Hubbell (HUBB) 30 Jan 242023 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to Hubbell's Fourth Quarter 2023 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 speaker today, Dan Innamorato, Vice President of Investor Relations. ahead. go Please

include our President press are morning, to hubbell.com. forward-looking Earlier statements Therefore, Good our announcing incorporated thank for Chairman, CFO, of by of CEO, statements XXXX. discussion you results may to and reference are Sperry. Please Litigation Thanks, Investors President this Vice XXXX. this joined of forward-looking and the Act morning, everyone, today note Securities Reform we Executive us. section considered The of quarter defined this the related website by release Bakker; to note and expected company issued comments joining slides in results and as for posted future at the our the Private Phoebe. the our fourth and release release I'm call. please a of morning Bill Gerben our our press our statements press by

non-GAAP measures. measures release in Additionally, comments and slides. GAAP financial included Those to may are the the and are press measures comparable include also reconciled

the over Now turn call me to Gerben. let

Great. quarter full exceptional XXXX Good us Hubbell for you to results. finish a and delivered strong year. year Hubbell's discuss morning, an and to thank Fourth joining

our but while attractive businesses. by per For maintaining of in These by consistent growth, productivity markets expansion points earnings of operating results service achieved people also industry-leading and and across driving in our customers the positions operating were not over X% year share. strong for we over full and only profit and our the price our levels execution margin XXXX, driven sales XXX basis XX% growth

initiatives. in and our investment us million also back to performance expenditures into levels in productivity our financial double capacity, business invested invest XXXX. from almost capital in strong $XXX XXXX, enabled innovation We Our

profitably for detail and off And We we intend will will future our grow more in that to later, strong of multiyear productivity are these base investments describe growth drive performance. we of a shareholders. confident as

expansion in to growth to We Turning fourth Notably, returned quarter. in the segments. volume both growth and Electrical Solutions. we margin also delivered strong year-over-year

noted earlier normalized. As we channel seen year October, our were had in had inventory previous confident the the that management in we largely we that on call

As stronger the continued well and strength seasonal a saw result, quarter renewables we as in data fourth performance across as verticals. centers

We the Electrical ending the also margin margins in with XX.X%. continued year adjusted trajectory of the expansion strong of operating segment,

plan quarter drive convert as productivity. In our strong, We opportunities supply consistent collectively we have as continue markets to of investment we to to as we Transmission XXXX Controls impacted Utility accelerate demand to in structural to be normalization chain we beyond. Telcom see by in continue distribution improved. backlog in continue channel anticipated, restructuring inventory visibility strength positive, strategy though on a investments. on in continue to see Utility Communications XXXX the & were margin an conditions are view quarter. on competing due more until fourth long-term and we in Solutions, expansion progress with visible cautious while quarter. long-term XXXX initial the past and trends our were markets largely third segment, and make operating were timing we remains weak here outlook markets taking have our And as of

be portfolio, of to per We sell that agreement strategically grid a on focused create Systems net and closed to share. actions close they expect Residential earnings anticipate executed and profile XXXX modernization margin accretive These strategy growth definitive Lighting early in previously and transactions which we to and portfolio as ongoing will portfolio the our also aligned the improved electrification. our transactions reflect around long-term of adjusted These X we we a on to quarter February. the our announced in important business, Control acquisition announced

that performance. With will success on our remain in build of to that of growth markets more call, uniquely walk this We through this and last the the 'XX Bill several positioned turn can of details higher that, Hubbell attractive base end is we outlook confident the of the to we at but off over it me let drive to years you quarter. profitable details this of provide

a Thanks fourth much, you I'm the going in I'm a joining everybody. found. to and was strong quarter, Gerb, you very discuss to on X hope strong I my performance X slides that which good morning, with of for the and Thank frankly, strong, Page the financial have to very pleased our us. you capping start comments years. year chance

place, have being continuing So expansion, as growth, driven well year growth the here in and strong flow as markets by cash and And obviously quarter. pricing are sales strong longer the strong and profit resulting. those trends including strong is in margin last been fundamental really, the for trends fourth operating

