Good morning, and welcome to the Rexnord Fourth Quarter Fiscal 2018 Earnings Results Conference Call with Todd Adams, President and Chief Executive Officer; Mark Peterson, Senior Vice President and Chief Financial Officer; and Rob McCarthy, Vice President of Investor Relations for Rexnord. This call is being recorded and will be available on replay for a period of two weeks. The phone numbers for the replay can be found in the earnings release the company filed in an 8-K with the SEC yesterday, May 14th. At this time, for opening remarks and introductions, I’ll turn the call over to Rob McCarthy.

Good morning, and welcome, everyone. Before we get started, I need to remind you that this call contains certain forward-looking statements that are subject to the Safe Harbor language contained in the press release that we issued yesterday afternoon as well as in our filings with the SEC. In addition, some comparisons will refer to non-GAAP measures. Our earnings release and SEC filings contain additional information about these non-GAAP measures, why we use them and why we believe they are helpful to investors, and contain reconciliations to the corresponding GAAP data. Consistent with prior quarters, we will speak to core growth, adjusted EBITDA, adjusted earnings per share and free cash flow as we feel these non-GAAP metrics provide a better understanding of our operating results. However, these measures are not a substitute for GAAP data, and we urge you to review the GAAP information in our earnings release and 10-Q. Please note that the presentation of our operating results includes adjustments to GAAP reporting for the impact of the RHF non-core product line in our Water Management segment that we exited during our fiscal 2017 in order to enable investors to better understand and assess our continuing core operating results. This is the last quarter in which the RHF product line exits will have an effect on our year-over-year comparison. Today’s call will provide an update on our strategic execution, our overall core performance for the fourth quarter of our fiscal 2018, and our initial outlook for our fiscal year 2019. We’ll cover some specifics on the two platforms, followed by selected highlights from our financial statements and our cash flow. And afterwards, we will open up the call for your questions. With that, I’m pleased to turn the call over to Todd Adams, President and CEO of Rexnord.

Thanks, Rob, and good morning, everyone. As you hopefully saw in our release last night, our fourth quarter results capital was a strong year for Rexnord with our core growth accelerating from the year, our adjusted EBITDA exceeding our guidance and our free cash flow growing 33% year-over-year to $188 million. We’re seeing reasonable growth in most of our served end markets and more importantly, our organic initiatives around innovation, cost reduction and commercial excellence are beginning to read through. Incremental to that and as we’ve been previewing with you the past couple of quarters, this morning will take you through the next phase of our supply chain optimization and footprint repositioning initiative. One that will reduce our structural fixed cost by another $15 million over next year with a very high return and with less complexity than scope for one. Finally, we’re initiating our financial outlook for fiscal 2019 that includes the decision to prioritize our focus within the Water Management platform around our Zurn business and exit VAG. Our outlook for fiscal year 2019 includes mid-single-digit core growth, both acquisitions and currency will be on top of that, EBITDA in the range of $420 million to $440 million and another year of robust free cash flow. Again, just for clarity, our guidance excludes VAG, which we think will generate about $230 million of revenues with a high single-digit EBITDA margin over the next year. Looking at the fourth quarter in isolation, sales of $575 million included core growth of 7% and were up 14% on a reported basis and were at the higher end of our expectations for the quarter. We sustained 6% core growth in our PMC platform and the core growth in our Water Management platform accelerated to 8% and 7%, excluding VAG. We are able…

