David Calusdian - Executive Vice President, Sharon Merrill
Roger Fix - Chairman
David Dunbar - President and Chief Executive Officer
Thomas DeByle - Chief Financial Officer
Elizabeth Lilly - Gamco Investors
Standex International Corporation (SXI) Q2 2014 Earnings Conference Call February 3, 2014 9:00 AM ET
Ladies and gentlemen, thank you for standing by, and welcome to the Standex International Corporation's Second Quarter 2014 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.
I'll now turn the call over to David Calusdian of Sharon Merrill. Please go ahead, sir.
Thank you. Please note that the presentation accompanying management's remarks can be found on Standex's Investor Relations website, www.standex.com. Please see Standex's Safe Harbor passage on Slide two.
Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations and other forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's recent SEC filings and public announcements for a detailed list of risk factors.
In addition, I would like to remind you that today's discussion will include references to EBITDA, which is earnings before interest, taxes, depreciation and amortization; adjusted EBITDA, which is EBITDA excluding restructuring expenses and one-time items; non-GAAP net income; non-GAAP income from operations; non-GAAP net income from continuing operations; and free operating cash flow.
These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States. Standex believes that such information provides an additional measure and consistent historical comparison of the company's performance. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in Standex's second quarter news release.
On the call today is Standex Chairman, Roger Fix; President and Chief Executive Officer, David Dunbar; and Chief Financial Officer, Tom DeByle.
I'd now like to turn the call over to Roger.
Thank you, David, and good morning, everyone. It's my pleasure to begin today's call by introducing my successor as CEO of Standex, David Dunbar. We issued a news release announcing David's appointment on December 18; and as planned, he took the reins of Standex on January 20. David brings to Standex a tremendous record of growth focused P&L leadership at Tyco, Emerson Electric, and Honeywell. In the interest of time, I'll simply say that we're delighted to welcome David to Standex.
I'll now turn the call over to David so he can introduce himself, and then we'll return to our usual agenda. David?
Thank you, Roger, and hello, everyone. Thank you for listening in today. It's tremendously exciting to be part of the Standex team. This is a great news professionally and personally for me. I spent my carrier in large, complex manufacturing businesses. And for the most part, they focused on highly engineered industrial products, some of them similar to those in Standex portfolio. My experience in these businesses include sales, marketing, services and product development; and as Roger said, P&L management at the global divisional level. My goal is to put this experience to work for Standex.
I've enjoyed getting a feel for the business and getting to know Roger, Tom and the rest of the management team during the past few months. This is clearly a company with strong capabilities and enormous growth opportunities. Working with the Board, management team and our employees around the world, it's my mission to leverage this potential and take Standex to the next level operationally and financially. I look forward to reporting progress on this mission when we hold our Q3 conference call this spring and to meeting as many of you as possible between now and then.
Now, back to Roger.
As we announced in December, excuse me, I'll be working closely with David over the next couple of months to ensure a smooth leadership transition. We're making good headway as we speak, and Dave will be taking a lead with Tom on our next conference call.
Now on to our second quarter results, and please turn to Slide three. This quarter was impacted by soft demand in Food Service, offset by solid performance in Engraving, Electronics and Hydraulics. Our growth and profitability were also negatively impacted by difficult year-over-year comparison at our Engineering Technologies segment.
Revenue growth for the second quarter of fiscal 2014 was 2.1%, non-GAAP EPS decreased 4.3% year-over-year to $0.88 per diluted share. We closed the quarter with a net cash position of $2 million and our balance sheet is well positioned to support future investments in organic growth as well as acquisitions.
In Food Service, we experienced soft demand at several of our largest Food Service chain accounts and in the U.S. convenience store and U.K. grocery store segments. However, given our recent restructurings in Food Service and our plans to take additional costs out of this part of the business, as well as the strength of new product pipeline of Food Service, we believe we will realize significant profit leverage as demand recovers.
We continue to feel good about our overall strategy for the business. We had a challenging year-over-year comparative in Engineering Technologies, but all three of the other segments delivered solid growth in sales and operating income for the quarter led by a record performance in Engraving.
Turning to Slide four and taking a long view, you can see that our trailing 12 month EPS is $3.66 a share, up 8% from full year of fiscal 2012, and up 23% from full year of fiscal 2011. This demonstrates the impact of our lower cost structure and the success of our growth initiatives both acquisition-driven and organic.
