Good morning. I would like to welcome everyone to Kennametal Second Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Michael Pici, Vice President of Investor Relations.

Thank you, operator. Welcome, everyone, and thank you for joining us to review Kennametal's second quarter fiscal 2024 results. This morning, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that deck throughout today's call. I'm Michael Pici, Vice President of Investor Relations. Joining me on the call today are Christopher Rossi, President and Chief Executive Officer; Pat Watson, Vice President and Chief Financial Officer; Sanjay Chowbey, Vice President and President of Metal Cutting; and Franklin Cardenas, Vice President and President of Infrastructure. After Chris' and Pat's prepared remarks, we will open the line for questions. At this time, I would like to direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements and, as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings. In addition, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found at the back of the deck and on our Form 8-K on our website. And with that, I'll turn the call over to you, Chris.

Thanks, Mike. Good morning, everyone, and thank you for joining us. I'll start the call today with a review of the quarter as well as some end market commentary, and then we'll share an example of the industry-leading innovations we're bringing to market. From there, Pat will cover the quarterly financial results as well as the fiscal year '24 outlook. Finally, I'll make some summary comments and then open the call for questions. Beginning on Slide 3. For the quarter, sales were flat year-over-year with organic decline of 3%, offset by favorable business days of 2% and favorable currency exchange of 1%. At the segment level, Metal Cutting was flat organically and Infrastructure declined 8%. On a constant currency basis, EMEA posted 3% growth, driven primarily by the Transportation and Energy end markets. The Americas declined 5%, mainly due to softening demand in General Engineering, Earthworks and Energy and the effect of the UAW strike on Transportation. Asia Pacific sales were flat, driven by growth in General Engineering and Transportation, offset by declines in Energy and Earthworks. The results also reflect the year-over-year declines in China. Moving to our end markets. Transportation grew 4%. Aerospace and Defense was flat, General Engineering declined 2%, Energy declined 3% and Earthworks declined 5%. Looking now at each end market. The Earthworks decline was driven by increased price sensitivity in Americas construction and softening mining in China. For Energy, as expected, oil and gas was down primarily due to lower U.S. land-based rig counts and continuing customer destocking within Infrastructure and wind energy project delays in Metal Cutting. General Engineering decline versus prior year with modest growth in Metal Cutting in the Americas, offset by declines in Infrastructure. In Aerospace and Defense, sales were flat year-over-year at the enterprise level. Metal Cutting grew 6%…

Thank you, Chris, and good morning, everyone. I will begin on Slide 6 with a review of second quarter operating results. We continue to execute our initiatives in the face of challenging market conditions. Sales were flat year-over-year with an organic decline of 3%, offset by favorable work days of 2% and favorable currency exchange of 1%. As Chris pointed out, the performance this quarter was affected by shifting market conditions that put pressure on all of our end markets. This is the second quarter for Metal Cutting and the fourth quarter for Infrastructure with negative year-over-year volume. Adjusted EBITDA and operating margins were 12.4% and 6%, respectively, versus 13.7% and 7.1% in the prior year quarter. During the quarter, we realized approximately $5 million in savings from the ongoing restructuring program. The adjusted effective tax rate was negative 8%, primarily driven by an approximate $8 million tax benefit from a change in the Swiss tax rate in the current year's quarter. The prior quarter included an approximate $2 million tax benefit from a Swiss tax ruling. Adjusted earnings per share were $0.30 in the quarter versus EPS of $0.27 in the prior year period. The main drivers of our EPS performance are highlighted on the bridge on Slide 7. The year-over-year effect of operations this quarter was negative $0.05, this reflects lower volumes and price/raw material timing, partially offset by operational excellence initiatives and restructuring savings. You can also see the effects of the Swiss tax rate I just spoke about on EPS, with taxes contributing positive $0.07. Lower share count also contributed $0.01. Slides 8 and 9 detail the performance of our segments this quarter. Reported Metal Cutting sales were up 4% compared to the prior year quarter, with 0% organic growth and a favorable foreign currency and…

Thanks, Pat. Turning to Slide 13 to summarize. Overall, although market conditions changed from our previous outlook, over the long term, the global megatrends driving market growth are still intact. We remain confident in executing our strategy to drive share gain throughout the economic cycle. We have experience navigating these market headwinds, and we will focus on taking actions to place the company in the best position moving forward. An example of this is accelerating the $100 million of cost-out actions we outlined at Investor Day. And with that, operator, please open the line for questions.

