Wagners Holding Company Limited (WGN) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Wagners Full Year Results Briefing. [Operator Instructions] And just please be advised that today's call is being recorded. But without further ado, I'll hand the conference over to your first speaker for today, Cameron Coleman, CEO of Wagners Limited. Thank you, and please go ahead, Cameron.

Good morning, ladies and gentlemen. Welcome to our full year results presentation. I'm joined today by our CFO, Fergus Hume; and Executive General Manager of our Technologies business, Michael Kemp. I'm pleased to be able to say that the company is back on track. 2021 has shown great improvement when compared to last year. Overall revenue is up 28% to $323 million. The EBIT result of over $25 million is a significant improvement as well. The business has continued to experience growth over the full year period, as highlighted on release of our first half results. This result has been driven by growth in cement and concrete volumes, increased precast activity, increased quarry volumes from both fixed plant and contract crushing operations, additional haulage work in the resource sector and strong utilization of those haulage assets. Whilst our CFT growth aspirations in the U.S.A. were put on hold until we could safely deploy staff to establish our new manufacturing facility, our low-carbon concrete technology, EFC, continued to make traction in the U.K. Over the last 12 months, we have reduced our gross debt by over $15 million. We are increasing our investment into our low-carbon technology and international expansion of our CFT business. For this reason, the Board has decided not to pay a dividend. Rather, it is committing to further investment into the business. I'll now hand you over to Fergus to take us through the financial results in more detail.

Thanks, Cam. Looking at this year's results, revenues have increased by $71 million to $323 million or by 28% compared to last year. As Cam pointed out, revenue increased across almost all business units, in particular, precast, concrete, quarries and transport. What is pleasing about this year's performance is that the increase in sales has fallen through to the bottom line. EBIT of over $25 million showed significant improvement on the prior year in terms of earnings result and also the margin. Even though there was growth in crossarms, the results also reflect a lower contribution from our CFT business, mostly due to the impact of COVID on demand for custom-build pedestrian and marine infrastructure projects -- products. Moving to Slide 7 and the segment results. The Construction Materials and Services segment is the largest business within the company. The good news is that our cement business is back to normal after the suspension from one of our major customers came to an end last year. So this year reflects a normal full year results compared to last year. In addition, there was strong performance from the precast business aided by the Cross River Rail project, quarry to the Carmichael mine project and a full year in the Emerald quarry. Transport again had another bumper year, increasing both revenue and earnings. We also renewed the haulage service contract with Glencore at George Fisher and Lady Loretta mines for a further 4-year period. The concrete batch plant had mixed results in FY '21. While revenue increased to reflect the general upswing in the building and full year trading from the Narangba, Coolum and Cawarral plants, the competitive landscape in South East Queensland continued to project challenges. As such, the earnings contributions in our concrete operations was again disappointing. Move to our segment results for Composite Fibre Technologies. So we also had mixed results from our CFT businesses. The crossarm business recorded a 4.2% growth in revenue and a 29% growth in EBIT contribution on the back of manufacturing efficiencies from our equipment upgrade. However, for the first time, a custom build business, being marine infrastructure, pedestrian and short span bridges, recorded a decline in revenue. This was mainly due to a lack of activity from regional councils and other customers who were impacted by COVID-19. We saw some momentum shift from these customers in the back half of FY '21 as all lockdowns were lifted. However, we are now uncertain how current lockdowns will affect our performance in FY '22. Our investment in R&D continues to create new product lines that provide opportunities to expand geographically, evidenced by the new poles developed for our electrical distribution products. Looking at our EFC low-carbon technology. As we continue to invest in the EFC technology and market development, it's difficult to gauge our performance from the financial results. The negative $2 million EBIT contribution should be viewed as an investment opportunity, and the company expects to see this investment increase further over time as we gain market traction. The performance of EFC should be measured in terms of these gains to commercialize the technology around the world. This will be covered in more detail later in the presentation. Now to the cash flow on Slide 10. A significant increase in cash flows from operations is due to 2 factors. The first is the increase in earnings, which provided an extra $20 million in cash flow, which we expect to continue in FY '22. The second is the movement in working capital at year-end, which shows the most significant contribution to cash flow from operations. However, this needs to be viewed differently as it reflects the higher investment in working capital at the 30th of June 2020 compared to this year, where debtors were lower than previous year and trade credit is significantly higher, which had a temporary impact that's showing a much higher cash position at the 30th of June 2021 than normal. The $17.5 million worth of capital expenditure this year has been spent across the business, with $4.8 million on land with concrete, quarry, and precast businesses; $2 million on quarry equipment; and $3.7 million on CFT plant in Australia to complement the $5 million spent last year, which significantly increased capacity and efficiency. Another $0.5 million was spent on CFT facilities and equipment in the U.S.A. This CapEx spend is mainly growth CapEx, not maintenance CapEx. On to the working capital and net debt. As mentioned previously, the net working capital has reduced, while cash at bank has increased this year. This has allowed us to repay both equipment finance and term debt. It should be noted that the net debt on this slide excludes any impact of AASB 16, which now puts nearly $100 million worth of debt and assets onto our balance sheet, reflecting the long-term nature of our property leases. We successfully renewed our finance facilities in June of this year with our existing bankers for a further 3 years with significant headroom on term debt and equipment finance facilities. I'll now hand back to Cameron and Michael to take you through more detailed results.

