Welcome, and thank you for standing by. [Operator instructions] Today's call is also being recorded. [Operator Instructions] I would now like to turn the call over to Mr. Whit Kincaid. Sir, you may begin

Good morning, everyone. Welcome to Mueller Water Products' first quarter 2020 conference call. We issued our press release reporting results of operations for the quarter ended December 31, 2019, yesterday afternoon. A copy of it is available on our website, muellerwaterproducts.com. Discussing the first quarter results and our outlook for 2020 are Scott Hall, our President and CEO; and Martie Zakas, our CFO. This morning's call is being recorded and webcast live on the internet. We have also posted slides on our website to help illustrate the quarter's results as well as to address forward-looking statements and our non-GAAP disclosure requirements. At this time, please refer to Slide 2. This slide identifies non-GAAP financial measures referenced in our press release, on our slides and on this call and discloses the reasons why we believe that these measures provide useful information to investors. Reconciliations between non-GAAP and GAAP financial measures are included in the supplemental information within our press release and on our website. Slide 3 addresses forward-looking statements made on this call. This slide includes cautionary information identifying important factors that could cause actual results to differ materially from those included in forward-looking statements. Please review Slides 2 and 3 in their entirety. During this call, all references to a specific year or quarter, unless specified otherwise, refer to our fiscal year which ends September 30. A replay of this morning's call will be available for 30 days at 1 (866) 411-8817. The archived webcast and corresponding slides will be available for at least 90 days in the Investor Relations section of our website. In addition, we will furnish a copy of our prepared remarks on Form 8-K later this morning. I'll now turn the call over to Scott.

Thanks Whit. Thank you for joining us today to discuss our first quarter results for 2020. We had a very good start to 2020 as we generated solid organic consolidated net sales growth, improved margins and increased adjusted EBITDA on the quarter. Our net sales increased 10.3% driven by the benefit of the Krausz acquisition with organic net sales increasing 3.1%. Both higher pricing and increased shipment volumes of our core infrastructure products drove our organic net sales increase. We increased our gross margin by 290 basis points to over 34% in the quarter, by our pricing, favorable product mix and the addition of Krausz more than offset increased cost from tariffs and inflation. Both infrastructure and technologies contributed to the gross margin improvement in the quarter. I was especially pleased to see technologies achieve breakeven adjusted EBITDA in the quarter. This performance and the addition of Krausz help deliver nearly 20% consolidated adjusted EBITDA growth. During the quarter, we settled the Walter Energy tax liability with a $22.2 million payment to the IRS. After a significant effort managing and resolving a complex situation over the past four years regarding the obligation of our one-time parent company, we can finally put this matter behind us. For fiscal 2020, we expect to see continued favorable demand in our end markets driven by health municipal spending and improved residential construction. However, we remain cautiously optimistic due to continued uncertainty from global and domestic matters. After a solid start to the year, we are increasing our expectations for both net sales and adjusted EBITDA growth for fiscal 2020, which I will discuss in more detail later in the call. With that, I will turn the call over to Martie.

Thanks Scott and good morning everyone. I will begin with our first quarter consolidated GAAP and non-GAAP financial results. Then review our segment performance. Our consolidated net sales for the quarter increased 10.3% or $19.8 million to $212.6 million. This increase was primarily driven by the acquisition of Krausz as well as higher pricing and increased shipment volumes at infrastructure. As Scott mentioned, we achieved organic net sales growth of 3.1% in the quarter. Our gross profit this quarter increased 20.8% or $12.5 million to $72.6 million. Gross margin of 34.1% improved to 290 basis points over the prior year. This improvement was primarily due to higher pricing, product mix and the addition of Krausz and was partially offset by higher costs associated with tariffs and inflation and approximately $500,000 a startup costs associated with our large casting foundry expansion in Chattanooga. Selling, general and administrative expenses were $49.9 million in the quarter and $8.9 million increase over the prior year. The increase was primarily due to the addition of SG&A from Krausz, which accounted for about half of the increase, an IT-related activities, personnel-related costs and professional fees. SG&A as a percent of net sales was 23.5% in the first quarter compared to 21.3% in the prior year. Our current expectations for full year 2020 are for total SG&A expenses to be about 20% of consolidated net sales. Operating income increased 27.7% to $20.3 million in the first quarter compared to $15.9 million in the prior year. Operating income included strategic reorganization and other charges of $2.4 million in the quarter versus $3.2 million in the prior year. Turning now to our consolidated non-GAAP results, adjusted operating income increased 18.8% or $3.6 million to $22.7 million in the quarter. Both infrastructure and technologies increased adjusted operating performance in the…

