Greetings, and welcome to Valmont Industries, Inc third quarter 2022 conference call. At this time, all participants are in a listen-only mode. A question- and- answer session will follow the formal presentation. We ask that you please limit yourself to one question and one follow-up and return to the queue to ask additional questions. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Renee Campbell, Senior Vice President, Investor Relations and Treasurer. Ms. Campbell, you may begin. Thank you, and good morning. Welcome to Valmont Industries Third Quarter 2022 earnings call. With me today are Steve Kaniewski, President and Chief Executive Officer, Avner Applbaum, Executive Vice President and Chief Financial Officer, and Timothy Francis, Senior Vice President and Corporate Controller. This morning, Steve will provide a brief summary of our third quarter results, commenting on our markets and long-term business strategy. Avner will review our financial performance and provide our outlook and indications for 2022 and preliminary indications for 2023, with closing remarks from Steve. This will be followed by Q&A. A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the Investors page at valmont.com. A replay will be available on our website later this morning. Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussions, is outlined on slide two of the presentation, and will be read in full at the end of today's call. I would now like to turn the call over to our President and Chief Executive Officer, Steve Kaniewski. Thank you, Renee. Good morning, everyone, and thank you for joining us. On behalf of the entire Valmont team, I would like to start today's call by offering our thoughts to those impacted by the devastation caused by Hurricane Ian last month, which impacted seven of our facilities in Florida and the Carolinas. We are saddened by the loss of life and destruction we have witnessed and wish our team members, their families, and the people in the affected regions a swift recovery from this historic storm. This storm serves as a tragic reminder as to why we speak a lot about grid hardening and grid resiliency. Utilities and other infrastructure companies have invested and continue to invest in structures that will better withstand natural catastrophes. In the case of Hurricane Ian, recovery efforts were sped along by having a more resilient infrastructure in place, allowing electricity and communication services to be restored very quickly, which is helping the region return to normalcy faster. The industry has done a tremendous job of improving the grid when considering the intensity of recent storms. However, there is still a significant amount of grid hardening yet to be done, specifically in areas susceptible to natural disasters. As an industry leader, we continue to innovate to provide better solutions, and we are proud to work with our customers globally to improve the resiliency of the grid. Turning to slide four and a recap of our third quarter. Demand remains elevated across all of our end markets despite macroeconomic volatility, reflecting the ongoing investments in global infrastructure and agriculture and our customers' preferences for our products. We achieved another quarter of record sales and earnings per share, driven by strong demand and the outstanding contributions of the entire Valmont team as they live out our core values. Our businesses have focused on technology-driven solutions to help our customers operate more sustainably. I am very proud of what we were able to accomplish this quarter. In addition to our team's flexibility and responsiveness to meet customer demand, we remain disciplined in our pricing strategies to ensure we are capturing the full value added by our distinct offerings, as well as staying ahead of inflation, specifically wage, energy, and administrative expenses, such as healthcare and insurance. It's important to note that our approach to pricing is not to simply adjust for variations in cost, but to also lean into the value we offer through our highly engineered solutions, superior ship complete on time, and unmatched support for our customers. Moving to the third quarter results. Sales of $1.1 billion grew 26% year-over-year, driven by a combination of sustainable pricing and mid-single-digit volume growth, resulting in the eighth consecutive quarter of double-digit year-over-year sales growth. Infrastructure sales of $778.4 million grew 23% year-over-year, with strong sales across all product lines. Investments in greater resiliency and renewable energy sources, upgrades to aging infrastructure, and ongoing 5G build-outs continue to drive broad-based market strength globally for our products and solutions. Additionally, funding from the Infrastructure Investment and Jobs Act is being deployed, and we expect the Inflation Reduction Act to be appropriated during 2023, along with other government spending initiatives across global markets. We believe these are long-term tailwinds for our businesses. Agriculture sales of $327.3 million grew at 36% year-over-year. The combination of strong global demand for increased food production, along with widespread drought conditions, is keeping farmer sentiment favorable, encouraging irrigation and technology investments. As we had expected, the impact of our typical third quarter seasonality was less pronounced this year as we successfully delivered backlog from the second quarter. Ag market fundamentals and positive farmer sentiment have also contributed to our robust project pipeline, notably in the Middle East and Africa. Severe drought conditions are