Q4 2024 Hillenbrand Inc Earnings Call

Robert VanHimbergen

Thanks Kim and good morning, everyone.
Turning to our consolidated fourth quarter performance on slide 5, we delivered revenue of $838 million an increase of 10% overall compared to the prior year due to the FPM acquisition, favorable pricing and strengthened EPS aftermarket parts and services which was partially offset by lower volume for midsize capital equipment across a variety of end markets. Organically, revenue is down 1% adjusted ebita of $144 million decreased 2% or 13% organically due to cost inflation and more volume partially offset by pricing and cost actions including savings from the MTs restructuring program.
We report a GAAP net income of $12 million down from $17 million in the prior year. Primarily due to an increase in business integration costs and higher tax expense related to corporate restructuring actions partially offset by a gain in the quarter related to the previously announced sale leaseback transaction adjusted net income of $71 million resulted in earnings per share of a dollar one which was slightly above our expectations coming into the quarter. But down 11% compared to the prior year as cost inflation or organic volume and an increase in interest expense, more than offset the incremental contribution of the FPM acquisition pricing and cost actions.
Our adjusted effective tax rate in the quarter was 27.4%.
We generated cash flow from operations of $167 million in the quarter. An increase of 93 million over the prior year, primarily due to trade working capital benefits and cash received related to the settlement of our US pension plans capital expenditures were $13 million in the quarter.
Now moving to segment performance starting with APS on slide, six APS revenue for the quarter of $591 million increased 15% compared to the prior year. Primarily driven by the FPM acquisition.
Organic revenue decreased 2% year over year as favorable pricing and record aftermarket revenue was more than offset by lower capital equipment volume adjusted ebita of $117 million was essentially flat year over year. But down 14% organically as cost inflation and lower volume, more than offset pricing and synergies adjusted even a margin of 19.8% was down 300 basis points over the prior year. But at the high end of our expectations for the quarter, as Kim mentioned orders improved sequentially but remained soft overall as we anticipated backlog of $1.7 billion decreased 10% compared to the prior year and 3%. Sequentially, order pipelines remain healthy across most of our key markets and regions. But as we discussed previously, customer decision timing continues to be uncertain in this macro environment.
Now turning to M Ts on slide, seven Q4 revenue of $247 million was essentially flat to the prior year. And ahead of our expectations due to better than expected execution of backlog and higher orders adjusted IVIA of $42 million decreased 8% largely driven by cost inflation and unfavorable product mix, partially offset by the restruction and benefit and other cost actions adjusted even a margin of 17% decreased 150 basis points compared to the prior year. But was generally in line with expectations backlog of $231 million decreased 1% compared to the prior year. And 3%. Sequentially, orders were up 10% year over year and 5% sequentially primarily driven by injection molding equipment while hot runner demand remains muted.
Although this quarter’s order slightly exceeded our expectations. External market indicators such as machine realization and mold making activity remain relatively soft and we have yet to see signs of a sustained recovery in demand.
The team remains focused on driving productivity and managing discretionary costs to ensure we are well positioned to return to profitable growth once the demand environment improves now, I’ll briefly cover full year results on slide. Eight consolidated revenue of $3.18 billion increased 30% over the prior year but decreased 5% organically as favorable pricing record aftermarket revenue and an increase in revenue for large polyolefin systems were offset by the persistent order. Delays for midsize capital equipment adjusted EBITA of $512 million increased 6% but was down 12% organically compared to the prior year as lower volume and cost inflation. More than offset pricing restructuring benefits synergies and productivity.
We reported GAAP net loss of $230 million down from net income of $107 million in the prior year, largely driven by the noncash impairment charge taken in Q3 related to our MTS segment adjusted net income of $234 million resulted in adjusted earnings per share of $3.32.
