Quaker Chemical (KWR) 1 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Quaker Houghton Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Jeffrey Schnell, Vice President of Investor Relations. Mr. Schnell, you may begin.

you. Thank welcome quarter and call. earnings our to morning, XXXX third conference Good

and and the Tometich, Coler, Officer; President Andy today our Financial President Vice On are Executive our call General Traub, Robert our and Chief Executive Chief Counsel. Officer; Tom

to relate released information markets financial of after XXXX. October XX, the close U.S. comments Our the yesterday,

statements. and company's differ. The non-GAAP Our under Investor the during the results the Both company comparable and This presentation statements materials, discussion to view company Relations provide the this which the website. statements, no actual also are is risks, measure subsequent on directly and may current most prepared on of slides forward-looking may operating contains measures and provided and GAAP be can events non-GAAP financial potential accompanying financial release to financial future financial website. press found performance. our our these certain in contain available call and reconciliations these the These of measures, on of effect to obligation uncertainties presentation has cause Houghton's forward-looking updates commentary which to involve reflecting appendix their Quaker

refer please filings information, more SEC. our For the with to

Andy. pleasure the my to Now it's call over hand to

morning, Thank you, Jeff, and good everyone.

our with well, near-term I'm we making, strategy are earnings continue as enterprise and generation. progress and resilience long-term quarter we basis, delivered the persistent the the third quarter overall solid pleased advancing The with once Despite on again are and objectives of a sequential stable flow margins environment. we of the market consistent Houghton. Quaker balancing and cash another market Together, highlighted our executing headwinds strong environment, in the sales we

below $XXX consistent Third million, year, quarter. second the quarter but net sales prior were the with X%

offset which sequential the remain driven to execution, regions volumes our by While backdrop. a and disciplined once current year-over-year on our and total of our end is This were basis. result again markets stable challenged, helping both many macro is

wins model business team are remain helping expected our trending on and quality and range, customer value as our leading intimate demonstrating of our the within solutions improve the operations differentiated businesses. their our focused and New portfolio of they of our customers services

the and third the prior in quarter. margins overall line in with were prior quarter XX.X%, the Gross year

We expected cost value have raw our serve remained committed customer-focused aspirations. use well and growth balancing to as as environment current the model our and material our with to

Our the value based current of financial is with service the best appropriate to deliver on customers. profile our enabling levels us products to

working improve actively supply operational our chain and and to our We enhance capabilities are manufacturing productivity. also

progress to third our the steady and trailing our $XXX of results and $X.XX We our consistently we making emphasize business are a long-term positioning our gross the range. the adjusted cash X.Xx in deliver of resilience company We earnings with supporting over the outperformance. ended quarter, In XX% of to continue net per million the on ratio of EBITDA $XX to EBITDA. focus of adjusted leverage third XX-month and quarter our diluted generated commitment share. These million non-GAAP XX% margins

of by supported flow. $XXX and our is position cash financial we capabilities approximately generated operating strong Our million generation year-to-date, cash

Our model balance our for accelerate value flow and support to characteristics and sheet, provide significant business opportunities model creation. cash

$XX that supported on million of our acquired have by capital To shareholders maximizing complement and technology returned portfolio our we approximately value and clear share operating dividends X and paid solutions. We've debt, also focus and is shareholder strategy. we expand date, XXXX, to repurchases. and through advanced Our businesses in opportunistic our allocation have markets down balanced advantaged

Turning to our segments.

