Barnes Group Inc. (B) Q2 2022 Earnings Call Transcript

Barnes Group Inc. (NYSE: B) Q2 2022 earnings call dated Jul. 29, 2022

Corporate Participants:

William Pitts — Vice President, Investor Relations

Thomas J. Hook — President and Chief Executive Officer

Julie K. Streich — Senior Vice President

Analysts:

Christopher Glynn — Oppenheimer & Co. — Analyst

Pete Osterland — Truist Securities — Analyst

Matt Summerville — D. A. Davidson & Co. — Analyst

Presentation:

Operator

Good morning. My name is Chris and I’ll be your conference operator today. I would like to welcome everyone to the Barnes Second Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions].

William Pitts — Vice President, Investor Relations

Thank you, Chris. Good morning and thank you for joining us for our second quarter 2022 earnings call. With me are Barnes new President and Chief Executive Officer, Thomas Hook; and Senior Vice President, Finance and Chief Financial Officer, Julie Streich. If you have not received a copy of our earnings press release, you can find it on the Investor Relations section of our corporate website at barnesgroupinc.com. During our call, we will be referring to the earnings release supplement slides, which are also posted on our website.

Our discussion today includes certain non-GAAP financial measures, which provide additional [Technical Issues] to investors. These measures [Technical Issues] to the related GAAP measures in accordance with SEC regulations. You will find a reconciliation as part of our press release and in the Form 8-K submitted to the Securities and Exchange Commission. Be advised that certain statements we make on today’s call, both during the opening remarks and during the question-and-answer session, may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

Please consider the risks and uncertainties that are mentioned in today’s call and are described in our periodic filings with the SEC. These filings are available through the Investor Relations section of our corporate website at barnesgroupinc.com.

Let me now turn the call over to Tom for his opening remarks. Then, Julie will provide a review of our second quarter financial results and our updated outlook for 2022. After that, we’ll open up the call for questions.

Thomas J. Hook — President and Chief Executive Officer

Thank you Bill and good morning everyone. I am honored to be appointed as the new President and Chief Executive Officer of Barnes and I look forward to leading the company into the next chapter of its remarkable history. I appreciate Tom Barnes’ and the Board’s confidence and would like to thank the Barnes leadership team for their warm welcome. In time, I look forward to meeting more of the Barnes team as I visit our operations across the globe. In addition, I would like to acknowledge Patrick Dempsey’s significant contributions to Barnes over the last 22 years, with nearly 10, as the Chief Executive Officer. All of us in the Barnes team wish him and his family the best.

Having served on the Barnes Board since 2016, I am keenly aware of the quality of our portfolio and global workforce. Under Patrick’s leadership, the company has seen a significant transformation. He has built a legacy of team work, established via the principles and applications with Barnes’ enterprise system.

As my CEO tenure begins, I’ll be diving deep into the organization to have a more detailed look at our operations, core technologies, capabilities, and opportunities for growth. In doing so, my goal is to extract greater value from the efforts of the entire Barnes team. We will take an action-oriented approach to reduce complexity across the organization, to attack the critical few initiatives that have the greatest impact and to move with increased speed and agility. This includes prioritizing business execution across the portfolio, driving organic growth, and tapping into new markets.

I anticipate leveraging Barnes capabilities and my professional experience to grow in markets like medical technologies. These are the focus areas that I believe will drive shareholder returns and employee engagement to a higher level, actions for which I will hold myself personally accountable. These are also the things that I will hold the team accountable for.

Regarding the second quarter, our financial performance mirrored the first quarter in many ways. Second quarter organic sales grew 5% from a year ago and adjusted earnings per share were up 24%. Our book-to-bill ratio was a healthy 1.16 times, giving us two consecutive quarters with a solid result, and both segments generated greater than one times ratio.

Performance was driven by aerospace, which once again generated strong revenue growth and margin expansion, propelled by a robust aftermarket. Industrial continues to see mounting economic pressures from several factors, which have inhibited our ability to drive the performance we expect to achieve from these businesses. Ongoing macroeconomic headwinds, including the shadow of the Ukraine conflict in Europe and automotive market weakness, continue to impact us. And we now see these pressures sustain for a longer period of time, leading us to reduce our performance expectations for the second half.

