P&F Industries Inc (PFIN) 2004 Q3 法說會逐字稿

Welcome to the P&F Industries third-quarter 2004 financial results conference call. At this time all participants are in a listen-only mode. Following management's prepared remarks, we will hold a Q & A session. To ask a question, please press star, followed by 1 on your touch-tone phone. If anyone has difficulty hearing the conference, please press star, 0 for operator assistance. As a reminder, this conference is being recorded today, November the 11th, 2004. I would now like to turn the conference over to Ms. Burfening. Please go ahead, ma'am.

Thank you, Operator. And good morning, everyone, and welcome to P&F Industries' third-quarter earnings conference call. With us from management are Richard Horowitz, Chairman, President, and Chief Executive Officer; and Joseph Molino, Chief Financial Officer.

Before we get started, I'd like to remind that you any forward-looking statements made during this call, including those related to the Company's performance for the 2004 fiscal year are based upon the Company's historical performance and on current plans, estimates, and expectations. They are subject to various risks and uncertainties including, but not limited to, the impact of competition, product demand, and pricing. These risks could cause the Company's actual results for the 2004 fiscal year and beyond to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update, publicly, or revise any forward-looking statement, whether as a result of new information, further developments, or otherwise. With that, I would now like to turn the call over to Richard. Good morning, Richard.

Good morning, Jody, and thank you so much. And thank you, all, for joining us today for our conference call. The third-quarter of 2004, overall revenues of P&F increased 64.3%, same period last year, $38.9 million, due substantial revenue increase at Countywide Hardware as a result of the acquisition of Woodmark International, accompanied by double-digit revenue increases for all of our other subsidiaries. Net income for the third quarter of 2004 was $1,605,401, or 44 cents per share, on a diluted basis. Before I take you through a more detailed look of operations of each of our 4 business units, I'd like to review what each of our companies does, for those of you who are first-time participants to our conference call.

Florida Pneumatic Manufacturing Corporation is primarily engaged in importing or manufacturing approximately 50 types of pneumatic hand tools. Countywide Hardware imports and manufactures various hardware products, including stair parts, kitchen and bath hardware, or window and fencing hardware products. Countrywide is comprised of Nationwide Industries, Franklin Manufacturing, and our most recent acquisition, Woodmark International. Green Manufacturing is engaged primarily in the manufacture, development, and sale of custom-designed, welded hydraulic cylinders used in heavy industrial and mobile equipment. Green also manufactures a line of access equipment for the petro-chemical and a line of post-hole digging equipment for the agricultural industries. And lastly, Embassy Industries manufactures and sells baseboard heating products, as well as radiant heating products and gas-fired boilers, primarily sold in the northern tier of the United States.

Now, I'll review with you the quarterly performance at each of these business units. Firstly, Florida Pneumatic, which accounted for 41% of our overall revenues for the third quarter. The third quarter of this year, Florida Pneumatic's revenues increased 27.4% to 15.8 million dollars, compared to $12.4 million for the third quarter of 2003, due, primarily, to increases in retail promotions, new product introductions, increased penetration in the automotive aftermarket, and general improvement in base sales. This was partially offset, however, by the loss of a major customer at the end of 2003 that we have mentioned to you on other occasions. Gross profit margins at Florida Pneumatic decreased to 26.7%, due to the loss of that major customer last year, which had higher-than-average margins, and the weakening of the U.S. dollar in relation to the Japanese yen. Cost reductions and productivity improvements helped to offset these negatives. We remain optimistic about our prospects at Florida Pneumatic, and are pleased to announce to you that one of our largest customers has been advertising heavily in air tools, which has contributed to 11% increase in store sales to that customer year-to-date. This increased spending should further support sales growth in the fourth quarter. Several new products at both the retail and industrial channels have been introduced and others are in the pipeline.

