Element Solutions Inc

Operator: Good morning, ladies and gentlemen, and welcome to the Element Solutions Q1 2026 Financial Results Conference Call. [Operator Instructions] I will now turn the call over to Varun Gokarn, Vice President of Strategy and Integration. Please go ahead. Varun Gokarn: Good morning, and thank you for participating in our first quarter 2026 earnings conference call. Joining me today are our CEO, Ben Gliklich; and CFO, Carey. In accordance with Regulation FD, we are webcasting this conference call. A replay will be made available in the Investors section of the company's website. During today's call, we will make certain forward-looking statements that reflect our current views about the company's future performance and financial results. These statements are based on assumptions and expectations of future events, which are subject to risks and uncertainties. Please refer to the earnings release, supplemental slides and most recent SEC filings on our website for a discussion of material risk factors that could cause actual results to differ from our expectations and predictions. Today's materials also include financial information that has not been prepared in accordance with U.S. GAAP. Please refer to the earnings release and supplemental slides for definitions and reconciliations of these non-GAAP measures to comparable GAAP financial measures. It is now my pleasure to introduce our CEO, Ben Gliklich. Benjamin Gliklich: Thank you, Varun, and good morning, everybody. Thank you for joining. Element Solutions started 2026 strong. We reported a record quarter yesterday that demonstrates ongoing success with our strategy of penetrating the highest value, fastest-growing subsegments in our addressable markets. The quarter's results are a product of work we've been doing for years in our labs at our sites and alongside our customers. It was enhanced by our strategic acquisitions of ESC and Micromax, those of which closed in Q1 and are off to a solid start as part of the Element family. The trends that drove accelerating performance at the end of 2025 continue to propel us forward. We delivered double-digit organic sales growth for the second quarter in a row and strong margin expansion, excluding the impact of pass-through metals, all while increasing investment in people, technology and plants to support customer growth. Sales in our Electronics segment grew 15% organically as activity accelerated across our supply chain in support of the ongoing AI infrastructure build-out. Technical requirements in data center, hardware and other high-performance electronics continue to increase, and our businesses provide critical enabling solutions across thermal management, power density and advanced packaging applications, to name a few. We're seeing volume growth in the highest-value categories across our end markets from leading-edge semi and high-end circuit board fabs to device assemblers and a strong pull for innovation to enable greater levels of device performance and manufacturing yield or throughput. This dynamic, combined with resilience in the higher-end mobile market led to double-digit organic net sales growth in all of our electronics verticals. Forecast from customers are increasing and innovation cycles are accelerating. This trend will continue, and we're increasing investments to better serve our customers, whether in inventory to support volume growth, additional manufacturing capacity for certain high-growth product lines or innovation to remain on the leading edge. Our investment in OpEx and CapEx is customer-led and supports durable growth trends. As a predominantly asset-light formulation business with low maintenance capital requirements, we're uniquely positioned to selectively target efficient investment ahead of industry inflection points. Our ongoing activity with Kuprion is an example of such an investment where we are in the midst of commercializing a differentiated new material to solve several emerging customer pain points. The pipeline for this capability continues to grow despite our limiting commercial activities to ensure the supply chain can keep up with demand. We've also expanded the areas of opportunity we serve through the acquisitions of Micromax and EFC. The results in the quarter and forecast for the year are tracking favorably to our expectations with both growing revenue organically this quarter by double digits. More importantly, we welcomed 2 highly capable deeply technical teams with the same customer-centric mentality that is the hallmark of ESI. Integration is on track, and the teams are settling well into our organization and energized by the opportunities that Element Solutions can provide them to better serve customers. Carey will now take you through our first quarter business results in more detail. Carey? Carey Dorman: Thanks, Ben. Good morning, everyone. On Slide 3, you can see a summary of our first quarter financial results. Organic net sales grew 10%, and constant currency adjusted EBITDA increased 21% year-over-year. Last quarter, we noted the timing of metal hedges related to tin and silver in our Assembly