Thanks, Martie. I will provide some additional insights into key areas and then comments on our full year 2020 outlook. After that, we'll open the call up for questions. Going forward, we are continuing to focus on executing our key strategic priorities. These include accelerating new product development, developing a fully integrated technology platform for infrastructure monitoring, driving operational excellence, and modernizing our manufacturing facilities. Our goal is to deliver above market organic net sales growth and improvements in our margins from productivity initiatives and continued price cost realization. Our organic net sales in the first quarter performed well as we benefited from higher pricing as well as higher volumes in our core valve and hydrant and leak detection products. During the quarter, our natural gas and metrology products sales experienced headwinds versus the prior year. Our natural gas product sales experienced what we believe is a temporary slow down in sales. We expect that sales will improve through the balance of the year as our red markets normalize. For Metrology products, our 2019 sales benefited from a significantly stronger backlog entering the year. Our current backlog is meaningfully lower than the prior year due to an inconsistent pipeline of large orders. As a result, we expect our Metrology sales to be flat this year. In recent years, we have focused on developing stronger partnerships in the distribution channel. As a result, we have enhanced our partnership with Ferguson, one of our largest customers for many of our Metrology products and have seen a greater percentage of our Metrology sales go through their distribution channel. Recently we worked with Ferguson to win a $34 million multi-year AMI water meter contract for Newport News, Virginia. This contract win is an example of how we were able to differentiate ourselves with our…

[Operator Instructions] The first question in the queue is from Michael Wood with Nomura Instinet. Your line is now open.

Hi, good morning. A great job this quarter. Infrastructure gross margin stepped up versus last quarter despite the seasonally slower sales. Was there anything unusual there? I know you typically experience a seasonal gross profit margin decline, so I'd love it if you can just talk about what drove margins higher, whether they're sustainable and how that compared to your expectations?

As we said in the prepared comments, I think it was a combination of things. Certainly infrastructure, the Krausz impact along with pricing, probably the two largest driving items. And then, the mix that we mentioned that we got with hydrants and R&D [indiscernible], a larger portion of sales also skewed the margin. So, as long as we're talking about sustainability, I believe as long as we keep those kinds of mixes with IVH then we will have favorable trends throughout the year.

And how should we think about the three projects contributing to the $30 million of gross margin improvement? Is it roughly 10 million each one larger or smaller than the other? And can you just talk about how long it takes once a plant's up and running to get the plan deficiencies?

Yes. I think you should think about it that the brass foundry is certainly the largest project of the three. And that the $30 million is going to be frankly fairly lumpy with the first piece coming from improvement as a result of the Chattanooga large casking foundry being virtually complete by midway through this year. And then, the balance with Kimball and Decatur having a much longer fuse and the bulk of the savings coming in the back half as a result of Decatur and Kimball.

Got it. Just finally wanted to ask the guidance. It seems early in the fiscal year to increase guidance. So just wondering if you could shed some more light on maybe the top one or two things that you're seeing that gives you the confidence in the visibility. Thank you.

I think that the biggest thing is, you know, when you come out of the gate at 7.3 you know, and you do the weighted average math for the rest of the year, right. I feel confident that we should be able to maintain implied organic growth rates in the 3.5%, 4.5% range given bookings and the state of the market. We also put the language in there that we're cautiously optimistic given some of the global domestic uncertainties. And certainly we recognized as we're in the early days of the coronavirus that that, there could be some supply chain impact. And so, nodding to what's been a strong order book through the first four or five months. But at the same time, recognizing there's some risks on the horizon.

Great. Thank you.

Next question in the queue is from Brent Thielman from DA Davidson. Your line is now open.

Thank you. Hey Scott, maybe just touching on that last point, I mean, anything in particular you're looking at related to supply disruptions or risks that you're monitoring? I'm assuming with no change in the guidance, if you want, but just curious where you might see it show up.

