DARLING INGREDIENTS INC. (DAR) Q2 2026 Earnings Call Transcript

Hello, everyone. Thank you for joining us, and welcome to the Darling Ingredients Inc. conference call to discuss the second quarter 2026 financial results. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Ms. Suann Guthrie, Senior Vice President of Investor Relations. Please go ahead.

Thank you for joining the Darling Ingredients second quarter 2026 earnings call. Here with me today are Mr. Randall C. Stuewe, Chairman and Chief Executive Officer, and Mr. Bob Day, Chief Financial Officer. Our second quarter 2026 earnings news release and slide presentation are available on the investor page of our corporate website, and a transcript of this call will be available once posted. You can also find reconciliations and disclosures with respect to non-GAAP financial measures in our earnings news release and slide presentation. During this call, we will be making forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's press release and the comments made during this conference call, and in the Risk Factors sections of our Form 10-K, Form 10-Q, and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. Now, I will hand the call over to Randy.

Thanks, Suann. Good morning, everyone, and thank you for joining us today. Before we get started, I want to thank everyone who participated in our Investor Day in May. During that event, we highlighted the global foundation we have built, the transformation of our business, and the opportunities we see to accelerate returns to our shareholders. We also outlined how our business is positioned to create consistent cash generation regardless of market condition and public policy environments. When we provided our outlook for the second quarter in April, we based that guidance on our March performance. As the second quarter progressed, finished product markets strengthened considerably, fat and protein prices rallied, and several trade-related developments created a more favorable operating environment than we anticipated at that time. That, combined with our strong operational excellence and margin management programs, ultimately drove our results. During the quarter, we received $280 million in cash distributions from Diamond Green Diesel. We used that cash to decrease our debt by $223 million, close on the purchase of the Potenze plants in Brazil, and repurchase $73 million of stock. Darling's core ingredients business really delivered this quarter, with improved global operations, margin expansion, and focused commercial execution. Combined adjusted EBITDA for the second quarter was approximately $742 million, including about $353 million from our global ingredients business and $389 million from Diamond Green Diesel. Our Feed Ingredients segment delivered improved results as fat prices rallied and sustained momentum in the quarter, fueled by robust demand from the biofuel sector. We saw protein value strengthen due to tightening global fish meal supplies and increased poultry production in the U.S. We continued our focus on operational efficiency, commercial optimization, price risk management, and contract management, which contributed to improved gross margins. In the quarter, we closed on the acquisition of three rendering facilities for the Potenze Group in Brazil. These are great assets and great locations, which we believe will be immediately accretive. Turning to the Food segment. Collagen sales have improved year-over-year, reflecting not only increased customer demand, but also new applications for collagen across food, nutrition, and the health space. As prices of whey continue to increase, companies are turning to collagen as a protein with benefits to complement their whey products. We remain very excited about our Nextida glucose control product, which continues to have repeat sales and is now being sold in Asia. Turning to the Fuel segment. Diamond Green Diesel delivered outstanding operational and financial performance during the quarter, reinforcing its position as the leading renewable diesel producer in the world. During the second quarter, we produced over 1.3 million metric tons of renewable fuel, maintaining DGD's position as the largest producer of advanced biofuels globally. In the quarter, we sold approximately 350 million gallons at $2.23 EBITDA per gallon, delivering $389.2 million of EBITDA to Darling. This includes a favorable IEEPA tariff recovery of approximately $51 million at the entity level. Our non-DGD green energy businesses also performed very well due to the increased energy prices in Europe. With that, I'd like to turn the call over to Bob to take us through some financials. I'll come back and talk about the third quarter and what we see coming forward. Bob?

