Good morning. My name is Jodie and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter 2016 Hyster-Yale Materials Handling Incorporated Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Christina Kmetko, you may begin your conference.

Thank you. Good morning, everyone and welcome to our 2016 fourth quarter earnings call. I am Christina Kmetko and I'm responsible for Investor Relations at Hyster-Yale. Joining me on today's call are Al Rankin, Chairman, President & Chief Executive Officer of Hyster-Yale Materials Handling; Colin Wilson, President & Chief Executive Officer of Hyster-Yale Group; and Ken Schilling, our Senior Vice President & Chief Financial Officer. Yesterday, we published our fourth quarter 2016 results and filed our 10-K. Copies of the earnings release and 10-K are available on our Web site. For anyone who is not able to listen to today's entire call, an archived version of this webcast will be on our Web site later this afternoon and available for approximately 12 months. I would also like to remind participants that this conference call may contain certain forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements made here today, in either our prepared remarks or during the following question-and-answer session. We disclaim any obligation to update these forward-looking statements which may not be updated until our next quarterly conference call if at all. Additional information regarding these risks and uncertainties were set forth in our earnings release and in our 10-K. Also, certain amounts discussed during this call are considered non-GAAP. The non-GAAP reconciliations of these amounts are included in our earnings release and available on our Web site. Now let me discuss our results for the fourth quarter. I will discuss the highlights first and then give into the details. Overall global lift truck markets remained strong in the fourth quarter of 2016, an increase over the prior year fourth quarter. In the strong market we saw a 3% increase…

[Operator Instructions] Your first question comes from the line of Mike Shlisky from Seaport Global. Your line is open.

Hi, good morning guys.

Good morning, Mike.

Can I start off, may be just start off with a broad question. Can I get your broader outlook as to why you believe the lift truck market is going to be flat globally, next year just looking at what happened in the stock market for example? I would suggest there's some increase in industrial and economic activity in 2017. I’m little bit surprised at your flat outlook. Where are the big puts and takes as to why we may not see any growth next year in the lift truck market?

I think there are probably two aspects to that. One is that, we want to be conservative there's no reason not to be as we think about how to run our business and we've been growing for quite some time and some markets go up and some markets go down at this point in the cycle. On the other hand, you know it may turn out that you're right in certain areas certainly there is evidence that areas that have had difficulties are bottoming out and turning out hard to say how quickly they'll turn out. So, I think we'll adjust our thinking on the markets as we go along through the year remember these are global markets not just the US and even in the US, if there's a major focus on infrastructure there might be some impact on some segments of the forklift truck business, but probably not really broad. Tom you want to add something on this?

Sure. I mean if anything, it’s maybe the reflection of how strong 2016 came in against direct taxation, the overall market in 16 grew by 7.5%. We've seen very strong growth out of Europe, about 10.5% growth in 16. When you really dig into it a lot of it was on tax free. But we have to be very careful when you look at the headline numbers, at the quality of the bookings. We saw a very strong growth in the Asia Pacific region, but it was really a rebound in China. China was very soft in 15 and it rebounded in 16 and we think a lot of that rebound was I believe a little bit of pent up demand from 2015. And then certainly the Americas, overall the Americas, only grew 1%. North America grew by about 2% and we saw softness down in Brazil compared to the prior year. We are projecting 2017 being sort of broadly flat. I think if there is on the balance of which an opportunity maybe a little bit more opportunity, but what I would encourage you to do always is look at the type of bookings and where the growth is coming from rebound in North America in the above 3.5% engine to versus much more important than the growth the Class 3 market in Europe. So I think the bias would be for maybe to a little bit more optimistic than we put in our overall outlook, but I think overall it's certainly from a dollar term. From a dollar terms it's pretty still stand by.

And remember the bookings market is not the short term driver of our shipments plan necessarily. We can build backlog if the market is better or if our shares are higher than we forecast and then produce those trucks over a considerable period of time. So we want stability in our manufacturing plants and in our supply chain ordering structure and that will also have an impact on how we think about the shipment side.

