Good day, ladies and gentlemen. And welcome to the Q3 2014 Brady Corporation Earnings Conference Call. My name is Mitchell, and I will be your operator today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I would now like to hand the call over to Mr. Aaron Pearce, Director of Investor Relations. Please go ahead, sir.

Thank you, Mitchell. Good morning. And welcome to the Brady Corporation's fiscal 2014 third quarter earnings conference call. During the call this morning, you'll hear from Tom Felmer, Brady's CFO and Interim CEO and President. You will also hear from Matt Williamson, President of Identification Solutions. After the prepared remarks, we'll open up the call to questions. The slides for this morning's call are located on our website at www.bradycorp.com. The prepared remarks will begin on slide #3. Please note that during this call, we may make comments about forward-looking information. Words such as expect, believe, forecast and anticipate are a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. Risk factors were noted in our news release this morning and in Brady's fiscal 2013 Form 10-K, which was filed with the SEC in September of 2013. Also, please note that this teleconference is copyrighted by Brady Corporation and may not be rebroadcast without the consent of Brady. We will be recording this call and broadcasting it on the Internet. As such, your participation in the Q&A session will constitute your consent to being recorded. Thank you. I'll now turn the call over to Tom Felmer. Tom?

Good morning and thank you for joining us. We have made significant progress in many areas in the third quarter. We returned to organic growth this quarter, posting organic growth of 2.5%. We launched a number of exciting new products including our newest handheld printer, the BMP21-PLUS, which we expect to be another successful printing system for us. We signed an agreement with Tego Incorporated, a leader in next-generation RFID solutions to jointly develop a smart RFID label, flexible in design intended for high-performance in harsh environments. During the quarter we repurchased approximately 893,000 shares of Brady’s stock at an average price of $26.14 per share and just after the quarter end on May 1st, we received $53 million of cash as we completed the first step of our divestiture of our Die-Cut business. Our third quarter financial results from continuing operations showed significant improvements over our second quarter. Organic sales growth was 2.5% and it is worth noting that we had a relatively weak February and first half of March especially in the U.S. but gained momentum as we progressed through the quarter. Organic sales grew by 4.8% in our Identification Solutions segment and declined by 1.9% in Workplace Safety. EPS from continuing operations excluding restructuring charges finished at $0.43 per share. We are making progress with our plans to return both of Brady’s segments to profitable organic sales growth and we are forecasting that both Identification Solutions and Workplace Safety will post organic sales growth in the fourth quarter. Our focus on execution and providing the best possible customer experience remains unwavering. In previous quarters we highlighted five areas of focus for fiscal 2014. First, we are focused on returning our Workplace Safety business to organic growth. We are expanding our multi-channel direct marketing model with an increased…

Thank you, Tom. Let’s turn to slide four for more detail on our third quarter financial results. Overall, sales from continuing operations were up 2.3% to $309.6 million in the quarter. This is made up of 2.5% organic sales increase and a 0.2% decline from foreign currency translation. PDC has now reached its one-year anniversary with Brady and it’s now fully included in our organic sales figures. PDC had approximately 1% organic sales growth in the quarter. Our third quarter gross profit margin finished at 50.1%, down from the 52.7% gross profit margin in last year's third quarter, but up sequentially from our second quarter gross profit margin of 48.9%. SG&A expense was 37.7% of sales in the third quarter, compared to 37.0% of sales in last year's third quarter. EPS from continuing operations excluding restructuring charges was $0.43 in the third quarter, compared to non-GAAP EPS of $0.55 in last year's third quarter. The tax rate on continuing operations, net of restructuring charges was approximately 18.5% in the third quarter of fiscal 2014, compared to 21.7% in last year's third quarter. As we mentioned in previous conference calls, we were expecting a lower tax rate in the second half of this fiscal year due to the lapsing of statute of limitations in certain geographies and the associated reversal of certain tax reserves. The tax rate this quarter was consistent with our expectations and we continue to expect a full year income tax rate in the mid-20% range. Slide #5 is our guidance for the fourth quarter of fiscal 2014. We are expecting earnings per diluted share exclusive of non-routine items such as restructuring charges to range from $0.45 to $0.55 during the fourth quarter. Included in our fourth quarter guidance is low single-digit organic sales growth from continuing operations.…

