Nucor Corporation (NUE) Earnings Call Transcript & Summary

Good day, and welcome to the Nucor Special Investors Call. Today's call is being recorded. I will now hand the call over to President and CEO, Leon Topalian. Please go ahead.

Well, good morning, and thank you for joining our call today. With me and Charlotte are Steve Laxton, our Chief Financial Officer; Dave Sumoski, our Chief Operating Officer; and Chad Utermark, our EVP of newly created role, New Markets Innovation. We're really excited about the opportunity to share with you the news about our acquisition of C.H.I. door company from KKR, and and we've posted some slides that I'll be referring to here in the next few minutes on our Investor Relations page under Investor Events that will be referred to. I also want to point out that, obviously, between the time of the e-mail and our call this morning is not a lot of time for each of you to really dig in, we will be reaching out to you -- many of you individually to make sure we address and answer all of the questions that you've got, how this integrates into Nucor and again, why we believe this is going to be a tremendous fit and an opportunity for us as we move forward. So if we turn to Slide 2, which is the forward-looking statements, we will be making some forward-looking statements during this call. So turning to Slide 3 for an overview of C.H.I. We see C.H.I. as a best-in-class asset with a dynamic leadership team and workforce. I personally look forward to working with them and very excited to welcome the C.H.I. teammates to the Nucor family. We like C.H.I's. business mix, roughly 65% residential. And up to this point, Nucor has not really had a direct product exposure to the residential construction market. We're also excited about the opportunities. We see the position -- the C.H.I. team to grow quickly and gain more share in commercial and to pursue selective regional expansion initiatives for the business. C.H.I's stong financial performance over many years validates our optimism. KKR and the C.H.I. leadership team have done a phenomenal job with the business. The company has consistently grown its topline at about 10% per annum and generates EBITDA margins of around 30%, and C.H.I. is a relatively asset-light business with CapEx averaging about 3% of sales over the last several years. Now on Slide 4. The overhead door market in North America is large, and it's roughly about $5 billion in size with about 60% of that being residential, where resilient demand has been driven mostly by the repair and remodel activity. And although CHI is a leading player, there's clearly substantial opportunity for future share gains, especially in commercial, and once Nucor or C.H.I. as part of the Nucor team and family. It's also clear C.H.I. has a very differentiated competitively advantaged business model. Doors and related products are made to specific orders coming in from C.H.I's nationwide network of about 2,000 dealers who can rely on it for its quality, on-time delivery, ease of installation as well as its broader product line. By all indications, C.H.I. has consistently performed well for its dealers even as competitors with more complex operating footprints have struggled to navigate supply chain issues during the last 2 years. Turning to Slide 5. With what we've seen of C.H.I's teammates and leadership, we have no doubt that together, we can build C.H.I's enviable position and track record. We're confident that C.H.I's culture and values align well with our own, and it's clear to us that their leadership team respects and values the efforts of their team and that the C.H.I. team members understand the business model and our outlined objectives. Our strong sense is that C.H.I. team is excited to be joining Nucor and also sees the incredible potential of this combination. C.H.I. is well-invested asset base means that by itself, it can accommodate further growth. We expect that there will also be opportunities to leverage Nucor's nationwide footprint as we integrate C.H.I. into the Nucor family over time. Turning now to Slide 6. Steve Laxt will walk us through the next 2 slides. Steve?

