Distribution Solutions Group Inc (DSGR) 2011 Q3 法說會逐字稿

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  • Operator

  • Good morning and welcome to the Lawson Products Inc. Third Quarter 2011 Financial Results Conference Call. All participants will be in a listen-only mode. (Operator Instructions). Please note this event is being recorded.

  • I would now like to turn the conference over to Carolyn Ballard, Lawson Products Inc. Communications Director. Please go ahead.

  • Carolyn Ballard - Communications Director

  • Welcome to the Lawson Products 2011 Third Quarter Earnings Conference Call. This call will be hosted by Tom Neri, our Chief Executive Officer; Harry Dochelli, our Chief Operating Officer; and Ron Knutson, our Chief Financial Officer.

  • Today we will start with a general overview of our quarterly results and operations by Tom and Harry, followed by Ron, who will review our financial performance. We will then open the call for questions.

  • We would like to remind participants that today's conference call is a proprietary Lawson Products presentation and is being recorded by Lawson Products. No recording, reproduction, transmission or distribution of today's call is permitted without Lawson's content.

  • This call is being audio simulcast on the Internet via the Lawson Products Investor Relations page on the Company's website. A replay of the webcast will be available on the website until November 21, 2011.

  • As a reminder, today's conference call includes statements regarding the Company's anticipated financial and operating results as well as other forward-looking statements based on current expectations as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may often be identified with words such as may, should, could, anticipate, believe, continues, estimate, expect, intend, objective, plan, potential and project. These statements are not guarantees of future performance and involve risk, uncertainties and assumptions that are difficult to predict. It is important to note that the Company's actual results may differ materially from those anticipated.

  • Information on factors that could cause actual results to differ materially from these forward-looking statements is contained in the Company's periodic filings with the Securities and Exchange Commission, and we encourage you to review those carefully. Forward-looking statements are made as of today's date only and we undertake no duty to update the information provided on this call. I would now like to turn the call over to CEO, Tom Neri.

  • Tom Neri - CEO

  • Thank you, Caroline. Good morning, everyone. I want to thank you for joining us on our first Lawson Products Earnings Call to Discuss our Third Quarter 2011 Results.

  • We have initiated these quarterly earnings calls to increase transparency for shareholders and analysts. The idea is to provide a regular update on the strategic direction of the Company and to make ourselves more available on a more routine basis to answer questions regarding the development of the business. We will provide some brief comments this morning and then we will open it up for questions.

  • I would like to start by saying that we continue to transform the business while rebuilding the Company's foundation. After considerable discussion and review, it became apparent to us that we needed to make a number of strategic changes to evolve our business in order to not only remain competitive, but to provide for future growth.

  • We recognized immediately that the decisions we made will have a long-term benefit for the Company. However, there would be some financial impact in the near-term. We have dedicated resources to build a new management team, refocus our portfolio on our core MRO business and improve our business operations. We continue to make investments in the business and are confident that these investments will provide us with the foundation for our growth and also improve our customers' experience with Lawson.

  • We have built the transformation of our business around three core initiatives to reach our vision of becoming our customers' first choice for MRO solutions that improve their operating performance. These are replacing our legacy systems and business processes with a new, fully integrated ERP system; network optimization, which is our ongoing effort to continuously improve our distribution network; and sales transformation, so that we have multiple ways to service our customers.

  • Harry will expand further on the progress of these, but let me comment on a major milestone that was achieved during the third quarter -- the implementation of our new ERP system. On August 2 we went live with SAP. We were pleased that within hours of the system going live we were able to pick, pack and ship orders.

  • We gradually ramped up our processing of orders for several weeks following our go-live as our team became accustomed to the intricacies of a new system. The cutover and the transition to a new system had an impact on our third-quarter results. However, I will say that we are satisfied with the conversion and with our continued progress in utilizing the new system.

  • The Company had lived with 20-plus year old systems and processes that were simply not stable, not integrated and limited our ability to have the necessary infrastructure to enhance the customers' experience and grow the business. For any of you that have been through system change or conversion, I'm sure that you realize that all have their challenges. Ours is no different.

  • We continue to work through post go-live issues that are impacting our customers, our independent sales agents and our employees. However, they are all manageable and we have made progress in resolving many of these issues. We will continue to invest the necessary resources to resolve the open items.

