Greetings, and welcome to the Allied Motion Technologies fourth quarter and fiscal year 2022 financial results conference call. At this time, all participants are in a listen-only mode. A Q&A session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Craig Mychajluk of Investor Relations. Thank you. You may begin. Thank you, and good morning, everyone. We certainly appreciate your time today as well as your interest in Allied Motion. Joining me on the call are Dick Warzala, our Chairman, President, and CEO, and Mike Leach, our Chief Financial Officer. Dick and Mike are gonna review our fourth quarter and full year 2022 results and provide an update on the company's strategic progress and outlook. After which, we'll open up for Q&A. You should have a copy of the financial results that were released yesterday after the market closed. If not, you can find it on our website at alliedmotion.com, along with the slides that accompany today's discussion. If we're reviewing those slides, please turn to slide 2 for the safe harbor statement. As you are aware, we may make forward-looking statements on this call during the formal discussion, as well as during the Q&A. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks, uncertainties, and other factors are discussed in the earnings release, as well as with other documents filed by the company with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. I wanna point out as well that during today's call, we will discuss some non-GAAP measures which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release and slides. With that, please turn to slide 3, and I'll turn it over to Dick to begin. Dick? Thank you, Craig, and welcome everyone. The fourth quarter capped off a record year for Allient as we continue to execute our strategy, leverage our diversified end market mix, and further develop our One Allient global platform. I'm incredibly proud of the teamwork and dedication of the entire Allient team as their consistent and focused efforts advanced our strategic priorities, both organically and inorganically, while navigating macro headwinds. There were a number of highlights during the fourth quarter as revenue grew 35% due to higher demand across each of our target markets, which included incremental sales from acquisitions and impressive organic growth of 18% during the quarter. Equally important was the strengthening of our margin profile in spite of the overall inefficiencies created by the global supply chain and labor constraints. Both operating income and net income doubled over last year's fourth quarter. On an adjusted basis, our earnings per share were $0.43, up from $0.30 last year. For the year, we reached a milestone as our revenue grew 25% to cross the $500 million level. We achieved solid annual organic growth of 12% on a constant currency basis, which reflected strong demand within our industrial and aerospace and defense markets. We believe our performance across markets substantiates the investments we have made to grow, diversify, and strengthen our business. As you know, strategic acquisitions are a key component of our growth strategy. We completed three acquisitions in fourth quarter 2021 and another three in second quarter 2022. Collectively, they enhanced our value proposition with new technology offerings, strengthened our competitive position, and improved our overall margin profile. The integrations have progressed well, and our teams are working hard to maximize opportunities and realize the full potential of these businesses. Overall, we achieved our stated goal of gross margin expansion, reaching a record 31.3% for the year, which was up 130 basis points. We have not yet fully leveraged these acquisition costs. We still delivered annual net income of $17.4 million or $1.09 per diluted share in an adjusted basis, net income per share of $1.88, which was up 18% for the year. With that, let me turn it over to Mike for a more in-depth review of the financials. Thank you, Dick. As a reminder, our results include the acquisitions completed during the fourth quarter of 2021 and the second quarter of 2022. Starting on slide 5, we provide some detail regarding our top line. As expected, we did see some minor seasonality creeping back into the business during the fourth quarter, particularly in December, due primarily to the typical holiday shutdowns and customer inventory adjustments associated with general business conditions normalizing. Nevertheless, fourth quarter revenue increased 35% to $131 million, which reflected higher demand across each of our target markets and incremental sales from acquisitions. The unfavorable impact of exchange rate fluctuations on revenue was $6.7 million in the quarter. Excluding FX, revenue was up 42% and organic revenue growth was 18.3%. Revenue in the aerospace and defense market grew 197% from organic growth, program timing, and incremental acquisition demand. Industrial market sales growth was 46%, reflecting strong end market demand in industrial automation, material handling, and electronics. We saw 8% sales growth within our vehicle market, largely from commercial automotive, trucks, and power sports demand. While medical markets benefited from surgical-related markets and medical pumps, there were offsetting pressures due to lower pandemic-related sales. The distribution market, while a small component of our total revenue, increased 22% during the quarter. As Dick highlighted, our full-year results are also strong, with revenue growth of 25%. On a constant currency basis, revenue was up 30% for the year, which included 12% organic growth. Sales to US customers were 58% of our total, compared with 54% for 2021, with the balance of sales to customers primarily in Europe, Canada, and Asia Pacific. The shift in mix continues to reflect the impact of our recent acquisitions