Thank you, Randy. Good morning, everyone. As Randy said, we significantly increased earnings, cash generation, and balance sheet strength this quarter. Net income was $387 million, or $2.41 per GAAP diluted share, compared to $13 million, or $0.08 per GAAP diluted share in the second quarter last year. For the first six months of 2026, net income was $521.6 million, or $3.24 per GAAP diluted share, compared to a net loss of $13.5 million, or negative $0.09 per GAAP diluted share a year ago. Net sales in the second quarter were $1.7 billion, compared to $1.5 billion for the second quarter last year, and $3.3 billion for the first six months of 2026 versus $2.9 billion for the same period a year ago. Second quarter combined adjusted EBITDA was $742 million, compared to $250 million in second quarter 2025. For the first six months of 2026, combined adjusted EBITDA exceeded $1.1 billion versus slightly under $450 million a year ago, reflecting strong contributions from both our global ingredients business and Diamond Green Diesel. The earnings power of our global model demonstrated the value added from some of our more recent acquisitions, such as Valley Proteins, Gelnex, and FASA. Overall, core ingredients EBITDA increased to $353 million in the quarter, up significantly from the prior year at $207 million and last quarter, $256 million. During Investor Day last May, we highlighted two important advantages about the core ingredients business that have gained meaningful traction this year. The first is measured by the operational metric implied return on replacement value, included as page 15 in this quarter's slide deck. This framework illustrates how we create value by increasing cash generated from our existing asset base. Most recently through negotiation of contract terms that allow us to keep pace with construction cost inflation, commercial optimization across our global network, and a more targeted approach to managing price risk. Together, these actions support the opportunity we previously outlined to generate an additional $150 million-$300 million in adjusted EBITDA over the following three years. More importantly, this framework shows how Darling can increase earnings and cash generation from its core business consistently over time. Our results so far in 2026 demonstrate real progress toward that objective. The second advantage is our ability to increase EBITDA and our operating metric implied net cash from Rousselot's existing fixed asset infrastructure. As this business represents the majority of our Food segment, Rousselot provides significant opportunity to enhance earnings and cash flow through product mix optimization, as illustrated on page 16 of this quarter's slide deck. As we continue to increase our mix of collagen and collagen with targeted health benefits like Nextida, we're using the same factories and infrastructure to produce products with meaningfully higher margins. In today's market environment, collagen generates roughly 2.5x to 3x the margin of gelatin, and targeted ingredients can generate 7x to 11x. This gives us a powerful built-in earnings lever, positioning the business to consistently grow EBITDA and net cash generation on an as-is basis, even before factoring in future growth initiatives. Diamond Green Diesel delivered an outstanding quarter both operationally and financially. Darling's share of DGD EBITDA for the quarter was $389 million compared to $43 million in the second quarter of 2025, supported by strong production of 356 million gallons, favorable market conditions, and the benefit of $51 million in IEEPA tariff recoveries at the entity level. More importantly, DGD generated substantial cash. During the quarter, Darling received approximately $280 million in cash from DGD, roughly $211 million as dividends and $69 million from 2025 production tax credit sales. This allowed us to reduce net debt by over $220 million during the quarter. As a result, our leverage ratio improved to approximately 2.3x at quarter end, compared to 2.9x at the end of last year. This debt reduction, however, doesn't illustrate the true impact of second quarter's performance and how it sets up our balance sheet as we move through 2026. Specifically, we had some cash demands over the second quarter that prevented us from paying down more debt. We expect most or all of that will be offset in the second half of 2026. Examples are the acquisition of the Potenze rendering assets in Brazil for around $122 million and $73 million in stock buybacks, and DGD's current assets minus current liabilities have increased substantially from the beginning of the year, mainly resulting from a strategic build of feedstock inventories to support high run rates and operational and commercial flexibility. With that context, lowering net debt by over $220 million in the second quarter was a great achievement. Meanwhile, we expect to offset most of the acquisition and stock buyback costs with sales of our trap and casings businesses. Subsequent to quarter end on July 22nd, we closed on the sale of the majority of our trap business for approximately $90 million. We also signed an agreement to sell our European casings business, which we expect will close by the end of 2026. Regarding DGD working capital, we anticipate a significant portion of this will flow through as cash by the end of 2026 as inventories naturally draw down during that time. We also expect the majority of this year's Production Tax Credits will be sold and paid for over the last half of 2026, and we believe the core ingredients business will continue to perform at a high level and generate meaningful cash. With all that, we believe our net debt will be very close to or below $3 billion by the end of 2026, and our leverage ratio well below 2x. We recorded an effective tax rate of approximately 22% during the quarter. Excluding the impact of Production Tax Credits and certain discrete items, our tax rate was approximately 27%. For the full year, we continue to expect an effective tax rate of roughly 25%. With that, I will turn the call back over to Randy.

