REVG - NYSE

Rod Rushing – President and Chief Executive Officer Drew Konop – Vice President of Investor Relations and Corporate Development Mark Skonieczny – Chief Financial Officer

Greetings. Welcome to the REV Group, Inc., First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require Operator assistance during the conference, [Operator Instructions]. Please note that this conference is being recorded. I will now turn the conference over to your host, Drew Konop, VP Investor Relations and Corporate Development. Thank you. You may begin.

Alright, thanks, John. Good morning and thanks for joining us. Earlier today we issued our first quarter Fiscal 2022 results, a copy of the release is available on our website at investors. revgroup.com. Today's call is being webcast and a slide presentation, which includes a reconciliation of non-GAAP to GAAP financial measures is available on our website. Please refer now to Slide 2 of that presentation. Our remarks and answers will include forward-looking statements which are subject to risks that could cause actual results to differ from those expressed or implied by such forward-looking statements. These risks include among others, matters that we have described in our Form 8-K filed with the SEC earlier today, and other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings call, if at all. All references on this call to a quarter or a year, are to our fiscal quarter or fiscal year unless otherwise stated. Joining me on the call today are our President and CEO, Rod Rushing, as well as our CFO, Mark Skonieczny. Please turn to Slide 3 and I'll turn the call over to Rod.

Thank you, Drew. And good morning to everyone joining us on today's call this morning, I'll provide an overview of the quarter's consolidated performance and then move to commercial operating and financial highlights achieved within the quarter. Before turning it over to Mark for detailed segment financials. During the quarter, we continued to experience external supply chain challenges across our businesses. Results were impacted by lower starts affecting completions and increase reward driving inefficiencies. These impacts to our performance stem from supply-side constraints that began in the third quarter of last year, and have continued through the current reporting quarter. Chassis inventory has improved sequentially, but it's still measurably down on prior-year compare. We have received deliveries against allocations and chassis later in cycle, and at a reduced fill rate. This created challenges within our production planning and materials processes. We also experienced an increased positive COVID case rate that grew throughout the quarter. Exiting fiscal 2021, the enterprise had only 12 new positive cases in October. The new positive case number grew to 158 in the month of December, and then to 615 in the month of January. In total, we estimate we lost approximately 45,000 total labor hours to COVID related absenteeism. As demonstrated by our first quarter consolidated results, the impact and ability to navigate through these external headwinds varies within our segments.Both our Commercial and Recreation segments delivered year-on-year revenue and EBITDA growth. While our Fire & Emergency segment, which has a more fragmented supply base and relies more on sole and single-source components, experienced a drop in revenue and EBITDA. Like many other industrials, we continue to work through a difficult environment. While I always expect that we should do better, our team continues to work these problems daily and continue to serve our customers. I'm very confident that the work we're doing will deliver increased value when we get back to a more stable operating environment. First quarter consolidated net sales of $537 million decreased 3% versus $554 million in the first quarter of last year. The decrease was driven by lower sales in Fire & Emergency segment, partially offset by increase within Commercial and Recreation segments, and price realization from our commercial actions that we've implemented over the past 12 months. Consolidated EBITDA of $18.3 million was down $5 million from $23 million the prior period. Solid results in the Commercial Recreation segments offset lingering headwinds in the Fire & Emergency segment, the decrease in F&E was primarily due to lower volume, resulting in fewer vehicle starts, rework, and labor inefficiencies. The increase in the commercial segment was driven by higher volumes in school bus and terminal truck sales. The growth in recreation segment performance was a result of increased throughput from Renegade in Midwest, as well as price realization. Turning to Slide 4, we had several accomplishments within the quarter that I would like to highlight. First end-market demand across our portfolio of products continues at record levels. We exited the quarter with a record $3.4 billion backlog, an increase of 69% versus the prior year. Each segment's backlog is a respective record, resulting from strong order intake. Municipal budgets remained healthy back my tax collection and federal stimulus that in many cases has yet to be out allocated. We believe broadly that the money is still finding its way through the budgetary and approval process. We continue to work with third-parties to connect unallocated federal stimulus dollars to our customers. This has contributed to a book-to-bill ratio of greater than one for seven consecutive quarters. Within the first quarter, we recorded a book-to-bill of 1.4 times, positioning us for growth in fiscal 2023. As our backlog has grown to 3.4 billion, our purchasing organization has remained focused on expanding our supply base, anticipating inflationary pressures over the next 18 months. Within the quarter, we experienced a greater number of inbound price increase requests. The team has worked diligently to limit these impacts through dual sourcing, leveraging offshore resources, and increasing the number of e-auctions. We have implemented additional forward-pricing actions to offset the forward inflation of raw materials, components, labor, and transportation. In addition to that, we have worked with our channel partners to re-price portions of our backlog. Shortly after we closed the first fiscal quarter, our ENC municipal transit business announced the first order for its Axess battery electric bus. It was an order for six buses by First Transit, a leader in University Mobility Solutions for operation at Emory University in Atlanta. The university recently joined the Race To

