Good day, and welcome to the A ZZ Incorporated first quarter 2025 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch tone phone, and to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Sandy Martin of Three Part Advisors. Please go ahead, ma'am. Thank you, operator. Good morning, and thank you for joining us today to review AZZ's financial results for the fiscal 2025 first quarter, which ended May 31st, 2024. Joining the call are Tom Ferguson, President and Chief Executive Officer, Jason Crawford, Chief Financial Officer, and David Nark, Senior Vice President of Marketing, Communications, and Investor Relations Officer. After today's prepared remarks, we will open the call for questions. Please note the live webcast for today's call can be found at www.azz.com/investor-events. Before we begin, I want to remind everyone that our discussion today will include forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. By their nature, forward-looking statements are uncertain and outside of the company's control, except for actual results, or comments containing forward-looking statements may involve risk and uncertainties, some of which are detailed from time to time in documents filed by AZZ with the Securities and Exchange Commission, including the annual report on Form 10-K for the fiscal year. These statements are not guarantees of future performance, therefore, undue reliance should not be placed upon them. Actual results could differ materially from these expectations. In addition, today's call will discuss non-GAAP financial measures. Non-GAAP financial measures should be considered supplemental to, not a substitute for, GAAP financial measures. We refer to the reconciliation from GAAP to non-GAAP in today's earnings press release. I would now like to turn the call over to Tom Ferguson. Thank you, Sandy. Good morning, and thank you for joining us today. I will discuss the first quarter results and cover our outlook for the rest of the year. Jason Crawford, our newly appointed CFO, will walk through our detailed financial results, and David Nark will provide an industry update on our end markets. Then we'll open it up for some questions. Our first quarter results met the higher end of our expectations, and we are very pleased with the performance and emphasis on execution in both segments. We reported record quarterly revenue of $413 million, improved segment profitability, and expanded EBITDA in both dollars and in terms of margins. Our results generated significant cash flow from operations for the first three months of FY25. Top line revenue growth by 0.7% versus the prior year, and Precoat Metals sales increased... for the prior year. Both segments. In the first quarter, we benefited from strength in a number of our end markets, including construction, bridge and highway, transmission and distribution, and renewables. Nonresidential project spending for both public and private projects is now tracking higher than pre-pandemic levels. This year, we have... in public sector construction, which demonstrates a size... energy and manufacturing that David will cover. Private spending and commercial construction continuing to be... interest rates. The shift... residential construction projects. Continuing with our first quarter results, Metal Coatings EBITDA margin grew to 30.9%, exceeding the prior year and slightly ahead of our target margin range of 25%-30%, due to both and zinc productivity improvement. Precoat Metals EBITDA margin of 20.2% was also meaningful, as we have noted before, that any reasonable uptick in volume helps drive margins above the 20% mark and towards the upper end of our communicated range of 17%-22%. In addition to the solid execution of our operational initiatives in the first quarter, we also completed a public offering of common stock to fully fund the redemption of AZZ's Series A Convertible Preferred Stock. Jason will discuss this more in a few moments, but the strategic rationale and timing were critical as the redemption premium was set to escalate on May 12th. The timing was right, and we were pleased with the efficient execution of this transaction with the support of our capital markets partners. In less than 24 months, we have fully redeemed and retired the mezzanine financing associated with the acquisition of Precoat Metals. The Precoat acquisition further supported our long-term strategy to improve the return profile and de-risk our business by transforming into a pure play Metal Coatings company with significant scale, expertise, technology, and a very strong balance sheet. This year, we remain focused on our operational and financial objectives. I'm gratified that our efforts in developing a strong servant-minded leadership team with a solid bench of talent over the last several years, have resulted in positive momentum, with strong organic growth and profitability improvements in both segments. We attribute this success to our team's well-executed strategic actions centered on revenue growth, operational excellence, margin enhancements, and working capital improvements, all of which contribute to the generation