Alamo Group Inc. Price & Performance (ALG)

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On the line with me today are Jeff Leonard, President and Chief Executive Officer of and Agnes Kamps, Executive Vice President and Chief Financial Officer. Management will make some opening remarks and then we will open up the line for your questions. During the call today, management may reference certain non GAAP numbers in their Reconciliations of these non GAAP results to applicable GAAP numbers are included in the attachments to our earnings release. Before turning the call over to Jeff, I would like to make a few comments about forward looking statements. Will be making forward looking statements today that are made pursuant to to the Safe Harbor provisions of the Private Securities Litigation Reform Act Reform Act of 1995, Forward looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: adverse economic conditions, which could lead to a reduction in overall market demand, supply chain disruptions, labor constraints, competition, weather, seasonality, currency related issues, geopolitical events, and other risk factors listed from time to time in the company's SEC reports.

The company does not undertake any obligation to update the information contained herein speaks only as of this date. I would now like to introduce Jeff Leonard, Jeff, please go ahead. Thank you, Ed. We want to thank everyone who has joined us on the conference call today and express our appreciation for your continued interest in Alamo Group. Our results for the fourth quarter were aligned with our expectations as the Industrial Equipment division produced strong results as they did all year in a robust market. Headwinds prevailed in several markets served by the vegetation management division as a result of elevated interest rates and lower commodity prices. I would now like to turn the call over to Agnes, who will take us through a review of our financial results for the fourth quarter. I will then provide additional comments on the results, and say a few words about the outlook for the first quarter of twenty twenty five. Following our formal remarks, we look forward to taking your questions. Agnes, please go ahead.

Thank you, Jeff, and good morning, everyone. We finished 2024 with double digit profitability despite significant headwinds in some of our markets. Forestry and agricultural markets were weak most of the year. While governmental and industrial sectors experienced growth. Fourth quarter revenue was $385,300,000 reflecting a 7.7% decline compared to the same period last year. Gross profit for the quarter was $91,800,000 with margin of 23.8% of net sales. Margin decline of two thirty basis points compared to the fourth quarter of twenty twenty three was due to lower volume in the Vegetation Management division and separation expenses related to our cost reduction initiatives. SG and A expenses were $53,300,000 which is a reduction of 11.3% from the fourth quarter of twenty twenty three. These reductions are a result of savings initiatives in the vegetation management division. Operating income in the fourth quarter of twenty twenty four was $34,400,000 with an operating margin of 8.9% of net sales resulting in a decline of 180 basis points compared to same period in 2023. This margin decline included separation expenses of approximately $1,000,000 Net income for the fourth quarter was 28,100,000.0 or $2.33 per diluted share compared to the net income of $31,500,000 or $2.63 per diluted share in the same period last year.

Interest expense in the fourth quarter was 3,100,000.0 lower than in the same period in 2023 driven by reduced debt levels.

The provision for income tax was $2,300,000 lower compared to the same period in 2023. With that overview, let's take a closer look at the performance of our divisions. Our vegetation management division reported net sales $159,800,000 a 25.5% reduction compared to the fourth quarter of twenty twenty three. [indiscernible] declines occurred in the Forestry and Agricultural segments while the Governmental segment continued to grow. Operating income for this division was $6,500,000 representing 4% of net sales Savings from cost reduction actions taken earlier in the year partially offset the impact of lower revenue. Additionally, this quarter's result results included approximately $1,000,000 in separation expenses. On the other hand, our Industrial Equipment division net sales were $225,500,000 representing 11% growth compared to the fourth quarter of twenty twenty three. Growth in the fourth quarter was driven by stronger sales of ex as well as snow removal equipment. Operating income was $28,000,000 or 12.4% of net sales, a slight improvement compared to the same period last year. A few words to summarize full year results. Net sales were $1,600,000,000 reflecting a 3.6% decrease compared to 2023. The vegetation management division declined 19.8% while industrial equipment division grew 18.7%. Operating income was $164,800,000 or 10.1% of net sales representing a decrease of $33,200,000 160 basis points year over year.