Thanks that's great color Colin. Now just a quick follow-up on [indiscernible] I mean if backlog is up at 10% your shipments in your system were down to the somewhere 85,000 this past year you might get to 115,000 in a couple of years. So I guess, I mean, with your backlog up 10% here do you think your revenues will be up in the double digits in 2017 that might be a good pace to get you from 85,000 to 115,000 eventually.

Well, I think you know as usual we're not going to forecast the percentage, but I think your general interpretation that we were pretty conservative on our shipments in light of the bookings last year is correct and you can assume that with higher level of bookings, we're more comfortable moving our shipment our builds schedules up than our shipments up to some degree.

Super. I just wanted to turn to a comment you made Christian relating the pricing, probably some package deals and just to get some deals done yet to some pricing there. Can you give us a sense is that sort of a more widely used tactic in the market these days to kind of get people on board with your brand and other companies on board with your brand or if that’s just really a very short term issue just to kind of get your share going?

Well, let me put it in a broader perspective and then ask Colin to comment. First of all, if you look at the gross margin position, the shortfall really occurs in Americas. Within Americas it's essentially all in North America and there was a combination of some revenue shortfall in comparison to the previous year which is largely driven by large trucks which were called out in the discussion as being weak and they were particularly weak in the Americas and we had a downturn in that segment of the market which began in 2014 and there are some signs that portion of market is coming back, as we look to the future. But explaining the past there was some volume impact, there was also a considerable share impact. We have some new customers, really significance in size, and they require an investment up front to put the infrastructure in place to provide the kinds of trucks they need, and we have opportunities to reduce cost over time. But it's really positioning ourselves particularly in segments of the market where we have been less strong with a really first class participation with certain accounts. Now I would also say that sufficiently specific that we don't expect that to re-occur on and in anyway on a regular basis as we look forward, there is an element of quarter impact that's unusual, but I would also say that mix is always important to us, and we don't have those big trucks and we do have other trucks, the margin servo but slimmer. Collin, you want to add anything to that.

Yes. As Al said it’s really North America, I mean we've made very significant penetration into some very large accounts, when we do that sometimes we have too much truck, what the customer was looking for, maybe the competition is being incumbent for some time and has developed the talk specifically to make that application. So getting in means we have to hit a price prime, but then it allows us to work with that customer in order to optimize our specs to meet the needs. I do want to stress, this is handful at least two hands full of accounts, I mean this is not a long list and we very carefully look at our pricing. Looking at these target accounts and then looking at what I would call outflow business, and we feel pretty secure that pricing is holding or is stable outflow business, and what we've been doing is using the opportunity of getting into these target accounts to build our position for the future, and we then have to improve our margins over time as we've prove ourselves, and as I say optimize the spec to meet the customer's needs.

But let me e be very clear, we don't really put -- the follow on comment to Collins observation is, that we aren't in there buying a market, we don't think that's the right way to go about business even though we're committed to share again. We want more value for our customers, we want to win them on the basis of the quality of the product that we offer, as Collin suggests that obviously, we have to be competitive with our -- with our prices and sometimes we get into situations where as he suggested our costs are somewhat higher and they need to be brought down over time, because in all these cases we expect that these are long-term relationships that we're entering into, they're not just one time situations, we wouldn't put the manpower and the positioning in place, if they were just a one-time deal. So, these are all situations where we're developing a long-term relationship and are certainly our hope and expectation is that we're providing value to our customers, that they appreciate and that is caused them to want to use us as their providers, as we look forward. Hopefully that helps to answer your question.

Definitely. I just want to squeeze one more in here, I don’t want to leave Ken out. Ken, can you just give me the kind of color as to where you think will be an approximate range, I know is a different -- there is differences in each segment but for a tax rate for 2017 your opinion?

Mike, I think what I say that we did drop from 28% to around a little less than 10% from 2015 to 2016, the big driver there is if you look at our footnote, I think it's page F-20, you'll see that our income in the U.S dropped dramatically, which is our highest tax jurisdiction, I think we had about a $70 million decline in U.S pretax income. And of course in our rest of the world we actually increased by about $6 million. So it's that swing that caused the very significant reduction our rate. Now as the U.S comes back in 2017 will again be providing for at a 35%, 38% rate would state, and that will grow the rate more in line with where we were at the beginning of this year. But I think if you go back to the rates we had the beginning of this year, I think that's the profile that we would expect.