[Operator Instructions] Our first question today comes from Steve Volkmann with Jefferies.

A couple of quick things, I guess, for me. I'm interested. I think both of you guys mentioned sort of increased price sensitivity, I think maybe that was just Earthworks, but I'm trying to get a little more color there. Does that mean you're seeing actually pricing go negative there? Or is it that you're holding the line but others might not be? Just any more color there would be great.

Yes, Steve, it was a U.S. phenomenon and it was related to road milling. And I think I would say that we're holding our prices and being more selective. I think what might be happening from a market perspective is the projects are still there. If you remember last year, we talked about the fact that there was less miles being milled because budgets were strained. And the Infrastructure bill helps to -- it's supposed to be able to help to backstop those budgets. But that business for the construction season, which happens at the end of our fiscal year, that business is quoted right now. And so I think people are worried that they want to make sure that they get locked into those projects right now, and it's kind of driving a little bit more price sensitivity than we would normally see, which was a little different than what we had expected.

Got it. Okay. And then relative to sort of the weaker end market outlooks that seem pretty broad here. Is there any way, Chris, to sort of think about how much of this might be inventory destock? And how much is just kind of weaker end markets? Because they seem a bit weaker than sort of what we're hearing from other companies.

Yes. I think, on the destocking side, our distributors have been pretty, this is kind of a global comment, pretty conservative in terms about not getting over their skis by adding inventory. So we never really thought we saw much of a restocking, if you will, except in areas where they knew like Aerospace, they were supporting, they knew they had to hold the inventory because those demand patterns are a little more certain. So, we don't think this is like a major destocking because it wasn't really a major restocking, if you will. And so, therefore, it's more of a little uncertainty in terms of what the economic outlook looks like. I mean you saw just based on how much the data has changed over the last quarter. So I think it's more about that. And then, clearly, in Infrastructure, from an oil and gas perspective, they've been working their inventories down, and they've now versus the customer sentiment and what's now been articulated actually by the oilfield service companies on their earnings calls, they now believe that, especially in North America, that, that business is going to continue to be slow at least for the rest of our year or the first half of calendar year '24.

The next question comes from Steven Fisher with UBS.

Appreciate that you're focusing on the things that you can control when the markets are outside of your control. So maybe you can just sort of level set us on the cost tailwind that you have for fiscal '25 versus fiscal '24 now that you're accelerating the cost savings. In other words, if nothing else changed, into next year, how much lower are your fiscal year '25 costs compared to '24? I mean, I know there's still going to be likely some inflation headwinds, but just understanding what's the tailwind that you start off with facing '25 on lower cost?

Yes. I think the way I would think about that, Steve, is we're going to hit a run rate and we exit the year at $35 million, right? And we think about the build this year in terms of where we had $5 million this quarter in Q2. We'll see a slight uptick here from Q2 to Q3, but probably more substantial uptick in Q4. One was, I think, about $4 million in total. So I take that $35 million and kind of back out, we're approximately, we're going to be here this year, we'll see that roll over to next year in terms of savings from that restructuring program in particular.

Okay. That's helpful. And then on pricing, I'm curious how broad are the price realizations that you have in, I guess, the 2% in Q3 and maybe Q4? And when were those price increases put in? And I guess, I'm wondering how hard is it to introduce new price increases at the moment, given some of the market backdrop?

Yes. The prices that we put in were largely done at the start of our fiscal year. And then we continue to monitor pricing in both segments as the year progresses. And I think there was some smaller modifications that were recently made in particular, in Metal Cutting. In general, Steve, we think that we can hold on to the prices that we've put in place. I think this Infrastructure example, road milling, which by the way, isn't a large portion of our business, and it's probably the least profitable portion of Infrastructure anyway. Absent that, for the most part, I think competitors have been behaving sort of logically and along the lines of what we do. So we think we can continue to raise prices, especially in line with inflation. So even in a declining market, there are some very small players in China, for example, that are less price sensitive, but they are always less price sensitive in any market. And we don't think they have a differentiated value proposition to be substantially much of a threat or influence the prices that we're able to demand in our key markets.