of Free Cash Flow. I am proud of the work and dedication of our teams in both segments and in our corporate headquarters. We also continued to prudently deploy capital this year to high return investments for growth, further debt repayment down and cash dividends to common shareholders, while we continue to strengthen the balance sheet. We're evaluating a growing list of acquisition candidates, but plan to be judicious as we evaluate leverage, strategic fit, ability to drive synergies, and timing. We reduced debt by $25 million this quarter, and again, repriced our term loan in March to lower interest costs. A significant company initiative this year is the completion of our new aluminum coil coating facility in Washington, Missouri. We expect to begin equipment testing in the third quarter, with plans to be operational by early in calendar year 2025. Our decision to build this facility was evaluated based on a long-term contractual customer commitment that accounts for 75% of the plant's total capacity. This facility should be well-positioned to respond to the secular shift from plastic to aluminum in the beverage industry, and we are pleased to report that this important project remains on schedule. AZZ is recognized for its number one market position in both of our Metal Coatings segments, with strong and growing economic moats, providing us with a significant competitive edge. This business edge is built on our differentiated, highly sustainable, and environmentally friendly Metal Coatings solutions. We bring over 65 years of technical expertise, customer-centric technologies, and strategically located facilities across North America. Our relationships with blue-chip customers, our scale and culture of operational excellence, and are crucial elements that we believe will continue to drive our future success this year and for years to come. With that, I'll turn it over to Jason. Good morning. As Tom mentioned, we reported first quarter sales of $413.2 million, compared to $390.9 million in the prior year quarter. Total sales increased by 5.7% over the first quarter of last year, with Metal Coatings sales up 4.7% and Precoat Metals sales up 6.5%. The first quarter's gross profit was $102.7 million, or 24.8% of sales, compared to $97 million or 24.8% of sales in the prior year quarter. Lower zinc costs in the Metal Coatings segment and productivity improvement in both segments helped offset wage and other inflationary headwinds, resulting in steady gross margins as compared to the prior year. Selling, general, and administrative expenses were $32.9 million in the first quarter, or 8% of sales, compared to $31.5 million or 8.1% of sales in the prior year first quarter. Operating income improved to $69.7 million or 16.9% of sales, compared to $65.5 million or 16.8% of sales in last year's first quarter. Interest expense for the first quarter was $22.8 million, compared to $28.7 million in the prior year. The decrease is primarily due to consistently paying down debt and our lower weighted average interest rates from various debt repricings that have occurred over the last twelve months. Equity and earnings of unconsolidated subsidiaries for the first quarter increased to $3.8 million, compared to $1.4 million for the same quarter last year. This increase is due to higher earnings from our 40% JV ownership in Avail. Current quarter income tax expense was $11.4 million, reflecting an effective tax rate of 22.4%, compared to 25.3% in the prior year quarter. Reported net income for the first quarter was $39.6 million, compared to $28.5 million for the prior year quarter. As Tom mentioned, we redeemed our company's 6% Series A preferred stock in May 9th of this year. The redemption premium, the amount in excess of the face value of the preferred stock of $75.2 million, was recorded as a dividend in our first quarter income statement. This resulted in a GAAP loss to common shareholders of $36.8 million and a GAAP diluted loss per share of $1.38. Since our non-GAAP measure for adjusted net income excludes the Series A redemption premium, AZZ reported adjusted net income of $44 million or adjusted diluted EPS of $1.46. This compares favorably to the prior year's adjusted net income of $33.4 million or adjusted diluted EPS of $1.14. On an adjusted basis, our earnings increased 31.9% from the first quarter of the prior fiscal year. The timing was right to redeem the Series A preferred stock to avoid further annual increases. While the redemption resulted in a one-time redemption premium payment of $75.2 million, the decision to redeem the Series A preferred stock during the first quarter allowed the company to avoid $14.4 million in future annual preferred stock dividends and future escalations in the redemption premium by a minimum of $36 million per year. First quarter adjusted EBITDA was $94.1 million or 22.8% of sales, compared to $85.4 million or 21.8% of sales in the prior year. This 100 basis point improvement in adjusted EBITDA margin was primarily driven by improved earnings and sales volume strength in both segments. Turning to our financial position and balance sheet. We generated cash flow from operations of $71.9 million, which was more than 50% higher than the first quarter of the prior year. After funding Q1 capital expenditures of $27.4 million, our free cash flow was $44.6 million. As Tom mentioned, we're expanding our coil coating capabilities by constructing a new 25-acre aluminum coil coating facility in Washington, Missouri, which we anticipate to be operationally in calendar 2025. We expect to spend approximately $63 million on the new facility this fiscal year, of which $16 million was paid in the first quarter. Our capital allocation strategy consists of investing in the business, paying down debt, returning cash to our shareholders through dividends, and evaluating potential bolt-on acquisitions. During the first quarter, which ended May 31st, we reduced debt by $25 million, and we expect to pay down a total of $60 million-$90 million for the full fiscal year. Our current trailing twelve-month debt to Adjusted EBITDA is 2.8 times, which compares favorably to 3.5 times twelve- month ago. As Tom touched on, we completed a secondary public offering earlier this year by issuing 4.6 million shares of common stock and raising $322 million, or $308.7 million net of transaction expenses. 100% of these net proceeds from the secondary offering were used to redeem the Series A preferred stock. We believe this full redemption of the preferred stock significantly improves the company's capital structure. At the end of the first quarter, on May 31st, we continued to maintain ample liquidity and flexibility through our $400 million revolver, with no debt maturities until calendar 2027. Finally, in addition to paying down debt, during March of this year, we repriced our Term Loan B, improving our margin from SOFR plus 3.75% to SOFR plus 3.25%. Our current interest rate swap agreement continues to fix our variable rate interest for a notional portion of our debt through September 30th of 2025. With that, I'd like to turn the call over to David Nark. Thank you, Jason, and good morning, everyone. Momentum from year-end in February carried into the first quarter with strength in a number of end markets. For Metal Coatings, we reported record-high sales driven by high single-digit volume expansion for the quarter. As Tom mentioned, we are now seeing an elevated number of public work projects related to essential industries that include bridge and highway, construction, utility T&D, renewables, namely solar, as well as critical chip plant construction projects. We believe that public sector has ongoing spending strength, which we expect to continue this year. The Precoat Metals segment continued to perform better than the market in the first quarter, with total volume increases in the mid- to high-single-digit range. In fact, certain end markets saw significantly higher increases, ranging in the high single to double-digit growth range for construction, HVAC, fueled by inventory build of cooling products and the implementation of a new refrigerant change, and transportation based upon a rebound in the recreational vehicle market. In addition, Precoat works on essential data center construction projects by pre-painting steel for the insulated wall panels used in modern data centers, which is a growing market for them. We remain enthusiastic about public sector spending and believe if interest rates soften later this year, it could signal growth in private sector spending and commercial construction. We also expect to continue to see secular growth trends in reshoring of manufacturing, the migration to aluminum and pre-painted steel, as well as the conversion from plastics to aluminum in the beverage space that will continue to benefit our business. As Tom mentioned, AZZ is the market leader in both Metal Coatings segments and providing superior capabilities as a high value-add Metal Coatings provider with scale, innovative coatings, technologies, and customer-centric systems that have become a distinct cost advantages to our customers. With that, I would now like to turn it back over to Tom. Thank you, David. As Dave mentioned, we are optimistic about our business prospects this year and appreciate that our business is typically more brisk during the peak summer construction months. We also know that hurricanes, as we saw recently with Hurricane Beryl, and macroeconomic events or changes, can impact our business, so we remain prepared for choppiness should it occur. While we don't have a crystal ball into what the economy holds the balance of this year, nor the impact of the upcoming elections, we have accomplished what we set out to do in the first quarter. We established new records for adjusted net income, for adjusted EPS, and for sales. So credit to both of our segment teams and also to corporate to accomplish the redemption of our preferred shares during the same quarter. Today, we are pleased to reiterate previous guidance. Our fiscal 2025 sales guidance is $1.525-$1.625 billion, Adjusted EBITDA guidance of $310-$360 million, and Adjusted EPS guidance of $4.50-$5.00. Capital expenditures for the current fiscal year are expected to remain unchanged at $100-$120 million, including approximately $63 million related to the new Greenfield plant. The equity and earnings from our minority interest in the Avail joint venture is expected to be $15-$18 million this year, and debt paydowns are planned in the $60-$90 million range. We are focused on paying down debt, and we'll continue to evaluate bolt-on acquisition opportunities that are beginning to enter the pipeline. Our long-term strategic plans include continuing to focus on growing the business organically and inorganically. We offer a highly differentiated value proposition to customers through a toll model that positions us with fewer commodity and financial risks, simply because we do not own the steel or aluminum that we coat. Our margin and return profiles position us well this year to continue to generate significant free cash flow and maintain adequate liquidity to grow the business while maintaining a solid balance sheet. This all translates into the creation of long-term value for our shareholders through our sustainable solutions. We continue to recognize that by investing in our people and relentlessly executing our strategy, we can continue to accelerate AZZ's value creation. Now, will the operator please open up the call for questions? Yes, sir. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. And at this time, we'll pause momentarily to assemble our roster. And the first question will come from Lucas Pipes with B. Riley Securities. Please go ahead. Good morning. Thank you so much for taking my question. The first one is just on your EBITDA guidance. Q1, very solid start to the year. You're annualizing to $376 million range for the full fiscal year, $310 million-$360 million. So, well, well below kind of where you've been annualizing, especially at the midpoint. You mentioned some factors, seasonality, election, the hurricane. But to what extent are you really conservative when it comes to the rest of the fiscal year? Thank you very much for the call. Yeah, Lucas, I mean, generally, as you probably have seen, we tend to be conservative. So, you know, we're getting back into it. We had updated guidance in April, which was a little out of cycle and, you know, prior to then having the offering and then finishing up the quarter. But our normal cadence would be, as we finish up the second quarter to, you know, look at updating guidance at that point. And that also gives us a better benchmark since we'll have finished what is typically a strong summer construction season, and the quarter's off to a good start. So, you know, we feel good about our outlook at this point, but just a little hesitant, given nothing specific. So I don't wanna say that. And Hurricane Beryl, while it affected a couple of our sites, we're talking about a handful of man days of production that was affected. And for the most part, while our sites had lost power, and I think in three sites, three or four sites, our customers did as well down in Houston. So, you know, that work's still gonna get done, and we'll clear that out within a few days. So overall, the net impact is very minor. In the longer term, almost sadly, in some cases, I'd say we do tend to pick up work after a hurricane because you just look at some of the photos of the down transmission towers and poles and docks and piers and things like that, tends to be stuff that gets galvanized. So, you know, over the longer term, we tend to pick up work. And the economy, you know, as we showed, we had record sales in the first quarter. Our teams are striving hard, taking some market share, driving volumes. So we're confident, but we just wanna get back into our normal conservative cadence of how we set guidance. That's very helpful. Thank you. Then my second question is somewhat related. On the Metal Coatings business, you came in at an EBITDA margin of 31%. I remember you've spoken to kind of 25%-30% as a target before, and so I wondered, was there anything unusual going on that margins were above kind of the target range? Well, I guess they can always go higher. Zinc, for example, was pretty volatile. Did that have an impact in any way? I would appreciate your perspective on this. Thank you. Yeah, a couple of things. One, zinc. Zinc didn't have much, it didn't really have any impact at all. It's for us, the cost in our kettles is still trending down, but then it, you know, with the higher LME zinc costs right now, it will flip over and start to gradually head back up as the year wears on. But that, you know, that's all factored into our forecast and our guidance already. I think the main thing was it shows that when our teams get a little bit of extra volume, that... And keep in mind, we have no backlog in, technically no backlog in either segment, but at least on the Precoat side, we do have some, a lot of customer steel and aluminum sitting in our warehouses and plants. But on the galvanizing side, particularly, they basically have what's on their yards, so they're forecasting off of their sales. You know, we've got a great sales relationship management capability, and our teams do well. So, you know, picking up an extra 90 basis points of EBITDA margin, that's pretty much, I'd say, it's not, definitely not rounding error. But, you know, a little bit of volume goes a long way, and they stayed focused on what they do, and they maintain their value pricing philosophy. And just to exit, you know, the leadership team and the plants just executed outstandingly well, and it's not that we anticipate that falls off, but after the, you know, the summer construction cycle, then it gets a little choppier as we get into the fall, and then in winter, that's when construction does slow up, whether it's public sector or private sector. So, you know, that just keeping in mind, the fourth quarter gets a little bit weaker, so we tend to look at that 25%-30% being a consistent target. If we do find that they continue to sustain above 30, we would naturally revisit that range. But I'm not anticipating that at this time. I really appreciate all the color to you and the team. Continued best of luck. Keep up the good work. Thanks, Lucas. The next question will come from Stephen Volkmann with Jefferies. Please go ahead. Hi, good morning, guys. Thank you. Maybe just sort of pull on the same thread a little bit. I'm just curious, as you think about your end market exposures, are there any... It doesn't sound like this, David, but are there any end markets out there that are kind of, choppy and, and giving you some concern for the rest of the year? Maybe there was some inventory stock or destock that we should keep in mind, just, just anything, that would keep you kind of conservative on the top-line outlook. Yeah, no, great, great question. As you look at our stated end markets and the results, we saw growth across every stated end market other than the catch-all category of other. So, kudos to the teams in both segments for strong performance there. You know, when you look a little further into each segment, you know, we saw some choppiness here and there, some give and take, but overall, you know, we don't see anything that worry, you know, really worries us or brings too much concern to us across either segment. Okay, great. Thank you. And then, as I sort of skimmed through the 10-Q, I saw that there was some headwind on mix. Can you just elaborate a little bit on sort of what you're seeing there? Yeah, I think, again, as you look at each segment, we had some puts and takes through the quarter on mix. Nothing really that jumps out at us too much as far as any kind of issues or concerns. And, again, I think when you look at the overall results, both by both segments, they were really solid. Yes, agreed. Does this mix headwind continue, or how do we think about forecasting that for the rest of the year? No, I think, you know, mix it can shift. I mean, our plants with 40, particularly on the galvanizing side, we've got 41 different plants, and so they will chase. They do a couple of different things. They've got their customers that they focus on, and then as load shifts, they chase different segments of the market, different types of customers. So if they need load, they're gonna, you know, go after structural stuff, or if structural stuff slows up, then they're gonna chase some smaller, as I like to call, soap, rope and dope. So that can move, but it's not anything I'd say we typically forecast. It's just as we see it, you know, we can use it to explain what happened. But looking forward, I don't. I wouldn't say that we're beyond maybe a weekly, monthly basis. It's not something that we have a lot of forecasting detail about. So we're anticipating normal mix going forward and continued good execution. All right. I appreciate it. Thank you. Sure. The next question will come from Mark Reichman with Noble Capital Markets. Please go ahead. Yes, while sales were up in both business segments, it looked like, you know, the average selling price was down in Metal Coatings due to the product mix, and, and the average price was flat in Precoat Metals. So I was just wondering, you know, to follow up on that last question, what's your outlook for pricing? Will it be will the results be more volume driven, or do you expect kind of a, a change in the mix that might help the prices going forward? Yeah, I think we're generally seeing... So a couple of things. Even though we've tried to separate zinc costs from our pricing models, the reality is when zinc starts to trend up, as it has been on the LME, it makes it easier to hold price. So, you know, 'cause customers are expecting it. They see, they know it's a significant part of our cost of goods sold. So I'd say as we look forward, it actually gets a little bit easier. You know, part of the problem of being a public company, we do talk about how the zinc's cost is moving in our kettles, and as we talk about it going down in our kettles, customers are gonna ask: "So, you know, why is your price going down, too?" So, you know, it's good to see this flip over a little bit and head back up. And like I said, we try to sell on the value add. We sell, you know, multiple services that beyond just the hot-dip galvanizing itself, and that includes transportation. So there's a lot of things that affect mix, but generally, I think we see prices holding as we look forward, supported by the fact that we still have inflation on virtually everything, from wages to our acid, energy, you name it. And like I said, with zinc costs going up, then that usually kind of bodes well for our ability to continue to drive and deliver value pricing. The second question is, you've got the take or pay contract for 75% of the output of the Washington, Missouri facility, and, I guess that's what, $50 million-$60 million of annual revenue. Do you expect to sign additional contracts before the facility is completed? ... You know, I think there, that, that's possible. We've got other customers already, so it, you know, this is not a new process for us. We actually have another plant in St. Louis that runs similar things, just on a smaller, with smaller capacity, so to speak. So we, you know, we're gonna balance capacity and load as we ramp up. And the key thing for us is to ramp up the quality and the capabilities effectively. So we will be looking for other customers, but keep in mind, we already do business with most of them. And so as we look to and feel confident with it, we can move some of the demand and give us those opportunities. In this case, the reason for the contract was just given the amount of the investment. Typically, our contracts are probably a little bit looser than this one, so to speak. But, yeah, we'll be looking to get other customers to put some business in there so that we can run that effectively. And it is, you know, a new state-of-the-art line, so we anticipate being run very effectively, efficiently, and cost effectively, too. That's very helpful. Thank you. Much appreciated. The next question will come from Kevin Gainey with Thompson Davis. Please go ahead. Good morning, gentlemen. Congrats on the great quarter. Thanks. Maybe if we can start on Precoat margins. They were flat year-over-year. Is it more of like a one- quarter phenomenon, or are you guys, what are you guys thinking for the balance of the year there, and then maybe how you see that over the longer term? Is there still opportunity to push those up? Yeah, there's still opportunities, and a couple of things. One, the customer inventories in our plants has increased, which says at some point we're gonna run that and paint it. So, you know, that tends to give us some confidence on the volume side of it. And as we can sustain the volumes, then we'll sustain those above 20% margins. There's other opportunities, too. I think, you know, both segment teams focus on operational excellence, driving outstanding quality. And I'd say on the Precoat side, we've got, you know, across the fleet of plants and 15 lines, you know, we're going to have opportunities to, you know, improve quality, improve productivity, drive on throughpu t. So those are obvious things, I think, that when you think about some of the distractions as you go back to fourth quarter last year, where we had too much customer inventory and it got in the way of our productivity, we're not gonna allow that to happen again. So, so I think the 20% range is something we'd like to hold and continue to move towards the higher end of the 22% in the range. That sounds good. And then, maybe welcome to the call, Jason. I'll give you this chance here. Cash flow. Thank you. How are you guys thinking about being able to generate cash from working capital as the year progresses? Yeah, I think if you look at our last prior fiscal year, we really made a step change improvement in working capital. I think this year, if you look at our projections, we're not necessarily projecting any step change. There's always opportunity, but you know, really our focus is more operationally and driving cash from there. So anything that we pick up from working capital will be above and beyond that, but it's certainly not our number one focus, given where we sit with our inventory levels and our, you know, our other constituents within that working capital bracket. I appreciate that color. And then just to squeeze one more in, 'cause you guys brought it up. Maybe if you can talk about the data center opportunity for Precoat and, if there's anything else you guys can give on that. Yeah, just a little bit on that, Kevin. You know, the data center market obviously is a large and growing market in the U.S. and has been. The Precoat business in particular has a customer where they're supplying pre-painted steel to them, and that customer makes a sandwiched, insulated wall that is being used in a lot of that market. So it's a small but growing area for them. It's an initiative that they're focused on, and you know, we're opportunistic about the future for that. Yeah, and I'd like to add, too, you know, even though in the AIS, which we sold the majority of, but a lot of that was electrical, well, five of the facilities produced electrical enclosures, and the skins on those enclosures were actually not pre-painted. So that alone, the manufacturers that fabricate the enclosures that quite often form the basis or foundation of a data center farm, so to speak, is opportunity. So there's lots of opportunities for us to continue to convert post-paint type things, in this case, the electrical enclosures themselves, to pre-paint. So, you know, that's what the sales teams focus on and trying to just get customers to understand, we're gonna capture 99.9% of the emissions, and we're gonna do it far more efficiently, far more effectively, and at a great cost. So, that, that's what we like to pitch, and it's what gets us excited. We have started doing some of that for now, the Avail side. Yeah, that sounds great. Looking forward to it. Appreciate the, appreciate the questions. ... The next question will come from John Braatz, with Kansas City Capital. Please go ahead. Good morning, everyone. Tom, question for you. You know, broadly speaking, can you talk a little bit about the trend towards pre-coated steel? And talk about it relative to what you were thinking back when you acquired Precoat, and maybe where you think it is today. Is the trend accelerating? The same? Can you talk a little bit about that? Yeah, I think a lot of it, the trend is tracking pretty much to how we had modeled it. I think, what we're finding is more opportunities as we... You know, we have a strong balance sheet, and we have access to cash, but working with customers to get them to get out of maybe their coil paint lines and things like that, we're seeing opportunities that probably more than we thought. They do take longer to convert. But, you know, there's just a good, strong list of those opportunities. And then, as on the aluminum side, that's probably been actually a little bit slower than we anticipated, but we do see that conversion. I'm sitting here drinking water out of a painted metal can myself. So, you know, those, those things are happening. And, so on one hand, we've got things moving faster. On, on the other hand, on, we've got some things moving a little bit slower. So, overall, though, the record sales tracking to, ahead of our models from that perspective, and, and then the margin profile, they're, they're kind of dead center on, on what we had, had hoped for. So very, very positive overall, and I think what we're seeing with the sales teams is, is the ability to focus on these conversions. And as, as we read the weekly reports, you know, we're, we're winning, a lot of battles and, and would hope that would continue. On the macro side, I think we still have to do a better job on the macro side of getting customers to understand the benefits of pre-paint versus post-paint. So that's work that's ongoing, and in the associations that we belong to, as well as with our own sales teams. So I'd like to say we're still early innings on this conversion opportunity. Okay. Thank you. And secondly, in the press release, you used the term. I haven't seen this before, improves zinc productivity. I don't think you're trying to imply that you're using less zinc in your galvanizing operations, but what is zinc productivity improvement? Yeah, zinc productivity. So we track this. It's one of our key operating metrics. You know, the idea is you wanna put just enough zinc on the metal to protect it perfectly, but not too much zinc so that you're layering it on, which also affects the appearance. So for us, that zinc productivity is just how effectively we utilize the zinc per pound or so to speak. So it is, it's how effectively we can apply it. Tools like Digital Galvanizing System have made us operationally more efficient, more effective. We still have outstanding experienced kettle operators that do this, you know, as I call it, do it as a day job and make it look easy, but, but it's not. So that's a key, key measurement for us and something that technically we're trying to use the optimum amount of zinc to provide outstanding quality, not have any rework, but not clump a bunch of zinc on the fabrication. Yeah. Is that making a big difference in the margins? The improvement in the margins, how much does that help? You know, it's a decent... You know, it's got a decent impact. You know, I don't wanna give out too much competitive information. We do have some competitors on this call, but Pardon me, it seems that our speaker line has dropped. Please stay connected while we reconnect. Pardon me, our speaker line has reconnected. The floor is yours. Yeah, let's go ahead and, if we can, operator, jump to the next, Yes. Individual in queue. That next question will come from Mr. John Franzreb, with Sidoti & Company. Please go ahead. Oh, yes, all my questions have been answered. Thank you. Hey, thanks, John. Yeah, we're sorry for the disruption. We lost phone service here. No worries. Okay, thank you. Thanks. As there are no more questions, I would like to pass the call over to Mr. Tom Ferguson for any closing remarks. Thank you, operator, and thank you all for your time. Sorry for the phone disruption, but I look forward to updating you at the end of our second quarter, which will just be in a couple of months. So thank you all, and have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.