Greetings, and welcome to the Cummins Inc. Fourth Quarter 2022 Earnings Conference. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Clulow, Vice President of Investor Relations. Thank you. Please go ahead.

Thank you very much. Good morning everyone and welcome to our teleconference today to discuss Cummins’ results for the fourth quarter of 2022 as well as the full year performance. Participating with me today are Jennifer Rumsey, our President and Chief Executive Officer; and Mark Smith, our Chief Financial Officer. We will all be available to answer questions at the end of the teleconference. Before we start, please note that, some of the information that you will hear or be given today will consist of forward-looking statements within the meaning of the Securities and Exchange Act of 1934. Such statements express our forecasts, expectations, hopes, beliefs and intentions on strategies regarding the future. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the forward-looking disclosure statement in the slide deck our filings with the Securities and Exchange Commission, particularly the Risk Factors section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During the course of this call, we will be discussing certain non-GAAP financial measures and we will refer you to our website for the reconciliation of those measures to GAAP financial measures. Our press release with a copy of the financial statements and a copy of today’s webcast presentations are available on our website within the Investor Relations section at cummins.com. With that out of the way, I will turn you over to our President and CEO, Jennifer Rumsey, to kick us off.

Thank you, Chris. Good morning. I’ll start with a summary of 2022, discuss our fourth quarter and full year results and finish with a discussion of our outlook for 2023. Mark will then take you through more details of our fourth quarter and full year financial performance and our forecast for this year. Last year was an incredibly exciting one for Cummins and our stakeholders. We made significant strides in our inorganic growth strategy, most notably through the acquisitions of Jacobs Vehicle Systems, Meritor and the Siemens Commercial Vehicles business. We also navigated complex global supply chain challenges, advanced our preparation for the separation of our filtration business and transition from Tom to me as the CEO. We accomplished all of this and delivered record revenues, EBITDA, and earnings per share in 2022. We did so with the focus on the exciting opportunity in front of us to lead the industry to a broader clean economy and do so in a way that is best for our stakeholders and the planet. Decarbonization is a growth opportunity for Cummins, uniting our business and climate goals. In 2022, we launched our long-term decarbonization growth strategy, Destination Zero, which includes making meaningful reductions in carbon emissions through advanced internal combustion technologies widely accepted by the market today, while continuing to invest in and advance zero emissions technologies ahead of widespread market adoption. As part of our organic growth strategy, we unveiled the industry’s first unified fuel-agnostic internal combustion powertrain platforms, and we continue to see momentum in our electrolyzer technology and green hydrogen production opportunities. Demand for our products remains strong across all of our key markets and regions with the notable exception of China, resulting in strong revenues in the fourth quarter. Fourth quarter revenues totaled $7.8 billion. Excluding the Meritor business,…

Thank you, Jen, and good morning, everyone. There are four key takeaways from my comments today. First, we delivered strong results in the fourth quarter of 2022, exceeding our own projections for revenue and EBITDA from three months ago, and we delivered stronger margins Engines, Components, Distribution and Power Systems compared to a year ago. Second, we continue to make good progress on the integration of Meritor and we remain on-track to deliver $130 million of pretax synergies by the end of year three. We returned $1.2 billion to shareholders in 2022 in the form of dividends and share repurchases. Finally, demand for our products remains strong, supporting increased revenues in our core business and New Power and growth in EBITDA and earnings per share in 2023. Now, let me go into more details on the fourth quarter. Fourth quarter reported revenues were $7.8 billion and EBITDA of $1.1 billion or 14.2%. For the full year, revenues were $28.1 billion and EBITDA of $3.8 billion or 13.5% of sales. Also in the fourth quarter, Meritor generated $1.2 billion of revenue, $60 million of EBITDA, after incurring $27 million of acquisition and integration related costs. Our fourth quarter results also included $19 million of costs related to the planned separation of the filtration business. Full year 2022 results included five months of operational performance for Meritor, yielding $1.9 billion of revenue, $26 million of EBITDA, reflecting $115 million of acquisition, integration and purchase accounting related costs. We will all look forward to a cleaner set of numbers in 2023. Our full year 2022 results also included $81 million of costs related to the planned separation of the filtration business and $111 million of costs related to the indefinite suspension of our operations in Russia. To provide clarity on the fourth quarter…

Thank you, Mark. Out of consideration to others on the call, I would ask that you limit yourself to one question and a related follow-up. If you have an additional question, please rejoin the queue. Operator, we’re ready for our first question.

