Lydall's (LDL) CEO Dale Barnhart on Q2 2016 Results - Earnings Call Transcript

| About: Lydall, Inc. (LDL)
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Lydall, Inc. (NYSE:LDL) Q2 2016 Earnings Conference Call August 3, 2016 10:00 AM ET


David Glenn - VP, Corporate Development, IR

Dale Barnhart - President and CEO

Scott Deakin - EVP and CFO


Robert Majek - CJS Securities

Edward Marshall - Sidoti & Company

Chuck Murphy - Liberty Park Capital Management


Good day and welcome to the Lydall Incorporated Second Quarter 2016 Financial Results Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference call over to Mr. David Glenn, Vice President, Corporate Development, Investor Relations. Mr. Glenn, the floor is yours sir.

David Glenn

Thank you, Mike.

Good morning everyone, and welcome to Lydall's second quarter 2016 earnings conference call. Joining me on the today's call are Dale Barnhart, President and Chief Executive Officer; and Scott Deakin, Executive Vice President and Chief Financial Officer. Dale will start the call with comments about the continued progress we're making in executing our long-term strategy, as well as provide an overview of current business conditions. Scott will follow with a review of our financial performance and discuss the key drivers by segment. At the end of our remarks we'll open the line for questions.

As you may be aware, our quarterly earnings press release and 10-Q quarterly report were released yesterday, so that you can follow along with today's call, please reference the Q2 2016 Earnings Conference Call Presentation, which can be found on in the Investor Relations section.

As noted on Slide 2 of this presentation, any comments made on this conference call that may constitute forward-looking statements are made available pursuing to the Safe Harbor provision as defined in securities laws. Please also refer to the cautionary note concerning forward-looking statements within Lydall's report on Form 10-K and Form 10-Q for further information. In addition, during this conference call, we will be making reference to non-GAAP financial measures. A reconciliation to GAAP financials can be found on the appendix in the presentation I just referenced.

With that, I'd now like to turn the call over to Dale.

Dale Barnhart

Thank you, David. Good morning, everyone and thanks for joining us today. I'm pleased to report another good quarter for Lydall. These results as well as our year-to-date performance and our recent acquisitions of Texel gives me continued confidence that we remain on the right path to achieve our 2018 long-term vision for profitable growth that includes $800 million in revenue and an operating margin target of 15%.

Slide 3 outlines our recently published financial results. On a GAAP basis second quarter 2016 net income was flat with second quarter 2015. Diluted earnings per share were $0.63 which were down $0.01 versus second quarter 2015. However, excluding discrete acquisition related expenses adjusted earnings per share were $0.70 or up 9.4% versus the second quarter of 2015.

Reported net sales grew 2% to $137.2 million or 0.5% organically for the quarter. The solid organic growth realized in three of the company's four segments was principally result of share and market gains in both our Performance Materials and Thermal Acoustical segments.

This growth was offset by a substantial decline in our Industrial Filtration segment, where continued weakness in air filtration markets most notably in global power generation applications dampened demand for the segments filtration products.

With respect to profitability, gross margin expanded 100 basis points to 26.2%.Reported operating margin was down 140 basis points to 11.3% but after excluding discrete acquisition related expenses adjusted operating margin was down 30 basis points to 12.4%.Overall our performance reflects the benefit from favorable product mix and lower raw material cost offset by inefficiencies in our Thermal Acoustic Metals segment on certain platform launches.

Next with respect to the ongoing investigation related to the possible violations of German Antitrust Laws, we continue to actively work with the German Federal Cartel Office. While we do expect to bring this matter to conclusion sometime in 2016, we are unfortunately still unable to fully estimate the specific timing or quantify the liability associated with the matter.

Turning to Slide 4, this is an overview of our long-term growth strategy which includes four drivers, new product development, Lean Six Sigma, Geographic expansion and M&A. First with respect to M&A, as you may be aware we recently completed the acquisition of Texel on July the 7. As I explained during the announcement of the acquisition, this business further diversifies Lydall into attractive adjacent markets focused on technical nonwovens with a leading brand.

In addition it provides Lydall with an opportunity to leverage our existing manufacturing capabilities and expertise in order to support future growth as this business uses the exact needle punch manufacturing process and capabilities we are skilled at within our Industrial Filtration segment.

We have begun the integration process of Texel and while it is still very early, we continue to be impressed with the strong team that has joined Lydall and I'm confident that we will execute well on our integration plan.

