Ladies and gentlemen, thank you for standing by. And welcome to the Q3 2022 EnerSys Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advise that today’s conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your speaker for today, David Shaffer, President and CEO. You may begin.

Thanks, Towanda. Good morning. And thank you for joining us for our third quarter fiscal 2022 earnings call. On the call with me this morning are Mike Schmidtlein, our Chief Financial Officer; and Andrea Funk, who will be succeeding Mike, when he retires next month. Last evening, we posted on our website that we will be referencing during the call this morning. If you didn’t get a chance to see this information, you can go to the Webcast tab in the Investors Section of our website at www.enersys.com. I am going to ask Mike to cover information regarding forward-looking statements.

Thank you, Dave, and good morning to everyone. As a reminder, we will be presenting certain forward-looking statements on this call that are based on management’s current expectations and views regarding future events and operating performance, and are subject to uncertainties and changes in circumstances. Our actual results may differ materially from the forward-looking statements for a number of reasons. Our forward-looking statements are applicable only as of the date of this presentation. For a list of factors which could affect our future results, including our earnings estimates, see forward-looking statements included in Item 2, Management’s Discussion and analysis of financial condition results of operations set forth in our quarterly report on Form 10-Q for the fiscal quarter ended January 2, 2022, which was filed with the U.S. Securities and Exchange Commission. In addition, we will also be presenting certain non-GAAP financial measures, particularly concerning our adjusted consolidated operating earnings performance and our adjusted diluted earnings per share, which excludes certain highlighted items. For an explanation of the differences between the comparable GAAP financial information and the non-GAAP information, please see our company’s Form 8-K, which includes our press release dated February 9, 2022, which is located on our website at www.enersys.com. And let me turn it back to you, Dave.

Thanks, Mike. Please turn to slide three. EnerSys delivered another quarter of strong year-over-year growth, with $844 million of revenue, the highest quarterly revenue in our company’s history, increasing 12% over the third quarter 2021, driven mostly by volume, as well as ongoing aggressive pricing actions. We saw record demand across all of our segments, with Q3 2022 orders increasing 30% from the prior year and 33% compared to the same period of pre-COVID fiscal year 2020. We also reported third quarter adjusted earnings of $1.01 per diluted share, which was in line with our guidance. Our Energy Systems business were formed better than expected due to strong product demand, improving price recapture and excellent fulfillment execution. Motive Power successfully navigated the current environment to deliver impressive results, while strong demand in our Specialty business particularly in EMEA drove another quarter of segment growth that was limited by our ability to supply. By leveraging our core product and service capabilities and technologies, we continue to develop a pipeline of short- and long-term opportunities across the business. Helping to meet that demand, our global TPPL output pace increased 10% sequentially, with each TPPL factory improving over the prior quarter, while our Richmond, Kentucky Motive Power Facility continued to perform very well. Our quarter end backlog increased an additional $160 million in Q3 to an all-time high of $1.2 billion, which is more than double historical levels. Based on positive customer feedback and ongoing industry analysis, we believe we are performing better than our competitors and continue to maintain and in some cases grow our market share. In addition, we utilized excess liquidity to buy back $116 million of stock since the beginning of the third quarter, bringing our full year repurchases to $148 million, while maintaining leverage below 2.5 times EBITDA.…

Thanks, Dave. For those of you following along on our webcast, we have provided the information on slide nine for reference. I am starting with slide 10. Our third quarter net sales increased 12% over the prior year to $844 million, due to a 10% increase from volume and over 3% from price net of mix, partially offset by a 1% decline from foreign exchange. On our line of business basis compared to prior year, our third quarter net sales in Energy Systems were up 14% to $385 million, Specialty was up 9% to $119 million and Motive Power revenues were up 12% to $340 million. Motive Power’s improvement was mostly driven by 9% growth in organic volume and 5% in price and favorable mix, offset by 2% impact from FX. Our Motive Power volumes are now comparable to the pre-pandemic levels of two years ago, with 8% higher revenues from the favorable impact of pricing mix. Energy Systems had a 14% increase in revenues from volume, as well as a 1% improvement from price net of negative mix, partially offset by a 1% decrease from the impact of foreign exchange. Specialty’s revenues benefited from over 6% price mix improvement and 3% organic volume growth, with the volume growth tempered by delayed shipments. On a geographical basis, net sales for the Americas were up 16% year-over-year to $578 million, with 13% more volume and 3% higher price mix. EMEA’s revenues were up 5% to $203 million from a 5% increase in volume and 5% improvement in price mix, offset by 5% impact from foreign exchange. Asia was up 8% at $63 million on 7% more volume and small gains from both price mix, as well as currency. Please now refer to slide 11. On a sequential basis, third quarter net…

Thanks, Andy. Towanda, we can now open line for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Noah Kaye with Oppenheimer. Your line is open.