Countrywide Hardware -- Countrywide accounted for 41% of revenues for the quarter. Country's third-quarter revenues rose 200.9% when compared to the same period last year, due primarily, to the inclusion of sales from our new acquisition, Woodmark International. Gross profit margin at Countrywide decreased from 35.1% to 32.2%, resulting primarily from the inclusion of Woodmark, which has lower gross margins than the Countrywide business units. Excluding Woodmark, gross profit would have decreased slightly, due to higher freight and overhead costs, offset somewhat by a more favorable product mix. Woodmark has made a substantial impact on our business in the first 3 months of our ownership, and we are excited about a number of this business' attributes. First, the comparatively -- the comparatively less seasonal nature of Woodmark's business adds to the overall stability of P&F's profitability and cash flow. Second, Woodmark has an exclusive relationship with an Asian vendor which adds to Countrywide's value by allowing the Company to utilize local management and buying power to coordinate approximately $20 million in annual hardware purchases. And thirdly, Woodmark's size is also an advantage, as it creates critical mass in the U.S., facilitating Countrywide's geographic expansion.

Increased fencing sales were offset by weakness in OEM and patio sales. And the severe hurricane weather in Florida had a negative impact on Nationwide sales and its large base of Florida customers, resulting in an increase of only $100,000 in sales for the period for Nationwide. However, we expect Nationwide to increase sales as a result of homeowners making repairs in the aftermath of the hurricane season. This increase may not be immediate, as we are heading into our slow season at this point. Our Green Manufacturing subsidiary accounted for approximately 11% of revenues for the third quarter. Third-quarter revenues there rose 26.6% as compared to the same period last year, due primarily to new cylinder customer acquisitions, price increase for cylinder customers, and general improvement in the cylinder market. In addition the access product line is benefiting from a new relationship with a manufacturers' representative organization that is generating significant new orders. Gross profit margins at Green decreased to 9.1% from 10.6% last year, due to increases in the price of steel. We were able to pass through some of these material cost increases to the customers in the form of price increases, but we're not able to completely offset the cost increases, due to contractual arrangements and competitive pressures.

And lastly, Embassy Industries accounted for approximately 7.3% of sales for the quarter. Embassy's third-quarter revenues increased 12.5% to 2.9 million, as compared to the same period last year, due, in part, to increased baseboard sales, resulting from the continued strength of housing starts in the north. Most of increase, however, was attributed to stronger sales of radiant products and boilers. Gross margin for Embassy increased from 27.7 to 27.9%, primarily due to a slight improvement in product mix. We are pleased to note that Embassy's recovery continues to be broad-based, extending across several product lines. Now, I'd like to turn the call over to Joe Molino, who will share some additional insights into the results for the third quarter. Go ahead, Joe.

Thank you, Richard. As Richard focused on the quarterly information, I'd like to give some perspective on the -- on the first 9 months. Revenues for the first 9 months, ended September 30, 2004 increased 23%, 77.9 million, from 64.9 million for the first 9 months of 2003. Net income for the first 9 months, ended September 30, 2004 was $2,546,341, or 70 cents per share, on a diluted basis, as compared to net income of $2,569,816, or 72 cents per share, on a diluted basis for the 9 months, ended September 30, '03. Despite the revenues increase year-to-date, profits were negatively impacted by the strength of the yen, the loss of a major customer with strong margins, and increased selling expenses to a major customer. All this, however, was generally in line with expectations.

Revenues at Florida Pneumatic were essentially flat at 33.6 million, down from 33.7 million for the 9 months, ended September 30. Although this appears somewhat disappointing, one should consider that in 2003, this figure included 2.9 million in sales to a customer lost at the end of 2003. This loss was partially made up by new product sales of almost 1.4 million in our standard channels, as well as almost 900,000 of additional sales in the revived automotive aftermarket channel, principally in new products as well. Gross margins at Florida Pneumatic also decreased from 34.7% to 30.7%, year to date. The main drivers here were the major customer loss, which generally had better margins than the remainder of the business, as well as the strengthening of the yen, which increased the cost of imported products.