Thanks, Bob. As we shared at Investor Day, our global scale enables us to generate cash across down, mid, and even up cycle environments. We've built an essential business with a global footprint that is difficult to replicate, creating advantages that continue to strengthen. As Bob said, our debt net leverage continues to improve, and we're on target to be below $3 billion in debt by year-end with a leverage ratio of well below 2x. This is a true inflection point for our company, and will create multiple opportunities for the future. We remain focused on operational excellence, disciplined capital allocation, and returning capital to shareholders. As we look ahead, we continue to see strong momentum in the third quarter and remain confident in the outlook for the balance of 2026 and even 2027. While the current market conditions are supportive, the fundamentals underpinning our business give us confidence beyond this year. Importantly, we do not view the progress we have seen in this quarter as a one-time event. The opportunities we outlined at Investor Day remain well ahead of us. In feed, we continue to see opportunities through contract management, commercial optimization, and price risk management. In food, we continue to improve our product mix towards higher value collagen and targeted health ingredient applications. Combined with our ongoing portfolio optimization and balance sheet improvement, we believe the business is positioned to continue increasing earnings and cash generation over the next several years. The strategic actions we have taken to strengthen the business, improve margins, and simplify the portfolio position it to create value well beyond the current cycle. For the third quarter, we expect Core Ingredients EBITDA to be between $325 million and $340 million. Included in the second quarter results were approximately $18 million in the net recovery of IEEPA tariffs for the Rousselot business. Excluding that benefit, our third quarter outlook implies underlying performance that is generally consistent with the strong earnings level we delivered in the second quarter. We continue to see support from growing global poultry production, strong global demand for our proteins and specialty products, and robust demand for our low-carbon fuels. On the DGD front, margins remain attractive, and we intend to produce approximately 335 million gallons in the third quarter. With that, let's go ahead and open it up to questions.

We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Heather Jones with Heather Jones Research. Heather, your line is now open.

Good morning. Thanks for the question, and congratulations on the quarter. I wanted to start with protein meals. Randy, I think you mentioned something about exports. I just noticed a rally throughout the quarter, and particularly in the latter part of the quarter, it strengthened pretty dramatically. Just wondering if you could flesh out those comments about what specific changes. Was it related all to the tariffs, and have you seen that strength continue into Q3?

Fish meal? Heather, this is Randy, Bob and Carlos can comment if they want to. You're in a very strong protein market globally, and it's ultimately driven, at least on the chicken side, by the tightness in the fish meal due to the Super El Niño. We're seeing very strong demand on all continents for proteins. We expect that to continue through the balance of the year. I don't see anything interrupting it.

Yeah. Thanks, Heather. We're not expecting any meaningful change in SREs and SRE volumes that would impact the overall RIN supply and demand. I think our view is the worst thing that the administration could do right now is negatively impact supply. This policy, which was implemented on April 1st, is achieving the objectives of the EPA and the administration as a whole. It's leading to higher prices at the farm gate, which is what they wanted. The industry responded within the third month of its implementation by making enough product that shows it can meet the mandate. We're not expecting a significant change that would overall impact this picture.

We think RIN tightness is going to continue, and that's what's required in order to maintain the kind of production that we saw in June and what we need to meet the mandate.

Thanks so much for that call. Have a good day.

Your next question comes from the line of Manav Gupta with UBS. Manav, your line is now open.

Morning, team. Exceptionally strong quarter. Want to congratulate everybody on it. My first question is on the overall renewable diesel macro. I think the world is short diesel. You have seen strong support from the government on RVO. When we think about renewable diesel margins and mid-cycle margins, should we think of a higher mid-cycle given all the dynamics that are playing on, including global distillate inventory depletion? Would that mean higher sustained earnings from your renewable diesel business for a longer period of time? If you could talk a little bit about that.

Thanks, Manav. I just want to be clear there is a page in our deck where we talk about our business as a whole: down cycle, mid-cycle and up cycle environments. The mid-cycle reference to $0.92 a gallon is really an approximate average of what the price per gallon was from 2021 to 2025. It's not a suggestion about what a future mid-cycle margin would be. If you look at current dynamics, the BOHO spread is tighter than we've seen in a long time, which suggests conventional diesel prices globally are allowing renewables to be more competitive from a cost standpoint. If you look at spot margins today and the RVO and the mandate through 2027, it certainly suggests an attractive margin environment for the foreseeable future, and that's what we expect.