Hi. Good morning and thanks for taking the questions. I appreciate all the color around the sequential improvement here. And I was just wondering if it would be possible to mention for us, how much price benefit you are sequentially expecting in 4Q, and if possible, to give us some color on how much of that is really coming in Energy Systems just based off of the lag in these contracts starting to catch up? And if possible, what you are thinking about price runway in terms of further improvements as we get into 2023?

Noah, as Andy is looking at the numbers here real quick. I just want to tell you that, the issue really in Energy Systems right now is the constraint we have on releasing backlog and also the mix impact, because the products that we can’t shift are the ones that have the highest margin. So there still is a nagging mix constraint on that business, as well as unleashing some backlog. But there is -- there’s been a lot of good work done on the price. So, Andy, do you have those numbers for Noah.

Yeah. I do, Noah. It’s a good question. It’s obviously what we spend a lot of our time and focus on. As we mentioned, Q3 was in the highest cost increases, but it was also the first quarter where our price kept pace with the cost increases. So that gives us a lot of confidence. In Q4, we expect our cost increases to again be very high in the range of $20 million, but we expect our pricing to keep pace with that again and actually be slightly higher. In Energy Systems, they have probably about a third of that cost increase, and we think the pricing is going to be almost twice what the cost increases are in the quarter. So that will be part of what contributes to the ongoing margin improvement in the business and with more to come once, as Dave mentioned, the mix begins to improve.

And Noah, remember that most of our costs are five-fold. So we do have a fairly good line of sight on the cost side and are optimistic, as Andy noted that, the pricing is starting to keep pace. So now the deceleration is welcome. But it’s by no means are we out of the woods in terms of these inflationary pressures. But we did see a $9 million drop sequentially in terms of the sequential rate of inflation increase. So fingers crossed it’s going to start to continue to slow down.

Yeah. That’s super helpful, guys. I guess to follow up on that, you mentioned that there’s some easing of bottlenecks, but then you just pointed to ongoing shortages still presenting some issues. So I guess, really where are kind of the primary bottlenecks? Is it really the chip and Energy System? And I guess, what are your expectations for when we start to see some easing there in your mix can really improve?

Yeah. I think we are kind of whittling it down to the chip issue. I think the redesigns are helping at EnerSys team of Devin. Unfortunately had to reallocate a lot of our focus on some chip redesigns and products to chips that are more readily available, that’s helping. I think that we haven’t seen any benefit, but we have actually made tremendous progress on our onshoring initiatives. So we have quite a few products now that are not being made in China anymore, which are starting -- which will start to have future impact. So we have made great progress on all of the initiatives we laid out last quarter and I am really happy with the team. So, but again, I would say, the biggest constraints right now beyond the chip issues. The second biggest issue, I think, we have fought in this quarter of this that we are talking about, this prior quarter were the labor issues that we had in Missouri. I think we are getting our arms around that one. Ted, he heads up our HR group and he’s over there. He’s in Missouri today. He called me last night. So I feel like, that when we are getting our arms around the -- but certainly the chip issues, they are pervasive and we will just continue to adapt. We like the customers in the beginning were very resistant. We had a lot of contractual obligations. We didn’t have the necessary protections for some of these explosive costs. But everybody is reaching a new level of fairness and there’s been a lot of positive cooperation with everybody to come up with a mutually beneficial solution. So I would say, yeah, it’s coming down to mostly a chip concern as we go into mostly a chip concern as we go into fiscal year 2023.

That’s super helpful. And I guess one more related question before I turn it over really on working capital and inventory management, it’s no surprise you are going to have working capital building when you got record broad-based demand and the supply constraints? But I guess when you think working capital starts to ease up a little bit, in particular, when the inventory levels start to plateau back down, because obviously, it’s a super-dynamic environment, you don’t want to carry too high inventory balances, particularly if that’s relatively high cost inventory?

I think, Andy, did a good job in her script of detailing out why the inventory numbers and I think DSO, DPO are…

Yeah.