Thanks, Fergus. On Slide 12, here, you will see our new crossarm automation line. It is fully automated and doubles our production capacity for crossarms. As reflected in the numbers that Fergus has just presented, it is encouraging to see an overall improvement in the business over the last 12 months with further opportunities for the business to continue to deliver growth in revenue and profitability. Michael will now take us through the composites and the EFC business.

Thanks very much, Cameron. I'll start with our CFT business. And for those that are unfamiliar with this technology, it's a lightweight, noncorrosive, nonconductive structural composite material uniquely manufactured by Wagners as the only pultruder in Australia. It's used in the form of crossarms, power poles and light poles. And composite products are also used in a range of civil engineering structures, including pedestrian infrastructure and bridges. Whilst revenue was relatively consistent with FY '20, continued investment in technology development has delivered significantly more efficient manufacturing processes, flowing on to improve margins. Our Queensland manufacturing facility is now home to 4 pultrusion machines, a brand-new crossarm automation line with 6 state-of-the-art robots controlled by the latest in programming technology. We have 4 injection and overmolding machines and 2 additional machines to be commissioned over the next 12 months. We're currently building an additional factory building on our Toowoomba site to house our new pultrusion machines that have been designed in-house and manufactured by our engineering solutions team. These machines have a much higher capacity than our existing pultrusion lines. Our R&D engineers have worked tirelessly to create the next generation of pultrusion machine, which will increase our production by 60% and allow the pultrusion machine to be dedicated to the manufacturing of poles, an emerging market for composites we're only just starting to service. You'll see a photo of this facility on Slide 13, which we're very proud of. In terms of business performance, our Australian and New Zealand business achieved a 4% increase in crossarm sales. This has been offset by stalling activity in local and state government funded pedestrian infrastructure and road bridge projects due to delays attributed to COVID-19. Looking now at our international Composite Fibre Technologies operations. In the U.S., COVID has substantially impacted sales, along with our ability to build and commission a manufacturing facility. We have now commenced the construction of our new factory, and installation of our new pultrusion machine will be complete later this year. Some of the international sales we have achieved throughout the year include pedestrian infrastructure to the Middle East, U.S.A. and Canada. We've also begun to sell light poles in the U.S.A. and crossarms into Oman. Our lightweight composite structures have also proven to be an ideal solution to noise abatement in large distribution warehouses, with 4 sound abatement systems installed in distribution centers in the U.S.A. More broadly, our international sales team continued to pursue opportunities that we can manufacture and distribute from our Queensland facility until the new facility in the U.S. is fully operational. Moving on to Slide 15, Earth Friendly Concrete, our low-carbon concrete technology that provides a solution for a problem that is now a major priority worldwide. Our technology replaces the cement powder used in traditional concrete. Given the production of cement is responsible for 8% of the world's carbon emissions, Earth Friendly Concrete is now very much on the radar of concrete producers and consumers around the world. We have significantly increased our spend on the development of our technology in response to increasing international demand. In South East Queensland, customers are beginning to select Earth Friendly Concrete for applications ranging from multistory building complexes to homeowners that value the environmental benefits our technology has to offer. We've supplied EFC for a large trade and distribution warehouse. With this project alone, saving close to 100 tonnes of carbon emissions. Our technology was also selected to be used in man-made marine reef for South East Queensland Gold Coast. Throughout the year, the third-party cradle-to-gate carbon emissions report we had commissioned to verify our carbon emissions compared to that of ordinary concrete was completed. This report confirms that every cubic meter of EFC used saves 250 kilograms of carbon compared to traditional concrete. In other words, if you build a 4-bedroom house from EFC, it's equivalent to taking 5 cars off the road for 12 months. All this activity has not as yet turned into any sizable revenue. We believe we are now close to commercializing technologies in various countries around the world, and this will involve further capital. Looking at our international EFC operations. Our Earth Friendly Concrete technology is being used in infrastructure projects being undertaken by various construction companies globally. I'll list a few here. Throughout the year, we've proven the application of our technology into numerous product applications, including roof tiles, concrete pipes and a wide range of various precast products. We've partnered with Keltbray and Capital Concrete in the U.K. market to deliver our technology into a number of projects within London, including structural slabs on the HS2 project and structural piling on the Canada Water project. We've run successful trials with a U.K. roof tile company and are now in the late stages of negotiating a long-term supply arrangement. We're negotiating with a number of precast concrete manufacturers in Europe, many of whom are seeking exclusive rights to our technology. The extension of our German DIBt approval into the European standards is progressing well. We expect to have full European approval by February 2022, creating an even larger serviceable market. We've now identified a site in Romford just outside of London for our U.K. manufacturing facility. We've commenced the manufacture of our digester, which is the next generation of this piece of equipment compared to the unit we commissioned in Brisbane. It provides higher capacity and improved material handling processes through automation. In India, we continue to work with our partner, JSW, to obtain the Indian standards approval required for the application of Earth Friendly Concrete in projects. I'll now hand back to Cameron to complete the presentation.

