AZZ Inc (AZZ) 2021 Q4 法說會逐字稿

Good morning, and welcome to the AZZ Inc. Fourth Quarter and Fiscal Year 2021 Financial Results Conference Call. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Joe Dorame, Managing Partner. Please go ahead.

Thank you. Good morning, and thank you all for joining us today to review the financial results for AZZ Inc. for the fourth quarter and fiscal year 2021, ended February 28, 2021. Joining the call today are Tom Ferguson, Chief Executive Officer; Philip Schlom, Chief Financial Officer; and David Nark, Senior Vice President, Marketing, Communication and IR.

After the conclusion of today's prepared remarks, we'll open the call for a question-and-answer session. Please note, there is a slide presentation for today's call, which can be found on AZZ's Investor Relations page under latest earnings release presentation at www.azz.com. Before we begin with prepared remarks, I'd like to remind everyone certain statements made by the management team of AZZ during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for the statements of historical fact, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year ended February 28, 2021. Those risks and uncertainties include, but are not limited to, changes in customer demand and response to products and services offered by the company, including demand by the power generation markets, electrical transmission and distribution markets, the industrial markets and the metal coatings markets.

Prices of raw material costs, including zinc and natural gas, which are used in the hot dip galvanizing process, changes in the political stability and economic conditions of the various markets that AZZ serves, foreign and domestic, customer-requested delays of shipment, acquisition opportunities currency exchange rates, adequate financing and availability of experienced management and employees to implement the company's growth strategies.

In addition, AZZ's customers and its operations could potentially be adversely impacted by the ongoing COVID-19 pandemic. The company can give no assurance that such forward-looking statements will prove to be correct. These statements are based on information as of the date hereof, and AZZ assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

With that out of the way, let me turn the call over to Tom Ferguson, Chief Executive Officer of AZZ. Tom?

Thanks, Joe, and welcome to our fourth quarter and full year fiscal 2021 earnings call, and thank you for joining us this morning. First, I need to express my great appreciation for the way our AZZ employees, their families and our partners stepped up during the COVID pandemic and also during the winter storm that impacted a significant portion of our production just 2 weeks before the end of our fiscal year. Due to the concerted, and in some cases, extraordinary efforts of our employees, we were able to quickly respond and finish out a profitable fourth quarter.

Overall, annual sales declined 21% versus the prior year record. Reaching $839 million, with metal coatings down 8% to $458 million and infrastructure solutions declining by 32% to $381 million. The lower volumes were driven primarily by the impact on our customers caused by the COVID pandemic as well as the divestitures we made during the year. I will get into the details of this as we go along. We're pleased to have completed our 34th consecutive year of profitability. And while COVID negatively impacted our results, we were able to take several actions to better position AZZ for the future.

We continued to generate strong cash flow during the year with $92 million in net cash provided by operating activities. We generated adjusted net income of $55 million and adjusted EPS of $2.11 per diluted share. We were successful in completing the divestiture of our SMS and Galvabar businesses during the year. We closed a couple of galvanizing plants due to both local market conditions and the proximity of our other plants that could efficiently absorb the majority of their business. We also closed the Surface Technology plant and items in coating lines too, which were recently brought back online. In line with our strategic commitment to value creation, we repurchased over 1.2 million shares for $48.3 million and distributed $7.6 million in dividends.

In Metal coatings, we posted sales of $458 million, while achieving operating margins of 23.3% on an adjusted basis, up nicely from the previous year. The margin improvement was primarily due to driving operating efficiencies and productivity in the face of rising labor and energy costs. The team completed the acquisition of Acme Galvanizing in Milwaukee near the end of the fiscal year. We remain committed to delivering on the investments made in our Surface Technology business, but it is important to note that customers for this business were more severely impacted by COVID than on the galvanizing sites.

Our Infrastructure Solutions segment was severely impacted by the COVID pandemic, particularly in the early part of the year. Sales declined over 32% to $381 million with adjusted operating income down 52%, generating adjusted margins of 4.1%. We divested the SMS business since it was deemed to be noncore to our long-term strategy. Restructuring and impairment charges for infrastructure solutions totaled $9.2 million for the year.

For fiscal 2022, COVID continues to generate some uncertainty, but our folks are managing disruptions well and keeping our employees safe. So we are reaffirming our previously issued guidance. We anticipate sales to be in the range of $835 million to $935 million and EPS of $2.45 to $2.95.