inventory from comes The reported is sign ] is noted, to bit than billion we fourth organic. But quarter the as [ than sales, So that return little growth, a sequentially, segment, growth to important acquisitions, X% Electrical. as XX% Gerben normalized in the on is $X.XX Utility truly channel volumes quite of typical. house. Interesting that stronger the the Electrical X% a side that for seasonally of stronger of

good sign. a that's think we So

investments. creating and and share investments see by XX.X%, productivity per cost On to expansion being really increase X to described. Earnings of year, prior flow, price Gerben source points million at free that in driven profit $X.XX, a margin you operating had XX% funding the some $XXX our helping and and cash side, acquisition of CapEx for fund

on Page So let's that X layer deeper. double-click one and go on

the said, were we'll to Utility X% quality of single get think and service that's return digits said comprised The X% evidence of Utility on good acquisitions more of the our was we sales of to from the organic. XX% brand our those when volume mid-single price. page. and talk as the volume digits That positioning and was side, Electrical We of welcome, we So I coming low all growth. and about

On well continued which the X for to XXXX. right, by to profit tailwind quarter up operating provide really XX% a The materials had points price driven margin as each $XXX being as expansion in they million. upper of as

So as the as that's the wage we're is absorbing lot productivity efforts, side, a we're well on and of on. transportation productivity we're where that there inflation more experiencing going focusing some investment operational

On earnings you higher the per slightly operating see rate the profit. up lower left, than XX%, a share growth

that free we some really cash So $XXX of And footprint drive nearly around rate a a CapEx of over $XXX benefited below from the full generated helped side, and productivity the million, investing. we see capacity and increase. favorability. flow $XXX million on year, you cash And line, which the XX% million, tax some for supported flow restructuring,

talk plus in we on with of year. remind this operating XX% December, start excellent acquisitions and Balestro And growth So in the about was quarter both let's the into closed ownership is in unpack and profit T&D We'll components a EIG Control the see so is organic acquisitions minute X last Systems of Balestro another from everybody comprised Control. and and second sales Page acquisitions. double-digit our much segments, and included and you'll there, Systems and our from and the Control EIG, more Comms & X, yet. in the side. enterprise which of Systems X% growth. growth our X% XX% utility contribute reporting quarter few we'll Utilities was to sales team, The years didn't are Control middle

on & with organic As side. Transmission we price. growth, it inventory If Transmission we management. think that was of drag the components, about our if start Control continued X% be volume Substation Communications components, And & second skewed I a continue inside see see look it you'll was very Distribution the channel where was through we you'll work organic, to towards X%, strong. Distribution the quarter to at components, and

quicker before, think had we sooner side. really electrical our utility I than that had as earlier and side mentioned experienced

some are on from So as who we've stimulus side still inventories their well and rates kick been customers to of for the some projects. in has high Telcom impacts emerged overstocked side. And -- demand as the potential interest on waiting distribution of a off combination function a then weak dollars electrical

Aclara Controls, both surging You the growth the there. businesses there, Beckwith Communications see & and on we've got

side, the existing backlog. allowed to some really up has satisfy chain Aclara them supply the On opening chips

to year, and as we last we so growth was there was some settlement item. And had easy double as in well, see great relays sales. Also -- digits Beckwith a there. remind a that makes sales we And protective up controls, there commercial have compare an contra which

the and the line contributing [ top the to strong the margins. OP same very continue performance $XXX make XX% to story and segment XX% growth a price million, (sic) we growth better even cost of side, by over So investments. XX%] is volume And on

just performance quarter fourth all of on a the about obviously is this the year, growth full year a full of from comment So bottom profit at XX%. page,

we a normalized as volume last Burndy centers is of thought as serving X% the would Page outstanding volume, the the from is his expansion, big to as Greg quarter, segment. that the bought verticals. points came is and U.S. the congratulations So was and Net performing it's bit news. The half occur growth, comprised year. On half the growth on team. in which that reshoring margin about of electrical strongly we you side. and strong segment. inventories is rebalanced And some X, and really team we've which just of Recall important And volume. be that and good got said, X PCX, benefiting from well that performance that Electrical year, mid-single-digit of did vertical fourth also little on Data a with price that really sales channel see of serving segment. from Burndy renewable industrial a one. sales in we October

