Thermon Group Holdings, Inc. (NYSE: NYSE:THR) reported its first-quarter earnings for fiscal year 2025, showcasing an 8% year-over-year increase in revenue to $115 million. This growth was significantly influenced by the inclusion of Vapor Power's operations. Despite this acquisition boosting the numbers, the company witnessed a 5% decline in organic sales, attributed to a slowdown in large capital expenditure (CapEx) projects.
However, operational expenditure (OpEx) revenues saw a 20% rise from the previous year, highlighting the strength of Thermon's diversified market exposure and balanced revenue model. With a cautious yet optimistic outlook, Thermon anticipates a rebound in large project spending in the second half of 2025.
Key Takeaways
- Thermon Group Holdings reported a Q1 2025 revenue of $115 million, an 8% increase year-over-year.
- Organic sales, excluding Vapor Power's contribution, dropped by 5% due to fewer large CapEx projects.
- OpEx revenues climbed by 20% year-over-year, reflecting the company's diversified market exposure.
- Full-year revenue guidance stands at $527 million to $553 million, with expectations for Vapor Power's contribution to be between $55 million and $59 million.
- Adjusted EBITDA is projected to be $112 million to $120 million, with adjusted EPS ranging from $1.90 to $2.06.
- The company achieved a $4 million savings and increased its backlog to $198.5 million, with orders totaling $127.2 million for the quarter.
- Free cash flow improved by $11 million year-over-year, and net debt was reduced by $3 million to $120 million.
Company Outlook
- Thermon remains optimistic about an improvement in large project spending in the latter half of 2025.
- The company maintains its full-year revenue guidance, with a continued focus on creating long-term shareholder value.
- Thermon is well-positioned to benefit from trends in energy transition, decarbonization, onshoring, and infrastructure spending.
Bearish Highlights
- Organic sales suffered a 5% decline due to a decrease in large CapEx projects.
- The company noted a slowdown in decision-making among customers, leading to a longer time between quoting and receiving orders.
Bullish Highlights
- The acquisition of Vapor Power is strategically beneficial, aligning with electrification trends and contributing to revenue growth.
- Positive trends in the marketplace have led to an increase in inquiries and opportunities for Thermon.
Misses
- Despite overall revenue growth, the company missed organic sales expectations due to weakness in large CapEx projects.
Q&A Highlights
- Bruce Thames discussed the stability of operating expenditures and the company's efforts to increase revenue from this area.
- Customers have not significantly cut their CapEx budgets, with some projected to increase spending.
- Thermon is working on scaling Vapor Power's capacity and implementing the Thermon Business System to improve operations and supply chain.
- There may be a need for increased CapEx in subsequent years if demand for Vapor Power's products exceeds expectations.
As Thermon Group Holdings navigates through the fiscal year, the company's strategic acquisition of Vapor Power and its focus on OpEx revenues provide a cushion against the volatility of large CapEx projects.
The company's financial guidance reflects both the challenges and opportunities ahead, with a keen eye on macroeconomic factors such as Federal Reserve decisions and election outcomes that could influence customer spending. With a robust backlog and a clear strategy to enhance shareholder value, Thermon Group Holdings continues to adapt and position itself for future growth.
InvestingPro Insights
Thermon Group Holdings, Inc. (NYSE: THR) has demonstrated resilience in its first quarter of fiscal year 2025, with a reported revenue increase and a significant contribution from its recent acquisition of Vapor Power. To provide further context to these results and the company's financial position, here are some insights based on real-time data from InvestingPro and InvestingPro Tips:
InvestingPro Data highlights that Thermon's market capitalization stands at $959.65 million, with a Price/Earnings (P/E) ratio of 19.34. This P/E ratio is notably low given the company's near-term earnings growth, as reflected in the adjusted P/E ratio of 18.44 for the last twelve months as of Q1 2025. Additionally, the company's PEG ratio for the same period is 0.68, suggesting that the stock may be undervalued in relation to its earnings growth. The Price/Book ratio is 2.02, which could indicate that the stock is reasonably valued compared to the company's book value.
From an operational perspective, the company's gross profit margin stands strong at 42.69%, with an operating income margin of 15.48%, signaling efficient management and profitability.
