Welcome to the Luxfer Group Third Quarter Conference Call. We will first hear from Luxfer's Chief Executive, Brian Purves, who will provide a market overview for the quarter; followed by Group Financial Director, Andy Beaden, who will review the financial performance for the quarter and year-to-date.

Brian will then return to sum up and offer an outlook. After that, Brian and Andy will be glad to take your questions. [Operator Instructions] We will now turn the call over to Mr. Brian Purves. .

Thank you, and good morning, ladies and gentlemen. Welcome to the Luxfer conference call on third quarter of 2016. .

Turning to Slide 4, the headlines for the quarter are, our earnings result was $0.01 better than our updated guidance, but it was a difficult quarter, because the FX styling is hindering us at the moment, but is expected to turn into a positive for us in the medium term.

The difficulties affecting parts of our magnesium business are expected to reverse, but not until early 2017. .

[Audio Gap].

The quarter 3 headwinds came from what it is normally a relatively predictable source, sales of our North American magnesium products, and in particular defense-related products. I will go into this in much more detail shortly. .

Turning to Slide 6. Following 2015's rightsizing actions, results from the alternative fuel cylinder business stream remain much improved. European demand for composite medical cylinders, however, remains low, although sales of aluminum cylinders were up in the quarter. .

Our Superform business is selling record levels of tooling associated with new contracts around the future supply of panels but is currently selling fewer than usual formed goods due to old contracts finishing in advance of the new contracts commencing..

Sales of high-performance magnesium alloys were again slightly improved, although towards the end of September, the largest sand customer that we supply entered Chapter 11 protection, citing the lower build rates on helicopters caused by reduced demand from the defense and oil and gas sectors, just as we ourselves have previously reported, but from within a much more diversified business.

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The end customers are the helicopter and engine manufacturers that are specified the use of our materials. So we can have confidence that the castings are required and will be made, but we have to count in some disruption over the next few months. .

In the catalyst sector, sales of automotive material were actually a little higher in the quarter, but there remains very significant potential for higher sales, particularly from our new G6 technology, on which we continue to get very positive feedback. We have further shipments of industrial material scheduled for quarter 4. .

Major impact on the fourth quarter was the dearth of orders for several of our magnesium products in North America.

On military powders, we have one customer still working towards a restock of the facility down east earlier this year, while another customer reported that they were short of orders from the military and would not require further atomized powder this year.

In response to reduced costs, we have suspended operations at our magnesium atomizer in Pennsylvania for the balance of the year and laid off much of the direct workforce. .

For each of the last 15 years, the U.S. military has come in with an add-on for Meals, Ready-to-Eat, or MREs, in the third quarter, adjusting the full-year requirement above the contracted minimum in order to rebalance stocks.

In 2015, the add-on brought the year to about 25% above the base level and generated the need for additional flameless heaters from our Magtech business. This year, no add-on was forthcoming, which reinforces our focus on expanding the business into non-U.S. and nonmilitary areas.

We did have expectations that we could, during the quarter, bring in one of the several large commercial tenders that we have underway to offset the military shortfall. But the timing of these tenders have slipped into 2017. .

The U.S. military have also been very slow to issue expected orders for the chemical detection and decontamination products of Luxfer Magtech. .

Accordingly, having scheduled production to a degree and expectation of an MRE add-on and additional decontamination business, our New York Magtech facility became short of work. Again, to reduce costs and avoid building stock, we have cut back on production and laid off several employees until year-end. .

Finally, we have invested in improving the flexibility of our manufacturing processes at our Madison rolling plant, and this has given us the ability to offer a direct service to more of our North American customers for photo-engraving sheet. This will improve customer service, lower logistics costs and build customer loyalty.

The downside is that the distributors to be bypassed had to be allowed to offload their stocks, and while this happens, our sales are reduced. .

Turning to Slide 7, on addressing these matters. At the very end of September, we saw one large, new contract award for military flares placed by the DoD with one of our customers for 2017 through first quarter '18 production.

With an expected resumption of production at the facility that had the outage, both major customers are expected to be back taking supplies from us early in the new year. I would remind you that we are only 2 years into the 5-year contracts for the core countermeasure flare requirements of the U.S.

military and that we have 100% of the powder supply for the manufacture of these flares. .

Three weeks ago, the new 5-year contracts for MRE supply were released by the U.S. military, split between 3 meal providers. We had already secured back-to-back contracts with all 3 for the supply of the flameless heaters, carrying over the 100% supply position that we inherited on purchasing Luxfer Magtech.

