Participants

Paul Clegg; VP - Investor Relations and Communications; SPX Technologies Inc

Eugene Lowe; President, Chief Executive Officer, Director; SPX Technologies Inc

Mark Carano; Chief Financial Officer, Vice President, Treasurer; SPX Technologies Inc

Bryan Blair; Analyst; Oppenheimer & Co. Inc

Damian Karas; Analyst; UBS Investment Bank

Ross Sparenblek; Analyst; William Blair

Steve Ferazani; Analyst; Sidoti & Company

Walter Liptak; Analyst; Seaport Research Partners

Presentation

Operator

Good day, and thank you for standing by, and welcome to the Q1 2024 SPX Technologies earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Paul Clegg, Vice President of Investor Relations. Please go ahead.

Paul Clegg

Thank you, operator, and good afternoon, everyone. Thanks for joining us with me on the call today are Gene Lowe, our President and Chief Executive Officer; and Mark Carano, our Chief Financial Officer. The press release containing our first quarter results was issued today after market close. You can also find the release in our earnings slide presentation as well as a link to a live webcast of this call in the Investor Relations section of our website at spx.com. I encourage you to review our disclosure and discussion of GAAP results in the press release and to follow along with the slide presentation.
During our prepared remarks. The replay of the webcast will be available on our website until May ninth. As a reminder, portions of our presentation and comments are forward-looking and subject to Safe Harbor provisions. Please also note the risk factors in our most recent SEC filings.
Our comments today will largely focus on adjusted financial results. Comparisons will be to the results of continuing operations only. You can find detailed reconciliations of historical adjusted figures from their respective GAAP measures in the appendix to today's presentation.
Our adjusted earnings per share exclude primarily acquisition related costs nonservice pension items, mark-to-market change changes, amortization expense, and in Q1, the favorable tax effect of stock base compensation awards that were exercised during the quarter.
Finally, we will be meeting with investors and various events during the second quarter, including at the Oppenheimer Annual Industrial Growth Conference on May 8, which will be Virtual UBS reshoring and Infrastructure Conference on June 4 in New York and at the William Blair Annual Growth Stock Conference in Chicago on June 6.
And with that, I'll turn the call over to Gene.

Eugene Lowe

Thanks, Paul. Good afternoon, everyone, and thank you for joining us for the call today. We'll provide you with an update on our consolidated and segment results for the first quarter of 2024. We're also increasing our guidance for the full year, we had a strong start to the year in Q1, our company continued to execute well and drove substantial growth in all of our key profit measures with significant year-on-year increases in margins. We continue to experience robust demand across key markets.
Our acquisitions are performing well and our production facilities are operating at high levels of efficiency today, we are raising our full year 2024 guidance. Our new midpoint reflects year-on-year growth of 30% and adjusted EBITDA 23% and adjusted EPS.
Turning to our high-level results for the first quarter, we grew revenue by 16.4% and adjusted EBITDA by 47% year on year with 410 basis points of margin expansion. Last month at our Investor Day, we shared a new framework for the continuation of our value-creation journey. We intend to further build on our strong foundation of niche engineered and tech-enabled products.
Strong positions, moats and sustainable solutions will also continue to leverage our business system to drive value through growth, investments in initiatives as well as through strategic M&A. Our new framework targets, average EBITDA growth of 15%-plus annually at margins of more than 20%.
Now I've taken on the progress of some of the key initiatives during the quarter. In Q1, we continue to drive continuous improvement and efficiencies across our businesses advancing on several fronts. In our HIS segment, our initiatives are helping to expand our addressable markets by broadening our range of application specific solutions for various price points.
This includes the successful value engineering projects. It helps create a more flexible fluid cooler solution with reduced material costs, integration of our recent acquisitions is also going well and driving value. We are creating numerous opportunities for cross-selling, including broadening the sales channels for our market-leading Doug heating products.
Our acquisitions are also benefiting from SPX's supply chain management tools, which are helping to reduce lead times and further improve our competitive position in Detection & Measurement. We continue to advance our digital initiatives during Q1, we gained further traction on cross-segment software and IoT or IoT development and resource sharing. Looking ahead, we see significantly more room to continue driving value through our business system including through continued investments in automation and R&D.
And now I'll turn the call over to Mark to review our financial results.

