THR - Earnings call transcript Q4 2022 | Thermon Group Holdings, Inc.

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Operator

Greetings and welcome to the Thermon Group Holdings Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to our host Ivonne Salem, Vice President of FP&A and Investor Relations. you. Thank

begin. may You

Ivonne Salem

filed Good Relations full thank this year earnings available has issued Diego. X-K on today’s it’s of and morning, for our fiscal an also been which release XXXX conference the press the morning you, SEC you Form Investor and on joining we with section Thank call. Earlier website.

XXXX. conference News in our conference on their and Additionally, IR found call the IR be QX slides call can for earnings Events, this calendar website

we some discuss do conform call, that the Principles. During Accounting to will not items Generally Accepted

filed those for GAAP in These we considered impact to reconciled make recently, refer end of our remind results. in reported measures non-GAAP tables GAAP. and annual might have report of company. items could including in uncertainties the substitute be more the forward-looking certain should addition We financial would risks statements, to performance future to the forward-looking report comparable at the like with this that most release. measures Please accordance measures and during regarding most our the not I information press regarding to with that earnings you and a our the our as SEC for call, statements quarterly

except a might as Our maybe result no statements required and of obligation contemplated information, materially we as differ actual whether by new results developments undertake forward-looking by any to those from these otherwise, or statement, forward-looking law. publicly future update

his Now, remarks. I and our President Chief Executive would to opening Officer for Thames, like introduce Bruce

Bruce Thames

and interest joining Ivonne. today. Thank appreciate call investment your Thermon. you, all in for our Thank you We

at on Fox, ‘XX Top team. which by full flow a by growth for fourth line of with adjusted net on year our marked execution XXX% ‘XX year. in like for the year, and Kevin Fiscal rate. more XX% twice top quarter while Slide million, reflect our strong of results. the Free was fiscal by our begin will line CFO Following the on detail results solid XX% year revenues $XX.X ‘XX provide our to represented to bottom to of than leverage the EBITDA year full year I’d expanded X underpinned fiscal recovering year turning grew financial line income. my the of more remarks, cash

importantly, we More enabled long-term technology of developing maintenance. and initiatives advanced our end diversified strategic economies markets,

During verticals. revenues to year, of gas achieve diversified growth markets and in able we are XX% in end achieve to non-oil the XX%

Network orders to streamline assets. We effectively solid continuation Genesis to-date, market X system also new customers of continued purchase seek as of saw manage with – to their the uptake more and

In the I market our the Many instrumental actually in addition, leading operations. energy sustainable software, commitment helping launched ‘XX. for products reduce and more year carbon were ESG create seen emissions, year. globe as recognized and the zero rail software time over commitment awarded growth of safety and to to for the applications. and to transit were Thermon out and end of year contractors. driving These consecutive incidents advanced mentor want for heating in and markets new our fiscal customers a commitment to of ‘XX consumption, their new a from recently year to products teams sustainability second lower our numerous shrink best-in-class the during diversified lost also ranging also company footprint, we our X,XXX thank products commercial, design environmental marked products our XD Fiscal and during we the around safety.

overall structure team. our we also and disclosures on environmental of social a of year, expanded increase our corporate accountability wide and diversity the our within range the issues, clear governance During assigned

and we their am growth deliver work our this high and I very look as in inflation this alongside fiscal XX-year in to to ‘XX Ukraine. Our disruptions, a chain while war profitable achievements teams team widespread them year execute continuing Overall, accomplished of facing forward strategy. all proud and supply to of

the Turning have we in year Slide I now diversify seen markets efforts our to X to fiscal end on highlight want markets. during To end advancements ‘XX. our begin, to

growth We are traditional almost diverse able end and year. of to end markets drive during oil in the fiscal that Xx XX%, by gas markets

growth a of As is wide our opportunities. the result, diverse XX% GDP our just gas end a while of business now markets, oil range by and of represents driven mix, with majority plus

