Thermon Group Holdings, Inc. Price & Performance (THR)

And is also available on the Investor Relations section of our website. Additionally, the slides for this conference call can be found in our IR website site under News and Events IR calendar earnings conference call During the call, we will discuss some items that do not conform to generally a 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 [indiscernible] for measures of financial performance reported in accordance with GAAP. I would like to remind you that during this call, we might make certain 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, further developments or otherwise, except as might be required by law. Today's call will begin with remarks from our CEO, Bruce Bain, who will provide a review of our recent business performance including an update on the progress we have made to our strategic investments, followed by a financial update and review from our CFO, Jan Schott.

Bruce will then wrap up our prepared remarks with an update on our business outlook. The conclusion of this prepared remarks, we will open the line for questions. With that, I'll turn the call over to Bruce.

Thank you, Yvonne, and good morning to everyone joining us on the call today. I'll begin by commenting on highlights, which we detailed on Slide 3 of our presentation. The was another period of solid execution by our global team. Which resulted in continued strength in our OpEx related revenue, bookings momentum, strong margin capture and efficient free cash flow conversion. Based on our disciplined execution against our strategic priorities, the cash flow generation of this business and our strong balance sheet, we are strategically positioned to benefit from the improving demand drivers, which we expect will translate to an improved growth trajectory in the coming quarters. We continue to benefit from our strategic focus on diversifying our revenue base and increasing our exposure to short cycle projects in MRO related recurring revenue. This has resulted in a revenue base that is both more stable and more profitable. We were also encouraged by the continued momentum in order trend during the and our strong backlog growth Our orders increased 11% on a reported basis and we were modestly organically on a constant currency basis. This resulted in another quarter with a positive book to bill Importantly, our backlog increased nearly 48% On a reported basis, NIM was up 9% organically.

The strong backlog growth is being driven by the solid order trends as well as the slightly extended backlog conversion. I discussed last quarter. While the slower backlog burn has been a bit of a headwind for near term revenue growth, the higher backlog and heavy workload in engineering gives us increased visibility and growing confidence in our growth trends moving forward. [indiscernible] key driver that enabled us to generate an adjusted EBITDA margin of nearly 24% during the which came despite a modest margin drag from our recent acquisitions. While mix was a key factor in the improvement, we've also benefited from the cost savings and productivity initiatives we've instituted across the business. We were very pleased with our margin capture during the quarter and believe our profitability highlights the overall margin potential for the business, providing confidence in the ability to achieve our long term profitability targets. And finally, our strict financial discipline resulted in in strong free cash flow conversion during the quarter. Through the first nine months of we generated $24,000,000 in free cash flow, which is up $3,000,000 from last year despite slightly lower EBITDA. As a result, we paid down $12,000,000 in debt during the bringing our net leverage at quarter end down to just over 1 times.

So with that, I'd like to turn to results starting on Slide Chad will cover the financials in more detail, but I want to highlight a few key items. While we are focused on growing our diversified end markets, oil and gas remains an important end market for our business and we are seeing improving trends in the sector. As I already discussed, we continue to experience improved order intake volume during the which was driven by broad market strength, including solid trends in chemical, petrochemical, [indiscernible] general industrial, in addition to a rebound in Oil and Gas, we're still seeing extended decision cycles on larger capital projects where we believe customer confidence is improving and we remain encouraged by the growing opportunities pipeline and strong cooling activity.

Recent aggressive and broad approach to tariffs has unfortunately created additional uncertainty in the business. With the fluid nature of the trade talks underway, the final outcomes are in question and we have not yet fully contemplated the potential impact on customer behaviors and the business. However, I would like to take a moment to reinforce ThermoD's manufacturing [indiscernible] We like to be close to our customers with our people, our services and our manufacturing operations. Our footprint in both The U. S. And Canada allow us to produce in country to be responsive to customer needs. Our acquisition of Fotis was a further move in this direction. While improving our competitive position, this approach also serves as a natural hedge to fluctuations in currency, and import duties. We'll be monitoring these trade negotiations as close We'll be monitoring these trade negotiations closely as the magnitude breadth and duration of tariffs becomes clear. Jan will talk more about the potential exposure later in the call. Our reported revenues declined by 2% during the quarter, driven by the ongoing pressure in large CapEx projects, however, our short cycle revenues remain resilient. Turning to Slide 5. Our OpEx revenues increased 13% during the and were essentially flat organically despite the challenging CapEx still in the environment in our business.