Mark Carano

Thanks, Gene. Q1 was a very strong quarter for SBX. technology year on year, our adjusted EPS grew 34% to $1.25 for the quarter, total company revenue increased 16.4% year on year. Organically, revenue grew 2.3%, largely driven by Detection & Measurement, while acquisitions drove a 14% increase and FX was a slight tailwind.
Consolidated segment income grew by $25.4 million or 34.1% to $99.8 million, while segment margin increased 290 basis points for the quarter and our HVAC. segment revenues grew 20.2% year on year. Acquisitions contributed growth of 22.2% and included Cameco and engineer in our pooling platform aspect in our heating platform, the FX impact was nominal.
On an organic basis, revenues declined to 1.9%, driven by lower sales of Hydronic equipment associated with unseasonably warm weather in our end markets. This followed a substantial increase in heating volumes in the prior year period that was supported by elevated backlog following the pandemic year on year, organic decline was partially offset by higher sales cooling and Electrochem product.
Segment income grew by $20.7 million or 43.4%, while segment margin increased 360 basis points. Increases in segment income and margin were due primarily to our recent acquisitions. Favorable sales mix in both cooling and heating segment. Backlog at quarter end was $462 million, up 20% organically in the prior year period.
For the quarter in Detection & Measurement, revenues increased 9.9% year on year, driven by organic sales growth and a modest FX tailwind. The increase in revenue was largely driven by higher contact project since Q1 revenue included delivery of the remainder of a large contract project. The majority of which shipped in 2023 also benefited from earlier than anticipated delivery of other projects previously expected in Q2 year on year, segment income grew $4.7 million and margin increased 130 basis points, primarily due to operating leverage from higher revenue.
Segment backlog at quarter end was $207 million, down 16% organically from the prior year period due to deliveries of the large contract project. Absent the effect of this project, backlog was up high single digits.
Turning now to our financial position at the end of the quarter, we ended Q1 with cash of $106 million and total debt of $855 million. Our leverage ratio as calculated under our bank credit agreement was 2 times. We continue to anticipate our leverage ratio declining to the lower end of our target range of 1.5 times to 2.5 times by year end, assuming no additional capital one.
Moving onto our guidance. Based on strong Q1 results and a robust demand outlook, we are increasing our guidance for adjusted EPS to a range of $5.15 to $5.40 compared with the prior range of $4.85 to $5.15. The new midpoint reflects year-on-year growth of approximately 23%. We are raising our guidance for Asia Pac and maintaining guidance for Detection & Measurement.
We now anticipate a track revenue in a range of $1.36 billion to $1.4 billion or an increase of $30 million at the midpoint from prior guidance. We also anticipate HVAC. segment income in a range of 22.25% to 23.25% or an increase of 100 basis points from the prior range at a total company level, we anticipate adjusted EBITDA in a range of $390 million to $420 million at the midpoint. This reflects year-on-year growth of 30% and a margin of more than 20%.
With respect to gaining in Asia-Pac with, we expect a sequential step-up in revenue in Q2 through a full quarter of the Ingenia acquisition, increased cooling production capacity. We expect Q4 to be the highest revenue and margin quarter due to winter heating demand for D&M. We expect Q1 to be the highest revenue quarter as we delivered the remainder of the large Comtech project I mentioned.
We also anticipate a heavier weighting of higher margin projects in the second. As always, you'll find modeling considerations in the appendix to our presentation. I'll now turn the call back over to Gene for a review of our end markets and his closing comments.

Eugene Lowe

Thanks Mark . Current market conditions are supportive of our updated 2024 outlook within HVAC, we continue to see strong demand for our quality products across a broad set of end market applications, including data centers semiconductor plants and industrial facilities.
We also continue to see solid demand for electric key associated with decarbonization in Detection & Measurement. We continue to experience flattish global demand in our short-cycle businesses with regional variation while project orders remain healthy.
In summary, I'm very pleased with our Q1 performance and strong start to the year with robust demand and significant operational momentum. We're well positioned to achieve our updated full year guidance, which implies 30% growth in adjusted EBITDA. We see multiple opportunities to continue growing our businesses, both organically and through our attractive acquisition pipeline.
Looking ahead, I remain very excited about our future. It's the right strategy and a highly capable experienced team. I see significant opportunity to continue driving value for years to come.
With that, I'll turn the call back to Paul.

Paul Clegg

Thanks Gene. Operator, we will now go to questions.