Perfect. Thank you, Bob. My next question is on leverage. Congrats on bringing leverage down, I think from 3.2 to 2.3 in a single quarter. At the Investor Day in April, you had said you want to be below two. What level would you be comfortable getting to and building a buffer where, in addition to share repurchases, you could possibly contemplate a dividend to reward shareholders?

Thanks, Manav. Our objective is to get down below $3 billion of debt. Given the EBITDA run rate that we're on, that would comfortably put us below 2x leverage. We're focused on total debt level because we want to be in a comfortable leverage position even in a mid-cycle environment. Once we achieve our goals in terms of total debt level, then we can evaluate a different type of capital strategy that potentially could include shareholder initiatives that we really haven't considered as much in the past. We now are able to do that since we have built out the global network and we have more stable earnings.

Thank you. Congrats on a great quarter.

Your next question comes from the line of Derrick Whitfield with Texas Capital. Derrick, your line is now open.

Thank you. Good morning, guys, congrats on a banner quarter.

Thank you.

I wanted to start with DGD. Given the strength of the U.S., Canada, and international markets, how are you thinking about the allocation of renewable diesel and SAF volumes across those markets to optimize margins?

Thanks, Derrick. Margin attractiveness between RD and SAF depends on the market. RD is more attractive relative to SAF in Europe than in the U.S. for our existing sales book. Europe is a mandated market; the U.S. is a voluntary market. In the mandated market, prices can move up and down depending on supply and demand, and we're not seeing a huge advantage for SAF in that market. In the U.S. voluntary market, SAF sales command a premium over RD and continue to earn a more attractive margin than RD. We'll take advantage of that and expect to produce SAF at a similar rate to what we've been doing over the past 12 to 18 months.

Great. On my follow-up, regarding the increase in 2026 capital, you initially communicated that during the first quarter. Could you speak to some of the investments you are undertaking and the expected uplift in business results associated with the investments?

When we started the year, we estimated maintenance CapEx around $400 million and revised it slightly higher to $450 million. That's a function of increased cash flow into the business and identifying opportunities to debottleneck in certain locations, slightly increase capacity, and improve efficiencies. I wouldn't say it's a material change to our CapEx plan for the year, but in a year like this, we're taking advantage of the opportunity to do a little bit more and increase efficiencies.

Derrick, in 2024 and 2025 we pulled back on capital spend. We had to avoid run-to-fail modes at the factories, and now there's some make-up capital. The poultry expansion in the Southeast U.S. is driving demand and we're running the Valley system wide open. We've been able to expand and optimize it, and we're getting the earnings out of it. That's a big part of the inflection point compared to last year.

Makes complete sense. Great quarter, guys.

Your next question comes from the line of Andrew Strelzik with BMO Capital Markets. Andrew, your line is now open.

Good morning. Thanks for taking the question. I apologize, I dropped for a minute accidentally, so I apologize if I ask something that's already been asked. You talked about your enthusiasm for the balance of the year and 2027, and obviously we saw the base business guidance for 3Q. With the volatility in market fundamentals recently and coming off the strength in 2Q, can you frame current spot run rate margin structures relative to the high, medium, low framework from the Investor Day? Are we still at the high scenario that you had talked about previously? Are we above? How do you see that going forward?

If you live long enough in this business, you see these cycles. We're very enthusiastic through the end of 2026 and into 2027. The core ingredients business, with the acquisitions we've made, has been rationalized and optimized. The core ingredients business is positioned to roll at that $325 to $340 million level. The third quarter can be a little challenging because of weather—summer weather is hot in North America and Europe—but strong protein and fat markets continue. DGD's margin environment is positive. Yes, there is daily volatility in heating oil and RINs, and crushing and soy markets are running hard, but soybean oil stocks are coming down. We can't be bearish on fats and oils. We feel really good about it. As we said at Investor Day, what we're seeing now is where we wanted to be a couple of years ago: taking significant amounts of debt off the balance sheet to give us flexibility. We're in a different position now. We expect to continue to grow organically and through debottlenecking, and we don't see material downside from the RVO actions—it's doing what it's supposed to do. Based on second quarter's production, the industry met expectations and that supports our optimism for the near term.

