© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Greetings and welcome to the Atkore International Fiscal Third Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.
I would now like to turn the conference over to Keith Whisenand, Vice President, Investor Relations. Please go ahead.
Thank you, and good morning, everyone. With me today are John Williamson, President and CEO; Bill Waltz, Chief Operating Officer; and Jim Mallak, Chief Financial Officer.
I would like to remind everyone that during this call we may make projections or forward-looking statements regarding future events or future financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our 10-Q and today's press release, which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Finally, when we are referring to the information relating to a quarter or a year during this call, we’re referring to the corresponding fiscal period. Any reference to a year is a full fiscal year, which runs October through September.
With that, I'll turn it over to John.
Thanks, Keith, and good morning, everyone. At Atkore delivered a strong third quarter performance through focused execution. We delivered net sales of $498 million, adjusted EBITDA of $77 million, and adjusted earnings per share of $0.86, up 25%, 24% and 76%, respectively versus last year. In addition, we delivered year-over-year 4% organic volume growth due to the strengthening industrial customer verticals and continued traction of key initiatives.
During the quarter, we passed through all of the commodity and freight inflation to the market. As we mentioned last quarter, the publicized nature of the latest deal inflation created an environment that allowed us to pass-through cost quicker than we would be able to normally to give perspective on the progress we’ve made in this critical capability, we successfully pass-through more inflation in the first three quarters of 2018 than we did in all of 2017.
Based on our experience year-to-date and the most recent steel, copper, PVC and freight forecast available, we expect total inflation dollars for 2018 to be around 50% higher than 2017 and we’re on track to pass-through at least 100% of that increase in 2018. Jim will walk you through the financial results and Bill will give you details of our new guidance, but first I will share a few key highlights that contributed to the quarters solid performance.
First, the Electrical Raceway segment delivered double-digit increases in net sales and adjusted EBITDA, primarily due to our acquisitions completed in the last 12 months as well as net sales being favorably impacted by the successful pass-through of our higher freight and raw material costs to the market. Our pricing activities are now ahead of the input cost curves year-to-date.
Second, the Mechanical Products and Solutions segment delivered an increase of 17% in net sales from higher volumes and average selling prices. However, adjusted EBITDA decreased to $12 million due to inflation exceeding the increase in average selling prices. Even though inflation continues to go up in the quarter, our pricing momentum is starting to catch up with the cost curve in this business and we expect that trend to continue.
Third, our M&A initiatives continue to favorably impact our results. Acquisitions completed over the last year have contributed incremental EBITDA and accretive margins as well as have driven synergies across the organization. Acquisitions and portfolio enhancements have been and will continue to be a big part of the Atkore value creation story.
Additionally, during the quarter, Atkore executed a stock repurchase and the subsequent retirement of 1.4 million shares. Overall, Atkore delivered another quarter of solid results. Organic revenue growth was strong, driven by the industrial markets. Net sales, adjusted EBITDA and EPS are up double digits year-over-year and exceeded our guidance for the quarter.
We maintain diligence around the successful pass-through of increased raw material input cost to customers. We continued to successfully integrate our acquisitions and we deployed capital to repurchase shares. Our team, culture and business system have provided the discipline to deliver our commitment and we remain focused on our goals as we near the end of 2018.
With that, I'll turn the call over to Jim, who will walk us through our financials in more detail and provide additional insights into the quarter.
Thanks, John, and good morning to everyone. Moving to our consolidated second quarter results on Slides 3 and 4, net sales were $498 million, up more than 18% organically after normalizing for acquisitions and foreign exchange. The impact of increasing average selling prices from passing through material and freight cost increases as well as mix favorably impacted net sales by 14% year-over-year.
Net volume excluding acquisitions was up 4% reflecting the strong industrial environment for MP&S and our organic growth initiatives. Volume for MP&S was up 16% and delivered the third quarter in a row of double-digit volume growth. Electrical Raceway organic volume was stable sequentially and is up 2% year-to-date. Acquisitions added 11% to the top line of the quarter and year-to-date.
Looking at the impacts of our key material costs on our P&L in the quarter, steel was up 26% versus the third quarter of 2017, and up 23% sequentially. Copper was up 18% versus the third quarter of 2017 and about flat sequentially. In PVC, resin was up 5% versus the third quarter of 2017 and up 2% sequentially.