Question and Answer Session

Operator

Thank you. At this time we will conduct the question-and-answer session.(Operator Instructions)
Bryan Blair, Oppenheimer.

Bryan Blair

You have new guests.

Eugene Lowe

Hey, Brian, good afternoon.

Bryan Blair

Another great quarter. Excellent start to the year. And as to kick things off, if we can level set on the lift in HVAC revenue guidance up $30 million versus the prior guide. How much of that is organic versus a stronger deal contribution from aspect for the year couple of months ago and the inorganic period there or stronger Ingenia growth, obviously pretty early days.

Paul Clegg

And Brian, this is Paul. I'll take that one. So yes, you have the certain guidance. Midpoint was raised by about $30 million of the revenue line and the margin basis, but up 100 basis points. The biggest driver is really the drop through of the higher revenue, which comes at attractive gross margins and really all of the revenue increase is associated with organic here. So really the biggest single factor is organic. We did say that our acquisitions are integrating well and we do expect them to have a little bit higher margin than we previously did.

Bryan Blair

Okay. National Pen. So I know the prior outlook you had baked in something in the range of 7% organic growth in HVAC So that moves closer to end the 10% level. That's just a quick remark. And how should we think about that in terms of cooling versus heating contribution, I would assume it's and notably weighted to the cooling side and better to ask and level set on that.

Paul Clegg

Yes, that's correct, though. The year-over-year increase that you're looking at here? Let me give you a little bit more here because up on. Yes, we talked previously about something in the neighborhood of $150 million of acquisition revenue coming into this year.
So that's your numbers spot on pretty much for each back then being around 10% organic. And yes, the lift is primarily it's going to be stronger on the cooling side, but we do still expect to get growth on the heating side. So if you're looking at double digits, low double digits on cooling, you're looking at something like more like a single digits on online, mid-single digits or lower on on helium.

Bryan Blair

Understood. I appreciate the detail there. And then for D&M, how did orders trends through Q1 and into early Q2? And what are you contemplating in terms of the full year outlook for project first run rate business? And what, if anything, is assumed in terms of size infrastructure spending contribution as the year moves forward?

Paul Clegg

I'll start on that one, but the numbers you're looking for, Bryan. Yeah so um, you know, overall our orders were pretty good for the overall company, but that was stronger in each back a little bit less than D&M. If you count them against last year, you've got to take into account the fact that you had some large projects that got delivered both in the back half of last year and then in the first quarter here as well.
So the book-to-bill was a little less than one in D&M is where it was about 1.2 in the HVAC. And as we look throughout the year, as you know, our guidance for this year for revenue is all organic and it has been roughly flat, maybe slightly down with the prior year.
That includes on a little bit of a hole left by the delivery of a large or we had a large project last year in contact, which I'll call it kind of a pass through project because it is lower than typical margins associated with it. And that left us with about a $30 million hole to fill in this year. And so we're bringing that back up with us mostly with other projects that are coming into the year.

Mark Carano

Brian, I think when you think about the growth year on year ex the Comtech projects, about 5% top-line growth. With respect to your question on infrastructure, we are seeing some benefit of the infrastructure dollars.
I think we've highlighted this in prior calls where we're really seeing it right now is primarily on the transportation side of our business I think that's a function of the fact that those projects are probably more ready for delivery relative to other projects that may be out there that we'll benefit from. So that that's really the first line where we're seeing activity and a benefit to the business from it has various federal spending bills.

Bryan Blair

Understood. Thanks, guys.

Paul Clegg

Thanks, Bryan.

Operator

Thank you.
Damian Karas, UBS.

Damian Karas

Hey, good evening, everyone. Congrats on the really strong start to the year.

Paul Clegg

(multiple speakers)

Damian Karas

So it seems like the majority of your EPS guidance range for the years coming from the HVAC. margins on a 100 basis point increase from your original guide. So that's quite impressive this early in the year.
Could you just talk about what's driving? You mentioned maybe the acquisitions are a little bit better than you'd anticipated. That's not driving all 100 basis points. Is it is there lower heating mix it's playing in? Maybe you could just talk about some that margin raise and what's supporting your confidence that this accelerated path and continue.

