Ladies and gentlemen, thank you for standing by, and welcome to AAON's Q3 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Joe Mondillo, Director of IR, you may begin your conference. Thank you, operator, and good afternoon, everyone. Press release announcing our Q3 2022 financial results was issued after market close today and can be found on our corporate website, aaon.com. Joining me on the call today are Gary Fields, President and CEO, and Rebecca Thompson, CFO and Treasurer. Shortly, I'll be handing the call off to Rebecca for her to go through the Q3 results. Gary will then provide further insight on the quarter along with commentary on our outlook, and then we'll open up the call to Q&A. Prior to that, though, we begin our customary forward-looking statement policy. During the call, any statement presented dealing with information that is not historical is considered forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, and the Securities Exchange Act of 1934, each as amended. As such, it is subject to the occurrence of many events outside of AAON's control and that could cause AAON's results to differ materially from those anticipated. You're all aware of the inherent difficulties, risks, and uncertainties in making predictive statements. Our press release and Form 10-Q that we filed this afternoon details some of the most important risk factors that may cause our actual results to differ from those in our predictions. Please note that we do not have the duty to update our forward-looking statements. With that, I will turn the call over to Rebecca. Thank you, Joe. I'd like to begin by discussing the comparative results of the three months ended September 30th, 2022 versus September 30th, 2021. Net sales increased 75.1% to $242.6 million from $138.6 million. The largest driving factor to the growth was organic volume, which contributed 26.9%. Volume growth reflected the company's strong backlog and a third straight quarter record production. Improved productivity along with an approximate 18% increase in organic headcount helped drive the increased production. In addition to volume, pricing contributed 24.4%, and the acquisition of BASX contributed 23.8%. Similar to the legacy business, BASX performed extremely well in the quarter. BASX realized record sales and EBITDA of any quarter in its history while increasing its backlog 33.8% from the end of the Q2 of 2022. Our gross profit increased 82.1% to $65.6 million from $36 million. As a percentage of sales, gross profit was 27% compared to 26% in the Q3 of 2021. The expansion in gross profit margin was driven by higher pricing and improved productivity, partially offset by higher costs and adverse effects of supply chain issues. Gross profit was the highest since the Q2 of 2021. Similar to the trend realized in the Q2 of 2022, gross profit margin improved throughout the Q3. Selling, general, and administrative expenses increased 81.7% to $28.9 million from $15.9 million in the Q3 of 2021. As a percentage of sales, SG&A increased to 11.9% from 11.5% in the Q3 of 2021. Excluding BASX, SG&A expenses increased 41.5% and totaled 10.7% of sales, down 80 basis points from a year ago. We continue to do a good job at controlling these expenses. Income from operations increased 82.3% to $36.7 million or 15.1% of sales from $20.1 million or 14.5% of sales in the Q3 of 2021. Our effective tax rate increased to 23.3% from 22.5%. The company's estimated annual 2022 effective tax rate, excluding discrete events, is expected to be approximately 25%. Net income increased to $27.5 million or 11.3% of sales compared to $15.6 million or 11.2% of sales in the Q3 of 2021. Diluted earnings per share increased 75.9% to $0.51 per share from $0.29 per share. Turning to the balance sheet, you'll see that we had a working capital balance of $193.9 million versus $131.3 million at December 31st, 2021. Unrestricted cash totaled $10.7 million on September 30th, 2022, and total debt at the end of the quarter totaled $76.3 million. Within the quarter, we paid down approximately $30 million on our line of credit, lowering our leverage ratio to 0.65 from 1.06 at the end of the Q2. Capital expenditures for the first nine months of the year were $41.6 million. We now expect capital expenditures for the year to be approximately $73.3 million. We monitor our growth trajectory and capacity regularly, and we continue to invest in long-term growth. The company had stock repurchases of $8.9 million during the nine months ended September 30th, 2022. Shareholders' equity per diluted share is $9.72 at September 30th, 2022, compared to $8.68 at December 31st, 2021. I'd now like to turn the call over to our CEO and President, Gary Fields. Overall, we're extremely pleased with Q3 results. Record sales, production, EBITDA, earnings, and record backlog. The company is performing very well, particularly compared to where we were just a couple of quarters ago. Gross margin is still not where we want it to be, but we have made substantial progress. Gross margin and operating margin in the Q3 was the highest since the Q2 of 2021. I'm very pleased with our operations and the