Atkore Inc. Price & Performance (ATKR)

And any reference to EPS or adjusted EPS means adjusted diluted earnings per share. Adjusted EBITDA and adjusted diluted earnings per share are non GAAP measures. Reconciliations of non GAAP measures and a presentation of the most comparable GAAP measures are available in the appendix for today's presentation. With that, turn it over to Bill. Thanks, Matt. And good morning, everyone. Starting on Slide 3, our Q1 performance was in line with our expectations. We achieved net sales of $662,000,000 and adjusted EBITDA of $99,000,000 both of which were within our outlook range Our $1.63 of adjusted EPS was near the top end of our outlook range. Organic volume declined 5% in the 1st quarter but this is in comparison to our strong volume performance in the first quarter of fiscal 2024. Our teams have been focused on executing the growth initiatives that we discussed in November related to water, and global construction services. We are on track with our organic initiatives and are planning for those who come online later in the year to and HCP water products. We continue to pursue several opportunities for global maker projects as we look to grow our pipeline and eventual backlog. We remain committed to returning cash to our shareholders as evidenced by the $50,000,000 in share repurchase in the Q1 which complements our quarterly dividend payment.

I'm also pleased to highlight the release of our fiscal year 2024 Sustainability Report which we published last month. This report details our ongoing initiatives accomplishments and progress toward our 2025 goals. In the Q1 of 2025, we released additional environmental product declarations for our core products. Atkore has EPDs for our core products covering a [indiscernible] half of our global sales. When we met in November, we planned our year with an expectation that we would continue to face challenges impacting both our volume and price due to increased foreign and domestic competition. Most notably, these challenges impact our PVC conduit and steel conduit businesses. Having completed our Q1, we now believe the challenges we outlined in November will have a larger impact on our 2025 performance than previously anticipated. We saw year over year volume increases in imported PVC knew it. Which is impacting the market environment. Additionally, we continue to see year over year increases in imports for steel conduit. The imports for both PVC conduit and steel conduit originated from countries where quantity limited or poorly enforced. During the Q1, we saw downstream constraints impacting our utility scales solar market which impacted our volume. However, we are pleased by the improved operational performance within the S and I team and our Hobart, Indiana facility.

I am disappointed that we continue to operate in these conditions. The challenges we are navigating are not what we anticipated at the end of year 2022 when we signaled normalization of our record profits. We now expect full year 20 25 adjusted EBITDA to be approximately $400,000,000 at the midpoint of our range. Our outlook reflects what we believe is most probable. We are pleased that an announcement was made related to tariffs on Mexico. Should these tariffs go into effect, they should have a positive impact on our business At this time, our outlook does not contemplate any material benefits from tariffs on imported tablet. As a reminder, the recently announced tariffs impacting Mexico and Canada do not affect our PVC conduit business. We are currently forecasting the headwinds impacting PVC pricing may In the meantime, we are advancing our key initiatives to expand our business in new market areas. Secondly, we are prudently looking at our enterprise wide cost structure to mitigate the impact of these industry headwinds. Lastly, we are looking at alternative scenarios for certain assets to provide the best economic return. My conviction in our team remains strong and we will lean into our business system to execute our strategy.

I'd like to take a moment to thank all of our employees for everything they do to support our key stakeholders. With that, I'll now turn the call over to John to talk through the results from the quarter and provide more details on our outlook.

Thank you, Bill, and good morning, everyone. Moving to our consolidated results on Slide 4. In the Q1, we achieved net sales of $662,000,000 and adjusted EBITDA of $99,000,000 Our tax rate in the Q1 was 21%, an increase from 17.5% in the prior year. As a reminder, the tax rate in the Q1 of last year These outsized benefits contribute to our stronger than Turning to Slide 5 and our consolidated bridges. Organic volumes were down 5% compared to double digit growth in the Q1 of fiscal 'twenty 4 when volume was up over 13%.

Our average selling prices declined 12% during the quarter. Most of which came from our PVC conduit and steel conduit products. Moving to Slide 6. Our volume decline during the Q1 was across most product categories.