Thanks, Rod, and good morning, everyone. Please turn to Page 5 of the slide deck as I move to a review of our segment level performance. Fire and Emergency first quarter segment sales were $237 million, a decrease of 15% compared to the prior year. The decrease in net sales was primarily a result of fewer shipments of fire apparatus and ambulance units, partially offset by price realization of units in the backlog. Within the 5th -- first fiscal quarter, our production rates experienced a typical seasonal slowdown due to fewer working days for holidays. However, production downtime was compounded by a spike of positive COVID cases. Throughout the quarter, cases rose from 22 positives in November to a peak of 375 in January. Including required close contact quarantines, the total first quarter impact was nearly 30,000 of lost labor hours. Entering the second quarter, we are encouraged at the rate of positive cases has dropped significantly, and we are currently experienced lower out-of-plan absenteeism, enabling greater productivity. As Rod indicated, F&E completions have also been impacted by fewer vehicle starts that began in the third quarter of last year and carry through the first quarter. Within the ambulance division, the numbers, stock-out parts have started to improve. In the third and fourth quarters, starts and completions were faced with 60 to 70 missing parts per vehicle. Today, that number is nearing 40. In the Fire Division, the biggest challenges have been related to industry-wide shortages of axles, wiring harnesses, and electronic components. We continue to work with our current supply base, as well as alternate suppliers to improve product availability. Where necessary we're also developing alternative engineered solutions to open other avenues of component supply. As an example, one of our high volume wire harness assemblies uses the same connectors used heavily in the auto industry, which are in short supply. Our Engineering team developed a solution that will allow alternate sourcing of connectors expected to be in production within the fiscal second quarter. As we receive increased shipments of these newly source components, we expect to be in a better position to complete units and accelerate starts. F&E segment Adjusted EBITDA was 1.8 million in the first quarter of 2022, compared to 10.2 million in the first quarter 2021. Adjusted EBITDA margin of 0.8% decreased 280 basis points versus last year. The decrease was primarily result the lower volume, supply chain disruptions, labor inefficiencies and inflationary pressures, partially offset by pricing realization. lost volume and sales would typically convert at, at 15% decremental. But the recent and efficiencies we've experienced have resulted in a 20% decremental impact, both year-on-year and sequentially. We expect supply chain challenges to continue in the near-term, however, the actions we have taken combined with an improved supply chain and increased in tenants are expected to lessen headwinds in the back half of the year. The wind-down and closure of our KME production facility in Pennsylvania and Virginia remain on track. Our unadjusted first-quarter results include 5.8 million of charges related to these closures, 4.4 million for restructuring and restructuring-related activities, and 1.4 million of accelerated depreciation on buildings and equipment as it reaches at final use date. The transition and ramp up production for KME backlog at other facilities being impact by supply chain and labor disruptions I highlighted earlier, this has resulted in floor progress a new start than anticipated. However, we expect the pace to improve sequentially, as we progress through the remainder of the year. Total F&E backlog was a record at 1.7 billion, an increase of 63% year-over-year. The increase in backlog was a result of strong orders for both fire apparatus and ambulance units, as well as price actions taken in the last 12 months. Fire orders increased 44% versus last year's quarter, while orders for ambulance increased 13%. Quarter lead times for most categories remain within industry averages and bidding activity is still elevated. However, we expect conversion of these orders remained challenged in the near-term. OEM chassis production remains fluid with recent announcements of temporary plant closures, shift reductions, or elimination of overtime. Chassis allocation has improved since the third quarter of last year. However, visibility into OEM production planning is still challenged. We remain focused on improving our operational capabilities to increase throughput and reach industry-leading lead times as the supply chain normalizes. We also expect the benefit on the labor side from implementation of CDC guidelines, which reduced quarantine protocols, and allow more of our workers to come to work. Turning to Slide 6, commercial segment sales were $98 million, an increase of 17% compared to the prior-year period. The increase was primarily related to increased sales of school buses, terminal trucks, and street sweepers, and price realization partially offset by decreased sales of municipal transit buses. sale of school buses increased 39% versus last year's COVID-related softness in 83% versus the fourth quarter. Line rates have started to recover from the suspension of normal production activities due to chassis shortages in the fourth quarter. Especially division momentum continued with terminal truck and street sweeper sales increasing 56% and 36%, respectively. Municipal bus sales declined 7% as we near completion of a large municipal order. Commercial segment adjusted EBITDA of $7.8 million increased 10% versus the prior year. The increase in EBITDA was primarily result of increased shipments of school buses, terminal trucks and street sweepers. Commercial segment adjusted EBITDA margin was 8%, a decrease of 50 basis points versus last year. The decrease was primarily a result of unfavorable mix of school buses, municipal transit buses and inflationary pressures, partially offset by price realization. Unfavorable school bus mix was due to shipments against orders taken during the competitive bidding environment related to at home schooling caused by COVID. We expect the normalization of profitability at this business on the current chassis allocation and fill rates. Commercial segment backlog at the end of the first quarter was a record 460 million. Strong orders for school buses, terminal trucks and street sweepers combined with pricing actions were partially offset by fewer orders of municipal transit buses over the trailing 12 months. The decline was partially a result of order lumpiness that can occur with large municipal orders and timing of the [Indiscernible]. Airport and University bidding has increased and we expect improvement within those