driven XXX%, to sources. Some forward of the Gulf Uri the included other power continued impact the in sector along We great the by examples from include Texas transition electric which opportunities power winter Coast. energy by growing going storm see traditional

also rail of expansion the year-over-year by team. and Hellfire Blizzard transit the and XX% our Duty of with We grew development business launch

business by a XX% grew with of cable freeze Smoke Halogen the Low Europe, heat driven protection Zero offering commercial the Our tracing our profile heating global market. by launch combined deep in for

in Our food in in year. XX% marketing growth campaign the channel resulted and and beverage development

see the and modestly with continue the sector, to addition, largest and in to lagging lockdowns Asia the the grown in recovery U.S. strength to we saw petrochemical In we lead our year. Europe and COVID has Geographically, due efforts, chemical which growing market. throughout become Canada end these ‘XX, FY

to now Slide for QX Turning X our results.

combined up Fourth that developing fiscal in by despite America. have the North quarter expectations exceeded end this year-over-year success $XXX.X year. maintenance, execution, the around chain key million, Revenue market quarter roughly and persist. largely Our our revenue XX% driven strong our been strength strategic at finished diversification, with economies to supply and quarter pillars technology-enabled challenges

year-over-year. revenue strength continued the grew Excluding the which million exceeded XX% highlighting has the in quarter, the $XX labor in revenue where one-time our contract, marks represented consecutive third expectations, revenue during recovery. This quarter, by

positions to $XX.X up the of increases us our QX three seeing the opportunities this net tactfully believe Adjusted well momentum prior million saw a quarter. year strong sheet at lower platforms. X.Xx cash at cost sets quarter was productivity growth good finished end balanced essentially $X.XX income investments augment finishing share range. pursue offset year $X.XX in at adjusted growth. shape, for balance projected EBITDA the strategic the the our representing This share, net inorganic in to with ‘XX EPS the particularly from Free EBITDA continued million, We a with The end of debt business in price inflation, continued that quarter, for and at XXX% quarter. we last year $XX.X with up flow The is over the also in very at well up we quarter, and management for also adjusted are for beyond. team as success FY of XXX%

to X Turning orders on Slide backlog. now and

strong bookings quarter the with over and growing XX% XX-month growth period. We the continue incoming orders to in XX% see trailing in

one-time eight has the a very contract, seven strong for the Excluding last X.Xx our and positive of quarters. QX was book-to-bill been

of opportunities call our we return level addition, that, up see more sequentially. continue volume to a review financial XX% capital to With turn over upon the of Kevin? Kevin I’d results. fiscal In XX% drive to for year-over-year and our anticipate second during spending Based growth a year-over-year is the quotation XX% half like this of year. sequentially. in-depth and activity, Backlog of and the was to up X.X%

Kevin Fox

Thank you, Bruce.

the and impact XX% revenue remained recovering and XX% partially consistent of year versus we versus Turning of prior were our with this due showing strong Russian where $XX slowly Hemisphere, and some revenues Western quarter, million, decision year-over-year the growth excluding $XXX.X and the project, to quarter in a prior year. from APAC previous investments the quarter projects to due $XXX.X in orders that so are Ukraine now in operations. to our larger war Page XXXX fourth totaled prior Drivers new million lockdowns versus contributed X, EMEA up up with Fiscal contracts large decline prior in one-time Thermon in the suspend periods XX% to year. million seeing The was revenues year. the in growth

year-over-year global million, Excluding in across in the XX% work The completed which the one-time full impressive has XX% in base. quarter. year strength an grew year, first XX%. in still our at quarter Point-in-time remaining contract revenues underscores growth the spending installed the maintenance been was and of fiscal already end our $XX

reminder, margins time, versus the total revenue overtime are making material the year-to-date and aligned engineering of that traditionally have point-in-time revenues material our driver services. revenues higher carry product key up revenues revenues contract material which while than work revenues installation XX% point-in-time the were with representative profitability a faster growth future. represented in including sales. revenue we today of and project As XX% quarter and or XX% of are of generally These overtime of our project this quarter revenues Point-in-time XX%. the the where revenues both stream one-time are a or in Over sales in reflective