that largely sell to the US market. Slide 6 shows the change in our revenue mix by market for the full year period, along with the 2022 growth rate for each market and the drivers behind the change. Sales to industrial markets were up 43%, driven by the verticals noted on the slide. Industrial has seen nice growth over the last year and continues to be our largest market, making up 38% of our total sales. Vehicle groups slightly as strong truck and commercial vehicle demand offset lower sales in construction and powersports. Medical market revenue was nearly flat on a full year basis, reflecting similar impacts as the fourth quarter. While acquisitions contribute to the aerospace and defense growth, we are also driving solid organic growth and benefiting from defense market program timing. As highlighted on Slide 7, our fourth quarter gross margin was 31.1%, up 240 basis points from the year ago period. Higher volume, margin accretive acquisitions, and pricing more than offset continued global supply chain disruptions and rising material and labor costs. Consistent with our stated objectives, you can see the progress we are making by executing our strategy in the annualized chart on the right as we achieved a record annual gross margin level of 31.3%. While our recent M&A activity is certainly helping, we also equate this performance to our global teams that continue to drive higher margin solution-based sales. Moving on to Slide 8, fourth quarter operating income more than doubled to $8.2 million or 6.2% of sales, which was up 210 basis points. Operating costs and expenses as a percent of revenue were 24.8%, up a modest 30 basis points, largely attributable to our second quarter M&A activity. Operating costs for the full year were also elevated due to M&A activity, which resulted in higher engineering and R&D costs, intangible amortization expense, and business development costs. Over time, we expect to fully leverage those expenses with continued sales growth. On Slide 9, we present GAAP net income and adjusted net income, along with our adjusted EBITDA results. Our net income and diluted EPS have been adjusted for certain items, which we believe provides a better understanding of our earnings power, inclusive of adjusting for non-cash amortization of intangible assets, which reflects the company's strategy to grow through acquisitions as well as organically. Fourth quarter adjusted net income was $6.9 million, or $0.43 per diluted share, up 43% from the adjusted $0.30 per diluted share in the prior year period. The effective tax rate was 27.7% compared with 53.9% as the prior period included a $0.5 million valuation allowance of a deferred tax asset in a foreign jurisdiction. We expect our income tax rate for the full year 2023 to be approximately 25% to 27%. Adjusted EBITDA increased 47% to $16.6 million or 12.7% of revenue, which was up 100 basis points from the fourth quarter in 2021. For the full year, Adjusted EBITDA was up 31% to $65.5 million and as a percent of sales was 13% up 60 basis points. We use Adjusted EBITDA as an internal metric and believe it is useful in determining our progress and our operating performance. Slides 10 and 11 provide an overview of our balance sheet and cash flow. Total debt was approximately $236 million at year-end. We used about $44 million in cash to complete the 3 acquisitions in the second quarter, net of cash acquired, which was largely funded with debt. The debt increase also reflects the new finance lease that we highlighted during the first quarter of 2022 for manufacturing facility expansion to support continued growth. At the end of 2022, debt net of cash was about $205 million or 48.7% of net debt to capitalization. Our bank leverage ratio was 3.42x. During 2022, we generated $5.6 million of cash from operations, a decrease from the prior year due to high levels of inventory and working capital timing. Based on our cash flow projections, we expect to deliver over time in a manner that aligns with and is consistent with our historical performance. You can see the strong cash generation during the recent fourth quarter. Full year capital expenditures were $15.9 million and were largely focused on new customer projects. We expect 2023 CapEx to range between $18 million and $23 million. Inventory turns were 2.9 times in 2022, a slight change from our 2021 performance as our teams continued to manage our inventory to meet increasing customer demand and combat sourcing and lead time challenges. Our DSOs saw a bump up to 54 days, largely due to timing and mix of customers. With that, I'll now turn the call back over to Dick. Thank you, Mike. We enter 2023 with momentum on our side as we continue to have a solid pipeline of opportunities and are encouraged with order levels from each of our target end markets. As highlighted on slide 12, fourth quarter orders of $145.6 million drove a book-to-bill ratio of 1.1 times and record backlog of more than $330 million at year-end. The robust order level was broad-based and reflects a noted FX headwind of $12.5 million. Our backlog was up 32% over the prior year period and 6% sequentially. The time to convert the majority of backlog to sales is within the next 9 months. While there are still some components with long lead times, generally speaking, we are seeing some stability within our supply chain. Turning to slide 13 for our outlook. While a heightened level of macroeconomic uncertainty remains, we believe we are in a position of strength and are confident we can continue to execute our strategy by capitalizing on the many growth opportunities and positive underlying demand trends within our targeted markets. Specifically, demand is expected to continue at relatively strong current levels within our industrial markets, which should continue to benefit from our increased market presence