Revenues at Countrywide are up 79% for the first 9 months of 2004, improving to 27.3 million from 15.2 million. Certainly, the additional 10.5 million of Woodmark's sales since our June 30 acquisition were the most significant factor, but it should be noted that Nationwide sales were up 13.3% for the year, as fencing growth continues to outpace weaker patio and OEM sales. Also, the severe weather in Florida in the month of September had a slight negative impact to Nationwide for the first 9 months. However, historically, as Richard mentioned, this has tended to improve sales in the longer run as customers ultimately replace broken outdoor hardware. Gross profit at Countrywide for the first 9 months decreased to 34% -- 34.9%, due primarily to the inclusion of Woodmark, which has slightly lower gross margins than the rest of Countrywide. Without this impact, margins would have increased to 35.7%, from a more profitable product mix and greater overhead absorption from higher sales.

Revenues at Green increased by 19.9% in the first 9 months of 2004 to 11.2 million from 9.3 million in the prior period. All of Green's product lines have enjoyed double-digit sales growth this year as the economy has improved. The challenge for the first 9 months of the year has continued to be the ability to pass along the significant price increases in metals in a timely manner. Although difficult to quantify exactly, these increases to Green have cost the Company several hundred thousand dollars on a year-to-date basis. At this point, barring further material cost increases to Green, our latest pricing to customers fully offsets these increases. The unfortunate result of the above was that gross margins decreased from 9.4 million -- excuse me 9.4% to 9.1% for the 9-month period, despite the revenue increase.

Revenues at Embassy increased 16.9%, 7.8 million for the first 9 months of 2004, from 6.6 million for the first 9 months of 2003. The main reasons continue to be strong housing starts increasing baseboard sales, as well as healthy growth of 56% in the boiler line the first 9 months. The reduction in gross margins from 29.9% to 28.3% is due, primarily, to the strengthening of the euro, which significantly increased the cost of radiant tubing, and the larger mix of boilers in total sales. Boilers have lower average margins than the rest of the product line. In addition, there was a less favorable mix of commercial product. Price increases in raw materials did not have a significant impact on Embassy's results for the first 9 months.

Consolidated SG&A expense increased 16.5% for the 9 months, to 17.7 million from 15.2 million in the year-earlier period. Excluding SG&A expenses of 1.3 million related to Woodmark, the comparative increase would have been only 7.7%. Much of this increase relates to the increase in compensation at Nationwide, as well as professional fees related to corporate-compliance work. Once again, we enjoyed substantial decreases in SG&A resulting from cost-cutting efforts in all segments that offset the increase. Overall, SG&A was 22.2% for the 9 months, down from 23.4%. Interest expense for the 9 months increased 26.3% to $701,363 from $555,265. This was due, primarily, to significant borrowings under the term loan facility for prior Woodmark on June 30, offset by lower-average borrowing under the revolving credit facilities. Other items affecting cash flow were depreciation and amortization of intangibles which were $1,340,153 and $542,250, respectively, for the 9 months. For the quarter, these amounts were $460,665, $276,250, respectively. Finally, capital expenditures were $943,914 for the 9 months and $294,014 for the quarter. I'd like to now turn the call back over to Richard. Richard?

Thank you, Joe. Now, I'd like to present to you what we expect from each of our subsidiaries in the fourth-quarter of 2004. We expect overall results for the fourth quarter of this year to be stronger than the prior year's comparable period, driven by sales increases of all of our subsidiaries. The addition of Woodmark in '04, when compared to '03 it was not there, and continued improvements in operating efficiencies. Sales at Florida Pneumatic are expected to increase 25 to 35%, due to heavy promotional sales of 2 major customers and new product introductions. Sales at Countrywide are expected to increase 200 to 210%, due primarily to the Woodmark acquisition. Sales at Green are expected to increase 25 to 35%, due to the general improvement in the overall cylinder market and continued strength in orders in the access product line. Sales at Embassy are expected to be flat. Gross profit margins are expected to range from 28 to 29%. Selling, general and administrative expenses as a percentage of revenue, are expected to decrease to less than 20%, due to improvements in overhead cost and the increase in revenue. Interest expense is expected to increase by over 200%, due to debt attributed to the Woodmark acquisition. And lastly, overall profit is expected to increase almost 100% in comparison with the fourth-quarter 2003. I would like to thank you all for your participation on our call today. And now, we are here to answer any questions you may have for us.