As we mentioned earlier, volume in the Q1 last year was atypical for what is traditionally our slowest quarter. However, our Metal Framing, Cable Management and Construction Services businesses grew mid single digits in the Q1 of fiscal 'twenty 5 after being up high single digits in the prior year. This growth is driven by both an increase in our construction services support of global mega projects as well as the high density of metal framing products required for this type of construction We anticipate additional growth from these businesses throughout our fiscal year in part due to the addition of new capacity for metal framing to support large construction projects such as data centers and chip fab manufacturing. Our plastic piping condylate product had This category grew high single digits in the prior year as the channel was adding back inventory after a period of destocking in 2023. Separately, as Bill mentioned earlier, we are also seeing an increase in imported products coming from multiple locations including Central and South America. The combination of imports remains below 10% of the overall market. Where we're continuing to monitor the situation closely. In addition, we are examining the product quality characteristics of these imported materials versus the standards and specifications.

Our volume decline for steel conduit was also impacted We believe that imports represent between approximately 20% to 25% of the overall market. As we look beyond Q1, we continue to expect growth across much of the portfolio including contributions from our plastic pipe category, driven by growth in our water related products. Overall, we continue to expect volume growth between low to mid single digits for the full year. Turning to Slide 7. Adjusted EBITDA margins compressed in our Electrical segment due to previously mentioned pricing and volume declines.

The adjusted EBITDA margins also declined in our S and I segment primarily due to lower volume.

The S and I segment margins however did and we are pleased with the operational performance and improvements being made in our key facilities such as Hobart. Turning to Slide 8, we continue to execute our balanced capital deployment model with an emphasis on returning cash to shareholders. Along with capital investments to progress our growth initiatives. Our balance sheet remains in a strong position with no maturity repayments required until 2028. Next on Slide 9, we expect low to mid single digit percentage volume growth for the full year.

We expect our Q2 net sales in the range of $685,000,000 $715,000,000 Our adjusted EBITDA is expected to be in the range of $85,000,000 to 90 $5,000,000 Our adjusted EPS is expected to be in the range of $1.30 $1.50 Historically, we are accustomed to anticipating some amount of seasonality, We generally build in an expectation that the back half of the year will be stronger than the first We believe this will be the case this year for 2 main reasons.

First, our overall business is generally stronger in spring and summer construction season versus the fall and winter. 2nd, as we continue to ramp up our initiatives, our volume should steadily increase throughout the year. Therefore, we expect adjusted EBITDA to improve sequentially As Bill shared, we are also updating our full year 2025 outlook We now expect full year adjusted EBITDA in the range of 375 [indiscernible] and adjusted EPS in the range of $5.75 to $6.85 With that, turn it back to Bill.

Thanks, John. Moving to Slide 10. As I and the entire management team focus on executing our growth initiatives and creating greater value for our customers and shareholders we remain confident that the electrical industry is a great place to be. Atkore strong balance sheet, breadth of products, service capabilities, and goal of being the customer's first choice positions us well to benefit from the strong electrical trends projected across numerous end market categories. We remain committed to returning cash to shareholders through a combination of share repurchases and quarterly cash dividends and look forward to sharing more about our progress against our growth initiatives related to Global Construction Services and water related products later in the year. Through it all, we are guided by our strategy, our process and our people the 3 fundamentals of the Acthar Business System. One recent demonstration of the Atkore Business System at work is our announcement of our new Chief Operating Officer, held by John Briginder. John's multidisciplinary career combined with his experience holding various roles at Atkore since joining in 2015, makes him a tremendous asset and I'm excited by the additional value he will help back or achieve for our customers and our shareholders With that, we'll turn it over to the operator to open the line for questions.

Thank you. Your first question comes from the line of Andy Kaplowitz with Citigroup.

Good morning, Andy. Bill, can you elaborate on the commentary that import competition is gaining momentum in PVC Maybe what has changed with PVC imports versus the You've seen a pretty big move from this Latin American competition. And then metal conduit volume looks like a reverse course and decline in Q1. Is that just tougher comps, project delays or new capacity starting to come in?

Yes.

So let's go through PVC And I'll go in to take your question and give a bunch of details here, Andy. Imports have grown. Now they're still single digit numbers. But they've grown over 20% year over year. So just whether it's hey, it starts working or they get customers, therefore they increase their shipments and that's probably the primary thing Again, single digits, overall market volume, but driving down price and Atkore competition was slower markets matching price, all those different things. So now the one thing I want to jump ahead on is in our guide, what we've done this year, just because I'm frank quite frankly for anybody frustrated with not having numbers that we hit and exceed, is that we put it out, we have it literally going down to pre COVID levels by the time we exit the year. [indiscernible] it our intention to add value and see if we can push price up and see what Trump does and everything else there. But for now, instead of saying, oh, we didn't expect it, We've taken a very aggressive view, quite frankly, a view for price [indiscernible] not what we're internally managing to that this would be the worst year for year over year declines in PVC.

