The AZEK Company Inc. (AZEK) Earnings Call Transcript & Summary

I'm the homebuilding and building products analyst here at Citi, and we're very pleased to welcome Jesse Singh, President and CEO; and Ryan Lada, CFO of the AZEK company. Jesse, Ryan, thank you for joining us.

Great to be here. Thank you.

I think most people here know about AZEK, and I'm probably willing to bet that many of you own AZEK or TimberTech products. But Jesse, just in case, can you maybe give -- maybe 1, 2 minute intro on the company.

Sure. I mean the general way to think of us is we take recycled materials and as our primary supply source and make outdoor building products. The two main product lines we have, the company was founded producing exterior trim out of PVC under the AZEK brand, which is the way to think of trim is basically it's the accent on top of siding. We give or take about 40% recycled in that product and increasing and then our Deck, Rail & Accessories products, which make up north of 75% of the company. Or the residential business and that particular product is we have two different product lines, one made out of recycled polyethylene and the other made out of recycled PVC. Our primary value proposition is really around having the most premium aesthetics. And one of the key growth drivers of the business is wood conversion, which is kind of a commonality to all of our businesses.

Great. Great. You recently reported strong fiscal 1Q results and raised guidance. Can you talk a little bit about kind of the decking season and how you see it shaping up?

Yes. I mean at this time of the year, it's obviously I'd say the lower part of the season, obviously, where we sit right now, you can build, but in many geographies across the country right now, there's snow on the ground, and it's quite cold. So we are in a low season. In this particular season, still has plenty of building. And it's also the season where we negotiate our shelf space with our pro channel. About 2/3 of the market or higher on the exterior side is the pro channel, and we basically go through a series of mini line reviews with all of those folks. And so the quarter we just finished was going through that process. We had what we define as double-digit sell-through growth, which basically means those key dealers are pulling inventory at the end of the year out of distribution, and we also include -- that's blended with our retail point-of-sale. And we saw strong growth there, and then we had a little bit of really modest inventory positioning from some of the new wins.

So in terms of what your pro channel partners are telling you, maybe about expectations for this, I mean, how much visibility do they have? And then maybe how conversations have trended versus?

Yes. As you look at where we sit in the market right now, there's some modestly increased optimism, I would say from a year ago, maybe from the fall. And once again, it's hard to tell, is that the election, is that certainty, is that the expectation of, in particular, in some of the sectors that are more interest rate dependent, is that an expectation of interest rate cuts. It's hard to really tell. We went through a pretty large contractor summit. We went through a pretty large dealer summit in the fall and incrementally just modestly more optimistic as they come into the season. I think for our contractors, when we ask them about backlogs, it's roughly in line with what we've seen over the last few years.

And you mentioned channel inventories. And I guess we've gone through 5 years when sort of nothing was normal, including channel inventories. Where do we stand today? And if you can kind of roll the clock back, maybe pre-pandemic? Or where do you think inventory should be versus where they've been historically?

So we've added a lot of capacity since the pandemic, right? We've expanded -- we built a new factory, which the good news is we don't have to rebuild a new factory. We've got our new facility online. And we think we're in a really good shape from a capacity standpoint. And because of that, we're in a position where we've got really good lead times. And one of the big shifts from pre-pandemic to now is pre-pandemic, we didn't have enough capacity to meet full demand during the season. So you had to build inventory, position inventory and then respond through a brand of capacity inventory. We have plenty of capacity to meet demand in season. I do that as a backdrop because we do believe that it makes a lot of sense for our customers to carry less inventory than they did pre-pandemic. So that's kind of the backdrop. If you think about where we sit right now, we're roughly at about 15% below our historical averages. At this time of the year, we've been trending 15% to 20% lower than our historical averages. And we didn't -- and that's on a days on hand. So basically, you position product and you have this process of -- and we look at how many days on hand you have. I think we're at a pretty good balance right now. And so the way to think of inventory, we always have changes in inventory in the channel every industry does, really starting last year at about this time, we've been operating at a pretty normalized level. It's not to say quarter-to-quarter, there won't be a little variation. But in general, we're in a really good spot relative to a very normalized inventory.

And I think when you reported earnings, you guided to resi sales up mid-single digit, high single digit against a more flattish repair and remodel market. I guess within there, there must be 3 components, right? So outdoor living seems like it's gaining share from R&R, composite decking seems like it's gaining share from wood decking and then it seems like AZEK gaining share from competitors. I'm wondering if you can just kind of help us unpack those 3 things and...