Ladies and gentlemen, if you wish to register for a question for today's question-and-answer session, you will need to press star, then the number 1 on your telephone. You will hear a prompt to acknowledge your request. If your question has been answered and you wish to withdraw your polling request, you may do so by pressing the star, then the number 2. If you are using a speaker phone, please pick up your handset before entering your request. One moment, please, for the first question. Your first question comes from Andrew Shapiro with Lawndale Capital Management.

Good morning, guys.

Good morning.

A few questions, if I could, then I'll back out of the question queue and ask a few more and let others in here. On the Woodmark acquisition, it's looking as accretive as your 8-K, kind of, showed it would be, and you said last quarter. I'm interested in knowing how the integration is going, some of the costs, now, that you have identified to be removed in the coming quarters, and maybe some of of the revenue synergies that you see happening?

Well, let me -- there's a couple of questions in there. In terms of -- the expense side, I don't recall -- maybe I'm not following the question. I am not sure that we indicated there would be lots of expense savings.

No, no, you only indicated the accretiveness, and that's been shown. But --

We don't see a lot of savings and overhead in that -- that unit requires its own staff and, in fact, during the integration process, we've -- in going through the various quarterly reports that we pulled together and in preparing that subsidiary ultimately for our -- also, our Sarbanes Oxley compliance, we're more likely to add a little staff there than anything else.

Sure.

As far as the integration going -- going, I'd say, fairly well. That subsidiary is being -- working directly with our folks in Tampa at Nationwide, and they're working very closely together in coordinating their efforts. And I think we've -- we've hinted -- or a little more than hinted -- that we're looking very strongly at possibly a west coast presence that would actually combine efforts in fencing, spare parts, and potentially, some other door and window hardware. So we wouldn't be doing that if the integration wasn't going according to plan, though, generally, I'd give us pretty high marks for the integration so far. But we're having the typical growing pains of getting a company that had been private for -- well, forever, to be working with the demands of a public parent.

Right. And -- and with that, can you update us on the progress? You mentioned, I think in a prior call, that the Company, as a result of this acquisition and prior ones, you have, like, 5 MIS systems, and your goal is going to eventually have to be is to integrate or to consolidate them all into simpler, fewer number of systems, especially for Sarbanes Oxley 404 compliance.

Yes. We've -- we've launched our 1 project to go from, at least, 5 to 4. Nationwide will be consolidating around the system that Woodmark currently uses, and that project is going to take a few months. But after that, we'll -- we'll reassess where we are with the other systems. It's a little bit complicated in that, in some cases, systems that we do have in place are -- are fairly customized to that operation. And we chose to do the easiest one first, where we combined 2 systems that were very -- very similar. So we're going to see how that goes and take it from there, but that probably won't be completed until Q1.

Okay, and lastly on the integration and other issues, and then I will back out into the queue here. You speak of this west coast -- it's not -- it's not an acquisition as much as it is opening up a distribution-type of center, is that --

Yes. I'd say it is a little more than simply a distribution center. We're going to staff it with a general manager and direct salespeople and have a product line that's geared toward the west coast market, which will be, certainly, plenty of overlap with the rest of the line, but it will have additional SKUs that you just don't see in the rest of the country. And, frankly, we are going to treat it as -- as its own entity with its own income statement and balance sheet and the management out there will be judged based on their operation. But we're certainly going to support it with the rest of the organization, and try to grow it as if it was an acquisition.

I am trying to understand. Is this Woodmark? Is it Nationwide? Or all the P&F-type of products that would be cross-sold?

It's really a Countrywide entity, though, any of our hardware products are fair game for that operation. It will not involve tools. It won't involve cylinders to a great degree. And most likely, not any -- any heating products.