will Greenfield be MRO/UE XX% revenues the construct. final remains our the of one-time contract, one-time versus was available contract XX:XX the of in quarter. in previous This information large was disclosing the versus XX:XX to this Excluding filings MRO/UE year. due large SEC XX% quarter versus split Greenfield for comparability. Historical in of the the

quarter the items provide year-over-year will a reported to few in the the to XX.X% in On costs. changes the year. gross through were we Reported last margins next quarter. A versus slide, clarity XX.X% cover walk on

quarter XX.X% out margin back the basis comparable the totaling year or ago points, a adjusting in $X.X giving us quarter. of from last items we gross year’s million First, adjusted base XXX

pricing of actions pleased have difficult of of points. operating and million but around of which profitability in team XXX labor to managing costs basis are this year’s margins was points, proactively basis than impact us This XXX we realized quarter the constantly particularly and Previously challenge an pricing increase fourth one-time availability. availability strategies. with Volume electronic impacted of comparable quarter, is navigate and figure we global we environment. components, costs the in long-term on points. basis prior was positive This announced Overall, giving XXX business XX.X% remain gross points, the material XXX margin contributed for pricing continuity revenue rising $XX and more through evaluating a are our contract ability XXXX versus fiscal year, increase to a of a Materials the quarter. benefits with dilutive by continue input and basis the

pleased see of most set we above a continuous margins are identified excluding in the specific We improvement future. business, level contract to one-time the core enhanced to have drive historic the projects XX%. in of the profitability And that

reported in of or on SEC arrive deduct to a As or by versus selling, XX% the XX% volume. strategic the primarily slide. In from general a was and costs $XX.X depreciation we of prior revenue, initiatives expenses investments the year quarter, SG&A at driven million reminder, administrative SG&A the higher $XX.X and on revenue brief million of

investing year, revenue in in of our focused revenue, of drive year. million while on above full was remain the the $XX million up XX% to the SG&A or or growth. highly business $XX XX% controllable For prior profitable slightly managing from spend, We

will over scalable navigate continue the be expands, recovery to as as business cost to ensure particularly that time. have disciplined base We we uneven this through a we

additional $X.XX share. quarter prior business previous were the was X, million overall for year expense prior of year to increased adjusted has impact drive an growth our XXX adjusted over up is able successfully adjusted million XX the incremental GAAP managing of XXX was expansion, versus basis our business, increased fiscal we of for to growth our significant we EPS the both controllable loss operations. Page actions, year EBITDA sales growth prior refinancing, growth EBITDA the while helping plus EBITDA million items and due while margins lower from drive points $X.XX the $XX.X materials is perspective, earnings points next in of the Xx million share. We the as pricing forces to adjusted $X.XX when full per estimates Adjusted importantly, labor at or the expect Most the but volume year. and on per quarter. or From the our timing year $XX.X partially impact for was or XX% finished basis environment of EPS to by Now there million, $XX EBITDA per earnings prior EBITDA Adjusted the room in still per believe in impacting versus still months. year manufacturing fiscal representing is a share, improvement in and And the prior versus in volume the share in XXXX, of versus considerable margins, versus per year’s the realized over spend. of by $X.XX fourth EBITDA increase XX% in inflationary We due non-repeating $XX.X in business XXXX margin share. an last inflationary interest periods. $X.X offset

guidance and our as on investments For collections. manage balance Quickly Revenue asset adjusted of as and on capital financial exposure EPS ended provide working flow as range X% the color adjusted XX. additional of pause debt the has EPS $XX lower approximately year was million the Page end full quarters. fiscal was business ended $X.XX sheet the our business roughly the at March in at the past XX. $X as the of revenue of in cash a $XX or sales improved the Cash year, $X.XX. and to debt over wanted EBITDA and and GAAP to on X.Xx little timing was Russia. I pay-down Net the few with at million a net of was we million exposure percentage