Yes. It's -- the last 2 years has been highly unusual in repair and remodel. And I know I've talked to some in the room and you would have said, well, the 2 years prior to that was nothing unusual in repair and remodel. And what's been unusual is we haven't seen growth in repair and remodel. The historical track record of repair and remodel is give or take 3% to 4% growth for an extended period of time. And we have -- last year, we assumed 0% growth. The residential business grew 12%. This year, we are assuming 0% repair and remodel growth effectively flat on new construction from where we sit now. And then you layer on top of that, we believe we've got the ability to grow 5 to 7 points -- 500 to 700 basis points above that particular market. And the question is, is it outdoor living? Is it conversion? What's kind of driving that? I think for us, we believe conversion is happening, but it has to be earned. In other words, you have to have the right -- someone's just not -- people -- the consideration set for our types of products is much higher. The consideration set is higher than the current purchase percentage. So 35% of people, give or take, are considering composite decks, 25% is the current rate of purchase relative to wood, 75% being wood. But to get that incremental 10%, you've got to have the right products, you've got to have the right marketing. You've got to have the right positioning, et cetera. So it's hard for us to say what's market and what's not. What we do feel comfortable on is that 500 to 700 basis points above the underlying market.

Can you tell us a little bit about how your products are positioned along kind of like good, better, best spectrum and maybe the kind of buyer that is looking at a TimberTech deck?

So the buyer thing is an interesting one. You -- there's certainly at times -- so if you think about the portfolio we have and the way it's been articulated in the market, good, better, best, right? We define it as good, better, best premium. On the premium side, it is meaningfully more expensive. And one of the questions we get is, well, what's the relative cost versus wood? And the honest answer is I have no idea for most of our product portfolio. I put an X in front of it, is it 2x, is it 3x, is it 6x? We honestly don't track that. What we look at and where it comes into play is kind of in this good category, which would give or take 2x the cost of wood. I would say consumers -- our types of consumers in general aren't looking at that. You're buying a chair, you're not pricing it out on, "Hey, I'm buying this beautiful chair, is it wood or is it not?" What would it cost wood? I mean, you look at the price of the product and the value and all that. But you're not -- when you're in the market for the most part with our customers, they want to solve the problem. And they've already -- they've defaulted to not wood. And with the exception of that pure opening price point, which is on the shelf and DIY. So the only consumer kind of segregation we can have is this opening price point DIY in the shelf, sort of a consumer, they will be -- if you're in one of the large retailers, you tend to be more DIY-centric and you tend to be a bit more cost-centric depending on where you are on that spectrum. But everyone else we have some of our -- what we would define as a middle-income consumer buying, by far, our most expensive products. And you also have the reverse. You've got $10 million homes that are going up with the cheapest wood you can possibly put on the outside of the house. And so I think it's hard to segregate consumers based on that. Our positioning, if you look at better, best premium, we start with premium. We've launched products in there. We will continue to launch products. It is a constant stream of winning that particular aesthetics. It's got to look like wood. In our case, it also our more premium products don't burn. They've got a designation, which is called ignition resistant. And if you think about plastics, in general, plastics are -- come out of petroleum. PVC is made a different way. It has a different makeup. It is what is behind the walls here, carrying our electrical current because it doesn't burn, right? So we use recycled PVC in our more premium products at least in one of those lines. So it has some advantages, it's cooler, et cetera. So I would say we disproportionately play in kind of the mid to premium in all of our products, and we have grown by expanding in the premium, but also we've grown by adding some good and better products to allow us to access more of the market. And that's, by the way, across the whole portfolio. Our most recent product launches, and I know it's -- I'm probably preempting the question, our most recent product launches on trim and we'll start to get from just purely premium to kind of that mid-price point to also an entry-level price point.

Got it. Got it. And Jesse, I want to go back to the pro channel. And is it possible to quantify or maybe talk in a little bit more detail about pro channel wins, your position there, kind of room to run. You've been very successful with it.