markets after several quarters order softness. School bus backlog is up 590% versus its trough in the first quarter last year. We are receiving increased interest in EV products from several states and are working with grant specialists to identify funding opportunities from the EPA's clean school bus plan. Terminal truck backlog is up 460% versus the prior year on continued e-commerce growth and conquest account wins. Several large retailers have expressed the need to increase warehousing and fulfillment footprint, while port congestion has focused attention on increasing throughput. Street sweeper backlog is up 560% as utilization remains high, and the American Rental Association forecast 20% annual growth in rental equipment through 2025. Turning to Slide 7, Recreation segment sales of $203 million were up 7% versus last year's quarter. Increased sales versus the prior year were primarily the result of increased Class B and Class C unit shipments, Class A mix, and price realization across all product categories, partially offset by fewer shipments Class A and Towable products. As Rod noted, the quarter included record results at the Tampa RV SuperShow, a mix of Class A motorhomes was favorable with increased sales of diesel units that carry a high average selling price and margin. Production of gas units continues to be limited by availability of OEM provided chassis. We are encouraged by absentee rate improvement at our Class A facility, which declined from 15% noted last quarter to 10% in January. Volumes in the Class B and C businesses continue to perform at a high rate despite material shortages that require reworking up to 90% of units after they come off the line. Our Class B business was able to streamline factory operations and achieve a 10% year-over-year unit production increase. We continue to review all of our manufacturing sites and individual production lines for opportunities to increase throughput. Recreation segment adjusted EBITDA was 17.1 million, up 2 million versus the prior year. Adjusted EBITDA margin of 8.4% increased 50 basis points compared to last year. The increase in EBITDA was primarily result the price realization and a favorable mix of Class B, C and diesel Class A units, partially offset by inflationary pressures and inefficiencies related to supply chain disruption and labor constraints. Despite the headwinds, the Class A business continues to improve profitability with a 160 basis point adjusted EBITDA margin improvement, versus last year on a small top-line decline. Segment backlog of 1.3 billion increased 70% versus the prior year. This is the seventh consecutive quarterly record, and a result of continued strong order intake across all RV categories. We feel a tap to show results demonstrate the continued excitement and interest in our portfolio products. Dealer inventories for our brands are made down an average of 60% to 70% versus two years ago. While some have noted increased stocking of towable units, our lands travel trailer inventory is down 15% versus January of last year. Normalizing inventory to pre - COVID levels would require another 1,500 units, equaling about 6 months of added production at the current run rate. We feel the opportunity is even greater when we get to stock dealers outside the core Western market where our market share is about 1/3 the size of the Western region. In the Class B, van market, our Midwest business outgrew the market over the past year and has grown year-over-year in each quarter since acquisition in 2017. It serves the RV camper market as well as locked vans, both of which have grown in popularity with baby boomers and millennials. The business continues to explore opportunities for volume growth and is among our most aggressive at procuring chassis from third-parties to meet its demand. We are leader in Class C and superC, another category that has grown rapidly since we acquired the Renegade business, December 2016. It serves the second or third time buyer looking at a high-end product. Renegade significantly outperformed the market 2021, resulting in inventory declined at 59%. Finally, we continue to execute within the Class A market by producing a near trop level units and peak level margins. We believe our RV portfolio category, placement, and whitespace will allow share gains in long-term secular growth. Turning to Slide eight, net debt as of January 31st, was $242 Million, including $14 million of cash on hand versus $202 million net debt at the end of fiscal 2021, the increase in net debt includes share repurchases of $24.4 million or 2 million net shares at an average price of $12.29. Trade working capital on January 31st was $388 million compared to $368 million at the end of fiscal 2021. The increase was primarily a result of increased accounts receivable and inventory partially offset by increased accounts payable and customer advances. Third-party chassis inventory contributed 23 million to sequential increase in balance sheet inventory in the quarter. However, our OEM pool inventory, which is not held on our balance sheet, was reduced by 6 million. The result is that overall chassis inventory availability increased 16 million from year-end, of which 8 million was in the Recreation segment. On a year-over-year basis, our overall third-party chassis inventory, both on balance sheet and in the OEM pool is down $31 million. Year-to-date cash used in operating activities was $3.7 million compared to $1.9 million net cash provided in the prior year period. The decrease was primarily due to the trade work and capital outflow due to timing of payments for the chassis inventory build, and accounts receivable collections, partially offset by increased customer advances. We spent a total of $4.5 million on capital expenditures within the quarter. At quarter end, the company maintained ample liquidity with approximately $258 million available under the ABL revolving credit facility. We continue to believe our leverage ratio combined with this liquidity and strong full-year cash conversion positions us for value accretive capital deployment, and opportunistic share repurchases. As I previously noted within the quarter we purchased 2 million shares of our common stock for $24.4 million. We also declared a quarterly class cash dividend of $0.05 payable April 15 to shareholders of record on March 31. Today we reiterate full-year guidance that provide -- was provided in December. We expect sales in the range of $2.3 billion to $2.55 billion and adjusted EBITDA in the range of $125 to $155 million. We continue to expect net income in a range of 45 million to 73 million, adjusted net income in the range of 64 million to 89 million and free cash flow in the range of 58 million to 80 million. With that Operator, I would like to open the call up for questions.

Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please [Operator’s Instruction] A confirmation tone will indicate that your line is in the question queue. You may [Operator's instruction]. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question comes from the line of Jerry Revich with Goldman Sachs. You may proceed with your question.

This is Jatin Khanna (ph) on behalf of Jerry Revich. Can you provide some color on what the price cost was year-over-year heading in the quarter, and if possible, maybe quantify that for us, and how are you expecting that to play out over the course of the year?

I'm sorry. Could you repeat the question? It was a little muffled there, and I think the first part of the question was on the price cost dynamic year-over-year? That's right. And the second part was how are you expecting that to play out over the course of the year? From within the quarter, we remained positive from a price cost perspective on a consolidated basis. Some of our businesses obviously are dealing with more increases on the commercial side where they use more steel, and as we've seen, the steel increase that we are seeing, so we've been able to maintain, like I quoted in my prepared remarks that we're able to get price realization in our backlog, which did offset within the quarter combined with the purchasing savings that Rod had alluded to, was able to offset the material inflation that we experienced in Q1, and we continue to see the ability to maintain positive price cost as we move forward. But obviously, as Rod noted, we've seen a significant amount of increases in the current developments in Ukraine with some of the impact that we've had on commodity cost we're obviously monitoring.

Our next question comes from the line of Mig Dobre with Baird. You may proceed with your question.