The operating income for the vegetation management division was $56,600,000 or 7.2% of net sales it included approximately $4,200,000 in employee separation expenses and an additional $1,800,000 of other planned consolidation expenses Industrial Equipment division operating income of $108,300,000 or 12.8% of net sales, a two sixteen basis points increase versus prior year on higher revenue and improved operating efficiencies. [indiscernible] Net income for the year was $115,900,000 compared to $136,200,000 in 2023. Interest expense improved by $5,500,000 versus prior year benefiting from reduced debt levels. Provision for income taxes was $5,300,000 lower versus prior year and represented approximately 22.5% effective tax rate. Let me provide an update on our cost reduction initiatives. In 2024, while forestry and agricultural we executed a number of actions with a long term goal to improve efficiencies, in the vegetation management division. Those actions included consolidation of forestry plants, consolidation of U. S. Ag plants, and a significant workforce reduction representing approximately 14% of total Alamo Group global staff. We are on track to achieving our savings target $25,000,000 to $30,000,000 on an annualized basis. We have already seen some of these savings in the third and fourth quarters of twenty twenty four. Further savings are expected to accelerate over the next few months.

The cost associated with these actions are mainly employee separation expenses. For the fourth quarter, we incurred approximately $1,000,000 and for the year, the total severance expenses were approximately $4,200,000 As mentioned earlier, Moving on to the balance sheet. We had a successful year navigating a challenging environment. Our financial position is strong providing us with the flexibility to support ongoing initiatives and future investments Our total assets were $1,450,000,000 dollars at the end of the year, representing an increase of $40,900,000 or 2.9% compared to last year at the same time, This increase is driven by higher cash and cash equivalents We reduced our accounts receivable by $56,400,000 to $305,600,000 also representing a reduction in day sales outstanding by about ten days compared to the end of 2023. Inventory of $343,400,000 was also reduced by $34,100,000 compared to last year. Reductions were achieved in the vegetation management division, and a more than offset increase in the industrial Equipment division. Higher inventory in the Industrial Equipment division, supported revenue growth of 19% in that division Operating cash flow in 2024 was $209,800,000 increasing by $78,600,000 or 60% year over year. Free cash flow into 2024 was $184,800,000 compared to $93,400,000 in '23, At the end of 2024, our total debt $20,500,000 and debt net of cash was $23,200,000 This is an improvement of $160,200,000 or 87.3% compared to the end of 2023.

To conclude, it has been a challenging but very productive year. The difficult actions we took will drive greater efficiencies long term and support our goals to increase our operating margins. I would like to emphasize our commitment to delivering long term value to our shareholders We are pleased that our Board has approved a quarterly dividend of $0.3 per share representing a 15% increase versus 2024. Consecutive dividend increases underscore our confidence in the strength and stability of our business As we move forward, we will remain focused on driving growth and optimization of our operations.

Thank you. I will turn it back over to Jeff. Thank you, Agnes. The company's fourth quarter results were broadly in line with our expectations given the mixed conditions that continued to be evident in our markets. The governmental, industrial contractor and vegetation markets once again followed divergent tracks during the final quarter of twenty twenty four, Governmental and industrial contractor customers served by our industrial equipment division continued to invest in fleet modernization and performance upgrades. In North America, demand from governmental agencies and a industrial contractors remained strong across all of our major product lines. Fourth quarter sales of $226,000,000 were up 11% to 23. Ordering activity also continued at a good pace, although some slowing was noted during the final weeks of the U. S. National election cycle. This division reported strong fourth quarter operating income of $28,000,000 up nearly 12% compared to the same period of 2023. EBITDA was also solid at nearly 16%. On a full year basis, the division sales improved by almost 19% and operating income improved 43% compared to 2023. EBITDA improved by 170 basis points year over year. Overall, the Industrial Equipment division had another excellent quarter and full year 2024 and remains well positioned to continue this pattern success heading into 2025.

Our vegetation management division continued to face tough market headwinds in several of its key markets in the fourth quarter. The combined effect of elevated interest rates and excess channel inventory has continued to depress market activity in the forestry, tree care and agricultural equipment markets. Dealers have remained cautious as they anticipated relief in interest rates has been further delayed by the Fed as it continues to battle inflation. Fourth quarter sales of $160,000,000 to declined 25% versus the corresponding period last year. Operating income in the quarter was $6,500,000 EBITDA was $15,300,000 or 99.6% of sales.

