Greetings, and welcome to the Valmont Industries Second Quarter 2024 Earnings Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Renee Campbell, Senior Vice President, Investor Relations and Treasurer. Thank you. You may begin.

Thank you and good morning. Welcome to Valmont Industries second quarter 2024 earnings call. With me today are Avner Applbaum, President and Chief Executive Officer; and Tim Francis, Interim Chief Financial Officer. This morning, Avner will provide a summary of our second quarter results, current market dynamics and strategic priorities. Tim will review our second quarter financial performance and provide our updated outlook and indications for the year with closing remarks from Avner. This will be followed by Q&A. A live webcast of the presentation will accompany today's call and is available for download from the webcast or on the Investors site at valmont.com. A replay will be available on our website later this morning. Please note that this call is subject to our disclosure on forward-looking statements, which applies to today's discussion is outlined on Slide 3 of the presentation and will be read in full at the end of today's call. Finally, to stay updated with Valmont's latest news releases and information, please sign up for email alerts on our Investors site. We also invite you to follow Valmont and our brands on the social media channels linked on our website. With that, I would like to turn the call over to Avner.

Thank you, Renee. Good morning, everyone, and thank you for joining us. Beginning on Slide 5, our second quarter results reflect the commitment of our 11,000 employees worldwide to delivering exceptional value through innovation, quality, and service. Their relentless dedication to customer satisfaction, operational excellence, and cost management has enhanced profitability and fostered resilience in dynamic market conditions. As a result, we expanded operating margins to 14.2%, up 140 basis points over last year, with diluted earnings per share growing to $4.91. I'm pleased with the progress we're making in delivering stronger results, even on comparable sales. Infrastructure segment sales were lower year-over-year. While volumes in transmission, distribution, and substation, which we refer to as utility, were higher, we produced a greater mix of distribution and substation products this quarter to accommodate our customers. This shift, along with lower telecom and solar volumes and the effect of a lower steel index on price, impacted sales growth. While a mix change can affect top line growth in any given quarter, we always aim to enhance profitability and return on invested capital. By focusing on footprint flexibility and leveraging strong market demand, we are steadily expanding and adjusting our factory output to meet evolving customer needs. Additionally, we continue strategic pricing actions to capture the value we provide. Agriculture segment sales were slightly higher this quarter. In North America, severe storm events in May and June, primarily in the Midwest and Southern U.S., drove strong demand for replacement equipment. During this summer of exceptionally severe weather, our team has shown an outstanding ability to quickly build and deliver equipment during the critical growing season. This responsiveness ensures our dealer and growers receive essential support precisely when they need it most. In international markets, continuing market softness in Brazil pressured growth this quarter. Alternatively, we're seeing good momentum in our Middle East project business with a strong multi-year pipeline in the region. Overall, I'm encouraged by our ability to execute and drive profitability. Our success demonstrates the strong core capabilities shared across our organization and the value-creation potential enabled by the Valmont business model. Turning to Slide 6 for current market dynamics and long-term megatrends for the Infrastructure business. Starting with utility. Industry CapEx spending remains elevated. We're at the beginning of a multi-year energy transition marked by significant changes in both energy consumption and generation. Valmont products play a crucial role in connecting renewable energy sources to the grid and supplying more electricity to address load growth. Additionally, aging infrastructure requires upgrades to create greater resiliency, increasing the demand for our steel, concrete, and hybrid products. The outlook for transportation remains strong, driven by a national priority to upgrade and expand critical infrastructure. We expect IIJA funding to provide a solid tailwind to project financing for years to come despite labor shortages and funding delays slowing project build-outs in the near term. Commercial lighting markets remain muted but are expected to recover with single-family housing starts. As we've previously discussed, telecom carriers have scaled their CapEx plans and are likely to maintain more normalized spending levels following a period of record investment. The increasing demand for data due to advanced technology and connected devices requires a robust and widespread network infrastructure. In solar, this market remains attractive with strong demand drivers. Solar continues to be the lowest-cost energy solution supporting renewable energy objectives. We have made adjustments to our commercial strategies to enhance the profitability of this business, which I will highlight later in the call. Finally, our coatings business continues to align with GDP trends while supporting our internal production. These multi-year infrastructure