Greetings and welcome to the Thermon Group Holdings Third Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Please note this conference is being recorded. I will now turn the conference over to Ivonne Salem, Vice President of FP&A and Investor Relations. Thank you. You may begin..

Thank you, Dan, and good morning, and thank you for joining today's fiscal 2024 third quarter conference call. Earlier this morning, we issued earnings press release, which has been filed with the SEC on Form 8K and is also available on the Investor Relations section of our website.

Additionally, the slides to this conference call can be found in our IR website under News and Events, IR calendar earnings conference call, Q3 2024. During the call, we will discuss some items that do not conform to generally accepted accounting principles.

We have reconciled those items to the most comparable GAAP measures in the tables at the end of the earnings press release. These non-GAAP measures should be considered in addition to and not as a substitute for measures of financial performance reporting reported in accordance with GAAP.

I'd like to remind you that during this call, we might make certain important forward-looking statements regarding our company. Please refer to our annual report and most recent quarterly report filed with the SEC for more information regarding our forward-looking statements, including the risks and uncertainties that could impact our future results.

Our actual results might differ materially from those contemplated by these forward-looking statements, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law.

Now I would like to introduce Bruce Thames, our President and Chief Executive Officer, for his opening remarks..

Well, thank you, Ivonne, and good morning, everyone, and thank you for joining us here today.

I'd like to start with a quick introduction of thermal and especially for those of you who might be new to our story as a diversified industrial technology company, we're a world leader in providing safe, reliable and innovative mission-critical industrial process heating solutions to customers in 85 countries from facilities on for continents, our technology is agnostic and our solutions are instrumental in enabling a wide range of applications across diverse end markets, including the energy transition through decarbonization and electrification.

As we begin this call, I'd like to thank our thermal team around the globe for their commitment to serving our customers with excellence and another quarter of strong performance. I would also like to welcome the vapor power employees to the thermal team and look forward to their contributions to our success going forward.

Let's turn now to slide 4 on our strategic pillars. As we discussed at our inaugural Investor Day in November, we are creating sustainable value through the execution of our long-term strategy that is based on three pillars. First, profitably growing the installed base. Second, decarbonization, digitization and diversification.

And third disciplined capital allocation. Over the past 69 years, we've developed a substantial global installed base by delivering mission critical industrial process, heating technology and solutions to our customers. Although these solutions represent less than 1% of the initial capital costs of a process facility.

They are critical to ensuring safe, reliable and efficient operations. This enables us to drive growth across our traditional IT market verticals, increased recurring revenues and expand margins through operational excellence.

We're generating additional growth through our long-term strategic initiatives of decarbonization, digitization and diversification serving as a key enabler of the energy transition through electrification and decarbonization.

Our innovative solutions drive energy efficiency, facilitate a circular economy and assist our customers in achieving their sustainability objectives through our digital solutions, we also help our customers optimize maintenance through enhanced controls and monitoring.

Our core technologies, coupled with our decarbonization and digitization solutions, are supporting our efforts to diversify our end markets, and we're making meaningful progress towards our goal of having approximately 70% of our revenues come from outside of oil and gas by the end of fiscal 2026.

Our commitment to a disciplined capital allocation strategy. It's foundational to the first two pillars. Our strong balance sheet gives us the flexibility to reinvest in our business for organic growth and positions us to pursue strategic bolt-on acquisitions that align with our financial objectives.

Vapor power is a great example of that strategy in action, which we'll discuss more in more detail later after completion of that acquisition, our leverage remains on the lower end of our stated goal of 1.5 times to 2 times net debt to EBITDA.

Turning now to slide 5, you can see our continued progress in executing our diversification strategy with approximately 66% of our trailing 12 months revenue coming from diversified end markets. On a TTM basis, oil and gas revenues up 9%, while revenues from diverse end markets are up 26%.

Most notably, we've seen significant success in the food and beverage end market with revenue growth of 209% over the past year. Our market share in rail and transit has also expanded significantly with revenue up 28% year over year, along with commercial market where revenue was up 18%.

Of particular note is the 55% year-over-year growth in the renewables end market, underscoring Thermon's role in facilitating the energy transition. The expansion in the renewables market reflects increasing activity across alternative fuels, hydrogen and ammonia applications.