A decrease of 6% compared to the prior year. That was lower organic volume cost inflation and an increase in interest expense will more than offset the impact of the FPM acquisition pricing and cost actions.
The adjusted effective tax rate for the year was 28.1% which was consistent with our expectations.
We generated full year operating cash flow of $191 million down 16 million compared to the prior year as lower earnings and fewer customer advances on large projects were partially offset by reduced inventory.
Capital expenditures for the year were $54 million and we returned approximately 63 million to shareholders through quarterly dividends.
Turning to slide 9 net debt at the end of the fourth quarter was $1.69 billion and net debt to adjust it. Ebida ratio was 3.3 times.
Debt reduction continues to be our number one priority for capital allocation.
We made good progress this quarter with solid cash flow and the execution of an opportunistic sale leaseback transaction.
However, given the uncertain trajectory of orders over the coming year, our anticipated deleverage time that remains prolonged due to our typical seasonality of earnings and cash flow along with lower starting backlog and the expectation that orders will remain relatively soft. In Q1, we expect leverage to slightly increase in our fiscal first quarter as this is normally a cash outflow quarter to the timing of certain annual cash payments.
Now let me conclude my remarks with our 2025 outlook on slide 10.
Our guidance for fiscal ’25 reflects the potential for ongoing uncertainty in the macro environment and the impact on the timing of orders throughout the year.
We anticipate total company revenues of approximately $2.93 billion to $3.09 billion down 3% to 8% compared to the prior year.
This decline is primarily driven by our APS segment which we expect to be down 5% to 10%.
We expect our MTs segment to be relatively steady with revenues expected to be down 2% to up 2%.
We expect adjusted ebita to be in the range of $452 million to $488 million down 5% to 12% and adjusted earnings per share of $2.80 to $3.15.
We’re assuming interest expense of approximately $105 million and an adjusted effective tax rate of approximately 29%. For the year.
We are targeting approximately $200 million in operating cash flow for fiscal year 2025 reflecting lower earnings payment timing related to the previously announced restructuring actions and payments associated with synergy realization and accelerated productivity initiatives.
We expect these impacts to be more than offset by our ongoing efforts to enhance trade working capital efficiency.
We expect capital expenditures to be approximately $50 million for the year.
Well, Cokie provides some additional color for our segments for APS. As I mentioned, we anticipate revenue of 2.05 billion to $2.175 billion down 5 to 10% driven by a decrease in capital equipment volume to the lower starting backlog, partially offset by modest growth and aftermarket at the midpoint. We are assuming orders remain essentially flat to 2024 with modest sequential improvements starting in our fiscal second quarter based on expected customer decision timing as capital budgets reset in the new calendar year, we expect adjusted ebita margin to be 18 to 18.5% which reflects better flow through than our standard detrimental margin due to ongoing focus on managing discretionary spend accelerating productivity and cost energy initiatives and favorable mix of aftermarket revenue.
For NTF we anticipate revenue of 875 million to $915 million down 2% to up 2% with slight growth in our injection molding product line and relatively flat performance and our hot runner product line assumed at the midpoint, we are targeting adjusted even a margin of 16.3 to 17% reflecting approximately 70 basis points of margin expansion at the midpoint. As we realize the carryover benefit of the restructuring actions taken in 2024 and continued focus on controlling costs and driving productivity partially offset by ongoing price/cost pressure and expected unfavorable product mix from a higher proportion of injection molding equipment.
Due to ongoing macro uncertainty, we are providing Q1 guidance as well. We expect total revenues of 685 million to $705 million in adjusted earnings per share of 52 to 57¢ down year over year, primarily driven by decreased volume due to lower starting backlog. Please review slide 10 for additional guidance assumptions with that. I’ll turn the call back over to Kim.