The next question comes from Julian Mitchell with Barclays.

I just wanted to circle back to the -- just to follow up on that sort of operating margin guidance for the year. So it looks as if you're looking at an operating margin clean basis exiting the year at sort of 9.5% in Infrastructure. I think you'd said to be flat year-on-year, and that's versus maybe a breakeven in the third quarter. So is all of that step-up that tungsten aspect? Just trying to understand, I guess, how much might be coming from, say, volumes sequentially in Q4? Versus simply tungsten? And then when we're looking at the kind of third quarter guide, is it sort of a margin of 7.5%, 8% total company? Is that the framework?

As you think about Infrastructure, Julian, you're right in the sense that there's a big component of that margin here in Q2 and will repeat in Q4 is this price/raw timing, right? Once we get out to Q4, that will flip to a positive for us, company-wide. And in Infrastructure, that's going to propel a pretty significant improvement in the margins. And then on top of that, as you know, Q4 is the strongest quarter for Infrastructure as well. And so we'll see a volume uptick more notable in Q4 than we would going from Q2 to Q3, from a margin perspective as well.

That's helpful. And for the third quarter, we should think about the company margin being about 7.5%, 8% with a sort of a breakeven in Infrastructure, is that fair?

Yes. I think from an infrastructure perspective, you'll see a really modest improvement in margin Q2 to Q3, right? And then you'll see a little bit of an uptick here as well from Metal Cutting perspective, again, based on volume.

That's helpful. And then just my follow-up question, maybe on the sort of cash flow conversion side of things. Surprised perhaps that with the weaker volumes, maybe you're not getting more conversion from working capital kind of liquidation, just as that volume rolls over. Anything going on there? Just sort of curious how you think about inventory management. I think inventories were flat sequentially and up a little bit versus June. Or are you kind of holding the working cap on the assumption that the sales will improve in kind of 6 months' time?

Yes. As we think about the working capital, a couple of things from a framework perspective, over a longer-term basis, we've got a number of initiatives underway to drive down working capital and inventory in particular. When you think about that in the context of, I'll say, shifting market conditions in the short term, the supply chain is relatively elongated just in terms of physical distance and time. It does take a little bit of time for us to rectify that supply chain. So as you know, we've got softening here that developed in the month of December, it will take us a little bit of time to kind of get the inventory and supply chain, reacclimated to where we expect demand to come out. And so that will put a little bit of a temporary pause probably on our ability to drive down the inventory, but that's not going to take us off track of the objective we've set for ourselves in terms of improving net working capital over the long run.

The next question comes from Tami Zakaria with JPMorgan.

So I have a question on the Aero and Defense segment. I think you now expect lower growth environment related to some OEM production initiatives. So from your perspective, how temporary or structural is this risk? If the said OEM issues prove more long term or structural, what's the strategy to diversify away from it and try to win new OEMs? How prepared are you should this need arise?

Yes. I think I would think of a couple of things here. The good news about Aerospace and Defense, whether it's the large OEMs or the other producers is there still is a huge amount of demand out there, and they're producing at much lower levels than even pre-pandemic. And they would like to actually produce even more aircraft, but they are constrained really by the supply chain. So the particular quality issue, we think, is probably just a short-term phenomenon. We don't know exactly. We think we've got the appropriate risk factored into our immediate outlook. But I don't see that as a risk for the longer-term projections of this business. And so we feel quite good about our ability to gain share. And we're adding new customers as part of that share gain, not just at the OEM level, but also the Tier supplier, the Tier 1 and 2 and 3 suppliers that support this industry, that's where our opportunity is. So I don't think any of that changes our picture. But it did, our forecast did have to reflect that, while there will be growth, it won't be quite as much as we thought in the short term.

Got it. That's reassuring. That's helpful. And then my second question is, can you remind us what your current price positioning is versus some of your main competitors, given the last couple of years of relatively higher price realization, from your perspective, are your products now cheaper or in line or relatively at a premium versus some of the competitors out there?