During the quarter, we incurred material input cost increases of $36 million year-over-year, and incremental freight and other cost inflation of approximately $6 million. Through pricing and mix initiatives, we successfully increased prices $56 million. We've broken out those items on the adjusted EBITDA bridge on Slide 4.
As we have mentioned previously, when we pass these costs through to our customers in price, net sales and cost of goods sold increased in equal amounts unfavorably impacting the resulting margin percentages. Gross profit was $120 million for the third quarter, up 30% or $28 million compared to the same period in 2017, driven primarily by volume and price mix versus cost.
Adjusted EBITDA was $77 million and up $15 million or 24% versus last year. Our net M&A activity completed within the last 12 months account for $6 million of the increase to adjusted EBITDA and organic volume and productivity added $4 million. These increases were partially offset by our investments in the business and variable compensation differences. Our net income on a GAAP basis was $34 million, up $7 million versus the third quarter of 2017. Adjusted EPS was $0.86, up 76% from the third quarter of 2017.
Moving to our Electrical Raceway segment, on Slide 5, net sales increased by $82 million or 28% to $370 million. The acquisitions completed in the last 12 months all of which are reported in Electrical Raceway, increased segment net sales in the quarter by $32 million or 11%.Organic volumes were down about $2 million, so about flat in the quarter. When combined with our strong first half, year-to-date volumes were up about 2% and in line with our expectations.
Higher average selling prices driven by passing through cost increases to customers and the mix of our products had a favorable impact to revenue of about $50 million or 17%. Adjusted EBITDA was $75 million, up $25 million or 50% compared to last year. The acquisitions account for $7 million of the adjusted EBITDA increase. Adjusted EBITDA margin increased by 290 basis points with pricing execution, accretive acquisition margins and favorable mix driving the improvement.
Moving on to our Mechanical Products & Solutions segment on Slide 6, net sales in the quarter were up $18 million or 17% to $128 million. Volumes increased by 16% as industrial markets continued to show strength, price added almost 5% to the revenue in the quarter and the divestiture of the flexible sprinkler business reduced net sales by about 5%.
Adjusted EBITDA of $12 million decreased by $5 million compared to last year, driven by the divestiture of the flexible sprinkler business last quarter and cost headwinds versus our pricing traction, offset partially by strong volume in all our strategic business units under the segment.
Adjusted EBITDA margin is below the third quarter of 2017 by 640 basis points, impacted by the price versus cost headwinds we see in this business, which is primarily due to the timing of passing through the latest commodity increases to our OEM customers with lagging index-based pricing. However, we did see a significant acceleration in our pricing traction in the quarter versus the first half of the year and expect that to continue as the cost curve flattens.
Turning to our balance sheet and cash flow on Slide 7, the balance of cash and cash equivalents at the end of the quarter was $110 million. We have spent a total of $27 million in CapEx year-to-date. Net cash flow from operating activities for the first nine months was $121 million, about double last year at this time. Finally, our net debt of $797 million in leverage ratio, which we define as net debt to the trailing 12 month adjusted EBITDA was 3.1x. As we've communicated in the past, our long-term goal is to move this metric back to the low 2x range and we're moving back in that direction.
Now I will turn the call over to Bill for our guidance update.
Thanks, Jim. Moving to the full-year guidance on Slide 8, with another strong earnings quarter and our confidence in market activity, we are increasing our guidance. We continue to expect the construction markets to be up in the low single-digit range in 2018 and now expect our volumes in industrial markets will be up about 10%.
Taking into consideration these factors, we're updating our full-year guidance as follows: for the Electrical Raceway segment, we expect volume to be up in the low single-digit range. After another strong quarter, we are increasing our adjusted EBITDA range to be between $250 million and $255 million.
For our MP&S segment, we are increasing our volume guidance to be up 10% and we're now expecting adjusted EBITDA to be between $48 million and $52 million. In total, we're increasing our 2018 expected adjusted EBITDA to be between $265 million and $272 million.
We estimate our adjusted EPS to be between $2.65 and $2.75. Interest expense will be approximately $41 million and our fully diluted share count will be 54 million shares. Our tax rate will be about 22% for the full-year and 24% for Q4. CapEx is now expected to be about $37 million for the year.