Thanks, Todd. Please turn to Slide number 8. On a consolidated basis, our fourth quarter of fiscal 2018 financial results were certainly ahead of our expectations. Our core sales increased 7% on a year-over-year basis. Our adjusted EBITDA increased 13% in the prior year fourth quarter to $111 million and our adjusted earnings per share increased by 20% to $0.43. For the full year, our total revenue grew 8% with core growth improving the 5%. Adjusted EBITDA increased 13% year-over-year to $390 million and our margins increased by 70 basis points to 18.9%. Adjusted EPS increased to $1.39. Let’s turn to Slide number 9. Our outlook for fiscal 2019 incorporates mid single-digit core growth – sales growth and 9% to 14% growth in our comparable adjusted EBITDA to a range from $420 million to $440 million and we expect to deliver another year with free cash flow to net income. Please note that our outlook excludes our VAG operations, which we anticipate reporting discontinued operations when we report the upcoming first quarter of our fiscal 2019. Moving to Slide 10. Here, representing a bridge into midpoint of our fiscal 2019 outlook for adjusted EBITDA. At the end [ph] of the slide, the jumping off point for adjusted for the required adoption in our fiscal 2019 of an accounting standard that changes the P&L geography of certain pension accounting items and requires a statement of the prior year, we reported each quarter with an overall annual drag of approximately $3 million to our fiscal 2018. In addition, we are removing VAG from the FY 2018 reported EBITDA number as our fiscal 2019 outlook excludes the VAG operations. The key elements of the bridge include incremental year-over-year benefit from the fiscal 2018 acquisitions of Centa and World Dryer and the overall net…

[Operator Instructions] Okay. And our first question is from Jeff Hammond from KeyBanc Capital Markets.

Hey. Good morning guys.

Hey, Jeff, apologize everyone, that somebody hit the drop button instead of the volume button, now would be neat, so my mistake.

That’s okay.

Good morning, Jeff.

So, just, I think you’ve highlighted the aerospace piece as part of SCOFR 2.0 and PMC, but can you talk about the split between Zurn and PMC in terms of the spend and savings for SCOFR 2.0. And then just as you look at Zurn on the standalone margins, it’s very good out of the gate as we see them alone. What’s kind of a long run margin opportunity for Zurn from your perspective?

Sure. The way to think about the split between the cost and the benefit amidst for two platforms, it’s probably two thirds PMC, one third Water Management, both on the cost and the benefits side, Jeff. And in terms of the long-term margin runway, we continue to see, I would say, reasonable demand. The combination of that with the SCOFR reductions and ongoing new products we think gives us runway for a bit. And I don’t know the top is another 200 basis points or another 300 basis points. But clearly, the business is performing well and the things we’re doing around the cost structure as well as new products we think give us pretty good confidence in our ability to continue to expand margins over time.

Okay, great. And then how should we think about incremental margins in PMC within the fiscal 2019 guidance? Thanks.

Jeff, this is Mark. I think the incremental we talked about PMC in the past being 30% to 35%, I think on a core basisstill see from the better analysis for SCOFR one benefits coming thorough in some early benefit from SCOFR 2.0. So think about incremental above that 30% to 35% range for the full year of PMC, Jeff.

And Jeff, you recall the margins will be more pronounced in the first half of the year as we pick up the full run rate in our first half. And so that’s what’s driving the incrementals for the year, but it’s more front half of the year weighted.

Yeah, with the core incremental….

Correct.

Then what’s the carryover savings from SCOFR 1 that goes into PMC and into fiscal 2019?

Approximately $7 million. The majority of that is in the first half.

Okay, thanks guys.

Thanks, Jeff.

Our next question is from Mig Dobre from Baird.

Yes, thank you. Good morning everyone. If we can, I’d like to talk a little bit about VAG and may be kind of doing a little bit of a postmortem of fiscal 2018. Obviously, this business has been uneven through the year and EBITDA contribution is lower than the way your kind of talking about the business contributing into fiscal 2019. So I guess two questions: may be some color as to what happen in fiscal 2018. And then it looks to me like Zurn has performed may be better than you were initially expecting to be able to sort of crowd out the noise from VAG. What kind of happened there? And how sustainable is that performance?