This quarter, approximately 4% of revenues were associated with decarbonization applications with the pipeline of opportunities growing to over $200 million.

We continue to see strong activity in the US power sector, particularly across the southern states as power generations as power generators winterize their assets, Genesis' network has become the system of choice that power generators used to provide operational awareness during winter weather events.

In fact, the most recent winter storm here in Texas had a very different outcome from Winter Storm Uri back in 2021, as utility companies were able to remain operational with no significant disruptions to service. This is a testament to the work our teams have done to help our customers operate safely and reliably during extreme weather conditions.

Turning now to slide 6, I'd like to discuss a great example of our third strategic pillar in action where we were able to use the strength of our balance sheet to fund inorganic growth to augment and accelerate our organic growth initiatives.

Our recent acquisition of Weber power marks a significant step forward in advancing our strategy for profitable growth through decarbonization and diversification.

As we outlined at our Investor Day, we evaluate potential acquisition opportunities based on four criteria and vapor power needs all first, it aligns with our long-term strategy by diversifying our addressable markets with approximately 75% of revenues from the food and beverage, commercial and general industrial sectors and very little exposure to oil and gas.

Second, it expands our portfolio to include electrical resistance, electrode and supercritical coal to blowers as well as steam generators.

The electric boilers and electrode steam generators provide customers the ability to generate hot water and steam with improved control and efficiency in a compact footprint while eliminating greenhouse gas emissions on site.

the supercritical CO2 borrowers are used in specialty applications such as plastics recycling for processes require extremely high temperature and pressure steam. By incorporating these products into our portfolio, we're enhancing our exposure to high-growth electrification and decarbonization opportunities over the next 20 years to 30 years.

As you can see here, this business has grown at an 18% compounded annual growth rate over the last five years with an adjusted EBITDA margin profile of approximately 20%. In addition, the business had over 70% of calendar 2024 revenue per day projections in backlog as of January first, at a level significantly above historical average.

By implementing the thermal business system, we believe we can further improve the EBITDA margin profile to meet our stated goal of 24% over the next 24 months. As importantly, we anticipate the acquisition to have a near-term positive impact to results and be accretive to GAAP EPS in the first 12 months.

Although not included in the economics in collaboration with the skilled team at Viper power, at least five new qualified opportunities have been identified through thermal market channels with each valued at over $1 million. Based upon initial feedback, we feel well positioned to win one or more of these opportunities going forward.

We believe the combination of these two businesses further positions Thermon to play a pivotal role in accelerating the transition to cleaner energy sources across a diverse range of global end markets.

As noted earlier, our balance sheet remains at the lower end of our stated leverage goals at 1.5 times net debt to adjusted EBITDA following this acquisition. As a result of both the financial capacity and management bandwidth to execute on additional opportunities in our pipeline that may become actionable.

Turning now to Slide 7, which details the case study illustrating how vapor power and serve on have complementary technologies for various applications. In this example, labor power provides engineer solutions to solve challenging customer problems while supporting our long-term strategy.

Here we see at Green Chemical Company is designing and constructing a plastics recycling plant to convert waste plastics to feedstock for chemical and petrochemical production.

Vapor power provides a supercritical boiler that generates steam at extreme pressures and temperatures to convert plastics back into the original feedstock to be used for reduction of other plastics and chemicals, by using vapor power and modulating supercritical steam generator.

The customer is able to deliver steam at extremely high temperatures and pressures in a very compact footprint to break down our crack the waste plastics into the original building. These products can then be used to produce urgent glass or go to chemicals in a true circular economy.

On this same project, Thermon is providing over 13,000 meters of heat tracing to provide temperature maintenance and freeze protection for the process transportable. There were also numerous applications and a process facility of this type were calorie check, Immersion heaters are required.

Turning now to Slide 8 and our third quarter fiscal 2024 results. This quarter, the Thermon team generated record revenue of $136.4 million, an increase of 12% year over year, driven by double-digit growth in U.S., Europe and Asia, while the Canadian market contracted 5% year over year.

In the quarter, we continue to see strong year-over-year revenue growth from large CapEx projects and resilience OpEx activity associated with recurring maintenance. Our profitability continued to grow with adjusted EBITDA up 2% year over year to $30.7 million. This was largely due to volume growth, price and productivity.