$XX allowing X there, in the I as you as XX% volume as I'll full make operating on of So helping And We Electrical of some comment segment XX%] in the (sic) year return like with cost favorable growth. points profit volume profit X.X side, well again, points did see profit growth [ million, saw to the margin growth, the on trends that XX% Utility reached really side. growth. And operating margin price for expansion. on the expansion

see the So margin that us year more where the Electrical looking in to we investing those in see portfolio margin definitive out intention ourselves to for forward have we're management. our think us we're collectively more talk February. we of over I segment see and compete of there's million yellow you bubble I'll blue about under start is I of with mentioned higher Mikes large team you Connection components, think that to million agreement the businesses. And continuing adding there. I higher here. bubble acquisitions, businesses in laid Cantega, $XXX $XXX a in to Ripley, activity, fourth early the XX push and And few very Bonding rolled growth, of make Armorcast, a hoping the successful X products. to added And last And that, intentions available Balestro. to billion the that wanted growth the And Mark and of his Page to we & in our numbering the you'll to into and And there X, T&D divested can proceeds, connector years on netted of last about few close where where just companies divestitures we here remind sure we've $X.X years.

mentioned our intentionally I verticals and Substation like Acceltex. as specific businesses Systems, Communications to high-margin, like of those growth as very in adding high-growth Wireless Grid Datacenter, Automation, areas well PCX, So

we want its we structure. to impact closing I margin on think pause Controls capital and enhancing So, growth the recent on of are didn't as as Systems because size, the company. of profile well the

well gives results flexible [ supportive we basis as that CPE funded with that us term some of $X.X ]. on A bank which and So very cash group. result was debt and around of as by purchase our levels in loan a prepayable The and structure, a a billion manageable provided price capital that think debt X.Xx net we X.Xx debt-to-EBITDA some optionality is some

in the acquisitions So were improving we about specific our talk guidance impacts the another And on that couple of portfolio. of pages. feel the I'll like

to Page on the expectations. start markets talk So let's then and roll those outlook, with switch earnings markets, through we'll about we how as XX our

on segment segment Utility the right. the got we've Electrical on left, the So,

and about electrical there. the really the rate that's of in been do their of for gas managing restart Starting meters they've healthy X noon comment, high orders long-term You medium- will backlog. And mid-single-digit that's Transmission, quickly is have very Gerben now with think expecting ] the can attractive to Telcom, are outlook here. the short-term we digits, the on a waiting talked relative Telcom. Substation see inventories different We and and pie. having outlook. for a in pieces around both Distribution [ We and a quarters the think cautious just normalizing which Automation, and pie single up there. I to distribution, those outlook mid-single digits, growth very

growth So the is a result rate. side on mid-single-digit the utility

On X%, mid. the to you so X% electrical, see low out nets at to

I heavy mid-single industrial see you think both digits. the and outlook, is to low light

mid-single-digit have verticals. And We I caution nonres, to maybe growth low a we in think single digits. rates of our bit at have flat

So XX rolls outlook. through market and let's outlook our and a go constructive Page for earnings XXXX, that see how to

affording generates from a in So to X% the X% to organic see you out, sales X% growth, growth XX% with one cash in X% bridge let's walk sales create and to continued combined about through net XX% coming you a XX% give of one That income to flow our profit. M&A, growth. going net Results at it. free in increase operating earnings CapEx. And of the feel for in a in X% just

under sell to we're will So Residential $XX will $XX contract Control, million EIG Balestro about OP, and of adding million. lose be Systems that Lighting

is on our consolidate nice the we X%, side, Electrical from $X point X% on continue over expense, a volume in investment, to under see of restructuring collectively column, to price, pay those compete right. We which the continued we had of that's to we have segment that program. list. footprint X% next so and can almost providing as for organic there you the coming the have we interest And the comprised particularly X and So we've which before X%

close You the midpoint result the result $XX.XX. And interest a Systems increase in an see on right X% to the the borrowings on far growth to Control. about of OP, is we below expense as of outlined that earnings

quarters being first last the quarter stronger. And of fourth to We're another I second seasonally a You there. those the for full contributing on just very seasonality first quarters, to and And XXXX in you add compares third one seasonality are the are little and which considerations who where bit listed that see being normal just year. some below was modeling for modeling. the year anticipating might quite strong

