Ladies and gentlemen, thank you for standing by, welcome to the Q4 fiscal year 2023 EnerSys Earnings Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this time, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Lisa Hartman, Vice President of Investor Relations. You may begin. Thank you. Good morning, everyone. Thank you for joining us today to discuss EnerSys' fourth quarter and full year fiscal 2023 results. On the call with me this morning are David M. Shaffer, EnerSys President and Chief Executive Officer, Andrea Funk, EnerSys Executive Vice President and Chief Financial Officer. Last evening, we published our fourth quarter and fiscal year 2023 results and filed our 10-K with the SEC, which are currently available on our website. We also posted Slides that we will be referencing during this call. The Slides are available on the Presentations page within the Investor Relations section of our website. As a reminder, we will be presenting certain forward-looking statements on this call that are subject to uncertainties and changes in circumstances. Our actual results may differ materially from these forward-looking statements for a number of reasons. Our forward-looking statements are made as of today. For a list of forward-looking statements and factors which could affect our future results, please refer to our recent Form 10-K filed with the SEC. In addition, we will be presenting certain non-GAAP financial measures, particularly concerning our adjusted consolidated operating earnings performance, free cash flow, Adjusted diluted earnings per share, and Adjusted EBITDA, which excludes certain items. For an explanation of the difference between the GAAP and non-GAAP financial metrics, please see our company's Form 8-K, which includes our press release dated May 24th, 2024. Now I'll turn the call over to EnerSys President and CEO, Dave Shaffer. Thanks, Lisa. Please turn to Slide 4. We were pleased to have delivered an outstanding fourth quarter and full year fiscal 23. I'm proud of our team's performance, achieving record revenue and operating earnings as demand remains steady across our markets, and we continue to build momentum on our strategic objectives. Before I walk through our results, there is some good news I want to report regarding the impact to EnerSys from the Inflation Reduction Act. EnerSys is a leader in driving the global energy transition, and our eligibility for IRC 45X credits of the IRA reinforces the critical nature of the products and services we provide. Andy will provide background on these credits and discuss the financial implications for EnerSys in more detail following the rest of my prepared remarks. I want to be clear that we plan to use funds we receive from the IRA as intended by the law, to make investments that accelerate our capacity and domestic sourcing of lithium-ion and other energy-dense battery technologies. To provide more color on our fourth quarter results. Record revenue in the fourth quarter was driven by organic growth and strong price mix realization. We maintained solid gross margins, offsetting continued but leveling pressure from inflation, representing significant year-over-year margin improvement even before the additional benefit of the 45X credits. Longer term, we are well positioned to benefit from the IRA, growing demand for energy efficiency, electrification, 5G small cell build-out, the $1 trillion infrastructure law, and defense spending. These trends are driving demand for battery technologies and energy systems that we are uniquely positioned to supply. We are staying on alert for signs of a slowdown, particularly in motive power, especially in EMEA. Motive power orders overall remain in line with pre-COVID levels. Supply chain headwinds are finally beginning to ease. We were able to reduce inventory in Q4 after seven consecutive quarters of inventory builds from higher costs and strategic buffers against supply disruptions. We had a strong cash flow quarter with free cash flow of $113 million on improved earnings and primary operating capital transitioning to a net source of cash. This allowed us to reduce our leverage and further strengthen our balance sheet. We expect our cash flow to continue to improve with higher earnings and additional POC reductions from the leveling of inflation and ongoing targeted inventory reduction efforts, as well as the projected IRA cash benefits. Please turn to Slide 5. Backlog eased slightly from the prior quarter to just below $1.3 billion, but remains healthy and currently sits roughly 2 times above pre-COVID levels with healthy order rates. Orders were up 9% compared to Q3 2023 and down 11% versus the prior year. As a reminder, in 2022, we had received large program orders in energy systems, and motive powers order intake was elevated from supply chain disruptions and COVID-related lockdowns, opening back up, which impacted customer order patterns and SKUs year-on-year comps. We view this as a positive, with loosening supply chains making it possible for us to satisfy customer demand. We continue to see stable demand across our lines of business and believe operational improvements will continue to direct backlog to normalized levels over the next few quarters. Please turn to Slide 6. We believe we are at the forefront of technology for our industry and continue to make significant strides on our innovation roadmap. On our journey to deliver the most advanced power systems, safety is always a top priority. This is why many of our technologies, such as our advanced lithium