Solutions business, which negatively impacted Q4 2025 performance by several million dollars. In Q1 2026, we largely recovered that amount through sales of finished goods and higher metals values. Underlying year-on-year growth in adjusted EBITDA would have been in the mid-teens when excluding this benefit as well as the impact of acquisitions and prior period divestitures. Our results in Q1 include a full quarter of EFC and 2 months of Micromax ownership. Assuming we had owned Micromax for the full quarter, adjusted EBITDA would have been $170 million. Electronics organic net sales growth of 15% was broad based. Each of the segment's verticals grew organically by double digits. Our Specialties business grew 1% organically, driven by strong performance in the offshore energy vertical. Global industrial weakness continued this quarter as our Industrial Solutions business was flat year-over-year on the top line. Beginning this quarter, we are updating our definition of adjusted EBITDA margin to remove the value of pass-through metals sold in the period. We believe this change allows for a better perspective on the underlying value we are providing to customers, eliminates the noise for metal prices, volatility and margins over time and enhances period-to-period margin comparability. Pass-through metals revenue was $256 million in the first quarter of 2026 and $101 million in the fourth quarter of 2025. On this new basis, adjusted EBITDA margin improved 170 bps year-over-year to 27.8% this quarter. This improvement was primarily driven by mix with organic growth in higher-value product lines and partially offset by continued OpEx investment to support growth initiatives. Adjusted EPS grew 21% in the first quarter, largely reflecting the underlying demand improvement in our Electronics business and offset by higher interest costs associated with our recent acquisition activities. On Slide 4, we share additional detail on the drivers of organic net sales growth in our 2 segments. In Electronics, 15% organic growth was the strongest we have seen in this segment since early 2021 during the COVID recovery. We are benefiting from rising demand for products that address new challenges around power delivery, circuit density, thermal management and reliability in high-value applications. As a result, our Assembly Solutions business grew 12% organically with a sustained increase in the sales of high reliability alloys and engineered starter preforms to data center suppliers. At the same time, in the Consumer Electronics market, pace used for higher and smartphones continued to grow in the first quarter. Circuitry Solutions net sales improved 17% organically, with growth continuing to come from the high layer count server board market, where our differentiated solutions have great traction. We generated record quarterly sales in these product categories tied to high-performance computing and AI server builds. Beyond the data center market, sales were further supported by strong demand from suppliers of high-end smartphone components. Finally, our business is also benefiting from continued manufacturing investments in Southeast Asia, where we have a strong and growing presence. Semiconductor Solutions organic net sales grew 18% due in part to improved order patterns for power electronics products at legacy customers and growing momentum in the thermal interface products for high power consumption applications such as AI GPU and CPUs. We also experienced strong and growing demand for advanced packaging solutions. Revenue growth for these products was magnified in the quarter by the large increases in precious metal prices that are input to many of these solutions. Micromax, which we own for 2 months of this quarter is not included in our organic net sales growth calculation, but contributed roughly $65 million to reported sales in the quarter. We expect metal prices fluctuations to create volatility in headline sales for this business as roughly 2/3 of reported revenue is related to metals. Turning to our Specialty segment. Industrial Solutions was essentially flat in the quarter as demand for surface treatment chemistry was impacted by softer Americas automotive production activity, particularly with customers operating in Mexico. European automotive customers saw relatively stronger growth in the period against an easier 2025 comp. We remain cautious about our European industrial demand outlook. Our Offshore Energy Solutions business grew 15% organically as a result of strong volume growth and pricing. This quarter also benefited from favorable comparisons to the prior year period, which was unusually soft due to a few specific customer delays. Finally, EFC gases and Advanced Materials contributed $19 million of revenue in the first quarter. This was a record first quarter for this business, which is typically the slowest of the year for EFC, primarily on the back of strong demand from electrical infrastructure customers. The EFC team is executing at a high level. growing wallet share with existing semiconductor and space customers and winning new qualifications in both. We expect a strong