Steve Nicola - Chief Financial Officer Joe Bartolacci - President and CEO.

Robert Magic - CJS Securities Jamie Clement - Macquarie David Stratton - Great Lakes Review.

Ladies and gentlemen, thank you for standing by. Welcome to the Matthews International Fourth Quarter Year End Financial Results Call. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions-and-answers, and instructions will be given at that time.

[Operator Instructions] And as a reminder, this conference is being recorded. I’ll now turn the conference over to Chief Financial Officer, Steve Nicola. Please go ahead..

Thank you, Noah. Good morning. I'm Steve Nicola, Chief Financial Officer of Matthews. Also on the call this morning is Joe Bartolacci, our company's President and CEO. Today's conference call has been scheduled for one hour and will be available for replay later this morning. To access the replay, dial 1 (320) 365-3844 and enter the access code 373117.

The replay will be available until 11:59 p.m. December 1, 2015. We have posted on our website, which is www.matw.com, the fourth quarter earnings release and financial information we will discuss this morning. On the top of our Homepage under the Investor tab click on Investor News to access the earnings release.

For the quarterly financial data, click on Financial Reports to access the information under the section, Matthews International Quarterly Reports. The documents are presented in a PDF file format.

Before beginning the discussion, at the advice of legal counsel, I have been advised to read the following disclaimer as it pertains to forward-looking statements. Any forward-looking statements in connection with this discussion are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements involve known and unknown risks and uncertainties that may cause the company's actual results in future periods to be materially different from management's expectations.

Although, the company believes the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct.

Factors that could cause the company's results to differ from those discussed today are set forth in the company's annual report on Form 10-K and other periodic filings with the SEC.

In addition, please note that the balance sheet, income statement and cash flow information provided today are preliminary data, since our annual report on Form 10-K for the year ended September 30, 2015, is not due to be filed with the SEC until the end of this month. To begin the conference, I'll review the financial results for the quarter.

Joe will then provide general comments on our operations. Following that, we will open the discussion for questions. For the quarter ended September 30, 2015, the company reported earnings of $0.51 per share, compared to $0.15 per share a year ago.

On a non-GAAP basis, the company's adjusted earnings per share were $0.93 for the current quarter, compared to $0.82 a year ago. The net amount of these non-GAAP adjustments was $0.42 per share for the fiscal 2015 fourth quarter and $0.67 for the same quarter a year ago.

As we anticipated a significant portion of the 2015 non-GAAP adjustments included cost and other charges in connection with the integration of Schawk, Inc. or SGK. In addition, non-GAAP adjustments for the fiscal 2015 fourth quarter included costs including inventory step up expense related to the acquisition of Aurora Casket in August 2015.

In our earnings release yesterday we provided a reconciliation between GAAP and non-GAAP earnings per share.

In our year-to-date earnings for fiscal 2015, the additional non-GAAP adjustments included charges related to our ongoing cost reduction initiatives, the first quarter litigation settlement net of costs, the write-off of certain trade names in the second fiscal quarter, a gain on the buyout of an installment payment obligation related to a previous settlement of SGK pension obligation and the loss related to assess the funds identified during the third fiscal quarter.

Consolidated sales for the fiscal 2015 fourth quarter were $368 million, compared to $350 million for the same quarter a year ago. The acquisition of SGK and Aurora contributed to the company’s sales increase. Changes in foreign currency rates unfavorably impacted sales by $18 million compared to a year ago.

Consolidated sales for the year ended September 30, 2015 were $1.4 billion, compared to $1.1 billion last year. Incremental sales related to the SGK acquisition approximated $340 million. In addition, the company reported higher sales in the Industrial and SGK Brand Solutions segments.

Currency changes unfavorably impacted sales by $57 million on a year-to-date basis. Consolidated operating profit on a GAAP basis for the quarter ended September 30, 2015 was $32.8 million, compared to $14.5 million a year ago. Recent acquisitions and the company's cost reduction initiatives contributed to the quarter-over-quarter increase.

In addition, acquisition-related costs were lower than year ago. Operating profit for the fiscal year ended September 30, 2015 was $105 million, compared to $81.5 million last year.

Higher consolidated sales and the impact of recent acquisitions were the primary factors in the operating profit improvement, offset partially by the unfavorable effect of changes in currency exchange rates. In addition, intangible amortization was $18.8 million for the current year, compared to $7.3 million last year.

