Good morning and welcome to the ZERN LK Water Solutions Corporation 4th Quarter 2025 Earnings Results Conference Call with Todd Adams, Chairman and Chief Executive Officer, and David Pauley, Chief Financial Officer for ZERN LK Water Solutions. A replay of the conference call will be made available as a webcast on the company's investor relations website. As a reminder, this call contains certain forward-looking statements which are subject to the safe harbor language outlined in Zurn LK's press release issued yesterday afternoon and in the company's filings with the SEC. In addition, some comparisons will refer to non-GAAP measures. The company's earnings release and SEC filings contain additional information about these non-GAAP measures. why they are used, and why the company believes they are helpful to investors and contain reconciliations to the corresponding GAAP information. Consistent with prior quarters, the company will speak to certain non-GAAP metrics as they feel they provide a better understanding of the company's operating results. These measures are not a substitute for GAAP. XERN LK encourages you to review the GAAP information in its earnings release and SEC filings. With that, I'll turn the call over to Todd Adams, Chairman and CEO of XERN LK Water Solutions.

Thanks, Rebecca, and good morning, everyone. I'll start on page three. We wrapped up calendar year 2025 with a pretty decent fourth quarter, as sales grew 10% organically over the prior year Q4, and EBITDA grew 14% to $104 million with margins expanding 100 basis points to 25.6%. In the quarter, we generated $83 million of free cash flow, bringing the full year to $317 million, which was up 17% over 2024. Over the course of the year, we repurchased about 3% of our outstanding shares for $160 million and paid $64 million in dividends, all this while leveraged decline to 0.4 times. Taken as a whole, we accomplished a lot over the course of 2025, the most important of which are the additional sustainable competitive advantages we've built in our business that will help us grow faster and be more profitable in the future, and I'll touch on those in just a bit. Along the way, 2025 afforded us the opportunity to live test the supply chain optimization plan that we had been deploying and talking about for several years, and for the most part, it's worked flawlessly. After we quickly celebrated 2025 here, our attention has turned to the next three years and even more specifically, delivering another record year in 2026. For us, leveraging the CERN-LK business system in everything we do and how we operate keeps us relentlessly focused on getting just a little bit better every day. To that end, one of the core pillars of ZEBS is our strategic planning and strategy deployment process. We wrapped up our annual three-year strategic planning process in Q4 and are now actively deploying year one of that plan. It's a process we've used and done annually for about the last 18 years or so, and we think we've made continual improvements in that process. But this process isn't a desk exercise. It's a full-contact sport where we evaluate every aspect of our business from our markets, competition, and our industry to products, customers, channels, and adjacency, as well as larger, more disruptive ideas. We ask what's changed, what did we get wrong last year, and what are our risks, and importantly, where can we further exploit the competitive advantages we've built? This defines and aligns an organization around what our priorities are going to be over the next coming one, two, or three years, the resources and investments required, as well as the tools, processes, and capabilities we need to leverage or develop to get there. But we're not going to be super specific this morning about the exact things we're up to, at least at this juncture, I can say this. We see more new organic growth opportunities largely in adjacencies and underserved verticals than I can remember. We have a plan to attack these opportunities, and assuming we execute, which we have a reasonable track record of doing, I'm confident this only enhances our organic growth trajectory over the coming two to three years. And I also believe that in time, our approach in attacking these adjacencies and verticals will have an incrementally positive impact on our M&A cultivations. Before I turn it over to Dave, I'll touch just briefly on our initial outlook and framework for 2026. The approach we're taking to our outlook this year is exactly the same approach we've taken in the past. We start with a range of outcomes that are reasonable, not back half-weighted, and in line with our demonstrated performance. We then go about retiring risks quarter by quarter while we work on our strategic breakthroughs. We gave everyone our view on the market last quarter, and that hasn't changed. We also have some carryover price from last year. And most importantly, we're executing well. All things equal, we're off to a really good start in January, but still 11 months to go in 2026. So now I'll hand it over to Dave to take you through some more color on the quarter.