around industrial automation, material handling, and as well as oil and gas tailwinds. We anticipate further organic growth given our exposure and program participation. We are anticipating modest growth within our vehicle sectors as the market supply chain continues to improve and demand schedules from our automotive customers continue to firm up for 2023. Our medical markets should continue to trend away from the pandemic-related sales to a more normalized sales environment focused on the higher margin surgical-related end markets. Having gained greater traction in many of our served markets, we are creating a larger, more robust base of business to support continuous and sustainable organic growth well into the future. While fostering organic growth remains an emphasis, strategic acquisitions are an equally important element of our overall growth strategy over the long term. We are currently focused on maximizing our recent acquisitions, driving cash conversion, and paying down debt while still grooming potential opportunities and building out our M&A pipeline. Lastly, we believe we can continue to enhance our margin profile as we demonstrated this last year by further expanding our multi-technology solution opportunities and driving continuous improvement through utilization of AST, our lean toolkit in all aspects of our business. With that, operator, let's open the line for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for your questions. Our first questions come from the line of Greg Palm with Craig-Hallum. Please proceed with your questions. Thanks. Morning, everyone. I wanted to just start a little bit about the quarterly results. You know, revenue's down a little bit sequentially, but maybe not as much as some of the past years. I think what really stood out is bookings were actually up quite a bit sequentially. I'm just kind of curious if you've noticed any change in behavior at your customers. You know, kind of what are you hearing and seeing in terms of, you know, expectations for the next year? I'll start, and I'll let Mike, you know, add some more color to it. I would say to you, Greg, one of the reasons that you're correct. As we've always said, fourth quarter is always a crapshoot. We're not sure what's gonna happen, based upon the prior years of, you know, holding back from receiving orders, making inventory levels look better for year-end for many of our customers and delaying things until the new year starts. I would say, given, you know, the broader background and diversity of our company now. You know, that's been minimized to a certain extent, or it's been reduced to a certain extent. I would think that, you know, that's something that we should expect going forward, that we may not see that big seasonal dip like we had in the past based on a few suppliers. In addition to that, you're correct, we did see strong demand going into next year and no drop-off. You know, maybe Mike wants to add some caller to that. I think, the only thing I would add, to what Dick said was that we were operating with a very strong backlog and with some improvement in supply chain, right? That's allowing us to dig into that backlog and ship, right? I think some of the seasonality that we expected to see in Q4 may have been partially offset by ability to draw from the backlog as well, from a sales perspective. Okay. M akes sense. Any notable change in order patterns and sentiment on a year-to-date basis? We've been shocked by the strength of the demand, Greg. You know, it's, it did vary a little bit month by month. Heading into Q1, you know, we haven't really seen any change in the order patterns to a significant degree. I think, you know, larger macroeconomic events are at play, you know, so maybe a little weakness from the European side in terms of forward-looking. Generally speaking, as we've stated pretty much all year long, it's just been a little surprising the level of demand and support out there. Okay. Just sticking with the, with the quarter, one more question. Gross margin did dip down a little bit sequentially, you know, relative to, you know, Q3, even Q2 levels, and I'm just curious if there was anything that stood out. You know, mix, anything else that you wanna point out? No. Again, I think that's part of the seasonality from a sequential standpoint, right? We're not leveraging as much volume, if you will. Then our own, you know, holiday type shutdowns, right? You're not pushing as much volume through your shop floor and, you know, generating absorption, if you will, to boost that pulling into inventory. I think that's not unexpected. I will say it is still a constant battle with inflationary cost pressures. I think the good team's done a good job, you know, raising selling prices to offset what we've seen from a cost perspective. It's a constant battle and it has ebbs and flows. Got it. Okay. I will leave it there. Thanks. Thanks, Greg. Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your questions. Thank you. Dick, Mike, congratulations on a very solid quarter. Thanks, Ted. Thank you. I got a few questions. I'd like to start, just sort of on the top line. One, I'd like, maybe we could talk a little bit about aerospace and defense. I guess why I would like to talk to is I know you know, saw strength and you continue to see strength. You know, we obviously have a war going on in Europe with Ukraine. There was an interesting article in the journal, you know, several weeks ago, you know, kind of talking about there has not been, so to call it, a ramp in, you know, defense orders relative to maybe expectations, you know, going through 2022. Really the finger that they, that they pointed at or what they pointed at was just, you know, a lack of production capacity and supply issues because, you know, these manufacturing lines are really not scaled to handle