Thanks, Aaron, and good morning, everyone. Before getting into our quarterly results, let me share few excited new innovative products, some of which are located on slide 11. We launched our next-generation portable label and wire identification printer the BMP21-PLUS. This printer is designed to be a super durable tool with software specific for the electrical, datacom and general industrial applications. This versatile printer has been well-received by our distributor partners and end-users alike and is the second printer launched to this market this year, the other being the BMP41. This new printer is a significant improvement over our popular BMP21 and we expect this to be one of our best-selling units. We are also very excited about a new version of the 21-PLUS specific to the laboratory market. Additionally, we are optimistic about a new printer called TrustSense launched in our PDC business. This is a wireless printer for patient ID wristband and labels, it’s a complete mobility to help improve patient safety at the point of care and made electronic medical record requirements. Lastly, our people ID business introduced new access control software called Rack Armour, launching us into a new market for providing security for computer server access. Earlier this year, we also entered two potentially significant long-term relationships. First, we entered into an agreement with Thin Film Electronics ASA. Thin Film has established itself as a leader in commercializing integrated printed electronic systems. We are working with Thin Film to bring our customers these breakthrough innovations. Our initial work with Thin Film is focusing on electronic timing and sensing for applications, electronic sensing and timing applications. This technology will complement our existing industry-leading products and applications such as visitor and patient management. Dynamic intelligent identification has the potential to be an important part of our product…

Thanks, Matt. Please turn to slide 13 for the Workplace Safety financial results. Sales decreased by a total of 1.8% to $203.1 million in the third quarter. Foreign currency translation increased revenues by one tenth or 0.1% and organic sales declined 1.9%. Although organic sales were down versus the prior year, this quarter sales result was a significant improvement over previous quarters, as our rate of decline substantially improved and we exited the quarter on a positive note with slight organic sales -- slight organic sales per day growth in April. Looking deeper at our results, Europe, which makes up approximately 50% of total Workplace Safety sales, experienced low single-digit organic sales growth in the quarter, improving from a 5% decline in the second quarter. The substantial improvement was driven by increases in new customer creation and order volumes, as the positive trends that we started to see last quarter continued into Q3, helping fuel our increased sales volumes. Similar to our IDS business, our WPS business in the U.S. had a sluggish start to the quarter. February in the first half of March were week, followed by improving order patterns in the last six weeks of the quarter ended April 30th. Overall, our America WPS business still finished with a mid-single-digit organic sales decline, but the trend coming out of the quarter was positive. Our Australian business also experienced mid-single-digit organic sales declines. While our Australian business serves many diverse industries, we have a higher concentration of manufacturing, non-residential construction, and, most importantly, mining, all of which struggled in the quarter. Our cost structure was adjusted in prior quarters and our teams are focused on numerous initiatives to drive top and bottomline growth in future quarters. Although this business has struggled over the last eight quarters, we believe that…

(Operator Instructions) The first question we have comes from the line of Charlie Brady from BMO Capital Markets. Please proceed.

Hi, guys. This is actually Patrick Wu standing in for Charlie. I just wanted to focus on the WPS side very quickly. You mentioned the investments just now. I was wondering how much are you guys looking at in terms of, can you just quantify the investments and sort of over what time period, and when do you expect to realize some of these investments? And what kind of returns are you guys expecting from that?

Thanks for the question, Patrick. We haven’t quantified the investments. We did see that in the quarter and throughout much of the year, our selling expense has been -- we have had increased selling expenses in WPS and this has been primarily in our digital efforts. So you can see it through those lines.

Okay.

And we expect those to continue, the digital expense, a big piece of that right now is tied to migrating to a common platform. We talked we have maybe 30 different platforms that our WPS business operates on today much a bit through acquired businesses and so forth. And we are working to get down to a common platform and we expect that migration to take -- to continue at least through the end of F’15.

Got you. Maybe can we drill down a little bit more on how much you guys are expecting for the catalog advertising spend to increase and sort of what kind of impacts it may have on margins as well?

I couldn’t understand. Could you repeat the question please?

Yes, sorry. Can you possibly quantify what the catalog advertising spend would be increasing by in terms of what you guys are expecting?

