Good day, and thank you for standing by. Welcome to the Kadant third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then 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 hand the conference over to your speaker today, Michael McKenney, Executive Vice President and Chief Financial Officer. Please go ahead. Thank you, Amy. Good morning, everyone, and welcome to Kadant's third quarter 2023 earnings call. With me on the call today is Jeff Powell, our President and Chief Executive Officer. Before we begin, let me read our safe harbor statement. Various remarks that we may make today about Kadant's future plans and expectations, financial and operating results and prospects are forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors, including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31st, 2022, and subsequent filings with the Securities and Exchange Commission. In addition, any forward-looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views or estimates change. During this webcast, we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our third quarter earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investor section of our website at www.kadant.com. Finally, I want to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call, we are referring to each of these measures as calculated on a diluted basis. With that, I'll turn the call over to Jeff Powell, who will give you an update on Kadant's business and future prospects. Following Jeff's remarks, I'll give an overview of our financial results for the quarter, and we will then have a Q&A session. Jeff? Thanks, Mike. Hello, everyone. Thank you for joining us this morning to review our third quarter results and discuss our outlook for the remainder of the year. I'll begin by reviewing our operational highlights. The third quarter was another record-setting performance, benefiting from a combination of excellent execution across the operating segments and stronger-than-expected aftermarket parts revenue. This led to near record revenue and record adjusted EBITDA, record adjusted EBITDA margin, and record adjusted EPS in the third quarter. As has been the case throughout 2023, our operations teams around the globe delivered exceptional value for our customers in the most recent quarter, leading to excellent performance across our key financial metrics. I want to thank them for their outstanding work and the results they generated, not only in the third quarter, but throughout the year. Turning next to slide 6, I'd like to review our Q3 financial performance. As you can see on the slide, our Q3 performance was notably higher across most key metrics compared to Q3 of last year. Revenue was up 9% compared to the third quarter of 2022 to $244 million, and benefited from record capital shipments and strong Aftermarket Parts business. Solid execution contributed to our record Adjusted EBITDA of $53 million and a record EBITDA margin of 21.6%. All our operating segments delivered excellent Adjusted EBITDA margin performance. Cash flows from operations and Free Cash Flow were outstanding in the third quarter at $47 million and $38 million, respectively, demonstrating the strength of our business model. As anticipated, bookings softened from the record-setting pace earlier this year and were essentially flat compared to the prior period. I'll review the performance of our operating segments next, beginning with our Flow Control segment. Capital project activity and solid aftermarket demand contributed to revenue growth in our Flow Control segment, up 5% compared to Q3 of last year. Bookings were $83 million, down 2%, due to weaker capital bookings compared to the prior period. Aftermarket parts bookings were up slightly in the third quarter and represented 71% of total revenue in this segment. Excellent execution in both the commercial and operational areas of the business led to solid adjusted EBITDA and adjusted EBITDA margin of 29.7%. Many end markets in our Flow Control segment remained strong, despite the general sluggishness found in the manufacturing sector. We continue to see good levels of project activity and are well positioned to win new business as these projects move forward, although the timing is somewhat uncertain. In our Industrial Processing segment, revenues were up 9% to $94 million, led by record aftermarket parts business, which made up 60% of our total revenue in Q3. Adjusted EBITDA was up 9%, and our adjusted EBITDA margin was excellent at 23.8%. As anticipated, demand slowed in Q3 in response to producers taking market-related downtime. As was the case in our Flow Control segment, capital project activity and interest remain high across all product lines, despite the economic headwinds. In our Material Handling segment, we experienced strong demand for both capital equipment and aftermarket parts. Revenue was up 15% to $59 million, due to record capital revenue in the third quarter. All product lines in this segment contributed to this performance. Bookings in this segment were up 17% compared to the same period last year to $56 million. This growth was largely due to increased demand for our high-performance balers, used to prepare