… are largely in check. I don’t think there’s any issues there to discuss. It’s all in the inventory line and so much of it’s just related to the extended lead times out of Asia, the longer times on the boats. It’s just mathematical. We did do, we are sort of pigeonholing or stockpiling some of the critical components that’s been a part of the number, Andy, certainly has all the breakdowns on that. But in terms of when does that situation stabilize more, it’s just when our confidence builds on the supply chain we get back to some, as you noted, it’s just very stat -- are very dynamic environment. So, I would say, next year, at some point things should get better. But in the meantime, we are just going to continue to make what we think are the right allocation. So, Andy, is there any other color on the inventory you want to talk about?

Yeah. Dave, I think you nailed it. Until supply chain issues subside, we are going to continue to use inventory as a buffer and we are very fortunate to have the borrowing capacity to do so. It will be a cash flow opportunity when the macro-environment normalizes. But as you mentioned, we had $153 million of increase in inventory year-to-date, with $30 million of that being in the third quarter, a lot of that is the cost increases. It’s intentional strategic build to mitigate against some of these supply chain headwinds. And then as our growth continues, I mean, you have seen our backlog numbers. But just to give you an idea, our Q3 2022 order rate is 40% higher than our sales rate. So we are seeing impressive growth last year that was about a one-to-one ratio. So, we need to make sure we have got ample working capital to satisfy our customer demand.

Yeah. Yeah. I should say if you put all these points together, it seems like you are setting up 2023 for a very strong free cash flow generating year. I will turn it over.

Thanks, Noah.

Thank you. Our next question comes from the line of John Franzreb with Sidoti. Your line is open.

Good morning, everybody, and thanks for taking my questions.

Hi, John.

I just want to go back to the previous point about the higher mix products and when you expect to realize shipping those products, because if you are maintaining the gross margin profile is flat, it doesn’t sound like you expect to have made any headway into the fourth quarter. Is that a fair assessments or I am missing something?

I think, John, the onshoring and the mix issues are definitely going to get better and we are expecting just continued steady progress. But it’s just a question of the rate of progress. So, Andy, do you have any dimensions you want to ask?

Yeah. Obviously, we have got significant price improvement that we continue to expect to see. But on top of that, I think, it’s worth at least noting the mass impact of margins. When we have got the price recapture of the cost increases, it’s zero margin sales. Now that’s not a big number. It can -- it does not that noticeable. But it hurts our margin when the percentages are going up, but it helps us when it’s coming down. To give you an idea in Q3 2022, the gross margin impact of this margin math is -- was 100 basis points. So we typically see ourselves as a 25%, 10% to 15% OE business, which obviously isn’t where we are right now. If you were to add $250 million of pricing at zero margin, you would get a 200-basis-point erosion in gross margin, and 100-basis-point erosion in operating earnings. So part of what we are seeing is the lag in the pricing catch up, as well as these mix impacts that we are starting to see improvement with our mitigating activities, but we are not yet where the business can get to and part of it is just the math of this cost increase.

Do you have a sense of when you will be able to reach equilibrium as far as the pricing and the mix balancing out?

Yeah. When we look at next year, we expect the second half of the year is probably when we will get back to normalized levels. Obviously, there’s some things outside of control with supply chain. But as we are -- have become more aggressive and effective with our mitigating activities and our pricing is catching up, we expect continuous sequential improvement and in the second half of next year to really be at record levels.

Great. Great. And then just switching to some of your lithium comments Dave, can you just -- I guess a couple of things, can you talk about how much lithium sales are, of course, open three segments in total -- at the total company maybe? And where you see that going in two years in light of the slide that had all those opportunities you were pointing out?

Yeah. I would say, in terms of the backlog, it’s still below $100 million in terms of the backlog for lithium. But the -- a lot of positive projects that we are working on involve lithium. So -- and that’s really in all three of our business lines. So my job is to focus on the future. And so there is quite a bit that we, we know is within reach, I think, the fast-charging storage project, the California Public Utility Commissions project, there’s a lot of lithium in there. Lithium Motive Power, we have got quite a bit in the budget that we just went through this -- with the Board last week. So the team is very focused and optimistic there, and that’s why we made some comments in here about -- from a capital structure standpoint. We are trying to make sure that we keep some portion of dry powder available for securing that supply chain. Because it’s really, I would say, exceeding expectations versus where my head was at five years ago, in terms of the rate at which lithium opportunities would avail themselves. I think things are accelerating quickly. I think, as we noted the legislation that the infrastructure law is part of that, customer feedback and acceptance of our solutions has been a big part of it. So everything is picking up pace, and as such, we need to make sure that that we have a viable supply chain and that’s one of our key focuses with our cap structure.