Correspondingly, we have commenced a systematic multi-phased initiative to significantly reduce costs and integrate our operations, decreasing complexity, and focusing on improved performance across our industrial portfolio. In doing so, we anticipate a restructuring charge of approximately $24 million, with $17 million of the charge in 2022. Annualized cost savings are forecasted to be $14 million. This initial restructuring will be broad-based, touching much of our industrial portfolio.

Within engineered components, we will accelerate our move away from high volume commoditized automotive business focusing on market segments where our products and technology are recognized for the value they create for our customers. This does not mean an exit from automotive end markets, but rather a focus on where we can generate suitable returns. Accordingly, as the product lines offered by engineered components are consolidated, we’ll be closing our Associated Spring, Bristol, Connecticut, manufacturing plant. Workforce reductions will be a part of these actions. This integration of our engineered component operations build upon the consolidation of our Detroit facility, which is already in progress.

Within our automation operations, we will be closing automation centers in Russia, Korea, and Japan. Our employees in Korea and Japan are largely transferring to channel partners so, we benefit from a lower cost base that can still drive sales in these markets. Within our molding solutions business, we are transforming our go to market strategy to focus on key regional markets of the Americas, Europe, China, and Asia. This represents a significant shift in the current brand based commercial strategy. While our powerful brands remain intact, an integrated focus on the varying needs of customers within individual geographies will allow us to better tailor our extensive technology solutions to their specific needs, generating the growth we must see from molding solutions.

Additionally, this integration will improve our cost structure by creating efficiencies and improve cost competitiveness. Across industrial, these actions and others are aimed at improving profitability and return on invested capital. In particular, we desire to grow margins beyond what we delivered before the onset of the pandemic. We will leverage our products and capabilities to expand recurring revenues across the portfolio. In addition, we will accelerate our growth ambitions in medical, automation, and electrification with a focus on less cyclical and more attractive end markets.

In closing, I’m thrilled to lead Barnes into the future and look towards to creating value for all of our stakeholders. For our employees, we will provide challenging development opportunities and promote engagement, empowerment, remain an employer of choice. For our customers, we will offer reliable service delivery, high quality products, and leading technologies to support this success.

And for our shareholders, we will work to extract the value potential embedded in our business with a focus on growth, profitability, and capital returns. We will move with speed and agility, take decisive actions, and re-accelerate the transformation of our business portfolio. Notwithstanding some current challenges, our future is bright and I am excited to get started. Now let me pass the call over to Julie for a discussion on the financial details and some end market color.

Julie K. Streich — Senior Vice President

Good morning everybody and thank you Tom. Let me begin with highlights of our second quarter results on Slide 4 of our supplement. Second quarter sales were $321 million, essentially flat as compared to the prior year period with organic sales increasing 5%. Foreign exchange negatively impacted sales by 5%. Operating loss was $28.2 million versus last year’s operating income of $38.5 million. In the second quarter, the company performed its assessment of goodwill. At our automation business unit, a worsening economic outlook and weak operational performance led to a downward revision of its sales and cash flow forecasts, which among other factors, triggered a non-cash impairment of approximately $68 million. This impairment relates to the October 2018 acquisition of Gimatic.

Excluding the automation goodwill impairment charge and a small amount of residual restructuring, adjusted operating income was $40.1 million this year, up 2% from an adjusted $39.2 million last year. Adjusted operating margin of 12.5% was up 30 basis points from a year ago.

Net loss for the quarter was $39.6 million or negative $0.78 per share compared to income of $24.5 million or $0.48 per share a year ago. On an adjusted basis, excluding the goodwill impairment, net income per share of $0.56 was up 24% from $0.45 a year ago. In the quarter, interest expense was $3.3 million, a decrease of approximately $1.1 million as a result of both a lower average interest rate and lower average borrowings versus a year ago.

Other income was 400,000 versus last year’s other expense of $1.3 million, driven by foreign exchange gains in the current year versus losses in the prior year. Excluding the goodwill impairment, our adjusted tax rate for the second quarter was 22.8% compared with 25.3% a year ago and 21.9% for full year 2021.

Relative to the 2021 full year rate, the increase was largely due to last year’s benefits related to foreign audit adjustments and a realignment of Italian tax basis goodwill and intangibles. These items were partially offset by a change in the mix of earnings between high and low tax jurisdictions.

