HI - NYSE

Good day ladies and gentlemen and welcome to the Hillenbrand Third Quarter Fiscal Year 2023 Earnings Call. Our host for today's call is Sam Mynsberge, VP of Investor Relations. [Operator Instructions] I would now like to turn the call over to your host. Sam, you may begin.

Thank you, operator. Good morning, everyone. Welcome to Hillenbrand's conference call for our fiscal third quarter of 2023. I'm joined by our President and CEO, Kim Ryan; and our Senior Vice President and CFO, Bob VanHimbergen. I'd like to direct your attention to the supplemental slides posted on our IR website that will be referenced on today's call. As a reminder, the divested Batesville segment is classified as discontinued operations for all periods presented and our commentary will be based on the performance of our continuing operations. Turning to Slide 3. A reminder that our comments may contain certain forward-looking statements that are subject to the safe harbor provisions of the securities laws. These statements are not guarantees of future performance and our actual results could differ materially. Also during the course of this call, we will be discussing certain non-GAAP operating performance measures, including organic comparisons for our segments which exclude the impacts of acquisitions, divestitures and foreign currency exchange. I encourage you to review the appendix in Slide 3 of the presentation as well as our 10-Q which can be found on our website for a deeper discussion of non-GAAP information, forward-looking statements and the risk factors that could impact our actual results. With that, I'll turn the call over to Kim.

Thanks, Sam and good morning, everyone. Thank you for joining us on today's call. I'd like to start by touching on our recently announced acquisition of the Schenck Food and Performance Materials business, or FPM which we expect to close later this quarter. This transaction builds upon the momentum of our Linxis, Peerless and Herbold acquisitions as we executed our profitable growth strategy to transform Hillenbrand into a pure-play global industrial company. As a reminder, with these acquisitions and the divestiture of Batesville that we completed in February, we've transformed our portfolio from having roughly 20% of our revenues generated from the secularly declining death care end market to now anticipating nearly 30% of our combined revenues to be in the higher growth, less cyclical end markets of food, pharma and recycling. These end markets are supported by long-term macro growth demands and our improved scale allows us to leverage our global engineering and service capabilities along with our global footprint and scalable foundation to drive profitable growth. I'm excited by the opportunity this acquisition will create by enabling us to provide more comprehensive value proposition to our customers, to create enhanced opportunities for our associates, to share best practices and drive scale benefits across functions like engineering, manufacturing and procurement and finally to create long-term shareholder value through our combined portfolio of leading brands and technologies with an expanded presence in higher growth, less cyclical end markets. We are on track to close the transaction this quarter and the teams are diligently planning the integration process so we can hit the ground running on day 1. We look forward to providing an update at closing. Turning to the next slide; I'll now touch on a few key highlights from our fiscal third quarter. Overall, we executed well in the quarter, exceeding our expectations for margins and earnings per share as our teams did an excellent job managing spend and driving productivity. Consolidated revenue grew 24%, driven by strong performance from our acquisitions and robust organic performance of 14% in our APS segment, with continued strength in our aftermarket parts and service business which offset continued softness within our MTS segment which I'll discuss further in a moment. We also delivered adjusted earnings per share growth of 36% and generated free cash flow conversion of over 110% in the quarter. I'm pleased with the progress we're making on our integration and the success we've seen creating enhanced solutions for our customers with 2 multi-million dollar system orders won in the quarter for alternative protein and stack applications which neither Coperion or Linxis would have been able to win alone. The teams are excited about the opportunity to create even further value through the addition of FPM. Finally, at the end of May, we published our fourth annual sustainability report, showcasing our purpose, shape what matters for tomorrow. In the report, we furthered our commitment to transparency by publishing our double materiality assessment which reassess the priorities of our internal and external stakeholders following the acquisitions we made in 2022. We also disclosed our Scope 3 emissions, water usage and approach towards reducing our emissions. I'm very proud of our team for the significant progress we've made, most recently reflected in Hillenbrand being named a finalist in the Reuters Responsible Business Awards for the launch and communication of our purpose. Now, I'll provide a high level overview of the dynamics we're seeing across our segments. Starting with MTS; we continue to see softness in orders across the segment. While orders and revenue for hot runners did improve sequentially, we continue to see elongated customer decision processes across most end markets and geographies, particularly in China, where we're seeing extended weakness in customer orders, driven by ongoing uncertainty within China's economy as well as customers pausing to reevaluate their own production footprint within the broader region. For our injection molding products, orders were relatively stable on a sequential basis but have not rebounded in the timeframe we initially anticipated. We continue to be cautious about the outlook for MTS and remain focused on managing costs and driving productivity to maintain margin performance. Now turning to APS, starting with durable plastics. While we were impacted by customers delaying decisions on a few large projects in the quarter, we continued to see a healthy pipeline of projects for both polyolefin and engineering plastics in India, the Middle East and China. The scale of these projects has continued to increase as customers look to maximize the efficiency of their investments and this plays into our strength as the leading global provider of highly engineered, high output extrusion and material handling systems. We've also continued to see strong demand for aftermarket parts and service in this segment which reflects the strength of our installed base and the enduring value proposition we bring to customers throughout the life of their equipment and systems. We delivered double-digit year-over-year organic growth in the APS aftermarket revenue this quarter and our aftermarket book-to-bill ratio remained above 1, now for the 11th consecutive quarter. Turning to recycling; as a reminder, through the combination of our Coperion extrusion and material handling system and the Herbold shredding, washing and grinding equipment, we can offer a unique value proposition to customers through our complete plastics recycling solutions. While this represents a small part of our portfolio today, we believe we'll see significant growth over the next few years as a number of projects as well as the scale and complexity of the systems required to process the recycled material increases. Now to food and pharma; we saw strong performance in the quarter with revenue improving nearly 20% sequentially and book-to-bill above 1, with robust demand for equipment and systems and applications such as baked goods and other processed foods, including pet food, snacks and treats. We saw strength across North America, Europe and Latin America and we're confident in the outlook for this less cyclical, higher growth part of our business which is bolstered by our ability to create enhanced value with our more comprehensive product portfolio. As a reminder, in fiscal 2022, these end markets represented approximately 3% of consolidated revenues. Through our acquisitions of Linxis, Peerless and Gabler, we have increased our scale to approximately 15% of total revenues and at closing the acquisition of FPM, will bring this to nearly 25% of expected total company revenue. Overall, we remain confident in our strong brands and leading technologies and we believe the portfolio actions we've taken have strengthened our position within end markets that can balance the cyclicality of our existing plastics business, while still leveraging our core capabilities around material processing and systems engineering. While the ongoing macroeconomic uncertainty is causing delays in customer decisions, we remain focused on executing our strong backlog, driving continuous improvement in our operations through the HOM, managing discretionary costs and executing our integration plans to achieve both growth and synergies. I'll now turn the call over to Bob to provide a more detailed overview of our financial performance and outlook for the fourth quarter.