Patrick I can answer that actually. If you compare our catalog advertising in Q3 of F'13 to Q3 of this year, we have increased our catalog advertising by about $1.5 million and we would expect some of that to continue into the future.

Okay. Staying here for one second, you guys mentioned the price adjustments as well as the mix sort of having contribution of the impact on the margin. Can you quantify what each of those two might be so we can get better clarity on that?

Yes. I mean, we haven’t gone into quantifying the price impact as we’ve gone through the year. Clearly, you saw the significant degradation in margins and the business that we talked to. A big piece of that is likely tied to the pricing initiative. And we talked about modifying a value proposition. We started making some adjustments as we ended Q3 and we will continue to monitor those and make adjustments throughout Q4 and as we enter F'15.

Great. Just hopefully last one, if I could just squeeze last one more in there. Earlier in the year you guys mentioned that WPS will be up year-over-year in the second half versus the previous year. Knowing what you guys know about Q4, do you guys still expect that to be the case?

Yes. Patrick actually at the I guess in our second quarter conference call we changed that and basically stated that we will be up in Q4, not the full year, I mean sorry not the second half of the year. And as Tom articulated, we still anticipate being up in Q4.

Okay. Thanks. That's all I have for now. Thank you.

Thanks, Patrick.

The next question we have comes from the line of Jason Ursaner from CJS Securities. Please proceed.

Good morning. This is actually Jack O'Brien calling in for Jason. I've got a couple of questions. First, in regard to the WPS segment I was just wondering how performance there compared with your internal expectations, or if there's going to be -- if you guys could elaborate the changes in the overall strategy in terms of focus or magnitude of internal investment.

I guess as we came out of Q2 even we’ve talked about being able to deliver growth in Q4 and I would say we are still on track with that. We didn’t talk specifically about our expectations for Q3, but as we saw business improve throughout the quarter, I think we did comment that on a sales per day basis, the WPS actually grew in the last month of Q3. So that would suggest that we are pretty much right on track with what we had anticipated.

Okay. And moving over to the IDS segment, can you guys talk about how PDC performed within the context of that division?

Overall, of course the sales increase was about 1% in total and the strength of the business was overall growth internationally, that was the highlight with lower performance in the leisure and entertainment part of the business. PDC is primarily in the healthcare business. There is also a nice piece of business that we have for patron identification in leisure and entertainment environments. And right now, we’re being hurt with our accounts there where due to some inclement weather last summer, they maintained some inventory. So the types of sales that we expected to kick off the new season for those sorts of events is lower than we anticipated.

Okay. Thanks. And then finally, I know this may be a little bit difficult to comment on but I was wondering if there is any update on the CEO decision from the Board. If there is a timeline in mind of any sort or anything -- any color you guys can give on that?

The process is still moving forward and there is no additional news.

Okay. Thank you very much for your time.

Thank you.

Thank you. The next question we have comes from Joe Mondillo from Sidoti & Co. Please go ahead. Joe Mondillo - Sidoti & Co.: Hi guys. How are you doing?

Great. Joe, how are you? Joe Mondillo - Sidoti & Co.: Good. Thanks. So I hopped on late. I was just wondering quickly, could you update us on the closing consolidating facilities and what the benefits that you are expecting there?

The process is moving forward. We talked about earlier in the, I think it would have been second quarter that we’re slowing down the execution. The entire plan is still intact. But while we had intended for much of it to be done this year, we moved a portion of that into F ‘15. So the total savings that we announced at the time is still intact, it’s just that the timeframe is pushed out. Joe Mondillo - Sidoti & Co.: And that was -- at the time, it was $20 million I believe in ‘15 but that’s going to be pushed out. So is that the latest update?

It was… Joe Mondillo - Sidoti & Co.: $10 million, right?

Yes, exactly, $10 million and yes that has been pushed out. This year, we’re actually incurring costs. We had incurred about $2 million through the first -- through the second quarter. We anticipate similar amounts in the second half of the year. So we’ll start to get benefits next year. But to Tom’s point, we have had some delays. So we won’t -- we certainly won’t see the whole $10 million of savings next year. Joe Mondillo - Sidoti & Co.: Okay. And then in terms, so it sounds like you're bringing on a lot of salespeople on both sides of the businesses. You're also bringing on a lot of additional cost catalog and e-commerce on the WPS side of the business. I'm just wondering on a cost basis looking at the third quarter, are we at a run rate going forward or is there additional costs coming online in the fourth quarter to think about?

