Greetings and welcome to Columbus McKinnon Corporation Second Quarter Fiscal Year 2019 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Deborah Pawlowski, Investor Relations for Columbus McKinnon. Please go ahead.

Thanks Stacy, and good morning everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. I have on the call with me here today Mark Morelli, our President and CEO; and Greg Rustowicz, our Chief Financial Officer. You should have a copy of the second quarter fiscal 2019 financial results, which were released earlier this morning. If not, you can access those and the slides that will accompany our conversation today at our website cmworks.com. If you'll turn to Slide 2 in the deck, I will first review the safe harbor statement. As you are aware, we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with Securities and Exchange Commission. These documents can be found on our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or the substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures to comparable GAAP measures in the tables that accompany today's release and the slides for your information. So with that, please turn to Slide 3, and I will turn it over to Mark to begin. Mark?

Thanks Deb, and good morning everyone. We delivered another quarter of strong results and we are even more optimistic about our future. We're gaining traction in the early innings of Phase 2 of our Blueprint strategy and our strong execution has driven results ahead of schedule. For the quarter, we had solid organic sales growth of 3% excluding the impact of FX as our approach is driving market share gains. And this growth was in spite of our simplification efforts that reduced sales about 1% as we eliminate unprofitable revenue. Gross margin of 35% held around record levels and operating margin expanded 240 basis points to 11.4%. These results are driving double-digit bottom-line growth. GAAP diluted earnings per share increased 24% over last year's second quarter to $0.67, and was up 37% on an adjusted basis. Further, adjusted EBITDA margins exceeded 15% for a second consecutive quarter and stands at 15.6% year-to-date. I want to also point out that our adjusted ROIC reached double-digit at 10%, an improvement approximately 200 basis points year-over-year and another milestone in line with our strategy. I attribute our success to our business operating system E-PAS, which stands for earnings power acceleration system. We are deepening the relevance of our standard work with the development and deployment of our 80/20 process. With E-PAS, we're driving deeper into our Phase 2 of our Blueprint strategy, and extending its scope and reach. Importantly, the pace at which we're making progress gives us the confidence to raise our longer term expectation. We've been able to identify even more runway for improvements that support our excitement. Please turn to Slide 4. Phase 2 of our Blueprint strategy will further expand margin and ROIC, and has 3 focal points. The first is on further simplifying the business. Through these plans,…

Thank you, Mark. Good morning everyone. On Slide 6 consolidated sales in the second quarter of $217 million we are up 2% from the prior year. Excluding that fact, we had organic sales growth of $6.5 million or 3%. This was inline with our outlook provided last quarter of 2% to 3% organic growth. We saw a solid growth in the U.S. and Canada. This was partially offset by slightly lower sales in EMEA. Sales volume was up $4.4 million or 2% and pricing was higher than the previous year by $2.1 million or 100 basis points. Pricing improvement of 1% is consistent with the fiscal first quarter. Foreign currency translation became a headwind in the quarter of 1% and we expect the headwind to get worse by about 1% to 2% based on where foreign exchange rates are today. For the quarter, U.S. sales were up $4.8 million or 4.3%. Sales outside of the U.S. were essentially flat, down $500,000 or 0.5% driven by the unfavorable impact of foreign currency translation of $2.2 million. Excluding the effect of foreign currency translation, we saw organic growth of 1.7% outside the U.S. It's important to note that our 3% organic growth as a company in the quarter is on top of 8.5% organic growth in the prior year. Despite all of the market volatility recently, our markets are growing and our leading position serves us well. On Slide 7 we recorded a strong gross margin of 35% in the quarter. This is the second quarter in a row of 35% gross margins. The changes we are making in our business have the potential to drive gross margins even further. Now let's review the quarter's gross profit bridge. Second quarter gross profit of $75.9 million increased by $4.6 million or 6.4% compared…