Thanks, Todd. Good morning, everyone. Please turn to slide number four. Our fourth quarter sales totaled $407 million, which represents 10% core and reported growth year over year. Continuing what we saw throughout 2025 and in line with our expectations going into the quarter, core sales growth in our non-residential end markets outpaced the softness we experienced within residential and pockets of the commercial segment within non-residential. In the fourth quarter, we continued to deliver positive price-cost position with respect to tariffs and saw the benefit of roughly five points of price in the quarter from our previously announced tariff-related pricing actions. Overall, we continue to have solid execution on our growth initiatives, and they help to drive our sales performance above the outlook we provided 90 days ago. Turning to profitability, our fourth quarter adjusted EBITDA was $104 million, and our adjusted EBITDA margin expanded 100 basis points year-over-year to 25.6% in the quarter. This strong margin and year-over-year expansion was driven by the benefits of our productivity initiatives, leveraging our Zurn-LK business system and continuous improvement activities across the organization that Todd will touch on in a few slides. For the fourth quarter, profit performance continued on a trend we saw all year of strong year-over-year margin expansion. 2025, our sales and adjusted EBITDA have increased $129 million and $52 million respectively, which represents a 40% drop-through on the year-over-year volume increase. Our full-year adjusted EBITDA margin improved 120 basis points year-over-year as core sales grew by 8% in 2025. Please turn to slide 5, and I'll touch on some balance sheet and leverage highlights. With respect to our net debt leverage, we ended the year with leverage at 0.4 times, the lowest leverage we've had as a public company. We continued to repurchase shares, and in the quarter we deployed $25 million to repurchases. That puts our 2025 full-year repurchases at $160 million, with an average repurchase price of $36.74. Pre-cash flow finished strong at $83 million in the quarter, bringing our full-year total to $317 million, or a 17% improvement year-over-year. We continue to cultivate and evaluate our funnel of M&A opportunities, and our combination of management team capability, low leverage, and cash flow generation all support our ability to execute on the right M&A opportunity. At the same time, we're actively working on entering organic adjacencies through investment and internal development. I'll turn the call back to Todd.

Thanks, Dave. And I'm back on page six here, where I want to briefly highlight a few of the things you'll see in our 2025 sustainability report that we'll be issuing later this month. So last year alone, our drinking water products provided 2.4 billion gallons of cleaner, safer, filtered water while preventing 20 billion single-use plastic bottles from entering waterways. We launched ProFiltration, our latest evolution of our trusted bottle filling station line, advancing both water quality and sustainability for customers worldwide. ProFiltration features include a top-mount filter access for faster 30-second filter changes and reduced downtime, new 10,000-gallon filtration capacity for longer filter life, filter life gauges, UVC LED lights. We also introduced a filter that expanded filtration beyond PFOA and PFOS to capture the full family of PFAS or forever chemicals. Filters are now certified to reduce microplastics, lead, total PFAS, and much more. And we expanded our filtration portfolio with LiveEasy, bringing commercial-grade water filtration into residences, life's commercial, and hospital applications, helping people enjoy the same high-quality water trusted in schools, airports, hospitals, and stadiums. We're especially excited to share that we have recently partnered with TerraCycle to launch a recycling program for used water filters. Customers can now return filters through TerraCycle's zero waste boxes where plastic casings are repurposed into durable industrial materials and carbon media is responsibly managed. Activated carbon filters like ours retain more than 99.5% of PFAS, ensuring contaminants remain securely contained during disposal. And it's not just advancements in drinking water. The sustainability benefits of our products permeate into our other product categories. Our world dryer hand dryers eliminated the need for 3.5 billion paper towels in 2025. We launched the sanitize and dry sanitizing dryer, a breakthrough in hygienic sustainable hand drying. Its cold plasma technology neutralizes 99.99% of common bacteria and viruses, including SARS, COVID, E. coli, norovirus, influenza A, and the common cold, all without chemicals. It's not why we do it, but our work continues to earn recognition. Zurnelke, again, maintained top-tier ratings from Sustainalytics, MSCI, and S&P Global, and we were named to six leading sustainability lists, including Newsweek, Time, Barron's, and USA Today. A lot of our efforts to expand access to clean water. Our Fountains of Youth program continued delivering filtered bottle-filling stations to under-resourced schools, helping ensure students have reliable access to clean, safe drinking water. And in total, we reached $1.9 million in philanthropic giving in 2025. All in another really solid year of walking the talk with respect to sustainability. And watch for the report in the coming weeks. So the last one for me is on slide seven. And last quarter, I shared our one-page slide on ZEBS that depicted how we think about and manage our business, leverage our operating philosophy, and ultimately, how we measure ourselves. In the middle of all of it, we highlighted that the glue to this was the Zurn-LK business system, our common language, which is rooted in a deep culture of continuous improvement. We found that continuous improvement can connect and engage everyone in every location, function, and role around the simple idea of making things 1% better every day, and the best part of it is it compounds every day into improved quality, better customer satisfaction, more engaged associates, lower cost, career development, the list goes on and on. We have an internal portal creatively named Hashtag CI where we ask our associates to communicate and share in real time some of the things they're doing or have done to get better. This creates a way to celebrate successes, share ideas, and radiate these across the company, regardless of position or location. Back in 2024, our team of roughly 2,500 managed to log 3,741 hashtag CI submissions. In 2025, that same group of roughly 2,500 people submitted 5,568, an increase of almost 49%. And if I was a betting man, which for the record I'm not, I'd take the over on what our team will do in 2026. And now I'll turn it back to Dave for the outlook.