recycled materials and post-consumer waste for secondary processing. Solid execution helped boost adjusted EBITDA by 33% and adjusted EBITDA margin by 300 basis points compared to the same period last year. While we expect demand to moderate in the near term, we continue to see growing business activity for our bulk material handling equipment and our balers, particularly in North America. As we look ahead to the remainder of 2023, we expect to finish the year with record results. We ended the third quarter with a large backlog and expect fourth quarter demand to be consistent with the prior quarter. Although we are seeing a lot of activity around capital projects, the timing of these projects is uncertain due to macroeconomic headwinds. And finally, our healthy balance and strong cash flow have us well positioned to pursue new opportunities. With that, I'll pass the call over to Mike for his review of our Q3 financial performance. Thank you, Jeff. I'll start with some key financial metrics from our third quarter. Consolidated gross margins were 43.3% in the third quarter of 2023, up 80 basis points compared to 42.5% in the third quarter of 2022. All our segments contributed to the higher gross margins, especially our Material Handling segment, which was up 340 basis points compared to the third quarter of 2022. Parts and consumables revenue represented 61% of revenue in the third quarter of 2023, compared to 63% in the prior year. SG&A expenses were $57.9 million in the third quarter of 2023, an increase of $4.7 million compared to $53.2 million in the third quarter of 2022, and included a $1.1 million increase from the unfavorable effect of foreign currency translation. The remaining increase in SG&A expenses primarily associated with increased compensation expense and outside consulting fees. As a percentage of revenue, SG&A expenses were 23.7% in the third quarters of 2023 and 2022. Our effective tax rate of 25.8% in the third quarter of 2023 was lower than we anticipated due to discrete tax items. Our GAAP EPS increased 12% to $2.63 in the third quarter, compared to $2.35 in the third quarter of 2022, and our adjusted EPS increased 13% to a record $2.69. Our third quarter 2023 adjusted EPS exceeded the high end of our guidance range by $0.40, due primarily to higher revenue in our stock preparation and material handling product lines. In addition, lower selling-related costs and a lower tax rate also contributed to the guidance beat. Adjusted EBITDA increased 10% to a record $52.7 million, compared to $47.8 million in the third quarter of 2022, due to strong performance in all our segments, most notably in our Material Handling segment, which had near record revenue and adjusted EBITDA in the quarter. Adjusted EBITDA as a percentage of revenue was a record 21.6% in the third quarter of 2023, compared to 21.3% in the third quarter of 2022. We had our highest quarterly operating cash flow since the fourth quarter of 2021, at $47 million in the third quarter of 2023, up 89% compared to $24.9 million in the third quarter of 2022. We had cash outflows in the first half of the year related to working capital to support our record backlog. In the third quarter, projects were completed and shipped, resulting in a sequential decrease in inventory of $12 million. Overall, working capital was a $5.8 million source of cash in the third quarter of 2023. Free cash flow increased 106% to $38.1 million in the third quarter of 2023, compared to $18.5 million in the third quarter of 2022. We had several notable non-operating uses of cash in the third quarter of 2023, paid down debt by $25.7 million in the quarter, paid $8.8 million for capital expenditures, and paid a $3.4 million dividend on our common stock. I'd also note that $2.5 million of the $8.8 million in capital expenditures related to the facility project in China. The facility move has been essentially completed, with a remaining capital expenditure of approximately $2 million-$3 million. Let me turn next to our EPS results for the quarter.... In the third quarter of 2023, our GAAP EPS was $2.63, and after adding back $0.03 of relocation costs and $0.03 of restructuring and impairment costs, our adjusted EPS was $2.69. The relocation costs relate to the facility project in China, and the restructuring and impairment costs relate to the consolidation of one of our smaller manufacturing facilities into a larger facility, both in Europe. In the third quarter of 2022, our GAAP EPS was $2.35, and after adding back $0.02 of acquisition costs and $0.01 of restructuring costs, our adjusted EPS was $2.38. As shown in the chart, the increase of $0.31 in adjusted EPS in the third quarter of 2023 compared to the third quarter of 2022 consists of the following: $0.53 due to higher revenue, $0.13 due to higher gross margins, and $0.01 due to lower tax rate. These increases were partially offset by $0.33 due to higher operating expenses, $0.02 from higher interest expense, and $0.01 from higher weighted average shares outstanding. Collectively included in all the categories I just mentioned, was a favorable foreign currency translation effect of $0.03 in the third quarter of 2023, compared