Yes. So I think with our facilities in China, we have a great handle on what they produce, how they produce, what's at risk, what the timeline of the month being and running in. That is what I think the uncertainty for all of them, national association of manufacturers may apply in other organizations is how about you have your domestic supply chain is dependent on components from a foreign supply chain. And one of that foreign supply change dependence look like especially in the Hubei province, Hubei province in China. So I think that's the part that that we're all scrambling frankly to figure out where resource components are two or three steps back in the supply chain. And I think that's where the real risk to manufacturing lies in the next, let's call it 12 to 16 weeks.

Yes. Okay. And then, can you just talk about kind of how Krausz is integrating or are benefiting from the integration in the Mueller? I mean, it seems like -- seem pretty good growth. Are they seeing faster core growth in their business and sort of benefiting from the synergies and kind of distribution channel you've brought to them?

Yes. I believe that everything that we identified in our synergies case when we made the acquisition, we've tracked quarter by quarter and I would say that without question on at the aggregate. We're very pleased with the acquisition, how it's performed, where we've gotten growth, the introduction to existing Mueller customers, and conversely, very pleased with exposure to some of the traditional Krausz customers of Mueller products. And in the aggregate, I would give it an A, the team's done a very good job of integrating the sales teams in a very good job of harmonizing programs across our customer base. But, we still have room for improvements and we're going to continue to measure and manage, measure and manage, measure and manage all the way through the process until we get to our fully integrated stake, which I think is another year away.

Yes. Okay. And then, any views or I guess expectations built in related to kind of larger municipal CapEx projects, which some of your larger products and valves are attached to, is this going to be a stronger year based on what you can see today?

So, thanks for that and the happy to get into it. I think that in the large valve market you will see far more kind of project base. It's not going to be kind of the routine maintenance kind of thing. And so, there will be some lumpiness in that. And the fuse on these things tends to be much longer timeline. So jobs that are bidding for a 72 inch valve today are likely not going to be in an installed base for another 12 to 18 months and sometimes even longer. And so we expect the large gate valve and the large butterfly valve market to behave very much like the Henry Pratt business where we have a fairly significant carry forward of backlog with longer fuses on big capital projects. And so I think that they call it, a meaningful impact in the current fiscal year, would be a misnomer and we look at it more in -- the things we are bidding now, 54, a 60-inch or a 72-inch valve being installed in fiscal 21. So I do not anticipate a huge lift this year for large valves.

Yeah. Okay. I appreciate it. I'll pass it on. Thank you.

Thank you.

Next question is from Deane Dray with RBC Capital Markets. Your line is now open.

Thank you. Good morning everyone.

Good morning, Deane.

Hey and just congrats on resolving that tax overhang. I know that was annoying and it did take cash to do it, but it is resolved. So just a moment of appreciation for that thanks.

Thank you.

So Scott, I was really interested in hearing more regarding when you listed all the different technologies at Mueller today that you're developing and between the Echologics, Metrology, the smart hydrants, Sentryx. So how will you and you would say you like to measure and manage? What's the deployment of these? What's the take rate of these technologies? What's the contribution either this year and the ramp in the next couple of years? I know each one of them is different, but from our perspective this is where all the growth is going to be, the higher growth, the higher margins that will come through. So, maybe in terms of triage, the most important ones, just expectations of take rates and growth and contribution and maybe we can start there please.

Okay. So that's, that's quite a lot. So let me speak in general Deane and then we can -- you can ask follow up questions. I think the most mature technologies that we have right now relate to obviously AMI being the most mature where there is a fair deal of take by water municipalities. That business has transitioned in my three years from about -- let's call it 70:30 between AMR and visual read to 30% AMI to now that the business has majority kind of AMI dependent software, revenue dependent, project management dependence. And so, which is the most mature, so when we talk about the meter business, we're really talking more about radios, collectors all this being a bigger portion of sales going forward. When you think about the next most mature, it would have to be in both pipe condition assessment and our fix leak detection from the [indiscernible]. Yes. But I think those two things in particular are kind of in their nascent stage of kind of exploding. I think people estimate that market to be between $100 million and $200 million today growing over the next Bluefield uses 19 to 30. So we'll use that. So, something that could be north of $1.5 billion by 2030. And, you have to look at pipe condition assessments and does that include the related services of repair of the pipes? Doesn't include the other aspects, but it's the next most mature and we really expect those two technologies for that business to kind of double every three to five years by the numbers. But we're starting with relatively small numbers and so its impact is not going to be as huge if you will in the near term. And then last but not least, I would take…

Scott, I know I asked a pretty complex question, but I admire how thoughtfully you clicked through all the different technologies. I really appreciate the answer and we do consider this to be the exciting part of the story and I'll stop there. Thank you.

