Standex International Corp (SXI) 2019 Q1 法說會逐字稿

Good morning, and welcome to the Standex International's Q1 2019 Earnings Conference Call. (Operator Instructions) I will now turn the call over to Ms. Ryan Flaim of Sharon Merrill Associates.

Thank you, Christy. Please note that the presentation accompanying management's remarks can be found on Standex's Investor Relations website, www.standex.com.

Please see Standex's Safe Harbor statement on Slide 2. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's recent SEC filings and public announcements for a detailed list of risk factors.

In addition, I would like to remind you that today's discussion will include references to EBITDA, which is earnings before interest, taxes, depreciation and amortization; adjusted EBITDA, which is EBITDA excluding restructuring, purchase accounting, acquisition-related expenses and onetime items.

We will also refer to non-GAAP net income, non-GAAP income from operations, non-GAAP net income from continuing operations and free operating cash flow. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States.

Standex believes that such information provides an additional measurement and consistent historical comparison of the company's performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available on Standex's first quarter news release. On the call today is Standex's Chairman, President and Chief Executive Officer, David Dunbar; and Chief Financial Officer, Tom DeByle.

Please turn to Slide 3, as I turn the call over to David.

Thank you. We began fiscal year 2019 taking big steps forward in our strategic journey to transform Standex into a world class operating company. We completed 2 key bolt-on acquisitions, Agile Magnetics in Electronics and Tenibac-Graphion in Engraving, which strengthened 2 of our strategic growth platforms.

And as announced today, we're pursuing strategic alternatives for our Cooking Solutions Group, which we believe will enhance our profitability, allow us to pay down debt and provide flexibility to invest further in our core growth platforms. Later in the presentation, we will also show the 2 bolt-on acquisitions deliver more combined EBITDA than the divested business.

I will cover these strategic highlights in more detail in a moment. First, let me touch on Q1 performance highlights.

Overall revenues increased 2.1% to $193.1 million with organic sales up 1.1% and acquisitions up 1.7%.

We had backlog growth of 13.8% and strength across several of our end markets.

Operating income was up 190 basis points in Q1, and adjusted operating income increased 50 basis points. GAAP EPS was $1.12 per share, while adjusted EPS, $1.21, was down 1.6%. We delivered top line and organic growth across 4 of our 5 segments, with high single-digit sales growth in Electronics, Engraving and Hydraulics as we advance growth laneways, continue to capitalize on Piazza Rosa and Standex Electronics Japan acquisitions and leverage growth in several of our end markets.

We also completed 2 bolt-on acquisitions in the Electronics and Engraving businesses.

This morning, we announced that we have engaged Baird to investigate strategic alternatives for the Cooking Solutions group. The net effect on EBITDA on a pro forma basis is accretive. Our Q1 profitability was most significantly impacted by Food Service group margins, which reflect market headwinds in the refrigeration business. Despite this, we continue to expect to leverage the benefits of the refrigeration restructuring as we move through 2019.

We saw a year-over-year increase of 270 basis points in our Engineering Technology's margins in Q1. We continue to believe this business will see further improvement during the second half of our 2019 fiscal year as the aviation ramp takes up speed and we start to capitalize on the mounting demand we are seeing in customer production schedules in the energy and space markets.

Please turn to Slide 4 to discuss our announcement that we're seeking strategic alternatives for the Cooking business. As the Cooking Solutions business evolved, we determined that it does not align with our strategic vision and that selling the business will provide greater flexibility to invest in our more profitable growth platforms. We intend to use the proceeds to pay down debt.

The Cooking portfolio includes attractive brands with a broad set of product lines that we believe will be a valuable strategic fit for a company that can provide focus and capabilities needed to more effectively compete in the market.

We expect there will be significant interest in the marketplace and anticipate a sale to be completed within the fiscal year.

With this change in the portfolio, we improve the quality of our earnings and margins across the board, although earnings per share will decrease as we lose the earnings and favorable tax mix of the Cooking business. Specifically, in Q1, the exclusion of Cooking increased our adjusted operating income from 12% to 12.6%, and adjusted EBITDA from 15.3% to 15.9%. On a full year basis, in 2018, excluding Cooking increases our adjusted operating income from 11.3% to 11.8% and adjusted EBITDA from 14.5% to 15.2%.

