Thanks everyone. This is, Todd, you are the last stop before lunch, so-
Oh, that's great.
No pressure. But,
Yeah.
Yeah, we're really happy to have the team from Parker, and appreciate all your support over the years from the company. Sitting in the front here, Jeff Miller and Yan Ho from the IR team, and to my right, Todd Leombruno, who's kind of a rookie at Parker.
Correct. Yeah.
Yeah.
Been here a while.
Yeah, 30-some years.
30-some years, yeah.
Good. Well, thanks again for coming, I always appreciate it. I think before we get into Q&A, we'll turn it to you for some
Yeah
... some comments, and then as we go along, if anyone has any questions, assuming I can even see you, just raise your hand and we'll try and ask questions.
Well, Tim, it's a pleasure to be here. Thank you. We appreciate all the help that the city's given us over the years as well, so it's a pleasure to be here. As Tim said, I'm Todd Leombruno. I'm with Parker Hannifin. I have been with the company 31 years. It's hard to believe. The company has never been larger. We've never been more profitable. We have never generated more cash, and it's a pleasure to be here today to just share some of the highlights with the team here. I see a lot of familiar faces, so we'll go quick through these slides, and we'll take as many questions as we can get to. The company's got a guide to $20 billion this year in sales.
You know, we have the number one position in a very, very large market, a $135 billion marketplace. We have a goal to reach 20% market share in our space, and you've seen we've made some big improvements in that goal over the last couple of years with our organic growth and also where we've spent time with acquisitions. The company is really a combination of eight core technologies. It really allows us to solve solutions and challenges for our customers in ways that other companies cannot. We are fiercely decentralized. We have over 85 divisions that are P&L owners. Those divisions roll up into five business groups, and then we externally go out in three segments. We are driven by a few main things.
One of them is being a great generator and a great, deployer of cash, and we are, bound by our business system, which we call the Win Strategy. We're in version three, of that, and, like I said, the company's never been performing better. And we've, we're really proud of where we've been, but we're also really excited about where we're going. If you look at what we've done over the last couple of years, this is just a look pre-COVID. So you take out all the noise with COVID and the supply chain ramp and all that kind of stuff that's been through here. You look at, since FY 2019, we've grown sales at a CAGR of, roughly 7%, which we're really proud of.
Margin expansion has been robust, 570 basis points of margin expansion over that same time period, and we've grown EPS at a CAGR of 13%. And probably the number that we're most proud about is, we have more than doubled the dollars of cash flow that we've generated as a company. This year, we're expecting cash flow to grow just over $3 billion. So it's really been a stellar time period with the company. But, like I said before, we are really excited about where we're going. We have a stated goal of achieving $30 of earnings per share by FY 2027. That's a 25% increase from where we're at today, and likewise, that $3 billion of cash flow will grow to greater than $3.5 billion.
How are we gonna do that? We're gonna do that by all the things that got us here, making sure that our people, our portfolio, and our strategy drives this performance. We have really been focusing the company on becoming more exposed to longer cycle businesses, and that has helped us through some pretty volatile times over the last five years, and that's gonna continue to expand as we get growth from all of the secular trends: aerospace, the mega CapEx projects, digitization, electrification, and clean tech. And that's really how we're gonna try to have organic growth grow 4%-6% over the cycle. So that's all we prepared. Tim, I know you've got some questions, or we can take them from anyone in the audience, if that works as well.
Good. Good. Maybe we start with the... so the Industrial segment, North America, International. Obviously, you mentioned, what, eight groups that roll into that. But, you know, specific to the Industrial piece, there's the Engineered Materials, which I think you-
Mm-hmm
... you had some oversight back in the days.
Right. Right.
