Good morning, ladies and gentlemen, and welcome to Advanced Drainage Systems Fourth Quarter and Fiscal Year 2024 Results Conference Call. My name is Danica and I am your operator for today's call. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Allison Justice, Director of Investor Relations. Ma'am, you may begin.

Thank you, and good morning. With me today, I have Scott Barbour, our President and CEO; and Scott Cottrill, our CFO. I would also like to remind you that, we will discuss forward-looking statements. Actual results may differ materially from those forward-looking statements because of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K filed with the SEC. While we may update forward-looking statements in the future, we disclaim any obligation to do so. You should not place undue reliance on these forward-looking statements, all of which speak only as of today. Lastly, the press release we issued earlier this morning is posted on the Investor Relations section of our website. A copy of the release has also been included in an 8-K submitted to the SEC. We will make a replay of this conference call available via webcast on the company's website. With that, I'll turn the call over to Scott Barbour.

Thank you, Allison. And good morning, everyone. Thank you all for joining us on today's call. Mike Higgins, Vice President of Investor Relations and Corporate Strategy, is in New York this morning at RBC's Future of Water Conference. Mike is participating in a panel discussion on Future Proofing Water Infrastructure, a very important topic given our position in this market. So we are dividing and conquering this morning with Mike in New York and Allison - excuse me, in-charges Scott. C and I here in Ohio. We are pleased to present the fiscal 2024 results on today's call. Both revenue and adjusted EBITDA results came in above our guidance range at $2.9 billion and $923 million, respectively, marking ADS's ninth consecutive year of record profitability. As you can see on Slide 4, end market demand improved significantly in the second half of fiscal 2024, resulting in a 3% increase in second half revenue, primarily due to the notable improvement in the residential and infrastructure end markets, which grew 8% and 14%, respectively. The non-residential, agriculture and international end markets also improved in the second half of the year. With the improvement in end market demand, we were able to partially offset the weak start to the year, resulting in a full year revenue decrease of just 6% overall. Most notably, fiscal 2024 adjusted EBITDA increased 2% to $923 million and adjusted EBITDA margin increased 270 basis points to 32.1%, despite a year-over-year revenue decline. These strong profitability results are due to better-than-expected performance from an Infiltrator business and Allied Products portfolio, effective management of price cost, solid operational execution and the benefit of previous capital investments in the business. Importantly, this year's financial results highlight the resiliency of the ADS business model, demonstrating our ability to achieve strong profitability levels…

Thanks, Scott. The fourth quarter revenue results were strong. As Scott mentioned, we saw the return of volume across - growth across all of our end markets. Infiltrator's revenue increased 22% in the quarter with double-digit growth in both chamber and tank products. On the ADS side, we continue to see exceptional performance from our high-performance polypropylene pipe, which is really the tip of the spear in converting the market from traditional materials to ADS's lighter, more efficient products. The price-cost performance during the quarter was in line with our expectations. Equally of note, this is the second quarter in a row of favorable manufacturing costs on a year-over-year basis, as we are seeing the benefits of fixed cost absorption with the increased volume as well as improved operational efficiency from investments we've made in new equipment, automation and tooling. As Scott noted, Infiltrator is operating very efficiently, benefiting from the newer more efficient equipment we've invested in since the acquisition. In addition, due to the strong results for fiscal 2024, and to reward the service and dedication of our employees, we paid a discretionary bonus to employees who are not part of our annual incentive compensation plans, resulting in approximately $4 million of additional compensation costs in the quarter. On Slide 9, we present free cash flow. We generated $534 million of free cash flow during fiscal 2024 compared to $541 million in the prior year. Capital spending increased 10% to $184 million as we continue to make investments to increase automation, grow manufacturing and recycling capacity and increase productivity as well as to build the new world-class engineering and technology center here in Hilliard, Ohio. In fiscal 2025, we expect to spend between $250 million and $300 million as we build the new manufacturing facility in Florida and…

[Operator Instructions] Your first question comes from Mike Halloran with Baird. Please go ahead.