Order bookings improved sequentially during 2024 albeit modestly, while still remaining off the peaks recorded in 2023. We still have a long way to go to get this division back to acceptable growth, the improvement in orders is a good indicator that the worst may be behind us. Turning our attention first to the forestry and tree care market. Sales were soft as dealer inventories remained elevated and large tree care contractors continued to postpone non essential equipment replacements. Sales were down compared to the fourth quarter of twenty twenty three and we're More positively, however, order bookings in this largest part of the Vectrus vegetation management division's portfolio improved sequentially every quarter during 2024 and rose nearly 8% on a full year basis compared to 2023. So it seems clear that this part of the vegetation management equipment division is beginning to steadily regain momentum.

The consolidation of our two largest facilities serving forestry and tree Care was completed in the fourth quarter and the expected cost savings are just becoming evident as we head into 2025 and this will certainly help this part of the division produce a stronger operating results even on lower volume. In the agricultural equipment market, similar patterns were evident. Sales in this market also declined throughout 2024 including the fourth quarter. However, order bookings improved sequentially every quarter during 2024 and fourth quarter book to bill was the highest of the year more than 115%, 1.15.

While dealer inventories remain elevated, they've continued to come down Field inventory of our own products remained at a very, very low level. The consolidation of our two largest ag equipment manufacturers facilities in The U. S. Continues to progress according to our planning. The physical move was completed at the end of twenty twenty four However, some capital improvements in the remaining facility will not be completed until the second quarter of twenty twenty five. That is when we expect to receive the full cost and efficiency benefit of this consolidation. It was great to see that other parts of this division's business were stronger. Equipment sales of the vegetation management markets in Europe were modest percent Vegetation management equipment sales in South America, while relatively smaller than the other markets, up 5% compared to the fourth quarter of twenty twenty three. Finally, this division sales of mowers to governmental agencies were also up about 5% in the fourth quarter compared to the final quarter of twenty twenty three. It's important to note that the division's governmental sales continued to be at a historically high levels.

Turning now to corporate performance. As Agnes noted, fourth quarter consolidated net sales declined 8% compared to the fourth quarter of twenty twenty three.

Fourth quarter net income declined 11% to $28,100,000 net of separation costs of $1,000,000 These results reflect the persistent headwinds we experienced in However, we've not been staying idle. During 2024, in addition to conducting two major we reduced our global employee population by about 14%. Cost improvement actions will continue in 2025 as we've identified additional opportunities to improve efficiency and streamline our operations. I was especially pleased with the improvement in the company's cash flow in the second half of twenty twenty four. As a result of our team's intensive focus on working capital reduction, we were able to dramatically reduce our long term debt net of cash to just $23,000,000 The business environment remains quite dynamic, particularly in North America. Closely monitoring developments involving tariffs and are planning actions to minimize the impact of them on our operations. With significant manufacturing facilities in The United States and Canada, we are optimistic that we can adjust our manufacturing strategy to minimize the direct impact Reciprocal tariffs with the rest of the global community are more concerning. These tariffs will probably appear in the form of input cost inflation. We successfully navigated the inflation during the immediate post pandemic period and I'm confident we will do so again.

But it remains to be seen what effect this will have on global trade. As we look ahead to the early months of 2025, we expect the pattern of the past several quarters will again be evident. We expect that our industrial equipment division will continue to produce strong results and mid single digit organic sales growth We also expect the vegetation management division will continue to show modest but steady recovery in order flow backlog and operating margin driven by the cost reduction initiatives. The division sales are expected to begin showing modest growth in the Profitability is expected to show improvement in the second quarter as the full benefits of the plant consolidations and staff reductions flow through. On balance, we like how the company is now positioned and we're pleased with the results of the cost reduction initiatives we implemented last year. We're also excited about the prospects for meaningful acquisitions in 2025. Our acquisition target pipeline is the most active it's been since the onset of the pandemic. [indiscernible] Our strong balance sheet gives us ample room for meaningful investments in inorganic growth in 2025. Before closing, I would like to take this opportunity to express our sincere appreciation to our customers, dealers, supplier partners, our dedicated employees, and financial stakeholders for their continued support of the company.

This concludes our prepared remarks.

We will now begin the question and answer session. Our first question is from Mike Schliske with D. A. Davidson. Please go ahead.

Good morning and thanks for taking my questions. Hi, Mike. Hello there. I appreciated your commentary on margins for meditation 2025 we'll start seeing some benefits here in the second quarter. On the plant consolidations I'm curious if you can talk to us about the industrial group for 2025. Whether you have some volume increases, are there any unusual mix changes anything we should be thinking about that might affect the margins in 25%, but just maybe just a broad sense of what the chemicals could be in the coming year here?