us. to Hubbell. And at a I'd some profitable to We have think year volumes, we So very turn to happy constructive we're Gerb. have push positioned, made well to portfolio of to net back in to feel return the in we're like addition continue and that, front it growth happy with

while over expanded adjusted strong. mid-teens at our over period, XX%. the the Thank very think before from have outlook Q&A, Great. earnings shareholders, Bill. not XXXX, been notably, few X-year a operating years for Most we it context. and you, to only last turn results the delivered and profit longer-term performance we to in XXXX And page at to operating over last I have margins doubled but it's helpful in per 'XX a share we our and on The CAGR look over growing adjusted double-digit sales adjusted

further years long-term have capital our and doubled our attractive expenditures X growth last to service also differentiate support expectations. customers to levels the over We

forward whose and to hard need our for to energy infrastructure, electrification deliver our renewable modernization shareholders. I'm with Hubbell of right positioned and over employees is have people, work extremely resilient reliable, grid strategy new achieve to the solutions XX,XXX drives enabled uniquely and dedication value As proud strategy we and on year with off continued meet with targets. more an the Investor evolving needs updated and to will customers of our of us June this the a X, 'XX that more and Day provide details attractive turn the beyond. We will growth call With later continued hosting am financial that, this baseline success we our on where let's And over I performance. confident profitable Q&A. build long-term to look in of

first our JPMorgan. of question Instructions]. Stephen And from Tusa [Operator comes

for segment Can trend the color margin bridge we any what the just a color And how price expect to little on on seasonally? then more you costs? and that get year expecting maybe you're

Yes.

flat, we've price as So cost, got Steve.

inflation. embedded we've using offset transportation, then effectively like that places like a point offset can we're in of effectively we think And things productivity that. commodity nonmaterial X got on have wages We to inflation which in help rollover price and there, program

quite are And PCP think, as -- a I it's segment that both result segments, flat say margins I'd reasonably think a that flat-ish. So segments I of to say, assumption, way by the would I expectation. our And Steve. applies

the ish other, positive negative-ish? Does kind the way or skew on of one utility or

about... think flat. say I'd should I What Yes.

Okay.

Okay. Great.

Maybe on the pieces give moving that, you. I'll X

those little provided very roughly And about If take bit you if addition those even a it's And -- a flat, think Control, attractive it's and little of margin, flat. think accretive. net though dilutive volume, about to that's the PCP with you we've you the numbers a Systems actually of it's addition. bit if

little the If it's electrical, at good that a the bit on you with -- look slight of on restructuring. maybe pretty color a electrical is because expansion a step-up I but think

out, And nicer So segment take opportunity referred then through that. better that of if organizing collectively, actually is it that Bill the more margin for work expansion a earlier, room it's expansion in there. competing that they as you still there to

from And our comes Sprague Research. Vertical next question of Jeffrey

utility the Just more color a little margins. on

also, also that in at to it's degree, about Aclara that Not but a margins business. some where the feels the Just from a business, are mix thinking sure like friction Comms point standpoint.

you address can you I said guess, if flattish. wonder Gerben, that, So

sort half us on in all on Telcom XXXX, the the believe. we're at weakness of, can here for guess powering still, effect in looking a So a down we'll just much you're context And you have but for was that, Aclara. weak a I some I a color we give how XXXX? but mix base through of have do least, XXXX, little

Yes.

right first. we're with for their developing you're component Distribution and the margins say say R&D working largely on of And margins would Transmission maybe to utility So comms the of next-gen are that margins amount below I Aclara, let's the doing investing start because package.

in you're outgrowing, I create So think where did 'XX, would fourth that say fourth I a in this saw quarter, the particularly mix and I them -- where quarter. does would going, it in you drag

I Jeff. anticipate we rates balanced, maybe year, think next more growth

big think margins your utility mix So And have a was we'll in don't question in second I effect on Telcom. 'XX.

quarter, year, Yes, context the XX%. we of Jeff. the there, towards slowing latter saw maybe fourth And little that provide specifically, part a the was really particularly down down more

to happened early we double through The year, the working be what of in expect were of a digits. quarter, lot first which still in us And a kind down shielded that little bit. we still that, backlog