the fiscal continue while complying that sanctions and and decline significantly with applicable revenues regulations. local current off all monitor expect period We to backlog exposure our run XXXX during as will we we time to in

be will information market was XX% year-over-year. The stages that any within continue focused CapEx pipeline at quarters with the robust increase believe in active with exceeding Overall, exposure, various maintenance quickly cash to million installed of generate markets, and we $X fiscal by quarterly control will even heating aligned long-term included on remains process. can external adapt the the side flow $XX volatility of investments is acquisitions in diversifying it capital only we back growing growth $XXX strategy providing XX since of page, will accomplish million our our see The right I the We Additional on the quarter future XX-K. our a will goal the in a goal global revenue to quarter in of achieving with XXXX. there happy cash results predominantly in maintenance And team environment of operating Customer will end and difficult and and free strategic of an fiscal our COVID results believe be remains and key our I at base discussions initiatives be expect or to we be focused to that of contributor changes. incremental can in to world deliver. our M&A year of markets. remain diligently long-term positive the ahead. million am the We inorganic developing flows and in lot plus fourth last emerged, demand persist. strong. the consistently as what remains our this we and process growth If the look we of environments. can indicative what XXXX months with show and technology-enabled Profitable

ample provides flexibility. sheet balance Our

provide values every special update progress a an we around global making for our while initiatives, delivering have thank winning are to that, the most I in We And continued strategic our team. the Bruce will a particularly to and A you importantly, results. Thermon strategy diversification. winning team ask with commitment to their with live day on

Bruce Thames

I attention Kevin. would initiatives. direct to like XX you, on strategic now our your Thank Slide to

fiscal in As initiatives earlier, strategic we ‘XX. our highlighted made year advancements significant in

forward to ‘XX, of we to position Looking success. number for company are year are long-term areas there fiscal where the investing

our grow First, to improve meet and we in requirements to manufacturing economies. our ability Eastern lead developing points business profitably the our time capabilities price to are Hemisphere expanding in

these to channel are adding better development business We in our direct also geographies key to resources serve. presence and both expand

rail transit, begun end continue industrial product light invest outside of our have sector. oil our and ‘XX, and development electrification gas and R&D gain Second, in year markets fiscal approximately now diversification on in of traction commercial for with applications. dollars to to new efforts we really In the XX%

the our growing We marketing are direct channels, resources these on areas our momentum to also adding advancing sales, we in efforts, business development have. expanding and specialized build

to is with renewable Thermon well biofuels that the transition energy applications energy. range enable Finally, wide very from to of a positioned solutions address

to enabled central is which continues initiative platform the digital communication space. around lead in transformation our to and control Our maintenance our technology

product software complement business to making current investments with and in intelligence, launches hardware new continued the to are We combined operations capabilities R&D expand for platform.

sold encouraged goals opportunities, in that are excellence systems which lies with potential and our program. our very growing while to Underpinning note conversion pillars self-healing It’s the quotation by positive system these strategic by create the fueled Xx real adoption response achieving is the We by the three to-date, systems of Xx installed fiscal year mesh important in log. six market base operational to incremental ‘XX, enabled network. by of is these the

asset Toyota velocity will will gains in EBITDA Operations be increase forward. productivity Senior new costs, waste, is utilization. and This of going transformation driving rising expansion that system to production improve offset President labor deliver margin leading a transformation instrumental reduce Our Vice and

green technological we Turning which a to plant since to opportunities, enable would where provides XX, to hydrogen over solutions October million Thermon in tracking Currently, grown like a illustrate to XX% of are example of have Slide highlight an by I of future. $XX greener hydrogen XXXX. breadth needed

order We generating the than green first X capacity. have also secured hydrogen less a with facility small megawatt for scale

see nascent, and solutions piece mix to with While forward, hydrogen enable industry developers we energy to are a this going the as key leading sustainable technology. working process provide of