Thank you, Leon. As many of you are aware, we've been busy adding to Nucor's market-leading abilities, focusing on areas where we believe there's substantial growth and competitive advantage for Nucor. C.H.I. is absolutely the right next step for executing Nucor's strategy of growth. This acquisition fits right in a sweet spot of our vision to expand beyond and complements Nucor's robust portfolio of value-added construction solutions, fitting squarely within Nucor's core capabilities as a low-cost manufacturer of steel construction products. C.H.I's business model, highly variable cost, conversion-based, solution-oriented, service-intensive and import resilient reminds us of some of the best attributes of our own steel products businesses. It represents a tremendous opportunity to execute on the expand beyond vision for Nucor's future by adding another market-leading platform to our Steel Products segment. As a segment that generated about $1.5 billion of EBITDA last year and just over $10 billion in revenue, C.H.I. will have significant incremental growth opportunities in commercial construction applications where we can leverage Nucor's position as already a leading solutions provider. These are positions that complement our abilities in beaming, choice, decking, metal buildings and, of course, insulated metal panels and racking and we've recently established Nucor as a strong national competitor. So while we do really like the residential market exposure C.H.I. brings we also see substantial upside potential for C.H.I. and the non-residential markets as part of Nucor. Collectively, these solutions-oriented products businesses can generate strong free cash flow cycles, and for Nucor increasing growth opportunities and they distinctly differentiate Nucor as a leading provider in construction industry. We're now on Page 7. We'll be acquiring C.H.I. for $3 billion on a debt-free, cash-free basis. We expect to close in June following HSR review and other customary closing conditions. Purchase price represents about 13x EBITDA for a well-run business that has a demonstrated track record of high-margin growth and a clear runway for more of the same, especially as part of Nucor. We expect to be able to rapidly further scale this business through our market share gains and potentially through acquisitions. Continued growth of the overall market for [Technical Difficulty]. We look forward to adding C.H.I. and the teammates to the Nucor family of industry-leading portfolio of high-cash generative steel construction products businesses. Okay. With that, let's open up the call for questions, operator.

[Operator Instructions] We will now take our first question from David Gagliano from BMO Capital.

Obviously, I haven't had that much time to get into the details here. So I guess I'll ask the question that brings to mind, at least on my side. How would you justify paying 13x EBITDA trailing 12-month EBITDA when your stock is trading 4x-ish trailing 12-month EBITDA. And what are the synergies associated with this transaction? If you could give us a dollar figure, that would be great.

Yes, David, thank you for the question. And look, I'll begin with the backdrop that Nucor in our minds, is incredibly undervalued. We believe our stock price has a much higher growth prospect, and we're trading well below what we can and sustainably provide back to our shareholders for the long term. But if you think about the public sector and public companies in the building sector like C.H.I. They're trading at 13x or above, but none of them have the return metrics and growth prospects of the C.H.I. We believe it is the best company that we've evaluated over the last 2 years because we've been watching and following C.H.I. for just over 2 years now. It is the best company out of the thousands that we've evaluated in its performance metrics. And so that is why we believe it's worth a premium valuation and why we believe over the long term, it's going to continue to generate incredibly strong returns and free cash flow for Nucor. Steve, if you want to maybe touch on the second part around the synergies?

Yes. Thank you, David. There's a couple of different synergies here with C.H.I. First, because of this fit with us, we have -- this is a company that's grown a lot in the past, and it will accelerate that growth under Nucor. If you think about the capabilities we have on the nonresidential construction side that amplifies an already strong growing company. And of course, we do have some supply chain integration synergy benefits there as well. So those are the 2 main sources of synergies, accelerated growth and supply chain benefits.

I'm sorry, can you quantify the synergies, please? I didn't hear that number.

David, we didn't specify what the dollar value is. Again, while there is direct synergies in the steel that they use, and again, we think about the expansion in Crawfordsville, for example, with our Galvalume and painted product, 100 miles away from their largest facility, there will be some synergies. We haven't qualified or quantified that yet. We will be doing that here shortly, but it's really the growth prospects. And we think about this sector, the garage door and overhead door sector is a steel-intensive component business, whether it be the rail, springs, doors themselves, the insulated panels that, again, marry up incredibly well for our current downstream businesses and portfolio. We believe there's going to be significant growth opportunities as well as synergies to be achieved in future months and years to come.

David, maybe to frame it just a little bit, give you a little bit more quantitative number there. The supply side benefits alone represent about 2% of revenue. So if you think about a typical deal, you usually get around 4% of revenue synergies. We're in line with that, but it's going to come from a split of accelerated growth and supply chain. And so this cost side or supply side represent about 2%.

Okay. And just last question for me, quickly. How will this be reported on a go-forward basis?

This will be reported in the Steel Products segment.

We will now take our next question from Seth Rosenfeld from BNP Paribas.

I've got a couple. Just kicking off with regards to the EBITDA margin performance. Can you give us a little bit more color on how margins compare to the trailing 12 months using the valuation versus historical trend? I was just a bit confused, the market share figures and the reported 30% margin, that would imply an EBITDA of about $150 million versus trailing 12-month $230 million. To get to the $230 million with the market share figures of market sales -- market scale to apply about a 45% EBITDA margin. Give us a bit of color on how margins have progressed over recent years. Obviously, the last year has been very unique. Has there been a period of kind of over-earning versus what we should model going forward?