Thanks, Kim and good morning, everyone. Turning to our consolidated performance on Slide 6; we delivered revenue of $717 million, an increase of 24% compared to the prior year or 5% on an organic basis, as strong organic growth within our APS segment of 14% was partially offset by lower volumes within our MTS segment. Adjusted EBITDA of $126 million increased 25% or 7% organically as pricing and productivity improvements and higher APS volumes were partially offset by cost inflation and lower MTS volume. Adjusted EBITDA margin of 17.6% improved 20 basis points. We reported GAAP net income from continuing operations of $44 million or $0.60 per share, up from $0.42 in the prior year. Adjusted earnings per share of $0.95 increased $0.25 or 36% compared to the prior year, primarily due to pricing and productivity improvements, the impact of acquisitions and higher APS volume, partially offset by cost inflation and lower MTS volume. The adjusted effective tax rate in the quarter was 30.6%. We anticipate our full year tax rate to be approximately 29% which is favorable to our previous projection primarily due to a strategic tax initiative that will take effect in the fourth quarter. We generated cash flow from operations of $89 million in the quarter, up approximately $104 million from the prior year, primarily due to favorable timing of working capital and higher earnings. Capital expenditures were $14 million in the quarter and we returned approximately $15 million to shareholders through our quarterly dividend. We were pleased with our cash performance in the quarter as teams did an excellent job executing reductions in inventory and receivables. We maintain our expectation that full year cash conversion will be in the range of 80% to 85% for fiscal 2023, while our longer-term target remains at approximately 100%. Now, moving to segment performance, starting with APS on Slide 7. APS revenue of $465 million increased 50% compared to the prior year, driven by acquisitions, favorable pricing, higher aftermarket parts and service revenue and an increase in large plastic system sales. Organic revenue increased 14% year-over-year. Adjusted EBITDA of $94 million increased 55% year-over-year or 22% organically as favorable pricing, higher volume and productivity improvements were partially offset by cost inflation. Adjusted EBITDA margin of 20.1% increased 60 basis points, primarily due to favorable pricing, operating leverage from higher volume and productivity improvements, partially offset by cost inflation and the dilutive effect of the acquisitions. As a reminder, the recent acquisitions currently operate with lower relative margins. However, we do expect to bring these in line with historical APS margins over the next few years as we drive synergies and productivity through the deployment of the Hillenbrand Operating Model. Backlog of $1.6 billion increased 31% compared to the prior year or 7% on an organic basis, primarily driven by demand for large plastic systems and aftermarket parts and service. Sequentially, backlog was down 4%, primarily due to the delay of several large orders, as Kim mentioned earlier. However, we see strong demand in our food business, particularly within our Linxis brands and continued strength in our aftermarket business. Turning to MTS on Slide 8; revenue of $252 million decreased 7% year-over-year or 6% organically as a decrease in injection molding and hot runner equipment sales were partially offset by higher aftermarket parts and service revenue and favorable pricing. Adjusted EBITDA of $51 million decreased 7% or 5% on an organic basis as lower volume, cost inflation and unfavorable product mix were offset by favorable pricing, lower variable compensation, productivity improvements and cost containment actions. Adjusted EBITDA margin of 20.2% was flat compared to the prior year as the teams executed well on managing costs and driving productivity to maintain margins despite the volume headwinds. Backlog of $266 million decreased 37% compared to the prior year, primarily due to lower orders for injection molding and execution of existing backlog. While we started to see patterns improve in our fiscal second quarter, the order volume in this quarter remained only steady to Q2 as we experienced continued delays in customer decisions. Activity in China had picked up initially following the Chinese New Year but we have since seen activity slow and we now expect China demand to remain suppressed through at least the remainder of the fiscal year. We continue to monitor the demand