InvestingPro Tips provide further insights into the company's financial health and future outlook. Analysts have noted that Thermon operates with a moderate level of debt and that its liquid assets exceed short-term obligations, which could provide financial stability and flexibility. Moreover, despite recent price declines over the last three months, with a 17.37% drop, analysts predict that the company will be profitable this year, as it has been over the last twelve months.
It is worth noting that Thermon does not pay a dividend to shareholders, which may be a factor for income-focused investors to consider. However, for those looking at growth potential, the company's performance and strategic moves, such as the acquisition of Vapor Power, could present opportunities for capital appreciation.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/THR, which can provide more comprehensive insights into Thermon Group Holdings' financials and performance metrics.
Full transcript - Thermon Group Holdings Inc (THR) Q1 2025:
Operator: Hello and welcome to the Thermon Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Ivonne Salem. Please go ahead, Ivonne.
Ivonne Salem: Thank you, Diego. Good morning and thank you for joining Thermon's fiscal 2025 first quarter results conference call. Leading the call today are CEO, Bruce Thames; and Vice President and Corporate Controller, Greg Lucas. Earlier this morning, we issued an earnings release -- press release which has been filed with the SEC on Form 8-K and it's also available on the Investor Relations section of our website. Additionally, the slides for this conference call can be found in our IR website under News & Events IR Calendar Earnings Conference Call Q1 2025. During the call, we will discuss some items that do not conform to generally accepted accounting principles. We have reconciled those items to the most comparable GAAP measures in the tables at the end of the earnings press release. These non-GAAP measures should be considered in addition to and not as a substitute for measures of financial performance reported in accordance with GAAP. I would like to remind you that, during this call, we might make certain forward-looking statements regarding our company. Please refer to our annual report and most recent quarterly report filed with the SEC for more information regarding our forward-looking statements, including the risks and uncertainties that could impact our future results. Our actual results might differ materially from those contemplated by these forward-looking statements and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by law. Today's call will begin with remarks from our CEO, Bruce Thames, who will provide a review of our recent business performance, including an update on the progress we have made on our strategic initiatives, followed by a financial update and review from our Vice President and Corporate Controller, Greg Lucas. Bruce will then wrap up our prepared remarks and update on our business outlook. At the conclusion of these prepared remarks, we will open the line for questions. With that, I'll turn the call over to Bruce.
Bruce Thames: Thank you, Ivonne and good morning to everyone joining us on the call today. I'm extremely proud of the team's hard work and disciplined execution during the first quarter against the backdrop of a weaker global growth environment where we were able to deliver top line and adjusted EBITDA growth and strong cash flow. The quarter was highlighted by continued favorable momentum in our diversified end markets, the successful integration and positive contribution from our Vapor Power acquisition and disciplined financial management leading to solid free cash flow conversion. But most importantly, this quarter demonstrated our successful execution on a couple of our key strategic pillars, namely our focus on growing our installed base as well as diversifying our revenue and end market exposure. Starting at Slide 4. We generated nearly 8% revenue growth during the first quarter which was driven largely by the contribution from our Vapor Power acquisition. The integration of Vapor Power is on track and we're excited by the revenue synergies we have quickly identified that were not contemplated in our initial strategy. However, excluding Vapor Power, our revenues declined roughly 5% on an organic basis. While we're disappointed by the organic revenue decline, it's important to note that our organic revenues declined only modestly despite a 34% decline in our large project revenue during the quarter. This type of performance would not have been possible if not for our focus on diversifying our end market exposure and growing our installed base of customers. In addition, consistent with the trends noted during our last earnings call, our Canadian business grew 9% in the first quarter on a year-over-year basis after a weak second half of fiscal '24. The continued pressure on our large project revenue which is generally tied to our customers' capital spending budgets, was somewhat offset by 22% growth in our point in time on material sales and small project revenues which together we refer to as OpEx revenues which are generally tied to our customers' annual operating budgets. As we detail on Slide 5, our materials and small project revenues were $98 million during the first quarter. Revenues associated with OpEx spending represented nearly 85% of our total revenues, while our large project revenues were only 50% of the total compared to a 75%, 25% mix in the prior year. Excluding Vapor Power, our OpEx revenue increased 4% organically. We're proud of this result and believe this demonstrates the benefits of our deep installed base and recurring revenue exposure. Our current mix provides a more stable and predictable revenue stream as well as a more profitable mix, given our OpEx revenues consistently generate