end our and third market in new segment metalworking quarter conditions, driven despite Asia to by has metals growth applications. business deliver the Our continued on Pacific focus mixed in wins

efforts in X% market experienced our year-to-date has compared in by segment XXXX. Volumes were evident performing aggregate customer segment segment quarter, extended to our rates. Americas Pacific the on earning the team's EMEA softer Asia its we new of volumes better business year, which outperformed significantly consistently prior portfolio. It continued This is production or production our geographies the has regions reduced volumes and the and through downtimes across we the by diversified whereas industrial in were are in performance segments total prior additionally automotive, the at quarter team's soft is environment, industrial Americas Performance than activity approximately with The market our have increased focused our in higher operate. by in our segments. These and in impacted customers. across the underlying declined. segments that driven especially metals and with in Despite in the with EMEA XXXX sales most consistent third our third we end and quarter markets

are also segment profile Our segment financial year-to-date. higher has as operating improved margins

our the performance of Our our and are to result is focus cost optimize structure. we the operations taking our portfolio, actions

unlocking these will year-end. be the conditions amplified quarter. capital underlying working to further growth enterprise restrained. Our customers anticipate improve. typical fourth soft as underlying organization, further begin remains and their economic outlook. the markets the This the in continue will by production We Growth as of the our actions market to overall through will through own manage benefit to seasonal persist conditions potential Switching patterns

We to control. can we continue on will execute what

to optimization our our to for on XXXX supply managing targeted have and than with announce prudently cost investments, that costs the approach more and pleased margins. I'm seeking original disciplined efficiencies achieved run in chain new of schedule. earn while customer that $XX driving improving customers announced million we and savings model, program we on a rate our continue manufacturing our to intimate and by maintain business also will outcomes We

optimization in We to identify working and global across business. further and cost our opportunities continuously are EMEA

initiatives success intentional have In customers center for we also and areas. And in most the addition clear to now our portfolio growth people and focus future. to several on our the cost we key where can our are drive we and advancing taken actions our the management, in

will on through momentum advance believe these we drive We which we as and progress are XXXX beyond. efforts, building

We strategy the industry. of and in are confident positive our fundamentals long-term our

been which XXXX. ability ample generation forward, than investments growth. market continue outperform capabilities, we to have above believe profitable cash We to have especially deliver end our Coupled to our have in delivering ongoing softer continued as to our earnings begin with moving to strengthen will markets avenues outperform, our markets, expected growth our strong We improve.

key around in I've As is leading enterprise several X quarters, and highlighted of digitalizing for globalizing, strategy our sustainability. centered themes

our at proven turn which we opportunities its and in value, services It XXXX, strategy of position and accelerates modernization growth. In core amplify enhance competitive customers for that made designed progress. our the to a model. Our have proposition, is our offer value is our solutions

by globalize the are we Pacific our We in being the is Southeast scale we on and more as as intense across segment build This Asia India our Asia. our world. growth capitalize capabilities out China, to around in evident

portfolio full base. ITV enhance directly advanced portfolio solutions our global provide and to of our operating acquisitions SUTAI and innovate Our customer deploy to of opportunities and and our for

progress and our achieving complexity We U.S. customers. Europe, the digital have on efficiencies in tools focus better to in sharper and simplification our efforts drive on outcomes reduce business global a for made and our using including

of our on to advance we initial continue fluid important intelligence iterate encouraging, leading this digitalization, and of and As we the trials offering are platform. theme

global We trials improving our to several instance, and chain our performance building underway environmental customers. that the across sustainability progress we're benefits landscape. provide and forging our experience, e-mobility in customer have have made enhancing manufacturing out And for metal our on supply and theme capabilities. and

the for long-term strengthening value Our have we on growing our our capabilities macro customers unfavorable and XXXX to team what is successfully driving in foundation, Stepping navigate by we can back, to control. environment our fully and shareholders. committed focusing continued

our of quality services technical products, earn We on profitable portfolio expertise. to regions new based leading in continue all business and the of

the operations. We improved profitability the have enterprise proactively and optimizing significantly are of our

unlock We intimate are enhance our opportunities. in customer investing and to strategy new our enterprise prudently model

our leading capital highly focused We are committed industry strategy, value. shareholder long-term attractive is a allocation growth which fragmented and our have in with a strong drivers. And with position to fully maximizing disciplined on secular this growth financial we hyper position accelerating expanding

