Pentair plc (PNR) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to Deutsche Bank's Global Industrials Conference. I'm Andrew Krill. I work on DB's Multi-Industry & Machinery Team. We're really excited to have John Stauch here this morning, CEO of Pentair. And this is a fireside chat format, and we'll open the floor for questions later. But I think, John, you have a couple of opening marks for us?

Yes. First of all, dearest Andrew, thanks for being here. Great being out meeting with investors again. So I appreciate that. For those of you who are not as familiar, Pentair is about a $4 billion focused and diversified water company. Three main segments: Pool, which is our enjoy water segment, IFT, which is our move water segment and then also Water Solutions, which is our improved water segment. With that as a backdrop, and just like everybody to know that about 70% of what we do directly impacts either water scarcity, challenges and/or solves energy efficiency needs.

Great. Thank you for the intro. So we'll start with the first quarter. I think the diversification of your portfolio really shown through all segments very nice margin expansion, and this was in the face of double-digit declines volumes for the whole company in Pool down almost 30% in volume. So just can you walk us through how you're able to achieve that in a tough setup?

Yes. So I appreciate the question. I mean a couple of years ago, we started a transformation journey. There's 4 main themes for transformation for us, all supported by partners externally as well as large internal teams. The first one is sourcing, which I'll come back to. Second one is pricing. Third one is our operational efficiencies. And then the fourth one is our organizational excellence and/or the structures of our organization, where the skill sets are, where we should be spending our money. Most of what you saw in Q1, honestly, was the recovery of inefficiencies from the previous years. Premium freights over time, half deliveries of supply chain coming in, half going out. So what we're most excited about is while we had really strong margin performance in Q1, other than freight and MRO, which was the early adopters in the transformation journey, really, the larger streams of transformation come later in the year, more in Q4 and into next year. So we were impressed that we recovered that margin primarily on price/cost. But again, I'm more hopeful and excited that the transformation stuff is still in front of us.

Awesome. I think we'll get into the margins a little more later, but another question related to the first quarter as this is the first quarter in your new reporting structure. I was just wondering can you give us some background on what's for this change? And is this driving any extra efficiency or gains and have you changed really like how you're running the company? Or is this just accounting and reporting?

Yes. No, it's a change. I mean this is the right structure for the company, period. We cannot spend enough time talking about how it took so long to get there. I mean I think with the acquisition of Manitowoc, it gave us a scaled water filtration segment that allowed it to stand on its own, which we'll come back to. And pool is now competing directly with 2 large public companies that are only pool-related companies. So I needed a structure that gave us the agility and the ability to focus the 3 segments against their distinct competition in ways that help them be able to react to what customers really need and have accountability to deliver on that. Underneath these segments, and those are really thinly staffed segments, by the way, primarily strategy, transformation, customer experience, energy. We have business units, which are operating units, which are accountable for productivity and delivering the day-to-day. And underneath them, we have basically 14 general managers that drive our unique brands and solutions to market. And I have P&Ls for all of them and the ability to have accountability at all of them, which is what I'm most excited about because I can't get comfortable transformation unless I know that the processes that we're actually asking these general managers to use drive value at the point of impact. And so measuring those P&Ls is the critical aspect of what we're doing.

Okay. Got it. And focusing on the near term for a little bit, just -- can you give us a general update on how end markets are trending maybe relative to your guidance, if you're willing to?

Yes, I won't create any Reg FD Moment here. I promise that. But I mean, ultimately, in our last guide for the year, we had stated that we were expecting a really soft full year. That was made up of several different factors, it's primarily inventory correction and the fact that the channel had bought ahead because of supply chain challenges and that we were expecting our channel partners to reset their inventory needs and we're going to experience that in the form of sell-in into distribution being a lot softer. That's the primary reason, and we addressed that with our update in Q1. The second features were that, ultimately, the new pool builds were expected to be down. The remodels were expected to be down both roughly 20%. And then in the backdrop, there was an expectation, which we agreed with, that some of the aftermarket was probably prebought into previous periods. And so when we take a look at the full year, I think we got that close to right. And I think we'll obviously take a look at how Q2 comes in and then update that further if need to on the Q2 earnings call.

Great. And I think as part of the Pool outlook, there is some destocking in the channel. Just maybe any update on how that's progressing now that we're kind of getting more into the peak season?