As I have mentioned before, even with this recent acquisition, both for a financial and organizational resource perspective, we have the means, the wherewithal and desire to execute additional acquisitions. I can assure you that as these materialize, we will continue to take a disciplined approach as we demonstrated with the acquisitions of Industrial Filtration and Texel.

With respect to Lean Six Sigma, we continue to work at new ways to operate more efficiently and better to serve our customers. During the second quarter, the results of Lean are evidenced in the gross profit dollars drop through of approximately 90% on the incremental revenue in our Performance Material segment, as well as the well-managed detrimental seen in Industrial Filtration given the drop in their sales.

At a consolidated level, the company delivered gross margins of 26.2% and an improvement of 100 basis point.

In terms of international growth, our Thermal Acoustic Metals operations in China continues to progress. We're on our track to achieve at least break even in operating income for the full year of 2016. This period was the first full quarter in which operations delivered positive operating income and we are encouraged by the outlook for the second half of the year.

Finally as we released some of the best examples of progress in new product development is in our Fiber segment with our integrated one-piece molded flooring product for interior cabin of several heavy-duty pickup truck models. Production is underway and we will start delivering at a full rate beginning in September.

On an annual run rate basis, this platform is worth approximately $15 million to the Thermal Acoustic Fibers business and actually we hope to grow this over time by winning awards on additional platforms with other OEMs.

Turning to Slide 4 with respect to the business conditions, overall we believe the underlying fundamentals of our business remains stable and we are well positioned for the remainder of the year.

Looking across our segments, we are seeing pockets of continued strength in certain areas offset by some pockets of softness, which we anticipate to moderate somewhat as we progress through the year.

Within our automotive businesses, current visibility suggest that the overall global demand remains healthy for the customers and platforms we serve.

While growth in light vehicle production in both North America and Europe is forecasted to be essentially flat for the remainder of 2016, we anticipate moderate growth in our Thermal Acoustic Fibers segment and low double-digit growth in our Thermal Acoustic Metals segment. This growth in excess of market is being driven by new product launches and the strength of the platforms we serve.

In our Performance Material segment, we anticipate demand for cryogenic installation products to remain weak due to the continued softness in liquid natural gas markets. While we have lacked the decline that began last year from a reporting perspective, we are still monitoring this market very closely.

In Life Sciences Filtration, the market remains healthy, but the timing of certain orders related to termination buys that benefit us in the last couple of quarters will wind down in the third quarter.

On the filtration side of the business, we remain encouraged. We continue to see improvement in demand in North America air filtration market and Europe demand continues to remain a highlight for this segment.

With respect to Performance Materials' operating margin we expect it to moderate as we go through the rest of the year given that the absorption benefit from certain life science filtration sales and inventory builds for the third quarter will conclude.

Finally to our Industrial Filtration segment, as a reminder this is the segment that will be renamed Technical Nonwovens for the third quarter reporting given the recent acquisition of Texel.

While we will benefit from stable demand from non-filtration products, we're continuing to face weakness from global power generation customers and experiencing general softness in China. We are cautiously optimistic that this will begin to moderate late Q3 and into Q4. In the near term, we're focused on successful integration of Texel.

To wrap up my comments, we're pleased with our performance in both the second quarter as well as the first half of the year. We continue to look forward to turning an another exceptional year and delivering solid financial results in 2016.

With that, I will now turn the call over to Scott.

Scott Deakin

Thank you, Dale. Today I'll briefly cover our consolidated results and then provide an overview of our operating segment results.

Turning to Slide 6, in the second quarter of 2016 the company achieved net sales of $137.2 million, an increase of 2% over the second quarter of 2015. Tooling sales, which reflect requirements for customer-funded capital associated with new platform launches particularly in our metals segment were up 1.6% in Q2 2016, versus the same period last year.

Organic growth for the quarter was 1.5%. This was principally the result of continued strength in automotive markets and growth in excess of SAAR as realized through platform share gains.

Performance Materials also had continued solid growth quarter-on-quarter given continued recovery in air filtration markets, share gains and termination buys and life sciences.

Our only area of quarter-on-quarter softness at the segment level as Dale noted, was seen in the Industrial Filtration segment where weakness from global power generation customers and general softness in China contributed to a sales decline of 22.5%.

