Thank you for standing by. And welcome to Brady Corporation’s Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the call over to Chief Financial Officer, Ann Thornton. Please go ahead.

Thank you. Good morning. And welcome to the Brady Corporation fiscal 2023 third quarter earnings conference call. The slides for this morning’s call are located on our website at www.bradycorp.com/investors. We will begin our prepared remarks on slide number three. Please note that during this call, we may make comments about forward-looking information. Words such as expect, will, may, believe, forecast and anticipate are just a few examples of words identifying a forward-looking statement. It’s important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. Risk factors were noted in our news release this morning and in Brady’s fiscal 2022 Form 10-K, which was filed with the SEC in September of 2022. Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. We will be recording this call and broadcasting it on the Internet. As such, your participation in the Q&A session will constitute your consent to being recorded. I’ll now turn the call over to Brady’s President and Chief Executive Officer, Russell Shaller. Russell?

Thank you, Ann. Thank you all for joining us today. First of all, I’d like to congratulate Ann for becoming Brady’s new CFO. Many of you know her already, as our leader for Investor Relations and now I’m delighted to see Ann step up to this new challenge as CFO. This morning we released our fiscal 2023 third quarter financial results, which marked another quarter of strong results throughout our global businesses. This is a direct result of the hard work and dedication of the entire Brady organization. We have a culture that focuses on innovation and puts the customer first. As a result, we have a team of fantastic professionals who are providing the best possible customer experience, while delivering innovative products that differentiate us from our competition. This quarter we once again improved profitability, while continuing to invest in R&D, expanding our sales force and improving our digital capabilities. These are the types of long-term investments that we expect will help us keep our momentum going. We not only had record earnings per share this quarter. We also had outstanding cash generation with operating cash flow of 151% of net income and free cash flow of 141% of net income. Brady’s global footprint and sales into many end markets give us a unique view of the macroeconomic environment. Let us share a few recent observations. Our ability to hire and retain high-quality personnel continues to improve in most geographies, but this still remains somewhat challenging in areas such as research and development, and IT, where skill sets remain in high demand. International shipping rates have normalized and have nearly returned to pre-pandemic levels. Additionally, our supply chain is also returning to normal. You can see some of this in our improved gross margins this quarter. As it relates to overall inflation, although shipping rates have come down and we’ve seen some incredibly high semiconductor costs moderate, we’re still experiencing inflation above pre-pandemic levels, which we expect to continue through the rest of this year. Wage rates continue to increase at a greater rate than we experienced before the pandemic and certain material costs continue to increase as well. But at the same time, we are seeing a few commodities stabilize or decrease in terms of year-over-year cost. From a geographic perspective, we grew sales organically in all of our major regions, with the exception of Asia. Our business in China has improved from the lows we experienced during December and January due to COVID-related shutdowns throughout the country. But in Southeast Asia, many of our customers are in the consumer electronics industry and we’ve seen a decline in demand in this end market. If we look at order patterns throughout the quarter, we started to see a slowdown in our rate of organic sales growth each month, with April being the slowest month of growth in the quarter. One month doesn’t make a trend, but we believe this is a combination of reductions in stock throughout our distribution network, as well as a slight slowdown in some of our geographies and end markets. Fortunately, the diversity of our end markets and customers in the geographies in which we operate allow us to continue growing sales and profit even in certain end markets aren’t growing at the same pace as others. Our cash generation, balance sheet and access to capital give us the flexibility to keep investing in our organic business throughout the economic cycle. Our priorities remain unchanged. First, our number one priority is to continue our evolution into a faster-growing company, which means that we’ll continue innovating and we will continue launching new products faster than ever before. We launched three new printers this quarter. The first is the M610, which is a significant update to one of our handheld industrial label printers. This printer is a must-have for on-site asset tracking and electrical product labeling. The M610 can print up to 4,500 labels on a single charge on hundreds of different types of materials. The second printer is the M611, which is another significant update to one of our portable printers. Some of the unique features of this printer is that it allows the customer to store more than 1,000 different types of labels on the printer itself and it’s military-grade shock resistant, it’s rugged and built to last. And the third printer is the M710 portable printer. The M710 is our fastest most advanced portable printer yet. It’s personal, easy-to-use and can be controlled using a built-in keyboard, desktop software or with a smartphone. There are also hundreds of material operation options for this printer along with connectivity via Bluetooth and WiFi. I’ve been looking forward to the launch of these new printers and I’m really proud of the creativity and the level of innovation that our team has put into them. We also have a strong pipeline of more new products that we’ll be bringing to market over the next year. We have a great R&D pipeline, full of products that bring value to our customers and will continue to keep us ahead of the competition. Our second priority is to improve our capabilities to assist with our customers’ automation initiatives. The acquisitions of Code and Nordic ID are key in this effort, helping our customers improve productivity is an essential part of reshoring manufacturing that’s underway in North America and Europe. Third, is to take actions to offset the impact of the inflationary environment that we’re in, while meeting customer demand and providing our products at market competitive prices. We believe we provide value to our customers and we pride ourselves on our ability to customize our solutions based on exactly what our customers need. We’re navigating this challenging inflationary environment by continuing to push for operational efficiencies throughout our global business. This has served us well for many years and we know it will continue to drive value over the long term. And our final priority is to deploy our capital strategically in order to drive long-term shareholder value through organic investments, acquisitions and returning funds to our shareholders. We’re in a great position; we’re leaders in many of the niche markets where we operate, we just launched several excellent new products and we have a pipeline of highly innovative solutions on the way. We’re continuing to make investments in our future; we have a cash-positive balance sheet and we have a fantastic team that delivers for our customers each and every single day.