megatrends are also driving demand for the superior corrosion protection provided by zinc galvanizing. Turning to Slide 7 for current market dynamics and long-term megatrends for the Agriculture business. While North American order rates trended higher this quarter due to the recent storm events, grower sentiment in the U.S. remains muted due to the expected decline in net farm income this year and the downward trend in grain prices. International market demand is mixed. In Brazil, we are seeing continued soft demand as farm income remains pressured by lower grain prices. The recent renewal of the financing program reaffirms the Brazilian government support for agriculture with favorable irrigation loans to growers. While we anticipate continued market softness in the near term, Brazil remains a key part of our long-term growth strategy. The pivot provides a compelling return on investment made even stronger by the region's potential for a third growing season. The international project pipeline remains strong and provides a multi-year line of sight. Our current project in Egypt and the $50 million in Middle East projects we announced last quarter remain on track. There is a rising demand to ensure food security globally, a challenge intensified with growing populations and geopolitical conflicts. With our manufacturing footprint, strong dealer network, and advanced technology solutions, we can deliver on these large projects which are essential to our global growth strategy. Valmont's market-leading products and technology solutions improve productivity on the farm by optimizing resources such as water, labor, and other input costs. We are well-positioned to build on our proven track record of successfully meeting growers' needs. To summarize, in both segments, our outlook for sustained long-term growth remains strong despite short-term demand headwinds in some of our markets. These multi-year megatrends drive demand and provide a solid foundation for future growth. We are positioning Valmont to capitalize on these trends while delivering long-term shareholder value. Turning to Slide 8. The Valmont business model defines our approach to maximize value creation. Executing these strategic focus areas while upholding our core values strengthens my confidence in our ability to outperform our served markets. Since stepping into the CEO role last year, I've worked with our team to refine our strategy and concentrate growth on areas that align with our core competencies. By focusing on customer needs, we aim to enhance value and returns while providing the best support. We're beginning to see the benefits of this refined strategy and the actions we're taking to align our team accordingly. For example, last fall, we took steps to streamline the organization to create a more efficient and effective structure while reducing costs. We are now more nimble and better able to make decisions while supporting our operations. The next step is refocusing our commercial and operational team on opportunities that deliver the greatest value and drive the highest return. This is captured by the phrases commercial execution and operational excellence. We saw benefits from this refocus in utility this quarter, as the team produced a greater mix of distribution and substation structures, enhancing margins while accommodating our customers. By allocating resources more effectively, we expect to achieve further efficiencies as we advance the strategy. Another great example is the actions we're taking in our solar business. We are exiting certain low-margin solar projects as we focus on enhancing profitability and return on invested capital. While this approach will impact revenue growth this year, we believe it further enhances our competitiveness and drives sustained growth towards our profitability targets. We are excited about the future of our solar business. By building on our success and distributed generation, we are driving geographic expansion supported by a strong global organizational structure. We are dedicated to advancing industry standards and will continue investing to deliver innovative solutions that meet our customer needs. Turning to Slide 9. Sustainability is a core element of who we are and is embodied in our promise of conserving resources and improving lives. Last month, we published our 9th Sustainability Report. We have demonstrated our commitment to our 2025 environmental goals by surpassing three of our four stated targets. ESG remains a core focus of ours as we view it as fundamental to good business practices. It creates efficiencies and cost savings, improves safety, manages risk, and fosters innovation. I'm pleased to report notable improvement in our 2023 safety metrics as a safe and engaged workforce is our highest priority. The report also features several product case studies that demonstrate our innovative solutions addressing resource challenges for our customers. We've been recognized externally for our ESG initiative, showcasing our global team's dedication to these priorities. To summarize, I am proud of our strong results. We are managing what we can and have ambitious plans to enhance our competitive position and drive profitable growth. Our balance sheet is stronger as earnings and working capital management have resulted in good cash generation supporting our capital allocation strategy. Our outlook is positive as we build a sustainable, high-performance culture that supports our growth objectives. Now, I'll turn it over to Tim for our second quarter financial review and an updated 2024 outlook.