I'm on slide eight with our 2026 guidance framework. As Todd mentioned earlier, our approach to the guidance is the same as we've taken in the past, provide a framework that we have confidence in our ability to deliver, taking into account the fact that we are one month into the year and a range of outcomes are possible. In fact, it's a full year, and based on the assumptions I'll touch on shortly, we expect core sales to be up plus mid-single digits, incremental adjusted EBITDA margins of approximately 35% on the increased sales, and generate approximately $335 million of free cash flow in 2026. On the upper left-hand side of the slide are a few assumptions embedded in our outlook. From an end market perspective, our outlook assumes our markets in total look a lot like what we just saw in 2025. Institutional and waterworks end markets continue to grow at low single digits, commercial end markets to be flattish, and a continued tougher residential end market. The result of these individual end market expectations combines to an overall assumption that the market is generally flat to slightly positive. In terms of price, we will have higher price impact in H-1 as by the second half we cycle against quarters that already have the tariff-related price realized. One of the uncertainties that will impact 2026 that we are actively monitoring is the evolving tariff environment. Our guidance assumes that the tariff countries and their respective rates remain consistent throughout the year and are consistent with today's levels. As a business, we navigated through the 2025 tariffs very well and continued to action our strategy to exit direct material purchases from China. We are on track and with some products ahead of schedule to our goal of having only a few points of COG spend coming out of China by the end of 2026. As we did in 2025, we again remain confident in our ability to execute a positive dollar price-cost impact from tariffs in 2026. For the first quarter of 2026, we are projecting core sales growth to increase 7% to 8% over the prior year with incremental adjusted EBITDA margins of approximately 35% on the year-over-year At 35% incremental margins, the EBITDA margin for Q1 will be approximately 25.5% to 26%, roughly 60 basis points margin expansion over the prior year at the midpoint of the range. In slide 8, we've included our first quarter and full-year outlook assumptions for interest expense, non-cash stock compensation expense, depreciation and amortization, adjusted tax rate, and diluted shares outstanding. We'll now open the call up for questions.

This time, I would like to remind everyone, in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. And at this time, your first question comes from the line of Brian Blair with Oppenheimer. My apologies. One moment. And your line is open.

Thank you. Good morning, guys. Very solid close to the year. Thanks, Brian. I guess starting with your core sales outlook, maybe speak to what your team is seeing to, you know, kick off 2026 and then how we should think about the build to mid-single digits in terms of market outgrowth. and price carryover or perhaps incremental price being decked in.

Yeah, I mean, I would sort of decouple those two for a moment and say, you know, if you look at what we're saying for Q1, you know, we're looking at seven to eight, I think we're off to a really good start. I think as I also mentioned in my intro comments, you know, there's 11 months to go. And so I don't know that there's a discrete framework that marches you from seven to eight to mid-single digits other than, you know, there's probably a little bit more price in the first half than second, but all things equal, you know, I think we endeavor to beat what we're saying for the year, and we're off to a really good start, Brian, I think is the only way to characterize it.

I understood. That makes sense. And as a follow-up, your balance sheet's in a pretty fantastic position. You're obviously generating a lot of cash flow. So maybe touch on the deal environment now. It's been a while since your team has executed the transaction. I know that's not based on inactivity, you know, behind the scenes. Just curious how, you know, your funnel has developed. How would you think about actionability this year, whether there's, I guess, any excitement on that front?