Thank you, Russell. This quarter we grew organic sales, we increased our gross profit margins and we grew our bottom line nicely. Putting it all together, we reported third-quarter GAAP EPS of $0.96, compared to $0.78 in the third quarter of last year, an increase of 23.1% and non-GAAP EPS, which is calculated as our GAAP EPS, excluding the $2.3 million after-tax gain on the sale of our PremiSys business and the after-tax impact of amortization expense was $0.95 this quarter, which was up 10.5% over Q3 of last year. The key financial takeaways this quarter are, another quarter of organic sales growth, nicely improved EPS, organic sales growth and segment profit growth in each of our three regions, and significantly improved cash flow, all of which helped us overcome the year-over-year appreciation of the U.S. dollar and delivered fantastic financial results. Let’s move to slide number four for our quarterly sales trends. Organic sales grew 1.9% this quarter, but foreign currency translation reduced sales by 2.1% and the impact of our PremiSys divestiture reduced sales by another 0.2%, resulting in a sales decline of 0.4% in total. Foreign currency had a much larger impact on our Europe and Australia segment, where we saw a reduction of 4.8% from currency translation in the quarter. However, with the recent strengthening of currencies such as the euro versus the U.S. dollar, we expect the headwind from foreign currency to subside as we progress through our fourth quarter. Based on April 30th exchange rates, we expect foreign currency to have a minimal impact on Q4 and then to turn positive in Q1 of next year. On slide number five, you can see our gross profit margin trending. Our gross profit margin increased 190 basis points to 50.3%, compared to 48.4% in the third quarter of last year, as we were able to offset the majority of our input cost increases through efficiency gains, pricing actions, and reduced freight charges. Our strong gross profit margins really show the value that we can bring to our customers. Slide number six is our SG&A expense trending. SG&A was $91 million this quarter, compared to $96.2 million in the third quarter of last year. As a percent of sales, SG&A declined to 27%, compared to 28.4% in the third quarter of last year. If you exclude amortization expense from each of the periods presented, exclude the non-routine charges from last year’s third quarter, and exclude the gain on the sale of our PremiSys business from this quarter, then SG&A would have increased from 26.8% of sales in Q3 of last year to 27.4% of sales this quarter. On a year-to-date basis, we continue to reduce SG&A, both in absolute dollars and as a percent of sales through our continual focus on becoming a more efficient organization.