Okay. And just one last question, just because I never heard this before, on the Motive side you talked about the electrical grid office opportunity for high forklift sales. Could you just talk to me about that comment or that slide and what I mean?

Yeah. It’s what we are -- what the group is talking about is that, there is a big push right now, I think, similar in the transportation world with electric vehicles. I think there’s a major push right now for electrification of material handling equipment, where you can’t do that if you don’t have available power and grid capacity. So I think there’s just some general optimism that is the grid investments are put into place. It’s not only going to facilitate electrifying the transportation fleets, but there’s also some large customers that are committed to electrifying material handling. So, if I think we have been stuck with a ratio in the U.S., for example, in the 60s for the percentage of material handling equipment that was electric versus gas. We think there’s going to be a breakthrough in that number and part of breaking through that constraint or that number is going to be the availability of electricity to charge these forklifts and so forth. So it’s -- and then we are working on a couple of projects longer term, which tie together similarly the -- our fast-charging storage solution with solar and then putting that in a DC warehouse, a distribution center or warehouse environment. So we just feel very positive and optimistic that what’s laid out in this bipartisan legislature or it’s just -- we are well aligned, our investors are well aligned with these future investments.

Got it. Thanks for taking my questions. I will get back in the queue.

Thank you.

Thank you. Our next question comes from the line of Greg Wasikowski with Webber Research. Your line is open.

Hey. Good morning, everyone. How are you doing?

Good.

Good morning.

First question is on the backlog, and Andy, those are really interesting data point that you brought up on that, plus 40% of the order rate. So just curious, how long do you think the backlog continues to build here? And then, as supply chain starts to ease do you think that eventually the backlog returns to more normalized levels or you kind of see that coinciding with this rising demand that you are seeing and maybe the backlog kind of stays at this historically elevated level?

Yeah. Thanks, Greg. Well, as long as our order-to-sell ratio is 30%, 40% above 130%, obviously our backlog will continue to grow, because we are getting more orders than we are shipping. So we do see the demand continuing. But if you look at what makes up some of the backlog growth, I’d say, about $70 million or so of that is supply chain delaying deliveries. So that should normalize as supply chains begin to get back to stabilized levels and we are able to ship that product out. We probably have about $50 million, which is price. So as we have higher priced orders, our backlog will be reflective of that. And then, we do have some advance ordering where it’s the order book is increasing at longer than normal phasing because of truck lead times and electronic lead times that might be in the range of $150 million to $200 million, and again, as supply chains normalize, that should start to be realized into revenue and not on a backlog book.

Yeah. Mike, do you had anything to add.

Greg, one other thing to think about in Motive Power and Specialty, the batteries probably not going to get ordered with a longer lead time than the truck itself. So when you get to Energy Systems and the scope and complexity of some of these bills, whether it’s for 5G or the CPUC mandate. You can still be taking orders that that might go out 18 months to 24 months. So I think in that line of business, you could see continuing growth in the order book beyond -- well beyond the revenue number that Andy referenced.

Yeah. I think, Greg, what’s important to me is that, we have and all the LOBs have extremely good line of sight on what -- what’s driving the backlog and it’s all in the Energy Systems, for example, as Mike noted, it’s tied to very specific network construction initiatives. Our transportation business, it’s really tied to our market penetration with our thin plate pure lead into a very enormous transportation sector. We have had tremendous success in the Class 8 over the road market, reaching the end users, showing the total cost of ownership benefits. So I think that the -- there’s a high degree of strategic alignment of our backlog with our strategic initiatives that we laid out in our Analyst Day some time ago. So we are -- we feel like we are lined up well. And then in Motive Power, for example, as Mike noted, there’s most of the customers wait until just the trucks -- maybe eight weeks to 12 weeks before the truck is supposed to arrive at the dealer. That’s when they ordered the batteries. So, I would say, Andy, most of our backlog in Motive is less than 90 days old. So, I think, in general, we feel extremely good about the quality of our backlog and to your question about getting more of it released, it’s just going to come down to contract manufacturing. So I don’t have that breakdown. Andy, I don’t think we talked about that yesterday. But some portion of that backlog obviously is going to be out of our battery factories and then some portion is going to be out of contract manufacturing. And so the contract manufacturing, I think, we have probably a little bit better ability to flex up as soon as the chips become available. So that’s really a lot of the constraint on the electronics and the contract manufacturing piece. And then on the battery piece, as you know, there is really -- there is only so much we can do out of those big fixed asset type of businesses. So, but we feel extremely optimistic about that and just like you, we look forward to just -- if anything and I said this to Andy yesterday and Mike, we just need stability. That’s what we -- if we have to re adapt to a new level of lead times or cost price, we can do that. It’s just -- it’s this crazy dynamic. I mean just the sequential impact of more than -- really more than $0.50 a share of cost pressures sequentially. It’s just these are unprecedented times, but it too shall pass.

