Good morning, and welcome to the Sensient Technologies Corporation 2024 Third Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Tobin Tornehl. Please go ahead, sir.

Good morning. Welcome to Sensient's earnings call for the third quarter of 2024. I'm Tobin Tornehl, Vice President and Chief Financial Officer of Sensient Technologies Corporation. I'm joined today by Paul Manning, Sensient's Chairman, President and Chief Executive Officer. Earlier today, we released our 2024 third quarter results. A copy of the earnings release and the slides we'll be using during today's call are available on the Investor Relations section of our website at sensient.com. During our call today, we will reference certain non-GAAP financial measures, which remove the impact of currency movements, the cost of the company's portfolio optimization plan, and other items as noted in the company's filings. We believe the removal of these items provides investors with additional information to evaluate the company's performance and improves the comparability of results between reporting periods. This also reflects how management reviews and evaluates the company's operations and performance. Non-GAAP financial results should not be considered in isolation from or a substitute for financial information calculated in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in our press release and slides. We encourage investors to review these reconciliations in connection with the comments we make today. I'd also like to remind everyone that comments made during this call, including responses to your questions, may include forward-looking statements. Our actual results may differ materially from those that may be expressed or implied due to a wide range of factors, including those set forth in our SEC filings. We urge you to read Sensient's previous SEC filings, including our 10-K and our forthcoming 10-Q for a description of additional factors that could potentially impact our financial results. Please keep these factors in mind when you analyze our comments today. As we introduced during our last quarterly call, we will be referring to a slide deck that will be referenced throughout today's call. This slide deck is also available on our website. We'll start on slide 5 of that deck. Now, we'll hear from Paul Manning.

Thanks, Tobin. Good morning and good afternoon. Sensient reported strong local currency revenue growth of approximately 9% in the third quarter. This revenue increase was primarily volume-driven, with price contributing low single digits. Our consolidated local currency adjusted EBITDA was up 13% for the third quarter of 2024. The company's third quarter adjusted EBITDA margin was 17.6%, up 60 basis points from the prior year's third quarter. With the continued resumption of volume growth across the groups, we expect revenue and EBITDA growth to continue to be strong in the fourth quarter. The volume improvement is due to our high level of new sales wins across each of our groups, our focus on sales execution, the end of customer destocking, and the stabilization of end customer demand in North America and Europe. Our sales pipelines remain robust in each of our regions. Each group is focused on expanding new sales win rates and working with our customers to support their development needs and new product launches. Turning to slide 6. The Color Group had an excellent quarter, delivering 13% local currency revenue growth and 31% local currency operating profit growth. The group's third quarter EBITDA margin was 22.2%, an increase of 250 basis points versus the prior year's third quarter. The group's year-to-date local currency revenue is now up 5%, and local currency operating profit is up approximately 11%. We saw solid volume growth in both the food and pharmaceutical and personal care product lines. We expect this volume growth to continue throughout the remainder of the year. The group is benefiting from its strong new sales wins, particularly in natural colors, innovative products, and exceptional customer service. As we expected and discussed during our last few calls, volume is the main driver of the strong operating leverage we now see in the Color Group. We expect this leverage to continue in the fourth quarter, and we expect the relationship between local currency revenue and operating profit growth in the fourth quarter to be similar to the group's third quarter results. For the year, I now expect the Color Group to deliver high single-digit local currency revenue growth. Previously, I expected the group to deliver mid to high single-digit growth. Turning to slide 7. The Flavors & Extracts Group had a strong quarter, delivering 7% local currency revenue growth and 13% local currency operating profit growth. The group's third quarter EBITDA margin was 16.4%, up 30 basis points versus the prior year's third quarter. The group's year-to-date local currency revenue is up 8%, and local currency operating profit is up approximately 9%. The group continues to benefit from its strong new sales wins, its innovative product offerings, and its focus on sales execution and customer service. The flavors, extracts, and flavor ingredient product lines reported solid volume growth in the quarter, which contributed to the group's operating leverage improvement. We expect this leverage to continue in the fourth quarter, and we expect the relationship between local currency revenue and operating profit growth in the fourth quarter to be similar to the group's third quarter results. For the year, I now expect the Flavors Group to deliver a high single-digit local currency revenue growth. Previously, I expected the Flavors Group to deliver mid to high single-digit growth. Now turning to slide 8. The Asia Pacific Group reported 13% local currency revenue growth and 15% local currency operating profit growth in the third quarter. The group reported a strong third quarter EBITDA margin of 23.8%, which is in line with the prior year. The group's year-to-date local currency revenue is up 9%, and local currency operating profit is up approximately 8%. The group continues to experience solid growth in all regions and continues to have a high level of new sales wins. The group is performing very well, and I expect Asia Pacific to have a strong finish in 2024. I expect the group to deliver in the fourth quarter at least what the group delivered in the third quarter for local currency revenue and operating profit growth. I expect the Asia Pacific group to deliver at least high single-digit revenue growth for the full year of 2024. Turning to slide 9. After a challenging 2023, Sensient's 2024 performance puts us back on track with our long-term goals of mid single-digit local currency revenue growth and high single-digit local currency adjusted EBITDA. In 2024, we now expect to deliver consolidated high single-digit local currency revenue and adjusted EBITDA growth. We previously expected to deliver mid to high single-digit growth for both local currency revenue and adjusted EBITDA. We also expect to deliver mid single-digit local currency adjusted EPS growth. The reason for the mid single-digit adjusted EPS growth is primarily because of higher taxes and higher interest expense. Looking ahead to 2025, we expect our local currency revenue to grow at a mid single-digit rate. We expect a decrease in our interest expense as a result of our focus on debt repayment and a lower expected interest rate environment. We also expect our tax rate to be relatively flat at approximately 25%. As we began last quarter, we thought it would be helpful to highlight a few new technologies within our businesses. Turning to slide 10. We've highlighted a couple of our flavor technologies. The first profile is called SensaMelts. SensaMelts is a novel technology that allows our bakery and savory customers to incorporate color and flavor bursts into their end products. Bakery and savory products are known for challenging production conditions, which typically degrades the performance of flavor and color. SensaMelts technology can overcome these challenging manufacturing conditions, extend product shelf life, and maintain the desired flavor profile. Trueboost is a second technology we'd like to highlight. It is a portfolio of products that supports our customers' continuing efforts to reduce sugar and salt, amplify the boldness of flavors, and enhance the overall mouth feel of products by importing juiciness and creaminess to the end product. Trueboost provides natural and clean label benefits across all of our customers' end markets. More information on these technologies and others can be found on our website. Overall, the growth we're experiencing is a direct result of the implementation of our strategy and the opportunities from the markets we have chosen to operate in. I'm excited about the growth opportunities within each of our groups, and I remain optimistic about 2024 and the future of our business. Tobin will now provide you with additional details on the third quarter results.