  • Ron will provide a full financial overview, but let me provide some highlights before I turn it over to Harry.

  • Sales for the quarter finished at $75.4 million, representing a 7.6% decline over a year ago, and were also lower than the first and second quarters of 2011. Sales were impacted by our transition to the new ERP system SAP, which resulted in two fewer selling days as well as some related shipping delays. However, we are encouraged that sales are gradually rebounding.

  • We posted an operating loss before taxes of $3.1 million for the quarter reflecting lower sales and gross margins, combined with our expected investments made the business (inaudible) in this quarter. I will now turn it over to Harry Dochelli, our Chief Operating Officer.

  • Harry Dochelli - COO

  • Thanks, Tom, and good morning to everyone. Let me echo Tom's comments that we're very pleased to be holding our first earnings call. We're excited to share with you the improvements we're making as a Company to transform the business.

  • Before I discuss the progress that we have made on our three key strategies, I'd like to make a few additional comments regarding third-quarter sales.

  • There is a lot of noise in our numbers. Tom already mentioned the most significant item, our ERP implementation. While we had [successfully] (inaudible) conversion, we physically did not accept any orders from July 28 to August 2 to ensure a smooth cut over of the data.

  • As Tom mentioned, we were picking and shipping orders to our customers on the first day of go-live. During the first few weeks after the cut over, our focus was primarily on restoring the ordering and shipping levels at our distribution centers to pre-SAP levels.

  • Our largest challenges at the time were our Mississauga, Ontario distribution center and processing nonstock special orders to our customers throughout the network. At this point, we've made significant [process] in catching up at Mississauga and are processing special orders on a more timely basis.

  • The rebound in sales is evidenced by our average daily sales, or we call it ADS. They were $1.243 million in July, $1.095 million in August and bounced back to $1.206 million in September. So while ADS took a dip in the month following the conversion, September ADS increased by 10.1% over August levels as we increased our shipping capabilities.

  • In terms of our current status under SAP, we continue to make progress on a daily basis and learn how to operate more efficiently using the SAP software. Heavy focus is currently being placed on the replenishment cycle through our packaging facility here in Des Plaines in an effort to reduce our current backorders to our customers. However, the current quarter also includes additional overtime and temporary labor, increased outbound freight costs as we ship more single-line shipments to support our customers, and a lower service level to our customers as we work through our inventory replenishment process under a new system.

  • We're also working through a number of customer-facing issues such as invoicing and customer support. We expect to resolve many of these items over the next 30 to 60 days. However, we could see lingering effects to a lesser degree over the next couple of quarters.

  • Now let me turn to the progress we have made on our three core transformational initiatives. First let's talk about sales transformation.

  • We continue to move forward on many initiatives to support our sales transformation. We understand that our customers are looking for a multichannel approach. Historically, we have had a single-channel approach in which our customers order through our independent agents.

  • During the quarter we continued the redevelopment to build out a fully integrated website that will allow for new and existing customers to easily perform product searches, immediately obtain pricing and place a direct order through the web. This will allow the organization to capture the unplanned purchases of our customers, an opportunity that we do not capture today. We plan to introduce the new website in the first half of next year.

  • We have also continued toward the conversion of our independent sales agents to employee sales representatives. This is a longer-term process that will extend through 2012 to ensure that we do it right for our agents, our customers and for the business.

  • All new sales individuals are being hired as employee sales reps. We had approximately 30 of these individuals in place at the end of Q3. Additionally, we're moving forward with the hiring of business development managers to identify new business opportunities and to help feed recurring sales to our sales team.

  • Part of the sales transformation effort also includes reviewing our customer pricing model. Currently we have transitioned approximately 50% of our customers to our new tiered pricing model. This market-based approach will allow us to increase penetration to our existing customers and attract new customers at more appropriate pricing levels. All of these initiatives are aimed at generating topline sales growth.

  • Now let's talk about network optimization. This is an area that is under constant review. During extensive customer research performed in late 2010, fast delivery was ranked as a top priority by our customers. We took this very seriously and have been hard at work to find solutions to meet our customers' needs.

  • Two quick examples of what we're doing to enhance our delivery speed; first, we are developing a pilot program to be rolled out in 2012 to leverage local delivery companies out of our Addison, Illinois distribution center. In using these local delivery companies, we will be able to expand the scope of our next day delivery throughout the Midwest.