Yes. The way I would think about it is we always try to price for value. And there's parts, for example, the Metal Cutting segment that we just don't want that business because it's only competing on price and that's not where our advantage is. In the current environment or even in a downturn or upturn, we think we're priced competitively. And it's based on the value we deliver, and we think even over the last few years through COVID and the high inflation, our competitors have largely been on par with our price increases as much as we can tell. Some of them are publicly disclosed information. Others though, for sure, are talking to the same customers we are and distributors. So we think we're in line with what the competition is doing and we don't think that landscape has really changed or put us at a disadvantage going forward.

The next question comes from Michael Feniger with Bank of America.

Just I know you touched on your own inventories. I'm curious with how you're managing the working capital, just with the weaker end market in your guidance. Do you have to do some underproducing in the back half, maybe more than expected? Just how do you feel like you can get your inventory to the end of the year to kind of position yourself for '25? Just curious how you're thinking of that given kind of the softer end market backdrop.

Yes, absolutely. As we think about the back half, and I'd say embedded in our outlook and the change in our outlook over the last 90 days here, we are assuming that we will take some actions here internally to make sure that we constrained production a little bit. That will result in a little bit of under absorption. That's factored into the outlook we have in place. And I think that inventory number, given the midpoint of the outlook and where we think the end market is going to be, relatively flat as we move through the rest of this fiscal year.

Great. And is there anything you would flag in January? You made some comments, I think, on the Earthworks side. Just I'm trying to get a sense on the General Engineering side, like typically, how your customers, either on the distributor side or the OEMs, typically kind of look at typically book in January, how that informs the next 6 months? And what you kind of saw in January now relative to maybe where November, December looks.

Yes. I think our comment on January was about the order pattern that we started to see in December and certainly in the second half of December, that lower order pattern repeated sort of in January. We didn't see much of a change there. So that was that comment. The other thing I want you to realize is part of what we had talked about on the call, when we do our forecast is that backlog in this business is not a meaningful indicator of the forecast for sales in any given quarter. There simply isn't much backlog. Most of this business is transacted in the same day and so it's very much a statistical process. So the better indicator is how are orders actually coming in, and so the fact that they came down in December and continued that pattern to sort of level off in January, I think, is the best indicator of the future for us, which is why we -- that was one of the major inputs that we had to take to reassess our second half outlook in addition to the third-party prognosticators on the longer term -- midterm trends.

The next question comes from Steve Barger with KeyBanc Capital Markets.

Just over the past few years, you put a real focus on commercial excellence, product innovation and new markets to try and drive share gains. But organic growth still seems to track the metalworking index or industrial production. Top line is going to be flat for 3 years now. Why are you convinced your initiatives are working? And is the team bringing you new ideas on how to drive out growth differently?

Yes. I think we talk about the share gains that we're making and if I think about what's different about Kennametal than before is, certainly, the simplification and modernization and many of the innovations that we kind of highlight on these calls, they weren't possible before modernization. And also, if you ask our customers from a quality perspective and delivery perspective, prior to modernization, we were playing defense. We were always -- we were a lot of times explaining why we were missing deliveries or not making their cycle times, et cetera. So I think that situation has improved. And that allows us to now go in and talk to new customers. And so we do believe that, like, for example, in Aerospace, that our growth rate has been higher than what the changes in industrial production in Aerospace are, so that gives us an indicator that we're growing faster than the market. Franklin has got several examples in Infrastructure where we were underserving customers, for example, in Chile, and we, we got large new orders because we've expanded into different types of mining applications or wear solutions applications. So we've got a number of things that point to gaining share, I would say, Steve. The headwinds, though, of the market in this situation that can move against you, the share gains, while they're there, can get lost in the noise. And if you think about the -- if you think about just in the month of December versus our midpoint, we probably saw most of that $7 million miss from our midpoint in the month of December. So that kind of a reduction happening that quickly can cause the numbers to be masked. The other thing is, is that on electric vehicles, we've got lots of indications that we're winning above our normal win rate in those type of applications. Again, most of that is based on our ability to differentiate from a technology perspective. So I agree with you that the share gains can get lost inside the noise of the cycle of the market. And volumes, I'll remind you, are still down about 20 -- 15% from 2019 levels.