Thank you, Paul. In my comments this morning, I'll be explaining the differences between our GAAP results and our non-GAAP or adjusted results. The adjusted results for 2024 include the cost of the portfolio optimization plan. We believe the removal of these costs produces a clear picture of the company's performance for investors. This also reflects how management reviews the company's operations and performance. Turning to slide 12. Sensient's revenue was $392.6 million in the third quarter of 2024 compared to $363.8 million in last year's third quarter. Operating income was $50.5 million in the third quarter of 2024, compared to $44.5 million of income in the comparable period last year. Operating income in the third quarter of 2024 includes $1.2 million of portfolio optimization plan costs, which is approximately $0.03 per share. In the fourth quarter of 2023, we incurred $28 million of portfolio optimization plan costs. So far this year, we've incurred approximately $5.8 million of additional costs. Excluding the cost of the portfolio optimization plan, adjusted operating income was $51.7 million in the third quarter of 2024 compared to $44.5 million in the prior year period, an increase of 17.1% in local currency. The company's consolidated adjusted tax rate was 23.1% in the third quarter of 2024, compared to 17.5% in the comparable period of 2023. Local currency adjusted EBITDA was up 12.8% in the third quarter of 2024 and up 5.5% for the year-to-date period. Foreign currency translation reduced EPS by approximately $0.01 in the third quarter of 2024. Turning to slide 13. Cash flow from operations was $136 million for the nine months ended September 30, 2024, up 27% compared to last year's comparable period. Capital expenditures were $36 million year-to-date as of September 30, 2024. We expect our capital expenditures to be between $60 million and $65 million for the year. Our net debt to credit adjusted EBITDA is 2.4. With the continued high-interest rate environment, we remain focused on reducing our debt levels and our interest expense. Overall, our balance sheet remains well-positioned for future investments. Turning to slide 14. As Paul noted, we have increased our 2024 local currency revenue and local currency adjusted EBITDA to grow to a high single-digit growth rate for the year. We continue to expect our interest expense to be up approximately $4 million for the year compared to our 2023 full year interest expense. We expect our 2024 full year adjusted tax rate to be around 25% compared to 23.4% in 2023. We continue to expect our local currency adjusted EPS to grow at a mid-single-digit rate in 2024. What this implies for the fourth quarter is that we expect our local currency revenue to grow at a high single-digit rate, and our local currency adjusted EBITDA to grow at a high-teen growth rate. We expect our fourth quarter interest expense to be around $7 million, and we expect our adjusted tax rate to be approximately 25%. We expect our local currency adjusted EPS to grow at a low 20% growth rate in the fourth quarter. In considering our GAAP earnings per share in 2024, we continue to expect our GAAP EPS to be between $2.77 and $2.87 per share. Our GAAP EPS includes approximately $0.18 of portfolio optimization plan costs. Thank you for participating in the call today. We'll now open the call up for questions.