Mig, in terms of the performance of each of the piece, I’ll step back and say, VAG had a uncharacteristically difficult sort of second half of the year, really driven by, I think a couple of decisions that we’ve made to accelerate some restructuring pull forward, recognize some costs over the course of our second half and into our fiscal 2018, to really set us up to think about what the business could look like on a clean basis into 2019, and that’s where we -- my initial comments, we talk about high single-digit EBITDA margins where it had been, if you look back over time and actually probably a little bit higher in particular years. And so the run rate into 2019 is clearly supportive of that high single-digit rate, and we did some, I would say modest cleanup of different things that would result in the margins in our fiscal 2018 probably being depressed relative to the underlying historical and projected performance. If we look at Zurn, the way we run the business for a long period of time has not really surprised us in anyway. I don’t think it surprised us to the upside. It sort of tracking very much with what we expected. It was just difficult to see when you had the VAG business aggregated with it in terms of performance quarterly in terms of growth and also levels of profitability. So I think we’re optimistic that with more focus and probably some more investment both organic and inorganic in Zurn, we’ve got what we think is a best-in-class Water Management platform. And we also think that VAG is an attractive asset given its global footprint brand and reputation, so we’re – we think we’re making the right decision and excited about the future.

I see. And then maybe to ask Jeff’s margin question differently, the incremental margins at Zurn, how do we think about that going forward? You’ve got quite a bit of margin expansion in fiscal 2018, that’s my math.

So I think the way to think about fiscal 2019 that would be embedded in sort of the outlook we’ve given is sort of 25% to 30%.

An incremental, okay.

Correct.

I think, Mig, just add to Tom’s comments. That range has been historically shrink this year, I’d say probably tend to be in the mid-to higher end of that range from an incremental standpoint.

Got it. And lastly, for me, obviously, there’s going to be some capital generated here with the sale of VAG. How do you think about capital deployment beyond delevering the balance sheet. I guess I’m wondering what sort of the balance between M&A or potentially removing some of the dilutive impact of the convertible cohort?

Mig, it’s a great question. I think it’s something we are, obviously, thinking a lot about I think we’re sort of too early to give you the – what we expect the proceeds to be, but we think they’ll be significant. And obviously, we do have a chance to delever the balance sheet. We do have a chance to invest in our business organically and inorganically, as the opportunities arise. And then as we move leverage down with this core plan plus some proceeds, you get to the leverage area that’s right around two times at the end of the year, and we have to start thinking about other ways to return capital to shareholders. So I think it’s moving from a pure delevering story with episodic M&A to more balanced capital deployment strategy and this year, I think you’ll see that come to fruition.

All right. Appreciated. Thanks.

Our next question is from Julian Mitchell from Barclays.

Hey, good morning guys, Ronnie Weiss on for Julian.

Hi, Ronnie.

Good morning, Roonie.

Good morning. So if I look at the guide from last quarter to this quarter, I guess one of the only places that really changed was the European industrial distribution. So I just wanted to go a little more color of what you’re seeing there and then kind of what’s may be step down from the last time you guys gave an update.

I would say it’s more new launch, Ronnie it’s just a little bit less growth than may be we had in our mind’s eye for the next six months or so. So have been performing pretty well. I think we’re sort of stepping down the expectation just a touch so I don’t think there’s any materially we can point to, other than just a modest week to really what we’re seeing.

Got it. And then back on the VAG divestment, I guess was this part of a broader portfolio or view and as you look at the portfolio now is there still kind of items out there that are assets out there that you could potentially divest going forward that might not be noncore to what you’re trying to do going forward? Or is this kind of isolated incident within the portfolio?

If you look back, we do well very strategic planning process every year. I think this year, like every other -- every business we have, gets reviewed -- through the lens of do we have a sustainable competitive advantage we want to continue to invest in. And I think we came to the conclusion this year that in the case of VAG, we felt like we had a good plan, we had a reasonable backlog and if you look at the fundamentals of the business. This just didn’t match with the other parts of Rexnord, and so we made a decision based all the facts and circumstances in the work that we have done. But it’s part of our normal ongoing review that we review will all parts of our business. I would tell you that is getting tougher and tougher to find things that don’t match that. And so I don’t anticipate we’d see anything else like this of this point but again, it’s part of the review process that we undertake every year.

