Okay, great. Thanks everyone for joining. I'm Mike Borges. I'm on the Aerospace and Defense Investment Banking team here at Wells Fargo. I have the pleasure of sitting with Chris Tucker, CFO of ESCO Technologies. Chris, thanks for being here. Thanks. Great to be here. Appreciate you having us. I'll ask some questions to Chris throughout the next 35 minutes. If anyone has any questions, feel free to raise your hand, but I'll save some time at the end. Chris, first off, you and Bryan, relatively new to your seats, how are you approaching things differently than your predecessors? Yeah, I think, listen, I've been in the CFO chair at ESCO now for just over three years. Bryan is a long-term ESCO guy. He's been with the company over 25 years, but just in the CEO role for a little over a year now. You know, I think we are looking at a few things a little different. You know, we've got a great company, a great set of assets underneath the company, but I do think we're trying to look a little bit more around, you know, how we can operate a little bit more like one company, focus on the things that bring us together. You know, I think we've run a pretty decentralized model over time. So we're looking at ways we can. You know, we're not trying to centralize everything. That's not really our objective, but there's synergies, and there's things we can do as we have the businesses work together. And so we're really focused on that. I think that informs some of our M&A a little bit, you know, as we think about, you know, buying things that really fit nicely with what we have, that can help give us some more scale. So that's, I think, kind of been the first thing, is really trying to act more like One ESCO, one company, and bring everything together and look for those synergies. The other big thing I would say that we are really focused on now is returns on capital. I would say that historically, we've probably had less focus there as a company. I think, you know, that's something obviously, you know, I've dealt with investors with a long time, you know, over the years, and we, you know, we kind of said, "Hey, this is an area we need to do better." We certainly had gotten some of that feedback, and so we spent a lot of time in the last couple of years kind of going through ROIC, you know, with our operating folks, explaining to them, you know, why it's important, what and more importantly, you know, how they can impact it, and what are the levers that they can pull, and what's the role everybody can play to help us improve our overall returns? You know, we've even kind of added that into our long-term incentive comp structures, which has been a change that we've just made here in the last couple of years. So that's been, I think, again, a unifying thing as we've kind of broadened some of those share programs to bring more people in and have us all pulling towards a better return environment. You know, lots going on, but those are a couple of the key things I would point to. That's great. You talked about the One ESCO approach. Maybe to start out, can you provide a brief overview of the three segments? Sure. Sure. So we, yeah, we operate in three segments. The first is our aerospace and defense. So we've got a pretty, you know, pretty broad set of companies in here. A little over half the business would be aerospace components and parts, so you know, that's commercial and military. Then we got about 25% of the business that's in Navy business, and that's mostly on submarine. So we're big on kind of the Virginia-class, Columbia-class programs. And then about 20% or so of the business is in the space market. So that, you know, a lot of good markets there, a lot of good growth dynamics. You know, so that's been a real good business for us. The next biggest business is our utility business. So here, we're selling mostly test and measurement and diagnostic equipment to help the utilities run their networks better. So we do a lot of work on testing transformers and relays and other parts of the critical infrastructure. So again, you hear a lot about, you know, kind of utility spend and things going on there with power demand going up, so that's been a real good business. And then our last business, we call test, and that's our RF shielding and test business. So here, you know, we're kind of serving a broad array of end markets and helping build out chambers that do different test and measurement for different applications. That can be wireless, it can also be defense, it can be medical, you know, kind of a broad, broad range of applications there. Yeah. What would you say is the competitive advantage that you all have in those different segments? Yeah, I would say, listen, you know, we're somewhat of a smaller player in some of these really big markets, and I think what we've been able to do is find nice niches where we can operate. And even though we're in some big markets with some big names in there, you know, our niches that we've carved out, you know, we have nice little leadership positions in those places. And so, that really helps differentiate us. We obviously also focus a lot on technology. I know that we all say that a lot, but it's very important to kind of look at our markets, see where they're going, understand the technology trends, and try to invest ahead of those to be ready to serve, you know, the customers in the best way