So first quarter, half down be the second to of still we of quarter it and certainly expect, stimulus expect rebound the freeze then funding we some to probably the up. after second in that

Everything can side, of your pretty also Gerben, industry, want on kind just throughput address of factory just utility up you've the rates. to seem just been to there? on here kind Maybe on at do And the growth ability a here kind of healthy expect out on what little work doing and skyline a more or compound buttoned to CapEx? particularly bit the there's to you is of factory

Jeff. more Yes. do, I'd to say

Some time get those equipment of online. of that to some and projects take

particularly example, Substation year this to strong our you if capital as online. Transmission still that about, come year that needing think as some saw. requires markets, last And and coming you So well, for and

done ability We've good feel that. Now well to very our the last about over I that year. do

we growth our that of some support in have to guidance. going embedded that's that So

And then one. one sorry. last I'm

had If whole done, could. I I if not last ahead. just follow-up, you're go one

Please go.

comment actually year of I've comps you to get to that given beginning in margin want the QX? -- year-over-year But that's back and I the expecting sort everything. given Totally to of seasonality modeling. just are EPS in the grow it, in particular, and the of what kind been come

I that in the our the and say to aren't just just last seasonality be it EPS with by our Yes, don't guide more anticipate to QX full line do did I think basis. I'd than we the so contributing year. -- typical -- we at year in earnings quarterly would

So...

of Stephens. comes And Tommy question our from Moll next

a destocking, seems at like more it year, discussion to the was for that has I of around most side than this of availability that last around the utility With conversation point? some on wanted Is price. distribution, all? changed inventory of business. bigger factor start the price at particularly rather It said, a given

I Tommy, not would say so, no.

I some are said, that What guess begs Good in then year of Bill, in pockets you your highlight price, outlook, pockets. uncertainty full were contemplate, you you certain I to there? follow-up hear referencing a you but where it. those wraparound a think point did

Yes.

down. think first a Telcom to be the So see would market I

puts little pressure I a on think that. just

noteworthy And most so that's really one. the

I think sometimes. other areas pressure overstocked can things where are little a put

very So we X -- the last a really successful pricing had over tactic we've years.

them them coordinated let point, constructive. manage to other is them, are and with implement it's it's the to time of very our And enough focused I've conversations described sure weeks moment, this close about none we very few make to with your that visiting the largest -- and Tommy, and your systems. big through that our so their in -- with as give b, course happen something a still them quite customers I increases of customers. Gerben a, be of of are, on; But asking price price over of just price couple than are to last we're

stage, your to a to weeks the that maybe over, carry built are increases that I'd the only but also we're but headwinds, point early year. few that also to those be again, tell having And announced hold. say we to taken in at into stick there we this rates, very the this early may price It's guidance positive some conversations

against levers have headwinds we by potential price, taking too. So

comes of our from Coe And next Research. question Wolfe Nigel

for specific, bit right the a math? that about zone full your Is year. be XX% XQ, typical for just it more So like Bill, the I of looks seasonality wanted to about

have asked Yes. Yes, a you if XX%, I would said little. me.

margins. growth electrical the That's then revenues just in And X% and Okay. this organic great. outstanding. pretty quarter flat both performance The is obviously Q-over-Q

there? data I demand, know electrification impact out there. market I'm of you in curious the you're and end seeing systems. during strength specific just So what is center saw a quarter and terms the you that mainly being channel called

We in sure saw and not what I essence where customers, And our Burndy our do benefited did I'm from centers their both good were we of to that data asking. business. find our vertically well. Yes, I'm we they that's PCX you're and business those getting managing renewables areas the at inventories, pushing saw been think had if big you're growth where as in return that

end we bit that So I'm you're not if a a But of sure had customer markets there. behavior getting mix or kind little of a both. of

it Yes. I know. straight But question, a impact channel was do neutral. the you I mean wasn't fairly think

the the impact pretty exit flattish selling then, question. guess seller in 'XX, is So for I know to up. sort my But we about answer said similar, I XQ XXXX, the into rate really you've restructuring but when think that's of picking margin

headwind in lighting a coming about But obviously out. just that's 'XX. So the curious impact that's because

So probably I toward expansion bias that drive in electrical. more think would a of that,

that. with agree you if curious just So

margin the digits sort do what they double were a at at I better of you agree segment. versus is see

I agree. do So

And then setting the sellout?