Investments in technology continue to be a very important driver of organic sales growth for Standex. And slide five highlights some of our most recent technology successes.
Starting at the top of the slide with Food Service, we have examples from both the cold and hot sides of the business. On the cold side, we introduced a new chest-style refrigeration line that operates at ultra-low temperatures. That is as low as minus 80 degrees Fahrenheit.
Ultra-low refrigeration is the state-of-the-art for applications such as storing genetic and biological samples as well as very high value blood and tissue inventories not just in labs and universities, but in biopharmaceutical and agricultural industries as well.
In addition, we're leveraging this sophisticated intellectual property we developed in the Ultra-Low refrigeration domain to enhance performance and add value in our conventional refrigeration portfolio.
In Cooking Solutions, we're introducing a speed oven line that combines microwave heating with our proprietary convection baking technology to allow for super fast cooking. An example would be to take a frozen pizza from our freezer and within a few minutes have it cooked and ready for consumption.
These new ovens are helping to transform the preparation of grabbing to hot foods in formats like convenience, coffee and sandwich store chains across the country and represent a significant opportunity for growth.
Following how the Engineering Technologies Group is innovating to drive top line growth, we're introducing solutions for customers that dramatically reduce the cost of critical components using aircraft jet engine assemblies by using our proprietary metals spinning technology.
As you can see, two examples on Slide five; a nacelle lip skin component on the left, and on the right a jet engine exhaust plug and nozzle assembly, both of which will be used on the Airbus A320 program. We've recently captured Lightweight Program Awards for both components which will represent well in excess of $80 million in sales over the life of the A320.
In Engraving, we've developed a proprietary wax jet printing technology that's truly differentiating Standex within the automotive OEM design community. This new technology allows us to rapidly create sample plaques that are used by our automotive OEM customers to design interiors of vehicles. This new technology allows us to create new texture designs in a matter of days versus the old technology used by our competition which takes a month or more. This new level of responsiveness and flexibility is allowing us to increase our success in capturing new vehicle platforms across the globe.
In Electronics, we've historically designed our sensor products around our core reed switch technology. Anticipating our customers' future requirements, we've been working to leverage Hall Effect Chip technology as a complementary technology to our existing reed switch sensor capability. We've recently captured our first large customer program with a Hall Effect sensor will be used to measure rotating speed in a washing machine application.
As a final example, we've been working with our customers in the hydraulics business to develop a new material technology that enable hydraulic cylinders to better withstand the arduous service conditions down in garbage truck applications. We've introduced new surface hardening techniques with cylinders, new designs for cylinder seals that are intended to substantially extend product life in this very abusive operating environment.
A takeaway from Slide five is that Standex is committed to significant technology advancements as a means of driving future organic growth.
With that, Tom will discuss the results for the second quarter, after that I'll discuss performance and the outlook in each of our business segments. Tom?
Thank you, Roger, and good morning, everyone. Please turn to Slide six, which is our quarterly bridge that illustrates the impact of special items on net income from continuing operations. These items include tax effect of $0.5 million of restructuring charges, $1.5 million of non-recurring management transition expense, and a tax affected non-recurring insurance proceed gain of $1.4 million.
In the comparable period for fiscal 2013, there were $0.6 million of tax affected restructuring charges and $59,000 of tax affected acquisition related costs. Excluding special items from both periods, non-GAAP net income from continuing operations was $11.2 million or $0.88 per diluted share compared with $11.7 million or $0.92 per diluted share in the second quarter of fiscal 2013.
A quick word on the special items this quarter. The charge for management transition expense includes search fees, relocation and other costs associated with David Dunbar's joining the company, as well as the acceleration of stock compensation for Roger Fix due to his retirement.
In addition, during the quarter we recorded a pre-tax $2 million insurance gain resulting from a catastrophic failure of a large vertical machining center located at our engineering technology facility in Massachusetts. Insurance proceeds for our insurance claims during the quarter were $3 million, partially offset by the write-off of the net book value of the sale of machine of $1 million. We have a secured replacement machine for approximately $2.9 million, and it will be operational by May 2014.