environment and will manage costs appropriately to respond to further potential softness. Turning to the balance sheet on Slide 9; net debt at the end of the quarter was $1.05 billion and our net debt to pro-forma adjusted EBITDA ratio was 2.3x. At quarter end, we have liquidity of approximately $1.08 billion, including $291 million in cash on hand and the remainder available under our revolving credit facility. As we consistently communicated, our capital deployment framework is based around 4 key priorities: first, driving profitable growth through attractive organic investments; second, enhancing our growth through strategic M&A; third, returning cash to shareholders through our attractive dividend policy and opportunistic share repurchases; and finally, maintaining an appropriate leverage profile with a targeted net leverage range of 1.7 to 2.7x. As we announced in May, we believe the acquisition of FPM will bring significant strategic and financial benefits to Hillenbrand. It clearly aligns with our profitable growth strategy, improving the end-market exposure of our business with leading positions in the attractive food end market, where FPM generates roughly 65% of the revenue, with nearly half of their food revenue coming from pet food which we believe will be an attractive growth area for us going forward. While the margins of FPM will initially be dilutive, we are confident we can successfully execute the integration of FPM alongside Linxis and Peerless to drive synergy realization and achieve margin expansion towards historical APS segment levels over the next few years. We plan to fund this acquisition through our revolving credit facility and our recently announced €185 million term loan. Following the closing of this transaction which is expected later this quarter, we anticipate our Q4 pro forma net leverage to be approximately 3.2x. Looking ahead, we'll be prioritizing our cash flows towards debt reduction with a target to be below 2.7 net leverage within 15 months post close as we communicated at the time of the deal announcement. Now, moving to our outlook on Slide 11. As we enter the final quarter of the year, we're narrowing our guidance based on our performance year-to-date as well as what we see in the current demand and operating environment. Given we have not yet closed the acquisition of FPM, we are not incorporating any impact into our guidance and we would not expect a material impact to our adjusted earnings per share from the acquisition at this time. Starting with total Hillenbrand, our guidance now assumes total annual revenue of approximately $2.78 billion to $2.81 billion, down from our previous range of $2.81 billion to $2.86 billion, primarily due to the delay in customer orders we experienced in APS impacting our revenue recognition as well as the ongoing delay in orders in MTS. Given favorable corporate items, including interest and tax, we are raising the midpoint of our adjusted earnings per share outlook with our full year range now expected to be $3.40 to $3.50, previously $3.30 to $3.50. As I mentioned earlier, we expect our adjusted effective tax rate to be approximately 29% for the full year. Now, turning to the segments. For APS, we now expect annual revenue to be in the range of $1.78 billion to $1.80 billion, previously $1.80 billion to $1.83 billion. While our organic growth is slightly lower due to the order delays in large plastic projects, it still remains strong at high single-digit growth and we expect slightly better performance in our recently acquired businesses. We now expect adjusted EBITDA margin to be 19.2% to 19.3%, higher than our previous range of 18.5% to 19.0%, primarily due to better performance from our acquisitions. Organic margins are expected to be up approximately 60 to 70 basis points over the prior year. For MTS, annual revenue is now expected to be $1 billion to $1.01 billion, previously $1.01 billion to $1.03 billion as customer decision timing has been slower than previously anticipated, particularly in China, where macro headwinds have continued to impact the region. Our guidance range for adjusted EBITDA margin is now 18.7% to 19%, slightly below the low-end of our previous range of 19% to 20%, primarily due to the lower-than-expected volume. We continue to deploy the Hillenbrand Operating Model to drive operating efficiencies and evaluate additional cost savings actions to help mitigate the ongoing macro softness. Please review Slide 11 for additional guidance assumptions. With that, I'll turn the call back over to, Kim.