On an adjusted basis, we saw gross margins decline by 319 basis points from the prior year as volume growth was offset by a lower margin mix in material sales due to an exceptionally warm fall and weakness in the Canadian market with a negative impact of 446 basis points in the quarter.

Free cash flow improved by $4.6 million year over year due to improving DSOs and inventory reductions. GAAP EPS was $0.46 a share, an increase of 86% over the prior year period. Finally, our bookings were down 1% year over year and the book-to-bill ratio was 0.91 times in the quarter.

On a TTM basis, our book-to-bill is 1 time and our bookings are $488 million, which represents 12% year-over-year growth supporting our full-year forecast. With that, I'd like to turn the call over to Kevin for a more in-depth review of our financial results.

Kevin?.

Thanks, Burress. Moving to the Q3 fiscal 2024 financial performance on Slide 9, global Thermon team continued to deliver strong results during the third quarter, even against challenging year-over-year comps and ongoing impacts from an exceptionally warm fall. As a reminder, the third fiscal quarter is typically our strongest due to seasonality.

Customer demand remained steady with incoming orders of $124 million in the quarter, roughly flat year over year. Demand continued to be strong across U.S., Latin America and LMA, while spending was down in other regions, particularly Canada.

In terms of our end market orders, we saw the highest rate of growth in the food and beverage sector during the quarter, with customer demand also expanding across the power renewables, rail and transit and commercial end markets.

Year to date orders for decarbonization totaled $28 million and our year to date orders in diversified end markets was 72% of the total indicative of sustained execution against our initiative to diversify the business into less cyclical end markets.

Trailing 12-month orders were $488 million, excluding vapor power, which we believe supports our updated full year revenue. Revenue in the third quarter was $136 million, a year-over-year increase of 12%, primarily driven by power chemicals and commercial activity.

U.S., Latin America continues to be our strongest performing region in fiscal 2024 with three of our four regional units reporting double digit revenue growth. There was no impact in the quarter from the vapor Power acquisition to reported revenues.

Large project revenue reached $34 million, up 26% from the prior year, while small projects and maintenance and repairs revenue totaled $103 million, up 8%. Over the trailing 12 months. 75% of our revenues came from customer OpEx spending indicative of the mix of our business shifting away from more cyclical customer CapEx spending.

Bruce provided some additional details on the vapor Power acquisition and wanted to add that if we updated our diversification metric to include vapor power on a pro forma basis, we would have approximately 69% of trailing 12 months revenue sourced from diversified end markets, which is just shy of our goal of 70% by the end of fiscal 2020.

Adjusted EBITDA increased by 2% year over year to $31 million with an adjusted EBITDA margin of 22.5% in the quarter.

Adjusted EBITDA margins decreased due to a pronounced mix shift within our point-in-time sales product lines, most impacted by a seasonally warmer winter in both heat tracing and environmental heating saw slower than anticipated ramp volume growth, shifting a higher percentage of revenues in the quarter to comparatively lower-margin product lines and projects with that shortfall dropping to the bottom line, the downturn in Canada also impacted our mix this quarter, as is typically the most profitable of our four regions.

Spending remains in line with expectations as we continue to focus incremental investments on our decarbonization, digitization and diversification strategic initiatives, while moderating overall spending levels to the rate of incoming orders. Adjusted diluted EPS was $0.59 in the quarter, a year-over-year increase of 13%.

On a quick modeling note, we are currently estimating a $0.23 per share impact from amortization in fiscal year 2024. Through the first three quarters of our fiscal year, we have achieved profitable growth by executing our plan, and that's ongoing macroeconomic volatility as evidenced by this quarter's results.

While we believe the negative impacts from the product mix shift will continue in our fourth quarter. We also believe that our long-term strategy to diversify the business will continue to deliver profitable growth in the future.

On Slide 10, we will cover the updated balance sheet, which represents the preliminary acquired balance sheet, including vapor power. At the end of the quarter, cash stood at $55 million. This represented a year-over-year increase of 57%, with about half of that due to acquired cash from paper.

Total debt for the quarter increased 61% to $213 million, which was also related to the acquisition of Apex. We expect the incremental interest expense to be approximately $1.6 million per quarter. This increase resulted in a net debt to adjusted EBITDA ratio of 1.5 times compared to 1.1 times in the prior year period.