Metal Coatings is continuing to focus on sales growth, including leveraging our spin galvanizing operations at several sites. Operational -- they are also focused on operational execution and customer service as labor and operating expenses due to material cost inflation are increasing. Our Infrastructure Solutions segment has seen a gradual return to more normalized business activity and ended Q1 with some momentum. Our industrial business is seeing good results from our expanded Poland facility, although globally, the business continues to experience certain intermittent project delays due to COVID outbreaks at certain customer sites. The electrical platform is focused on operational execution and growing its e-house and switchgear businesses.

For fiscal year 2022, AZZ will continue to execute on strategic growth objectives that drive shareholder value. At our core, we're a Metal Coatings company and a manufacturer of products and provider of services that are critical to sustaining infrastructure. Our commitment to superior customer service is unwavering. Our ability to generate strong cash flow is based on initiatives that drive operational excellence, manage costs, ensure pricing discipline and emphasis on receivables collection within our operating platforms. We are confident that our businesses remain vital to improving and sustaining infrastructure, so we are actively working to position our core businesses to provide sustainable profitability long into the future. And with that said, I'll turn it over to Philip.

Thanks, Tom. For the fourth quarter of fiscal year 2021, we reported sales of $195.6 million, $49.7 million or 20.3% lower than the fourth quarter of fiscal year 2020. Gross margin of $45.8 million for the quarter was $5.3 million or 10.4% below prior year. However, gross margins rose to 23.4% of sales compared to 20.8% in the prior year fourth quarter, a 260 basis point improvement year-over-year.

Net income for the quarter was $16.2 million compared to a loss of $10.6 million in the comparable prior year fourth quarter, where the company had recorded the loss on sale of our Nuclear Logistics business and reported charges related to the impairment of assets within the Infrastructure Solutions segment. Reported diluted EPS for the quarter was $0.63 per share. As Tom had earlier indicated, full year fiscal 2021 sales of $838.9 million were down 21% compared to the prior year sales of $1.06 billion, largely as a result of the impact to the business from the pandemic, divestiture and lower revenues in China as we continue to execute on our existing China backlog.

Gross margins, as reported, improved to 22.5% from 22.3% on a year-over-year basis on stronger Metal Coatings performance, partially offset by the impacts of the pandemic within our industrial and electrical platforms, which are part of our Infrastructure Solutions segment. Reported operating profit for the year of $61.6 million was $17.7 million or 22.3% lower than the prior year.

Operating profit in the current year was reduced $20 million as a result of our second quarter restructuring and impairment charges as well as losses recorded on the divestitures of Metal Coatings Galvabar business and Infrastructure Solutions SMS business during the year. Reported operating margins of 7.3% were down 20 basis points from the prior year.

Full year operating profit as adjusted, was $81.6 million, $25.5 million or 23.8% lower than the prior year's adjusted operating profit of $107 million, mostly as a result of the impact on the Infrastructure Solutions business, where they were impacted more strongly by the energy market downturn in the pandemic. EBITDA for fiscal year '21 was $105.2 million compared with $128.5 million in the prior year. Due to the lower current year earnings, partially offset by a reduction in tax expense in the current year as compared to the prior year. Full year EBITDA, as adjusted for impairment and restructuring charges, was $125.2 million, or a 19.9% decrease from prior year's adjusted EBITDA of $156.3 million.

Cash flows from operations in the current year of $92 million were $50 million -- $50.3 million or 35.3% lower compared to the prior year, on lower net income, higher noncash charges in the prior year and fluctuations in working capital during the year.

During the year, we continue to invest in the business. In regards to capital allocation, we were successfully able to navigate tougher market conditions and accomplish the following: we repurchased $48.3 million in outstanding shares. We refinanced our $125 million, 5.42% senior notes with an upsized offering of $150 million over 7- and 12-year periods, bearing interest under 3%, resulting in $2.5 million of lower annual interest expense. Even with the pandemic, we were able to reduce debt $24 million, ending our fiscal year with $170 million -- $179 million in borrowings compared to $203 million in borrowings at the end of last year. We continued to support growth initiative by internally investing $37.1 million in capital projects during the year.