Our gross margin on the quarter increased to 100 basis points to 26.2% versus Q2 2015. Consolidated operating margin was down 140 basis points to 11.3%. After excluding discrete -- excuse me, after excluding discrete acquisition-related expenses however, operating margin in the underlying business was 12.4% a decrease of 30 basis points over the prior year.

Higher accrued incentive compensation and severance costs in the European facility primarily contributed to the reduction. Overall these results reflect a benefit from lower raw material costs, favorable product mix and further progression of the company's Lean Six Sigma continuous improvement programs and this in spite of inefficiencies on certain new platform launches in our thermal acoustical metals segment.

The effective tax rate for the quarter was 32% compared to 33.6% in the second quarter of 2015. We continue to anticipate that our effective rate going forward will fall somewhere in the range of mid to low 30s.

On a GAAP basis, second quarter 2016 diluted earnings per share were $0.63, which were down $0.01 versus second quarter 2015. Excluding discrete acquisition related expenses however, adjusted earnings per share were $0.70 or up 9.4%.

Moving to the balance sheet our liquidity remains very strong. At the end of the second quarter, cash was $82.7 million with $18.2 million used in beginning of the third quarter to partially fund the acquisition of Texel.

The remainder of the purchase price was financed with $85 million in borrowings from the company's amended $175 million credit facility. Post-acquisition, our debt-to-EBITDA leverage was 1.3 times.

Finally as it relates to capital expenditures, we spent approximately $15.6 million through the first six months of the year, compared to $11.7 million in the prior year. For the full year 2016, we expect total capital expenditures to be in the range of $25 million to $30 million.

Turning to Slide 7 with half of the year behind us, I also wanted to take a moment and walk you through the progress we've made year-to-date. Organic sales in the first half were up 1.7% to $266.9 million.

With the exception of industrial filtration, all segments had nearly double-digit organic sales increases. Industrial filtration’s organic sales decline offset this growth however, with a reduction of 13.8% due to weakness from global power generation customers and general softness in China.

With respect to operating margin, we continue to make progress on improving year-to-date profitability. Adjusted operating margin increased 130 basis points to 11.7% versus the adjusted operating margin for the first half of 2015. The continued improvements of the consolidated level are driven primarily by favorable mix and lower raw material costs across the business.

Moving to Slide 8, I’ll discuss our segment results. I’ll start with our thermal acoustical metals business. This is our global automotive segment which specializes in providing under hood and under body engineered thermal solutions for vehicles.

This business delivered very strong organic sales growth of 10.6% during the quarter. Net part sales increased $4.7 million to $41.1 million or approximately 12.9% compared to the same period in the prior year.

Tooling sales were down slightly in the second quarter of 2016 given the timing of product launches. The site sales being up significantly, operating margin declined 270 basis points quarter-on-quarter to 9%. Higher labor and overhead primarily due to operating inefficiencies on platform launches drove the erosion in margin. But we are disappointed in the launch of execution of these programs discrete actions are being implemented and we anticipate that the inefficiencies will be fully behind us by the end of the year.

Slide 9 refers to our Thermal Acoustical Fibers business; this business also serves the automotive industry and provides molded polyester acoustical solutions primarily for underbody applications for vehicles in North America. Sales in the quarter were $40.2 million up 13.2% versus the same period in the prior year. While timing of tooling sales primarily drove a significant growth in the quarter, part sales were up 4.6 organically which is a reflection of the health of the strong platforms we serve.

Operating margin decreased 320 basis points quarter-on-quarter to 26.5%, this was primarily due to unfavorable product mix primarily -- particularly as it relates to a greater amount of lower margin tooling sales in the second quarter of 2016 compared to the same period in the prior year.

Moving to Slide 10 I’ll cover our Performance Materials segment which provides specialty filtration and insulation products to a variety of end markets globally.Net sales in the second quarter increased 15.1% quarter-on-quarter to $30 million. Building on the success experienced earlier this year the business continue to realize strong demand and was able to increase share and benefit from market gains primarily in filtration which grew 13.2% in the second quarter.

Life Sciences Filtration also experienced strong quarter-over-quarter sales increase of 62.7% and this was primarily related to termination buys by certain customers due to discontinuation of certain raw materials used in the production process.

Lastly Thermal Insulation grew only 2.5% as we saw continued headwinds in the energy spaces our cryogenic insulation products are sold into liquid natural gas infrastructure applications.

