David Langevin - Chairman and Chief Executive Officer Michael Schneider - Chief Financial Officer, SVP, Treasurer & Secretary Steve Kiefer - Executive Vice President of Sales and Marketing.

Matthew Koranda - Roth Capital Partners David Michael - Raso Evercore ISI Michael Shlisky - Seaport Global Securities Lenny Dunn - Mutual Trust Company of America.

Good day, and welcome to the Manitex International Inc. Second Quarter 2017 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to David Langevin, Chairman and CEO at Manitex. Please go ahead sir..

Thank you, Chris. Good afternoon, ladies and gentlemen, and thank you for your interest in Manitex International. On the call with me today is Michael Schneider, CFO at Manitex. This is Mike's third call with us, so many of you are familiar now with his participation. Recently, Mike also added the title of CFO replacing David Gransee in this position.

David, has been with us since we went public, and his concentration has always been in the reporting area, and he will continue to do much of what he has always been doing for us. Mike came to us a few years ago and brings more of an operational emphasis to our office.

We appreciate the many years of service provided to Manitex by David and of course we are pleased that he will continue to work with us. Also on the call with us today is Executive Vice President of Sales and Marketing for Manitex, Steve Kiefer.

This is Steve's first call with us and is a valuable resource for us at Manitex, who have served for the last two years. Now, please refer to our first Slide regarding our Safe Harbor statement. We ask that you to review this statement and also refer to our SEC filings for further guidance on the many risk factors associated with our company.

Also, please see our website or our release for replay instructions for this call, which will be available until August 10, 2017. I will begin with a brief overview. Michael will comment on our financials, after which we will open it up for questions. Let's begin with Slide number 3.

As you may have noted in our earnings release, we showed a great deal of improvement in the second quarter over the first, and we continue to see a slow and steady recovery from the market contraction in the last four years.

Many of you know that I preferred to deliver a key comment with these releases, because of the volume of reports that you have to review, which makes it hard to distinguish one from another. With Manitex, the second quarter message is clear. We accomplished a lot for two reasons.

One, we reduced our consolidated debt by over 35% in the quarter, which is very important for our shareholders, as well as our company. And second, all the numbers whether adjusted or not, are directionally moving in the right way.

As we head into the second half of the year, all aspects of our business are improving being led by sales, which we believe will ultimately lead to greater expansion in profits and cash flow.

We have now completed the bulk of our portfolio optimization with the sale through a public offering in the second quarter of about half of our holdings in the ASV joint venture. This event resulted in Manitex reducing its debt by approximately $50 million and we still also retain a minority position in ASV of approximately 2.1 million shares.

For those who maybe new shareholders at Manitex or looking at us for the first time, our portfolio optimization program started several years ago to emphasize our highest margin products and retain for our company those co-lifting products, where we had the strongest position in the marketplace to realize the greatest return of growth and profits.

When we started this analysis, our company was made up of approximately 50% material handling businesses, which carried lowered profit margins and represented diverse set of products and the other 50% were crane products with significantly better margins.

We also had the burden of $225 million in worldwide consolidated debt, which we incurred as we grew the company and diversified our product offerings. With our two largest transactions coming in late 2014 and early 2015, right before our markets entered a steep decline.

Fortunately, we were able to sell nearly all of our material handling companies for around ten times trailing EBITDA and those proceeds along with working capital reductions allowed us to retire approximately $135 million of debt over a two-year process.

Now, we are a focused company with a simpler operation and in the first quarter of this year, we saw growth in the crane markets we serve for the first time in four years.

We started to realize the improvements in many of our key measurements resulting from the improvements in the crane marketplace and the previously mentioned divestiture of smaller and lower margin businesses, which were not crane-related, as well as the implementation of our cost reduction programs.

This positive trend has continued into the second quarter and we believe we will see a further expansion in the third quarter. As reported today, sales, adjusted EBITDA, adjusted net income were all up substantially in the second quarter, when compared to the first quarter of this year.

Our company has made it through another significant downturn over the last four years, which was compounded by the influx of used equipment pouring into the marketplace as a result of the collapse in energy prices. But this all seems to be behind us now and the used equipment markets for our products have returned to normal activity.

We are now positioned for much improved performance as a leader in the market for cranes in both stricken knuckle boom forms mounted on a commercial chassis. Our knuckle boom products serves a worldwide customer base through our company-owned branches, as well as by our high-quality dealer network.