This ratio was within our long-term target range of 1.5 times to 2 times, and we still have significant capacity for further growth should additional opportunities emerge.

Working capital was $190 million in the quarter, an increase of approximately 24% due to the acquisition of a power volume growth of large projects that extends typical collection cycles and some payments related to strategic inventory, reducing AP. in the quarter working capital as a percentage of trailing 12-month sales was higher coming in at 39%.

Please see Note two in the 10 Q we will issue later today for additional details on the vapor power acquisition. Turning to cash flow, net income in the third quarter was $16 million, up 88% year over year.

Capex spend was $2 million and free cash flow was $22 million, reflecting a nice upturn to the free cash flow generation of the business as we enter into the seasonally stronger periods for cash conversion, particularly on the back of the strong first half of our fiscal 2024.

We are pleased with our strong performance in the first three quarters of fiscal 2024. We continue to experience growth across end markets and regions while absorbing some headwinds from our product mix in Canada, which is a testament to the resiliency of our business model.

Looking ahead to the last quarter of fiscal 2024 and beyond, we will continue to control costs while we remain committed to achieving the long-term targets we outlined at our Investor Day.

Finally, I would like to extend my gratitude to the entire Thermon team for their hard work, dedication to our customers and commitment to delivering long-term value for our shareholders. And with that, I'll turn it back over to Bruce..

Ladies and gentlemen, turning now to Slide 11. As we enter the last quarter of our fiscal year, we're adjusting our full-year revenue guidance for fiscal 2024, revenue guidance is being increased from a range of $478 million to $498 million to a range of $490 million to $500 million for the full-year, implying 12% growth at the midpoint of the range.

Adjusted EPS guidance is being lower from $1.84 to $1.94 per share to a range of $1.76 to $1.84 per share.

This revised guidance takes into account the success we've had in the first three quarters of our fiscal year, combined with the contribution of the vapor Power acquisition, while factoring in the negative impact that both the weaker Canadian macroeconomic conditions and exceptionally warm winter have had on gross margins.

While these two factors create a near-term headwind, we believe the weather was an anomaly and the mid to long term growth drivers remain intact. Our strategy is working, and we remain confident in achieving our fiscal year 26 goals strategic goals. As we conclude today on slide 12, we'd like to leave you with the following key points.

Thermon stands out as a leading global brand, providing mission-critical processing technology and solutions across diverse end markets. Our operational excellence, innovative products and differentiated solutions are significant competitive advantages and create sustainable value for all of our stakeholders.

Our extensive global installed base and long-standing customer relationships driving resilient aftermarket franchise that generates high margin recurring revenue, through our existing technology.

We're well positioned to capture the vast opportunity tied to the energy transition and decarbonization through the electrification of industrial heat, with a strong balance sheet featuring low leverage and high gross margins, coupled with our capital-light business model, Thermon remains resilient through economic cycles, providing significant flexibility and optionality as evidenced by the Viper Power acquisition we're able to deploy the cash generated to expand our portfolio of heating solutions, diversify our markets and increase our exposure to opportunities around decarbonization and energy transition to deliver growth above and beyond the organic business.

In closing, I'd like to once again thank the entire Thermon team for their exceptional performance, unwavering commitment to safety and dedication to fulfilling our customers' needs Looking ahead through the last quarter of fiscal 2024 and beyond.

I'm excited about the collective achievements we can attain as we continue to deliver sustained profitable growth to create value for our shareholders. Operator, we'd now like to take questions..

Thank you. [Operator Instructions]. our first question is coming from the line of Brian Drab with William Blair. Please proceed with your questions..

Hi, good morning. Thanks for taking my questions. I just first wanted to ask in the third quarter, revenue came in above the Street expectations, but my forecast and by about $7 million. And then for the full year, you raised the guidance midpoint by about $7 million or so.

And then we've got the vapor Power acquisition to incorporate for the fourth quarter. And so, I'm just trying to my first question, I guess is just did your third quarter revenue and beat your expectation or listening to the call today.

And I'm just wondering, it sounded like maybe the third quarter actually didn't even it actually meet your internal expectation for revenue..

David, this is Kevin. Maybe a couple of pieces there.

I'll walk you through and maybe starting with Q3, we were right in line with volume expectations on the third quarter with both an eye Bruce are alluding to is that product mix was a little bit shifted towards some of the lower margin products there and some of the weakness in Canada, the warmer winter up there as well combined to drive those gross margins down.

