Good day, and welcome to the Carpenter Technology Corporation Fourth Quarter 2023 Conference Call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. If you'd like to ask a question, please press star, then one on your telephone keypad. If you would like to withdraw your question, please press star, then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to John Huyette, Vice President, Investor Relations. Please go ahead, sir. Thank you, operator. Good morning, everyone, and welcome to the Carpenter Technology Earnings Conference Call for the fiscal 2023 fourth quarter, ended June 30th, 2023. This call is also being broadcast over the internet along with presentation slides. Please note, for those of you listening by phone, you may experience a time delay in slide movement. Speakers on the call today are Tony Thene, President and Chief Executive Officer, and Tim Lain, Senior Vice President and Chief Financial Officer. Statements made by management during this earnings presentation that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter Technology's most recent SEC filings, including the company's report on Form 10-K for the year ended June 30th, 2022, Forms 10-Q for the quarters ended September 30th, 2022, December 31st, 2022, and March 31st, 2023. The exhibits attached to those filings. Please note that in the following discussion, unless otherwise noted, when management discusses the sales or revenue, that reference excludes surcharge. When referring to operating margins, that is based on adjusted operating income, excluding special items and sales, excluding surcharge. I will now turn the call over to Tony. Thank you, John. Good morning to everyone on the call today. I will begin on slide four with a review of our safety performance. For fiscal year 2023, our total case incident rate was 1.7. Although a 1.7 injury rate would rank as one of the safest metal manufacturing companies, it is not a rate we've come to expect or accept at Carpenter Technology. As we've discussed in previous quarters, the rate increase is largely due to the increased employees undertaking new tasks, either as new hires or transfers into new roles. We continue to invest in additional training for any employee new to a job or task, with frequent monitoring and follow-up. Our goal continues to be a zero-injury workplace. Despite the increase this year, we believe it is possible, and we will continue to invest and work tirelessly to achieve that goal. Let's turn to slide five and a review of the fourth quarter. More than a year ago, we set out the goal to return to pre-pandemic fiscal year 2019 profitability on a run rate basis by the end of fiscal year 2023. It was an important milestone, marking a waypoint on our growth trajectory to doubling our operating income by fiscal year 2027. Not only did we achieve that goal in the fourth quarter, we exceeded it. With increased productivity, improved product mix, and the realization of higher prices, we demonstrated accelerating momentum on that growth trajectory. Most notably, the SAO segment significantly exceeded expectations for the quarter, delivering $80 million in operating income above the outlook we provided of $65 million-$70 million. SAO realized an operating margin of 16.8%, a step up from the 11.9% in the previous quarter. With increasing high levels of demand, net sales increased across each of the end-use markets. Net sales, excluding surcharge for the quarter, were up 14% sequentially and 39% compared to last year. Driving our performance were continued productivity improvements across our facilities, improving product mix and higher selling prices. In addition to the strong profitability in the quarter, we generated $175 million of cash from operations and $144 million in adjusted free cash flow. This further strengthens our liquidity as we finish the quarter with $393 million in total liquidity. Now let's move to slide six and the end-use market update. The first takeaway is that sales in all of the end-use markets were up year-over-year and sequentially for the quarter. Our near-term and long-term outlook for each of the end-use markets remains positive, and record backlog levels support this outlook. Our aerospace and defense end-use market, accounting for 53% of sales in the current quarter, continues to ramp and was up 22% sequentially and 65% year-over-year. Global aerospace traffic continues to increase, pushing the supply chain to ramp production of new planes to meet the growing demand. To support the growing demand, customers across our commercial aerospace submarkets continue to request higher shipments of material as soon as possible. The defense submarket saw an increase in sales on a sequential basis, driven by next-generation missile, fixed-wing, and rotorcraft platforms. The medical end-use market, accounting for 12% of sales in the current quarter, was up 7% sequentially and up 24% year-over-year. The increase in sales was driven by the continued strong customer manufacturing activity to meet the patient demand for elective surgeries. The overall outlook continues to be positive, as medical procedures are expected to grow throughout calendar year 