You'll also see how we improve our ROIC metrics by over 80 basis points. Now, I will ask you to retain the EBITDA number of $126 million that Standex delivered in 2018 with Cooking for a later comparison.

Please turn to Slide 5. We're committed to investing where we see the greatest value-creation opportunities. This includes our Electronics and Engraving businesses. And within our Food Service segment, the scientific, pump and merchandising businesses. The Tenibac and Agile acquisitions are 2 recent examples of actions we've taken to support this growth strategy. In the case of Hydraulics, our strategy is to defend our market position in order to capitalize on strong market momentum and good earnings potential.

As shown in the middle column, we are focused on improving margins with our Refrigeration and Engineering Technologies businesses. In Refrigeration, operationally, we are pleased with the restructuring program as our team has done an excellent job driving improvements in our plants. The bottom line benefits, however, are not flowing through due to the national account volume declines referenced earlier. There are, however, sizeable NBOs in the pipeline and we remain focused on controlling the items we can control in order to achieve our targeted margin rates over time.

Our Refrigeration brands are strong in their segments, and we believe our teams have the plans to align the business to its market needs.

In Engineering Technologies, we're focused on leveraging the operational improvements we have made and capitalizing on the imminent aviation ramp as well as key development programs and new NBOs in energy and space in order to deliver bottom line improvements. The third category is portfolio rationalization for businesses we determine are no longer in line with our strategy.

Turn to Slide 6. Here you see how our earnings have evolved over 5 years. Consolidated adjusted EBITDA has increased from 12.1% to 15.9%, as our investments in Electronics and Engraving have more than doubled those businesses and expanded their margins. I also must point out that the 2018 pro forma EBITDA of $129 million includes the effect of the 2 recent acquisitions. This compares to the $126 million Standex delivered in 2018 with Cooking, but without our 2 recent acquisitions.

Tenibac and Agile together deliver more EBITDA at a higher rate than the Cooking business.

Turning now to Slide 7. Here, you can see how our mix has changed. The bottom pie chart, which states FY '18 results by adding the new Tenibac and Agile acquisitions on a pro forma trailing 12-month basis and excluding Cooking. With these changes, you can see the significant mix shift in our portfolio to drive more sales and profits from our growth platforms. This is a result of organic growth focus on market test and laneways as well as 8 bolt-on acquisitions to reinforce our growth platforms.

This shift is a key consequence of our strategy to transform Standex into a world-class operating company.

We have made progress in the past 5 years and believe we are entering the middle innings of our journey to become a world-class operating company.

With that, Tom will review our first quarter results. Tom?

Thank you, David, and good morning, everyone. Before I review our performance for the quarter, I would like to note that the results of the Cooking Solutions group have been classified as discontinued operations and as such are not included in our Q1 fiscal 2019 financial results from continuing operations and are excluded from the year-over-year comparisons to our Q1 fiscal 2018 results.

Turning to Slide 8, which shows our historical trend of adjusted earnings per share and sales on a GAAP basis as well as on adjusted basis. For the first quarter, adjusted earnings per share were $1.21 through September 30, 2018 versus $1.23 through September 30, 2017, down 1.6%. This was impacted by Food Service operating performance, higher interest expense and increased tax expense.

As David noted, sales in Q1 were up 2.1% with year-over-year to $193.1 million versus $189.1 million in the prior year period. As shown on the bottom of the slide, our revenue and earnings performance this quarter were consistent with historical trends.

Please turn to Slide 9, which details our revenue changes by segment. Overall, organic growth was 1.1% in Q1 with 4 of the 5 businesses reporting organic growth, namely Engraving, Electronics, Engineering Technologies and Hydraulics. The acquisitions of Tenibac and Piazza Rosa contributed 1.7% to our overall sales growth. As expected, foreign exchange had a negative 0.7% impact. We continue to expect FX to be a headwind in 2019 due to the strong U.S. dollar.

Please turn to Slide 10, which summarizes our first quarter results on a GAAP and adjusted basis.

Q1 operating margin was up 190 basis points on a GAAP basis and up 50 basis points on a non-GAAP basis. Earnings per share was up 13.1% on a GAAP basis. On a non-GAAP basis, EPS was down 1.6% due primarily to the weakness in the Food Service segment, higher interest expense and higher tax expense.

