Kadant Q3 2026 Earnings Call Transcript

Kadant (NYSE:KAI) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://edge.media-server.com/mmc/p/gu6s99yb/

Summary

Kadant Inc. reported record revenue of $313 million in Q3 2026, a 15% increase year-over-year, driven by strong aftermarket parts sales and improved capital equipment demand. Adjusted EPS reached a record $3.64, exceeding guidance due to higher-than-expected revenue and improved performance from recent acquisitions.

The company raised the lower end of its full-year 2026 revenue guidance to $1.195 billion to $1.210 billion and increased its adjusted EPS guidance to $12.58 to $12.73. Cash flow from operations and free cash flow were also at record highs, with significant debt repayments enhancing financial stability.

Strategic focus on expanding into new markets such as defense, aerospace, and automation is contributing to growth, despite extended order cycles for large capital projects. Management transition was announced, with Jeff Powell moving to Executive Chairman and Michael Colwell appointed CEO, ensuring continuity in leadership and focus on growth initiatives.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the Q3 2026 Kadant earnings conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your first speaker today, Michael McKenney, Executive Vice President and Chief Financial Officer. Please go ahead.

Michael McKenney (Executive Vice President and Chief Financial Officer)

Thank you, Stephen. Good morning everyone and welcome to Kadant’s third quarter 2026 earnings call. With me on the call today is Jeff Powell, our Chief Executive Officer. Before we begin, let me read our Safe Harbor Statement. Various remarks that we may make today about Kadant’s future plans and expectations, financial and operating results, and prospects are forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are subject to known and unknown risks and uncertainties that may cause our actual results to differ materially from these forward-looking statements as a result of various important factors including those outlined at the beginning of our slide presentation and those discussed under the heading Risk Factors in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026 and subsequent filings with the Securities and Exchange Commission.

In addition, any forward-looking statements we make during this webcast represent our views and estimates only as of today. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our views or estimates change. During this webcast we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles.

A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our third quarter earnings press release and the slides presented on the webcast and discussed in the conference call, which are available in the Investor section of our website at kadant.com. Finally, I wanted to note that when we refer to GAAP earnings per share or EPS and adjusted EPS on this call we are referring to each of these measures as calculated on a diluted basis.

With that, I’ll turn the call over to Jeff Powell who will give you an update on Kadant’s business and future prospects. Following Jeff’s remarks, we will give an overview of our financial results for the quarter and we will then have a Q&A session. Jeff.

Jeffrey Powell (Chief Executive Officer)

Thanks, Mike. Hello everyone. Thank you for joining us this morning to review our third quarter results and discuss our outlook for the remainder of the year. We had an excellent financial performance in the third quarter across a broad range of key metrics. We achieved record revenue and were particularly pleased with record aftermarket parts revenue in Q3, continuing the record-setting pace from both Q1 and Q2 this year. As you know, our aftermarket business is a core strategic growth area and it’s encouraging to see this continue to thrive.

Market demand for capital equipment strengthened, though political uncertainty and economic headwinds continue to impact the timing of large projects. We are winning new capital projects, but the quote-to-order cycle continues to be extended. As has been the case throughout 2026, our operations teams around the world delivered exceptional value for our customers and shareholders. I want to thank them for their outstanding efforts and the results they produced in the third quarter as well as their commitment to our operational excellence demonstrated throughout the year.

Turning next to Slide 6, I would like to review our Q3 financial performance. Our Q3 revenue and earnings performance continued to improve sequentially. I am pleased to report record adjusted EPS performance. Bookings in the third quarter increased 23% to the same period last year with growth across all three of our operating segments. Revenue was up 15% to a record $313 million and benefited from outstanding aftermarket parts business and record first-half bookings.

Our focus on internal cost control and solid execution contributed to increased operating leverage, with record adjusted EBITDA of $72 million and an adjusted EBITDA margin of nearly 23%. We are thrilled to achieve these results in less than ideal market conditions. Adjusted EPS was also a record at $3.64 in the third quarter. And finally, cash flow from operations and free cash flow in the third quarter were records at $63 million and $58 million, respectively, demonstrating the continued strength of our business model.