Now, I’ll turn to our segment performance beginning with industrial. For the second quarter, sales were $212 million, down 10% from a year ago. Organic sales decreased 3%, while unfavorable foreign exchange lowered sales by 6%. Industrial operating loss was $48.7 million versus operating profit of $27.3 million a year ago. Excluding the goodwill impairment and a small amount of restructuring charges in the current and prior years, adjusted operating profit of $19.5 million was down 29% and adjusted operating margin of 9.2% was down $250 basis points. Adjusted operating profit was impacted by lower sales volume, lower productivity in part — a result of COVID-19 related absenteeism –, and the net impact of inflation. These factors were partially offset by lower incentive compensation.

Across industrial, we experienced approximately $1.2 million in net absenteeism costs in the quarter, a bit better than our April outlook. These costs have trended down over the first half and we expect that to continue in the second half. In addition to the absenteeism costs, we saw approximately $10 million in gross raw material, freight, and utilities inflation in the quarter. Through continuing pricing and procurement actions, we were able to mitigate approximately $9 million, resulting in a net $1 million inflation impact. We expect an additional $2 million to $3 million net inflation impact in the second half of 2022.

With respect to orders and end markets, at Molding Solutions, organic orders increased 6% year-over-year, though organic sales decreased 10%. Medical and Personal Care orders were up strongly, while automotive and packaging were down. That said, orders improved sequentially from April to June and book-to-bill was 1.1 times.

For 2022, we now expect the Molding Solutions organic sales to be down low to mid-single digits. At Force & Motion Control, organic orders were up 7% and organic sales were up 4%. We anticipate mid-single-digit organic sales growth for the year down slightly from our prior view.

Engineered Components saw organic orders decline 3%, driven by lower automotive and general industrial orders, while organic sales increased 7%. Full year organic sales growth is anticipated to be up mid-single digits, unchanged from our April expectation. At automation, we had a down quarter with organic orders down 10% and organic sales down 5%.

Geographically, Europe, where we generate approximately 80% of our revenues and automotive end markets drove the weakness. As mentioned earlier, our full year expectation has declined and we now foresee flattish organic sales growth for automation. For the Industrial segment, we now forecast flat 2022 organic sales and have lowered our adjusted operating margin expectation to the range of 8% to 9%. As Tom mentioned, the broad-based economic headwinds and our performance continue to weigh on industrial results.

At Aerospace, sales were $109 million, up 26% from a year ago, benefiting from continuing end market recovery. OEM sales increased 14% while aftermarket sales increased 55% compared to the prior year period, both very strong results. Operating profit was $20.6 million, up 82% as compared to the prior year period. Excluding a small amount of restructuring charges in the current and prior years, adjusted operating profit of $20.6 million was up 76% from a year ago. The adjusted operating profit increase benefited from higher sales volumes, in particular, robust aftermarket sales, offset in part by labor availability challenges, which led to unfavorable productivities. Adjusted operating margin was 18.9%, up 540 basis points.

In our OEM business, orders were solid, and our book-to-bill was greater than 1.5 times for the second consecutive quarter. For the first time since Q1 2020, sales crossed the $70 million quarterly threshold. OEM backlog grew to [Technical Issues] million, up 5% from the first quarter. We expect to convert approximately 45% of this backlog to revenue over the next 12 months. Our OEM outlook has increased as we now expect low double-digit growth for 2022, with narrow-body platforms as the primary driver.

Our aftermarket business remains very strong as we generated MRO and RSP sales growth of 38% and 88%, respectively. Recent data from IATA on international traffic was encouraging and growth in international demand is expected to continue, incrementally positive news on what has otherwise been a narrow-body led recovery.

For the year, we now anticipate sales growth for MRO to be up in the low 30s percent and spare parts to be up in the mid-30s percent, both representing an increase from our prior outlook. Aerospace adjusted operating margin is now forecast to be between 17.5% and 18.5%, an uptick reflecting the higher aftermarket contribution.

With respect to cash, year-to-date cash provided by operating activities was $9 million versus $86 million in the prior year period. The primary drivers of the lower cash generation are an increase in working capital and paid incentive compensation related to 2021. For working capital, inventories increased during the first half as we built buffer stocks to combat supply chain constraints and de-risk exposure to titanium availability. Accounts receivable grew with the sales level, which built through the quarter. Free cash flow was a use of $5 million compared to a source of $68 million last year. Capital expenditure were $14 million, down approximately $4 million from a year ago.