Thank you.

Next question is from Bryan Blair with Oppenheimer. Your line is now open.

Good morning everyone. Nice start to the year.

Thanks Bryan.

I was hoping we could circle back on the quarterly cadence baked into your guide and I know you've touched on some of this, but you had a very strong first quarter, relatively easy second quarter comp. And then it, it seems like your guide contemplates flat to down operating profitability in the back half. So I guess two parts to that. One, am I correct in what is assumed in your guidance structure and two, if that is the case, what are the specific points of conservatism that, looking into the fiscal third and fourth quarter, admittedly more difficult comps, but on top of that, what drives the conservative stance?

Bryan, I'm going to give that to Martie. As you know, we don't guide to quarters, we guide to years. So I'm not sure what the inference is and I'll leave that to the higher mathematical brains in the room. Martie?

Well, I think just starting off, I think I'd understand one piece is certainly in our first quarter is the last quarter that we have Krausz as a additive on a year-over-year base. So as we move into the second half of our year, sorry, the last three quarters of our year, Krausz will have been in the prior year's results. So I think that certainly, a portion of what we saw with the growth rate in first quarter on net sales. And I think as you've heard with the guidance now towards the upper end of the net sales range that we gave with the baked in addition to Krausz this quarter that sort of implies continued organic net sales growth going forward. And we would say with that, it also implies continued growth from an adjusted EBITDA perspective as well without any particular guidance with respect to the quarters. Other than, as you know, we're typically going to see stronger growth in the second half of our year due to the seasonality of our business.

Okay. I appreciate the color there. And then, I'll also appreciate the additional detail you've offered on the large project investments. And particularly the 30 million in incremental gross profit step up. I just wanted to clarify that as we look out to 20 23 that is truly incremental as an additive to the -- more normalized margin progression you've spoken to upward of a 100 basis points of gross margin improvement each year via typical productivity initiatives and you are up there?

Right. So I kind of expected that question because it's -- so let me say that, it's mostly additive that there's -- think of it as a third of it coming from volume and absorption and incremental profit on that. Think about two thirds of it kind of coming from operational efficiency. So the question being asked, if I could restate it is, you outline 50 basis points net, 100 basis points of productivity a year, 50 basis points net after you reinvest in engineering and some of the other things. Can I use the 50 basis points and 20-ish million as the cumulative or is there some overlap? And the answer is there is a slight amount overlap. If you think about the math and you think about what's going on with appreciation and you think about the depreciation offset with it and then there is by definition incremental productivity that has to take place. And but I think for the purposes of modeling, I am confident that we can find the noise, if you will in other productivity initiatives and other capital projects that we still have baked in the out years that are not fully available for us to see today -- we can see the -- I trust from my 20 odd years of doing this that there will be cost savings projects that will allow us to say that this is out of it. No, I think you should think about it that way kind of the 50 basis net improvement and then the $30 million.

Okay. Excellent. And the last one from me, on capital deployment, your balance sheet is obviously in good shape you do have these large projects underway, but still have decent capacity. So I assume if something Krausz came along, you could pull the trigger on it in terms of deploying in that capital, would you at this stage of Krausz integration be able to take on another deal that size and the complexities that come with it?

Yes. I think what I said to everybody when we bought Krausz is that we would not do deals for 90 to 180 days until we saw how the -- whole world will be on that now. And I feel like the playbook from the team on the integration and where we are with integration that I'm eager to exercise those both muscles as an organization again. But, it's got to be the right deal at the right price. And so yes, we would nothing to disclose to that.

Got it. Thanks again.

Thank you.

Next question in the queue is from Joseph Giordano from Cowen. Your line is now open.

Good morning guys. This is actually [indiscernible] on for Joe. What's your outlook for profitability for tech for the rest of the year? And you guys have a longer term outlook as well?