  • Secondly, we rolled out a new line of safety products in the third quarter of 2010. As part of that program, we partnered with a vendor to supply over 5000 products, of which we stock less than 2000 ourselves. The remaining products are shipped directly from our supplier to our customers, which expedites the delivery process. We continue to review other product expansion opportunities using this method to expand our offering to our customers.

  • And finally, ERP; let me emphasize that many of the initiatives we're working through, such as tiered pricing and the new website, would not be possible without a fully integrated ERP system. While we recognize the short-term financial impact of the conversion, we expect that the benefits of easier ordering, improved customer service, enhanced inventory management and better financial systems will be realized from 2012 onward.

  • I would now like to turn it over to Ron Knutson, our CFO, to discuss our financial highlights of the quarter.

  • Ron Knutson - CFO

  • Thanks, Harry, and good morning, everyone. In terms of sales, we finished the quarter at $75.4 million, a decrease of 7.6% from a year ago. As Tom and Harry mentioned, sales for the quarter were negatively impacted by the transition to our new ERP system.

  • From a sequential average daily sales basis July was down 3.5% from June, and August was down 11.9% from July. However, September rebounded nicely, up 10.1% from August. And while we continued to work through various post-ERP go-live issues, the immediate drop in sales appears to be behind us.

  • We continue to actively pursue larger, national and government accounts. For the quarter, our national or strategic accounts increased 6.7% or $400,000, while our government sales declined by $3.2 million due to a decline in military orders and a tightening of the government spend. On a sequential basis, our government business has moderated during the year, and looking forward we will continue to focus on multi-location strategic accounts.

  • I would like to add that amidst the moderating ISM index for the past five to six months, we're continuing to focus on and invest in resources that will drive future sales growth. Our hiring of business development managers, employees sales reps and continued investment in our strategic accounts team are just a few examples of these investments.

  • Consolidated gross margins finished at 56.5% for the quarter versus 61.2% a year ago and 57.4% in Q2 of 2011. MRO margins were 58.4% compared to 59.1% in Q2 of 2011.

  • The year-over-year margin erosion was driven by three items. First, vendor costs increased while we held customer pricing constant to facilitate our ERP conversion. Secondly, net outbound shipping costs increased as we shipped more single-line orders to support our customers. And third, our planned strategy to gain larger customers at lower margins.

  • This brings a lower gross margin percentage. However, the fact that we gained higher customer retention, increased aggregate margin dollars over time, and we will have the ability to leverage our SG&A outweigh the tightening gross margin percentage.

  • In October, we accelerated the conversion of many of our customers to our tiered pricing program and also implemented specific product category price increases which should expand margins in future quarters.

  • Selling, general and administrative expenses increased by $1.7 million or 4% for the quarter compared to a year ago. Our selling expenses decreased by $1 million as a result of lower commissions paid on lower sales, which were partially offset by increased costs of health insurance claims. And for the quarter, selling expenses were 25.7% of sales as compared to 24.9% a year ago.

  • Excluding selling expenses, G&A costs increased by $2.7 million. ERP implementation expenses, Web development costs and higher insurance claims drove the increase, which was mitigated by lower compensation expense as a result of our current financial results. Excluding the ERP cost of $2.3 million in the quarter along with post go-live support costs and investments in the website, G&A costs increased by 4.5% over a year ago.

  • Other items in the third quarter compared to a year ago were lower severance expense as we incurred fewer restructuring charges in Q3 versus a year ago. Also in 2010 we realized a nonrecurring favorable legal settlement for $3.5 million which related to actions of several former sales agents. The net loss for the third quarter of 2011 was $2.2 million or $0.25 per diluted share compared to net income of $3.4 million or $0.40 per diluted share in the prior year.

  • Now let me turn to our balance sheet. We ended the quarter with $19.3 million cash and no outstanding borrowings. For the year we have expended a total of $13.1 million for our ERP implementation, of which $6.5 million has been capitalized and $6.6 million has been expensed.

  • We estimate that our CapEx for the full year will be approximately $12 million inclusive of the $8.9 million spent to date. Any further cost associated with this phase of our ERP implementation will be expensed as incurred.