Yes. Thanks, Seth. Good question. This is a company that had EBITDA margins in the upper 20s or low 30s percent for the last couple of years. So when we use a 30% figure, that's a 5-year -- that's in line with a 5-year average. If we look at the revenues of the company on a trailing basis, it's around $600 million from this June or we expect this June to finish. So we're giving you figures that are trailing 12 months from June of '22, looking back. Does that help?

It does. It's doesn't square with the figures for market size and market share. So if you look at the $5.1 billion market and your reported market share for resi and for commercial, it seems to not align.

Yes. So some of that data on market share is based on third-party consulting health and it's 2021 data looking back.

Okay. Understood. Maybe a second question, please in regards to the growth strategy. Obviously, you plan on growing this business quite significantly. Can you give us more color on what parts would be organic versus inorganic. It seems like from your prepared remarks, on the commercial side, you see an opportunity to expand existing facilities. What will be the CapEx implications of that? And given the low consolidation of the market overall, how do you think about the opportunity to further lead M&A in the space?

Yes, Seth, maybe I'll kick this off and ask Chad Utermark to speak a little bit more to the overall growth prospects. But as you mentioned, today, on the residential side, C.H.I. has about 14% of the overall market share. We believe there's great opportunities to continue to increase that as we move forward. The commercial side is roughly about 4% of the overall. So as we think about their channels to market, that goes through a massive dealer network, not unlike a dealer network that Nucor is established on our commercial side and our building systems and other footprints. We believe that the marriage of those 2 sectors for the commercial growth is going to be a unique value proposition that Nucor can help leverage with C.H.I. But the other thing to keep in mind is the current 2 operating units are roughly running about 60% utilization. So already, we have a 40% opportunity to increase utilization rates and what they currently have. And it's really opened up, it's really from a -- in a Nucor's position, a very CapEx-light requirement, but we have a lot more growth that we can take on board with the current footprint before we would need to expand beyond what we currently have and -- or C.H.I. currently has. Chad, anything you'd add?

Just a couple of things, and I would just echo again. I think these are CapEx light opportunity in their existing operations. We've got a chance to see both facilities in the Midwest and there's ample room to grow with fairly low CapEx expenses. We've touched on the commercial side and the growth potential that C.H.I. has. And we look forward as we get in, get this deal done to expand on that and create these opportunities because they really have a low market share in that commercial space. And don't forget, even on the residential, they're at 14%, so there's room to grow. Their facilities are in the Midwest. While they do reach geographically across the U.S., it appears to be a little bit more regional right now. I think there's opportunity to expand that. We've got existing facilities around the country. We'll look at those opportunities as well. There's some correlation with the insulated panel business that we discussed earlier, where some of the processes are very similar. So as we get this deal done, we're going to grow this company. I mean that's the story here.

We will now take our next question from Timna Tanners from Wolfe Research.

So I wanted to ask a little bit more about the embedded assumptions in the market outlook in this deal. I think looking at retail and warehouses and residential, there's some concern that this could be top of market. I know last cycle, you talked a lot about selling shares at the top and buying through the downturn. So I guess my first question is just really, can you talk about why now. And what's your outlook for these end markets that's embedded in your assumptions?

Yes. Let me take it off and obviously, Chad, Steve, any additional comments to make. But in -- we see great growth in this sector. And while there's some balancing, it is still a rapidly growing market. So data warehousing, digital storage, cold storage, the chip manufacturers that are building the giga factories and battery -- lithium battery factories that are being announced and continue to expand. All of those require overhead doors. And so that market, again, operates independently of the traditional cyclicality of steel. So projected growth, as we see in Dodge and others, expect nearly 2 billion square feet of warehouse space to be added in the next few years. So we see this as a continued incredibly strong market. The question around why. And again, one of the things that we did 2.5 years ago when I took over as CEO, we adopted our new mission statement, 8 words, grow the core, which is our core steelmaking businesses. The new Sheet Mill in West Virginia, the new micromill in Lexington, North Carolina. The expansion of Galvanize and Galvalume and painted products coming out of Crawfordsville and on and on. But the expand beyond piece is really where Steve latched in, and how Hoffman have spent a majority of their time looking at over 2,200 companies, none of which operate with the growth and return metrics of C.H.I. So the now piece is we see this as a great fit. Culturally, they take an incredible care of their team. Dave Bangert is the current CEO of C.H.I. He and the entire executive leadership team are going to stay on board with Nucor as we transition. So again, the now is really -- it's the right time. And again, we see great growth opportunity as we move forward. Chad or Steve, anything you'd add?