persisting across many key global markets, putting pressure on crop yields and expected stock levels, keeping global commodity prices elevated. Turning to slide five. We have been executing on our three strategic pillars of pursuing operational excellence with ESG focus, expanding the markets we serve, and using technology to drive productive disruption across all our organization. We are seeing the benefits of our strategic approach as we build a more resilient business. As an example, we have grown our ag tech sales with attractive margins to approximately $83 million year to date, an increase of 15% over last year. On track for full year sales to exceed $100 million. Another example is our focus on high growth opportunities in end markets with favorable and global long-term demand trends. We have done this through targeted investments in organic growth and strategic acquisitions, such as our recent purchase of ConcealFab in the telecommunications market. On slide six is an example of our sustainable solutions and a testament to our strategy and disciplined capital allocation framework. Over the past four years, we have successfully entered and grown our solar market presence, both in infrastructure and agriculture, through acquisition and investment. The acquisition of Convert Italia in 2018, later rebranded as Valmont Solar, marked our entrance into utility solar markets. Over time, we have solidified our strategic focus on distributed generation projects that offer a more attractive margin profile, less raw material risk, and faster completion than large-scale utility projects. Our key international markets of Europe, North Africa, and Brazil have more pronounced barriers to entry and favorable legislation that helps drive demand. At the same time, we have been successfully expanding our presence in the U.S. and are targeting additional growth as we move forward. Our competitive advantages of manufacturing capabilities and a global supply chain are enhanced by our deep relationship with developers and utilities. This year, we expect to nearly double our sales to approximately $120 million and anticipate continued robust growth in 2023. In 2020, within the agriculture segment, we acquired a majority stake in Solbras. Their services have since been integrated with our world-class Valley dealer network to provide global ag solar solutions. With the Solbras investment, we became the sole global player in this underserved market, which has tremendous growth potential, allowing farmers to enjoy our scale for projects that are typically much smaller than utility or distributed generation. Also unique, our dealer network offers unparalleled service and support in every region of the world, positioning us to be the partner of choice for a variety of applications. Whether the grower is looking to meet Scope 3 emission goals, realize tax credits and energy savings, or produce alternative power generation, our Valley dealers are there to help. We expect continued strong growth in this business. Since entering the market, we are on track to exceed $100 million in ag solar sales by the end of this year. We are very pleased with the execution and performance of both solar teams as meaningful demand of renewable energy sources is expected to continue. In summary, we performed well during the third quarter, building on our momentum from the first half of the year. We are on track to deliver our best full-year earnings per share in the history of the company. Demand for our infrastructure and agricultural products remains robust, and our team is demonstrating our core values while providing outstanding customer service. Our focus on operational excellence is helping us to navigate external challenges, reinforcing our confidence that we are on the right path to deliver even greater value to our customers and to our shareholders in 2023 and beyond. With that, I will now turn the call over to Avner for the third quarter financial review and updated outlook. Thank you, Steve, and good morning, everyone. Turning to slide eight and third quarter results, my comments will focus on the adjusted results as outlined in the press release and in the Reg G disclosure in the presentation appendix. Operating income of $114.1 million grew 42% on sales growth of 26%, with operating margins increasing to 10.4%, reflecting higher volume, improved fixed cost leverage, and continued execution of our disciplined pricing strategy. Diluted earnings per share grew 36% to $3.49, attributable to higher operating income, partially offset by a higher tax expense due to a change in the geographic mix of earnings compared to last year. Turning to slide nine. Operating income for the infrastructure segment increased to $93.6 million or 12.1% of sales, driven by favorable pricing and volume growth. Moving to slide 10. Agriculture segment operating income increased to $47.4 million or 14.6% of sales. The benefits of higher average selling prices and additional volume leverage were partially offset by higher SG&A, including incremental R&D expense for technology investments. Turning to cash flow on slide 11. Year-to-date free cash flow of $117 million reflects a meaningful sequential improvement driven by diligent working capital management, including a reduction in inventory. We expect full-year operating cash flows to be in line with net earnings in 2022. Turning to slide 12 for a summary of capital deployment. We continue to maintain a balanced approach to capital allocation by reinvesting in our businesses, which enables us to grow organically and inorganically while returning cash to shareholders. Third