Got it. Makes sense. And then lastly, just really quickly on the incremental margins for water little low this quarter. Can I – it will be explained away by the negative mix you called out?

It’s the negative mix on the VAG side. On the Zurn side as we anticipated going to this year when you would have as little set up over the course to year, particularly in our fourth quarter and some accelerations from investment for both quarters [indiscernible] the VAG mix was now also a negative [indiscernible] incremental down the quarter.

Got it. Makes sense. Thanks very much.

Thanks, Ronnie.

Our next question is from Jim Giannakouros from Oppenheimer.

Thanks, good morning everyone.

Good morning, Jim.

Good morning, Jim.

Centa, forgive me if I should know this, but can it get to PMC margins or are there structural barriers there that kept their margin to a few hundred basis points lower than what PMC averages?

Without any question, the basis of our investment thesis is that the Centa margins can migrate clearly to the PMC level as it exists today and probably actually a little bit higher over time. So I think we’re very confident in what the margin profile looks like for Centa after we finished integration rated, which happens over the course of this year.

And is there any sense as far as the timing of that ramp? Would it take two years, three years? Or it could be even quicker than that? Or much…

I think the way to think about is, we’ve got some work to do really happens over the course of this year. But within 12 months to 18 months, it should be at that run rate and probably not at the -- not above it at that point. But clearly within two years, we think we have the opportunity to be above with the current PMC margin profile looks like.

Thanks. And one more if I may, you guys are set up to meet or beat expectations. You are pretty clear about that, Todd. You exhibited that. You did very well last year. But just looking at the lower end of guidance, I mean what are the bigger variables that would drive guidance to the lower end or below it? Is at macro, potential disruptions from SCOFR 2.0, pace of sale traction of new products? Any color on what -- where the -- where your pressure points are internal or external that would drive to the lower half of guidance would be helpful? Thanks.

Sure. I mean just to be clear, I think the lower end of the range is not our base case. But other scenarios out there that could result in getting to the bottom of the end of the range? I think there are. I think they’re largely macro, and I think they’re largely sort of second half of our fiscal year thing. So think about the December and March quarters, so from where we are today, the trajectory we clearly point you towards the upper half of the range. But if you think about a variety of things that are outside of our control, you can find yourself below the midpoint. But I don’t think that’s our base case. And I think as we sort of highlighted in our comments, our view is to provide something we think is pretty durable and lasting and we’ll update accordingly. But I don’t think that we’re going to endorse the bottom end of the range with a set of facts or circumstances other than to say, are there things out there in the world that can happen that the drive our numbers as low as everyone else’s lower, particularly given the second half uncertainty in this relatively short cycle world. I think the answer is, of course, but that’s not our base case and clearly, not the trajectory we’re on.

Great. Thank you.

Our next question is from Charley Brady from SunTrust Robinson.

Good morning, actually this is Patrick Wu standing in for Charlie. Thanks for taking my questions.

You bet Patrick.

Just going to direction for a little bit. Just wanted to -- as you guys continue to Smart Tag products on both segments, how should we think about the contribution from sales, and I guess in fiscal 2019 and then possibly beyond that the growth rate that you guys are expecting from just sort of having that digital platform, if you will?

Again I think we’ll get a little more clarity as we go through the year. But in less than a full year, revenues related to direction were right around $20 million, The growth trajectory on that is very high. We think that as we continue to roll out new families and products plus the goal and start to attack of the installed base, we think that the growth rates for the direction initiative can be very high. We’re not going to break it out for obvious competitive reasons. But if you think about from o to 20 and essentially nine months with the better growth trajectory heading into next year, I think we feel very confident with the adoption. Customers have really embraced the technology. Learning cycles that we’re going through continue to accelerate, and I think you’re going to hear us talking about how do we then go back and start to monetize this technology with our installed base, which is important because in periods of uncertain economic times, the ability to go back and refresh and renew the installed base will be a powerful growth and margin opportunity when end markets aren’t as good as they are today. So we’re looking at it both ways but really nice traction to start the first year, and we think that builds over time.