Yes. I mean, I'll admit that I wasn't sure that the channel could actually destock as quickly as it said it wanted to. I'm really excited that after the Q1 earnings announcement that I think we're going to get that done. And the reason that gets us excited is if you really think of where sell-through is today, it's significantly higher than our sell-in. So once the inventory has been reset, we've got some pretty good growth looking into 2024 from just getting our sell-in back up to those cell-out levels. As a reminder, we used to always serve this industry with about a 5-day lead time, which was a strength of our operating channel. We got way behind during the COVID years in the supply chain challenge years. We're back to those types of delivery days now. So having that real-time visibility and the sell-through and then being able to catch up against it, we think it's is an exciting way for us to contribute value next year.

And on supply chain, it seems like Pool is getting back to more normal supply chain. Just what about the other 2 segments?

Yes. I think we're relatively what I'd call more normalized now across the entire enterprise. We still got a few components here and there, but we've been able to substitute them out for the most part, Andrew. So I feel like we're back and now we can focus on our efficiencies again. And as a reminder, I can't say it enough. I mean, I think Pool's performance was outstanding in Q1 despite volume decline.

Great. And next, just on pricing and inflation. Can you give us an update on how that's trending this year? Like are you -- should we still expect kind of price to moderate back to flattish in the back half of this year, just as what you put through last year trails off? Or are there a need for more pricing increases?

Yes. I don't think it's flattish. Normalized pricing environment for us would have been somewhere in that low single-digit range. We're always going to have things like wage inflation that needs to be dealt with. The nature of our channel, 75% goes through distribution into an end dealer who installs that product. So there isn't the same price sensitivity that exists in what I'd call direct to OEM business models, which is the other 25% of our businesses. Clearly, in those businesses, we're going to probably be having tough conversations with our customers where we're not able to get price because we're getting the commodity deflation. They're going to expect us to book productivity that way, which is how it all averages out to what we call low single-digit pricing for the enterprise.

Okay. And looking ahead into 2024, like do you think it's a more normal pricing year kind of what.....

Yes. I do.

Okay. Any differences by segments there?

As I mentioned, I think the stuff that goes through distributors and dealers, we're going to get to more normalized pricing expectations. And where we're going direct to end customers, I think we're going to be having tough conversations trying to hold on the price. And it will average out.

Okay. And then also on '24, it seems like Pool is in the process of resetting this year back to kind of trend line growth, especially on like the new pool construction. So maybe can you just walk us through where are you expecting this to be a normal year? And maybe like what does that look like of -- you break down 60% kind of break fix like the 20% new pools, et cetera.

Exactly. You got it. So 20% of pool goes into new pools. We love new pools. New pools are an opportunity for us to put in all the highest technology, upgrade those pools to work efficiently with our dealers and also the consumer. Maybe you're an individual who wants to turn your spa while you're golfing and then come back and use the spa. That's actually a big high-end user of ours that does that. Automation of pools allows for water chemistry monitoring, which generally helps our dealers not have a nonrevenue-generating experience to go visit you. They have the visibility to monitor that. And it generally gives you as a consumer just a better overall experience. And that's the biggest opportunity to sell the entire suite of products. When you get into the remodeled pools, it's another conversation we can have to have that type of automation upgrade. So we like those as well. As a reminder, both of those are down about 20% this year. We think that, that more flattens as we head into next year. Some of that impact this year is finance pools, are probably not getting done to the level that they -- the nonfinance pools are. And some of what I would call the non-Sunbelt states, those were decisions people made during COVID that we probably wouldn't have seen that type of volume before in places like the Midwest and the Northeast where people put those pools behind their homes. The warm weather states continued to benefit from the demographics of people moving to them. We get a great aftermarket, break fixed business there, as we're talking about. And we also have the elements of the new housing build that's still happening, mostly cash-based and therefore, propping up those new homes and those new pools behind those homes.

And I know one of your pool distributors spoke this morning. I think they were discussing the difference in the finance pools tend to be the lower end, the higher-end pools or people kind of flush with cash, just paying for it. I mean can you talk about how much more content you have in the higher end pools? Because I think my understanding is it's a lot more and like how does it help going forward?

Yes, if you took -- we call it 6 for 6 , right, the whole suite. I mean if you get automation, you get IntelliChem and basically your coronation done, we obviously got the pump in the filter on every pool. But if you get into hybrid sanitation, you could be in the neighborhood of a $20,000 equipment bill.....