So Andy, I both answered kind of the imports. I also think now again, I don't know anybody's cost base. If you get to that point, where it's pre COVID, I don't think they can make money with the additional freight even if they have lower level. From our analysis, the resin costs in these countries are the same as ours. There's the proportion as labor is just small compared to everything else. I don't think it would make economic sense anymore.

So hopefully you get a feel for that. Steel, I think in look over my team and so forth, but it's mostly just year over year comp. Imports are still a challenge there. But literally imports have grown like 4%. So I think it's moderating with that. It's just we had a tough comp. But again, in one of the things we did with this thing is to go, you know what, we talked in previous calls, we did not expect much bump from Trump and tariffs versus like, hey, somewhere in the end of the year, things to steady out. It's like, no, guys, just take a linear or like do not expect any price increase anywhere So again, I think you have not changed our guide to get on call, but I think we've taken out all variables and now it's just for us to perform. Any Trump tariff, a quota, [indiscernible] anything else is upside to these numbers.

No, that's helpful. And then just on the volume side, I just want to make sure of this. Like so volume was down 5%. It looks like that is just tough comps. You're not forecasting any season any cyclical improvement in construction markets. It's just seasonal improvement. Is that right? And maybe any sort of commentary on the health of the markets that you see?

Yes, exactly, Andy. So, no bounce back in industries, no bounce back in residential, or anything else there. So it's literally as I think in John's prepared remarks, I think we will finally get back to normal pre COVID things that there is that 7%, 10% and so forth that we'll have that. Otherwise, even most of our initiatives like I'm sure somebody will ask about BEETS and HDPE, We really have going into 'twenty 6 and so forth.

Okay. And just one more for me. Like can you give more color into comments regarding looking at your cost structure and or getting value? I think you said value for strategic assets. Might we see bigger activities on these fronts this year and what could that look like?

I'll start and turn it over to John Dicer because there's so many things, but I'll steal some of John's just talking this morning. Sorry, John. But give you things we've already done. We had a facility in Tempe, Arizona. And again, we do drive lean We were able to close that operation, so keep the business activity, but move it into Phoenix, move it up into Massachusetts. So that's one example. We did also, as we look forward strategically, looking at, hey, we can produce in some areas, I don't want to get what specific line, but to go, hey, we can actually produce and we don't need this asset. So we told sold 2 or 3 production lines. Again, we will still meet our customer demand without that. We are cutting back on, I say personnel, but hey, headcount freeze for attrition. We're looking at lines back to let's say PVC conduit and water making trade offs depending on the economic return making the economic return on how much mechanical product versus conduit products and the list goes on. We have and I think we'll hit this the most aggressive or the highest year over year productivity that I'm aware of in Atkore's history.

So Andy, it's a bunch of things we're looking at. And could we spin off small businesses that like you bought within acquisition that weren't strategic. All those things are either have happened or in place as we go.

I agree with everything Bill mentioned there. I would just add to his point, the we did have some positive productivity and we are going through almost every line item asset by asset. What makes the most So I think we are actively trying to understand what levers we have to pull. Yes. And it's Andy, since for you, I know you appreciate, but again, it's a forecast. We have 2 weeks of backlog, all those other things. But [indiscernible] do think this is a point where I'm just frustrated with the unexpected. It's like, okay, guys, listen, I assume good things. They will raise forecast and let's work like hell. To get these numbers. Moving forward, Appreciate the color. Good luck guys.

Thanks, Andy and Sandy. Your next question comes from the line of Deane Dray with RBC. Please go ahead.

Thank you. Good morning, everyone.

So just if I step back and look at the Q1, price and volume, both came in largely in line with our expectations. So The cut here is all prospective and how you think the dynamics change.

For the balance of the year. And maybe if it would be helpful if you could just in broad strokes kind of break out for us on that guidance, Scott, how much is the PVC? How much is steel conduit? Just the size kind of the severity And you hadn't, unless I missed it, talked about the new competitor in PVC, maybe that hasn't really become all that volume online yet, but if you could address that.