systems and wireless charging, are among the first to pursue safety testing and certification from industry bodies such as Intertek and UL. For example, rigorous safety testing is underway for our TouchSafe product, with customer field trials planned for early calendar 2024. We also shipped our first EMEA customer units of our NexSys iON 80 volt, which received authorization to mark CE, certifying that we met EU health, safety, and environmental requirements, ensuring customer safety. We were proud to receive the 2023 Power Project of the Year award at the Electrical Review and Data Centre Review Excellence Awards last week. This recognition is a testament to our commitment to excellence, innovation, and sustainability in data center, energy storage, and power management. Our fast charge and storage initiatives are advancing with good progress on our production roadmap and supply chain initiatives, and our design for manufacturing now complete. Sourcing requirements related to EV tax credit qualification for our customers is top of mind as we qualify our domestic and global supply chain and production partners. We've already secured all components with long lead times, which are being held in inventory at our contract manufacturer. We are excited about our progress and look forward to featuring our NexSys AIR wireless charger and fast charge and storage system, among other technologies, during our product showcase at Investor Day on June 15th. I'll now briefly walk through our business segment highlights. Please turn to Slide 7. Please note, I will discuss our segment adjusted operating earnings, excluding IRA benefit we recorded in cost of goods sold in the fourth quarter. We believe reviewing the results without this credit provides a better view and comparability into the operating performance of each line of business. EnerSys had strong full-year sales of $1.7 billion, up 13%, and adjusted operating earnings were up over 80% versus fiscal year 2022, driven primarily by growth in broadband, data center, and telecom, and our pricing actions catching up with the unprecedented cost increases we've endured the past two years. While getting better, chip supply unpredictability continued to impact our production plans. Backlog is normalizing toward a run rate that we anticipate will settle to approximately one quarter of bookings, modestly higher than pre-COVID levels. Our CPUC lithium ion installations, which account for a large portion of our $70 million of CPUC backlog, are on track to begin deployments in the second quarter. While current demand trends are healthy, we are monitoring our key customer CapEx spending plans closely. We remain excited about the long-term opportunity for EnerSys, driven by the global megatrends for which our critical power solutions are a key enabler. Our motive power business had a strong year, with revenue up 7% and adjusted operating earnings up 5% year-on-year. Despite pressures in EMEA and the potential of a recession, this business remains healthy. Demand trends are stable and approximate normalized pre-COVID levels, with backlog more than two times that of pre-COVID. EMEA lead times were stable, and European on-time deliveries hit a record high despite a softening order book. Maintenance free was 19% of revenue mix at the end of fiscal year 23, up from 15% in fiscal year 21, driven by customer enthusiasm over our proprietary TPPL technology. Lithium order rates continue to climb, and the CE rating for our new 80-volt variant has resulted in new customer trials in EMEA. Specialty full-year sales were up an impressive 13% over the previous year, though adjusted operating earnings was down 14% over prior year, impacted by productivity headwinds in our Missouri factories and temporary cost pressures from our Sylmar facility, which we are vacating at the end of the first quarter. We continue to rationalize our footprint and are transitioning our Sylmar activities to other existing sites. Missouri TPPL output and costs are improving, although it remains an area of focus and significant opportunity as we see incredibly unmet demand for this technology with our transportation customers. As such, transportation revenue continues to be paced only by capacity. We saw strong U.S. transportation orders in Q4, with a book-to-bill ratio greater than 1, in the quarter. Class 8 truck production is stable, up 12% year-on-year. Growth projections remain positive. Aerospace and defense demand strength continues. Our unique capability to combine commercial and defense production at scale has resulted in several exciting projects in our pipeline, which Mark will be talking about at Investor Day. Please turn to Slide 8. We achieved impressive milestones toward the ESG goals we announced last year and continued to ensure that our metrics are accurate and auditable. Last week, we published our 2022 sustainability update, which includes solid progress towards our long-term goals. On the leadership front, we announced Shannon Thomas as our new Chief Human Resources Officer. I'm delighted to have Shannon join our executive leadership team, where I believe her strategic vision and leadership will be instrumental as we continue to attract, develop, and retain top talent from around the world, while fostering a culture that values diversity, equity, and inclusion, and supports our ongoing goal of being the employer of choice for our valued employees. We will continue to update you on these important objectives. Please turn to Slide 9. In closing, I'm pleased that our