As well as filtration, two areas that if you line up the growth rates over time, both organic and inorganic, I think they've been kind of outsized growers and-
Absolutely
... I think what gets lost a little bit in in Parker is just, you know, when you, within industrial, again, a lot of different markets, and the competitive-
Mm
... dynamics aren't the same across the board. So may-
Yeah
... maybe just highlight, just for folks that maybe haven't been focused, just those two segments alone, what makes them unique and-
Yeah, certainly.
Yeah.
Yeah, so the glue that binds the company together is really these eight technologies that we define as motion control technologies. These would be things like, like you said, Filtration, Engineered Materials. It would also have Fluid Conveyance, it would have Electromechanical, there would be some climate control in there. Hydraulics, of course, would be a big one. What's unique about the company is whether you're in the Aerospace business or you're in the Industrial business, it really is the application of those technologies to our customer applications that really tie it together. We feel it's a critical element for us. Over two-thirds of the sales that the company generates are from customers that buy four or more of those technologies. So it's meaningful for us.
I think we see it with the way our customers interact and by the way they spend their purchasing dollars, so it's important to us. So your question on the industrial side of the business, you know, that's roughly 75% of the company. That part of the company has things like our motion systems business, our flow and process business, and our engineered materials and filtration business. Those businesses specifically, we have been acquisitive with engineered materials and filtration. CLARCOR more than doubled the size of the filtration business. LORD more than doubled the size of the engineered materials business. What we like about those businesses is, first I'll start with filtration. It is a clean tech business, right?
Filtration is making everything cleaner, whether it's water, whether it's fuel, whether it's air. It is making the world a better place, and that is part of our purpose statement, and we also love the fact that there is significant aftermarket within the filtration business. So that has kinda helped us as demand ebbs and flows, that aftermarket remains fairly constant, so that's kind of a nice growth element in the business. On the Engineered Materials side, this is really a materials science business. So this is a business that is really using chemistry to apply technologies across a wide range of market spaces. There's aerospace business within our Engineered Materials business. There is an electrification business within our Engineered Materials business. So we like that that business is also levered towards these secular trends.
Quite honestly, it is a business that fits perfectly with all the technologies within the company, and it's just become a really nice fit. Those businesses were smaller in scale before the acquisitions, and it's kinda, like, made them more significant part of the portfolio.
When you think, you know, of the fluid power space, just generically, you... Okay, how's Parker's hydraulics and pneumatics business?
Yeah.
Well, you know, what did Deere or Cat or Parker say? Would be historically how you think about that. And now, as you think about just how that business, you know, data centers probably have more hydraulic content in it and more EV, and I mean, there are some to your point about these megatrends, how has that shifted the opportunity?
It's a great question. It is really a diverse end market, application, and you're right. I think historically people would say, "Hey, how Deere goes or how Cat goes, that's how Parker's gonna go." But when you look at the portfolio and the changes we've made, you know, there's over 30% of the company is now exposed to Aerospace. If you look at our top 10 customer list, over 70% of those customers are Aerospace customers. So, those large mobile OEMs are still extremely important to us. They're just a smaller piece of the total company as they, you know, versus what they were, five, 10, 15 years ago.
When you look at the way we apply these industrial technologies, what's also a kind of a unique element is over 50% of the sales in that industrial business goes through our distribution network, and our distribution network is second to none in the space, and this is something that we've been working on for over 80 years now. What makes it very unique is the fact that because we have the broadest breadth of offering, product offering in the motion control space, there's very little competition within the distribution network from competitive sources. Our distributors are either end market specialists or application specialists. They're really an extension of our engineering expertise across the platform. They're not just ordering product from us and delivering it to a customer.
They're really applying our technologies to whatever, situations the end customer may need.
Yeah, and to that point, a good segue, just in terms of the role of the distributor, as the technologies evolve, you think about, you know, the fluid power has, you know, cloud services, automation, you know, electronic controls. I mean, it's not, you know, selling hoses and-
Correct.
So, how much investment or to the extent that the distributor network needs to keep up with how?