Yes. No, that's -- it's a great point, at least to my second question, which is about capital allocation. Again, just looking at 3 years of what will be flat sales, but really, we can go back to FY '16 or '17, and we're in the same general range of revenue and earnings. Why are you convinced share buyback is a good use of cash? Versus more aggressive cost streamlining or M&A to find some growth?

Yes. I think -- we think we have the right capital allocation strategy. So your question implies there's a trade-off going on between restructuring and taking cost out. And we absolutely have that as part of our investment thesis, that's why we're going after the $100 million. And that project is not being inhibited of cash allocation. We're moving at a pace and it's sized properly for what we think we can execute, but we're not limited by cash there. From an M&A perspective, we are looking for other opportunities to grow, but we're going to stay within our own fairway, and we're looking for opportunities where we can help accelerate growth. And so there is a pipeline of those opportunities that we continue to pursue, and we'll have to inform you about those as we go. Anything else you'd add to that, Pat?

I just think the other thing I would add, Steve, as we talked about at Investor Day, we talked about a little bit today in terms of our inventory management. We were really focused on driving cash performance in the business, here this year and the going-forward years. We've got a string over the last couple of quarters of generating cash flow that's much improved over where we have been. And so I think as we as we work forward here. We're really confident in our ability to drive cash out of the business. And that we'll go back from the standpoint of, as Chris said, reinvesting back in the business at the pace we can support as well as funding share repurchases as appropriate.

The next question comes from Angel Castillo with Morgan Stanley.

Just wanted to quickly clarify on January comments. I think you mentioned trends continued versus December. Just wanted to clarify, I guess, the leveling off, is that basically the same year-over-year kind of drop as you were seeing in December? Or is that to mean that January continued to be weak or even then December more from a sequential basis? So just kind of clarify there. And then maybe from a longer-term perspective, you noted PMIs or manufacturing indices in your slides. As we see maybe a modest pickup in those in kind of the January time frame, how would you kind of read that in terms of your longer term maybe as we look into kind of the first half of your fiscal year '25? Do you anticipate that some of these trends will start to drive more of a pickup based on what you historically see?

Yes. I think to answer your first question, that was a sequential comment. So they leveled off sort of sequentially. And then the -- we're encouraged when the PMIs start to go above 50 and look favorable. And so I would say to you that the January actually, when you start to look at some of these forecasts, there was a bit of an uptick. Now we've seen that before. I mean the U.S. S&P Global Flash PMI had increased, I think, 3 months in a row prior to the lead up of our second -- our first quarter earnings call and that trend reversed. So -- but what encourages me, though, is that the, there's still a lot of now industrial companies, we have the advantage of seeing what they're saying about their markets. They're now projecting their full year calendar year fiscal year '24. And it seems like, Angel, that a lot of them are saying, yes, it's probably going to be a little slower in the first half of the calendar year and they're expecting an increase in business in the second half. And so we're encouraged by that.

Very helpful. And then maybe just more from a regional standpoint, I guess, the dynamic that you saw in December versus January, could you talk about that? It sounds like maybe Americas and EMEA is an area that might be slowing down a little bit more within that kind of December-January time frame. So, just curious if you could unpack some of that more near-term nuances maybe by the kind of the regions ex China and ex Asia?

Yes. I think most of that slowdown was in the Americas. And then Asia Pacific, we were expecting, frankly, China to have a recovery, and that didn't really happen. I think they're going to continue to struggle, and we think that will continue for the rest of the year. I would say EMEA was about in line with what we thought. They're already kind of operating at a low industrial production level. The change there, though, is going forward is that was expected to start to improve, and it looks like it's going to take a little longer to start to improve.

The next question comes from Joe Ritchie with Goldman Sachs.

Chris, I'm going to start with a broader question. I just want to kind of understand the cycle that you're seeing today versus maybe some previous cycles that you've seen with this business. It seems different, at least to us. Just curious, how would you kind of characterize it? And then similarly, do you have any expectation for how you guys would rebound or reaccelerate post this cycle?