possible. You know, and then again, that notion of customer focus is also really important. I think, you know, kind of having high quality, high customer service, you know, those are key core values for us that also help build that moat around us and drive the business. Yeah, and I know you feel that you're in some good growth markets. Are there any particular that really excite you as you look out? You know, I would kind of highlight the utility and the aerospace and defense, probably. If you look at utility, you know, we've got about 20% of that is renewables, and the rest would be kind of more core utility, and both of those are really great markets. You know, I think you see a lot in the headlines there about, you know, just a lot of investment and a lot of demand for additional power generation and then transmission distribution. That plays well into what we do, so we feel really good about that. And then on aerospace and defense, you know, I mentioned the kind of the commercial military aero. I mentioned Navy. Those are two markets where, again, there's a lot going on there to increase demand, increase build rates, and a lot of momentum around those end markets. So, you know, we feel good about everything in the company, but I would point out to those in particular where we see really good dynamics. Yeah, appreciate that. And just diving down a little bit further in your A&D segment, Mm-hmm. You touched on it there with your prior answer, but what are some of the growth drivers specific to A&D? Yeah, if we start with the aircraft component side, I mean, really there, you're talking about kind of build rates, so kind of Airbus, Boeing is kind of the two big OEMs. You know, we sell direct into them. We also sell through the tiers, and you know, that's just, you know, there was obviously a big correction that happened during the pandemic that we all know about, kind of took activity down to very minimal here, and it's been, you know, I would say since kind of our year end of September 30th, so our fiscal 2022, is when we finally start to see the recovery kick in. And it's really been a scramble to kind of support the ramp and build rates. You know, a few fits and starts there with Boeing, as we all have heard, but you know, in general, we're still on a really nice upward trajectory there, and as we look out over the five-year planning cycle we're in right now, you know, we feel like there's you know, good, good characteristics there around that. And then, if we kind of shift to the defense and Navy, you know, little bit different, but kind of, you know, similar in that we see a real strong growth profile. I think these are programs that generally have very strong bipartisan support, and particularly on our submarine platforms. I mean, I think that's an area where there's a lot of focus to ramp up production. You know, we've got some good positions on those programs, and we've seen a little bit of increasing in our market share recently, or our, I should say, not really our market share, but our ship set content on some of those platforms. And so, you know, we think that the growth, again, as we look out kind of in five-year increments, you know, we feel really good about, you know, kind of the overall profile there. Great. Going back to the commercial aerospace side- Mm-hmm. Where do you think we are in the growth cycle? Well, listen, I think as we look at some of our external advisors and market prognosticators, I mean, you know, they would tell you that this, you know, that they don't see, you know, kind of a dip in for at least five years, you know? So, I think that, as we get out to 2030 and beyond, you know, you might see at that time, but right now, you know, it's really more about supply chain stability, workforce stability, and kind of increasing those build rates. And, so that's really. And, I mentioned we kind of started seeing our growth come back in 2022, so, we're a couple years into it, but, you know, we think we've got, you know, a good period of time to go here still. You mentioned Boeing. Are you seeing impacts from some of their production challenges? You know, not, not really. I think where we serve them, obviously, they're very important, you know, very, very interested in them getting healthy and getting their build rates back up again. I think some of the places where we sell in through the tiers, and there's a lot of past due backlog, and it's taken all that a while to work through, they. You know, it's been pretty clear that they want everybody to keep going, you know, no slowdown. We have some other areas where, you know, we're caught up, and there's less past due backlog, and so I think in those parts of the business, you see kind of less orders coming in from Boeing as they're okay on that stuff. Really, in those businesses, you know, frankly, we've got a lot of other demand, you know, for military and other commercial applications. So we haven't really seen any kind of change in forecast or slowdown from some of those difficulties. Yeah, and on the other side, you've seen incredible activity on the aftermarket. How has that impacted your business? Yeah, I mean, that's been honestly good. Obviously, with some of the production rates unable to keep up, we've seen the aftermarket continue to pace pretty nicely. And so, you know, we're probably a little less aftermarket-centric than some aerospace