Karen Bauer - Investor Relations Bob Arzbaecher - Chief Executive Officer Andy Lampereur - Chief Financial Officer.

Charley Brady - SunTrust Robinson Humphrey Mig Dobre - Robert Baird Ann Duignan - JPMorgan Jeff Hammond - KeyBanc Capital Markets Matt McConnell - RBC Capital Markets Robert Wertheimer - Barclays Stanley Elliott - Stifel Justin Bergner - Gabelli & Company.

Ladies and gentlemen, thank you for standing by. Welcome to Actuant Corporation’s First Quarter Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded Thursday, December 17, 2015.

It is now my pleasure to turn the conference over to Karen Bauer, Communications and Investor Relations Leader. Please go ahead, Ms. Bauer..

Thank you. Good morning and welcome to Actuant’s first quarter earnings conference call. On the call with me today are Bob Arzbaecher, Actuant’s CEO and Andy Lampereur, CFO. Our earnings release and the slide presentation for today’s call are available in the Investors section of our website. Before we start, a word of caution.

During this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are inherently uncertain and that there are number of factors that could cause actual results to differ materially from these statements.

These factors are outlined in our SEC filings. Consistent with prior quarters, we will utilize the one question, one follow-up rule in order to keep today’s call to an hour. Thank you in advance for following this practice. And with that, I will turn the call over to Bob..

Thank you, Karen. As you saw this morning, we delivered results well above our guidance range for sales and earnings. While it rounded flat, we did have a little bit of core sales growth for the quarter, which was significantly better than expectations.

The beat was due to strong activity from our energy segment, specifically our Hydratight service business. But despite strong energy sales, there is plenty of challenges in most of our end markets and we aren’t seeing improved demand.

EPS at $0.31 a share, excluding the restructuring charge, was also above our $0.20 to $0.25 per share guidance due primarily to the higher sales. Consolidated operating profit came in as expected and taking into account the unfavorable sales mix across the portfolio.

We had strong free cash flow of $17 million for the quarter versus a cash outflow in the comparable prior year quarter. Overall, a great start to the year. I will turn it over to Andy to go through some quarter details and then come back and discuss a couple of topics with you and updated guidance.

Andy?.

Good morning, everyone. I am going to start today’s financial review on Slide 5 which is summary income statement. First quarter sales were $305 million, down 7% year-over-year due entirely to the stronger U.S. dollar. Our gross profit margin was noticeably lower than the prior year on account of unfavorable sales mix.

The 11% reduction in SAE expense was greater than the sales decline for the third consecutive quarter as a result of continued belt tightening and cost reductions. However, the lower gross profit margins more than offset these SAE reductions leading to lower operating profit margins this year.

Excluding restructuring charges this quarter, our earnings per share was $0.31 a share, which compares to $0.38 a share in the first quarter of last year. Lower operating profit more than offset the benefit of share buybacks in this year’s lower effective income tax rate.

In summary, while earnings were down year-over-year due to continued headwinds in most markets, they did exceed our expectations. Before peeling the onion on first quarter results, I am going to provide a brief update on our restructuring program.

We booked a $4.5 million pre-tax restructuring charges covering a number of projects that involve consolidating our footprint and reducing staffing levels. We worked on several other projects that don’t yet require or allow for restructuring charges to be booked at this point, but those will be coming later this fiscal year.

We are happy with the progress made in the first quarter and expect another similarly sized charged in the second quarter for restructuring as other projects advance further.

We continue to expect the restructuring charges to aggregate about $25 million between this fiscal year and the first half of next year and estimate slightly over a 2-year payback once all of these are finalized. Moving on now, let’s dissect first quarter 2016 results starting first with sales on Slide 6.

Consolidated sales for the quarter were down 7%, as I mentioned earlier, all due to the stronger U.S. dollar. Our flat core sales, was a huge improvement sequentially from core sales decline in the last couple of quarters of 7% and 8%.

By segment, our first quarter sales were up 13% on the core basis in energy, down 9% in industrial and down 3% in engineered solutions. I will provide color by segment in a few minutes. With the exception of some energy-related markets, we continue to see weak demand globally, including the traditionally higher growth in emerging markets.

Pockets of strength from an end market standpoint, including European heavy duty truck and European and Chinese auto markets. Unfortunately, we continue to encounter weak demand in most other markets, with incremental softening in general industrial end markets.