Thanks, Michael. So we'll move on to the Construction Materials and Services segment. And on a consolidated basis, the business delivered a 33% increase in revenue and a 79% increase in EBIT compared to the previous year. I'll start with the quarry business, which has performed well. The fixed quarries have produced solid volumes. And when coupled with the increase in activity from the resource sector, this business has made a significant contribution to our performance through this period, delivering a 36% increase in sales compared to last year. Our cement business, on Slide 19, has enjoyed increased volumes. We've experienced an increase in sales due to growth through our internal concrete plants, along with the general increased activity in the sector. The construction industry in South East Queensland is looking promising for the years to come. Our cement plant is designed to deliver value for the future. The cement grinding technology we selected at Pinkenba is ideally suited for grinding slag, a waste product generated by the steel industry that is one of the key ingredients in our Earth Friendly Concrete technology. Moving to the concrete business. We have seen a 55% increase in sales from our concrete plants as our sites are now fully commissioned, all capable of producing Earth Friendly Concrete as well as traditional concrete. We have also seen a general increase in construction activity in the South East Queensland market. As Fergus has pointed out, the concrete business remains one of the bigger challenges. The business has continued to be impacted by pressure on concrete pricing and resulting margins. As we work through these challenges, this business has the potential to add significant upside to our overall performance. On to the precast business on Slide 21. That's a new image of the Cross River Rail project. And this year, the business has realized a significant increase in revenue due to that project. This project is a great example of the value that can be achieved through the vertical integration our business model represents, with our cement, flyash, concrete, reinforcing steel and engineering solutions businesses all contributing to the manufacturing process. As at the 30th of June, we had only completed approximately 70% of the segments due to project delays. While that impacted last year's performance, the carryover into FY '22 provides additional opportunity when coupled with many other new packages of work we are currently in the process of negotiating for this year. Our bulk haulage operations provided another solid contribution to our financial performance this year, delivering a 44% increase to our sales. Throughout the year, we had approximately 50 bulk haulage trucks travel over 10 million kilometers and hauling over 8 million tonnes of product for clients through the North West Minerals Province. We have been successful in securing extensions of 2 of our long-term haulage contracts in North Queensland and a new contract in the Northern Territory. These contracts provide this business with confidence over the next 4 years. Our customers have increased their outputs, which has meant higher utilization of our assets and increased revenues in this business. We see further opportunity to grow this business into the future. We've seen a significant increase in tendering activity in the recent months. So I'll now move through to the outlook. So I'm up to Slide 24. In CFT, we look forward to the U.S.A. manufacturing business opening later this year, which will provide a better cost structure and allow us to declare the made-in-America status on many projects, which will provide more tendering opportunities for the business. A full year of efficiency from our new automated crossarm manufacturing cell will further improve margins going forward. Revenue growth is expected to improve in the custom-build applications, including the local and state government-funded pedestrian and bridge market across Australia and New Zealand subject to the current COVID-19 lockdowns and restrictions easing. The commissioning of 2 new pultrusion machines for our Queensland facility that we spoke about earlier will allow us to significantly increase capacity to produce poles, positioning us to service a market we've recently established. We expect the CFT business to deliver growth throughout FY '22 as we continue to invest in our new pultrusion machines and manufacturing facility in the U.S.A. We anticipate further investment throughout the year to position the CFT business to service a growing market. The outlook for our Earth Friendly Concrete business focuses