and defense companies, but if you look at just our aerospace and or just our commercial aerospace and defense aerospace, it's probably 30%-45% aftermarket, 30%-40% aftermarket, and the order rates have continued to be very high there. Yeah. You touched on a large portion of your A&D segment sells into the Navy. Obviously, naval capabilities are a high priority within defense spending. Mm-hmm. Can you touch on some of the products that you manufacture and the platforms you're on? Sure. So we basically, you know, we're kind of, as are a lot of people that sell into the Navy, I mean, we're helping focus on kind of the signature reduction of the boats as they are out, you know, kind of conducting their missions. So we make a lot of valves, like what we call quieting valves, that'll manage the flow of fluids, you know, can be water, even air, airflow through the subs. And we have different technologies we offer to help, you know, kind of make all those things operate in a quiet fashion, so that the boat has less of a signature. And the other big product we have is, like, composite materials that go on the outside of the submarines, and those have a similar function, as they try to help reduce the overall signature. So those would be the key products we have there. If you look on kind of our investor materials, for a typical Virginia-class boat, we have around a $45 million ship set content per boat, so it's a very important program for us and one we see, you know, good momentum on. Speaking of that, you've had some nice orders on the Virginia-class. Do you wanna touch on those? Yeah, definitely. We've had about $100 million of orders, you know, through the last, I think, we got about $40 million in the September quarter, another $60 million in the December quarter, and those were really, you know, increases to our ship set content on that Virginia-class platform. So, you know, we've been working hard to support the Block V build-out there. You know, these were kind of additional Block V orders, which was, which was a great win for us, and we're working now on kind of the next part of Block V and Block VI in the future. What do you see as the growth drivers for Navy specifically going forward? You know, really just those build rates, and again, you know, there's a big schedule out there of, you know, kind of boats that have to be retired, and then bringing these new boats online. You know, the build rates aren't where the Navy wants them right now, and they're trying to ramp up that capability, and they're doing a lot of work with the ship builders and the supply base. You know, they've got a lot of supplier development activities going on right now, you know, that we're taking advantage of a little bit as well. And so, a real focus on getting those ships, ship rate or build rates up, which we're ready to support. Another fast-growing area within A&D is space. You mentioned that at the outset. Who are some of your customers? And talk about some of the products you make there. Yeah, so for space, for us, we're really more of a legacy space guy, so we would be more into some of the NASA programs. So that's kind of the SLS and those kind of big launch systems and then, you know, kind of the propulsion systems when the things are out in space. And we also do some satellite stuff for again, micro-propulsion systems and things like that. Those are, you know, those are an important part of the portfolio. So that's but that's really. You know, that market's undergoing a lot of change right now. And we'll probably continue to focus in that legacy area. That's where we've kind of got, you know, good heritage products and good performance, and, you know, we continue to see a lot of activity there. Yeah, absolutely. Let's pivot over towards the utility segment. This segment has seen really strong organic growth over the last couple of years. Could you provide some color on the major growth drivers here and what you see going forward? Yeah, for sure. I mean, it, it's, it's an exciting space. I mean, I, I think, you, you don't have to look too far into the headlines, you know, to kind of find, you know, the key drivers here. But, but fundamentally, what I would say is, you know, there is, we've got kind of an aged grid here in the U.S., so that's the first thing, is, you know, kind of keeping that running to its fullest capabilities. We have a lot of transformer, relay, and other test equipment, that can, you know, work on these big assets on the grid and assess them, and make sure that they're running to their best potential. So that's very important, you know, as they try to get the most out of their assets. But, you know, beyond that, there's a lot of demand coming towards the grid, and so they've got to, you know, invest to increase capabilities on the grid. And so for us, you know, that's gonna drive new demand as well, 'cause you'll have new testing cycles as assets get commissioned and all that. And so, you know, really just kind of this increased demand from electrification. You know, we hear all about kind of the data centers and that kind of stuff. You know, that's a real impact. We see benefits there. You know, we've got a renewables business. I think the renewables is also gonna be a key factor. It, it's important. It. You know, it adds some kind of complication on the grid as you integrate, you know, those sources of, of energy