However we were able to offset some of this inflation weakness with new wins on customer – excuse me – on commercial HVAC applications. Segment level operating margin improved by 690 basis points to 15.6% during the quarter, this improvement was driven by leverage on the increase sales, absorption benefit from a life sciences buys, inventory build in advance of third quarter sales, favorable mix and the effect of continuous improvement programs.

Slide 11, covers the Industrial Filtration segment which provides needle felt filtration solutions and nonwoven rolled good media for various commercial applications. Prior to the acquisition of Texel our legacy business primarily provided needle felt for the Global Industrial Air Filtration segment.

As we've mentioned before Texel will be integrated into the Industrial Filtration business and beginning in the third quarter the segment will be renamed to technical nonwovens which will reflect the combined performance of both businesses. In the second quarter of 2016 sales of $27.8 million were down organically 20.5% primarily due to weakness from global power generation customers and general softness in China.

Operating margin decreased to 110 basis points primarily attributable to a 270 basis point percentage increase in segment selling product development and administrative expenses as a result of lower sales volume in the second quarter of 2016 compared to the second quarter of 2015.However this increase in SGA&A percentage was partially offset by an improvement in gross margin of approximately 160 basis points driven by favorable raw material costs and effective operational execution in management of volume declines.

This concludes my comments regarding Lydall's financial performance and I'll now turn the call back to Dale.

Dale Barnhart

Thank you, Scott. To summarize we had another strong quarter and these results as well as our year-to-date performance demonstrates that we remain on the right path to achieve our 2018 long-term vision for profitable growth. Generally our end markets are stable and we continue to remain focused on executing new product development, implementing Lean Six Sigma and executing flawlessly on integration of Texel.

With that, we will now open up the call for questions.

Question-and-Answer Session


[Operator Instructions] The first question we have comes from Robert Majek of CJS Securities. Please go ahead.

Robert Majek

Good morning. In Industrial Filtration, is my understanding that customers can only delay the purchase of replacement filters for so long. What's the dynamic there and should we expect sales to bounce back over the next few quarters?

Dale Barnhart

You're right. We have the key drop we're seeing - a significant drop we're seeing in revenue as it relate to power generation is twofold. One, general weakness in China where we have a strong presence in their power generation market. And secondly, principally in North America we've seen the end of new installs.

So those bag houses were installed up through last year projects going in. Now we’re going into a replacement cycle. We won't see much during the peak summer months because that's when power generation is at its highest demand. We do anticipate some recovery in the third and fourth quarter and in fact we're seeing some bid activity right now as it relates to that in North America.

Robert Majek

Great. And can you give us some more detail on the product launch inefficiencies you’re facing in the metal segment and the impact on margin that caused this quarter?

Dale Barnhart

The inefficiencies are one new products and a new production line. So we've been challenged and we were having issues with downtime on that equipment. But that’s something we're good at resolving. So I have a high degree of confidence that we will get those issues behind and we did have Kaizen a couple weeks ago where we took the line off-line and had a team go in there and address several aspects of the production equipment that that process is improved some but we expect continued improvement there.

And then the other is in our European operations particularly our German operation again they’re starting to use a new type of metal which has created some scrap issues there. Again we have good understanding of how to operate that material from our North American experience and we’ll be transferring that. So by the end of the year we expect to have those issues behind us. I really can't quantify the impact on margins.

Robert Majek

Thank you. And lastly from me, in addition to the capital expenditures you disclosed, can you also give us an update on your working capital needs this year so we can kind of get a sense of potential free cash flow generation?

Scott Deakin

I’ll just say generally as we think about the momentum in the second quarter was actually improved over prior year. I think as you know we changed our performance metrics for management to have the fourth element more focused on that versus general free cash flow generation and that starting to have some benefits.

So I think the same kind of momentum you saw in the second quarter will carry into the third and hopefully we'll see some further improvement in that to even beyond the - what we were able to do in the second quarter.

Robert Majek

Okay, thank you. And congrats on the quarter. I’ll jump back in the queue.


And next we have Edward Marshall with Sidoti & Company.

Edward Marshall

Good morning. So I wanted to dig into the deeper a little deeper on to the inefficiencies within the metals that relates to the new program component of it. Is that learning curve issues or is it lower volume as you start to ramp up that program that’s causing those inefficiencies?