Next, I’d like to review the performance of our operating segments, beginning with our Flow Control segment. Record aftermarket parts revenue and solid capital equipment shipments drove an 8% year-over-year increase in Q3 revenue. Growth was led by our fluid handling product line supported by healthy demand from the energy, defense, and packaging markets. Encouragingly, our new order activity was up more than 7%, largely due to the growth in our aftermarket business.

Adjusted EBITDA of $31 million was a record and up 22% compared to the same period last year, leading to a record EBITDA margin of 30.7%. Factory automation, defense, and energy end markets continue to show strength, particularly in the Americas, while industrial activity in Europe and Asia reflects the persistent economic headwinds in those regions. As we look ahead to the remainder of 2026, we expect stable demand in our Flow Control segment. The segment continues to benefit from diversified market exposure, with improving investment sentiment in North America and Asia helping to offset some of the softness in Europe.

Our Industrial Processing segment again delivered excellent quarterly results despite challenges in the global capital equipment market. Strong competitive positioning, recent acquisitions, and 12% organic bookings growth drove new orders to $123 million. Revenue increased to $143 million with strong contribution from both aftermarket parts and capital equipment shipments. Operational leverage in our recent acquisitions contributed to our improved margin performance in this segment.

Adjusted EBITDA was $37 million and represented 26.1% of revenue in the third quarter. Looking ahead, we believe our aftermarket demand will remain stable and that our capital business will see an uptick in order activity. Our capital project pipeline remains healthy and we expect orders will move forward as economic confidence strengthens. In our Material Handling segment, we benefited from strong commercial execution. In the third quarter our bookings were up 13% to $67 million, led by exceptional aftermarket demand for our bulk material handling equipment. Revenue was down 4% compared to the record third quarter performance of last year. This decline was due entirely to lower capital shipments compared to the same period last year. With the lower revenue volume, adjusted EBITDA margin decreased to 22.1% compared to the record performance of Q3 last year.

We expect demand to be stable in the near term and project activity to remain healthy, particularly in infrastructure spending and the build-out in data centers. For the remainder of 2026, we expect demand to remain stable with potential upside from capital projects. There remains a lot of activity around new capital projects and this could become a meaningful contributor, though the timing of these projects can be uncertain and could shift to 2027.

Before I turn the call over to Mike for a closer look at our third quarter performance, I’d like to briefly address my upcoming transition to Executive Chairman and Michael Colwell’s appointment as CEO. I’ve had the privilege of leading what I believe is an exceptional company, not just one with great products and innovative technologies, but a company whose people come to work every day determined to make a real difference for our customers, communities, and all Kadant stakeholders.

Over the past 48 years I’ve been a part of some great businesses. None, however, compare to Kadant. It comes down to the special qualities that make Kadant unique. I believe our culture of integrity, commitment, accountability, and entrepreneurism allows us to serve our customers better, creating lasting value for the shareholders. When Michael takes over at the beginning of the year, I will remain actively engaged in supporting the leadership team and its growth initiatives.

I want to thank the employees and shareholders for the opportunity to be part of Kadant’s legacy, and I’m confident that Kadant’s best years are still ahead. I’ll now pass the call over to Mike for his review of our Q3 financial performance. Mike.

Michael McKenney (Executive Vice President and Chief Financial Officer)

Thank you, Jeff. I’ll start with our third quarter performance. Our third quarter record revenue of $313.2 million included record aftermarket parts revenue of $218.4 million. Organic revenue increased 4% compared to 3Q25, including a 5% increase in organic capital revenue. Gross margin was 44.7% in 3Q26, down 50 basis points compared to 45.2% in 3Q25, largely due to a lower gross margin profile associated with the mix of capital projects in the period.