onto the system. Again, that, that drives testing points and things that help us. So, so there's a lot of dynamics, I would say, that are converging out there right now, that, that really give us a high, high confidence as we look at the growth going forward. You are running up against some tougher comps now. What are your growth expectations for the rest of 2024 and going forward? Yeah, so I would say that, you know, we've kind of talked about high single digits there for the year. We've been a little bit above that so far this year, so that would indicate we'd be a little bit below that for the balance of this year. But we feel good as we move forward, that we'll, you know, we'll be in that kind of high single-digit range, you know, as we move ahead. So, yeah, I think we really don't see a change in the outlook there and feel good. Okay, great. NRG's orders have moderated in the last few quarters. Yeah. What are you expecting there going forward? Yeah, so NRG is really our renewables play there. So there, we're selling wind and solar kind of assessment equipment that really what we're doing there is kind of assessing a site, a potential solar site or a potential wind site to see how bankable it is and see, you know, how good is the wind pattern there, or how good is the sun pattern there, and how much power could be generated from these places. We did see a pretty big surge in order. We really had three phenomenal years there in a row. We saw a pretty big surge in orders last year through the June quarter, really driven by kind of the Inflation Reduction Act and some of the incentives that were put in place around renewable spending. So that, you know, led to a kind of a surge in backlog in that June quarter a year ago. We've seen the orders kind of, you know, taper off a little bit since then, but the sales have been good because we've been working off all that backlog. So as we get past that June quarter this year, we would expect the order growth to return. And we certainly continue to have an outlook and an expectation here for continued growth. Okay, great. Let's pivot now towards the last segment, the RF test piece. Mm-hmm. Test has had some end market softness recently. Could you explain the cyclicality there? Yeah, you know, listen, I think the test business really was a good performer for us through the pandemic. You know, really didn't go down during the pandemic and started growing, you know, quickly in 2021. Had a great year in 2022. So, 2023, we kind of saw some moderation there. This is one place where we have exposure to China. We're not real China-centric, but we have a China business here. It really grew nicely through 2022, and then we saw it, you know, kind of taper off in 2023 and again here in 2024. We also have a pretty sizable kind of wireless business here, where we're supporting the handset and device makers. We're a little bit between development cycles there as we kind of have done a lot of work, you know, on 5G build-out and some other facility refreshes. So those things are a little softer right now. And then we also have a bit of a construction content here, you know. So we're typically a capital spend for large industrial companies as they build out some of their test capabilities. And so we've seen some delays and things like that on the construction side. So, you know, a little bit light last year, a little bit soft so far this year. We would expect a return to growth next year as we kind of go forward. Again, we've got really nice diversity of end markets here. We've got military, wireless, medical. You know, as you look at all those and add it up, you know, we expect, you know, those things will come back next year. Yeah, and I know you recently announced some restructuring efforts. Are you seeing the impacts of those cost reductions? Yeah. You know, to the credit of the team there, you know, we kind of came in through our first fiscal quarter, which was the December quarter. We saw some bigger challenges than we expected, saw some backlog pushouts, where we saw some demand pushed into the next fiscal year. So we had to get aggressive on the tack or on the cost reduction side. And, you know, the team stepped up, and we got a lot of that work done in the February timeframe. So we're absolutely starting to see the benefits of that. As the end market issues are resolved, are you gonna have to add costs back? You know, we'll try hard not to do that, honestly. You know, I think if you look at this business, it's got the lowest EBIT margins of all the businesses. It's. I mentioned kind of we're tied into construction here, so that can be a little bit lower margin aspect to this business. Still a good business, still approaching 15% EBIT margins, but a little lower. So listen, as we go forward, you know, we'll be very focused on cost, and in particular, cost add back, you know, and so that we can. You know, our goal here would be to drive, you know, good incrementals up towards 30% and you know, watching costs will be a key part of that. What are your longer-term growth expectations and margin expectations for this segment? Yeah, listen, I would say for the other two businesses, we're in that more high single digit range. I think here, we'd be more mid-single digits, so probably something like 3-5. And so that means the margins become very important. You know, I think for us, we want this