As mentioned earlier, sales mix in the quarter was not favorable with some of our traditionally highest incremental margin product lines such as Enerpac’s industrial tools and Viking’s rental business posting the largest core sales declines of our product lines.

Meanwhile, the biggest revenue growth came from Hydratight service, which typically generates lower margins in the rest of energy. So, what this adds up to is poor sales mix, which weighed on our margins in the first quarter. We were able to offset part of this, but not all, with lower SAE spending.

In total, our first quarter operating profit margin excluding restructuring cost was 9.8%, which was up sequentially from last quarter, but down from a year ago. Now, I will spend a few minutes on each of our three segments starting with the industrial segment first here on Slide 8.

Industrial segment results reflected sequentially weaker demand in the industrial tool product line and closer to flattish trends in both innovative solutions and precision. Things were weaker in the Americas and Asia than in Europe with a very weak October weighing on quarterly results. Emerging market demand was poor and the stronger U.S.

dollar hurt sales into countries such as Brazil and Canada. Even within the industrial segment, sales mix in the quarter was not good, with our higher margin product lines declining much more than our lower margin product lines.

That weighed on industrial segment operating profit margins, which were down in the 200 basis point range, both sequentially and on a year-over-year basis. I will turn now to Slide 9 and cover the energy segment. Results there were much better than expected. Core sales advanced 13% with robust service growth at Hydratight and easier comps at Cortland.

As expected, Viking’s sales were down significantly as some of the large Australian projects that had benefited from over the last 18 months were winding down. Operating profit margins for the segment were up 170 basis points sequentially, but declined 50 basis points year-over-year.

This was due to continued pricing pressure, but much more so the unfavorable mix given the lower sales in our high margin Viking rental business and significant growth in Hydratight’s lower margin service business.

Considering the industry-wide challenges, we are very happy with the first quarter energy segment results and how the business responded, reacted to and withstood the headwinds in these markets. Now, I will turn to Engineered Solutions on Slide 10.

Segment level results improved sequentially with the decent demand in European heavy duty truck and auto offsetting continued weakness in most of our other [Technical Difficulty] to work down inventory levels.

Segment operating profit margins improved sequentially, but were down year-over-year, 70 basis points due to lower absorption in the impact of the continued stronger U.S. dollar. So, that’s it for segment deep dives this morning. I will now shift to the balance sheet and cash flow.

We had a good free cash flow quarter, which reflected improved year-over-year primary working capital management and lower current year income tax payments. With $17 million of free cash flow generated this quarter, we are on track to hit our targeted $110 million to $120 million of full year free cash flow.

During the quarter, we paid out our annual $2 million cash dividend and we deployed a little below $5 million on the buyback of $200,000 additional shares. Quarter end, net debt to EBITDA was in line with expectations at 2.3x. So, that’s it for my prepared remarks today. I will turn the line back over to Bob..

Thank you, Andy. We have met with many investors over the last quarter between our October Investor Meeting here in Milwaukee, sell side conferences and non-deal marketing visits. Based on these conversations, we picked up one common misconception about Actuant’s energy segment.

Investors have been quick to assume that all of our energy exposure is directly correlated to oil and gas prices. Yet, our biggest energy business, Hydratight, at about 60% of the segment sales is primarily a maintenance service provider.

Maintenance can be on an offshore rig, a refinery, petrochemical, nuclear, power gen, many, many other types of industries, but the fact is while maintenance can get deferred and scopes can change, at the end of the day the assets are getting older and any periodic schedule maintenance to meet safety requirements. This quarter was a great example.

A lot of our growth was in the U.S. from work that had been deferred in the spring. Hydratight was up about 30% on a core basis. While we have the benefit of a big Middle East refinery job, our Hydratight core sales would still have been up double-digits without it.

The core sales trend in Hydratight over the last four quarters has been up 2%, minus 12%, up 1% and now up 30%. Lumpy, yes, but looking at it on our trailing 12-month basis, oil prices are down 50% yet Hydratight grew 6%. So the takeaway here for investors is not – is to be careful not to group our energy segment with all other energy companies.

There are a lot of different end markets and applications within the broader energy spectrum and not all businesses move in the same direction or are directly linked to the price of oil and gas or CapEx spending and you just saw that from Hydratight this quarter. Next, I would like to provide a quick update on our CEO search process.

