Greetings, and welcome to the First Quarter 2023 IDEX Corporation Earnings Conference Call. [Operator Instructions]. And it is now my pleasure to introduce to you, Allison Lausas, Vice President and Chief Accounting Officer. Thank you, Allison. You may begin.

Good morning, everyone. This is Allison Lausas, Vice President and Chief Accounting Officer for IDEX Corporation. Thank you for joining us for our discussion of the IDEX first quarter 2023 financial highlights. Last night, we issued a press release outlining our company's financial and operating performance for the 3 months ending March 31, 2023. The press release, along with the presentation slides to be used during today's webcast, can be accessed on our company website at idexcorp.com. Joining me today are Eric Ashleman, our Chief Executive Officer and President; and Bill Grogan, our Chief Financial Officer. Today, we will begin with Eric providing an overview of the state of IDEX's business. Then Bill will discuss IDEX first quarter financial results and update on segment performance in the markets they serve and our outlook for the second quarter and full year 2023. Following our prepared remarks, we will open the call for your questions. If you should need to exit the call for any reason, you may access a complete replay, beginning approximately two hours after the call concludes, by dialing the toll-free number 877-660-6853 and entering conference ID 13734462, or simply log on to our company homepage for the webcast replay. Before we begin, a brief reminder. This call may contain certain forward-looking statements that are subject to the safe harbor language in last night's press release and in IDEX's filings with the Securities and Exchange Commission. With that, I'll now turn this call over to our CEO and President, Eric Ashleman.

Thank you, Allison, and good morning, everyone. I'm on Slide 6. I'd like to start with some key first quarter highlights. We delivered record sales with positive organic growth across all 3 of our segments, $2.09 adjusted earnings per share and strong free cash flow. Our FMT and FSD segments performed exceptionally well, both achieving record sales and strong profitability, offsetting some pressure in our HST segment. Price/cost was positive and above IDEX historical performance. As we look ahead to Q2 and the balance of the year, our outlook has changed. The last time we spoke, we anticipated short-term volume pressures within life sciences from inventory calibration concentrated in a few select OEM customers. However, as we progressed through the quarter, we saw signals of a broader, more prolonged recalibration within our HST segment, largely centered in our analytical instrumentation, life science, pharma and semiconductor markets. End-market demand is still positive, but we believe our customers have sufficient inventory of our critical components to support their needs in the near term. Over the past 2 years, we experienced robust growth in HST, with sales up over 30% organically to support strong end-user demand and customer-specific inventory replenishment. But as supply chain conditions improve and the broader demand profile normalizes, our OEM partners are aggressively attacking higher inventory levels, beginning with those suppliers that have demonstrated the quickest returns to pre-pandemic lead times. The sharp and simultaneous nature of this inventory recalibration exceeds all prior historical cycles. In response, we proactively executed cost reductions to offset a portion of this volume impact. We tailored our approach to the specific challenges in individual businesses as well as broader discretionary costs across the entire company, managing through the short term but not losing focus on our longer-term growth path. These top line challenges,…

Thanks, Eric. Moving on to our first quarter consolidated financial results on Slide 8. All comparisons are against first quarter 2022, unless otherwise stated. Orders of $826 million were down 4% overall and down 10% organically, mainly driven by the timing of project orders for dispensing in FSD and next-gen sequencing in HST as well as OEM pressure across the life sciences, analytical instrumentation, pharma and semiconductor markets in HST. Record sales of $845 million were up 13% overall and up 6% organically. We experienced 9% organic growth within our FMT and FSD segments and 3% growth in HST. Gross margin of 45.2% contracted by 40 basis points. This was driven by unfavorable mix, largely centered in HST, the dilutive impact of acquisitions and employee-related inflation, partially offset by favorable price cost and productivity. Adjusted EBITDA margin, which includes $6 million related to accelerated recognition of share-based compensation, was 27.2%, down 140 basis points. I'll discuss the remaining drivers of adjusted EBITDA on the next slide. Our effective tax rate for the quarter was 22.2% and was relatively flat compared with our prior effective tax rate of 22.4%. Net income was $140 million, which resulted in EPS of $1.84. Adjusted net income was $159 million with adjusted EPS of $2.09, which was up $0.13 or 7%. The accelerated recognition of share-based compensation that I mentioned earlier lowered adjusted EPS by $0.06. Finally, cash from operations was $148 million and up 86%, primarily due to lower investments in working capital versus last year. Free cash flow for the quarter, which included higher year-over-year capital investment, was $121 million, up 91% versus last year and coming in at 76% of adjusted net income. This represents the strongest first quarter free cash conversion we have experienced in the past 5 years. Moving on…

[Operator Instructions]. And our first question comes from the line of Deane Dray with RBC Capital Markets.