With our balance sheet, the debt-to-EBITDA ratio as defined by our credit agreement was 2.3 times at quarter end, down from the first quarter’s 2.4 times and significantly improved from 2.9 times a year ago. On a net debt-to-EBITDA basis, we’d be at 2 times.

Our first quarter average diluted shares outstanding and period end shares outstanding were both approximately 51 million shares. During the quarter, we repurchased approximately 200,000 shares at an average price of $33.60 and approximately 3.4 million shares remain available under the Board’s 2019 stock repurchase authorization.

Moving to our updated 2022 outlook on Slide 6 of our supplement. We now expect organic sales to be up 5% to 6% for the year, with FX having a 3% negative impact. Adjusted operating margin is forecast to be between 11% and 12% down from our previous expectations due to the continuing pressures in our Industrial segment. Adjusted EPS is now anticipated to be in the range of $1.90 to $2.05, down 2% to up 6% from 2021 adjusted $1.94 per share. We expect a $0.20 impact on EPS for industrial restructuring charges in the third quarter and another $0.06 in the fourth quarter. In addition, included in our 2022 outlook is a $0.04 impact for CEO transition costs. We do expect adjusted EPS in the third quarter to be lower than that of the fourth quarter by a few cents.

A few other outlook items. Interest expense of approximately $13.5 million and other expense of approximately $4 million are consistent with our prior view. An effective tax rate of 24% to 25%, excluding Reg G items, capex of approximately $40 million to $45 million, which is lower than our prior view, average diluted shares of approximately $51 million, and cash conversion of approximately 100%.

To close my prepared remarks, while we exceeded our internal expectations for adjusted operating income for the quarter, our overall outlook for the second half deteriorated based upon deepening industrial pressures and productivity challenges. We are actively addressing our cost structure and go-to-market strategy and industrial, positioning the business to improve its performance. As Tom mentioned, our focus is to drive profitability and return, but we will remain active in managing both through the cycle. Operator, we will now [Technical Issues].

Questions and Answers:

Operator

[Operator Instructions]. Our first question is from Christopher Glynn with Oppenheimer. Your line is open.

Christopher Glynn — Oppenheimer & Co. — Analyst

I had a question on the restructuring, the $24 million, I don’t recall Barnes having a charge that large, but you kind of referred it as the initial restructuring. So, I wanted to kind of explore that word initial and why you use that terminology?

Thomas J. Hook — President and Chief Executive Officer

Hey Chris, this is Tom Hook, and I’ll give Julie a chance to chime in here at the end. Barnes has done significant episodic restructuring in the past as they made individual decisions with — under Patrick and prior CEO’s leadership. I believe, as does Julie, we need to have a systematic ongoing approach for driving our revenue and profitability improvement. And as part of that, a structured ongoing systematic approach to cost rationalization to drive efficiency and effectiveness needs to be implemented. The first initial phase is what we’re talking about today that we’ve outlined here in the investor call in our disclosures that we’ve issued via 8-K. And we will, as we move forward, have additional phases that we will implement as we completed the planning cycle for those and are ready to announce them and implement them. So, that’s a prospective expectation that we were going to do this on an ongoing basis as part of a fundamental strategy codified under the Barnes Enterprise System. Julie, anything else?

Julie K. Streich — Senior Vice President

No. I think you covered it well.

Christopher Glynn — Oppenheimer & Co. — Analyst

How are you thinking about the timing on the payback, that 14 million?

Julie K. Streich — Senior Vice President

So, the payback will be approximately two years on this initial phase. And from a cash perspective, which may be your next question, we expect a net cash impact this year of about 3.6 million negative, and then it will be neutral in 2023, it is the expectation.

Christopher Glynn — Oppenheimer & Co. — Analyst

Okay. And then curious, Tom, it’s pretty early, but curious your view of capital allocation strategy from your approach there as CEO, maybe it makes sense to build cash for a while as you focus on portfolio interventions for now assuming the acquisition strategy might be on hold?