We had a benefit in the third quarter from tariff refunds, but this was offset by the negative impact from the amortization of acquired profit in inventory and deferred profit associated with intercompany sales. At our Kadant profile, SG&A expenses as a percentage of revenue decreased to 26.4% in 3Q26 compared to 27.9% in the prior-year period. SG&A expenses were $82.7 million in the third quarter of ’26, increasing $6.9 million compared to $75.8 million in 3Q25. This increase includes $6.1 million of operating expenses and $2.3 million in non-cash intangible amortization expense from our recent acquisitions. These increases in SG&A expense were partially offset by a $2 million decrease in acquisition-related costs.

Our GAAP EPS increased 26% to $2.96 in the third quarter, and our adjusted EPS increased 21% to a record $3.64 in 3Q26. The third quarter ’26 adjusted EPS exceeded the high end of our guidance range by $0.64, in part due to higher-than-expected revenue. This included higher-than-expected aftermarket parts revenue at our Industrial Processing segment as well as higher capital revenue at our Flow Control segment. In addition, our acquisitions performed better than anticipated and our operating expenses were lower than forecast.

This strong performance contributed to a record adjusted EBITDA and record cash flow performance in the quarter, which I’ll discuss further in further detail on the next slide. Adjusted EBITDA increased 24% to a record $71.7 million compared to $58 million in the third quarter ’25 due to strong performance at our Industrial Processing segment driven by our recent acquisitions and record performance at our Flow Control segment. Adjusted EBITDA margin exceeded the last four quarters and rose to 22.9% compared to 21.4% in the third quarter ’25. I should note that our businesses have done an excellent job in controlling expenses while optimizing business processes to help drive our record results.

Turning to our cash flows, we had both record operating and free cash flow in 3Q26 at $62.9 million and $58.1 million, respectively. On a year-to-date basis, both metrics are ahead of last year, with free cash flow up 20% over last year. Non-operating uses of cash in the third quarter ’26 included $51 million of repayments on our debt, $4.8 million for capital expenditures, and $4.3 million for a dividend on our common stock. Let me turn next to our EPS results for the quarter. Our adjusted EPS increased $0.63 from $3.01 in 3Q25 to $3.64 in the third quarter ’26. This included increases of $0.50 from the operating results of our recent acquisitions excluding associated borrowing costs, $0.29 due to higher revenue, and $0.04 due to a lower tax rate. These increases were partially offset by $0.15 in higher interest expense, $0.02 due to a lower gross margin percentage, $0.02 due to higher noncontrolling interest, and $0.01 due to higher weighted average shares outstanding.

Our effective tax rate of 26.4% in the third quarter was lower than anticipated primarily due to discrete tax benefits. Collectively included in all the categories I just mentioned was a favorable foreign currency translation effect of $0.02 in 3Q26 compared to 3Q25. Looking at our liquidity metrics on Slide 15, our cash conversion days were 133 at both the end of the third and second quarters of ’26 compared to 131 at the end of the third quarter ’25. Working capital as a percentage of revenue decreased to 17.8% in the third quarter ’26 compared to 19.3% in 2Q26. Our net debt, i.e., debt less cash, decreased $56.4 million, or 15% sequentially, to $316.6 million. As noted earlier, we paid down $51 million of our debt this quarter, demonstrating our ability to generate strong cash flow globally and efficiently pay down our acquisition borrowings.

Our leverage ratio, calculated in accordance with our credit agreement, decreased to 1.49 compared to 1.72 at the end of the second quarter ’26. At the end of the third quarter ’26, we had $300 million of borrowing capacity available under our revolving credit facility. Now I’ll review our guidance for ’26. Despite many challenging market conditions, we delivered strong financial performance in the third quarter and expect to end the year with records in a number of financial metrics, including revenue, adjusted EBITDA, and adjusted EPS. We also had record operating and free cash flow in the third quarter as well as the first nine months of ’26. We are raising the lower end of our full-year ’26 revenue guidance to $1,195,000,000 to $1,210,000,000, revised from our previous guidance of $1,190,000,000 to $1,210,000,000.