The minimum annual quantity is carried over from the previous contract. And an informal indication was given that there would be an add-on in 2017, where there was none in 2016. .

We've also received around $2 million worth of orders to date relating to stock replenishment, following usage of emergency supplies during the recent hurricane season, and we expect this to benefit quarter 1 2017. The castings made by the customer now in Chapter 11 will be required, so we should at most expect short-term disruption..

And as mentioned earlier, we have submitted tenders to several non-U.S. buyers of self-heating rations, and we are targeting incremental business in this area. The stock held by [indiscernible] photo-engraving distributors should be largely exhausted by the end of quarter 4, removing the current depression effect on sales. .

Overall, while we still await some order cover, particularly for the decontamination products, we do expect a strong recovery in sales for these magnesium products early in 2017, albeit the quarter 1 may still be somewhat affected, as production is restarted at our customers. .

Turning to slides on our update on the strategic growth projects, on Slide 8. BIOTRONIK have now launched their magnesium scaffold product, now branded Magmaris, in several countries, including in Europe, the Middle East and Australasia.

Although for a small amount in this launch phase, it was a big moment for us when we received our first royalty statement during the quarter. .

Slide 9. When we bought the business that we now call Luxfer Magtech 2 years ago, we said that one of our objectives would be to expand its geographic presence.

Last year, we established new sales positions outside the USA, and in the second quarter of this year, we purchased a small European competitor in the field of flameless heaters and ready-to-eat meals, largely for their customer list. As stated earlier, we have now quoted for several millions of dollars' worth of business to a number of non-U.S.

buyers of self-heating rations..

Slide 10. We now have 3 prototype components in testing for possible inclusion in new aircraft seat designs, and we remain confident of getting at least one of those parts into a production seat during 2017. .

Slide 11. We continue to get good feedback from customers on the benefits from our next-generation automotive catalysis technology. The customer still needs to complete engine testing on catalysts made using the material, but we are already planning for how we can start making the material in commercial quantities. .

Slide 12. The automotive industry increasingly demands a supply of assemblies rather than panels.

We are currently investing in our Superform facility in the U.K., installing a restrike press to allow secondary operations to remain on superformed panels, and also on a henning cell [ph], where we fold the outer door panel over the inner panel and supply an assembled, unpainted door.

These new facilities will be used on the new work for Ferrari and another high-end customer expected to start in the second half of 2017. Andy Beaden will now take you through some of the detail on the financial results. .

Thank you, Brian, and welcome, everyone, to the call. My first set of slides will cover the sales analysis for the quarter. Total revenue for Q3 2016 was $98.9 million compared to $113.2 million for Q3 2015. FX translation was a negative $3.9 million. Underlying group revenue reduced by $10.4 million compared to Q3 2015.

Gas Cylinders underlying revenue reduced by 7.2%, and Elektron by 12.3%. .

Slide 15 covers Gas Cylinders. While underlying demand in the U.S. self-contained breathing apparatus market remains stable with solid FEMA funding for the U.S. firefighters, actual sales in the quarter were impacted by a major customer slowing down its requirements while it worked through a production issue unrelated to our products.

However, the same customer remains very positive on 2017. .

Medical composite demand remained weak in Europe. However, we have now won new business in this market and expect improvement in 2017, also helped by new product launches. AF and aluminum cylinder sales improved, despite the difficult economic environment for these sectors. .

Superform tooling revenues were pushing towards record levels, with new work won at several high-end automotive OEMs, including, very significantly, as Brian covered, Ferrari, and this should lead to higher forming part sales in the second half of 2017, when they begin to manufacture the new models.

Forming sales have been recently reduced with the transition from legacy contracts to these new customer models. For the long-term, volume forecasts for the new business outweighs that of the legacy contracts now ending..

Now on Slide 16. As you have seen recently, Elektron underlying revenue is currently compressed and was down 12.3% in the quarter. It remains impacted by the continued weakness in lower-margin automotive recycling, which year-to-date is down $10 million. Automotive catalysis sales did show some year-on-year improvements, though from a lower base level.

And magnesium aerospace was pretty good in the quarter, with stronger European sales. The major impact for us was in the U.S. magnesium business and in its defense-related products, with weak powder sales for U.S. DoD countermeasures down approximately 50%.

And Luxfer Magtech's product lines all down 20% to 25%, along with some general industrial softness..