Yes. I'll hit the beginning and then I'll turn it over to my Las financial partner just on what level of precision on the breakout between 2 groups. But Dean, to the earlier comments I made to Andy, yes, he's out there others are there. I think it's mostly the imports at this stage that are driving it. And then just market reaction, I would say and this has been consistent for 10 years, [indiscernible] is supply and demand is the biggest challenge. And now December was light. We answered that with the previous set of questions is mostly comp and then obviously January was light. What I hate to talk about like storms, fires on California and freezing temperatures down south that I but us looking saying, hey, how is January pricing going and what happens to this trend continues? I just don't want the optimism this won't continue to happen. Let's literally extrapolate that. Now I'm not changing to go the 1st week of February, whether the concern of tariffs have actually if we keep this up, it'd be another number, but that's 1 week. So I think we're going through those things and just saying, hey, let's not hit with what we would like to have happened, what could happen and work our way back up from there.

And then John, if you'd address Yes. I think there's something here kind of help you dimension it, Dean. So from a price versus cost standpoint, we roughly had an outlook of down $300,000,000 previously. Now we're at the midpoint roughly down $400,000,000 So it's $100,000,000 delta from a price versus cost standpoint versus where we were at back in November. I'd say roughly $75,000,000 or 3 quarters of that is on the PVC side 25% of that is on the steel conduit side. So overwhelmingly driven by the changes in expectations from a PVC conduit. I'd say that market is changing as we've talked about and probably kick it here over to John Fregenza can kind of give some context on what we're seeing from an import perspective, where it's coming from, because I don't think it's just about the domestic competition as well.

John?

Thanks, John. Good morning, Dean. So when we look at the PVC market, there's been a number of new entrants from all different sources, whether it's imports, from Latin America, from China, We've seen domestic producers diversify out of the water work business to get into the electrical space and obviously there's new entrants are coming in out of nowhere. So it's my career probably the most disruptive period we've ever seen in regards to number of new entrants and that's just creating a lot of pressure on price and spread that we're experiencing and would there's been a significant acceleration here as we've been tracking this price normalization over the past couple of years, the last quarter to 2 quarters has really accelerated. So I think what we're trying to do is to capture that going out the rest of the year?

That's the only thing I'd ask. Go ahead. [indiscernible] No, I just that's great color. To be able to size what those are and to hear John's comments about the how many other entrants are in the PVC side. We were thinking just it was Venezuela.

And Dominican Republic, but it's much more than that. So that's very helpful. And Bill, I cut you off.

Yes. No. And the only thing I would put a pin in is like, hey, we have factored you never know, but literally as I mentioned earlier, to go, okay, was that bring it back to pre COVID levels. And Dean, back to again, I can't commit to this Dean or anybody else but you've been around for the decades plus or even before that as you know. But the PVC rule of the 500 miles like the margins aren't there to substantiate. So we actually think before we get to that number, some of this would shut off, but I'd rather have it as best as we can in the forecast. Yes, that's a great last point there. And just one question and I'll hand it off was, are you suggesting some of these imports and is it both PVC and steel might not be meeting specs?

Yes. I would say without getting too specific and looking over my attorney here because there's not a 30 second rewind, We've communicated in the past there's several things occurring. 1, there's products that have all the specs. So for example, you can use it in this application, but you can't use it in that. So then a contractor has to decide are they meeting as they input this and quite frankly, they're not looking to go, oh, it doesn't meet a temperature of 90 degrees Celsius. 2, we are working with authorities on products coming in even for example, I won't call what specific customers and so forth. But where they have to pass like an impact test of 7 out of 10, you have to drop away from a certain thing and not crack. And we've recently tested 1 significant importer and they're passing 1 out of 10. So [indiscernible] authorities to customers to our government relations This also are things that just for the safety of society need to be fixed.

Thanks for sharing that. Appreciate it.

Thank you.

Yes. Thanks, Dean.

Your next question comes from the line of David Tarantino with KeyBanc Capital Markets. Please go ahead.

Hey, everyone. Maybe just to put a finer point on PVC.

Is the revision entirely from the imports or is there also this [indiscernible] incremental capacity being added from the market as a whole? Yes.

I think, David, it's a little about to what John Brginzer said. What we don't know, because again, we don't talk to our competition, I don't know how much is additional lines coming on board versus just the mix of some of these people will go, hey, I'm in this world just like we're moving into like we generically call it the water market. You got ag, you got plumbing, and this will within there. But how much of these others saying this expands I say expand, but sign up an agent and so forth.