Yes. It's -- opportunity is an interesting thing because when you look at it, we were -- you end up being somewhat pleased that you've made progress, but then you always looking -- we're already -- we just finished our discussions with our customers. But this year, we're already trying to define what is the opportunity next year. We didn't get 100% of what we were going after. There is a lot of opportunity. We're not quite where we want to be in this geography. This customer said, "Give us another year, we had a small position here next." Long-winded way of saying, when we look at opportunity, we're always looking in that over a multiyear journey. We picked up, we haven't disclosed specifically, but I would say in the neighborhood of, call it, greater than 2 points of growth, the last couple of years coming from shelf space gains and in the pro. That doesn't always mean we eliminated a competitor. What it -- think of shelf space gains when I talk about it is reach, right? You worked in this particular geography in Northern California. You had contractors that wanted you, but you weren't on the shelf and you didn't have the right position. And so now you're on the shelf, you have access to the contractors that are buying from that dealer and you're in a good position. You could say North Dakota, Northern California, Texas, Florida, pick any geography, that's how we think of it.

Great. Great. Kind of moving to the other side. In terms of your retail strategy, can you talk about how that's evolved over the last few years?

Yes. We've -- in 2016, 2017, give or take, we were about 5% of our business was retail, and we thought about 1/3 of the market was retail. And all of that business, while there was some trim and stock, and we had -- it was primarily a special order. We didn't have necessarily the right product portfolio. We didn't have the right coverage model, et cetera. Every year that's gone by since then, for the most part, I'm sure there's a year that we're what I'm going to say is not quite perfect. But it's been accretive growth. So when you look at -- we've been driving really good growth rates in what we define as the retail channel, which is, in our case, three larger retailers. It has been accretive to our aggregate growth. That's come out of both special order and a stock position. We had a stocking position in one retailer that we had built up, a relatively modest stocking position. Tens of millions, but not many tens of millions and one particular retailer, and we had an opportunity to expand with the other retailer, and the outcome of that was at some point, whether you do it consciously or not, you end up having some choices and the retailers have some choices. So what we -- where we sit now, both retailers, major retailers and all three retailers are great customers in very different ways. And from a stocking position standpoint, we will be expanding more with one retailer, and we will not be in another retailer, but we will continue to drive special order across the portfolio. What that adds up to is where we sit right now, we're about 15% of our sales in retail. We would expect that to modestly continue to grow. As we move forward, your next natural question might be, what's our objective in the retail? I don't know that we have one. We just want to make sure that we're in a really good position to continue to serve customers and in particular, pros and then selectively DIY, where there's an opportunity to appropriately represent our products. And we're continuing to expand in both pro and retail and we feel really good about the opportunity ahead of us.

In terms of pros buying at retail, is that a sort of a step change difference than it was a few years ago? Or is it kind of...

I would say there might be some incremental activity there. It's hard for us to know at times perfectly whether or not the pro was new to that particular store or whether the pro was there and just wasn't buying our product. I would say that there's some incremental shifts, but I don't know that I have a good enough database to be able to be specific on that.

Got it. And I guess the last question, just following up. You referenced geography, you obviously built the plant in Boise. Is it safe to say that your kind of geographic wins have been really weighted towards the West, West Coast? Or is there sort of other areas that you point out?

I would say if I look at -- and Ryan, what do you think -- when you look at the data from a footprint standpoint, what do you think?

Yes. I think having the West Coast manufacturing has helped to win on the West Coast. But I think from an overall perspective, we're focused nationally. So I think there's been wins. I think some of the recent ones we talked about with capital and domain, that's more West Coast focused. But again, it's been nationwide.

Jesse or Ryan, in terms of price cost, how should we think about '25 kind of shaping up? And can you talk about sort of your pricing strategy generally?

You want to go ahead?

Yes, I think for 2025, we did some select pricing increases on the decking and railing side, not the entire portfolio. And then as we mentioned kind of prior, we feel like this will probably be the last year. But on the exterior side, a little bit of programming discounting, think of it as 100, 150 basis points. So when you add those up on the year, it will be basically flat to modestly up on price for the year. I think, longer-term strategy, I think coming out of COVID and kind of the inflation we saw there, I think the pricing has been kind of consistent the last 3 years, but we have opportunity probably in '26 to do get back to our more, I guess, structured cadence of pricing.

Got it. Got it. And in terms of raw material inputs, what should investors be tracking? What have been maybe the most inflationary where you've gotten a break, like?

Yes. I think if you go back a couple of years, it was really the PVC side. And I'd say really that's our biggest input. Our current view is really relative to stability there, no major increases or decreases.

Great. You talked a lot about decking. In terms of the opportunity in adjacencies, I'm wondering if we can do maybe just like a quick deep dives on rail, exteriors, I guess, the premium siding. And then other maybe outdoor furniture or stuff like that.