Yes. Thanks, Mike. Great question. I don't see significant mix changes within the Industrial Equipment division at the moment.

All three of the segments of that division are holding up very, very nicely. And January has gotten off to a good start. So we're very pleased with the direction inside that division. In terms of the tariffs and plant capacities and so on, Mike, you may recall that we repurposed our plant in Worcester, Ohio from forestry and tree care equipment manufacturing to snow removal. That was done partly to mitigate the potential risks related to tariffs, so we can produce snow removal equipment for The U. S. Market inside that facility and use our Canadian facilities to serve the Canadian market.

So that's really the only significant major shift As we've done that, that's liberated some capacity in another one of snow removal plants in The U. S. And so it gives us some opportunities to think about how we continue to the operations inside the Industrial Equipment division. Having said that, the utilization of facilities in that division is already very, very well. The under absorption is essentially nil. For a bit now. So we're in a pretty good spot.

Got it. Thank you.

Also great to see you've basically got almost zero net debt at the moment.

I give you a lot of kudos, it was really a gradual process to pay down that debt from more bark and get to a very comfortable level here So I guess I was wondering what you do with your free cash from here. Do you pay down the gross debt and try to go below zero net debt? Do you and you just raised the dividend. Do you have other plans for So the investments or are you just going to try and save money for EBITDA?

No, we're not trying to save money. For a rainy day at all, Mike. Obviously, as I said, our M and A pipeline looks very interesting right now. So really that's the primary purpose of any cash that we continue to accumulate. And that why we like the debt position that we're in.

But I think any further reduction of debt would frankly be counterproductive. So if the M and A targets don't come, we may buy back a few shares. Just because we believe strongly in the future of the company.

All right. Maybe one last one for me. Jeff, congratulations, you announced a few months back your eventual retirement. Congrats there. Any update for us on how the next deal of search has been coming so far?

It's proceeding very, very well, Mike. We've just come off our Board meeting and I'm very pleased with the direction the Board is taking.

However, having said that, I'm in the saddle and I'm going to continue driving the bus as long as I need it to do that. I'm not slowing down at all.

That sounds great, Jeff. Thank you so much. I'll pass it along. All right. Thank you, Mike.

The next question is from Chris Moore with CJS Securities. Please go ahead.

Hey, good morning guys. Thanks for taking the couple. Good morning. Start with margins. So Q4 operating margins were 8.9%.

Just trying to get a feel for maybe the puts and takes of you guys being able to generate better than 10% operating margin in 2025?

I think we're in a pretty nice position to do that, Chris. And the reason is the full effects of these costs were reductions initiatives haven't flowed through yet, but the cost associated with them largely have. So as I mentioned on the call, we have a little bit of CapEx left do associated with that, but all of the separation costs and so on are well behind us now. And as you heard in the remarks, the resizing of the company was actually a little bit more dramatic than we had buffer from our point of view. So I think as long as industrial can keep growing and they are and hold on to their proper seen, We get our vegetation management division to keep kind of gathering momentum. It won't be dramatic in the first half. But as I said, our own inventories in the field are really low, particularly in Ag.

A little less so in forestry. But even in forestry, the inventories come down quite a bit. I think the outlook for the second half is quite good. And of course, when forestry does start to regain momentum, their cost structure is so streamlined now that that should drop very, very quickly at the bottom line. And that's where my confidence comes that we should be able 10% off income for the full year in 2025. Maybe if I can add, this is Agnes.

If I can add something here, fourth quarter seasonally is always a little bit lower. So I expect us to be above 10%. Last year 2024, we achieved 10.1%. I was was quite happy with that because looking at history at of Alamo, Alamo is the second highest year that we've done in the last at least few decades. So So we've been okay with that. And like Jeff said, considering all the are already starting to see some benefits of that. So I will be pushing to get back to normal.

Got it. Very helpful. I think Jeff, in your prepared remarks, you talked a little bit about channel inventory levels. I know they have been coming down over the last couple of quarters, but maybe could you characterize them a little bit further in terms of what you're seeing in early 2025? And how much further they need to come down in order to make a difference? Yes, I can give you some good color on that, Chris.