Eugene Lowe

I'm else I'll start off. This is Gene. The I think overall th back end market demand, we actually feel really good about what we're seeing and we're seeing a lot of strength. As you know, our products play in very many different end markets, but some of our larger ones really have a lot of strengths in particular I'd call out tech healthcare slash pharma and then industrial.
We do have a tag data centers are very strong and we are seeing some nice growth there. We just have very strong competitive positions across a number of our product lines, and we're doing very well there. Semiconductor and IEV.s are also had some notable wins, and we're seeing some nice strength there.
Healthcare and pharma. This is this is an area that tends to have high specifications and higher requirements. Those are markets that we do very well on it is a substantial portion of our business, and we're seeing nice, nice progress and momentum there.
And the last ones, industrial in industrial is our largest end market in our HVAC area, and we're seeing very strong aftermarket, also supplemented with some reshoring projects. If you look at it, I think on the end market side, we just feel really good about our positioning and markets we play and you want to talk Mark about margins a little bit different.

Mark Carano

Yeah, I think, Damian, as we've talked about in prior quarters, we continue to see efficiencies across our platform. On the cooling and heating side, we continue to invest in those businesses to both improve production and as well as reduce labor utilization. That's required in those plants. So it's really dropping through it's creating a lot of efficiencies in those plants.
And that's that's really a function of new capital that we've talked about that we were deploying this year in those plants. That was a process that started last year in earnest primarily. And then also we continue to find new opportunities on the C&I front to drive more efficiency through those plants, whether that's through plant layout or footprint, things of that nature.

Damian Karas

That's really helpful. Appreciate it. And Gene, very, very helpful comments on the end market verticals and what you're seeing. I was wondering if you could just maybe take us a little bit of a walk across the different units within HVAC cooling because you just have so much under the hood there.
Now with all the acquisitions in recent years, thinking about cooling towers on, you've got the van business dampers, there's not there's a lot of areas where you're playing? Are you kind of seeing a similar level of growth across there? Are there any particular areas, areas of business that really stand out and appreciate any just kind of color on on that going?

Eugene Lowe

Yeah. So I think on cooling, we really view ourselves as the We invented the cooling tower. We believe we're the global leader in in cooling. We just have a very strong position there. We see very nice momentum across our businesses there. We play in a lot of the attractive end markets that I discussed. We're seeing very nice growth there organically in and you do care movement, which would be Cincinnati van Tampico.
Cameco has a very strong position with data centers and is benefiting from a lot of the growth, very diverse customer base there. I'm seeing very nice growth on the EAM. side and then Ingenia is new our newest acquisition, but our biggest challenge there is being able to produce the demand. We have very strong demand. I do believe they have a better product than what's available in the market. They really were very, very pleased with that. So so again, very nice growth and then also growth opportunities ahead for us there.
On the heating side, what I would say is we've always said hydronics, you're not going to see particularly high growth there. That's going to be more of a mid single digit growth. And I think that there is the the weather, which you know can can move the TAM up or down in any given no winter environment. But I'd say we're anticipating modest mid-single growth there.
And then electric heat, we're also seeing some growth there but I'd say the biggest growth areas would be the three primary cooling product categories. But we're very we really like our value pumps in these markets. And one of the things that we talked about in our Investor Day as we see a lot of synergies.
And there are real hard synergies across our rep channel across our relationships with the engineers and we're starting to unlock some of these, and we actually think it's early days for us on that on that path. So we feel our Asia Pac segment has really had some nice momentum over the past couple of years, and we like the position and the really strong team and we feel good about where we're going there.

Damian Karas

Great. Thanks for the added color. Best of luck, guys. I'll pass it along (multiple speakers)

Operator

Thank you.
Ross Sparenblek, William Blair.

Ross Sparenblek

Good evening, guys. (multiple speakers) A nice start to the year here. You're looking at Detection & Measurement. I think we all understand the tough comps but just given the backlog growth and the now not revised full year guidance, I mean it seems to indicate that locators are going to see further deceleration at least into the second or third quarter, is that kind of the expectation?