For your pool?

Yes. But still as a percentage of the pool is probably 10%, 15% of your pool build. But now you've got a fairly rich set of content. And every one of those is an opportunity for us to upgrade download to have the break and fix on that later on the business. So we root for that. A lower-end pool, your pool equipment is probably going to be in the $7,500 to $10,000 range. So it's almost double, Andrew.

Okay. Great. And then to get away from pools, it's not the only thing going on. And just on the -- going back to margin improvement from the beginning, just maybe can you walk us through and we've discussed this a little before, but just like what changed at the company? It seems like it's finally started to come through in the first quarter. Is that a fair way to think of it? And just it's taking a little bit of time to get the results.

Pool specifically, you mean?

The whole company.

The whole company. Yes. No. I think the resegmentation has been a journey to accountability, right? And I think what's happened underneath the scenes is these general managers in these categories and the fact that we can measure their P&Ls allows me to work with the business leaders to talk openly and honestly of which ones are growth oriented and which ones need to be more margin-focused. And I think the most difficult part in large companies is the prioritization of resources and getting that optimization of results right. And so oftentimes, your highest-performing businesses get the least amount of growth volume, right, because they provide the quarterly numbers necessary to meet your numbers and then the underperformers tend to hoard all the investment and then the investment doesn't always yield a return. But given the visibility across the portfolio now, we have very large clarity, and we've been adjusting where our priorities are and where we're investing. And you're starting to see the benefit of that productivity.

Great. And in one of the recent conference -- earnings calls, I think one comment that was made that really struck me was 5% of your SKUs are driving 80% of gross profit. And then another way, 95% only 20%.

I don't think you want me to just get rid of everything....

It just seems like a huge opportunity for kind of 80-20 of the business.

It is. And it's a big principle of ours, and it's a tool in the toolkit, right? So when you think of transformation, I mean, every person who leads the category, the very first thing that they should do is what don't I need to do anymore? And we've made the most amount of progress in IFT because the complexity is so high there. Now when you've got 150-year-old brands and you've got products that were made 50 years ago, sometimes you're holding on to those SKUs, but that's what your distribution partners are there to do. And it's also the opportunity to upgrade every one of those and look at margin mix. So it is probably single-handedly the #1 item that we're addressing in transformation okay? Because if I don't have to source it, I don't have to source it. I don't have to create a new part number. Think about all of the energy in the company we save. So it is a big opportunity. That's why we're going to continue to talk about it. We want to continue to complement our teams for the success. Hard to do. It's hard to have the guts to walk away from 5% to 10% of your revenue and then have to earn that revenue back through mixing other customers up with the other products that you have. But those that do it well, I think, really recognize the benefit to the gross profit of the organization, and you're driving a lot less work to get the same amount of income.

All right. And on the bigger picture, the new 2025 margin target is 23%. It was 21% before you added a point from Manitowoc being margin accretive and added another point from additional transformation savings. Just can you give us some sense of, I guess, your conviction in hitting these. And maybe talk about the different buckets? I know it's like there's 2 ways of targeting like COGS, for example, and you're expecting 12% or so reduction in those. Maybe just walk us through some of that?

I mean, first of all, yes, higher levels of confidence. We're now at that point in the transformation journey and process where we can see the real specificity of every part number on the sourcing side, and we know what the benefits are going to be. I think when we came out with our original guide, we weren't sure where inflation would land. And so while we felt good about the net savings on sourcing, we were worried about some incremental inflationary drift. So the numbers we're starting to now point to now are real savings that we can get to of existing run rates. The other one that we're struggling to pinpoint was pricing, right? I mean most of all the price realization we have is just passing through inflation. The pricing work we're doing is more value-based analysis where we can take and compare every one of our products against a competitor product and talk about the attributes and talk about what the customer really values and how do we sell that. So I think we're building confidence across these work streams. And as we implement them and we're realizing it and we're saving and seeing those results, it's building our confidence level and hopefully building the credibility we have when we work with you and talk to you about it as well because it's the most easily measurable aspect of what we're doing is our ROS. And I think that's where you're going to see the improvement.