Hi, good morning, everyone.

Good morning.

So a couple of things here. First, can we just have a conversation about, how you're thinking the year plays out in terms of cadencing, both on the revenue and the margin line, front half, back half weighting, are we looking at relatively normal seasonality. And you obviously just mentioned the tough 1Q margin comp. Are we just expecting a little bit more balance and normal seasonality on both those categories as we work through the year. Any kind of help on that would be great.

Yes, Mike, Scott C here. I would look at the revenue side of the house consistent with prior years, where 55% to 60% of our revenue is in the first half of the year. So that's how I would think about the phasing. I think on the margin phasing, as I tried to indicate in my prepared remarks, we look at the first quarter as the most challenging. You'll remember last year was 36% - over 36%, EBITDA margins in the first quarter, a record quarter, not just first quarter, but a record quarter for us. And again, based on the price cost comparison we'll have on a year-over-year basis, we see that as by far the most challenging quarter from a margin expansion perspective. And then as we look at Q2 through Q4, we look at those as the best opportunity for margin expansion opportunities as we move through the year. So that's the way I would think about it.

No, that makes sense. And then maybe just a few more thoughts on the non-res landscape as you sit here today. Obviously, you return to growth this quarter, expectations for more - some modest growth next year. Could you talk about two things here. One, what are the customers saying, what are your sales guys in the field sales engineers saying. And then secondly, how are you thinking about the internal rates returns for the client base today and where that stands as far as impacting investment decisions and if you're getting any more stability there.

So Mike, Scott Barbour here. I'd say on the non-res side, it's much like we have been seeing over the last several months in terms of release of projects, how clients, customers feel about releasing projects and going forward with projects. I think it's really more of the same. Those projects like the big ones, the onshoring, the - those that are owned buildings versus and fully occupied like our engineering center, those kind of things move and we see that around the country. So I wouldn't say that's inflected up a lot, but just a steady pace slightly up into the right. Our quote and order activity is good, probably slightly stronger than I just described is what we're seeing. And so our engineering - our sales force, our engineering, our business development resources that are focused on the onshoring projects, the large projects, like I mentioned these airports, I mean that's a lot of airports going on. So that all is - we feel pretty darn good about that. And here, non-res is obviously a big segment for us. We're across a lot of different sub segments. We're pretty agile in the market where we can move resources from one sub segment to another. And I think we're executing that pretty well on a day-in and day-out basis. And we're at that front end of the cycle. So that's why I kind of think we're in a progressively better state. That's why I say kind of slightly up into the right. This guidance on non-res does not contemplate some massive interest rate move. Yes, that makes sense. We're not counting on five interest rate cuts or something like that. I mean, we're kind of sailing the ship with the wind that we have.

Would you say it's fair to characterize this as, you expect stability from current levels on the non-res side and some of the improved quoting and order activity that you've just mentioned. Is that contemplated in the guidance as we sit here today.

Yes. It contemplated in the guidance. And if those things were favorable, it would nudge us towards the upper end of that.

Got it. Great. We appreciate it. Sorry, go ahead.

The reason I say it that way, Mike, is it's such a big segment for us, that small moves and that small positive moves in that segment nudge us pretty hard and quickly.

Yes. Makes a lot of sense. Thanks, gentlemen. Appreciate it.

Thanks, Mike.

Your next question comes from Matthew Bouley with Barclays. Please go ahead.

Good morning, everyone. Thank you for taking the questions. I wanted to ask around the guide. I think in dollars, you're speaking to EBITDA up nearly $40 million for the year. And if I look at Q4, of course, both volumes and the manufacturing transportation line, I think together got you $40 million just in the quarter. And I know that's on an easier comp and that's kind of what my question is. But as we think about a $40 million increase to earnings or to EBITDA over the next year, you know, if you've got these kind of positive volumes coming through and sounded like April trends are continuing with what you just saw, how should we think about that breakout of the volume leverage and the level of fixed cost absorption that you think you can achieve and sort of how does that play into that bridge. Thank you.