Let's start with the agricultural equipment side. The inventory is now very low. By historical standards. And that's why we're seeing some orders even though the rest of the ag market is reporting that recovery yet. Dealers are just out of stock. They have to order now. And I think that's going to continue for a bit. It won't be overwhelming, but it will be a trend, I believe, all through the first quarter. Then if we move up to TreeCares, or the next segment up the food chain inside that division, The field inventory in Tree Care has come way down and that was our biggest problem A lot of the mulching equipment and the trackers that drive those were in excess and that's come down very, very nicely during the fourth quarter. We've been very pleased with that. And then as we expected we started to see some nice orders starting to come out of our national accounts again. These are people like the the Davie trees, the Lewis trees, the Asplans of the world who began to reinvest in fleet. They've been postponing some investments and we saw some of that flow through. We also saw some nice orders flowing through from the state of California related to the fire management going forward for chippers and the like.

So that's very helpful to us because that was the most hard hit area in 2024. Then when you go to the high end of the food chain, the industrial forestry equipment. Field inventory isn't heavy there, it's expensive. It's not a lot of machines, it's just high ticket items. But with the wood pellet industry now starting to recover, with Amneva now finally getting capitalized and back on their feet. Those customers are ordering again as well. So there's still further work to go to clear the inventory there, but we're in a much better position than we were one quarter ago.

So I hope that helps.

Very helpful. And maybe just to wrap that up a little bit. So vegetation revenue was down, I think [indiscernible] 2024%. Comps will be a little bit easier.

I mean, is a low single digit decline for the year, is that achievable? Is that aggressive?

I think we're going to do better than that, Chris. I'm more of an optimist about that. I actually still think we're going to work out a little bit of growth So I'm more optimistic and our dealers are more optimistic than they have been for quite a while as well in that space. So I think the overall ag market is so dynamic right now and farmer sentiment is reacting both short term and long term Short term sentiment has been a little bearish because of all the talk about tariffs and kind of the actions of the federal government.

Makes everybody nervous.

But their long term outlook is actually quite good right now. And the prospects for that market, if the war in Ukraine gets settled, and I think it will, that helps a great deal, particularly from us. Historically, we had an ICEX export market in both Ukraine and in Russia. So I'd love to see that come back. So then as you move into the Forestry and Tree Care space, as I said, most of the inventory overhang now in Tree Care is gone. And we're starting to see nice orders flowing through again for mulching heads and for chipper not at the level they were in the sort of late pandemic period, but coming back to a much more normal order flow. And as I said, sequentially orders have been rising every quarter for most of last year. So I think we can clearly state that we're off the bottom. And I think the momentum should continue to increase as we go throughout the year. Obviously, tariffs are the big wildcard, but if you think about that, most of that business for Alamo Group is North American business. And most of it is U. S. Business. And again, we have facilities on both side of The U. S. Canada border.

So I'm not overly concerned about tariffs. We've studied and exhaust profitability, it's not a significant risk at this point in time. So I'm fairly bullish about the way 2025 is going to shape up. Up and already we're off to a pretty good start. The early weeks of the year have been very encouraging.

Sounds good. I'll jump back in line. Thanks guys. Thanks Chris.

Next question is from Greg Burns with Sidoti and Company. Please go ahead.

Good morning.

Good morning, Craig. Could you just talk a little bit about the order activity on the industrial side Where in particular were you seeing declines this quarter?

Okay.

Yes, great question, Greg.

The vacuum truck market first of all, held up very, very well. That's been running steady and decent growth. So there's been no interruption in that whatsoever. The sweeper side street sweepers were down a little bit. And you've heard me talk on the call before, Greg, sweepers tend to be the canary in the coal mine.

But this was a national election year as I highlighted and we always see disruption in that product group in a national election year. That's happened every year every four years anyway since I've been with the company. Snow removal was down a little bit. I think some of that is related to our own lead times. We were so busy throughout the second and third quarter. I think our lead times were getting a little bit long. But ramping up this Worcester facility in Ohio to produce snow removal is helping to alleviate that quite bit. So I think that will come back on. And obviously, the snowfall this winter has been actually really, really good. We've had frequent snowfall, so it's required continuous plowing. So I think the outlook for snow removal going forward is actually pretty good. But it was those two areas that we can then back vacuuming trucks remain very strong.

The sweepers and sewer cleaners vac trucks, what are your lead times like there? We've heard others in the space talk about longer lead times. And if you have like more normal lead times, are you at all able to benefit from that dynamic in the market?