Yes. So, we do not give guidance by segments and I found it to be kind of a trap in the past. And so I'm not going to get back and do it. But I will say that I expect tech to do exactly what it did in the first quarter, which is to show operational improvements, quarter-over-quarter-over-quarter-over-quarter through taking necessary actions both on the manufacturing floor in the market from a pricing perspective and from a deal point of view to make sure that we continuously improve profitability. I am not interested in being the largest meter manufacturer in the world and not making any money. I am interested in being profitable and we are going to continue that march. I think since I've gotten here. We've gone from a $15-ish million loss and we've been steadily merging that down at the same time, we steadily merge that down. We've launched the Sentryx. We've launched [indiscernible]. We've launched multiple radios in the LoRaWAN network. We've gotten a lot of really good technology out of the group that we can apply to infrastructures and I think that the team has done a good job showing good progress. We'll eventually get profitable, of course, that's why we invest. But I think that we're going to have some time less than I would point out, again, if you listen to Martie in her section, we know we've got ways to go in Echologics and continued investment there. It has to get scale in order to be profitable. And then I think the whole of the segment will be good.

Great. I appreciate the detailed answer and that certainly encouraging to see the margins improving there. And then when does the impact from price increases last year in infrastructure start to fade out? And do you guys have any more price increases planned for the year?

Yes. So, just to give you a reminder, this is sort of the last quarter where with a lot of our products, we've got the benefit of two price increases, the one we implemented back in September of 18, as well as the February of 19. So going forward, we have announced price increases for a number of our infrastructure products sort of in that February, March timeframe. And so I'd say from that piece, reasonably comparable on a year-over-year basis, but this would be the last where you'd see the benefit of a couple of price increases.

Okay, great. Thank you. If I could squeeze in just one quick one on the outlook for interest expense, I'm noticed it's about 3 million higher than what it was last quarter. Is this related to the capital interest or lower cash interest or what exactly is driving the increase?

I'd say largely -- certainly looking at the quarter for the non-cash adjustment for capitalized interest. And then, I think as well, just a small piece with just lower interest income outlook going forward.

Okay. Excellent. Thank you for your answers.

Next question is from Brian Lee with Goldman Sachs. Your line is now open.

Hey guys, thanks for taking the questions. Good morning. I guess starting with technology, in the Q1 conference was obviously [indiscernible], so I can appreciate the 5% revenue decline year-on-year. But just wondering how should we be thinking about growth in the segment for the next several quarters comp seemed to be getting easier here at least until you get to the fourth quarter. And then, just I guess higher level, do you expect technologies, [indiscernible] in line below or above the 35% consolidated view?

Yes. So I think in our prepared comments, what we said was that Metrology, you should expect lag performance year-over-year. And as I discussed, we're going to transition the business to more of the Ferguson kind of distribution model and we've got a lower backlog as we've ceased the elephant hunting at lower prices. And we've recognized the improved performance, we've recognized improved -- both from a cost perspective and from an operating perspective. So I think that we're going to continue to run the business that way. So you should think about the meter business kind of being flat for the year. The growth part of technologies ought to be in our fixed leak detection and our pipe condition assessment business. That's where we're focusing sales selling resources. That's where we're focusing our marketing resources so people can start to get a broader base acceptance of the Aquasure DX product line. And we've got quick penetration at San Jose, Connecticut and other big customers, marquee customers that are using this technology successfully to find leaks in their network. And this'll be the years of kind of getting it out into a much broader acceptance arena. So, that number, what that growth should be. We're not disclosing any of that for obvious reasons. And I think that we'll have relatively slower growth because of the flat meter business, which is the bulk of the -- which is the bulk of the segments today but won't be in the long run.

Okay. Helpful. Appreciate the color. And then, just the second question and I'll pass it on. I might've missed this, but the EBIT conversion margin in the quarter, we get to something like 18, if our math is correct, so wondering if that sounds like it's about in the right ballpark and if you have any thoughts on the trend line, kind of moving through the rest of the year in the context of your historical targets and 35% plus, you have a number of different initiatives moving through the year. So wondering how we should be thinking about that conversion margin amount? Thank you.

Look, I think overall, as we think about conversion margins, you can absolutely find some lumpiness as you look, think about it on a quarterly basis. So, I'd sort of -- I think you've got implicit with the guidance we've given where the conversion margin falls out from that. But certainly on a quarterly basis, there can be lumpiness.

Okay. Fair enough. Thanks guys.

Next question from the queue is from Walter Liptak with Seaport Global. Your line is now open.

All right, thanks. Good morning everyone. I wanted to ask about Krausz and you guys didn't call out what the contribution was either in percentage or whatever for the quarter. And since this is the last one, I think where it's incremental, I wonder if we can get that number?