XXXX guidance. Turning year and plan our now to full fiscal

the we seeing ahead, with we our in pleased are Looking progress are very business.

an includes initiatives. fiscal strategic Our key our and $X business development new investments, on execute year sales, product million incremental plan ‘XX in to development,

and the into expanding In to integration supply to fund addition, growth in in X% Hemisphere while manufacturing rail of support vertical anticipate our markets. transit CapEx Eastern developing approximately we chain, to X.X% capabilities

of level uncertainty. we in continued the creating of and risk chain supply forward, challenges see some Europe, Looking particularly recession,

to and incoming of upon remains represents our and is our which about suspension orders in year, at over be business guidance backlog $XXX are these recovery expect revenue our to million months business and a XX full where forecast accounts our focused and new midpoint heat investments X pre-COVID fiscal on is typically ‘XX. to environmental heating million tracing our offerings, we However, projected XX% growth We for lags the robust. the year-over-year, of up from revenues year million which for process Based anticipate Russian to the by months. product $XXX factors in at fulfilling core existing $XXX entity, rate our commitments. the This across order XX% exceed continuation

are we full time, by first XX% operational the to profile XXX XXXX. fiscal initiatives share, growth share We for points inflation For to GAAP a in business year anticipate $X.XX XXX the the excellence a representing to year-over-year basis of offset the $X.XX to guidance year initiating price EPS combined points at overall any improve basis margin the with in midpoint.

this call the the the to moderator, and this fiscal like the global for the ‘XX team industry at to strength a would positioned has business leadership look brand, a of that cycles, entry. generates of global over solutions. I profitable that and of investment strong of As year geographies this installed customers portfolio to with barriers business, and flows revenues resilience this call. position established significant portion certifications large across wide creates and our broad A turn of industries recurring a deliver in of Diego cash well of range Q&A generates and base recognition I to loyal Thermon The very business, beyond. model now that Thermon light growth well across

Operator

go William [Operator comes ahead. Please Blair. from Instructions] Drab with Our Brian first question

Unidentified Analyst

morning. East is continuing in And for markets discuss on restrictions they [indiscernible] pushing recovery in This even more? could projects? for in large Thermon’s shift demand cyclical the out end the still affect are detail in a Brian, demand gold how COVID could Tyler Good you pent-up more

Bruce Thames

Yes.

if are your some early restrictions, question, We of the I positive And In have seeing of signs, we question. recovery the COVID kind lagging. South that delayed are stages. your you So, part first very particularly do Korea, seeing China repeating. in China in of there. part – Japan India, see don’t actually latter see but think mind the we we very

Unidentified Analyst

activity or the would do you I am I large impact? affecting your it affect think but you projects? mentioned defensive, scale, slows is do you just more in your recession, Yes. slowdown end am large Europe it global wondering, wondering for would see demand. that I if just global was a like, wondering a large I markets on But it down, just know as see if how have how more projects? there a being you do

Bruce Thames

Yes.

all have well, first didn’t demand really weighted all, maintenance been than mean we of towards and was heavily – and kind has our So, the pent-up of base. this large the one-time one project year, materials. really I to other We which any spoken business have installed on maintenance labor

this in haven’t really from return seen COVID. the recovery of we a CapEx since So, kind big year past

maybe I move the So, I all is would CapEx don’t really – see would out that further.

look at end and As changing. our is our end mix we market markets

in would think about had certain types to it’s food processing. like oils, were bulk we that. the different note important food expect remain fairly that to areas some have in areas food we that food wins processing, and of power, I If beverage, like recently base things candies, like utilities, installed think strong, of

of demand. safety be new there water systems, – for we transition driving be seeing is natural where still would then from sector, also that firing some some continue. gas that fire whether other have boilers, so, in And things we electric for really lot hot commercial buildings think we those heaters, means fire of sprinkler that changes I will are the are or whether to kind boilers space, a for nature, of and the and – done that And a

would where think the they diverse end be focused, we downturn. I markets in during more resilient So, of some a other

in oil growth year. gas look at about only and we and As gas, really saw we oil this XX%

haven’t we seen And it so pricing. stronger strong have rebound. What was seen, a really we

we shift have begin maintenance. of around in a seen capital really seen deployment. spin have kind We some – But really

shareholders that rather have has we of than of more lot capital investing dollars. seen focused a As been to on CapEx return

awaiting are that so kind And of expenditure. we still

the to happen. then depending seeing move might could what So, right, some of that on

