Standex International Corp/De/ Q1 FY2021 Earnings Call

Good day and welcome to the Standex International Fiscal First Quarter 2021 Earnings Conference Call. Please note this event is being recorded. I'd now like to turn the conference over to Gary Farber with Affinity Growth Advisors. Please go ahead, sir.

Thank you, Rocco, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com. Please refer to 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 most recent SEC filings and public announcements for a detailed list of risk factors. In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBITDA, which is earnings before interest, taxes, depreciation and amortization; adjusted EBITDA, which is EBITDA excluding restructuring, purchase accounting, acquisition-related expenses and one-time items; and EBITDA margin and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted income from operations, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow and pro forma net debt-to-EBITDA. 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. On the call today is Standex's Chairman, President and Chief Executive Officer, David Dunbar; and Chief Financial Officer and Treasurer, Ademir Sarcevic. I'll now turn the call over to David.

Thank you, Gary. Good morning, and welcome to our fiscal first quarter 2021 conference call. On today's call, I will provide commentary on the quarterly 2021 results and the trends we are seeing in our business. I will then review our segment performance. Ademir will follow with a discussion of our consolidated results and financial position. Finally, I will conclude with comments on our outlook and key takeaways. If everyone can please turn to Slide 3, key messages. Overall, fiscal first quarter results were ahead of our expectations on several fronts reflecting stronger-than-anticipated demand and solid operational execution, particularly at our Electronics, Engraving and Scientific segments. Consolidated revenue increased 8.5% sequentially. This is ahead of the outlook we provided previously of fiscal first quarter 2021 revenue being flat to slightly above the fourth quarter of 2020. At the Electronics segment, revenue increased 23% sequentially and 18.6% year-on-year, reflecting positive trends in magnetics as well as contribution from the recent Renco acquisition. Sequentially, Engraving operating margin increased 800 basis points to 16.1% due to cost efficiency and productivity initiatives on 15.1% revenue growth compared to fiscal fourth quarter 2020. Finally, the Scientific segment reported its highest quarterly sales ever at $16.7 million. Earlier this year, we divested our Refrigerated Solutions business and established Scientific as a stand-alone reporting segment, both actions advancing our strategy to build our higher-margin segments. In particular, the Scientific segment's results reflected increased demand for seasonal flu vaccine storage as well as initial sales related to potential COVID-19 vaccines. In addition, our Electronics new business opportunity pipeline is healthy at $56 million across a wide variety of end markets. We expect the sales contribution from this pipeline to grow sequentially on an annual basis. In Engraving, we see continued opportunity in the tool finishing and soft trim tool laneways globally. We are leveraging these top line trends with stronger operating disciplines in all businesses, complemented by several financial initiatives. We are on track to deliver over $7 million in savings in fiscal 2021 from the actions we announced in the third quarter of fiscal 2020. We also began to implement tax savings initiatives in the quarter, including optimizing our foreign tax credits. We expect our tax-related actions to result in cash savings of $2 million to $3 million in fiscal 2021. As a result, our tax rate in fiscal '21 is expected to be approximately 22% or 500 basis points lower than fiscal 2020. We also expect to realize $1.5 million in cash savings in fiscal '21 due to our previously announced floating-to-fixed-rate interest swaps. We continue to maintain a strong financial position with a solid balance sheet and significant liquidity supported by consistent free cash flow generation. Standex had approximately $206 million of available liquidity at the end of the fiscal first quarter with a net debt-to-adjusted EBITDA ratio of 1.1. During the quarter, we generated free cash flow of $4.4 million. We also continued our cash repatriation efforts with approximately $8 million repatriated in the first quarter. We expect to repatriate $35 million in total in fiscal '21, which would result in $74 million in cash repatriated over the past 2 fiscal years. In sum, we are off to a solid start and expect continued growth and margin improvements as we move through fiscal '21. Our financial flexibility will continue to strengthen through free cash flow generation, cash repatriation and new tax initiatives. In our fiscal second quarter of '21, we expect consolidated revenue to be flat to slightly above the first quarter with a slight-to-moderate increase in segment operating margin. Please turn to Slide 4, and I will begin to discuss our segment financial performance, beginning with Electronics. Electronics segment revenue increased $8.7 million or 18.6% year-on-year, reflecting a 3.9% organic growth rate with strength in the Magnetics product line and $5.9 million from the recent Renco acquisition or approximately 12.6%. The balance of the revenue increase is related to foreign currency impact. Adjusted operating income increased approximately $1 million or 12.7% year-on-year, reflecting operating leverage on the revenue growth, productivity initiatives and Renco Electronics' profit contribution, partially offset by inflationary material cost increases. Our new business opportunities funnel has increased to $56 million and is expected to deliver $11 million of incremental sales in FY '21 across a broad range of end markets, including industrial, electrical vehicles, safety systems and military. We are also very pleased with the pace of integration of our sales channels with Remco. In 3 months, we've identified over $1 million of cross-selling opportunities in each other's accounts, ahead of our expectations. In terms of our second