quarter capital spending was $17 million, and we returned $22 million to shareholders through dividends and share repurchases, ending the quarter with approximately $166 million of cash. Moving to slide 13. The strong cash generation this quarter allowed us to reduce total borrowing by approximately $60 million, further strengthening our balance sheet. Total debt to adjusted EBITDA of 1.5x remains within our desired range of 1.5x-2.5x. I would now like to review our updated 2022 outlook as shown on slide 14. We are increasing our expected sales growth due to strong third quarter results. We now expect full year 2022 net sales to grow 22% to approximately $4.3 billion, which includes an unfavorable foreign currency impact of approximately 2%. We are also tightening the range of expected adjusted earnings per share to $13.65 and $14. We are confident in our outlook for the balance of the year based on the execution of our operations, our robust backlog, and strong project pipeline. A reminder that project timing in many of our businesses can be hard to predict, and that changes in our geographic mix of earnings may have a more pronounced impact on our effective tax rate. Turning to slide 15. In addition to updating our 2022 outlook, we are providing preliminary indicative guidance for 2023. Building on Steve's earlier comment regarding global demand trends and maintaining our pricing discipline, we expect 2023 year-over-year sales growth of 6%-9% and EPS growth of 11%-15%. This assumes steady market demand, stabilized raw material costs, inflation in line with global central bank expectations, and continued growth in R&D investments. Other assumptions are provided on the slide. We continue to leverage our scale and global footprint to improve margins and mitigate supply chain challenges. Strong cash generation is enabling us to support our capital allocation framework, putting us on the path to achieve our long-term financial targets and drive sustainable shareholder value. With that, I will now turn the call back over to Steve. Thank you, Avner. Looking at the fundamental market drivers for our segments on slide 16, the trends that have supported us over the last several quarters appear set to continue, providing future growth opportunities. We are delivering great results due to robust demand drivers and our ability to increase output to meet this demand. While these end market drivers remain strong, we acknowledge that growing economic uncertainty is creating headwinds for certain sectors of the economy. Demand for our products is less sensitive to general economic factors. Our backlog solidifies our confidence in our revenue projections. We are investing in capabilities, technologies, and strategic capacity improvements to better enable us to deliver on our long-term goals. Turning to slide 17. In summary, we have demonstrated an ability to grow sales through innovation and execution, bringing unique solutions to solve the complex needs of our customers. We are doing this by advancing operational excellence across our global footprint, supported by a strong and flexible financial foundation, enabling us to invest in our employees and technology. Our disciplined approach to capital allocation has served us well, and we remain committed to making strategic investments to facilitate the achievement of our long-term goals that we believe will result in greater value creation for our shareholders. I will now turn the call back over to Renee. Thanks, Steve. At this time, the operator will open up the call for questions. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. To allow for as many questions as possible, please limit yourselves to one question and one follow-up. One moment, please, while we poll for questions. Thank you. Our first question is from Chris Moore with CJS Securities. Please proceed with your question. Hey, good morning, guys. Thanks for taking a couple of questions. Well, just when you think about visibility for 2023, which subsegments are likely least impacted by, you know, further rise in interest rates or a modest recession? Hey, Chris, this is Steve. You know, we've been looking at, obviously across all of our end markets, and the macros really across all of them are in very good shape. To your point about interest rates, not that susceptible at this point to any kind of interest rate increases. The utility CapEx model was just announced about a month, maybe a month and a half ago. That's in the 6%-8% growth range. You heard the two telecom CEOs of AT&T and Verizon in the last week reaffirm their CapEx into next year. We know agriculture is really independent of kind of all of the general recession commentary that's out there, and that's moving forward. You know, lighting and traffic or transportation is both the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. There's really strong drivers across all the markets. Even coatings with the general, you know, recession talk tends to follow GDP. The fact is that it supports a lot of our own business. As such, with the markets being up, you know, we should see growth there too. Really not that susceptible at this time to any kind of the general slowdown that's out there. Got it. Very helpful. Just as my follow-up, you talked about telecom CapEx being reaffirmed. Telco sales were very strong, I don't know, $92.8 million in Q3. Is that a sustainable level, or is it likely to be, you know, kind of lumpy, you know, up and down over the next year or so? You know, historically, telecom was extremely lumpy. It would be up, it would be down, it'd be up, it'd be down. That was when I would