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Presentation

ESAB Corporation misses on earnings expectations. Reported EPS is $1.31 EPS, expectations were $1.32.

Operator: Thank you for standing by, and welcome to the ESAB Corporation First Quarter 2026 Earnings Release and Conference Call. [Operator Instructions] Thank you. I’d now like to turn the call over to Mark Barbalato, Vice President of Investor Relations. Mark, you may begin.

Mark Barbalato: Thanks, operator. Welcome to ESAB’s first quarter 2026 earnings call. This morning, I’m joined by our President and CEO, Shyam Kambeyanda; and CFO, Brent Jones. Please keep in mind that some of the statements we are making are forward-looking and are subject to risks, including those set forth in our SEC filings and today’s earnings release. Actual results may differ, and we do not assume any obligation or intend to update these forward-looking statements, except as required by law. With respect to any non-GAAP financial measures mentioned during the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release and today’s slide presentation. With that, I’d like to turn the call over to our President and CEO, Shyam Kambeyanda.

Shyam Kambeyanda: Thank you, Mark, and good morning, everyone. Thank you for joining us today. Turning to Slide 3 to discuss our first quarter highlights. We’re pleased to report a strong start to the year headlined by record first quarter sales. Total core sales grew 10% year-over-year, a result that reflects both the effectiveness of our compounder strategy and the resilience of our diversified global footprint. Despite a more challenging environment, which included higher costs as a result of the conflict in Iran, we generated sales of $715 million and adjusted EBITDA of $136 million, an increase of 6% year-over-year. We delivered this performance while continuing to invest in the long-term drivers for the business. I am especially encouraged with the performance of our acquisitions.

EWM and Aktiv both grew double digits year-over-year, and our sales synergy funnel across the portfolio improved meaningfully, reinforcing our confidence in the strategic value these businesses bring to ESAB and their potential to drive organic growth in the years to come. Looking ahead, we are accelerating our compounder journey through the previously announced acquisition of Eddyfi, which we expect to close midyear. This transaction strengthens our portfolio and extends our runway into profitable growth. Given our first quarter performance and our visibility to the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance, we are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate.

Moving to Slide 4. Before we turn to the quarter, I want to put the past 1.5 years into context. Throughout 2025 and into the start of ’26, we have deliberately been reshaping ESAB, sharpening the portfolio and building new capabilities across the company. The ESAB you see today is meaningfully stronger. Our capital allocation strategy is the clearest place to see it. We have continued to build a premier industrial compounder by adding strength across every layer of the value chain. We have strengthened our position in gas control with DeltaP and Aktiv. We’ve created a best-in-class equipment portfolio with EWM and filled out every gap in our equipment product lineup. We added to our leadership position in proprietary filler metal with Bavaria and Eddyfi, which is expected to close midyear, extends our workflow solution into inspection and monitoring.

Complementing these acquisitions, we now have more than 40 AI projects actively underway contributing both to near-term productivity and long-term growth. The new acquisitions coupled with AI initiatives will drive growth, reduce cyclicality, expand our gross margin profile making ESAB more durable through the cycle than it has ever been. Turning to Slide 5. This slide brings the story to life. Over the past decade, we have reshaped ESAB into a faster-growing, higher-margin enterprise and the shift is now plainly evident in both our mix and our margins. Three levers have driven the work. First, sustained R&D investment to refresh our product portfolio and fuel growth; second, EBXai, our operating system for productivity and operational excellence, third, a disciplined M&A program that has added growth and margin.

Let’s start with our mix. In 2016, equipment represented roughly 38% of our sales, a fully refreshed product portfolio and an optimized manufacturing footprint and 18 successful acquisitions have changed that picture. With the recent additions of EWM and Bavaria in Fabrication Technology and DeltaP and Aktiv in gas control equipment now accounts for roughly 44% of revenue. Upon closing Eddyfi midyear, that mix will rise to approximately 52%. The margin trajectory tells the same story. Our gross margin has moved from approximately 35% in 2016 to nearly 38% today. Eddyfi accelerates the next step. As I’ve shared with you before, our equipment product carries gross margins closer to 45%. And Eddyfi, as we shared before, is close to 65%. Together, these dynamics will push our consolidated gross margins to greater than 40% for 2027 and beyond.