company. the the excited of talented the I'd opportunities of to it like With the by by commitment pass that, the to focused who is and possible the motivated our resilience made our by financials. customers inspired them over only our are turn, ahead. I'm team of results success Tom discuss in organization and Our on by to

morning, and Andy, you, everyone. good Thank

the net were sales change unfavorable X%. X% $XXX prior approximately of to declined selling lower our mix sales reflects volume approximately of contracts, year-over-year of the and index-based Our product foreign impact million. from We of exchange year of primarily X% impact of the which and The approximately X%. lower price drivers

automotive segments. In there lower market impacted be the the We downtimes in were extended headwinds quarter, in to increased the end EMEA third production by continue Americas market soft activity, to due rates. and primarily and

line on a Pacific. Raw within second to our quarter with costs to due compared lower XX.X%, and new gross both basis these however, below trending prior a EMEA stable the and range, helping primarily the in in and to margins material business margins year were on volumes, basis but prior sales quarter, offset declined challenges. stable the Our Gross are third sequential points year-over-year quarter. the have XX Asia in year-over-year were are wins, persistent have basis remained which as

We stable fourth quarter. material in remain the expect raw costs to our

with to compared EBITDA quarter, slightly the of million were and delivered to or in sequentially. items, prior cost XXXX. SG&A year exceeding at the or Adjusted year decrease SG&A onetime XX%. $XX our EBITDA and compared acquisitions. On basis, reflects decline efforts, year-to-date line Excluding margins, X% X% our $X recent we the prior of offset a a $XX by effectively program lower costs, of optimization year as run in million have X% targeted third benefit however, partially The rate year-over-year. adjusted managed decreased focused in our cost we million management announced $X the increased prior the is million with We

while driving progress growth our make to continue building profitable initiatives. out efficiencies We

be across in have compared approximately to partially and business earnings $X at in prudent is less prior the Asia volumes, X% offset by prior increase primarily will by working the Net increased approximately a which year. mix. streamlining and million applications. Segment the improvements investments, the productivity decrease and in year-to-date, Pacific metals than X% our Asia segment by driving segment volumes to with results. driven X% in and continue The or sales selling metal declined to in Pacific an to year We both compared enterprise. Switching price are product organization which our wins sales these across aimed driven improvement approximately new increased

in Year-to-date, We overall at in Selling especially and price prior Pacific decreased the product and in the mix. approximately the region by through the XXX be are to million low they have EMEA Net with compared the consistent lower environment. effectively benefit tough performance by Asia or year-over-year. very managed sales higher manufacturing reflecting trends continue in market pleased year, X% to as X% were segment to our of in for mix to year. levels, allocations. to the the inclusive market contracts. Sales of metalworking in points sales region. Segment EMEA the EMEA and muted segment XX% IKB the primarily increased and prior savings volumes operating costs higher, compared the remain margins index-based conditions compared declined initiatives. this declined due of earnings ongoing impact acquisition, driven prior $X economic quarter, impacts cost the Overall, basis volumes with of Net approximately

margins. due customer the and improvements selling We Americas lower the the the impacted was quarter automotive Americas EMEA basis, the continue in as mitigate impact, productivity approximately quarter. This On in and downtime other the region further reflecting in mix. lower new a lower unfavorable quarter and and applications. softer production sales XX% the the foreign primarily activity sales business by third Segment to sales were year, to in expect metalworking in efficiencies volumes prior year-over-year and the prior product stable price sales lower Volumes environment. additionally to Americas industrial primarily excluding were to in the with and by an flat market sequential be compared in the in wins in to segment rates declined earnings currency the impacted helped XX% in drive declined XXXX. Net compared Americas

persistent the Our considering market business continues especially challenges. to perform well. end

making segments to due the new continue challenging current environment. progress underlying all outperform the market to considerable we business in aggregate our We aligning are demand cost wins and to

well to conditions positioned are capitalize market as improve. We

nonoperating Turning to costs.

