Atkore Inc. (ATKR) Q4 2018 Earnings Report, Transcript and Summary

Greetings and welcome to the Atkore International Fourth Quarter Fiscal 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the conference over to Keith Whisenand, Vice President of Investor Relations. Please go ahead.

Thank you, Rob, and good morning, everyone. With me today are Bill Waltz, President and CEO; David Johnson, Chief Financial Officer; and Jim Mallak, Chief Accounting Officer. I'd like to remind everyone that during this call, we may make projections or forward-looking statements regarding future events or future financial performance of the company. Such statements involve risks and uncertainties such that actual results may differ materially. Please refer to our 10-K and today's press release which identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. With that, I'll turn it over to Bill.

Thanks, Keith and good morning, everyone. Let me start by saying that we're proud to report strong financial performance for the year that delivered double-digit growth in net sales, adjusted EBITDA, and earnings per share. Starting on our full year 2018 results on Slide 3, Atkore outperformed on our guidance and delivered net sales of $1.8 billion. Adjusted EBITDA of $272 million and adjusted earnings per share of $2.78 up 22%, 19%, and 69% versus last year. These results were due to several key factors. First, our Electrical Raceway segments delivered net sales of $1.4 billion and adjusted EBITDA of $255 million. These equates to a 25% increase and a 35% increase year-over-year based in part on our increased average product market prices in the past through impact of higher freight costs to the market. Second, the Mechanical Products & Solutions segment delivered net sales of $470 million up 14.5% increase year-over-year due in part to higher volume of products sold in higher average selling prices. However, segment adjusted EBITDA declined 19% versus prior year due to an increase in average input costs which exceeded the average in price that we sold through partially offset through higher volume. Third, our portfolio changes over the last two years have provided accretive margins added $24 million of additional EBITDA versus 2017, and continue to drive synergies across the organization. Fourth, our pricing initiatives and active product mix management increase average selling prices of $166 million which more than offset commodity and freight inflation. Lastly, Atkore's overall strong financial performance also provides ability to repurchase and subsequently retire approximately 19 million shares. As a result, Atkore’s ownership under Clayton, Dubilier & Rice has transformed to a fully independent company with a Board of Directors that now reflects this new stature. Taken together, Atkore delivered strong results for the year. Net sales, adjusted EBITDA and EPS were all three up double digit year-over-year and exceeded the midpoint of our full year guidance. We also delivered strong operating cash flow, continue to integrate our acquisitions and deploy capital to repurchase shares in an efficient and accretive manner. We deployed additional capital shortly after 2018 close to acquire Vergokan, a Belgian-based manufacturer of metal cables, support, under floor and industrial trunking systems. Vergokan will add approximately $48 million in net sales and $8 million of adjusted EBITDA before synergies. The team, the culture and the business system continue to provide the discipline to deliver on our commitments to our customers, as well as our shareholders. With that, I'll turn the call over to David, who will walk us through our financials in more detail and provide additional insights into the quarter.