Moving to Slide 6. Momentum is building globally across our welding equipment portfolio, and 2 launches are leading the way, the Ruffian 270 engine-powered welder and the Aristo Edge. The Ruffian fills a critical gap in our offering and stands out as the most productive operator-friendly unit in its class. It is the only welder in its category to deliver full power simultaneously. 270 amps of welding output and 11,000 watts of generator power at the same time at a 100% duty cycle, an independent generator arc ensures that running power tools never causes a spike or drop in the welding arc. The Aristo Edge sets a new performance benchmark on both the advanced manual and robotic sides. Its ultrafast arc control manages the arc 10 to 20x faster than traditional equipment, clearing short circuits instantly and preventing defects and the advanced waveforms reduce spatter by up to 85%, producing a stable puddle that virtually eliminates post-weld cleanup.

With 500 amps at a 60% duty cycle, the plug-and-play compatibility with all major robot and cobot brands, it is built for continuous industrial scale production. Customer response has been strong. We have secured preferred status with the yellow goods OEM on the Aristo Edge, and we’re gaining channel share with the Ruffian. Together, these 2 product families add roughly $250 million to our servable market. Turning to Slide 7. When we acquired EWM, additive manufacturing was one of the capabilities we were most excited about. It is an advanced 3D metal printing process that uses electric arc as the heat source and metal wire as the feedstock to build large high-strength components layer by layer. And EWM is a clear leader in this space. EWM’s React technology is now opening doors for the broader ESAB portfolio.

We are gaining real traction with a major U.S. distributor and with defense OEMs. We have secured orders with integrators, engineering and construction firms and 2 German OEMs manufacturing in the U.S. today. In parallel, our teams are building a healthy cross-sell funnel, bringing ESAB filler metal to EWM customers and EWM equipment to ESAB customers. There is still work ahead, but Q1 was an encouraging start. The next product, Tetrix 350, adds a second growth lane, it is the best-in-class power source for TIG applications, including precision welding requirements needed for semiconductor wafer manufacturing and it pairs naturally with our AMI product where order activity continues to rise. Together, these 2 products give ESAB access to an additional $900 million of servable market across additive manufacturing and TIG and orbital TIG welding.

They have our sales teams energized by the new workflow solutions we can now deliver to our most discerning customers. Moving to Slide 8. Let me reiterate what I shared when we announced the Eddyfi acquisition. This transaction extends ESAB workflow solutions into faster-growing, higher-margin inspection and monitoring space, a bit more detail on the asset itself, Eddyfi is a clear market leader in electromagnetic testing, ultrasonic testing and automated inspection. It serves mission-critical end markets with attractive secular tailwinds across aerospace, defense, nuclear and energy infrastructure. The business also brings meaningful North American exposure that pairs naturally with ESAB’s global footprint, opening immediate geographic expansion opportunities for both companies.

Financially, Eddyfi is a premier asset, high single-digit growth, gross margin is about 65%, and EBITDA margins around 30%. Strategically, the deal accelerates our shift towards equipment, strengthens our ability to deliver differentiated workflow solutions, expand margins, reduce cyclicality and ultimately improves the predictability and resilience of our earnings profile. Although the transaction is expected to close midyear, we’re already in motion. Our integration team is in place sharpening the combined workflow solutions value proposition and beginning to share Eddyfi’s capability with ESAB customers. Turning to Slide 9. What I love about this industry is that we enable extraordinary engineering every day. A few moments capture that better than what is happening right now with NASA’s Artemis program.

For the first time in more than 50 years, humanity returned to the moon and ESAB technology helped make that possible. A decade ago, we would not have been at the table. Today, we are a key contributor and that is a source of enormous pride across our company. You can see one example on this slide. Our friction-stir welding technology delivers the exact combination of strength, precision, reliability and weight optimization that the most demanding aerospace environments require. ESAB’s technology enables aluminum alloy structures to be extraordinarily strong and remarkably light. Boeing’s selection of our technology for the Space Launch System, fuel tank reinforces the thesis behind our portfolio, differentiated innovation applied to mission-critical manufacturing in the world’s most demanding end markets.

This is what we mean when we talk about being the fabrication technology provider of choice, and it is what gets our teams out of bed every morning. Before I go into more detail about the quarter, I’d like to take this opportunity to thank Kevin Johnson for his contributions to ESAB and wish him well in his new role. At the same time, I’m very excited to welcome Brent Jones to the ESAB family. Brent brings diverse and highly valuable expertise as we move into the next phase of our compounder journey. With that, let me hand it over to Brent to say a few words.