Thank you, Avner, and good morning everyone. Turning to Slide 11 and second quarter results. Net sales of $1 billion were similar to last year. Operating income increased 10.2% to $147.3 million and operating margins improved to 14.2% of net sales. Diluted earnings per share of $4.91 increased 16.6% year-over-year. This includes a tax benefit of approximately $3 million or $0.15 per share due to the reduction of a valuation allowance on a tax loss carryforward in a foreign subsidiary. The steps we implemented to control expenses and reduce our cost structure continue to have a favorable impact on our profitability. Turning to the segments in Slide 12, Infrastructure sales of $762.7 million decreased 1% year-over-year. We were pleased with higher volumes in utility even as the mix this quarter shifted to more distribution and substation structures. Also, average selling prices for utility products were slightly higher year-over-year. Through pricing excellence, our commercial team secured projects at pricing levels that offset the contractual price impact from steel index deflation. Telecommunications volumes were lower this quarter, but we do not expect any further year-over-year decline in telecom sales for the rest of the year. Solar volumes were also lower due to project timing. Operating income increased to $133.6 million, or 17.6% of net sales. Operating margin improvement was driven by improved commercial execution including pricing strategies, lower cost of goods sold due to declining steel costs and reduced SG&A expenses. We have begun to realize the benefits from strategic investments in our manufacturing facilities, enabling us to increase production of higher-margin products. Moving to Slide 13, Agriculture sales of $281.7 million grew slightly year-over-year. In North America, irrigation equipment volumes were significantly higher, driven by a large increase in replacement sales due to severe weather impacts. Average irrigation selling prices were lower compared to last year, primarily due to targeted regional pricing actions. International sales decreased, primarily driven by significantly lower sales in Brazil due to normalizing backlog levels and lower grain prices impacting growers' buying behavior. The lower sales were partially offset by higher Middle East projects and the contribution from HR Products acquisition. Operating income decreased to $40 million, or 14.3% of net sales. The benefit of reduced SG&A expenses was more than offset by the impact of lower volumes and pricing in Brazil. Turning to cash flows and liquidity on Slide 14. Second quarter operating cash flows were $130.8 million, nearly 50% higher than the second quarter of 2023, and we ended the quarter with approximately $163 million in cash. We expect strong cash flows throughout 2024 through earnings growth and diligent working capital management. During the quarter, we reduced borrowings on our revolving line of credit by $90 million and total debt to adjusted EBITDA of 1.7 times is within our desired range of 1.5 times to 2.5 times. Our cash balances, available credit and flexible balance sheet provide us ample liquidity to execute our capital allocation strategy. Turning to Slide 15, for a summary of capital deployment. Year-to-date capital spending was $33.3 million. Our Infrastructure operations team is steadily making progress on approved capital projects to expand our production capacity. Our acquisition strategy is sharply focused on natural adjacencies to our core capabilities that would enhance our portfolio or expand our addressable markets. Our capital deployment approach balances growth investments with returning cash to shareholders. Year-to-date, we returned approximately $40 million of capital to shareholders through dividends and share repurchases. Over the past year, including our $120 million accelerated share repurchase program, we have returned approximately $275 million to shareholders through dividends and repurchases. I will now share our updated 2024 outlook, as shown on Slide 16. We are revising our net sales outlook to a sales decline between 1.5% to 3.5% from prior year. This reflects a strategic commercial adjustment we are making in our solar product line that will impact full year sales but has minimal effect on the profitability of the total segment. Additionally, the contractual price impact from steel index deflation is leading us to adjust our expected increase in utility sales downward from previous outlook assumptions. As a result of these two factors, full year Infrastructure sales are now expected to be between flat to up 1.5% compared to prior year. In Agriculture, our outlook remains unchanged with segment sales expected to be down between 10% and 15% compared to prior year. In North America, despite the additional storm-related sales this quarter, we do not expect an improvement in our sales outlook this year due to current U.S. farm income projections and recent downward trends in grain prices. We also expect continued market softness in Brazil. We remain focused on pricing excellence and increasing adoption of our technology solutions. Even with the downward revision to our sales projection, we are increasing our outlook for diluted earnings per share to a range of $16.50 to $17.30. We also expect earnings per share for the second half of 2024 to be below first-half results. I'd like to take a moment and expand on that. In Infrastructure, we anticipate full year gross profit margins to improve compared to 2023, although they may not reach the levels seen in the first half of this year because steel costs will be more aligned with the contractual steel index pricing to our customers. In Agriculture, we expect that a higher mix of international projects during the second half of the year will pressure segment margins. However, this impact will be partially offset by reduced SG&A expenses compared to last year. As we noted last quarter, we expect second-half segment operating margins to be similar to the fourth quarter of 2023, which were 10.3% on an adjusted basis. We expect full year consolidated SG&A to be a smaller percentage of net sales compared to last year, reflecting the meaningful process improvements we've implemented. With that, I will now turn the call back over to Avner.