Okay, that makes sense. I will pass along, thanks so much guys.

[Operator Instructions] Your next question comes from the line of Joe Mondillo with Sidoti & Company, your line is open.

Hi, good morning everyone. So my first question regarding sort of gross profit margins and going -- related to the product mix. The gross margins at the America segment was sort of the weakest that we've seen in a while, in the fourth quarter I know you're dealing with this product mix issue and you've been doing that, dealing with that for several quarters now, but looking at the backlog, if you look at the backlog on a unit or dollar basis, so the backlog in units divided by the dollar basis. It's up three straight quarters essentially throughout 2016 and increased, but we also saw that trend on that sequential increase throughout 2015 too, and so year-over-year it's still slightly down. I'm just wondering if you look at the backlog and the mix in there, are you starting to see an improvement in your orders of larger trucks and that sort of gives you confidence that the product mix issue will sort of reverse in 2017.

Collin.

Short answer is yes. We are seeing an improvement in big truck, everything from three tons and up wards all the way up to our big trucks, it's not consistent -- not consistent by industry or by geography but we just think the Americas which clearly is a big market for us starting to see improvement in industries like steel and concrete mining starting to recover. We are starting to see a little bit more activity coming out of the ports. So yes, we did -- we came down quite significantly from where we were in 2014 all the way through, really first half of 2016 and then started to see the recovery, but it's by no means yet back to full force, but we are cautiously optimistic, we'll see a continued recovery going forward.

And let me add to that that -- and it's a little hard for us to be absolutely clear about it. But I think our instinct is that with the very deep down turn in 2008, 2009, 2010 in some of the industries in which we’re strongest, our customers really cut way back on their bookings and their orders. And then, by the time things turned up in 2013, 2014 they got pretty aggressive, because they had gone for a long time without buying. And then you came to 2015 and 2016, so in addition to hesitation about the direction of the U.S economy, I think there was also something of a cyclical pattern among where you going to least argued that there was something of a cyclical pattern among some of those customers, that are our most traditional customer base and they in a way kind of went to sleep. And I think our hope is now they're waking up and if the economy continues to be robust as seems to be the case that this slow growth is continuing much less if the new administration hopes, growth rate can be increased. We think that some of our traditional customer base may come back and complement our initiatives with both new customers and certain segments of the market, as well as a strength and position and a whole new in markets where we haven't been as strong. So you put all that together and I think it's too early to forecast it, but we're certainly hopeful that things are going to move sort of the direction that you're implying.

The other thing I can add is deal is [indiscernible] utilization increase all the way across the board, in big trucks and that's typically a leading indicator and a sign that we could see they the industry becoming stronger, people tend to rent [ph] to meet the short term need and then turn it over into a unit acquisition once the demand solidifies.

I might also add with regard to the Americas debt and sort of the fourth quarter of this year versus last year, that they comparison for North America is a tough one, because for quite some period, North America had been benefiting from deflation in its supplier costs, the dollar was very strong, commodities were very weak all of that was beneficial, and the margins under those circumstances tend to perhaps be artificially a little higher than our target margins would be on average, over a cycle in terms of our objectives [ph] and now you're starting to see things move in a little bit different direction commodities improving, the dollar has been stronger, but that sort of stabilized in terms of its impact and buying a lot of the components that we buy. So that's also a factor that's probably going on little bit in the situation that we see, comparing the fourth quarter or fourth quarter in terms of gross profit. And don't forget that in gross profit is not only our product margin position, but also the manufacturing variances that we have and we had factory variances which result from shipment levels that occurred during the quarter and certain plants, that also had an effect.

And I agree upon it was hit by hurricane in the third quarter which effective what went on the fourth quarter.

So a lot of factors at work which doesn't help you but it part of the explanation.