Yes, it's in the quarter, pretty Nigel. consistent

And our Mitchell question comes from next of Barclays. Julian

destock. a fully that in around bit guide Telcom, in revenue. guidance, electrical don't color the of maybe the you Maybe start a year for have and X% you've sort just utility the the give understand destock and you of to extra organic growth And trying detailed of but to nonresi last got year drags weak quarterly the comprehend

suggest growth second organic to a rate. seems that of half stronger all So

as the year-on-year go dialing much as that a to year Just the you year wondered we in get of through improvement how whole? X% are for an to

the of of confident having we you. And kind we'll welcome we that Yes, could the Julian, done feel as I be would we And utility at we all, call. on you see, the could but are. well. side, say -- Nice destock say if to have that electrical of would first -- that to more be point with the I

Your Telcom is point right.

what you on I start. And that's about actually And we second the -- think -- a anticipate seasonality compare. and VPY look of sequential destocking do introducing the half I easier. a going could of VPY think as little basis, the of bit you're sort because compares think to be weaker some how

strong. upped the more last investments For and that around those was our creates year think half second we actually easier example, last year of first a seasonality-wise, half. wrap quite quarter at as And I consistent second

So I net though other, puts that think kind to work more here. there's against things obviously hear getting forces of Even and year. each you, takes that's I a typical as we're and those how seasonal

saying at the we destocking, trends look hesitantly to off January, is how Bill we're we that And as maybe, supportive in Julian, it's data and provide it, right point, more out point maybe little starting our some early order here realize could that. And year at way be I'll still a balance on and one it's and look somewhat what an at there's look to But I context we actually headwinds. exiting to our you're it's but constructive.

early to of this guidance. year of constructive that seasonal As I'd is into profile the read kind say, it's

single a for within the to just plus follow-up. nonresidential vertical the then XX, quick Electrical, guide the And flat low That Slide year.

that the channel word outlook, course. on uncertain. stocking used understand run market the You just maybe you But largely its fully having

Just different put you're bucket? could that, any what of in verticals around color seeing in you nonresi sort that

on the constructive office, think feels a it bit mean just less pressure little just like certainty. I pie. puts maybe it's a I quite

just by, probably less but in that you think, But still I it could stronger, maybe of a -- growth be certainty think weaker. So guess office institutional some the I position. be puts I side,

puts effect the medium of pie, growth. the rather low the it So which just than growth mix I there's rest think in is more that

next One our And of moment from for Linzey question. our Brett comes next Mizuho. question

you investments, the talked in to back of about the first come half. the to wanted and some I carryover

these are from the of clarify, footprint. to wanted Just portion the the separate bridge embedded within and volume

quantify Just trying might look those understand versus restructuring what investment paybacks and if to like. the you could

Yes.

that if show i.e., up, yes, would last in was volume. you margins, in So if continues, it count, head investment it an year, added

investment, as areas of that would saying, in work a volume. higher initiatives or we show new around development wouldn't on So March in as new wrap step things up right? a up to Brett, for you're It would like cost people that example, productivity last year, product be

share term? anything in these on then bit the can longer little terms something embedded year? And paybacks a of is this that Or you is footprints

Yes.

think ROICs nature. this that I be paybacks I R&R will tend think And be that to of of that. in another The -- new bucket range. a year. the are of X-ish paybacks $XX footprint we year good there's have I in think magnitude, order the the invested that It's on million

benefits from of today And with that in cases now. those we're or investing start X year sort so probably a

thing would some say guidance. that of in other that's those I higher our the improvements will productivity level a is Maybe embedded of drive in embedded

you look of it when higher a price at the productivity higher offset has a inflation of it of level to level productivity, in cost construct and So it. flat

So where investments are going. those of some that's

And then expectations. Great. a price just on the follow-up Okay.