Brent Jones: Thank you, Shyam, and good morning, everyone. I want to start by thanking Shyam and the entire ESAB team for the warm welcome. I’m thrilled to be joining ESAB and look forward to working closely with the team as we continue to advance ESAB’s compounder journey. ESAB has a strong foundation a compelling strategy and a tremendous opportunity ahead, and I’m excited to be part of it. Let me hand it back to Shyam to go through the financials.

Shyam Kambeyanda: Thanks, Brent. Moving to Slide 10. Turning to the quarter. We’re pleased with how the business has performed overall. Strong execution by our global teams drove record first quarter total sales growth of 10% year-over-year, a clear demonstration of the power of our compounder strategy. Adjusted EBITDA was $136 million, up 6% year-over-year with an adjusted EBITDA margin of 19%. Margins in the quarter reflected an expected 40 basis points impact from EWM and an additional 30 basis points of headwind from the conflict in Iran. Important to note, EWM is already contributing strong growth this quarter. As I’ve shared before, EWM is accretive to gross margins but dilutive to EBITDA margins for the first 3 quarters in 2026.

Our cost out and sales synergy efforts are running ahead of schedule, and we expect EWM to be EBITDA accretive as we exit the year. Turning to Slide 11 and talking about the Americas. The Americas delivered a steady first quarter. Total sales were $288 million, up 3% year-over-year and adjusted EBITDA was $56 million, also up 3% year-over-year, with margins flat at 19.4%. Within the segment, North America, excluding Mexico, grew mid-single digits and Mexico held stable. We’re also seeing meaningful interest in EWM across the U.S., which is encouraging as we broaden the commercial reach of that business. At the same time, we’re reshaping our manufacturing footprint and accelerating our EBXai initiatives, which are designed to strengthen competitiveness and expand margins.

Moving to Slide 12 to talk about EMEA and APAC. We continue to gain share from competition across EMEA and APAC, a clear demonstration of our global footprint. Sales increased 16% to $426 million and adjusted EBITDA rose 9% to $80 million. Margins declined 130 basis points with 50 basis points of that reflecting the conflict in Iran and the additional 70 basis points coming from EWM. Europe and India performed in line with expectations, and the Middle East saw limited disruption. EWM and Aktiv both grew double digits with strong sales funnel momentum building across all 4 acquisitions. EWM integration is progressing ahead of schedule, and we’re already seeing early benefits from the combination with ESAB. Moving to Slide 13. We continue to gain share in the Middle East, and that success starts with our local presence in the region.

The resilience we have shown this quarter reflects both the local footprint and the way our teams have responded to changing conditions. The Middle East represents roughly 7% of our sales. And despite the conflict, the region saw limited disruption. Our teams reacted quickly to the disruption by rerouting inventory through ports of Jeddah and Salalah in Oman and implementing surcharges to offset higher costs. It is a clear example of the agility and discipline that define our operating model. Long-term fundamentals remain attractive. We’ve made investments on the ground, most notably in Saudi Arabia and that footprint positions us better than any of our peers to win with customers and support the rebuild once conditions stabilize. Turning to Slide 14.

Our balance sheet and cash flow remain important enablers of our compounder journey, and we’ve made meaningful progress on both fronts. Adjusted free cash flow was $40 million and cash conversion improved to 49% up from 40% in the prior year quarter. The improvements reflect strong working capital management and continued EBXai-driven process gains in order-to-cash. We expect strong full year cash generation. We’re also focused on deleveraging. We ended the first quarter at net leverage of 1.9. That figure will step up temporarily once the Eddyfi acquisition closes where we expect to be back below 3 by year-end. Moving to Slide 15. Given our first quarter performance and our visibility to the remainder of the year in booked orders and additional price, we are reiterating our previously announced guidance.

We are confident in the trajectory of the business while remaining mindful of the dynamic environment in which we operate. On a core basis, our outlook assumes total sales growth of 6% to 9%, which consists of organic growth of 2% to 4%, 400 basis points from M&A and FX contributing approximately 1%. Our adjusted EBITDA range remains $575 million to $595 million, and our adjusted EPS range remains $5.70 to $5.90. Turning to Slide 16. In summary, our recent initiatives have fundamentally reshaped ESAB, accelerating our transformation into a premier industrial compounder. The 4 acquisitions we made last year, EWM, Bavaria, DeltaP and Aktiv and Eddyfi now to start 2026, have moved the company decisively towards higher growth, higher-margin, lower-cyclicality and a more predictable earnings profile.