overall team and want to continue to commend their performance. The last 18 months have been an extremely challenging environment, and to be able to say we just realized a third straight quarter of record production is truly commendable. Organic volume growth at 26.9% that was realized in the Q3 is pretty much unheard of in this industry, and the comp was not easy. Volume in the Q3 of the year ago period was down 1% from a record Q3 in 2020. On a two-year stack, volume was up 25%. This performance is a result of several factors. First, as Rebecca mentioned, headcount at the legacy company was up 18%. We continue to do a good job with onboarding new employees. Second, productivity has improved significantly. When we look at our unit sales on a per day, per production employee basis, the Q3 was the highest it's been all year, and that's even when eliminating all the price increases. The legacy operation is operating at a much improved level, and I can say that this trend continued through October. Lastly, the volume growth is also a reflection of our premier sales channel and the backlog our rep partners have been able to generate for us. I'd like to thank all of our channel partners as well as all of our internal sales support. Our sales channel has never been as strong as it is right now, and we're seeing it through the share gains we've been realizing. Before diving deeper into the backlog in our sales channel, I want to discuss our pricing and gross margins. As we've discussed in the past, dealing with hyper demand and hyperinflation while at the same time maintaining best practices with our channel partners has been challenging. We've been saying the margin profile of the backlog has been on track to drive a recovery in gross margins. I'm thrilled to report that's exactly what we saw in the Q3. The 27% gross margin realized in the quarter was up 430 basis points from the Q2 and up 100 basis points from the year ago quarter. It was the strongest gross margin since the Q2 of 2021. We're very happy to see that. We're still not where we need to be, but gross margin improved throughout the quarter. The margin profile of the current backlog is the best it's been in over a year. We're going to continue to see productivity improvements going forward. Our gross margin is well on track to fully recover. This improvement is largely related to a normalization of price versus cost. In addition, improved productivity is also a contributing factor. You can specifically see this at our AAON Core Products segment, but it's happening throughout the organization. In the Q3, AAON Core Products generated almost the exact amount of gross profit that it realized in all of 2021. It's not only a result of pricing. Productivity improvements have been a driver to gross margin as well. We expect that factor will continue, especially as supply chain issues ease. Returning to the backlog and what we're seeing with demand. Overall demand remains strong. Total backlog was up 183.1% from a year ago and up 10.9% for the end of the Q2. Organically, backlog was up 109.6% from a year ago and up 4.7% from the end of Q2. The fact that backlog continues to increase sequentially is a sign that demand remains strong, particularly because our production is also increasing. Organic bookings in the quarter were up year over year 28%. Sequentially, they were up 36.7%, which is mostly volume driven. Demand is very strong at BASX. Bookings at BASX compared to the Q2 were up 67%. Backlog at BASX is up 267.1% since the end of 2021 and up 33.8% from the end of Q2. While both the legacy business and BASX continue to increase production to record levels, backlog continues to grow. Our lead times remain a contributing factor to the growth in bookings at both the legacy business and BASX. Demand continues to be fairly broad-based as far as end markets. Lodging and office buildings remain soft, but outside of that, most sectors are quite strong. Data centers and semiconductor markets are very strong. Education remains solid. Healthcare and manufacturing are still good. We're seeing robust demand in the grow facility. Warehouse seems to be slowing a bit, but remains still pretty good. Overall, demand is quite strong across the board. While we continue to monitor for the slowdown that it seems everyone is anticipating, we do not see it. Sentiment among our channel partners remains very positive, and the macro data we track is also encouraging. Construction spending is back to pre-pandemic levels, and all of the leading indicators that we track, such as the ABI, the Dodge Momentum Index, and construction starts, are suggesting the next 12 months will continue to be strong. Our biggest challenge right now is ramping up production fast enough. While everyone is happy to see backlog growing, we'd actually like to see backlog start to come down, led by improving lead times, which I think we're going to start to see in 2023. The team is doing a great job with adding headcount while improving productivity at the same time, and we're continuing to invest in capacity. Our CapEx this year is probably going to be about 8% of sales, and CapEx, both on