So is it capacity versus expanding their market presence that's a little bit tougher, but it is imports, the large part. Oh, I'm saying large. Again, I'm trying to dimensionalize it, so less than 10%. [indiscernible] but it was up over 20% year over year. And then it's expanding out with some of the U. S. Manufacturing companies.

And just to confirm, this quarter's revision was mostly just the imports that Well, I think it's pricing, George. The one problem with this even I've talked in the past, whether it's steel, condo or whatever else, it's [indiscernible] outright Atkore. And then I'll try to answer your question. I still think we're the market leader out there. We had the full breadth of product. We have regional service centers. We have national footprint. Because of our spend, we have relationships with all these companies. And we're kind of the 1st choice and last look But people trying to enter the market, trying to grow will leverage price. It's hard to say to go, well, hold it, who was the one that dropped their price? Or now that somebody dropped their price, even a well known recognized competitor of ours called a Tier 1 person who's been around for a century or something. The PVC hasn't been long that long, but you get it. To go, hey, now they're matching and now they think that's the market price. So David, it's just so hard to say here is the one causing it. I think it's more the imports, but I just can't say or you can't point it down to one specific one?

Does that make sense hopefully?

Yes, that's helpful. On the volume growth, is there a way to break it out between end market expectations and the internal initiatives and maybe on that, could you give us an update on the progress around the growth initiatives, particularly between solar and water?

Yes, absolutely, David. Thank you. So I would just think about the framework we laid out on Page 6. Is a good way to start. That metal framing, cable management, construction service business did very well in the Q1, mid single digit growth after high single digit growth in the previous year. This is where we have really good exposure to some of the strongest growing end markets like data centers, some of the large manufacturing projects then we have the capability that we've talked about from construction services as well as we have some new equipment related to the metal framing product line that we think will really help us here drive a significant portion of that growth That product category continue to grow in the back half of the year, probably that would be a key driver for us As you mentioned, the other key driver the plastic pipe conduit product category We think with the new water related products that will have that's the next biggest growth driver in the back half of the year, especially as we manage through some of these comps. We talked about the Q1 the difficult comparison around last year with the restocking.

Things like that. But now we have that equipment and benefiting. So that's probably the next biggest driver.

And then then we expect metal conduit electrical cable, there should be that kind of market level growth of low single digits [indiscernible] the overall non residential market, but we do have the competitive factors, especially thinking about the steel conduit dynamics. And then the mechanical tube area, we were Soft here in the Q1.

We do anticipate that getting better in the back end of the year.

But there is challenges with the solar market in general We are performing well as we mentioned, but there are dynamics I think some people are trying to sort through. It's kind of the construct in the framework on how to still get to that low single digit volume growth for the back end of the year.

I think it's the there are some positives. We've talked about a lot of unfavorable items here. We are positive here this metal framing construction services is doing well. And I think not just this year, but as we look into the future, this is a really key area for us to combine a few different offerings. So think it can be really good for years to come. Thanks, David.

Your next question comes from the line of Chris Dankert with Loop Capital. Please go ahead.

Hey, good morning guys. Thanks for taking the questions. Good morning, Chris. Forgive me forgive me if I'm misunderstanding. But the expectation around profitability is now that we're kind of to reset the pre COVID levels on the PVC side However, we've seen more imports come in, we've seen more domestic production. So how do we be confident that that is actually the right level and not something lower than Okay. So I'll go through that. There's no guarantee But what I would say, Chris, to my earlier remarks, at first off, I'll even clarify a little bit what we have in here is our pricing down. To that level. And then the nuance of that is, I think everybody would agree that labor costs going through COVID, double digit inflation for a couple of years, transportation going up that the margins we have the end are even lower than pre COVID, like what we're thinking for industry level. And then to answer I gave earlier, again, I don't know others cost position. But at some point, our quick analysis, she says, is just no longer effective because of the freight. Back in the day, and I'm seeing pre COVID, we used to have this general rule that you didn't ship more than 500 miles 700, 800 miles because back then freight was around 7 to 8 [indiscernible] Cubes out.