Yes, we are, Greg. Our lead times are still running three to four months. We're in a pretty good position there. We've still got capacity available. So we're not overwhelmed in either one of those product groups at all. Okay. Thank you.

The next question is from Marcia Dobre with Baird. Please go ahead. Hey, guys. This is Peter Talamarian on for MIG this morning.

Quick question for me on Good morning, Jeff. Quick question for me on vegetation. Could you first remind us the percent of that $25,000,000 to $30,000,000 in savings that is flowing directly through vegetation. My recollection was almost all, but I just want to confirm that And second, given these cost savings, how are you thinking about vegetation five? Should you be able to hold decrementals maybe in the low to mid 20s like we saw in the fourth quarter? Or maybe does that get a bit better with savings still to flow? I'm curious to kind of hear your thoughts there maybe the margin puts and takes for vegetation Hi, this is Agnes. I'll take a first run at this. So the $25,000,000 to $30,000,000 in savings that we have announced, we're on a very good way to achieving that, by the way. And this is all in vegetation. So all actions we took the consolidations of plants, the reductions in force, is in vegetation. So nothing in industrial. When it comes to decrementals, we have seen improvement as we've been taking those actions. And as we go into 2025, I expect that to improve quite a bit, especially since those savings are still a little accelerating in the early months in this year.

And also the costs that we're not going to have, the separation costs that we had last year or not repeat. So I expect those to improve.

Yes.

And I would echo that. What I would say further on beyond that is that the actual sell price cost margin in that division held up pretty nicely all through last year.

The impact to net margin that you see in our published results is the effect of under absorption, which is why we took such dramatic actions to reduce capacity. That work is largely done. We're still seeing just a little bit of impact from it. Because the consolidation isn't quite bedded down yet in the large facility down in Alabama, but that should settle down in Q1 then I think we'll see the margin stabilize and start to rise.

So and as Agnes said, all of savings really that we've announced will be a vegetation management.

Awesome. Super helpful guys. I guess moving to industrial now, just thinking longer term, You've taken a lot of steps to improve the overall margin profile of the segment. You hit roughly, let's call it, a 13% operating margin for the full year 2024.

Maybe thinking longer term, where do you think the margin in this business can get? Any further plant consolidations, operating initiatives to be aware of that could lead to, I don't know, sort of fundamentals, structural margin up tick in this segment. I know maybe in the past you've talked about like hitting mid teens. Is there anything any color there?

Yes.

So I can give you some nice color there. I think a 15% operating margin in that segment is very doable.

And very doable within 2025, at least the end of the year, not on a full year running basis. I expect we should be able to end the year at that level next year. We do have some further plant consolidation opportunities within the [indiscernible] The second largest facility in the vegetation management division was the Wash the one in Worcester, Ohio, which has now been repurposed to produce snow removal equipment. That allows us to consolidate some of our smaller facilities that were more fragmented of The U. S. In particular. So I think that will be a nice gain as we head through 2025 and we have clear plans to get that done this year.

Awesome. Thanks, Jeff. And then just one more for me. I want to go want to circle back to M and A. We've been talking a lot lately about some bigger opportunities on the M and A side.

Are there any categories in particular you're looking at, adjacent categories of interest geographic expansion, any color you could add there on kind of what you're looking with that inorganic component would be super helpful.

Yes, I mean, I obviously can't be too terribly specific here, but we're looking at things that are closely in our wheelhouse, more governmental work, there's opportunities there. In some larger segments of governmental that we are not currently serving. That would be incremental products within our governmental portfolio. We We see very nice opportunities in Europe. We're chasing a couple of very interesting cases at the moment. Would take our industrial footprint further and deeper into the European market which has been a goal of the company for a very, very long time. So we've seen so many opportunities right now and the timing of them is what we're trying to gain a little bit because some of the sellers are also wary of what the tariff impact might be. But in any event, our goal is to keep our balance sheet spotlessly clean and nice and taut, when the opportunities do come, we can react very positively to it. And I do think that's going to happen during the first half of twenty twenty five. At least some of these are going to break loose, at least that's my expectation right now.

Awesome. Thank you guys.

Thank you.

This concludes our question and answer session. Would like to turn the conference back over to management for any closing remarks.

Thank you for joining us today. Look forward to speaking with you on our first quarter conference call in May 2025.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.