lower cost which in compared million year, Our interest reflects expense approximately was $X ongoing third to quarter the the debt. in reduction our prior the variable

Our cost X.X% of slightly quarter. the of debt improved versus prior

XX% approximately rate, third quarter. Our was items, excluding and noncore effective in tax nonrecurring the

rate tax effective XXXX to be continue We our in expect will approximately XX%.

the $X.XX, earnings per diluted from liquidity. third Year-to-date, quarter $X earnings are environment. year-to-date. We Capital year diluted on share are capital operating of X% million on per despite expenditures and remain non-GAAP our cash We to flow $X.XX. by million operating deliver diluted were in our the GAAP the track and approximately share higher $X $XX generated share earnings focused Our working of year-to-date. were to non-GAAP per cash Switching were tough in million efficiency and third $XXX quarter XXXX. million in strong another approximately operations and

We have year-to-date of sales we growth some $XX approximately approximately in CapEx repurchased paid far in we X.X% we September. $XX of of and have expect shares. million to XXXX. initiatives. In above thus XXXX total, midpoint $XX million the shareholders to will million our dividends approximately continue quarter, be a range in total as And to returned approximately In we repurchased of of the of X.X% million fund total through opportunistically communicated $X our

strong. Our and liquidity balance sheet are

Our is end evident. XX was the Quaker EBITDA. resilience months net third debt adjusted quarter Houghton our of The million, X.Xx leverage at improved our $XXX trailing to of ratio the net

navigate to our items while environment the challenging successfully continue market controlling end control. We within

on executing back value. growth clear it Andy. on to accelerate remains that, turn shareholder and I'll to long-term focus objectives our Our over deliver With

team Thank for you, our execute business strong. our Houghton's well is customers continues model Tom. The Quaker and company. to

positioned With your committed enterprise markets be to in our well to drive to are we'd end We our take value and for questions. happy long-term shareholders. that, strategy

question first of Research line our Partners. Harrison the Instructions] Mike from And Seaport comes with [Operator

that. about Sorry

it you you Looking QX, at though were us understand the even XXX Can guys the help was lower sequentially revenue level pieces margin performance basis similar pretty in operating last points different the to of quarter. that better cost? margin decline? mix? in? to in change change we kicking investments Just sequential trying some Was margin understand there Was growth Did see a dynamics price there. really in those some

factors. down Yes. to Thanks, Mike. Really

as were also but we've come gross when we there's raw have pricing So indexes did on the then we the number effect a past in over margin our a typically that on seeing level. quarters, at And bit a of down. lag level, pretty the of kicks to consistent materials lag due pricing

have did an that. Raw bit impact the related to basket we balanced. overall, So materials pretty quarter of in the third a was

degradation third to in there quarter little bit was a but of So consistent, a related the that.

anticipate SG&A a expected an upon that that then offset stabilize, the is well. fully the side, some going timing materials thing with were we As of we But And raw have of had phasing controls some that effect as bit actually to we diminishes. our cost on a we few structures. based of uptick cost of around nice just

impacted really that leverage. was it those the So a bit areas down of operating to

stimulus single-digit bright about you've talked next possible kind All strength we this that see right. with and rate China, you guess that in over driving the as few you It's And is what's And then with Can high even momentum look been continue we seen of or a Asia there. that some you accelerate the I about year. talk volume for spot quarters? this strength? growth it

great Yes. across Mike. observation, It's We've Pacific relative the seen a region. strength

it's not positive only So We've in metals, India, China, country. particular it's Southeast seen working. It's but metal a in some also Asia. not

identifying business well with of the team been value focused customer on add the really a growth job associated is is did opportunities new a their it. And great the really as we wins. positioned us, the they're unlocking SUTAI organic business that. team The and doing for it's of bit growth additional and the majority acquisition, with but of vast help Now has on

continues to on the positive we're market but hopeful So be to and own things of some that our making that, of other the lot progress a we're backdrop we're doing.