Alright, thanks, great. And then looking at Bolzoni the operating margins excluding that one time inventory adjustment, our purchase accounting with 8.1% a lot higher than I was anticipating, it looks like it's in the SG&A line. Is that stronger than you're expecting going forward, 8% seems a little higher than what you guys have to talk about in the past, but just in terms of that, why was it so strong in the fourth quarter and what you're sort of thinking related to that in 2017.

Well, they had a good quarter and fourth quarter that's number one, and some of that was sort of getting up to speed after the acquisition which always has a slowdown in fact at one kind or another well it's going on. So that's a part of it, but also keep in mind that we expect an enhanced volume and Bolzoni through increased share and also by serving certain segments of the business more broadly including to us, they have the capacity to do that without adding a lot of extra cost. So the leverage that they should have as their volume grows is very substantial, and we're very optimistic about the impact that Bolzoni is going to have over a period of time. I think at this point it's living up to our expectations, the toughest thing for us is the accounting treatment. And you have to keep in mind that because of acquisition accounting some of our earnings, affective earnings and cash are not treated as GAAP earnings under the accounting. And so, it's really performing better than the numbers suggests, Ken, I think I said that reasonably accurately.

Yes, I think I couldn’t agree more, I think we're thankful for the strong fourth quarter out of Bolzoni, fourth quarter is their strongest quarter historically and seasonally. So I don't think we were un expecting a good quarter but we're happy that the transition to being part of the Hyster-Yale organization is now behind them.

There was another discussion in the second quarter to the acquisition, I mean of the second quarter we had the worst of all worlds because we on 51% and yet it was -- we have tweet [ph] them absolutely separately and couldn't cooperate on things like insourcing of folks that we've -- that we've now been able to really get moving on in the fourth quarter.

So the gross margin doesn't look a whole lot different when you compare the fourth quarter to the second quarter, it's a little bit better but it's not a whole lot better, but the operating margin I guess that's what I'm focusing on, it's 8%, so it looks like it was on the SG&A line, so I don't know if there's something seasonally in the fourth quarter that causes that SG&A to be lower than the rest of the year. If that's the case are we expecting that next fourth quarter -- is there anything else that you can sort of explain why the SG&A was.

Joe, the only thing I'd point out is second quarter of last year, they would have had the acquisition cost in SG&A.

Well, it's hard to exclude I think on a fully comparable bases we can do it in terms of certain accounting adjustments that we have to make, but non-accounting adjustments are a little harder to identify in certain areas.

How about this, do you think it looks like a 35% or so gross margin seem to be sustainable, do you think the 8% operating margins are sustainable, if so I'm assuming that the SG&A was lower than expected or some reason it's a lower in the fourth quarter.

I think we'd have to look at that level of detail and we're not likely to forecast it that way. I just put it in terms of the fact that looking forward we expect more volume to flow through and we expect that there will be leverage, and that the performance of the business is going to be very satisfactory.

Okay, I just got a couple questions on Nuvera, the revenue a lot less than I was expecting. I thought these products would be starting to ship in the fourth quarter, and you saw less revenue in the fourth quarter and then third, just wondering sort of your outlook there, how the orders have been trending, are we expecting shipments in the first quarter. Just give us more of an indication of how shipments in that top line part of the businesses is trending.

I think Colin; will comment more specifically on some of the timing. I just introduced the subject by noting that we're in an odd period in my judgment, if we chose to we could probably take more -- we could probably be more aggressive about taking orders with certain customers. We don't choose to do that at this point, because we'd rather get the product a little more comfortable that the product cost structure down where we expected to be quarter-by-quarter number one, number two the introduction of the product into the marketplace is fully bedded down, so that from the customer's point of view it's perceived as a very high quality with very strong service and support, and so we're being a little bit careful in our introduction cycle here, to make sure that we have exactly what we want. We'd rather go slowly than stub our top [ph] bottom line. But with that background let me ask Colin, to comment more directly on kind of the pace that we do see as we look at it now.

You see shipments pick up as we go through 2017, to our point we want to operate at a very measured pace, we could have took bookings in much greater numbers than we have done, if we had made commitments to [indiscernible] to deliver and certainly third and fourth quarter of 2017. We do have a couple of products that still in the development phase of that a critical to be able to offer us some customers the complete package to meet there needs.