Yeah, I mean, they're really, it's a great partnership that we have with our distributors. We have a team that supports them specifically, but really, what we've done within innovation across the company is we've made sure that we've focused our resources, our people, our investment spend, in areas that there are higher growth opportunities, that there is a appreciation for the value that our engineering expertise brings, and that obviously it brings a margin along with that. When you look at our distribution network, sales that go through that distribution network, on average, are between 10 and 15 gross margin points higher than direct business.
So what we're seeing in these distributors are, depending on what's happening with mega projects, is a great example, and whatever region of the world they're in, they're an extension of our reach, and that really helps with new things like precision cooling and data centers and clean tech-type applications. Hydrogen would be another example.
As you've, you know, you're talking about transforming the business, having more of that long cycle exposure now... You're in the industrial business. Your backlog coverage used to be like in the, I think, mid-teens, call it.
Yeah.
You're now in the thirty-
Thirties, right
... plus percent range. What, what does that afford the company in terms of, presumably, you have better, you know, ability to manage the, the factory floors when you have more-
Yeah
More... Just talk, talk to that in terms of-
Well, yeah, it gives us some comfort. So yeah, the total numbers, you're absolutely right. If you look at the total company, our backlog coverage is around 55%. That's the entire company. Aerospace is over a hundred. I think it's 120%. The number you mentioned, the 30%, is the industrial business, 30% coverage. That, and all of those metrics are roughly two times what they used to be. We like that because what that signals to us is this shift to longer cycle business is working, it is meaningful.
It has remained at those levels throughout the last year and a half, which has been very promising because we've been in a period of destocking, we've been in a period of negative order from a year-over-year comparison standpoint, but that backlog has remained very resilient. So it does give us a little bit better window of time. That is a focus. You know, where we've always prided ourselves is on delivery on quality, and making sure that there's an engineered aspect to every one of these products. One of our big focus areas is on doing that even better from a demand and capacity planning standpoint, and we really do think that that brings value to our end customers, and that that's gonna help us grow that 4%-6% organic over the cycle in the future.
We have pressure tested that backlog. It is real. We have gone through that constantly, and it, again, it just gives us confidence that that there's a little bit more visibility than we had in the past.
Got it. Maybe we can just talk about what, kind of what, what you're seeing on the ground, what you're hearing from distributors, and-
Yeah
... we start in North America. To your point, you know, this, you were talking about destocking, well, almost a year ago, when we sat here, behind us, that wasn't-
Yeah
Quite on the radar, but you could kind of see it, that we were maybe getting towards that.
Yeah, we were just. You know, it's been four quarters, so it's been almost a year now of really destocking.
Yeah.
We've looked at this historically. That period has been six quarters. We're through four quarters of it right now, so I'm not here to officially call a bottom or anything, but you know, if we look at over time, it's been six quarters. We're through four quarters of it right now. Our international businesses have been a little bit longer. They've been five quarters of negative order growth. But I would tell you, what I think is different about the company today versus where we've ever been is that historically, when those orders would have turned negative, we would've, either that very quarter or the very next quarter, we would've been forecasting and delivering a negative organic growth number. If you look at what we're doing this year, we're forecasting a 1.5% organic growth.
So that is, to me, pretty impressive after four quarters of negative order growth, that we're still forecasting 1.5% growth. That speaks a little bit to the backlog that we just talked about, but it also speaks to the long cycle nature of the company. A lot of that growth has been held up by Aerospace businesses, which has been by design, to be quite honest with you. We have started to hear some positive sentiment from customers. I think we talked on the earnings call; we just had our large North American distributor meeting just in Texas in December, and there was some positive offshoots from that.
So, I think we're through the majority of this, and that, you know, I'm hopeful that, you know, we only have a few quarters left of this rebalancing and destocking.
Okay, so Todd Leombruno calls bottom-
No, I didn't.
Got it. Okay.
I said historically, you know-
Deep
... we've got two more quarters.
Got it.