Paul Clegg

So no, I think you have what's your what you may be seeing there is there's a little bit of a comparison issue in L&I against the year-ago period. If you kind of look at it across the different quarters of last year, L&I had its lowest quarter in the first quarter of last year sorry, highest quarter is. But and I'd say in the first quarter last year from where you still saw fairly healthy levels of demand, we did call out that things got a little flattish, you know, during the during the back half of the year.
So we look at the full year this year, we're expecting that to be pretty flat overall impacted we've made both in terms of the on its contribution from revenue and profit standpoint be pretty pretty much in line with what it was last year based on what we're saying so the again, the if you look at the backlog, backlog for Detection & Measurement, some is down really as a result of the large order that we delivered and through throughout last year.
And with this final large delivery being in the first quarter of this year for that Comtech project that had lower than typical margins associated with it. Hopefully that helps a little bit to straighten up CN or capital on the sticking on the project cycle, it sounds like second half you have some larger projects hitting community gives you a sense of price and how we should think about mix as it relates to again, the guidance full year?
Yes, for Detection & Measurement, specifically from typically the driver this year, if you look at kind of the various parts of the business, it's really all or rather the vast majority of it will get some price. But the vast majority of what we see in D&M is typically volume.
So again, it's that decline from the volume associated with the large project offset by improvements in other project areas. And largely speaking, if you look at it on the media interact side on price volume, there are price, yes, price volume there. You're looking at from something like 10% organic growth. And I would say that's going to be modest price and mostly volume there.

Ross Sparenblek

Okay, that's perfect. And then maybe one more, if can you just remind us of what the minimum cash requirements are to run the business as we think about debt paydown, absent any. Yeah, accretive M&A.

Mark Carano

I mean for us, absent M&A, really, I mean, this year, we were in a this year and last year, we're in a I would call it a capital cycle where we're spending more than we have typically spent. We're going to be closer to 2% of revenue but on an average basis, I think we said that should be between 1 times to 1.5 times as a percent of revenue just to support the business.
And then you have normal working capital needs depending on the scale of the business and where you are in the quarter, which will it varies.

Ross Sparenblek

Okay. One thing again.

Paul Clegg

Thanks, Ross.

Operator

Thank you.
Steve Ferazani, Sidoti.

Steve Ferazani

Good evening, everyone, on a great quarter. So I don't want to be too much of a downer, but I do want to ask about the sort of your one underperforming platform, the location and inspection. Yes, I know Gene, previously you've always talked about that being the most GDP dependent platform. I mean, I think you indicated the weakness you were expecting was going to be from Europe while US was doing.
Okay. Can you catch us up on that and what really would be the catalyst to generate growth in that business again, is it is it just generally better GDP growth?

Eugene Lowe

And I think I think the way you framed it is stays pretty pretty pretty accurate. If you look at location and inspection, we expect to be flattish this year. This is really a predominately run rate businesses. Having said that, what I would say, if you were to break it down by the regions, we're seeing actually meaningful growth in the US. We're actually growing nicely in the US. Most of our product categories there, but I would say it's a little bit choppy in Europe and Asia, a little bit slower.
And that's why when we talked about it we said relatively flattish for some regional areas. And I do think this is going to be stronger as the economies come back. And actually in terms of some of our own initiatives there. I'm very excited of radio has a new GPS integrated GPS locator that is doing very well in the market. This is a product that's a premium product, typically 40% higher than our core product.
We also have queues coming out with HD. robotic solution, and we also have ULC., which is getting some really strategic wins. So if I look at it, the end part or the GDP of the countries, I can't really can control what we can control the team's doing a really nice job on margin and new products, we actually feel really good about where those businesses are headed going into 25 frame.

Steve Ferazani

That's helpful, Mark on the cash flow front, typical way this year plays out you had the working capital build in Q1 in the first half. Do you think the real reversal is Q4 typical where the year will play out?

Mark Carano

Yeah, Steve, I think that will look similar to prior years where you're going to see cash continue to build as we move towards a free cash flow conversion target that we've signaled. I expect that we'll be under 100%, as we've said, of net income, but that's driven by the incremental CapEx spend that we have this year.

Steve Ferazani

So chances are depending on how robust the pipeline is any debt reduction would probably save till till, yes, late for 4Q or early '25 dependent on whether the pipelines converted into any actions or.

Mark Carano

Yes, I think absent any obviously any other acquisitions or anything of that nature You're correct, I mean it will be back half weighted on the paydown side

Steve Ferazani

How do you think about debt reduction given your pipeline, if you have enough stuff that sort of in timing is impossible to know, is it worth paying down debt in the short term knowing, you know, the pipeline is still pretty robust yet?