Thanks, Bill, and good morning to everyone. Moving to our consolidated fourth quarter results on the Slide 4, net sales were $478 million, up 16% organically after normalizing for acquisitions and foreign exchange. In the quarter this increase is driven by higher average selling prices as well as favorable mix. Net volume excluding acquisitions was flat reflecting the continued strength in the industrial environment for the MP&S segment and softening in our Electrical Raceways segment in the closing months of the year. Volume for MP&S was up 8% in the quarter and 11% for the year. Electrical Raceway organic volume was up 3% in the quarter and was up 1% for the year. The software Q4 appears to be timing and distributor stocking. To total Atkore, acquisition added 6% for the top line in the quarter and 7% year-to-date. During the quarter, we incurred input cost increases of $46 million year-over-year, through pricing and mix initiatives we successfully increased our average selling price at $63 million. We've broken up these items on the adjusted EBITDA bridge on Slide 5. As we've mentioned previously, when we pass these cost through to our customers in price, net sales and cost of goods sold increase in equal amounts, unfavorably impacting and resulting margin percentages. On a constant input cost basis, our adjusted EBITDA percent would have been up 150 basis points versus Q4 2017. Gross profit was $112 million for the fourth quarter, up 25% or $22 million compared to the same period in 2017, driven primarily by price and mix versus costs. Adjusted EBITDA was $71 million, up $11 million or 19% versus last year. Our net M&A activity accounted for $5 million of the increase to adjusted EBITDA in the quarter. These increases were partially offset by a small decline in volume, growth investments we've made in the business in variable compensation. Our net income on a GAAP basis was $33 million, up $12 million versus the fourth quarter of 2017. Adjusted EPS was $0.79, up 98% from the fourth quarter 2017. Moving to our Electrical Raceway segment on Slide 6, net sales increased by $62 million or 21% to $355 million. Our recent acquisitions, all of which are reported in the Electrical Raceway increased segment net sales in the quarter by $26 million or 9%. Organic volumes were down approximately $10 million or 3% in the quarter. When combined with our strong first half, full year volumes were up approximately 1%. The fourth quarter ended lighter due to what looks like inventory adjustments in the quarter - or in the channel, sorry. Higher average selling prices and the mix of products had a favorable impact to revenue of about $47 million or 16%. Adjusted EBITDA was $68 million, up $17 million or 34% compared to last year. The acquisitions account for $6 million of the adjusted EBITDA increase. Adjusted margin increased by 180 basis points with pricing execution, accretive acquisition margins, and favorable mix driving the improvement. Moving on to our Mechanical Products & Solutions segment on Slide 7. Net sales in the quarter were up $20 million or 20% to $123 million. Volumes increased by 8% as industrial markets continue to show strength. Price increase has accelerated in the quarter and added almost 16% to revenue. And the divestiture to flexible sprinkler business reduced net sales by 4%. Adjusted EBITDA of $12 million decreased by $3 million compared to last year. The reduction was primarily due to the divestiture of the flexible sprinkler business, cost headwinds versus our pricing traction, partially offset by stronger volume. Adjusted EBITDA margin is below the fourth quarter 2017 by 500 basis points impacted by the price versus cost headwinds which is in part due to timing of passing through the latest combined increases to our OEM customers. However, we did see continued acceleration in our pricing traction in the quarter with more than 70% of our 2018 price increases being delivered in the fourth quarter. We expect our pricing actions to catch up to the cost curve in early 2019. Turning to our balance sheet and cash flow on Slide 8. The balance of cash and cash equivalents at the end of the quarter was $127 million. Net cash flow from operating activities for the year was $146 million. Please keep in mind our working capital increased by about $45 million most of that driven by higher commodity costs. A conversion will be higher when commodities flatten out or decline. Finally, our net debt of $778 million and leverage ratio which we define as net debt to the trailing 12 months adjusted EBITDA was 2.9x. As we've communicated in the past, our long-term goal is to move this metric back to the low 2x range and we’re moving in that direction. Now, I'll turn the call to Bill for our guidance update.

Thanks David. Before I move to our future guidance, I want to recognize important piece of our past. This is Jim Mallak’s last earnings call with Atkore and I want to publicly thank Jim for being a strong advocate of Atkore for the past seven years. With his guidance, the company started its evolution as a leader in the industry with strong fundamentals that will now enable our continued success. The entire leadership team of Atkore wish him well on his retirement in a warmer climate and as he improves upon his golf game Jim, thank you for everything. Moving on to market expectations for 2019 on Slide 9, my team and I spent a lot of time in the field with our customers and end users. The contractors and distributor partners are very positive about the project finals and the activity they see in the market. They do call out availability as labor as one headwind though. With their input as well as the latest forecast from Dodge and Architecture Billing Index, we expect the construction markets to be up 2% to 4% in 2019, and we expect volumes in our industrial markets will be up 4% to 5%. Taking into consideration these factors, our 2019 guidance on Slide 10 is as follows; for the Electrical Raceway segment, we expect volume to be up 2% to 4% and adjusted EBITDA to be between $265 million and $285 million. For our MP&S segment, we expect volume to be up 4% to 5% and adjusted EBITDA to be between $55 million and $58 million. For total Atkore, we're expecting 2019 adjusted EBITDA to be between $285 million and $305 million. A simple bridge for the midpoint of that range with our $272 million of adjusted EBITDA for 2018 is the jumping off point add $8 million for the acquisition of Vergokan, then add net productivity savings of $6 million to $10 million, and adjusted EBITDA generated by volume had 20% to 25% contribution margin then subtract $2 million for the loss of EBITDA from the sale of Flexhead and a net headwind from price versus cost of about $5 million to $10 million which offset some of the tiny in favorability that we saw in the back half of 2018. We estimate our adjusted EPS to be between $3 and $3.30. Interest expense will be approximately $50 million in our fully diluted share count will also be around $50 million shares. Our tax rate will be about 25% for the full year. CapEx is expected to be between $35 million and $40 million. Turning to the first quarter 2019, adjusted EBITDA, our guidance range is between $67 million and $72 million. The year has started out strong for our markets and we expect that to continue as we go forward. To help ensure we deliver on our commitments not only now but well into the future, our teams will continue to focus on three key things. First, we will provide profitable grow organically through product, service and geographical expansion in addition to accretive and synergistic acquisitions. Second, we will make it easier to do business with Atkore and drive to improve customer experience so that we become the customers' first and only choice. This means we need to drive strong execution of the voice of customer to deliver meaningful solutions. Third, we need to ensure we continue to recruit, develop and retain the best talent in the industry. We are proud of the organization that we've built here at Atkore and with engaged in the line employees dedicating makes in business better every day for everyone. With that, operator, please open up the line for questions.