margin some seasonality. All right. thinking and talk you into And expect as puts of about versus current of we're as about decline well standpoint? from just QX a would in some to terms we QX, outlook some QX maybe And see for Can the the QX. then seasonal this you typically, takes mentioned QX there's revenue as quarter from levels

EMEA. I the that continue some have outages quarter continues and aerospace the of percent challenges We're the And be in we fourth a now expecting highlighted seasonality, Americas on impact in steel in to well. the the overall, Yes. that as right, including headwinds you're you've quarter. industry into third the particular, couple Sure. the in Yes. pretty and fourth automotive as the quarter saw typically we look around soft market mean, to we and in

On continue though, for earning some and are expectations to offset of kind note, still to continue be to positive Asia of we a new positive. business that we to Pacific

think continuing a don't as our cost hope pretty well. give I to executing bit would while I to guidance, And up that explicit least quarter we when still think little structure start a focus well setting we're will at advancing margins, the overall, takeaway the bit we're business strategy. net our we We're So improve. be I little managing contextualizes our really markets we're for you because the while on say fourth challenging, the is do

And see do from clarify, line, QX Okay. the just into margin top to if you seasonal a QX on would expect decline decline well? as to some see we

is Yes. Tom. Mike, this

pricing through QX, at RAWS as declines moderate are mentioned, here we stabilizing Andy will anticipate we think, as to would these QX. continue had that as I levels. our move

stable to QX. So our we to in to be still as generally range QX general, of from margins XX% anticipating within we're with look XX%

half some to share of guys we to XXXX? see start EMEA. be then on about Any in assumptions sneak some inflection anticipate on get then thinking markets is little giving market comment particularly soft, do our to I one we're Maybe bit year. and that can attention modeling more we the EBITDA would some chance All the assume would more right. talked restructuring as at about remain going gains second I'm you volume reset? and least as I a incentive to pretty whatever comp to next you and about here done. to need you. But turn in I'll think margin productivity, year, in the top we're You've starting

as model help out about year? appreciated. to to be would to we're margin think trying next Any EBITDA Just how looking

bit give us try Thanks, a bit early XXXX. for But Sure. a you Well, little Mike. course, much to specific context. have of for it's to I'll of

First build of over couple years. progress the of last on we're all, we've made the to planning

on holding initiatives, find that we range, about our regardless before, of getting strategy traction the in can on control. We're successful things operate some continuing macro we've and our the in some of control things So the to organization, growth continue to so the margin the side. target about optimize of talked we it we're We've talked that efficiencies some environment. good

of are of There's improve. some steel couple things I really happen macro. auto some the to for couple contraction. And to production hard a could on But what's from of new could There's pretty years spot think a and last some reasons it's points just going based been year. improve There believe operation announced that. the next some been external on starting predict just that suggestion that to in after signals. have mills low that it's

market, we then and a pretty -- So too. have diverse

I'm and to some that and But that to to execute pretty we'll of drive to do continue So that order things to And earning to drive will new do we well, business. need we're confident the includes going start hopefully, improve. in continue

based We're here outperformance And a even be pronounced on in healthy recover, going accelerate our to to will it's gives us. the respect new flow, growth with market the with going we've that drive that us more what We're for success to do when markets position the that balance and position sheet on we're our winning cash business. the really deploy and to a ourselves. financial got that good and

line next with Jefferies. from of Our the Alexander question comes Laurence

net current If pricing, Dan tail for we to what It's would were would price the on lap be Rizzo year? next Jefferies.

question. the mean, thanks to Well, context Yes. I first, get for it. first, Dan, some

index down While pricing commented to pricing. was was the it we related year-over-year, and

to look sequential you at basis, it starting mitigate. on a it's If already

the So to raw you in now because materials, forward. I see to year-over-year, some And that it's diminish how negative. that of was going X% and -- And down we're expect index it a pricing think gross margin it's stabilization in managing seeing we that on rather would can flat.

confident to things do we We're will stabilize we targeted operate necessary anticipating to will as year. into the So next move the range. XX% we're that XX% within things our

think to you Okay. And share the over then Is of say? gains years? would how X past pace accelerating much the you've you share do captured X

Yes.