If you look at those margin environments—down, mid, and up cycle—we're not in a mid-cycle environment right now. If you look at spot margins, it's more toward upcycle as we sit here today. We're optimistic about what that's going to look like over the next few quarters.

Okay, great. That's helpful. Maybe to your point about the evolution of the balance sheet, it feels like given the results and the outlook, you'll hit your targets sooner rather than later. We saw the buyback in the quarter. Can you give updated thoughts on capital allocation once you do get to those target levels? Is that a signal for which way you're leaning?

That's above my pay grade, but it allows discussions in the boardroom to shift to where we've wanted to go: making investors view a yield under Darling not as a commodity company but as one that can deliver a dividend and share repurchases consistently. We've stayed focused on bringing debt under $3 billion and getting leverage below 2x, and we've put a capital policy or a max debt policy at 2.5x. Once we achieve those goals, we'll evaluate options for transforming Darling going forward. This has been our plan and we're now executing it.

Great. Thank you very much.

Your next question comes from the line of Ben Kallo with Baird. Ben, your line is now open.

Hey, good morning, guys, congratulations on all the work. Maybe if you could talk a little bit about the supply side for renewable diesel, whether you see any capacity coming online or new capacity intended to be built. I think you did a good job talking about demand, just if you could touch on the supply side, please.

Thanks, Ben. We're impressed by what the industry achieved in June; the best cure for high prices is high prices in these markets. Nameplate capacity is a number, and many companies can overachieve that when the operating environment is positive, which we're seeing. We're not necessarily seeing a lot of new capital for increased renewable diesel capacity in the U.S. right now. If we were to get Set 2 that provides a longer-term outlook for the RVO and mandated volumes, then we would likely see more capacity. For now, with existing capacity and improved performance, the industry has been able to make enough product to meet and satisfy the mandate.

Great. Just on the Nextida side, you mentioned starting sales in China. Could you talk about that market and the opportunity there, whether it's more competitive there, and how it's different than the U.S. and European markets? Thank you.

As we look around the world, we're seeing a transformation from gelatin to hydrolyzed collagen. Gelatin was largely commoditized; hydrolyzed collagen has many more applications and generates 2.5x to 3x the margin. We've transitioned extraction capacity to hydrolyzed collagen and have seen growth in Asia. We've approved projects for a spray dryer to make collagen in Kaiping, China, and we're adding extraction and spray drying capacity in Paraguay. The market is growing in the mid to upper single digits. Our Nextida portfolio is a 2.0 version of hydrolyzed collagen for specialty health and wellness applications. We continue to see repeat orders for Nextida glucose control. As GLP-1 drug side effects enter the narrative, this protein product has similar applications without those side effects as we know them today. We're also preparing to launch a newly named Nextida Brain product after clinical trials that have shown promising health benefits. The Nextida line is a multi-year build with several products under development. We see this space as very attractive and a structural growth area with improving margins over time.

Great. Thank you, guys.

Your next question comes from the line of Conor Fitzpatrick with Bank of America. Conor, your line is now open.

Good morning, everybody. Thanks for taking my question. It has been apparent that the RINs market has been difficult to balance, which is a good problem for RIN producers to have. I wanted to get a check on what's going on with domestic utilization and where net imports could progress. Biodiesel utilization in the U.S. has been rising; how far from max biodiesel utilization are we in the U.S., and what is the opportunity that net exports of biodiesel and renewable diesel out of the U.S. could flip and supply the market to help balance RINs?

Conor, we're probably somewhat close to max biodiesel production in the U.S., but there's room for more imports. Overall, biodiesel and renewable diesel are running at a very high rate in the United States. Imports have a longer supply chain and take longer to show up. We expect to see more imports in July and beyond; that's important to meeting the mandate. For exports to slow, margins in the U.S. would need to increase from where they are today. Given the June run rate and a slight increase in imports, we're in a position to meet the mandate, provided margins remain strong.

Makes sense. I've noticed an increase in animal-based protein value per ton surging relative to soybean meal. As a rendering-focused company, Darling is benefiting relative to vegetable-focused companies. Could you comment on drivers of the relative value of different protein meals and how that sets up the cycle for feed ingredients going forward?