That makes a lot of sense. And then don’t – not sure if you mentioned this, but for your midsingles core growth guidance for 2019, how should we think about it for the PMC segmented Water Management? Are they pretty balance? And then your expectations for Centa for fiscal 2019 as well, is that tracking in line with the legacy PMC business for above or below, can you just speak a little more about that?

Sure. When you look at core growth and midst the two platforms is both would sort of following to that mid single digit range. And the Centa margins that would be embedded in our outlook for fiscal 2019 are currently below and as we said, maybe a little bit earlier that the heavy lifting if you will really happens over the course of fiscal year 2019 and they step up in 2020 and then continue to migrate to that fleet average where PMC is today and ideally above over the next couple of years.

Okay, understood. And I was more referring to your expectations for Centa’s growth for fiscal 2019. Yeah. I’m aware of the margin commentary that you already made.

I’m sorry. Yes, Centa will probably grow again in that mid-single-digit range over the course of fiscal 2019, which is in line with the core platform.

Okay. Sounds I guess pretty balanced. Thanks.

Our next question is Andrew Obin from Bank of America. Andrew, your line might be on mute. We can go to our next question from Justin Holm from Mesirow Financial.

Hi. Just wanted to double check VAG – what was VAG’s EBITDA in fiscal 2018, when you look at the bridge from 2018 to 2019; it only shows VAG as $1 million negative EBITDA for the bridge. So, I’m not negative about the $1 million adjustment to carve out VAG?

[Indiscernible] million of EBITDA, which we are backing out of the base jump up point as we bridge to 2019, where we’ve excluded VAG from the guidance.

You broke up for the answer. Can you repeat that?

VAG [Indiscernible] approximately $1 million of EBITDA, which we’re then subtracting out of the base number in 2018 kind of a jumpoff point to get to our fiscal 2019 guidance because that excludes VAG in fiscal 2019.

I see. So can you tell me what was the VAG EBITDA in fiscal year 2018?

We just finished our fiscal 2018 and it was about $1 million.

Okay. So when you said earlier about it being high single digits, is that gross margin then?

Yes. The high margin – high single-digit margin for VAG is what we would expect the margins to be in our fiscal 2019, which begins sort of April 1 of 2018 and runs through March of 2019. So, it’s more of a forward look margin versus – as Mark pointed out, we reported earnings for our fiscal 2018, which is in March of 2018.

Okay, great. Thank you.

And our next question is from Isabelle Dawson from Goldman Sachs.

Yeah. Hey good morning guys. This is Sam Eisner. How are you?

Good morning.

Yeah. Good morning.

Good morning. Thanks. Along the same lines of questions, can you maybe just provide some historical detail on EBITDA dollar turnover percentages, the business associated with the VAG business? I understand that was mainly [indiscernible]. but if we go back farther maybe from fiscal 2013 to fiscal 2018, how much EBITDA was generated, you made a comment that you expected, are there – there was a good amount of cost in the business last year. So relatively, low base and more interested in prior history, not just fiscal 2018.

Sam, I think I appreciate the question and as I’m sure you can appreciate we are in the midst of the sale process. And so that information will be provided once we get to a sale and in discontinued operations, you’ll be able to see that, and will reporting Zurn on a standalone basis starting on our first quarter here that ends in June. So we’re not going to sort of go back to rehash everything because we do have an active sales process. And it will all become sort of a parent for everyone over the course of the next hopefully quarter or so. I think the thing the point out is on a recurring basis, you can see the Zurn margins, where they are today, and I think if you look back over the last several years, you’ve seen a steady march up over time, 100 plus basis points a year of margin improvement, and that’s what’s the continuing operation view of the world and will be able to get you all the historical VAG stuff and everyone else in time and as we’re able.