business, the first place we gotta get is 15%, and then, you know, we'd like to see those EBIT margins working back towards 20%, where the other businesses, pardon me, kind of live today. So, it's definitely a margin story here. You know, we think the growth will come back, but it'll be a little bit less than the others, and so we'll be focused on those margins. Can you comment on any difference between the U.S. and international market? Yeah, listen, I think that, you know, we—for us, the US, we've probably got the broadest exposure of all those different industries I mentioned, and kind of the deepest footprint to support the market. In Europe, you know, we're a little bit more wireless-focused with some big customers there. We've also got some, you know, a lot of shielded room-type application for some government applications, so a little more niche-y in Europe, but, you know, really have seen good results there and good performance. And then in China, we're a little bit more—we've got a little bit more of an offering there for electric vehicles. You know, there's been a lot of investment there in testing and those capabilities, so we've seen some good activity there, and then a lot of the more traditional, just test and measurement. Is there more growth opportunity in one versus the other? No, listen, as I said, China is a little bit uncertain right now. We've seen it kind of flatten out and frankly come down the last couple years. You know, we think that business will be okay, but you know, we're not expecting that it's some big return to massive growth. And I would say Europe, for us, is one place where we might see a little bit above-trend growth. You know, we've done pretty good there, and we still have a lot of good targets that we're going after. Great. Taking a step back, looking at capital structure- Mm. How do you think about desired capital structure, target leverage level? Yeah, so, you know, we've got a great balance sheet. We're under 1x levered today. You know, we've been in that position for, you know, 3-4 years now. I think as we talk, you know, internally about that, I think we feel like a more ideal capital structure would be up more towards, like, 2x leverage. You know, but that's gonna be more about probably finding the right M&A opportunities to get us there. I think, you know, we certainly have the capacity to go beyond 2x leverage, and, you know, we could, so we could run up a little higher, and then, you know, pay it down pretty quick, and hopefully kind of land in something around 2x. We have put in place a share buyback program here over the last couple years. We hadn't bought any shares back in many years, so we started up a program in fiscal 2022, and we've had good results with that in 2022 and 2023 and again this year. We'll do a little bit there, but that's gonna be a little bit more of a maintenance program, and we'd probably be looking more to the M&A to help bring that leverage up. Just building on that, how do you think about capital allocation priorities? It seems like M&A more of a focus than buybacks. Yeah, for sure. I mean, listen, you've heard kind of the story. We've got a couple of real good end markets we serve. We've got really good presence in those markets, but we think there's ways we can supplement what we do today, and you know, kind of make the enterprise a faster-growing enterprise. And so that's really where we're focused right now. I would say that, you know, we talked a little bit on our last earnings call. You know, obviously, we all understand last year was a pretty low year for M&A activity, but we've absolutely seen a pickup, I would say, since we kind of turned to this calendar year. We've seen a lot more kind of activity, more things coming across the transom that we need to analyze and look at. So, we're really pretty focused, I would say, on utility and aerospace and defense as we make those M&A, you know, inquiries. But, you know, there's a lot going on there, so we would, you know, hopefully be able to make something happen. Yeah, and just building on the M&A theme, how is that pipeline looking? You said you're seeing more opportunity. We have, yeah. I would say, you know, really pretty empty. If you look at the last couple years, we spent less than $20 million a year purchase price on deals. We did get one done for a little over $50 million in our first fiscal quarter this year, but still pretty low levels. And I would say, as I mentioned, you know, since we came into this calendar year of 2024, we've seen a notable pickup. It seems like a lot of the things that were kind of stalled out over the last 18 months, with interest rates going up and, you know, kind of some of the uncertainty that underpinned all that, that seems like it's kind of waned a little bit, and people are now getting more active as far as, you know, kind of letting things back out of their portfolio. So, it's, you know, it's a fuller pipeline than we've seen in a couple years. That's great. And how would you prioritize what you would like to add to the company through M&A? Yeah, I think, you know, for us, we are very interested in getting a little bit more scale in the businesses we have. You know, so as I mentioned, we're kind of in some niche places. We've got really good businesses with good technologies, but, but we think we can bring a little more scale to some of those