2023, supported by a strong procedures backlog. The transportation end-use market, accounting for 7% of total sales in the current quarter, was up 8% sequentially and up 12% compared to last year. With high demand and low inventories of light-duty vehicles, build rates are expected to remain strong throughout the second half of calendar year 2023. The energy end-use market, accounting for 6% of sales in the current quarter, was up 22% sequentially and up 66% compared to last year. With the growth in demand for energy continuing to exceed supply, capital investment is expected to increase. As a result, the demand for our material solutions will rise with it. The industrial and consumer end-use market, accounting for 17% of sales in the current quarter, was up 1% sequentially and up 17% year-over-year. In this end-use market, we remain focused on high-margin, high-growth business, including our material solutions used in semiconductor fabrication and consumer electronics. We'll turn it over to Tim for the financial summary. Thanks, Tony. Good morning, everyone. I'll start on slide eight, the income statement summary. Net sales in the fourth quarter were $758.1 million, and sales excluding surcharge totaled $560 million. Sales excluding surcharge increased 39% from the same period a year-ago on 19% higher volume. Sequentially, sales were up 14% on a 7% higher volume. The higher volumes were driven by strong demand and by our improving productivity and throughput across our operations. Consistent with the last several quarters, sales growth continues to outpace volume growth, both sequentially and year-over-year, driven by an improving product mix and increased base prices. Gross profit was $119 million in the current quarter, compared to $72 million in the same quarter of last year, $93.5 million in the third quarter of fiscal year 2023. Gross profit in the current quarter is up 65% compared to the same quarter last year and up 27% sequentially. The improvement in gross profit is primarily driven by higher sales and improving product mix and increased selling prices, partially offset by inflationary cost increases. SG&A expenses were $56.1 million in the fourth quarter, up about $9 million from the same period a year ago, roughly $2 million higher sequentially. The increase in SG&A expenses versus the same quarter last year is primarily driven by investments and higher variable compensation accruals. The SG&A line includes corporate costs, which totaled $22.5 million in the recent fourth quarter. As we look ahead to the upcoming first quarter of fiscal year 2024, we expect corporate costs to be about $20 million-$22 million. Operating income was $62.9 million in the current quarter. When excluding the impact of special items in the prior year quarter, adjusted operating income was $14.9 million, and in our recent third quarter, operating income was $39.3 million. Again, the improvement in profitability is being driven by the increasing productivity, enabling higher volumes along with mix and price benefits. Our effective tax rate for the recent fourth quarter was 21%, which is slightly below the full-year effective tax rate of roughly 22%. Earnings per share for the current quarter was $0.78 per share. The results demonstrate our continued momentum, supported by improving productivity and a strong demand environment. Turning to slide nine and our SAO segment results. Net sales for the fourth quarter were $667 million, or $477.2 million, excluding surcharge. Compared to the same period last year, net sales excluding surcharge increased 46% on 19% higher volumes. Sequentially, net sales excluding surcharge increased 16% on 9% higher volumes. The year-over-year improvement in net sales was driven by higher shipment volumes due to productivity gains, the impacts of higher prices, and an improving product mix, as demand across our key end-use markets has strengthened even further, as Tony reviewed on the market slide. Sequentially, we continued to drive momentum in net sales as the operating efficiencies drove higher volumes, combined with a stronger mix of products. Moving to operating results, SAO reported operating income of $80 million in our recent fourth quarter, outpacing our expectations and resulting in a significant improvement versus both the same quarter last year and our recent third quarter. On a year-over-year basis, the SAO adjusted operating income improvement of $60 million is largely due to higher sales, driven by strong demand and increased production levels, which also improved cost performance. This was coupled with an improving product mix and price increases. These improvements are evident in the adjusted operating margin, which has increased to 16.8% in the current period, as compared to 6.1% in the same period a year ago. On a sequential basis, operating income improved $31 million. The improvement was driven by increased volumes as we continue to ramp our operations to meet the strong demand. Looking ahead, the SAO team remains focused on increasing production levels and production flow to maximize the capacity for high-value product mix, while managing production schedules to ensure preventative