Please turn to Slide 11, which is a bridge that illustrates the impact of special items on net income from continuing operations for the quarter. Tax affected special items include restructuring charges of $0.3 million, purchase accounting-related costs of $0.3 million and acquisition-related costs of $0.5 million. GAAP net income was up 13.1% and adjusted net income was down 2.1%.

Turning to Slide 12. Net working capital at the end of the first quarter of fiscal 2019 was $172.5 million compared with $151.5 million in the prior year. Working capital turns decreased to 4.6 from 5 turns in the year ago period.

Couple of comments on working capital. First, our operational excellence teams are focused on improving inventory turns and days payable outstanding. Second, we have incorporated working capital turns measured on a quarterly basis in the annual bonus program in order to provide consistency across quarters and improve this metric.

Slide 13 illustrates our debt management. We ended Q1 in a net debt position of approximately $190.2 million, an increase of $106 million since the fourth quarter. We define net debt as funded debt less cash. Our ratio of net debt-to-capital was 29.2% compared with net debt-to-capital of 15.7% last quarter. Our acquisitions of Tenibac and Agile in Q1 represent the primary drivers for this increase.

We anticipate repatriating over $50 million of foreign cash during fiscal '19. The repatriation process in many locations involves approvals from foreign governments, statutory audits and other approvals that lengthen the repatriation cycle. We are currently working through requirements in multiple jurisdictions in order to achieve our repatriation targets.

Please turn to Slide 14. Capital spending in Q1 came in at $8.1 million versus $7.9 million in the prior year. Engraving continued to add laser capacity and Electronics spending increase related to the new Cincinnati headquarters. Looking ahead, we are projecting our capital spending in 2019 in the range of $35 million to $36 million to support our growth opportunities and operational excellence initiatives. We expect depreciation to be about $23 million and amortization to be about $9 million.

Slide 15 details the reconciliation of free operating cash flow. Free operating cash flow was negative for the quarter as it was in the prior year. Free operating cash flow is generally negative in the first quarter and improves throughout the remainder of the fiscal year.

With that, I'll turn the call back to David.

Thank you, Tom. Please turn to Slide 17. And I'll begin our segment overview with the Food Service Equipment Group. Revenues for the segment decreased to 7.1% in Q1. Scientific sales growth of 11.8% and merchandising growth of 4% were offset by a double-digit decline in refrigeration sales.

This was due primarily to a decline in drug retail, dollar stores and quick-service restaurants in line with national spending levels industry-wide. The market for specialty pumps also was soft during the quarter. As a result of the top line decline, operating income decreased to 19.9%.

Looking ahead, we remain focused on continuing to grow differentiated products through the introduction of new offerings in the scientific, merchandising and specialty pump businesses. In addition, we are focused on taking additional actions to realign the Refrigeration business for the current market conditions and leverage our well-known brands to generate value.

Turning to Slide 18, Engraving. Sales increased 9.6% and operating income was up 2.6%, with an adjusted operating margin of 22% as we capitalize on automotive demand and sales of our new technologies including laser, tool finishing and nickel shell, which were over $10 million in aggregate for the quarter.

The Piazza Rosa integration continues to be a key catalyst for growth as we accelerate tool finishing across our footprint. The Tenibac acquisition that was completed in August, looks to be an excellent cultural fit and we remain very excited about the added value that we now are able to bring to our automotive and non-automotive customers.

By bringing on Tenibac-Graphion, we gain access to a highly skilled workforce that will be essential to our rollout of new offerings in North America. Looking ahead, we continue to focus on capitalizing on robust automotive rollouts as well as leveraging our recent acquisitions and driving growth from laser, tool finishing and nickel shell technologies.

Please turn to Slide 19, Engineering Technologies. In line with our expectations, sales were up 2.6%. Aviation and energy sales growth were partially offset by softness in space sales due to contract timing on development programs in the manned segment of the market. Operating income was up 50.2%, and operating income margin of 8.5% showed improvement year-over-year in part due to a profitable core for the Enginetics' business as it realized improvements in operating efficiencies.

Going forward, we are focused on leveraging the investments we have made to support the upcoming aviation ramp, delivering on our growing backlog for critical engine parts and lip skins and capitalizing on the mounting demand we are seeing in customer production schedules in the energy and space markets. We continue to expect significant sales and margin improvement during the second half of our fiscal year.