excellent Q4 and full year 2023 results demonstrate continued progress towards achieving our long-term financial and operational goals. We believe the steps we have taken over the past three years better position our business to benefit from global mega trends such as 5G, data center growth, material handling, electrification and automation, grid stabilization, and electric vehicle fast charging, all of which provide us both near and long-term growth opportunities that are materializing in our financial results and outlook. In addition to these trends, we are excited about our opportunities to benefit from U.S. government mandates and funding that are driving markets to us because of the criticality of the goods and services we provide, such as broadband expansion through the Rural Digital Opportunity Fund and the IRA. I am proud of everything our team achieved in fiscal year 2023, despite lingering uncertainties from geopolitical tensions and potential recession, as well as ongoing headwinds from supply chains, inflation, interest rates, and FX. I want to thank our employees for their dedication and hard work, consistently capitalizing on opportunities and confronting challenges head-on. I look forward to seeing you in the next few weeks at our Investor Day on June 15th, New York City. I'll now ask Andy to provide further information on our fourth quarter and fiscal 2023 results and go-forward guidance. Thanks, Dave. Please turn to Slide 11. Our fourth quarter net sales increased 9% over the prior year to $990 million, due to a 7% price mix improvement and 4% growth from volume, partially offset by a 2% erosion from foreign exchange. Full-year net sales increased 10% over the prior year to $3.7 billion, due to an 8% increase in price mix and 7% increase in volume, partially offset by a 4% FX headwind. Adjusted operating earnings were $107 million in the fourth quarter, up $22 million sequentially, and $322 million for the full fiscal year, up $59 million versus prior year, inclusive of the $17 million IRA benefit booked in Q4. Even excluding the IRA impact, this marks 3 consecutive quarters of sequential Adjusted operating earnings improvement, enabling the company to achieve another record quarter with our price recapture offsetting inflation and our mix improvements and EnerSys Operating System cost savings beginning to be visible on our bottom line. Adjusted EBITDA for the fourth quarter was $118 million and 11.9% of net sales, compared to $88 million and 9.7% of net sales in the prior year fourth quarter. For the full fiscal 2023, Adjusted EBITDA was $388 million and 10.5% of net sales, compared to $340 million and 10.1% of net sales in the prior year. Our Adjusted EPS was $1.82 per share in the fourth quarter of fiscal 2023, up from $1.27 in the third quarter, due to the adjusted operating earnings improvements previously mentioned, as well as the favorable impact of the IRA, which contributed $0.42 per share. Full-year Adjusted EPS of $5.34 represents an increase of approximately 20% over fiscal 2022. Note that our full-year Adjusted EPS before the IRA benefit was $4.93 per share, matching the previous annual EPS record level achieved in fiscal year 2019, despite approximately $1.20 per share of FX and interest rate pressure. Please turn to Slide 12. I will now provide additional details on the benefits we expect to receive through the Inflation Reduction Act. Section 45X of the IRA introduced advanced manufacturing production tax credits for batteries and battery cells produced in the United States with a specified energy density. Credits will be determined based on third-party sales of qualifying products produced in the U.S. over the 10-year period from January 1, 2023, through December 31, 2032. Based on the current information available on the tax credit qualifications, we expect a material portion of our U.S.-produced batteries and battery cells, including much of our proprietary Thin Plate Pure Lead batteries and a portion of our flooded lead-acid batteries, will qualify for these tax credits. While we are still awaiting further clarification from the IRS on some specifics of this law, based on our sales of U.S.-produced batteries and battery cells in the quarter, we have calculated that we qualify for credits of $17 million, which we reported as a reduction to cost of goods sold. As Dave mentioned, consistent with the intent of the law, we plan to use the credits received to accelerate our investment in U.S. capacity of qualifying batteries, including lithium and Thin Plate Pure Lead products. We will continue to evaluate the potential benefits of the IRA as the Treasury and IRS provide specific implementation guidance and will provide further updates to you as appropriate. Please turn to Slide 13. On a segment basis, compared to the prior year, all lines of business posted strong revenue growth in the quarter, driven by substantial price mix improvements and higher volumes in Energy Systems and Specialty, which were partially offset by foreign exchange headwinds. The favorable impact of price mix improvements on adjusted operating earnings more than offset the higher costs for the quarter year-on-year. Please note, like Dave, the figures I will present on segment adjusted operating earnings also exclude the benefit of the IRA for better comparability purposes and insight into operating performance. As David mentioned, Energy Systems delivered significant improvement to adjusted operating earnings as a result of price mix cost recapture taking hold for the