Consolidated adjusted EBITDA for the quarter ended September 30, 2015 was $62 million, compared to $55 million a year ago. For the year, consolidated adjusted EBITDA was $216 million, compared to $172 million last year, representing an increase of $44 million or 26%.

The quarter and fiscal year increases resulted primarily from higher adjusted operating profit and the impact of recent acquisitions. Beginning this fiscal year the company realigned its operations in the three reporting segments, SGK Brand Solutions, Memorialization and Industrial.

The SGK Brand Solutions segment is comprised of the graphics imaging business, including SGK and the merchandising solutions operations. The Memorialization segment is comprised of the company's cemetery products, funeral home products and cremation operations.

The Industrial segment is comprised of the company's marking and automation products and fulfillment systems.

Sales for the SGK Brand Solutions segment increased to $201 million for the current quarter, compared to $192 million for the same period a year ago, primarily resulting from incremental sales related to the acquisition of SGK, which closed in July last year.

Changes in foreign currency exchange rates had an unfavorable impact of approximately $14 million on the segment’s current quarter sales compared to a year ago. The segment sales for the fiscal year ended September 30, 2015 was $798 million, compared to $497 million last year.

In addition to the impact of the SGK acquisition, European sales were higher for the year. The SGK Brand Solutions segment reported operating profit of $16.3 million for the current quarter, compared to an operating loss of $6.7 million for the same quarter a year ago.

Excluding charges related to the acquisition integration and cost structure initiatives from both periods, the segment reported operating profit of $23.5 million, compared to $15.7 million last year. The year-over-year increase primarily relates to the SGK acquisition.

For the year the segments operating profit excluding charges related to the acquisition, integration and cost structure initiatives was $61.3 million, compared to $33.9 million last year, primarily reflecting the acquisition and sales growth within the segment.

Operating profit for this segment also reflects an intangible amortization expense [Technical Difficulty] for the current quarter, compared to approximately $3.3 million for the same quarter last year. Year-to-date, this intangible amortization was $15.9 million, compared to $4.3 million last year.

The increase is resulted from incremental amortization in connection with the SGK acquisition. Memorialization segment sales for the fiscal 2015 fourth quarter were $136 million, compared to $127 million for the same quarter a year ago. The increase for the current quarter primarily reflected the impact of the acquisition of Aurora.

Changes in foreign currency rates had an unfavorable impact of $2.7 million on the segment sales. In addition, the fourth quarter last year included the benefit of a waste incineration project. Year-to-date sales for the Memorialization segment were $508 million in fiscal 2015, which was relatively consistent with last year.

The segment reported higher revenues from casket and memorial products during the current year. Fiscal 2015 sales also reflected the impact of the acquisition of Aurora. In addition, sales of cremation equipment in North America increased in the current year. However, European equipment sales remained slow.

Changes in foreign currency rates had an unfavorable impact of $9.7 million on the segment’s year-to-date sales compared to last year. Additionally, fiscal 2014 sales included the benefit of a significant waste incineration project.

Operating profit for the Memorialization segment for the fiscal 2015 fourth quarter was $12.7 million compared to $15.9 million for the same quarter a year ago. The current quarter included costs, including inventory step-up expense related to the Aurora acquisition. The fourth quarter last year included the benefit of a waste incineration project.

Year-to-date operating profit for the Memorialization segment at September 30, 2015 was $70 million compared to $68 million last year. The increase primarily reflected higher sales of caskets and memorial products and the impact of the Aurora acquisition.

The current year also included the benefit of the gain from a litigation settlement recorded in the company's fiscal 2015 first quarter, offset partially by acquisition costs related to the purchase of Aurora.

The Industrial segment reported sales of $31.7 million for the quarter ended September 30, 2015, compared to $30.8 million for the same quarter last year. The segment reported sales for the year of $120 million for fiscal 2015, compared to $101 million last year.

The increase has primarily resulted from higher sales of warehouse control systems and increased volume of marking products and related inks. Operating profit for the Industrial segment was $3.7 million for the current quarter compared to $5.3 million for the same period last year.

The current quarter reflected the significant increase in new product development spending and an unfavorable change in currency exchange rates. The segment’s operating profit for the year ended September 30, 2015 was $13.1 million compared to approximately $11 million a year ago.

The operating profit improvement resulted primarily from the benefit of the segment's sales growth. Year-to-date current year costs related to the segment's new product development project increased $3.3 million over last year.