maintenance is performed. Given the strength of demand, incremental improvements in our productivity represents a significant opportunity to further accelerate profitability, and we're pushing to exceed our targets in this area for the coming quarters. Based on current expectations, including productivity increases and planned preventative maintenance, we anticipate SAO will generate operating income in the range of $72 million-$77 million in the upcoming first quarter of fiscal year 2024. Now turning to slide 10 in our PEP segment results. Net sales in the fourth quarter of fiscal year 2023 were $118.7 million, or $107.6 million, excluding surcharge revenue. Net sales, excluding surcharge, increased 16% from the same quarter last year, and 4% sequentially. The year-over-year growth in net sales reflects increased volumes driven by strong demand conditions, primarily in our Dynamet Titanium business. More specifically, in our Dynamet Titanium business, net sales increased in both the aerospace and defense and medical end-use markets from the same quarter a year ago. The sequential increase in net sales primarily reflects increases in both Dynamet Titanium sales and additive sales to the aerospace and defense end-use market. In the current quarter, PEP reported operating income of $5.9 million. This compares to adjusted operating income of $8.2 million in the same quarter a year ago, and operating income of $10.2 million in the third quarter of fiscal year 2023. The reduction in operating income in the current quarter is primarily the result of near-term timing of operating costs versus production flow in our Dynamet Titanium business. As I mentioned, demand for Dynamet's materials continues to strengthen, and we are focused on matching production activities to more closely align to our spending via improving productivity and flow of materials throughout the operations. We currently anticipate that the PEP segment will deliver operating income in the range of $10 million-$11 million for the upcoming first quarter of fiscal year 2024. Turning to slide 11, and a review of adjusted free cash flow. In the current quarter, we generated $175 million of cash from operating activities, for a $170 million sequential improvement. The increase is largely attributable to the higher earnings, combined with an inventory reduction of $73 million in the current fourth quarter. As we had signaled, we reduced inventory in the second half of the fiscal year, driven by strong shipments, improving productivity, and a more balanced flow of materials across our operations. In the fourth quarter of fiscal year 2023, we spent $31 million on capital expenditures and finished fiscal year 2023 with $82 million in capital expenditures. With those details in mind, we generated adjusted free cash flow of $144 million in the fourth quarter of fiscal year 2023. As a note, in the current quarter, we've modified the definition of adjusted free cash flow to exclude dividends and have updated prior periods to be consistent with this new presentation. Our liquidity remains healthy. We ended the current quarter with total liquidity of $393 million, including $45 million of cash and $348 million of available borrowings under our credit facility. Let's move to slide 12 to talk about selected fiscal year 2024 guidance. We're providing this selected information to help modeling for our fiscal year 2024. Depreciation and amortization is expected to be $131 million in fiscal year 2024, or essentially flat from fiscal year 2023. We expect to spend about $125 million to $130 million in capital expenditures in fiscal year 2024. We view this as a normalized annual CapEx spend for our business as operations continue to ramp up. This estimate includes amounts necessary for maintenance-type CapEx, but also allows for opportunities to make targeted investments where we can expand capabilities in select areas, as well as expand capacity in constrained flow paths. Moving to pension contributions, we expect to make $11 million of pension contributions to our U.S. qualified plans in fiscal 2024. For non-cash net pension expense, we expect net pension expense to increase to $24 million, compared to $20 million of pension expense in fiscal year 2023. For clarity, about $10 million of the pension expense for next year will be included in operating income, similar to fiscal year 2023. The balance, or approximately $14 million, will be reported in other income expense through the next fiscal year. Next, interest expense is estimated to remain flat to slightly lower at about $52 million to $54 million in fiscal year 2024. Lastly, our reported full-year effective tax rate was about 22% in fiscal year 2023. For fiscal year 2024, we expect the effective tax rate to be in the range of 22%-24%. With that, I will turn the call back to Tony. Thanks, Tim. Now to recap our fourth quarter of fiscal year 2023. With operating income of $62.9 million, we exceeded our goal to return to pre-pandemic levels of profitability on a run rate basis by the end of fiscal year 2023, a goal we communicated over a year ago. The current quarter's result represented a significant step forward from