[Operator Instructions] Our first question will be coming from the line of Andrew Kaplowitz with Citi. Please proceed with your question.

This is Eitan Buchbinder on for Andy. Last quarter, Electrical Raceway volume was marginally down and now you have inventory destocking. It seems like there's some volume degradation and that volume has gotten a little choppy as the year went on. Can you talk about the volume decline in Electrical Raceway? And what is the risk that destocking continued longer than you think given that interest rates are coming up and there is some uncertainty over the U.S. economic situation?

Yes, a great question. From what we see, we don't see in the market itself. In other words, back to interest rates and so forth as we give guidance into next year. What we do see is some slight decrease in commodity costs, and therefore, if you just do a simple math on each, and there’s in a lot of inventory out there. Just because of the size of some of our products, but between distributors and contractors, if you just take one week of inventory out of a 13-week period, that’s 7%. So it's a slight decrease distributors and so forth, worked on their inventory. And then the other thing that we have done really well, and I want to emphasize, compliment to all of our leadership is work our mix management. So we are talking about volume. But if you actually look at our pricing, our revenue, we've gone obviously up significantly in those areas. And it's because instead of selling some of the basic commodity products that don't have quite the margin, there’s a lot more focus on higher margin products but when you measure in feet, which we do to give that indication, it works against us. So, we're still very comfortable with our guidance as we top it 2% to 4% Raceway growth going into 2019. And I think most other competitors would probably be talking the same type of ranges.

And just as a follow-up, within industrial, you’re still predicting 4% to 5% market growth. The industrial market seems pretty strong and we know you’re mostly U.S. based. You have solid expectations for industrial in 2019, are all market growing in that range? Or are there any industrial market that concern you? Thank you.

We have a such wide diverse thing. The one great thing with our group where there’s still lots of opportunities, if I would start listing, everything from racking systems that you’ve put your home depot shopping cart in, to roll cages, to green houses and just walk through that we have such a diverse set of segments that there’s nothing where one segment concerns us and we are also optimistic about 2019.

The next question comes from the line of Steven Winoker with UBS. Please proceed with your question.

I just wanted to maybe dig in a little bit to first of all, what do you think goes on in terms of your ability to hold on to these price increases and the space of what looks like certainly October anyway deflationary commodity price environment obviously steel, etcetera. And also would there be any differential impact between Raceway and MP&S in terms of the answer to that?

Yes, I’ll do them in reverse order. One of the things that we have that works for us really well with Raceway is it’s literally everyday pricing I mean every hour quite frankly that we do given market situation. So commodity cost are a factor in there but just what supply, demand, or competitor is doing that we can react very quickly to pricing. And that’s why you’ve seen us execute I think so well in 2018 and continue to expect that to do well going into 2019. MP&S is similar but you have two challenges. One, there is 20% to 40% of the volume that somehow tie to longer pricing either there’s a contract term involved in it or you made bid a purchase order that’s two or three months long. That just creates a price lag. And therefore, we haven’t seen quite the pricing strength that we have in Raceway. Now that said as we go forward, obviously we’re going to continue to focus on what we do really well with Atkore pricing discipline, and I know our whole Mechanical Products & Solution on what best practice is, they can continue to learn and drive their own self-help as we go into 2019.

So the deflationary side of that given that what you're describing is a little bit of ability in MP&S but Raceway is going to pass that on the way down just as quickly as what I'm hearing?