an absolute basis and as a percent of sales, will most likely increase in 2023. We want to continue to provide our channel partners and customers with the best lead times. To do this, we're going to continue to invest in the business. We feel strongly that we have the best product offering at the best value to accommodate the increasing demands related to decarbonization, energy efficiency, and indoor air quality. As we continue to deliver at a very competitive lead time, we're going to set our channel partners up for maximum success, enable them to continue to take share. I want to provide a little color on our water source heat pump business and the decision we made to exit a couple of product lines. In 2015, prior to my arrival, the company entered this market organically with the thought that it would complement our product portfolio of energy-efficient equipment and that the market had vulnerabilities we could capitalize on. We've determined to terminate a portion of this business, specifically our horizontal and vertically configured indoor units. Equipment is very standard and has minimal pricing power, and we haven't been able to generate profit margins that we expect. Furthermore, the upcoming refrigerant regulations would require capital investment we decided would not be the best use of capital. It's not unusual for an innovative company like AAON to make changes like this, and as we've always done, we'll continue to monitor the financial performance of our product portfolio. This portion of the business generated approximately $10 million of sales in 2021 and is on track to do similar in 2022, so it's only about 1% of sales. We wouldn't normally address something so immaterial to revenue, but we've openly discussed the water source heat pump business since inception. As such, we felt it would be appropriate to provide some information on what we're doing. Also, by doing this, it's going to lend more capacity for high-margin, high-growth equipment. We will repurpose headcount and equipment once the production of this product line is wound down, which will be in early 2023. I also want to touch briefly on our parts business. Parts still make up a small percentage of sales at 6.6%, but it's something we've been focusing a lot on, both internally and with our channel partners. We've been having great success. Parts sales in the Q3 were up 31.4% and were a quarterly record for the company for the second straight quarter. The 31.4% growth was against a comp of 15.4% growth realized in the Q3 of 2021. Compared to 2020, parts sales were up 51.7% in this past quarter. Parts generate some of the strongest gross margins in our company, so growing this business will continue to be a strong focus of ours. Before finishing up and handing off the call for Q&A, I want to provide some information on our outlook for the rest of the year. Based on the size of the backlog, the improving margin profile of the backlog, and the increasing production capacity and productivity, we anticipate we will finish off the year on a high note. Sales in the Q4 most likely will be comparable to the Q3 due to the holidays we see in the quarter. Margins and earnings will continue to improve sequentially. We expect gross margins will finally fully recover to the target range of 28%-32% that we've been talking about. Looking out to 2023, it's still early, but we remain optimistic. Backlog will be entering the year up substantially from a year ago, and we will continue to realize more price, which should pave the way for continued margin improvement. Long term, we're continuing to invest in capacity and growth. In closing, I want to finish by thanking all of our employees, sales channel partners, and customers. Thank you, and I will now open up for Q&A. At this time, if you would like to ask a question, please press star followed by the number one on your telephone keypad. Your first question comes from the line of Chris Moore with CJS Securities. Your line is open. Hey, good afternoon, guys. Hello, Chris. Congrats. Good afternoon. Congratulations on a great quarter. Maybe thanks for just taking a couple of questions. You know, AAON historically has been priced at roughly, you know, 15% premiums to the market. Even with your recent price increases, the pricing delta looks to be, you know, maybe in high single digits, in some cases close to parity. Can you maybe talk a little bit about what's driving that closing gap, and do you expect this to be the new normal? Well, we're watching that carefully. We've always kind of managed to margin, not so much to market. But I think we need to pay attention to that because we are a value over most of our competitors. I think that the equipment definitely warrants a bit of a premium. As I've said in past calls quite a while back, at a 15% premium, there's a fair amount of work goes into proving the value. In the past, it took some pretty strong talents in the sales channel to do that. As that premium comes down to 10%, it becomes much easier to explain, and people begin to take notice of it much better. I'd like to make sure that we stay in that range. We've also added a lot of