the demand that, you know, that might be out there. So with that, backdrop of caller, I wonder if you could maybe talk about what you're seeing in the defense market and kind of, you know, sort of walk us through how you see that business performing as we go through 2023 and beyond. Sure. Well, I would say to you, Ted, that the article is pretty accurate from the standpoint of while there has been inquiries to and quoting and looking at higher volumes, we have yet to see those higher volumes come through with actual orders for you know, with assigned delivery dates. I think there's certainly the front-end work is being done to determine what's available, what they can get in what timing. you know, the issue that we would have when you look at it from our sales is that we're just one element of what's required in the system. Even though we could deliver, all right, if everyone can't deliver, they're gonna reshuffle and reschedule because it doesn't make any sense to have three-quarters of a device sitting there and not being able to ship it. We've seen some shuffling. What's interesting, we've seen some shuffling that says, okay, what can we get on a current basis to handle some real, let's call it more urgent requirements, which actually resulted in pushing other equipment out so that they could free up capacity. Again, not from our standpoint, from the complete supply chain that's required to fulfill the requirements of whatever that device might be. I would say the article is quite accurate. We have not seen. All we can be assured that inventories are being depleted, and the demand is there, and at some point in time, they will have to be replenished. It sounds like it's clearly a bullish driver in terms of the business, but given some of the issues, maybe it'll be a little lumpier in the near term as these, you know, kind of production issues work themselves through. Correct. Next one just on the top line is spinning through the cadence. Now it looks like Polaris was about 11% of revenue, call it $55 million. You know, you've done a really nice job in terms of trying to sort of, you know, diversify, bring down the exposure to Polaris. I mean, it's still, you know, a pretty important customer. You know, if you listen to their call, you know, they clearly expressed some, you know, concerns with regards to the outlook in 2023. As I recall, I think they were even talking about the side-by-side market. I wanted to sort of, with that as a backdrop, square against your view in terms of, you know, modest growth in the vehicle. You know, like where. If Polaris is really, let's just say, not really a, an avenue of growth, and maybe I'm wrong on that, but where are the avenues of growth for vehicle that's gonna allow you to push that to a modest growth level? Sure. I can answer that. I think, you know, you were absolutely correct. I mean, our business with Polaris has remained strong, and it has been through diversification in other markets and, you know, the overall growth of the company. That's been the reason why the overall percentage of sales as part of Allient have gone down. That definitely was something that, you know, we wanted to do, but we did not want to. Obviously, we don't wanna see the volume within Polaris get reduced. I would say to you that, you know, that whole market is had some really boom years during COVID. Whether or not there's a settling out and demand will go down, I mean, Polaris is much closer to the end market than we are. We sell to multiple people in that business and, you know. I think it's probably something we should expect, but as you've noted, it won't have as huge of an impact, you know, given the level of sales and diversification of the customer base that we have as it would've had in the future. Other, you know, the other vehicle markets that we're in, we are seeing some strength, and we've had some major programs that we've invested in the past, you know, whether it's construction vehicles and buses or automotive or trucks and so forth. We have some good emerging applications that we've been getting designed in on the last several years that are starting to take off, and it's all involved in electrification, and, you know, we're in a pretty strong position to benefit from that. We also have those, you know, contracts that we booked. We don't have it in our backlog. We didn't record as a booking. We call it unscheduled backlog, so that's not in our backlog, for automotive. That we do see that that is schedules are firming up and getting stronger. That industry still has some challenges with certain components which are keeping lead times long. We do expect from our standpoint, based upon schedules, that we'll see an increase there. A little offset, definitely an offset to what we might see on the from the sports utility sports market. I would like to also say, when you mention ATV and side-by-side, you know, think of ATV as more as the, you know, the residential, you know, the type of product, whereas the side-by-sides are used in many different applications, industrial, commercial, so forth. I would just. Another kind of. You prompted another question with regards to the vehicle section of your business. D o you have some kind of sense in terms of what your exposure to like the construction equipment, the heavy equipment business is? 