I think Leon summed it up very well. And Timna, as you know very well, we deploy capital for the long term, and we remain very confident that this is going to drive incremental value in Nucor over a very long period of time.

I'll just add one thing, Timna. While we look at that residential space, I know everybody is focused on interest rates in the economy. But just a couple of things. First of all, when you really look at the housing inventory out there right now, it is very low compared to historical times. So we still believe there's a lot of opportunity on what we would call new builds. Also, the trend working from home, shifting demographics, we think that there's still a strong story going forward over the next 3, 5, 7 years in housing. So I think I just wanted to point that out that we're pretty excited about that space as well.

Touch on the 70% as well on the retail or residential space.

Yes, this was surprising when I got a chance to look at this business, but again, 70% when you look at that residential is repair and remodel and the opportunity for that to continue to grow. The trends that are out there now with garage doors being a part of curb appeal and where people are thinking about reinvesting in their homes. That's becoming a significant opportunity for people to add value to their home. So it was shocking to me to see how much the garage door business is in that repair and remodel.

Great. Okay. That's helpful extra color. And especially residential is a lot bigger, and you talked a lot more about commercial. I guess my only other question, and I'll hand it off afterwards the system. We had assumed an aggressive buyback program given your strong cash flows, especially in recent strong markets. So I wanted to know if we should think differently about capital allocation if you're going to shift more toward acquisition mode or how to think about buybacks going forward?

Timna, I'll answer that one. Newport had a long established capital allocation framework, and that's not changing. We've always had as our top priority to reinvest in the business and to grow value through capital deployment in our business. And so this is consistent with that. We have made significant shareholder -- share repurchases over the last couple of years. And of course, we're committed to maintaining and growing our dividend, something we've done for 49 straight years. In the first quarter, Timna, we bought back over 900 million shares of Nucor stock. So we're continuing to have a balanced approach on capital allocation. That's not changing.

We will now take our next question from Emily Chieng from Goldman Sachs.

My first question is just around how should we thinking about the integrated product offering Nucor now has following the acquisition of C.H.I. and the past acquisitions of the insulated metal panels business and racking solutions. Essentially, when Nucor goes to market, are you now thinking about offering a package deal? Or should we be thinking about these businesses still operating distinct from each other?

No. Look, great question, Emily. And you may remember, when we met and spoke probably a year or so ago, about 1.5 years ago, Nucor launched our Construction Solutions group. This group is driven to bring together Nucor's complement of offerings in the construction business to our customers, to the architects, to the engineers to make sure that we leverage the very breadth of the Nucor offering to the marketplace. Again, not just in sales, but technical capability to offer a differentiated solution. So this fits incredibly well into that integration. So Chad Utermark that's joining us on the call today was EVP over the Products Group. Chad now moves into the new markets in Innovation Group, which now will marry the best of all of that together. So under his responsibility will be the insulated metal panels, the racking businesses, all the products group integration as well as the new company C.H.I. that will fold into the Nucor family in the coming weeks. So that offering is going to absolutely be tied directly into what we're doing today. Again, with the complement of the residential piece that C.H.I. brings to the table today, it's -- we believe it's going to be a very seamless and smooth integration and one that's going to bring great value to our shareholders.

Understood. And maybe a follow-up just on the acquisition piece. You're going also into the rubber door segment here. But how should we think about your appetite to perhaps go a little bit more tangential in nature with your acquisition targets? And should we be expecting more to come through the course of this year in terms of further acquisitions?

Yes. I'll try to do my best in keeping it very ambiguous to answer your question, and I'm obviously joking a little bit, Emily. As we talk about expand beyond, one of the things that we've tried to do in past, sit down with you and other analysts is to frame up, well, how far does that go. And what I would tell you is C.H.I., insulated metal panels, the racking business is sort of that one standard deviation step away from the traditional steelmaking lanes that we've operated in over the last 5.5 decades. We're not going to go into services. We're not going to go into these very disparate manufacturing sectors that Nucor doesn't bring any efficiencies to. The reason this fits incredibly well is Nucor's bread and butter, not only from a cultural standpoint, but is the overall manufacturing efficiency that we bring. C.H.I. has that exact same model and is one of the most efficient manufacturers in the sector. The cultural fit, the margins and growth prospects and that future opportunity are all the reasons why we think this makes an incredibly strategic fit and one that isn't so far out. It does bring some unique opportunities to leverage Nucor's breadth, but we believe this is right in our wheelhouse of what we're looking to do as we grow Nucor.