During the interim period, we have increased the production from a similar machine located at the same facility and secured an outsourcing solution, which in the combination will allow us to meet the needs of our customers. We expect the cost to acquire and install the replacement machine and the instrumental cost associated with subcontracting will be fully reimbursed by the insurance company.
The tax impacted gains recorded during the quarter was $1.4 million. As a result of the unplanned replacement of the vertical machining center, we are increasing our estimated capital spending for the fiscal year to be in the range of $23 million to $24 million.
Turning to slide seven, net working capital at the end of the second quarter was $130.3 million compared with $117.4 million at the end of the fourth quarter of fiscal 2013 and $129.9 million at the end of Q2 last year. Working capital returns were $5.3 million in the second quarter of fiscal 2014.
Looking at Slide eight, we generated free cash flow from continuing operations of $15.2 million during the quarter as we successfully resumed converting our net income into cash flows from operation. Capital spending for Q2 was $3.7 million in line with our expectations for the quarter.
On a year-to-date basis, free cash flow from continuing operations was $12.2 million versus prior year of $18.2 million. Capital spending on a year-to-date basis was $8 million versus $9.7 million in the prior year.
Slide nine illustrates our debt management. As Roger mentioned earlier, we ended the second quarter in the net cash position of approximately $2 million. This compares with the net debt of $29 million a year earlier. We define net debt as funded debt less cash.
Our balance sheet leverage ratio of net cash to capital of 0.6% at the end of the quarter compared with the net debt position of 9.8% a year ago. Our strong balance sheet is well positioned to meet our needs. We continue to have ample financial flexibility to fund future growth, acquisition and other strategic initiative.
With that I'll turn the call back to Roger.
Thank you, Tom. Please turn to Slide 11, Food Service Equipment Group, and I'll begin our segment overview. Sales in Food Service decreased 2.9% from Q2 last year and operating income was down 23.4%. In the refrigeration side of business we were encouraged by continued growth in the dollar store segment and double-digit growth in small quick service restaurant chains. It was also encouraging to see stabilization in our sales to drug retail accounts, which have been trending downward.
However, similar to our experience in the last quarter, refrigeration sales at several large quick service chains were down as the chains temporarily diverted capital investment away from new store openings. Based on our discussions with the chains, we don’t see this slowdown as an ongoing trend. There was also some weakness this quarter in refrigeration sales of the small dealer channel.
We're making good progress in penetrating the dollar store segment with our new line of value engineered upright merchandising cabinets. These segments are highly cost sensitive, so our sales with dollar stores are coming through at lower margins. This is due in part to the dollar stores segment being more cost sensitive than the QSR and drug store segments. It's also due in part to the productivity issues and the inefficiencies associated with rolling out new products which we expect to see improve during the next several quarters.
We've had good success with our upright glass door merchandizing and endless display cabinet lines in the dollar stores segment, and I've seen early signs of approval in the drug store segment. We're now working with value engineer and lower our price points to be more competitive in refrigerated cabinet price we sell in to the ice-cream and other end markets where we apply these products. It takes time for change to go through testing and evaluation, so we don't expect to see results overnight. We're encouraged by the early positive response these new products that we're seeing in the marketplace.
In Cooking Solutions this is another slow quarter in chain business and its sales to the U.S. government. Our seasonal spare parts supply business was soft as well. We did see some improvement in bookings for the latter part of the quarter in the North American hot side and that has continued into the early part of the current third quarter.
The early signs of strengthening the U.S. grocery store segment that we saw last quarter became even more evident in Q2, and we're also seeing improvement in our project pipeline here in the U.S. These gains continue to be offset by the very soft grocery store environment in the U.K.
We're making progress on our strategy to drive revenue growth on the Cooking side of business by rolling out a number of great new products. We launched a new line of countertop griddles and charbroilers in Q1, our new value line deck oven in Q2, both of which have been well received.
Looking ahead, we plan to substantially expand our portfolio of combi oven products by introducing a new value combi oven, mini combi and speed oven in the second half of fiscal '14 which benefit sales in fiscal '15. We did see year-over-year improvement in both sales and profit performance from our Procon Pumps business as business conditions are improving in the European side of this business.
Turing to Slide 12, we're obviously not satisfied with the current performance of our Food Service Group. All of our current initiatives in Food Service are focused on driving profitable growth and improving operating margins in both assured and longer term. On the top line, our focus is on introducing new products that will generate higher margins, specific examples include the line of combi ovens we've been introducing over the past 18 months, the introduction of the speed oven during calendar of 2014 and ultra-low refrigeration.