actions some raw do you with. out So could it embedded sticking in that the you I'd incremental actions in these that nonmaterial of what the to sounds as maybe seeing a Maybe inflation. no potential like marketplace you're are just on like little planning. see if context imagine hedge some look

inflation to as price. lot of corresponding of give drop-through. kind $XX that's no gets this So equally a there's you a I XXX% us sensitivity kind little about right? of You'd a sort speculative if north point bit Conversely, if of could million of analysis, And to of you see each be it obviously of mean, if price leverage Yes. a little, maybe have that. add

well sort of productivity transportation so, last And related because the I as think we certainly we have inflation investments year, in area see have of areas. target a material outlined, wage, as some ambitious on made we as more kind level, the we and of Gerben

need that focus to -- ahead rigor to sort level come those on of the push really month a it's We at even we an sure continue getting levers it all is to to think we or I my out keep of stay even carefully ahead. initiatives So Gerben's obsession. make every and enough and review

Wells O'Dea our from of And question comes Fargo. next Joe

detail the of just fair the some with the get of organic things, to First, lighting organic buckets any expense XX% model? the if the And I side just 'XX, about I that you XXXX right think you bridge. wanted proceeds? a expense restructuring, the interest M&A on deployment of on think about it, in guess, focus think X And piece? we it does piece And incremental what contemplate and to the we the in piece, on is in add can is resi that on so interest then M&A then

Yes.

is $XX I of rather reasonable, So I like about reasonable. that drop-through incremental but volume on I XX%, think of more expense. XX% think. is -- high And I'd see could in million the think put you XXs somewhere in that we interest

lighting And the resi proceeds?

Yes.

interest So we've interest a there expense we you plus see income a as -- as and have minus.

yes, of one So that's I going available our not pay guess in we guess any either construct modeling it's be sort earn is thing new explicit the the going to cash say And I acquisitions. guidance -- or it's that so -- it's it's built to that down. we're I'd to

And so guide. that to this would incremental be

what top roughly that think of to size -- 'XX? line kind side, in electrical the plus Got you of the growth 'XX? then contribution on just it. can to about the headwind so should as the was kind we X% what for that, destock non-repeat of And X% And the to

Yes. high Overall, in the to digits down low year. sell-through volumes of sell-through were was up. say most And double single the kind I of think I'd flattish to slightly

in mid-single-digit basis. can you think the But fourth on impact about So overall, better got I think quarter. year full a it

and Okay. price volume did split fourth And then quarter organic a of you in the X% just the that? clarification utility, that give

negative, was right? positive, into it So slightly aid -- sorry. price. Volume volume The the Joe, Yes. the is

is positive? Volume slightly

Yes.

asking You're whole of utility. a for

you about Sorry, [indiscernible]. talking I were thought

sorry. Yes,

X% organic, slightly volume. whole a that so positive Just

Cowen. And TD question Amicucci of Nicholas from our next comes

in Electrical couple. the hone to segment. Solutions wanted I a just on had I

to this going optimization. the somewhat year benefit obviously, from So footprint

see to perspective within how much -- wanted do Just much that you how segment? I mean, guys optimization an have from headroom more

then mean you Yes. that bigger, the are, -- scaled in [ locations. this putting have get I'd the it value, we be that facilities. I more keep locations, And volume year, chance will to after still absorbing you'd the be in say projects consolidating ] existing always there's so

in answer at where be it perspective. But we'd few bit I'd years, you very say, be a narrowly, quite a a your can happy with question more the process. stage you So we'd the long little next with if optimization took

years. but into a the think few along guess, point, of goals I done, desired You're probably in go never our just I we sort achieving

Sure. upon That's I want did fair. to touch too. Then

I it So the adjusted amortization, in press that's of release, the within think $X.XX guidance the about indicated EPS.

wanted And step-up so within of and and kind significant that if XQ Solutions. a just timing the in just roughly I a the amortization, you million between to do to that's $XX get sense -- Control. of But was better mean, understand breakdown that the I math, of the for year. Electrical Systems of did related kind probably the utilities, there We Utilities

Yes.