Thank you, Tim. Turning to Slide 17. I'd like to close by thanking our global team. We're actively managing what we can by driving commercial and operational excellence, leveraging key strengths and enhancing productivity across the organization. Streamlining our administrative functions has improved operating margins and is creating sustainable shareholder value. Today, our company is more resilient and making steady progress on our strategic initiatives, positioning us to achieve our long-term financial targets. Our team is delivering innovative solutions to our customers in growing markets that address vital megatrends. I'm confident in our ability to continue delivering value for our stakeholders. I will now turn the call back over to Renee.

Thank you, Avner. At this time, the operator will open up the call for questions.

Thank you. Our first question comes from Chris Moore with CJS Securities. Please go ahead with your question.

Hi, good morning, guys. Thanks for taking a couple of questions. Yes, I was hoping maybe we just go a little bit deeper on solar kind of on the strategic adjustments. Just trying to understand a little bit better in terms of some of the projects that you are going to be exiting and just how the overall strategy kind of impacts beyond '24.

Thank you for the question, Chris, and good morning. When we look at our solar business, we made a strategic decision to exit products that are really more commoditized, and we cannot add our engineering expertise. We initially started along this road when we were supporting one of our customers. But as we looked into it, it's just not a business where we can add value to meet our financial targets. So what we're doing is focusing on the areas where we can drive that value and drive financial results. And mostly it's in the DG space. So in the DG space, our margins are improving year-over-year. We are a large, stable player in a largely underserved market. What we bring to the table there is our deep knowledge and expertise in the local countries where we operate. We have a good track record over 15 years providing a solution that offers low operational costs and low maintenance costs. Actually, our tracker suits very well into smaller fields. Some of these DG fields have odd shapes, and our product fits very well in that area. It's easy to install and allows for labor flexibility. So when we look at the DG space, we're doing very well there. We've actually increased our revenue in that space around 30% year-over-year. We're very pleased with that result. We can also support our customers in the utility space by providing them with additional products. So we're going to be highly focused on that area where we can drive strong growth. That market is growing 8% to 10% every year. So we're going to keep on serving that market and continue down that road.

Got it. It's helpful. I appreciate it. And maybe just for my follow-up, North America Ag was strong this quarter. A lot of replacement sales. The guidance for the year didn't change. Just trying to understand if the mix between the decline of North America versus international is changing at all, even though the overall 10% to 15% decline stays the same.