Yes. I think. I mean we gave our guidance here. There may be as we gave guidance I mentioned I think was $5 million to $10 million a year-over-year because we did such a great job and we also called out at the end of Q1 of last year the hurricane in PVC products where we had a bunch or resin and reacted quicker. So we're just trying to be very objective, conservative on our numbers. But at the end of the day, we've shown in the past whether it's a deflationary period or inflationary that we're able to keep and hold and drive our margins. And if anything, there's a little bit during deflationary periods that we're able to hold on to our prices up to 90 days more on the way down. So it could actually work to our advantage slightly as pricing goes down.

And the other question in terms of capital allocation. Obviously, the market right now has been penalizing companies above a certain leverage level and we're sort of seeing that in several cases. You guys have been de-levering. We can see that, but you've certainly been allocating in a balanced way too. How does - how are you thinking about the pace of the de-leverage from here?

David, do you want to?

Yes. I'll take that. As we've seen those we've put in our presentation in Q2 alone, we were at 3.4 and we worked our way down to 2.9. The 3.4 after the large buyback, I think we’ve continued to be balanced between two main priorities that being accretive acquisitions where we feel we can add a ton or two of synergies. I think if you look at the Vergokan acquisition, I think it very much fits right into that our disciplined approach, as to where our priorities are in acquisitions. And then second, clearly is going to be reducing our leverage ratio. With our cash generation, we have the ability to move this number down quite quickly, so I would say that it's all going to depend on the appetite or the availability of different acquisitions, but we do intend to move this down into the long-term range into the lower 2s.

And if I could just sneak one last to end, on your seasonality that you've laid out, - I guess the EBITDA looks pretty similar. Are you stuck in normal seasonality for - to the shape of the year?

Yes, at this stage. We had - the only thing I would call out at all is just as you get into the details. If anyone recalls Q1 of 2018 we had higher volume, distributors who were buying up, probably even more so that we did call out. So we had a good - tough comp on revenue and a little bit of profit in Q1. But, no, we're expecting normal seasonality and overall EBITDA up 8% and you'll actually see probably even higher year-over-year for the first quarter.

The next question is from the line of Deane Dray with RBC. Please proceed with your questions.

Maybe, we could start with price cost on for 2019. You gave a helpful data point about the headwind. But how does that play out, at least what is baked in your assumptions on the quarterly progression for the year on price costs? But I know you need a crystal ball for that. But just what's your best estimate at this point?

Yes, great question Dean. It's probably spread out throughout the year. I mean every quarter, last year was an amazing quarter or last year, excuse me, overall again, where we were up 19%. We did have some onetime things in every quarter that you look and say hey PVC we got extra spread in the first quarter as we called out in previous quarters because the U.S. President's tweets we are able to get our steel price up even higher and costs in Q3 and Q4. So, I think in the conservatism, we just want to make sure that there could be that $5 million or plus as we give guidance and probably evenly spread across the quarters because of that Dean.

And then on the adjustments to EBITDA this quarter, a little bit of noise there at least from versus what we were looking for. What were some of the larger items? Was there a nonrecurring legal matter and some transaction costs? Can you just give us some color there please?

Just once sec there Dean…

And as you're looking maybe Dave can give us some comments on tax came in lighter than what we were looking for. What were the dynamics there?

And so we'll start with the tax first and basically, I just said - our stock comp, excess benefits was higher than we expected, so that definitely reduced the rate. And then we did have a reserve tax provision and M&A that we reverse it and goes back to the Tyco pre-spin, so it was a FIN 48 release for again the tax and M&A. So those are the couple of two one timers for the quarter

And then also as Dave is talking one of the biggest things for the onetime adjustments were we had I'll give general numbers here versus per size but it was slightly over $7 million of the reversal of an anti-dumping duty with the government. And then we also released a reserve with, I won't call out the company but we had a legal reserve for $1.1 million if I can release the company - so that - they were the two big ones in play.

Your next question comes from the line of Rich Kwas with Wells Fargo. Please proceed with your questions.

This is Deepa for Rich Kwas. How are you doing today? I had a few questions. I'll start with the Electrical Raceway volume assumptions. Within your 2% to 4% volume assumption which are some of the non-res verticals that you think will grow at the higher end or slightly above, and which probably will be towards lower end, for example institutional, the heavy infrastructure in there in a commercial and there any color there would be appreciated.

So, the two - obviously I'm focused on the positive tools that we think are growing the most and that really help us because what we call it density and that's where we sell more electrical products per square foot. Our education and hotels both seem to be going up significantly. Some of the other ones that are just a little bit less are things - but they're so minor to us are things like parking structures, public buildings seemed at least for 2019 be down. But education, hotels and again if you think through that and even manufacturing are lining up to be in a great position as we go into 2019, our fiscal year.