marketing tools that help explain that value. We have a new building that's gonna be opening up, probably Q1 of 2023, where we'll have our equipment along with different competitors' equipment sitting side by side, and the visual representation is quite strong by itself without a lot of calculations. Got it. Very helpful. Maybe just one more. You guys have introduced some cold climate air source heat pumps this year. I guess maybe a few questions there. How is the market reacting to them? You know, how significant they are, you know, relative to the whole decarbonization trend? And lastly, you know, how do the capabilities compare to the rest of the market? All right, I'll start with your first part. The market is loving it. We had significant building owners in the laboratory recently for them to witness the testing of those units. We've already proven their performance, but we keep a unit available to display to people so they can see the performance characteristics with the empirical data, not some modeled data. This particular client has kind of made the news recently for not building quite as much as what they had originally intended to. What they're doing is going back and looking at some existing buildings and trying to bring them into compliance with some of their decarbonization goals that they have. We have multiple clients looking at it that way, and that's where e-commerce warehouses, maybe on a new construction basis, have slowed down. Our impact on that is growing substantially. I think a lot of it's gonna be change-out. Another thing you may recall was when I came to the company six years ago, we were about 50% new construction and 50% replacement. I made the statement then that our goal was to raise the replacement percentage while also growing the new construction application. We've been very successful with that. I don't have latest figures on that, but it's somewhere upwards of 60%, approaching 65% the last time I saw it on replacement. I think the cold climate capable air source heat pump is driving a fair amount of that. The next thing, I got your third part of your question on the capabilities. I'll ask you to repeat the second. Here in a second, I'll answer your third. Yeah. The second one was just, you know. Okay. How significant this products are relative to, you know, the whole decarbonization trend. Well, they're very significant. When you look at the portion of the United States, or North America for that matter, that a 0-degree Fahrenheit capable air source heat pump with good efficiency and good capacity applies, it's significant. We have development ongoing with new technology that will take us down to minus 25 degrees Fahrenheit, but that's gonna also be completed in conjunction with the refrigerant changeover. At this point in time, we've opened up a lot of possibilities with zero degree capable, and we're seeing, you know, strong support for that. As we get the new parts and pieces that are required for minus 25, I think it'll be very, very significant. Now I've forgotten your third part. Give me the third part again. Yeah. Just in terms of, you know, as it compared to the rest of the market, what else is out there? Yeah. The vast majority, according to the research that my team has provided me, of air source heat pumps that are out there, which there's not that big of a selection in packaged rooftops. There are great selections in residential unitary split systems. But in packaged rooftops, there's not a huge selection, but most of them seem to not be viable below maybe 30 degrees or even 35 degrees Fahrenheit. Being able to capture that delta, we'll use the smaller number, from 30 degrees down to zero degrees, that captures a huge amount of operating hours in areas that are not Sun Belt areas. It's pretty significant. Like I say, with the research we've got, products that they've already been in the lab and tested with prototype materials. As those become commercially available, we're going to be able to capture just significantly more of those people that wanna decarbonize. Terrific. Very helpful. I'll jump back in line. Your next question comes from the line of Brent Thielman with D.A. Davidson. Your line is open. Good afternoon, Brent. Thanks, Steve. Hey, good afternoon. Congrats on a great result there. Thank you. Hey, Gary, it looked like you got about 24% from price of the 75% in total growth. Was wondering if any of the March price increase, which I think was 7%, is any of that represented in the revenue you've reported today? I guess you've still got the one percentage point increases thereafter. Yeah. I don't have the exact percentage. Maybe Rebecca might have that. I'll ask her to look that up, and see if she can get that for you, percentage in the quarter. I know in October we're getting a good bit more of the March price increase. We looked at how that occurred. At one time I was told of the 7%, we got about 5% in October. So it was beginning to come into the quarter, but it would've been the very tail end. So there's quite a bit left to gain. Then, as you mentioned, starting 1st June, we had 1% per month, and that's still in place. We've