Thanks, Bob. Before taking questions, I'll end our presentation this morning with a few final remarks. As we navigate the ongoing macroeconomic uncertainty, I remain confident in the actions we've taken to position Hillenbrand for long-term profitable growth. We remain laser-focused on managing what we can control and driving shareholder value through our leading brands, with strong competitive positions in large end markets, supported by long-term growth trends through our large installed base that supports profitable aftermarket expansion and by capitalizing upon enhanced capabilities we've achieved through our strategic M&A, by utilizing the Hillenbrand Operating Model to drive sustained operational performance, productivity and synergies and by deploying our cash flows towards deleveraging high-return growth opportunities and returning capital to shareholders. With that, we'll open the line for questions.

[Operator Instructions] Your first question comes from Matt Summerville of D.A. Davidson.

Kim, I really like some of your perspectives here, given your experience in running Coperion for so long. How long do these order pauses typically last when it comes to these large plastic projects like you're seeing? And do you consider this to be a normal course of business given kind of where we are from a cycle standpoint? And then I have a follow-up.

Yes. So I would say that for some of these very large projects, it is not unusual for them to move several quarters. It's really not unusual. Sometimes that's due to specification enhancements that we continue to work on with them. Sometimes that's due to market conditions, sometimes that's due to their own internal processes. So there's going to be a wide variety of factors. And remember, these things are multibillion-dollar projects that are being worked on. So we're one part of multi-billion dollar projects. What I would say is that based on long, long history -- and so while I was at Coperion 7 years, that pales in comparison to the rest of the management team I worked with there who were decades in the chair. So they had a lot of experience through the cycle. And what I would tell you is that their level of concern that this is indicating something more akin to a recession is not high because we are continuing to see a lot of activity in the pipeline. We are not seeing those projects cancel. We're continuing to see FEED studies which are kind of feasibility studies that we do with companies early in their process. So those -- if you looked back to kind of the most recent big downturn which would have been '08-'09, projects were coming off the list, FEED studies were getting halted, at the time there were no conversations going on. And I would tell you that we're not seeing those -- any of those indicators. And we're also continuing to see in our short-cycle business like parts and service, we're continuing to see a lot of strength and a lot of projects that have been on hold are going forward from that perspective. So those are the things that we continue to monitor. Hopefully, that helps provide some clarity on that, Matt.

Yes, Kim. I appreciate that. And then just as my follow-up, can you talk about maybe the magnitude of pricing you're realizing across the two businesses relative to last year and your views on sustainability there in with respect to price stickiness?

Yes, I'm going to let Bob take that.

Yes. Sure, Matt. Yes. So really no change from what we've seen, I'd say, in the last probably 4 or 5 quarters. So we continue to have great processes that were put in place probably 2 years ago from our global supply chain management team, where we're tracking costs when they go up. And as you can imagine, more recently, costs when they've been going down. And so we've, again, this quarter, delivered price cost that was above 100%. We have line of sight to seeing that through Q4 as well and even beyond because of some of the good processes we have in place between the GS cycle, the supply chain management team as well as our commercial team. So as we sit here today, we see price/cost favorability the rest of this year and into '24.