quarter fiscal 2021 outlook, we expect revenue to be sequentially slightly higher and operating margin to be sequentially similar to the fiscal first quarter. Our outlook assumes improvement in European and North American markets with Asia results slightly below fiscal first quarter of '21. Please turn to Slide 5 for a discussion of the Engraving segment. Revenue decreased approximately $2 million or 5.3% year-over-year, and operating income was lower by approximately $600,000 or 10.2%. The results reflected the impact of COVID-19 on our end markets, partially mitigated by productivity and expense savings in the quarter. However, sequentially from Q4 fiscal '20, Engraving reported a significant improvement as revenue increased 15.1% and operating margin improved 800 basis points, reflecting an overall increase in the level of customer activity combined with cost efficiency and productivity initiatives, which will continue with the segment. Laneway sales are recovering quickly from Q4, growing by 27% sequentially to $11.7 million, nearly back to pre-COVID levels on strength in tool finishing offering and soft trim tools. I'm pleased to see the progress our North American Engraving business has made improving labor management through standard work and better capacity planning. Our Corporate VP of Operations, hired in February, is collaborating with business management to improve operating procedures and drive efficiencies. In addition, the completion of our global ERP platform will allow additional analysis and improved performance management across all major global sites to further drive consistent performance. As far as second quarter outlook on a sequential basis, Standex expects a slight revenue increase and continued improvement in operating margin in the fiscal second quarter of '21. The expected revenue growth reflects an increased level of customer activity due to new automotive launches, along with continued introduction of soft trim tools and tool finishing offerings. Turning to Slide 6, the Scientific segment. Scientific segment revenue increased approximately $1.9 million or 13% year-on-year, reflecting organic growth in end markets, especially retail pharmaceutical chains. The sales growth reflects distribution and storage of vaccine for the coming flu season as well as a few initial orders for COVID vaccine storage. Operating income increased approximately $400,000 or 10% year-over-year, reflecting revenue growth, partially offset with reinvestments in the business for future growth opportunities. The picture highlights our under-counter cabinet used for storage of refrigerated and frozen medications and vaccines. Standex is well positioned with strong distribution channels for a leading role in a potential COVID-19 vaccine rollout. In the second quarter, we expect to see a sequential and year-on-year revenue increase, driven primarily by continued positive trends in retail pharmaceutical chains and clinical end markets and accelerated by the expected rollout of a national COVID vaccine. We expect operating margin to slightly improve, reflecting volume increase, balanced with reinvestment for future growth opportunities. Looking further, we expect Scientific revenue growth sequentially and year-on-year in fiscal '21 with approximately $10 million to $20 million of incremental sales to support COVID vaccine storage. Turning to the Engineering Technologies segment on Slide 7. As expected, Engineering Technologies had a challenging quarter. Revenue and operating income decreased $7 million or 28.4% and $2.9 million or 86% year-on-year, respectively. The first quarter results reflected the economic impact of COVID-19 on the commercial aviation market, especially engine parts manufacturing. However, we continue to experience positive trends in the unmanned segment of the space industry and defense sales. In our second quarter, we expect revenue to be sequentially similar to the first quarter as a result of continued weakness in the Aviation end market. Operating margin is expected to increase slightly sequentially despite Aviation end market trends as a result of productivity initiatives and cost reduction activities, which are ongoing. We are pleased to show the progress of our efforts to expand capacity in our Billerica plant using lean processes. As a result of set of time reduction, improved layouts and process improvements, we have increased throughput 20%, positioning us well to support continued growth in our space end markets and deliver higher margins. Please turn to Slide 8, Specialty Solutions, which includes the Hydraulics, Merchandising, and Pumps businesses. Specialty Solutions revenue and operating income decreased year-on-year, although this was in line with our expectations for sequential results similar to the fiscal fourth quarter of 2020. Revenue fell by approximately $6.2 million or 19.7% compared to last year. This decline was primarily due to the economic effects of COVID-19 on several end markets, including food service equipment and hospitality for the Pumps and Merchandising businesses, as well as the dump markets for Hydraulics. Operating income dropped about $1.7 million or 30.9% year-over-year, reflecting lower volume, which was partially mitigated by cost-cutting measures. To help counter these trends, we sought additional opportunities focused on enhancing the segment's margin profile. We continue to direct hydraulics capacity toward higher-value opportunities, especially in aftermarket sales. We have also closed a Pumps operation in Ireland and outsourced the components previously made there to save around $1 million each year. Other end markets are also suffering from the impacts of COVID-19. The businesses are maintaining our growth discipline processes to collaborate with customers on promising future opportunities. An example of this is a pump control system that contains eight pumps along with electronic controls and diagnostics. This illustrates how the business is using a structured approach to explore new growth opportunities in a cost-effective way. Looking ahead, in the second quarter of 2021, we anticipate slight sequential declines in revenue and operating margin due to normal seasonal trends and fewer shipping days in the quarter.