run for EFC this year and into the future. Slide 5 addresses cash flow and the balance sheet. When our business grows, we typically need to invest in working capital. And higher metals prices compounded our working capital investment in the quarter. As a result, free cash flow was negative. The first quarter is always our slowest from a cash flow standpoint and the high level of growth in the quarter magnified this impact. We expect strong cash flow generation in subsequent quarters this year, assuming metals prices stabilize. CapEx in the quarter was $25 million, which is trending above our previously guided annual run rate of $75 million. I do recommend, there are excellent opportunities in front of us to invest in growth CapEx to support large, profitable commercial wins. We are taking the initiative to build incumbency and leadership in these areas. We are also continuing to invest in footprint consolidation and other efficiency projects where we see compelling returns. As a result, we now expect to invest between $75 million and $100 million in CapEx this year, which remains less than 3% of sales. Our expectation for other uses of cash unchanged for interest and modestly lower for taxes. Turning to the balance sheet. Our net leverage ratio at the end of the quarter was 3.4x and it would have been 3.1x assuming we had owned both Micromax and EFC for the full trailing 12-month period. We anticipate reducing leverage by approximately half a turn by the end of the year, assuming no further capital deployment. This strong balance sheet position should once again give us flexibility to act on opportunities if and when they arise. With that, I will turn the call back to Ben. Ben? Benjamin Gliklich: Thank you, Carey. We had a great start to the year. At the same time, geopolitical events have created a more complex macro environment than anticipated. We're seeing signs of inflationary pressure and expect increased variance in quarterly earnings driven by swings in metal prices. Further supply chain disruptions and the impacts to global demand resulting from higher energy prices creates risk for our suppliers, our customers and ultimately for us. That said, our organic acceleration in the first quarter, and in particular, the sources of that growth give us confidence in a strong year. Underlying demand in the high-end electronics market remains strong and the positions we've established in the fastest-growing, highest value niches of these markets should serve us well. As a result, we're raising our adjusted EBITDA guidance to a range of $665 million to $685 million for the full year. This range reflects the growth that we saw in the first quarter, combined with continued strength in Electronics and softer demand in Industrial Solutions. It also contemplates a less favorable FX tailwind than we expected a few months ago. We expect second quarter adjusted EBITDA in the range of $155 million to $170 million, with demand conditions sequentially similar to the first quarter and taking into consideration some risk from raw material and logistics inflation that we may not recapture immediately despite ongoing sourcing and pricing actions. We now expect 2026 adjusted EPS growth in the high teens on a full year basis. As we've demonstrated repeatedly in recent periods of uncertainty, we're prepared to react quickly to shifts in demand and cost. We have a variable cost structure and local teams that can rapidly respond to customer needs, and we're already taking action to preserve our profitability in certain business lines. Our diversified regionalized manufacturing footprint allows us to be nimble to accommodate dynamic trade flows. As was the case with tariffs last year, there may also be opportunities where our competition may not have the same flexibility, geographic breadth and access to capital that we enjoy. We're actively leaning into growth in 2026. The customer signal is clear. They're asking more from us and the potential rewards from the investments we're making are apparent, high-margin sales and long-term incumbency in fast-growing categories. Through our efforts to build research and applications development in high-leverage geographies like Southeast Asia or our expansion of Micromax capacity, we've proven the value of investing ahead of inflections. Our company is executing and our people are eager to capitalize on our attractive long-term growth prospects. Three final topics before questions. First, our portfolio has changed through acquisitions, divestitures, strategy implementation and end market evolution over the past 5 years. So we're holding a virtual Investor Day on May 18 to provide a deeper look into our businesses, introduce business unit leadership and share some of our emerging technologies, and we're looking forward to that day. Second, I'd like to express my deep gratitude to our Chairman, Martin Franklin, who is not standing for reelection to our Board at our upcoming annual meeting. He's been and will remain a great partner and mentor to me and valuable resource for our company going forward. You'll hear from him on May 18 as well. But in short, he remains