Demand is being impacted by the continuing production outage of one major countermeasure customer, which we did report on our last call and tightness in DoD procurement spending, which has led to some general destocking. Our PE [ph] sales were compressed by the destocking in the U.S.

distributor sector as we transition major customers to direct sales accounts, as Brian covered earlier, something which we certainly think will be beneficial both for us and our customers from 2017. The destocking factors will continue well into Q4, as we cover in the guidance, but should rightsize themselves through Q1 2017. .

Slide 17 shows the trend in sales for Q3 2016 by geographic region, with very little change in regional sales mix, meaning North America remains the largest region for sales at 54%. .

Turning to the trading profits and adjusted EBITDA result on Slide 18, trading margin was down at 7.4% at trailing profit of $7.3 million, the fall being in Elektron Division, mainly as a result of the weaker U.S. magnesium defense-related sales. FX did reduce profit by $1 million, so the underlying profit fall was $2.3 million. .

The adjusted EBITDA was similarly compressed at $12 million, FX differences being $1.3 million and trading explaining $2.2 million, again consistent with defense sales disruption in magnesium, partly offset by Gas Cylinders' underlying EBITDA being improved adjusted for FX..

Slide 19 covers net income and EPS. Gross trading profits, we have made a charge for doubtful debt of $1.2 million relating to the U.S. aerospace customer that voluntarily entered Chapter 11, though we continue to trade with the customer. The historical receivable is frozen.

I thought it prudent to make an accounting impairment now, whilst awaiting the outcome of its Chapter 11 legal process..

We also had a charge of $0.3 million in relation to some rationalization and legal costs. This meant the operating profit was $5.8 million against $10.3 million for Q3 2015. .

Net interest costs were lower at $1.2 million, as we now benefit from the refinancing of our loan notes and investment income from our JVs. Statutory IFRS net income for Q3 was a net profit of $3.3 million compared to $6.1 million for Q3 2015.

Adjusted for exceptional items and excluding the IAS 19 pension finance cost, Q3 2016 was an underlying net profit of $5 million compared to $7.6 million for Q3 2015. The effective tax rate on adjusted net income was 23.1% versus 21.6% for Q3 2015. Year-to-date the effective rate is averaging close to 25%, very similar to last year..

Adjusted diluted EPS was, therefore, $0.19 for Q3 2016 compared to $0.28 for Q3 2015, slightly better than we suggested in the earnings estimate we made in early October and still providing significant cover against the dividend of $0.125 per quarter. .

Return on invested capital was 12% after-tax, this being consistent on the 12% achieved last year. Net debt was $105.2 million. This has increased since the start of the year's position by $10.5 million that includes the funding of the share buyback and increased dividend payouts. The net debt-to-EBITDA ratio remained respectable at 1.8x. .

Our year-to-date operating cash flow after taxation for 2016 was a positive $19.8 million. Net cash flow before financing was $10.3 million. Year-to-date for 2016, we have returned in cash $16 million to shareholders compared to $10 million year-to-date for 2015. .

Thank you. I will now hand you back to Brian to sum up. .

Thank you, Andy. Summarizing quarter 3, our cylinder business continues to do much better than prior year. The Elektron Division has been affected in North America by a dearth of defense-related orders and by some short-term market disruption. Our adjusted Q3 EPS is $0.01 above the updated guidance, but $0.09 below quarter 3 last year. .

Turning to the outlook on Slide 22. We must assume that the shortage of orders for various magnesium products will continue through the balance of the year. For quarter 4, it is likely to be similarly impacted to quarter 3 and is seasonally lower than quarter 3. So quarter 4's profit result is likely to be lower than the Q3 figure.

The combined effect leaves us looking at an adjusted EPS for the full year some 15% down on prior year. After a decent first half, this is very disappointing. But we do believe the factors affecting demand for our magnesium products to be largely temporary, and we can already see evidence of orders being placed for 2017 production.

We have repeatedly secured our position as the supplier of choice of certain military materials, including in the last few weeks on flameless heaters. Unfortunately, while that is a great position to be in when demand is high, it can be painful when military budgets are tight. .

The weakness of sterling does hurt our reported figures by reducing the translated dollar value of non-U.S. earnings. But in the medium term, a weaker sterling against the euro is potentially very beneficial to the profitability of our exports into mainland Europe.

We expect the current -- this benefit to continue for the balance of 2016, because of our near-term ForEx hedges. But we expect a significant net benefit in 2017 and beyond, if exchange rates stay roughly where they are. .