the previous quarter's operating income of $39.3 million, demonstrating increasing operating momentum. Driving the performance was improved productivity and capacity optimization, a stronger product mix, and higher realized prices, particularly in the SAO segment. We are operating in a strengthening demand environment, with positive near-term and long-term outlooks in each of the end-use markets. Notably, the aerospace submarkets continue to accelerate their recovery. With strong demand and improved productivity, we saw sales increase across each of the end-use markets, we generated $175 million of cash from operations, further strengthening our liquidity position. Taken all together, with increasing volumes, improving mix, increasing prices, and improving productivity, we are accelerating our momentum heading into fiscal year 2024. Let's turn to the next slide and take a closer look at our near-term and long-term outlook. First, let's review our outlook for the first quarter of fiscal year 2024. On our last earnings call, I said that we expected operating income to be flat sequentially in the first quarter of fiscal year 2024, representing a significant improvement over the historical trend of a sequential Q1 decline. For the first quarter of fiscal year 2024, we expect to be in the range of $61 million-$67 million of operating income. This would put us flat to slightly up sequentially, despite the fact that we outperformed the fourth quarter expectations. This would represent a meaningful step up compared to the historical trend of a sequential decline in profits in the first quarter of the fiscal year. It would exceed the operating income from the first quarter of fiscal year 2020, our most profitable first quarter in recent history. This outlook builds on the momentum we generated in the last quarter. As discussed throughout this call, we see strengthening demand across the end-use markets, with customers wanting more material sooner. We saw a significant step-up in productivity last quarter and are driving to further improve output across our facilities. Our fiscal first quarter is when we have historically performed our more significant preventive maintenance activities. This year, given the demand environment, we are actively managing preventive maintenance schedules to protect our unique assets while also maximizing shipments. Let's take a look at the longer-term earnings growth projection. If you recall from our Investor Day in May, I discussed the trajectory of our earnings growth between fiscal year 2023 and fiscal year 2027. The chart on the right demonstrates that. These figures imply a 40% CAGR on the operating income from fiscal year 2023 through fiscal year 2027, a very strong growth target. I also noted that this growth wasn't going to be back-end loaded, and that we expected to make significant progress toward this goal in fiscal year 2024. Clearly, with momentum from our fourth quarter results and strong first quarter guidance, we are setting ourselves up to take that meaningful step toward this goal in fiscal year 2024. Additionally, we expect the second half of fiscal year 2024 to be stronger than the first half, which is consistent with historical performance, and we are working to accelerate our productivity gains to push earnings even higher. This is an exciting time for Carpenter Technology. Macro trends are driving increased demand across our end-use markets for our broad portfolio of specialized solutions. We have leading capabilities with a difficult-to-replicate system of assets, and we continue to drive improved productivity to unlock additional capacity to capture the demand. This quarter, we demonstrated a significant improvement in our operations, and looking ahead, we are well on our way to achieving our long-term goal. Thank you. Now I'll turn the call back to the operator. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star two. At this time, we will pause momentarily to assemble our roster. Today's first question comes from Gautam Khanna with TD Cowen. Please proceed. Hey, thank you. Good morning, guys. Good morning, Gautam. I had a couple questions, Tony. Maybe I missed it in the opening remarks, the backlog in the quarter, how did that trend? Maybe sequentially or? Yeah, the backlog was up 4% sequentially, 38% year-over-year. That number is going to become less relevant, Gautam, because we've closed the order book a couple times now already, just to control the flow. You're at a very strong level and anticipated staying there for quite some time. Okay, that's helpful. Tony, I hate to ask, but just, do you have any directional commentary on the December quarter, just given that you're bucking normal seasonal trends in the September quarter, but then you do have the maintenance dynamic. I'm just curious, what are you thinking for December, directionally? Directionally, our goal is to, you know, the floor would be the first quarter that we just guided to. As you all know, historically, the second half is going to be a jump up for us, especially since we see significant ramps in productivity. Again, Gautam, what really drives the message here is that the demand is