Okay. Yeah. That’s really helpful color. Thanks. The follow up is on the EV charging product. I just have a couple there. Andy, can you give us any specific details or updates around those -- your initial expected orders or initial two customers in that $100 million order that’s kind of dangling out there? And then as you kind of continue to think about this product and commercializing it, is the focus still on the commercial reach thinking about office, park, shopping centers, apartment buildings, et cetera, or have you kind of spoke about this a little bit in the material handling. Have you thought about different applications like highway corridors or fleet applications kind of combining that material handling seems like something that would really make sense for that system, just your thoughts there as you kind of move forward with commercializing it would be great?

Yeah. It’s a great question. And our sales funnel, even in the last 90 days, has sort of exploded in terms of the breadth of opportunity. So it’s not as narrow a play as I thought maybe initially that, I think, especially fleet charging, corridor charging, the ability to rapid charge. We had one customer Class 8 fleet customer that was looking at Class 8 electric trucks and they had a kind of a charge drive profile where they wanted the charge to be done in 45 minutes with this particular application that was over 700 kilowatts of electrical load and I just to dimension that, that’s like adding 100 homes to the grid, every time you plug in one of these trucks to charge it. So, I mean, just the scale of that. So I think most people are starting to recognize in these high charge environments how limiting the grid connectivity is going to be. And so that people are certainly coming to the realization that they are probably going to have buffer that with available energy so that the impact of that search or that charge is not so heavily fell on the grid directly, so it’s worse. I think all the things you mentioned, the distribution center, the corridor and then fleet charging, I think we have gotten a lot. Now for us, what I am trying to do from an execution standpoint in the way we roll it out is, keep the spec narrow, so we don’t get too crazy in terms of rolling this out and I have been pushing the team hard to hunt with a rifle, not a shotgun. So as we go forward, our focus is still on these commercial lead type customers. The spec is -- I would say, the spec is done. There’s been a lot of arm wrestling over the last 90 days about the size of the container, the number of how much storage energy. But that’s all nailed down now. And I really hope by the end of this fiscal -- coming up fiscal year 2023, we are going to start the revenue. But this same concept -- and one of the things I just have to remind you, I want to take this opportunity is that the technology we are using is highly, highly, highly aligned with the modules that we are doing for Motive Power, for Energy Systems business. I think these Bow Coulston [ph] principles that our CTO has driven into the business are really starting to show the benefits. So it’s amazing to me how quickly we have been able to put this system together simply because of the hard work we have done over the last five years, putting together our whole lithium infrastructure and DNA software, BMS. So it’s very exciting project. We have made a tremendous amount of progress in the last 90 days.

Okay. That’s great. Thanks, David and Andy, and congrats again, Mike. Best luck to you.

Thank you. Our next question comes from the line of Greg Lewis with BTIG. Your line is open.

Yeah. Thank you and good morning. And yeah, Mike thanks for the help over the last couple of years and good luck. Dave, I guess, I wanted to talk a little bit about your comments around the ability to kind of aggressively push price, but at the same time gain market share. Any kind of color around the business lines where that’s happening and/or is that being driven by any or what should I say are there any differences by region of where that is happening?