Yes. So when you kind of step back, we define -- for us, it's Deck, Rail & Accessories. So rail has been a key part of the value proposition for years. We have historically sat at a more premium position in rail. So we had a composite rail, which was made out of wood and PVC and has this kind of rigid New England field, right? So if you think of the Hamptons, you think of Cape Cod, you think it's beautiful, right thick rail. That was a lot of the rail we had. But obviously, as you look across the entirety of the country, there's a lot of different styles. So for us, in 2018, we bought a small aluminum rail company, think of it as barely $10 million in revenue. We have scaled that up and aluminum rail is a meaningful part of our rail business. And then most recently, in the last year and specifically in the last few months, we've launched products that access to entirely other segments of the rail market. So once again, vinyl rail, think of it as a lower cost wood look, hollow vinyl rail. We bought a company that was a contract manufacturer and we've been retrofitting that company, reformulating it and then scaling it for the purpose of having a more premium look and feel vinyl rail. So why does vinyl rail matter? It is the lowest price point typically in the marketplace. It is incrementally very close to wood depending on how you look at it from a post-paint, post-stain process and wood right now is 60% of the rail market. So for us, launching that particular product category is really important. It's core to what we do. We just didn't happen to have -- we just didn't have to happen to manufacture it. We're using our own recycled PVC. We're using our own capping technology, which has some aesthetic benefits. This is just what we do. We extrude PVC profiles for our entirety of our business. and that's what this business is. We had 0% share in this particular market, which is $300 million. And it's a market where our contractors are buying product, our distributors are buying product, our dealers are buying product. It's part of the necessary offering in this area. So we're really excited about that product. We view that as having a very long runway and will help us drive with conversion. And then we've also launched a steel rail, which is another, give or take, a few hundred million dollars segment of the market. And the way to think of rail is it's highly fragmented, and it has more SKUs, but it's a natural part of everything we sell. So -- and then on the exterior side, we've historically had white PVC trim. We launched products that were very paintable, which allows us to access more of the market. And then most recently, we've launched a very high percentage recycled PVC trim product. Why does that matter? I'll reiterate garbage is probably the best raw material you can have. And our PVC is -- when we recycle PVC, we start with something that looks almost like a landfill of PVC products and then we process it and make a product out of it. And so having a high recycled content, trim product will allow us for the long term to continue to drive wood conversion and trim. So those are -- and then lastly, just on the siding side, as I mentioned earlier, the trim and our exteriors business is basically an accent on top of siding. There are some natural -- there's some great siding players out there that are really good at doing flat things. And so when we look at the market, when we look at areas where they don't do as good a job, we have the ability to mold PVC in different shapes and do different things with PVC. We launched a premium siding product that installs like traditional vinyl siding, but has a look and feel that's much more premium. We'll see where that goes. We think it's at least double-digit millions. There's probably $100 million of products that are similar already sold in the market. So we should incrementally pick up, as I mentioned, double-digit millions. The question is, does that scale? Can we actually have it be more than that? It might be. But once again, it's always going to be a very, very, very niche accent-type product compared to the siding players that are at scale, at least at this point.

And then the contracted base for all these products is basically the same as the overlap is?

Yes. Yes. So think about what we do. We sell Exteriors and Deck, Rail & Accessories through the same distribution. We sell it to the same retailers, we sell it to the same pro channel, every one of our major pro channels, think of a local dealer, lumberyard will carry both those product sets. And then our contractors divide up a little bit. There's decking contractors, there's general contractors, there's experienced contractors, but pretty much anyone that's installing trim or -- the better trim and siding contractors are obviously, by definition, installing siding.

Got it. Got it. And as you kind of zoom back out and think about sort of long-term maybe growth and margin targets for the company and you think about sort of decking versus non decking. Can you talk about sort of the contribution or the profile?

Yes. I think our biggest opportunity has and will continue to be our core, which is our decking business. If you look at Deck, Rail & Accessories, you think of each of those categories, for the most part, they're all in the same general gross margin range. We might be modestly lower on the stuff we source versus what we buy. It's just -- it's more capital efficient. But in general, you're in the, call it, the 40s. As you look at our Exteriors business, it runs at a similar gross margin kind of cost structure as our Deck, Rail & Accessories business. Our intent, as we've highlighted, is to hit 27.5% EBITDA margins by 2027. If you look at our guide and what we've done, we're probably going to hit that earlier. We should hit that earlier. The question is, what's the next stage? Just to give you an order of magnitude of how much margin opportunity is left for us, we were just going through as we're looking at -- we just bought a recycler a few months ago. We just bought another one that we announced this morning. As we start looking at the opportunity from either recycled PVC or polyethylene and in-housing and driving some of that, there's probably another at a minimum $40 million plus of incremental margin opportunity as we look at all the cost savings that's there. Now I don't take that and put it into your models. I'm just saying that's the opportunity. So there's a lot of runway ahead of us. The question ends up being what's the right long-term target? I have one in mind. I'm not going to share it, but it's probably going to be higher than 27.5% in terms of EBITDA margin. So we've got to figure out the right time to have that conversation, but we're far from done at when we hit our target.