Yes. Thank you. So, I guess if we're leaving the Omicron impact to decide, I'm kind of curious as to how the quarter played out relative to your expectations? You commented that the missing parts that -- that you're dealing with you went from 60 to 70. Now you're seeing more like 40. Certainly I understand that chassis availability remains challenging. But I'm curious if the quarter is sort of in line with what you were originally expecting, or if things are getting either a little bit better or a little bit worse Versus how you originally had it framed, internally.

[Indiscernible], this is Mark. Obviously, as Rod quoted in the mix, on a consolidated basis, more or less, we delivered what we expected, but the mix results in our segment. So we're very happy with the performance we had in commercial and RV. And as we noted, despite all the challenges that RV had, they still were able to deliver the results they did with Fire. Fire and ambulance obviously being impacted most more towards the backend of the quarter, with their ability to complete units. And you can see that in our increase in [Indiscernible]. So we have a lot of units there we talked about that. If you look at our balance sheet still tied up in [Indiscernible] that are sitting up offline. So I would say towards the backend of the quarter, Fire and Ambulance was below what we were expecting, but we're able to make that up through RV as well as commercial execution.

Understood. You left your guidance unchanged and I understand that we're only one quarter end, but the range on your EBITDA guidance is wider than normal. And what I was trying to get at here is, are you having any degree of comfort whether or not you can be, I don't know, above the low-end, closer to the midpoint or maybe better than that based on what you've seen right now? And related to this, how should we think about the cadence of the year in terms of EBITDA progression?

I think we can worked through them, and [Indiscernible] discussions are made. But from a perspective of -- on your first question, what was the first question again, if you want to repeat that?

Yes. I mean, look, you've got a very wide rate -- a wider range.

On range itself, so we still like we pointed out there. And I think we said this heading into our guidance that we thought Q1 and Q2 would be lumpy and we're definitely seeing that, and with the current environment when we're really one more lead the range until we see as Q2 progresses. And then, normally as we did last year, will provide a tighter range exiting Q2 based on our chassis availability. Because as we pointed out, we still have very limited visibility. We are seeing an improvement in allocations, but allocations are only as good as when you get them delivered, right? So we're getting the allocations we request, but we are delayed as far as in timing and getting them, and ultimately converting them to real chassis coming to our facility. So that was really our rationale for not tightening the range until we see the impact here at chassis. And we still need to see some loosening of the supply base, especially when it comes to the things I quoted, which I think is an industry phenomenon here around the axle and wire harness availability. So those are things that we said right now, we want to see play out in Q2, and then we can provide a better view exiting Q2. And I think that's pretty consistent with our mashing that first two quarters will be lumpy here.

Hey, I just want to add on top -- big on that -- just the -- as dullness chassis thing, I mean, Mark mentioned that we're -- this is Rob by the way. We are getting the allocations are good, but the challenge we're having as from a production execution standpoint is the lead time we're getting on delivery against those allocations and the fill rates on those allocations remains challenged. We're used to having a little bit longer lead time visibility on the chassis bins so we can plan materials around that. Now, there's a lot of changes lasting up to three weeks before the chassis is supposed to land on the ground, and the fill rates are still affected. So it's creating inconsistencies in our planning process as well because of the nature of the receipt of these chassis that we continue to manage, and we're having daily, weekly conversations with the OEMs. I think we're all over it to optimize the best we can. They're struggling in our tough environment too. I believe that. I've talked to myself. I know what they are dealing with, but it just makes it more difficult for us to get visibility on a longer cycle on what's going to happen because everything starts with the chassis, and I know you guys are tired of hearing that. I'm tired of hearing about it too, but it's just the reality we're faced with right now.

Understood. My final question. I'm looking at the backlog in Fire and Emergency, and it's extended to a degree that we haven't seen ever before. I'm curious in your discussions that you have with your customers, how are they reacting to these extended lead times? Are we getting to the point that this is starting to impact demand? And for the orders that you do have, where you have to communicate that deliveries are slipping out because you're not getting your needed parts and materials, how are customers taking that message and how are they dealing with it? Thank you.