It is well underway with an outside search firm narrowing down a list of external candidates and a round of Board level interviews with both internal and external candidates is scheduled for next month. There is significant interest and the Board is pleased both with the caliber of the talent as well as the progress of the search.

Meanwhile, I continue to enjoy my short-term assignment and in preparing for a successful transition to the new CEO as soon as that person has been selected. Now moving on to acquisitions, while we have been pretty active we didn’t complete any acquisitions in the quarter.

We have one transaction in energy that was expected to close in the first half of fiscal ‘16, completely move away from us due to increased seller price expectations. We have others that are looking promising and continue to progress towards the finish line.

Most of these are in the $25 million to $75 million sweet spot, well aligned with our targeted industrial tools, energy services and agriculture secular growth themes. In summary, we are busy on the M&A front, but we are maintaining discipline. To wrap up today’s call I would like to provide an update on guidance.

As you can see here on Slide 14, for the most part things haven’t changed a great deal since the – in terms of core sales guidance. Broadly speaking, the industrial economy remains challenged and has weakened a bit since the beginning of the fiscal year. The U.S.

dollar has strengthened against most other currencies, which puts costs and pricing pressure on our BUs. Commodity prices have continued to weaken and markets such as mining, agriculture and off-highway have had sluggish demand and in some cases destocking. In summary, not a lot of growth prospects.

We are a little more optimistic about our energy core sales prospects for the year on account of its strong start for the year in the first quarter and a little more cautious in industrial segment due to the weakening we saw in the first quarter.

But in total, our consolidated core sales guidance remains unchanged with an expected full year core sales range of minus 1 to minus 4. On Slide 15, we summarized other key assumptions for our EPS guidance in the second quarter – for the second quarter and the full year.

We exceeded our first quarter guidance but remain cautious for the full year outlook due to continued uncertainties and lackluster demand in most end markets.

Therefore, we have updated full year guidance – the updated full year guidance reflects the increase in the low end to reflect the first quarter beat, but we are maintaining the high end of our ranges. This puts our revised sales guidance at $1.165 billion to $1.2 billion and our revised EPS at $1.25 to $1.40 per share excluding restructuring.

We remain confident with our full year free cash flow estimate of $110 million to $120 million. Our second quarter guidance is for sales of $270 million to $280 million, reflecting a minus 4% to minus 5% core sales decline, which is sequentially weaker than what we just completed in the first quarter on account of the large Middle East service job.

Our second quarter is always seasonably our weakest of the year due to weather-related activity in energy, holiday shutdowns and the short month of February. We have been advised by several OEMs that they are extending the holiday plant shutdowns from the typical one week to up to four weeks due to weak orders and an attempt to reduce inventory.

The combination of these factors puts pressure on margins which is evident by our second quarter EPS guidance of $0.17 to $0.22 a share again excluding restructuring charges. We continue to expect the second half of fiscal ‘16 to be better than the first half.

We will anniversary most of the difficult comps that happened about midway through the year, both from an end market and an FX standpoint. We want to make it clear we are not calling for improved second half demand, simply stabilization and easier comps.

In summary, I am happy with the just completed quarter, cautious given the market uncertainties, but confident in our full year outlook. That’s it for my prepared remarks. Operator, let’s open the line for questions..

Thank you. [Operator Instructions] Our first question is from Charley Brady with SunTrust Robinson Humphrey. Please proceed..

Thanks.

Good morning guys and Karen how are you?.

Good morning Charley..

I would just start on the industrial business, we have been hearing a lot of destocking talk, it sounds like destocking is may be stretching into Q4, might go into Q1, can you just give kind of what you are seeing from an industrial destocking basis, is it lessening, is it getting worse, what do you see in there?.

I think there’s less chatter this quarter, last 90 days from our distributors out there Charley. They are adjusting inventory levels down than we heard in the prior quarter. They don’t carry a ton of inventory in the first place. So don’t think it’s impacting us in a big way there.

I think the destocking for us is built actually more on the OEM side over on our engineered solutions segment..

Thank you. Our next question is from Mig Dobre from Robert Baird. Please proceed..

Yes. Good morning everyone.