Can you give us an update on where that sale process you discontinued ops of some kind of reasonable basis for a time line. So when will you guys expect to sell this business in fiscal 2019? Is there an auction process? Is it negotiated? Just give us a update of where that sale process stands today.

I don’t know that we’re going to go into great detail on it other than to say, it’s – it is an auction process along with I would say some selective buyers that we’ve engaged with, and we’re well into the process. It’s not weeks away. It’s months away, but it’s clearly something we expect to have done in the first half of our fiscal 2019.

Got it. And Rodney Hunt clearly written down or sold off at this point, obviously at the beginning of the last year fiscal 2018, you guys have moved out to discontinued ops, I believe in an expectation to how they sell and walk down the entirety of that business. Where do we stand in that process?

Sam, it’s Mark. That’s fine. Yeah. That’s kind of sold, that is 11 numbers started as Rob pointed out.

Got it. And maybe, just lastly, as you think about the kind of multi-industry platform nature of the business, discontinuing or moving out of a business that may be was less cyclical than some of your other businesses may have enhanced the multiple or may have announced the business so how do you think about full year cyclicality now that you’re getting out of – maybe cyclical some of your other businesses? Thanks.

Sam, you broke up really over the course of the question. But I think where we are today as we think we have two terrific concentrated platforms with great brands, very high margins and real competitive advantages that are sustainable. And so we’re – I think we’re pretty excited about where we are I think obviously, the decision was taken lightly, but we think it’s highest return that we can provide to shareholders and focused on these two core businesses and met them exceedingly well. So I didn’t every part of your question, but I think the assets of response would be something along those lines.

Got it. Thanks so much.

Our next question is from Mig Dobre from Baird.

Yes. Thanks for taking my follow-up. I want to talk a little bit about free cash flow if we can and I understand that is north of where your net income will be for fiscal 2019. But any more color on some of the idiosyncratic portions of the cash flow, I know there are some movements in 2019 that we need to be aware of, maybe you can remind us that?

Well, in fiscal 2019, obviously, we’re using free cash flow that we had in 2018. Given the phase we will look similar last year over the back half of the year tends to be stronger free cash [indiscernible]. cash interest, modestly better. I think outside of that.

And the old tax bill.

Right.

Taxes from overall cash taxes will actually be higher, given the fact that we have generated more taxable income and some timing issues. So we said in our call 90 days ago, our cash tax [indiscernible] in the low 40s as a percentage of free tax income this year. Drop in the little 30s in our fiscal 2020 due to some timing issues. Those are probably the two I think things that would come out of our initial guidance. We gave CapEx guidance, cash should be about the same. So I think really it’s really the earning power year-over-year driving for incremental free cash flow of the business.

Okay. Are you willing to maybe put a dollar amount around the free cash flow number?

Well, I don’t think it’s a stretch, Mig to talk about it being in excess of $200 million. Now it’s probably not the precision that you’re looking for, but I think where we are is, we have a great degree of comfort that everything we’ve been doing over the past couple of years, it really enhances the free cash flow profile permanently and also there isn’t – and there is some legacy tax liability that is in the base that anniversaries itself in our fiscal 2020. So clearly run rating above $200 million with more to go. And so probably, that’s a degree of positioning we were looking for but clearly in excess of $200 million.

Right. I mean to be clear about what I’m asking here. I’m trying to figure out as you’re looking at 2019, say, exiting fiscal 2019, what your firepower essentially is going to be at that point from an M&A perspective. And I don’t know if you are able or willing to provide some kind of a figure that investors should consider, but obviously, it’s important to the store.

I mean if you take the base case and use that $200 million of free cash flow, you can find your way to leverage in the very low 2s by the end of March. Incremental to that, there will be proceeds from VAG. And so you’re right at or perhaps a little bit below. If you do think the side leverage ratio of 2:3, that’s $440 million at the high end plus cash on the balance sheet, plus future cash flows that easily eclipsed the $200 million mark beginning in fiscal 2020. So I think our M&A wallet continues to grow but in concert with you’ve got the right leverage on the balance sheet. And so I think it’s a good problem to have, but in the cash flow that we’ve been working to generate starts to I think accelerate over the next couple of years and we’re pretty confident that that increases our financial flexibility and keeps the leverage ratio at a relatively conservative level.