Please turn to Slide 20, Electronics. Sales increased to 9.9% with double-digit growth in all regions and solid performance across several end markets. Operating income was up 24.4% and we reported a margin of 24.9%. At the end of the quarter, we completed the acquisition of Agile Magnetics, enhancing our ability to service the high-reliability, mission-critical, custom-designed magnetics market. Standex Electronics Japan continues to perform exceptionally well. And we delivered strong sales across the portfolio, including growth in relays, sensors, switches and magnetics.

Orders in backlog increased with backlog shippable within one year, up 24.8%. While we believe this is indicative of positive momentum going forward, some customers have indicated inventory corrections in their forecasts and we are monitoring this closely.

Looking ahead, we're focused on advancing the integration of Agile and Magnetics and capitalizing on new business opportunities in the funnel, which we anticipate will offset any potential inventory corrections or slowdown in the coming months.

And we continue to anticipate $13.5 million of capital investments in Electronics, including $5 million for a new plant and headquarters in Cincinnati.

Please turn to Slide 21, Hydraulics. The 9.9% sales increase in Hydraulics was driven by strength across all sectors, notably construction, housing and infrastructure. Orders and backlog were strong. Operating income decreased to 15.4% as profitability was impacted by material price increases, tariffs and machine downtime.

We remain optimistic about the future of this segment as we continue to leverage the strong market environment and pursue market tests to grow the business. New pack eject cylinders have been well received by customers and orders are on the rise.

We are closely monitoring OEM concerns about a potential slowdown in calendar 2019.

Before we go to questions, let me leave you with a few key thoughts as shown on slide 22. First, despite the market headwinds we faced in Food Service, we delivered top line growth of 2.1% in Q1, with very strong performances in Engraving, Electronics and Hydraulics and year-over-year growth by Engineering Technologies for the first time in several quarters.

Second, we made significant progress with our actions to deliver improved bottom line growth. Our efforts to improve the profitability of our legacy engine parts for aviation is now reading through and lifting margins in Engineering Technologies. We remain focused on margin improvements in Refrigeration and are committed to making further cost adjustments in that business to align with the softer market conditions.

Additionally, the announcement that we are seeking strategic alternatives for the Cooking Solutions group increases corporate margins.

Third, our recent acquisitions are performing well, and we're very excited about the 2 bolt-on acquisitions that we have completed during the quarter in Engraving and Electronics. At a corporate level, the cumulative impact of these 2 acquisitions, with the divestiture of Cooking, increases the EBITDA dollars and increases our margin rates. With the expectation of paying down debt with proceeds of the divestiture as well as the cash we are repatriating from overseas, we expect to improve our leverage ratio versus prior year, adding more dry powder to our balance sheet.

And finally, our growth laneways and acquisition pipelines remain robust. With a strong balance sheet, we remain well positioned to invest in the platforms where we see the greatest growth opportunities.

The Standex team continues to work hard with a relentless focus on executing the Standex value creation system to position Standex to fulfill our mission of becoming best-in-class operating company. We began 2019 with strong momentum as we executed on several important strategic initiatives and delivered growth across several businesses. We thank our employees, customers and shareholders. We're excited for the opportunities ahead and look forward to keeping you updated. Now with that, we will take your questions.

(Operator Instructions) And your first question is from Chris Moore of CJS.

Maybe we can start with the Cooking Solutions. Just get a better view in terms of where you are in that process? Is it just getting going right now? Have you been working through for the last month or so? Just trying to get a sense there.

Well, we obviously have been preparing for this for some time. From here on out, the expectation is that we will -- we're actively beginning the marketing of the business. We expect the process through November and December to get down to a shortlist of candidates. We'll have final offers in early January and we would expect -- this fairly aggressive schedule, but we'd like to close sometime in February.

Got it. And I know you're just getting into it, sounds like. From a kind of evaluation range, any thoughts on that?

Well, you can see pretty easily, with the way we split out Cooking, the sales and EBITDA of the business. I guess, I would just refer to recent comps in that market anywhere from 9 to even 14x EBITDA. And we expect quite a bit of interest in the process. I wouldn't go any farther than that until we get farther along.

Got it. And in terms of looking on the other side. So if someone is out there considering purchasing the Cooking Solutions, just -- you've talked about just little bit, talk maybe a little bit further in terms of why it might be more valuable to them? Why they might be able to generate higher margins?