Yes, Chris, let me start off by giving some background, and then Tim can jump in. But overall, we did have a strong quarter with storms. I would like to point out it is the unfortunate reality and a way of life for a grower where they get hit with these storms. I just want to emphasize that it's not a given that we get that business. We utilize our strong dealer network. We're ready there with emergency stock and our supply chain, and we're able to get the farmers back on their feet quickly during a very critical time for them. So we did have a very strong quarter. When we look globally and consider some macros, what we are seeing, at least even in this quarter compared to last quarter, is that the crop pricing is lower. I mean, going into last quarter, corn was closer to $4.60, and now it's around $4. You look at soy, it was over $12, and now it's a little bit below $11. So it is putting additional pressure on the farmer. And right now there's no real indication that the yields won't be good, and the stock-to-use ratio is still pretty high. So when you factor those in, we're expecting a challenging year globally, both in North America and in Brazil. And Tim, I don't know if you want to add some color around that.

Yes. Good morning, Chris. It's Tim. To provide more specifics, our current outlook suggests that North America sales for the full year will drop, nearing mid-single digits. The decline for international sales is expected to be slightly over 15%. Avner summarized the reasons for these changes well. We experienced additional replacement volumes in the second quarter, but we are adjusting our outlook for both North America and Brazil for the latter half of the year.

Good morning, everyone.

Morning.

I want to start off with a few questions on pricing and on, I guess, price versus cost as well. You guys have talked about some specific areas for price declines in Agriculture and the contractual price pass-throughs in utility. You haven't discussed softening prices in any other part of the business. And steel prices have come down a lot. So I'm interested to hear your views on whether you can hold on to those lower input costs, whether you have to give back some pricing in other areas, and then what your views on that, net of the input costs would be. So do you expect that to be accretive to margins and income, even if you're seeing some lower pricing?

Perfect. Nathan, I'll start off and just talk about the environment and our pricing strategies; then Tim can elaborate. We're going to continue to maintain our pricing leadership. We provide valuable solutions to our customers. Demand is strong in a lot of our end markets. We talked about utility space, the transportation area; there's strong market demand, and we provide our customers with these solutions, and we will price accordingly. There is no expectation that we will take broad-based pricing reductions. We're going to maintain our pricing, and I don't see any reason for that. And even in the areas that we are adjusting pricing, it's very specific to every particular area. We mentioned in Agriculture, it's a surgical approach, also making sure we're maintaining our market share. But overall, right now, I don't see any reason why we would take any actions to reduce our pricing.

Nathan, it's Tim. Let me expand a little bit. I'm going to talk about TDNS, and then I'll move on to Agriculture. For TDNS, about 50% of the sale of a utility structure is the cost of steel. We do expect a return to the cost of steel aligning with the contractual deflation we're seeing in that steel index as the year progresses. When you turn to Agriculture, there are lots of components to pivot. There are center drives, tires, electronics, and pieces that go into a control panel. Because of all the different components we see in a pivot, we don't see a dislocation of price versus cost. As we said in our opening remarks, we are being very targeted on the regional pricing actions we're taking.

Thanks for that. I guess my follow-up question is on the Infrastructure business and the total margins there. For most of the last 10 to 20 years, the combined margins of all of those Infrastructure businesses have been in the 10%-ish, low-double-digit kind of area, and we're pushing above mid-teens at the moment. What's your view on the sustainability of that versus the market competing those back down to where long-term averages have been? Just any thoughts you can give us on that?

Yes. Nathan, so we did mention that specifically, you look at the quarter, there are puts and takes, and I'll just look at it more broadly. It's a different environment than it's been over the last decade. We are seeing a lot of strong market demand and some of these megatrends, once-in-a-lifetime energy transition. We're seeing load growth for the first time in decades, driven by electrification of the grid, bringing more and more plants internally to the U.S., et cetera. So it is a very strong market environment, and we expect that to continue. Now, we've taken actions internally as well. We've streamlined our organization, so we eliminated SG&A costs, which allows us to benefit from those costs while being more effective and efficient. We manage our capacity closely to maximize it. We're driving continuous improvement. We do that year in and year out to ensure we continue driving profitability. We're adding products, and over the years we have a much bigger portion of our business going through concrete. This is beneficial. We now do more distribution and substation, specifically in utility. These are just some specific examples of what we're working on to continue to drive market expansion and achieve our long-term goals of increasing our margins over time. Overall, I would say we should continue to see margins improve.