We now have several new products and sale initiatives that are expected to make a progressively meaningful contribution during 2017.

Overall, despite seeing a recent softening of demand in North America, and even if the first quarter order cover for magnesium products might not be fully restored, we feel that there are sufficient positives around to be confident of getting 2017 profitability back to the 2015 level..

Finally, you will have seen the announcement that I intend to retire in 2017. This is something that I have been thinking about for some time and first talked to the board about around the 2015 AGM. There is now a process in place to identify my replacement, and I am working with the Nominations Committee to identify my successor.

You may be sure that it is my firm intention that our profitability will be much improved by the time that I hand over the business. .

Thank you. And we will now take questions. .

[Operator Instructions] Your first question comes from the line of Phil Gibbs with KeyBanc. .

I had a question on the high-performance alloys market. I think you had made a mention that the business was up year-on-year. And I know a lot of goes into the helicopter markets.

How was that achieved in the third quarter amid that, call it, end-market weakness? Or are you starting to see some signs of stability in the helicopter market, excluding, you'll call it, this bankruptcy issue short term with Waman [ph]?.

Well, first of all, the comment was in relation to quarter 3. I'm not quite sure where they are year-to-date. We reported quarter 2 was a little bit up, and Q3 is a little bit up again, but Q1 was down. So not quite sure where the [indiscernible] is. We are seeing a little bit of pickup.

It's mainly coming out of European manufacturers rather than North American. We continue to see softness in the North American market. Generally speaking, I mean, the European market has been pretty flat for us for quite some time. And when we're talking about softness, it's mainly North American that we've seen relatively recently.

So we do think that the demand for the aerospace alloys has stabilized and is picking up a little bit in non-U.S. areas. But the U.S. still has a degree of recovery. The customer that went into Chapter 11 in the third quarter does take these aerospace alloys, but their move into Chapter 11 happened quite late in the quarter, in the middle of September.

So there wasn't really time for that to impact very much on sales. And it even may not impact in the fourth quarter. We just have to be careful of how we are trading with that business.

So we have to anticipate there will be some disruption, because we've obviously taken out a provision against the $1.2 million that they ordered at the point they went into Chapter 11, and we must be very careful to ensure that we don't add to that exposure. .

Okay. My follow-up here is on the chemical decontamination piece. I think you said it was down pretty materially year-on-year.

Can you give us a sense of the size of that business, one? And then two, why is that business being, call it, unusually impacted year-on-year? And what tends to drive that?.

Well, it's difficult to be sure. I mean, the Magtech business is -- the biggest revenue stream is the flameless heaters, but after that the chemical warfare detection and decontamination kits is the next biggest product line. And the situation there is that we've been told the orders are on their way.

In fact, we've been told the orders were less than 24 hours away, and at the very last minute, the orders have been canceled because the budget has been reallocated elsewhere. So we believe it to be budgetary tightness and people trying to juggle the military expenditures.

We don't think that it's indicative of an underlying lack of demand, but all of these products have clearly significant stocks in the system. They tend to use the stock and then occasionally replenish the stock. So they do have the ability to, for a while, run without significant production.

They also have some in-house capability to manufacture the end products, and we have been selling, during the course of this year, the active ingredients to their in-house facility. So we do get some of the business, but we don't necessarily get the added value. They have limited capacity.

To meet large volumes, then we have to come on stream, and we've been short of that degree of work in the recent past. We're not being told that there's any change in the underlying need.

And indeed, when you see various articles in the press about people like the ISIL building chemical warfare capability, you have to think that it would be a prudent expenditure for the military to be laying out. But right at the moment we've been struggling with lack of orders. We do still expect those orders to come through, just delayed.

And obviously, we are waiting at the moment to see if we've got order cover for quarter 1. .

Just following up, Brian. So just covering that few of those questions, Phil. Back to aerospace. We're probably flattish for the year, year-to-date now, having been improved in Q3.

And then on to the questions you just asked, whereas in the quarter, we're down on the looks of Magtech full range, both the chemical side and the MREs, year-to-date we are down on the MRE side, the meals side, but on the chemical side, we're more flat.

So it was down in the quarter, but actually year-to-date, it's still around where it was last year. .

And one of the issues here, Phil, is that we obviously manage the business to try and smooth the production. And if you take the MREs -- the same applies with decontamination products. We schedule a production to be as flat as we can in the expectation that orders will come through.