'Cause I will tell you that if you listen to the players in that world, there is a lot of backlog for them to work through. I mean, I could, you know, I'm just kinda, it's, you know, I mean, it's the exposure there, I can really see how that could be a benefit for you in that business and just maybe some color around how much of your vehicle business comes from just that segment of the market, if you would. It's again, it's the whole vehicle market. It's, for us, quite diversified other than, you know, the large player. Let's just put it this way. I mean, saying the large piece of it, 50% of the business coming from, you know, the powersports market and the rest coming from all these other sub-markets that we have. We do have exposure in construction, agricultural, which is, you know, has been strong, and we think should continue to be strong, trucks. It has a lot to do with some of the programs that we've worked on in the past that are coming to fruition. We do see. There is a backlog. There are opportunities, and we do see, you know, into the future, some opportunities for that to grow for us. Okay. I'm gonna ask just one more. I have a whole list, but I'm gonna get out of line 'cause there's just other people that wanna talk. on the backlog, I mean, you had a nice pickup in backlog. you know, it's, it's healthy. I'm curious, when I look at that, like was I think $330 million backlog number, you know, we're so far into this quarter, how much of that backlog is scheduled to go out beyond the first quarter? We're so far. For us, we're already two-thirds of the way into the first quarter. As we're looking at it, we're kind of looking at the whole backlog relative to the rest of it. See, I'm not. Like for that, I'm still stuck in December, so. I got you. I don't have the number off the top of my head. Mike, you might wanna. To characterize the backlog, I would say it's. Again, because lead times have gotten stretched over the last couple of years, I would characterize the backlog as predominantly the next six to nine months. I can't pinpoint it for Q3. That's where else I would do that. Want to? I'm sorry. I mean, as we said, we've seen continued strength of incoming orders. The backlog, you know, continues to remain strong. I would say to you that I don't have an exact number. We know we're gonna get asked that in the future. We'll have it prepared. I think it's kinda we don't obviously get into forward-looking, and, you know, I know it's, you know, as we said, two-thirds of the way through, we kinda know where we are. We don't. I would suggest that we're not looking for fill for the first quarter, right? Correct. It's. Correct. Okay. Well, that's actually very helpful. I do have more questions, but I'm gonna step out of the out of queue, and I'll come back in at a later time. Thanks very much. Thank you. Our next questions come from the line of Brett Kearney with Gabelli Funds. Please proceed with your question. Hi, guys. Good morning. Thanks for taking my question. Morning, Brett. Morning. Wanna touch on the really strong growth, you're seeing, within your industrial end market. You know, obviously, there's concerns out there on kinda how the broader macro environment could unfold. We're also hearing from folks on just kind of, you know, the historic, you know, reindustrialization that's taking place in the U.S. in part supported by some of the federal spending streams, some of the recent, you know, Inflation Reduction Act, CHIPS and Science Act, IIJA. I'm sure it's hard for you guys to, you know, parse out where exactly the orders are coming from. Within your industrial market, what's your sense in talking to some of your customers and channel partners, some of the, some of the activity and applications your solutions are going into, related to kind of industrial plant build-out, particularly in North America? That's a great question. Incredible demand. That's really what's out there, and it's more about being able to fulfill the requirements. I would mention that, you know, one of our larger acquisitions serves that space to a great extent, and we're not seeing any slowdown there. Matter of fact, I mean, there's some backlog that sits out there that we, you know, we'll be working on into the future. I would just say to you that I agree 100%. A number of factors come into play. You know, industrialization U.S., but I mean, we're a global supplier, so we see it all over the world. The labor constraints haven't let up. They were pre-COVID, and they're still there today. You see innovation becoming a part of everybody's thought process here in order to be able to minimize the labor constraints that they're seeing. I agree. there's some strength well out into the future here. The only thing that's gonna slow it down is the ability for, you know, the suppliers to be able to meet the demand in the timeframe that they're looking for. Excellent. Thanks so much, Dick. Thank you, Brett. Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next questions come from the line of Gerry Sweeney with Roth Capital. Please proceed with your questions. Good morning, Dick and Mike. Thanks for taking my call. Morning, Gerry. Just a couple quick follow-up questions. One, you talked a little bit about inflation, constant battle. Just curious if where you are on both material costs and labor costs sort of pushing those costs through. Are you up to date, still trailing a little bit? You know, is the market receptive to more catch-up pricing if necessary? I'll let Mike start. Maybe I'll answer whatever he says at this point. I said there's ebbs and flows when we talked about it earlier, Gerry, right? I would say, you know, late last year, I would call us caught up in the sense that, right, we had contractual agreements which automatically allowed us to pass things through. As I think we've talked in the past, there's usually about a three to six month lag in all that being processed and pushed through and seeing it in results. Then the team did a really good job passing through purchase price variances and the like. The debate over here is classically, right, we don't. It's difficult to do that with any margin on it, right? It's a zero-based pass through to a large degree, which doesn't help your gross margins as well. My, you know, my only cautionary note was that, hey, you know, in all the reports, you're