committed to our company and invested in our success. Our nominated successor, Ian Ashken, has been on our Board for 13 years and knows our company and our people exceptionally well. I'm excited to welcome him to his new role. Finally, on that same note of gratitude, I'd like to thank all of our stakeholders for their continued support of Element Solutions and in particular, our talented, dedicated and growing team around the world working to support our customers and drive long-term value for our shareholders. With that, operator, please open the line for questions. Operator: [Operator Instructions] And your first question comes from the line of Bhavesh Lodaya with BMO Capital Markets. Bhavesh Lodaya: Congrats on the quarter. Can we dig a bit deeper into your 15% organic growth that you saw in electronics? How much of that is volume driven versus pricing or mix? And then it seems like you are seeing an improvement in your order books as well. How should we think about a continuation of this organic growth spending in the second quarter and the full year? Benjamin Gliklich: Yes. Great question, Bhavesh. Historically, the framework for organic growth in our business is volume versus price, meaning that most of the growth comes from volume as opposed to pricing actions. The exception to that is our offshore business. And other than metal price, which we've adjusted out when we look at organic growth, most of our growth in the first quarter has been volume driven. On the margin, there's been a mix benefit in our semi business and to a small extent in our circuitry business. But roughly, I would say this is a volume-driven quarter. As we look forward, what we've projected is for a continuation of these trends. And so our outlook is for a continued robust volume environment. We will have to take some pricing actions in parts of the business to offset some of the inflation that we've seen. But really, it's a volume story when we think about 2026. Bhavesh Lodaya: Got it. And then you're stepping up CapEx a bit to support growth that you're seeing with your customers. Can you talk about which product lines or regions these are in? And then looking at your deck, it also looks like you're looking at certain plant consolidation opportunities. It would be great to hear your thoughts on both of these aspects. Benjamin Gliklich: Yes, absolutely. So capital is going to both of those initiatives. On the electronics side of the portfolio, we're seeing customer forecasts increase rapidly. So especially our B2B customers who have longer-term visibility, they give us a forecast for what they expect to require over a 6- to 12-month period. And those are never particularly accurate. But in the past, it's been inaccurate in both directions. At the moment, they've been inaccurate in one direction. And so we're seeing a rapid increase in certain categories of demand and increase in forecasts that has us reconsidering our capacity equations. So obviously, Kuprion is something that we're investing heavily in, and we're accelerating some of that investment. There are a few other product categories in the semi assembly market, in particular, where we need to add some capacity. This is for global customers but in specific sites where we make those products. And by and large, most of our manufacturing is fungible, and we don't have significant capital requirements to expand capacity for blending. But in some of our engineered products, we do have some bottlenecks and we need to debottleneck and add. With regard to site consolidation, in our industrial business, we've been reducing our footprint over the past several years, and that's really long-term integration-related activity, and that continues at pace. And so we're in the midst of a large site consolidation project in one site in Europe that is requiring significant investment but driving productivity across the business. Operator: Your next question comes from Josh Spector from UBS. Joshua Spector: Congrats on a strong Q1. I just wanted to ask with the guidance here. I mean, obviously, you're flowing through the raise from Q1, but you're flowing through almost an additional $10 million that appears more back half weighted. So I mean, clearly, you have higher confidence. I was wondering if you can comment on where you're seeing that? And if you feel like you're getting a little bit of a longer lead time view around customer demand, which maybe helps you forecast a bit more or not. Benjamin Gliklich: Yes. Thanks for the question, Josh. As we said in our prepared remarks, we're seeing an acceleration. We saw an acceleration in the first quarter in the Electronics segment. Over the past 2 years, we've talked about how our business has migrated from consumer, which is more short cycle towards enterprise applications, which is longer cycle. And so we've got confidence in the durability of this acceleration in demand through 2026 from data center and associated investment. And so that's where that comes from. With regard to phasing, the back half is typically stronger than the first half, and we expect that seasonality to continue. We benefited in the first