On slide number seven is the trending of our investments in research and development. This quarter we invested $15.7 million in R&D, which was 4.7% of sales. We remain committed to new product development. We have opportunities throughout our global businesses, including the development of our newest lines of printers. As Russell mentioned, we launched three excellent new printers this quarter and a pipeline of additional printers are scheduled for launch over the next several quarters. On slide number eight, you can see that pretax earnings increased 23% on a GAAP basis. GAAP earnings this quarter include a pretax gain of $3.8 million from the sale of our PremiSys business. If you exclude this gain, exclude amortization expense from both the current year and the prior year and exclude last year’s non-routine charges that we recognized in our Workplace Safety business, then our non-GAAP pretax earnings would have increased by 8.6% from $56.8 million in Q3 of last year to $61.7 million this quarter. Slide number nine outlines the trending of earnings and EPS on an after-tax basis. Looking at these charts, you can see a clear trend of increasing earnings and you can also see that Q3 is our strongest quarter on record. On both a GAAP and non-GAAP basis, our Q3 EPS was an all-time record high. And on a year-to-date basis, EPS is up 23.1% versus last year on a GAAP basis and up 10.5% over last year on a non-GAAP basis. One other item to point out is that we did have a higher income tax rate than normal at 23.8% this quarter. This higher-than-normal tax rate was due to certain statute lapses that occurred last year and didn’t repeat this year. So we still expect that our annual tax rate will be approximately 21%, and we still expect that our long-term tax rate will be approximately 21% as well. On slide number 10, you’ll find a summary of our cash generation. Operating cash flow increased substantially this quarter from $40.9 million in Q3 of last year to $72.5 million this quarter. For the quarter, operating cash flow was 151% of net income and free cash flow was 141% of net income. So if you look at the first three quarters of this year, operating cash flow was up nearly 100% over the prior year to $129.9 million and we expect to finish the year with another strong quarter of cash generation in Q4.

Turning to slide number 11. You can see the impact that Brady’s historical cash generation has had on our balance sheet. We’re currently in a net cash position of $84.9 million. To put this in perspective, even with returning more than $23.3 million to our shareholders in the form of dividends and buybacks this quarter, we still reduced our outstanding debt by more than $26 million and we increased our net cash position by more than $53 million. Our approach to capital allocation is to first use our cash to fully fund organic sales and efficiency opportunities. This includes investing in new product development, sales generating resources, capability enhancing capital expenditures, and automation focused CapEx. Despite the economic uncertainty, we’ll continue to deploy capital to drive productivity and sales growth into the future. And second, we focus on consistently increasing our dividends. We’ve increased our dividends annually for 37 consecutive years, which is a streak that we’re very, very proud of. After fully funding organic investments and dividends, we then deploy our cash in a disciplined manner for either acquisitions where we have clear synergistic opportunities or for buybacks in an opportunistic manner when we see a disconnect between intrinsic value and Brady’s trading price. Our balance sheet puts us in a position to really drive value by investing in R&D and other organic sales opportunities, completing acquisitions when the price is right and the synergies are clear, and returning funds to our shareholders through dividends and buybacks. As we look to the future, we’re confident that our strong balance sheet and our positive momentum set us up for success even in this uncertain macro environment, which brings us to our guidance on slide number 12. We are raising the low end of our fiscal 2023 EPS guidance range of $3.40 per share to $3.60 per share on a non-GAAP basis and $3.23 per share to $3.43 per share on a GAAP basis to our new range of $3.45 per share to $3.60 on a non-GAAP basis and $3.32 per share to $3.47 per share on a GAAP basis. Our outlook is based on exchange rates as of April 30th and assumes continued economic expansion. Although we’re concerned about the stability of the global economy, we’re still experiencing organic sales growth in most of our businesses outside of Asia. Because of this, we still expect full-year organic sales growth to be approximately in the mid-single-digit percentage range for the year ending July 31, 2023. Other elements of our guidance include an income tax rate of approximately 21%, depreciation and amortization expense of approximately $32 million to $34 million, and capital expenditures of approximately $20 million. We also expect our fourth quarter to be another strong cash generating quarter. Potential risks of this guidance, among others, include a strengthening of the U.S. dollar, inflationary pressures that we can’t offset in a timely manner through price increases, destocking and inventory reductions at our distributor partners, and an overall slowdown in economic activity.