seeing it as well, you just continue to see prices increase. At some point in time, we're gonna come to a crossroads here where, you know, demand and inflation kinda, you know, battle each other here, and we're not gonna be able to pass them through as easily. It's, like I said, it's just a constant battle. I wouldn't say that, we're flush with the current market in the sense that, right, continue to seeing significant increases here in the last three months. It's moderated to some extent. We're not seeing the massive jump- That's. Gotcha. Less, less velocity, I guess, or. I got it. The gap has narrowed. Well, okay. I'd say I agree exactly what Mike said is, from the standpoint of, we would have expected to start to see some slowing, but we haven't. I do agree that at some point, I mean, as the prices keep going up and up and up and get you know, the pass-through, and who's paying them, and there's gonna be pushback. The, the overall inflation rate comes into play, and that impacts the labor rates, which, you know, certainly commodities are easy. When I say easy, if you're contractually bound by commodity price increases, you just. Whether it's plus or minus, you're going back to the contract. It's these labor cost increases, too, that aren't in contracts. The days of where the expected cost downs in the future, signing up for long-term contracts where cost downs are occurring, to follow the market we're in today, I think anybody would be foolish to do that. It's hard to control these, and who can predict what's gonna happen there. It's not just a battle that you're having to get, let's call a constant challenge to make sure that you're staying whole, but you gotta be careful that you're not putting yourself in a rough position in the future because the norms of cost downs and some efficiency improvements are not necessarily achievable. That's the other piece. It's upfront. You gotta be careful, and we're very aware of that. We're watching that, what we're doing now, and certainly in contracts and certainly in new quotes. Got it. Staying with just margins percent obviously, you know, on a full year basis, I believe it was a record. And I'm not sure how much detail you wanna go into this, but I'm just curious. You know, one of the main themes is moving from component sales to solution sales, and it's been an ongoing, I guess, progression and will continue to be a progression. Any way you can sort of bracket out how much those sales have changed over the any given period of time, 1, 3, 5 years type of thing? Just, you know, open that up a little bit in terms of visibility. We've discussed this, you know, it's in multiple calls where the question is how have we transitioned the business from component sales to solution sales? We've said that, you know, if you go back, let's call it five years, what was the percentage of our sales? Well, they're what we would call components and what we call solutions today. We also mentioned in previous calls that it's a little more difficult because what we would have considered a solution sale back then, that is, let's say, adding gearing to a motor, you know, today we'd consider that more of a component sale. That's just a normal sale versus adding electronics, adding some kind of feedback, and a more sophisticated software-based solution and so forth. To answer your question, I mean, look, we are. We have created a team in the company. We are getting some very, very interesting projects that we're working on and programs. We're seeing that the content that we're putting in, and this. You know, we had a discussion at our board meeting yesterday about, you know, what did we do in the market? We started selling integrated drives with motors many years ago. It was part of our focus. We start, as we start adding up the number of opportunities that we've won as part of this solution-based selling, you know, it's a significant portion of our new business, and that's the thing. We're not. You know, we have component business that will be here forever. There we go. We'll be sitting here saying, you know, That's never gonna be shifted out. There is a, there is definitely a shift and a trend where we're doing more and more system-based solutions with integrated solutions, and that's the opportunity. We go beyond just that now, too, where the company has transitioned, where it was like, okay, you got a motor, let's add a drive to it. Well, okay. Today, and some of the wins that we've had have been more about really sophisticated modeling and simulation that increase our speed of play, get us to the market faster, and are really meeting the real needs and requirements of the customer, not just what they think they need. Okay? That's another change. It. We invested in the group that we called it we started out by saying Global Electronics Team. It now expanded at the Global Engineering Team, where we take on these major programs. We staff them appropriately to win on big projects that are system-based solutions, and it continues to grow and go beyond the level of what we've had in the past. I would hesitate to just, you know, as I come back, my numbers would be a little bit inaccurate, and even their classifications would be. I can tell you that, you know, more than 50%, I would say, you know, certainly in the, with the global team, it's almost 100% is in the system sale opportunity, where multiple technologies being applied to a higher level solution. Yes, the margins are higher, I'll caution us on that, too, because when you start getting into these larger, more sophisticated solution sales, there's software being developed, there's a lot of electronics, and, you know, you're measuring margins based upon content of material and so forth. It's really your investment that went into these products that could be millions of dollars that have to be