Yes, Matt, Scott C here. Yes, you're thinking about it the right way. When you look at that EBITDA bridge next year, you're going to see a good volume growth. We talked about the end markets, you know, infrastructure, resi, non-res. So there'll be nice growth year-over-year there. We'll get some nice fixed cost absorption out of that, that will help that manufacturing bar as you look at that EBITDA bridge. But it's also the investments we've made in the new tooling, the new machineries and all of the other efficiency initiatives that will help out with that as well. The headwinds on a year-over-year dollar basis when you look at that EBITDA walk from the $9.23 to the midpoint at the $9.60 is going to be additional challenges on the price cost side, which is fine. We deal with that every year. We got to deal with that as we move forward. It's constant battle as to kind of market share versus continuing to move that as we move forward. And then on the SG&A side, think kind of a - we were about 13% SG&A as a percent of revenue for this year, think about that being flat next year. And when you've got 3% to 4% growth at the midpoint, then obviously that entails some dollar growth as SG&A now. Again, when we talk to that, that's because we're making investments in systems and in technology, improving our customer service. We're also making investments in material science, and engineering, and innovation to accelerate and get those things fully staffed with that engineering technology center beginning here in the next couple of months. So a lot of investments, we're investing in the business. There's some cost associated with that. So that's the way I would look at it. Investing in the business with a little bit of headwind year-over-year on a price-cost basis.

Perfect. Okay. That's super helpful. Thank you for that, Scott. I guess second one kind of maybe sticking on the theme. I know it was asked around the revenue cadence earlier, but you know, so you've got the price cost headwind at the beginning of the year, as you mentioned on the tougher comp. I guess, number one, it would be helpful if you could quantify that to any degree you can. But it also sounds like if you're entering the year with this type of volumes and maybe the volume comps are in a better place to begin the year. So as I look from an EBITDA perspective, is the implication that most of the EBITDA growth in your guidance is in the first half of the year and then you'd be sort of flatter in the second half of the year or would you expect that kind of EBITDA dollar growth to be kind of spread more ratably through the year. Thank you.

Yes. I would say, much like we talked about the revenue being mostly 55% to 60% in the first half. I think the EBITDA might be a little bit north of where we'll see the revenue phasing come in, but not significantly, Matt, as you look at it and you model it out. It's just going to be an interesting discussion on EBITDA dollars versus EBITDA margin as you look at it. So that's the way I would model it out.

All right. Got it. Thanks and good luck.

Our next question comes from Garik Shmois with Loop Capital. Please go ahead.

Hi, thanks. Congrats on the quarter. I wanted to ask first, just you provide a little bit more color just on segment margin expectations in '25, maybe more specifically, just how sustainable these marginal levels are and maybe a path to even more margin expansion, particularly in Allied and Infiltrator, just given how strong the breakout has been over the last year.

Yes. Hi, Garik, Scott C here. Absolutely. We're - there is such still margin expansion opportunity in this business, and that's why we continue to double down on investments. So we look forward to that. If you look at those segment margins in the fourth quarter, you'll note that the pipe segment was down 50 bps in the fourth quarter year-over-year. But I mentioned that discretionary bonus we paid employees of $4 million of compensation cost in the quarter. A lot of that got recorded in that pipe segment. You normalize for that, and it was up on a margin basis. So again, we look at Infiltrator, great opportunities to grow. Scott mentioned the new product that they've introduced. Innovation is key to what these folks do and what they'll continue to do. On the Allied side, wow, we talk a lot about StormTech, but Nylo Fittings, all of those areas. We're making big investments. We tend to talk a lot about the pipe side of the business and the investments we're making in machines and tooling, but we're doubling down on the Allied side as well, same with Infiltrator on a bunch of innovation and efficiency projects that we've got underway. So again, we get really excited about the opportunities in front of us and we start getting the volume coming back, not in a 3% to 4% clip, but kind of a return to that high single digit 8% clip for this business and the leverage that it gets, we get really excited. So a lot of opportunities, a lot of initiatives, a lot of things that this management team and board are focused on. And the best part of that is the cash and the capital allocation piece that gets generated from all those efforts and hard work that our employees do. And again, I would look at that as being something that we'll optimize here over the next 12 months as well.