We're also value engineering in number of our existing products on both the refrigeration and cooking side of the business, which is intended to improve margins and allow us to penetrate new markets. Also on top line, we're rationalizing our sales efforts away from lower margin products and market segments.
On the cost side of the business, we have a number of major initiatives underway beginning with the closure of the Cheyenne Cooking Solutions facility. We're on-track to complete this closure by -- this facility by the end of fiscal 2014 and to generate $4 million in annual cost savings beginning next fiscal year.
We're improving our shop floor labor cost and productivity by moving the production and more products to our low cost manufacturing facility in Mexico and investing in automation in our U.S.-based Food Service manufacturing facilities. Finally, we're driving procurement and lean initiatives to provide ongoing cost reduction opportunities.
This is multi-year initiative and results will not be achieved overnight. However, we are satisfied that these initiatives will in the long run make significant improvement in the financial performance of this group.
Please turn to Slide 13 to the Standex Engraving. Q2 was a quarter of all time record sales and profitability for the group. Sales were up 20% and operating income grew 30% from Q2 last year. This growth was mainly driven by our mold texturizing business, which was very strong in both automotive and non-automotive segments around the world. All three geographic regions did very well in the quarter and we expect to report strong mold texturizing sales in the second half of fiscal year not only in North America we continue to see solid growth in bookings and backlog, but in Europe and China as well.
Over the past year we've opened the mold texturizing facilities in Brazil, Korea, India and Mexico and the customer response has been uniformly positive. It’s still early days and the activity of these facilities remains focused on running samples for the QA and acceptance process at the automotive OEMs. The production work at all four facilities is beginning to ramp up.
Our Innovent business turned in a good quarter despite continued softness in the Aerospace segment, largely related to sequestering and defense budget uncertainties. Sales in Innovent's non-aerospace product lines were solid both in Europe as well in emerging markets and we expect to see further acceleration in the second half of the fiscal year.
Sales in our roll and plate engraving and machinery businesses remain soft this quarter, primarily in North America and Brazil. Product demand for building application has not been as strong as we expected and we expect continued weakness in this part of the business through the second half of fiscal 2014.
We continue to make good progress on our strategic growth initiatives in engraving. The objective for these initiatives is to introduce new mold texturizing technologies and production capabilities that expand our addressable market and differentiate Standex from our competitors.
We are currently focusing on a number of technology opportunities, the first being the wax jet texture prototyping I mentioned earlier. The second is slush molding, which is a next-generation substitute for injection molding and plastic components and a superior technology for manufacturing soft-touch plastic parts for the automotive market. We just completed a large slush molding tooling project for a Tier-1 supplier to Renault.
Sample products have been produced on the tooling and both the Tier-1 supplier and Renault were extremely satisfied with our tooling performed. This is a milestone that positions Standex as part of a select group of top-Tier suppliers in the slush molding area globally. As a result, we are now expanding our slush molding capacity in Portugal and plan to have new capacity online in North America during fiscal 2015.
The third new engraving technology we are developing is using lasers to directly engrave very large complex metal molds. Laser engraving is a next generation alternative to traditional asset hedging techniques. As I said last quarter, we've been running two laser engraving machines in Germany for more than a year at this point and our capacity on those machines is essentially maxed out on a seven day by 24-hour schedule.
We have three similar new machines on order targeted for Germany, China and North America and scheduled to be delivered in calendar 2015 and pre-selling capacity on those machines for several months and we have a number of customer commitments for production as soon as the machines are operational.
Please turn to Slide 14, our Engineering Technologies Group. Sales for the quarter were down 3.9% from Q2 last year and operating income was down 32.6%. These negative year-over-year comparisons reflect a one-time customer settlement that we booked in Q2 of fiscal 2013 based on poor quality material that they had provided to us. This settlement had a positive $1.9 million impact on sales and a positive EBIT impact of $700,000 in the prior year quarter.
Our space sales were up double-digits in Q2 of fiscal 2014 excluding the impact of the customer settlement. We continue to capture development orders from NASA and suppliers for the space launch of system program, which is a next generation manned deep space vehicle.