A summary of sales and operating profit by segment including non-GAAP adjustments for the quarter and year-to-date periods are posted on our website for your reference. Our fiscal 2015 fourth quarter consolidated operating margin was 8.9% of sales compared to 4.1% a year ago.

On an adjusted basis, our operating margin was 12% for the current quarter compared to 11.2% last year. Our consolidated operating margin for the year ended September 30, 2015 was 7.4% of sales, which was relatively unchanged from a year ago. On an adjusted basis, our operating margin was 10% for the current period compared to 10.9% last year.

Year-to-date operating margin decline primarily reflected the impact of the incremental intangible amortization expense from the SGK and Aurora acquisitions. The company's consolidated adjusted EBITDA was 16.7% of sales for the fiscal 2015 fourth quarter and 15.1% of sales year-to-date.

Gross margin for the quarter ended September 30, 2015 was 38.4% of sales compared to 33.4% a year ago. Gross margin for the year ended September 30, 2015 was 37.1% of sales compared to 35.5% a year ago. Gross margin a year ago was impacted by inventory step-up expense related to the SGK acquisition.

Selling and administrative expense for the current quarter was 29.5% of sales compared to 29.2% for the same quarter last year. The increase primarily resulted from the impact of acquisition related costs and incremental intangible amortization expense.

Year-to-date selling and administrative expense for the current year was 29.8% of sales compared to 28.1% last year. The investment income for the fiscal 2015 fourth quarter was a loss of $856,000 compared to income of $383,000 a year ago -- $380,000 a year ago.

Year-to-date investment income was $175,000 for fiscal 2015, compared to $2.1 million last year. The year-over-year declines primarily reflected lower investment performance on assets held in trust for certain of the company’s benefit plans.

Interest expense for the current quarter was $5.5 million compared to $4.4 million for the same period last year. Interest expense for the year ended September 30, 2015 was $20.6 million compared to $12.6 million a year ago. The increase has resulted from additional borrowings in connection with the recent acquisitions.

Other income deductions net for the fiscal 2015 fourth quarter represented a deduction of $1.4 million compared to $2.1 million a year ago. Other income deductions net for the year ended September 30, 2015 represented an addition to pretax income of $5.1 million compared to a deduction of $4.9 million a year ago.

The income for the current year resulted from a pretax gain on the buyout of an installment payment obligation in connection with a previous settlement of an SGK pension obligation. Other deductions also included the respective period portions of the theft loss.

Other income and deduction is generally included among other items, banking related fees and the impact of currency gains or losses on certain intercompany debt. Net income from non-controlling interest for the current quarter resulted in a deduction from income of $28,000 compared to $360,000 a year ago.

Year-to-date net income from non-controlling interest for the current year resulted in additional income of $161,000 compared to a deduction of $647,000 last year. The year-over-year changes primarily reflect the minority interest portion of losses for our European cremation operations.

The company's effective income tax rate for the year ended September 30, 2015 was 29.4% of pretax income. The effective rate was 34.5% for the fiscal year ended September 30, 2014.

The effective rate for fiscal 2015 included the benefit of the utilization of certain tax attributes resulting from organizational restructuring during fiscal 2015 first quarter and favorable adjustments in the third quarter with the corporate income tax return filings, offset partially by the unfavorable treatment of certain acquisition related and other costs.

The effective rate last year also reflected the unfavorable tax treatment of certain acquisition related costs. At September 30, 2015, the company's consolidated cash was $72 million compared to $63 million at September 30, 2014.

Accounts receivable at the end of the current fiscal year totaled $284 million compared to $283 million at the end of fiscal 2014. Consolidated inventories at September 30, 2015 were $170 million compared to $153 million at September 30, 2014. The increase primarily reflected the Aurora acquisition.

Long-term debt at the end of the current fiscal year, including the current portion was $903 million compared to $729 million at September 30, 2014.

The increase resulted primarily from borrowings for the Aurora acquisition and the early buyout on the SGK pension obligation, partially offset by repayments on the company's domestic revolving credit facility.

At September 30, 2015, $857 million of the outstanding debt balance represented borrowings under our domestic revolving credit facility at an average interest rate of around 2.4%. The borrowing capacity of this facility is $900 million.

Additionally, as we previously disclosed, we received the claim from a customer and funded a draw on a letter of credit earlier in the fiscal year in an amount of approximately $13 million.