Maybe a little clarification on the energy segment, I am trying to figure out exactly what the impact of this Middle Eastern project was, my back of the envelope math based on your comments Bob, was that this contributed close to $14 million maybe to your energy revenue in a quarter, is that correct? And how should we think about whatever is left in this project for the year and the flow-through at some of the other quarters?.

Yes. So you are a little high on the number, but you are out of the ballpark in terms of what we booked as revenue. There is some tail that will fall into December and then there is also some talk about other ancillary work we could do on the site that will flutter into the rest of the year.

I think from that point of view, those would be comparable to prior years and other kind of work that we do. So I wouldn’t look to that to be incrementally that high..

The other thing I would add in there Mig, is obviously that helped out our revenues in the quarter. But if you were to pull that out, our core sales and Hydratight and the segment overall still would have been positive. And even within Hydratight, without that job, the Middle East was up, U.S. was up a bunch, Asia was up.

And even Europe, which you would think with the North Sea being probably ground zero, it was down just a couple of points. So overall, service levels around the globe were actually very robust even without this large job. And the job itself really is a take off to some of our growth and innovation projects here.

So this isn’t a one-time win that just came popping in and now we are back down to nothing out there. There is other wins that we have had as well, but certainly not this magnitude..

But the reason we are forecasting negative core sales in the second quarter is second quarter is always the tough one from a service point of view for Hydratight. You are in the middle of the winter, a lot of these sites, particularly offshore, you just can’t – they are just too hostile environments to be there in the winter.

So the quarter we just finished tends to be the strongest of the year for our service side of Hydratight. That was no exception this year..

Thank you. Our next question is from Ann Duignan with JPMorgan. Please proceed..

Hi. Good morning guys..

Good morning..

One question and one follow-up, could you give us a little bit more color on your comments about your OEM customers, some of them have announced four week shutdowns versus one week normally, I know you are probably not going to be willing to tell us which specific customers those are, but maybe which industries or which regions.

And then could you comment – I think you said in your opening remarks that China automotive was up or was strong for you guys, China Metal the other day said that China automotive was very weak.

And I am just curious to get some color from what you are seeing in the China automotive industry?.

Alright. So, your first question is correct, I don’t want to get into a customer by customer forecast. But as you know, Ann, our business is predominantly in truck, is cab-tilt and it’s the Europeans contract – European makers. I would say there is also some element of that in agriculture and off highway equipment.

So, those are the markets that would be affected by that..

More so in the U.S, Ann, but more so in the U.S. and then truck, heavy duty truck..

Yes. The second comment I would make would be on the auto in China. We – This was an air emissions product that we have in China. It was a market share win that happened several years ago when we won this contract. So, I don’t think it’s a reflection of autos in China as much as it is a reflection of market share wins that we had as a company..

Thank you. Our next question is from Jeff Hammond with KeyBanc Capital Markets. Please proceed. .

Hey, good morning guys..

Good morning..

Good morning, Jeff..

So just back on the energy, I guess was the big incremental surprise that the service in the U.S.

or both some of you would do some of that Middle East business pull forward? And then just kind of generally, what kind of – how do you think about the growth for Hydratight kind of over the perspective 9 to 12 months?.

We did have this larger job that we talked about earlier in the Middle East that was in our forecast. I think it ended up beating our forecast by $1 million or $2 million, so it was not a significant variance. It was just the robustness of the service growth really globally. The U.S.

in particular was very strong in the quarter, but that was the big driver. It’s just service overall elsewhere relative to our guidance..

I think the Middle East contract came quicker than we saw. I think we had it over 4 or maybe 5 months and it was an accelerated timeframe from our original guidance, and I think that drove some of it also. I think when you are talking about service long-term for Hydratight, we are just very positive about the outlook for service.

These assets are older. They are, many times, past their useful life and still running, and that creates demand for more service not less. Now, it is lumpy is hell. As I went through with my prepared remarks, it jumps from positive 30 to minus 10 in a hurry. And I think we have tried to take that into account in our guidance.

I think we tend to try to be conservative there and wait for actual results to beat rather than try to predict every turnaround. And I think you see some of that in this quarter..

Our next question is from Matt McConnell with RBC Capital Markets. Please proceed..

Thank you. Good morning..

Good morning..