not discontinued that yet. Okay. That's great. Then Gary, I mean, last quarter you guys talked a bit about, you know, the inroads that BASX is making and maybe some opportunity to produce product out of Longview for a customer or maybe set of customers. Just any update on the progress on that front? Yes. The first prototype units have been built. There's one on the way to the laboratory right now for final testing. It may be there by now. Last week it was finished in Longview. The manufacturing facility's ready to go. We vetted out the process. We built three prototypes so that we could learn what was most manufacturable to meet the expectations of the client. We actually ended up giving them a little more than what we originally thought we were gonna give them, but it was a more manufacturable unit. We're not anticipating starting full-blown production till around 1st January. Between now and then we'll be vetting out the manufacturing process, refining it, and so forth. Because remember, you design and build one of these units once. You design it once, and then you build it hundreds if not thousands of times. They are very, very custom, but you get to put a fairly large number in front of the bill of materials when you go doing it. You wanna make sure everything's as optimized as possible, and that's what we're in the process of cleaning up and finishing up right now. Hey, Brent, I can circle back to you on that pricing question. For the March price increase, that was 7%. We saw about 1% of it in August, almost 3% of that in September, and a little over 6% of that in October. Okay. That's great. We got a- Yeah, thank you. Mm-hmm. Thanks, Rebecca Thompson. Yeah, maybe just another one. Gary Fields, you mentioned, you know, potential for, you know, backlog to come in here at some point in 2023 as your lead times improve. There's some of your, some of the competition's out there has talked about, you know, continued stretched lead times in the industry. Maybe you could just talk around that and, I guess, you know, what you see in terms of visibility for 2023 and even into 2024, if you can comment on at this point. Well, I wanna go back to the beginning. It's six years ago last week that I began as president of AAON. When I became president, I took over all the sales, engineering, and manufacturing. The back office stuff stayed with Norm. Norm made the statement to me as I walked in the door that the company could build more than we could sell. I went about working with the sales channel to improve a lot of things that I knew was holding them back from being more successful. Unfortunately, we proved Norm incorrect on that statement. That's why 2018, 2017 we did pretty good. 2018 and 2019 were very challenging. Q3 in 2019 we began to show that we had figured out this manufacturing deficiency, had corrected it, and we actually had good capacity. Now, all of this process is well documented. There's a lot of objectives that we monitor and measure, and so we're very confident that we know what our capacity is. We got well ahead of where we were. As you've seen, the CapEx investments have been substantial in additional capacity. Let's just circle back to Longview for a second. You know, we built a new building, and it won't be two years that it's been in production until February of 2023. But they are now producing over double of what they produced prior to that new building. We have put a lot of investment into manufacturing capacity. I felt certain that the demand was there for the equipment. The sales channel proved that way back there in 2017, 2018, and they've continued to prove that. They've done a great job for us, and we've listened to them intently on, you know, what product positioning should look like for them, what we can do for, you know, just adding capabilities that help them to close sales more efficiently. We've invested an awful lot in those aspects of the business, and they're all finally coming to fruition. You began to see it, like I said, in Q4 of 2019, but then the pandemic hit and kind of slowed things down for us for a little while. Now we're able to. The supply chain has thawed out a lot. It's not totally without strain, but it's substantially improved, and we're able to ramp up headcount along with the availability of these components that have been a little scarce from time to time. We already had the manufacturing infrastructure. All of these things are going to power us to increase production. The demand is very solid. Like I say, if we were to reduce the backlog a little, it's not going to be because of reduced bookings, it's gonna be because of increased production. Okay. Gary, I appreciate the color. I'll pass it on. Your next question comes from the line of Julio Romero with Sidoti. Your line is open. Thanks. Hey, good afternoon. If you guys could just talk about the customer reception to the shift in pricing strategy to that 1% monthly. Secondly, is the order number you put up in the quarter kind of a cleaner order number with less noise, so to speak? Let's talk about the 1% price increases. I took that advice from Norm. He had lived through inflationary times