Now is this intended -- in the past, you guys have been into, like, for example, the Home Depot regions in the southeast and maybe the east, but I don't think in the west. Is this an avenue for which to obtain, possibly, the Home Depot regions out here in the west?

Well, Florida Pneumatic, actually, is in every Home Depot in the United States and Canada. Franklin Manufacturing is just covering Home Depot in the east. It is certainly one possibility that we could attack the west -- the west operation of Home Depot. You know, it's something we're going to discuss. We'll certainly be able to handle it from a proximity standpoint.

Andrew, it is not the motivating factor, though, if that's what you are driving at. It's not the motivating factor of why we're going to the west coast. We just think it's an untapped marked for our products that we really haven't explored to the greatest degree. And we feel a presence there will help us do that.

Great. I have more questions, so please come back to me, but I will back out of the queue to let others ask

Once again, ladies and gentlemen, as a reminder, to register for a question, please press star, then the number 1 on your telephone. Your next question comes from Andrew Shapiro with Lawndale Capital Management.

That's not a good sign if I am the only one here. I'll ask a few more, guys. You mentioned and talked about the hurricane impact, and I wanted to understand this. This is the quarter ended September. The hurricanes came through in September or October? And have impact in Q4 in which way?

The hurricanes came in July, August, and September.

Okay. So it was all Q3. So the rebuild and -- and whatever deferred activity would be kicking in for Q4 then?

Well, we're not saying that either. It's got to, like, regenerate itself, you know, the demand. People first have to, like, catch their breath. So we're going into our slow season now. So there's no -- there's no -- we're not saying that the fourth quarter is going to show an increase there. It will certainly be better than our third quarter in those areas, but we're not even sure of that, so much. But it's going to be a slow -- it's going to be a slow go, coming back.

Yes. Let me just comment that the -- our business generally softens quite a bit at Nationwide in Q4. So we may see some uptick in relation to a typical Q4. It will certainly not be above Q3. What -- we're not 100% sure what will happen. In some cases people will wait until the spring to -- to repair their patio doors and lanais and various other, you know, outdoor --

Right, right.

-- and hardware products. So, but some of them may go ahead in the fall. It somewhat depends on where they are in the state of Florida.

But, nonetheless, there was damage done and will be a replacement cycle over a period of quarters.

Yes, and -- yes, could be a couple -- it certainly will be more than 1 quarter, and may not even start until Q1 '05.

And that's an area of substantial geographic presence for you?

Yes. I haven't looked at the numbers in the last few months, but, certainly, in '03, Nationwide had almost 50% of its revenue in the state of Florida.

Wow.

You can imagine the impact.

Yes. Yes. Florida Pneumatic, speaking of Florida, the customer -- I think it was Grainger, or whatever, it was -- was, was -- went elsewhere in January. So that means Q4, where you've now given some guidance because of promotions and new products from other customers. Q4 would presumably, then, be the last quarter before the loss of Grainger is anniversaried anyway, and you've already given guidance that you're going to have growth, is that correct?

That is absolutely correct.

And, basically, filled back up that hole, then?

Yes, we have filled the hole up. As I think I said, partially through new products, and then we've also had some increases in promotions at the, you know, the customers we've retained.

Right. Now, you guys have had a lot of new products you've talked about lately, is there any -- you know, internal analysis that you can share with us that, kind of, says, you know, of -- of your revenues this quarter or this year, you know, a third of it is from products that were introduced in the last few years? Trying just to get a feel for what percentage of the revenue streams coming through that division, in particular, or -- and the Company as a whole, are coming, really, from new products introduced over the last year or 2.

Yes, well, I think what I said, is that for this year so far, if you add products that have gone through our regular channels, which are primarily retail plus the automotive aftermarket, it's probably close to, or a little more than $2 million for the first 9 months, and quite a bit of that, really, is just third quarter. I don't believe we've had a great deal of new product sales in '03. You know, I don't even, really, go back that far, so I'd say starting in this year, you know, we will call it 2 million -- almost -- frankly 2 million out of the third quarter's revenue at Florida Pneumatic is probably new products.