Hi, thanks. Good morning. I guess just a question within the Infrastructure segment. Tim, I caught your comments just regarding the telecom business. It's obviously been a difficult area for you. It sounds like maybe you're suggesting some stabilization here in the second half of the year. Any insights into what you're seeing from those customers and what gives you confidence that maybe that business is starting to inflect?

Yes, absolutely. Good morning. I'll take that question. Overall, if we take a step back and look at the telecom business over the last several years, the telecom providers have spent a significant amount of CapEx on both projects and spectrum acquisition. As they're trying to monetize their investments, they got hit with higher interest rates which placed pressure on the carriers. So we've seen a slowdown in spending. However, we're starting to see some stabilization and we're cautiously optimistic. We're seeing better order intake at this point. But what we are observing from the carriers is they are not currently spending a lot of resources and CapEx specifically on densification, which we initially thought would be the case. Instead, they're more focused on increasing capacity, operating in the mid-band space, particularly in suburban and urban areas, to add additional customers. They're still working on strengthening their balance sheets. You just heard AT&T yesterday discussing that. They're heavily investing in the 5G space as well. We're seeing more business as usual, so to speak. Our second half should absolutely see growth in telecom, which is positive for us. When we look at our product offerings, they fit well with what we can provide in that space, specifically around mid-cell and some of our PIM products. Overall, I'd say we're seeing positive signs, and we expect more stabilization in the telecom area.

Okay. Very good. Avner, I appreciate that. And then on Agriculture, it seems like the project-based business is giving you some offset, notwithstanding a tough overall spending climate in that segment. Could you talk about the pipeline for those sorts of projects and the visibility you have into those? And what sort of visibility does that potentially lend you for 2025, especially if, in fact, this Ag weaker market persists?

Yes. That sector has different drivers compared to North America and Brazil. The project pipeline is influenced by food security and water scarcity, and we are experiencing strong activity in North Africa, the Middle East, and other regions. We are successfully managing the projects we have, and we remain engaged with our dealers and customers. Our pipeline is robust at this time. While finding the timing for each project can be challenging, we have seen significant project activity in recent years. Compared to the pre-COVID period, the current environment is more active and positive, which helps balance out some weaknesses in other areas. Overall, I feel optimistic about our pipeline in this sector.

Okay. Thank you. Appreciate it.

Good morning, gentlemen. Thanks for taking my questions.

Morning.

Morning.

I was just wondering, maybe just a follow-up to Nathan's question on pricing, specifically on the irrigation business. You indicated that in the quarter, you took some targeted pricing actions. Just wondering if maybe you could quantify the magnitude of those actions. And were those more kind of one-time, or is that an ongoing review that you have as far as your pricing in that market?

Yes. So thanks for the question. Pricing in irrigation is very specific for us. Every grower, every region is different, and every pivot offering is unique. We had to make some small adjustments in specific areas, but overall, our strategy is to protect our market share. Every region can present different dynamics. Overall, I would emphasize that pivots have very strong value propositions for growers. They ensure yields and help optimize costs. Without a pivot, achieving desired yields becomes very difficult. We will leverage our dealer network and strong offerings to address these needs. Again, it's very specific to particular areas. We should not expect to see broad-based pricing reductions in irrigation.

I appreciate that. Maybe just a follow-up on the capital allocation plans, your thoughts on the M&A environment and where you could be targeting that going forward. Thank you.

M&A is part of our capital allocation strategy. Our number one priority is CapEx, followed by acquisitions. I've taken a close look at our pipeline and streamlined it by removing acquisitions that do not meet our financial or strategic criteria, so we focus on adding value. Our targets are tied to our core competencies and appealing markets and geographies. We are actively building our pipeline, and there’s no specific segment or area we are focusing on. We’re looking at all areas capable of driving growth and significant synergies. There are ample opportunities within the TDNS space that we are watching closely, alongside others. You’ll hear more from us over the next several quarters as we continue to build our pipeline. Timing these acquisitions can be difficult, but this will remain part of our strategy. We’re generating strong earnings and cash flows, and we aim to leverage that.