Well, with our -- you've been following the company for some time. You know the last couple years, we put quite a bit of investment into restructuring and in our standards part of that business, investing in the plant and in our supply chain.

And gosh, a couple years ago, we announced that the expectation was with improvement in plant performance, which we are seeing, we would expect the day-to-day business from the dealers and the buying groups to begin flowing through. And that has been slower to come back.

So we think one of the advantages another buyer brings to this is stronger counter relationships, better end-customer relationships that create more pull. And within -- within our business, we have 3 Cooking businesses, 2 differentiated businesses and the standards business.

And each of them individually -- they're a somewhat modest scale. There is a small engineering team in each of them. There are 3 plants. Depending on who you match up with this business, you can see synergies from your energy -- from engineering, sales, operations.

Got it. That's helpful. Let me just switch gears to the Electronics side. The potential inventory corrections, where -- what area is that specifically in that we're talking about?

Well, we saw a little slowdown coming out of Asia. So a slowdown in the growth rate from Asia. So some shipments into some end markets like semiconductor. Semiconductor seems to be taking a little pause. There's some language from customers in Asia, uncertainty related to tariffs and how that will affect trade. We see these as transitory effects.

And as I mentioned in the script, we have announced new business opportunities, new projects coming through that, we believe, that those will overcome any pause in the -- for the inventory effects.

Your next question is from George Godfrey of CLK.

On the sales of Cooking Solutions, any thought on selling Refrigeration with it to exit that business? Or do you think the Refrigeration is so attractive that, that's a business you want to stay in? And then I have 1 follow-up.

Yes, sure, George. So the way we look at our uses of cash, everything goes through a returns filter. And we made significant investments in Refrigeration. We think those investments are taking hold. We're seeing the improvements in operations.

There is a slowdown in the marketplace. And you see other companies that have Refrigeration groups seeing the same thing. Our assessment of where the market is going is there is long-term modest growth trends here. Some of the large customers that we serve had dips in their spending in this last quarter.

Our Refrigeration brands are pretty strong in the segments that they serve. And we still believe that there is a good return on the investments we've made in the Refrigeration business. We have a good team in place, there are strong brands in those markets and our assessment is that there is value-creation opportunity.

Okay. And if the Food Service Equipment business operates as expected, what do you think the target EBIT margin is for the new business as it's configured today?

You know what, what's interesting about that is, back in our Investor Day in May, we updated that and we continued to communicate that getting that business at 15% was our target. It was more dependent now on volume in Refrigeration. So we were communicating year-on-year improvement, but towards 15%.

Within that model, George, with the mix of the Cooking business that we have, a couple differentiated businesses with margins above 15% and the standards business we projected to be below, it actually, in our forecast, would deliver something just under 15%. So removing Cooking actually doesn't change the answer to the margin evolution in the Food Service group.

(Operator Instructions) Your next question is from DeForest Hinman of Walthausen and Company.

Just a few different questions. First, on the Cooking side. I think, in the past, and you alluded to this in one of the earlier questions, that you were preparing for this on the Cooking side. And you've stated previously to investors that the go-forward Standex will look different than it is does today and hiring Baird is kind of making that official, but Cooking is for sale.

But having said all that, were we approached by a third-party or another -- or more than 1 and then it became apparent that we had to make this official and that leads us to have kind of that accelerated timeline on the transaction? So the short question is, was the phone ringing?

I would say because we buy and sell businesses, we regularly get calls about all of our -- nearly all of our businesses, and we also get people pitching other businesses.

That did not enter at all into our planning related to Cooking. It really had to do with us stepping back, looking at how do we want to use the cash that we anticipate generating, where are the best returns, what can we do with each of our businesses? And it really fell out of that analysis quite -- through a rational and thorough process.

Okay. So since we took a look it in a strategic review, I would guess we know what the tax basis of that business is now, can you share that with us?

Turn that to Tom.

Yes. So, DeForest, we've looked at it, it's a U.S.-based business. So we're -- we think it will -- we show that it impacted us year-over-year by $0.38. And we have about $150 million in assets and $100 million in stock. So we will...

Well, of course we don't have the number with us. We can follow up with that.

Yes.

Let's give you the right -- make sure we give the right answer for those assets that are part of the sale.