Now I’ll turn it back over to Russell to cover our performance by region. Thanks, Ann. Effective with the beginning of this quarter on February 1st, we changed our reporting structure from a global product line to a more geographically aligned organization. This change was all about creating a structure that sets us up for the future by taking advantage of the synergies that exist between Identification Solutions and Workplace Safety, by utilizing our best go-to-market strategies in each of our key geographies and by using our increased geographic scale to accelerate new product development, while delivering tailored solutions that meet the unique needs of each region. We’re also providing sales information for our former segments to assist with the transition through this fiscal year. As part of this transition, we are incurring certain costs such as severance. However, these one-off severance charges are effectively being offset by reduced personnel costs, so these charges aren’t significant enough to talk about or break out separately. Slide 13 illustrates the financial results of our Americas and Asia region. Sales were $222.8 million this quarter and organic sales growth was 1.2%. Foreign currency reduced sales by 0.8%. We also sold a small business this quarter that reduced our regional sales by 0.3%. The $2.3 million after-tax gain on the sale of this business is not included in the segment financial results. Adding this up, total sales increased by 0.1% this quarter in the Americas and Asia region and segment profit increased by 9.3% to $49.2 million. Approximately 90% of the revenue in our Americas and Asia region consists of our historical Identification Solutions business and the remaining 10% of this region is our historical Workplace Safety division. Our historical IDS business in the Americas performed well this quarter. Our increased investments in R&D and excellent new product launches are making a difference. Our productivity solutions and our focus on providing complete solutions that combine products, software, and services to help our customers improve safety and get their jobs done in a more cost-effective manner should help us capitalize on secular tailwinds as companies continue to push for efficiency gains and increase productivity from their employees. Our business in Asia struggled this quarter with a slight organic sales decline of 0.3% as a result of weak demand from our consumer electronics customers. However, India continued to do well and they help to mitigate some weaker demand in other countries in the region. In fact, we are expanding our footprint in India by adding a new plant in Delhi. We expect this will become operational by the second quarter of next fiscal year. Moving to slide 14, you’ll find a summary of the Q3 financial performance of our Europe and Australia region. Sales were $114.3 million this quarter. Organic sales growth was 3.4% and foreign currency reduced sales by 4.8%. Comparing to our former product line segments, slightly more than half of the European and Australian business is our historical Identification Solutions business and the remainder is Workplace Safety. Our business in Australia continues to perform very well with both organic sales growth of approximately 13% and a solid improvement in profit. And in Europe, we continue to experience organic growth across both our historical IDS business and our Workplace Safety business. In Europe, our ID Solutions business is benefiting from many of the same trends we’re seeing in the U.S. as companies work to shorten their supply chain and struggle to find personnel, there is a clear demand for Brady’s productivity solutions. Meanwhile, our Workplace Safety business in Europe grew organically in the mid-single digits this quarter. Our team is doing a great job ensuring that our products are relevant to our customers and that we’re helping them to identify the right solution. At the same time, we are increasing spend on our websites and on our online advertising, while deemphasizing our catalog spend. The strength of our European and Australian businesses shows in the increase in segment profit this quarter, even with the tough economic background and foreign currency headwinds, segment profit increased by 6.5% this quarter to $17.1 million and segment profit as a percentage of sales increased from 13.8% in Q3 of last year to 15% this year. Lastly, I want to share what our sales results would have looked like by product line if we hadn’t reorganized our structure in the region with the understanding that we have incurred both costs and benefits in the restructuring. Our Global ID Solutions would have had organic sales growth of 1.5% and our Global Workplace Safety business would have had organic sales growth of 3.5%. And with that, we’d like to start the Q&A session. Operator, would you please provide instructions to our listeners?

Yes, sir. Standby for our first question, which comes from the line of George Staphos of Bank of America Securities. Your question, please, George.

Yeah. Hi. This is actually Cashen Keeler sitting in for George this morning. Thanks for all the color. So I guess you discussed that April slowed in the quarter. So I was just wondering if you’re able to quantify trends maybe in February and March relative to April. And then as you sit here today, are you able to provide any color on exit rates, or I guess, how things are trending to start the fourth quarter? Thanks.

Yeah. Sure. So it’s hard to take too much into one month, because we do see a fair amount of volatility from month to month. But one of the things that I think is being talked about pretty significantly is what is the right level of inventory to have at our distributors, and that’s not just Brady. That is, I think, a question that’s happening throughout the industrials worldwide. So we have seen a little bit of a destocking effect that happened in April. We didn’t see the same effect in February and March. But more interestingly, we do track direct customer demand and with the exception of our business tied to consumer electronics, most of the point-of-sale purchases seem to be pretty robust. So not necessarily in every last segment or every last region. But the primary demand seems to be holding up. I think what we’re seeing largely is a transitory effect of stocking levels in the supply chain, which is that going to be a headwind for a month or two or a headwind for the next four months, I think it’s just very premature for us to tell. But we do see a little bit of that, and we saw it in April, and the likelihood of course is that it will spill into May; whether it goes past that, we just can’t predict.