So, um-
Okay. And just in the International markets, you know, focus on Europe-
Yeah
-and China being the two big ones, maybe-
Well, like I said, Europe and our international businesses have been in it one quarter longer. You know, really, Europe has been, if you look at all the macro indicators, they have been stagnant for some time. If you look at Germany, the production out of Germany has been low. So we're monitoring that very carefully, and we're adjusting our businesses, and we're making sure that we are focused on new opportunities, new applications, but serving the customer business that we have right now. Asia really has been driven by just some choppiness out of China, specifically. The recovery has been slow. There's been some tough comparables with the Covid starts and shutdowns, but you know, that's something that's been slower than we had expected.
Surprisingly, the second quarter was actually a little bit better than we had forecasted. That surprised us a little bit, and if you looked at the orders, the orders did get a little bit better in the International segment. We actually did raise our guide for the second half of the year, just really driven off of the strength of Q2. So, what I really am positive about is that, again, we've had a significant number of negative order activity year-over-year, but it's at such a high level that if you look at this, this is still near record levels. And the other thing that's been really nice is we've been able to expand margins during all of this activity. We are very proud of our margin expansion.
We are not done yet, and quite honestly, if you look at our guide, we've expanded that margin expansion into the second half, even on a soft top line.
Yeah. Going back to International, I remember it makes probably a decade or so ago.
Yeah.
Now, at this point, you know, a lot of the, your domestic OEMs going to build out their infrastructure-
Sure
... bringing suppliers like Parker, you know, with them. You know, a lot has changed since then. Now you see a lot of those domestic OEMs in China saying, "Our home market is soft, so we're gonna try and look at export markets.
Mm-hmm.
I mean, how is-
You know, we've-
How do you-
... we've always been proponents of what we call local for local supply. We like to produce, deliver service in the local currency, in the local economy. That has been a method that has worked for us extremely well. I think it helped us fare better than most through the supply chain noise that was, you know, prevalent the last two years. And we feel that that's the right exposure. We have done that. You're exactly right. That's how we kind of grew the business globally. We've started to gain share with local suppliers as well, and that's what the team is focused on. So, I don't think... I don't see a big shift in our strategy as far as that goes.
What we're trying to do is we're trying to capitalize on this whole reshoring and nearshoring activity, which for the first time it really does feel weird. We're seeing our customers do it, we ourselves are doing it, and it is meaningful for our business.
The nearshoring it, yeah.
Yeah, absolutely.
It's just the jury's kind of all over the board on that in terms of-
Well, yeah, I think this is, you know, we've heard these terms before in the past. This time it really does feel real. I think we learned a lot through these supply chain challenges that, you know, initially it was maybe difficult to get product, but once it became an issue where you couldn't deliver to your end customer, I think that's really what's driving-
Mm
... a lot of the investment.
Just sticking with the Industrial, and we, we will shift over to Aero, but-
Yeah
... you know, if you look at the margin performances, you've discussed this multiple times, but-
Yeah
... you know, Americas versus International used to be this big gap.
Correct. Yeah.
You look, you know, just use the German economy, for example, versus the U.S., and over the last five years, there's been, you know, it's been down-
Yep
... and the Americas continues to grow, yet the weakness in China, despite all those factors-
Yeah
... uh.
Well, it's been, you know, Tim, it's a great question. It's been a long-term focus of ours, because the technologies are what they are, and our feeling has always been, there's no reason why we shouldn't have similar margins in our International businesses than we have in our North American businesses. So I will tell you, this has not been an overnight surprise. This has been many, many years of looking at the cost structure, looking at the customer base, shifting that distribution mix. You know, we used to have... Obviously, North America has a much higher distribution versus OEM mix. That was totally inverse in the international markets. We have increased that mix by 100 basis points a year for the last eight years, right? So it's now 43% of the mix of International business goes through distribution.