Great. Great. And can you or Ryan talk about -- you talked about PVC versus HDPE versus LDPE. Can you talk about that kind of transition and what sort of drives the savings and maybe where you are on that?

Yes, do you want to...

Yes, for sure. On the PVC side, I think it's continuing to source lower cost streams and converting that cheaper and then the inclusion rate in the product. So if you think about decking, we're in the mid-60s. I think at our Investor Day, we laid out a target of getting to 70%, that's not a finish line. I think we can go above that. But that every few years that -- or every year that a couple of points step change helps drive some favorability there. On the composite side, the low-density, high-density mix, we were running 50% high density, 50% low density. We're in the process of converting to 75% low density, 25% high, that's about 50% of the way through on a conversion perspective. So we'll look to complete the rest of that this year. That's a line by line, product by product. So it takes time. It doesn't just roll out overnight. And then a lot of the opportunity on the sourcing and recycling side there is we still source probably 75% of our low-density material that goes into the recycle. If we could source raw and convert that, there's a large cost savings there. So a lot of these acquisitions give us additional capacity and network to do that. So that's part of the strategy as well.

Great. And you had an announcement this morning, I guess, Northwest Polymers and you had the acquisition in Indiana. I mean, should we envision kind of maybe a string of these kinds of acquisitions. Can you give us a sense of broadly the -- with the price tag for these kinds of assets? Are you just buying really a material stream? Or is there's a technology that's part of this? Or...

I think it's both. So the acquisition we completed in December was about $11 million. The one that was completed last week was south of $10 million, so I think of mid-single-digit millions on that. What you're buying with the Indianapolis location was -- or Indiana allocation was source was additional capacity and it was new technology. So we actually have opportunity on some of like you might get a batch of mixed polymer, it could be polyethylene and PVC. We weren't able to separate that before. Some of the new technology allows us to do that and use lower grades that would typically end up in a landfill. So that helps us from a long-term strategy. And then with Pacific Northwest acquisition, I think about localization with Boise facility out there, we're chipping material across the country. This gives us opportunity to process locally and increase that in-house conversion versus sourcing it. So those are kind of the opportunities you have there from the acquisition. I think from a longer-term perspective, we're pretty active on the recycle side. The payback is typically less than 18 months on that. So we will continue to be active there as opportunities come up.

Great, great. And we have to ask this question to all our management teams. In terms of potential tariff impacts, either directly or indirectly, raw material costs, how much product maybe crosses the border into Canada. And then just generally, I mean, sort of your non-U.S. exposure and maybe non-U.S. strategy. I mean, you have a competitor that's maybe more active overseas, just how you think about all that?

You want to hit the...

On the seller side, right? So our exposure, think of it mainly on like metals, like fasteners for railing, things like that for substructure. We've estimated that between $100 million and $120 million of material costs for us. That's multiple different countries and sources. As you know, the tariff situation is changing daily. So exposure could range from low single-digit millions up to $15 million on the worst case. I think as you think about that, we're monitoring that daily. We have actions in place if we had to take appropriate pricing actions and things around that. We're always looking to qualify additional sources and regions. So I think we're being proactive on that and as part of the daily dialogue now.

Yes. And the international strategy is an interesting one. We -- so I used to work at a company that was 65% outside the U.S. And to win internationally, you've got to be good and local. And so I think our strategy, and there has to be a reason. I think we view ourselves as being U.S. and Canada focused. And we believe these -- those are 2 markets where we primarily play are the best places to fish. There's a ton of opportunity. We've got competitive advantage. We have scale. We've got resources on the ground, and that's predominantly where we're going to win, and I won't say it's borne out. We think it will continue to bear out, especially given the way that the housing markets are in U.S. and Canada. We're just -- there's a certain type of build and a certain type of structure that really works for us. We do, it might be $10 million or something that we do from an export standpoint. Maybe that grows to $20 million over a period of time. We've got some business in Australia and the U.K. and in Germany. It's fine. It's good business. And they should have access to a good product if they want it, and we'll continue to have that. And then relative to Canada, it's a good business for us. So we export from the U.S. We've had some discussions on what we can localize in Canada. We do have a local team there. And so it might make up 3, 4 percentage points of our aggregate sales going to Canada. And then for the most part, we're U.S. for U.S.