John, back to you for final comments.
All right. Thanks, Bill. In summary, I’m proud to report Atkore's strong performance during the third quarter with double-digit growth in net sales, adjusted EBITDA and earnings per share. This success is based on organic growth due to the strengthening industrial customer verticals, our completed acquisitions performing better than our business models, successful pass-through of increased raw material costs as well as efficiencies gained from productivity initiatives.
As I’ve said before, our team, our culture, our business system are at the core of our ability to continue delivering these results. We put in place the fundamentals to manage in an ever-changing business environment and delivered upon our commitments to ourselves, our customers and our shareholders.
Since this is my last earnings call for Atkore, I want to thank the investment community for their time, interest and support of Atkore. I've never been more confident in Atkore's capabilities and excited for its future. I’m pleased to see that many of you are also recognizing Atkore's true value. Atkore's foundation is strong. It's momentum true. I’m pleased to have been part of this team and look forward to hearing about the future successes.
With that, operator, I’d like to open the lines for questions.
Thank you. [Operator Instructions] Thank you. Our first question is coming from the line of Andrew Kaplowitz with Citi Bank. Please proceed with your question.
Hey, good morning, guys. Nice quarter. John, good luck.
Yes, thank you.
So just, obviously, focused on -- focusing on the pricing environment, strong performance in Electrical Raceway, maybe talk about how sustainable the improvement is in your ability to stay ahead. It looks like you did 30% incremental margins in the quarter, which is a strong result. Can you talk about the visibility into this kind of margin in terms of moving forward? And then we know MP&S lags Raceway. So is there any reason why that segment can't catch up as we get into FY19?
Yes, I will hit at the high level and get some input from Jim and Bill. We feel pretty confident in our ability to continue to drive the business as we have. Obviously, from a quarter to a quarter, you’re going to get different pass-through. This quarter we may pass-through well in Raceway and lag a little bit in MP&S and that will changeover next quarter a little bit. So there's always a fluctuation in the time period, month-to-month, quarter-to-quarter. But we feel pretty confident about the -- that the foundation that's delivering these results, first of all it's about delivering the products to customers need. It's about getting our share of market growth and more based on our sustainable capabilities around meeting the customers' needs. We put a lot of work into how we price, how we make that decision, what information we base it on, and we're not getting worse at that or getting better at it. And keep in mind we are improving our business every day, whether it's -- the large processes about how we integrate new customers and new products into our mix or just how we manufacture a particular product on a given day, we're continually using the Atkore business system to improve those processes. So we feel strong about our ability to continue with these results with the caveat that the timing of pass-through of raw material costs and freight can ebb and flow a little bit.
Yes, I will just very much, Andrew, emphasize couple of John's point. So hallmark of Atkore, we pass-through our commodity costs, up and down over a time period. There's always some fluctuation within the quarter. Diving a little bit on the Raceway side, obviously, all the public information that tweets have helped us get price even faster in this last quarter, but we now expect to continue to keep that price. And then for mechanical, there is that lag, Andrew, there. I think you realize with index pricing and contracts. But as John mentioned with the Atkore business system we’re focused on how we can improve the margin going forward.
John I wonder -- shift gears and ask you about Raceway volume. Obviously, you had a good EBITDA quarter. If you looked at the guidance now, you’re seeing low single-digits, you said I think low to mid single-digits last quarter for the year. Is the issue at all to do with underlying nonres markets, what are you seeing there? Are you getting, I think -- we are getting as much push from the initiatives as you talk about last quarter, or maybe higher pricing slowing down demand at all. Any sort of color you could give us? And maybe if you could talk at all about how you look at FY19 Raceway volume growth at this moment?