on increasing sales through our concrete batch plant network in South East Queensland and through our commercial partners across Europe. Opportunity exists to build more and more strategic partners under similar arrangements to those that we have established over the past 12 months. These partners provide a critical channel to market. As advised in our half year results presentation, we are currently undertaking a process to identify potential partners that are dedicated to accelerating the use of green technologies through investment in our EFC business. Our technology makes a positive impact on carbon emissions in the construction industry. We are excited about the global demand for green technologies such as ours, which was identified in consultation with potential investors. It is on the back of this keen interest that we have made the decision to not only continue to invest in EFC, but to increase our commitment and investment to the development and rollout of this technology globally. It is critical that we move quickly and accelerate the rollout of this technology while the market is desperate to find solutions that reduce carbon emissions, particularly in the construction materials area. Therefore, we will spend more money and invest further in this business to leverage all opportunities. We will now move into the next phase of identifying a suitable partner to invest in our low-carbon technology that will add significant value to our business. Also, we will continue with the installation and commissioning of a production facility in London. On to the outlook for the Construction Materials and Services segment. As I mentioned, we see opportunity for growth in our Bulk Haulage business coming from the resource industry. We look forward to continued opportunities in South East Queensland construction materials business with improving concrete demand driving increased sales in our cement, flyash and aggregates businesses due to the vertical integration of our business. However, even with the demand increases, it remains a challenging market. FY '21 did benefit from some more significant projects like Cross River Rail and the crushing operations in the resource sector. These projects will finish in FY '22. Our business development team remain focused on seeking new opportunities. The recently announced Olympic games scheduled to be hosted in Brisbane in 2032 will provide opportunity and demand for construction materials and services. While we will not see any activity in this phase in FY '22, it will, in time, present significant opportunities right across our business. We also see this as an opportunity to showcase our CFT and EFC technologies in various applications for future development. It certainly is an exciting time for South East Queensland and our business in the lead up to these games. So in summary, Wagners has performed well in FY '21. We've delivered a positive financial result compared to the prior period, and we've had continued traction from our growth strategy. In Construction Materials and Services, we have expanded our concrete plant network and have experienced growth volumes from those plants. We've also experienced strong volumes in the cement business, along with growth in volumes in our quarry and transport operations. With the current and forecast level of activity in the construction and resources sector, we expect these volumes to remain strong over the next 12-month period. We will continue to pursue major project opportunities internationally and remain well placed to deliver major infrastructure projects planned for South East Queensland as and when they are awarded. In our composites business, we've seen growth in crossarm sales and realized the benefits of our investment into manufacturing automation and optimization with improved margins. Throughout the year, we have continued to invest in research and development to identify new products, increase our in-house capabilities and improve our production processes. We have also continued to invest in business development in new markets. All of this will deliver future growth for the business in years to come. A really exciting aspect for our business for the next 12 months will be our global expansion as with -- and establishment of our international manufacturing facilities, which will deliver significant growth for our CFT and EFC businesses. This expansion will require significant investment. For this reason, the Board has elected not to declare a dividend. So that concludes our presentation for today, and we're more than happy to take any questions anyone may have. Thank you.