Kimberly Ryan-Dennis

Thanks Rob. Before we open the line for Q&A, I’ll end our presentation with a few closing remarks. I’m incredibly proud of the team for delivering solid results to end our fiscal year. Although we haven’t seen clear signals of meaningful demand recovery yet, we’re confident in our strategy, the strength of our market position and the underlying health of our end markets which we fully anticipate will return to a solid growth trajectory. Once current macro uncertainties are resolved, I firmly believe our teams have the right tools and capabilities to manage the business through these near term headwinds and come out stronger. On the other side, we will continue to diligently manage costs, drive productivity and innovation and execute our integration plans to position Hillenbrand for long term success with that operator. Please open the line for questions.

Operator

Thank you. We’ll now be conducting a question and answer session.
If you’d like to ask a question today, please press star one from your telephone keypad and confirmation tone will indicate your line is in the question queue.
You may press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys one moment please while we poll for questions. Thank you.
Thank you. And our first question comes from the line of Daniel Moore with CJS Securities. Please see your questions.

Daniel Moore

Thanks, Kim Bob. Good morning. Thanks for taking the questions.
Good morning. The you gave pretty good color. Maybe just drill down a little bit. You know, it sounds like orders starting to improve modestly in Q4. How do you see order rates, trend, order trends playing out in fiscal ’25 across end markets. Any additional color, relative to those comments you just gave? And then when might would you expect backlogs to start to level off and begin to grow again? Is that, is it, you know, maybe late 25 or more likely in fiscal 26? Just based on what you see today.

Robert VanHimbergen

So I’ll, I’ll take that, that question here. So, you know, as we, as we mentioned on the last call, you know, 90 days or so ago, you know, we, we clearly see capital budgets really being locked down for the rest of the rest of this calendar year. And obviously, you know, we had, you know, back back, you know, three months ago, we had a couple of, you know, unknowns, one certainly the the Presidential election where that would land, but also, you know, interest rates and, and just broader macro economic you know, topics I would say. And so obviously, we have the the election behind us. So that’s, that’s known, but we still have, you know, the interest rate environment and, and obviously with Trump being elected, you know, obviously he’s, he’s spoken about, you know, kind of what he’s thinking, but it’s still early days to determine exactly where things are going to land. But with that being said, just based on discussions with our customer base and obviously where we see interest rates ultimately going, you know, we’re not expecting a steep recovery here in Q1, but as capital budgets are unlocked here starting in our fiscal second quarter, you know, I think we’ll start seeing orders trickle in in that second quarter and continue to accelerate through the second half of the year.

Daniel Moore

Helpful and maybe shifting just more specifically to hot runner demand. Seems like it continues to bounce along the bottom. Can you give any more granularity on what you’re seeing kind of across industries as well as geographies from an end market perspective? And I’ve got a quick follow up there. Thanks.

Kimberly Ryan-Dennis

Yeah. So Dan, it’s Kim, you know, what we continue to see is this is the 2nd quarter in a row that we’ve seen, you know, a good bit of stability and a little bit of growth in that Hot Mar hot runner market. Specifically, we’ve continued to see a strong quarter in in India. And we’ve also seen good stability in China, although obviously, it low levels than we had originally been experiencing there. Some of the activities that we’ve taken are really moving actively into a variety of end markets in order to expand our reach. And we’ve through new product innovation, moved into some end markets that I think are going to create some opportunities for us specifically in China and India with with a couple of products that are going to hit that kind of top of the Midtier.
And those products are some areas that we’re looking to expand. We’re also continuing to monitor markets like medical and market, which we believe will continue to show positive signs of growth in the coming 12 months and will require some additional capital infusion in order to address some of those market opportunities.

Daniel Moore

Great. And, and maybe last for me, and I’ll jump back in queue. But it’s only been a few quarters, but I’m just wondering if you’re surprised by the kind of degree, degree and duration of the pullback in spending in food and Pharma, I realize it’s subject to the same macro, you know, challenges and budget constraints. But just curious if, you know, in terms of the confidence around the thesis that, that those markets will hold up, you know, generally better in a downturn for capital spending. And maybe your sense for kind of pent up demand when the cycle does turn, would you expect to see a period of maybe outsized growth beyond the typical kind of mid to high single digits or is that just too early to call? Thanks again.