The company has assessed the customer's claim to be without merit, and as such pursuant to an action initiated by the company, a court order has been issued requiring these funds to ultimately be deposited with the court until the matter is resolved. The company had approximately 32.9 million shares outstanding at September 30, 2015.

During fiscal 2015, the company repurchased approximately 305,000 shares under its share repurchase program at a cost of approximately $15 million. At the end of the current quarter, approximately 661,000 shares remained under the current share repurchase authorization, which was recently increased by 2.5 million shares by the Board of Directors.

Depreciation and amortization expense for the quarter and fiscal year ended September 30, 2015, was $15.5 million and $62.6 million respectively, compared to $14.8 million and $42.9 million respectively a year ago. The increases resulted primarily from the recent acquisitions and the related intangible amortization.

Capital expenditures for the quarter and year ended September 30, 2015 were $13.6 million and $48.3 million respectively, compared to $10.5 million and $29.2 million, respectively a year ago.

The increases primarily resulted from the SGK acquisition and integration, capital expenditures by our gravure operations in Europe and purchases of casket delivery vehicles. During the fiscal 2015 third quarter, we identified a theft of funds from the company by an employee that had occurred over a multi-year period through May 2015.

The cumulative amount of the loss was determined to be approximately $14.8 million. The amount of loss in any prior period was not material to any prior period financial statements. However, because of the significance of the cumulative out-of-period adjustment for the fiscal 2015 third quarter, the prior period financial information was revised.

The matter was determined to constitute a material weakness in internal controls as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended. The company took immediate action and implemented changes to the design of the controls. As a result, the material weakness has been remediated and no longer existed at September 30, 2015.

Finally, the Board last week declared a dividend of $0.15 per share on the company's common stock. This represents an increase of 15.4% in the company's dividend rate and reflects the company's continued strong operating cash flow and our confidence in the integration progress for our recent acquisitions.

The dividend is payable December 7, 2015 to stockholders of record, November 23, 2015. This concludes the financial review and Joe will now comment on our operations..

Good morning. Thank you, Steve. We are very pleased with our results for 2015. During the year, we had both great financial and key strategic accomplishments that we are proud of and which should continue to benefit shareholders for years to come.

These accomplishments cover all of our businesses and individually, have positioned us for continued growth.

Some of those accomplishments include successful year of integration of our SGK acquisition in which we achieved our synergy targets, the acquisition of Aurora Casket, which completes our 15-year migration to becoming the leader of the Memorialization products industry.

The success of our best-of-breed strategy in the warehouse automotive division, the continued successful deployment of game changing technology in our Marking Products division and a significant geographic expansion into developing countries in our SGK Brand Solutions segment.

Some of these successes are reflected in the financial results that we have reported today, while others will benefit in the years to come. In the end, we are proud of our accomplishments and the teams that helped us achieved them.

Despite significant headwinds, we met our financial target on a full year basis, while positioning ourselves for future growth. Some of these headwinds will continue into next year but other should not. During the past year, we saw greater than expected foreign currency headwinds impact our year-over-year operating results by almost $5 million.

In addition, during the year and because of growing success in the significant research and development project that we had very hoped for, we increased our capital expenditure for the research and development by $4.7 million, which further reduced our actual operating results.

The sum of these two items would have added $0.20 per share to our reported $3.03, which is a better reflection of the performance of our teams. The best way to describe this year is that our core businesses stepped up and perform well. We also continue to do a great job on the balance sheet.

We focus on improving our receivables collection, managing inventories and being proactive in reducing our pension liabilities. These efforts together with the success of our businesses have allowed us to generate record cash flow from operations of almost $140 million and a record EBITDA of $216 million.

As you can tell by our announcement, we have used this cash flow wisely by further increasing our dividend by almost 16%, and by reducing our debt balance by almost $90 million on a comparative basis. It is important to note that we did all of this, despite the incremental cost of integrating our two acquisitions.

Regarding the individual businesses, this is a good story too. The integration of SGK continued to go well and we have our targets set for fiscal 2016. Similarly, the acquisition of Aurora is also on track with synergies and timelines being clarified as we speak.

Aurora, which only added modestly to our 2015 results, should be a fantastic acquisition to us, adding upwards of $40 million of EBITDA when fully integrated but with very little incremental capital expenditure needs.