One very specific focus for growth for us is to expand our North American market share, which can be seen by the number of our recent announcements describing the addition of new dealers. And we anticipate that we will have more dealer additions to announce in the near future.

We are also expanding our production of knuckle boom cranes in our main production facility in Texas to better serve the North American market out of our lowest costs USA facility.

Finally, we continue to decrease our operating costs in our international operations, which resulted in restructuring charges in the second quarter of approximately $300,000.

These efforts will continue in the third and fourth quarters with our expectations that we will be incurring another approximately $400,000 additional charges per quarter, which we believe will translate to higher returns on our cost in 2018.

It is great to now focus on executing our business plan and could not devoting all of our time on repositioning of our company from a strategic standpoint. And while this - our portfolio optimization program is substantially complete, we may still do some minor pruning as we go forward.

Our shareholders will also see us continue to concentrate on our efforts to further reduce our debt level, which is down 60% from its peak with further reductions coming from the approximately $20 million, we have in finished goods. Also these reductions will be at more normalized pricing than we experienced last year.

We did something unusual for us in our second quarter investor deck, which we published after the ASV transaction. We put out a range of indications for our financial performance for the 2017 year. We do this because of the large change in our organization and the understandable confusion that went with all the changes.

When we published the revised numbers with the divestiture of ASV, we became concerned that the public will take the first quarter numbers and annualize those for the year. We did not believe that the first quarter of this year fairly represented what we saw for the 2017 results.

Thus we gave a range for 2000 sales of $180 million to $200 million and we will strive to end the year at the high-end of that range. We indicated our gross margin should be in the range of 18% to 20% and we are at 18.5% through the first six month, with the expectations that we will improve as we move through the rest of this year.

Adjusted EBITDA, we indicated, will be in the range of 8.5% and with improved pricing embedded in our backlog, we are expecting to be at or above that range. And lastly, net income of $1.5 million to $3 million and if we annualize the first half of this year, we will be at the high-end of that range.

Finally, we believe we will see good growth in our company this year from last year’s cyclical bottom, and with this growth, we are well-positioned with our product portfolio to realize improved results for the benefit of our shareholders, as well as our other stakeholders.

With that opening overview, I would like to turn it over to Michael to summarize the financials, after which we will welcome any questions.

Michael?.

Thanks, David, and good afternoon. Moving to financial results, today we reported a Q2 2017 GAAP net loss from continuing operations attributable to Manitex of $2.3 million or $0.14 a share, compared to a GAAP net loss of $1.8 million or $0.11 a share in the second quarter of 2016.

On Slide 4, I will concentrate on discussing the adjusted results for the second quarter, as compared to Q2 2016, which adjusts for normalizing plant absorption levels, restructuring fees and other expenses. Our adjusted results for Q2 2017 for net income from continuing operations is $1 million or $0.06 per share.

Net revenues for the first three months ended June 30, 2017, increased $2.9 million or 6% year-over-year.

However, compared sequentially to the first quarter of 2017, net revenues were up $11.8 million or 29.5%, reflecting the growing production levels that occurred in Q2 2017 to address the $51.2 million backlog that we had recorded at March 31, 2017. The revenue increase was primarily related to straight mast cranes from our Georgetown facility.

Sales were up $7.7 million or 51.3% on a sequential quarter basis. Additionally, we saw strength in our knuckle boom cranes from our PM facility. Sales, excluding impact of FOREX were up $2.3 million or 11% on a sequential quarter basis. Additionally, we have seen expansion in our PM distribution throughout North America.

The book-to-bill ratio was at 0.93 to 1 for the second quarter, leaving a healthy $47.6 million backlog at June 30, 2017.

Adjusted gross profit for the second quarter of 2017 was a $11.1 million or 21.5% of sales, compared to $9.6 million or 19.6% of sales on a year-over-year basis and $9.7 million or 24.3% of sales on a sequential quarter-over-quarter basis.

Adjusted net income for the quarter was $1 million or $0.06 a share, compared to adjusted net loss of $0.1 million or $0.01 a share in Q2 2016 and net income of $0.3 million or $0.02 a share in Q1 2017.

Adjusted EBITDA for the first quarter of 2017 was $3.5 million or 6.7% of sales, compared to $1.7 million or 3.5% of sales in the second quarter of 2016 and $2.5 million or 6.4% of sales in the first quarter of 2017.

Slide 5 is a bridge table showing movement in sales and adjusted net income for the second quarter of 2016 bridged to the second quarter of 2017.