Yes. I think the cycle, and I'll let Pat comment because he's got more of a history than I do, but my feeling is that this is a little bit different than what we've seen. I would characterize this as a continuation of what's been a mild downturn. And previously, we expected, of course, for this to sort of bottom out here and then start to improve in the second half, and it looks like it's going to continue to have a mild downturn. But this downturn has been happening and playing out over quite a long period of time. And we've talked on this call before, that's probably due to the fact that there was a huge amount of backlog associated with all the supply chain issues, and so that sort of moderated this. So I think that, typically, you might find that once these volumes start to go negative, they go negative for quite a while and go pretty steep. We don't see that steep decline, but we recognize we've actually been in decline for some time. I think it's been a couple of quarters of volume reduction in Metal Cutting and now 4 quarters in Infrastructure. So I think that we -- I think that our forecast for the first half sort of contemplates the midpoint that there's not an uptick, but things are sort of moderating at the current levels. And then I absolutely believe in my mind that, as industrial production improves in the second half of calendar year '24, that, that's going to be a good opportunity. And maybe the snapback won't be quite as great because we, the decline has been slow. Maybe the improvement will be slow, but it could also snap back. I guess, the answer there is I don't know what that answer is, on how the snapback looks. What would you say, Pat?

Yes. I think one of the things I think that if we think about downturns in Kennametal or in short-cycle industrial companies over a longer period of time, over the last 15 years, we've got 2 events thrown in there that are, quite frankly, really idiosyncratic, right? We've got a global pandemic, right? And we've got a global financial crisis. And I'd say in terms of where we're at, and Chris mentioned where we are from a volume perspective in both of the businesses here, I think we've got a much more, I'll say, normalized industrial downturn, right, that's kind of playing out, where the volumes are coming down gradually. And at this point in time, there is some stability here. We talk about how the business kind of performed here in December, and I just kind of comment in terms of the overall performance in December. We came in within that sales outlook we had in place for the full quarter, although a bit lower in the end where -- than we would have liked to have been. But I'd say the business kind of performed within the range of as expected in Q2. And as we think about how that rolls forward here, it doesn't feel like there's any places where you would see, historically, if you looked at some of the other downturns and even some of the slowdown that occurred in 2015, where you've got a dramatic fall off in one of the end markets. We do see some choppiness in Energy, within oil and gas. We talked about some of the issues that are going on in Aerospace. But the base feels pretty solid in terms of where demand is at this point in time. As Chris talked about, as we kind of move forward, what's that recovery look like, I think we'll have to kind of see how that plays out over time.

Got it. That's super helpful color from both of you. And then just my follow-on question is just I'm trying to bridge the 2024 guide, the EPS guide to 2023. And so there's a few moving pieces, specifically, it looks like you're annualizing your synergies at a higher rate, which is great. So I don't know, maybe you'll realize $20 million, $25 million or so this year. But what are the kind of decrementals that you've got baked in to your base volume for the year? And then also just on tungsten, do you have a sense for how much of a tailwind that's expected to be as you exit the fourth quarter?

Yes. So as we think about that, the year-over-year, right, I'll walk you through what are the main components. Obviously, you've got some price realization that's really going to be overcoming some of the inflation that's in the business. From a raw material perspective, while we have raw material headwinds, I'll say, in the middle of the year here, we're going to see some of that flip. We talked about in terms of going into Q2 here, like a $12 million, $13 million headwind. That headwind will go away as we get to the back end of the year. So raw material for the full year, I would say, should be slightly positive for us as we get through it. I think you kind of talked about where the restructuring number is coming in, in terms of like we got $20 million to $25 million range. It sounds reasonable in terms of, again, the cadence we talked about earlier on the call. [ Taxability ] and shares will be slight tailwinds as well, and that really gets you to the big number in terms of what's changing there. And that's the volume, right? And so unfavorable volume, yes. And yes, probably a little bit normal as we work our way through here some decrementals, again, as we talked about just kind of managing production and inventory as we move through the back half of the year.

This concludes our question-and-answer session. I would like to turn the conference back over to Chris Rossi for any closing remarks.

Thanks, operator, and thanks, everyone, for joining the call today. In closing, let me just say that we continue to execute our initiatives in the face of challenging market conditions. We're absolutely focused on what we can control and drive margin improvement and share gain throughout the economic cycle. As always, we appreciate your interest and support. And please don't hesitate to reach out to Mike, if you have any questions. Have a nice day. Thanks.

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