As we've stated for the past several quarters, we continue to see strong demand in our Industrials group, which is the result of multi-year, multi-million dollar investments, which are now yielding great results.

As discussed above because of this success, we have and we will continue to intentionally increase our R&D spending of this business, as we work on yet another new product which we believe to be a winner. We intend to keep you inform of the amount of these expenditures throughout the year but we will not adjust our earnings.

As we look forward to fiscal 2016 and beyond, we remain confident of our ability to achieve the financial targets that we have been communicating. We, however, remain somewhat cautious this year on the timing of some of those synergies, as we enter the most challenging yet most rewarding phase of our integration of SGK.

Starting in January, we will begin the rollout of a significant component of our ERP solution, which is a driver of the large portion of the remaining synergies.

Similarly with regard to Aurora, as we've communicated in the past because of the potential for these synergies during the early part of integration, we have remained cautious regarding the near-term impact of this acquisition.

Also, during 2016, we are also planning to make a -- to make permanent a portion of our bank revolver debt, which will increase our interest expense but will add considerable stability to our capital structure. Finally, we expect another challenging year with respect to foreign currency translation, which will again temper our reported results.

Given these challenges, we have set a cautious target for 2016, non-GAAP adjusted EPS of at least $3.25. Let’s open up to questions right now..

Yeah. So at this time, we’d like to open the call to questions. For those of you who will be asking questions, we request that you limit them to one question and a follow-up question until all those who wish to participate has had an opportunity to do so? Noah..

[Operator Instructions] Our first question is from Dan Moore with CJS Securities. Please go ahead..

Good morning. This is actually Robert Magic filling in for Dan..

Good morning, Robert.

What’s your outlook for organic growth in Schawk’s legacy business over the next four to six quarters and given the market has generally been soft do you see that turning at all? And lastly, what are your goals for increasing share beyond just market growth?.

Well, from an organic growth in SGK, the challenges are the economies in which we operate. In U.S., we see a very soft market, part of that could be because of impending regulation implementation and part of it could just be the economy. So, we’re cautious with respect to our growth but we expect to begin to take some share.

We’ve had some good success on a couple of accounts, particularly in the U.K. where we landed some new business and there is other opportunities we’re looking at as we speak. So, we think that over time, our commitments to the growth in that division will be met..

Great.

And can you update us on the trends in memorialized cremation? And perhaps talk about how attitudes you’re changing amongst the funeral home directors and cemetery operators towards those products?.

Well, the migration towards cremation continues to grow. The fact of the matter is that we’re starting to see the growth in the total number of deaths in the United States beginning to trend. So, as the total number of debts continued to grow, we expect most if not all of that growth to go to cremation.

The change is that we’re starting to finally see more effort on the part of our funeral homes and our cemetery in terms of memorializing those deaths. So, we don’t think that’s a quick change.

But we’ve been communicating for a while that we believe casketed, in-ground burial deaths will remain relatively flat in the near-term as deaths grow and end up in cremation. The opportunity lies in memorializing those cremation deaths and we think that will start to turn as well..

And next, we go to Jamie Clement with Macquarie. Please go ahead..

Steve, Joe, good morning..

Hi, Jamie. Good morning..

Joe and I guess, Steve, maybe both of these are high. I was a little confused in some of the prepared remarks about investments in the Graphics business. Obviously, there is the ERP implementation. But I think you’ve also referred some new product investing that kind of thing.

Are those part of the same project, or those two separate things, can you give me a little bit more clarity there?.

Sure. There’s a couple of different investments going on. The first one is new product development in automations where we said that we incurred somewhere near $4.7 million worth of development costs that we’re not calling out. That is well beyond what we would call normal R&D expense in that division.

We think that new product development hasn’t lagged and we’ll continue to spend and continue to inform you and our guidance going forward anticipates a similar level of R&D expense in that division..

Joe, what exactly does that do for customers?.

I mean, we’re not ready to talk about that thing..

Okay..

But we are happy to talk about it very, very clearly in about 18 months..

Got it..

But for right now -- but there are some other investments. So, for example, on the SGK Brand Solutions side we did launched two new facilities. We ended up partnership in Nigeria especially tobacco industry, as well as open a new facility outside of Moscow to service that, again, the tobacco industry in that part of the world.

Those are areas of the world where tobacco is still very, very prevalent and given a relationship with some of the premier tobacco companies in the world we think that’s the way..