  • I'm also pleased to announce that during the quarter we amended our existing $55 million credit facility with a private bank. We were able to extend the term for five years, gain more favorable pricing by over 100 basis points, obtain more favorable covenants including our allowable dividends -- increasing our allowable dividends from $7 million to $10 million, decreasing our minimum working capital ratio from 2.0 to 1.75, and providing a larger basket for acquisitions.

  • We're confident that our existing cash on hand and our untapped credit facility provides us ample resources to continue the necessary investments for the transformation of the Company and to pursue growth opportunities.

  • During the quarter we paid a dividend of $0.12 per share for an aggregate amount of approximately $1 million, representing a yield of approximately 3% at our current stock price.

  • With that, we will open up the lines for questions.

  • Operator

  • (Operator Instructions) Arnie Ursaner, CJS Securities.

  • Arnie Ursaner - Analyst

  • Hi, good morning. A couple of quick questions. You mentioned September showed a nice improvement from August. Now that you have an ERP system, can you give us a feel for how October did?

  • Ron Knutson - CFO

  • Sure, Arnie. Good morning, Arnie. This is Ron Knutson. Our October sales were relatively flat with September. I think you are aware that we don't go out with formal monthly announcement on monthly sales for each individual month. But we have seen basically relatively stable sales versus September.

  • Arnie Ursaner - Analyst

  • Okay. My second question, we've approached your Company where this was a transition year. You were incurring some very sizable expenses on a relatively small share base. So, I would like to try to focus on the ERP cost and the web costs we have incurred to date, but more importantly, how we should think about them, spreading out over say the next three quarters.

  • I think you gave us your ERP for the year to date of $13.1 million, $6.5 million was the -- $6.6 million expense. Can you walk us through both your ERP and web costs for the next few quarters, what we have incurred to date and what you expect to incur for the balance of the next couple of quarters?

  • Ron Knutson - CFO

  • Let me -- again this is Ron Knutson. Let me just first give you a little bit of a background as far as what we've spent for the quarter. And I will do this more from an expense standpoint, and then if we want to talk capital I can certainly expand into that also.

  • So for the quarter, for the third quarter of 2011 we incurred $2.3 million of operating expense related to ERP. That compares to about $1.6 million for Q3 of 2010. And as you look back, publicly we've disclosed that we spent $1.9 million in Q1 in 2011 and $2.4 million in Q2 of 2011. So on a year-over-year basis, at least through the first nine months, we've spent $6.6 million in expense for 2011. And that compares to about $2.2 million for the first nine months in 2010.

  • Relative to the web, we've been incurring about -- from an expense standpoint, about $200,000 to $250,000 a month as we've been developing it. Similar to our ERP system, a portion of the web development costs will be capitalized. And year to date we've capitalized about $400,000 of web costs.

  • So, all-in, we're at about $1.1 million of development costs on the Web. As we look forward into future quarters any expense, any support expense, any post go-live -- working through some of the post go-live issues on ERP, those dollars will be expensed on a go forward basis. So there's not really heavy development dollars being invested today. But items such as support, resolving some of the open issues as well as potentially some of the temporary labor and so forth that we're incurring, that will probably linger on for the next quarter or so.

  • Relative to the web, we have we've commented publicly that we'll spend about $2.6 million developing that -- the website. And I would anticipate that the spend that we've seen over the past few months, over the past few quarters will continue until we roll that out in the first half of next year.

  • Tom Neri - CEO

  • This is Tom Neri speaking. I just wanted to add a little comment on the ERP or SAP extension. There's still some smaller modules of SAP that we have not implemented, such as an HCM system.

  • We're going to evaluate the benefits of those on an individual basis, and if there is a return to implement those, we will do that. If we don't see the adequate return, we won't. In neither case will that have significant impact on our results.

  • Arnie Ursaner - Analyst

  • And since you have now gone live, how should we think about the amortization expense occurred incurred this quarter and on a go forward basis?

  • Ron Knutson - CFO

  • Sure. So, on a total capital basis we have about $13 million capitalized. We'll amortize that for a period of five years. It's about $700,000 a quarter that will hit depreciation expense.

  • Arnie Ursaner - Analyst

  • And when does that start?

  • Tom Neri - CEO

  • It actually started. We took a month-and-a-half depreciation in Q3, so that was burdened with about half of that.

  • Arnie Ursaner - Analyst

  • Okay, I will jump back in the queue. Thanks.