Great. And by segment, it seems like IFT probably has the lot biggest room for expansion. But I've also -- I know you guys have spoken about pool, which are already like a 30% ROS segment, which is impressive. That one also has upside just because it uses so much of your materials. So maybe you can help us array like where this is going to come through.

Yes. So pool is a great business. There's great industry dynamics, and it's starting from a really good spot. Better businesses usually do better. So I think you're right. I mean there's a big sourcing opportunity in pool that I think the entire channel could benefit from us, including us. All of our products are uniquely designed with our intellectual properties. So it's not like we're using some unique large supplier who has got the industry domination of that particular line. So I think it gives us really good encouragement that we're going to see the savings in pool. Water Solutions and IFT are more operationally biased of transformation benefits. They'll get sourcing benefits as well, but they'll be more operationally biased. And then organizational excellence, obviously, cuts across all avenues, but really has an impact on COEs, shared services and everybody will share in that equally as well.

Great. And given everyone is concerned about a recession. Are these dependent on...

I'm glad everybody is concerned because we're kind of in one. I think we've been in a residential recession for some time, I think, driven primarily by interest rates and the fact that people who are in sub-3% mortgages are sitting still. And, obviously, that's impacted our residential businesses and has for about 4 to 6 quarters in a row. We're hopeful that, that's flattening out and we continue to grow by having new products and penetration. And then yes, I think we would all expect to see these types of interest rates start to have impact in other industries as well.

And so just how much of these -- the margin target is volume dependent, if we were to see a broader deterioration in demand?

Yes, what we showed you and what we committed to is the 23% relies very little on volume. We try to do it more of an absolute basis. Obviously, we want to hold our value levels clearly to achieve that, but we're trying to show you business model efficiencies. So certainly, as I mentioned earlier, pool putting up these types of margins without growth when they return to growth, you should expect incremental lifts just from volume contributions alone.

Great. And in 2024 and 2025, is there -- should we be assuming these are kind of linear savings, how that flows through? Or is it more back-end weighted, front-end weighted?

Well, haven't got there yet, but I don't want it to be back-end weighted because I think I won't earn the credibility if I tell you, it's all coming in '25. So if you were to simply take the math and say, we'll take what's remaining after we deliver 2023 and divide by 2, I think it'd be pretty close to the way I'm thinking about it. And I think you should assume if we're giving it as an external target, we've got a much richer, higher aspiration internally to try to achieve.

Okay. Good to hear. Maybe we'll pause to see if the audience has any questions. And I think we have a mic.

I'll ask one. I mean. Just thinking about where you guys have come. You've done a lot. The slides that you had at the earnings call were good, gave a couple of good overview slides at the beginning. What do you think is most misunderstood to get you guys back to sort of the next level and sort of out of this area. I mean, obviously, 1Q was great, and I think people certainly appreciated that. But how do you -- what else do -- are people asking about?

I'll tell you simply put, and I'm going to guess what's on your mind. I think when you've got the type of business like we have with pool that has been very predictable over its tenure and has generally never surprised other than maybe 1 quarter in 10 years. And it goes through this type of turmoil, I think you're only as good as your best business getting better, right? And I think people want to see and know when the bottom is to pool. And then I think when it can get back to that predictable growth element that it has, we'll start to get credit for it plus the work we've done in Water Solutions and IFT. Internally, we're excited because we want to be more than a pool company. We really believe we have the sustainable theme as a backdrop. We've been at energy efficiency for 11 to 12 years. Manitowoc won the energy store -- a Star Award for its energy efficiency on ice machines. We've had it on pool for a very long period of time. We're reducing chemical needs. We think in the net-net, PFAS is probably a good thing for Pentair because we do have solutions that eliminate all of PFAS today. So we want to be recognized for things beyond pool, but I think simply put, we need pool to perform at a predictable way to get credit for what the portfolio has become. Would you agree with me?

I think that sounds like a good answer.

Okay. Thank you.

You read my mind.

Anyone else? All right. And then sort of transitioning a little to, I think, more like capital allocation, your leverage probably to be around 2x or even lower end of this year, obviously as we get through the next 2 quarters. So just -- your capital allocation seems to be improving, like what are the focal areas? And maybe on M&A, like what would you be interested in? It seems like Commercial and Water Solutions has been a focus, but maybe tell me if that's wrong.