to the third quarter of last year. Looking at our liquidity metrics on slide 15, our cash conversion days, which we calculate by taking days in receivables, plus days in inventory and subtracting days in accounts payable, were 138 at the end of the third quarter of 2023, unchanged from the prior quarter. Working capital as a percentage of revenue decreased to 15.4% in the third quarter of 2023, from 16.7% in the second quarter of 2023. Our net debt, that is debt less cash, decreased $36 million or 42% sequentially to $50 million at the end of the third quarter of 2023. We've paid down $70 million of our revolving credit facility debt in 2023, helping to lower our leverage ratio, calculated in accordance with our credit agreement, to 0.38 at the end of the third quarter of 2023, compared to 0.74 at the end of 2022. Our net interest expense increased $0.2 million to $1.7 million in the third quarter of 2023, compared to $1.5 million in the third quarter of 2022. We have a strong balance sheet and are well positioned to take advantage of investment opportunities with our current net debt position of $50 million, current borrowing capacity of $285 million available under our revolving credit facility, and an additional $200 million of uncommitted borrowing capacity. Now turning to our guidance for the fourth quarter and full year 2023. Due to our strong third quarter performance, we are increasing our full-year revenue guidance to $941 million-$949 million, from $925 million-$940 million. We are increasing our Adjusted EPS guidance for the full year to $9.65-$9.75, from $9.15-$9.35. The Adjusted EPS guidance excludes $0.03 of relocation costs and $0.03 of restructuring and impairment costs. Our revenue guidance for the fourth quarter of 2023 is $222 million-$230 million, and our Adjusted EPS guidance is $2.02-$2.12. As always, I'll caution here that there could be some variability in our quarterly results due to several factors, including the variability of order flow and the timing of capital shipments. In addition, other risks that could impact our guidance include central banks' policy responses to inflation, geopolitical tensions, and softening markets. We continue to anticipate gross margins for 2023 will be 43%-43.5%, with fourth quarter margins projected to be in the mid-42% range, as the mix is expected to be more heavily weighted towards capital. We expect our tax rate for the fourth quarter will be approximately 27%. We hope these guidance comments are helpful, and that concludes my review of financials, and I will now turn the call back over to Amy for our Q&A session. Amy? As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the Q&A roster. Our first question comes from Gary Prestopino with Barrington Research. Your line is open. Hey, good morning, Jeff and Mike. Good morning, Gary. Could you maybe—I, I was trying to write this down as quickly as possible. Could we maybe dwell a little bit into the strength that you saw in material handling? And I think you said you were gonna see maybe a step down in demand in Q4. Could you help me out there? Sure. Well, you know, we had very strong performance on the material handling front, in regards to bookings, and that continued in the third quarter. And I would say, you know, I'd remind you that in the first quarter, we had a large order that we booked for that conveying system, the 42mi long. Right. Conveying system. And. You, that is, you're seeing some of that in revenue in the third quarter, and you're gonna see a good portion of that in revenue in the fourth quarter. So I think on the revenue front, material handling's performance will be pretty strong. But on the bookings front, I'd say, I'll just let me just take a peek here for the fourth quarter. You know, we usually don't get too granular on forecasting bookings, but when I look back to our performance in the fourth quarter of 2022, we had quite a strong quarter on capital bookings, and I would anticipate that we'll see that pull back a little bit. So, that may cause overall, that may make material handling kind of flattish or down a little bit on the bookings front. Yeah, you also, I wrote down here, demand for balers, that was pretty strong, too? Or do I have the right? Yes. Yes, we had a very good strength in the baler business. Okay. And then, the flow control, you mentioned good levels of project activity within various segments of the business. Could you maybe elaborate on that a little bit? Yeah. So, of course, you know, we're particularly strong, they're particularly strong in the, in the, in the packaging and paper, but they've also done a great job. That product line probably has more applications through the general industry than almost any other product we have, and they've grown that side, that industrial side, nicely. So they're particularly strong in the metals. They have, they're particularly strong in food, and tissue, which, you know, is a subset of paper, but a little more stable. And then just general industry. You know, it's amazing how many industries there are out there that use our fluid handling products, you know, from, you know, solar fields to windmills, to you know, just all kinds of