Thank you, David, and good morning, everyone. First, I will provide a few key financial takeaways from our fiscal first quarter 2021 results. Overall, results were ahead of our expectations, specifically revenue at Electronics and Scientific segments was higher than anticipated. Strength in the Magnetics product line at our Electronics segment and vaccine-related storage demand at our Scientific segment benefited results in the quarter. In addition, our cost efficiency and operational initiatives, which will continue throughout the fiscal year, are providing a tailwind to our results. As previously communicated, we are well positioned to deliver over $7 million in annual savings related to cost actions. Our financial position remains strong with substantial liquidity and low leverage, complemented by consistent cash flow generation and ongoing cash repatriation efforts. In addition, we have also implemented several initiatives in the area of tax planning and interest expense that will further add to our cash position. Now let's turn to Slide 9, fiscal first quarter of 2021 income statement summary. On a consolidated basis, total revenue declined 3% year-on-year to $151.3 million. This reflects organic revenue decline of 8.2% year-on-year, mostly due to the economic impact of the COVID-19 pandemic. As we expected, this impact was felt primarily at Engineering Technologies segment due to weakness in the Aviation end market, and at the Specialty Solutions segment due to weakness in the food service equipment and hospitality industries. The Renco acquisition, which closed in early July, contributed revenue of $5.9 million or a 3.8% offset to the organic revenue decline. In addition, FX contributed 1.4% offset to the organic revenue decline. Gross margin decreased 70 basis points, primarily due to a decline in volume and increased material costs year-on-year, mostly in Electronics. On a sequential basis, gross margin increased 290 basis points reflecting cost outcome productivity actions and favorable product mix. Our adjusted operating margin was 11% compared to 11.3% a year ago. Interest expense decreased approximately $600,000 year-on-year mostly due to lower overall interest rate as a result of the variable-to-fixed-rate swap we implemented in the fiscal third quarter of 2020. In addition, the tax rate of 22% in the quarter represents a 580 basis points decrease year-on-year, largely due to various tax planning strategies we have started to implement. Adjusted earnings per share were $0.96 in the first quarter of 2021 compared to $0.91 in the first quarter of 2020. Now please turn to Slide 10, fiscal first quarter 2021 free cash flow. We remain a consistent generator of free cash flow. We reported free cash flow of $4.4 million compared to $2.8 million in the first quarter of 2020. This increase primarily reflects a lower capital spending with $4.8 million in the first quarter of 2021 compared to $6.7 million a year ago. Capital investments in the first quarter of '21 were focused on maintenance, safety and our highest priority growth initiatives. Next, please turn to Slide 11, a summary of Standex's capitalization structure and liquidity statistics, which remain very strong. Standex had net debt of $106.2 million at the end of September compared to $80.3 million at the end of June of 2020. Increase in net debt is due to the Renco acquisition, which was financed with cash on hand. Net debt for the first quarter of 2021 consisted primarily of long-term debt of $200 million and cash and cash equivalents of $93.7 million, out of which $75.7 million was held back for in subs. We also had approximately $206 million of available liquidity at the end of September. The company's net debt-to-adjusted EBITDA leverage was 1.1 with a net debt-to-total capital ratio of 18.2%, and interest coverage ratio of approximately 9.9x. We also continue to proactively identify opportunities to further add to our financial strength. We have started to implement several tax planning and saving initiatives, including implementation of strategies to optimize U.S. tax cost on global intangible low tax income, implementation of various foreign tax credit optimization strategies that are expected to provide us the ability to utilize additional credit, and the filing for amended returns to take advantage of regulations that have recently been finalized. As a result, our tax rate in fiscal 2021 is expected to be approximately 22% or 500 basis points lower than fiscal 2020. We expect these actions will result in cash savings of $2 million to $3 million in fiscal 2021. We also expect approximately $1.5 million in annual interest expense savings due to the previously announced floating-to-fixed-rate interest swaps. We also repatriated $8 million in the first quarter and expect to repatriate $35 million this fiscal year. From a capital allocation perspective, we had an active quarter. Earlier in the quarter, we announced the acquisition of Renco Electronics for approximately $28 million, which was financed with cash on hand. We also repurchased approximately 87,000 shares for $5.1 million in the quarter. There's approximately $38 million remaining under the Board's current repurchase authorization. We declared our 225th consecutive quarterly dividend of $0.24 per share, a year-over-year 9% increase. And finally, we expect capital expenditures to be approximately $25 million to $28 million compared to a prior expected range of between $28 million to $30 million and actual expenditures of $19 million in fiscal 2020.