Thank you, Greg. As we have discussed, we're making excellent progress here at Columbus McKinnon with our self-help strategy. In addition to strong financial performance, we had 11% order growth across all of our markets in the second quarter. We believe our responsiveness and product availability are driving market share gains. We're successfully reducing our lead times to get products to our customers ahead of the competition. Product innovation is also working to our advantage in market segments that continue to grow. Our lifting solution for the entertainment industry that combines our Prostar hoist with black low chain is another example on how we're beginning to ramp our growth engine. It has enabled a leading entertainment distributor to win a fairly large project for the encore in Las Vegas. The entertainment market continues to remain strong because performers are looking to provide for more entertaining shows which incorporate automation enabled by our products. Other markets remain strong as well such as aerospace, where build rates are improving and new models are ramping up production. Utility, construction, oil and gas and mining, all remain solid. Severe weather such as Hurricane Florence and Michael has created demand in the utility sector. With Hurricane Michael especially, as you know it was a very heavy wind storm that did quite a bit of damage to electric supply lines, so we expect it will likely increase demand for utility toolkits. Another boost to our order strength and backlog growth in the quarter was the major rail project in Israel that I mentioned last quarter. That order is the largest in the company's history at about $5 million. Rail customers are upgrading infrastructure and electrifying rail systems as they expand new routes and replace diesel trains. Given the strength of our order growth during the second…

[Operator Instructions] Our first question comes from Matt Koranda with Roth Capital. Please go ahead.

Just want to start off with revenue growth in the quarter. So how much did the shedding of bleeders weigh on revenue this quarter? And did it have an outsized impact in EMEA or were there still a project there that sort of drove the decline?

So the revenue growth was impacted about 1%, possibly even a little bit more. The lens that we're using on our simplification clearly identifies revenue that is not the kind of revenue that we really want to serve, and as a consequence we take that out. I can't say specifically that was coming out of EMEA. However, we did have some real projects that move around on us a little bit, and they tend to be more global in nature. We have those both in Europe and in Asia. But overall we've been pretty pleased that we achieved that outlook that we gave you last quarter on the revenue side.

And then just in terms of the 4% to 5% growth outlook, just wanted to double-check that that is excluding FX? If we include it, it would bring down sort of the blended growth heading into Q3?

That is correct, Matt. And it also already incorporates any further rationalization of bad revenue so to speak. So that's netted out of the 4% to 5%.

So that's probably netting out another 100 basis points at least from shedding...

Yes, at least - yes, we think it's going to be between 1% and 2%.

1% to 2%. Okay, got it. And then just in terms of the $7 million in savings that you talked about from 80/20, it looks like the footprint initiative that you highlighted is probably more of a savings item in fiscal '20, I think you mentioned $2 million. What's the balance of this year's 80/20 savings coming from? Could you dig a little bit more into the productivity initiatives, give a little more detail there?

So we've identified $7 million of savings for the fiscal year. About $1.6 million year-to-date has already occurred. It's all going to be in the gross profit area. It is coming from strategic pricing changes as well as indirect cost reductions out of our manufacturing facilities.

And when you say strategic pricing, you're talking about sort of a later year price increase for certain components, a little more detail, that would be helpful?

Yes, that is correct. So we should see incrementally a little more pricing coming through over the next couple of quarters as we look to improve profitability of certain product lines and harmonize discounts with customers.

And then the long term target in terms of the EBITDA margin target that you guys shared to 19%, is that fair to assume that's over a 3-year time frame? And then could you help me understand sort of is there any change to the sales growth target to achieve that or we're still kind of in that 2% to 4% band?

Yes, so that is over our approximate 3 year horizon that we discussed and the revenue I think you should probably keep the same. I think what we're demonstrating here is that there are tools for getting greater earnings power and that's exactly what we would expect with this strategy.

And then just last one or two for me, on the working capital, are we at the tail-end of the inventory build to support better build rates? And then I guess how much of that inventory build, you guys mentioned both sort of supply chain being stretched and also availability in terms of the inventory build, so how much should we kind of attribute the inventory build to each of those items? And then is the U.S. promo for extent terms done at this point?

Yes, let me answer and I'll like provide you a little more color. It's no secret that supply chains are tight right now which is so difficult to arrange speed in the market that we're in, so we've tried to take advantage of some of our opportunities to build some inventory. I think it's very good thing to do given what we see with some of the pressures and also some of the strengths of our end markets. So I think we're probably reaching the tail-end of that. We don't want to continue to extend that, but we think we've made some good decisions with our new supply chain director so far. Greg, do you want to add some color?