Got it. And then just wondering if you could speak to your share gains, both in the quarter and what you're anticipating for fiscal '25 just given how nicely volumes have come back, particularly in some of the residential end markets. But just curious, do you think that you're gaining share at an above normal clip for the company at this point. Is that in your guidance or how should we think about your share opportunities here?

So, Garik. Good morning. This is Scott. Scott B. I would say, Infiltrator continues to be a steady share gain with new tank products and the new ECOPOD product in the active onsite treatment segment. Allied Products continued to gain share. I think we gained a lot of share in Allied products in over the last year of our last FY '24, and I say that because it grew so nicely versus relative to the pipe. And the pipe is kind of the market. But across all of our categories in Allied Products, I feel like we gained share, particularly in water quality, which was up like 15% year-over-year. In Pipe, I think we're probably gaining some share at the normal rate, the normal conversion rate today. This is led by our HP product, that's the polypropylene product, the tip of the spear when we compete against reinforced concrete pipe. And I definitely think we're gaining share there versus a concrete pipe. The black pipe, the N12 is a bit more of a regional battle kind of ground war, you know, region by region, but we're certainly holding our own versus our normal conversion and overall plastic pipe versus traditional materials, market model.

No, that sounds good. I appreciate the help. Best of luck. Thanks guys.

Thanks.

All right, our next question comes from Bryan Blair with Oppenheimer. Please go ahead.

Thank you. Good morning, guys.

Good morning.

Last question actually offers a pretty good segue to one of mine. Share gains and new product intros are, of course, linked for you again. And maybe offer a little more color on the influence of new product intros in terms of the outgrowth of Infiltrator and Allied Products. You believe you mentioned ECOPOD growing 40% or so within Infiltrator. Curious if you're willing to quantify the total contribution of new product growth to - on 4Q performance. And then similarly, you had mentioned the RWS partnership is tracking very well. Any detail you can offer there in terms of top-line impact in the quarter or fiscal '25 outlook, which I believe would entail both Allied and Infiltrator.

All right. A lot to unpack there. This is Scott B.

There is both.

Yes. So here's how I would answer that. Often a brand-new product is working off of a small base. So you can get really good growth rates and the overall top-line revenue, impact isn't huge. But what you're establishing is leadership in those local markets. And that's what we're doing with the Infiltrator, ECOPOD product in Florida, in these sensitive regions that have these higher nitrogen removal standards. So you work on the standards, you get the right product in there, you get your distribution all fired up. And while the - it isn't big at the beginning, Bryan, it's building that - it's building that market participation, which makes it more difficult for others to come in. And that's really what we're doing there. Now we say on the tanks with Infiltrator, and we tooled two new tank models over the last year that's part of that invested capital that we did, these tools aren't cheap. They're not cheap at all. And by the way, they're technically very, very sophisticated and to get them ramped up is quite an engineering effort. We have one of the two ramped up and going and it's really taken off. So it's kind of meaningfully moving that tank that - they will meaningfully move the tank sales this year for Infiltrator, and we're excited to have that. The second one comes on, I think, later this summer and the 1250, so we're going to be in great shape on that. And then, I think the other was on the Allied Products and how those might be growing. We just introduced a new SC-800 StormTech model kind of better product performance in terms of cubic feet of storage, better costs, a higher value proposition. That one is coming along pretty darn quick. Again, another…

Yes, absolutely. All very helpful color. And also be great to hear a bit more about infrastructure. Revenue is still moving in the right direction. It sounds like your team is quite confident in the outlook for fiscal '25, and I'm sure that entails a solid growth across your traditional states and exposures. Curious in terms of the high single-digits plus, the plus prospect there, what influence Texas has on that and how momentum has built in that state and just how the pipeline looks overall.