We will now begin the question-and-answer session. The first question comes from Ghansham Panjabi with Robert W. Baird & Co. Please go ahead.

Hi. Good morning, everyone. This is Matt Krueger sitting in for Ghansham. So my first question, I wanted to focus a bit on the volumes for the quarter. Obviously, the volume performance was quite strong. By segment, can you break out what portion of your volume growth do you feel was due to end market normalization due to the lack of destocking versus what portion of the volume growth is really sustainable kind of following the washout of the comparisons on a year-over-year basis as we move forward?

Okay. So, overall, if you look at Q3, we were up revenue 9% for the company, price being kind of 2% to 3%, low single-digit type level. So, you figure about 6% to 7% volume overall. Now it varies a bit with Asia-Pacific having double-digit volume, Color having double-digit volume and Flavors more like mid-single-digit volume. And so to answer the question explicitly, sure, there's a number of factors here. So, the end market, you heard me talk about for the last couple of years as we measure the market, the North American market, the volume of our end customers was down 1% to 2% in terms of volume. Europe was kind of flattish, maybe up 1%, and then, of course, things vary by Asia-Pacific and LatAm. So, now as we look at the market in North America, volume among all of our customers selling their product is more like flat. So, we don't have that 1% to 2% headwind in our biggest market in North America. Europe is still fairly consistent. So, figure maybe a portion of it was that, the no destocking. So, this is where I think the differences in the groups will come out a little bit more, obviously. That destocking impact, I think it was reprofiled last year, it was running anywhere from low to mid and in some cases, even high single-digit headwinds. And so Colors was largely at the peak of the destocking last year in Q3. Flavors were not as much destocking last year in Q3. You recall that Flavors has kind of got a lot of their destocking out of their way faster than Colors did. So, net-net, kind of to your question, what does this look like into the future? In 2025, we're guiding in accordance with our long-term guidance, mid-single-digit revenue where we anticipate pricing to be low single and the balance to be made up from volume. So, specifically to Q3, a couple of points in the market, say, low to mid on the destocking, not happening as strongly in color. But the majority of the volume growth in Colors and Flavors in Asia-Pac are largely our new wins, which continue to be very, very strong in each of the regions. We had a particularly nice uptick in Asia-Pacific and our new wins. So, yes, while some of this is favorable comparisons to last year and again, not having that destock, not having the market growth headwind, by and large, the volume growth is stemming from new wins. And this is why I have confidence that we can keep up that level of new wins into 2025 and that should translate nicely and support the mid-single-digit projections.

That's great. That's very helpful. And kind of building on that a little bit. You already mentioned that you expect volumes to be kind of in line with the long-term expectation or guide or target. Are there any other high-level variances for 2025 that you can provide us maybe expected contribution from the productivity initiatives that you have ongoing or any other notable variances as we try to bridge to 2025 estimates?