[Operator Instructions] The first question today is coming from Jerry Revich of Goldman Sachs. Please go ahead.

I know it’s early post the acquisition of the Siemens propulsion systems and Meritor, but wondering if you could just comment on what the acceptance has been of the products in the marketplace? Post-Cummins ownership, what’s the pipeline from the developments look like? How is that cross-selling working out versus what you folks had expected before acquiring the assets? Thanks.

Yes. Thanks, Jerry, for the question. Yes, we are right now really focused on integrating the Meritor business, the Siemens Commercial Vehicle business and the investments that we were already making within New Power and having a number of conversations with our customers on how we bring that together to deliver those electric powertrains and components to meet their needs. So, it brings some strong products, employees as well as customer relationships, and we’re seeing growing opportunities as we have relationships at a senior more strategic level with these customers to grow our business going forward. It’s really early days at this point, so we’ll continue to talk about that as we bring those businesses together.

Sounds good, Jennifer, thanks. And Mark, can I ask in terms of the pricing that you’re expecting in ‘23 within the outlook? And if you could just touch on the logistics costs embedded in the guide as well. You folks have been running pretty hot to hit deliveries in ‘22. I’m wondering to what extent does that a tailwind within the guidance?

Yes, we’ve got about 2% of price cost benefit embedded in the guidance, Jerry. That’s the biggest single driver of margin improvement.

The next question is coming from Jamie Cook of Credit Suisse. Please go ahead.

I guess, two questions. Just given the concern on the macro out there, can you guys speak to by business line where you see the most visibility or where demand trends do you see sort of weakening? And then, I guess, on the engine margin guidance. I guess, I would have thought margins would have been a little better in implied guide just given maybe price cost going away, China improving. So, if you can just help me bridge 2023 to 2022 engine margins what’s implied? Thank you.

Great. Thanks, Jamie. Let me speak first to what we’re seeing in the market. And we, of course, are paying attention to some of these macroeconomic trends. If you take just the North America truck market as a starting point, while there has been some decrease in spot rates, we still continue to see healthy freight activity and strong backlogs out through the first half, which gives us confidence that the market is going to remain strong, certainly through the first half of the year. And it’s important to note, it’s just not been a typical cycle for us because for the last two years, we’ve been undersupplying to the market demand. They’ve been using that equipment. We’re seeing that reflected in very high aftermarket demand which continues, and these new trucks provide efficiency benefits to the fleet. So, we continue to expect strong North America truck market. In the Power Systems business, again, we have a healthy backlog of products and strong demand across many of our markets. Mining, we’re forecasting to remain around flat, but growth in power generation, growth in the oil and gas business. So, we’re feeling pretty confident about that as well. The biggest uncertainty is really around China. And as I said in my comments, we do project some slow recovery throughout 2023. With the lift of the stringent lockdowns that they had in the last couple of years in December, we expect that that may result in economic strengthening and certainly, less operational disruption, but we’re still monitoring what happens with the COVID waves there, is there any government stimulus into the economy. We feel really well positioned there. We’ve launched our NS VI products, which we think will enable Cummins to grow our position in the market. We’ve launched the automated manual transmission there. We’ve got a new natural gas platform. So, we’re really well positioned as China continues to strengthen and just uncertainty on exactly what the shape of that will look like. I’ll let Mark talk about the margin question.

Yes. I think the main thing on the Engine business margins is that we haven’t got building a very strong recovery in China. And then the other piece that you didn’t mention, Jamie, is that we’ve got fairly sustained investments ahead of us over the next couple of years because we’re updating several of our platforms. We’ve won a lot of external business, and we’ve got to meet future emissions regulations. So, that’s the only other element that’s running through the Engine business that may not be obvious from the outside, but otherwise, we’ll expect them to do well if markets continue to be strong.

The next question is coming from Stephen Volkmann of Jefferies. Please go ahead.

Maybe just following on, on the Engine margin question, Mark. Given what you just described around increased spending, R&D, et cetera, should we think about sort of flattish incremental margins over the next few years, or can it still be better than that, if we have some volume?

I think it can definitely be better than that. We’re still battling some inefficiencies here and there Steve. We’re still expecting to have aftermarket growth over time. So no, we’re not locked into these margins. I was just trying to be clear on what the underlying factors. I’ve seen a few comments around Engine business margins, but no, I think they can go higher. Getting China, which is the world’s biggest truck market, I know the earnings come through JV, we have the lowest market in a decade. And we think we still got more share to gain there. We’ve got more content in the Components business. So, if I sit here today and say what could be the one thing that could move that could change our guidance most clearly, I would agree with Jen, it would be China, right now. We don’t have visibility. People are more enthusiastic, but the activity hasn’t yet materially picked up. So, that would be one important factor.

Great, understood. And then, my follow-on maybe a bigger, broader question. But as we start very early days but we start to think about the 2027 emissions regulations, do you guys feel like you have line of sight to what you need to do technically to get there? We’re starting to hear that this is going to be sort of the biggest emission hurdle ever and that some people may have trouble getting there or maybe have some massive costs associated with it, which has some implications for prebuys and maybe whether people do it themselves or outsource it to you, just your big picture thinking on 2027 and how that kind of plays through.

Yes. We are focused on continuing to meet more stringent regulatory requirements and do so with products that will provide benefits to the environment and exceed our customer needs. We now have clarity on the EPA 2027 NOx regulations that happened late last year, and they finalize that standard at a 0.035 gram NOx. And our intention is to offer a full product lineup with our new fuel-agnostic engine platforms to meet that regulation, and we’re finalizing our product plans right now with our customers on those. But we really feel well positioned to invest in really as a part of our Destination Zero strategy, reduce CO2 and NOx impact to the environment and offer products -- market-leading products to our customers with that regulation.

The next question is coming from David Raso of Evercore ISI. Please go ahead.

Hi. Thank you. The China guide, the up 7%, I assume that includes consolidated and JV revenue, sort of how you usually kind of speak to it.

Yes.

Even -- maybe can you update us on the mix of your end markets? It feels like the consolidated off-highway, the construction exposure you have that shows up in the P&L more so than JV, and the JV is more of the on-highway. I’m surprised with the mix because that construction business at this stage must be pretty small after the declines we’ve seen. So, to have truck up double digit for China, for heavy and light, even though the excavator is down a lot, the mix would suggest you’d be up more than 7%, if truck is up double digit and at now relatively small construction business is down. Are there other businesses keeping it only at 7%? Is there a share comment there? Just trying to understand why only up 7% with that China end market guide?

I don’t think there’s anything significant in there, David. I mean, obviously, whether it’s consolidated or unconsolidated, trucks probably [70%] plus when you add up all of our markets. So, the truck does better, we’ll be up more than 7%. If it doesn’t, we won’t. I think for components, that’s all consolidated revenue. That’s almost entirely on-highway. It’s really the engine business that has the off-highway business of any of any size. And then, yes, I think Power Systems has been pretty strong last year in China. It has probably been the exception to what we’ve seen in every other market. But there’s no big change in dynamics.

Just on your share, we expect to continue to grow our share in the China market with the launch of the NS VI product. So, that’s assumed in our guidance.

I’d even think with some of the transmissions as well. So, I’m just trying to understand like Photon is struggling more than I would have thought. It’s still barely making money now for two quarters in a row. Is there something about that dynamic we should be more sensitive to on the margin recovery in China in the JV because of Photon?

No. We did get some sizable tech fees and other things from the early part of last year, which kind of helped -- the wrong word, we were entitled to those based on product launches, but no, I don’t think there’s anything significant there.

And I’ll hop off, just one kind of modeling question. If you take the interest expense in the fourth quarter and annualize it, it’s $348 million. You mentioned there’s debt reduction, but your guide is $380 million. I mean, what are we assuming for interest rates from the fourth quarter on to have up interest expense, but you’re targeting debt reduction?

Right. So, I think the answer to that is, we’ll need to keep working that down. I think we’ve got some floating rate exposure. It’s not all fixed, and probably, the debt reduction will come in the second half of the year, but let me come back to you on that, David.

The next question is coming from Rob Wertheimer of Melius Research. Please go ahead.

Hi. I know it’s still early days, but you’re starting to see some ramp in electrolyzers. And I guess there’s obviously a lot of uncertainty as to what the ultimate margin structure is going to be, New Power or clean energy generally. So I wonder if you have any thoughts on when you see clarity, any thoughts on where gross margins might trend. Maybe you’re still heavily investing, but the gross margins are improving, or just your thoughts on how the curve of profitability is shaping up in clean tech.

Yes, the electrolyzer business is really going to drive the majority of our progress towards breakeven in ‘27 for New Power and the growth aspirations that we shared for 2030. And so, we expect during that time frame to scale up the product, the supply chain and manufacturing and continue to see growing backlog and conversion of orders into revenue. And so through that time period, you’ll see margins going positive and improving, the exact margin structure of that business is still unclear. There’s not a lot of suppliers in the market, and we expect demand to be quite strong through that time period. So, I’m optimistic on what margin structure for the business will look like. But, obviously, we’ll share more as we get towards that breakeven point and go margin positive.

Yes. Rob, one thing I’ll add is, for the gross margin on a project basis, we’re at gross margin positive last year, which is a good early indicator. We have other costs that are going in, too, for capacity expansion and other things that obviously offsets that, but it’s a good indicator that we’re on the right path for profitability as we move forward with more volume.

Okay. That’s helpful. Thank you. And obviously, there’s just still a lot of build-out in manufacturing and supply chain. So, do you have a sense as to how you stack up competitively on either design cost, or I guess you have a lot of advantages in manufacturing as you build out and off the top there.

I mean one of the advantages we have here is we’re able to leverage our existing footprint and capability that we have as a part of the broader comment. So, you saw us announce recently, we plan to use our Fridley manufacturing facility for electrolyzer production in North America. So, we are tapping into that strength we have in our footprint and supply chain capability to help build out profitable both product as well as supply chain. And that’s an advantage that I think Cummins has here.

The next question is coming from Nicole DeBlase of Deutsche Bank. Please go ahead.

Maybe just on the distribution margins. It looks like you guys aren’t expecting margin expansion there, even though sales are up 2% to 7%. I guess what is the reason for that?

I think there’s a little bit of improvement baked into the guidance, but we’ve got a pretty strong track record of improving. There’s no structural impediments to growing margins over time. It’s a range. So, under the different revenue scenarios, some variation, Nicole. But over the time, we expect the margins to keep going up.

Okay, understood. Thanks. And then I guess Power Systems stood out to me. On the other side, it’s just the margins look really impressive year-on-year in 2023. Is price/cost the biggest driver of that, or is there any other big drivers of the margin expansion that you guys are expecting?

I think, certainly, that’s been a big factor, and we’ve got pretty healthy demand locked in now. So, there’s been a lot of focus on that business. We’ve been pleased with the solid results, particularly in the second half of this year, and we just -- we’ve got a very, very strong focus on continuing to drive…

For that business, it’s important to keep in mind, you see a very long -- we have a very long lead time on orders. So, as costs accelerated, it took a while for us to pass on some of the price increases to offset that, and that is in part what drove the strong margin improvement from ‘21 to ‘22.

The next question is coming from Matt Elkott of Cowen. Please go ahead.

If you can give us a sense of how much of a growth moderation can we expect in the second half? I’m assuming that will be the case directionally because you’ll have the Meritor comps. And also, it sounds like you guys are more cautious on the second half. So, how much of a growth moderation are we expecting?

You can roughly split our revenues 52% to 53% in the first half versus the second half, Matt.

Got it. That’s very helpful. And then, just one follow-up on the New Power front. It’s been about a year since you guys announced the fuel agnostic engine. So, any update on that and the receptiveness from customers in your conversations? And also, I think back in August PACCAR announced that they’re using your new natural gas engine. So, is there anything new on that front as well?

Yes. So, the fuel agnostic platform, just to clarify, that’s being developed as a part of our Engine business. And as I mentioned earlier, we’ll launch a full lineup in North America of that product as a part of the 27 EPA regulation. As you’ve seen, PACCAR is integrating and plans to introduce the natural gas version, and we have customers that are very interested in that product, including with renewable natural gas, and we announced partnerships around that. We also announced a memorandum of understanding with Tata late last year on the hydrogen version of that platform. And so really, we see a lot of interest in those platforms, both as a way to improve efficiency of diesel engines and then create flexibility to move to other fuels such as natural gas or hydrogen with the platform and really minimizing the integration pair up that’s required for customers as they move between those platforms. So, we’ll begin to launch those with the natural gas version here, in North America in late ‘23, early ‘24 and then accelerate introduction in the coming years after that.

The next question is coming from Noah Kaye of Oppenheimer. Please go ahead.

Can you characterize the current mix of investment spending in New Power? Just kind of give us a sense of the key buckets where you’re spending? Maybe you can even give us some guidelines on how much of the CapEx for this year would be attributed to New Power? And then, I think the higher question here is, are you ready to call 2023 kind of the peak of net investment spending for the segment?

At a high level, the different categories of investment in New Power, of course, there’s big investments happening in electrolyzers, and we talked about the growth and capacity investments that we’re making there. The other buckets include investments in batteries, other electrified components in the electric powertrain and then in fuel cells. So, we’re investing end of the prime mover as well as some of the key components to position ourselves as our current markets start to move to electrified powertrains to be both the powertrain provider as well as provide key components similar to the model we have today with Engine business and Components. You want to talk about allocation of investment?

Yes. So CapEx, probably in the $100 million to $125 million range. So just under 10% of the total for the company in the New Power segment, and most -- more of that’s weighted towards electrolyzers where, of course, we’re ramping up production, albeit using existing Cummins sites, where possible and appropriate. And then, yes, I’d love to call the peak in New Power losses. They’re going to have to peak soon because we’re aiming towards breakeven in 2027 at the EBITDA level. The only caveat is, if there’s a significant change, should we invest in some new capabilities that aren’t part of our current portfolio? That’s not part of our plan today, Noah, but that would be the only variation.

That’s helpful. And then just to give us some expectations around the cadence of earnings this year, obviously, you’re guiding to EBITDA, not EPS. But thinking about China JV modestly improving, getting better synergies, capture on Meritor throughout the year, but then maybe some offset from potential deterioration in some end markets. So, just any guideposts you would give us on first half versus second half, the EBITDA or even EPS?

No. I mean, by and large, it will go along with the revenue. Unfortunately, we had a tough Q3 in 2022. So that probably gives us the easiest comp, just kind of going through by quarter, and then we started the year much stronger. So ex-JV, I think we’ll have a good first half of the year. The JV will be the biggest single swing factor. When you look at our P&L, I would think -- in the first half of the year, maybe that helps in the second. Q3 gross margins were disappointing. We’ve rebounded well in here in Q4. So yes, modestly expect first half to be stronger all in, unless revenues in the second half change direction significantly from what we’ve guided.

The next question is coming from Tami Zakaria of JPMorgan. Please go ahead.

So my first question is, are you expecting any synergy savings from the Meritor acquisition this year? I believe you were expecting $130 million in total by year three. So, anything this year?

Absolutely. Yes, we’re working very hard on that. I mean personally, along with many members of the Meritor, Cummins team. So yes, and we’ll talk about those as we go along, but yes, we’re feeling confident about that progress towards that $130 million.

And some of that is embedded in guidance and assuming -- or would that be incremental?

We’ll try and get as much as we can -- both helps the long-term interest of that business and improve the cost structure. So yes, we expect the results clearly to improve, especially in the Components segment. We’re assuming that’s all in for now. If we get more, then we’ll be happy to report. We won’t get more than $130 million, just to be clear. That’s a year three number, but we’re making good progress.

Got it. And so, I’m sorry if I missed it, but can you give some color on the embedded Meritor margin expansion cadence for the year? Should it be in the guided 10% to 11%, or does it ramp towards the back?

Yes. So, let me just reiterate the guidance that we had within the Components business. We have $4.5 billion to $4.7 billion in revenue and EBITDA margins for the Meritor business, 10.3% to 11% compared to in 2022, that was 7.2%. And some of that is progress on price/cost in that business, operating efficiency as well as synergy cost savings.

Got it. Thank you.

I think you should just expect sequential improvement through the first half of the year from the Q4 levels.

The next question is coming from Avi Jaroslawicz [ph] of UBS. Please go ahead.

Hey, guys. Thanks for taking our questions on for Steve Fisher. Just in terms of the power generation market, can you talk a little bit more about what’s driving that market to be so robust this year? We might have expected data centers weakening a little bit. It sounds like you’re expecting that to be up still again this year. But, if you could just talk about some of the drivers in that market.