second consecutive quarter, with almost 90% adjusted OE improvement versus prior year and over 12% improvement sequentially. We are pleased the recapture lag in EnerSys has reversed, as we had anticipated when we advised that price mix cost recapture would be slower to manifest in EnerSys versus our other segments, due to the contractual nature and historically Asian-based supply chains inherent in this business. Another positive note, motive power adjusted operating earnings improved 26% over the prior year fourth quarter and 7% sequentially, driven by very strong TPPL mix improvements in the Americas, as well as ongoing positive price cost recapture. Finally, adjusted op earnings in our specialty segment was down $1 million versus prior year on 12% higher revenue as a result of performance issues in our Missouri plants incurred in the third quarter and higher costs in our Sylmar plant, which we are closing and transferring production out to other factories this quarter. These elevated costs were approximately $5 million in the fourth quarter. We expect the consolidation of the Sylmar factory to provide annual cost savings of approximately $4 million. Accomplishments across all of our lines of business, coupled with healthy market dynamics, resulted in solid improvement in our quarterly adjusted OE results and increasing momentum going forward. More detailed sequential and geographic results can be found in our press release and in the supplemental slides. Please turn to Slide 14. On a sequential basis, in the fourth quarter of fiscal 2023, we realized $15 million or $0.29 per share of improvements in price mix, adding on to an exceptional Q3, in which we had realized over $30 million of sequential price mix improvement over Q2. Q4 2023 sequential price mix improvements more than offset the $12 million, or $0.24 per share, of volume-adjusted incremental costs incurred during the quarter. While we are still incurring significant cost increases, Q4's $0.05 per share of positive price mix cost recapture is our third consecutive quarter of favorable net price mix cost recapture, closing the gap on the unprecedented cost increases we have endured over the past 2 years. Cost increases in the fourth quarter were driven by continued but leveling inflation, including commodity and energy rates, particularly in Europe, as well as productivity challenges in our Missouri plants. While we are beginning to see costs stabilize, it is important to remember that there is a delay in realizing product costs in our P&L until the related inventory is sold. Fortunately, this accounting treatment, coupled with lagging price cost adjustments, should provide very nice margin tailwinds if and when inflation turns to deflation and costs normalize. We are more optimistic now that inflation is near an inflection point, as we have seen three consecutive quarters of solid gross margin improvement. Our adjusted gross margin expanded 320 basis points in Q4 2023 over prior year, inclusive of the IRA benefits, and 150 basis points before the IRA impact. Excluding the IRA benefit, we maintained margins sequentially. Going forward, price mix gains should continue to surpass cost increases due to ongoing price cost pass-through, mix improvements from supply chains loosening, especially for our higher-margin electronics products, and the margin benefit of maintenance-free conversions, as well as savings realization from our EOS accomplishments, such as footprint rationalization, cost reductions, and other lean initiatives, all of which should drop to our bottom line. Please turn to Slide 15. Looking at our quarterly sequential Adjusted EPS bridge, Q4 '23 Adjusted EPS came in at $0.02 per share, higher than the midpoint of our guidance at $1.40 per diluted share before the additional $0.42 per share benefit from the IRA. Our sequential results were driven by higher volumes and the $0.05 per share of net price mix cost impact previously discussed. Year-over-year, Q4 '23 Adjusted EPS endured over $1.20 per share of pressure from higher costs in the quarter, which were more than recovered by an impressive nearly $2 per share of quarterly price mix improvements. Please turn to Slide 16. Our balance sheet remains strong and positions us well to invest in growth and navigate the current economic environment. As of March 31, 2023, we had over $340 million of cash on hand, and our credit agreement leverage ratio was at 1.8 times EBITDA, below the low end of our target range. For the full year, we generated cash flow of $191 million, aided by a reduction in inventory this quarter. It is important to note that primary operating capital has historically been a significant cash generator during recessionary periods, providing a very effective natural hedge against the risk of a downturn on our balance sheet. Capital expenditures of $89 million in fiscal 2023 were below our original full year guidance due to the impact of supply chain headwinds on our capital projects. We remain on track for continued expansion of our TPPL capacity for fiscal 2024 and incremental $150 million-$200 million per annum increases through fiscal year 2025. Our capital allocation strategy remains focused on three key priorities: investing in organic growth, complemented by strategic M&A, returning excess cash to shareholders through competitive dividends and opportunistic share buybacks. We have adjusted our target to the lower end of our 2-3 times EBITDA leverage ratio range in an effort to mitigate the impact of higher interest rates and provide dry