We expect, based on the volume projections for 2025 and low single-digit pricing, to maintain a positive operating leverage, although perhaps not at the current levels. This improvement is partly due to the recovery from last year’s weaker third and fourth quarters. As we consider 2025, the key contributor will be new wins, which is the most critical metric we monitor as a company. This reflects the effectiveness of our strategy, execution, service levels, and product technologies; new win rates remain very high, around the low to mid-teens percentage of revenue. We anticipate this trend will continue. There are a few variances that may play out differently in 2025. Ideally, I would prefer the market in Europe and North America to remain flat, but a decline of 2% to 3% would present challenges. I expect these markets to stay mostly flat, with possible growth in Latin America and Asia. Despite discussions about China, we still see solid growth there, even if it’s not as robust as in the past. During the COVID period, many companies shifted focus to SKU rationalization, which is complex and time-consuming. We've seen some product discontinuations this year and last, largely driven by these SKU initiatives. If we experience a decrease in discontinuations, it could offer some upside in 2025. Regarding portfolio optimization, we are on track and anticipate significant savings from the program, estimated at $8 million to $10 million, while keeping costs around $40 million, mostly non-cash. The impact will span across 2024, 2025, and 2026, reinforcing our projections for improved operating leverage and profit growth. A key question is why robust EBITDA and profit growth aren’t reflected in EPS growth, which can be attributed to taxes and interest. For example, the 17% operating profit growth in the third quarter only translated to 8% EPS growth due to these factors. However, we expect taxes to be less of a hindrance in 2025, improving our EPS flow-through. Interest costs have also impacted EPS, potentially around $0.08 this year, but this could shift to a slight positive effect with reduced debt and potential actions from the Federal Reserve. These are some reasonable projections for 2025 as of late October.

Great. That’s very helpful Paul. That’s it for me. I’ll step back in the queue.

Okay, Matt.

The next question comes from Nicola Tang with BNP. Please go ahead.

Hi, everyone. Thanks for taking my question.

Hi, Nicola.

Hello. First, maybe picking up on your comments there on new wins, I think you mentioned low to mid-teens as a percentage of revenue, which is pretty impressive. Can you talk a little bit about what's driving this? Is it customers who are looking to reformulate? Is it penetration and wins with new customers? Just trying to understand a bit what's driving this momentum and what's giving you confidence as we look into 2025? That's the first one.

I believe this is a key aspect of our company’s strategy. While great ideas are important, the real success lies in our ability to execute those ideas effectively. Our sales team has been doing an excellent job, supported by the leadership in our business units. This dedication is vital to our progress. Being responsive to our customers and understanding their needs is essential. The first factor contributing to our success is effective sales execution and exceptional customer service. The second factor is that many of our products have significantly contributed to our achievements, particularly natural colors, which have experienced strong growth this year. This growth is partly due to our new product launches, with about 80% of new products featuring natural colors. We've seen a double-digit increase in natural color growth, with more than 20% growth in Q3. This success can largely be attributed to new launches, along with market conversion efforts. Most new products involve natural colors, and we have established a robust natural color business thanks to excellent product development, continued investment in a strong supply chain, and significant improvements to our plants to meet customer demands in this competitive market. The complexity of the market requires substantial investment, and much of our current growth reflects the investments we've made over the past 15 to 20 years. Additionally, we are focusing on serving local and regional customers, from startups to established brands. The quality of service and innovation we provide, combined with our execution strategies and targeted product selection, has greatly contributed to our success. Over the years, we have shifted our focus to selling flavors, which are among our most resilient products. These require advanced technical expertise and formulation support. This focus on specific markets, along with our exit from less strategic industrial businesses after restructuring, has allowed us to concentrate on food, pharmaceuticals, and personal care. The products and technologies we offer, especially in natural colors and flavors, along with strong sales execution, have been critical factors driving our success. While there are many influencing elements, these three are the most significant.

That's great. Second one, I want to talk a bit about personal care. I think some of the larger players like beauty care players have been flagging a slowdown or fears of a slowdown in the industry, particularly in North America and in China. I was wondering whether that's something that you see as a risk? Or do you see any signs of slowdown in your personal care business? I know it was pretty strong in the last quarter, but I'm just trying to think ahead a little bit?

Personal care has had a really good year with strong sales in our makeup category and body wash. We have also performed very well in skin care. We've focused on specific segments within personal care, achieving great results. In our personal care ingredients business, we have several products catering to the fragrance market, which is currently thriving. It's important to note that personal care, more than any other market we operate in, experiences significant timing differences for our customers and us, partly due to the shelf life of these products. This situation allows us and our customers a level of flexibility. The personal care market is undergoing many changes, with over 20% of transactions now happening online, compared to just around 2% several years ago. This shift is influenced by growth from smaller, low-capital brands that use contract manufacturers, not just large multinationals. While some customers may be facing challenges, many others are performing well. Looking ahead to 2025, we are very confident about our continued performance, although we don't expect to reach 17%. A more realistic expectation would be mid-single-digit growth, potentially slightly higher in some regions. This growth is primarily driven by volume, customer selection, effective execution by our sales team, and high-quality products.