Yeah, I mean, as we talked about, you know, we went through our strategic planning process. I think we've, you know, been even more exhaustive in how we've looked at adjacencies. And so, you know, there's a fresh, you know, sort of view on the funnel and some of the cultivations that are happening that have been in the works for a while continue to progress. We have not seen anything transact that we feel like we've missed. And so, you know, I'm optimistic that the combination of continuing to do the cultivation work, I would say, you know, maybe a new fresh look at adjacencies and what that can do both organically and inorganically, I think will be incrementally helpful. And as you point out, you know, we've got tons of flexibility over the course of the year to, you know, repurchase shares, look at the dividend again, and ideally get something done from an M&A perspective that fits, meets our criteria, and we can do a lot with. So I think we're optimistic, but we're not going to predict or project either.

Got it. Thanks again, guys.

Your next question comes from the line of Nathan Jones with Stiefel, and your line is now open.

Good morning. This is Adam Farley on for Nathan. And following up on that last M&A question, you know, could you provide any more color or detail on maybe some of the adjacencies or verticals that you've identified through that three-year planning cycle?

Adam, you're a little bit muffled. I can't quite hear what you're saying.

Yeah, so following up on that last M&A question, could you provide any more detail or color on maybe the new adjacencies or verticals that you've identified in your three-year planning cycle?

Yeah, I guess I will give you a little color. I mean, I think it looks and feels a lot like things we do today. So it's North American-based. It's in and around water, professional-grade plumbing. It could have flavors of, you know, leveraging certain lead products into different verticals. And I'll take you back to, you know, what we did in fire protection, you know, you know, five, seven years ago, where we identified, you know, we had some niche products and then we built out a portfolio around that and then, you know, grew our fire protection business into something that's substantial. And so it's got a lot of that flavor where we start with, you know, maybe a larger application where we have some products that are involved, and then what else can we add to that bundle either organically or inorganically to all of a sudden be a formidable, you know, supplier into that vertical or into a discrete market adjacency and so I think you'll you know you'll see some of these things roll out over the course of the year and when we do that I think it'll become obvious as to you know why it makes sense for us to get into these and the kind of you know incumbency that we have right next door that we can leverage that kind of expertise that go to market that supply chain you know into these adjacencies and be a formidable competitor right away.

Okay that's helpful and then looking at the 2026 guide you know given some of the more recent increases in metal prices and continued general inflation I mean do you think you need to or maybe already have been out to the market with additional price increases?

Yeah I mean you know it's a it's certainly something we're watching you know you know we're not oblivious to it, but in the same breath, I think, you know, when you look at what we're doing with our supply chain, you know, our costs are coming down, you know, month by month as we continue to move and leverage the new supply chain base that we've created. That being said, yeah, we've seen and watched metals, and I think it's one of those things where you know we'll be as judicious and smart about you know any incremental prices as we can for our customers in the industry itself but it is something we're watching but for the time being and we feel like we're relatively well positioned thank you for taking the questions your next question comes to the line of Mike Hallerough with BARD hey good morning everybody this is pezz on for Mike I wanted to ask about the drinking water business I know in October the lead and copper rules came out from the EPA and I know that they did some presentation

and educational awareness in November and some tweaks to that plan in December. I'm wondering is that do you view that as an accelerant to the drinking water within the institutional specifically school market? Or do you see that more as helping sustain the healthy trajectory of attachment and acceptance that you've been seeing since the merger?

Morning, Pez. I think we view it as helping to sustain. I think things like what the EPA came out with only helped to continue to raise the awareness around drinking water and some of the drinking water quality issues that we have here in the U.S. So whether it's lead, whether it's lead and copper rules, whether it's PFAS microplastics, I think any of the, you know, legislation or pending things that you see around that is only helpful for us. I think it continues the trajectory that we saw and don't see it as an accelerant to what's already out there, but it doesn't hurt.