Got it. Yeah. That’s helpful color. And then, I guess, just going back about a year ago, roughly, you laid out a number of initiatives in terms of SKU rationalization, better addressing competitiveness and some other items. So I guess can you just help us understand where we are in terms of the stages of that, how much more needs to be done? And relatedly, you divested some business here in the quarter, so ultimately, are there more opportunities to do some more pruning of the portfolio?

Yeah. I would say it is, I’ll call it, a light nip and tuck that is self-funding. So, yeah, clearly, we’re going through our portfolio. It wasn’t in bad shape. There were just some parts that either we felt we weren’t the best parent or had become sufficiently commoditized that we no longer saw them as an opportunity for really profitable growth. So in the case of access control, it was actually a good business, very small, but it was distinct from the rest of the businesses within Brady and really wasn’t a fit hence the reason we divested it and I think it’s gone off to a much better parent at this point. We do have some other businesses. I don’t immediately anticipate any further divestitures given the climate out there. And what I would again say in terms of SKU rationalization, that is an ongoing effort that we have and we’ll continue to do so. But, again, self-funded and not to the level that you’d see a dramatic impact to either top or bottom line.

Great. Thanks.

Thank you. Please standby for our next question. Our next question comes from the line of Steve Ferazani of Sidoti. Your question, please, Steve.

Good morning, Russell. Congratulations, Ann. I wanted to ask about gross margin, obviously, you got it back over 50%. Where do you think you are in terms of pricing and keeping up with inflation? Now if it’s tamer than it was, do we see more benefits from pricing moving forward if we remain at a more tamer level, even though, as you noted, there are still some moving parts?

Yeah. I mean if you look at the drama over the last couple of years, most of that is all gone. So we along with many people experienced purchase price variance with semiconductors significantly elevated shipping rates, container shipping rates, in particular, or the need to switch to air freight to get parts at the right place at the right time. Almost all of that has relaxed. We still see a little bit of elevated, I’ll say, inflationary trends, both in wages and in some regions. But I feel like we’re in a good and stable place at this point; unless there’s some unusual shock to the global economic system of one sort or another. I think our gross margin is in a reasonable place. It’s largely recovered to historical levels given the product mix that we have. If I was to trace back pre-pandemic and adjust for mix, which has changed a bit over time. It feels like we’re in a pretty good place where pricing and raw materials and efficiency gains all balance each other out to deliver a pretty good gross margin for us.

When we think about the, I guess, what you would have called the ID Solutions and the slower growth, given the launch of those three new products, which are major products in your portfolio, the M610, the M611…

Yeah.

...M710, does that drive the replacement cycle, can that spur some growth in a slowing growth global economy?

Yeah. So there’s two things. Again, we are super excited about those product launches and refresh cycles. They are being launched into a refresh base. So we already have a pretty significant installed base on all three products. But what it does open up for us is more mobile app-based applications. So the prior generation of devices were not as smart as the new ones. So it does open up market segments that might traditionally have been opaque to us, particularly the ability to store imagery in the cloud or on a phone and be able to port it to the printer rather than manually keyboarding it or having some other way of inputting the data. So what we’ve seen in the past, if we start to introduce mobile-based computers, we get additional market share from either non-consumption or people who aren’t used to using those types of products. At the same time, you’ll notice there are keyboards still on many of our products to service our traditional users. So given the size of Brady and the size of these printers, you wouldn’t expect to see an immediate uptick. These are very long-term plays for us, where we see growth for essentially anywhere from four years to seven years is typical for these products and then the consumables that come along with it. So you wouldn’t expect to see a pop in 2024. But at the same time, it keeps us relevant and keeps us at the forefront of technology.

Great. Great. That’s helpful. One more, Ann, just on, obviously, cash conversion well over 100%, starting to build up that net cash position again. How does that affect capital allocation decisions in terms of M&A buybacks?

We remain focused on organic growth opportunities through our sales team and new products. We introduced three excellent new products this quarter, and we are committed to maintaining our dividend. In the quarter, we repurchased 229,000 shares for $11.9 million and are still exploring strategic M&A opportunities. This quarter has been a significant cash-generating period for us, primarily due to a decrease in inventory, and we expect this trend to continue as we approach the end of the year.

I see. Okay. Thanks, Russell. Thanks, Ann.

Thanks, Steve.

Thank you. Please standby for our next question. And our next question comes from the line of Keith Housum of Northcoast Research. Your line is open, Keith.