We really shows pretty good markets, in team. I a resilience tough pretty and have the done think of job the it

growth on of of X% our As are previous we've algorithm, calls, in indicated our actually higher outperforming the wins market our typically by that X%, in think the a we range. new couple to business end

been subdued with bit just we've churn that as our margins. go that was associated and that little But down some Now that's soft of because the the of a seen recovering over markets time. churn were we

doing a new So we our but actually targeted wins And that we the we have we're the net to as range. within are job on better accelerating opportunity an within range. churn, still and improve new wins. better think that mitigate business

from of a have to -- thought wondering as has Could guys sales kind you of that. kind that's well cross-selling long of through characterize or if any you cycle. synergies a a past like flow I was Houghton? that I revenue starting But

Yes.

We were stunted the in that. unfortunate still think system. of which really synergies respect chain pandemic the some long global think, through after growth and combination, with anticipated supply I kick had moving the our not the situation to then the that are combination, of I challenges

we have progress. So made

business is opportunity the for doing all forward. better new I operating still within going job targeted a and range think us wins we're better of time. But of reason part the there's we're really well our that of plenty

the with Securities. Our next Tanwanteng John of comes from line question CJS

how even factory a much be talk over normal incremental was you downtimes could or and your if of and I bit customer QX wondering seasonality. the that and more facility on extended little impact strikes specific will about shutdowns

Yes.

in has and if highlighting where in auto impact we're well outages just the and I into any have regions. you'd first, continued don't additional primarily carryover on are it bigger seeing and industrial now to but that other does So as general Europe, some like a just aerospace that? have Tom, know context again, the Americas

just characterized think in auto Andy and terms of I it say, would well steel. I Yes.

think I the than our item the impacted less many global in we're revenue, very for of in QX, a X% new a that in to Aero here is work aerospace. approximately of us and challenges of QX amount -- is emerge X% little our in seeing Americas. we parts across the aerospace in particularly supply again, small the chain. But market starting that

we to with dollars few market continues depending that million segment. look in EBITDA in the length the we associated of as see of environment, particularly into a QX, that, market if on aerospace impact So could current exist QX forward

much And geography impact guys of or I Great. pricing and either wondering the spend you of related market Okay. mix then by that a how impacted type? was or was QX. time index bit product end talking about

improve. for well Yes, opportunity be to And Europe. to sure, a It we area continues a of the that. impact there in Europe impact It's focus continue to challenge as segment and on some the mix it. was us. the for you we'll an biggest as hit geography. It's -- little in market to more have related that was

profitably. So we we're and get sure growing that growing back to there making

thoughts you your the a healthy do Any in quarter. shares in flow, capital you me. allocation just update back bought for is leverage on cash one have nice last And place. or given it. I still know Got

your in what operations, still Just have going the your on this are forward of we priorities the a but as maybe lot or preferences weaker firepower enter period bank.

that very to to out. make feel interest our financial that about we we're sure do. Thanks the deploy position John. have positive the continuing do cash shareholders, for we of and responsibility the we in the best overall And which pointing Yes, We generate.