applications out there. So there's quite a mix of general industry, and they're continuing to make good progress in taking their products to new markets. And so, in fact, I'd say that's true through all of Kadant, where our largest segment now is what we call, you know, general industry. It's our biggest of all of our segments. So everybody works hard to try to take their products into new markets, and the fluid handling, in particular, has a lot of broad applications there. Okay, Thank you. One moment for our next question. Our next question comes from Lawrence De Maria, with William Blair. Your line is open. Hi, thanks. Good morning, everybody. Hey, first question: You said you expect, I believe, flat backlogs for the end of the year. Obviously, you gave your sales guide, implies orders pick up sequentially to the $220-$230 range. So I guess, first, what's driving that uptick sequentially, especially if, you know, if the MH is maybe down a little bit, I guess the other two have to be up. But, you know, is there any specific driving that? Because that's good visibility as we move into next year. Well, I'd say specific to the fourth quarter, Larry, you know, I'm not sure how you define that. We, you know, basically, the guidance we gave last quarter, we indicated that we expected bookings in the third and fourth quarter to kinda be mirror what we saw last year in the third and fourth quarter. So- So I think, I think we think right now it looks like it's gonna be relatively flat. I will tell you that, when you're, when you're, you know, dealing in the, you know, in, in the economy right now with, with all the puts and takes, it's particularly hard to figure out what demand is, and in particular, the timing on it, Larry. The, the, you know, customers are being cautious. They're looking for more visibility. You know, the Fed today is going to, I guess, make an announcement that may impact the thinking a little bit. So, yeah, I would say these times are more uncertain than we normally see, just because of where we are in this economic cycle and kind of the interest rate environment. But generally speaking, we think that it's gonna be fairly flat with last quarter and really with last year. That's on the orders, right? Not the backlogs. That's on the orders side. Yeah. Yeah. Okay, exactly. Yep. Okay, that that's very helpful. Thank you. Then, well, just to clarify there, and obviously, one would assume that there's much more price, there's more price in these orders. So is it fair to say that there's more price and lower volume as we exit the year? Or, you know, maybe that's not worth discussing, but I think it is. Well, you know, as you know, we really work hard to try to contain our cost, you know, maximize our value to our customers. There are times, and there were times during the last, you know, probably 18 months, where we have had to pass some price increases on because the cost increases were just so significant. But we always work hard to really try to reduce our costs so that, you know, we maximize the value for our customers. Clearly, you know, if you look at our margins, they've stayed pretty flat, which would tell you that, you know, our divisions did a good job of staying in front of the inflationary pressures, you know, and we're able to kind of maintain their, you know, kind of a flat performance, which, you know, is what we were shooting for. And so, you know, there is some certainly some, you know, price increases that have stuck. Some input costs have started to come down, but if you look at our margins, it would tell you that we just kinda stayed kind of even with, with what was going on from a cost standpoint. Perfect. Thank you. Then my other question, you know, bigger picture, you know, International Paper obviously shutting down large portion, I think 10% of their installed base, so there's some pulp and paper, mothballing going on and closures. So can you speak to the, you know, direct impact to your business, if you're seeing it yet? How material that could be for, you know, 2024? So just kind of help us contextualize, you know, some of those bigger events that are happening and drill it down into what it means for your performance, if you think about it. Thanks. Well, I'll open up on that one, very specific to, you know, the most, I'd say, most recent IP announcement. You know, when I look across the operations that they're gonna be closing there, you know, Kadant isn't doing a lot of business in those mills. Some of that was on the pulp side, not much in the way of activity for us there. On the containerboard side, those, we do business in those mills, but they haven't been very big for us. So we don't, you know, and of course, some of that production will get shifted, you know, to their more efficient mills. You know, we don't think that particular announcement will show up in our numbers in any material way. Okay. So we shouldn't overly, you know, analyze those and think that's gonna have a big impact. Well, you know, what's going on is, if you look at the cost, the production cost of paper companies, especially in the Northwest, you know, relative to the cost in other parts of the country, and in