The principal items on this reconciliation are higher sales of $2.8 million from volume, we had a net gross margin improvement of $1.6 million, a result of $0.6 million from increased volume combined with $1 million from higher margin percentages.

We also see $0.8 million improvement, due to lower operating expenses related to our cost reduction programs, $0.5 million improvement in lower interest expenses due to lower borrowings, $0.2 million improvement in lower FOREX and other expenses, which is offset by a $2 million tax benefit that we recorded in Q2 2016 that did not recur in Q2, 2017.

Slide 6, shows that our working capital increased slightly from $31.4 million at December 31, 2016 to $32.4 million at June 30, 2017. But our current ratio remains at 1.4 times and is consistent between periods. Operating working capital increased by $7.1 million at June 30, 2017 and is consistent with the higher production levels.

Slide 7 provides a breakout of the $93.1 million of total debt at June 30, 2017. Net of cash, our total debt is $89.5 million as of the end of the quarter. Additionally $52.5 million of that debt is non-recourse to Manitex. As a point of reference, our total net debt at March 31, 2017 was $139.2 million on a non-restated basis.

We have reduced debt by $49.7 million or 35.6% in the quarter due to largely to the ASV transaction. Slide 8 shows our capitalization, net debt and liquidity position. Adjusted EBITDA for the quarter was $3.5 million and a $7.5 million on the trailing 12-month basis.

Please note that our 2017 TTM results, continue to be negatively impacted by the weak Q3 and Q4 2016 figures that we have previously discussed. And with that, I would like to turn it back to David for any final comments..

Thank you, Michael. Chris, we would now like to open it up for any questions..

[Operator Instructions] And we'll take our first question from Matt Koranda with Roth Capital..

Hey guys. .

Hey, Matt..

Thanks for taking the questions. Just want to start off with a bookings question here. It looks like, I think you guys said, book-to-bill was about 0.93 to 1. So, it indicates bookings pretty healthy here in kind of $48 million range.

So one, is that right? And then two, could you just talk about sort of the trend through the quarter in terms of how those bookings came in? And then, what those look like in terms of mix? And how that impacts the margin that's implied in your backlog here going forward?.

Sure, Matt. Thanks a lot for your question. I appreciate it. So we had a reasonably – because we had obviously coming off of - if you have to kind of put this in context, last year we had total sales for the Group that we now are $161 million and you saw in the first six months, we had a little over $105 million in sales.

So it means we had very, very low sales because your PM knuckle cranes will be fairly consistent. So the skid crane market was non-existent in the second half of the year and really I mean, which got to $10 million a quarter, which is just really down to nothing.

And as you know, we started to get orders in the fourth quarter of last year and of course, obviously those were at very, very low margins, because we were at negative margins going into the fourth quarter with the orders that we were getting. And so that has improved through the first quarter.

So the first quarter margins saw a pick up and – as I have discussed in previous calls, that basically represents a decrease in discounts and that has continued into the second. We had a couple events in the first quarter, which are dramatic. We had the one every three year Con Expo event in the first quarter.

So we had some orders that normally wouldn't get, which was very positive. And we increased our production by 30% between the first quarter and the second quarter. So the answer to your question, the second quarter numbers, the second quarter orders were good, were solid, consistent, at higher margins and that will flow through in the third quarter..

Okay, got it, and then I think by your comments, you are sort of implying that I guess, EBITDA - adjusted EBITDA for the year could come in, if you hit the high-end of the range in revenue and then that 8.5% margin that you talked about, you could be looking at as much as $10 million plus in adjusted EBITDA in the second half of the year.

Any sense for sort of the cadence of that in the back half, should we be waiting toward one quarter or the other? Or is it look like still kind of a sequential improvement through the end of the year?.

What we were expecting is, PM is much more of a non-backlog type company, as we have discussed in the past. But it's more of a consistent company and that it doesn't have the volatility that we have seen historically on the skid crane market and it's also involved in a growing market.

So it is much more consistent and steady in the third and fourth quarters. However, because of the July and August holidays that you experienced in our European facilities or European production facilities, we have less manufacturing hours and days in the third quarter at PM than we do at Manitex.