very We capital approach. have a disciplined allocation

as business as X a so also, supporting this did in through we generator, we're going We have investment well and as But for just CapEx year not build. evidenced the inorganic we're organic preference cash the a our IJV. to growth, by SUTAI with let and we're growth cash as acquisitions own

million year done we And we've $XX this returned buybacks. to opportunistic We've again some once dividends, then shareholders through increased. which

to the want buybacks, make all right On to advantage have we tools was it we of. So sure opportunistic. take

look to we -- not appropriately $XX going deploying at capabilities space. we'll So continue million think cash we're year-to-date. on that that really, generate valued. to do we're flow in and through target the value whenever we shareholder we'll opportunistically But where And be primarily there's growth

next comes RBC. Our from Viswanathan of line Arun with question the

a guess dig So on -- guess yes, I here. mean, seen I wanted I performance just I to bit in little the you've that

So according single that slide, the in low you year-on-year volume little maybe a to it looks bit like maybe at digits part and down volumes, are the lower of that.

if do cycle you so, the course? headwinds accelerate? decline year this And of kind volume are run has Or to further price some deterioration So I especially most to expect that in guess, considering would you now price? of revenue attribute you if its

I saw volume Thanks declines. single-digit Tom. for We right. you're is think This very year-on-year is what Yes. would Yes, the I year-on-year low question. say

If of to last see several as the index-based you over impacts the impact quarters, through effects of down the the and come look work come our material we raw those continue contracts. system on pricing time at through deflation over our sort

our range, and see of as QX stabilize go forward. had relative outlook, less is in price to to continue that Andy impact as we said, margins we'll this our anticipation So will

then. a as just And Great. follow-up,

above-market strike some seeing rates production, feel with aluminum kind of market resumption 'XX. aero ultimately that maybe in and couple often of of in headwinds well. modeling you lower utilization a So lower the automotive above the you But market. in of still these and that a steel result Do of around growth, kind kind could were hundred maybe growth as like and of the basis that's we cards? target know points I

So moderate of view? kind flat year? earnings in face should margin volumes, would the to next turn be growth Or to expansion that down able in you we and of still

we we know that But the our macro understand mentioned couple we're remarks. growth. of It's advancing to our with everything after environment. the things prepared in Yes. control -- drive key What in always also I in we is years, can't some of do our the last expectation strategy the

in going continuing to wins to new macro unlock value to help costs We're is whatever on business control customers And new we're we to we macro on had our couple we're finding the to that. as success can focus environment. to years. generate in respect continue position, of Should happening we've the to the with and but even to manage opportunities continue the environment better we improve, be to do what build best an will last our

And a then here. quick follow-up just

So sheet now it's deal. been material on years few a more and guys size capital have the balance a you done allocation, since

leverage very at X.X%. is manageable Your that

curious those process? and us growth those in Is just bit any businesses you've opportunities some consolidation if as that down, sale that mind? some you now had could opportunities there open larger material are you'd is good are really keep look with potentially for considered opportunities, interest any more like out? that especially drive Is a your -- that -- and consolidation rates to that you've if synergies little eye there coming be a on, are seeing a So you to

great question. Yes,

Inorganic course, and SUTAI. so year other well the a our We result opportunities as seen that. Of We've got of strategy, shareholder a pipeline. drive added in growth, we've within of deals as a part did X our with of number right? important pipeline and capital success this value allocation IKB an it's will growth as and larger bolt-on bolt-on the of lot deals far

the we we things What here. go is are as be up. an those with possibility can when to bit heating see to to though, little are and of predict able happen. acceleration a always I say, move can't You things forward going

So we'll we places useful that's focus customers. continue had going on in technology for add we value had to scale, add those or we where our to be channel, geography, adding we and

the balance we've and job, be be really a is And to on that sheet to in a when I able done think, our nice generation the do to right. moment position cash

the the Andy CEO, I'll closing and back And Tometich the of we have remarks. to for call reached question-and-answer the end over session, turn

you reach Yes. Houghton. good interest Thanks We Have day. in much. very so additional Thank questions. Quaker follow-up much. to you out if any Please a everybody's appreciate have Jeff continued

today's And this conference. concludes

this time. You may disconnect lines participation. you for your at Thank your