And then -- okay, and then on Engineered, it's been kind of a slog trying to get things to improve and you stated that. Is first quarter an inflection point for that business in terms of revenues and margins? Or is it still really going to be more second-half weighted? Or are we seeing that activity already starting to pick up that's really given us that confidence in the -- for the remainder of the year?

That's a great question. I would say the first quarter was an inflection point from a margin standpoint because, last year, the real struggle in that business was legacy parts and our engine parts business. And that team has just, through a thousand of small actions and some -- a few big actions, has really moved that -- the needle in that business. So that is starting to read through, that's what's driving the margin improvement.

The sales improvement, that's going to be more second-half story. Looking at the -- in this -- it's growing, but the sales projections from our customers with their current published schedules present a significant pickup in the second half for that business.

Okay. And then on the Engraving business, we're seeing a lot of headlines on production rates in auto, but we've done some [kneels] and it sounds like we've got some new platform wins and some new technologies we're bringing to the market. Do you still see this as an organic grower in fiscal year '19 where we stand today?

Yes, we do. When we've talked in the past about the tool finishing investment in particular, that allows us to dramatically expand the share of wallet from our customers. So that gives us a means to grow even if the -- our traditional markets for chemical Engraving begin to soften.

And if you look at what happened in the quarter, I mean, our new technologies, which is tool finishing, nickel shell and laser delivered $10 million of sales, that was up 75% from last year, so -- whereas the chemical Engraving, which is the traditional business, was actually down about 1% from the prior year. So we do think these new technologies and the new offerings give us an opportunity to continue organic growth.

I would point out that the data we have from the auto OEMs globally is that we're looking at a few years where there will still be a growth in the number of new models and model refreshments in the market, which is the underlying driver in our business as opposed to SAAR.

And then now that I think we're going to have a little bit -- well, maybe not too long, but Graphion integrated, any help that you can give us in terms of understanding the margin profile of that business versus the -- kind of the historic operating profit margin within Engraving? Higher, lower or same?

Yes. Same. Same.

Okay. And then in terms of -- just to wrap a ribbon around everything, just so everyone understands. We paid about $97 million for the 2 deals, the net EBITDA contribution from those deals is -- is it the same or less than the EBITDA we lose from the discontinuation of the Cooking business?

Yes, this is a very important point, I'm glad you got. I didn't put the text in my comments. The EBITDA from the 2 companies we've acquired is greater than the EBITDA we lose with the Cooking business sale. And your numbers are right, but -- what we paid for the acquisition.

And you can estimate for yourself what the divestiture proceeds will be. But our quick math would say that the round-trip through these transactions is we end up with more EBITDA and a stronger balance sheet with lower leverage than when we began.

And just kind of roundabout, I keep bouncing around, and I apologize, on a cash proceeds basis from that business, would all that Cooking business revenue -- or proceeds be U.S.-based cash, so we won't to have to deal with any repatriation or anything like that?

Yes, yes.

Okay. And we haven't been -- let's double check, we haven't -- different periods of times where we've been active buying the stock have a decent amount of weakness in the share price, even with the results today, outlook's seemingly pretty good. From a capital management perspective, is share repurchase going to become potentially a higher priority going forward?

Well, when we talk about capital allocation, we always -- always look what -- at the buyback. The value of a buyback, that's the lowest risk use of cash. And compare other adjustment alternatives to that.

Two years ago, we got a -- an authorization from the Board to do buybacks. And we use that opportunistically. And we're multi-platform, small-cap, sometimes we believe the market just doesn't appreciate that long-term value of the corporation. And we have dipped into buy back shares.

So I -- we don't have an expectation of how many shares or how much money we would devote to a buyback. But if the market presents attractive buying opportunities for us, we will jump in.

Is there an authorization outstanding currently, dollar-wise?

Yes.

$100 million.

$100 million.

Okay. So I guess, since [you're in] asset blackout, you could be buying the stock in a couple days?

Yes.

Thank you. There are no further questions at this time. I will turn the call back over to David Dunbar for any additional or closing remarks.

All right, thank you, operator, thank you, everyone, for joining us this morning. We will also look forward to speaking with many of you at the upcoming Baird Industrial Conference and, of course, returning to report on our second quarter earnings.

Thank you.

Thank you. This does conclude today's conference call.

You may now disconnect.