We are raising our adjusted EPS guidance and now expect $12.58 to $12.73 in ’26, revised from our previous guidance of $12.43 to $12.68. Our adjusted EPS guidance excludes $2.19 of intangible amortization expense and $0.51 of acquisition-related costs. Our revenue guidance for 4Q26 is $287 to $302 million and our adjusted EPS guidance for the fourth quarter is $2.67 to $2.82, which excludes $0.55 of intangible amortization expense and $0.11 of acquisition-related costs.

Our full-year ’26 guidance includes the following assumptions: gross margins of 44% to 44.3%; SG&A as a percentage of revenue of 27% to 27.5%; net interest expense of $19 to $19.5 million; a tax rate of 27% to 27.5%; and depreciation expense of $27.5 to $28 million. That concludes my review of the financials and I’ll now turn the call back over to the operator, Stephen, for our Q&A session. Stephen?

OPERATOR

Thank you. At this time we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press star-11 again. Our first question comes from Ross Sparenblick of William Blair. Your line is now open.

Carlo Von Haraloff (Analyst at William Blair)

Hey, good morning. This is Sam Carlo Von Haraloff. Thanks for taking my questions. So organic orders are relatively strong across the board. I’m curious how your capital equipment project funnel has evolved over the past few months in each segment. And then are there any major macro or customer trends that have gotten better or worse for your business over the past few months?

Jeffrey Powell (Chief Executive Officer)

I think the activity level and the discussion level has improved, and I would say the pipeline is growing, although I can’t say there’s any particular area where, you know, things have really changed. What we’re finding is more activity in some of the newer markets that we’ve gotten into. The defense side, aerospace, automation. Those areas are growing faster, and they seem to be, right now, willing to make more investments in those areas. So that’s the areas that we’ve seen some nice bookings, some nice growth area.

The larger capital projects tend to be associated with our Industrial Processing segment. I’m talking about projects that can be anywhere from $5 million to $25 million. Those, I would say, are still in discussions, but they are taking longer to turn into orders than they have traditionally. So there’s still some caution in some of those larger capital projects in some of our older core markets. But in the newer markets we’ve entered into, the investment cycle seems to be accelerating.

Carlo Von Haraloff (Analyst at William Blair)

Got it. No, that’s super helpful. I guess, switching gears for a second, can you give us an update on the integration of Profil and kind of update us on where you are working through the inventory on hand from that business?

Jeffrey Powell (Chief Executive Officer)

Yeah, I’ll let Mike discuss where we are. But I would say from an operational standpoint, the integration’s going quite well. As you’re aware, we’ve worked with them for 30 years. Half their business was to us already. So it’s been a very smooth, I would say, integration. And we’re very pleased with the way things are going there. They’re out chasing some new markets and having some success. We announced, I think last quarter, they got in a very large order in the aerospace area.

So we’re so far quite pleased with the operational integration.

Michael McKenney (Executive Vice President and Chief Financial Officer)

Yeah. And Sam, on the inventory front, I think as we had forecast, we’re going to start to turn the corner here in the fourth quarter. So by 1Q27, that should be relatively behind us for the standard components.

Carlo Von Haraloff (Analyst at William Blair)

Got it. That’s super helpful. And then just before I forget, can you give the split on the backlog for capital equipment versus parts and consumables?

Michael McKenney (Executive Vice President and Chief Financial Officer)

Yep. So we ended with a backlog of $316 million. And the split is $167 million capital; parts and consumables, $149 million.

Carlo Von Haraloff (Analyst at William Blair)

Got it. Okay, that’s super helpful. I will pass it along.

OPERATOR

Thank you. Our next question comes from the line of Gary Prestopino of Barrington. Your line is now open.

Gary Prestopino (Analyst at Barrington Research)

Hey, good morning, everyone. Mike, just going through some of my notes on when you made this acquisition of—was it Profil, KAI? You said it was going to be dilutive this year because of the intercompany transfers, right? About $0.20 per share.

Michael McKenney (Executive Vice President and Chief Financial Officer)

Yeah. Yeah.

Gary Prestopino (Analyst at Barrington Research)

Okay, so as we get into ’27, how does that start factoring out? I mean, that whole $0.20 drag is going to go away, and it should start maybe kind of mimicking the margins that your overall company has or generates, or within the segment division that it’s in.