powder for investment opportunities. I should note that in the first quarter, we completed a small bolt-on acquisition of a U.K. motive power distributor, IBCS, for under $10 million. Our fiscal 2023 capital allocation demonstrates our flexibility to thoughtfully invest in organic growth and return cash to shareholders during a period of little to no M&A activity. We repurchased approximately $23 million of shares and paid $28 million in dividends in fiscal 2023. We are entering fiscal 2024 with ample room on our balance sheet to remain flexible to meet our business needs, and we will continue to allocate capital with the goal of delivering the best long-term returns to our shareholders. Please turn to Slide 17. While we enter our new fiscal year 2024 with stable demand trends and a healthy backlog, we expect to continue to operate in a dynamic macro environment and anticipate headwinds, including FX, geopolitical tensions, supply chain challenges, and inflation to persist for some time. Our fiscal 1st quarter 2024 guidance range is $1.77-$1.87 Adjusted diluted earnings per share, inclusive of $0.40-$0.50 per share from IRA benefits. Excluding the IRA credits, this represents an increase of approximately 20% over the prior year. We anticipate realizing gross margins of 24.5%-26.5%, including 150-250 basis points from the IRA, reflecting our expectations that our continuing mix improvements and EOS savings will drive margin expansion. This is especially impressive when you consider that we have absorbed approximately $500 million of zero margin pass-through price cost recapture drag over the past two years on an annualized basis. Our CapEx expectation for the full year fiscal 2024 is approximately $120 million, reflecting investments in new products, including lithium production lines and continued expansion of our TPPL capacity, and will increase over time as we deploy additional investment from the IRA credits. Please turn to Slide 18. A reminder here that we look forward to presenting our strategic plans, growth drivers, and long-term outlook during our Investor Day in three weeks on June 15th at the New York Stock Exchange, and we hope you will join us in person or virtually. This concludes our prepared remarks. Operator, you may now open the call for questions. Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star one on your telephone and then wait for your name to be announced. To withdraw your question, please press star one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Noah Kaye with Oppenheimer. Your line is open. Yes, good morning. This is Noah. Can you hear me? Hi, Noah. This is Dave. Hi, Noah. All right. Yeah, just to make sure, this is Noah Kaye from Oppenheimer. Thank you. A quick question on the tax credit to start. The range of $0.40-$0.50 benefit for the next quarter, I guess, just what factors would drive that to the higher or lower end of the range? Is it really just, you know, production of batteries or, you know, selling of those batteries? Are there other tax-related variables? Just help us understand the factors in the calculation. It's mostly gonna be mix, you know, and if there's any production issues or, you know, unforeseen, you know. The go forward, obviously, for the rest of the year is gonna be more like our forward look, you know. In Q4, to qualify, you had to build in the quarter and ship in the quarter, but we shipped in Q4, some of that was from inventory, so that's why we didn't get a full benefit in Q4. I think the go forward should be fairly predictable and consistent with product mix. Certainly, we have to work, Noah, towards this new reality in terms of energy density. You know, the market is clearly going to move, and we have to move with it. Thankfully, volumetric energy density has always been one of the key things our engineers have strived for since the beginning. You know, our customers want the most available energy in the smallest available space, so we've always driven for high volumetric energy density. The market's gonna continue to move that way, and my team, and we've allocated dedicated resources to make sure that we keep pace with the market. I think it's largely a fairly predictable number. That's very helpful. If we can sort of carry that forward, I guess, what would drive it up from here is really just your capacity and manufacturing expansion, right? If it really is the function of how much you produce, and you're already kind of capacity limited as you add, you know, TPPL and lithium-ion capacity, theoretically, that number can grow from here. Is that fair? Absolutely. This is mostly a TPPL story right now, but to your point, lithium is certainly going to far and exceed those volumetric energy density criterion. Yeah, I think you summed it up really well. As we can execute to higher levels of kilowatt hour production output out of our TPPL factories, we should, you know, see more of this benefit. Again, there will be some level of optimization required in terms of balancing our factories, deciding what we make where, so there's some, certainly some opportunities around the edges, I think you summed it up well. Right. Thanks. Can I double-click on the commentary around, you know, how you see the timing of backlog normalization playing out? I think you had said maybe it would be a couple of quarters. You know, obviously, it's still pretty elevated versus historical. Just talk to us about how you see that playing out and any directional view you have on actual order rates, versus just improving conversion of