higher gross margins. In addition to benefiting from recurring revenues during the first quarter, we were also aided by our more diversified end market exposure. An important aspect of our strategy you've heard me discuss has been our goal to reduce exposure to the oil and gas market. We have a goal of getting our diversified end market revenue to at least 70% of the total and as a result of our efforts, together with inclusion of Vapor Power, we've achieved our goal on a trailing 12-month basis which has been a positive driver to our results given the recent weakness in the oil and gas sector. While oil and gas is an important part of our business, it is no longer the key driver of our results that it once was. Our oil and gas revenues declined 7% during the first quarter, so we're very pleased we were able to generate solid financial results despite the weakness in these markets. We're very proud of the work we've accomplished to position our business to be more successful across the business cycle. We have built a business that we believe is more durable and one that is equipped to generate stable, more predictable operating results across a range of economic scenarios and spending cycles. All that said, the large project business is still an important driver to grow the installed base for Thermon and we are well positioned to benefit as large project spending trends improve. As we discussed in recent quarters, large capital projects have experienced extended sales cycles driven by customer uncertainty related to the macro environment, the upcoming elections and the uncertain trajectory of interest rates. While we don't have a crystal ball and timing is difficult to predict, we do remain cautiously optimistic that large project spending will improve in the second half of our fiscal year as we get some clarity on the November elections and we hopefully start to see some Fed rate cuts in September as the market currently expects. We remain encouraged that our quoting activity continues to be robust, up almost 13% and our total bid pipeline is up 9%, both on a year-over-year basis. Unfortunately, project decisions have been delayed given the market uncertainty but we believe we are very well positioned when normal spending patterns resume. Now turning to Slide 6 and our strategic pillars. I've already spent quite a bit of time on our focus in growing our installed base and diversifying our end market exposure. However, I do want to quickly give an update on decarbonization opportunities and our execution on our capital allocation priorities. We continue to see our sales pipeline of decarbonization opportunities grow to now over $320 million, representing roughly 30% of the total. During the quarter, we secured approximately $9 million in orders related to decarbonization or approximately 7% of the incoming orders in the quarter. As it relates to our capital allocation, Greg will provide more of the details but suffice it to say we are very pleased with our solid financial discipline which has enabled us to quickly delever following the Vapor Power acquisition. We're in a strong financial position with our leverage ratio of 1.1x, coming in nicely below our targeted range of 1.5 to 2x. We believe this provides us with more than sufficient capacity to pursue our growth objectives and capital allocation priorities. With that, I'll turn it over to Greg, who will provide a more detailed review of our first quarter results before I wrap up with some remarks on our financial outlook. Greg?
Greg Lucas: Thank you, Bruce and good morning, everyone. I will provide some additional details on the quarter and give an update on our working capital and free cash flow and conclude with a commentary on our balance sheet and liquidity. Moving now to Slide 7 and our first quarter performance. Revenue in the first quarter was $115 million, a year-over-year increase of 8%, primarily driven by the inclusion of Vapor Power which contributed $13.9 million of revenue during the first quarter. Excluding Vapor power, first quarter organic sales decreased 5%, primarily related to the softness in large CapEx projects that Bruce has already discussed. Large project revenue was $18 million during the first quarter, down 34% from the same period last year as customers continue to delay decisions on large capital projects. The weakness was more pronounced in our oil and gas end markets but the weakness was broad-based. While large project spending was weak, our OpEx revenues were $98 million during the first quarter, an increase of over 20% compared to last year as our customers shifted their priorities to maintenance and repair spending. Excluding Vapor Power, our OpEx revenues increased 4%, demonstrating the benefits of our balanced revenue model and the strength of our long-term customer relationships and deep installed base. From a geographic perspective, we saw sales improved 9% year-over-year in Canada and 7% in APAC. While sales in our U.S.-LAM segment, excluding Vapor Power, declined 14% and sales in our EMEA region declined 19%. Adjusted EBITDA was $23.2 million during the first quarter, up from $22.1 million last year due to the contribution from Vapor Power. Adjusted EBITDA margin was 20.2% during the first quarter, slightly down from 20.7% in the same period last year. Our margins benefited from an increased mix of materials revenue during the quarter which generally carry higher gross margins. However, this was offset by certain contracts with higher labor content which dilutes our margins as well as the continued investments we have made in our strategic initiatives. Last quarter, we discussed our manufacturing rooftop consolidation program which is a key component of our operational excellence strategy. This program includes the consolidation of our rail and transit production lines from Denver into our San Marcos facility. From this