  • Operator

  • (Operator Instructions) Edward Marshall, Sidoti & Co.

  • Edward Marshall - Analyst

  • Hi, guys. Clearly the inventory turns have gone up -- or come down, I guess, in the quarter. And that is clearly showing some improvement as your inventories fell. But as I kind of think about maybe paring down some safety stock you may have had in place, I thought that may be the reason for it.

  • However, you mentioned in the press release that you saw inability for timely replenishment in the distribution centers, resulting in fewer fill rates. Did you not have -- is this basically saying you didn't have enough safety stock on hand or this disruption was a little bit longer than you had thought? Or kind of walk me through what happened there.

  • Harry Dochelli - COO

  • This is Harry Dochelli. Yes, we actually bought in inventory for ERP in anticipation of having a learning curve to understand the systems. This was a new replenishment model that we're working with and a new [F&P] model that we've got to work our way through from an understanding.

  • So, our inventories carried us through in August and we learned pretty quickly that we had to ramp up some of our purchases of inventory into September as well as in Des Plaines here. And I think as you have been through our Des Plaines facility, you see that we do repackaging of goods in here at Des Plaines. That's a pretty unique process that exists outside of a normal distribution company.

  • We had some challenges moving product from receiving through the packaging area and then out to our DC. So, when you put that all together, that had a negative impact on our inventory levels and consequently a negative impact to our customers.

  • Edward Marshall - Analyst

  • And I'm assuming that is not quantifiable as far as the impact?

  • Harry Dochelli - COO

  • Well, I guess, we're in a more planned inventory environment, so our customers have inventory at their facilities. Now eventually it goes down, right? They run out and they want to order with us.

  • So, if you think about it, we keep safety stock. Our customers keep safety stock. So to really measure it directly, quantifiably what that is and the impact, I think we would have a hard time trying to get to that number.

  • Edward Marshall - Analyst

  • And then you mentioned in the press release that there was level of price increases on par with the industry average. Can you kind of talk about what that average price increase was across your board there?

  • Harry Dochelli - COO

  • Sure. It's on average about 5%. And I think we also mentioned that we had held our increase prior to ERP go-live, because we wanted to have a clean cutover and not have any other risk in that cutover point. So that was a delay for us in the marketplace where you will see others had gone ahead of us, ours was not until October. And on average it was about 5%.

  • Edward Marshall - Analyst

  • It started in October, or it was implemented (multiple speakers) October 1?

  • Harry Dochelli - COO

  • We implemented it October 1.

  • Edward Marshall - Analyst

  • Okay. And yet, sales were still flat with say -- did you say September or July?

  • Harry Dochelli - COO

  • No, they're on par with September sales.

  • Edward Marshall - Analyst

  • Okay. And then can we talk about longer-term, maybe the benefits of the part ERP system that you have seen so far, understanding that you are still facing disruptions and kind of working through the full benefits that you'd receive from it. But can you talk about what -- where the ERP system -- now that you've gone two months with it, and what you foresee you may not have foreseen prior to implementing?

  • Harry Dochelli - COO

  • One, Ed, I will tell you that our ability to do a price increase was the first thing that we saw. We could quickly adjust our pricing levels, where before in our legacy systems it was about a 90-day planning process and implementation process to do a price increase. With the new SAP system, it is relatively turnkey for us to be able to do that.

  • Secondly, as you know, as we commented, we are rolling out a new market-based pricing model. We're getting off of our old legacy model. And that has really accelerated our ability to do it, being on the new system.

  • The old system, frankly, we were stalled. We had reached the maximum point that we could get on to that new model. With the new system, I have to tell you it is literally turnkey. We could change customers very quickly with it. So, both of those are really significant advantages for us.

  • And I will tell you the other thing, Ed, we're now on a fully integrated system. So throughout our facilities, we have visibility of a 360 view of a customer that we never had before because we were on these disparate legacy systems. And as people learn the system more and more, and as they gain more skills around understanding the system, I think our customers will really start to see the benefit of it in the future.

  • Ron Knutson - CFO

  • Ed, this is Ron Knutson. Maybe just a couple of additional items on top of that. We're starting to get just some early views around profitability from a customer standpoint, so that is certainly an area that we'll be placing emphasis on over the next three to six months, just relative to cost to serve and margins by customer.