We completed our Houston spin plant as well as the expansion and modernization of our Poland manufacturing and operations facility. We acquired one galvanizing and planning operation in January 2021. We divested, as Tom noted, and/or closed underperforming operations during the year, and we continued to pay quarterly dividends. We maintain a strong balance sheet with plenty of liquidity and continue to evaluate capital allocation strategies as we progress further on our strategic alternatives. Lastly, we improved our internal controls over financial reporting and successfully remediated our previously reported material weakness related to our tax accounting.

With that, I'll turn it back to Tom.

Thanks, Philip. Here are some key indicators that we are paying particular attention to. For the Metal Coatings segment's galvanizing business, we are carefully tracking fabrication and construction activity, material and labor cost inflation and progress of infrastructure legislation. For Surface Technologies, we are primarily focused on expanding our customer base, and some of our customers may take considerable time in getting back to doing their production. For infrastructure solutions, we are off to a decent start with turnaround and outage activity having returned to a normal level and the fall season is currently looking to be quite good. The electrical platform is benefiting from transmission, distribution and utility spending and increasing data center and battery energy storage activity.

Finally, for corporate, we are focused on completing the strategic review of infrastructure solutions and replacing our credit facility. We remain committed to our growth strategy around Metal Coatings and achieving 21% to 23% operating margins, with galvanizing performance being quite steady as we continue to improve Surface Technologies. We will remain acquisitive, particularly in galvanizing. For infrastructure solutions, we will continue to focus on profitable growth in our core businesses. Our infrastructure Solutions business unit should benefit from more normal turnaround in outage seasons and a solid market for T&D, utility and data center, e-houses and switchgear.

And with that, we'll open it up for questions.

(Operator Instructions) Our first question today comes from John Franzreb with Sidoti & Company.

First, regarding the corporate, could you talk about the winter storms impacts maybe in the fourth quarter and if there's been -- has been any deferred revenue, into the first quarter of [2022]?

I think during the first quarter, we were impacted during the last couple of weeks of the year, mostly here in North Texas up to the Midwest a little bit. A lot of our business was able to recover during the last 2 weeks of the year, but there would be some carryover, we believe, into the first quarter.

It's pretty minor, though.

I mean just a couple of million or beyond that scope?

Probably, not even that much.

Okay. All right. Secondly, can you talk a little bit about the rising zinc costs? You mentioned in the prepared remarks last time, roughly $1.30 a pound. What kind of headwind that presents for you in the year ahead?

I think we're seeing them. Zinc costs have been fairly stable now for a little while. So in that $1.25 to $1.30 range. I think it's down even a little bit more than that right now, but likely to be in the, I'll call it, $1.25, $1.26 range. And if it stays there, our costs, we've already got a lot, I think, about 6 months of normal inventory in our kettles. So we don't look for tremendous headwinds or even significant headwinds in the first part of the year.

Okay. Great. And you said that the turnaround season was looking better in the fall, but close to the home, what's the spring turnaround season look like relative to last time we spoke a couple of months ago?

Yes, it's active. We're deploying on quite a few projects. We've only had one that I'm aware of that's been where the crew has been pulled back because of COVID on one international job. So for the most part, it's active, obviously, significantly better than the spring of last year.

We don't have any what I'd call whales, no mega projects, but a good stream of activity and a lot of those because there have been delays, a lot of them are having good scope growth as we're getting on site. So it should be a good solid season.

Our next question comes from Noelle Dilts with Stifel.

So my first question kind of sticks with the line of just raw material inflation. I was hoping you could speak to how you're thinking about steel costs that have escalated and how that impacts the cost side of your business within Industrial Solutions? And then if you're seeing any impact on demand as it relates to Metal Coatings and just generally things being produced with steel?

Yes. I think on the raw material for -- particularly on the electrical side, where they buy a lot of metal for fabrication. For the most part, we have relatively short-cycle times in terms of -- from the time we quote to the time and job book. So we're only talking a matter of weeks, maybe a couple of months. So for the most part, we're able to work those increased costs into our bids.

And so I'd say that's the vast majority of -- so far, what has been happening.