And so a couple of other effects as we talked about we have inventory in advance of tariffs and moved some product around and so with the idea that that inventory will get sold by the end of the fiscal year. So that's one impact as well. And certainly we - typically our fiscal fourth quarter is our strongest quarter, so we'll be monitoring orders going into that and making sure we've got enough product online. But now typically we see a pretty good performance from a working capital perspective in the fourth fiscal quarter and we would expect that to continue when you look at working capital as percent of sales. And then the other, one other aspect, Matt, too is as we further implement our 80/20 simplification, we would expect further reductions in our inventory as we rationalize products that will help us well.

Our next question comes from Greg Palm with Craig-Hallum. Please go ahead.

I guess to start I'd like to dig into the macro a little bit more. Just wanted to get a sense from what you're hearing and seeing from your customer-base based on the results and order patterns, it doesn't seem like much of any softness or weakness, but any additional color would be helpful?

We're seeing pretty robust markets right now. Obviously we have some ebb and flow from quarter-to-quarter, so it's not completely even. But our end-markets continue to be pretty robust and we think we're doing the right things to take advantage of markets that are really ready for growth. And so we think we're getting outsized opportunities afforded to us based on better availability and responsiveness. But you cannot point to particularly any specific areas that have a weakness right now.

And in terms of cadence either from a sales or maybe an order standpoint, can you give us what that looked like in the quarter? Any comments on what it looks like in October today?

Yes, we have some ebbing and flowing of some of our project business which you know is not a predominant part of our business, but does affect our revenue from quarter-to-quarter. And so we're seeing some pretty strong up-tick in rail orders that will impact longer-term out. But we have a good flow through of orders so far this quarter. And we're seeing some pretty good demand. Part of our business has a cyclical downturn in this calendar Q4 as folks try to manage their inventory levels for the end of the fiscal years and their budgets might tighten up. And we also have more holidays in this quarter. So seasonally it's down, but I think your question is more towards what's going on with orders and we're seeing some pretty good robust orders. So it's hard to say how the rest of the quarter will shape up, but we don't have any indications that things are slowing.

And Greg, just to add on to it, so we saw a really strong year-over-year order growth in the quarter, double-digit and certainly impacted by the large rail project that we talked about previously. But without that, it was still roughly in the 9% level. And in terms of how orders have kind of progressed through the fiscal year, so August is typically a slower month with holidays in Europe and all, but our order - total orders for the company in July, August and September, each individual month was higher than the order levels in April, May and June.

And remind us, I don't think you have a lot of exposure to APAC, but what's revenue generated from that region again?

Yes, so it's roughly 6% of the total and it increased substantially with the STAHL acquisition. So they sell a lot to the region. And they saw really good growth in the quarter, double-digit increases, but once again coming off of relatively small bases.

Yes, our exposure to Asia-Pacific, as Greg said, is not significant, it's not a significant part of our business also from a supply chain perspective either.

And obviously congrats on a really solid profitability and the margin improvements. I mean I think it's pretty impressive that you're already raising those targets after a few quarters since the beginning of the year, but I guess question is where do you think - if you look back since you introduced those first ones, where do you think the company is seeing the most progress since - versus initial expectations?

Well, thanks Greg. I think this is a company that has tremendous runway to improve. And I think what you're seeing is that we're really digging deep on this 80/20 process. And the team is fully embracing this. I think it's resonating with them. They're really embracing this tool and it's being deployed to some of our larger businesses with some more of our significant businesses to come in the next calendar year. And so I think that that is kind of a centerpiece to our strategy right now. And if you think about a company like Columbus McKinnon is focused on just revenue growth for the sake of revenue, you might imagine over a long period of time that this can generate a lot of opportunities for us. So we're going to mind that fully as Phase 2 of our strategy. And then as a consequence, it frees up other dimensions that before the company didn't really know how to go after such as a footprint example because as you begin to simplify things, then you say, well, gee, that leads to the next thing where we can - don't need that product line. And so if we close that product line, then maybe we can consolidate some more of our footprint. So we think we also have a lot of opportunity on our productivity measures such as footprint. And then also taking on indirect costs. So you can see how that begins to have this sort of domino effect where you start taking advantage of these opportunities. So we're really excited about the Phase 2, the strategy we're in. We think there's three aspects to it. And the first two I described as sort of early innings, being able to get traction, but then also the third aspect which is about growth and we've got Mario Ramos onboard, who comes from Schneider Electric and we're beginning to plant those seeds for growth. So we're also excited about that as well.