Great. Great. Maybe going back to kind of the outlook for '25. Can you remind us sort of capital allocation priorities, where leverage should sit, repurchases kind of...

Yes. I'd say the priorities remain the same, right? So first, we're going to focus on investing in organic growth, our typical CapEx, 5% to 7% and things like that. Second one be kind of inorganic and whether it's tuck-in M&A, nothing transformational or additional recycle M&A, like we've just announced the two. And then I think third would be repurchases. So I think the timing of that historically has been more back half weighted. We typically burn cash in the early part of the year and then generate more in the back half. We paid off some debt in our fiscal first -- or fourth quarter. And then with the 2 acquisitions and lowest cash generation quarter, we would look to be more active in the back half on share repurchase.

And on leverage, when we went public, we said kind of 2s is probably the right spot. We also went public in a 0 interest rate environment. I think retiring some debt and where we sit right now is we're probably around 1. It gives us flexibility if there is an opportunistic -- some type of an opportunistic scenario acquisition or whatnot, if we needed it, we have the wherewithal to do it. And then we'll -- I don't know that we have an exact leverage target. It's something greater than 0, but it's probably not 2.5 right now as we sit. At least it wouldn't be 2.5 for very long. So I think we're in a good spot right now. Our debt payments, we adjusted out, obviously, for EBITDA, but our debt payments are meaningfully lower. Our cash generation is in a good spot. So we feel pretty good about where we sit right now from a capital allocation standpoint. It gives us plenty of room against the buyback authorization to continue to modestly bring down the share count every year.

Got it. Got it. Just checking quickly. Any questions from the audience? Maybe we'll wrap up with a couple. I guess, on M&A, you kind of identified an opportunity from these kind of smaller recycling centers. Outside of that, are there opportunities and would they be in some of these adjacencies? Or what is the...

Yes. I think Ryan did a good job of highlighting it. We don't want to be coming in and having a discussion with you all saying, "Hey, we're going to do this transformational acquisition". And -- because we really like the model that we play in. It allows us to get that double-digit growth and every year have a target of expanding our EBITDA margins. So you should think of any acquisitions as tuck-in and very, very selective relative to -- does it fit within the portfolio? Does it fit with our contractors? Does it drive material conversion? Does it have a differentiated position or differentiated technology that allows us to continue to expand our share of wallet and do a better job with solutions with our customers. So think of, for the most part, everything is kind of tuck-in, we do buy things, right? So we've got an M&A process. We've got a department. Some really sophisticated individuals that do it. And so we feel good about our ability to engage. We do think that's an advantage. We're scaled to do it. People talk about it. In our particular segment, we've got a nice track record of stringing together some good acquisitions. So it's part of it, but a tuck-in part of it.

Great. Great. So maybe just wrapping up, if we had to summarize, I mean, it sounds like pros and consumers are maybe incrementally slightly more positive on decking kind of going into the spring season. It sounds like composites continue to gain share, you're gaining share within composites. Your long-term margin target, it seems like you're going to hit it maybe sooner rather than later, not ready to raise it, but it seems like that's at least possibility.

And it's going to be hard not to...

Yes. So anything else that you would add or...

No, you have the benefit -- when you go public, you have the benefit of laying out what you think the future would look like. And I think we said a few things. One is, we believe we're a double-digit grower. The other one is we believe we're resilient. And we believe our business model has some competitive advantages. And I think as you look at the last few years, we look at it as we could have done certain things better. But in general, I think what you see is in a flat market, we -- our goal is to find ways to drive growth independent of the market. I think thematically for us, we're assuming things are about the same as we move through the year. We'll have to see what happens. But against that, we believe that growth is something we should control as best we can. And the way to do that is to have a portfolio of programs, new products, expansion. One thing we didn't talk about is our downstream sales force is constantly driving market activity. We think that model sets us up pretty well on the growth side, and then we've got the recycle and continuous improvement on the margin side. So we feel really good about our ability to operate in just about any market. And we're excited about the opportunity that's ahead of us that's meaningfully larger than what we've gone through in the last few years.

All right.

Appreciate it. Thank you.

Thank you. Take care. That was great. Thank you.