effort and a concurrent reduction in force, we incurred a charge of $2.3 million during the quarter and expect another $0.3 million to $0.5 million over the next few quarters as we complete this initiative. This effort is on track and we expect the cost to implement this reduction in force and facilities consolidation to be less than our original estimate. As a reminder, we are targeting $5.7 million in annualized savings. We continue to target just over $4 million in realized savings during fiscal 2025 and we saw the savings begin to benefit our results during the first quarter. Backlog was $198.5 million compared to backlog of $172.1 million as of the first quarter last year. Excluding backlog attributable to Vapor Power of $44.3 million, backlog declined 10% on an organic basis. Orders during the first quarter were $127.2 million compared to $114.1 million in the same period last year, an increase of 12%. On an organic basis, orders declined 5%. It is important to note that over 70% of our incoming orders in the quarter were from diverse end markets. Moving now to Slide 8 for an update on our balance sheet and liquidity. Net working capital was 31.4% of sales during the first quarter, down from 34.6% last year as we continue to optimize our supply chain while also improving lead times and on-time deliveries to our customers. CapEx was $3.9 million during the first quarter of 2025, up from $2.8 million last year. As a result of our sound working capital management, free cash flow was $8.8 million in the quarter, an improvement of nearly $11 million versus last year. We expect our continued focus on fiscal discipline, combined with our expectation of solid operating results to deliver another year of strong free cash flow conversion. We paid down roughly $3 million of term debt during the quarter, bringing our net debt balance to $120 million. Net leverage declined from 1.1x at the end of the first quarter, down from 1.2x at the end of the previous fiscal quarter and down from 1.5x immediately following the acquisition of Vapor Power. Our ability to quickly delever following the Vapor Power acquisition highlights the strong free cash flow capabilities of our business. Based on our total cash and available liquidity of $141.8 million, we remain well capitalized and have ample flexibility to continue to support our capital allocation priorities. Assuming no additional acquisitions, we expect to target incremental debt paydown of $20 million to $40 million during fiscal 2025. In summary, we are pleased with our financial execution during the quarter as we made further progress on operational excellence initiatives which should drive further margin benefits in the coming quarters and we continue our strict financial discipline, resulting in strong free cash flow performance. With that, I will turn the call back over to Bruce.
Bruce Thames: Thanks, Greg. Now if you'll turn to Slide 9, we'll wrap up with our outlook for fiscal 2025. While trends in the large project market remain depressed, so far, the year is tracking roughly in line with our expectations. Our OpEx revenues are benefiting from a shift in our customers' priorities to MRO spending and our more diverse end market exposure is helping us overcome the weakness in the oil and gas markets. We are continuing to execute on our operational excellence priorities, including our supply chain initiatives and manufacturing rationalization program. These efforts helped drive savings in the first quarter and we expect more progress from these and other operational efficiency programs over the balance of the year. As a result of these factors, we are maintaining our full year 2025 guidance that calls for revenue in the range of $527 million to $553 million which includes expected revenue from Vapor Power of $55 million to $59 million, adjusted EBITDA in a range of $112 million to $120 million and adjusted EPS in a range of $1.90 to $2.06 per share. Historically, the seasonality in our business has resulted in roughly 55% to 56% of our revenue being generated in the back half of the year. And given the expected ramp in our large project revenue through this fiscal year, we have communicated and anticipate revenue to be more heavily back-end weighted to around 57% to 59% in fiscal 2025. The team remains laser-focused on executing to achieve our FY '26 goals and objectives. Finally, just to wrap up things on Slide 10. We were pleased with our first quarter results which we think demonstrate the progress we've made in developing a business that is more stable, profitable and durable across a cycle. We're not nearly as reliant on large projects or the CapEx cycles in the oil and gas markets. Our large and growing installed base of loyal customers provides us with a resilient aftermarket franchise which gives us access to a steady stream of predictable and highly profitable MRO revenues. We also remain well positioned to benefit from several powerful secular growth drivers. These include the energy transition and decarbonization, onshoring in North America and infrastructure spending. While the recent macro uncertainty has delayed some of this spending, we don't think that anything has changed to impact these long-term drivers and we remain confident that this only serves to create pent-up demand when customer confidence improves. Lastly, we benefit from a high margin, low capital intensity business that yield significant cash flow. This enabled us to quickly delever following the Vapor acquisition and leaves us in a strong financial position. We have ample flexibility to pursue our capital allocation priorities which include investment in growth, both organic and through acquisition, capital returns and debt paydown, all with a focus on creating long-term shareholder value. That completes our prepared remarks. We're now ready for the question-and-answer portion of our call.