Got it. Then lastly from me, one last clarification on guidance. Can you give us a sense of how much incremental investment and incremental compensation 2019 versus 2018 is currently baked in call it midpoint?

Yeah. Maybe, I think from an investment compensation year-over-year, we should [indiscernible] neutral year-over-year, investment thing from mid single-digit investments in the platforms. Probably, soon to be a little more of the PMC side, as Todd pointed of about two thirds of PMC is sort of that in the water side. We’ll think a mid single-digit investment number with course of the year.

I see, mid single-digit…

Yes.

Okay, understood. Thank you.

And our final question is from Joe O’Dea from Vertical Research. Joe O’Dea: Hi. Good morning. First question, just on the pricing side of things, understand that segment level I guess and PMC and both Water Management. What you’ve done on pricing in response to some of the pricing costs and whether that’s deviated from normal pricing at all meaning were there normal beginning of calendar year pricing actions and maybe done anything incremental for that and just where it stands on that front?

It varies by segment. So we did have different, I would say, historical practices of win we would institute price increases, obviously yield the course of the last 90 days or so, we’ve formed what we call an internal team called an inflation task force. And that is really a multidiscipline that’s working both the price side and the cost side. And so we think we’ve got a pretty and again, very real-time view of when we’re implementing price and how we’re managing input costs. I would tell you that in fiscal 2019, it’s very likely that in some cases, we’ve already prevented incremental price increases that we would have order that had already done or we have planned future price increases that match the timing of input cost rising over the course of the year. So I think we’ve got what will be above average year in price, and we think it’s sort of matches probably a little ahead of where the input cost layout over the course of the year. Joe O’Dea: It doesn’t sound like cost inflation is margin dilutive as maybe just to confirm that’s what you’re getting on the pricing, it’s not just cost capture, but the incremental you’re talking about is not like cost inflation is posing incremental margin had been for you.

That is correct. Joe O’Dea: And then last question just on kind of philosophy around the outlook. I’m talking about the importance of the durability of the outlook, and I think when you look at where there could be pockets of conservatives and some pretty good and incrementals underlie the outlook. And so I a total of the conservatism would lean more toward the top line, and we’ve seen in the acceleration and some of the organic growth recently. But I guess also reportedly just also above the headlights we’ve been working through over the course of the past three months and whether or not you’ve seen that generate a higher degree of uncertainty and customer base now that we’ve got half of May underway. Just the customer behavior and I guess the strength the kind of the acceleration and some of the end market demand that we’ve seen instability there. So looking at kind of confirmation of that or anything you’ve seen in response to some headline uncertainty.

Yeah. I don’t think I can point there any specific Joe, from a customer standpoint where we’ve seen any behavioral changes as a result of the headlights. I think as we talk to our sales force, our independent reps, we’ll get our funnels, we continue to see good activity that supports I think the outlook that we provided. I think our view has been let’s take a really good look at the next six months and then assume that the following six months could be less. And I think that’s where we’ve got, I would say, may be a little conservatism. So if the trajectory of where we are sort of finishing the year and starting the New Year continues, there could be upside in the second half. But that’s also six months away. And so the way we’ve approached it is, take a look at the full year with a pretty sharp look at first half, be a little more conservative over the course of the second half and then update accordingly based on where things are. Joe O’Dea: Thank you. Appreciate it.

Thank you.

And we have no further questions.

So thank you, everyone. Thanks, Sean, and thank you, everybody, for joining us on the call today. We appreciate your interest in Rexnord and we look forward to providing our next update when we announce our fiscal 2019 first quarter results in early August. have a great day.

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you for participating, and you may now disconnect.