Thank you. This leads nicely into my final question regarding your long-term targets. I appreciate the clarity you've provided in the slides. Concerning the revenue target of mid-single digits, could you remind us of your goals by division? And for the high single-digit EBITDA growth rate, could you explain the main factors influencing this and where you see the greatest potential for margin improvement? Is it primarily on the Flavors and Extract side? Please highlight the key components for us. Thank you.

Yes. So I think the mid-single digit is a good average that is used across the three groups. I mean clearly, Asia Pacific has been operating above that. So yes, they may have a little bit of a higher opportunity there. But of course, that's also a smaller part of the portfolio. Certainly, as you look at things like natural colors, they're going to be on the higher end of that, possibly even above that range, certain segments of personal care, certain segments within flavor. So without getting into 26 shades of gray here, I would say, mid-single digit across the groups would be a pretty good proxy. And we'll keep you posted as we go along during the course of the year, where will we sort of above that where we a little bit below that. With respect to your question around leverage, yes, I think a lot of that is going to be the product mix, the types of products we're emphasizing and where we have been emphasizing, a very, very strong focus on cost and maintaining costs and not letting costs get out of control from a production standpoint and from an SG&A standpoint. But really, the sales and the volumes stemming from that manufacturing business can be very, very sensitive to volume declines, and that can have an outsized impact on EBITDA, but it works the other way too, right? So when volume is good and it's consistent and it's steady, that should offer us a nice operating leverage. Again, consistent with having a relatively strong focus on production cost mitigation, SG&A, managing that, although being a little bit different in our thinking when it comes to R&D and investing in innovation. Those don't necessarily get the same scrutiny as Tobin's launch expense that we look at very closely. So that leverage should continue to flow through very nicely. The biggest margin uplift opportunity continues to be Flavors. I think you're going to see a nice improvement there. The EBITDA, as we profile in Asia Pacific and Colors, is quite robust, quite competitive, and possibly even industry-leading by some accounts. So our biggest opportunity is Flavors, and we're just going to continue to focus there on the product mix. And then of course, we've got our portfolio optimization that's going to contribute there as well.

All right, great. Thank you.

Okay, thanks, Nicola.

Thank you.

Our next question comes from David Green with Boldhaven. Please go ahead.

Hi everyone.

Hello David.

A couple of quick questions. Just starting off on Colors. You've mentioned natural colors as a sort of area of strong growth. So, is there anything else within Colors you'd call out as being a big driver?

Sure. Yes, I think our Cosmetic business, our Personal Care business that was even a bigger driver, although not as big as the Food Color business. There was some fairly significant driving force for our success here in Q3. And I think, once again, it will do the same in Q4. So, that Personal Care whether we're talking about makeup, skin, or hair. We've carved out a nice position there. We have really good products. And again, I think that there's constant need for innovation in market, whether driven by performance expectations of the end consumer or regulatory changes. Regulatory drives a lot of our innovation work in the personal care market. Now, pharma is a smaller part, pharmaceutical excipients, where we're selling Colors and Flavors and Coatings. That is also a nice piece of the growth picture as we look to the future. But here, again, not as large as food colors, but certainly has many of the same attributes and technology that we're able to deploy. So, yes, Color is a very broad-based level of success. And again, I go back to that. We don't have those industrial businesses like we used to, which candidly may not be defensible, profitable. I think you like to use the term moat that didn't have such a good moat. The moat was kind of dried up and the alligators that were on strike or something. So, we got rid of those, it's really about food and personal care with a piece of pharma in there as well and we feel good about that portfolio.

Regarding the destock, I understand that Colors was the last to enter and will be the last to exit. Are we completely through the destock now, or are there still any challenges this quarter?

Now, the destock is over for Colors. In fact, it was more or less over in the beginning of the year. There might have been a little bit in Personal Care in Europe, maybe for Q1. But by and large, destocking that's in the past, thankfully.

Great. And a quick one. I'm not sure if I've got the right numbers here, but EBIT margins in Color were 18.4% in Q3?

EBITDA margin for Color in Q3 was 22.2%.

Sorry, I've got the wrong number there, I apologize.