Michael McKenney (Executive Vice President and Chief Financial Officer)

Yeah, that’s a good way to think of it, Gary. We’re tracking to that $0.20 drag and right now, as we get right off the bat, when we get into ’27, we’ll, I believe, turn the corner on that and you’ll, you know, you’ll start to see improvement in the margin profile for the Industrial Processing—for, you know, specific to the wood sector.

Gary Prestopino (Analyst at Barrington Research)

Okay, that’s good. And then the previous question asked about the backlog for capital and aftermarket parts. What was the corresponding backlog last year at this time for capital and aftermarket parts?

Michael McKenney (Executive Vice President and Chief Financial Officer)

Last year it was $273 million. And I don’t have it with me. I will guess that that was probably about 60/40—60% capital, 40% parts. That’d be my estimate on that.

Gary Prestopino (Analyst at Barrington Research)

Okay. And just any thoughts that now that this election is over, you know, the uncertainties are gone, at least domestically, what do you think—what kind of impact do you think that could possibly have in your capital project activity?

Jeffrey Powell (Chief Executive Officer)

Boy, I gotta be honest with you, Gary, I have no clue. I mean, it’s, you know, things have been—I would say, generally speaking, things have been—and we’ve said this now for actually for quite some time—things have been much softer than we would have expected when you look at the overall state of the economy. And so, you know, short of us going into a macro recession, it’s kind of—you know, it would be surprising if things get substantially worse.

Could they get better? Absolutely. You know, we think that many of our customers have underinvested now for the last several years, and that’s why our parts continue to set new record levels even though operating rates are actually quite soft. They’re nowhere near record operating rates, and yet we just continue to have quarter after quarter of record parts because they’re running such old equipment. So they’re going to have to start to make some investments, and we’re talking to some customers that are now saying, okay, we’re starting to put our plans together to start to reinvest in the business.

So—but I wouldn’t venture a guess on these election results and how they might impact things. I don’t see—I mean there’s nothing quite obvious that would be highly negative that I can see. But, you know, I’m not smart enough to figure out what these guys are going to do.

Gary Prestopino (Analyst at Barrington Research)

Okay, that’s helpful. Just add a thought there and then just a comment on the M&A pipeline.

Jeffrey Powell (Chief Executive Officer)

Yeah, I would tell you that it’s softened a little bit as the year’s progressed here. At the beginning of the year, there was some decent deal flow, but recently the bankers have been telling us, and we’ve experienced ourselves, a little bit of a slowdown in new deals coming to market. And there’s a huge pent-up book of businesses that need to be moved. Certainly on the sponsor side, on the private equity side, they’ve got big portfolios of businesses that they’ve not brought to market.

They’re going to have to do that. But things have, I would say, softened a little bit here as the year’s progressed. Thanks, I appreciate it. I’m not going away completely.

Michael McKenney (Executive Vice President and Chief Financial Officer)

He’s not getting out that easy.

Jeffrey Powell (Chief Executive Officer)

I’m not going away completely. It’s a little less work. Well, I’m actually still gonna be an employee through ’27, so I don’t come off the payroll till ’28.

OPERATOR

Thank you. As a reminder to ask a question, you will need to press star 11. Our next question comes from the line of Walter Liptec of Seaport Research. Your line is now open.

Walter Liptak (Analyst at Seaport Research)

Hi. Thanks. Good morning, guys, and congratulations, Jeff, on a really good run.

Jeffrey Powell (Chief Executive Officer)

Thanks, Walt. Appreciate it.

Walter Liptak (Analyst at Seaport Research)

I wanted to ask a question about the comment that you made on the first question about some of the pivot into defense, aerospace, automation growing faster. I wonder if you could give us a little bit more color about what that funnel looks like and maybe the magnitude. Like if you are seeing more capital orders there. What percentage of revenue do those sectors make up?