particular, Southeast, there's a significant difference in their cost. We're talking, you know, in some cases, hundreds of tons, hundreds of dollars, $200-$300 a ton difference in production cost. And so when they when you see an announcement in these mills, it's often, if it's a very old, inefficient mill, or more likely, it's just in a very high-cost area, and they've got the ability to move that production down into a low-cost area. And so what you really need to look at is kind of what the total output is, you know, of paper products in the country, because if it's just transitioning from one region to the next, you know, we operate in every mill, and so we're likely not to see a big impact from that. If you see tonnage dropping down, now that's a different issue. I mean, for instance, I think, packaging, you know, boxes this year are down about 7.3% over last year. So, you know, we, you know, we felt that. Obviously, our bookings, you know, have slowed down in that area because of that. But when it's just shifting from a higher cost area to a lower cost area, that has less of an impact on us, 'cause we'll just, as they pick up volume in another mill, we'll benefit in that. Well, so to that point, should we expect, you know, either further shutdowns in other areas, or, you know, how, what's, do you have a view on tonnage next year, as it relates to, you know, this specific end market? If you look at what the companies that have announced already in the third quarter, I would say the general tone is slightly optimistic that things are improving a little bit. Not in a significant way, because I think there's still not enough visibility. But I would just—if you look at the color that, you know, they're giving on their earnings calls, they're hoping they saw a little slight pickup in the third quarter in some cases, and they're hoping that there'll be some continued improvement into next year. But I think it's still, you know, they'll caution that it's, as I said earlier, still uncertain times. Visibility is not great, but they're, I would say, slightly positive that things are going to strengthen a little bit. Okay. Thank you very much. Appreciate it. Yep. One moment for our next question. Our next question comes from Aditya Madan with D.A. Davidson. Your line is open. Hi, good morning, Jeff, Mike, and thank you for taking my question. I actually have a follow-up to that question. So we've seen the North America containerboard sector work through big destocking challenges, and volume seem to be in a better trajectory, but we've also seen curtailment announcements and we're far from a strong market. So how are you seeing those different elements impact parts and consumables demand versus capital equipment appetite, and whether you think that potential inflection in the market could represent inflection for your activity levels with that customer base? Well, you're right that there's been two kind of trends or phenomena happening this year. One is, of course, a slowdown in, you know, in industrial production, but also there has been a destocking, you know, effort going on, both with our customers and their customers. You know, when there's uncertain times, you know, and the Fed's trying to talk down the economy, you know, everybody tends to to destock and try to conserve capital. So there has been some of that. That can't go on forever. You know, our experience in the past says that that happens for a number of quarters, and then, you know, as visibility starts to get a little clearer, they, you know, you'll start to see that destocking stop, and then obviously, it ultimately reverses, and they start to build inventory. And there's a little bit of that going on, I think. I've seen some of the companies announce that they're starting to maybe build inventories a little bit. I think it's still a little too early to know if that's, you know, a trend that you're gonna see throughout the industry. But at maybe at a minimum, maybe the destocking has kind of, you know, hit its bottom. That's certainly our, our hope, that destocking hit its bottom, and we'll start to see inventory start to build a little bit. Most of our customers that we talk to think that, you know, the first half of next year is still gonna be, you know, kind of sluggish, and their hope is that the second half of the year is going to, is going to improve. Many of them are sitting on a lot of money. They made a lot of money the last few years, and frankly, many of them have equipment that's, you know, that, that it's run hard. You know, they ran it very hard the last few years to meet demand. And they really need to make some investments, but they're just waiting to see, you know, kind of when the economy starts to turn and interest rates start to drop. So that's kind of what we're currently operating under, is the belief that, you know, things will probably start out slowly next year, and with a little hope, will start to improve as the year goes on, certainly the back half of the year. Oh, great. Yeah, that's, that's good to hear. As, so as a follow-up, has the tone in your conversations with customers changed much relative to last quarter? And, have there been any additional