Kimberly Ryan-Dennis

I think the top10 part of your question is a little bit too early to call. I think that the key driver there in those markets is consumer demand and discretionary income and those are affected by the factors that we brought forward, you know, interest rates and inflation and those types of topics. And so those are some of the things that consumer demand is what what companies are looking for in order to drive incremental investments in capacity and new products. And the those are the things that we continue to watch. You know, we’ve seen, we’ve seen pretty stable markets, I would say on the food side, remember FPM is a combination of food businesses and also performance materials. I think we’ve seen good performance, you know, relatively stable performance, even as people are pausing some of the investments on the food side of this equation. And that’s, that’s, you know, really in line with what we expected to see in this market. We’re also continuing to use this time to really focus, to really focus our energies on getting the integrations done and really taking advantage of this opportunity to leverage the scale that we’ve created with these businesses drive cost efficiencies which you have seen and then be able to attack those markets in a coordinated way. As the timing of those orders, you know, becomes a little less dynamic as these, as these market conditions continue to stabilize.

Daniel Moore

That’s really helpful. I’ll drop back with any follow ups. Thank you.

Operator

Thank you.
Our next question from the line of Matt Summerville with D A Davidson. Pleased to see you with your questions.

Matt Summerville

Morning, morning, morning. So you know, when, when I look at the AP S deleveraging with organic down to EBITA down 14, I think it was with the benefit of generating record aftermarket revenue. What are kind of the influencing factors that drove that deleverage and embedded in your guide is a material less impact from deleverage. So if you can kind of bridge that, that would be helpful and then I have a follow up.

Robert VanHimbergen

Yeah. So if you think about if your question is more on Q4, Matt you know, I think we over a year, you know, certainly our, our ebita percent was a little bit better than what we thought going into the quarter. But year over year, you know, we did have an impact of volumes. We did have timing of incentive comp that was a headwind for us, you know, in the quarter versus last year. And then we did have a mix of projects, lower margin projects that we executed this quarter versus, you know, versus last quarter. If I, if I’m thinking forward to fiscal ’25 in our guide, you know, order volume is going to be relatively flat. What we see is, you know, we just as I mentioned earlier on, you know, on the call, we, we do see some modest improvements in in aftermarket volume and pricing, but we’re going to see some, some mixed pressure, you know, I’d say within our, our food health and nutrition business as well. So with all that being said, I think we’re going to continue to focus on cost containment actions and integration. You know that that Kim’s just highlighted.

Matt Summerville

Got it. And you mentioned in in your prepared remarks that you’re seeing continuing to see price pressure on the MTs side of the business. Can you maybe quantify that a little bit and then talk about what you’re thinking is in terms of incremental price capture to your last comment, Bob for AP S in fiscal ’25 relative to fiscal ’24. Thank you.

Robert VanHimbergen

Sure. Yeah, sure. So, you know, if I think about pricing in Q4, it’s been relatively consistent from what, from what we’ve seen all year, you know, so AP S continues to see, you know, price/cost coverage well above 100% MTF, we’ve been pressured all year and then below 100% and, you know, total brand above 100% which is, which is great MTF specifically, though I’d say in Q4, we actually saw some improvements this quarter from what we’ve seen throughout the last, the last couple of quarters. And so that’s certainly something we’re pleased to see. But as we think forward to fiscal ’25 at this point, we’re not, we’re not assuming a continued steep recovery in pricing. So we’re still assuming some muted pressure on that front going into 25.

Matt Summerville

Got it. Thank you.

Operator

Our next questions are from the line of Mitch Moore with Keyban capital markets. Let’s just see a few questions.

Mitch Moore

Hey guys, good morning.
This quarter came, this quarter came in a bit higher than you’d guided to. Just wondering if you could speak to what trended better for you in the quarter. Kind of relative to your expectations. A couple of months ago.