Good morning, guys. Thanks. I appreciate the opportunity. Russell, just touching on some of your growth initiatives. I remember earlier in the year, you talked about adding salespeople in India and your commentary is you’re adding a plant there in the second quarter. Perhaps just expand a little bit more on some of your growth initiatives, including this one and outside of that and when we might be able to see a little bit more of an impact on that to the top line?

One of the advantages and also challenges for Brady is our presence in nearly every industrial segment and country worldwide. This brings various fluctuations; for instance, we see strength in India and Australia in certain extractive industries, while there is some weakness in consumer electronics. Our focus has always been to identify positive trends for the future, targeting countries and regions that are experiencing growth. Recently, India has performed exceptionally well for us, consistent over the past few years, which has led us to increase our growth and investment there. Australia has also shown promising recovery after their lockdown. Regarding our growth initiatives, we have emphasized that productivity solutions and printer-related products form the core of Brady. We also offer numerous peripheral products that support these core offerings. Overall, this is primarily what drives Brady’s operating profit, alongside some specialized products we have in various regions and countries. I believe we are well-positioned with our initiatives and see no barriers at this time. We faced some challenges during COVID, particularly with chip supply and availability affecting product development. However, we think those issues are largely resolved now, and unless we encounter a significant global slowdown or recession, we are optimistic about capitalizing on growth in 2024.

Thank you. I appreciate that. Regarding your R&D, I understand how crucial the printers are to your business. In terms of your R&D pipeline, do you foresee new products that could help you enter new markets, aside from just the current updates you have? How are you approaching the use of R&D to drive revenue growth?

It’s interesting because many of our products are addressing non-consumption. We are targeting industrial manufacturers who have yet to automate or are unaware of their automation options. Our market consists largely of those already purchasing from us. In fact, among the 500 largest industrial companies, it's challenging to find one that does not buy from Brady. The focus now is on how we can increase their purchases, grow our market share, and assist them in their automation and productivity efforts. Our product portfolio, which includes printers and Workplace Safety Visualization products, is designed to enhance productivity and ensure that both manufacturing and healthcare environments are safer and more efficient. While we currently work across a wide range of industries, there is significant potential for expanding our share of customer spending.

Got you. I appreciate that. And then last question for you here. As we look at sales in the quarter, is there a feeling that perhaps sales benefited from backlogs being finally fulfilled as supply chain eased or that was not as big for you as perhaps some of your competitors?

I would say that several quarters ago we decided to build up our inventory to ensure we didn't let our customers down. As a result, we haven't experienced any backlog issues with late product shipments. For over 95% of our sales, the time from order to sale is a matter of days or less, which has been the norm for us before the pandemic, and I feel confident about that. This decision came at the expense of increased inventory levels, but it's part of why we're generating significant cash this quarter as we've managed to reduce some of our inventory, even though it's still higher than it was before the pandemic. Our focus is on ensuring our customers and distributors receive their products without shortages. So, to answer your question, we don't see this impacting our sales by creating a backlog at this time.

Great. Thanks a lot. I appreciate it.

Thank you. At this time, I’d like to turn the conference back to Russell Shaller for closing remarks. Sir?

Perfect. Thank you. Thank you all for your time today and for your questions. Brady is in a strong position regardless of which direction the economy heads. We’re growing organically and we’ve accelerated the pace of our new product introductions. Our diverse portfolio of products in our diverse geographic footprint increased Brady’s ability to overcome challenges. We are very resilient. Our pricing and efficiency actions are helping us generate gross profit margins of approximately 50%, which demonstrates the value we bring to our customers. Our profits are up and our cash flow was outstanding this quarter. We have a balance sheet that allows us to keep investing in our sales growth initiatives while also returning funds to our shareholders throughout the economic cycle. On the ESG front, we are making great progress. We’re working to ensure our manufacturing footprint is ecologically friendly and we’re excited about the contributions we’re making to our communities. Because Brady strives to be a transparent company that provides value to all of our stakeholders. Even though the global economy may face challenges in the future, I’m optimistic that our team and our company will overcome these challenges. As I hope is evident, we are excited about the Brady story. At some point, mid-fiscal year, we’re looking to hold an Investor Day to talk about our future in great detail. Thank you for your time this morning, and as always, thank you for your interest in Brady. Have a great day.

And this concludes today’s conference call. Thank you for participating. You may now disconnect.