quarter from a metal price recapture from a stronger-than-expected MicroMax result, and we're still getting comfortable with the seasonality and lumpiness of that business, which speaks to why you've got this dynamic sequentially from the first quarter to the second quarter. But for the full year, our outlook is stronger from the electronics side of the business than it was when we gave our original guide. Joshua Spector: That's really helpful. And maybe just to follow up there on the points around some of the lumpiness and specifically MicromMax. I mean I think when you call out the impact in January, you extrapolate that, you're north of $80 million in that business. Obviously, that's much higher than what you indicated when you acquired it. Is that primarily the lumpiness in first quarter? Or maybe another way, if you could characterize kind of what you think the earnings contribution is at Micromax now versus what you thought a few months ago for the full year? Benjamin Gliklich: Yes. Good question, Josh. So it's dangerous to do that extrapolation math. The same thing that happened in our assembly business with metal prices where we got -- there was a lagging impact in Q1 from metal price fluctuation is the way to think about that January number. So that was a recapture of value from 2025. That said, it's a stronger result from an organic perspective, right? The MicroMax business grew in the double digits in Q1, which is higher than the long-term growth algorithm we would have expected from that business. And it speaks to this point that the entire electronics ecosystem is benefiting from the AI and data center build-out. It's not simply the semiconductor market or the circuitry market. And so we are expecting better contribution from MicroMax on a full year basis. And -- but we are still working our -- wrapping our arms around the seasonality to -- associated with it. Operator: Your next question comes from the line of Chris Parkinson with Wolfe Research. Christopher Parkinson: Ben, obviously, there have been a few changes in terms of the '26 outlook and the nice 1Q beat even without January MicroMax, the FX adjustments and so on and so forth. And obviously, it seems like you're integrating some of the global uncertainty for the remainder of the year. But given the -- what appears to be by all intents and purposes, the building momentum in several of your businesses that are benefiting kind of all the substrates of electronics, have you kind of increased your expectations for anything on whether it's MSI, PCB, any other kind of like fastest the electronics market as we progress the second half of the year? Are those metrics or kind of market dynamics similar to how you're thinking about this market just a few months ago? I'd love to hear your updated thoughts there. Benjamin Gliklich: So at this point, we're looking more at the subsegments of the market. We do believe that PCB growth will outstrip what was originally forecast entering the year, and you just see it in the results, right? Our circuitry business growing in the mid-teens this quarter is an indication of the continued robustness of that market. On balance, if there's one indicator that's better for us than forecast, it's the smartphone market, which we were assuming would be flattish this year. And our smartphone-oriented business grew in the mid-single digits this quarter. We did see weakness at the low end, but the high end was quite strong. And so the risk associated with memory dynamics and pricing, it is flowing through the smartphone market, but it hasn't been impacting us to a proportionate extent. And so that's a tailwind. PCB overall is a tailwind. And then there are the unknown unknowns associated with inflation and geopolitics, and we try to factor that into our guide as well. Christopher Parkinson: Got it. And just as a quick follow-up, I feel like it's a mandatory Kuprion and thermal interface update. I think everybody is aware that it's not a material contributor at all in 2026. But in terms of the customer receptiveness, how your conversations are going in terms of the commercialization process and trajectory for '27, '28. Perhaps you can just give us an update on how you're thinking about that and where you've been pleasantly surprised on what you still perhaps need to work on. Benjamin Gliklich: Yes. So Kuprion is different than the thermal interface materials that we call out in the CapEx slide, that's -- the thermal interface materials are another product that we offer. We're seeing huge demand from hyperscalers. But Kuprion is a very good story from a commercialization perspective. We have a small handful of customers who are working with the material and they're developing new applications and use cases regularly, so that's the good side. The note of caution I'd strike is just supply chain and our ability to meet demand. And so we are ramping up our investment to add capacity in order to satisfy the few customers who we are engaging with at this point in 2027 and into 2028. Commercialization is good. Supply chain is coming along, but we have work to do there. Operator: Your next question comes