businesses, particularly, I would say, in aerospace and defense within Navy, and within kind of the aircraft components side of the business, and then within the utility business. I think on the utility side. We've done a lot of deals there over the last seven or so years, kind of building out that diagnostic test equipment, under our kind of core brand, which is Doble. We think there's more room to run there. We think we can continue to kind of build out the capabilities on that utility side as well. What metrics do you use to evaluate M&A opportunities? So we really look at, you know, IRRs, you know, internal rates of return. Obviously, we kind of do a full DCF model and, you know, compare our returns back to the cost of capital and make sure we're driving a spread there. So that's a key thing. We also look at, you know, kind of if we look at the deal on its own, and we want it to get an ROIC that's above 10%, you know, within the first three to four years of ownership, you know? And so those are kind of the key things. And then beyond that, I think it's just, you know, fit and synergies, you know, as we would bring something on board. Yeah, and as you've seen some bigger transaction multiples, do you think multiples are trending higher from here? Well, we hope not, if we wanna get more done. But you're absolutely right. You know, I think especially we serve a couple of good markets, aerospace, defense, utility, and I think if you look at some of the comps there, there's no doubt that they've rerated, you know. You know, even the public company comps have rerated over the last couple of years up to higher multiples. So listen, we've got to be disciplined. I think that if you go too far, that whole value equation and that return equation falls down on you a little bit. So multiples are high, and that means we've got to be selective, and. But you know, I think so far, we've really shown good discipline. You know, I think we've been in some processes where we've said, "You know, this might not make sense for A, B, or C reason," and I think we've been able to step away from those and let them go on without us. And we'll continue to do that, but you know, we'll continue to take our swings until we get some hits. Looking at some of the past deals you've done, can you point to a couple that you feel especially good about and especially good adds to your company? Sure. I mean, I think some of these predate me. As I said, I've only been with ESCO about three years, but the NRG company, we bought in 2016, 2017 timeframe, and that was our first play into renewables. And, you know, the first couple of years were tricky there. You know, I think the renewables were kind of a boom and bust, kind of driven by incentives, right? So, there would be government incentives that would drive some renewable and wind activity, and that would help the business, and then, you know, those incentives go away, and the business comes back down. And the other thing I would say about that business, when ESCO bought it, it was just a wind business. And so in the ensuing years, we developed a solar offering to kind of do some of the same solar assessments the way we do wind assessments. And, man, has that business taken off on the wind and solar side over the last three years. And so, you know, really been a home run and gotten back on track after those early tough years and really been, you know, a core part of the overall utility offering. And obviously, renewables continues to be a key topic and a key driver in that space. And so, you know, I didn't really mention that with M&A before, but I think that would be a cool another good place for us to kind of continue to add on. So that's one I would highlight. We also did in the utility space, a business called Morgan Schaffer. Morgan Schaffer is really a condition monitoring play. So historically, most of our products were, you know, you roll a truck out to the transformer, take it offline, and do your test and your diagnostic work. Morgan Schaffer has a what we call online condition monitoring product. And again, we've done some technological development around that product and rolled some new things out. But that's a. You know, that's a really nice trend in the market where they're-- you know, they like these more real-time measurements. And so those can. You know, you still have to do the offline stuff that's required, and that's gonna be out there, but these are, you know, good instruments that really give the operators more real-time insight to how their assets are running. And so the market dynamics there and our own technology investments have really been a nice one-two punch, and we've seen some really great growth there as well. So those are a couple I would highlight. That's great. Thank you for that. You mentioned ROIC in your opening comments. Mm-hmm. That was recently added to incentive compensation. Mm-hmm. Could you provide a little color on what you're doing to drive that focus throughout the organization? Sure. I mean, I think we first of all, it was a little bit of just kind of education, you know? So, you know, you do talk about NOPAT over invested capital, and, you know, some operating guys look at you funny, "What does that mean?" And so kind of explaining to them, "Hey, we're just talking about tax-affected EBIT here, you know, so your EBIT is really important. We got to manage that." And