indications regarding customers potentially looking to push out or extend timelines on capital projects? Well, that's normally what happens. I think we normally say on most calls that it's unusual for projects to be canceled, you know, terminated forever. They just get delayed. And I would say in all the discussions we've had with our customers, and there's actually a fair amount of that that occurs once summer's over. You know, we kind of. There's trade shows, industry shows, and so we get an opportunity to spend more time with our customers and get a sense of their current thinking. And I would say what we're generally hearing, as I mentioned earlier, is well, you know, we've got the cash to make investments. We have some older equipment that we know we need to make some investments in, but we just wanna, you know, just get a little better sense of, you know, where we are in this economic cycle, you know, or have we bottomed out? Is there a recession still to occur, and what's gonna go on with interest rates? So they're all taking a wait and see attitude, but obviously, every quarter that goes by without a downturn or without a technical recession and, you know, interest rates and inflation continues to moderate, I think they're, you know, they become more and more hopeful that we're gonna get through this without a true recession, and things will start to turn around. But right now, it's a very challenging time. We'll see what, Chairman Powell says today, I think. Yeah, I think we all are looking forward to that. So let's see what he has to say. And just lastly, on capital allocation, just I'm just curious on the M&A pipeline and how are you thinking about M&A versus share repurchases? So, I mentioned, I think, through the last couple of quarters, that our corporate development group is probably as busy as they've been in many years. You know, there was clearly a slow period, you know, kind of during the pandemic and after the pandemic. But this year, things have been very, very active. And, of course, our balance sheet is in very good shape, so we're well positioned to pursue these opportunities. And, you know, we're hopeful that, you know, we're gonna find some good fits for the organization. But there's a fair amount of discussions and activities, you know, and opportunities out there in the marketplace right now. As far as stock buyback, we haven't done that for many years. You know, we normally have found that we can create—we create more value if we can find good, good opportunities to bring companies into, into the Kadant family. And so that tends to be, you know, where we, we first focus on, on capital allocation. It doesn't mean that we wouldn't buy stock back, but, you know, certainly, as, as long as there's good opportunities to, to acquire companies out there, that's our, that's our, our first priority and focus. Got it. Makes sense. Good luck in the home stretch here, guys. Thank you. Thank you. One moment for our next question. Our next question comes from John Franzreb with Sidoti & Company. Your line is open. Good morning, guys, and thanks for taking the questions. I'd like to circle back to what you said about the balers and maybe a little bit more discussion on the whole recycling market. Are you seeing differences in demand on a regional basis or not? Well, I think, North America has been particularly strong, but we've also had good, I would say, really over the last several quarters, maybe a year and a half or so, Mike, good in Europe. In Europe. In fact, good. There's been a lot of consolidation into larger and larger recycling facilities in Europe, and our machines in Europe are well suited. They're very large, multi-stream machines that are well suited for these big MRF, these big recycling centers, where you're recycling everything. And so we've had, you know, we've had good success there. We've, that's a product that gets a fair amount of development and R&D work, you know, from an investment standpoint, and we've introduced some new products that have been quite successful in Europe. And also, we've brought that product to the U.S. The acquisition of Balemaster really has helped us start to penetrate the U.S. market with our European technology, because we now have the engineering and the service network in America that our customers look for here. So that's helped us a lot, too. So we've started to have some good success with that. So it's, I would say it's broadly based, but in particular, in North America, you know, our Balemaster, which makes machines that go into the, you know, into the packaging industry, the distribution centers, the corrugators, they've been quite busy with a lot of demand. In Asia, there was once a major migration going there. Is that process permanently over post-COVID? Where did that end up relative to your expectations? You're talking about on the baler side or other aspects of the business? Other aspects of the recycling business, other aspects of that. So, you know, on the stock prep side, which is the technology that recycles packaging and paper. Right. They started to build these facilities, and I think you're referring to these countries in Southeast Asia that