[Operator Instructions] Your first question comes from Kurt Gelsomino from Morgans.

Hopefully, you can hear me, Fergus. But I'll just start with maybe a quick question. It looked like a pretty clean NPAT result. I think there was sort of no one-off items. Was it sort of any one-off [indiscernible] that sort of underlying that result was sort of, yes, not expected to recur going forward? Or is it a pretty clean result from your view?

It's a pretty clean result, Kurt. We didn't really have any one-off costs or anything this year compared to prior years. So yes, it was, as Cam said, sort of back on track and back to normal.

Okay. Perfect. And I sort of flagged that increased investment you'll be making across both EFC and CFT. Maybe can you provide any sort of color on, I guess, what that investment will be from an OpEx perspective to your business?

Kurt, you'll see in the pack we've called out the EFC business a stand-alone segment now. So when you look at that, you'll see we spent about $2 million last year. And we can -- it is our intention to double that and take every opportunity that presents itself for EFC this year. So I think if you worked on double the spend that we had last year, and if Michael gets his way, he can even spend more. And we will be pushing to take every opportunity for EFC across Europe. So at least double what we spent last year would be a good guide there.

But that spend is part of the reason why we are looking at the strategic partner or investment partner for EFC. We need to accelerate to take advantage of the current market, which is looking for low carbon technology right across everywhere. We've seen the carbon sort of capture has had a real purple patch, but the mix is the actual carbon abatement. So it's about not producing carbon. So that's why we want to really hone in on this and take advantage of it. Otherwise, we could get left behind.

Understood. And maybe could you provide a bit more color on how that external investment process in EFC is progressing? I guess the level of interest at the moment? And when are you sort of targeting an outcome for that process?

Well, it's progressing well. We've been extremely encouraged by the process so far. Our advisers are doing an excellent job. And we would be moving in about a fortnight's time to the next stage of that process, where we will be able to get a feel at that point for perhaps a deal conclusion date. We're -- but at this stage, it's probably a little difficult to put a conclusion date on that, Kurt. But I guess, I can say we've been very, very encouraged by the process today and the level of interest that is out there for this technology.

Terrific. Maybe just on Cross River Rail. Cam, I'll just confirm, you said you completed 70% of the tunnel segment contract in FY '21. And then just a follow-on of that sort of Cross River Rail project. I think my understanding was that there's potential to secure some follow-on for a couple of other stations, I think. But how is it going on sort of securing that follow-on for Cross River Rail?

Yes. So those negotiations are all on track, Kurt. Yes, it was disappointing not to get the whole project finished last year but, I guess, the upside for us is having 30% of the jobs still flowing for this year's numbers. And then we're very confident with where we sit on future works for the precast business. The opportunities are looking quite attractive there.

Awesome. And I might just squeeze one final one in. Obviously, I think there's been some time until you've enjoyed major concrete project work. I think that's been a few wind farms you've been close to over the last couple of years. I guess do you have any further sort of update on how those opportunities across the wind farm space is progressing and the likelihood of them falling in maybe first half '22 or FY '22 overall?

I don't see too much upside in the first half, but we'd anticipate certainly some opportunity from our mobile concrete business. On the contracts that we're very close to at the moment, we would certainly be expecting something in the second half and maybe a small amount of the contribution in the first half.

And those 3 opportunities across the wind farms are still live, Cam?

Yes, they are, Kurt. We've still got sort of more than 3 mobile concrete project opportunities. And as you say, there's 3 of them in the wind farm space, and there are a couple of other mobile plant opportunities that we are pursuing as well.

Your next question comes from the line of Peter Steyn from Macquarie.

Just a quick one on the concrete market in South East Queensland. Cam, what's your sense of when stability could return? Obviously, that's a balance both between supply and demand and some of the factors that are driving the price environment. But how are you thinking about the next 12, 18 months in that space?

We're thinking the market conditions will improve. We've seen a small improvement already, Peter. And we are experiencing quite significant demand in the concrete business now and seeing the opportunity to sort of command a price that reflects the level of investment we have in those concrete and delivery truck assets. So we're certainly predicting continued improvement there. Just how quickly we can get that improvement remains the challenge.

And does EFC play a big role in how you try and write prices in the market? Do you think it can? And how much of the base do you think you could transition into EFC sales realistically over the next year and then maybe on a 5-year view? I'm just curious how you think about that.