Robert VanHimbergen

I’d say so if I think about about aps certainly, you know, we higher revenue on the food health and attrition as well as the plastic side, aftermarket revenue was another record quarter for us and, you know, FPM specifically continues to perform on the EBITA side, you know, so we bought that business a year ago at 13% margins. And as Kim’s highlighted on some of the integration that we’ve seen, you know, we’re well ahead of what our expectations are on that front. And so I think we’ll consistently see that business operating at that midteens margins as we had here recently and going into 2025. And so we’ll continue to see, you know, that, that that business perform well on the MTs side, you know, revenues came in stronger on the injection molding business. And we saw that strength both in the Americas as well as India on the hot runner business. I’d say still bouncing around the bottom of the cycle. Although we did see some some slight improvements in China, particularly in the automotive space. And so, you know, that business when it does return, you know, is it does spike up. We are not assuming that now, but we’re seeing some signs of, of, of some recovery there. So, that’s really what drove the really the benefit in the in the quarter versus the guide that we gave.

Mitch Moore

Great, that’s helpful. And then just on MTs seems like it’s becoming stable, kind of at a low level of potentially turning a corner here just with your initial guidance. How did you get comfortable with the, the flat sales guide for the year?

Robert VanHimbergen

Yeah, I mean, so again, you know, based on discussions with our customers, you know, we’ve seen spikes in the last year where we, where we have a good month and then, you know, the next month is a bit muted. And so as we sit here today, obviously, you know, Trump, you know, that’s 11 box that got checked, but certainly interest rates is still something that is a wait and see. And, you know, the customer base within MTI a little bit more subject to the interest rate environment. So as we sit here today, you know, we’re seeing recovery in the injection molding side, that hot runner business, you know, maybe a little bit less recovery. And so right now, it’s kind of a wait and see until we see, you know, some orders really gotten unlocked. And at this point in time, you know, just being cautious. And the one thing I would highlight though is, you know, we did take some restructure actions as we’ve highlighted the last couple of quarters. And so we do see margin improvement on the MTs side because we have completed all those restructuring actions. And so we will see that incremental $12 million of benefit coming through fiscal ’25. So as a reminder, we did have that charge of $25 million.$20 million dollars of synergies coming from that. And so we’ll see that here throughout 2025.

Mitch Moore

Great, thanks. I’ll hop back in you.

Operator

As a reminder. If you like to ask a question today, you may press star one from your telephone keypad.
The next question from the line of John Franzreb with Sidoti company. Please see if there are questions.

John Franzreb

Good morning. Thanks for taking the questions. I.
Want to discuss a.
Little bit about the changes in geography and in demand in both India and China. It seems like there’s inflection points going on in both regions.

Kimberly Ryan-Dennis

Yeah, I would say relative to India, you know, we’re, we’re continuing to we, we continue to see a lot of opportunity in India. I think you heard us comment on the fact that we, we saw a good quarter in our India injection molding business, a a good level quarter in our hot runner business. And you know, that continues to be an opportunity for growth as we think about projects on the ap side of the equation as well as we anticipate further investments in India due to that growing global middle class, which as you know, is an underpinning of why additional products and services are are going to continue to grow in that region and hence the need for our equipment in terms of China, China has really been you know, while we had experienced, you know, a significant downsizing of volume in that market over the last year and a half, especially on the MTs side of our business and hot runners that has leveled out and continues to kind of bounce around. It’s not growing at historical growth, excuse me, growth rates, but it continues to be stable and especially as we continue to invest. As I mentioned on Dan’s question in that kind of upper mid tier and some interesting end markets for us. I think we’re going to be able to continue to look for opportunities to leverage, to leverage our footprint. There, we are very focused from a supply chain standpoint on a real local for local approach, both in India and in China and in the US, which allows us to we believe be able to compete over the long term. Even as some of these macroeconomic situations work out, we think we’re best positioned with that footprint to be able to attack opportunities in each of those geographies.