in the 70s and had used that strategy once before and said it was very successful. We needed to kind of get. We had to make some big moves to get back between the proper range. I call it between the guardrails. Once we felt certain that we were there, then with inflation running roughly just short of 10%, I felt like 1% per month was very appropriate. We did that, and our sales channel just really appreciates that. They said it's very predictable. They know exactly, you know, what to expect, and we have not yet shut that off because inflation hasn't yet shut down. I mean, we're looking at wage rate increases, electronic component increases. While some raw materials have come down, the component material, component costs have not. We feel like that we've got it handled really well with the 1% per month, and we'll probably continue that for a while yet until we see things strengthen in our margins a bit above historic, which, you know, very likely could happen in 2023 if we're able to keep these price increases. We also look at the bookings rate to make sure that we've not slowed bookings down. As you can see with the increased backlog and the bookings the way they are, we've not slowed down anything. We're very satisfied with what we're doing on that price increase strategy. What was your second part, Julio? Yeah. You know, on the order number, I was just looking to see if, you know, my thought process is with the monthly price increase that's very predictable, as you said, you would see less kind of spikes, you know, ahead of a price increase. Just trying to see if that order number is more indicative of underlying demand. Yes. At least on a relative basis than prior quarters. On a relative basis, it is. We're not seeing. When we had, you know, 3%, 5%, 7%, 8% price increases, we saw a huge pull forward. I mean, 1st January, was just absurd we saw a pull forward on that. It was in the not quite $200 million, high 100s that pulled forward, and that's what damaged our margins for so long there for a couple of three quarters. With the 1%, we're not seeing much pull forward at all. It's fairly insignificant. It's not totally absent, but it's pretty insignificant. I think that the bookings rate is normalized. I mean, this goes all the way back to June now, so that's several months that we've done that. Each month, our prediction or projection actually from the sales department telling us what's gonna happen, that's pretty much what's happening. We're not having any surprises on the high side or the low side. Got it. I guess, you know, with that change in pricing strategy, you know, talk about where you are with price cost alignment. I think you mentioned some of those component costs are still, if not rising, then at least not coming down. Yeah. We've put together an FP&A team. I'm very happy with the information they've been providing to all of us. It's something that we were probably in need of. You know, if the market's very stable, an FP&A team's job is pretty boring. It's when it's so dynamic like it's been for the last couple of years that their value is just absolutely, you know, proven. With what they're telling me, you know, our margins are gonna continue to strengthen. What we see in Q4 looks like, you know, we'll be well into that 28%-32% range. You know, we might possibly see something a little stronger than that Q1 if things stay the way they are. We'll just have to monitor this along, but I'm very confident that we're in that range and that we're capable of staying in that range. Perfect. Just last one for me. You just mentioned it on that higher margin backlog that's flowing through. You know, I don't know. What are your thoughts on the duration of that higher margin backlog? Like, how long does that tailwind potentially go on for you guys? Well, if you look at absolute run rate and absolute backlog, you know, you're looking at about six months that's in the house, and orders have not slowed down a bit. You know, historically, the company had a bit of a bell curve on bookings. You know, the Q1 and the Q4 were always a little slower than second and Q3. We've not yet seen that. This has been a steady slope up. I think a lot of that is the better products that we're putting together, like the cold climate capable air source heat pumps. The growth in opportunity as a result of acquiring BASX, all of these things are keeping that going forward and up. With regards to the margin, again, you know, we've got that margin where we want it, and, you know, it's going to continue to strengthen a bit. Great. Thanks for taking my questions. I appreciate it. Thank you. Mm-hmm. Your next question comes from the line of Jon Braatz with Kansas City Capital Associates. Your line is open. Gary. Good afternoon, Jon. Hi, good afternoon. Hey, nice quarter. Thank you. One question. You're moving a lot of products out the door, and I think you indicated that headcount was up 18% in the quarter year-over-year. As you look at the production opportunities or the sales opportunities going forward, what kind of additional headcount might you need for next year? Obviously, productivity is improving, but do