Jeffrey Powell (Chief Executive Officer)

Yes, I don’t have that exact number. Of course, it’s a new market for us so it’s a smaller percentage. It’s just that a lot of it is new business that we didn’t have before, so it is impactful from that standpoint. It is growing probably. I think this year, I think our biggest order in a new market was on the aerospace side. I think it was about an $8 million order. Mike, is that right? Correct. We got about an $8 million order. We mentioned that on the factory automation side that we picked up several million dollars’ worth of business this year. That was new business to us and that continues even recently. I think we’ve continued to book some nice factory automation projects with some big, well-known names. So it’s all kind of incrementally new business for us. And it’s markets that we’re putting a lot of focus. You know, strategically we’re focusing on those because we do know they’re new business for us and also growing faster than some of the older markets.

So it’s encouraging to see that we’re having some good success there.

Walter Liptak (Analyst at Seaport Research)

Okay, and the $25 million order that you referenced, is that in the paper making sector?

Jeffrey Powell (Chief Executive Officer)

Well, I just talked about project sizes in the industrial processing side range anywhere from 5 to as much as 25. We have booked $25 million orders in the fiber processing side in the past. That tends to be—our single largest projects tend to be on the fiber processing side.

Walter Liptak (Analyst at Seaport Research)

Okay, okay. And then, yeah, I guess as we’re thinking about 2027, it seems like some of the sectors, you know, been consolidating here for a little while is, you know, based on your experience, is there like a point at which the recapitalization starts as they invest in the remaining facilities, updating them and things even before sort of the sectors start changing? Or is there something that we should be thinking about for when some of the more traditional capital orders start picking up?

Jeffrey Powell (Chief Executive Officer)

Yeah, I think that some of our customers have started to talk and announce that they’re going to start to reinvest in the assets that they kept online. As you know, there was a fair amount of consolidation, particularly in the fiber processing side. And when that happens, of course, they spend their time focused on which assets are going to shutter and which ones they’re going to invest in. Because overall demand for the product, globally at least, has not gone down.

It continues to go up. So you’ve got to replace that. If they shut down a plant somewhere, somewhere else it’s got to be picked up. And so some of our customers have announced and are talking about an investment cycle starting up as they now have rationalized their combined operation and are ready to start, you know, trying to improve efficiencies and get ready for, you know, I think the economies as they start to reaccelerate. So we do expect to see some of that, have had some discussions along those lines.

Walter Liptak (Analyst at Seaport Research)

Okay, great. And then just the last one for me, you know, the margins look pretty good, kind of across the board with the exception of some of the noise from acquisitions. But the how are you feeling about price, cost and just selling price increases and being able to deal with inflationary pressures?

Jeffrey Powell (Chief Executive Officer)

Yeah, I mean what we primarily focused on is internal cost control, internal initiatives. I mean the market isn’t very excited about price increases right now with the economy in some areas still being somewhat soft. But where we can make an impact and where we have focused and got benefit from is really operational efficiencies and cost controls internally within our organization. So we have some fairly global, I would say global-wide initiatives working on right now to continue to bring our costs down to become more efficient.

And so that’s really where we’re seeing the benefits from—less so on pricing and more on our internal efficiencies and cost control.

Walter Liptak (Analyst at Seaport Research)

Okay, got it. Okay, thank you.

OPERATOR

Thank you. As a reminder to ask a question and you’ll need to press Star 11 on your telephone and wait for your name to be announced. Please stand by while we allow some time for additional questions. Okay, I am showing no further questions at this time. I would now like to turn it back to Jeff Powell, CEO, for closing remarks.

Jeffrey Powell (Chief Executive Officer)

Thanks, Steven. So before wrapping up the call today, I just wanted to leave you with a few takeaways. 2026 is expected to be a record-setting year for Kadant. Despite the economic pressures and geopolitical challenges around the world, strong performance in the first three quarters of 2026, along with the numerous operational improvements we’ve achieved through our 8020 performance system and other initiatives, position us well for the remainder of the year.

We look forward to sharing our successes with you on future calls. And we want to thank you for joining us today.

OPERATOR

Thank you for your participation in today’s conference. This does conclude the program and you may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.