We've been very vocal with this, our distribution business, 10-15 gross margin points more profitable than direct shipments, and that has helped that balance out that international margins. But the team has really done a great job. We have done multiple simplification efforts. We have worked on our processes and, you know, everyone likes winning. You know, our strategy is called the Win Strategy for that very reason, and our international team members have proven to themselves that they can achieve the same or better margins than our like businesses in North America. So it's been really rewarding to see that. If you look at our margin expansion, that 570 basis points that I showed on that slide, it has been equally generated across North American businesses, across our international businesses, and across our Aerospace businesses.
We've looked at this in depth internally. 80% of that improvement has come from our core businesses, and only 20% has come from the businesses that we acquired.
Mm.
So that's kind of almost an equal mix of what those percentages of sales have been, and it's just proof that we can expand margins in every one of our businesses, and we feel really confident about not just where we've come, but also where we're headed.
Yeah, I'll, I'll pause there for a second. Does anyone have any questions? Good. As we're thinking about that, maybe-
Yeah
... shift to Aerospace.
Yep, aerospace.
You know, as you look at the build rates, at least what they're planned from Boeing and Airbus, you know, should see a nice increase. The expectation is that retirements will accelerate as that happens. Thinking about the impact of that in terms of the commercial OE-
Yeah
... growing, how do you, how should investors think about the potential margin impact of-
Yeah
... that mixing down is, you know, the OE piece, take out defense for a moment?
Yeah. Well, you know, the big thing, if you don't know where we're at today, I think I said it earlier, but 30% of our end market exposure is now Aerospace businesses. It's never been a larger part of the company, which is fantastic. The other thing is that our Aftermarket OEM mix has never been higher. You know, this last quarter was 47% Aftermarket. On a normalized basis, we think 45% is the right number, but you can just see how much bigger it was, just specifically in Q2. So we like that mix. You know, part of what made Meggitt attractive was it increased our Aftermarket mix by 500 basis points.
So that was one of the elements that made us so attractive to bringing Meggitt into the Parker family. So when we look at that, we're on all these major programs. We know that the OEM business is ramping, but it also helps us with efficiencies within our facilities. It helps us on the supply chain side. So I'm not here to say that we're not gonna have any pressure, but it'll be minimal pressure as that aftermarket mix reverts back to a 45% number from 47. And we think it's all upside on the OEM side of the business.
One of your peers in that market spoke earlier and talked about how the supply chain on the commercial side continues to kinda stifle growth.
Yeah.
And you guys just raised your aero guidance, but what are you seeing there in terms of?
Yeah, I mean, it's true. The Aerospace supply chain is still under pressure. There's no doubt about it. I think the Industrial supply chain has kinda normalized. I wouldn't say it's back to normal, but it is normalized, and our teams are reacting to it. You know, with the Aerospace business, you know, we're guiding 12% organic growth this year, so that's a much different situation than the Industrial businesses that are, you know, at least flattish. So, I think there's still some time that it's gonna take Aerospace to get back to a normal standpoint. There are some chips involved there, a lot of electronics that are also making it a little bit more complicated, but we're still not through normalization on the Aerospace side of it.
To answer your question, you're right. Once that normalizes, I think that will release a little bit more volume.
Does that require you investing in the supply chain?
You know, we're working with our suppliers. Obviously, it's a partnership, especially with the Aerospace business, its long nature. But, I wouldn't say there's no outsized investments required.
Yeah.
It's really just working the process. There's a lot that we can do better from a, you know, we call it demand and capacity forecasting, that I think helps our end customers and our suppliers as well.
Maybe a minute on Meggitt.
Yeah.