So if you take MREs, we've been producing MRE flameless heaters at a fairly flat rate through the first 8 months of the year. And then when the add-on that we've had every year for the last 15 years doesn't appear, all of a sudden, we're in a situation where we've overproduced against the annualized requirement.

So we're short of business for the remaining months of the year. When we reach the 1st of January, we have a new year with a new contract with a new minimum, and we will schedule production accordingly. And obviously we'll be a bit more circumspect in 2017 about the level of add-on that we anticipate.

There has been an informal indication that there will be an add-on next year, which we take to mean that the underlying usage rate is higher than the contractual minimum that they offer the new providers. But we're obviously a little bit more careful about not counting on too much of an add-on next year.

And so the first quarter will be up on the last few months of this year just because of those impacts. .

Your next question comes from the line of Jonathan Sacks with Stonehill Capital. .

I just have 2 small questions. The first was on your guidance. You said you have confidence that 2017 will be a significant uplift on 2016.

I'm just curious, when you said that, were you thinking in terms of sales, EBITDA, EPS or all of the above?.

We're focusing on EPS, because that's the figure that we -- that people are metering on. So yes, we're focusing on EPS. Obviously, underlying that, the operating profit, or the EBITDA, will have to move to facilitate that, and revenue just as -- whatever the revenue is, it's obviously very much down to the mix. So yes, EPS is the answer. .

Okay, great. Thank you. And then one other thing. I think in your press release, or news release, there was a mention that you sold $10 million of pensioner liabilities during the quarter.

Can you just explain what that transaction was?.

Yes. As you know, we've been trying to manage our way through our pension liabilities progressively over the years. And last year, we achieved really quite a big reduction in our U.K. liabilities with the change to the forecasting assumptions, and that actual application of inflation to pensions on payment.

But the other way that we're always looking to reduce the liabilities is by finding an insurance company that's willing to take on the liability in return for a lump sum.

And we found an opportunity in North America this year to sell $10 million worth of pension liabilities to an insurance company, actually for a very modest premium over the liability that we recognized on our balance sheet.

So of the payment that we made to the insurance company, $10 million came from the assets of the pension scheme and only $100,000 or thereabouts came from the company, as the premium that was required for them to take on that liability. So it was really an extraordinarily good opportunity to reduce the liabilities.

Now, that doesn't, of course, reduce the deficit as it happens, but does reduce the gross liabilities, and it does reduce the volatility going forward. .

[Operator Instructions] And your next question comes from the line of Phil Gibbs with KeyBanc. .

Andy, can you remind us how the pension works in terms of the discount rate adjustments? I think, under IFRS accounting, the discount rate get sets every year, mark-to-market every quarter. And let's say, through the balance of the year, you've got a 50 basis point increase in interest rates, 40 to 50 basis points.

Is that going to be a material assist to your liability calculation, if that unfolds?.

Okay. Phil, you're right. So under IFRS, you recalculate the deficit every quarter, and that means you use the latest discount rate per quarter, and you also apply the discount rate relevant to that country. So at the moment, we have quite a difference between the rates that we're applying to the U.S. liabilities to the rates we're applying to the U.K.

pension liabilities. That difference is something like 1.3%. And in fact, if you used the U.S. discount rates on the U.K. liabilities, which obviously you can't at the moment, you would virtually wipe the deficit out. There is such material difference between the bond yield rates used in the 2 countries. And the -- a 40, 50 basis points change in the U.K.

discount rate, if it happens, because it's down to the U.K. bond yields, would be a very material change in the liabilities. Off the top of my head, you would be looking at a $30 million, $40 million potential change, depending, of course, on other factors.

If that is happening at the same time as active values go up or down, you clearly can have other factors. But discount rates moving at the level you said would have a material impact as, sadly, they've had in this last quarter going the opposite direction. .

Just one additional thing on that. The pension trustees have invested in some financial instruments, which do reduce the volatility of interest rate movements. It only protects the scheme by about 30% of liabilities. So you don't get the full negative when interest rates fall; you don't get the full benefit when they go up.

But certainly, if you reflect on what actually hit us in quarter 3, then the new rate should make a very material improvement on that. .

Okay. And then question on your $4 million net benefit, assuming that the sterling remains in and around current levels.

Are you are assuming in that, that you pick up any volume in next year from being in a more competitive cost position in the U.K.? Or are you just assuming that relative to whatever your current, call it, existing opportunities are in the marketplace that, that would be the benefit?.