Yeah, it depends. I mean, the way to think about it is, you know, there's, you know, it's a relatively new category, bottle filling, and, you know, there's six million of these drinking fountains installed. And so, to the degree, you know, people are more aware and, you know, it's going to help, you know, with that and, you know, it's got such a long tail on it, I'm not sure that we actually need the acceleration. I think it's just a steady drumbeat of, you know, better products, more awareness, funding at the right times, and then, you know, once that installed base continues to grow, the filtration opportunity you know compounds from there and so I agree with Dave's comments that I don't know that it accelerates it as much as it just it's another down payment on you know converting this massive installed base out there understood that makes a lot of sense particularly given the traction that you've already been seeing you know when maybe switching gears a little bit when we take a look at the incremental margin guidance obviously execution has

been exceptional. You know, the 42% pull through last year, the supply chain optimization. You know, it feels like that 35% is probably a prudent approach to 2026. And I know that you said that you're taking a similar approach to guidance as you have in the past, trying to remain prudent and mitigating potential risk through the year. You know, as we move forward, do you see an opportunity for that baseline incremental margin to move higher over time, just given some of the work that you've done on supply chain optimization, the new product innovation, and just a mix of overall business evolution?

We do. You know, I think we're trying to continue, as we've talked about, you know, maybe in the remarks, invest back into the business in organic growth. And so, you know, I think when you think about our business today, you know, our fastest growing categories and products are above the fleet average. So I think there's a mixed weighting that's going to naturally, you know, raise the overall incremental margin over time along with, you know, putting some resources and investment back in to grow more. So we feel like 35 is, you know, a baseline that we're very comfortable with and, you know, all things equal. If we execute like I think we will over the next two to three years, you know, I think that, yes, the number can move higher for sure.

Great. Thanks. I'll pass it on.

Your next question comes to the line of James Coe with Jeffries.

Good morning. Thanks for taking questions here. So I wanted to ask on kind of just the construction industry kind of overall. I mean, you obviously track many different indicators, but data continues to kind of suggest elevated planning pipeline, but the conversion remains weak given kind of declining billing. So what are some tangible signs that you're watching that would suggest inflection point in project conversion here?

Yeah, I think when we look at it, James, If you go back in some of the information that we shared on our last earnings call, you know, we look at a number of different indices. We specifically highlighted some of the Dodge square foot data. But I think when you look at, you know, the guidance that we gave, the guidance that we gave for 2026 is essentially what we're seeing in the institutional market that continues to grow, a weaker commercial market, and then a residential market that at the start of 2025, I think we called flat. but ended up being a little bit tougher of an end market and so when you look through what we're seeing in terms of our incoming order rates what we're seeing in terms of project starts country and we have a pretty good insight into the level of construction activity that's happening and are comfortable with you know the guidance that we gave in 2026 looking a lot like what we just saw

in 2025 great oh thanks for the color and I wanted to touch on the drinking water business here again uh can you kind of update us on how filter attachment rate is kind of progressing with the pro filtration and it seems like uh gallons of filter water kind of increased like missing digits uh in 2025 so how should we think about that in terms of filter sales yeah i think we've seen um good early adoption of pro filtration so that's the product that Todd talked about the different feature set and that launched this summer.

I think, you know, when you look at that product, the features and benefits that Todd walked through were a direct ask of the consumer and the maintenance folks that interact with that product every day. And so one of the nice things about that product is as we sell it, the attachment rate becomes very high. So we've done some things with a proprietary head that only our filters work in. And also to make the unit work properly, you have to continue to change the filter on a regular interval. And so I think profiltration is only going to help us in that effort to get the attachment rate as high as possible. And then just from a filtered gallons perspective, yeah, there's some nice growth in terms of actual filtered gallons. And so that stat of us is really how much – we know how many filters we've sold. We know the gallons of the associated filter. And what you're seeing is the result of that. And so that's the work that our team's doing. getting the latest pro-filtration specced in, and then making sure that we pull through the related filtration along with it.

I think it's not a – we're not going to measure attachment rate every 30 or 90 days. I think with the recent launch of pro-filtration and the very, very high attachment rate associated with that, as that becomes a bigger portion of our overall shipments, and as that grows into the installed base there's without question it's going to pull the overall attachment rate up and so I think it's a good question I think it's something that we're you know measuring and but I don't know that it's a 30 or 90 day sort of thing let's get profit profiltration units into the field over the course of the year we know the attachment rate that is exceptionally high and as that happens over one two and three years and that compounds I think you know we see we see a really good path for filtration your next question comes from the line

of Jeff Hammond with key bank hey good morning guys hi yeah yeah can you get can you give us price in the fourth quarter and what's embedded in 1q and then just on your announced pricing for this year is that kind of in line with back to normal course or does it contemplate, you know, a higher annual price increase because of, you know, tariffs, you know, newer tariffs or some of this copper inflation?