Let me be clear what Colin is talking about, he is talking about a product there, it's not a new product it's a new packaging of our system.

Certain capabilities.

The battery box sized box sizes.

Responsibility for the development of those Battery box -- new battery boxes is being done now out of our Portland Development Center, with the cooperation of the Nuvera engineers, not to change to the way we've been doing it, we have articulated in the release we've moved the responsibility for the packaging of the fuel cell engine over to Hyster-Yale group and Hyster-Yale group will also be working not only on development of the new Battery box packages to be working on value engineering, the ones that have already been delivered, there be putting them to a vigorous test for the cause, I would put all of our new product development through. But they'll also be working on integrated solutions, where instead of just having the Battery box replacement, it will be integrating the fuel cell engine and all of the relevant components in to the trucks themselves. So that's going to happen very quickly. We envision that really happening during 2017. From a piercing point of view what -- we working on getting the cost down of components, we don't want to as we articulated this in the release that as we shipping units today, basically we're losing money on them because our costs are too high, and we're working on bringing the cost down at the same time we're working very hard on making sure that we have best in class, mean time between failure on these units, because we want -- we would rather make the customer wait and then provide them with the right unit, with the right quality level and all of -- a lot of value added capabilities and to [indiscernible] by putting units in when we were really not ready to made that volume.

Just to remember that the cost and the mean time between failure, issues can really be a part of the same equation, because if we are using components that are still not fully commercialized, that are Quezada prototype [ph] components, where the supplier is not fully bedded down for volume production. Sometimes the performance of the components is less reliable, and so we've been -- we go through this in every new truck that we do, and we think we're bringing real power to this by the division of responsibilities that Colin outlined in that are outlined in the news release. With the forklift truck business, not only having responsibility for the packaging of the engines, but also for the sales of trucks that used deal sales, and that that puts it in the hands of the people who know what the customer's needs really are, and we have always said that what we want to do is have a variety of solutions for our customers, that can meet the very specific needs that they have. One of the solutions we have is a fuel cell power generation capability, but that's not applicable across the board and all applications, it takes a relatively high intensity application to make it economically for the customer, or a particular environment where electric traditional battery, electric trucks don't make sense for a particular customer, a variety of things. So we think that now that we got our first commercial customers and we’re shipping to them then and really up and operating that now we can shift focus and put big commercialization responsibility for everything except the engine in the hands of people, who after all are packaging engines all the time, they do it with electric motors, motive power electric motor motive power, they do it with internal combustion engine and different kinds of those. So that's their business way.

I think -- so again coming back to the original question, we expect the results to improve during 2017; our volume will ramp up in 2017.

Particularly in the second half.

Particularly in the second half. And we feel very bullish going into 2018 because we have a full range of these battery box replacements to meet the costumers needs, as well as I would tend to have the integrated solution, we will be manufacturing in Greenville, where we make our electric products, we'll work on getting the cost down to target levels, and we'll have units which will have very high meantime between fairly, which is something that our customers are telling us are looking for.

Okay, great thanks a lot, I really appreciate it.

Your next question comes from the line of Mig Dobre with Robert W. Baird your line is open.

Good morning everyone, it's Joe [ph] for Mig this this morning. My first question -- my first question was on EMEA, a very strong quarter our unit shipments and sales, strongest quarter in several years, operating income pretty good also. I was surprised to see that you changed your outlook for 2017 operating income from being up year-over-year to being down year-over-year and just wondering what was driving that, especially looking at the fact that there was on and on favorable currency movement of $20 million on gross profit in 2016. So thoughts there.

Ken, maybe explain the impact of currency on the situation here, and that is probably the biggest driver for us over all.

Joe, the -- for 2017 obviously the contracts we had in place in 2016 have expired and are behind us, so we have a reduction in the cover that we have in 2017, for the currency exposure in the EMEA division, they do purchase some U.S dollar components, some of those U.S dollar components are from low cost resource, so they're not necessarily U.S costs, but they're build in U.S dollars and as we work through that process of course we are the stair steps move closer and closer to market, and now we're seeing more of the full effect. Since year-over-year the euro's roughly at the same place that was at the end of -- at the end of 2016, as it was at the end of 2015. But now that that movement has been fully adjusted into the forward rates we have for our contracts.