I will now turn the call over to David for closing comments. Thank you, Ademir. If everyone can please turn to Slide 12 for closing thoughts and key takeaways. In the second quarter of fiscal 2021, we expect consolidated revenue to be flat to slightly above the first quarter of 2021 with a slight-to-moderate increase in operating margin. Several assumptions underpin this outlook. We expect the Electronics and Engraving segments to have a slight sequential revenue increase due to an increased level of customer activity. At Scientific, we expect a moderate sequential revenue increase as end market momentum builds to prepare for vaccine delivery. Engineering Technologies revenue is expected to be similar to fiscal first quarter 2021 as commercial aviation markets stabilize, with a slight increase in operating margin from productivity and cost reduction activities. At Specialty Solutions, we expect revenue and operating margin to decrease slightly, primarily due to seasonality and a lower number of shipping days in the quarter. In general, we expect continued growth and margin improvement as we move through fiscal 2021. In addition, we see attractive growth opportunities across the businesses. In the near term, we anticipate the opportunity for COVID-19 vaccine storage to be between $10 million and $20 million in the fiscal year. The growing funnel of opportunities in Electronics will deliver an incremental $11 million in sales in the fiscal year. Previous cost actions complete and expected to deliver over $7 million in savings in fiscal '21. Operational excellence initiatives are gaining momentum across all businesses. We are also strengthening financial flexibility with strong free cash flow generation, continued cash repatriation and new tax initiatives. In sum, we're very well positioned to further build our higher-margin business segments into more significant platforms with customized, differentiated solutions, supported by deep technical and applications expertise. Operator, please open the line for questions.

Today's first question comes from Chris Moore with CJS Securities.

Yes. Let’s start with Engraving. The Engraving margins improved more quickly than we anticipated. Can you explain a bit more about what contributed to that?

Well last quarter, we announced that the entire industry kind of took a pause as tools couldn't be released from tool shops into our shops, in part because these collaborative meetings couldn't take place. So that is really opened up. So obviously, we saw volume increase. But at the same time, we put a lot of effort into improving the operating disciplines in Engraving, particularly in North America. I mentioned our VP of Operations, Jim Hooven, is working closely with that business, improving the labor management practices and leveraging the investment we've made in the last few years in a global ERP system. So we can just improve our local operating disciplines in a common way around the world and it's first really showing up in North America.