That changes in the fourth quarter, because believe it or not, Manitex, the U.S. operations and the U.S. plants have more holidays than the European facilities in the fourth quarter. So what we are expecting is kind of a steady-state increases in the third on our U.S.

operations, decreases in Europe a s a result of the days available and vice versa in the fourth, along the range that we see now, but what we will see is an improvement by 2%, 3%, 4% in the gross margins, of which, not all of that because of efficiencies and variances, et cetera, not all of that will flow down to the EBITDA line but you should see where we've been below the range in the first half of the year and obviously above the range in the second half, so that we come in closer to the range for the full year.

That's our expectations..

Got it, okay. Wanted to cover the knuckle boom progress in North America for a moment. If we could, saw some obviously some news from you guys during the quarter, just subsequent to it.

Could you just talk about sort of – did you have any product sales that benefited in Q2 in the knuckle boom category in North America? Or are we expecting all of that to come in Q3 and beyond?.

We've had product sales in the knuckle boom category every quarter. But we have seen a steady increase and now obviously, that we are a small company, we have small company resources and we have been very busy over the last couple years surviving. And we did it.

It is always a good thing from a shareholder standpoint because you don't enjoy the benefits of the upturn, if you don't make it through the downturn. And this is a very steep reduction in our business over the last four years.

I mean, we peaked in 2012 and since then it's been a steady-state downward trend, down to the bottom at the end of the third quarter last year, which obviously started to turn in the fourth quarter.

So we have had sales, but we've now really obviously dedicated the resources, the time, the effort, the expansion and that's why you’ve started to see a increase in dealer announcements this quarter. Steve has been very - being the leading in this processes, he is head of all this area.

So, you might want to comment Steve, on your efforts and what you expect as you go forward?.

We’ve put out over the past two weeks, eight weeks, two announcements regarding new dealers. Those dealers have taken some initial inventory. But they are ramping up both in terms of getting their sales teams trained and out on the road, promoting the product.

And going forward, the dealer acquisition program is very aggressive or currently in various states of discussion with the number of dealers that are progressing well.

I am very confident that within the next several weeks, there will be more dealer announcements, dealer conversations coming to successful conclusion and more new dealer announcements to follow..

Thank you, Steve. And Matt, I want to emphasize for our shareholders, this is really important, the rollout of PM, because it had negligible business in the United States. This is our stronghold. We are a leader in our type of cranes in the U.S.

So it's really an opportunity for us to really expand that business and that's the upside because the margins at PM are better than the margins of our skid crane business. So it's really important for us to as we have said get ourselves in a position where we are only expanding in the highest margin products that we have..

How many dealers do you think you guys could add for PM, I guess either for the remainder of this year on an annual run rate basis? And then, Steve mentioned some stocking orders, what are those typically look like? I know there is no average dealer.

But like, what should we be assuming in terms of sell-in initially for those dealers?.

I think I'll take a quick step, Steve then turn it over to you. We have roughly $6 million in additional sales earmarked for the U.S. that I am familiar with and Steve might have plans on his drawing board as well. But that's what I am familiar with the second half of the year at PM. Go ahead, Steve. Sorry..

Yes, specific to the number of dealers, I would anticipate that we sign up in the second half of the year. I view five dealers, as being very achievable. We have ongoing discussions with more than that. But I am reasonably confident that there will be successful in closing deals of five of those dealers.

And each dealer, when they take on the line, typically order one or two units and if that unit is supplied with a chassis, which a chassis itself is a low-margin piece of the equipment. But each unit chassis and crane combined is say, roughly $200,000 in revenue..

Got it. Okay, that’s very helpful guys. And just one last one and then I'll turn it over to someone else here.

But you didn't mention in the prepared remarks, Dave, just the intent to continue to make improvements to the balance sheet citing some of the finished goods inventory you have on hand, do you guys have a target or sort of a number in mind in terms of what you'd like to end the year with in net debt or just some goal that you could share with us on that front?.

Well, I guess it depends on our changes in working capital, because if we don't know, we haven't completed third quarter as pretty well set.

We are booking into the fourth quarter and having discussions, one of the reasons why we are feeling good about going forward is, we are having discussions with customers on 2018 orders already, which is very positive.

But obviously, $20 million in finished goods is doubled what we've had experience in the past, we have to remember that PM has a little bit different structure than what we've experienced that on the stick crane side of our equation there. We have very – we've had a historically very limited finished goods.

But on the PM side, you would have finished goods at a number of the branches around the world, because it's again, it's somewhat of a different sales point product..

Okay, all right. Got it. I will jump back in queue here. Thanks guys..

Thanks, Matt. Thank you. .

And we'll take our next question from Mike Shlisky with Seaport Global..

Hi, Mike..