No.

Joe, historically, when you all talked about the graphics imaging business and this is before the SGK acquisition? I think you all had over -- over the long period of time you’d said a good long-term margin target for that business was about 15%? Now you’re consolidating Merchandising Solutions with that business, plus you have Schawk, plus you have the SGK synergies, all that kind of stuff? Is 15% the light long-term margin? I mean, long-term, I’m not talking about this year or even next year, but long-term target for that segment or can you even be higher than that?.

Well, Jamie, I’ll take the first, I’ll answer the first piece of that. Part of the challenge in near-term is going -- with operating margins are going to be the intangible amortization expense….

Sure..

… the acquisition. But if you look at that business on an EBITDA basis, pre-corporate charge adjusted EBITDA basis, we are actually currently operating in the mid-teens already..

Right. So, I mean, just, not to put words in that, but, Steve, I think, for the quarter you were, I think, shade below 12%, plus you’ve got more synergies coming from SGK and in North American market it isn’t really growing.

So, I mean is -- I mean versus where you all are running right now even giving affect to intangible amortization? I mean, is there another 200 or 300, 400 basis points theoretically in three to five years?.

We think that’s where it is Jamie..

Okay..

In fact, there is probably $0.02 -- just 2% just in the amortization and another $0.01 or $0.02 out of corporate allocation as we go forward..

Okay..

So mid to high-teens..

Okay. And then the last question, you touched on this briefly, Joe.

Pending set of regulations in packaging? Can you give us an update of where you see that process and kind of what your conversations with your customers look like? It sounds like that may kind of be coming a little bit later and maybe some of us would have thought nine to 12 months ago?.

Yeah. I mean, as you know, we do not control stock..

Sure..

Right now we are -- the conversations we’re beginning to have with our clients around this time in United States are that that we expect to start to see some things towards the end of calendar ’16..

Okay..

And we’re currently expecting completion to be sometime in 2018..

Okay..

About two-year period..

Okay. And then the last question is Aurora had I think a bigger brand nationwide than Milso did some years ago.

How are you all planning on specifically working your merchandising display unit at the funeral home level with Aurora now part of the Matthews’ mix? Are those two brands going to be separate or you are going to combine, how is that going to work?.

You’re very astute there, Jamie, because what we’ve -- for purpose of the market, we try to merge the two brands together and we call ourselves Matthews Aurora funeral products. Aurora had a fantastic brand name recognition.

And over the course of the next 24 to 36 month, we’ll be cautious in terms of our integration, making sure we satisfy and retain our customers around the United States and allowing them to get what they’re looking for. So the migration to a single product line will be slow and with the participation and acceptance of our customers while we do that..

Okay. Very good. Thank you all for your time as always..

[Operator Instructions] Our next question is from David Stratton with Great Lakes Review. Please go ahead..

Good morning..

Good morning, David..

Quantify the interest expense that you expect with the permanent portion of your revolving credit line?.

Well, just to elaborate that a little bit, what we talked about in general is taking our debt structure and moving it towards -- moving it in thirds to where we keep a third in floating interest rates. We keep a third with fixed interest rates through later derivatives like you see on our balance sheet and our footnotes today.

And then to move a third of our debt into our more permanent vehicle. And right now we see those interest rates maybe a little higher this week as the market moves but those interest rates in general for us somewhere in the 5.5% to 6% range.

So if you compare that to our current floating rate of 2.4% for approximately a third of our debt, you can understand the potential impact..

Got you. Thank you.

And then also just out of curiosity, last time I believe you mentioned that you are seeking ways to recover some of the money stolen? And has there been any progress on that either to insurance or recovering from the individual?.

We expect to recover all of that money, pretty much all of them over the course of next 12 to 24 months between insurance and from the individual themselves..

All right. Thank you..

Sure..

And there are no further questions..

All right. Thank you. Well, we want to thank everyone for participating in our call this morning. And we look forward to our first quarter fiscal 2016 earnings release and conference call in January. Have a great day..

Ladies and gentlemen, this conference will be available for replay after 11 AM today through midnight on Tuesday, December 1st. You may access the AT&T executive replay system at anytime by dialing area code 320-365-3844 and entering the access code 373117. Those numbers again are 320-365-3844, access code 373117.

That does conclude our conference for today. Thank you for your participation and for using AT&T teleconference. You may now disconnect..