So pipeline looks good, no pun intended. For infrastructure, I refer back to two plus years ago when we stood up a sales team and market management around infrastructure. And Texas was a piece of that, but also a lot of these other things we're doing like the airport projects are a great example. And we sell a lot of pipe and a lot of StormTech on those airport projects. And we have a great value proposition for airports because of our transportation efficiencies and needing less trucks to get our products onto an airport site. So my point is, we've invested starting two plus years ago in infrastructure. We've gained some share there. Texas order rates are good. It's a battle there. I mean, that's a competitive situation. If those are kind of long lead projects, but we're winning some projects and we're getting stuff in the hands of contractors. We're working to influence the market. We were down there three weeks ago for a customer event, and we saw lots of really great customers at that event, many of them in the infrastructure. We have a really nice job going on at Houston Hobby Airport right now, which is a several million-dollar project. That kind of work is a result of our infrastructure team we stood up doing it. So we'd like to get over the plus. Allison doesn't like double-digit sometimes on these calls. I'm looking at her, because we feel like we got a good spot in that infrastructure space right now. And again, you know, and I'm kind of expanding on this, Bryan, I apologize. But you know, we are able to make those investments at ADS, starting two plus years ago. In salespeople, business development, the programs, the tooling, all that kind of stuff. It's that cash generation Scott talked about, which I think is a really cool thing about our model is it really allows us to make those kind of investments that we know take a little while to pay off. But the payoff - I mean, I think we're delivering on those investments that we've made over the years.

All very encouraging. And if I can slip in one more, just given you kind of teed it up. The airport projects, you mentioned a lot. If we think about the path to the double-digits that Allison is currently pushing back on, but may be for the average content per airport projects like you said 20 or 20 plus of those, and that's a better pending, I assume that's quite material.

I mean, yes. And those are kind of long lead projects. You don't get the - you don't start on those like on Monday and you get the order Friday. I mean, they're long lead projects and there's a lot of competitive quoting in that and stuff. But we're pretty good at that. And if all 27 of those hit, Allison might let me nudge it above, I don't know, but I don't think all 27 will hit this year. But those are the kinds of things that have to happen for us to nudge it over the line. We're not going to quit selling, I can tell you that.

Completely understood.

All right. Thanks, Bryan.

Our next question comes from John Lovallo with UBS. Please go ahead.

Good morning, guys. Thank you for taking my questions as well. Maybe the first one just kind of focusing in on the resi side, where you expect mid-single-digit year-over-year increase in 2025. I think roughly a third of that resi business, if I remember correctly, is multifamily, which could be challenged here over the near term. So how are you sort of thinking about the multifamily component as we move forward here.

Good morning, John. Scott B here. We anticipated this question. So if you - if you look at the - we told you the ADS piece is 14% of sales, about a third of that 14%, so let's call it 5% of our total sales are in the multifamily segment. And it's down. So in our guidance, we're contemplating that market being off double digit. And it's a good market for us. We participate well in that across a lot of different products. It hasn't been great for the last 12 months. We don't think it's going to get any better in the next 12. So we're kind of - that kind of we are using this highly agile salesforce that we have, to have them kind of point towards other segments that are growing. So we think the impact is relatively minimal and we can overcome any kind of degradation at the topline or the bottom line from that market in these other opportunities and was factored into our guidance.

Yes, definitely in our guidance.

Okay. That's helpful. And then margins for the company have benefited in recent quarters and you guys have talked about this from a little bit less pipe mix as opposed to Allied Products and Infiltrator, where the margins are a bit higher. So if we think about what's embedded in the 2025 outlook. How are you expecting that mix to kind of trend. I mean, is there going to be some normalization there or how should we think about it?