Just starting with the HST story here. And look, we're seeing this across the sector. We covered Danaher. They've been through this, this whole kind of you're on the other side of the COVID surge in volume. And Dover's biopharma pumps, same story there as well. So it's not execution. We know that. It's not share loss. But what's your degree of confidence in the path to normalizing? Just what kind of visibility do you have here?

Well, thanks, Deane. I mean I'd say a couple of things. One, as you'd expect, given the magnitude of some of the swings, I mean, the discussions and the intensity and the iteration of them with end customers and at all levels, commercial operations is probably at the highest level we've ever had. And then I would say, as you look at the actual order intake, you can see some things firming up in the back half. So you can see actually kind of the same planning and methods that are pulling it down now are actually repositioning it a little further out in the later -- in the year, sorry. And you're seeing that for the kind of standard products that we would usually gauge, that are kind of right down the middle of the volume fairway. So that's -- it deviates a little bit market for market, but I'd say, those 2 factors are probably the 2 that we're most reliant on as we think about that.

And I'd just add is our guide. On the low end, we have kind of that HST recovery only up about 1% sequentially from the first half to the second half. And then on the high side, a 7%. So reasonable range relative to the things that Eric just highlighted.

All right. That makes sense. I appreciate that. And then second question, and Eric, maybe you can bridge the comments from last quarter about uncertain period of softness, how that's being playing out here as well as the trends you're seeing across your short-cycle businesses, the implications, day rates, lead times and so forth.

So are you saying, Deane, kind of take it from a little bit more depth...

Yes.

On the HST and then rotate it over -- okay.

No, no, no. Just broadly for IDEX, your comment last quarter about uncertain period of softness. We're all seeing pockets of softness, but I wanted to see with a quarter through now, what trends you're seeing in the short cycle, is there...

Got it.

In lead times and so forth, thanks.

Yes. So obviously, the most pronounced recalibration happening exactly in the area that we're talking about here in HST. As you look at the industrial side of it and in particular, kind of the day rate stuff right down the center of our fairway, first quarter held up really, really well. I mean business to business, I think we called out ag is the only one where we saw some similar dynamics of kind of inventory and things ready to go to plan. I will say though, in more recent data here in April, some of those canaries that we often reference, you can see things pull back a little bit, and you can see them doing it together. So it is going to be something we'll watch. April is, for whatever reasons, never a real strong predictor for us. It firms up as we go through May and especially into June. But I will say you can see a little bit of that there in those businesses. In terms of just day rates, it's not a big drop, but the uniformity of it is interesting across a couple of weeks here most recently. And when you kind of hold that up with some other things, some of which we do informally and others have done more formally around inventory positions of distributors and things like that, maybe you can see sort of the same comments, hold that up with the same feelings of uncertainty. So it's not a logic break in terms of how this might play out. And let's remember, in our comments here last time, I mean, we actually have this positioned in our back half. So we have a bit of a glide path and then here, very recently, seeing some of the first signs of it.

That's really helpful. Just to clarify, when you talk about the leading indicator canaries, that's like BAND-IT and Warren Rupp and Gast?

Yes. And a couple of the other FMT pump businesses and even more specifically, a couple of product lines we look at within and where we just know they tend to be ordered typically, 1 and 2 and 3, general replacement. The ones you mentioned, a few other places, but yes, they're the ones we often always look at when we talk to you.

And the next question comes from the line of Michael Halloran with Baird.

Can we follow up on Deane's question and talk about the other side of the coin, just maybe the CapEx side of things? Are you seeing any pullbacks? Obviously ignore some of the destock HST stuff you already commented on. But on some of the other longer cycle pieces, are you seeing any change in dynamic? Or anything noteworthy underneath the hood?