Hey guys, good afternoon.

Wanted to touch, first on one of your earlier answers and your comments also, just looking from the back half of the year, you said it from a revenue standpoint from a profitability standpoint, that's going to be at a runrate above what you had in our slideshow offsetting the kind of below the average runrate you had in the first half.

But the net-net this will be ending more towards the high-end and the low-end, when all set and done.

Is that the right trajectory you are trying to look forward?.

Yes. We are trying, we are trying obviously. We have the third quarter and again we run with visibility on the Manitex side, not so much on the PM side. So you are little bit more of a guessing game and taking a look at what's in the hopper on the Knuckle side around the world.

But assuming that, because they have less manufacturing hours in the third quarter, we were down slightly from where they were in the second quarter and then assuming, because they have more manufacturing hours in the fourth, that they have a good fourth and the reverse is true at Manitex, that we expand and as we said number of times slow and steady for the third and fourth quarter.

So that should get us, if we were at $40 million plus $51 million plus low 50s, - plus low 50s then we should get towards the high-end of our range that’s what we're striving for at the end of this year..

Got it, okay, okay.

And it sounds like in your comments Dave, that you said, that the pricing has improved versus last year, would you characterize the current pricing environment as back to a normal again?.

No, we're not, we're not back to normal yet, because we were so far down last year at the second half, I don't know if you picked up, I was trying to, trying to kind of give some cadence of how that – it's always easy to talk about how bad it was after the fact, not during the process, but after the fact and as I mentioned, we had a $161 million year, last year in sales.

And again, you assume that PM is rather steady in the $20 million to $25 million quarterly rate.

So you could tell, if you did a $161 million and the $150 million in the first six months last year, you had a really bad second half and when you are experiencing that, you are not worry about margins or pricing, you are just worrying about absorption and keeping the lights on.

So, the increase that we experienced in the first quarter and the second quarter are coming out of those troughs, which were very bad. And so now we're experiencing better pricing embedded in our backlog in the third than we had in the second and better pricing in the second than we had in the first. But we're nowhere near our normalized levels yet..

Okay, okay. and just about for your more recent orders, let's say throughout the year so far.

Do you get the sense that all these cranes are kind of destined for construction environments, as opposed to oil and gas environments? Just trying to get a feel for hypothetically, if you were to see the rig count turning back drastically or oil prices declined drastically, is there a chance that what happened in 2015, 2016, could happen again or do you feel the challenge is much new now than it was during the last oil price downturn?.

Yes, I don't think you would see, Chris, we went from nothing to almost 2,000 wells in North America, as you well know. And now, we are in the 700 range, which it went down as low as 300.

So you don't have the concentration that we had back in the 2010, 2011, 2012 period and everybody was experiencing, we said at one point that we had a very high percentage of our sales going into energy and that's certainly not the case now. It’s certainly less than 10%. So it's very low percentage.

But we’d have seen the customers that we have that are prone to be in the energy area, they did let their fleets go down to very low levels and they have reflated and their utilizations are at very high levels.

So, I would assume that they are experiencing the same thing that everybody else is, that since we can't buy used cranes like you could a couple years ago in the used market.

The construction market and the infrastructure work and the warehousing and all the places that you use cranes, our type of cranes has really absorbed the used market and is now showing some good recovery..

Okay, got it. I want to turn quickly to usually - last quarter, which was the chassis availability, some of your products, there was some issues back then.

Can you give us an update as to how that's going and did that impact the Q2 shipment activity at all?.

No, I alluded to the fact that, as we anticipated, there is always the catch-up that occurs. We still have occasional non-timely delivery of chassis from our customers. But it's nothing likely we experienced when we started to ramp this up in the first quarter and going into the second quarter..

Okay. Kind of last one from me. You've got $15 million on the books for your ASV shares.

Right..

That is in your long-term assets, this is more of an accounting question I suppose, does that turned to short-term assets, when the lock-up period expires? Or is it simply, you don't intend to really sell your ASV shares at this point from when you know today?.

I’ll let Michael respond to that, but I don't believe it converse, I think that's where it stays, but again, let Michael respond to that..

Yes. I think, you referenced a lock-up period, but from an accounting perspective, it's going to be based on what management's intent is, if the intent is that the shares are not held for sale, it would remain as a long-term asset..

And you are not turning that against your net debt even though it does, it would reduce it by $15 million, if you were to liquidate?.

Of course. .

We alluded to it, Mike, but at this point, we're not coming out against that debt. .