Yeah, I think any price increases that we've put in place this year, Jeff, are sort of back to normal course. And then in terms of, you know, what's in Q4 and what's in the guide, I think Dave will. Yeah, Jeff, I would. do that?

Yeah, so Q4 was about five points of price. I think the way to think about price in 2026 is I'll just walk you through what we experienced in 2025 and 2026 looks like the inverse. So Q1 was a light price, Q2 a point or two of price, and then in the back half of 2025 we had four to five points. And so as it rolls into 2026, it's almost the exact opposite.

You've got four to five points of price in the beginning and then starts to lap some of the price increases that we put and then as you look at you know kind of this you know these adjacencies and new products I remember you know back with with LK you were maybe considering you know entering that market and then and then you bought LK like do you see and I think Todd you mentioned kind of you you know, these organic opportunities lead to inorganic opportunities. Maybe just talk about how you see those, you know, going together as you look at some of these adjacencies.

Yeah, it's a good question, Jeff, and it's really grounded in, you know, the way we look at our strategic plan. And so, you know, as we're going through our work and, you know, looking at competitors and markets and doing the meccos and evaluating, you know, who's there and, you know, what would it take to compete and all those things. It launches sort of a dual path, right, of, you know, what do we want to prioritize and do internally that may lead to cultivation and ultimately an M&A opportunity, and, you know, we sort of volley those two things, you know, for a while. And then, you know, when there's a decision to go one path or the other, we make it and we live with it. And so that's the process that we've used really for a long period of time. And, you know, I think as we've, I would say, expanded, you know, our view on what could our serve market look like, that only creates, I would say, more optionality for M&A that perhaps maybe we weren't cultivating before. But we can do it organically as well. So it's a little bit of the same, you know, path that led us to LK, Jeff, as you point out. And so I think we're excited about it. You know, I think it's, you know, if we can think about our markets being a billion or a billion and a half or two billion bigger, that's a big opportunity for us. And, you know, when you think about can we grow, you know, 1% is $17 million. 2% is $34 million. So that's a great opportunity for us over the coming years to enhance our underlying organic growth rate, either organically or through an M&A transaction or some sort of transaction that makes a ton of sense because we've already vetted the category. We know the business. We've cultivated it. And so, you know, we're excited about it and optimistic that, you know, the good things will happen as a result.

I look forward to hearing about that.

Your last and final question comes from the line of Brett Lindsey with Mijuho. Your line is open.

Hey, good morning. Just to follow up on the adjacent market strategy, so I understand you don't want to expand too much on the product categories, but maybe just a finer point on the expense or the product development spending you think is required this year as you ramp up and get set for any type of commercialization there.

Yeah. I mean, there was clearly some throughout 2025. There will be more in 2026. You know, it's measured in the millions of dollars for sure, but it's all sort of embedded in, you know, sort of that 35 for the year, maybe better. But yeah, it's going to be one of those things where, you know, we're not going to specifically call it out, but just know that it's, you know, it's millions of dollars in 25 and it'll millions of dollars in 26 as well.

Got it. Thanks. And then just a follow up on data center. So currently not a big market for Zern. We're seeing orders accelerate as we exit 25. Is this a growing focus for the company internally? And I guess what is your right to play and win in that vertical, whether it's drainage or filtration and, you know, other addressable opportunities?

Any color would Yeah, you know, it's funny because, you know, we have, I would say, the commensurate amount of content in a data center as we do in anything else. So when you think about a commercial building that requires lots of water, plumbing, drainage to either heat or cool or provide fire protection, you know, we do participate. And I know some people have questioned whether or not we're in it at all. We absolutely are. It's absolutely growing quickly for us. Do I ever see it being a wedge in our pie? Perhaps not. But nonetheless, it's clearly a growth category for us. We have a great suite of products that we compete with others that are in the space. We don't have the heating or the cooling, but we've got everything else that touches And so I think we're doing quite well there. And, you know, it certainly is helping us as we, you know, exit 25 and grow into 26.

Got it. Thanks for the detail.

Yep.

I will now turn the call back over to David Pawley for closing remarks.

Thanks, everyone, for joining us today. We appreciate your interest in Zirn Elke Water Solutions, and we look forward to providing our next update when we announce our March quarter results in late April. Have a good day, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.