On a trailing twelve month basis, our OpEx revenues represented 84% of our total revenues up from the low 70% range just a few years ago. We do anticipate a rebound in large capital expenditures, which will an impact on the mix. But the increased exposure to OpEx revenue should continue to provide a more predictable and profitable revenue stream going forward. In addition to improving our revenues stability, our evolving business mix is driving enhanced margin performance. Our 23.7% adjusted EBITDA margin during the quarter was our highest quarterly margin performance in two years. And has enabled us to grow our EBITDA despite the modest revenue decline. Now turning to Slide 6 and our strategic pillars. We continue to make important progress on our strategic priorities during the as evidenced by our favorable OpEx revenue trends margin expansion and backlog growth. And a key aspect of our strategy has been our goal to reduce exposure in the oil and gas sector. As I discussed last quarter, we achieved our 26 goal of generating at least 70% of revenues from diversified end markets. While we remain committed to maintaining or further improving this metric, oil and gas is still an important end market for Thermon so we've been encouraged by the recent momentum we've seen in this business.

In particular, we've seen a pickup in our Canadian oil and gas business driven by an increased maintenance activity and drilling programs to support LNG export and additional export capacity with the newly commissioned Trans Mountain pipeline. I will discuss our end market outlook in more detail later in my remarks, but we are encouraged by some of the pockets of straight through steam and oil and gas and expect we could see further momentum given the priorities of the new administration. We remain focused on our disciplined which is based on a balanced approach between investments in organic growth strategic M and A maintains financial flexibility and opportunistic return of capital. We continue to successfully integrate the recently acquired Drink and Power and Potti businesses. Fotty generated solid financial results during our of owning the business. At Voatware Power, we continue to see strong backlog trends and are focused on expanding capacity to convert the current backlog while building on the strong market momentum. We purchased 620,000,0.0 of our shares this far during and have approximately $43,000,000 remaining under our $50,000,000 share repurchase program. We continue to see a robust M and A pipeline and with our current leverage comfortably below our 1.5 times to 2 times net leverage range, leaving us in a strong position to continue to execute on our capital allocation priorities.

With that, I'll turn it over to Jan who will provide a more detailed review of our results. Before I wrap up with some remarks on our financial outlook. Jim?

Thank you, Bruce, and good morning, everyone.

I will review financial results for the quarter give an update on working capital and free cash flow, and conclude with comments on the balance sheet and liquidity. Moving now to Slide 7, Revenue in the was $13,440,000,0.0 dollars a year over year decrease of 1.5%. Bank of Power and contribute $13,000,000 of revenue during the Acquisition revenues coupled with continued resilience in off revenues, mitigated the impact of the ongoing headwinds in a large [indiscernible] Excluding Vapor Power and Flossie, organic sales decreased 11% versus record results last year, mostly from large project sales. Large project revenue was $1,860,000,0.0 during the down 45% from last year as customers continue to delay decisions on large capital projects. Geographically, this weakness was primarily in the U. S.-Latin American region and was fairly consistent across our vertical our various smart verticals. Our OpEx revenues were $11,580,000,0.0 during the the an increase of 12.6% compared to last year.

As our customers continue to prioritize maintenance and repair spending. Excluding the contributions from Vapor Power and Fluffy, our OpEx revenues were essentially flat [indiscernible] We believe that the stable results in our OpEx revenues, despite the challenging capital spending environment demonstrate the benefits of our long term customer relationships, deep installed base and the resilience of MRO's spending by our customers.

Demand in Canada remains favorable with sales of $4,350,000,0.0 up 6% year over year.

EMEA sales were $1,380,000,0.0 up 11%. APAC sales of $980,000,0.0 declined 3% and U. S. Latin America sales of $6,720,000,0.0 declined 8 driven by the continued contraction in large project sales. As we are discussing our geographic exposure, We'll take a quick minute to build on Bruce's comments regarding tariffs. At this point, the tariff situation is very fluid. And it is clearly too early to predict what the ultimate impact might be on the business. Importantly, as Bruce already highlighted, our manufacturing strategy to being close to our customer Our total cost of goods sold, exponents to U. S. Canada tariffs, is roughly 10%.

Our products were not impacted by the initial trainer measures Canada had proposed.

We believe that our Mexico and China exposure is limited given we have no manufacturing presence and the combined markets represent roughly 5% of revenue.