Last one from me. I guess given some of the share declines you're in on the recent past, I'm just curious if your capital allocation priorities have changed at all? And can you remind us, do you have a buyback authorization in place or not?

So on the second one, we currently do not and our capital priorities haven't really changed. As you know we've been focused on paying down debt, trying to get down to our 2x net debt to EBITDA level and we're just about there. We'll get there certainly before the end of the fiscal year. But that's something - we do have a dividend that we pay currently. And our board typically will look at that in the March time frame. So I wouldn't anticipate any changes between now and March.

Our next question comes from Jon Tanwanteng with CJS Securities. Please go ahead.

Nice quarter and the guidance is really nice too. What are the biggest items in the margin outside for the 19 % coming from? How does that ramp over the next 2 to 3 years? What are the biggest things that has to happen from your product portfolio rationalization, your footprint rationalization to get you there?

Yes, thanks Jon. We see a progression of double-digit earnings growth and I'll let Greg give a little more color on that, but the progression of what has to happen is exactly what we see taking hold right now, is that we have this toolkit where we define a process and we deploy that process. And we're now doing that very well in our 80/20 process with some of our major businesses. And given the fact that folks are really embracing it, we're training them, they're deploying it. We're executing, we're beginning to see not only the benefit of it, we can start seeing the other benefit. In the future, we're pretty encouraged by the results that we can achieve. And by the way, these tools work sometimes in tandem together and we're beginning to see that work really well. So we project out how we're going to deploy this to some of our other businesses and what the impact might be. And that's how we come up with our projection and the confidence that we have. So there's a lot of productivity improvements that we see through 80/20. But as we said, there's also a dimension of that where we look at relative strength. We can raise price there. We can focus there for further growth. We can focus on customers that we think we can get more revenue from in a profitable way. And then we absolutely go after that. So we see these signals. We see the progress we're making and we are really being able to sort of lay-up what's going to happen next as a result of what we see happening now. Greg, you want to give any color too?

Yes, so I would point you back to our strategy chart, what we call the A chart in the Phase 2. And it's really all around the simplification efforts, the operational excellence which are being - we're driving in our manufacturing facilities as well as profitable growth as we will ramp new products that are going to have higher margin. So we see this largely as a gross margin expansion, although we'll continue to monitor our costs in the SG&A area. Clearly we do want to invest more in R&D and will as we continue to ramp up our efforts in that area.

And then since you addressed the R&D, looks like you pulled back in the quarter. Are you pushing anything out from a product development perspective, are you just getting more efficient? Anymore color there would be appreciated.

Yes. No, that's more of a look on efficiency. I'm very happy to spend more on R&D and we will. We've got to make sure that we're also ready to spend more on R&D because I've seen a lot of mistakes made where you add to your R&D, but your processes and capability can't fully absorb it. So it's essentially turning on the spigot for more water come out, but unfortunately you lose some down the drain. So I want to make sure that we have very good capture of that increased flow. And as we get better capture of that flow, then we will absolutely spend more. But to me, it's not your spending level, it's your capture on your spending level is most important.

And Mark, can you update us on the ongoing divestitures and the kind of the timelines for those? And if you can identify any more of these bleeder type businesses as you've gone through the rest of the organization?

Sure. So our divestitures are really coming out of really our 80/20 process so far. It's about identifying areas of - that are not really a good fit for us and I would say could be managed better by other folks. So I would definitely say it's a relative weakness and you probably know that from looking at the financials. So it's actually progressing well because these not being core businesses, really do fit better in other companies. And those are the dialogues that we're now having as it's public. And so I think we're progressing fine down that path. And Greg can also update you some little bit more on the timeline there. But we feel very good at where we are. And then I think more of your question is where does this lead to? Well, we have our Phase 3 of our strategy. We don't talk a lot about that on the earnings call. We have talked about it in the past. But part of Phase 3 is further looking at our portfolio. It's a more outside and approach. And I think we'll take another look at our portfolio, we'll take a look - more look at M&A and where are areas of industrial technology we want to further grow. So we're not really into our Phase 3 yet. I can't say we really anticipate anything there, but that always - you always turn it around with a little bit of a different lens when you look at growth. And so we'll be - we'll probably be approaching that in the future and this is not really reflected in our thinking at the moment.