say carrier investment had other priorities. If you think of AT&T in the past putting money towards satellite and taking it from telecom. You know, the general consensus now is that even in a recession, nobody's gonna turn their phones off. They may cut cable, they may cut satellite. We think it'll be a smoother rollout, plus with the mandates for coverage that are out there, kind of keeps the impetus to move forward. Not to say that quarter to quarter, we won't see some, you know, ebbs and flows, but we don't anticipate any kind of massive pullback. Got it. I appreciate it. I will leave it there. Thanks, Chris. Thank you. Our next question comes from Brent Thielman with D.A. Davidson. Please proceed with your question. Hey, thank you. Congrats on a strong quarter. Steve or Avner, I guess my first question would just be with steel prices kind of recalibrating, where do you expect to be able to hold on to price, and where do you think you're gonna see some, you know, quicker pushback from customers, I guess, especially just considering the demand environment, you know, across all your product lines is pretty strong. Yeah. Hey, this is Avner. I'll start off. You know, so overall, you know, a couple of things here. First of all, you know, yes, we are seeing some moderation or reduction in steel and mostly HRC. But if you really look at the other part, right, we do use a lot of plate, and that actually stayed very much elevated. On top of that, right, we are seeing broad-based inflation across the board in many areas. Steve mentioned them earlier in the call. You know, you add on the energy and labor, et cetera. We are seeing broad-based inflation, and we are maintaining our price discipline. We continue to raise pricing where appropriate, and really have not needed to reduce pricing, evident by our strong demand, our strong backlog. At this point, I say that, you know, we are holding our pricing discipline, our pricing approach, and don't see any indications that we need to lower pricing. Yeah. I would add, Brent, that, you know, in utility, as you know, there's already mechanisms to give back, you know, any kind of reductions or increases in raw materials. That's been accounted for in our projections as we look forward. That's probably the biggest area that would be susceptible to it. Again, market fundamentals, what they are of supply and demand, we're looking at the value that we bring in that kind of environment and making sure that just because some headline costs move, there's other costs that have not or have continued to elevate. We'll keep a close tab on our, you know, factory outputs and hit rates and things like that. Yep. Okay. Appreciate that. Then my follow-up would just be, Steve, you touched on it in your opening remarks, but maybe just your thoughts on the timing and the positive implications of the Inflation Reduction Act on your various businesses and also whether, you know, any of the infrastructure bill is beginning to have any influence on the business today. Yeah. I'll start with the Infrastructure Investment and Jobs Act. That was, you know, the earlier approved bill that came through. We said it would take at least until the end of 2022 to start really seeing anything. We're quoting jobs now. Some of the appropriations have gotten through the states, you know, to work on the highway and lighting areas. That now is really starting to, I'll say, factor into some of the demand profile we see into next year. With the Inflation Reduction Act, there's a lot of good favorables in there, particularly around energy. Whether it's solar or the transmission sector, there's some real nice benefits for us. We'll see some of it start in early 2023 in terms of the solar markets because it kind of changes the project financials for the developers pretty quickly. Really for us, you know, again, to get through appropriations and things like that, it'll be later in 2023 kind of event. It provides good tailwinds, as we look at like 2024 at that point. Yep. Perfect. Okay. Thanks, guys. Thank you. Our next question is from Nathan Jones with Stifel. Please proceed with your question. Good morning, everyone. Morning, Nathan. We have started to see a lot of companies start to see inventory corrections from, you know, in the channel and from their distributors. I don't imagine that is much of an impact for you and that you don't have much inventory sitting out there that might need to be cleared. Can you just talk about any places where that might exist or doesn't exist, and what kind of impact that might have for you? Yeah, Nathan, the only place where we really have any inventory in the channel is in agriculture, with our dealer network, and they have actually had very low inventory levels as we've gone through the summer months. So there's no, let's say, overhang or correction there. If you take utilities direct to customer, if you look at telecom, there's a little bit of inventory, particularly with our Site Pro 1 components area, but no overhang. We're trying to meet demand there. You know, the lighting and transportation typically goes through our rep organizations, and they don't carry inventory. So I would say, there's not much of an inventory kind of correction, so to speak, in the industries we serve. That's what I figured. I want to talk a little bit more about pricing and the sustainability and strategic value pricing that you guys have looked at. Historically, pricing and margins has been correlated to supply and demand, and when that's tight, you've been able to generate better margins, and when it's not, margins have fallen. So it is cyclical, and