Another comment I make, is that the [indiscernible] weren’t so strong in the broader sense EMEA’s operating profit performance would be a lot better than these numbers, not just because of the comment that Ken made, but because of the translation effect when you're taking the euro-dollar relationship. The one thing I would note that we are encouraged by and it is hard to say exactly how effect the numbers, it's really too early this point. Is the pound that devalued to some degree against the euro, and that's important for us because we have more pound content than our competitors do, and so our Craigavon manufacturing facility in northern Ireland is probably benefit to some degree in terms of its competitive cost position, and its ability to have margins and be highly competitive on price, as a result of that. But the bigger effect you're seeing the expiration of the currency contracts on the one hand and the translation effects and the other.

Thank, now it makes sense. And maybe a similar question on JAPIC. I know there were negative currency impacts in 2016 on operating income in that segment also, but I think even if you strip those out with the segment with a little bit below break-even, and the way I interpret your guidance for 2017, is that it's going to improve but probably out of stay, maybe a little bit below break-even. What has to happen to get -- To get back to back above breakeven on an ongoing basis in that segment.

Well, you know there are a whole series of things that come together in the reporting of our JAPIC area. And as a backdrop it's probably important to remember that we do many things in Asia, which benefit the company as a whole. The purpose of our business and business relationships in China is not just to provide product and activity for the JAPIC area, the trucks are shipped around the world. Are SN trucks made in Japan are shipped around the world. On the other hand, there's no question that the profitability of our business in for example China is less than it was a while ago, the market for -- which is our core market, for foreign trucks which tends to be highly Western oriented customers, or Western type customers, has been weaker than the overall China market in which we are not a major participant. The situation has been very competitive in the Asia markets, I think we feel we're going to see some improvement above Asia particularly in Pacific and Australia, but there -- I think the best way to think about it is that it's not going to make a big difference from a JAPIC reported area a point of view, in the immediate future.

One of the big markets for us is Australia. The Australian big truck market was down obviously with the collapse in the commodities and then the other thing is margins in Australia have been under pressure because of currency.

I think the big truck business is important I haven’t mentioned that.

That's very, very helpful perspective, thank you. But maybe question on Nuvera, you kind of walk through the reorganization there, is that reorganization something kind of always what's contemplated at this part of the development, or is it kind of a reaction, to maybe where you see the opportunity for the business going forward.

What we always intended to have our production location eventually for the battery boxes in our Greenville operation, so there is nothing new in that sense. I do think that we probably accelerated our point of view about the value of having all of the selling activities concentrated in our Hyster-Yale Group, and probably also accelerated our shift of -- toward more integrated solutions and in conjunction with battery boxes for the non-fuel cell engine business. So I don't think it's fundamentally a strategy that we hadn't contemplated, I think the more important reason is that frankly, the power that we see and establishing our position effectively is -- we want to take advantage of the strengths of the Hyster-Yale Group and they have the strengths in integrating engines into our product. They have the strength in selling trucks with any kind of different power based on the application and don't forget that it isn't -- that there is a complete separation, obviously Nuvera is going to continue to be highly supportive of the activities because they are going to depend on the end market and its success but they get to concentrate on their technology and I think that probably we feel even more strongly than at the time of the acquisition in the value of the technology and the breadth of capabilities to the development of the fuel cell engine business could develop for us overtime.

The way we'd like to think of Nuvera is really is almost either comments of field sales, we want them to be a stock in engine manufacturer supplying to us but building the baby by us, I mean Hyster-Yale but also supplying those engines and stuff to other companies. So if you think about Cummins [ph] as an example; as an engine manufacturer, that's in effect to what we want Nuvera to be going forward and then our people, our Hyster-Yale people selling engine trucks, battery electric, lithium ion, they have the expertise, their customers are asking them for fuel cell solutions. So as far as the selling of the battery box replacement or the integrated solution, that responsibility is very much in the hands of Hyster-Yale in terms of selling stacks or engines or the other technologies that Nuvera has, that expertise and competency will still reside within Nuvera.