We will now take our next question from Andreas Bokkenheuser from UBS.

Just 2 quick questions for me. Number one, I know it's difficult for you to obviously comment on why KKR is selling, but any insight as to why they are selling now. I guess it's the first question. And second of all, when you kind of look slightly longer term, as you said, you invest long term and you think about the CapEx dollars that's going to go into more expansions. Looking upstream versus downstream, you've obviously already announced your EAF expansion. Where do you think going forward that CapEx is going to be weighted towards? Do you think we're going to be more in the downstream CapEx environment for you guys? Or is it going to be continuous focus on upstream investment as well?

Yes. Let me start with the first part of your question, Andreas. And as we think about why KKR is selling now, if -- you can obviously read their press release this morning. But in the conversations we've had over the last weeks, this is a business KKR has now owned for 7 years. And they've been very deliberate in how they were going to sell and who they were going to sell to. One of the things that KKR has stressed and shared with us over the last, again, weeks and weeks was that they weren't just looking to flip this company. They wanted to bring it to a strategic that saw the same fit and value that would also offer the same cultural support and tie for their team members at C.H.I. So Nucor became an incredibly strategic fit in both senses, a, as a strategic company, but also as the strategic fit for them to sell. So it really ended up being, again, best of both worlds for both of us. The second part of the question, Steve, maybe you want to start off.

The second part of the question, Andreas, was around outlook, around capital deployment as we move forward. And as you know, we have -- at the end of this year, we will have completed about $4.5 billion of investments in our core businesses. Those will generate somewhere around $600 million of incremental EBITDA at midpoint of cycles. And then we have another $3.5 billion or so that we've announced future expenditures through the next several years that also are tremendously accretive to earnings. And on top of that, you've seen us do a few acquisitions. Most of those have been in the downstream area. So this will be our largest acquisition that we've done about $2 billion in the last 1.5 years or so on top of this. So what you're seeing us do, Andreas, is deploy the capital across the spectrum that is consistent with the strategy that Leon outlined earlier to grow our core and expand beyond both.

We will now take your next question from Alex Hacking from Citigroup.

I have a couple of questions. On the first one, how fungible is the manufacturing capacity between retail and commercial products? So if there's a slowdown in residential construction, can you kind of shift manufacturing both the nonresidential side? How does that work?

Yes, Alex, let me kick it off, and Chad, if you'd add some comments. As we think about the opportunities, as we mentioned earlier, it's about 14% of the residential market that they currently have. We have no plan of stopping there as well. We think there is a differentiated value opportunity here. When we think about the quality of supply chain and just the delivery, the contrast between C.H.I. and their competitors is stark. C.H.I. is turning orders around from order entry to delivery, which they control and they deliver. Their truck drivers will actually be on the site and help with the installation. It's about 2 weeks compared to the industry market that's measured in 20 to 30 weeks. So there is a unique opportunity there to continue to grow that. But the really cool part of that residential piece, as Chad mentioned a few minutes ago, is that 70% of what they're generating in terms of that return is coming from repair and replacement. The highest return on investment in the residential market for homeowners is garage doors. It is the single greatest return on that investment. It's better than a kitchen remodel, bathroom remodel. And so again, that is a big, big piece of the residential. The commercial has huge upside. At 4% today, again, their dealer network relationships, combined with Nucor's dealer network relationships offer a very, very synergistic opportunity to grow that very rapidly. And again, that is what we're planning on doing and how we're planning on moving forward.

Yes. I think part of your question was their ability to go back and forth, and absolutely, they can make both commercial doors as well as residential doors. They're doing it now. And so if the demand profile gets stronger in a certain segment, they have the ability to meet that demand. Again, we're going to grow in those areas. And I'm just going to add on to what Leon said. As we talk about this portfolio of Nucor's downstream products, when you think about joist and deck and where we started and where we're at now as a market leader. When you think about pre-engineered metal buildings and where we started and now as one of the top leading pre-engineered metal building companies out there. Let's just talk about that for a second. We have over 3,000 builders that are signed up to build our pre-engineered metal buildings. We make over 10,000 buildings a year. Think about all the commercial doors that are in those buildings. Some of them have them 10, 20, 30, 40 doors in those buildings. So to me, there's a great opportunity for us to partner with C.H.I. and bring the power of Nucor to the marketplace. And again, we're going to grow this business. It's going to grow.