Our assumption, really, for 2017 is that we get a benefit to the margin of what we're already selling. It's -- the situation is really too volatile for us to count on the exchange rate being perpetuated such that we would materially alter the pricing of our products.

Now, during the course of next year, if the exchange rate proves to be stable, we will progressively start to take some advantage of that on -- particularly on specific tenders, where we can see the opportunity to grow volume using the bigger margin available to us.

But the primary impact is just that our existing level of sales will enjoy a better margin, and even while the profitability made outside of the U.S. gets translated back into dollars at a less favorable rate, the overall benefit is a very positive one because we don't really buy very much in euros. We export a lot out of the U.K.

in euros, and the net benefit to revenue and profitability is quite significant with the 18%-or-so devaluation that we have seen since the end of June. .

Again, Phil, on new business rather than ongoing business, we are now more competitive operating out of the U.K. As you know, a number of the key drivers for growth over the next 2 to 3 years are with European customers, as mentioned one of them by name. And you know that in the catalyst business that we have key customers based in Europe as well. .

Over time, yes, it could well turn into volume, but in quoting these numbers at you, we're just assuming the current rate of business. .

And I just have one last question on some of these new products. I think you mentioned at the stent piece of the business you actually received your first royalty stream. Probably modest, but at least somewhat encouraging that, that's -- you're finally being reflected in the results in terms of commercialization efforts.

Can you give us an idea about how incremental you think it could be to 2017? And then secondarily, the Superform opportunity in the body panels for some of these higher-end automobiles, question on that is, what could be the revenue opportunity or market opportunity, and whether or not you're a sole source to those applications?.

Okay. Well, talking about the Superform application, first of all. The forecast volumes under the new contracts are really quite exciting. And provided that they happen in the way that's been indicated, we should see an increase in the revenues out of that business. It is something which is scheduled to impact the second half of next year.

That's when the production is scheduled to start. So we won't see the benefit until then. We get benefit from selling tooling, and then there's a gap until the start of production. So we would expect to see an uplift in the results from our Superform business in the second half of next year.

And certainly, from a profitability point of view, I would expect that to add at least $1 million to the operating profit in 2017, obviously with a higher run rate as you go into 2018. That's something that we've been looking to do to increase the run rate of Superform for some time. It's basically been capacity-constrained.

But with the work that we've done on reducing cycle times and the investments that we're putting in to aid its capacity, we do think that, that is entirely feasible. The new business which we have won is scheduled to deliver that sort of scale of improvement.

In the nature of that industry and of our business, we're not usually selling a complete set of panel work for a vehicle. We sell panels, or door assemblies, in this case, for Ferrari based on the particular design on whether it fits our process. So if there is any particularly deep-drawn [ph] aspects, then that favors us.

The Ferrari-type volumes are very much in our sweet spot. The full [ph] benefit, of course, is that Ferrari tend to be very, very accurate in terms of the number of cars that they sell. Because they have a very large order book and are very disciplined about chiming [ph] their model base.

So we've got a high degree of confidence that, that will happen next year. Albeit that in the automotive sector it's always possible for things to slip by a few months, but we're very confident that it will happen. Sadly, since I've taken so long to answer that part of the question, I forgot what the first part was. .

Stent. .

The stent, yes. The statement that we got -- I mean, it was really a very big moment for us. But if you'll imagine, in the launch phase, it's pretty small beer. But it's important from our point of view, because it's the start of a revenue stream, of a royalty stream, which obviously in its nature comes in at 100% margin.

And we're obviously entirely dependent on how successful BIOTRONIK are with that product. But while we are not medics, the early indications seem extremely promising. We have results seem to be very good to us. And so I'd be very disappointed if that didn't turn into a material revenue stream over the next couple of years.

I do expect it to be a significant positive benefit in 2017. The statement was important to us because it sets down there in black and white what the financial arrangements are between us. And everything was entirely in line with what we expected. It's just nice to get that one under our belt. .

So just to reiterate on that, Brian, you are anticipating that the stent business will be nice incremental contributor to next year?.

Yes, when I said there were a number of things now in the market or in the schedule for 2017, the stent was certainly in there, as indeed is the Superform increasing capacity, and a couple of other medical products that we have -- have had a long gestation period. So I do think that in 2017, we should start to see in aggregate and progressive event. .

At this time, there are no further questions in queue. I will now turn the conference back to Mr. Brian Purves for closing remarks. .

This concludes today's conference call. You may now disconnect..