Yes. The power generation market really nonresidential construction as well as data centers, and despite some of the announcements that you’ve seen from our data center customers regarding staffing levels, they continue to show interest in investing in data centers and have demand and drive backup power -- demand on our products in that market. So, we are still quite bullish about the opportunities there for 2023.

I think it’s fair to say, it’s pretty broad-based across multiple markets, broad parts of the economy. Yes, the data center gets a lot of attention. It is a significant individual segment, but we’re seeing robust underlying demand for power generation across multiple segments.

Okay. I appreciate that. And then just in terms of the New Power business, have you seen acceleration in the recent months following the IRA in terms of customer interest there? And does that possible acceleration in the market change your view on when we could be breakeven in that business?

Yes. How I would describe it is, the inflation reduction act and the investments around that are really going to be key to enable the adoption rate that we anticipate is going to drive an acceleration in hydrogen investment. The details around that investment are being clarified right now. So, it’s going to take several years before you really see that translate into actual projects and business. Definitely, it’s going to drive growth in the hydrogen market in the U.S. between now and 2030 as that -- as those incentives come in place to both put the hydrogen production in place as well as drive adoption of some of these technologies, which today, frankly, just cost more. So, you need those incentives in order to start to drive customer adoption and bring down the costs and make them more viable in the market. I mean, in the short run, we’re investing more because we’re building up capacity as are others in the industry. So, the faster we go in the short run could consume more cash. But obviously, we want the market to move, and we expect to deliver good gross margins once we get this kind of investment phase. So, it could go faster. It’s quite a long incubation period, so very different from, say, our on-highway engine business, while we take an order. And then typically, we’re shipping in a few weeks. It’s not been that typical in the last 12 months versus sometimes more than a year between headline announcements to actually putting equipment into place and sometimes even more than a year. But we are encouraged, strong adoption for our technology, and yes, business is doing well on the business development side.

We’re showing time for one final question today. The final question is coming from Michael Feniger of Bank of America. Please go ahead.

When we look at China revenue, the consolidated plus JV in 2022, it’s basically the lowest it’s been over three, four years. I think slightly below 2019. I’m just curious, in those three years, how profitability looks maybe post some restructuring optimization? If units in China recover, are you more profitable in each of those units than maybe you were in the past?

Well, what’s happening over time is that the content is going up, right? So, one thing that’s been a big positive for our business is China consistently adopting more advanced emission standards. So the amount of revenue that we’re selling is going up per vehicle quite significantly over time. And certainly, cycle over cycle, it’s billions of dollars of extra revenue growth a year. We’re just at the lowest market in a decade. So, we agree that that growth rate is modest. We don’t have any signs yet of a rapid adoption. We’ll be looking at the same data you’re looking at, and obviously, taken on board the feedback from our customers, but we are profitable in our operations. We don’t disclose profitability by region, but for sure, when China volumes improve, our profits will go up.

Thank you. And we’ve seen quite a few emerging suppliers in the EV, e-mobility space really struggled in the last 12 months with deliveries or profitability. Do you see some of those dynamics driving OEM conversations back to you and traditional suppliers as we start looking ahead to some of these key dates and trying to adopt more of this altered powertrain?

Yes. We talked about this in our Analyst Day about a year ago. We expect that this transition is going to take a long time for our industry, and that positions incumbents like Cummins well because you need to invest for the long term. Regardless of what our customers are adopting, we’ve got the solution in our portfolio. And so for sure, you see the benefit of a company like us that has a portfolio of options to meet their needs, it’s going to be around for the long term and continuing to invest in some of these new technologies, be able to do that and support the product as an advantage, and it’s playing out to be more of an advantage as time goes on compared to some of the new entrants. We continue to pay attention to those new entrants though and how they advance the technology and work to enter the market. So, we wouldn’t discount them, but certainly, this long investment period makes it more challenging for them to stay in and be successful.

And I think also our footprint, our reputation for dependability, wherever our customers operate, is leading us to be approached in new segments by global large industrial players. So, it’s not just in the market that we operate in today, we’ve been approached to expand into different market applications. That’s particularly exciting.

At this time, I’d like to turn the floor back over to Mr. Clulow for closing comments.

Thank you all for your participation today. That concludes our teleconference. I really appreciate the interest. And as always, the Investor Relations team will be available for questions after the call this afternoon. Take care.

Ladies and gentlemen, thank you for your participation and interest in today’s conference. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.