amortized over more like a software business and or, you know, a high-end electronics product. That's where we're headed, and that's what we see more and more of, and it's well on its way. Got it. I appreciate it. That's actually very helpful just from a, the qualitative aspect, understanding where you are. I appreciate it. Thank you. Okay. Thank you, Gerry. Thank you. Our next questions come from the line of Ted Jackson with Northland Securities. Please proceed with your questions. Thanks. Welcoming myself back. I wanted to circle back, and I have a quick discussion again back on the top-line with regards to the distribution business. I know it's not, you know, a major driver of top-line performance, but I know it's an area that you have been focused on in terms of growth, and you really are seeing some nice growth there. Can you give a little color on, you know, kind of what actions, you know, efforts that you've made that have driven that growth and kind of, you know, what are your plans going forward? How are you going to continue to drive that, you know, that revenue line? Sure. I would say to you, Ted, that, you know, conscious decision for one of our acquisitions, which sells 100% through the distribution channel. What's interesting is we don't report it through the distribution channel because we know it's the end markets that they're serving, so we're reporting it into the end market. Our distribution sales and business has definitely increased. We are seeing the opportunity, and we're working on grooming some, let's call it some, opportunities that can go through the channel that we're not participating in today. We've been successful in increasing the amount of our business that's growing through the channel. We're not reporting it that way, but it's growing faster than what we're showing. We are looking at other ways we can leverage the channel that we currently have to increase our volume into it. It's important to us, and it hasn't reached that. Because of the broad customer base and other products that are going into it's a real opportunity for us to increase and expand our business from a channel standpoint. Is that growth coming as you're bringing more of your products into existing distribution partners, or do you see your future growth being driven by expanding your your distribution partners in terms of, you know? Great question. down the road? Great question. I would say to you, to start with, it's looking to leverage the distribution partners that we have today, expand our reach with them, given our existing products. That's the best way for us to, you know, to I'll let's call it test the market, test the waters about do we have the right solution/product mix that you can successfully take through the channel. That's the best opportunity for us out of the shoots. Certainly, there is an opportunity to grow with additional distribution channels, I think our focus initially, well, I don't think I know, our focus initially will be on looking forward to seeing what the opportunity is for us to bring more product into the existing channel. Okay. Just two last questions, really kind of a little bit more around the guidance and such. One is on the CapEx guidance for 2023. You know, it is a little bit more than, I guess, you'd say I had, you know, well, that I had in my model. Doesn't mean that, you know, I'm the end all. I don't run your business. I wondered if perhaps you could maybe talk a little bit about some of the investments that you're making in the business and where that money, you know, where that money's being invested for if, you know, possible. Just kind of on a side note on the, on the income statement, your business development expense, if you could just give a little guidance with regards to how you see that in 2023. Those are my last two. Thank you. I'll let Mike take those. Look, the CapEx has a little ebb and flow in the sense that, right, we didn't probably execute all the projects we had lined out for 2022 simply because of supply chain, you know, delivery of product from vendors to allow us to complete projects. I would tell you see probably a little bit lighter on the 2022 side. It was on the low end of our outlook, and some of that flowing into 2023. obviously, the additional businesses being added to the mix, while not capital intensive, right, they add to that as well. Most of the CapEx that we spent throughout the year, I would say 80% plus is growth and customer project driven, right? It's supporting a new product line with a line in one of our factories, adding tooling, adding capacity to our equipment to meet growing future demands on existing programs. I would say that that's the nature of the majority of what we spend. You know, from a maintenance CapEx standpoint, safety CapEx, and the like, again, I think we've talked before, we don't have significant expenditures. Most of everything we do is growth supported. Well, I'll add to that, then I'll let Mike jump onto the next section here. Yes, what he's covered. It could be. And he mentioned some of the things get delayed for supply chain, and that's correct. There's other reasons too that that occurred. I mean, delayed program launches, when. In addition to supply chain, and not necessarily anything that we were doing, but we're one element of an overall solution. If they can't get everything that they need, then they delay the program. There were some delayed program launches which then delayed the capital investment to go into it. Another item that I think, we see is that we've had some success, some early on success with some new opportunities we've been working on, and they're starting to ramp. As they're ramping, we're finding that they're expanding as well. Well, we've allowed in there some program expansion beyond the original estimates that do require capital investments, because