Well, it's -- these are the larger projects that we sometimes talk about here. I mean we have them in 2 places, and they're a little different. So I think they're more pronounced, more aggressive on the HST side in the markets that we're referencing here. So you can see some concern in places like MPT. We referenced those in the comments. But let's tie those to that sort of general macro story that Deane did a good job framing for us. I think on the industrial side, I would just kind of come back and say, this -- the entirety of the cycle, it's not been a big piece of our story. I'll remind folks, in the beginning of the ramp-up post COVID, there was a lot of uncertainty there. Frankly, that turned into the inability to put those projects together, then as inflation came about, there was a repricing element that sort of prevented some of them from our side. And now maybe we're drifting a bit more into uncertainty, too. So I'd argue it kind of held pretty [Technical Difficulty] quite positive for us, not really because of large projects, just that sort of general day-to-day business is doing real well.

And apologies in advance for this one. I think Bill gave some commentary on expectations by the segments for the remainder of the year. Unfortunately, you guys were breaking up on me. Could you just repeat that in case I misheard? Or maybe I'm wrong, maybe you guys didn't do that, but can you comment on that?

No, no. We did. In our updated guide, the implied organic revenue for HST is negative low single digits, and for FMT and FSD, positive low single digits.

Okay. Okay. That's helpful. And then I guess just a quick follow-up on that then. On the FMT piece, the orders are good. I think the end markets there are probably a little bit healthier broadly. Why the decel as you work through the year on that piece specifically? Is there anything you're seeing that's concerning? Or is it just how you think things layer out as we look forward?

No. Exactly. I mean, it's been our stance as we came into the year with an expectation that the industrials were going to start to fall off in the back half of the year. We saw strength in the first quarter. We knew what our backlog positions were. And Eric just highlighted some of the caution we're seeing in our daily book and ship order rates that I think just give us more confidence in our call that the back half will be softer for those businesses, down a couple of percent on the volume side as we progress over the next quarter or 2 -- post the second quarter, still positive there, yes.

The next question comes from the line of Allison Poliniak with Wells Fargo.

Keeping on FMT, can you touch on the acquisitions, KZValve and Nexsight, because it seems like they were exceptionally strong? Just want to better understand maybe the drivers there and sort of how we should think about those for the balance of the year.

Yes. I mean, holding up really, really well. KZ, just to remind people, brought a key piece of automation technology that, frankly, goes to the same customer set that we have in our Banjo business. They're very close by. So I mean this is a [Technical Difficulty]. And so we're working on the commercial side, the technical side and all of the pieces of the IDEX operating model. So really, really happy there. The Nexsight business, reminder, there was -- they were kind of long channel partners, and there's a piece of software that came with that business we've long used as well. So many people have kind of associated this with IDEX for a number of years. So pretty seamless integration, expands our presence in depth. And then the water markets, as we referenced in the earlier comments and we'll say here, are doing well. There's good strong support for municipal projects, municipal work that I think will play out for quite a while. So yes, real favorable with those 2.

Yes. And KZ, their mix of business is much more concentrated towards OEM. So they're not seeing some of the inventory issues that Banjo is.

Yes.

Got it. And then just on the HST side, again, I know you're looking for maybe that second half recovery from those inventory issues. But as we think about sort of that back half and then maybe even into '24, does that sort of drive that growth somewhat below trend of what you would expect kind of going forward at least over the next 12 months? Just any thoughts there.

I don't think so. I think largely, this is a story of coming off of a multi-period of really aggressive rates, both for us and our end customers. I mean I look at our segment. I mean HST was up 30% across 2 years. I think that tracks with a lot of the end markets where we are. And so a retraction or a pullback down to more typical rates in the single digits. Even if they're mid-single digits, it's pretty dramatic if, in fact, your thinking is changing in a relatively short time horizon. So I think the single biggest variable for -- certainly for us as a component supplier into it is going to be levels of inventory [Technical Difficulty] taking it into different areas. So it's -- in some ways, it's doing math. It's math and rate of travel. It is different than we've seen before, but the preceding period in the run-up there was different as well. So I think we're all learning to do that together. And as I spoke earlier on the call, the need for even tighter alignment and iteration as we go through that to protect everybody is very important.

And the next question comes from the line of Nathan Jones with Stifel.

A couple of questions on HST. I was just wanted to hit the margins, down 300 basis points year-over-year in the first quarter. I think, Bill, you said -- you talked about lower absorption, but revenues were up 3% organically. Can you maybe just flesh out a little bit the inputs into the year-over-year margin decline in HST?

Yes. I think the biggest driver, Nathan, is the mix impact. Some of the volume decreases we've seen are our highest margin product portfolio in the business that has somewhat offset that to keep the business positive from an organic perspective. And then with the overall segment being positive, there are still some pockets that were negative that caused us to deleverage on some of the fixed cost side.

Okay. That makes sense. And then just maybe a little bit more color on how you expect the year to sequence on HST. I mean you had in the 20s of orders down. Just maybe any color you can give us on how we should think about the comps, I guess, especially in 2Q, with this being a relatively short-cycle business. Do you take most of the pain here on organic growth in the second quarter, and then you see revenues improve pretty meaningfully, sequentially as we go past that?

No, no, relative to our backlog position. We will be negative in HST in the second quarter, but kind of low single digits. And then remember, the second half of this year is significant -- or the second half of last year was significantly higher. So we'll have a little bit of comp problems that will keep HST either flattish or slightly negative for the balance of the year.

And then just one last one on HST. IDEX is not typically an inventory business. You end up typically seeing a lot of inventory on customer shelves. Obviously, an inventory destock is what we're talking about. And so can you just talk about how this inventory ends up on customer shelves, how that works its way through the system?

Yes. No, it's a great question, Nathan. I mean in general, everything we make here is pretty customized for a very specific end use, if not a specific single customer. And in the area that we're talking about in the health science world, I mean, that absolutely happens. These are spec-ed in components. They don't travel East and West. When we're more generally talking about an IDEX, though, FMT in that segment, FSD as well, you've got a channel between us and all of these fragmented end markets, which are at much lower volumes. And so no single one of them is going to tend to raise its head up at any one point. So that -- the comment generally holds there. And while it's specific customized here, this is a highly concentrated customer set, and it's a super direct transaction. So if you chose to do it, and they don't often do it and this is a bit unprecedented, but if you chose to do it that way, you could put mission-critical components down that you know you're going to use because they're the most high-running parts that you have in the system, even though they are absolutely customized for that customer only.

And the next question comes from the line of Vlad Bystricky with Citigroup.

So I just wanted to ask you, in FMT, I think you, if I'm not mistaken, kind of upgraded your commentary around the strength of the energy and chemical performance you're seeing. I know you mentioned it's not really project activity. So can you just talk a little bit more about where you're seeing improvements in demand in those end markets, and how you're thinking about sort of the sustainability of that strengthening?

Yes. Well, I think in energy specific, remember that we largely do mobile custody transfer there. So there's a little bit of an overhang as the industry gets healthier and price support are out there. You're going to get some general tailwinds for CapEx spend. More specifically for us, though, we do a lot in mobile applications, a lot of which depends upon chassis availability. That's been -- that was highly constrained for a couple of years. That's freed up as a lot of other supply chains have, and some of it is just captive demand at a good and favorable time in the environment, that -- something like that, a micro story like that actually matters for us. On the chemical side, we've seen strength in China, specifically, with our Richter business. I think some of that is probably also related to the fact the country was kind of locked down for a while. There are some investments that have to be made. We're super well positioned there. We'll see how that plays out longer term. And actually, Europe in the chemical side, which is an area of concern and was pretty depressed as well for a bunch of reasons we've talked about, that was actually pretty strong for us as well. So it's these little pockets that kind of play out in typical IDEX fashion that goes from big to small stories here. But I would say, generally, we're still following others out there that are larger. So not a massive component of project spend or multi-period expansion here, but more micro events and things. And otherwise, markets, I think, are doing pretty well.

And I think the other thing is on the Energy business, they've launched a couple of new products that have been very well received in the end marketplace. And then we talk about businesses that they had some differentiation relative to their ability to have inventory to supply their customer base. I think a couple of businesses within our valve that mostly sell into the chemical market have been well positioned relative to the inventory that they've carried to take some share from their customers.

Okay. That's really helpful. And then just on the M&A front, can you give us some more color on the Spectral tech acquisition? I know it's relatively small, but can you just talk about what attracted you to that particular asset, potential scalability of the business? And more broadly, what you're seeing in the M&A pipeline and environment today?

Yes, sure. So the -- I mean the Iridian business, I mean, it's -- as we said in the release, it's a leading designer and manufacturer of thin film, multilayer optical filters. We do that in a lot of other places within IDEX, both in our optical technologies segment and some of it embedded into the life sciences platforms as well. So I think honestly, the size of this business is pretty typical for how we specialize technology of this type, it's kind of an ideal unit of measure, if you will. So think of it as a puzzle piece of technology that goes well with other pieces that we have. And honestly, the 3 primary segments here, we attack from a whole bunch of different places in IDEX, not all of them, just in optics and technology. So space broadband, super complementary to some other things we've talked about along the way in a great market. The life sciences place side of it is probably intuitive. I mean we do other coatings here. Their technology is a little bit different. And so it fits in, in a way that we were -- we've been looking for, for a while. And then there's a telecom piece that's involved with 5G rollout and game filters and things like that. So it's the kind of work we know how to do. The other piece of this is their coding capacity then, when aligned with other pockets of coding capacity we have across IDEX, you can start to think of this as an aggregation and think of how you might move capacity around on what's now becoming quite a bit of mass and a very important job to do. So it's a just really, really nice fit. We've known a lot of the folks associated with businesses like this for a number of years. So it's right in our universe, proprietary transactions. Super happy to have it here.

And the next question comes from the line of Jeff Sprague with Vertical Research.

I just wanted to come back to Nexsight and KZ. I think you responded to a prior question that they're strong. It's -- they look amazingly strong, right? I think an 11-point impact in FMT or acquisition impact in the quarter. Was there something unusual going on or some reclassification or something to drive that big of a result in those businesses?

No. I mean the only thing of note, it was small, it was a couple of million dollars. Just as we got Nexsight on our normal accounting procedure, they picked up a couple of weeks of incremental revenue, but it was a $2 million, $3 million type of deal.

Okay. Great. I think I'll leave it there. My other questions were answered.

And the next question comes from the line of Matt Summerville with D.A. Davidson.

Matt?

Matt, your line is now live.

This is Will Jellison on for Matt Summerville. I wanted to learn a little bit more about price and maybe start out with some historical context for how much price was realized in 2022 and how much incremental realization is expected across your businesses in 2023.

Yes, sure. So price is a big part of our value capture across our portfolio balancing, hey, we have differentiated products and making sure we capture that value from our customers. Obviously, last year, from an inflationary perspective, we were hitting an all-time high. So we had ramped our price pretty significantly as we went through, I think, topping off close to 5% last year. This year, we guided about 4%. We're on track for that. That's a combination of new price increases that we've launched here throughout the first quarter and then carryover pricing from actions we took throughout last year.

That's great. And then as a follow-up, I wanted to get an update on Muon. What is the expectation for organic growth in that business for 2023? And about how much adjusted EPS contribution is contributing to the guide for the year?

Sure. I mean we haven't disclosed exactly other than it's at -- it will be at the high end of HST growth on a normalized basis. Before we bought them, they had been a double-digit compounder. So really successful with their growth trajectory historically, and we continue to see that here as they progress in the high single digits. From an EPS perspective, I'd refer you to our annual guide. We didn't break out the individual pieces, but I think incrementally this year, we said $0.43 for Muon, the carryover for Nexsight and KZ, net of the divestiture of Knight.

And the next question comes from the line of Brett Linzey with Mizuho.

I wanted to come back to HST. So the order's down 23%. Are you able to parse out how much of that decline was specific to the OEM destock versus maybe some softening in other areas of the portfolio?

Brett, I apologize. Can you repeat that question? You broke up on us.

Yes, sure. So the first one is on HST. So order's down 23%. Wondering if you're able to parse out how much of that decline was specific to the OEM destock versus softening in other areas of that business?

[Technical Difficulty] million on the onetime order or the blanket that we received last year. So that was a couple of percent of the 23%. The balance is a lot of the market factors that Eric highlighted.

Okay. Got it. And just one other one. You talked about some of the barometer businesses pulling back a little bit. How does that shape your thinking around incremental restructuring or further curtailment of some of this discretionary? Do you lean into additional actions here to defend the margins? Just curious what the business planning assumption is.

Yes. Look, I think so far, it's very in line with what we had played out in our -- for the year, the planning for it. So remember, we the softening in the back half on the industrial side. We're saying here, this might be some early indications that it will come to fruition. And so in those businesses, we've already made and lined up the discretionary cost reductions and some thought and care around any additions we might make in a way that's completely in line with what we had originally said. The targeted actions that we spoke about related to the HST destocking phenomenon, those are pretty targeted actions within those businesses. So this is where the -- if you will, the portfolio nature of IDEX really helps us. We can treat these in kind of a differentiated way and occasionally come together on just smart investments around travel and other discretionary things and just do it well as a team.

And the next question comes from the line of Joe Giordano with TD Cowen.

Sorry, I had muted myself. Can you guys hear me?

Yes.