orders. I would say largely, orders are getting back to what I consider they feel more normal, even though, to your point, they're still elevated. I think a lot of that is gonna depend on our customers and their ability to clear through their supply chain challenges, and how much they're gonna be able to get their staffing necessary to work down their backlogs as well. We're not entirely in control of the rate at which that backlog gets absorbed. We certainly have our own challenges that we have to wrestle with every day, but so do our customers. A lot of that backlog release will come down to their ability to clear things out. In terms of the go forward, the order rates are getting back in check. I've always, Noah, since the beginning of all this craziness, tried to keep the team focused on what an extrapolated projection of order activity would be from a pre-COVID standpoint, because everything got so disrupted. I would say we're largely on track. Europe, we certainly have our eye on. They've got some very unique challenges over in that part of the world related to energy and the Eastern European countries. Certainly, a lot of that demand has evaporated. I would say things largely in the ES space, it's always lumpy. It's there's always big project wins, and I know we have our eye on one of our big customers in the telco space in the U.S. has announced a CapEx slowdown. Certainly, we've got our eyes on that impact. I think so far, Andy, I don't know if you've seen, that seems to be isolated to that one customer. I don't think Drew Zogby or John or Paul or anybody has said anything different. Yeah, I think right now it's right now it's the one customer. Actually, Noah, I'm real happy with what happened to our backlog in the quarter. What we'd like to see is a very soft landing to more normalized levels. You know, we're still seeing strong orders in line with pre-COVID levels, where we'd expect them to be. We don't expect there to be some big drop off of backlog. We think it's gonna be kind of normalized as customer order patterns return to pre-COVID levels. It's gonna take a little while to burn that through. Well, okay, I guess just the last question, related to that is, you know, within motive, the volume is kind of going slightly negative. Was that more related to production issues or kind of end markets? Can you just give us some color on the volume dynamics there? I would say mostly Europe, it's mostly a Europe story. It's that's where most of the, if any, of the pressure is. Motive Power had an incredible maintenance-free mix pickup in the Americas. You know, it's a little bit of softening in EMEA. Americas remains strong. We're not yet seeing, you know, really anything that we're concerned with, but we're keeping a close eye on it. Yeah. because we read the same things in the newspaper as you guys do. That team's doing a great job. That's really a fantastic group effort. I love what they're doing, their forward look and their product roadmap is. I'm really, really proud of that group. Okay. Well, look, nice job on the margins, great to see the IRA benefits come through. We'll see you at your Investor Day. Thanks. Thanks, Noah. Thank you. Please stand by for our next question. Our next question comes from the line of Gregory Wasikowski with Webber Research & Advisory. Your line is open. Hey, good morning, Dave and Andy. How are you doing? Good morning, Greg. Good morning. Hey, thanks for taking the questions. First one is on the tax credits and material portion being qualified. Can you just... It's a two-parter with it. Can you remind us what portion of your product is produced within the U.S.? Then within that, what is currently on plan regarding that portion of U.S. product that you expect to qualify for the credits? I'm thinking, in other words, you know, I just kinda wanna establish a benchmark, I guess, maybe it's, you know, when we get to the other side of Treasury guidance in the second half of this year, and we know that, you know, X% will ultimately qualify, how does that ultimately compare to, you know, what you guys are putting in plan right now? Yeah, well, you know, this is just batteries for Section 45X. I would say U.S. batteries, as a percentage of revenue, is just probably a little north of 50%. It's in that zip code. I don't have that exactly, I apologize. I think in terms of the way to model it and think of it, is, as I said to Noah, is it should be a reasonably stable from that Q1 projection to extrapolate that. As we are able to increase our TPPL production capacity, that should drag along additional IRA benefit as well. Okay, that makes sense. Along those lines, just on the facility closures, just curious now at this point, are those still purely related to cost savings, or is there any sort of correlation to draw here between the products that you expect to qualify for tax credits and the facilities that you've closed or could be thinking about closing in the future? In one case, we got evicted. The developer of that industrial park wanted to redevelop it. We had to scramble, frankly. We didn't. That was out in California. Luckily, we were able to, and the team has been really supportive. I just had a great call, and we had some success on our first product we made for some medical batteries in a new facility. The team out there has been great, and we're, you know, we're really happy with that. In that instance, thankfully, we were able to pick up that equipment and physically move some of the team members into other locations, and I'm really happy