  • And then certainly the financial closing process; we successfully have closed August and September, and I think those -- that process when extremely smooth. So I think that is just a sign of things to come throughout the entire organization.

  • Edward Marshall - Analyst

  • And just to be clear, my understanding from what your comments were this morning is that it is not business as usual yet. It's going to be another two to three quarters of hangover. But once we're through that, it's pretty much the restructuring as is reference to ERP is kind of behind you, or should be behind you.

  • Ron Knutson - CFO

  • I would say that is fair.

  • Edward Marshall - Analyst

  • Thanks, guys.

  • Operator

  • Arnie Ursaner, CJS Securities.

  • Arnie Ursaner - Analyst

  • Hi. I guess a couple of follow-ups. Given the amortization expense and the various moving parts, do you expect or hope to achieve profitability in Q4?

  • Ron Knutson - CFO

  • Arnie, this is Ron. I think everybody is aware that our policy is to not provide guidance for -- on a quarterly basis or for a full-year basis. I would say to our earlier comment that the sales for October, relatively flat with September.

  • The other couple of items to keep in mind for Q4 -- first of all, it's a 60 business day period for us. If you look at Q3 that was 64 days, and actually Q4 of last year had 61 days. So not only are we 4 fewer days versus Q3, we are one fewer day versus Q4 of last year.

  • Our business is fairly seasonal, at least in the last quarter or in the fourth quarter, in particular the month of December. I would say, however, in 2010 we had an extremely strong fourth quarter from a topline sales standpoint. Actually I think it had the highest ADS out of all of the quarters for last year.

  • So we're up against some strong numbers from a year ago, fewer days. We're cautious about Q4 for those couple of items, as well as continue to work through some of the ERP items.

  • Tom Neri - CEO

  • And I think, Arnie, just add to that, if you look at the ISM index and you looked at it a year ago and look at it today, it's heading in different directions, too. So I think the market has changed year-over-year. So we're keeping an eye on it. But we may see different behaviors from our customer this year than we saw last year, where people were more optimistic going into the year.

  • Arnie Ursaner - Analyst

  • Can you expand a little bit on the whole sales force transformation? I know you mentioned in your prepared remarks that you have added quite a few direct sales people. But you also have had a structure in place that is going through transition where you're trying to weed out or eliminate some of the very -- the lower-producing reps within your structure. What was headcount, turnover? And maybe you can update us more generally on the wholesale force transformation.

  • Tom Neri - CEO

  • Sure. I think what you're referring to, Arnie, when we have discussed this in the past publicly that we have been monitoring the performance of our salespeople. And as they hit -- we call them underperforming salespeople, we've more aggressively started to manage those folks out of the organization than has been historical with our Company.

  • And we really targeted a group of approximately 150 sales folks that were what we would call low performing folks, and we've managed through most of those people now. And they are in various stages of a transition plan. So I think we've commented before that we have a program called secession planning, which is a thoughtful way of having our salespeople exit the business.

  • In order for us to retain the volume of business that they have, we have a planned approach with them. Those 150 or so agents that are in our program are in various stages of that. Some of them left the organization. Some are still in the secession plan.

  • And we continually monitor that, Arnie. So, every quarter we look at a new group of folks. And if they have fallen below a threshold of performance, we're following the same.

  • If you look at it on a year-over-year basis, we're about 1024 at the end of September, end of third quarter. And if you look at it at the end of last year, it's 1139. So, you can do the math on that. We've heard some people in. We've (inaudible) some people out. But we are exiting more than we're bringing in.

  • Arnie Ursaner - Analyst

  • Okay, thank you.

  • Tom Neri - CEO

  • And then I -- okay.

  • Operator

  • (Operator Instructions). This concludes our question and answer session. I would like to turn the conference back over to Tom Neri, President and CEO of Lawson Products Inc. for any closing remarks.

  • Tom Neri - CEO

  • Thank you, Andrew. In closing, want to reiterate how excited we are with our progress on our strategic objectives. With SAP in place, we are positioned to better meet our customers' needs and drive our business forward.

  • Additionally I would like to take this opportunity to personally thank our team members for their efforts over the past year, and in particular the most recent quarter as we converted to our new ERP system. Their dedication and commitment to the organization has allowed the Company to take a significant step forward in reaching its objectives. Thank you.

  • Operator

  • The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.