So, any color on your free cash flow expectations for fiscal 2019? I mean, I think last year we've got some guidance from Jim on that, just curious if you have any to provide us this year.

Deepa, this is Jim. I think on that one - we've never really given guidance on cash flow per se. You see the tax rate and the CapEx and the interest expense as expected. So we would leave that and everyone knows where we flow from EBITDA, so we're going to leave that out there with the main components alone.

But how do we think about as you're working capital converts were better. I mean, should we expect conversion should be to be better than fiscal 2018 at least?

Yes, I'm going to talk in Dave and I think that we're going to be probably flat, maybe 2% to 3% improvement in days and lot still depend on what we're going to see on inflation because that's going to impact the dollars and not necessarily the days.

So now that you are below 3 on leverage, I know your target is to be below 2 or closer to 2. So that sets you up well for better capital deployment prospects at least on the acquisition side and maybe some on share buybacks. It's not in your guidance obviously we see your 50 million share count pretty - probably just has some dilution factor in there. But, how should we plan - how should we model for a share buyback if at all? Any color there. And if you can also help us think through what - what are you thinking in terms of capital allocation in terms of the acquisition? How's your pipeline? I think last year you had a $150 million spend that you are targeting, stuff - anything there would be appreciated. Thank you.

Deepa, I'll start here, David can add color. We've always stated, I'll just give slightly different numbers to look at $100 million to $150 million of acquisitions a year. And I think that's still the targeted number. But I really want to emphasize for everybody, if it hits all the criteria of being accretive and synergistic, and part of our strategy in the management bandwidth and that responsibility you bring out. So some years, we'll do three or four or maybe a year. We just closed Vergokan. If there’s not one that fits that, we will wait patiently and we have such great use of our capital and continue to pay down. I think you mentioned getting below two. I would say our objective is to get to a low 2s on debt to EBITDA ratio. And then from the stock buyback, the only thing I would say is, these are general numbers but the board had authorized $75 million. We have used today approximately $50 million and we have approximately $25 million left and we'll - obviously to consider what's best we've received for our shareholders on what is the exact use of that capital between continue to drive synergistic acquisitions, continue to pay down our debt, and then obviously stock buyback.

So, are you like not thinking in terms of - as percentage of free cash flow, how you want to deploy capital, I mean anything I mean now that your leverage ratio is well within favorable range. I mean, I would have thought you probably have some targets that you want to provide us with.

No, at least nothing - neither externally, Deepa.

[Operator Instructions] The next question comes from the line of Taylor Finch with Century Management. Please proceed with your question.

So I wanted to ask about your guidance and the $50 million shares. We're ending the quarter with a weighted average of $48 million. I know that there was maybe $0.5 million repurchase in the quarter. So I guess what's the disconnect there?

Basically, the only thing that we've really guided so far, we haven't guided any stock buybacks or what have you. We did say we have some capacity up to $25 million. It's essentially our stock compensation dilution that we basically see every year.

That would be $2 million shares or…

Roughly.

Okay. Then, I wanted to revisit the capital allocation priorities and that you mentioned a certain amount of cash remaining on the repurchase authorization, but I guess given that your share prices [indiscernible] levels and next year should be a strong year of free cash flow. I guess, how do you weight your appetite for share repurchases, I guess given the market conductions right now?

Obviously, we feel our stock is undervalued and we do think that we should be trading much higher than we are. I think right now, we're looking at our opportunities around acquisitions like we've mentioned, reduction of our debt, and then we do still have capacity on our buybacks. And I think we’ll look at those in a similar manner is the best way to deploy that capital giving our opportunities with acquisitions at this point in time.

Okay. So then, I wanted to ask you about MP&S. So, in terms of price cost catching up, it looks like your guidance might imply maybe 11.5% margin at the midpoint on that segment. I guess as price cost catches up, can that margin do better than that in time? I think there's some prior comps that were a bit higher than that or has that sort of maybe the launching up point from there?

Yes. So the answer is, can it be higher? Absolutely. It can be higher. I mean, we gave guidance that we feel is the best, most accurate information to give to you, the shareholders and analysts out there. But obviously over time, we aspire to continue to drive that adjusted EBITDA up higher. And as we go out through the year and into future years, we aspire to get it back to the 13%, 15%. But - so we gave our guidance that we just provided is the most accurate information for 2019.