That's EBITDA, though, David. You're asking for EBIT, which was 18.4% that you said.

Yes. So, the EBIT. So actually, your EBIT margin was 18.4% for Q3, which was actually below Q2, which was 18.8%. So, I was just wondering, given the strength in top line within Colors why the EBIT margin didn't actually improve more?

Well, EBIT last year was 15.8%. So, that was a 260 basis point improvement that’s a touch short of the 18.8%. But yeah, I wouldn't draw much of a conclusion from that. I think, yeah, we will be approaching 19% of the year on EBIT, but as you see on EBITDA, it's quite robust. And I think you can kind of write down that figure for long-term expectations for the EBITDA.

Yeah. Great. A couple more, if I can, just on Flavors and Extracts, Q3 was a sequential deceleration from Q2. Any reason for that specifically?

There are seasonal patterns in our business, and not all quarters are the same. For example, while ice cream sales are strong in certain months, they drop significantly in January. On the other hand, beverage sales tend to be higher at the beginning of the year due to numerous product launches in that time. This natural seasonality is a key factor. Additionally, the timing of sales wins or the specific products sold can also affect results. It's important to recognize that these quarters are not equal. Historically, Q2 and Q3 have been our strongest quarters, followed by Q1, while Q4 is generally the weakest across all groups. However, this can vary between our food and personal care ingredients businesses, and competitors may have different customer mixes. Overall, seasonality is a common aspect seen throughout the food industry.

Then just a couple of final questions. The guidance for 2025 was for high single-digit adjusted EBITDA growth. Given your comments about interest costs and taxes, should we expect EPS growth to be higher than the high single digit?

When we look at 2025, we're currently anticipating mid-single digit revenue growth. We believe interest rates will improve, and we expect them to decrease in Q4. In Q3, interest was around $7.7 million, and we foresee it dropping to about $7 million. With a more favorable interest rate environment, we expect improvements in 2025. As for our tax rate, we don’t expect it to be a challenge; it increased by about 6% or $0.06 this year. Looking at the bottom line, while we should see some leverage from this, I don’t think it will reach levels higher than what we are experiencing this year.

The final question is about the balance sheet. You've successfully reduced leverage to 2.4 times and generated a significant amount of cash this quarter. Could you provide an overview of your expectations for the end of next year? Additionally, what do you consider the appropriate leverage level for the business, and at what point would you start considering options like share buybacks?

Yeah. No, you're exactly right. So our leverage has improved. We're at about 2.4 now. So our focus this year has really been to pay down our debt, lower that interest expense and the headwind that we're experiencing right now. So we're at 2.4, I think as we kind of move forward with what I just mentioned on the lower interest expense and everything from that standpoint, we expect low 2s, rolling into next year. So low 2s, I think, from that standpoint, then we'll start to look at potentials on buying back shares in 2025 aren't any acquisitions or anything else from that standpoint. I think when you look at our capital this year, we should be around $60 million to $65 million. And I think that's a good proxy as we kind of move forward, $60 million to $70 million is the range we would anticipate our CapEx to be and then our dividend is roughly around $70 million a year. Yeah. And I think I'd add to that, David. We're a little bit fat on inventory. So I think we can do some more work there. That will be a net positive, obviously, on the cash flow. And so as we've been saying, we'll continue to drive down that debt, but it's probably safe to say as you think about all these numbers and how they come together that we would probably be in a reasonably good position to buy back in 2025. I think my philosophical approach to that would be one of you buyback with excess cash after you pay your dividend, your CapEx, and maintain debt. So if you're looking for what would conceptually be the order of magnitude, it would be whatever the excess cash is based on those other inputs that Tobin just gave you.

Right. Many thanks.

Okay. Thank you, David.

There are no further questions at this time. I will turn the conference back to the company for any closing remarks.

Okay. Thank you. Before we end our call today, I'd just like to recap some items for the fourth quarter and some expectations. We expect our local currency revenue to grow at a high single-digit rate, and we expect our local currency adjusted EBITDA to grow at the high-teen growth rate. We also expect our fourth quarter adjusted corporate expense to be similar to the third quarter. Interest expense to be approximately $7 million, and our adjusted tax rate to be around 25%. As a result, we expect our local currency adjusted EPS to grow at a low 20% growth rate in the fourth quarter. So thank you again. That concludes our call today. If you have any follow-up questions, please contact the company. Thank you.

The conference has concluded. You may now disconnect.