It doesn't wait out for the pricing. Therefore, at some point, imports coming from across the globe no longer in our opinion from our analysis at the moment make economic sense. So I can't guarantee the future there. But I just think at some point you start getting down to your cost position. And from that standpoint, I feel good with Atkore because we are one of the largest resin buyers We've talked in previous there has been massive over the last couple of years for the pricing. But we have automated factories where people have things we automatically bundle our products and the 20 other things mix things that people do manually that I think we have a good efficient process. And as I mentioned earlier, even this year alone, including PVC should be our best year for productivity that I'm aware of. Pre or post IPO.

That's extremely helpful. Thank you for the color there. And then I guess just on Hobart, I mean, maybe can you tell us where production levels are kind of at versus And then to my understanding, if the IRA or those incentives are narrowed, changed, whatever, that doesn't particularly shift the profit pool for Hobart, right? Like most of those incentives are passed along to customers, correct?

Yes.

So a couple of things. Operations is doing well now. I Even to the point of where I was on a call with the operations teams last week saying, hey, look in a different plant, what are you going to do? And there was a little bit of I think I wish I had a year before, but the team going, well, what we did at Hobart, we're going to now come do there. And my point there is operations are hitting speeds, productivity, all the different things that we're expecting at the time. So it's now back in our one of our top sales teams to go, okay, now that we got this in addition to solar, customers or anything else, go fill the mills, expand beyond and so forth. So we're in a good spot there in general. Again, now it's with SCOBI volume. As for the IRA and so forth, our expectations whether it's that or no one's asked me about BEATs and HDPE that I think these were all bipartisan acts that is spending that hit most states. Therefore, whether you're red or blue, So I don't see things changing and or if there's less back to our current President, if there's less less incentives, you would think there's a tariff to offset [indiscernible] run things.

So short term, when you get to solar, and I think in the prepared remarks, we talked about there is some hooking up to the grid I'm well beyond my skis here. But if anything, as President Trump talks about deregulation, over time that could be an enabler that we get things moving quicker as we add more solar capacity. 1 of I'd like to reference other people. In other words, this is just Atkore. One of the largest solar trackers, I think, already had their earnings announcement. And they talked about record backlog and so forth. So again, I'm not getting into the quarter, but longer term, I still think this is a great market to be in. And by the way, we started the Solar Torque 2s before there ever was like an IRA tax credit. So we're prepared to grow this market with or without incentives.

Got it. Well, thank you so much for the color there and best of luck guys.

Thanks, Chris. Your next comes from the line of Chris Moore with CJS Securities.

Hey, good morning guys. Most have been answered. Good morning. Maybe good morning.

Can you provide perhaps the puts and takes as to why fiscal 2025 will be the bottom from a revenue and adjusted EBITDA [indiscernible] So here's the puts and takes. We do expect, as I mentioned earlier, and I'll give you some caveats to think through with models, Chris and everybody else. That like the PVC and so forth to ask to go, okay, let's just take it down. It's not going to all drop in January again or February right now. 1st week of February is pretty damn good. But over time, let's just bring it down as I already answered. That's one price and there's more costs than there was 5 years ago in the industry. So we think it's a natural number and then it's our productivity, our growth in global mega projects, and so forth that will actually be upsides. Now the one thing in the model that people have to think about is going into next fiscal year there would be some if pricing levels out the end of the year, there would be some decline in 2026 because if you just think about comps, to think about October of 'twenty 6 versus October of 'twenty 5, pricing dropping this year make a tougher comp at the beginning of next year.

So now we're not here to give guidance on 20 6 yet. I want to show and perform over the next 3 quarters and Atkore. And drive these initiatives, but do we have enough productivity? I really think and I look forward in future earnings talk about global mega projects and what we have accomplished there.

Various things the puts and takes. But that's Chris, our thought on 26 going forward.

Fair enough. I will leave it there. Thanks guys.

This concludes the question and answer session. I would now like to turn the call back over to Bill Waltz for closing remarks.

Thank you.

Let me take a moment to summarize my 3 takeaways from today's discussion. First, Atkore continues to evolve as we expand our product and services portfolio through our initiatives, which we believe are natural extensions of what we've built over many years. 2nd, we continue to monitor the overall market dynamics and competitive landscape and believe several factors could have a positive impact for us as we move throughout the year. Finally, we remain committed to our capital deployment strategy to create shareholder value over the long term. With that, thank you for your support and interest in our company We look forward to speaking with you during our next quarterly call. This concludes the call for today. That concludes today's conference call. You may now disconnect.