John Franzreb

Fair enough. Thank you. And in the past, you talked about test labs as being an indicator of future demand. Can you kind of update us on the test lab activity? And is that.
Still the case?

Kimberly Ryan-Dennis

Yeah, we have continued to see, you know, we do a lot of R&D with customers and typically that test lab experience is what allows them to to do proof of concept. And that’s a precursor often almost always for for their capital investments specifically because those are collaborative, those are collaborative experiments in those test labs and those are a pay to play environment So it’s not just, it’s not just an environment where they come in and, and utilize test facilities, they are also paying for those trials. And so there are, it, it really connotes a, a very serious investment on their side and on our side to investigate viability for those lines, the recycling labs are full, the polyol and labs are full, the food labs are full. So we do feel very encouraged by that. And as we have mentioned before, typically, we see those lab trials really slow down if we are entering a downcycle and that has not occurred here. Nor have we seen downcycling of our parts and services business. In fact, those could have, as we’ve mentioned, continue to be very robust. And so those are both bellwethers for some of the optimism we feel as we look into the the next year. And and some of the things that we continue to to double down on as we look for some of these capital decisions to start working themselves through the pipeline as we enter the beginning of the calendar year.

John Franzreb

That’s good to hear. Best of luck and thanks for the detail.

Operator

Great. Thanks John.
Thank you. Our next questions are follow up from the line of Daniel Moore with CJS Securities. Please see your questions.

Daniel Moore

Thank you again. I apologize if you mentioned it. I may have missed it. How much of the 30 million synergies were realized as of September 30th and what’s left in terms of incremental benefit for 25 and beyond.

Robert VanHimbergen

Yeah. So our, you know, our original, you know, guide going into the year, Dan, we thought we’d have about 7 to 9 of that achieved and we’re closer to like two times that amount here in, in the year. And, you know, I think we’ll continue to see acceleration there, you know, on within 2025 and into 2026 as well.

Kimberly Ryan-Dennis

And they had a reminder that those are cost synergies and we feel very comfortable with the cost synergies. And you see that coming through in the margin. You know, they performed very well on execution of the projects that they had in their pipeline. They’ve also, you know, been able to bring forward a lot of valuable benefit from the shared services and from their operating operating model implementation. And also now the, the cobranding and the simplification of that branding story into the marketplace, which was completed in September, that we, we also obviously see opportunities on aftermarket collaboration and the organization just went into place October 1st for combined aftermarket approach and also the operating model that they put in place to really create synergies among all of the food companies. And and, and how we’re approaching all of that and that has organizationally created a number of synergies as well that started being implemented in June and then completed its implementation on October 1st. So we’re, we’re really pleased with the way that it is going and the cadence and the rigor with which we are managing that implementation and the folks that are doing that on our team.

Daniel Moore

Got it really helpful and I think I can answer this one. But the, the guidance in terms of cash EPS for 25 doesn’t include, doesn’t assume any material change in tax rates. Correct.
Correct. That’s right.
And lastly, I appreciate the guide for operating cash flow as well as CapEx.
Is there a working capital headwind embedded in the 200 million OCF guide as demand and as demand for mid and large sized systems recovers. How much of a tailwind could that be as we look out to, you know, 26 and beyond? I’m just wondering how quickly we can get back to, you know, 250 maybe even 300 million in operating cash flow in a, in an environment where demand does pick up. Thank you again.