your businesses don't tend to correlate with the business cycle, and we might be early in some of those cycles. Can you talk about, you know, anywhere where you think there's a difference? Obviously, supply and demand is tight now, and so you guys have a lot of pricing power. Do you think you can maintain that pricing even in environment which may be a few years down the track where that balance is not as favorable for you? Yeah, Nathan, I would say that, you know, we had to develop a true pricing muscle, so we're looking at it much more regularly. We have analysts that analyze it every day, every week. That's not a trait that we had in the past, and so now that's kind of embedded within the sales organizations. I'll say also what gives us confidence to hold it is our real push on operational excellence and building a supply chain team so that we see what's coming at us with a lot more visibility than we would have in the past. There's a materials council of senior executives in Valmont that get together on a regular basis to look at, you know, everything from hot roll to plate to zinc to copper. You name it. We look at it, and we look at what our positions are and what we should do. That's how we believe we'll be able to maintain a lot better pricing discipline, as we go out. I'll say lastly, from a capital allocation perspective, part of our problem in the past is overcapacity. I think we're being much more diligent in our capacity additions to really make sure that we're not getting too far ahead of our skis, so to speak. I think that in the markets we serve, which are fairly niche-y, can help keep things a lot more moderated than maybe in the past with some of the ups and downs. Thanks for that. I just had one more. I wanted to talk a little bit more about that ag solar business and the history of it. I mean, getting up to $100 million out of that is a pretty significant chunk of the agriculture business. Now, can you talk about, you know, where that's been historically? I don't think you've owned that business for very long, kind of what the growth rates have been and what you think the potential growth rates over a few years might be. Yeah, we you know bought it in maybe November of 2020, and it only had a couple million dollars, all Brazil-based. As we went through 2021, we really started to put together a team around it. We looked at where go-to-market would really be effective, how we could do many projects on scale. 2021 was kind of a year to build, and it's really paid off. Sometimes it's better to be lucky. Particularly in Brazil, where they changed legislation to give retail net metering. That's caused a quote-unquote, "a mini gold rush" around solar there. I think what we saw as a market driver for us was, you know, agriculture specifically needed to be good stewards of the environment, and many of their operations, as far-flung as they are, could go to solar with a good cost profile. We have the ability to buy at scale, to produce at scale. When we go against a local electrical contractor, we can obviously beat them. That's why it's accelerated as quickly as it has. We would expect at least a 15%-20% growth rate, you know, in line kind of with the solar market. It's pretty underserved at this point. You know, this is the advantage of having our dealer network that can. They do the exact same thing today. They run power, they erect things. They have the equipment, they have the know-how, and they can help them through. With our custom monitoring software, our customers can see what's there and how much it's producing. We feel very good about the growth trajectory in both the ag solar piece and the distributed energy piece. Great. Thanks very much for taking my questions. Thank you. Our next question is from Brian Drab with William Blair. Please proceed with your question. Hi. Thanks. First, Steve, just on that last question, ag solar, 15%-20% longer term, but I'm just wondering, you grew this thing from zero to $100 million in basically like a year and a half. Wouldn't 15% growth in 2023 be, you know, disappointing or the very low end of what you're expecting? Could this business potentially double again in 2023? It definitely has the potential to do that, Brian. You know, we're just looking at market CAGRs as we look out. Of course, we allocate capital looking further out. Yeah, as it gets off the ground and gets rolling, you'll see it's just, you know, the law of small numbers. We can double it pretty quickly. Right now it's building scale, and so that would be the only caution there is to build our sales teams, our engineering teams, build up the supply chain. In Brazil, it's strong. In other parts of the globe, we're still in the process of building that. You know, we've delivered some projects in, say, Bulgaria and the Middle East. Those will take time to build a further team there. It's got great fundamentals, and we have a good go-to-market strategy. Great. Yeah. The reason I think it's an important question, of course, is just that if you're able to add another $100 million, I mean, like, that accounts for a couple points of your organic revenue growth for next year, potentially from this business that has kind of popped up out of nowhere in the last year. I'll just ask one more question for now. You gave us guidance for revenue growth for next year. I'm wondering if you could potentially give us a little more granularity in terms of what your expectation is for volume pricing. Is there any contribution from acquisitions in there? What's the expectation for FX in that expectation? Thanks. Yeah, sure. I'll take that one. So we will