But if we focus on revenue for a second. We were right on budget in the third quarter. I know The Street kind of had the Q3, and Q4 roughly flat between the two, but that's a little inconsistent with the normal seasonality that we see with Q3 being a peak and then Q4 being sequentially down.

So last year was maybe a little bit an anomaly in Q4, but if we think about that revenue flowing through to the guide on a couple of pieces there, I would point you to as well, we think vapor is going to be about $10 million to $12 million in the fourth quarter. So, if you look at the midpoint, yes, the guidance about plus seven.

So organically were maybe thinking that Q4 is going to be a little bit softer than expectations and a lot of that's really being driven by Canada.

So, I know there are a few pieces there, but just wanted to kind of get that out for you as you guys triangulate the back half of the year?.

No, that's helpful.

I mean, third quarter volume roughly in line with your expectation and then you and you've got $10 million or $12 million from vapor and you raised the guidance midpoint by $7 million so that you could see there's a little softness in there, maybe call it $5 million or $7 million that you took out of the fourth quarter that might be on your radar item?.

Yes..

Thank you. Okay. And the backlog has ticked down slightly sequentially the last couple of quarters.

Can you give us any view? Maybe it's too early, but I mean, I know you must be working on the budget side for fiscal 25? Or are there any major projects maybe in fiscal 2025 that that you have some visibility to? And what would you say the seven has got any concern that backlog is it's been ticking down a little bit?.

Yes, Brian, this is Bruce. Just I'll make a couple of comments on kind of our backlog and this quarter, we saw bookings contract about 1% year over year, so that certainly was a factor and our volumes were up pretty substantially. So, a couple of things that we've seen happen.

One is as we've implemented our operational excellence programs, our lead times in many, if not most of our products are now market leading. And so, we're seeing that backlog come down just because of the velocity in our factories. So that's a piece of it.

Certainly, the incoming order rates being, below of our shipment level, that's the other component of seeing that backlog decline. Look in a couple of things to note, our quote activity was extremely strong. During the quarter. We quoted $248 million of opportunities.

Anything over $200 million is really strong for our business and we have a pipeline or pipeline of opportunities. It has actually grown. So, as we look ahead, we are seeing some we did expect kind of in our plan to see a deceleration of growth coming into the fourth quarter.

And when I think the what we've seen in Canada has probably been weaker than what we had originally expected. And certainly, as we go into next year, we're looking for, Joe, Bob, the overall activity would begin to kind of pick up. And certainly, we would think the weather itself was an anomaly..

Brian, if I might add maybe a little color just on end markets as well.

If you think about the split between oil and gas versus maybe the diversified end markets on an orders basis, oil and gas has actually declined year to date, but the diversified markets are up and you kind of think about it in orders rate that's in that you have still double-digit growth rate year to date? We're seeing fairly substantial growth on those diversification initiatives and that's right in line with the strategy as well.

Site, I think got a little bit of softness in the back half that was expected. Maybe the weather's pushing out a little less than where we expected or wanted to be.

But I think if we look to the future, as Bruce alluded to, the pipelines of the boats are up margins in backlog are still historically healthy, maybe a little bit off the peak, but we're still seeing some really attractive leading indicators of that..

So, I mean, I guess to wrap it up, we see slower growth next year organically. But with the vapor Power acquisition, it really positions us to deliver some nice growth in the coming year..

We see for growth in fiscal '25 and '24.

Could you can you put numbers on that for now?.

No. we're able to de-bottleneck and we'll do that. Yes..

Okay. But fiscal 24, you'd end up with what type of organic revenue growth at the midpoint..

I guess I need to look at back at some of the release, if you said business to the extent organic-inorganic, I think 12% is at the midpoint and then looking back out about 2% for vapor. So, we're talking about 10% organic growth in 24% roughly..

Okay.

So, coming off somewhat from a very high level of?.

Yes, correct..

Okay.

And then last question for me for now is, is there anything you can say about the gross margin that you're expecting in the Q4 and Sergey said it already?.

I think, Brian, if we look at the product mix that we saw in Q3, I think we would expect that to be fairly consistent with where we are, the drivers in Canada macro, that's not going to reverse all of a sudden, I'm sorry, I think the gross margins in Q4. If you think about the guide implies something fairly consistent in Q4 as we saw in Q3..