Adjusted EBITDA was $3,180,000,0.0 during the up from $3,070,000,0.0 last year, an increase of 3% due to strength in our short cycle revenues and the contributions from vapor power These were partially offset by declines in our project revenue and continued investments in growth initiatives. Adjusted EBITDA margin was 23.7% during the up from 22.5% last year due to a more favorable revenue mix. And productivity gains from operational excellence initiatives.

Orders during the $139,000,000 compared to $124,000,000 in the same period last year an increase of 11.4%. We saw broad momentum in our order trends highlighted by notable strength in petrochem, transit, and wind and gas. Importantly, nearly 70% of our incoming orders in the quarter were once again from diverse end markets. As a result of the solid order momentum, backlog was $23,560,000,0.0 at the end of the up 48% compared to the Excluding vapor power and FOSI, backlog increased 9% on an organic basis only. Moving to Slide 8, for an update on our balance sheet and liquidity, Our customers. CapEx was $140,000,0.0 during the down from $220,000,0.0 last year. As a result of our strict financial discipline, free cash flow was $850,000,0.0 in the quarter bringing our year to date free cash flow to $24,000,000 up $3,000,000 or 14%. From the same period last year. We believe our focus on working capital management, and solid operating results will deliver another year of strong free cash flow conversion. We paid down $12,000,000 of debt during the quarter bringing our net debt balance to $115,000,000 Net leverage was 1.1 times at the end of the down from 1.5 times last year.

This past Oct. 0, we completed the consolidation of our Denver facility and the sale of the property which brought in net cash of $580,000,0.0 and a gain of about $3,000,000 in the quarter. In summary, we are pleased with our financial execution during the quarter as we made further progress on operational excellence initiatives and we generated strong free cash flow, which enabled us to reduce our leverage. Based on our total cash and available liquidity, of 136,000,000 We remain well capitalized and have ample flexibility to continue to support support our capital allocation needs, which will be a balance of investments in growth debt pay down and opportunistic share repurchases. With that, I will turn the call back over to Bruce. Thanks, Jan. Before I wrap up with our financial outlook, I thought it might be helpful to provide some updated thoughts on what we're seeing in some of our key end markets as we enter the new calendar year. Particularly with the administration taking over. Over the last several quarters, the industry has faced headwinds due to the pause in large project capital spending, particularly in U. S. Land. Believe the delayed investment decision timelines over the last year were due in large part to the uncertainty surrounding interest rates, the presidential election and the overall economy.

While the timing and magnitude of further Fed easing is yet to be determined, and the macroeconomic environment is still uncertain, customer confidence appears to be improving, particularly with the election now While our order momentum in has remained robust, we haven't yet been able to assess how the threat of tariffs may impact customer behavior going forward. The improved order momentum according to activity we've witnessed over the last couple of quarters have been broad based. I'd like to provide some color on some of the key areas of strength. First, while we are focused on growing our diversified end markets, oil and gas remains an important end market for our business and we're seeing improving trends in this sector. LNG project activity has notably increased following the lifting of the hold previously placed on new LNG export permits. Given our technical capabilities, and customer relationships, we are well positioned to benefit as project activity resumes. We continue to see favorable trends in our power business, due in large part to increasing demands on the current owned grid driven by growth in population, data centers and EVs. The current administration recently announced project starting which will provide up to $500,000,000,000 in funding computing infrastructure in support of AI.

This program has made $100,000,000,000 in funding available immediately With 10 data centers already under construction and tech In Slide 9, we see an example of an electric boiler being used as load banks in liquid data centers to simulate both the heat and electrical load needs to These systems are also used for maintenance and testing throughout the life of the data center. While liquid cooled data centers represent only 10% of the market today, they have the distinct advantages of being more cost efficient, [indiscernible] estimated that Rippel's pool data centers represent as much 40% to 50% of the new data centers planned for construction in 2025. Another area of strength has been the chemical and petrochemical markets. Both projections for the sector range from 5% to 6% through 02/34. And our sales pipeline shows this as the largest sector representing 16% of the total opportunities through FY 2027. Overall, we continue to be encouraged by the growing momentum in our business particularly in some of the markets that have been facing headwinds over the last year such as LNG and oil and gas. This improved momentum combined with favorable secular trends we're benefiting from Reshoring, electrification and decarbonization We must increase confidence in our growth trajectory and we're getting to see this in our improved quarterly activity oil rates, and backlog growth Before I discuss our FY twenty twenty five financial outlook, I want to provide some brief comments on the targets we provided at our twenty twenty three Investor Day.