We have meaningfully increased our exposure to defense, nuclear and the fast-growing additive manufacturing space while positioning ourselves opportunistically to benefit from rising semiconductor capital spending. We are thrilled with these acquisitions and the way they have shaped our portfolio, strengthening our ability to compound value and generate stronger cash flow over the long term. Operationally, we’re winning in the market, our acquisitions are performing. EBXai continues to power productivity across the company. The second quarter is tracking to plan with stable sales and orders, supporting our decision to reiterate full year guidance. Taken together, these actions position ESAB to compound long-term shareholder value at an accelerating pace.

Our teams are energized, our strategy is working. The path ahead for ESAB is full of opportunity and our finest moments are still in front of us. With that, operator, let’s open the line for questions.

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Operator: [Operator Instructions] Your first question comes from the line of Nathan Jones with Stifel.

Nathan Jones: Again, at a fairly high level, volume in the first quarter was minus 3 and I would have thought that price should be fading from the plus 2 that we had in the first quarter, maybe not with all the renewed inflation. It does imply an inflection on volume to get to the 2% to 4% organic growth for the full year. So can you maybe talk about where you see the inflection in volumes as we go through the year from that negative 3 to something that’s positive.

Shyam Kambeyanda: Yes. I think, Nathan, we obviously were going against the comparable last year, if you remember, with the pull ahead with tariffs. So comparably, we knew Q1 would be just a bit softer as a result of the pull ahead that happened last year when the tariffs went into play. So we sort of landed in Q1 even a little stronger than what we thought based on when the conflict started. So very pleased with the top line number and how the teams performed. And as you go through the year, a couple of things happen. One, obviously, we go in with some additional price into Q2. Second, in the back half of the year, as you know, some of the acquisitions that today show up, the acquisitions that show up today on a different line become organic as we go into the third and the fourth quarter driving up organic sales as we finish out the year.

So the thoughtful way to look at it is down slightly neutral, a little bit more positive in Q3. And then when the acquisitions become part of the base, you really see that organic driver kick in. Clearly, for us, the teams have done, in my view, a phenomenal job navigating through the first quarter even though the war came upon us as we finished out February, the team sort of really rallied, figured things out quickly in terms of supply chain, handled the quarter strong and we finished well, and we set us up nicely for Q2 and beyond.

Nathan Jones: I guess I’ll ask my follow-up about the Middle East. We have heard from companies about lack of side access and things like that, that are impeding, I guess, work being done in the Middle East, can you talk about the impact that’s having on your business? We were only at it for 1 month out of the quarter in the first quarter. Should we expect a little bit more impact than I think you called out 50 basis points of margin in EMEA and APAC. Does that get a little bit worse in the second quarter? Or maybe talk about the mitigation activities that you’ve deployed to help offset that?

Shyam Kambeyanda: Yes. So the way to think about it, at least in the first quarter was when it came upon us, I think we drove to get supplies into the Middle East so that we had the right inventory in place for the business. And so think of it as some additional costs that came at us in Q1 that we thoughtfully engaged with to make sure that the business was in a good spot. We’ve gone out for price as the month went on. And so think about that margin gap actually reducing. That being said, we are going out for price to match costs so we don’t have any additional price there. So we expect to be price cost neutral. So it’s an improving scenario. And as the year goes along, we’ll continue to work the price piece to continue our journey forward like we’ve done in the past.

So that’s the way to think about it. So a little additional hit in Q1, getting better as we get into Q2 with the additional price that we’ve gone out with and then getting slightly positive as we finish out the year in the third and fourth quarter.

Operator: Your next question comes from the line of Tami Zakaria with JPMorgan.

Tami Zakaria: Good morning. Thank you so much. I heard you talk about acquisitions growing double-digit percent. Did those acquisitions have unusually easy compares? Or that’s a good gauge for the rest of the year. And within that double-digit percent, how much was price versus volume?

Shyam Kambeyanda: All right. So let me start with the first piece. The 2 businesses that I highlighted were EWM and Aktiv. The short answer is, year-over-year, it wasn’t about easy comparables. It was the actions that the team were taking, engaging with new customers, getting new orders especially in Europe, the Middle East and some extent also in North America for the EWM business. And so we feel really good one about the acquisition, two, about the funnel that we’ve created that’s now creating momentum in the equipment business. There was some price in it, but most of it was volume, which is what’s exciting for us as we go through the year. So I hope that sort of answers that question. The other piece that I think I want to reiterate as we look at the second half of the year as well, we have some automation orders that we booked several of them that stack up quite nicely adding to that organic growth number that we expect to see in the second half of the year in Q3 and Q4.