Operator: [Operator Instructions] Our first question today is coming from Brian Drab from William Blair.
Brian Drab: Could we just start off by, Bruce, maybe you giving us a little more detail around your visibility to the project revenue recovering later this year? And which -- are there certain projects that you have line of sight to? And what needs to happen for that revenue to come in?
Bruce Thames: Yes, it's a great question, Brian. So I'll start with our pipeline of sales and project opportunities. That's all the opportunities that are 100,000 and greater. That pipeline is over $1 billion in revenue opportunities and it's grown about 9% year-over-year. And so if I start there and then I'll look at our quoting activity, it's up 12% to 13% year-over-year. So that's been quite strong. And then I look to just our incoming order rates with the positive book-to-bill which this is the first positive book-to-bill we've had in a couple of quarters. So some of those trends are leading indicators. We'll need to continue to see book-to-bill being positive in Q2 but we feel like we have the pipeline of opportunities. The quote volume is there and our win rates are flat to improving. So we feel like we're very well positioned to capitalize on these opportunities as these projects move forward.
Brian Drab: Okay, great. Can you -- I mean, I'm still trying to sort through all the numbers. So maybe you just help us reconcile -- that positive move -- up 9% for the pipeline, up 13% quoting activity with what you're actually seeing in the backlog.
Bruce Thames: Yes. So as I look at backlog, if we look year-over-year, backlog was down year-over-year, 10% but it was up 5% sequentially. And I'll just remind you that as we look at backlog, we're talking about these are the large projects in backlog. Typically, our flow business, our MRO business that we referenced in OpEx spending is in and out of backlog very quickly. And the fact that we had 85% of our revenues in our first quarter were tied to these types of revenues really speaks to the flow and the velocity. It comes in and out of backlog within the period. So I think 2 things to note. One is the backlogs have risen sequentially based on the positive book-to-bill. Second, the change in mix to more OpEx spending which we're very well positioned with our large installed base to be able to capitalize on. Those 2 things are the dynamics that we're looking at as -- in backlog year-over-year and sequentially.
Brian Drab: Got it. So at the moment, when you have a mix like this, the backlog kind of becomes less relevant, it really does.
Bruce Thames: Yes. Particularly, when we're talking about OpEx revenues.
Brian Drab: Yes. Maybe just one more question for now. And I may have missed but did you mention what percentage of orders coming in or what percent of the backlog is tied to decarbonization and renewables and how is that trending?
Bruce Thames: Yes, it was $9 million in orders during the quarter and 7% of total bookings.
Brian Drab: Got it. Okay. Okay...
Bruce Thames: The pipeline has grown to $320 million, up from roughly $250 million at the end of our fiscal '24.
Brian Drab: That's good to know.
Operator: Our next question is coming from Justin Ages from CJS Securities.
Justin Ages: Can you unpack the diversified end markets a bit, good progress on that but I wanted to get your thoughts on food and beverage, transport, what trends you're seeing in those end markets?
Bruce Thames: Yes. The areas we've seen the most activity have really been in chemical -- petrochemical power has been very strong as we look there. Certainly, some of the opportunities that we've seen around infrastructure and rail and transit as we look forward, those are all significant opportunities. And I did note some of the building pipeline of opportunities we have in decarbonization and electrification opportunities that is really spread across a wide range of end markets.
Justin Ages: I appreciate that color. And then -- sure. Go ahead.
