and so a little bit of what appears to be softness is not really demand from the consumers being solved. It's just yes there may be a little bit of destocking. It doesn't feel like anything was pulled forward in the last quarter necessarily so you may see a little bit of destocking as people go through it as the supply chain seems to have a little relief to it, but at the same time I don't think it's a dramatic shift that we've seen yet because the supply chain can turn pretty quickly. Just as we are going to be very cautious to relieve inventory because those things still take a couple of months to get across the ocean. It may not be three or four months maybe now it's three there's a little bit of that. Nothing dramatic though I would point to.

Yes. The other thing I would say, Julio, this is Joe is that as you look regionally there are regions that are up double-digits or regions that are down double-digits and that seems to me to be an effect of weather and temperature and not necessarily an overall demand statement and so we're still pleased with the demand we see obviously again unit growth will moderate from what we've had over the last year or two, but revenues continue to grow nicely because of pricing and at the end of the day we have a very resilient line of products that are used in replacement of units in repair and maintenance and cleaning and those types of things which are all opportunities for us to sell to our customers and sell through that's very different from the capital-intensive businesses that require the purchase of a unit.

Okay. That's very helpful. Then within the residential portion of your portfolio can you just give us a quick refresher on the breakout between your exposure in new housing construction versus repair and remodel?

Yes. Really the way we always characterize that Julio is that the industry again which is driven primarily by the capital equipment guys would tell you it's 80% replacement and 20% new build. We index even more so toward the replacement market because again repair maintenance cleaning those types of things. And so it's --at the margin do housing construction is helpful but that is not the meat and potatoes for this business.

Got it. Then just switching over to the Specialized Reliability Solutions segment. Very nice margin gains there. You mentioned price and volume were up. Do you think the pricing strategy has more runway either in the form of maybe more price capture or maybe just further improvements of the time between notice and effectiveness there?

Well, certainly, on that one the notice and effectiveness is very efficient. I think that yes, because of the specialized nature of our products, because of the low cost high value that our products represent I think there's an opportunity, for us to certainly maintain our margins as inputs rise and so we feel like that is truly a specialized business and the margins reflect that and we'll continue to reflect that over the long term.

Okay. Very good. Then just last one for me, is if you could just speak to your capital spending expectations for fiscal 2023.

Yes. It's hard to project that necessarily. Obviously, as Joe talked about we've got kind of an intrinsic value model on our share price. So if we think that that's below where it should be and have opportunity, then we would repurchase that we did $30 million last quarter. I've used $50 million of the $100 million, under the program at this point We raised our dividend this last quarter so that's a little bit that goes back to the shareholders. Then as Joe talked about, and we've both chatted a little bit about, it comes up to M&A opportunities we do have several active opportunities. We've seen M&A opportunities that we passed on this year so, we're being very disciplined about that. From that perspective, that's a question mark on what comes across the table and what makes sense for us. Lastly, from a CapEx standpoint, I think in line with historical norms is pretty expected here. Other than right now, we don't have any ERP implementations. We did our last large Jars implementation for now, when we brought TRUaire on at the beginning of the fiscal year. So some of that's behind us so that's in the depreciation phase. We have a few businesses, some of the smaller businesses, not on that yet and those are in the planning stages. But -- so CapEx could be on the lower end of the range, we've had historically, because we don't have as much IT CapEx from that respect. From a business CapEx perspective, we always say Joe, and I that we challenge our business leaders to find good growth and expansion opportunities beyond just the maintenance and repair and we see some of that on the horizon. We see growth opportunity here, across our segments where some investment would really have some nice attractive quick returns, but the normal CapEx type range of a couple of percent of revenue is probably a good starting point.

Very, helpful. Appreciate you taking the questions. Thank you.

Thank you.

Thank you. Our next question is a follow-up question from the line of Jon Tanwanteng. Please proceed with your question.

Thank you, and I appreciate the notation. My second or my follow-up question is just on the margin commentary. I think last quarter, there was a little bit of confusion just with the 20% plus, given that you did 21% already in the prior year, in a year where you had a lot of input pricing headwinds, it sounds like you're in excess of 20% should be well in excess of 20%, just given you're expecting to be sequentially higher in Q2, is that fair to say and how should we think about that commentary specifically?

Yes, Jon, it's James. I appreciate the follow-up. Yes the first part of that I want to be sure you and others have heard it is, we've shifted to a high teens revenue guidance on the heels of a really strong Q1, which still implies a nice high teens-ish type growth in the final three quarters, so really pleased with that outlook. From a margin perspective, yes, I think you're looking at it appropriately. What we're indicating is we expect to be in excess of the historical 20%. I think we have opportunity to be a decent amount above that. Obviously, some of that comes down to what costs come through and do we see changes there. As you well know, you've got a little bit of a year-over-year challenge these first couple of quarters, because you're still working with numerator and denominator that we've been able to raise prices to cover cost increases, as some of those costs have started to subside a little bit you've got a little margin expansion opportunity there, but we're just maybe a few months into some of that slowing down, so we don't want to get too far ahead of ourselves and assume that freight rates are exactly where they are in the rest of the year, and input costs are exactly where they are in the rest of the year but yes, I think you're looking at it the right way. The opportunity to do better than kind of right on the 20%, is certainly there and certainly what we're challenging ourselves internally to accomplish.

Okay. Great. Thanks guys.

Thanks, Jon.

There are no further questions at this time. I'd like to turn the floor back over to Joe Armes, for closing comments.

Yes. And I just want to say thank you, for joining our call today. We appreciate your interest in and support of our company. We look forward to speaking to you again next quarter. Thank you.