So additional price, additional orders in automation, these businesses that we’ve acquired that are really matching the strategic fit that we saw are today outperforming our plan, creating additional tailwind for volume as we finish out the year.

Tami Zakaria: That is excellent color. And regarding the 30 basis points headwind you saw in the quarter to EBITDA from the Iran conflict. Do you expect a similar 30 bps headwind in 2Q or that steps down?

Shyam Kambeyanda: I think the way to think about it is, we’ll obviously see, but let’s start with the positive. The war could settle in a week and maybe we’re talking about something different. But on the side, if the war were to continue, we would see 2 additional months of volume that would then get offset by some additional price that we’ve gone in. So the way to think about it is that it’s not going to get worse, could get slightly better as the quarter goes on.

Operator: Your next question comes from the line of Mig Dobre with Baird.

Mircea Dobre: Thank you, and good morning, everyone. I want to talk a little bit about the Americas segment. And I guess the moving pieces here, I’m trying to think through them. You had the negative one organic in the quarter, but you kind of call out here that excluding Mexico, North America is up mid-single digits. Mexico, it’s stable. Obviously, something else acted as a drag here. Can you comment at all on that?

Shyam Kambeyanda: Yes. We were actually very pleased with our U.S. and Canadian businesses for the quarter, Mig. We felt that both on price and on what I would call created volume, we were very happy with how the business performed. And I would also say that in April, we did better than how we finished out in Q1. So really happy about how that business is performing. The traction that we’re getting with customers and the channel. I was actually out with some of the distributors. Our team had an EDAC, our distributor meeting out in Albuquerque. That went really well. I’ve done some gemba with the North American team down in Texas and also down in Mexico. And we feel really good about the traction, the funnel, the growth bridges that the teams have that are now driving results in U.S. and Canada.

When it comes to Mexico, as you remember, this was the last quarter in those comparables that we spoke about and so what I meant by stable is that the business continues to be at the levels that it was in Q4. As I visited with the team last week, there are shoots of improvement as we go through the year. So optimistic about how the year sort of shapes up, also with Mexico kind of lapping itself in Q2. To give you some additional color on the volume, obviously, the rest is South America where they also had some tariff-related volume bump last year that sort of goes away and neutralizes now and puts us in a better spot for Q2.

Mircea Dobre: I see. And given the way the comparisons are looking here from a volume standpoint for the rest of the year, I mean, we started with negative 4, but then your comps are getting easier. At what point in time do you — so I guess 2 questions. At what point in time do you see volume inflection here? When can we expect some growth? And how do you think about the full year from a volume perspective? So what’s embedded in the 2026 guide for America’s volume specifically?

Shyam Kambeyanda: Well, America’s volume, we expect to be — so let me just sort of thoughtfully walk you through that. When you look at U.S. and Canada, we feel that we’re going to be volume positive. And when it comes to Mexico as well, we think as the year goes on, we’re going to be volume positive, slightly positive on volume also in Mexico. South America, in my view, will stay slightly volume positive. They were a bit volume negative in the first quarter just on the back of year-over-year comparables with the tariff year. They also go positive. So the way to think about the year as it plays out is you saw Q1 be slightly negative. You’ll see Q2 be neutral, Q3 getting positive. And then Q4, in my view, will be nicely positive because some of the acquisitions that today are not considered part of our base, become part of our base.

In addition to that, obviously, we’re really excited about the Eddyfi acquisition that will close here in midyear. That then allows us additional opportunities for growth for our base business and to be able to pull to Eddyfi with our customers. Yes. And Mig, the other thing I’d say to you is that in the second half of the year, I made the comment earlier, we’ve got additional price going in, in Q2. We’ve also got additional automation orders that we have booked for the third and the fourth quarter. So as you look at it, one, obviously, you’re lapping a tariff quarter in Q1, you’re getting to a spot where Mexico becomes — laps itself in Q2. You’ve got additional price Q3, you’ve got these automation orders plus additional price. In Q4, you’ve got these businesses that today drove double-digit growth in Q1, becoming part of the base in Q4.