I would think mostly consistent with what we've seen historically with Allied particularly growing above kind of the Pipe business. Infiltrator as well will be part of that residential mid-single-digit growth, algorithm that we talked about earlier. So again, largely consistent. Obviously, there's always a little bit of tweaking that goes on there based on year-over-year comps, but largely consistent. I think you'll see Allied be the outperformer this year, more so than it has been in the past.

And if I could add something, John. You've been around us a while. You know, our basic formula is, grow Pipe a little bit better than the market. We'd like to - we target two points better than the market, really led by the HP, grow Allied Products and Infiltrator kind of that high-single digits. And if we do that all correctly, we kind of mix up and we get into that, to a well above mid-single digit type of growth. That's our long-term formula. And we're not going to - we're - this guidance doesn't change that at all. It's plus or minus every year a little bit, but that's our basic, most fundamental strategy.

Makes sense. Thank you, guys.

Hi, John.

Yes, thank you.

Our next question comes from David Tarantino with KeyBanc. Please go ahead.

Hi, good morning, everyone.

Good morning.

Maybe just to - maybe just start on the CapEx investments. Can we frame where we are in terms of the timeline here, relative kind of the elevated investments, how much more runway do we have to come. And how do - should we expect this to show through on margins over-time. How much is kind of in the margins today and what's in the guide?

David, Scott Barbour here. You look at the Infiltrator margins, and what's happened with those over the last several years. There's a nice portion of that - that is attributable to the investments we made in 2019 approved - literally approved two weeks after the acquisition. We knew we had to make these investments. Roy and I knew it, as we closed or well before we closed. Those investments that we made, I think, were like $65 million or something like that. I mean, those are paying off today in better designs, better tooling, more efficiency in manufacturing, lower headcount through the automation we've done. Now not all of the improvement in the infiltrator is due to that, but a meaningful amount of it is. And so I think as we spend these elevated cap - elevated capital and we're still investing in Infiltrator, but we're rebuilding machinery in the ADS network. We bought two new lines or several new lines, some of them still ramping, some of them producing pretty darn well. The CapEx that we're spending on new tooling in the ADS network, in our recycling activities, we're still early in that whole kind of rollout. And one difficulty of - we got to spread those investments over many facilities in the ADS network because of the nature of the product line versus in really one or two primary facilities there in Kentucky. So the nature of the payoff is it maybe as dramatic. But again, builds over time in that ADS network.

David, what I would add to that is the fact that when we do our CapEx and we do our modeling, it's kind of a 20% IRR, 15% MIR threshold. You could also see where the team has effectively put this capital to work based on our return on invested capital metric as well and how that's continuing to go North by Northeast as we go. It's not - when we look at return on invested capital, it's important to understand profitability in that numerator for sure, but we want to also do that while we're investing heavily in the business through innovation, efficiency and all the other areas we mentioned. And we've shown we can do that. And that's what we're going to continue to do. And we think that drives really good shareholder value and total shareholder returns. So your question about elevated, sure. In our guide $250 million to $300 million, it will be elevated again this year for all the right reasons. I mean, doing a new facility in Florida with our HP product, tip of the spear on conversion, absolutely the right use of our capital. Debottlenecking resin, absolutely the right use of our capital. Investing in innovation, new products, supporting our distribution partners, absolutely the right use of our capital. So as to how you model that from a margin expansion EBITDA growth perspective, again, use those return metrics as a guide, but that's how we think about it. And again, it's a really good future. Scott made a good point earlier about, we can talk about this next year coming up, which is important. But when you look at the three years in our strategies and the investments we're making, again, we remain bullish and excited.

Okay, great. That's super helpful. And then maybe just to put a finer point on some of that price cost commentary. Could you just give us an update on what you're seeing from a pricing perspective in the channel kind of both on your products and from competitive - competitors' products.