with the folks that moved. That's one of the cases. Andy, is there? I'd add two things. First, just to comment on the Sylmar closure, even though we were evicted. It's gonna cost us a little shy of $6 million, of which $1 million is non-cash, we'll save $4 million a year. Yeah. It's a net positive. These plant closures, while cost savings, is always something we look at when we optimize our strategic plan, Greg. I think this, it's really interesting to us to just show how the Inflation Reduction Act really aligned with what our long-term strategic objectives are. Closing Hagen, closing Ooltewah, was closing, you know, some of our flooded footprint as we migrate to more of our energy-dense products like Thin Plate Pure Lead and lithium. It's really consistent with the strategic initiatives we had in place already. Yep. Yeah, the maintenance-free element of that as well is critical for where we've intended. Volumetric energy density and maintenance-free are exactly what, you know, we've been focused on all along. Andy's exactly right. That is the go-forward plan. Got it. Okay, that makes sense. One more, if I could, just on Slide 14, the price mix charts, which are always very helpful for us. Just wondering if you could break that down per segment at a high level, remind us, you know, which segments are contributing most to that price mix catch up and which are lagging at the moment. I'm gonna start and let Andy, you know, go to her magic computer here. I would say all the groups in the prior Q4 had a good price mix catch up. I have to say that our customers have been reasonable, and we've tried to be reasonable as well, recouping these costs. It's just been an unprecedented period, and there certainly were some lags. Our ES got, you know, it took much longer due to the nature of that business to get started. I think in all three groups had a pretty good performance in the quarter. Andy, do you have those numbers in front of you? Yeah, I mean, I'd say, there's a couple things that I think are worth commenting. Number one, as we had talked about before, in EnerSys, there really was a lag. They were a little slower getting out of the gate, and a lot of that, as we had talked about previously, was really due to the fact that they source a lot of their products from China, so there was a longer lead time between the quote to ship. Really just took a long time for the savings to begin. A lot more contracts as well. Yeah. It took a little while till it began to manifest, and we're very pleased to see it coming through. That, we continue to get positive price cost recapture. The other thing that happened this quarter is our motive power, as we mentioned this quarter and last quarter, just had an outstanding- Yes mix improvement with migration to our maintenance-free. That's very positive as well. I think when you look at the trend of, the price cost, as we mentioned, the last three quarters being positive, price mix, it's, we've caught up, and I think our narrative now will probably pivot from being a price cost recapture. We'll certainly continue to go after pricing of inflation and move more towards a mix improvement and cost reduction. Yep. In terms of the balance, between the 3 LOBs, it was fairly consistent, right? All 3 groups contributed meaningfully to the results. Yeah, yeah. Specialty had a little bit of struggle from the Missouri cost, otherwise, yes, you're right, Dave. Okay. All right. Great. All right. Thanks, Dave and Andy. I'll see you in June. Thank you. Great. Look forward to it. Thank you. Please stand by for our next question. Our next question comes from the line of Sherif El-Sabbahy with BTIG. Your line is open. Good morning. Thanks for taking my questions. I wanna focus on specialty. How do you see margins trending past Q1? Are they just a function of Missouri production and working through those, TPPL capacity constraints? Yes, and the Sylmar facility move we just talked about. It was a combination of we had a pretty tough Q3 in Missouri, and those costs disproportionately hurt the specialty P&L because it's smaller. As a percentage of revenue, those costs are more problematic for the return on sales and then the Sylmar facility. Yes, in terms of the price mix, the revenue growth, the product roadmap, I would say that business is moving along nicely. I think there's a lot of defensible momentum building for us. It's really exactly as you said, it's these plant issues that we think are temporary and should improve as we move forward. I could definitely see us returning back to double-digit in specialty over the course of the next fiscal year. Yeah. It'll be a gradual pickup as we get Sylmar behind us. That might take a quarter or two, and then continuous improvement in our Missouri plants, as we've mentioned, both on a cost standpoint as well as an output standpoint. Yeah. Got it. You're on mark, though. Okay. You had it right. You had it right. Yes. That leads perfectly into the, my, follow-up. The backlog increased sequentially for specialty. I'm wondering, what are you hearing from your Class 8 customers more broadly? Obviously, you know, you just said growth is limited by capacity, I'm just curious about the demand side. I think, you know, a lot of our Class 8 business today is with the OEMs, so we're selling into the OEM portion of the business, and that sort of dominates the narrative with us, and that's where a lot of our focus is. The most of the discussion we have with the OEMs is still related to the tremendous amount of backlog there is for new