In addition, we continue to see orders for manned and unmanned space stationary supply. We are also booking orders for emerging space tourism applications such as for the Virgin Galactic program, which has been in headlines recently. Looking forward, in addition to these three areas, we continue to experience solid growth related to the unmanned National Reconnaissance Organization satellite launches through our participation in the Delta IV and Atlas V programs.
Sales in the land- based turbine market were up nearly double digits as we saw strong sales to our largest OEM in this segment. Our oil and gas sales and engineering technologies were up three fold from Q2 last year on very good margins. Having said that, it's important to remember that oil and gas will continue to be project focused and lumpy for us because bookings are largely driven by the timing and funding of large offshore oil and gas production floating platforms.
Up to now, our oil and gas business has focused on just two OEMs. During the second quarter we received our first development order from a third OEM based in the U.S. Looking ahead, we have a solid pipeline of future oil and gas projects and are confident that a number of them will materialize as we move through the second half of fiscal '14 into fiscal '15.
Aviation sales in the quarter were essentially flat year-over-year; however, as I mentioned earlier, we are continuing to make good progress in our developmental activities related to jet engine components, as well as nacelle lip skins for both European and North American wide body aircraft.
This follows production contracts we have previously discussed related to a long-term lip skin contract with a new version airbus A320 passenger jet. On the internal engine component side, we will continue to move forward on production orders with sub-suppliers to GE and in developmental efforts with Rolls-Royce in Europe that we reported last quarter, targeting production in the second half of fiscal 2014.
Please turn to Slide 15, Electronics. Electronic sales for the second quarter were up 6.3% year-over-year. Our operating income increased 7.1%. The customer programs we talked about in the past several quarters have begun to launch and are positively affecting sales in both Europe and North America. These include magnetic devices and a sensor for GE that I mentioned earlier in the white goods and appliance end user markets.
Sensors for automotive applications, read relay programs as well as hydraulic oil pressure sensors. Looking ahead we have a solid pipeline of electronics customer programs that we expect to launch during the rest of this fiscal year and through the next. We are also continuing to make good progress in our developmental work on new products and customer programs for the domestic market in China.
In addition to our solid pipeline of new products from customer programs we are executing our robust set of lien enterprise cost reduction initiatives in electronics and expect these initiatives to benefit the business trend in the next 12 to 18 months. This is on top of the estimated $4 million annual run rate savings that we are now realizing and procurement savings and from our facility consolidations in Tianjin and Shanghai, China, resulting from the Meder acquisition synergies.
Please turn to the Hydraulics Group on Slide 16. Q2 hydraulic segment sales were up 12.4% year-over-year and operating income was up 10%. We did see continued recover in our traditional North American dump truck market. This growth was primarily driven by the rebound in new home construction and to a lesser extent by market share gains. Dump trailer sales in the North American market were flat with Q2 last year. Dump trailer sales in the oil and gas market were up year-over-year, but this growth was offset by soft sales related to infrastructure construction and coal hauling.
We continue to see robust growth in the roll-off refuse market, where we are benefiting from continued sales growth at two key large roll-off refuse OEMs as well as more recent share gains of smaller OEM customers. In addition, the hydraulics business benefitted from some growth and aftermarket sales during the quarter as well as early signs of recovery in several of our export markets namely Mexico, South America and Europe.
Looking ahead, we've introduced several new product launches in the garbage refuse market segment, some of them featuring the innovative materials I mentioned earlier. Several customers are in field testing and we've been awarded some initial production orders.
Finally our most recent expansion in the Tianjin, China Hydraulics facility has been completed. We have a solid backlog in place for this facility and we anticipate robust demand for production out of the facility during the rest of the fiscal year.
Please turn to Slide 17. In summary, fiscal 2014 is shaping up to be a mixed year. However, market conditions and food service are likely to remain challenging through the second half, we believe we have foot in place and are executing on a series of multiyear initiatives to drive profitable growth and improve margins in the food service group from which we can expect significant long term effect on growth and profitability.
The trends elsewhere in our business look to be increasingly favorable for future organic growth. We are introducing a range of new products to leverage these end market opportunities. In light of a strong balance sheet and liquidity, we also remain focused on pursuing acquisitions that will strengthen our base business. We believe that Standex is well positioned to leverage future sales growth into strong profitability.