That makes sense, thank you. And last question for me, kind of a bigger picture question; the goal is to get to 7% operating margin by 2018. I know a lot of that is dependent on increased lift truck volumes, margins had been kind of between 4% and 5% from 2011 to 2015, took a little bit of a step back in 2016, more into the 3%. You know, kind of based on the way 2016 played out, is the thought that the 7% margin at the 115,000 produced lift trucks is that -- is that kind of still attainable?

Absolutely, I mean nothing has changed in our thinking. I would emphasize that we have to be at our target margin levels, as well as get the volume; in other words, there can't be more discounting than is or lower margins, lower pricing that is appropriate and it's got to be incremental, that's the option. But basically, you know I'd just emphasize again that filling up our manufacturing plants as our standard margins and then it covers manufacturing variances which are contained in the other part of gross profit and spreads the GS&A across a bigger amount of revenue and that's the whole story in a nutshell, right there. So the real question is, when can we get to that number. Now we're being pretty careful about that, you said something about 2018; I think in our news release Kristie we said precisely what?

We actually said in our investor presentation that we'd like to do in 2018 but 2019 was more realistic.

So I think we want to think about that guidance that we've used and depending on how the markets go it could even stand out a little bit longer than that. So you know we're -- I'm less comfortable putting a specific time period on it. You know, what we -- and let me go back for a second to the discussion of the margins and the new customers that we had some particularly strong shipments for in the fourth quarter. As Collin indicated, we expect those volumes overtime to not only repeat but be greater, those are long-term arrangements we've entered into; we think the margins will improve and we think the volumes will improve. But that didn't happen overnight; we worked on with that customer for couple of years, maybe even longer to get those -- that value adding relationship well understood. And sometimes they can come more quickly, we've got a couple of other significant accounts that we've been fortunate enough to develop a new strong relationship with -- where we've simply gone in and really got through how the lift truck business can be structured differently for them in a way that that helps their P&L. And -- but again, you're starting relatively early in the cycle, you can't come in and tender offer bid at the last minute and offer a lot of value to the customer because you don't have a chance to understand the application well enough. Now that's a long way of saying that there is a customer development cycle that we have to work with but if the basic -- so we feel that the programs we have in place and I particularly mention count [ph] identification and -- because if we don't call our new customers and happen to understanding of them industry by industry by industry, we're not going to get share efforts by definition. And I'd also call out the solutions capabilities that we've added in our business because we're not going to get the business unless we have better solutions for people; and so we've got to really understand that. And we feel we have the capabilities in there and we're building them on the -- in ways that reach more and more customers, it takes little time but we see it unfolding over '17, '18, '19, '20; that's the time period. And we feel comfortable that it can happen during that time period but we're not very comfortable telling you when.

Sure. Okay, thanks everyone.

There no further questions in the queue at this time. I turn the call back over to the presenters.

Yes, I'd like to just provide one clarification; net effective tax rate I was providing for that was before discrete items; so if you're trying to recreate those percentages that's how you do that. Secondly, Christie mentioned a couple of items at the end of her prepared remarks that relate to cash flow and other things; I would point you to our footnote on the acquisition of Bolzoni because we do have receivables, payables and other items that are on our balance sheet at year-end that in the beginning of last year, we didn't own Bolzoni, they are not included in our results. And with respect to the accounts payable item, that represented slightly less than 40% of our debt outstanding at year-end that would not have been there had we not had that unplanned item. So just to help you in putting your miles together, I just wanted to share that information so everyone had it.

Yes, and I understand that unplanned item had to do with dates and a highly technical computer coding issue and -- but the net impact was payment a few days before we would ordinarily paid those bills. This is not anything of any significant duration, one where the other but it just happens to show up at year-end and therefore beyond on the books at that period of time. So it's not a material issue and from a financial point of view, it's more optics and in any given year I think it's the twitch [ph] that I would put on it. Thank you.

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