Got it. Helpful. Maybe on the Electronics side, talk a little bit more about the improvement there, the Renco integration. It sounds like Renco is off to a pretty good start.

Yes. Yes, we are really pleased with the first few months of integration with Renco. First of all, culturally, it's a great fit. They'll be a great member of the Standex family. And they're bringing some things to us. For example, they have some practices they put in place for their COVID response protocols that we've been able to duplicate that we learned from. I mentioned in the script earlier that the cross-selling opportunities are ahead of what we expected. So the sales channels are really coming together well. And their profitability is running ahead of our model. So we're very happy on that front. More broadly, in Electronics, North America's strong. Asia was stronger than we thought it would be, and Europe really started to come along towards the last part of the quarter. And If you cut it between the Sensor and the Magnetics business, we're seeing a lot of strength in the Magnetics customers here, especially in North America.

I understand, thank you. Regarding the $7 million in cost savings for fiscal '21, could you elaborate on the expected timing? I also assume that all of this will contribute to fiscal '22.

Yes, Chris, it's Ademir. Yes, that's correct. We feel really good about where we are with all of our cost saving actions. You should continue to see the readout as we move through this fiscal year and we fully expect that to continue through fiscal '22.

And then in terms of kind of that cadence during fiscal '21. Is it more back-loaded on the savings? Or is it kind of smooth or...

Most of the savings year-to-year, we will see probably in the first 3 quarters. In the fourth quarter of last fiscal year, we had about $4.2 million worth of savings. And some of those are not going to repeat. So Q1 to Q3 is where you would see most of that $7 million readout.

Got it. And then on the tax rate side, looks like 22% for fiscal '21. Obviously, we don't know what impact the elections will have on tax rates moving forward. But from where you sit today, is there any reason to think that, that rate would not flow into fiscal '22?

Chris, based on where we sit today, we believe that the rate in fiscal '22 might pick up a little bit, maybe to 23%. But still significantly lower than what was our tax rate in the prior fiscal year. Again, kind of where we sit today without knowing if there's going to be change in administration or new tax law.

Hello, Rocco. Anyone else in the question queue?

I apologize. My line was all on mute. Our next call comes from Chris Howe with Barrington Research.

I wanted to highlight here the Scientific segment. David had mentioned the $10 million to $20 million of incremental sales as we look to this fiscal year. If we look below the top line, you had 24.5% operating margin this quarter. We expect some improvement on that going into Q2. Perhaps you can talk a little bit more on the margin line. How we expect maybe the remainder of the year to play out as we look at investments you are making in the segment versus opportunities for margin expansion?

Yes. Well I think the margins in those low 20s still is certainly a reasonable expectation. This business levers well, the products that we'll sell are standard products. So they will deliver the same margins as our core business. The investments we're making in the business are largely in the short term to support the growth, of course. But we're also investing in engineering capability. We have a very active new product development funnel. And as the quarters roll on, we'll begin announcing some new products. So our plan here is to invest, but invest appropriately. And we're not going to lower the cost structure and reduce the EBIT rate. So continue to expect kind of the EBIT rates that you've seen in this business.

Okay. Perfect. That was helpful. If we shift back to Engraving, following up on some of the previous questions. Good margin recovery sequentially in the quarter. Some of that is tools being released into the quarter from Q4. If we strip that out, margins still came in at around the same level?

Yes, it is true that this business leverages nicely. The volume is crucial due to the high fixed cost base typical of a service business, which allows for a 60% to 70% leverage. In the example we provided, we are accomplishing our work with fewer labor hours in North America, marking a significant and lasting productivity improvement in the business.

Okay. Very helpful. And that you see as relatively sustainable. I know we don't know what's going to happen with all these different variations of a resurgence. But that improvement you're seeing in Q2, we think that can be relatively sustained as we get into Q3 and Q4, barring any kind of unseen economic disruption?