from the line of Mike Harrison with Seaport Research Partners. Michael Harrison: You talked a little bit about the impact that you're seeing from metal price volatility. I'm just curious if higher metal costs have led to any demand disruption? Is it leading customers to look for substitutes for more expensive metals? How are customers responding to this unusual volatility? And what could it mean? Do you view it as a threat or an opportunity? Benjamin Gliklich: Yes. So higher metal prices have not had an impact on demand as yet. Customers don't like that their bill of materials have gone up. The volumes that we're selling relative to the overall bill of materials for these high-end electronics are still small from a value perspective. And at the moment, they're operating with such a high level of activity and capacity that they're not really looking for substitution. Kuprion, to some extent, is a substitution by the way, copper instead of silver. And so we are working in a few areas, not just with Kuprion but with other thermal materials and attached materials to reduce the amount of silver to solve that customer pain point. But we have not seen that. On the other hand, we have smaller competitors who are running into cash flow issues because the value of their inventories with long payment terms are making it such that they're running out of capital and they're withdrawing from certain markets. And so that's a competitive benefit that we've seen from higher metal prices. Michael Harrison: Right. And then just to follow up. Obviously, we've seen this metal price hedging impact that hurt you in Q4. It helped you this quarter. Are you considering any changes just from an accounting standpoint to how you approach the metal pass-through, either internally or with your customers so that maybe you don't have to bear the hedging costs or maybe we can dampen further these earnings swings related to metal prices? Benjamin Gliklich: So in the fullness of time, we recapture the value, and it's it's the right commercial practice to allow for our customers to lock in metal prices in some cases. And for us not to wear the risk associated with those metal prices. So it's the right commercial decision. And periods of volatility like this are pretty infrequent. And so we're comfortable with the practice and don't expect anything to change. That said, we have changed our EBITDA margin definition this quarter to reduce the noise in our reported financials associated with metal prices. Operator: Your next question comes from the line of John Roberts with Mizuho. John Ezekiel Roberts: What would you estimate organic industry growth was this past quarter in Electronics? Benjamin Gliklich: That's a really challenging question to answer at this point, John. The data isn't out yet. I'm confident that our organic results are outstripping the overall industry because we are participating disproportionately in the fastest-growing vectors of the market. John Ezekiel Roberts: Okay. And do you have any updated thoughts on how the shortage of memory is going to impact your mix? As things progress here, you talked about a little weakness in low-end mobile devices, more strength in high end. Where else might you see the impacts across your portfolio? Benjamin Gliklich: I think, if anything, it accelerates the transition of our business away from Consumer Electronics and towards enterprise applications. That's where the highest value Electronics are going with the highest ability to pay. And that's a transition we were already on before this dynamic. John Ezekiel Roberts: Do you have a rough split, consumer versus enterprise, if that's the way you think of it? Benjamin Gliklich: We'll talk about that at our Investor Day in mid-May. Operator: Your next question comes from the line of Rock Hoffman with Bank of America. Rock Hoffman Blasko: I've seen some data points which seem to imply that smartphone shipments year-over-year growth make it a bit more challenged as we get through the rest of the year. Just curious if this drop is kind of baked into your guidance? Or do you expect to continue to skew more positive given your alignment to more premium smartphones? Benjamin Gliklich: Yes. Over the course of the quarter, the forecast did get worse from third parties around the smartphone market. What we saw in the quarter was that there's a real bifurcation between low-end and high-end device manufacturers and our business skews towards the high end. And so our business grew in the quarter despite the low end actually seeing a decline. So our going-in assumption for the year was smartphone units would be flattish. At the moment, the AI and data center dynamics are stronger than we expected, and that gives us room for the smartphone market to be a little bit weaker. But we believe we're insulated from that, given where we play. Rock Hoffman Blasko: Understood. And just as a follow-up, can you speak to the potential scale and timing of some of the ongoing pricing actions that you're implementing to offset some of these nonmetal raws? Benjamin Gliklich: Yes. So it's actually less nonmetal raws and more logistics and