Yes, just Jon, to jump in, so the sales processes are progressing. Our tire shredder business divestiture is farthest along. And that one could be closing by the end of this calendar year. With the other 2 businesses, we have preliminary nonbinding bids. We're trying to get those buttoned up here and we're in the process of determining who the prospective buyers would be for the other 2 businesses. But I think the key point is we expect we'll have all the businesses through the remainder of this quarter and we expect all the divestitures to be completed by the end of the fiscal year.

And does your leverage outlook include the divestiture of those businesses?

I'm not sure I understand the question.

By the end of the year, you expect to be at 2x?

Yes, and that's without applying any of the proceeds to debt repayment.

Next question comes from Joe Mondillo with Sidoti & Company. Please go ahead.

I wanted to ask about just the overall sort of EPS and the overall savings relative to the $7 million of savings that you're sort of now expecting in fiscal '19. Just wondering how you're thinking about fiscal '20 in terms of magnitude? Are there more opportunities in fiscal '20? I know you already sort of stated about the Ohio plant there that's going to amount to about maybe $2 million of savings. But wondering sort of given sort of list of things that you're attacking right now, what the opportunities are and what the magnitude could look like in fiscal '20?

So I think it's hard for us to guide in fiscal year '20 right now in terms of an outlook. But I can certainly give you a little color on maybe how to think about that. So our Phase 2 which we're in right now in E-PAS is our operating system, that's our toolkit to really help us get at these opportunities. I think it's fairly early any - I mean, we just embarked on Phase 2 kind of at the beginning of this calendar year. So we're sort of 6 months in and my experience is that as you embrace that as we further deploy it to the organization, we'll continue to build some headwind. So I think Phase 2 is pretty deep. I don't think that Phase 2 ends really after a year. I think that we'll continue to mine those opportunities and be successful. So it's hard for us to exactly to know all of what fiscal year '20, but my experience is that we're early innings and that we will continue to get some real good uplift from this.

And closing, consolidating of facilities or sort of rationalization of your footprint, I assume - I mean it seems like earlier this year at the Investor Day and maybe thereafter, it seemed like there's probably more opportunity than just that. I don't know if there's anything else that you can comment on that, you could just talk about your sort of your footprint and the rationalization there?

Well, at a high level we're about 2.5 million square feet, we have 19 factories. It's pretty complex for an organization our size. I can't make comments about any further footprint moves we make ahead of announcing those kind of things. But I can clearly say that we look for greater productivity in terms of dollar per square foot. Our new operations leader is clearly embracing this and pushing it down and we're looking for that and we think there is a good opportunity for us to continue to look at that metric and improve upon it.

And then I wanted to ask about sort of the gross margin - the incremental gross margins. In the second quarter here, they look like they amount to almost 70%. So it looks like on the small amount of revenue growth that you saw in the quarter, you got some really good leverage. Just wondering if you could just talk about your just general sort of normal sort of incremental margins on the gross profit line and sort of how you think about that going forward?

I think it's exactly indicative we're talking about is these are the aspects of the Phase 2 of the strategy that we're in and that's why we're optimistic because we're seeing it drop to the bottom line. So this is a kind of thing we should expect based on the strategy that we've articulated we're posting these kind of results. So having a good drop-through is something that we're very happy to achieve and that also encourage us to provide some better guidance.

And Joe, just to give you a historical perspective -

Go ahead. Let Joe finish. I think we didn't answer his question.

I just wanted to clarify - I just want to clarify what I'm actually looking at with Slide 7 on the deck. I think a lot of the E-PAS and lot of the productivity stuff is in the productivity and the pricing. Correct me if I'm wrong. So what I'm really referring to is that sales volume and mix of $2.9 million which - that kind of leverage on the small amount of rev growth that you saw in the quarter is pretty good and I'm just wondering if that's sort of normal, was there a favorable product mix that maybe helped the quarter or just how to think about that normalized?