With that, I'll be pleased to take your questions. Operator?
[Operator Instructions] The first question comes from the line of Beth Lilly of Gamco Investors.
Elizabeth Lilly - Gamco Investors
Good morning, Beth. How are you?
Elizabeth Lilly - Gamco Investors
Just terrific. How are you this morning?
Well, it's cold here in New England. Not as cold out there I guess.
Elizabeth Lilly - Gamco Investors
It's a high of -- I think it's going to be a high of 15 today.
There you go. It's a warm spell in Minneapolis then…
Elizabeth Lilly - Gamco Investors
Exactly, exactly. I wanted to dig into what's going on in your Food Service equipment group and the decline in margins. And you've set this long-term target to get margins I believe to double digit, maybe even to 12% to 13%. So can you talk about the decline this quarter, which was disappointing, and then also what steps you are taking to get to that 12% to 13% level?
Okay. The year-over-year were negatively impacted by a couple of things. We mentioned that we've grown our sales in the Dollar Store segment and that's coming in at lower margins and what the sales are that we've replaced basically that the drug store sales that are down and the second is really the mix, the large chains we do go to direct. As a result, our sales channel expenses are less and our margins are higher. So we had a shift change -- or a mix change, I should say, away from the large accounts to smaller chains, which go through the rep and dealer organization.
To address our long term plans, I bring your attention to Slide 12, which we are going to use as a bit of a mantra as to what we want to do in our Food Service Group and you can see from that slide, there is really two basic avenues. One is to drive profitable growth in segments where we can generate higher margins and what we really are saying here is that we have not enough growth in the high margin segments of Food Service and we want to over time, reduce our exposure to some of the lower margins.
Not all customers, not all products, not all end user segments have the same margin opportunities. So as we think about our organic growth initiatives, our focus is on products and categories where we can generate higher margin. So the new products for example, the combi speed oven, the combi oven, the speed oven, ultra-low refrigeration, all reflect higher margin opportunities.
Same time we know that we have to continue to participate in a lot of our traditional marketplaces. So our focus there is on value engineering and so the upright glass merchandizing cabinet is a good example of where we went in and made a radical change to the design of the product itself and totally re-did the manufacturing progress along lien enterprise lines.
So a lot of work if you will on new products, value engineering and then again over time, rationalizing ourselves away from lower margin products and segments. Then this straight up cost side. We've been talking about the Cheyenne consolidation. That is going to deliver $4 million in savings beginning next year.
We haven’t talked a lot about it, but behind the scenes we are doing a fair amount of moving a product into our Mexico operation where we have obviously significantly lower hourly cost as well as the ability to leverage our fixed overhead in that facility and we are also making investments in automation in particularly the U.S. side, that is we can't move a business or a product right into Mexico for various infrastructure reasons.
We are investing heavily in capital to automate and take cost out of the operation and then finally trying to drive a lot of lien and procurement programs. So those are really the primary things that we are doing, excuse me, to drive margins over time.
Elizabeth Lilly - Gamco Investors
So the problem is, if I remember correctly, the problem is on the heating, the hot side of your business, right? That's where you are really challenged.
I think we have opportunities on both the hot and the cold side. On the cold side, that's the one that's being impacted the most by the decline in new drug store openings. So we are transitioning that business to be less dependent on drug stores into these new markets like the dollar store side. So there is opportunities on both sides.
Elizabeth Lilly - Gamco Investors
Okay. Great. Thank you very much.
Thank you, Beth.
[Operator Instructions] At this time, there are no further questions. I will now turn the call to management for any additional or closing remarks.
All right. Thank you, operator. This is David Dunbar and thank you, everyone for joining us this morning. I would like to close by thanking Roger and the Board for the opportunity to lead Standex. We put together what I believe is a thoughtful plan to ensure smooth transition. Roger and I will be off this afternoon to being a six-week campaign to visit our key sites, conduct quarterly business reviews and meet with customers.
As I said at the start of the call, one of my top priorities of getting to know you, our shareholders, and we schedule a number of meetings for that purpose as well. Standex is well positioned to execute on an ambitious growth agenda. I look forward to reporting back on our progress at our next earnings call. Thank you again. This concludes our call.
Thank you for participating in the Standex International Corporation second quarter 2014 earnings conference call. You may now disconnect.
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