trucks. That's one of the industries that's sort of really had trouble releasing a lot of pent-up demand for new trucks. Folks want new trucks for better fuel efficiency, just modernizing the fleet, so that we still see a lot of opportunity as that backlog works its way through. In terms of the miles driven or the overall economic activity, I would say that we haven't been given any strong signals that are negative in any way. One of the big opportunities we have to remind you of is, as our production capacity improves, we want to expand our focus on beyond just the factory fit OEM business. There's still 3, maybe 4 times as much business in the service elements of these OEMs that do the service for these fleets. There's still so much upside in this business. In general, the team's very optimistic. The backlog's still very strong just in that transportation sector. Andy, is there anything I missed? Yeah, the only other comment that I'd make, Blake, and hopefully you'll get this message from Mark at Investor Day. What's really exciting, as Dave mentioned, is the OES side that we've really been holding the reins on. We have a new transportation DC all ready to go as soon as we have the capacity available to start getting out of the gate. Mark will provide a lot more color on that in Investor Day. It's higher margin. The other piece, when you look at specialty backlog in the aggregate, is to keep in mind that our aerospace and defense is pretty much made to order. Backlog isn't really a good indicator in that business. Okay. That's really helpful. Thank you. Stand by for our next question. Ladies and gentlemen, as a reminder, to ask the question, please press star 1 1 on your telephone. Our next question comes from the line of Blake Keating with William Blair. Your line is open. Hi, guys. Good morning. This is Blake on for Brian. Good morning, Blake. I just wanted to ask about the maintenance-free. You guys have touched on it a little bit. It was up, you know, almost 20% year-over-year for the full year. Can you talk, dive in a little bit more into the demand drivers you've seen this year and how we should think about growth moving forward? What kind of margin tailwinds should we see from growth in maintenance-free? I think the demand driver, mainly for maintenance-free, is it's just related to the lack of availability of human capital to do these tasks. These There's just not available people anymore to maintain batteries. That's the key driver. It's in a sense, it's a form of automation, but it's technology advancement. That's just been the key driver all along and will continue to be. The other element of our products, beyond being maintenance-free, is we tend to operate at the high-performance end, and the duty cycle on batteries tends to just increasingly every year, get more tough. In the old days, the battery sort of had one job, which was to crank an engine or just a emergency backup. One time, the amount of service that the battery was called to do was not very frequent. Today, the electrical demands, the batteries just get really abused. Customers need higher quality, more advanced products to stand up to the abuses of these today's applications. That's the other, the other driver, is just the more electronic content in anything from a Class A big rig or a forklift truck. There's just more electronic content, and as such, the batteries are having to work much harder than they did in the years past. These are the main drivers for these, and this is things we identified from the beginning, is the need for us to have these high-performance, maintenance-free products. As Andy noted, I don't think it's a coincidence that this lines up so well with what the IRA is all about. We've been on the right path, and we're gonna stay on that path. Got it. Understood. Thank you. Just lastly, you know, we're hearing companies are beginning to see quoting activity pick up for projects related to the Infrastructure Bill. Can you talk about what you're seeing with project activity and the expansion of broadband access? Are you seeing, like, the level of activity you were expecting, or how should we think about potential growth tailwinds there? I think specifically for us, the one that gets most attention on my radar screen is the Rural Digital Opportunity Fund, the RDOF build, which I think some of the funding came through that law. One of our, I guess, broadband cable television customers, has really taken a strong lead in that area, and we've seen and identified a pretty good chunk of their order book has been associated directly with these RDOF builds. That's encouraging. We expect more of our customers. They're certainly out front, but we expect more of our customers in the ILEC world and other cable television-type customers will also see opportunities to push fiber deeper into these rural areas. That's the one that's the most prominent for me, and we're off to a very good start. Got it. Thank you. I'll pass it along. Thank you. Thanks. Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to David M. Shaffer, President and CEO, for closing remarks. I just want to thank everybody for your time today, and most importantly, I'm really excited to go in a higher level of detail and really demonstrate the product roadmap and the strategic initiatives we have going at our Investor Day, June 15th, at the New York Stock Exchange. I hope you can make it, or certainly at least I hope you can dial in. Thank you so much for your time today. Take care. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.