Obviously, you know, you front-loaded some of the synergy-
Yeah
... realization. You know, what, how, what's there? I mean, I know there was a lot of opportunity to kind of Parkerize Meggitt-
Yeah
... when you took it over. Where, where are you in terms of-
Well, listen, we couldn't be happier with Meggitt. It is going unbelievably well. It is the largest deal we've ever done. You know, we have been aided by this unbelievable growth that's happened within the Aerospace business, so that has been very, very helpful. But the other thing that's been really unique about Meggitt is, you know, this is now the fourth large acquisition that we've done in the last 8-10 years. So we've taken lessons learned from, you know, CLARCOR or from Lord, from Exotic, and we've applied all of those to Meggitt. Meggitt is a company with a long history. This is a company that we have admired, competed with. It is very, very familiar.
The cultures, the values are very similar to Parker, and, it has been unbelievably smooth, and, I think you see that in our results, right? We committed to generating $300 million of synergies by year three. We've committed to make that $200 million, by the end of this fiscal year. It is all across the board. There's obviously a significant number of cost out opportunities, but really, it is basically applying the tools of the Win Strategy that are helping drive that forward, right? So, better supply chain, better operationally, better pricing methods, and all of that has been part of what has made this so successful. We're really bullish on it.
Mm-hmm. Were there, in terms of pricing, were there, like, long-term agreements that, you know, have is about to or will roll off, that you're able to get out?
Yeah, I mean, there's obviously, you know, aerospace is a little bit of a different business when it comes to pricing, but there's a significant amount of aftermarket, right? We're now 47% aftermarket. So there's some of that. There is the contracts that we have addressed. You know, what we've talked about is we've talked about this last, you know, year and a half, two years of unbelievable inflationary pressure, coupled with unbelievable demand in the aerospace markets. And, you know, ultimately, we have to make sure that we get value for those products, whether there's a contract or not, and I think our teams have worked really hard to make sure that we're not getting taken advantage of, and that we're getting value for our services.
Yeah, so the margin point, you know, rightfully so, was highlighted earlier.
Yeah.
It looks like you're, you know, not to jinx you, but that 25% target-
We're getting close. We're getting close.
... yeah, it's in sight. What, I mean, what factors are still left in terms of... I mean, there's been such a-
Yeah
... significant run here over the past decade. What-
Well, listen, what we
single magic bullet, but-
Yeah, it, it's been a lot of hard work by a lot of people for a lot of time. What we pride ourselves on, and what we drive ourselves to be, is top quartile performers. At every metric we look at, margins are one of those metrics. We are not at top quartile performance today. We believe we can get to top quartile performance. So I would tell you that 25 is certainly in sight. That is not the end destination by any stretch of the imagination. I have full confidence that the team is gonna be able to continue to expand margins. And if you look at this year, I think based on our guide, we're guiding 140 basis points of margin improvement, and that's with a 1.5% organic growth top line.
Mm.
Right? So, it is just proof that the margin expansion machine is real within the company, and we look at that every day across every one of our businesses, and we feel really strong about our ability to continue that.
I think one of the things that Jenny mentioned on the call was that, I mean, demand better. I know, I mean, it was just forecasting-
The demand fence, yeah.
Yeah, yeah. What-
Yeah, what that does is that really takes a lot of noise out of the business. And, you know, we're early days on that yet, so we have a lot of opportunity on streamlining that and getting even better with that. But, we do believe that that is a way that we can win over even more customers and grow even better than we have in the past.
So the price cost discussion-
Yeah
... for as long as I've covered Parker, it's always come up, and it's always -
Yeah
... you know, just not, just you manage right through it, but-
Well, we certainly don't like to use it as an excuse, right? I mean, I think that, we have been, focused on pricing for decades. We have an organization that prides itself on making sure, we get value for the product, and that's what it really comes down to. You know, the world has been unbelievably volatile. That has caused us to go off of cycle, and, I think we've been successful with that. But we've done that because we've had to do that for our shareholders to make sure that, we're not, slipping. So I think we're past all that. I think we're now back to a normal, pricing environment, and, we will remain that way unless we have to pivot based on, you know, whatever happens to input costs.
Yeah, and obviously, having that distri-
Yeah
... distributor network.