there. In many ways, that's locked in, so it's really all about our ability to continue to improve the productivity. I would anticipate, our goal is for another step up and then hitting the second half in very good position. Just following up on the productivity comments, what changed sequentially? You know, what kind of explained the throughput increase? What happened with the productivity? Yes. Specifically in SAO, the team is doing a really nice job just eliminating bottlenecks, understanding the flow. Remember, the products that we're making now are quite different than what they were in 2019. A lot of people don't realize that. Customers have moved to different diameters. There's different specifications, different testing that's required now. That changes the production flow quite a bit. That's a big challenge that they've been able to get on top of. Number two, it was just another quarter. We've made some great hires, some great operators, and they've just got another quarter under their belt of learning that system, learning how to operate safely, and you see it come through in the numbers. Lastly, on the Performance Engineering segment, it was a little bit below the expectation you laid out. Could you elaborate on what explained to that? It's one of those items that we'd never speak about, Gautam, quite frankly, in the whole company, it wasn't material. With PEP, the size of PEP, it was, and that's just getting a little misaligned with, you know, the cost and the production flow. I see that coming back. That's not a market problem. We see PEP, you know, quite frankly, as we get through FY 2024, could see a big improvement in their profitability. No red flags, not an issue. It's disappointing. Not happy with the way we paced our product flow for the quarter, we'll get that back next quarter. Okay, I'll turn it back. Thank you, sir. The next question comes from Josh Sullivan with The Benchmark Company. Please proceed. Hey, good morning. Good morning, Josh. Just wanted to follow up on that comment about closing the order book. You know, when you close the order book, what's the gating factor to reopen it? Is it customers meeting your price or is it your ability to supply? Neither one. It's really about how far out those orders are, right? It's about, we'll open it back up once, you know, for example, another quarter goes by and you're, you know, 12 months out in advance and say, okay, now it's time to open it up again. It's really from a timing standpoint, not to get too far ahead of us, to get orders too far out there. Got it. Just to follow up on PEP as well, you know, the dynamic that you're talking about, did it impact the volume of titanium wire that was supplied to the market, or was it more related to a Carpenter cost issue? Yeah, it didn't impact our sales. We got the sales out. It's just where you have the product in the process flow and how your cost accounting works. Again, this isn't the story really of the quarter. This is a small event. It just stands out because we have a smaller PEP segment, not a, not an issue here at all for us. Got it. Just the high-value aerospace products take more and more of your capacity. Can you talk about your non-aerospace markets? You know, what's the ceiling on how far you can push that pricing mix? Maybe historically, when aerospace was commanding, you know, significant share, you know, how much of a mix shift could you get out of those non-aerospace markets? Well, I'll answer it this way, we have some very attractive markets outside of aerospace. Medical being at the forefront. We're looking for ways to grow our medical business now. Excellent margins, excellent customers. We want to continue to grow that market. On the energy side, you have customers now competing to get time on the mill with aerospace customers, for example. Margins have gone up significantly in the energy market, Josh, different from what we saw back in 2018, 2019. That's a market that we'll continue to stay active in, albeit at a much lower level than aerospace, for sure. When you look at our industrial market, those are very good submarkets for us as well. You see very high-end valves and fittings in very unique and complex applications. We're very happy that we have the, a broad portfolio. We think it insulates us from different macro changes. The key is that we're always gonna operate at the very, very top of the pyramid, in very difficult environments, very unique applications. We're looking across all of our markets and how we can move even higher up that supply chain. Got it. Maybe just one last one on, on free cash flow. Just what do you think about the cadence throughout 2024? Any difference or just any thoughts there would be great. Thank you. Well, we have the opportunity, as you well know, as we talked in the Investor Day, to generate significant amount of cash. We're gonna be prudent throughout the year because we want to make sure we serve our customers to the best of our ability, especially in this environment. There could be times that in a quarter, the way a quarter ends, that we'll build some inventory because we have the opportunity in our schedules, and we're gonna do