Well, I'd love to think that all of our plants converted over to full production of EFC and we can do the great concrete anymore, but that's just not a reality in this market at the moment. It is amazing how many customers and consumers out there are prepared to pay for carbon-reducing technology. So it's very difficult to put a -- to sort of put a number on what volume of EFC we think we can distribute out of these concrete plants in the next 12 months. We now have a dedicated sales team sort of committed to educating consumers on the difference between our Earth Friendly Concrete and our great concrete offering. But to sit here and say we think we can get 10% of our market delivered as EFC at a price premium is very difficult. It's a guess really at this point. We really need to understand how those consumers are going to sort of react to the availability of this product, and that's a job of work we've got on foot at the moment.

Perfect. If I may jump just with an extension of that question. So on the EFC side of things, what would make your product offering distinctly different to some of your peers? There's obviously a lot of people talking about, let's call it, low-carbon concrete. But -- so curious why yours would be different and, therefore, whether there's any competitive advantage that you see.

So for many -- well, I might let Michael talk to that. But we have zero cement in ours, I guess, is the key. But Michael, can you answer that?

Yes. So we've been developing this since 2007. We did our first test tube of it. And our focus the whole while long has been to not use cement. The purpose of this technology is to, as Fergus alluded to, abate carbon. Just about every other low-carbon concrete on the market still uses cement, still relying on it to drive the reaction. There's a lot of other technologies coming out of America or other parts of the world that they have minor improvements, but we're saving 250 kilograms of carbon dioxide emissions per cubic meter without planting trees or other offset-type activities. We're doing it by not using cement in the first place. And that's the big difference, and that's where the environmental sort of world is heading. And to put that and sort of just pick the perspective, so CarbonCure gets a lot of press at the moment around being a carbon-reducing technology or carbon-capture technology. The amount of carbon they save per cubic meter of concrete, and got to say a number here and it may not be right, but it's 17 kilograms per cubic meter and we save 250 kilograms per cubic meter.

And slag availability is not a constraint?

No. We've got solid slag supply chains in place, not only here in Australia but also in the other areas where we're focusing our efforts.

Your next question comes from Raju Ahmed from CCZ Equities.

A couple of questions. The first one is you've talked about your outlook statement and there's quite a few moving parts there, and I can appreciate those. Cameron, I think first of all, you mentioned that you had a number of major infrastructure-related projects like the -- or major projects, I should say, like the Cross River Rail and Carmichael mine and so on. Can you just give us a more clearer sense of where you stand in FY '22 in terms of timing of the next wave of infrastructure projects like Inland Rail and the second wave of Cross River Rail packages, Bruce Highway and so on and how they could sway the earnings one way or the other?

Okay. Yes, sure. So I'll start with the precast business. We've got quite a bit of work to carry over into this year already on the books. And the next wave of work coming is really -- the discussions around that work are really focusing on when we can actually perform the work. So the key discussion point with our clients there is when we commence the next wave of work. The yard at the moment is at capacity. And we physically cannot take another job for approximately 4 months, and that just happens to tie in with the next wave of work that we see coming. So we're very, very fortunate in the precast business to have the timing of the completion of the segments match with the next decent size opportunities that we're working on. So we see that -- and we see that as a great opportunity and all sort of matching together quite well. In the resource sector, it's a mix in the resource sector at the moment of bulk haulage and contract crushing. We've just recently commenced a new contract crushing job. And the team only, in the last couple of weeks, have secured another quite reasonable sized contract crushing job. So whilst the Carmichael project that you just referred to will start to ease in volumes, we expect that -- we still expect to be at that site for a number of years to come. And we do have a contract with that site that allows us a 5-year right of use for that quarry. So any construction materials that are required for that site that come out of our quarry, we have that contract in place. So we don't expect to see earnings drop off completely from that side. And we've recently contracted another 2 pretty reasonable sized contract crushing jobs and are actively searching for more. So that's quite encouraging. The Inland Rail opportunity, I really don't know that we're going to see too much revenue from that project this year. We might get some work on the northern end of the New South Wales part of that project from our Goondiwindi operations. But moving through sort of to the Toowoomba to Brisbane leg, I think we're at least 12 months of seeing decent revenues out of that work. The Bruce Highway opportunity for us is another massive precast opportunity that we are actively discussing, and there are a number of precast -- large precast opportunities in New South Wales that our team are working on as well.

Okay. That's helpful. So the next question on that front is when we think about CMS earnings, and I know it's a moving piece at this point given the macro environment, what's your feel in terms of growth? Do you expect the continued revenue growth and earnings growth? Or am I getting the sense that you're still a bit unclear at this point?