Are there any products that are new in the Countrywide or the Florida Pneumatic side, in particular, that are somewhat proprietary in nature or excite you about the future prospects for the coming quarters in here?

Yes. Several of them are quite proprietary where we either we hold the patent or have an exclusive patent license. Product that nobody else has got and nobody else is going to have for some period of time until they are able to, frankly, copy it. So, absolutely, we're excited about some of them.

Okay. In the -- with respect to the -- the steel pricing that was discussed, it sounds -- it sounded as if the primary discussion of the steel pricing impacts for you were within Green, or are there other particular divisions?

Yes. I mean -- Green is -- has been impacted the most, because it is -- it is purchasing the most amount of raw metal.

Yeah.

So, you know, that's where we've got -- and it's also our highest material content of any of our products. And Embassy, probably, second, in terms of impact, and then Florida and Nationwide less. Though, in fact, I'd say that for everything but Green, any impact to material price increases were immaterial.

So aren't the competitors, thus, experiencing the same cost pressures and there should be a rise in prices across the board to the customer base or just a lagging --

There absolutely has been a rise in prices to customers in the cylinder business across the board.

Andrew, I would just say that it's a -- it's such a dramatic increase, steep inclines with prices. It was just, we weren't able to do it at quite the same rate that we were getting hit with the increases. And so there was a delay factor there, you know, orders in house, commitments, et cetera, et cetera. But as Joe mentioned earlier, at this point, now, we are -- we are at -- you know, at sea level. We are okay with it, but to get there was a work.

Right. Now, Green had the biggest hole during the recession, whereby the capacity utilization at Green got down, I think, as low as the 30% levels. Business seems to have come back a bit. Where do you find yourself in terms of the rebound in Green with all the new prototyping that went into place? I am assuming, now, these sales are the result of all that prototyping. I am trying to get a feel for the capacity utilization, monies dropping to the bottom line, as more prototyping results in new orders, et cetera?

Yeah, I would say, Andrew, somewhere between 50% and 60%. You know, unfortunately, if you look to year-to-date, it's been -- it's been hidden by this -- this material cost increase.

Right. We're not seeing it in the margin.

So, we're not seeing it across the bottom line. And as I said, the impact of several hundred thousand dollars.

And during the recession, what you were able to convey was a very sizable increase in prototyping activity versus the prior year as Green, in a sense, became a more diversified customer base, and in -- in a sense, showed a pipeline that would eventually result in contracts and increased sales. If you were to take a look today at your prototyping activity versus last year's prototyping activity, do you still have a growth and acceleration? Or is it a flattening and stabilization of that activity?

It's definitely flattened out. We have a little catch-up to do, frankly, on staffing and coordinating some of this product that's come in. So not to say that we can't gear up again, but we're sort of a step-function in terms of an increase in staff and we've got to absorb that before we can jump back in to prototyping.

Okay. I'll back out of the queue, again. I do have more questions, but I will give anyone else a shot at it. Okay?

Okay.

Once again, ladies and gentlemen, as a reminder, to register for a question, please press star, then the number 1 on your telephone. Your next question comes from Andrew Shapiro with Lawndale Capital Management.

All right, guys. Can you talk about the reason for the move-up in the tax rate in your guidance with respect to the tax rate, especially as you move into the fourth quarter when these things often get trued up?

Yeah, generally, the tax rate is affected by some of the non-deductibility on intangible amortization. That's certainly one impact. We are, frankly, still feeling our way through the tax effect of the Woodmark subsidiary. There's some unique tax aspects to that -- that business in the state of Texas. So we're probably a little bit conservative on our rate right now. And -- and as you said, generally, we're fairly conservative throughout the year on our tax accrual. And in the fourth quarter, we go hard at it and, you know -- you know, nail down the number.

Right. In terms of understanding the cash flow, what was the depreciation and amortization number and the CapEx numbers for the quarter ended September?

Sure. As I said in my prepared remarks, for the quarter, depreciation was 460,000, amortization was 276,000, and CapEx was a little less than than 300,000.