Yes. I think what we said and we'll continue to say is that, you should think about it as consolidated EBITDA margins for -- into the business would be about equal. But we're not getting into what pieces are trading in, as we negotiate pockets of products where we're decidedly not disclosing that. So I think, Walter, if you think about it in the context of kind of at par with the consolidated results, you'd be pretty close.

Okay. All right, great. And then the CapEx startup cost, you called out, I think a $0.5 million of incremental costs in the first quarter. Is that something that continues on or was this lumpy where we got the extra costs this quarter but then they ramp back down in the second and third quarter?

What I would say we did, we called out roughly $500,000 this quarter for the large casting foundry, which includes depreciation. And as we said, we expect to start production by the end of the second quarter. And what I would say is startup costs -- our expected startup costs for the balance of the year are incorporated into the guidance that we have provided.

Okay. Yes, I heard that. I guess the question is, $0.5 million keep ramping. Like, is it another $0.5 million or more in the second quarter and then continuing to ramp through the year?

Yes. What we have -- we called out the dollar amount in the first quarter. We do expect more through the balance of the year and that is incorporated in the guidance that we have just provided.

Okay. Okay. Got it. If I could just ask the last one on Ferguson and the tech margins, is there something structural that changes with the Ferguson relationship where you have better visibility to profitability in the tech segment now?

No, I wouldn't say it's better visibility or that the lumpiness of the jobs will go away or anything like that. I think what it is, is that, I'm afraid it's the way we used to do it. You go elephant hunting for these multi-year contracts and you look at the average price point on a contract, you look at the average price point in the replenishment market and there's a significant spread. I'm not going to say how much, but just -- it's better business. It's better business from a flow perspective, and it's better business from a yield perspective. And so yes, it's now got some of the complexity and we would take more of it. I'd be happy to have more distribution business.

Okay, great. Sounds good. Thank you.

Thank you.

And the last question in the queue is from Jose Garza of Gabelli. Your line is now open.

Hey, good morning guys.

Good morning, Jose.

Hey Scott, I noticed you guys bought in that Pratt JV. Just I guess talk about if kind of any structural difference that you guys are undertaking now that you guys kind of bought that in small amount?

Yes. So let me just start off. So this was a joint venture that we entered into in 2014. Just to be clear, as you think about it from a financial statement perspective, since we entered into that joint venture, we have always consolidated the results within our operations. So, as you look at it, you won't see anything different from that perspective. It was just the small amount of the equity interest that was factored out. But we did acquire the balance, the non-controlling interest that we had about 51%. It was just a little over $5 million. It's a small business. It's part of our Pratt brand and gives us capabilities largely in the industrial sale segment of the business. And we think it's a good opportunity. It's a business that we've certainly watched for the last five years. And we'll continue to look to grow that business and integrated as we need to.

So I guess nothing strategic difference?

Well, I would say the strategic rationale to take it over was to be in control of both the brand and the product offering. We liked the industrial space. There are certain applications there that we think have long-term growth capabilities. And that we think we can also bring some technology too that will give us an ability to be successful against the traditional competitors. But, are you asking me, are we going to go into flow control in the industrial and bump against the Emerson's et cetera? No, not interested in doing it. We have our niche. We believe it's got some attractiveness to it that's why we bought it out.

Okay, fair enough. And then you talked quite a bit about the technologies new product introductions. I guess if you could talk about on the infrastructure side your new product pipeline kind of going into this and this year and then compared to where you've been?

Yes. I think that we've been working tremendously. I'm not going to say or announce something here that we plan to announce at ACE or something, but I think you've seen at the last couple of ACEs, some new restraints. You've seen some integration of hydrants and the Krausz products, you're seeing some integration of valves and the gross products. You've seen some early indications of a new insertion valve. There's been many, many things that the infrastructure team has been working on that over the past three or four products entry windows we have launched. And the pipeline is full for the year. That is to say that, when we review our product development pipeline and we look at our engineering resource availability, we currently set for the year at a deficit. That is, we have more projects than we have resources that we go through the prioritization process and come up with what we'll be launching next. And you obviously have come to ACE, you come to our WesTech, hopefully you'll see some things you have not seen before.

Then we would be there. Thanks very much guys.

Thank you, Jose.

Thanks.

Operator, thank you. I believe that's end of the queue and you can wrap up now.

This concludes today's call. Thank you for your participation. You may disconnect at this time.