Dale Barnhart

No, it’s learning curve and in fact the challenge we have as we're having downtime with the new equipment is that we're running over time on weekends. So, we have ample volume and as demonstrated in the organic growth in the second quarter of over 10%.So the volume is there which is reassuring and as I've always said that it's hard to make money with an empty wagon. We don't have an empty wagon. We have a full backlog of order and we're good at solving these types of problems. So we’ll get it behind us, Ed.

Edward Marshall

And the specifically and although I was curious as to if you've seen is it a typical summer shutdown period that will commence I guess in now and what you'd kind of seeing from - I think you mentioned in the release about the orders being relatively strong in auto or consistent, but as it relates to summer shutdowns, what should we be thinking?

Dale Barnhart

Well July is the typical month and we have seen that. Some of our OEMs have taken two weeks down. We’re also experiencing again some more change-outs of models, which are particularly in some of the larger pick-up trucks that are in process right now.

So we’re seeing some of that, but if we look at our -- so yes, we have seen the shutdowns, but as we look at our EDI and releases from our OEMs and our platforms, we’re seeing stable revenue for the balance of the year and it will be complemented a little bit by the flooring project that kicks in at the end of the year in fibers.

And everything we’re seeing on the automotive industry is saying that overall sales and production are going to be pretty much on par with 2015. I think the concern from the OEM is the discounting they have to give to maintain that level and so their profitability maybe impacted, but it should have very little impact on our overall volume for the balance of the year.

Edward Marshall

Got. And if I asked about Performance Materials, can you tell me what the plus-up in the margin was due to the mix, can you quantify that?

Dale Barnhart

Just trying to think -- are relative to the other components, I would say probably about a point relative to some of the other drivers. The life sciences piece of business whereas the principal component of that, air filtration is solid margin there, but if you look overall at that termination by, that’s about $2 million over the course of three quarters.

The majority goes -- half of which is in the second quarter and the drop through that was in ballpark of 50%. So just that piece of it was about $1 million impact to the business over the second, third and fourth quarters, excuse me, first, second and third quarters.

Edward Marshall

So you're still within double-digit margins in that business despite the shift down in mix.

Scott Deakin

Ed, I would say we’d be right around the 10% give or take a little bit. We also benefited from typically -- we have our plant shutdowns in July and August. So we had inventory build ahead to support demand we have in July and August and we benefited from that in the second quarter, the absorption of that additional volume.

Edward Marshall

Got it. And then if I look at industrial filtration, I thought it was a pretty good margin given the -- despite the revenue drop and I know that you’ve been doing a lot of work there. And was there anything specific that kept the margin in the double-digit category?

In other words do you anticipate you can sustain this level with the kind of the run rate that we're now? And secondly when sales recovered to maybe last year's level, what do you think the incremental margin in that business will be at the improved I guess operations?

Dale Barnhart

Well there are several things that have enabled us to maintain the margins as well as we have with the drop in revenue. First of all, the revenue drop for the power generation product line is one of our lowest margin product line.

So one we have -- while the sales went down, we had favorable product mix because the rest of our filtration products are at better gross margin. So that benefited us. Secondly, raw material prices, we’ve been taking advantage of good commodity pricing for the base products that we supply.

Thirdly, one of the key synergies in that business was picking up our automotive rolled goods and that continues to be very robust for us tied directly to our thermal acoustic fibers business and then fourthly, insignificant is our continued leaner productivity drives we have in the business.

So as we see revenue come back, if it’s in the power generation, we’ll see growth in operating income, but you could a see a little unfavorable mix as it relates to gross margin.

Edward Marshall

Got it. And one last attempt at this. Do you guys have accretion estimate for Texel?

Dale Barnhart


Scott Deakin

Unfortunately, it’s the same answer. We’re right in the middle of it and obviously we know that there is a thirst for it. As you know, there is two components to it. One is we have to finalize the closing balance sheet and then we have to our valuation work on it.

We’re on the midst of that and expect to be able to give you better clarity of that in our third quarter release. As we’ve talked about in the past, the biggest percentage of the write-up is going to be associated with inventory that’s probably in the ballpark of two thirds of it.

The next biggest component is going to be the intangibles and that piece of the write up and a very small piece in terms of the PPE write-up. So as I said, we’ll be able to get you some better clarity on that with the third quarter release.

Edward Marshall

Even though I think inventory write-ups are axed from the pro forma numbers, I am just curious do you have a sense as to what ballpark range for that number?