Thomas J. Hook — President and Chief Executive Officer

Yeah. Thanks for the question, Chris. I think, first of all, since I’ve been on the Board since 2016, I want to make it clear that I’m part and parcel of the strategy that Patrick and Julie have been executing for years. So, I changed seats to the CEO seat a little bit different approach. But fundamentally, the strategies and approach, think of my CEO tenures, accelerating and refocusing it and prioritizing core business execution, you’ll probably recall my 13 years of Integer, we branded the company in order [Phonetic] specifically to do integration and cost-out rationalization on an ongoing basis. And I believe that strategy is a very important thesis to have at Barnes together, hence, the first of a multi-phase approach in cost rationalization. I think our best investments are to continue in developing innovative products and driving commercialization, hence, why we spoke to those today. From a capital allocation standpoint, I would say that we’re going to continue to look for attractive end markets where we can pick up technologies and grow through the automation portfolio that already commenced its foundation and some operational challenges given what’s happened during COVID and the automotive industry’s upheaval. But we’ll continue to look for those areas where we can invest and be able to target those sweeter end markets, I mentioned specifically the medical technologies markets, also the automation markets, electrification. So, I do believe there’re good deals out there that have the fit to [Phonetic] the Barnes portfolio and we’re going to look to exploit those.

Christopher Glynn — Oppenheimer & Co. — Analyst

Great, thanks for the color.

Thomas J. Hook — President and Chief Executive Officer

You are welcome.

Operator

Our next question is from Pete Osterland with Truist Securities. Your line is open.

Pete Osterland — Truist Securities — Analyst

Hey, good morning. I am on for Mike Ciarmoli this morning. Thanks for taking our questions. I just wanted to ask on aerospace. Given the strong performance and the strengthening outlook that you got there, what are you seeing on the labor front? Have you been able to meet all your hiring needs in order to support the rents that you’re experiencing? Have there been challenges around finding experienced workers on the productivity, and just kind of wondering if you’re seeing conditions in the labor market improving in the second half or is the environment becoming more challenging?

Thomas J. Hook — President and Chief Executive Officer

Pete, outstanding question. Labor, especially in the Americas, is going to be a challenge for our aerospace. We, Ian Reason and our CHRO, Dawn Edwards, are very focused on making Barnes a very attractive employer of choice and increasing our competitiveness to get at the labor challenge. We have significant labor needs in aerospace to keep up with growth. It is a primary area of investment we’re making to be more systematically competitive and individually. I think as — we did lose a lot of talent when the aerospace disruption occurred through the COVID pandemic, and it is largely a recovery group right now. We do have the advantage with both Singapore and Malaysia operations that have a more fluid ability in those markets to attract talent more efficiently and effectively. But that is, in my mind, probably one of the primary vectors of continued aggressive growth on aerospace is the progress on bringing in skilled labor into our aerospace business. And that is really one of the primary operating focuses that we have. And I look forward to as we get into the second half of the year being able to update on how that’s progressing, but it’s — from an operating and an employee standpoint, there’s a lot of focus on this right now.

Pete Osterland — Truist Securities — Analyst

Yeah. That’s very helpful color, thank you. And then I also just had a follow-up on the capital allocation question. Are there any pieces of the industrial portfolio at this stage that you would view as noncore or might consider for a divestiture?

Thomas J. Hook — President and Chief Executive Officer

So, I think from a macro standpoint, is coming in as a board member and then as a CEO, I am going to take a keen look at our entire overall portfolio as a company and assess how we feel the pieces fit and connect together. So, that assessment I’ll be doing as I’m visiting facilities and operational teams and getting into propositions [Phonetic] within the market, strength of our portfolio and technologies, and we’ll make that assessment and kind of communicate if there’s anything that we feel we need or we don’t need, and then we’ll make decisions from there. So, I’d say everything is under consideration right now because I’m obviously new as the CEO. But we’re going to continue to drive each of the product lines, businesses, and segments we have as constructed because we have good operational skills and we have to show that we can make them work. So, I’m mostly concerned first about just performance. We’ll handle the strategy question next on composition and go forward how we’re going to aggregate and collect things from an acquisition or disposition standpoint.

Pete Osterland — Truist Securities — Analyst

Alright, thanks for taking the question.

Thomas J. Hook — President and Chief Executive Officer

You are welcome.

Operator

Our next question is from Matt Summerville with D.A. Davidson. Your line is open.

Matt Summerville — D. A. Davidson & Co. — Analyst

Thanks. A couple of questions. First on Industrial. I guess I’m sort of struck by, if I heard you right, the full year operating margin guidance, 8% to 9%, that basically implies little, if any, improvement in the second half. And I guess maybe just struggling with that a little bit, really trying to understand operationally what is sort of broken here. Again, you just look across the industrial universe more broadly speaking and there’s a lot of names right now that are delivering record margin performance, and you guys are kind of — debt is low [Phonetic], if you will, in this business. So, maybe just a broader kind of assessment on what’s maybe gone wrong here, Tom?