Our next question comes from Brian Drab with William Blair. Please go ahead with your question.

Hi, good morning. This is Tyler on for Brian. Appreciate you guys taking some questions. First of all, can you just elaborate on how a greater mix of distribution and substation sales negatively impacts sales? Pricing was higher year-over-year for the segment. So I'm just trying to understand the ebbs and flows of the different mix.

Sure. This is Tim. I'll take that one. So I'll go back a little bit to my comment about that. If you think about sales of TDNS, 50% of a utility structure's sale price is the cost of steel. Therefore, as we make fewer large transmission structures, we'll have less revenue. We are excited about the ability of our commercial and our operations team to increase production of more distribution and substation structures to serve our customer demand, but again, all else being equal, smaller structures, with 50% of their cost being the cost of steel, will result in less revenue.

Got it. Yes, that's pretty straightforward. I just wanted to confirm with that pricing was still up and that the negative impact was mostly just transmissions being down. And my follow-up question is, can you just give examples of the higher-margin products you are producing due to the strategic investments in your manufacturing facilities? You mentioned on the call. I just want to get some examples of those.

Sure. It would be back to the distribution and substation product lines. Every year we try to find that balance of taking orders from our alliance customers versus taking orders out in the bid market. As we looked at what was available in the bid market, we saw an opportunity to take more orders for distribution and substation, and we were pleased with the margin profile of those orders.

Yes. Let me just add that we're very pleased with what we're seeing in these markets. In transmission, distribution, and substations, we have strong growth and strong demand. I wouldn't focus specifically on one area; quarters will always have various shifts in mix. In this quarter, we were able to support our customers precisely as needed, and we have a broad product offering that allows us to do so. Overall, our backlog and demand outlook are very robust, and we’ll keep driving growth in that area.

Good morning, everyone.

Morning.

Morning.

Avner, last year you made some major organizational changes at Prospera, and I'm wondering where Prospera now sits in terms of your longer-term goals and Prospera's ability to add new technology to the agriculture and irrigation business and what are the plans for Prospera from this point forward?

Yes. Thanks for the question. Prospera has been more integrated into our tech organization. I want to emphasize that we're focused on providing the highest value to growers. We are concentrating more on our core strengths, particularly under irrigated acres and the pivot offering, and we aim to deliver strong value. Prospera is supporting these areas as we develop tech to help farmers be more effective without requiring them to be on-site with the pivot. We’re embedding more data science and machine learning into the pivots and many other relevant aspects. So we see the pivots evolving to become smarter and more effective, tackling their challenges from operational to input cost efficiency. We're making great progress in this respect, and on top of Prospera's talent in AI and ML, we’re exploring how they can assist us in various other business aspects, including infrastructure. Overall, I am excited about their contribution to help growers solve pressing issues and enhance productivity.

Thank you. We have no further questions at this time. Ms. Campbell, I'd like to turn the floor back over to you for closing comments. Thank you for joining us today. As mentioned, today's call will be available for playback on our website or by phone for the next seven days. We look forward to speaking with you again next quarter. These slides contain and the accompanying oral discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that could cause the actual results of the company to differ materially from the results expressed or implied by such statements including general economic and business conditions, conditions affecting the industries served by the company and its subsidiaries the overall market acceptance of such products and services, the integration of acquisitions and other factors disclosed in the company's periodic reports filed with the Securities and Exchange Commission as well as future economic and market circumstances, industry conditions, company performance and financial results, operating efficiencies, availability and price of raw materials, availability and market acceptance of new products, product pricing, domestic and international competitive environments, geopolitical risks, and actions and policy changes of domestic and foreign governments. Consequently, such forward-looking statements should be regarded as the company's current plans, estimates, and beliefs. The company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

This concludes today's teleconference. We thank you for your participation and you may disconnect your lines at this time.