Okay. So that -- that was enhancement done with respect to the EBITDA. So, with respect to the EBITDA, and eventually, I guess, it'd be the build-up of cash, probably, starting next quarter it would be? Because this quarter looked like maybe cash was flat to stable?

Third quarter is usually our biggest cash hog as we're in the middle of the heating season. We are generally just shipping out losses of the promos for Florida Pneumatic and Nationwide is in the peak of their fencing shipping season. As that all winds down, the heating business, the trough that we see in the fourth quarter in Nationwide, and as we start to collect on some of those big shipments at Florida Pneumatic, historically, we have very strong cash flow in the fourth quarter. And I certainly expect that we will, in that, Woodmark isn't really going to impact that negatively at all. As I mentioned, they have a very steady operation. They don't see a lot of peaks and troughs. So now that they're on board, you know, they're going to contribute cash flow in the fourth quarter as well.

Right. Now as you build up cash, because with this acquisition and all, you're going to end up building up cash and paying down your debt. We looked at your 8-K, which showed the high accretiveness of Woodmark. Obviously, others in the marketplace didn't. But as you are going to start generating a lot more cash and start paying down that debt at a pretty decent pace, I don't think you bought back any shares, can't tell, during this last quarter. And I was wondering what your views and thoughts are on that, in terms of when you feel your leverage gets paid down enough that it no longer precludes that kind of activity, which would only make this acquisition be even more accretive, because the multiple the stock's at, even now after this announcement, is still quite low relative to pro forma numbers.

Andrew, I would be disappointed in you if you missed one phone call with the opportunity to talk about back-off stock.

Of course, we only want to accelerate your accretiveness here.

Okay. Well, I think we're doing -- I think we're doing pretty good on all fronts on that way. We are positioned with buying back stock and we have the same position we've -- it has been on a very consistent basis for the last couple of years --

Sorry, I can't hear you Richard.

We just authorized at our last Board meeting, we made an announcement, I think 125 or --

Yes. No, you reauthorized the expiring buyback and re-upped the quantities. Very happy to see that.

Right, right. So, when we feel, and the Board feels, that the time is right to buy the stock, and that's a better use of capital than other uses, certainly, that's something that we will consider in the future. But, you know, right now, we're in a different position. We have an acquisition we just made, and we have certain restrictions with the banks and covenants and all that. And right now our position is exactly as it's been for the last couple of years, I guess.

Yep.

And I would just add, certainly, not before year-end, Andrew. You know, I think we want to get this year closed out, go through -- you know, go through a full-blown audit. I'm sure the banks are anxious to see that, because it is a substantial amount of debt. And, you know -- again, we would not have increased the authorization if we weren't looking to continue that program. It's just that we need to catch our breath a little bit here, close out '04, and we'll certainly take a look at it next year.

Sure. Okay. I backed out of the queue a few times, and I've came back in. I'm, unfortunately, the only one, either willing to ask questions, I mean, I hope I'm not the only one on call.

You're, certainly not the only one on call, that's for sure.

You're not the only one on the call.

With the revenues that you've just put in and the less seasonality, you are looking at a Company, clearly, with more than 100 million in revenues, nice earnings, still at a very low multiple, and thus, in cost to capital for the Company is still cheapest via debt rather than equity. Any thoughts you have as you've now -- you're over the hump, in terms of Florida Pneumatic, as well in anniversaring with next quarter's projected growth. Of going back out with a little bit more incremental investor relations activities to, let's say, widen the following of the Company, you know, you're getting to be a little bit larger and maybe more attractive?

Without a question we are. We have been talking about that for about the last 2 months or so, I guess.

Okay. Well, if we can be of any help, of course, let us know, and we'll try to steer you to the right people.

You got it.

Great. That's all the questions I have, thank you.

Okay. Thank you.

There are no further questions at this time, please proceed with your presentation or any closing remarks.

I'd like to thank you all for joining us today. We look forward to speaking to you with our next quarter results as we discuss that and to 2005 first-quarter expectations. Thank you, all. Have a nice day and a good holiday

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines.