Arrow Electronics (ARW) 31 Oct 242024 Q3 Earnings call transcript

Ladies and gentlemen, good day, and welcome to the Arrow Electronics Third Quarter 2024 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Windbigler, Arrow's Treasurer and Vice President of Investor Relations. Please go ahead.

Thank you, operator. everyone Call. Arrow welcome XXXX Third to Conference Earnings like to Electronics the Quarter I'd

on call Financial me Marano; Eric Officer, our Joining Nowak. the of and Sean Chief President President Global Kerins; Executive our and President our Enterprise Components, Chief Global Officer, of Agrawal; today Raj Rick is Computing, our

and today. During we'll make which our plans strategies, outlook, financial this forward-looking results, about of call, and based are expectations predictions on business statements, including as future statements

Our differ including number to most events. of result other forward-looking could update the actual risks the of or or information to in new obligation with described publicly and the a statements results SEC. revise to as due materially no of future We factors and a our due uncertainties, filings factors undertake recent risk any

figures a non-GAAP associated comparable to not will measures quarter's we earnings discuss of on a are in GAAP results. release. be reconciled some substitute GAAP As call which most intended this directly non-GAAP to our the We've reminder, measures, the financial are today's measures for these

presentation reference You accompany and webcast. can release at slide of this prepared investor.arrow.com, our earnings these to call. slides We've access during encourage posted a with you a remarks also along our replay to the

our remarks Raj Following questions. today, will and be Sean your prepared available to take

our CEO, Kerins. Sean and over President I'll now the to call hand

over to quarter. on for more to up discuss for some as the the market fourth as quarter I'll Thanks, Brad, third environment like our our with to then turn and well detail future. thank joining our and thoughts lining for how close things I'd you all provide Today, outlook then Raj on overall, financials some for results, commentary as the us. we're

per For sequential ECS. results Contributing year-over-year share of our quarter, growth sales non-GAAP generating Americas our components of delivered the billion in guidance, the solid sales earnings were business $X.X to that per global of total and $X.XX. sales we the and share exceeded and midpoint both third earnings in growth

global with did we mix through improving pleased and pleased steady our anticipated. an deliver ECS components expectations, business, but momentum regional America. a our in North customer see in different to market to also in were better line We In so were than Europe highlighted trajectory business, sales dynamics by in originally our and

addition, strides positive of to related of optimization the In working environment. we make necessary in of the structure, capital and cost management to market our initiatives light the continue our current

from points Raj more both on shortly. hear You'll

global more leading our persistence. contributing correction business. our components are estimated. levels to indicators stable and inventory headwinds the relatively to remained market quarter. to The appears previously macro in be Having said We its further both Turning prolonged believe than excess that,

above basis. or are still Our on just parity yet reached full a They've even at global book-to-bill ratios not levels QX overall.

Our and backlogs normal to have activity trend And remains continues cancellation bookings ranges. forward positively. further profile within stabilized, our

any and varied From verticals, cycle. market the later across the In saw stability and region, consistent with largely QX, we of consistent we we perspective, what patterns a across trends stages in regional mixed Asia, overall. saw think with but regions

That industrial IP&E market modest in saw trends in in We improving in in Our once grew softness with automotive the of the China, the sequentially parts business growth again sector. especially alongside quarter. and was ASEAN. some

across decline by broad-based the with across And led sequential our of and territory. better-than-normal a sequentially relative aerospace verticals its a based EMEA, grew we Americas, strength industrial in handful was defense, correction decline offsetting and nature, into seasonality, reflecting later in on markets. the entry In

volume the that skewed over specifically mainly time. basis, more regional pricing market, a be business go-to-market less and somewhat mix sales our quarter. to this This mix, the in to due pressure relative as modest where Recall customer EMEA, more overall under came margins for attractive, and operating mass customer base. Asia Our was significant been and the priority has larger end a tend of to margins our on

that not to conditions our these indicative are in we the structural As changes and any nature transitory of normalizes, business market believe model.

Our QX relevant especially to which of in ongoing we the to outlook markets continuation trends, choose reflects market compete. those

such, think along still As we bouncing we're the bottom.

see trends and ebb to and the can across next. quarter Given regions different we the seeing from some one we're verticals, flow expect to

sales in our lower to expect across activity Based margins the softness Asia driven segments. to do in levels we operating the automotive on sub-seasonal will expect fourth We with business closer perform market predominantly quarter, by the trends Pacific volume, seasonal West, and industrial decline.

case As the difficult of piece the remains an has to predict. eventual timing this throughout shape recovery of specific cycle, the been and

global to revenue related our healthy well delivered in for to North and improving AI-related of infrastructure growth function continued ECS. We global in solutions. demand execution Turning was saw That a again, basis, hybrid on of year-over-year EMEA, we a software Once with in expectations. excess strength cloud along America. both

better a year-over-year pivot to we've by to growth believe realignment transition leading recurring point the our contribution streams the market solutions toward we growing for a dollar as deployed is gross American As well overall. as profit our our accretive better us the revenue important for an include the market quarter, result, proof margins. strategy reflect in business of implied to outcomes steady successfully and increasingly more These North hybrid backlog, delivered We the EMEA cloud in IT-as-a-Service.

North consistent EMEA performance in outlook America. QX Our in and progress continued reflects

expect operating and growth As income a result, expansion. we margin year-over-year

and central we We've global our also our In on manage scaling robotics in focused to supply for centers we closing, expansion we've components, our and established similar go-to-market the to the in In chain for cyclical platform in base the strategic our design And base what to progress And our components of continue our global continue future. high at In both correction to management services all and model to growth priorities. continue through is while revenue fashion. we streams. a now our in IP&E us remain in grow deploying of the offerings motion power, ECS, in through line enabling business, businesses, the solution-centric in position aimed a recurring excellence go-to-market make automotive, customer established expansion. customer our market, expanding we're our model, West. card to becoming Asia ArrowSphere

Lastly, each I'd things like And around during the thank us work our of the with and represent throughout year. They all employees that, every the to I'll recognize for in day. Raj. over and hard market and proudly to their turn the world quarter

versus ahead year were expectations. Enterprise mix of X% and the to computing or versus the down the billion, prior solutions midpoint were $X.X third year. Thanks, above were and Sean. our sales down midpoint high components product higher the billion, of sales prior versus Global favorable due prior billion our for XX% end above quarter, quarter X% of of $X.X Consolidated our outlook. guidance sales range $X.X

for Moving financial quarter. to other metrics the

Third step included $XX quarter sequentially the sequentially, of approximately global a expenses. second in regional points driven release greater bad within components margin by in down customer the to gross consolidated third Recall impacts declined business. XX.X% mix our XX $XXX Non-GAAP primarily an also was of and $XX even million down quarter that implying million, million quarter. debt expenses basis operating

the our million basis. of quarters, on approximately implemented We actively past the producing X have $XXX market managing base turned an annualized since been expense savings over with initiatives

focus of and, costs, approximately X/X these approximately approximately $XXX on are to fourth achieving and restructuring consolidation to are million These of while on our expenses XXXX, beginning by our focus million next total savings efforts $XXX million. these reduce related to We with to resources. the In estimate line will geographic executing by initiatives annual reducing plan in simplifying realignment year. operating be continued $XX quarter, we our a operations further expenses

intends $XX Based we will also company exit given and The underperforming on current business these we comprehensive. and are certain conditions costs. lines, expectations non-core believe million for market recovery, approximately in to appropriate generate future estimate initiatives which additional

$XXX non-GAAP to on solutions margin linked third quarter, of as with both expense from enterprise at third working capital non-GAAP efficiencies. our the which X.X% levels lower represented was operating and computing in average drive we operating we efforts benefited income and X.X% a other Interest million the of sales, X.X%, at $XX global debt million, to basis. components In quarter generated

rate for the Our EPS was non-GAAP from benefited range, $X.XX, third tax benefiting and XX.X%, which resolution non-GAAP effective And the quarter diluted finally, successful high from interest was tax exceeding our of audits. guided recent expense. favorable of end

the grew quarter at ending decreasing modestly capital. over of million end $XX was quarter at from the second at QX. to $XXX the the billion, quarter, compared Moving end by million Inventory third $X.X of billion. to the approximately working quarter Net third $X.X capital working

XX days. at cycle cash finished Our quarter the conversion

year-to-date. Our was fifth the million with quarter quarter $XXX $X compared approximately $XX the cash short repurchased or repurchase to we million debt our This have balance we end priorities flow In the and million. was at flow third from the stock. managing debt the term, at our cash consecutive of operations ratios. shares at of positive We $XXX of quarter, lower quarter to in is stands of $XXX generation. in are our authorization $XX Year-to-date, billion. capital third QX third repurchased remaining Net our million continuing million the

to turning QX guidance. Now

be $X.XX between sales expect and quarter We fourth to for the $X.XX billion billion.

at sales quarter. the components we typical the prior global is quarter $X.X between billion midpoint to between and seasonality, computing which midpoint sales which billion, expect X% $X.XX fourth down approximately should $X.X billion is to be Enterprise $X.XX year-on-year. at from billion, and up and solutions We benefit from X% be expect

operating are seasonality Consolidated margins more quarter-on-quarter leverage resulting negative in non-GAAP in offsetting from fourth anticipated than primarily global margins, due volume. benefit operating operating components to an decline ECS, quarter expected sales from lower to

currencies found And tax to currency and to in in interest million. $XX approximately our have $XX our $X.XX. range of foreign is QX We're between to foreign immaterial to we be XX% our rate diluted press expense share of per And details be assuming million earnings can finally, on The changes and the approximately expected XX% release. effect an in of impact a non-GAAP guide. $X.XX estimate

With open that, and take are please the Sean questions. I ready Operator, your to line. now

your with line of from Stifel. Sheerin [Operator Matt Instructions] And question first comes the

relative for Just down -- X% on guidance to your guiding sequentially. first around components, question

markets single clarify expect to I you down. Europe I it of down think, and high and Western question. be North that Could the seasonal just to have flat should that follow-up America what means? be said Asia And mean you that Sean, and digits? Should sort you be Asia a

Sure, Matt.

seasonality, I something you looks that So So flattish in question you're to is for how the helps that step about QX, we Asia, modest that in we if the see compares downs right? see the and think looking West, out. if

a it's bit below X. in said Got it. and regions all better X the you little in of Asia, And below terms by X the your book-to-bill, basically other Is it but followed best, markets?

advancing, got X Asia you the and overall. than Yes, below It's like, still just we'd slowly way. more It's is it. leading

Okay. in a weak, number Great. think as on which you then few years. the gross margin, and that's said I has lowest been the And

You gross quarters, Because when gross would With like margin talked about other quarter. it you by about mix be back be and XX% down, also be X to give markets Europe flattish, you expected lagging expect the take, of next plus? to deals. X at as least kind margin guiding for talked you're to to said, sounds large or or

mass happens, larger I to the mass impact to think won't little into it's Obviously, from And customer again, bit about about our in you Matt, typically able OEMs the return. than the gross say is it more hit in occurs. Tough Remember OEMs a market. market our that I'd mass to when that that that the experienced the we follows see of market QX. improves larger recovery. piece that be now, the call. right When base when the you'll see love market margin

recovery. you there's at the quite I beyond levels, think we're inventories shorter than, visibility believe would broader means really to about to the not levels just that, distribution if as part at recovery do time. still call should lead to XX at but throughout industry. the the And say, We days customer say, certain margins getting we the tough that inventories a it long time, coming, to a at well. need but of timing a us be more excess it's times, more I look related is challenge lead excess Not excess that look, or, of

line And next of your the Securities. from question William with Stein comes Truist

When below discussing even I you're perhaps the results, was in more the guidance, think so a expectations. that bit

mix. mix geo You and cited customer

hoping driving I'm maybe, more, Maybe we end the customer us more mix, But geo for not the get But sure think what's how little on or minute. ask bit be can it. exactly that. linger can you you a a to side, that I about tell that. markets on specific, I'm

us in could And either and be generally any particular, was suppliers that the any of among sort policy can or of change a if influencing outlook? larger you of performance your tell change there your

Yes. in in us Well, because QX any see start certainly in us programmatic a QX. thing. impacted let's material we there changes impacting that Sure there way or that wasn't

I So big policy any will. wouldn't if you shifts, cite

-- bit before type market it by typically see in the type, we're We you tried and it. exits the it back see Asia see before the But first think we and right, and the eventually go I market playing now. we to out customer Matt's think, that's now. the follows. verticals. in out large play end If question, typically what mass then by be then way customer a Typically, to a and Europe, that's remember, seeing And market, across what you're America does with North recovery it it tends see and I answer little of vary West we recovery, then I to the

And mix We quarter. a good what little so of predict a our each do job tough bit pretty to start the look at like it's exactly it. of will

just got a Last we is end think being read to the strictly factors. versus to automotive more I'd the other quarter, themselves lots variety but markets saw of at QX, about the understand about us of volume margin not talk you too. margin to which we'd we're gross demand accurately tend traditional which our profile, sector, companies across a in that names fairly we impacted we the headwind say industrial the look in for mix, think larger big downturn main markets. the why line. if we've on We little operating whole involve very rotation our especially industrial smaller of strong it the all And

back at rate been seeing deals we're ones. for that times, at come the us. we not so defense And all West the tends and in companies programmatic Aerospace well. involve has as large more to, But small the are steady the same larger

So a more little for least think read at bit we've quarter. got well We it color. fourth the

more. it's I it. I if just make can Maybe just sure I to appreciate that ask I clarification. understand one that -- want I

I is sort it a going of paying a that, over not but outlook? either in of that of years. continued sort the another let in of has But and, just that with for at analog the recently fulfillment Several them that very and there's that -- years answered Or has changed maybe deal competitor a way. sort I dynamic and go think to me Is example, happened it, play a you not idea in seeing? or that the different there's just to companies or the is way number quite of where circulating one, out company they one think only. following years ago, space, distribution, the this suit you're that not design for that wins for happening big

market, to one future. little no as a bit our you the not time, very terms. Well, as other to is true this role see about we that the we like, changes. is feel diverse. bit because you point large, in to allow of over been kind question context, first, at growth I'm potential total me we're about more -- our in than never in broader I thinking portfolio program alter just fairly to single can revenue. it supplier guess, talk XX% see do supplier as that industry look this But maybe little might accounts for as talk our our especially of any than the we But There's we by make actually and term. asked probably a It's But too does business margin in And glad suppliers how long the general this for suppliers fact the of as remember. change as we we any longer big for and look for our

to positioned that. we're and from globe. exercise I then delighted the think with proven we're consolidation. to certainly across far benefit We've behalf that we're customers of away doing not would even they're And they're reaching, running chain economies say, on processes them things And time, I suppliers look, supply opportunities They're channel come they're frankly, resilient, assets further and around would the from well got also And of to world. like our over related scale large the scalable, compliant.

So about landscape anything we don't over your question and because specific to road in the potential time. in the our see suppliers. altering view talk I high don't the the again, took market we of But

question And Fargo. Joe comes your Quatrochi next of from line the with Wells

to you're of wanted Asia demand kind I seeing. about ask that the

I that of stronger think a saw Asia. kind recovery quite reported in your competitor yesterday bit

understand just what different? market maybe an you're So wanted there I of and to seeing from kind kind of what's end

Yes, sure. No, enough. fair

part in in at an specifically automotive, at our some think healthy as typical If saw it, we the growth that sign. market from And in that something included Asian China. we came business said with modest earlier. in or you EV QX improving seasonality, We a seasonality, look QX line good really and that China. look growth normal as And outlook as our of suggests approached I

moving in year. this were better I a than direction last they think, So things market general, time in are that in

priorities Mainland been the China, have mass to industrial would to But recover. I especially where competition, a always things frankly, speaking this verticals have slower in of in largely play market, any go-to-market without number of broader guess on our centered we say, our I region. in

to the relative strategy play, to team eye And and the we ball got focused and what that's we've I try our so on. where our keep on

That's it Raj. to on follow-up given you the just that $XXX Or a And is think to how is very think maybe $XX in kind that helpful. million, help of about net organization? million Any should reinvested? it to be then just a entire cost across And as then then being the outlined Or reduction plans savings? is of OpEx, mostly components? And the we some the today? for clear, modeling about that spread

I some out as the OpEx taking you let me few mentioned pretty my a quarters. I mean, in job Yes. comments, done give of good just Joe, background. we've last in

that You $XXX of down do along, can our that say us. do but I come opportunities is year see always incremental would with it across a the looking We're $XX ago. materially see the going be million, rate savings And just expect an a to OpEx run was that from today, and new organization. the actions million may investment net. to get real to to where as that's is It we for we

are So going around model. world we consolidating on cost-efficient delivery the functions focusing and really of certain really to and regions shared services more a and of more operations the

I account trajectory you've we we'll board. of so putting business think the in Obviously, year. the see structural got do in But see I certainly And in that. that. other moves the that across certain you'll isolation, see are to and next so how and along consolidating around And world, that the take business and expect to the think other functions locations savings it's we things because real into

to add they sense stuff of haul, regardless potential the these our of creates reinvestment I are that that we're put away. over actions and that of for the this to think would and in right reinvestment And long undertake. And for fact, work We us, company some a to we've of lot already just kind chosen capacity make outlook. near-term structural no-regrets looking actually Joe,

Bhattacharya And of your Ruplu from the comes next with question America. of line Bank

to look on margin operating from the lines were ECS XQ? And in what you which are a into XQ seasonal side, Sean, the ones typical expecting quarter, year product as talk and in next get can you uptick weak? going strong that same the we about you were

The Ruplu, the We'll with seasonal see welcome. I'll business, uptick your Well, first. see we're answer that Sure, sure. is that it. for start in for second grateful yes, and we question normal and

time also pieces I of in really with aligned that we'll coming year-on-year. look been we've and also at And the margin talk about the that to protection where cybersecurity, infrastructure terms you of because cloud we're growth. intelligence. consolidated about strategy, we're your playing uplift you talk you software, part business getting, leads can can the Given consistent better with to we question virtualization, And think we're when shift channel. specifically, And seeing driving portfolio, infrastructure think think can the first and about role our you the the in that data mix think, if market to see hybrid is over good we of and data Certainly, indirect software. AI

they added growing. feature recurring a potentially of bit growth, about is GP may Many they're But talk not for dollar bodes it as the of future. think why in those line. offerings us on more we billings being importantly, about have well little we our for accretive which contribution And the while nature, therefore, do, be it

a of out. done thought December. it's by And inventory I Okay. correction question be would the the sounds this extending ask earlier like year, Sean, can the end still now was on the that thought component I it side?

lines distribution? end like that components for where customers? or which sitting excess? any it Is So at does are Or inventory still sense is which sit? And at in product it

sure you come in demand? they less anticipated? these I -- is that rationale related the for some part terms exiting you back what this strong think correctly you're the won't or And now. product just So just doing that had to the if recovery of lines than I Is right Why going there be cards. restructuring, exit line that heard of this, to think, as are lines? you also Do

bearing have it It non-core I'll would Well, start for our on or and QX Yes, sure. revenue a next really we very no year. from because what call much would there outlook less perspective. is we're immaterial exiting

read too, much into that. too don't So

I said I broader as As call for recovery, to it. the I knew exactly how earlier, wish look,

challenge You're away it improves go enough right. The ultimately itself. for demand doesn't excess fully environment to resolve inventory until the

are It's upticks on inventory use relevant verticals the demand longer just until the sharply, and the tends excess we little to that still taking still on more is We be based a to bit cases But we headwind. like, sitting inventory still all serve. a of sell.

as in in question, And as -- some market. think It's supplier it's broad-based, level, large well, the at of both certainly at and at the cases. the your I certainly it's channel It's part also level it's in right? the OEM distribution the level, and then mass customer

sat gotten need will So in It bit thought before about environment a it's a resolve itself, we're year. better, healthier to recovery better demand to that. you're be of we pace out. longer right Things taking are would the play but from We where that. see little the going earlier we

Got one it. just If more in. I sneak can

exiting you're question, As lines, you get investment, though going even said of areas into quickly have and that a you previous part some to that. of you're

investment? So talk have the about happens? So you're out areas give terms downturn, details can so you be you're Arrow focus of -- focus you going on as stronger what like on to any recovery any Coming better areas positioned? is in can of that us you to of investment this of going what

spot we us great Well, think a our We I market. see in can the pretty that's components That's In of long-term terms strategic broadly potential for well. our demand always clear-eyed growth served the priorities. mass business, talk creation. in about we're

at So increase for of we're how continue strategy. our going that look capacity to piece to we

in as will design we're to motion to so where market making IP&E, is We look to invest management of so that our offerings we market is motion steady versus the in services. for that it our And slow the value-added our semiconductor. important, specialization for and but segment which supply continue to progress distinguish related chain pertains

So the infrastructure world create and at to IT-as-a-Service. selling environment. priorities invest had That a things progress involves hybrid a the capacity rates. And leads all well. market to. that I to we investment greater We We we those all about we really and can for for see to just outcomes market challenging global steady clear we've that would know rate structural like cloud, think capacity, ECS, like involve costs, it in piece with as are the say also doesn't about continue -- I navigate experience, to priorities to those of it's the as result. But ArrowSphere, make talk our us we're at digital investment that, for outcomes of us, we as at market starting that in in better continue a software.

from of And your the next question with line comes Fairbanks Melissa Raymond James.

this continual non-core can just kind basis. of that had to but I a just a point, to it not at that the more but some you trying a us of I know behind dead all some bit catalyst Wondering either is certain products? it's into why certain this business large-scale assume happens horse some limited probably visibility on a color. not Well, if at Or chunk you something Is quick visibility the revenue, into was what of a beating to or give get kind once? follow-up, to I more plan immaterial exit? this exit. geographies large little that scale. big

Yes, sure. very little But bit it. talk and again, of to Maybe we're a just the words, of And geography remote in let a of our not Raj just that revenue smart then is just that, you in isn't right perspective. couple I'll aspects this about right talking happened core the line financial environment to being isolated the Melissa, at business about and a for more this a portfolio, time to business time components material -- global say, as from overall, we're the be about looking a decision. always

an we just of has associated that Yes. to asset $XX add, down it, the fourth the is right million, most impairment that of as be as that assets well. in reserves expect said and quarter noncash the be we're charge charge inventory some And And now. there business today Melissa, closing with will about and because a will we it for mostly

that's stage. number, but why bigger you at noncash see this mostly it's So the

Perfect. business How that complexion helpful. the about time does with follow-up, in about in as Or get more of seasonality That's it sales, over wondering my revenue? does recurring ECS. Okay. change really the IT-as-a-Service, cloud-based long of should Then we moving I out toward the seasonality? over So more smoothed the think was term?

I X/X on something continues piece to as of approaching of learning the of we're revenue this our It's the more order think about grow. our recurring mix now volume.

further as it's rates. that out So really this nice growing seasonality we'll see if still at because plays changes

I I tends But spending across these recurring the general, for all think CIOs generating benefit may of piece not and is that fairly larger to as we're think continues in our our because over similar larger that the backlogs going change to of much. the to it piece progress year and IT of business be the Melissa, from course years, ultimately grow. most cycle do

we smoothing play I over slower see to might to So a that's little be more time, going think out. but

Hari the question comes from line of your with Sachs. Goldman And Toshiya next

Raj one a pricing environment. had Sean well. Sean, as then the for for and I one question on

any inflationary you the reverse There said, the in of far pricing is kind into remains pricing in most situation the of are today? oversupply suppliers because of a stable pretty What concerns XXXX? on your so part the investors pandemic, could think going And have seeing quarter market persists. that was concern I marketplace. this this so that as during

I actually seen So you. Well, for straightforward I we if make many, first, any, reduce of pretty think suppliers haven't our prices formally. this can

to won't. leaked believe So of that into reason certainly yet. We channel lot that hasn't a -- it the happen that hasn't there's

you therefore, agree look relatively were The that and, at say base, would look, is, stable QX. would second if mass customer our transactional the environment in pricing margins thing market I traditional I

We did them be we the overall same in the as as mentioned, necessarily where XXXX. same tends relatively expect base, towards heavily skew customer QX. pricing we say, where negotiated. expect end larger be mix is I to that, our would more that change assuming stable much and to At the that in would our Not of time, somewhat

mass next returns, market for the dynamic we're that us. the At near you'll in and a the about term. how piece see be of least, could That But normalize thinking that's beyond. year gross as margin factor

helpful. then flow thinking forward. how Curious cash free Yes, Raj. for that's And you're really follow-up going my about

are past can given have into the inventory speak to stock guys capital that where in done needs sits down would helpful. as your a priorities, or You especially you And job so. working upturn thinking you today, in allocation capital hopefully go bringing you be really over really How about importantly, year good an if your more 'XX?

would hasn't business I Toshiya, Yes. say model the changed.

the business, in cash. over in of make times typically, if period, from use it $X.X the to times we've business to going of and to Generally, basis, growth, And that's working business, the about we're want working that last to XX sure of and generate to capital well And is billion the to So aspect cash generate that period we're we an months, going the the generated have cash grow in of decline flow. will. up positioned operating so needed really cash. we'll you more varies capital ongoing we're on

small perspective. capital, standpoint, or the just our whether a that we've nothing allocation has We investing that's capital, about focused always And capital And the have in changed. trajectory pay into the have a And engineering capital in allocation I'd done been focused million small back cash. we'll organically been back some certainly earlier from historically not time, more the $XXX say this then back it's that We've we we've a we've space, way that CapEx done so priorities use on stock in and also year, historically, of working of right focused on this M&A. on bought week one Last the changed been debt buying from we down get business. business. given very cash. our same so years. over XXXX, announced But in small at of the year, the

Windbigler remarks. And for turn closing that Mr. over Brad the question-and-answer our conference concludes will session. I now to back

and look a joining meeting events. Abby, thank good call. you all you Have at Thanks, We investor to upcoming forward day. for today's

for We you today's concludes participation. This call. thank your

You now may disconnect.