Yes. On both fronts, the indications we get from our customers is that there's pretty steady outlook for the market. And these practices that are being put in place, they are standard work and improved operating disciplines as we deliver consistently better results. So yes, we're counting on them continuing.

Great. My last question is on corporation level basis. More specifically, perhaps wholly did on a monthly basis in the quarter. If we look at that trend and what you're seeing currently in October, has there been any shift or change in the trend line? Or perhaps you can talk about how the mix was as it played out from month to month?

I noticed you cut out. Were you referring to a specific business or the corporation as a whole with that question?

Corporation overall, if we were to split it out by month in the quarter. And then what you're seeing in October? Any change in behavior?

No, I wouldn't say so. The outlook statements we provided throughout reflect our overall perspective on the business. We are anticipating sequential growth throughout the year, which we are observing in our backlog and customer activity. As we analyze each segment, we adjust those statements based on the feedback we receive from our customers.

And our next question today comes from Chris McGinnis with Sidoti & Company.

It was a good quarter. Many of my questions have mostly been addressed. However, I would like to discuss the productivity gains implemented in Engraving. When assessing the five segments, which other areas are you actively focusing on to enhance productivity with Jim in charge?

Well, if I look at the quarter sequentially, comparing Q1 to Q4, we're seeing an increase of about $500,000 to $800,000 in Engraving due to productivity. A great example of this is in Engineering Technologies, which is further along in adopting lean practices and driving productivity improvements, partly because of the demanding markets they serve. A couple of years ago, we identified potential capacity constraints in our plant that manufactures dumps for spacecraft, so we initiated a project to reduce setup time and enhance capacity by improving the workflow from critical machines. Today, they have successfully expanded their capacity by 20%. This is a prime example of how we can leverage that fixed cost structure for increased volume. In the Electronics and Scientific segments, Jim and his team are implementing a sales, inventory, and operations planning process to better align the demand forecasts from sales with capacity planning and operations. This is particularly important in cases where we have long supply chains with our suppliers. By refining this process, especially when we have a 12-week lead time for some components and are quoting a 3 to 4-week lead time to customers, we can improve cash management and on-time delivery over time. Jim is assisting all the businesses with varying degrees of focus, especially on Engraving in North America in the near term.

Yes. And Chris, if I can add, Engraving is all about labor management, because there's a very little material contact in the business. So if we can solve labor management, that business levers up pretty nicely when the volume occurs.

Great. What success is Jim achieving compared to his predecessors? What unique contributions is Jim making that are leading to our early success?

Yes. Initially, we filled the OpEx role with someone who was a strong teacher and capable of running events and facilitating process improvements. Jim, on the other hand, has experience as an operator, including roles as a plant manager and P&L leader. This means he brings more than just teaching and instructing; he understands how to run a business. His credibility allows him to engage with our companies, thoroughly assess their challenges, and effectively outline a strategic plan. Jim's hands-on experience has been a key factor in his success.

Could you elaborate on the comments in the release regarding opportunities in mergers and acquisitions? Have more companies approached you since the last quarter? Please discuss how your pipeline looks for potential mergers and acquisitions moving forward.

Yes. We have an active pipeline that we continue to work on throughout the year, even though many paused to assess market developments. We maintain our relationships with business owners, who we believe will present good opportunities in the future. As we approach the end of the year, a few of these opportunities are starting to develop and may become actionable in the upcoming quarters. I was somewhat surprised that we didn't receive more unsolicited inquiries this year; we were hopeful that our strong balance sheet would attract unexpected opportunities. However, we still have a robust pipeline and a solid balance sheet, and I believe our successful acquisition streak will continue into next year.

And ladies and gentlemen, this concludes the question-and-answer session. I would now like to hand the conference back to the management team for any final remarks.

All right. Thank you, Rocco. In closing, we are off to a solid start in fiscal 2021. Very excited at the results we were able to communicate today. And very proud of the employees globally around Standex, who have responded to these unprecedented circumstances we all live in with great agility and adaptability, and a heightened degree of collaboration and teamwork around the world, making us all proud to be part of this company. I also want to thank shareholders for their continued support and your interest in Standex, and we look forward to speaking with you again in our second quarter fiscal '21 call. Thank you.

And thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.

Thank you.