I don’t think that a region -- it’s not a regional issue. It’s a -- it’s pretty much the toughest place on the price recapture was on our Energy Systems with our large contracts with big wireless carriers, broadband carriers. And it’s just the nature of the agreements that we have had with them. So, it just took longer. So you saw that in terms of our Motive business and our Specialty. Now, in the Specialty side we have similar issues -- we have similar issues with the some of our large OEM customers on the Class 8 side. But, in general, it’s really not the issue anymore. But there was absolutely a delay in our ES business just due to the nature and the customer centricity issues. We have much fewer customers and much bigger customers in ES than we do in the others, just by the nature of the business. But I think the pricing and the fair accommodation is gotten a lot better. We will continue to improve and really it’s that mix from the electronics drag that I am still really cautious about and then from a margin perspective. And then obviously, as Andy pointed out, that the margin math, we are not getting a margin on the cost price recapture. So that obviously has a dilutive effect on the way up. But to Andy’s point will be more of a benefit on the way down.

Okay. I realize we are on the hour. So, yeah, thank you very much.

Thank you.

Thank you. [Operator Instructions] Our next question comes from the line of Brian Drab with William Blair. Your line is open.

Good morning. This is Blake Keating on for Brian.

Hi, Blake.

Hi, Blake.

So I just looking to get an update on the Alpha business, how that’s been growing, kind of how you expect it to grow over the next year or two? And then also within that business, how you are seeing the opportunities in 5G and if there are upgrade opportunities in the cable network?

Right. I would say it’s hard for me anymore to talk about the Alpha business, because it’s so integrated in with our whole Energy Systems business today. But I will tell you that Alpha’s greatest market share as a brand was in the North American cable television companies like Comcast and Charter, for example, they have always just done extremely well there. I think the business is doing fantastic. The California Public Utilities Commission business is coming through those kind of legacy channels. But the products we are putting together for CPC are absolutely an amalgam of what was Alpha and what is EnerSys. So whether it’s TPPL batteries, lithium batteries, enclosures from our legacy Purcell -- EnerSys legacy Purcell factory or XM3 UPS systems out of Alpha. But I would say the business is extremely healthy, doing extremely well. Those customers continue to invest heavily in their hybrid fiber coaxial networks. The -- there’s still a lot of potential in the rural broadband. I think the RDOF projects, we have started to capture revenues for the RDOF funding already. So a plenty of runway left in that business. It’s just the electronics piece, as noted, has been frustrating with first with tariffs bringing that -- we - that those tariffs became extremely burdensome. And so this -- and so I would say, when we talk about Alpha, I’d say a lot of what we are talking about the pressures are on the electronics piece of our business. And as noted, we have made significant progress on onshoring for tariff relief and the chip issues are -- they are what -- they are -- we are doing what we can with redesigns and so forth.

All right. And then just a last quick one, you guys still expect revenue in the fourth quarter to be up about $50 million sequentially. And then any directional guidance on 2023 would be great -- 2023 revenue would be great? Thanks.

Well, Blake, traditionally we don’t guide for the upcoming years revenue at this point. I would say, in terms of sequentially that, you would expect our fourth quarter historically our strongest quarter. I think, in terms of -- we had a very good third quarter in terms of topline too. So it’s probably not as big of a sequential volume growth, but you will see pricing moving the needle up as more of our pricing initiatives come in. So the $50 million is probably not all that unreasonable, but it’s not all volume growth.

Yeah. It’s different. Yeah. It’s a little different right now with all the constraints we have on delivery.

I pass the line. Thank you.

Thank you. I am showing no further questions in the queue. I would now like to turn the call back over to David Shaffer for closing remarks.

All right. Well, Mike, I went back and counted, you have participated in 50 of these. This is your 50th analyst call. You have done three Investor Days for us. You were on the stage twice to ring the bell for the New York Stock Exchange. 18 acquisitions, $1 billion of debt offerings and I don’t know how many calls with investors. That’s got to be a countless number. Let me speak on behalf of all EnerSys’ stakeholders and thanking you for 26 years of invaluable service to the company. Thanking you for recruiting and preparing Andy. And from me personally, thank you for your wisdom and loyalty to the company. I will miss you and always consider you a friend.

Well, thank you very much. It’s been a most enjoyable ride. And I am still, I have -- I am working through the 31st, but Andy is taking over most of the day-to-day stuff and I have got some bucket list items, strategic initiatives. I wanted to run down, so I will still be around and I will miss all of you, but if anybody needs to talk to me in the next 75 days, I am still here.

Great. Thanks, Mike. So thank you everyone and we look forward to providing further updates on our progress on our fourth quarter and year end 2022 call in May. Have a good day everyone.

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.