Okay. And then I'm not sure if I missed this, but did you disclose or are you going to disclose how many kind of pull-through tons of steel are involved in this transaction?

Alex, your question, how many tons of steel are they consuming annually?

Yes, that's correct.

Yes. It's roughly about 50,000 tons of product today.

We will now take our next question from Curtis Woodworth from Credit Suisse.

I just wanted to see if you could provide a little bit more historical context in terms of financial performance for the business. There's an article this morning out saying that 2015 margins were around 21%, up to 35% today. So can you just kind of frame out what was EBITDA for this business 2 to 3 years ago? And then do you have an estimate for what calendar year EBITDA will be this year.

This is Alex Hoffman. I would just point to the fact that over time, the margins have consistently grown in this business. And so KKR has been relatively transparent about where this was a couple of years ago. These margins for about 10 years have averaged in the low 20s until they bought the business in 2015, brought a new leadership team, invested in new processes, new operators and different processes to go to market. That has grown on a consistent basis to the upper 20s to the lower 30s. Today, it's a little higher than that.

Okay. And I guess just in terms of sort of the fit here, is it -- is the thought process more that you already have such substantial share in the joist and deck and more on the commercial side, and this kind of gives you more balance with exposure to residential. And then just on a go-forward basis, when we think about the last couple of years in the pandemic, there's been massive remodeling efforts. Obviously, the housing market has been very strong. So how do you get comfort that apart from maybe some of the synergies you talked about on the commercial side that you can continue to grow this business. I mean it seems like you've had an extremely positive macro environment the last 2 years. So in terms of sort of stress testing this in a housing downturn or in an environment where the consumer spending maybe tighten up a little bit. Just how do you get comfort around that?

Yes, Curt. And look, all factors and thoughts and points that we've evaluated over, again, a very long period of time. But let's go back to the great financial crisis of 2008 where the housing bubble burst. At that time, there was such a glut of inventory that that sector took a really hard hit. But if you look at C.H.I's impact, it was relatively benign during that time compared to what the other industry sectors and public companies in the building sector had faced. So as we look at today, we're not -- and Chad mentioned this a few moments ago. Obviously, we're well aware of what's happening in inflation, we're happening and watching very closely what the Fed does with monetary policy and how it plans to try and curb that. So as we think about that as a potential headwind, the overall market today is still underserved. In most segments across the U.S., homeowners are looking for those homes to buy. And so on a unit basis, there's still great demand. Again, understanding that inflation is there, we don't see this drop off because of that need -- because that strong need is going to be there. The other piece of that, again, it comes back to the repair and replace. And that is a big segment that stays very consistent through cycle that we think there's huge opportunity. And then again, you mentioned it, but I'll just reinforce that. The 4% commercial share that C.H.I. has today has huge upside. Again, the marriage and tying that in very strategically with the Construction Solutions team, our product and portfolio of businesses in joist and deck and insulated metal panels and racking provides a unique platform for us to expedite that growth. Alex, anything you'd add on that?

I was going to just to touch to your points during the '08, '09 time frame for peak to trough, they lost only 16% of revenue. It hurt, but it was -- they got back on track almost immediately. And if you chart the growth rate over time for this company, it's incredibly unique. The last 5 years, 10 years, 20 years, 40 years, they grow at an average rate of 10% per year. If there's a downturn, they snap back almost immediately to that line. And it's through -- they look through it, and over time, it's back to 10% per year. We don't have many businesses like that, that continually grow at such a consistent basis. It's one of the reasons we're so excited about it.

As there are no further questions at this time. I'd like to turn the call back to your speaker Leon Topalian for any additional or closing remarks.

Well, again, thank you for your interest. Thank you for joining us on such short notice. As we've shared, and you can hear in our enthusiasm and passion, we're incredibly excited about this business. We're incredibly excited by welcoming the nearly 800 team members of C.H.I. to the Nucor family in the coming weeks and continuing to grow this business for our future returns, for our shareholders. Thank you for your interest in Nucor.

Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.