On the Metal Coatings side, we are seeing -- so far, we haven't seen a lot of either cancellations or delays because of the either availability of steel or the cost of steel, but we are hearing more of that in the marketplace. And so it doesn't pose a headwind at the moment. But definitely something we're paying close attention to. And because we do have a lot of our fabricators that are running tight on steel availability for the projects and then longer term, I'd say as we get towards the latter part of the year, if steel continues to appreciate in cost, we could see that creating some headwinds for us. But for the moment, it's just mostly noise.

Okay. That's helpful. So then I was hoping you could expand a bit on just some of the key -- the trends you're seeing in the key Metal Coatings markets. I'm always interested in what you're hearing on T&D, galvanizing -- I'm sorry, T&D, solar and then the industrial and infrastructure markets.

Yes, solar has been active. We've seen an uptick there, and that's always good for hot-dip galvanizing, so that's been positive. Quite a bit of transmission distribution, toll activity, including some of the 5G stuff. And so we're feeling fairly bullish on where that's been going. And Ag has been good. I think we've seen that coming out of the floods from the prior year. So we've seen quite a bit of Ag activity throughout the Midwest, which is positive for our sites.

And the other thing, we were not expecting to see a lot of recreation stuff that we have seen some of that, too, and strangely enough, a lot of docs. So it's been relatively positive. And the major markets have been good. We even have a pretty good-sized petrochemical project that we've seen some activity on. And so just generally positive.

Okay. Great. And then obviously, a lot of headlines in the news -- information in the news about the potential stimulus bill. Could you speak to how you kind of think about your exposure to some of the categories that have been proposed to date? I understand the ultimate bill will likely be something different from what we're looking at today, but sort of how are you thinking about the opportunity there?

Yes. The difficulty for us is that by the time this any of the actual spend flows into our customer base, our fabricators, for the most part, we're not looking at much -- we're not expecting much impact this year. So it really starts to get us a little more excited about maybe next year. But almost any infrastructure spend is good for our Metal Coatings business, but when it comes on the electrical, power gen and transmission distribution. We know the grid has to continue to be updated and expanded, particularly as we saw here in Texas through the winter storm. So that's good for not just our Metal Coating side, that's also good for infrastructure solutions. But I -- but right now, we're just looking at it. We're paying close attention as more impacts mood, I guess, and optimism if something got done. So -- but it would definitely play into as we're looking at our facilities capacity and our capital deployment as we get through this year and into the next year.

Our next question is a follow-up from John Franzreb with Sidoti & Company.

Could you just talk about the tax rate that occurred in the fourth quarter and what we should be thinking about in 2022?

Yes. Our tax rate finished up last year, a little bit higher than we'd like to have seen. We finishing up the year where we're at just over 22%. Might see a little bit of an uptick, 23%, 23.5%. But I think we're going to hover in that range going forward at this point in time unless there's obviously a tax bill change.

And any thoughts about capital spending. You did [$37 million] last year, and how does that look, the company is currently configured in 2022?

I think what you'll see, we spent a little more last year because we had a couple of growth initiatives. So you will see that capital spending come down a bit this year. We're continuing to invest in the business. So I think we're in the $25 million of maintenance-type spending, and you'll probably see us in the $30 million, $35 million on a full year spend.

Okay. Okay. And just one last question about labor cost. Is there any issues as far as personnel? Are you fully staffed? If kind of give us an update there?

Yes. We're fully staffed, but we are -- we've had to enhance our recruiting programs and the cost of entry-level craft has been increasing. And we would look for that to continue. I guess the good news is we're spread across 60 locations. And so generally, we're pulling from a lot of lot of markets and in some cases, for markets that aren't in the major metropolitan areas.

So -- but it's definitely something we have a lot of focus on and resources deployed to make sure we can access people. And we are having to use some temp agencies probably a little bit more than -- I wont say than we like, but then we've had to the last couple of years. But generally, you look at the labor as a percent of our total cost, I don't know which business we want to talk about, it's manageable.

Okay. And Tom, on (inaudible), I'm sorry to miss this, but what does the pipeline looked like? And have you considered -- just giving us some kind of an update, your thoughts around that?

Yes. I think we've -- we're normally a relational kind of buyer for the most part. And so there's some things. There are just places in North America that we can't get to and without quarantining for days or weeks. So it's -- we have a really, really solid pipeline, just slowed by the impact of COVID. And like I said, I think all of my officers have been vaccinated now. So for the most part, we do intend -- we're ready to travel. And get to the location so that we can, in some cases, get into due diligence, but in most cases, just finalize negotiations. And I wish I could say we were going to get something done this quarter, but it just looks like everything is dragging out an extra quarter or 2 in terms of our normal activity levels.