And so as you sort of look at it, my thoughts here are very realistic and maybe slightly conservative is how you think about the volume numbers as you finish out the year.

Operator: Your next question comes from the line of Neal Burk with UBS.

Neal Burk: I just wanted to go back to the Middle East question. Just to clarify, this 50 basis point drag that was on segment EBITDA margin. Was there any impact on volumes and is there any sense that more broadly, higher commodity prices are in any sense, weighing on overall demand?

Shyam Kambeyanda: Yes. The short answer is we did not see it, and we have not seen it yet. But we have seen cost impact, specifically some like tungsten, we’ve seen nickel move a little bit. We’ve seen steel move a little bit. So yes, the war has created a little bit more cost in some of the steel and components that we buy. The other piece that we’ve really seen is around freight. Freight costs have gone up and partially, that’s likely because of fuel costs. And so those are the 2 aspects. We’re moving price to the market to sort of overcome and offset all of it. We expect price/cost to be neutral for at least the second quarter, and then we’ll continue to sort of work to be price/cost positive as the year plays on.

Neal Burk: Okay. And then just another question on margins. I think incremental margin in the quarter was about 12% for the total company and the guide seems to embed something around 20%. So can you just kind of walk through the progression through the rest of the year of how incremental margins should improve?

Shyam Kambeyanda: Yes. I think the first one, obviously, is we expect better price from Q1 to Q2. So that’s assumption number one. Things came at us a bit fast in March. We went out with some price. We didn’t get all of it in Q1. We get price in Q2. The second piece is that we are seeing good momentum in the North American market. And those margins for us are also accretive. We see really nice activity in Europe. One of the things that we have not talked about is how well Europe performed for us to offset some of the issues that we had in the Middle East. So those are basically the 2 aspects of it. And then we continue to make improvements in the acquisitions. We talked about EWM being ahead of schedule. In terms of its integration plan and the plans that we had to continue to improve EBITDA percentage in that business.

So Q1 will be sort of the — in terms of EBITDA, the lowest quarter for EWM. And every quarter, sequentially, the EBITDA percentage for EWM improves becoming accretive in Q4.

Operator: [Operator Instructions] Your next question comes from Steve Volkmann with Jefferies.

Stephen Volkmann: Shyam, you mentioned Europe’s strength a couple of times. Can you just delve into that a little bit and sort of share versus kind of what you’re seeing from an end market perspective? I think you might have mentioned some stimulus benefits over there in past calls or something? Just an update on what’s happening there?

Shyam Kambeyanda: Yes. There’s a couple of pieces playing in our favor. One, obviously, we have a phenomenal footprint and now with the 2 acquisitions that we’ve made in the Germanic region, we really have a position of strength in Europe. We are local. We are able to supply and serve our customers locally, giving us a significant advantage in the region. In the moments of conflict and the moments of uncertainty, what we find is customers begin to realize that they can rely on ESAB. The second thing that’s driving it to some extent is the defense spending that’s happening in Europe, we’re seeing quite a bit of orders associated with that come to us. We’re also seeing a lot of momentum on the equipment side, especially with EWM that’s benefiting our business.

And there’s a couple of actions underway in Europe that could also benefit us. One is this carbon tax piece that is expected to land in 2027. That’s giving us a little bit of an advantage and then there are some additional tariffs and quotas that the European Union is expected to put in midyear that would advantage local companies in Europe. So those are the aspects that are giving us a benefit, really pleased with how our European business did. Obviously, if the Middle East conflict resolves, there’s some additional significant tailwind for us in Europe and Asia Pac.

Stephen Volkmann: Okay. Great. And I think you may have almost segued to my follow-up, which is I know it’s early days, but has your team been able to think about what type of sort of rebuilding and upgrades might be required in the Middle East and how that — you might participate in that?

Shyam Kambeyanda: Yes. We actually have — we met with our leader in the Middle East this week to look through what the opportunities will be once peace finds its way into that conflict. We feel that with the damage that has occurred in the conflict and the repair that would be needed, ESAB could have a position to take advantage of that rebuild because most of our filler metal is specced into most of the damaged sites. As a result, we find ourselves in a position of advantage.

Operator: And that concludes our question-and-answer session. I would now like to turn the conference back over to Mark Barbalato for closing comments.

Mark Barbalato: Thank you for joining us today, and we look forward to speaking to you next quarter.

Operator: Ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation, and you may now disconnect.

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