that. You could see some quarters that are down a bit because of that, or just the opposite. I mean, at the end of the day, we wanna serve our customers the best we can. You know this better than most. Over that three to four-year period, that's gonna be significant cash generation. I think that's the best way to look at it. Great. Thank you for the time. Thank you, Josh. As a reminder, if you do have a question, please press star, then one. Our next question comes from Michael Leshock with KeyBanc Capital Markets. Please proceed. Hey, good morning, guys. Good morning. First, I wanted to ask on your 1Q guidance. I know that's typically a heavier planned maintenance quarter and weaker seasonality, and you called out planned maintenance as a priority. I want to better understand the moving pieces that drive that flat to up EBIT guide. Is there gonna be some sort of element of seasonality, maybe on the volume side, that's gonna be offset by price and mix, just given some of the planned maintenance that you're taking? Well, I think guiding the 61-67 answers your question, right? I mean, usually, the first quarter is down significantly because of seasonality. Now, off of a very strong fourth quarter, we're saying it's flat to sequentially up. That kind of takes off the plate any issues around seasonality. Is the seasonality on the volume side gonna be similar to what you've seen in the past, and the pricing and mix is gonna offset that? No. It's as I just said, I think this puts to rest any seasonality for the first quarter. You've got customers now that are wanting as much material as we can get them sooner. Of course, there's gonna be some work stoppages or whatever from some of our customers as they do those, but the demand environment now just overshadows that. I don't see that. I think the gating factor or the factor, if you look over the next several quarters, from results, because demand is so robust that I can ship everything I produce, and many times the difference between quarter to quarter is gonna be when I strategically take preventive maintenance outages. That's gonna be one of the driving factors, as well as continuing increase of productivity. Got it. On SAO, how do you see margins there progressing throughout fiscal 2024? 4Q was a very strong quarter, and I know you have some price increases flowing through on a lag. Just wondering how much further do you see SAO margins progressing and what needs to occur for that to happen? Well, I think it was approximately a 5 percentage point increase, quarter-over-quarter this time. You know, prior to the pandemic, SAO was in the 20% range. That's our target to get back there. That's, we have line of sight to that. You know, where we're at right now, where the market is so strong, it really is about our ability to drive productivity, which the translation of that is higher margins. We're running many pieces of our equipment above nameplate capacity, and we'll continue to find ways to get more and more out of the equipment in a very efficient manner. That's what they do out on the manufacturing floor every day, is trying to get more and more out of that system because we know we have very good customers that want it. Then lastly for me, on jet engine sales, could you provide that number for the quarter, either sequentially or year-over-year? Jet engines, up 92% year-over-year, 34% sequentially. Okay. All right. Thanks, guys. Thank you. The next question is a follow-up from Gautam Khanna with TD Cowen. Please proceed. Yeah. Tony, you mentioned the medical demand being pretty strong. What are you seeing in terms of aerospace fastener demand, you know, 787 related, you know, titanium and non-titanium feedstock? Both of those are increasing for us, Gautam. I can tell you that, sequentially, fastener submarket was up 31%, year-over-year, 135%. Okay. You expect that to continue, I mean, at least at these absolute levels, to continue to rise? Well, I think we'll start looking at sequential, right? The year-over-year is gonna fall off. In many cases, you know, that year-over-year, we're still compared to very low quarters, obviously, a year ago. As those roll off, I think we'll focus on the sequential growth. We know we're not at the top there as far as satisfying demand across many of the aerospace submarkets. Tony, you've talked about pricing, you know, being more favorable and not quoting business out too far in advance as a result. Could you remind us on the engine side, you know, how much of the business is under long-term contract, and maybe how much of that business turns over every year in terms of pricing? Just to give us a sense for what the potential tailwind would be in. Yeah, it's a. The [crosstalk] years. Yeah, it's a difficult question. You know, the contracts are spaced out differently. It seems like every year, year and a half, there is a significant one that comes up. I will tell you, all of the primary customers, customers that you would consider the largest or the most strategic in the industry, are under some form of long-term contract with us. Given that, do you expect kind of pricing to continue to be a tailwind as we move out 12 months, 24 months, et