We're currently developing our FY '26 plan and will provide full year guidance when we report on our results in May 0. I do want to provide some additional color on our targets. Which included $600,000,000 to $700,000,000 in revenue, and adjusted EBITDA margin of approximately 24% it needs 70% of revenue to be derived from diverse markets. The team has made tremendous progress towards obtaining these objectives over the last four years driving revenue growth, diversification, and EBITDA margin expansion. And while we remain confident in our ability to achieve these goals, there are 2 key factors outside of our control that will affect timing. First, will be the overall macroeconomic backdrop, and second, the timing and magnitude of acquisitions in our M and A pipeline. Without strength in both, the timeline for achievement will likely push beyond the fiscal year 2026. And now if you turn to Slide 10, I'd like to discuss our outlook for Based on everything we shared this morning, we're maintaining our full year 2025 guidance that calls for revenues Have not been contemplated in this guidance. Finally, just to wrap things up on Slide 11, We're optimistic in our business outlook and the opportunities ahead remain as We made significant progress in developing a business that is more stable profitable and durable across cycles.

We believe our large and growing installed base provides us with a resilient aftermarket franchise which gives us access to a steady stream of predictable and highly profitable MRA revenues. We also remain well positioned to benefit from several secular growth drivers including the energy transmission and decarbonization, onshoring in North America and infrastructure spending. We remain confident in these trends and we believe that the recent spending delays only serve to create pent up demand with customer confidence improves. Lastly, we benefit from a high margin low capital intensity business significant cash flow We continue to maintain strong financial discipline and with leverage of just over 1 times, we have the flexibility to pursue our capital allocation priorities. We remain focused on following a disciplined approach capital allocation, and we will balance these priorities all with a focus on creating long term shareholder value. That completes our prepared remarks and we're now ready for the question and answer portion of our Thank you. At this time, we'll conduct our question and answer session. From the queue. And our first question comes from Brian Drab with William Blair. Please state your question. Hi, good morning. Thanks for taking my questions.

The point in time revenue $99,000,000 it was, I think, an all time record. And I'm just wondering if you could talk about that number a little bit and the dynamics. I mean, I know it's obviously the heating season that drives this time of year to be strong. But is there Anything else in there that was unusual in the quarter? And are we reaching kind of a new base line level? I mean, again, acknowledging that this a seasonally strong period, but a new baseline level of A point in time revenue going forward Yes, Ron. So a couple of things. Know. First of all, we have seen a more normalized heating season. And so that is certainly contributed and we have been focusing on driving recurring revenues on the installed base. It's been a key piece of the strategy. And we're seeing success in those efforts. And then also, we've had contributions from some of the new acquisitions with point in time revenue generated through those as well. And so when you think about those things combined, yes, I think the point in time revenues as far as volume levels were we're seeing are really a step change in our business and something we'll continue to drive on a go forward basis.

Okay, great. And by the way, I guess I should round up to $100,000,000 it was $9,960,000,0.0 following on to that, I guess, Bruce, you can envision at some point, maybe it's a few quarters from now, where the overtime large revenue lines has kicked back in and then you have this point in time foundation that's larger mean, it seems like once that overtime large kicks in, in, that's where your that's your target, that's your expectation, right, a few quarters from now?

Yes, Brian. And I think a couple of things to note. Our focus has been heavily on driving recurring revenues on the installed base, but We really can't lose sight of the fact that growing that installed base through overtime project activity is really how we continue to drive growth So we are still very focused on the CapEx piece of our business as a means to grow that Given the bookings momentum, given the backlog growth, organically of 9%, Given the load that we currently have in our engineering organization, and the overall quoting activity it's pointing towards return to capital spending and growth. There. When we do see that, we would expect to see this revert back. I mean, we're at a very high mix of OpEx related spending that would probably begin to move back towards the 75% to 80% range. Whenever we do see this CapEx cycle are improving and customers begin to release larger CapEx spending.