Kevin Fox

think Kevin million our to build And about that year. if last for maybe about were backlog. our Tyler, TTM just we on second, $XXX and is a orders orders this here,

growth I materials business think of that’s were is the performing contract, about think even the point-in-time on once well. months again, if And, supportive excluding the the or the XX strong revenues, today, over next you exclude where a as the the well. as revenues XX% large of contract we

So, I think in etcetera. the facts give got even of of we environment XX given an a few in kind they confidence up, us the over those uncertain raising stacking rates that next in business months are and the U.S.

Unidentified Analyst

Okay. do revenue sales Thank for see ‘XX? time just fiscal And an having you allocation that. you over larger sales up, point-in-time following so even than of in year

Bruce Thames

growth I a But touch it be we fair higher. to But consistent start. think historical think be the maybe is biased historical in it I about relative average. a certainly, to point probably would the that think be would with average rate,

Unidentified Analyst

target color of run Okay, on mentioned for purposes, million appreciate a on the the $XX of that. call, excluding And me rate last last SG&A more just you depreciation. modeling for

you slowdown, expect top expenses line? around does come that wondering operating down there or $XX run expenses, to you headwinds growth Just some if a Do little bit? that global stay is do still million to expect operating rate

Kevin Fox

you question. appreciate the Tyler, asking Yes.

with SG&A at incremental a you of of forward. million business that’s not was for think about revenue, XX% the XX% year just in course target We ended I expect would Clearly, normal a around anything revenue. the the a on ‘XX, fiscal $XX business going SG&A basis. growing

heard of a a that’s in lot you of think Bruce’s But are investing on in comments, the business baseline basis. type this I mark to grow. we right

certainly initiatives that of we new a our investments require to the those to help to building making require going are capabilities bringing do Hemisphere, Eastern we upfront out a in commercial in payback markets. investments standpoint well. in but drive strategic Our have resources as growth be us period, some that from these be be some And have to in operations

because investments SG&A, I in number. million was than look touch of strategic So, these an FY that’s came think higher just we a rate, at are $XX that, making We we initiatives. not run a as ‘XX in

So, trying capital. we the on to added those growth, as focused returns see value very cost incremental on much generate line, profitable

markets our is, I changes, have if seeing very would the the quotation customer feel ‘XX if are. where here, backlog, than the we we are think external given going be today obviously certainly over got recalibrate the if in spending, pretty at fiscal seeing certainly think question what those Bruce roll a environment again, log list I what those business seeing And in we quoted, we okay, good we of [ph]. given investments expectations. higher But, in that what your SG&A to our we tight are about is did and would

Unidentified Analyst

Okay. That’s Thank you. I along. it all for pass will me.

Kevin Fox

Thanks Tyler.

Operator

Capital. Our comes next question question. your Jon City from Braatz Instructions] [Operator with state Kansas Please

Jon Braatz

Good morning Bruce, Kevin.

Bruce Thames

morning, Good Jon.