Well, through the first quarter, the order rates have continued as we talked about the book-to-bill, and part of that's because the bill is lower. But even on a book-to-book basis, we are still seeing demand pretty steady. There is maybe on a longer tail forward look, some softening in pipelines a little bit, but when we look at to the point on what customers think, our lead times, the feedback we get are our lead times are competitive. Everybody's got extended lead times right now, and so it's not really affected our demand to this point. I think people are still trying to get orders and to get in line, and also maybe get ahead of pricing a bit, but I don't see any softening in any of the intakes. Although we have seen in some of our businesses, when we look out 6 to 9 months, the pipelines are not maybe as robust as they were a year ago, but that might change. Those pipelines a lot of times that far out have variability as to what actually happens when you get there.

Great. Thank you.

Our next question comes from the line of Jamie Cook with Credit Suisse. You may proceed with your question.

Hi. This is Chigusa Katoku on for Jamie. Thanks for taking my question. So think your competitor commented that dealer inventory -- this is for RV, but they commented that dealer inventory levels are improving and their RV backlog declined sequentially, but I was wondering if you could give some more color on what you're seeing in terms of RV dealer inventory levels.

So I think -- this is Rod. I think broadly -- and Mark had comments on this in terms of our specific inventory levels of our products on the dealer lots, and they are still down year-over-year. So we're still on a down position. I do think in the travel trailers that inventories probably get more to a stable historical number. Something I've talked to a lot of the dealers about the RV show down in Tampa is that they are seeing those inventories get back to a level, but our travel trailer-camper business is still below where it was a year ago. So I think, in our particular case because we manage production rates diligently, I think that we still have backlog on, our inventory to build ahead of us, including the demand to fulfill that a lot are already ordered and quarters that we're delivering all that are already consumer orders. So I think we still have, as Mark said, some time around that, but I do think that the travel trailers pieces is getting more of a stable spot in the dealer inventory, but the motorized still probably got to build piece to it.

Thanks. And then we were wondering if you could give any color on what's embedded in your outlook in terms of margins by segment?

Yeah, we can follow-up in the private calls on the modeling calls if you don't mind.

Okay, thank you.

As a reminder, if you would like to ask a question, please [Operator's instruction]. A confirmation tone indicate that your line is in the queue and you may [Operator’s Instruction] would like to remove your question from the queue. Our next question comes from the line of Courtney Yakavonis with Morgan Stanley. You may proceed with your question.

This is [Indiscernible] [Indiscernible] on for Courtney. Thanks for taking a question. Within your Recreation segment. How has market share gained or progressed within each class that you all participated in and how should we thinking about the cadence over the share gain for the next one to three years across classes? Thanks.

Yes, I would say broadly. You have to get into the details of each -- each segment has sub-segments in it. And, I think in the land segment, that kind of higher end travel trailers we've maintained a past share of that space. In our B and it C's we continue to gain share. Those are segments inside of the B and C segments, those are kind of more, I call it the higher-end segments [Indiscernible]. In a -- we're basically to maintain spot of our market share. I think over the next period looking forward, we're obviously looking -- we think there's opportunities for us to grow share in A's, B's and C's, and also [Indiscernible] share since that's why we made this move and to leverage some of the footprint that we had idle indicator to serve customers better and also get our extent economic reach of our plants because it was really hard to deliver on the east coast for out of the West Coast location. So we believe that will yield share gains as well in that high-end travels trailer segment, did Lance serves.

Great, thank you.

At this time, we have reached the end of the question-and-answer session, and I will now turn the call back over to Rod for any closing remarks.

Yes. Thank you. So I think broadly, it's -- the quarter, much like the prior two quarters, had -- is difficult. But our team continues to battle through that and serve our customers. And I -- and we are very proud of the work that they're doing because I can promise you, it is a difficult environment we're working through. As I mentioned earlier, I'm very confident the direction we're heading. A lot of the things we talked about in the first two calls we had around the changes we had to make this organization, we continue to make progress on that, even in spite of the fact we've got a lot of work going on just to deliver products right now. We're continuing to work the longer-term solutions around product platforming and getting us some of the core process deficiencies we had in this business to improve performance. And obviously, I think we didn't talk about is -- in detail was the work we're doing around the footprint in our fire business that's going to put us in a much better place. So I'm very optimistic about where we're headed in a mid-term to longer term cycle in this business. We just need to get some stability around the markets we serve. I want to thank our team, thank our employees for the work they're doing, appreciate with the hard work that they're doing every day and making a difference in serving our customers. And lastly, thank you all for joining the call today, and I look forward to talking to you in roughly 90 days. Thank you.