Yes. So, I will let Bill talk a little bit about 2019 and what he sees going forward, but its -- I mean, you framed that pretty well, Andy. It's -- we see that the underlying business activity and kind of the construction activity out there as being favorable. Keep in mind that the way we do our volume might be a little bit different than the way competitors do volume. We do our volume in Raceway in feet. So one thing I will point out that is, if there's a -- especially in the copper market or the cable market, if there's a mix shift away from the really low and light weight and cheap very commoditized products to a higher value add, there's a usually a trade off in feet. So you could be doing much better in terms of sales, dollars, because it's much better in terms of value add and you can be giving off footage -- you could be letting some footage go strategically and it will serve as volume. So we see a little bit of that in our cable markets. But that’s even actually -- the difference in feet and pounds for steel conduit can be the same thing where if we’re getting a higher share of as an example of heavier rigid or just heavier conduit pipe, we might actually be trading off some footage. So we're doing less of the lightweight conduit and more of the heavyweight. So keep in mind, we do it by feet. It's a good way to do it. It's the way we've always done it. It's a very consistent number and our numbers that we give you are meaningful and true, but mix will have an effect on that. So I think the highlights would be underlying business activity is strong. That low single-digit is based on what we're actually seeing now. There are -- there is some mix impact though as you go to higher value add, you might be giving off some in terms of footage.
Yes, and I think just to add, Andrew, really focused on 2019, we haven't given guidance yet, but from all of our indicators whether it's Dodge, ABI, or quite frankly just voice of customer, we see the continuation of that low single-digit numbers as we go into the next fiscal year.
Congratulations and good luck guys.
Thanks.
Thanks, Andrew.
The next question comes from the line of Deane Dray with RBC Capital Markets. Please proceed with your questions.
Thank you. Good morning, everyone.
Good morning, Deane.
Good morning, Deane.
Appreciate all the color on the pricing actions in the quarter. And just maybe I’m not sure there's any change here, but if you could just comment on your current expectations about tariffs impacts.
Yes, yes. So, high level on tariffs, we said this very consistently. On a day-to-day basis, we basically manufacture where we sell. We operate in six countries and fundamentally we're making product where we sell the product. So tariffs on a day-to-day are neutral. Basically to the extent that tariffs affect our customers though and are either driving our customers to different solutions, or driving their volume down or hurting their business prospects, it could have an impact to us. And now we tend to be more on the slightly negative side. And then to the extent that tariffs hurt the economy in general that will play out over a longer period of time and obviously we'd -- our boat would float on the same types that everybody else's does. So I think, generally the take away from tariffs is, it's pretty neutral to us. There could be timing impact if a commodity such as steel has, moves up very quickly, we might not recover it all across all of our businesses in the same timing. So we're seeing that within MP&S. Steel goes up very quickly, we pass it through a little quicker on steel conduit than in our MP&S business it takes longer to pass that through. So there's some timing impact, but on the net, tariffs are neutral to Atkore day-to-day, and then we do worry about what it does to our customers businesses.
Yes, I don't, unless he has any follow-up.
Got it. And then just in terms of timing, I thought I heard Jim say that regarding the lag on mechanical would be a catch-up when the cost curve flattens. And is there an expectation about the cost curve flattening? And do you guys have a crystal ball that you can share with us?
Well, we -- yes, it's a little bit cloudy crystal ball, but we’re in the same boat as everybody. If you look at steel over time, there is a flattening usually in the late summer and fall. And so we would expect that that we see something along those lines how profound that is or how new onset is, it will remain to be seen. But we’d say there's a seasonal adjustment coming up of some size and shape that will allow us to catch up a little bit on MP&S.
Got it. And just last point is, first of all, John, I want to say, wish you all the best, and it's nice to see you go out with a big bang this quarter. So congrats on that. And then for Bill, could you share with us at a high-level what priorities you expect to focus on as the new CEO? And then maybe share with us a bit about your prior experience of working with Mike Schrock, who is just named Chairman?
Okay, cool. Thanks, Deane. For priorities, it's very much continue down the path that John, myself, Jim and the rest of the leadership team has set over the seven years. So the consistent theme of the Atkore business system focused on people process strategy, our values are fundamental. So that’s 90% as we now have I think a very good foundation, thanks to all our employees. There will be additional focus on how we spend more time externally with our customers and more focused on very focused growth initiatives, again, not only the pricing, but other specific segments with specific value adds and products that we can target to make sure that we are over time growing above the markets. But very much the same with the leadership team and focus on talent. From Mike Schrock, I worked with Mike on and off at Pentair for probably 10, 15 years. The nice thing with Mike is he very much fits the culture of Atkore, even though he wasn't part of Atkore, but Deane, as I think the PIM system at Atkore is very much the same as the Atkore business system policy deployment. They're focused on talent and people. Mike also, obviously, brings the electrical experience both as an individual and growing an outwork as an electrical contractor and then being the head of Pentair that had nVent. So his unique set of skills that I know the board overall and we're excited to have as the Chairman going forward.