So while we'd like to get 2 or 3 deals done, usually, in the early part of the year, we don't have that -- we just don't have anything teed up that way. So but we will get some deals done this year. And we've got enough in the pipeline to ensure that we can do that. And it is loosening up. So we are getting out more and people are more willing to see us or even travel here .

Our next question comes from DeForest Hinman with WaltHausen & Co.

Can you give us an update in terms of your outlook on share repurchase activity and kind of wrapping that with the strategic review? Are we precluded from buying stock as part of the strategic review with like a blackout or anything?

More subject before us to normal block out. Well, I shouldn't say that actually, we're under a 10b5-1 plan. So we aren't subject to that. And we've got some restrictions on that. But we've been in the market continuing to buy stock opportunistically.

We're evaluating that as part of the strategic review as to pricing, but we continue to be in the market post-February 28.

Okay. That's helpful. And then just any color on the strategic review from a benchmark perspective and from a timing perspective, we're waiting on the consultant to give us something, it's already been received or reviewing it? Has the Board looked at something? Any color you can provide there would be very helpful to shareholders?

Yes. We actually had our first in-person meeting with one of the advisers a couple of weeks ago. So that was encouraging. That's actually not a knock-on anybody. It's just kind of let you know, it's the process. This is complex project, and we're doing -- going through a thorough analysis. We've received preliminary packages to review. We've had at least 1 review, actually probably 2 with the Board. But we still have I think, 2 or 3 fairly significant work streams in front of us that will continue on through the summer. And then dependent -- hopefully, dependent on that progress, we'll be able to tighten up and give you some more definitive milestones, hopefully, by the time we talk next time.

Okay. Maybe just one final question on that. Has the Board given us or the consultant a deadline in terms of when they would like this to be completed?

And obviously, COVID is (inaudible). But is there tentatively a date when you think this will be completed?

Yes. I think we probably started out with a time frame in mind, I'm not realizing how much extra time was going to be involved because of COVID and doing video calls instead of in-person fact finding meetings and sessions and being able to travel to sites and stuff like that. So I think where I'd leave it is we've got a lot of questions that are being explored. We've got several work streams. And it's proceeding. We're now on a good pace. Like I said, we had our -- not that it was a kickoff meeting, but we had our first face-to-face meeting just a couple of weeks ago. And we had a lot of video calls before then, a lot of teleconferences and our focus for now, and probably through the next quarter or so, is just making sure those -- that infrastructure solutions performs that our operations stay safe and functioning and that we're able to take care of our customers and minimize the distractions on the businesses as they focus on that because it is still -- there are still a lot of complexities with maintaining manufacturing operations and field service deployments in the face of COVID. So that's our focus right now.

Okay. That's helpful. And I'd like to just ask you if you can provide a little bit more color on an earlier comment as it related to steel availability. It seems like from I've been reading a lot of steel companies working very hard to keep volumes up. Some commentary that some of the distributors maybe unwilling to take a lot of inventory in the short-term with prices so elevated. Is there, from your perspective, a lack of inventory available broadly? Is it certain types of steel are not available? Any color you can provide in terms of what's happening on the ground would be very helpful.

Yes. I think it's -- for us, it's spotty. There's some places, some -- and I don't -- not -- without getting into any specific geographies or customer groups. It's just general fabrication on large projects, they're able to manage through this. But you've got some of those mid-sized projects where they are running into, I hesitate to call it shortages right now, just delays. And I think the bigger concern is over the cost appreciation as that starts to come into the justification on whether projects remain financially viable or not. So far, I don't think we've seen anything actually of any significance, cancel. So it's just -- right now, it's just delays and a lot of extra work to access the inventories or the steel they need. I'm not -- I don't think it's any particular -- well, high beams and things like that, some of the structural stuff, I think, is a little harder to get to. And maybe that's more of of a stocking issue.

Our next question is a follow-up from Noelle Dilts with Stifel.

So I was hoping you could expand just a little bit on how you're thinking about the margin profile. So the to divisions in fiscal '22, I think, for us, the government, the Metal Coatings margin came in a little bit ahead of our expectations. So do you think you can kind of sustain margins above the high end of that target 21% to 23% range that you talked about in the past? Any color there would be helpful.