And so I guess just to rephrase it. For 2019, just on a price cost basis, that will be fully caught up by year-end in terms of price cost basis?

Yes. It's accurate. Yes.

The next question is from the line of DeForest Hinman with Walthausen. Please proceed with your question.

I wanted to just get a better understanding of the volume performance and you've talked your - metric like revenue per foot in the past and not in this call, but I think at some other calls, thinking about you know where's the most profitability on some business and if there's even instances where there are some products that don't make sense to sell where we step away from those, where - maybe it's not even bad to lose some volume. So at a high level, can you help us understand whether or not you think you’re losing market? And if you are losing share on a volume basis, can you just give us a little bit more color on either revenue per foot, revenue per pound, and how has that been trending?

Yes, great question. I'll try to provide as much as I can. I'll try to provide as much as I can with - we do feel we're either holding to losing possibly in the last quarter 50 to 100 basis points of share. So, again, the markets are up in the low single digits. We were up in 2018 around 1%. So, if you just assume 2% we were up 1%. We probably have lost a little bit. But I will tell you most of it's been very conscious where we have done things to go we're going to push pricing up, hold pricing. Can you always have a competitor willing to lock pricing for a month but we're making very conscious decisions to drive our earnings, our EBITDA higher and also focus as you just mentioned and we mentioned in our prepared comment about the mix of products. I think in that area, I'll give you examples of things where we're selling more specified products, larger diameter of products that have a higher revenue and a higher gross margin. But I don't want to call out specific products down to saying here's the one that we're consciously moving away from other customer. But I think it is that active management that really our employees have done so well that quite frankly delivers 19% increase in EBITDA in 2018 and it provides us the capability to give an 8% increase in EBITDA for 2019.

But I was thinking as a shareholder thinking out loud a little bit and - I'm just thinking out loud but I don't know very many industrial companies that maybe nearly year-over-year doubled their earnings. And I will give it to you that your leverage ratio increased but your stock is down and you doubled earnings. Is there anymore thought needed in terms of how we're explaining our business? And I'm saying this there's some metal processing businesses and I'm not saying your metal processing business, but is there any way that you could help shareholders with that understanding either revenue per pound? And I know some of the products are plastics, some of made of metal. But it seems like the execution has been very, very good and the story is just not being understood. Do we need to disclose that metric or is it something for competitive reason that doesn't make sense to the talk about?

I think a couple of thoughts. One, it probably does not make sense because again in your - your thoughts are good. You realized that - you even mentioned steel. We're selling copper products, PVC based products and then there's products beyond just those. So there's not a metric here. Some of it gets just the sophistication specificity of different products. I do agree with you that one of the things that David, and I, and Keith and Investor Relations need to do is to get out and continue to tell the story better just because, as you mentioned some of the numbers, we've had a great year and we look forward to communicating why we think it's an attractive company for people with our own.

And then, maybe beating a dead horse a little bit but on the capital allocation with the stock repurchases. If you're looking at whatever metric you're using for - looking at acquisitions and I think in many cases using EBITDA and then maybe some post synergy EBITDA metrics. If you have your stock down here maybe sub-7 EBITDA I don’t know what adjustments you're using. How do we balance buying our own stock the easiest acquisition to integrate because there's no integration versus potentially paying more for deals and subjecting ourselves to integration risk?

We are philosophically overall aligned and one of the things that we talk about is there is no integration cost. And if there was confidence in the management team in our future as you look at something. Yes, we would consider buying ourselves i.e. stock buyback. On the same hand by each deal we have to look case by case. It depends on the synergies. What does it bring to their profiles specifiable products or future strategy. Over time, I personally believe the stock price will take care of itself as we continue to perform and communicate, so that is one of our levers there. So with that, I was going to say just to wrap-up, I was going to - Operator, is there any other questions or I was going to look to close the call?

And there are no additional questions at this time.

Okay. So, if I can wrap-up then, it's a great year in my mind. I'm proud of what we've achieved. We walked through some of the numbers but it's a great year. As we look forward to fiscal 2019, I think we're also excited on what we see out in the markets and our ability to prioritize and drive our success. The key thing to make that happen for us is our employees, so for them I want to thank them for their hard work this year, and everything I know they will continue to do and deliver to truly make us the customer's first choice. I want to thank our shareholders for their interest in Atkore. And with that, everybody, I hope you have happy holidays. Thank you everyone. Operator, you can finish the call.

Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.