Dale Barnhart

Not just yet and so we've finalized the closing balance sheet but we’ll be able to get it decent enough.

Edward Marshall

I gave it another shot. All right, thanks. I appreciate it.


[Operator Instructions] Next we have Chuck Murphy with Liberty Park Capital Management. Please go ahead.

Chuck Murphy

Good morning. guys. Yes, so Ed already asked my question about auto, but maybe if I could take it from a slightly different angle, your largest customer Ford sounded a little bit more cautious, and I was just wondering if you could talk through how your thinking about the market is. It is -- well, the other guys are not as cautious and we also have some share gains, how are you thinking about it?

Dale Barnhart

Well, again as I started earlier, even if you go through and look at all the detail on Ford’s what they're projecting, they're still projecting $17.5 million or slightly higher than that SAR this year. So again they're projecting a flat market on a worst case flat to last year.

What they're concerned about is they’ve seen more discounting going on. So therefore they are margin linked. So from a volume standpoint, which really drive our revenue factory production, we feel relatively positive about the balance of the year.

And you also have to in both of our segments, both in the fibers and the metals business we've gained new platforms that are launching this year. So we're benefiting from incremental growth as it relates to those new platforms coming on board that we’ve won. So we should be -- our revenues in the second half should be slightly higher than what you're going to see factory production in both North America and Europe.

Chuck Murphy

Okay. And I know it’s pretty early, but how would you think about 2017 with that backdrop?

Dale Barnhart

Everything we're seeing again from the industry forecast IHS and everybody that’s putting on what the OEMs are telling us, so that '17 should be maybe another replay of 2016. So slight growth. The one area that’s been a decline year-over-year is China in factory production, but there again we’re just ramping up. So we should see incremental growth there.

Chuck Murphy

Okay. Sounds good. Thank you.


Next we have a follow-up from Edward Marshall, Sidoti & Company.

Edward Marshall

Just a quick question on capital deployment. I know you have a pretty clear acquisition strategy and I commend you for the multiples paid, but as look at your business and I think about maybe debt reduction and obviously the German overhang, you’re generating a decent amount of cash down.

I am just thinking longer term when we think about maybe a capital deployment whether it’s from buying back stock or even potentially a dividend, what’s your thought process from the Board level if you can talk about either a return to capital to shareholders from a long-term plan.

Dale Barnhart

Good question. All options, we think about all the time. I think we’ve been pretty clear in the near term for at least the next 18 months to two years you're not going to see a big change in our capital structure either in terms of taking on debt or buying back shares, but over time as we get bigger, certainly that maybe something we would consider.

I think in the near term our plan is to start to pay down the debt we’ve taken on similar to what we did in the Andrew acquisition and really start to use that powder for additional deal activity that we’re pursuing as a part of our pipeline, but over some time I think the tendering mix of that may start to change, but we talk about it all the time and we’ll see how it looks couple of years out.

Edward Marshall

And I guess asked another way, in the even of a downturn or a market pullback, I know the acquisition strategy is relatively laid out, but let’s the stock is cheaper here, is there a better investment out there than buying Lydall in the form of the Board’s eyes. Will you turn to a different strategy maybe towards share repurchases as opposed to a pretty well laid out acquisition strategy?

Dale Barnhart

Yes, that’s a possibility. There is no firm plans to do that, but I can say if we put, initiated a share repurchase program, it would be structured two ways. One is to take away the dilution of our executive staff program and secondly, to buy should the stock go down.

We don’t believe -- we believe a lot of shareholder value is eroded when companies blindly throw cash at share repurchases when their stocks are very high valued. So right now we’re valued appropriately. If we drop significantly, that’s something we would consider, but we do not have an active program in place right now. We have to initiate another one because we closed out our prior share repurchase program.

Edward Marshall

Got it. Thanks very much.


Well at this time, we’re showing no further questions. We’ll go ahead and conclude the questions-and-answer session. I would now like to turn the conference back over to Mr. Glenn and the Management Team for any possible closing remarks. Gentlemen?

Dale Barnhart

I just want to thank everybody for participating on the call. Another great quarter. We look forward to speaking to you again in our Q3 results. Thank you.


And we thank you sir and to the rest to you team for your time also today. The conference call has now concluded. At this time you may disconnect your lines. Thank you. Take care and have a great day everyone.

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