Yes. I think they had some nonrecurring onetime things that helped them in the fourth quarter. But -- so -- and the fact they're one time, we but I think they're generally running -- I'd like to think they're going to be in the -- above the midpoint of that range, and so cost, 22%, 23%. And of course, as they're doing that, sometimes they're going to be able to talk about it. I think as we -- right now, Surface Technology is not a big part of of what we do. But as they continue to stabilize and improve those operations, that's going to help us trend towards the upper end of that range.

And Noelle, this is Philip. On the other side of the infrastructure solutions in electrical, I think we've seen the bottom there early last year. So as we progress, hopefully, these businesses are stabilized and we'll see better business going forward, and hopefully, we'll see some margin improvement there as well.

Yes, our focus there right now is building the backlogs back in some of the businesses. And they're still pulled down by that little bit of oil paths that they have exposure to. But we still want to trend those back to double-digit operating margins is strategically, that's where we think they should be. and we think they can get there, particularly as we've divested SMS, which was low single digit, if you will, operating margin business. That tended to have some fluctuation greater than its size. So I think we're better positioned with what we have. And we're -- we've got a better spread in WSI and the industrial piece that around the world so that we can take advantage of some of the refinery turnaround activity in other parts of the world, and we're just not always dependent on the U.S. as we used to be.

Our next question comes from Bill Baldwin with Baldwin Anthony Securities.

Tom, you mentioned at the outlook for the grid, you continue spending on the grid, looks like it's going to continue to be pretty good over the next several years. And you indicated that is a positive also full year. Infrastructure business. Could you be more specific as far as the particular products that you think will primarily benefit from continued spending to improve the grid?

Yes. The enclosures, e-houses, really well positioned given our 3 locations outside of Baltimore than in Chattanooga and Pittsburgh, Kansas. And then the switchgear businesses, we like Fulton, which is more the utility grade, switchgear is well positioned in Missouri. And then up in Oshkosh, we've got more of the industrial muni kind of switchgear. So we just like the range of products we have and feel good about our locations. And the operations in a COVID-disrupted year, we're able to really focus on their efficiencies and improving their operations. And it's -- so we're bullish on e-houses and switchgear. And we've got the additional opportunities in the e-house side coming from data centers and battery storage. So we're very bullish there. And then galvanizing hot-dip, just as soon as you get into poles and hardware and solar, any of the renewables. For the most part, we -- it's just good steel, and that's good for our galvanizing business. So I'd say that's our other businesses may benefit. So bus systems a little bit, but that's not really in their sweet spot.

Right. And secondly, can you give us a little feel for the also business internationally, outside of your Specialty Welding business but more of your traditional legacy Electrical and Industrial business?

We don't have much outside the U.S. We've got the China work, and we -- you see the drop in our backlog and a big chunk of the drop in the backlog, a reduction in the China orders we've been working on for the last couple of years, and we haven't taken a whole lot of new orders in China.

Well, we just took one but -- so there's activity. I think being competitive and because of the travel restrictions. So our executives that will normally be traveling from the U.S. to Saudi or to China, that's just not happening. So I think that just -- it creates a little bit of a hurdle for us. So as travel opens up, and once again, I mentioned, most of our folks are vaccinated so they can travel. And I look for that as we would get it into the second quarter in December.

But your JV over there in Saudi Arabia is still active, right?

It is, it is. It's open for business. Yes. I think we can see some activity over there, that would be good.

Well, that could be a plus, all right, I think.

We see some interesting developments.

I'll just throw one out here to see what your thinking might be. Are you at all considering any kind of international activities for your coatings business?

Yes. International, if you want to call, North America, outside of the U.S., potentially.

Okay. You got to take North America, right?

Pretty much. All right. Now get back in queue, Bill.

This concludes our question-and-answer session. I'd like to turn the call back over to Mr. Tom Ferguson for any closing remarks.

I just thank everybody for being on the call with us today, and I look forward to finishing out our first quarter. And being able to give you more and deeper updates on our progress, on the infrastructure Solutions evaluation work. And that effort as well as looking forward to reporting out our first quarter is a much more normalized Q1 versus what we were talking about last year. So look forward to that update in a couple of months. Thank you.

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