Robert VanHimbergen

Yeah, so I’ll give you some color on that then. So if you think about, you know, the the $200 million and just maybe just talk about free cash flow, none of the cap back. You think about where we landed in fiscal ’24 you know, we had $137 million of free cash flow coming in the door. If you think about what that looks like for for fiscal ’25 you know, we do have lower earnings. So obviously, that would be a headwind. We also had a onetime pension settlement that you saw in our in our remarks in our press release as well. You know, as previously discussed, we did, you know, offload our pension assets and liabilities to an insurance company this year. And so there’s $27 million of cash, you know, left over from that. So that that was shown as a onetime item in our, in our cash flow statement here, you know, this this quarter. So you have a couple of headwinds there. And then what we really see is upside with lower interest expense and then actually working capital improvement, particularly on, you know, inventory AR and AP we continue to focus on trade, working capital percent of sales, the things that we can control and certainly some recovery in advances in that second half of the year. Now, if order trends pick up a little bit quicker, obviously, we know with the cash advances, you know, that could move that $150 million free cash flow number North, you know, really that would come in, I guess probably Q3 Q4 is what what I would say there. The thing I want to highlight is if you’re trying to bridge your, your free cash flow year over year, you know, we did have that sale back transaction that we announced in in before. That was about $55 million of cash coming in. That’s actually shown as investing cash flows. It is not in our $137 million. So it’s additional cash that came in the door, we used to pay down debt. So that’s kind of a bridge year over year. And then, you know, again, because of the lumpiness of orders, it’s hard to predict when those advances come in. But that certainly the upside in the second half of the year.
But.

Kimberly Ryan-Dennis

I think fair to say, Dan, you know, look places where we’ve had the most pressure is on those in that midsized tier, mid to mid to large. And when I say large, I don’t mean like mega large, I mean, I don’t mean giant Polyolefin. It’s been that, you know, it’s been that engineering plastic space, those do, those are poc projects, those do come with down payments. Those down payments are for both our engineering hours as well as buyout. So, you know, those are, those are the types of business that we’re waiting to break on these orders is the type of business that is accompanied with down payments. The businesses that have been very steady and kind of are, are a steady pay as you go as the parts business, the the individual equipment business. So smaller projects, those are the types of businesses that have been a little more steady in over the course of the last year. And it’s those midsize with the companying down payments that are that create some opportunity if those break, if those break more quickly.

Daniel Moore

Makes sense and safe to assume that debt repayment remains a priority beyond dividends as it relates to, you know, that use of incremental cash generation, at least in your term.

Operator

Yes.
Perfect. Thank you again.
Thanks SAM.
Thank you. Our next questions are follow up from the line of Matt Summerville with D A Davidson. Please proceed with your questions.

Matt Summerville

Just following up on the last point. In the context that your integration activities with F PM have been seemingly quite successful, maybe ahead of kind of the trajectory you had laid out when you bought the business and knowing what I think at least is your desire to get back into the M&A market sooner versus later to, to continue that acquisitive pivot towards more secularly attractive businesses. If that is indeed the case, how should we be thinking about, you know, this 3% dividend yield in, in in context of me thinking about where you guys want to go and the idea that you would probably want to get back in the market sooner versus later from an M&A standpoint, I guess, Kim, how are you thinking about all that?

Kimberly Ryan-Dennis

Yeah, Dan, that’s, you know, that’s obviously a topic as we discuss our our capital allocation priorities, we continue to discuss that and evaluate that with our with our board and, and obviously in consideration of our our investor base. And so we continue to, you know, we continue to look at that as we look at our priorities and as we look at our portfolio of all of those things as a part of our normal processes with our board. And so, you know, I can, I can tell you that, that we are, we have active considerations about exactly what we think best use of cash is for the benefit of shareholders and, and we’ll continue to do that. And, if any changes, if any changes are on the horizon, well, you know, well, obviously we’ll, we’ll share that if and when that is appropriate.
Thanks again.

Matt Summerville

Thank you at this time, I’ll turn the floor back to Kim live for closing remarks.

Kimberly Ryan-Dennis

All right. Thanks again, everyone for joining us on the call today. We appreciate your ownership and interest in Helen brand and look forward to talking to you again in February with our first quarter results. Have a great rest of your day.

Operator

Thank you. This does conclude today’s teleconference. We thank you for your participation. You may now disconnect your lines at this time.