Yes. I mean, listen, we have a wonderful Pool business. I certainly think it's one of the best businesses I've been around for a long period of time, but it's probably not a surprise to you that we have difficulty doing something with pool. So we'll start there. There's little product line extensions that we've been able to take advantage of and maybe they come over time, but it's not likely to be anything large or big. I think we've built an amazing Commercial Water Solutions platform. Everpure was bought before I joined the company. We bought into KBI services to understand the service element of water filtration better and beverage filtration better, and I'll come back to that in a second. And then Manitowoc has been an asset that we got on our second try, okay? And I think people were surprised that it went to Pentair versus maybe one of the other food services group. But the distributors are complementary in the same, the dealers are complementary in the same with Everpure. And there's just such a natural opportunity to integrate filtration into ice machines, which actually consume water and turn it into ice. All of those have some type of filtration somewhere behind them or sold separately. That integration aspect is really exciting because now we can get the serviceability of the filtration of those units. I mean if you just look at the water dispense units that you're used to seeing, just ask yourself the next time you go to fill your Hydro Flask or Yeti, which I'm not advertising or endorsing those 2. That's just -- you probably have 1 of the 2, ask yourself at the filters, right? And then think of how you're going to go into an airport and have to change out all the filters of all the systems to make sure that you're providing water qualities that meet PFAS levels, think about schools, universities. So serviceability of water is about changing out that filter and putting that filter capabilities. We love that platform. And it's natural to our customers who expect us to service the beverage side of that in the water side. And so if you think about other options there, I think some of those become obvious to you. but also some of those are not available for sale. So we have to organically create that path, right? IFT, I think they've done a lot of great work proving to me that their product lines and their primarily discipline with our customers are really relevant to their end customers. I do think they'll deserve M&A dollars in the next several years around those particular product lines that they've continually demonstrated that consistency of growth and the consistency of execution. I've complimented them publicly. I'll continue to do it. They've walked away from large projects that don't yield aftermarket and services revenue. We don't chase lower-margin products that -- or projects that would be good for revenue. So we're very margin focused, and I'm really proud of what that team has done. Right now, it's debt pay down, probably some stock buyback and organically trying to grow the portfolio. That's simply what we're going to focus.

On Manitowoc just -- can you expand on why maybe you said same distribution? Just any other reasons like this was the right deal to build out Water Solutions? How is the integration coming, is it still on track for $370 million sales or so?

Yes. I mean it's stupid pun. It's a cool business, right? It's ice. But ultimately, if you think about it, it's such a little cult industry. We're freezing ice really quickly and doing it in high volumes and it's really, really critical to our restaurants, fast food service people who distribute ice for basically drive-through purposes. And they've got unique formulas that they've utilized over years to build that intimacy. Almost all of our dealers will buy a nice machine and then they buy filters and they connect the filters to the ice machine. But really, what you got to see is the passion for the business, right? Knowing how many units I sold today is what the team wakes up every day thinking, knowing what account to go in, knowing what restaurant, not to eat at because they don't have Manitowoc Ice Machine. And I think that spirit and that passion and that team chemistry was what I wanted to keep intact. I actually promoted their team to be in charge of our Everpure and also our KBI team. They've known each other and 15 years in the industry. Our teams work really well together, and I couldn't be more pleased with the complementary nature of that acquisition so far. And we wait, we had a good market component here, too.

Definitely. And so on your focus of being a diversified water company and portfolio, I think trying to be more than just a pool, which we've probably dominated half of the conversation already. But just can you -- what's your view of the portfolio as it stands now, it's changed a lot like nVent than other large asset sales. But just I think IFT is one of the people kind of continually product, but just I know there are some synergies through all the businesses and kind of common technologies. Maybe just how do you view the whole holistic portfolio right now?