Mark Carano

No need. I mean, that's been our approach thus far. And I think when you think about the cost of capital today to borrow relative and the return you can get on that cash, it makes more sense to go ahead and pay down debt, particularly with respect to the revolver right now because that's that's obviously an evergreen instrument. We have the ability to redraw on that. But I think from an M&A perspective supporting that, we've got plenty of capacity to do that or liquidity today to do that.

Steve Ferazani

And obviously, capacity if we need to Fred & Gene any update on how you're thinking about the pipeline now, obviously, you've made several larger HVAC. acquisitions.

Eugene Lowe

How is it looking out there and say it's like and looking very solid, you know, as Mark alluded to, will be at our one five or actually probably likely lower than that just kind of on under normal course, there's a healthy amount of activity. There's a good pipeline.
We're actually seeing a good number of Detection & Measurement opportunities as there is more in the small to midsize, some some very attractive technology, some Comtech opportunities on also attend the electric heat side. That's a that's a great opportunity that we have to continue to build and grow there. So yes, I'd say if you look at it overall, it's healthy. It's active. We have irons in the fire. And I mean, I think the machine rolls forward. So I think our strategy is working and we'd expect it to keep rolling into the back half of the year.

Steve Ferazani

Thanks, everyone thinks

Operator

Thank you. (Operator Instructions)
Walter Liptak, Seaport Research.

Walter Liptak

Thanks, guys, and good quarter. I wanted to ask about the a pull forward and why did that order get pulled forward?

Mark Carano

Yes, actually wall that was some of the pull forward actually wasn't the sorry if we weren't clear, there wasn't the Comtech project that was already forecasted. This was this was other project work that, Tom, that pulled forward from Q2 into Q1.
I mean, as you know, some of these projects gating the timing of some of them between quarters is some is never easy. So it just was a function of how we executed that contract and when we were ready to deliver it relative to oh eight, we are saying.

Walter Liptak

Okay, thanks for that clarification. So was it was that one order that got pulled forward It was many orders that pulled forward?

Mark Carano

It was it was more than one.

Walter Liptak

Okay, great. And could you repeat what the backlog was in contact? I'm in the D&M segment, sorry.

Paul Clegg

Yes, sure. I got that pretty well. The D&M. segment backlog was $207 million at the end of the quarter. And in HVAC, it was $462 million at the end of the quarter.

Walter Liptak

Okay. All right. Good with the backlog, even considering the large orders that rolled off last year end and the timing of that order getting pulled forward, I mean, it's still pretty robust order activity in D-N.M. I wonder if you could talk about the funnel and maybe some Comtech funnel, some of those projects that we saw last year. Are those should we have done for the foreseeable future there? Is there a nice funnel and Comtech and for some of the other products within D&M?

Eugene Lowe

Yes, I would say overall, if you look at it from where we stand, we feel good about the funnel, and we did have that large faster your project, which is a we're replacing that this year. So that's that's that's where we're actually seeing growth in what we would call our core on the I look at the funnel across our businesses as predominant contact.
And then in transportation, I would say activities very healthy transportation uses the one area that we've called out that that has been supported by some of the government infrastructure spend in. We're seeing a lot of activity there. A lot of bidding there. We actually feel very, very comfortable about '24. We actually see a lot of opportunities for '25 and '26. So as you said in our prepared remarks, we feel very good about the project activity there.
And the same is true for Comtech there that as a reminder, that business is very global in nature. So there's many countries, and we're seeing a lot of that activity. We've gotten a lot of key wins. We like our technology are actually getting very big, very positive feedback from some of our newer customers that are using our technology there. So from the project side of the house, we feel we feel very good for '24 and also looking ahead to '25, we feel like we're well positioned.

Mark Carano

I think adding to that either when you look at the backlog, Paul and you exclude Comtech project that we refer to over the last many quarters, backlogs are actually up kind of high single digits.

Walter Liptak

Okay. All right. That's great. Yes, and it's great to see orders pulled forward. I think this quarter there were a lot of orders that pushed out and so on. Yeah, congratulations on the nice quarter.

Paul Clegg

(inaudible)

Operator

This concludes the question-and-answer session. I would now like to turn it back to Paul Clegg for closing remarks.

Paul Clegg

Thank you, everybody, for joining the call, and we look forward to seeing many of you at the upcoming conferences and roadshows and we will talk to you next quarter. Thank you.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.