that's one of the things that we looked at. We've mentioned that efficiencies and costs and so forth and, quality, all of that comes into play. Those will expand, but they'll expand with additional revenue streams to support it. Another thing that I'll mention to you that has caused some additional and some expected additional spending is localization of manufacturing. You know, we've come up with some standardization of certain product lines that we're investing in that are multinational. Our belief is that, you know, we need to be close to our customers so that there's been some, and I'll call it duplication, but duplication from the standpoint of there's enough demand in, let's call it Europe, and enough demand in North America that we may be putting in redundant systems in both. Some of our planning has been around that. They're sized appropriately, so it may not be one large capital expansion in one geographic region. It may be multiple ones. There's reasons that the payback on those come back, you know, are very quick. We had a program that we're ramping up right now. We looked at it and said, "Okay, we've got a great facility down in Reynosa, Mexico. Highly automated, highly sophisticated, and we can produce the product that we needed, but that's the end customers going into Europe." Then we started to look at our internal transportation cost, and we realized that we could, with a little over a 1 year payback, duplicate some of the capital and put it in Europe and eliminate those transportation costs. You know, I hate to say it, but transportation costs always are going in at best method, and, you know, everything's ideal, and then something happens, and you're air freighting things in that could be quite heavy and cause some problems. Some of that's going in. Again, last thing I'll mention to you is efficiencies and upgrading because of labor constraints. You know, one of our facilities does another fantastic job of just looking at it and says, "Hey, I need six more full-time equivalents in production. I can't get them. I have to upgrade what I'm doing today and automate what I'm doing today to generate more efficiency, so I no longer have a need for six more full-time equivalents. I can get the same output by improving our, you know, the capital and equipment that we're using to produce the product." Those are other reasons why, and I think those will continue, and they're definitely good, you know, and strengthen our company for the future. more caller to that CapEx, but I'll turn it back over to Mike. On the biz dev costs, really two things I would say drive that, right? It's our M&A activity and then activity relative to either expansion or rationalization of some of our facilities. Again, those activities from a lean AST tool set, you know, will be ongoing. Again, that's the lesser side of things from a cost standpoint, but, you know, we're always looking to optimize our footprint and/or, you know. A good example is we recently changed locations of one of our North American facilities to accommodate growth into a much larger and a much more advanced facility that should be very beneficial going forward, right? You know, the duplicative costs and things like that of making a move like that are in there. Again, what drives the bus, Ted, is M&A activity. As we've talked before, we're focused at the moment on paying down debt, but we are always grooming opportunities and the timing of such opportunities are not always aligned with some of those priorities. We'll continue down that path and depending on how those opportunities develop and what our means to fund them are, it'll drive, you know, the M&A expenditures. Kind of let me rephrase my question then. You know, since, you know, I would imagine that anyone that covers you doesn't have any M&A built into their forecasts. If we were to assume that you had no M&A, you know, kind of would be a sort of a steady state of that line item within your P&L. Why I ask is 'cause we do actually, you know, for pro forma back it out. You know, since it's really not something that's, you know, an operational expense, you know, that we see, it's kind of hard to model without a little bit of guidance. You know what I mean? We see it like, is it like a $400,000 a year kind of steady state, you know, absent any kind of M&A as you kind of work towards, you know, cost of, you know, reevaluation and efficiency stuff? Is it $500,000 a year? Is it, you know, see what I mean? It's like this kind of some kind of bracket might be helpful at least. Let us get back to you on that, Ted. I think rather than just shooting a number to you right now, I mean, we can do a little bit of work here and come up with something that, you know, would be more representative of what we really think is gonna be in the future here. I think we'd just be looking at, okay, here's what we did. Say instead of doing 6, we're gonna do 2, we're gonna do 3 instead of, you know, whatever. Let us get back to you with a number that you can plug into your model. That's okay. I think it'll be more accurate. Okay. That's fair. Hey, thanks for taking all my questions. Again, congratulations on a very nice quarter. Thank you. Thank you. There are no further questions at this time. I'd now like to turn the call back over to management for any closing comments. Well, thank you everyone for joining us on today's call and for your interest in Allied Motion. For those of you that are interested, we will be participating in person at the Roth Conference in Dana Point, California next week on Monday, March 13th. Otherwise, as always, please feel free to reach out to us at any time, and we look forward to talking with all of you again after our first quarter 2023 results. Thank you for your participation, and have a great day. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.