So, just to follow up on the previous question, is there any common theme you saw that drove such an increase in maintenance activity, whether that’s particular customers or end markets or most of the data points we have heard have it be just anything gotten – had gotten better in capital or operating spending.

But any reason why it would all come through in such a strong way in this quarter specifically?.

Well, I think there was a bit of pent-up demand. So, there were some things that got pushed out of this summer that got moved into this quarter. I think as I said earlier, this is the big quarter and I think people are anxious to get work done. And so I think those two drove it.

And as Andy said, some of this is our joint integrity strategy, where customers are looking to kind of outsource the whole thing to us. And the Middle East job was a great example. We did everything from planning, which joints needed to be worked on all the way through the manpower in training local Saudi service technicians on how to do the work.

So, it was a kind of a cradle-to-grave process and that is exactly what our joint integrity strategy is tied to..

Thank you. [Operator Instructions] And we have a question from Robert Wertheimer with Barclays. Please proceed..

Yes, hi, good morning. Just quickly, I mean on industrial, you mentioned generally, so we just call it energy and mining.

Are you seeing broad-based weakness across the U.S., and okay, Europe? I mean I wonder if you can just give any other color on that segment, whether you have seen it flow through to the whole industrial economy whether it’s still very patchy?.

Yes. The – our weakest regions by far were the U.S. and Asia and it was pretty broad-based across North America, but Europe actually had an okay quarter, bringing the quarter in terms of industrial tools. As I mentioned in the quarter, we had a very weak October.

And from reading other companies’ reports, as they were announcing earnings for the third quarter, they were commenting on a weak October. We certainly saw that.

We exited the quarter certainly better than we – than our overall results for the quarter in terms of the core, but there is no question in our mind things weakened sequentially from quarter four – our fiscal fourth quarter and to our first quarter here, which is what’s got us cautious overall on guidance..

Yes. I mean, it was from a volume point of view, it was kind of a disappointing quarter in industrial. I don’t think it’s any different than you are reading from other peer kind of companies. The outlook we think is conservative from here on out. But that is the part of the business that from a top line was the weakest.

I think they did a pretty good job on the margin side offsetting that, but clearly, that Enerpac industrial tool business is a bellwether for general industrial activity and it’s really not a great picture right now..

And we have a follow-up question from Mig Dobre from Robert Baird. Please proceed..

Yes, thank you for taking my follow-up.

Can you guys help us out with ranging your margin expectations and what’s embedded in your guidance at segment level?.

We typically don’t give out segment level guidance quarter by quarter. Clearly, our view for the full year, margins in total, they were going to down a hair in total, for the year and by – really for the full year by segment as well.

As we move into the second quarter here, even though we had ugly mix this quarter within our segments and across some in the second quarter, as you have known over the years is just really drops down because of absorption and our production is low and that sort of thing. So, that will not change.

I expect certainly a pretty nice ramp up in the back half of the year as we get a little bit of volume and some of these adjustments between sales and production balance out as well and our mix gets a little bit better within energy hopefully.

So, that’s a view, but beyond that, Mig, I mean, I don’t want to get into, this is going to be down X by quarter or by segment in total. All three of them we expect them to be down a little bit year-over-year for the reasons we outlined..

So, I want to just add a couple of comments to where Andy is. And I have said this to a number of investors. This company is going to feel a lot different when you get into the back half of the year. And Andy, in effect, said that. As you guys know, we are very focused on $300 million of EBITDA and 18% EBITDA margins.

And I think we are going to be moving quite solidly towards that in the back half of this year from where we are at today. And when Andy says there is incremental volume, we are not talking about growth, we are talking about normal seasonality as we get into the spring and you start picking up additional volume.

It’s not necessarily much growth year-over-year it is growth sequentially. So, just a couple of comments I want to add to Andy’s..

We have a question from Stanley Elliott from Stifel. Please proceed..

Good morning, everyone and thank you for taking my question, but quick question kind of delving back into the energy business in the U.S.

Was the whole market up like that or with some of the activities kind of combinations and I guess with some of your competitors in the space, is this more of a share gain and how sustainable do you think this is going forward?.

Well, we don’t have that true of a competitor in Hydratight’s space that is a public peer that you can compare to. Team and Furmanite get close. They don’t really have product sales. Team is not as global as we are.