And can you talk a little bit about the potential for the release of some of that large CapEx spending and specifically, you mentioned LNG projects What are other types of projects? I know you've talked about hydrogen and bio fuel projects. How about also combined cycle natural [indiscernible] plants and what is in the the what kind of big projects might we expect to hear you talking about in the next call it, four quarters next year? 1 of the big things that we've seen is really since the new administration has been in place lifted the ban on LNG export permits is there's been a really a big surgical activity around LNG and so a lot of those projects largely along the Gulf Coast are moved forward. And as I had noted in prepared remarks, our technical capabilities, the breadth of our solution set and our customer relationships position us well to take advantage of that. The other areas where we see deemphasis on subsidies around wind, solar, EVs, We do expect to see a pickup in combined cycle natural gas fired plants. And we are that's really front and center for our market and we're very well positioned to take advantage there.

We've also seen a renewed interest in nuclear. And so we've seen some of those projects around refurbishments and expansions in North America. But 1 of the things we're really excited about and it's a little further out, but we just won a very nice engineering award for small modular reactors for a a customer in Europe. And so we're excited about that. And being able to participate in the development of that technology for building some about 3 gigawatts capacity in Central Europe. So those are some of the areas we've seen movement. Petrochem, Kim, remains strong. It's been a bright spot general and industrial as well. And certainly, we'll see what happens with tariffs and that's very fluid, but that could drive more on shoring in The U. S. Particularly, which would be a tailwind as well.

Okay. And then the last question for now, Could you comment on gross margin, which was obviously a function of strong point in time revenue [indiscernible] it's got to be the highest gross margin that we've seen for many quarters, at least maybe a few years. But how should we expect to look in the and maybe beyond if you give us a sneak peek at next year?

Yes. So I think the assumption we've got in the is We are going to begin to see a stronger mix of projects in the Now I think 1 comment I would want to make is We've got to see the customer sentiment shift. If we don't see movement there, which we've seen some positive indications, but we don't see movement there. I think there could be some downside. We would probably land on the lower end of our revenue guidance, but gross margins would be quite strong and still put us in the midpoint of what our EPS guidance. So I think that's an important thing to note. When I look at gross margins mix, is about half of the improvement year over year. The other half is related to productivity and continuous improvement initiatives. As well as price. So it's pretty evenly balanced And I would go on to say that organically those margins are quite strong. We've seen about 164 basis points dilution from the acquisitions, but we're very confident that we can bring those businesses up to the similar barge profile over say the next eighteen months to twenty four months.

Okay. I am going to ask 1 more just because I think this is important to make sure that I and everyone has this clear. You're saying it's likely that you'd be for the full year closer to the end closer to the low end of the revenue range but gross margin although maybe down a little sequentially, solid margin overall solid putting you at the midpoint closer to the midpoint of the EPS range for the full year.

Is that right? Yes. The real will be, Brian, is just on project execution in the quarter. Should that continue to drag, we would expect to be on the lower end of the revenue guide, but in the midpoint the easiest guide given the margin profile of the business. [indiscernible] Thank you.

Your next question comes from Chip Moore with ROTH Capital Partners. Please state your question. Good morning. Hey, thanks for taking the question. Bruce, you touched on some of this already, but hey Bruce, You touched on some of this, but Maybe can provide a little more color on, I guess, just the current bid pipeline and makeup since the new administration took over in Jan. 0? And then you talked about some of the puts puts and takes for Maybe talk about the biggest things you're watching there. Obviously, M and A is timing dependent, but any thoughts on '26, Yes. So first of all, We'll give full guidance at our May 0 earnings call for But I would say at this time, given just the quote volume and what we believe is is improving customer sentiment and optimism I'd say we're cautiously optimistic about growth in returning to that organic growth and then certainly we'll have the contributions of the acquisitions in addition to that. So we're cautiously optimistic about an improving overall scenario, particularly as it relates to larger capital spending in the coming year. Since the new administration has been in place, we have seen a resurgence quoting activity around a number of different projects I would say oil and gas activity has picked up in Canada.

We've actually seen growth there year over year which we've noted. And so that's been very positive. I think part of that is related just to a more normal winter, but also just MRO spending with our customer base.

Very helpful. And I guess a follow-up on tariffs, I think you did a great job outlining how those could impact you. Is the risk maybe more indirect around some of that that uncertainty? Is that something you're concerned about? Yes. I think we understand roughly, I mean, depends on the magnitude of breadth and the duration of any types of tariffs and the impact on the business. [indiscernible] Our approach to business and our manufacturing philosophy really In country 4 country helps to insulate us from some of this. The real unknown is what impact might this have on customer sentiment And so that gives us a little pause. We'd like to see where things land. And really understand how customers may or may not react or respond.