provide additional data, of course, as we go into next quarter and finish through our budget process, et cetera. At a very high level, we should continue to expect mid-single-digit growth in the volume. Pricing, we're not gonna see anything nearly like we had this year. It gets more to a normalized and historical basis. On the currency, on the FX, right now we're seeing about a - 1% impact. That's kind of how we roll up pretty much to 6%-9%. At this point, we're not baking in any new acquisitions into those numbers. Pricing's positive, just to be clear. You're assuming maybe while- Pricing's positive. Pricing's positive. That is correct. Okay. Thank you very much. Thank you. Our next question is from Ryan Connors with Northcoast. Please proceed with your question. Hey, thanks for taking my question. You've covered a lot, so I don't really have anything new, but wanted to just clarify a couple things from earlier. You talked a little bit about, Steve, about when you talked about price cost a few questions back, and basically that, you know, for the orders that are already in the door, that's already baked in the cake. There's really no benefit or detriment when raw materials move. Is that really the case across the backlog? I mean, can you dive into that a little further on the backlog? Is everything in there pure escalation deflator, and you're not exposed to any risk? Is there any component of that where the things can move around? No. There are definitely areas that things can move around. On hot roll as an example, we can take positions. On zinc, we can take positions. On fuel and energy, we can take positions. On plate, we can't. The markets are too thin. They have too much variation with them. It's one of the reasons why you still see plate over $1,500 a ton, when hot roll is around $700 a ton. It's double, you know. There it has to be good inventory management. It has to be the right timing to bring in raw materials. Earlier in this year in the first and second quarter, we were still being pinched a little, because of the stubbornly high kind of plate number, you know, where the averages were starting to drop because of hot roll, and so we saw some of that. Now there's been a lot of stabilization in that raw material. Again, we've gotten much better at, you know, not worrying about literally supply. When we first had to buy it was hard to even get it in the marketplace. We kind of overdid it a little bit. That will help us as we go into particularly the first half of next year. The backlog, the further it gets out, is always a potential concern. Where we're at right now as compared to where we would have been a year ago, we're in just a tremendously better place. If you look at that $2 billion in backlog and kind of knowing what kind of margins we can get out of it, how we can perform with the tight labor markets, all the supply chain disruptions that have occurred, et cetera. Okay. That's very helpful. Thanks. The other one I had was, you know, on the issue of pricing in ag and irrigation, in particular, I mean, ag is not a bidding market for you like it is in telecom and transmission. You know, there's a bit more of a strategy and a game theory about how the different players are gonna position around price. I know some of the similar indicators coming out of the tractor type guys about what pricing looks like for next year. I mean, is it your intent to sort of be a price leader on the way? You know, just talk about your strategy. I mean, because there's a lot of uncertainty for the farmer. I mean, what is your sort of approach to pricing in such an uncertain environment as we head into the next big selling season there? Yeah. You know, we've always been a price leader, and, you know, we're looking at input costs and service levels and things you have to do to maintain that, which are very different than they were, let's say, during the last peak in 2013. You know, in 2013, you could outsource a lot of production pretty easily. There was available supply chain. This is a much different environment. We will maintain very, you know, value-based kind of pricing for all that effort and to make sure we can hold that. I think we went out just a couple of weeks ago with a 3% price increase between, you know, now and kind of the end of the year, just looking at all the factors that are out there. Ultimately, in this environment, with net farm income projections where they are, crop prices where they are, you know, if you talk to anyone during harvest, they'll say they got, you know, 280-300 bushels of corn under irrigation and maybe 75 or 80 under dry land. The value proposition is very strong for them. You get a crop. You need water to get a crop. You know, over time, we wanna put more in. We're starting to bundle the insights product from Prospera with the pivots. We've launched that over the course of this quarter. We'll put more and more things with the pivot to bring the value part of that up and maintain pricing. Got it. Okay. Thanks for your time this morning. Thanks, Ryan. Thank you. Thank you. Our next question comes from Brian Wright with Roth Capital Partners. Please proceed with your question. Thanks. Good morning. Can you give us how to think about the potential impact of Hurricane Ian on the backlog for next quarter? Or maybe that's too early, but just how to think about how that could build the backlog over the coming quarters, maybe. Sure, Brian. It's a good question. What we typically see when there's a large natural disaster in the utility space is we have to redo kind of where the backlog is gonna ship. You will have to create openings