packaging. Those are our primary petrochemically linked inputs, if you will. And it looks different in different businesses and in different regions. Historically, when we've had these spikes, we've put in place surcharges. They aren't always immediate, so there's a bit of a lag, but we're able to recapture the value -- the potential value leakage. It's a dynamic environment and unmitigated. It's tens of millions of dollars of risk, but we expect to be able to mitigate most of it over the course of the year. Operator: Your next question comes from the line of Pete Osterland with Truist Securities. Peter Osterland: I just wanted to start by following up on the topic of inflationary pressures and supply chain disruptions. Are you seeing any signs of potential demand destruction in the industrials business? How, if at all, has your growth outlook for '26 in that business changed versus what it was 3 months ago? Benjamin Gliklich: So entering the year, we didn't have particularly high hopes from a market perspective in the Industrial surface treatment business. We were off to a better start than we expected across most of that business. But obviously, geopolitics has put a dampen on some of that -- on some of those green shoots. So on balance, our expectation is for weaker demand growth in the Industrial Solutions business. We're in an advantaged position given our scale and ability to continue to support customers and remain on the offensive from a market share perspective. But overall, that business' growth outlook is worse today than it was entering the year. Peter Osterland: Got it. And then just sticking with that segment, the offshore energy business. I understand it's a small piece, but high margin, just given some of the dynamics impacting the global oil market right now, are you seeing any increased interest or demand for this business at this stage? And following that 15% organic growth, what is sustainable going forward? And then what are you currently assuming for the year? Benjamin Gliklich: Yes. So in fairness, Q1 of 2025 was quite weak for the offshore business, and that 15% is benefiting from an easier comp. But this business is in really good shape at the moment. There's a bit of disruption from a demand perspective, given what's happening in the strait. But drilling activity is increasing. Drilling rates for vessels are going up, and the contracts are getting longer. Those are leading indicators for the business. So we see acceleration from a volume perspective. And this is a business where we have a pricing lever. And so we will get a price benefit as well. So it should be a good year for our offshore business, another year of high single-digit organic top line. Operator: Your next question comes from the line of Jon Tanwanteng with CJS Securities. Jonathan Tanwanteng: Really nice Q1. I was wondering if you were seeing any current constraints in the upstream or downstream electronic supply chain. And are you including any potential headwinds in your outlook, whether they're related to helium for the foundries or PCB availability or any other derivative impacts that may pop up? Any color on that would be helpful. Benjamin Gliklich: Yes. Thanks for the question, Jon. It is something that we're keeping an eye on for sure. There is risk there. Unknown bottlenecks that can emerge driven by disruption in the supply chain and raw material availability. By and large, similar to what we're seeing in the memory market, it's the low-end PCBs that would be first impacted because the marginal supplier there is going to be more impacted than the high-end suppliers. And so we skew disproportionately towards the higher end. So while I'm not dismissive of that risk, I think that our customer mix will be insulated from that exposure. Jonathan Tanwanteng: Got it. That's helpful. And then what are your EV versus total auto expectations for this year? It looks like EVs are picking up in several markets just related to the high gas prices. But maybe just help us understand your views between the subset and the total and how that's included in your guidance as well? Benjamin Gliklich: Yes. I don't know that we have a fine point on EV units versus auto units. Our EV exposed business has been outgrowing even EV units because we're taking share with power electronics. Interestingly, in the first quarter, the source of growth last year, which was Asian EV manufacturers were a bit weaker as some subsidies rolled off, and there was a bit of an easy glut over there. But our domestic customers saw really strong performance in the first quarter. And so overall, our EV business grew nicely in Q1, and we expect it to continue to grow healthily even if the mix there is a bit different than we expected entering the year. Operator: That concludes our question-and-answer session. I will now turn the conference back over to Mr. Ben Gliklich for closing remarks. Benjamin Gliklich: Great. Thank you, Angela, and thanks, everybody, for joining this morning. We're looking forward to speaking with many of you on May 18 at our Investor Day. Have a good day. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.