then, you know, your denominator is kind of the net capital you've got invested in the business. From their perspective, it's like a working capital discussion, right? So inventory and receivables, payables, all those things. And so, you know, explaining to them the levers they can pull and how they can drive improvement there, I think has been, you know, really well received. I would also say that we put some tools in place to allow them to have visibility to their own ROIC, which they historically didn't have, you know? So being able to see their own impact and their own kind of trend on ROIC has been a, you know, a big change as well. So all those things, and I think, you know, we're, I would say, early innings still of our overall program of ROIC improvement. But, you know, it's, I think, helped bring a good focus on cost management and then working capital management and revenue growth, and all those things, you know, help come together to form that equation the way we want it. Where do you think you can realistically drive ROIC to? Well, listen, as we look at kind of some of our, you know, high-level operators and an all-in ROI, and these are companies that do acquisitions and, you know, kind of compound, you know, you're looking at, you know, kind of low to mid-teens type returns all in, and that's where we'd like to get to. Great. You've spoken about driving 30% incremental margins. Where are you in that process, and do you think you can get that in each segment? Yeah, listen, that's absolutely the goal, is to get it in all three segments. I think, you know, we're getting closer to being there, I would say. I think, obviously, with some of the difficulties we've had in test this year, that's kind of held us back a little bit. But I think if you look at the gross margin profile of the businesses overall, we feel like that's very achievable, and I think as we. Again, we go through kind of a pretty rigorous planning process with the businesses every year. We did that in April here just a few months ago, and that's, you know, kind of one of our stated goals is, you know, how do we drive that 30% incremental over this planning cycle? I think that, you know, generally, we find a way to get there. There's some businesses that get there easier than others, but I think we always kind of start with, you know, let's put it on paper. What does it take to get there? Then we can decide, you know, do we wanna go that far or not? And so I think certainly for utility and aerospace, we feel like we can get there. I think for test, it might be a little tougher. We're talking more, you know, probably mid-twenties there, but, you know, we're even there, we'll push them to get up there. Great. I know we have a couple minutes left. I have a few more questions. Any questions from the audience before I keep going? Okay, seeing none. Your free cash flow conversion was down last year, hasn't fully recovered yet, 2024 year to date. What's the major driver there? Yeah, really, the main driver there is on the A&D side. So for us, you know, I mentioned earlier some of the past due backlog challenges and the supply chain challenges we see across the aerospace and aircraft components business. So that's been a drag on working capital. I think, you know, you end up with a lot tied up in inventory and you know, kind of contract assets as we struggle to get some of that stuff out. We also talked a little bit last year about the space business and some development contracts we were challenged with there. That's a business where you kind of get cash up front, and then you get the rest of your cash at the end. and so as we struggle on those programs to close them out, that cash gets delayed, so we've had some challenges there. So listen, I think those are, you know, kind of the main challenges we've seen as we've managed the cash. But again, I think as we look out over time, I mean, and you look back historically, we've typically had operating cash flow to net earnings of 130%-140%, and we don't see a reason why we won't get back there in the future. Okay, great. Maybe one more then for you. What makes you optimistic about ESCO's future? Listen, I think we've tremendous runway. You know, I talked a little bit about the business dynamics and the growth characteristics in the platforms. We think there's really good underlying secular trends that are supportive of the businesses and supportive of a good growth environment. It's great when you're starting from a place of high growth. I do think we've got a lot of operational performance and improvement, you know, enhancements we can make. And I think, you know, that you mentioned the 30% incrementals, you know, so I think that, you know, we really feel good about our ability to drive that and what that means for our bottom line and our overall picture. You know, and listen, we've got, you know, a lot of new players on the team. We've got a really energetic group of folks. We've got the clean balance sheet you mentioned that I think allows us, you know, some optionality and flexibilities as we think about, you know, how we want to invest in the company. So we think ESCO is a great place to be, and we really feel good about the future. All right. Well, Chris, appreciate you coming in today. It was great to hear the story. Yeah, thanks for having us. Thank you for your time. Appreciate it. Thank you. Thank you.