Conor, thank you for differentiating us from crushers and ag services businesses. We have a unique global position: we provide fats to the fuel business and proteins to several end markets. Aquaculture demand is strong, and tightness in fish meal adds value to our low-ash poultry meal products. The pet food segment, which saw a large upcycle during COVID, has moderated a bit but remains strong globally. Commodity proteins for mixed species are being consumed by strong global protein demand—red meat is expensive, poultry is growing rapidly in the U.S., Canada, Europe, Poland, China, and other APAC countries. Overall, it's a balanced environment for our offerings around the world.

Thanks, everybody.

Your next question comes from the line of Matthew Blair with TPH. Matthew, your line is now open.

Thanks, good morning and congrats on the strong results. You mentioned some positive trends in your Food segment and noted using collagen in whey protein applications. Could you expand on this? Why is this happening, is it temporary, or do you think it's a structural shift?

Today we're able to compete on a cost basis with whey protein. The market has realized that collagen can act as a replacement for whey in some applications, and we're finding a home there. Given overall demand for proteins in food products, we expect this dynamic to continue and provide a favorable spot for collagen.

Sounds good. Have you applied for any additional tariff recovery? Should we expect anything coming in Q3 or Q4 of this year?

Tariff recoveries are classified into categories based on likelihood of recapture. The ones we have recognized are largely paid for. There are others that remain and we will recognize them later if the probability meets the standard for recognition.

Sounds good. Thank you.

Your next question comes from the line of Jason Gabelman with TD. Jason, your line is now open.

Morning. Thanks for taking my questions. You highlighted another divestment this quarter. Are there more non-core assets you could sell? Conversely, as net debt approaches target levels, will the M&A holiday end and will you look to inorganically expand the business?

Jason, we continuously review the portfolio and there are additional assets that could qualify for divestiture if the numbers meet our criteria. The term 'M&A holiday' is a shorthand—internally we have a list of global expansion opportunities. Historically, once you build the platform and network, you look to minimize freight, maximize margins, and help customers and suppliers. Over the next three years, we expect more organic expansion—collagen and some rendering capacity—rather than chasing a large transformative deal. We're out of rendering capacity in Brazil today and need to address that. The U.S. chicken industry increase in line speeds will push our factories, so we need to anticipate supplier needs. Overall, the next three to five years will be more about organic growth and targeted expansions.

Great. Thanks for that. My follow-up: the DGD margin was extremely strong in the quarter. Were there any abnormal benefits in the quarter, or was some strength due to selling to markets outside California, like the Pacific Northwest, British Columbia, or Europe? Any more color on what drove that strong number?

We announced the approximately $51 million of IEEPA tariff recoveries, which contributed to the result. More broadly, our supply chain and commercial capabilities allow us to sell to optimal markets and buy the lowest-cost feedstock on an adjusted basis. That volatility generally works in our favor, and it did in the second quarter. As the market stabilizes, we expect margins to more closely track the spot market, which remains healthy. The $2.25 per gallon average for the quarter reflected DGD taking advantage of volatility and running a strong supply chain.

Thanks for that.

Our last question comes from the line of Carla Casella with JPMorgan. Carla, your line is now open.

Hi, thank you for taking the question. In the past, you've talked about looking to get to investment grade. I'm wondering if there's any update in terms of your leverage targets or thoughts about a potential investment-grade rating?

Carla, we have about a half-billion dollar bond maturing in April. With the cash generated this year and our revolver, we have the capability of paying that off, which would leave roughly $1.8 billion of unsecured debt with maturities in 2030 and later. Essentially, we could be investment grade if we choose to be. As we assess capital structure and shareholder returns, achieving a leverage ratio consistent with our 2.5x policy is implied to support an investment-grade rating. We're evaluating all options for Darling as we move forward.

Okay, great. One quick follow-up on the tariff question. I know you're not including anything in that basket until it's likely, but do you have the value of what's the potential?

We have not made that public.

There are no further questions at this time. I will now turn the call back to Randall Stuewe for closing remarks.

Thanks everybody for all your questions today. As always, if you have additional questions, please feel free to reach out to Suann. Stay safe, have a great day, and we thank everybody for joining us today.

This concludes today's call. Thank you for attending. You may now disconnect.