Your next question comes from Daniel Moore of CJS Securities.

Maybe building on that question. In APS specifically, what was price versus cost for the 14% organic growth we saw in Q3 as well as the high single-digit organic growth you expect for fiscal '23?

Yes. So price/cost for APS was over 130%, Dan, in the quarter.

And just the breakdown of that organic growth in terms of price versus volume?

Yes. So the price was about 5 -- a little less than 5% and the volume being the delta. So consider price 5%, volume closer to 8% or 9%.

Perfect. And then, I guess, building on Matt's question a little bit as well and sticking with kind of plastics in the APS side. Is it purely or mainly China where you're seeing some push out in orders? Or is it India and other geographies as well?

No, I would tell you we're seeing it in the geographies where we have pipeline which was China, India, Middle East.

And are there any common denominators in terms of -- in your conversations what's causing some of the delays?

No.

Just the macro uncertainty more generally?

Yes, I would say the only one that has kind of its own undertone is in China specifically. And that's just, I think, relative to a lot of the macro geopolitical environment that we're operating there. But other than that, I would say that some of the projects we continue to discuss in Middle East and India, they're just going through normal machinations on these types of projects just as they continue to work their way through their process, the engineering efforts, the site efforts, all those types of things. So we're not -- I'm not seeing anything that I would say is a continuing theme.

Got it. That's helpful. And then shifting gears to MTS. I know it's early, obviously but given orders continue to be pushed out, how should we think about organic revenue growth or maybe potential contraction as we kind of look to fiscal '24 at this stage?

Yes. So obviously, we're going to give guidance next quarter on our Q4 earnings call. But we did see, I'd say, modest sequential order improvement in hot runners in the quarter versus Q2. Injection molding continues to remain soft. And certainly that -- because that is somewhat of a backlog business. That is going to put '24 under -- in a challenging environment. And then as we just talked about and Kim highlighted, right, China continues to be a little bit weaker. And certainly hot runners is an area where we have a leading position there, right? So it's something that -- we needed orders to come in here in Q3 and -- to really -- but really that's going to impact part of fiscal '24. So it's something that we're just going to focus on, obviously, driving all the orders that we can but then utilizing the Hillenbrand Operating Model and focusing on continued improvement within our 4 walls as well as focus on the fundamentals of things that we can certainly control. But again, we'll provide more feedback in our call next quarter on '24 guidance.

Okay. And maybe just a little bit of -- Kim, you gave the anecdote of one business win, I think it was a combination of Linxis and Coperion, that you maybe wouldn't have been able to previously. Just a little bit more color on the integration of Linxis, Herbold Meckesheim and Peerless, I think last quarter you alluded to Linxis maybe not being used to hitting public company deadlines. How are those integration progressing potentially?

I give a lot of credit to these guys have been -- these guys have really been running quickly to try and catch up with some of our processes and our cadence around quarters and kind of re-planning on a quarterly basis in those types of things that are a normal part of what our other businesses do. And through the efforts of the finance team and frankly, I think the efforts of the engineering teams to really understand what kind of cadence we're looking for and get used to POC and those types of accounting methodologies that are a normal part of our process. I think they are continuing to make tremendous progress there. I would also say that the teams have really been coming together nicely in terms of identifying opportunities where we were going to previously be doing buyout for some of the product offerings that we have in other parts of the company and really approaching those customers with a fulsome -- call it a full Coperion now solution for some of these end markets. And I've really been pleased, especially with our team in Kansas City, [indiscernible] team working very closely with the Coperion food team. They're now bringing those groups together to deliver and quote systems. And we're really seeing, I think, a lot of promise with what they can deliver as a team as opposed to going after these customers individually. And we are really excited about that. And so I think the teams are moving quickly. Obviously, with Schenck coming in, we'll -- there are certain parts of the integration activities that we will kind of reimagine and retime so that we can do everything at once but they have continued to work on operating model improvements, they've continued to work on getting things under contract in our Global Supply Management group. They continue to work on all of their financial processes and their need to be SOX compliant, et cetera. So that work continues. And then we'll fold in some of the other activities that will encompass the Schenck team, the FPM team when they come in starting late this quarter.