Helpful. I could ask 1 last 1. Liquid cooling in the data center very interesting. I hadn't thought about that as they're usually trying to get the heat out. So interesting opportunity for you. Is that a market you're you're still nascent, but is that a market you're active in already? Or how are you thinking about that opportunity? And then maybe you play 2 sides of it as well?

Yes. So, yes, that's a great question. So we've been trying to highlight where we play in some of these opportunities. This is a very nice and very new But I'll tell you, we've won 3 orders that have totaled around $10,000,000 and we've identified a very large market [indiscernible] that will be developing on a go forward basis. And so we're excited about the application and it's 1 illustration of how we play. Certainly, when we think about demand growth for power, Much of that's driven by data centers, EVs, population growth. We're very well positioned to benefit from that and as especially changes in environmental regs that will make natural gas fired power plants more in favor. That's certainly going to be an area of benefit, but this is another area we identified and we've won some nice business just in the last two quarters.

Very good color. Appreciate it. Your next question comes from your next question comes from John Bratz with Kansas City Capital. Please state your question. Good morning, Bruce. Good morning, Jan.

Good morning. John, just some commentary if you could on your SG and A spending.

It continues to be pretty high and And I know you're investing on growth initiatives and so on. But as we look ahead will that begin to ease a little bit and and we begin to see some leverage on that on that line.

I think on the near term, we would expect it to be relatively flat going forward. I mean that's really a function of just the if you look historically the M and A that we've added on with Fotzi and Vapor Power, But I would say, kind of where we were for the probably staying flat for the near term going forward at that rate.

At that dollar rate or the the ratio? I'm sorry, what? [indiscernible] And the acquisition, dollars 1,330,000,0.0 contribution in the quarter. I guess I was looking for a little bit more but I'm can you parse it out a little bit between vapor and the Italian acquisition? And is Vapor continuing? It has been. Is vapor continuing to perform in line with your expectations?

Yes, John. So a couple of things. 1 is revenues from acquisitions were below our expectations. [indiscernible] actually performed exceptionally well. Just as a reminder, there's about a $1,250,000,0.0.00 trailing 12 revenue business with a backlog of $15,000,000 So very strong backlog. The challenge there is really around growing capacity and in fact it's weak we've got teams there doing Kaizen events, reorganizing the factory floor, and working to improve throughput. Vapor is a business that really fell short. We had some a couple of major projects or major orders that were going through production and did not convert in the quarter. And so we fell fairly short in revenue and we expect to pick up some of that in the but our big focus there is on increasing capacity both on the factory floor as well as in the supply chain and in order to convert what is roughly a $45,000,000 backlog in that business. And while we've seen really strong market momentum, we had another quarter of positive book to bill in that business. And so we're excited about the market potential for growth, but we really got to work through some of the capacity constraints to take full advantage of it.

And we'll add just even with that, what Bruce said, our measure for kind of evaluating our M and A on first year accretive, we were about flat with Baker Power and we expect [indiscernible] kind of reverse out and be accretive going forward through the next quarter.

Okay. Thank you. And Bruce, on the LNG front, Obviously, there's a big opportunity there. And [indiscernible] In Dec. 0, the DOE came out with their LNG report and it wasn't that flattering. And I know the Trump administration has to come up with a rebuttal, so to speak, I guess I am concerned and I don't know how how concerned the industry is that now that the pause has been lifted, if the rebuttal report, so to speak, isn't all that strong, are we just going to see some additional lawsuits filed and and things just get further further pushed to the right in the LNG area, And I guess what's how is the industry thinking about that?

Yes, John. I'll tell you just from our customer engagement, It feels like they're very positive on the outlook of being able to secure permits on a go forward basis. We've also seen a number of customers take existing permits and use those and expand the plans for the capacity for export. So we've seen some of that type of activity. And I'll be honest, I don't really have an opinion or any insight or information as to any litigation or legal act actions that may happen. Thank you. Thank you.

Thank you. And there are no further questions at this time. I'll hand the floor back to management for closing remarks.

Thank you, Diego, and thank you all for joining on the call to We appreciate it. We hope to speak to you between now and the May 0 timeframe. We look forward to reporting out on our full year. At the May,.

Thank you. With that, we conclude today's call. All parties may disconnect. Have a good day.