I would say, we always mentioned it's a local business. It's kind of that hand-to-hand combat. Our sales team, again, the best I've ever worked with, they do a great job. And again, it's constantly measuring competition and market and share penetration. And we do that continually, constantly. We do it every year. We'll continue to work it. I would generally say that, when we look at that price cost dynamic, resin cost has kind of flattened out as we - as we go into this year on a year-over-year basis. We talked about the first quarter comps on a pricing or yield perspective as we referred to it being by far our most challenged. As you remember, this past year fiscal '24, we held onto most of our pricing as we talked about it and didn't see any of that price cost start going away on a year-over-year basis till Q2. So right now, I would say that by and large, when you adjust for mix and seasonality, it's hanging in there. There's not big moves off of where we've been as we've ended '24, as we turn the corner into '25.

Okay, great. Thank you.

Our last question comes from Noah Merkousko with Stephens Incorporated. Please go ahead.

Good morning. Congrats on the strong results, and thanks for taking my questions. So first, it sounds like pricing is still performing as expected. What are you assuming for price in the guide as we look at fiscal '25.

So as we talked about the way we talk about pricing is price cost and material cost. And again, the way to look at it, and again, I like using a visualize the EBITDA bridge for the '25 versus '24, if you were to fast forward to the end of the year. And again, price cost will be a headwind on a year-over-year basis, primarily from a first quarter year-over-year comp perspective, and that's the way to think about it. And again, we know that it's in our forecast, it's in our guide. But again, we'll overcome that with really - we talked about the end market growth that we've got in our guide. We've talked about the manufacturing efficiencies and absorption - fixed cost absorption we plan on getting. And those are all in there that lead us to that $923 of EBITDA in fiscal '24, growing up to the $960 at the midpoint of our guidance range. So that's how I would think about it.

Got it. That makes sense. Switching gears here, it sounds like infrastructure clearly very strong growth as you look forward. I know Texas was a big win a few years ago. So maybe just kind of give us an update on your efforts to gain DOT approval for using your products. Should we expect maybe any more states to kind of come on board here as we look forward.

Scott, this is Scott Barbour. Noah. I - no, there's no big - I mean, Texas was so big because it's the biggest pipe market in the country and all that stuff. We've talked a lot about that. So there's no other really huge state. What we - what I would say we're really focused on is where we do have good approvals, and we feel like we're under-participated relative to the strength of our approvals. California is the example we use often. We're really putting together as many initiatives as we, as we can to kind of to do that. The other thing that we're focused on from an approval standpoint is municipals, the highly localized, where you might have a really - you might have a county, even in a great state like Florida, there's some big counties where we don't do as well as we think we should. There's some - there's examples like that everywhere. And so we'll be focused on those. We have a good-sized team out there working this every day. And so on any given year, there'll be tens of municipal and county approvals that will come our way. And in our model, that gives us kind of that approval and then we got to go work on acceptance. And that's really, I would say, a big part of our focus is on getting that acceptance at the contractor in the engineer level so that we win the bids.

Got it. That all makes sense. Thanks for the time and good luck with the rest of the year.

Okay. Thank you.

Thanks, Noah.

I will now turn the call over to Scott Barbour for closing remarks.

All right. Thank you very much. So we really appreciate everyone participating today and we closed up the year strong. We're pretty proud of the results in FY '24. Our organization executed well. You know everything, not everything, but a lot of things went right for us as we particularly worked that second half of the year and it came in slightly better than our guide, but I think we're kind of doing what we say we're going to do. As we look into the next year, I think you hear from Scott and I, we're pretty optimistic and confident about the - not only the long-term future, but the short-term future for us. It remains our focus to execute well on the capital, you know, in the field, in our factories, these things we got to do those well every day. And that's what we're - that's what we're all about. So I think as we go through this year, it will unfold. There'll be some twists and turns, but we'll manage those. One of the things I've been telling the team is, you know, we got to be agile. We got to be agile because things happen during the year and you're going to have to adjust to those, keeping the - that planned in North Star in front of us and that's what we'll do. So thank you. We look forward to the calls later on today and seeing you guys around. So we appreciate the time today.

And that concludes today's call. Thank you all for joining. You may now disconnect.