you need that type of increase in headcount next year, too? We're monitoring it based on the manufacturing facility as a whole has probably around 40% more surplus capacity as a whole. The headcount, we need to measure it in at somewhere between 15% and 18% headcount's probably the maximum that you can measure in effectively. If you bring them in too fast, you'll either have turnover or you'll have low productivity. As you've seen, we've measured in 18%, but our productivity's gone up. Our onboarding procedures, training procedures are much advanced over what they were a few years ago. What we're monitoring now is supply chain. As parts are available, then we're able to relay that to HR and say, bring us more people. We've kind of been ratcheting back and forth between the two. As more parts are coming, then we're adding people. I think our limiting factor in 2023 is twofold. I don't wanna add people so fast that we become inefficient. That's number one. Mm-hmm. Number two is I don't want people standing around without parts to put together. Now, you know, we manufacture a very high content of our equipment. One of the things that, you know, go back four or five years ago, we bought WattMaster Corporation, now called AAON Controls. They're in Parkville, Missouri, not far from you. We challenged them with designing and building more of the electronic components in our units than what they had historically supplied to us, and they've been very successful with that. They keep moving forward with that. We have a better handle on that set of components than, you know, we ever have had in the past. The next thing was that our fan manufacturer that, you know, we were buying 35000-40,000 fans a year, we were able back in late April to purchase from them the intellectual property tooling, all the fixtures, along with instructions. You know, they're teaching us how to build the fans. We're starting to build fans in Tulsa here in another month or so. Slowed down a little bit by some of the major equipment we had to purchase to do that. Those people had supply chain issues, and ironically, our purchasing department went to bat for them and got them some of the parts to build our equipment for us, which I thought was fun and pretty innovative. They're getting these big pieces of equipment to us probably three months ahead of what they had told us not so long ago. Being able to build our own fans is another thing that we can control a lot of the supply questions on. You know, we continue to look at vertical integration. You know, what else is being constrained? What else can we do? We're very creative and innovative with that. We're gonna continue to do that, and some of our 2023 CapEx is gonna be dedicated towards that exact quest, is increasing our manufactured content even more. Okay. Gary, one other question. Obviously BASX had a good quarter. The outlook looks very, very strong. Maybe incorrectly, I thought of BASX more as a data center company, but we talked a little, you talked a little bit about the semiconductor opportunities. Is that something that is sort of new and emerging, and have they done a lot of work with semiconductor manufacturers before? Well, actually, the founder's heritage was from semiconductor. Okay Dave Benson began his career with Intel. When he left Intel, he went to Brod & McClung PACE Company in Portland and built units for Intel. I would say he's got around five decades of experience with semiconductor. It was probably I don't have the number off the top of my head, but I think they've been doing about 30%-35% of their revenue with semiconductor and clean rooms. Okay. That is something that is accelerating. The alignment with AAON, it is allowing some of those companies, because those companies buy huge orders at a time. You know, previously, if they wanted to give them an order that, you know, they were capable of technologically building, but maybe not physically building, because they didn't have enough physical infrastructure to do it. Now they've got more infrastructure. The new building they built just prior to us purchasing them helped that. The legacy AAON facilities helped out a little bit too. This is something that's a very good opportunity for them. They have very high regard in the industry for their abilities, and now they've got a strong foundation underneath them that will allow us to capitalize on those. If things continue well for BASX, do they have, in combination with your legacy business, the footprint to, let's say, double sales? Easily. Okay What we're able to do for them in long view, just in the data center itself, doubles their sales. Yeah, okay. Okay, all right. Gary, thank you very much. Thank you, Jon. There are no further questions at this time. I'd like to turn the call back to Mr. Joe Mondillo for closing remarks. All right. I'd like to thank everyone for joining on today's call. If anyone has any questions over the coming days and weeks, please feel free to reach out to myself. Have a great rest of the day, and we look forward to speaking with you in the future. Thank you. This concludes today's conference call. You may now disconnect.