It is, it is really a science within the company, and we monitor it, measure it consistently in every one of the businesses and, you know, we hold our team accountable for it.
Got it. Maybe, in the last couple of minutes and see if anyone has any-
Yeah
... questions out there.
Questions from anyone? Oh, there's one.
Could you talk about the opportunity for Meggitt top-line synergies, and are any of those starting to come through?
That's a great, that's a great question. You know, what's happened with Meggitt, that's been unlike any other acquisition that we've ever done, is if you look at our, our top 10 customers within our Aerospace business, we have gotten larger with every single one of those customers. That has made us more important to those customers. That has brought us in on deeper discussions with customers. The amount of issues that we can solve has been expanded, and I think, longer term, that is gonna be great for top-line opportunities.
The way the aerospace business works now is, you know, that's more of a longer benefit in the future. We're certainly seeing it with on the aftermarket side of the business, and I think we'll see some near-term gains there, but certainly longer term, that's gonna be important.
Great. One of the things Todd used to highlight was this whole notion of instead of selling widgets to an end customer-
Yeah
... you're gonna design a whole system and-
Yeah, absolutely
... it just brings together all the different groups that we highlighted. Where are you in terms of along that-
Yeah, I mean, that shift continues. You know, I mentioned that stat, two-thirds of our revenue comes from customers that buy four or more technologies. That means those technologies are integrated together. They work better when they're integrated together. We can offer a better performance when we know that we've designed that system, and we know how that works and what the issues may be with it. But I would say that continues on.
Yeah.
You know, we are not competing on commodities. We're not competing on price. It really is a interconnected solution that has a ton of engineering IP wrapped around it.
Turning to the balance sheet.
Yeah
... so with the debt paydown that you're forecasting, by the end of June, you'll be back to right around that 2 x-
Yeah
... of leverage. What should investors think in terms of where the priorities are?
Yeah, I mean, we're ahead of schedule, so we're doing better than what we initially laid out, which is fantastic. This has been in the playbook on the last couple deals. So what we've targeted is June to be 2x net debt to adjusted EBITDA. That is our immediate focus. But, you know, I would tell you, the acquisition pipeline, it has never gone cold. We have continued to work that pipeline. We've continued to build relationships. We have continued to track activity, and I would tell you that while our main focus is to get to that 2x leverage, if something needed to happen before that, I think we've got the credibility that we could do that.
And I will tell you that the one thing that we've learned over the last couple years is, you have to be active with the balance sheet, and we will do that. If there's something that doesn't make sense from the acquisition standpoint, you know, there's other levers that we can pull, and we wouldn't be afraid to do that. We're not trying to do a deal that's larger than Meggitt. We're trying to do the right deal for the shareholders, the right deal for the company, and, we're gonna be disciplined on that.
Mm-hmm. All right, so just to kinda sum everything up: so if we fast-forward, you know, with the industrial economy, we have all kinds of fits and starts-
Sure
... over the past couple years.
Sure.
So who knows where we go? But let's fast-forward to August, and you're giving a early-
Yeah
... read into FY 2025. Your call earlier that the Short cycle is bottom-
Well, you know, I, like I said, I don't know if I made that call, but I would tell you, on the Aerospace side of the business, we feel very bullish about that. So, you know, for the foreseeable future, we see, you know, high single-digit growth within Aerospace. Industrial, I'd like a little bit more time before we do that. Hopefully, we'll have some better information by the time we get to August, but I would tell you, we've never felt better about the prospects for the company with not just our performance, but the way these technologies are really levered to these secular trends and these capital projects. We've never felt more bullish on our prospects for growing.
Excellent. It just is a plug. We're doing a launch on that theme, on megatrends-
Yeah, great
... with Rockwell, Trane, and Symbotic, so-
Excellent. We'll be there.
Thanks again, Todd.
Yep.
Thanks for coming.
Thanks, everyone.
Yep.
Thanks for your interest.