Yes, sure. So that's really directly related to the whole 80/20 process and not taking bad business or bad revenue. So there's nothing unusual in the quarter from a mix perspective.

Good to know. And then lastly I just wanted to ask about Europe. You saw a - I missed - I think I might have missed your initial comments on that. But I know you said that Europe was down slightly in the quarter. Just sort of wondering what you're sort of seeing there? We've been hearing some small pockets here and there whether it's in auto or what that we may be seeing a slowing. Just wondering what your thoughts are on Europe declining in the quarter and sort of what you're seeing going forward?

Well, Europe is still pretty strong. If you've been there recently, we obviously get there and review our operations and visit customers. But if there's a little bit of slowing of Europe, it's still extremely strong. I mean, the trucks moving around in Germany is just incredible, the amount of activity, the supply chain is very tight, it's still at pretty strong robust level. So I would not be concerned that Europe is having a major slowing. There might be a little ebbing of some of that growth, but clearly it's a robust market for us.

And Joe, what I said was that we saw a slight decline in Europe. But I can tell you from an order perspective in our industrial products business within Europe, we saw a mid-single digit year-over-year order increases in Europe, north of 5%.

Our next question comes from Christopher Hillary with Roubaix Capital. Please go ahead.

I know you've answered a few questions on this topic, but I wanted to ask just with your updated long-term margin targets, when we look back at your scenario analysis that you presented at the start of the year, the higher margins you suggested would come with the higher revenue growth rate. And it appears now you're comfortable with higher margins with a lower revenue growth rate. Is that correct and do you care to add any more color - any more color on that that you haven't already added?

No, I think that's right on. I think you followed the messaging well and I think that's exactly what we would expect from this strategy that we're articulating.

And then...

And Chris, just to add on, I mean it's really due to really being deep now into Phase 2 of the strategy and seeing all the opportunity from simplification from operational excellence. And then to come will be the new product development ramping the growth engine piece of it. So we know a lot more today than we did in January of 2018.

Yes, well, I think it just certainly stands out given a team of this recent earnings season in the sector has been the challenges of price cost and the pressure on margin. So it's a big contrast for you to provide that sort of an outlook versus a lot of your peers.

[Operator Instructions] Our next question comes from John Sturges with Oppenheimer & Company. Please go ahead.

Very nice execution. I was just curious, it sounds like for the E-PAS that you've really cut back on the sensitivity to any moves in currency, just curious noting you had a lot of currency issues back in 2015. Could you comment on the sensitivity to the U.S. dollar?

Yes, so about half of our business is overseas and we're going to have translation impacts and typically from a translation perspective, as we said this quarter was about 1% headwind and we expected to be a headwind of about 1% to 2% in the next quarter. The operating impact of that is going to be essentially your operating - your international operating margins times the change and the impact of sales and that's what's going to impact from a translation perspective. But from a transaction perspective, which may be is what you're really getting at, we do have I would say a robust hedging program that's focused on eliminating volatility on cash flow, not necessarily on earnings, but we also try to be smart about where we're sourcing products, so to the extent we can source in country, we take away the transaction approach. And one other side of it from a treasury perspective is, we did a great job hedging our interest rate exposure when we put the debt in place for the STAHL acquisition. So we're 60% fixed, so we're not quite as impacted by rising interest rates as perhaps other companies.

Yes, I guess where my question really comes from is your operational efficiencies seem to be offsetting in maintaining your - offsetting what might occur with the U.S. dollar if it gets a little stronger and you're maintaining your competitiveness?

Absolutely. Yes, I'll weigh in on that when I think as you can see from the numbers that we're posting that we're having some very good productivity and the team is really stepping up there and there's obviously a lot more work to do. So, yes, you're correct, we're encouraged by that and that's clearly a part of what we're tackling in this strategy.

There are no further questions. I would like to turn the floor over to Mark for closing comments.

Great. Thank you, Stacy. Thanks for joining on the call today and your interest in Columbus McKinnon. Have a nice day.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.