cetera? Yeah. Have we had the reset and from here, it just kind of stays? Yeah, there's still some over the next year that will reset. There are still significant contracts to be negotiated over the next 12 months. Can you give us an update on Athens? I know you view the production system across. Mm-hmm. The three major facilities, but any sense for, like, utilization levels? How much, you know, where are you at Athens with respect to output and. Mm-hmm. You know, where do you expect. Yep. To be over the next year? Yeah, we're still ramping up Athens. Obviously, we run, subset of our aerospace business through there. The energy business that I spoke about earlier, getting more attention there, and we do, a fair amount of conversion work through there as well. In terms of ramping up, I will tell you right now, we are still hiring people at Athens, so we still have a fair amount of people that we wanna hire at Athens right now. Maybe another 10% on the current workforce to be able to even push more volume out of that plant. Is it still kind of a lower cost facility as, as you have been ramping it? Is it proving out to be that way? Well, it's a lower cost facility just because the flow is much more compact and much more efficient. It's a straight line. That, by itself, gives it advantages over our other facilities. They share some of the same costs when it comes to energy and supplies and some of that, but certainly from a flow standpoint, it is more efficient. Okay. You know, just lastly on, I know you're not a huge beneficiary of VSMPO, being kind of displaced, but in the titanium wire bar coil world, have you seen any kind of inroads, maybe with the medical customers, you know, where they had some traction switching over to Carpenter or? Well. [audio distortion] We see a large increase in our demand in the titanium side, regardless of what's going on with VSMPO, right? We're driving market share mainly because of the solutions that we provide. Certainly, out there in the market, I mean, we're not melters of titanium, so this whole VSMPO scenario really plays to areas, to entities that melt titanium, and certainly you're seeing a shift there. Yeah, not so much on the downstream where they, they stood up a facility, you know, seven, eight years ago. I'm not trying to. You know, we're at our, we're at, you know, sold-out levels, customers wanting more, and it has nothing to do with VSMPO. It's just that we have a good product, the market is growing, and they're looking to Carpenter Technology to be, to be that supplier. Last one for me. Just any update on soft magnetics and automotive penetration there, what you guys. Thanks. I appreciate the question. A lot of that gets lost because aerospace is so dynamic right now. We're doing really well as far as filling up that new mill there in Reading. A lot of interest from, you know, the eVTOL crowd as these companies try to get FAA certification even quicker. You're seeing a lot more activity there, and we're very happy with the pace there. Obviously, that's a little longer term than the current aerospace market we have today. We feel it's important for us to always be involved in some of these other submarkets that will have significant growth, maybe past the 12-month period that we're always looking at, to continue to enhance our earnings going forward. Thanks a lot, guys. Appreciate it. Gautam, thanks for the questions. The next question is a follow-up from Josh Sullivan with The Benchmark Company. Please proceed. Yeah, I just wanted to follow up on that as well. The consumer electronic demand you call out in the presentation, is that eVTOL, or is that something else for the hot strip mill? Well, it's different, right? There's It's really on the electrification side. I just mentioned eVTOL as one area. That's not a lot of volume in that area right now, as you well know, because that's gonna be muted until they get FAA certification. That's one area that's very attractive for us going forward. In the more immediate mode, that's not having the same impact, obviously. It's more on some of the traditional electrification areas that's driving that growth, and on the semiconductor side, it's still strong. On the semiconductor side, I mean, some others have called that out as a, as a softer market. Just curious, you know, the strength you're seeing there, is that on some of these new capital builds? Or just where in the semiconductor market are you seeing the strength? Yeah, I've seen that. We've not experienced that at all. Remember, our product goes into manufacturing the equipment that then makes the semiconductor, so a very harsh environment, and that's where our product goes into, and we've not seen any softness in that area. Okay. Thank you. Yeah, thank you. At this time, I am showing no further questioners in the queue. This does conclude our question-and-answer session. I would now like to turn the conference back over to John Huyette for any closing remarks. Thank you, operator, and thank you everyone for joining us today for our fiscal year 2023 fourth quarter conference call. Have a great rest of your day. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.