Jon Braatz

maybe you the about the And margins. influencing division, bit March, the the a influencing the business gross the sense, little got on issues, as margin, area. talk is be cost of have Obviously, the Let’s or aim to on. Russian XXXX…? the – front other sort the to pressures absence a of business you parts, it’s with How Russian going mid-XX% moving a got forward. things of China margin get up of we go the struggle the intention bit a see little But you some of back margins the I gross and here going lot get margins a in to do

Bruce Thames

new will, forward, a think excuse large lot fiscal fourth first behind this fiscal that. in ‘XX in that’s on that’s the Yes. you But noise a question. been contract little If us – in the the We past Obviously, hope the core, quarter of if contract bit quarter on certainly about be quarters when the of it’s ‘XX. as I we years. we think you looking X of the be call. this highest looked will XX.X%, Jon, There of will me, here. Yes. over good five

I a I gross some XX% sequential that’s But But margin around year, XXX come, that be think about in think that basis higher margin might points we of sense. the volume, expect of the everyone XXX next those we chains. it’s line, points way We to versus think the on on gross little not quarter bit if certainly basis supply that basis pretty to obviously, of all the is the facing increases, given to a makes indicative challenges translates to of things improvement cadence EBITDA back year-over-year a fairly. on base normal. probably if know the we

Jon Braatz

Okay.

word So, the I you a you the it’s accelerating. maybe that maybe, you look these are to margin really And right? use on you I if to years it thinking you pressuring, really, are of couple SG&A investments that limiting hate that investments that, it’s again, or am operating improvements, margin, year, at were, the ago, margin, making maybe that’s pressure, call that but making the line, if weren’t last the want of that and making,

Bruce Thames

about million resources, sales You of Jon, comments noted are expenses. I in SG&A sit and really in – in R&D. And incremental those all my that’s investments $X of investments,

gotten has challenges finger have war only we really are our keeping more leading are if see Russia And that if pace a would and And year-over-year. of some indicators. pulse investments, been the of lot demand of that, shifted, of so while still Kevin the are are yet. I signals overall. on in seen due we and there see, and of we the some the we looming, that’s business to impact can on it the getting recovery the they And really think any haven’t are and we change. the watching seeing picture very now, a I those seen And significant certainly, growth said when tell worse. we piece we China, Europe. kind in but we issues closely, the in as we haven’t strong And But certainly there impact moderate you right of begin our haven’t necessarily Ukraine,

of So, those seeing would be are we and the two kind that things experiencing.

we seeing that, are demand Beyond of a robust across wide a environment pretty industrial range verticals.

Kevin Fox

X it’s drive making investments just that, future. that’s the payoff this in drive years, would We markets, Clearly, a goal $XXX of longer think in I to we are and comfortable add we etcetera. time. is that that have organically, a million end the investments investments these of We certainly in growth, to think if think where in to wait. business absolute north now Jon, require this those to But don’t at order we that the going can have we are change get to feel make revenue. to position organically we term, to

Jon Braatz

Okay.

CapEx you markets, when specifically, your a end there and end at surprise gas spending a of from than might level sector? way energy some anticipating Specifically, see you the prices that in and oil that that – what you little and that that you energy given end bit a might the coming look given is additional pleasant maybe market that get market, possibility stronger be maybe

Bruce Thames

there think we be from upside Jon, I forecasting. Yes, are what could currently there,

is I XX% upside of We those Overall, saw the of indicative were of XX% potential wall year. of last about quote think end markets there. the some XX%, kind bounce a only post-COVID. down

prices So, these at they see have And the not seen certainly not fully we commodity have CapEx by would at levels. that recovered. any spending we typically means

might we year. that upsides potential fiscal the of the one is coming that see in think I So,

Kevin Fox

it on project Jon, either. might the And be side, not

I we the priorities probably I customers dollars going look where capital and the have maintenance articulated. spend, that’s to our think been would utilization, bias think get that be, allocation those just are at of as given

the be necessarily we on types long-term not margin project might of it of that sales see. lower So,

Jon Braatz

you. Thank Alright.

Operator

further back remarks. this Thank you. the for to There will are turn closing Thames Bruce no floor I at time. questions now

Bruce Thames

all us. your Again, We thank joining appreciate the day. rest and your you interest Thermon of in for enjoy

Operator

conference. This may parties day. concludes disconnect. you. good Thank today’s All a Have

Thermon (THR) 26 May 222022 Q4 Earnings call transcript