I'd say just to add on. I mean food and pharma was an absolute bright spot for us in the quarter. And again, you highlighted the fact that last quarter we mentioned we saw a push out in maybe some orders and a lot of that was probably just due to timing of a company trying to understand public company requirements. But they did catch up in the quarter and beyond really what we thought. And sequentially, food and pharma revenue was up 20% from Q2. And so as we sit here today, we see high single-digit growth here in the next couple of quarters out of that business. So truly a bright spot of what we're seeing from that team.

Perfect. Last housekeeping. Just the lower tax rate, is that sort of discrete for Q4? Or should we think about that as maybe more sustainable into fiscal '24?

Yes. No, that's actually going to be sustainable, Dan. Our tax team did a fantastic job with some planning initiatives. That will be executed this quarter and that's going to provide benefit moving forward.

29% is best to -- if we had to model in something for ongoing, is it the best number to use?

Yes. Well, the benefit of -- it's probably in that 29% to 30% moving forward. So we'll get probably a point of benefit moving forward. So obviously, we'll provide guidance next quarter but that 29% is probably not out of the range of where we'll be.

[Operator Instructions] Your next question comes from John Franzreb of Sidoti & Company.

I'm just curious with backlog and your levels. What's the capacity utilization look like across the business profile? Are there any bottlenecks anywhere? And how are you addressing that?

Yes. So really no bottlenecks, John. I mean we actually have -- in our APS business because of our significant backlog, we're actually outsourcing some of that work which obviously helps us when -- if we get to a point where we can execute everything within our 4 walls, we can actually bring that in-house and protect margins a bit. But utilization even within our MTS facilities has been really above 90% the last couple of months and probably actually a couple of quarters. So again, that's attributable to our continuous improvement initiatives with our Hillenbrand Operating Model and continued just great performance from our operations teams within the organization.

Great. And considering the weakness in China, I'm actually kind of curious. Have you seen any change in the competitive landscape at all, more aggressive pricing? Any potential share losses going on there?

Yes. I think you're definitely going to see people trying to press on pricing terms and those types of things in order to get volume in the door. And so I think that's not unusual for us to see that. China is primarily a hot runner business for us as opposed to an injection molding business. Our primary injection molding markets are really in India and North America, both of which are a little soft right now. And I think part of that is that as companies kind of determine what their supply base footprint should look like -- we do see incremental quoting activity going on for hot runners and for injection molding in India as people kind of rethink: do they want to have their entire footprint in China or do they want to have that footprint in multiple areas in Asia? And so that's something we continue to monitor. Obviously, we -- our global footprint, we have facilities in India. We have facility -- a hot runner -- a large hot runner facility in China. So whichever way that ends up going, we think we're well prepared with personnel, engineering resources, manufacturing resources, procurement resources on the ground in both of those locations to respond to that. But we do continue to monitor that. And I think in the short term, people want to keep their factories busy. And so discounting and terms become a part of the short-term landscape. We continue to try and use our operating model to keep control of our costs and trying to stay ahead of what we anticipate in terms of volume. I think you see that when you look at the flow-through on some of the volume challenges we have in the quarter and how that flowed through on the bottom. I think you see that we're working really hard to balance those and not have an outpaced bottom line effect as a result of some of the short-term volume challenges.

That's very helpful. And just one last question. Given the transformation that the company has undergone in the past 2 years, has there been given any thought to rebranding the Hillenbrand name?

I think right now, we are -- I think right now, honestly, we're really focused on making sure that we are focused on the integrations right now. And I think we've really done a lot of work in the last year to make sure that Hillenbrand is positioned as a pure-play global industrial. I think we're getting some improved recognition on that front and we feel good about that. And I think that the most important thing we can do here is to continue to deliver on profitable growth strategy that we believe will create a compelling value proposition for shareholders. And I think that, that will -- that has a much greater impact of continuing to deliver results and that's what we're focused on in the near term.

At this time there are no further questions. I'd like to now turn the call back over to Kim Ryan for any closing remarks.

All right. Thank you, again, everyone, for joining us on the call today. We really appreciate your ownership and your interest in Hillenbrand and we look forward to talking to you again in November with our full year results and our 2024 guidance. Have a great rest of your summer. Thanks, again.