Thomas J. Hook — President and Chief Executive Officer

Certainly is — so, I think if we step back and we look at our performance, we’re not satisfied with our performance in Industrial and by each of the underlying pieces we need to parse and look for our growth trajectories of where they need to improve. Whether I was a Board Member or now as the CEO and certainly Julie as CFO, we worked with Steve Moule who has been on Board as our Industrial President for the past several years at how we look prospectively to improve that performance. So, you’re correct, Matt, it is that the second half guidance is largely mirrored on our trajectory for the first half, but our actions and plans, which we’ve announced obviously on the engineered component piece with the closure of Bristol is to right size cost structure, to be able to leverage the operational facilities with more volume in that engineered components business to improve profitability. For our operations out of our Automation segment by re-rationalizing some of the cost structures we spoke here today, some of the technical distribution centers we have is to start that trajectory as well. There will be other actions that we’re not prepared to speak to today, then we’ll also get underneath some of the cost structure of the other business segments as well. But most importantly, we need to do a better job of managing the exogenous pressures, inflation and supply chain, industry dynamics, engage customers, and pick up business better. Core business operational performance takes a lot of hard work and I view it as one of my primary responsibilities coming into this company is to get that momentum picked up through disciplined operations, customer engagement, and get our service delivery levels to customers. That’s what will turn our revenues and will turn our profitability. It is a lot of hard work, but it is very effective in terms of the results. And that’s one of my initial primary focus is that beyond the cost rationalization is to just get the businesses running and being more effective and being from a comparative standpoint relative to other industrial companies, a higher level performer.

Matt Summerville — D. A. Davidson & Co. — Analyst

If you look across the four different SBUs within Industrial, what is your market share assessment as to how Barnes has performed in that regard over the last couple of years?

Thomas J. Hook — President and Chief Executive Officer

Yeah, I think challenging, each SBU obviously has a position within the market, but they vary based [Phonetic] because of the different sizes of the business. But I would say that while we’re very significant in the molding market in terms of our size and capabilities and presence, the other areas of the market are positioned differently. So, I don’t really think if your direction of your question, that is more, do we have market limits, I don’t think so. I think we’re very competitive. We have operational execution. We’re internally limiting our performance. We’re not being market limited. So, we — I will not use an excuse market variables or exogenous variables for our lack of performance. We have to perform in a tough market environment and be more competitive because our competitors have shown that we can — they can do that, which means we have to be able to do that.

Matt Summerville — D. A. Davidson & Co. — Analyst

And then — I appreciate that answer, Tom. And then just maybe just my final question. Within Industrial, your sort of initial assessment, what kind of long-term margin entitlement do you envision for this business, both as from the time you’ve kind of had your director hat on to now wearing the CEO hat, what’s your assessment in that regard?

Thomas J. Hook — President and Chief Executive Officer

Yeah. In one word, much better, but I’ll refrain from giving any sort of granular long-term guidance. I believe that the general threshold that I’m looking at first as a benchmark is as we put in our comments because we want to be able to return and exceed pre-pandemic margins, which I view as the correct initial watermark seen through the pandemic and the industry dynamics, degradation of margins. Our struggle with managing inflation and logistics and COVID quarantines. All those challenges, we have to prove that we can manage and go back and deliver the margins we were delivering before. The second half of the question would be is really more that’s prospective that I’m not ready to comment on is what margin should be prospectively when we have better internal operational performance. And I’ll just have to leave you in suspense, Matt, on that one. We will answer that in the future — at a future quarterly conference call for you.

Matt Summerville — D. A. Davidson & Co. — Analyst

Appreciate it, thanks Tom.

Thomas J. Hook — President and Chief Executive Officer

Welcome. Thanks for the questions, guys.

Operator

We have no further questions at this time. I’ll turn it over to Bill Pitts for any closing remarks.

William Pitts — Vice President, Investor Relations

Thanks, Chris. We would like to thank all of you for joining us this morning and look forward to speaking with you next on October 28th with our third quarter 2022 earnings conference call. Operator, we will now conclude today’s call.

Operator

[Operator Closing Remarks].