Got it. Okay. Thank you, both..

Thank you, Brad..

Our next question comes to the line of, Jon Braatz with Kansas City Capital. Please proceed with your question..

Morning, Bruce. Morning, Kevin. Bruce, could you touch a little bit more on Canada. You the weakness there.

Obviously, you talk a little bit about weather, but is it merely whether there or anything beyond that might have legs into 25, and let's say beyond?.

We are seeing just a weaker macroeconomic backdrop in Canada, and they've got some very restrictive fiscal policies. And I think inflation, there's been a little stickier and the impact of both. They're higher interest rates, I think is, as affected their consumer more just based on some of the structure of kind of their mortgages and the like.

So, we do expect that to be a headwind in the Canadian market. But certainly, we believe that our business as we position that with our strategy, we are executing and I'll go back to the point. We've been able to grow our bookings in spite of just some weakness that we've seen there over the last couple of quarters.

We have seen that business decelerate and we've still been able to generate growth. So, well, I think it's going to be a little bit of a headwind, as we said on the organic growth going forward.

So, we expect slower growth rates organically, but our ability to acquire vapor power and have the capacity for potentially additional M&A is going to generate some nice growth in our fiscal 2021..

Okay. On vapor power from the numbers you showed in terms of revenue growth and margin improvement, it's pretty nice, Doug. They've done a good job.

And when you look across, let's say, the boiler industry in general, what do I assume they're probably growing faster than the industry the industry? What are they doing differently that sets them apart and differentiates themselves? And would you think that that type of growth you've seen 18% on the top line, would you think that, would we'd be able to be continued?.

Yes, that's a great question. And I think, how they achieve that growth will. First of all, vapor power actually has some very kind of niche needs products that they offer. And I mentioned some of those here on the call, and one is the electrode boilers and steam generators as well as their electric resistance boilers.

In addition, they have of gas fired coal to supercritical steam generators, and these are generating steam at extremely high temperatures and pressures. And all of these are really very compact packages.

And so, if you look back at that growth, a lot of that's been driven by growth in their electrical boiler and their revenue from electric boilers has virtually doubled over that more than doubled over that period of time. And we see that being driven by electrification.

And these electric boilers are really the best technology for electrification of steam, which has traditionally been generated with hydrocarbon fired here.

So, this really gives customers the ability to eliminate their emissions on site by converting traditional gas fired boilers and steam generators to electric so that's a big trend that we see continuing, quite frankly, for the next couple of decades. But the other thing or the super [indiscernible]. .

Not to go ahead, Bruce. .

The supercritical, the gas-fired supercritical steam.

Our generators of those are used for these specialty applications, which I illustrated here for plastics recycling, where extremely high temperatures and pressures are required in this case to take waste plastics and frac those back down to their constituent parts that can then be used and sold for and petrochemical and chemical manufacturing.

So really truly bringing that back down to the raw material and feedstock. So those are some pretty unique products and applications, and that's really enabled them to grow above and beyond. Maybe what you would see in a typical gas for gas-fired hydrocarbon fired boiler business. So, and that's really how it fits with our strategy.

And certainly, we believe we can drive double digit growth with that business going forward by plugging that into the global thermal Neville, first of all, we believe that will continue to grow independent of what we do at Star mine, but we are also seeing very early signs that our third-party channels are bringing more opportunities that they had not seen previously.

So that represents upside to the growth model. And then on the other side of that our operational excellence program by implementing the thermal business system, we believe there's some low-hanging fruit there where we can drive incremental EBITDA margins from that business, say over the next 24 months.

So that's really what we see with this business center, and it's really well positioned and fits our strategy quite well..

Bruce, would you say there in terms of electrification efforts at vapor that they're sort of a step ahead of everybody such that if I need a electric boiler, they're going to be one of the first calls I make..

Yes, without question, particularly within a certain range of sizes and temperatures and pressures they are very well respected and have a really nice portfolio of solutions so absolutely..

Okay. All right. Thank you very much..

Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Mr. Bruce Thames, President and CEO for closing remarks..

Thank you, Brian and [indiscernible], and thank you all for your interest in Thermon, and thank you for joining us here today. Enjoy the rest of your day..

Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time and enjoy the rest of your day..