Bruce Thames: Yes. One other thing to note, we do have a significant number of opportunities in the LNG liquefaction facilities in -- particularly in North America.
Justin Ages: Okay. And then on capital allocation strategy, can you give us an update on what you're seeing in the M&A market, especially as it pertains to reaching that $600 million to $700 million kind of revenue target for fiscal '26?
Bruce Thames: Yes. First of all, we have a -- really a healthy pipeline of M&A opportunities that we believe are actionable within the next 12 to 18 months. So I think that's very positive. Certainly, our balance sheet is in good shape. These things are binary. So certainly, it's a win or lose scenario but we think we're very well positioned and we see a number of opportunities that really fit squarely within our strategic initiatives.
Operator: [Operator Instructions] Our next question is coming from Jon Braatz from Kansas City Capital.
Jon Braatz: Bruce, just back on the -- when we look at the big project and the prospects for business in that area. Should the spending on the CapEx budgets begin to increase, let's say, after the election with some interest rate cuts, would you see a cut in sort of the operating expense budgets? I mean is there a given -- what kind of give and take between those 2 budgets are there for your clients?
Bruce Thames: I really don't believe they're closely related. Operating expenditures are much less susceptible to economic cycles. And I really view those as being fairly stable. It's one of the reasons we've really focused to have that be a larger part of our incoming revenue stream. So I'd start there. As far as the CapEx, as I look at this, the customers that we've spoken with haven't had significant cuts in CapEx budgets. In fact, in most cases, they're flat. And in some cases, they're even projected to increase this year. But what we've seen, particularly in the last 2 quarters, our fourth quarter of '24 and into this quarter, we have seen a slowdown in decision-making. So we continue to see that pipeline of opportunities grow but the time between when that's quoted and when we actually receive orders has become more protracted. So our hope would be in the latter part of this year, we get through and maybe get some clarity from the Fed around interest rates as well as around the election that customers would feel more comfortable in moving forward with some of that spending.
Jon Braatz: Sure. Any sense on your part that there was some catch-up in the maintenance spending by your clients?
Bruce Thames: No, that's long in the rearview mirror from like 2 years back.
Jon Braatz: Yes. Yes. Okay. Okay. Good. And then on Vapor, I think that's going to be a very nice acquisition. Are you seeing things fall into place for Vapor as you expected? And secondly, maybe is there an expectation that maybe Vapor will contribute more and growth at Vapor can accelerate a little bit because of these electrification trends that we're seeing?
Bruce Thames: So Vapor, it's -- first of all, strategically, it has really -- we're beginning to see that it's probably even a little better as far as the opportunities in the marketplace that we're seeing, particularly around electrification. And I would highlight particularly the electrode boiler line as well as our resistance electric boilers. And really that shift from hydrocarbon-fired heating and industrial processes to electric. So that trend has been positive. I think the other thing that's really surprised us to the upside is just the number of inquiries we've received in our sales organization and our traditional channels having added Vapor to the mix. So we're really getting better market coverage and we're seeing more opportunities. Quite frankly, right now, our biggest challenge is scaling capacity and we're focused on implementing the Thermon Business System in the Vapor Power operations, both in Franklin Park and Morristown. And so we're heavy at work trying to unlock capacity there that would give us the ability to deliver upside to the current plan. I can tell you there's work to be done. Our teams are busy, really working on those opportunities to debottleneck and improve both the supply chain as well as manufacturing capacity in our facilities. And so certainly, that would be our hope, maybe if not in this year, to see upside in the coming years as we build capacity in that operation.
Jon Braatz: Would you envision an increase in your cap spending to support the growth at Vapor? A new facility or expanded facility beyond improving supply chain and other things?
Bruce Thames: We believe our current estimates for CapEx include capital to debottleneck and increase capacity within those operations. And -- but on a go-forward basis, as things evolve, certainly, in subsequent years, we might see that there could be additional CapEx depending on if demand ramps faster than what we had originally contemplated.
Operator: We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.
Bruce Thames: Kevin, thank you. And again, I'd like to thank our Thermon employees around the globe for serving our customers with excellence each and every day. And I'd like to thank all of you for your time and interest in Thermon. If we don't speak during the quarter, we look forward to speaking to you again on our next quarterly call. Have a good day.
Greg Lucas: Thanks, everyone.
Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
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