Okay. Cool. So Nathan had talked about this in his question, but I wanted to follow up there on the inventory thing in HST. Yes, you guys are not typically like components that are overstocked at OEM. So just -- was this a change in behavior like where OEM just acted differently because like unbeknownst to you where they were just buying in excess of their need for a long time, and maybe like maybe that level of granularity is not clear to IDEX? And so that's one. And then you guys are generally a company that learns pretty quickly. So what do you do differently coming out of this? Or do discussions have to change? Or how do you kind of make sure that's something like this don't catch you off guard again?

Yes. No, it's a good question. I mean look, if you kind of get it right down to the way that inventory replenishment is done, obviously, your future projections and your assumptions around lead time drive almost all of your requirements. And so in hindsight, now you can view this and think, well, there must have been irrationality there, but I don't think that's actually the case. I think if you are projecting a line in a certain way, and you've been experiencing delivery patterns, not just for us, but for others at a certain level, it's going to say, you need a lot of stuff. I think part of what's changed here and maybe changed most dramatically is you have kind of a simultaneous -- well, first of all, the calendar change, funny as it sounds, that always tends to bring a different headset. And I think there's some legitimate things out there kind of from a macro perspective that people are wondering about. We're further away from COVID. We're starting to see some pullback in biopharma spending. We have some funding crisis associated with start-ups and things in biopharma places. So the minute you interject that back into the equation, you potentially go change your assumption on long-term demand, it actually has a pretty striking effect on what you should be bringing in. Now you combine that with the fact that we execute really well, so our lead times and our customer set, returning quickly back to normal, you put those 2 things together, even an automated system is going to say, "Hey, you've probably got too much here." So back to your point on learnings and things like that. First of all, we're not typically seeing cycles of this magnitude, these kind of swings. But to be fair, maybe in the world to come as we see, and it seems like there's always another chapter around the corner. So I do take your point. And I think higher iteration, really coming together and understanding long-term projections being maybe potentially more transparent with where we are in terms of lead time performance, customer set, making sure that, that's exactly understood not just today, but tomorrow as we move through cycles and swings like this, I think those would be the kind of things that our teams are talking about at both the commercial and the operational level.

No, that's fair. And then just last for me on the FMT side. I mean you talked about April weakening, and I know that your guidance assumes that industrials get worse in the back half of the year. But is the April weakening here kind of like in line in terms of magnitude with what you're contemplating at this point? Like nothing is -- if this was -- did you expect it to start now? Like how consistent is what you're seeing with what you previously thought?

Yes, I mean, I think this is about the pattern that you would expect at some point. I would say, look, this is pretty recent. April, as I said, is often a kind of an interesting month of transition as you move into the spring. So we'll see. But we're always looking for a slight step down one way or the other, and then uniformity. Because I think that's where, again, the portfolio nature of IDEX comes into play. We're able to kind of see it across a variety of end markets simultaneously, all of which have kind of the same sort of short order fulfillment patterns that have long been known to people. So when they tend to move in concert with each other, either positively or negatively, it's at least worth looking at and taking a signal. I would say this is a small drop. It is uniform in nature, but that is exactly what we would have probably expected and I think is modeled in ultimately in the back end. And we'll obviously continue to monitor it and talk to you and others about it as we get -- roll through and finish the second quarter.

There are no further questions at this time. And now I would like to turn the floor back over to management for any closing comments.

Thanks so much. I apologize, I know we've had some glitches with the technology. Maybe we'll need to put more filters to work on telecommunications. First of all, I want to thank the IDEX employees. I know there's always some listening in on the call. Very, very strong quarter. You've continued to really perform for the business and for our customers. Thanks to others on the call for your interest and support in the company. Bottom line here, we knew 2023 was going to be a year of recalibration moving from one state of the world to another. It's playing out more dynamically than we initially suspected in the HST side. But as you can see, we're executing through it. We're taking the appropriate responses in the business. And I think most importantly, we ultimately believe in the long-term success and outgrowth in those markets. We're talking about coming down from highs to something that's actually pretty typical, but absolutely advantaged. We think it's going to continue that way and then accelerate for years to come. So through all of these dynamic swings over the last 3 years, I'm really proud of the fact that we've executed well, and we certainly stepped up our capital deployment, really happy to announce the sixth transaction since the beginning of '21 with Iridian, doubled our emerging markets footprint and capability set and continue to strengthen a really unique culture as we've done it. So we're built for the long haul here. We're confident that we're going to perform and deliver value throughout. And I look forward to updating everybody along the way as the -- in the year to come and the years in the future play out for IDEX. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.