I like the portfolio. I think that the -- I think the mystery is in the industrial solutions side of IFT. Think about a $500 million business there. That -- it's primary core as it serves some really challenging issues for processing companies around beverage, primarily beer. That team used to produce with the membranes that they had, most of all the Desal membranes that existed, and they still produce industrial wastewater membranes. So it's more connected than people think, it has more of the water element than people think. But what happened when desalination decided to be deinvested in, they pivoted to be a beer membrane filtration provider. Great aftermarket recurring revenue, eliminating Kieselguhr which was a cancer-causing agent, a much more environmentally friendly aspect. The next product stream that they got into is waste of CO2 in those productions being recaptured and then taking all that food-grade CO2 and reinjecting it back in the process or selling this food-grade CO2. So waste to value. The third revenue stream that got created from that industrial platform was taking that waste and turning it into methane and selling it on the European grid and turning that waste into value. So really intimate with the food and beverage partners in the processing space. They're all IoT-enabled now pretty much on the platform. They get to see real-time performance. There's optimization of service. So pretty cool stuff, right? Those membranes will be the solutions to better filtration offering a pool where we can take the water quality of a pool to much higher clarity standards than we have today with a lot less chemical usage. That probably a '24 introduction. And then somewhere in the '25 and '26 periods, I would expect to have a whole home filtration offering, might start in commercial because it's going to be really high cost. But we'll also get your whole homes water quality to be free of any worry of PFAS chemicals. I won't have to squeegee my glass shower door anymore. People won't have to scrub their glasses that are coming out of the dishwasher. But I got to create the energy around the why of that aspect through some type of promotional need where water should be something in your home that you're at least spending the same amount that you're spending HVAC on. But those membranes are the solution and those membranes sit in industrial solutions. I don't want to sell them or give away. I want to use them more commonly across the organization to solve the world's hardest and harshest water challenges.

Makes sense. And so with this, your diversified portfolio, how do you approach sales and marketing and your go-to-market strategies? Are these run at the segment level? Or is there kind of a common...

They're in the GMs. Those brands, those revenue streams where the accountability exists, that's where the optimization, the sale, the tactical marketing happens. The storytelling in the segments will come from the segments, right? How do we tell a better story of why you should invest in pools, why you should have a saltwater pool, how do we do that in a more ESG way. But the actual day-to-day marketing sales is controlled by the general managers day-to-day, and that's where you win or lose, and that's where all the product competition exists.

Okay. Great. And I think you just mentioned ESG is a big top -- a huge topic for the water-focused names in particular. Maybe can you -- I think there exists a fairly large or full gap between yourself and the other water pure-play industrial names. Maybe why do you think that is? Do you think that's deserved and like what are you doing to change that?

I can't answer that question. I'll let you guys decide. I think what we're focused on, and I think we'll get recognition. We started creating sustainability scorecards right? I mean, first of all, I'll start with the things that don't seem to get measured. We don't have environmental liabilities as a company. We don't have legacy pension debt. They don't fall into the ESG governance view, but they fit into my view of being a CFO and a CEO and thinking about the liabilities of the company that are generally unknown to the investors. We've got a great governance structure. I would say my compensation is founded on compounded EPS growth and 3-year intervals that have to be earned and also having an ROIC component in there, which I'm very proud of. That's ultimately how I should be measured as the investment of the capital is precious. Within that construct, I think ESG informs everything we're going to go do, buy and solve. And we're very clear that our portfolio has to continue to make progress around energy consumption usage. But we really also believe that water is life's most essential resource. It is constrained, very much of the water is nonusable. The places that are growing are water scarce environments. And I think we take that on as our particular role, and that's why we're trying to offer it in the most sustainable way.

Great. I think we'll pause to see if there are any last questions from the audience. Okay. I think we're right up near the end of time. Maybe just you want to end with what you're most excited about. I'm sure the ESG story is part of it, but the key message you want to leave the audience today.

Yes. So thank you for that question. I'm really excited about our opportunity. I know hidden in this difficult pool year is the fact that I believe we have the opportunity to share with you that we're not just a pool company. I want to be a pool company because I think we have a really good pool space. And I think we want to demonstrate and showcase to you what we're in Water Solutions and IFT. Internally, the team has a chip on their shoulders and IFT because they believe what they do is really critical and important. You can't improve water without moving it. They look at that other company that you speak to and say, well, they're bigger than we are, and they're getting that multiple. So why don't people like us? And I love their progress, I love what they're proving. And then being able to tell these stories more effectively on the moving and proving and enduring is really resonating not just with customers with ourselves. And I believe that transformation, which we started at the right appropriate time, it did not have a burning platform, now has a burning platform. And the energy in the company that they're putting behind that to improve these business models and deliver not just for customers but create value for shareowners is what we have to do as a public company to get noticed. Growth is one aspect, but share price accretion is the real way we're measured.

Okay. Great. That's a good ending. Thank you for being here, John.

Thanks. I appreciate you having us.

Thank you.

Thank you.