in the fourth quarter for some of the emergency kind of pull orders that would come in from the different utilities in Florida. We have to then push some of the existing orders out into the first part of next year. That's kind of the immediate whipsaw that you'll see. It really doesn't change the volume, so to speak. It just changes the kind of mix of products that may be coming through the factories. It's a lot, a little bit of turmoil. It settles down, the utilities all look, and then they really take a real assessment as to what is gonna be replaced with what kind of structure, and you'll see follow-up orders there. The longer-term effect is that they all now see what was done in South Florida around grid hardening and how quickly they got back up as compared to a Katrina-sized storm. It just reinforces with the PUC, with the government leadership, the utility leadership that they have to harden the grid. It just becomes a good, strong long-term demand driver. You know, there could be little spikes in demand, but there's never like, typically a massive spike. They had some inventory on the ground, we had inventory that they take, but you know, it'll just be a strong year as we look at 2023 because of that. Great. Also wanted to follow up on one more thing with the total debt to adjusted EBITDA kind of at the low end of the range here and just kind of how to think about that going forward in terms of M&A, especially kind of giving your success in the ag solar and not to put kind of any areas of specific interests, but just how you think about that kind of given where your capital position is and M&A activity. This is Avner Applbaum. I'll take that question. First of all, we're really pleased with the fact that we've really been able to generate cash over the last quarter and really strengthen our balance sheet. We have a lot of dry powder now, which we're in really good shape. Our capital allocation strategy has not changed, right? We have a lot of opportunities internally to invest in our portfolio, in capital and automation, et cetera. We do have actually a very strong pipeline of acquisitions. We are looking at the areas where we could really continue to add growth, like you said, in some of these markets that are really strong, like we've done ConcealFab last quarter. Steve talked about the solar area. We are targeting areas where we could really drive growth synergies and ultimately a strong ROIC. We're gonna put that balance sheet to use. After that, we return cash to shareholders through opportunistic share buybacks, which we continue, and dividends, of course. Great. Thank you so much. Thank you. Our next question is from Jonathan Braatz with Kansas City Capital Associates. Please proceed with your question. Good morning, everyone. Steve, on Valmont Solar, you mentioned that in your commentary that you're focusing on distributed energy. Is there a diminishing interest on your part in utility scale projects? No. In fact, you know, we spent the last couple of years really building up our team to handle the utility scale, particularly on a U.S. basis. But we just wanna be very disciplined about the kinds of projects that we take. You know, when the raw material inflation occurred around steel and then modules were restricted, you know, there were jobs out there that from a volume perspective, looked very attractive, but from an operating income perspective, would have been a disaster for us. There's enough market growth out there that we'll be able to take utility scale, but we'll do it based on kind of the right value for us and for whoever the developer or utility happens to be. We do have some orders in the U.S., but in terms of the large-scale bids, you will see us from time to time, you know, take those as we believe we can make money and lock in our risk around those orders. Secondly, what is maybe the prospects for additional large scale irrigation projects in Africa and the Middle East? I know you've had some here recently, but going forward, how do the prospects look for additional business there? Yeah, there's still a number of large projects out there, whether that is in North Africa or the Middle East. They are upscale to the likes of Egypt that we had earlier. There's a number of those. Then there is a real strong pipeline when you talk about the range of $10 million-$40 million kind of projects that exist. Again, it's food driven by the same factors, food security, growing more food locally, less susceptible to currency fluctuations. You know, all of COVID and the after effects have kind of reaffirmed countries' desires to create, you know, more stability in their markets that way. It's a good driver for us and good driver for the whole pivot industry, frankly. Okay. Thank you. Thank you. We have reached the end of our question-and-answer session. I would now like to turn the call over to Renee Campbell for any closing remarks. Thank you for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days, and we look forward to speaking with you again next quarter. Included in this discussion are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on assumptions that management has made in light of experience in the industries in which Valmont operates, as well as management's perceptions of historical trends, current conditions, expected future developments, and other factors believed to be appropriate under the circumstances. As you listen to and consider these comments, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties, some of which are beyond Valmont's control and assumptions. 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