Okay, got it. That’s all for me guys. Thanks so much..

Thank you. .

[Operator Instructions] And we'll take our next question from David Raso with Evercore ISI..

Hi, good afternoon. Quick question about the comment about taking orders already for 2018.

Which end-markets are you seeing that in particular? And also are those getting quoted at a higher prices than what's being currently shipped?.

Well, I would say, David, that there are discussions underway, that people are putting together their order outlines for 2018 is for the first half of 2018. But this is, this is the 1st of August. So we'll have several months of negotiations, it's worth also, those are finalized. So that’s still left to be seen in.

And I would say it's consistent with all of our dealers right now, again we deal with dealers not necessarily, completely with the end-markets. But it's a cross-section. Our dealers are seeing the same thing that you are seeing all over, which is a very broad cross-section of activity..

And these cranes, it'll be taken by the dealer and then look for retail? Or do you already know these quotes are directly linked to retail activity?.

Generally speaking, the dealer has a home, if they're putting into their fleets, generally our dealers are not ones that keep it in their fleets, they usually put into their fleet to sell.

And Steve, I don't know you have more direct contact on this, if you wish to comment at all?.

Yes. The dealer activity is really broad spread between the retail and their own internal rental fleets with more of a bias towards the retail, based on end-market activity. Regarding the specific segment and some of the drivers behind the orders.

We are seeing the industry numbers and our numbers as well showing a slight bias towards the larger cranes.

They are going to some of the infrastructure and utility and energy work in the – one of the recent numbers we saw and the industry data showed that in the first six months of this year, about 57% of the shipments were of the smaller type cranes, under 30 tons. And only about 43% of the first half shipments were the larger cranes, 30 tons and up.

However, the orders in the first half of the year across the industry, were more biased towards the larger cranes, about 55% of the industry orders in the first half of the year are for the 30 ton and larger cranes and only 45% for the under 30 ton crane.

So, the industry has seen a slight increase in the larger cranes for the energy and utility and infrastructure and that is well-reflected in our order dynamics as well..

So that's something positive mix when we think about some of these quotes maybe coming to fruition and become orders.

When you think of your input cost to produce these cranes, what is the setup right now for you on input costs, say three, four months out from what you know in the supply channel?.

And - are you referring into to our cost of goods sold?.

Correct..

Yes, most of our material costs are – have been favorable. We obviously saw an increase in steel in the first part of the year. I believe that has been reduced towards the second quarter. So I am not aware of any significant material cost increases coming on the horizon.

I don't know, Steve, if you've heard of anything?.

There is slight decreases, there is slight increases and net-net, we haven't seen anything concerning on a near-term basis..

All right, terrific. Thank you for the time..

Thank you, David..

And we'll take our next question from Lenny Dunn with Mutual Trust Company of America..

Yes, hi, it appears that we have returned a corner here and things are going to be even better each quarter going forward.

Clearly, obviously, if we can get this infrastructure bill done later in the year, I would expect if that would lead to some upside surprises, but that politics – being politics, you can't take that to the bank, but we have a pretty favorable impact if - in 2018 if you have something is actually passed?.

Obviously, there will be a lag, as you know, from the time of implementation of anything like that to actually execution. And we can only hope and pray that sometime in our life, we'll see a real infrastructure bill because, it obviously is very well needed.

But again, as you said, that's very hard to predict, but it clearly would be a significant event for all of us in the equipment business..

Yes. I guess, people would have to get the equipment in place prior to starting the jobs. So, it could actually – that we talk - we talk very positively by this time next year..

That's correct. Right..

Okay. And the debt seems under control now and obviously we are going to have some interest savings.

So, are we going move more into the black in the third and fourth quarter as a result of that or?.

That's our expectations. Yes..

Good, good. That's what I am reading from what you are saying..

So that's correct..

Between interest savings and increased business and cash flow and cost cuts, we could actually be making real money..

Real money. That will be a good – that's our expectations, yes..

Okay, okay, well that's why we are in the stack. We are paying shareholders, but like to actually see something in the second half of the year. And okay, well that's all. I mean as you take it as blocking and tackling and I understand that it takes time..

Thank you very much. Appreciated, thanks..

[Operator Instructions] And there are no further questions at this time, I'd like to turn the call back to you..

Thank you, Chris. Thanks everyone for your interest on our company. We look forward to future calls. Thank you..

This concludes today's call. Thank you for your participation. You may now disconnect..