Thank you.
Thank you. [Operator Instructions] Our next question is coming from the line of Rich Kwas with Wells Fargo. Please proceed with your questions.
Good morning. This is Deepa Raghavan for Rich Kwas. Congratulations, John on your tenure and good luck. So couple of questions from me. The acquisition synergies are much better than we’d have expected. Could you please talk about cost synergy versus revenue synergy realization and where are you in the timeline? You just made these three acquisitions in Electrical Raceway. Where are you on the timeline? I’m assuming we are still harping on cost synergies at this point in time, revenue synergies yet to come. And how long a tail can that be?
Yes. Deepa, thank you very much for the question and the well wishes. Yes, so on acquisitions, something we’ve -- you know, you've been part of our history here, we put a lot of effort into managing our portfolio and getting the right portfolio. The acquisitions we made last year, I would say, where they are over performing is really in growth and on the commercial side. Bill Waltz has been a big driver of this, but in general, at Atkore we are pretty focused on our integration, making sure we integrate a business into Atkore without killing what we would call the X factor of each business and I think we’re doing better. It's not ripping cost out. It's finally those natural synergies between the businesses that might lead to cost savings, but also letting the businesses that are now part of Atkore be who they are, and in many cases giving them a little bit of funding and a little bit of help to achieve the commercial synergies or the commercial initiatives that they have been driving. We bought these companies by what they can do commercially. It is the short answer to that. We continue to have a very robust pipeline heavily weighted towards Raceway. And probably the pipeline is a little bit more of a global nature than maybe we’ve see in the past, but a strong slate of very good accretive opportunities. As you know, as everyone knows, you don't control the timing of acquisitions. Yes, there's the process we got to go through and we're in that process. We do have things that we think have potential to close. Certainly if not in the fiscal year, early in the next fiscal year, which would be of the same ilk you’ve seen from us in the past. Commercial focus bring something to us commercially, fits well with Atkore, drive some cost synergies and with investment things we can really accelerate what they're doing in the market. Bill or Jim, any additions to that?
No.
No, not for me. I think you covered it well. I think that’s a good summary.
Okay. My follow-up is -- this question was asked before, nonresidential vertical strength, I mean, looks like weather should have been favorable in the quarter for at least the Raceway segment. And just curious, if you can give us some color on institutional versus commercial versus industrial strength in the quarter?
Yes. I will start there. I think where we're seeing some of our largest strength is in areas like offices and education, that are up in the higher single digits. But again, I think our guidance -- the overall low single-digit for the year is what we’ve been focused on and we’re pretty comfortable with our execution towards that. And there is some light year with -- when projects start until we actually get the business by six months, but everything is on track with a couple of segments going above the average.
Got you. My final question is on MP&S margin recovery. So if steel prices were to stay at current rates, I mean, when do we expect that segment to be price positive? Is that going to be more like a second half '19 phenomenon? I mean, what I’m trying to get at is the price cost cadence from here, it looks like it's negative, it's probably going to be negative for -- probably starting to improve next quarter on. But when do we really turn that equation around and yet to be price positive, I mean over cost? And how should we think about incremental margins once that price cost dynamics comes back to normal? Thank you.
Deepa, Jim here. So I think when we take a look, you got about a 90-day lag on the indexing. But then -- the mix of products as it go through the different verticals, as you go through the season will change. So I think as we take a look, we will start seeing the margins come back as we go into 2019, and a lot of its going to depend on what the commodities and what the mix of the product does. So …
Mechanical Products & Solutions is really -- it is a great segment for us. It's kind of getting the worst end of the stick with regards to just how you pass-through inflation in that business, but we do see that the trend improving in the right direction for us. But keep in mind, there's a number of commercial initiatives that Mike Schulte and his team are driving and a number of cost synergies that we’re focusing on as well. So good business for us. We have leadership positions. It's a business we really like. It's very synergistic operationally with our Raceway business and we see that going in the right direction. As far as the timeframe, we're guessing on a couple things, such as flattening out of steel etcetera, but that notwithstanding I would say that the trend is pointing up for Mechanical Products & Solutions.