really ring China to get around the. Right. W aste import ban. Yeah, I would say that had, I would say, mixed success. As we somewhat expected, a lot of those companies said, or those countries said, "Well, if you don't want the waste coming into your country, why would we want it coming into ours?" And some of the economics didn't work out, and so I would say that's had mixed success. They've come to the U.S., you know, and built, you know, took over facilities, refabbed facilities here, and that's where they're getting some of the fiber. But there's also an emerging kind of recycled fiber market out there that they're able to just buy from... and they're doing that too. And of course, they're also putting in some mechanical pulp mills into China to generate some fiber there. But, I would say that the, your question around where we are in that cycle on, on those countries that ring China, I would say that's slowed down quite a bit and probably, will not be a major growth area going forward. Perfect. That's exactly what I'm looking for. At least not going into China. It is a growth area for Southeast Asia, because, of course, those countries are still growing well. And so we are booking orders in those countries, you know, for a product that will stay in those countries. But as far as they being a fiber source for mainland China, I think that's probably not going to be, it's not gonna be a major market. Great. And in your pre-prepared remarks, it sounded like you were surprised by the strength of the parts business in the quarter. Did I misinterpret that? And if that was the case, how would you expect the fourth quarter to compare to the third? Yeah, John, I would say, you know, we're very happy with the parts performance. It was quite strong, and as I noted in my call notes, you know, that was the lead driver of the revenue beat. So, you know, that helped us out in the quarter to produce the excellent results that we did produce. Looking at the fourth quarter in terms of the parts and consumables front, I think, you know, one thing that's a little bit of a unique phenomenon for us is, as we go through the year, the parts bookings are usually their strongest in the first quarter, and then they just kind of slowly step down throughout the year. Mm-hmm. I think we'll see that here, in the fourth quarter, is what I'm anticipating. I think when you stack it up against the third quarter, it will likely be a little bit weaker, but that would be, I'd say, normal course for us. Got it. And you had an excellent Free Cash Flow quarter, in part due to the inventory drawdown. I guess two questions regarding that. Should we expect not as strong of a operating cash flow quarter as you rebuild the inventory for future capital projects? And now that you've completed that facility relocation, how should you think about CapEx in 2024 relative to 2023? Well, I'd say, you know, my hope is we are not done producing excellent cash flows. To your specific point on will we need to rebuild inventory, we had a significant backlog in capital, which we've been working down, and that's why I made the comment on, you know, inventory finally has started to turn and has come down. So, to that specific point, I don't think we'll-- that will be an issue for us until we see the next robust buying cycle and the backlog grows. So I don't think that particular issue is gonna be a headwind for us. What was the. CapEx mixture. So yeah, the facility project this year, you know, I give numbers on that every quarter, and I think we're gonna end up, of our overall CapEx, maybe, eight to nine million will have been for the facility in China. We have fairly robust demand for robotics from our sites, so I think you'll see us continue to make investments. If I back off the, we had a facility project in China, we have a facility project in our wood group in Europe, if I take those out, our CapEx was projected to come in a little over 2%. Mm-hmm. So I'll say, you know, for next year, you know, that's probably where we'll be, in that two, little over 2% range. Perfect. That's exactly what I was looking for. I appreciate the clarity, guys. You're welcome, John. Thanks, John. As a reminder, if you have a question, please press star one one on your telephone. Again, that is star one one. I'm showing no further questions at this time. I would now like to turn the conference back to Jeff Powell for closing remarks. Thank you, Amy. So before wrapping up the call today, I just wanted to leave you with a few takeaways. First, 2023 is shaping up to be the best year in our history across a wide range of metrics. We made solid progress this year on our efforts to accelerate revenue growth, win new business, and boost our profitability, despite the increasingly challenging macroeconomic environment. Our leverage ratio is 0.38, which positions us well to pursue new business opportunities, and as always, we expect to deliver excellent cash flows and optimize allocation of capital to maximize the value for our shareholders. With that, we'll conclude the call today, and I wanna thank you for joining us. This concludes today's conference call. Thank you for participating. You may now disconnect.