They certainly will be more when they team up with Furmanite, but I don’t think there is a great comparable to be able to look at and make that adjustment. So, the Middle East job somebody was doing that work at the Saudi Aramco refinery before we got there. So obviously there is an element of that that is market share related. Other things in the U.S.

are jobs that we have had for years, I don’t – I think it’s just normal turnaround activity..

Our next question is from Justin Bergner with Gabelli & Company. Please proceed..

Good morning Bob. Good morning Andy..

Good morning Justin..

I just wanted to start off by asking, in terms of your core sales guidance by segment for the fiscal year, would you hazard to say that your energy is tracking towards the high end of that and industrial towards the low end of its segment guidance or is it too early to jump to those conclusions?.

Well, clearly with 13 up in the first quarter, energy is off to a blistering start. We told you it will moderate in the second half or in the second quarter to bring that in line. Yes, I think we feel pretty comfortable with energy and that service activity doesn’t shutdown. So we have got some momentum associated with that first quarter activity.

Industrial is the one that’s probably got to turn the corner a little. Some of that is just the seasonality of the business and getting easier comps in the back half of the year. Engineered Solutions tracked exactly what we thought it was going to do. I don’t see any plus or minus on that one..

Okay, thank you.

And one other question, in terms of the deal that got away from you, what sort of dollar amount was that and could you sort of provide any detail on what type of asset you were looking at?.

Well, I think we told you it was kind of in the energy segment and it was in the middle to upper middle of the fairway I talked about on the prepared remarks..

Thank you. And we have a question from Charley Brady with SunTrust Robinson Humphrey. Please proceed..

Hi. Thanks. Quick follow-up on Engineered Solutions, in the release you called out convertible top being up, which I guess was a little bit surprising.

I mean is there any kind of growth happening there, was there a new platform that’s coming out or is it just kind of an easier comp year-on-year?.

We have a couple of new platforms, but we also have some that are exiting. I think it was just production Charley, nothing particularly different..

Okay.

And if I could throw one more just on terms of heavy truck, Volvo came out with monthly numbers for November today and really strong European truck, are you seeing any acceleration in Euro truck from where it’s been over the past few months?.

I wouldn’t say we have seen any acceleration. It was a good quarter as Andy talked about in his prepared remarks. We are probably 60 days, 90 days ahead of when Volvo builds that truck. So I think you are probably looking at some of the activity we saw in August, September, October..

Got it. Thanks..

And we have a follow-up question from Robert Wertheimer from Barclays. Please proceed..

Hi. Thank you. I was just trying to squeeze out in before, so maybe this is a little bit detailed, but I was curious – I very much understand maintenance needs to get done in Hydratight.

And yet in some other industries, we have seen people push maintenance out, have you seen any major or noteworthy split between integrated with maybe a larger upstream exposure or folks who have more pure maintenance in midstream or whatever you want to say.

We can kind of guess at if there is an impact of delayed maintenance, how big that might be or do you think that’s not a factor or do you not know yet? Thanks..

Yes. It’s a good question, one we ask internally a lot. And I wouldn’t say we can draw any correlation to upstream, downstream, midstream versus what they do in terms of this OpEx maintenance that we are so prevalent in.

Clearly, we believe and know just because we were working on the jobs, that some stuff got pushed out of the summer into the fall and we saw that come through this number. But there is a limit to how much they can do there just from a regulatory point of view different. It’s different in different parts of the world, so even that is hard to quantify.

So it’s just something that’s always got that lumpiness to it. But we clearly are going to great strides to send you guys the message that this is not necessarily tied to some of the CapEx reductions you are seeing and even OpEx reductions you are seeing. This stuff does have to get done..

Thanks..

And we have a follow-up question from Justin Bergner from Gabelli & Company. Please proceed..

Thank you for taking my follow-up.

I just wanted to ask quickly if any of your cash flow priorities have changed with sort of the further weakening of the industrial backdrop and lower oil prices or is it unchanged from what you sort of laid out at the Investor Day two months back?.

It’s exactly where it was in the Investor Day..

Okay. Thank you..

And there are no further questions registered at this time..

Great. Thanks to everybody for joining the call today. I will be around all day if you want to give me a call with any follow-ups. For your planning purposes, our second quarter call will take place on March 16 and we all wish you a very safe and happy holiday season. Thank you..

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line..