Thank you. Our next question is coming from the line of Steve Winoker with UBS. Please proceed with your questions.
Thanks and good morning all.
Good morning, Steve.
I just wanted to maybe start with free cash flow and -- well, let's start with that one. Just how do you see that playing out from here, I think you guys have talked about a 100 to 120 previously, but this quarter puts you even closer to that for the full-year. So do you see any higher number at this point as you move through the rest of the year?
Yes, normally the fourth quarter -- our fourth quarter is very strong, so I think that we’ve been seeing somewhere in the $135 million to $140 million range for cash flow for 2018.
Okay, great. And again, stable on a CapEx side, so mostly just operating cash flow improvement?
Correct. We did up our guidance for CapEx, up to about $37 million. We have the opportunity to pull ahead some productivity projects that we were able to get into this year, so that's why you see that type of increase, but we're pretty comfortable with the cash flow that we're generating right now.
Okay, that’s helpful. And then, in terms of that M&A enveloping or capacity compared to the prior, I guess, 1 to 150, how are you thinking about that given all the work that you’re doing on that front?
On the M&A?
Yes. Yes, just on M&A. Just additional envelope from here.
Yes, I still think that we’re going to be -- we’ve been targeting and have targeted $100 million to $150 million. Obviously, John mentioned the different one that we have different projects that we’re working on, the ability to close them. It takes two to tango on those, so saw a very active, very robust funnel that we are pursuing in that and we are still driving to bring those to closure.
Okay. Sorry go ahead.
If I can add, so from a strategic standpoint, as John -- Jim just mentioned, we do intend to spend around $100 million to $150 million. We have a robust funnel as we go forward. And then we do have a set of criteria from is it strategic, is it accretive, is it debt responsible, do we have the right management bandwidth at the time. So we're not going to rush or do anything that doesn't make sense for our shareholders or company, but methodically, we will continue to drive acquisitions as we go forward.
Okay. And are you leaning more towards one segment or the other when you mentioned that?
Yes, I think that there's a slight preference towards the Electrical Raceway. And as John alluded, that would either probably be North America or as we continue to expand our European footprint. If you think last year we did two acquisitions in Europe. We have a great management team over in Europe like we do in the U.S, we're opening up kind of our parameters there to consider European acquisitions as they make sense.
And I’m just trying to tie or square some of the comments earlier on the footage volume in Electrical Raceway versus what you're seeing by underlying segment in construction, institutional, industrial, offices, education etcetera. So just in the quarter itself, the additional lightweight versus heavy footage that you saw was that link to a particular growth in any couple of segments?
To some degree, yes, and then also I think it's linked a little bit to preferences we have or decisions and choices we make with regards to how we price. So on the very low end we're not that interested in chasing volume for the sake of volume at diminished and counterproductive price levels. And so that that has an impact on the volume, especially in the measure in terms of footage.
All right. That’s all helpful. John, congrats and best wishes and good luck.
Thank you very much, Steve.
[Operator Instructions] Thank you. At this time, I will turn the floor back to John Williamson for closing remarks.
Great. Thank you everyone. I want to reiterate couple of things. First of all, Atkore from day one of CD&R involvement with the business over seven years ago and when a number of us came into the business, we focused on long-term capability. Build the business that would be better every single day and would be better when we moved on. And I would say that I’m pretty happy with the business we have today, especially when you measure it in terms of capability. The ability to take care of customers, the ability to manage, the ability to take what the environment gives us and do the most with it. And then I'd like to thank the people that do the work. Atkore, you are exposed to a handful of us. There's nearly 3,800 employees at Atkore taking care of customers and each other every single day. Those are the people that quite frankly are getting the work done and those are the people that we believe investors should be counting on and can count on. So, my thanks to all Atkore employees and my thanks to the investment community in your interest and we look forward to getting an update on the business in another quarter. That’s the end of our call. Thank you.
Thank you. Today’s conference has concluded. You may disconnect your lines at this time. Thank you for your participation.