so -- a $X the we've while. been running for So at

that's in $X.XX utilities. is the new So all

amortization, you I it think XX to value separate places and you a a that them. years. customer of as mean, lot have So the law, quite going by is about when And like long

rate. pretty So it's a stable run

question Snyder comes Chris UBS. of next our And from

you that guess ask of M&A you well organic feels QX, like because a deal wanted QX down utility know an and first the had below in it's to asking started versus half. guys headwind for are on And XXXX. be I good in a flattish I but margins. bit expectation will year it's specifically, exiting where it I the a margins organic, the maybe

back to the expect the should into -- utility growth organic year-on-year year? guide return margins down So is them we it and fair are half that then the does the year-on-year half? throughout Or to in assume up first

I of see I think in know right? of kind You down I anything -- there's the think observing, Yes. at they're -- 'XX, don't assume because flattish look a margins. the exactly what you're through would step I shape sequential like maybe I'd

doing. some spending, attributable Some of investing to is that that we're

the effect. Some Aclara of attributable it is to mix

Some Systems of were the our the partners. Power inside fact attributable that of is with volumes their it to work destocking customer channel through going

think, And that, returning normal see shape. Chris, more we to just a so again, I

I to volume with piece see And start Aclara to the of so mix quite balance becomes we to Systems think Power important that, the I think equal more contributions. equal

I a feel QX that, should quite in below expect in we QX. be shape margins would the QX world, think normal. And And QX in 'XX so that and in and margins balanced to

And appreciate margins. utility as then, on just a I that. follow-up

sequentially they're revenue. lower just QX, into know down always I So

the quarter a the in starting dynamic? Is lot more know steel a prices? we Is This 'XX starting a came is has up to Or of on than months. quite in impact utility over that come QX of sharper been X expected. margins? that those feel I to through the higher deal maybe still metal company last X,

move. starting of the company mean LIFO on would through those as Yes. November, most I pay December that saw the say there's usually a way And I steel certainly we months supply couple recent prices. lag we, chain, works a when

the maybe So we'll quarter those those mid- first to if and in first you -- the of costs, end I quarter. think prices feel will, the

And our Partners. Seaport next question Research comes of from Scott Graham

is would aspirations us question of this Just really net maybe the a And mean the which good-sized have the without a really nice are now the fold, I -- particularly be good couple disappointed work a to I number you of X.X like? 'XX, Systems portfolio with you've got sized telling Control sort for slide. outlook of leverage is the What acquire. in your about in there another year? you by what even does have under management deal is what to bubbles look off pipeline

way X It's the Yes. question. interesting I'd come to phrase perspectives. an from at it

leverage which very comfortable already our raised, you is are levels. first we The with

afford kind working make kind we start. So of It's integrated. would together. sure we say, And like and to have of Control Systems healthy to think, a I we'd that integration people invest got off can We've is we a acquisitions. financially, the to in amount perspective, secondly, of certainly well great

but feels that to many want to it. work don't we and happy are have sure with takes too it like still make integrated spinning. It fit, customers it's Our a plates good cultural

So to we your be well from love we'd in But be, of cash growth, of the out, think, may higher in pointed both this feel capacity I months margin. this yes, flow agree sheet financially million you the capacity. $XXX range And up and I as now. Northeast year, question in we that generation, plus, have balance with higher you businesses strategically, matrix X revisited northeast add we'll

X So we're -- But feel. -- it's months and just revisit how good I think question see maybe good we question. so let's that a it's a in

can also I and just fair itself I was people you a enough. Well, bit. send the what off guess looks like pipeline wondering little

market pipeline, and year. second pretty quite half at we're a the is expecting of decent the there's few There to probe in a Yes. things least the

to of or of there may be So market. an that to those interesting attractive. is be any be appears they'll buy what doesn't we'll inventory mean But amount coming

I'd like to Gerben remarks. time, this it At turn back closing to Bakker for

close drive about our questions, you. to in the of time we the to quite I our all outperformance. you a that I ability years growth Thank by really feel commitments focus Great. saying few put that to for profitable Maybe to on on appreciate after out and our really good this call the robust year outlook. I'll deliver

call. quarter forward our look year Investor in first the Day into So later our to

about talk doing Let's how we're year. so far this

So, thanks much.

participating, This disconnect. for concludes now you Thank and call. may you conference today's