Speaking for IDS, in the third quarter, we had approximately $500,000 in cost due to the salespeople that we’ve added and that number is ramping up. We’ve added a number of people here over the course of the quarter. And so it will be a little higher number as we go into the fourth quarter. It should be more representative than what we would expect going into next year. I’d have to get you the fourth quarter number though. Joe Mondillo - Sidoti & Co.: Okay. And then WPS, how does that sort of cost situation look compared to the third quarter?

Again, we’ll continue to invest in catalogs and in the digital investment as I had mentioned earlier. The cost typically due come down in Q4 due to seasonality. We may have less catalogs particularly in Europe as we get lower response rates in their summer period. So we do expect them to come down a little bit in Q4. Joe Mondillo - Sidoti & Co.: How about going into fiscal ‘15? Are we still sort of implementing additional costs or is it -- are we sort of consistent with the plan right now?

I would say we are on a consistent rate now. As you look at it, the additional cost that we had is really the incremental investments that we have consolidating our website. The digital investments that you see -- or that you saw as we went throughout this year. But we do not -- we do not see a ramp up in spend there next year. Joe Mondillo - Sidoti & Co.: Okay. On the administrative cost line, I don't know if you look at it like that or if you just look at it as SG&A as the total. But the administrative line was consistent with the second quarter around $29 million. Is that -- looking at that cost base, is that consistent with what we are expecting going forward?

Yeah. It’s certainly in the ballpark, Joe. And by the way, we do look at it that way. We cut the data every way you could possibly imagine. Joe Mondillo - Sidoti & Co.: Okay.

So yes, that is relatively consistent in the $29 million range or so. Joe Mondillo - Sidoti & Co.: Okay. So I guess just lastly in terms of the guidance, the $0.45 to $0.55 for the fourth quarter. So you're bringing on a little additional cost in IDS. I guess maybe WPS is flat to maybe slightly down because of seasonality at catalogs. But you're saying sort of WPS margin, don't expect a ton of improvement in the fourth quarter versus the third. And we're only sort of looking for sort of modest improvement on the top line. I'm just trying to reconcile how you get to the pretty good improvement on the earnings from the third quarter to the fourth quarter and do you have any share repurchases baked in?

I can certainly answer the last part as far as share repurchases. And the answer is no we generally do not bake those into our guidance when we look at guidance for such a short period out. And frankly share repurchases wouldn’t have a huge impact anyway. So we typically use a constant share account in our guidance. And then as it relates to our forecast for the fourth quarter and our guidance, basically everything you’ve just articulated is consistent with what we’ve just said. And when you roll it out, it falls in that range. Joe Mondillo - Sidoti & Co.: Okay. All right. I'll hop back in queue. Thanks.

Thank you.

The next question we have comes from the line of Mig Dobre from Robert Baird. Please go ahead. Your lines is now open.

This is Joe Grabowski for Mig this morning.

Hi.

Congratulations on a solid quarter. Maybe starting out with Workplace Safety, you guys have talked the last several quarters about attracting new customers. And I was just wondering if you had a sense, sort of, the catalyst for the new customers, is it the enhanced digital capabilities? Is it the increased sales force? Is it the expanded product offering? Just maybe all of the above. What do you think is bringing new customers to the platform?

In Workplace Safety, we haven’t added a lot of new salespeople. It’s been primarily driven over the internet and new products contributed somewhat to that. But I think it’s really the enhanced efforts that we’re putting into our digital efforts.

Okay. And do you have any metrics as far as sort of repeat purchases from the new customers, profitability from the new customers, just sort of how sticky they are?

In the quarter, we monitor that very closely. We don’t -- we never talked about it publicly but right now, one of the things that we have said is that as we’ve evolved with our digital efforts is they have not been as sticky as catalog customers. And probably the reason that we ramped up our catalog spend again is we still believe that we can advertise profitably through a catalog and continue to build and sustain that business and then look at the Internet as additive to that.

Okay. And the increase in the catalog investment, when does that sort of stabilize maybe sequentially or stabilize year-over-year? When do you kind of get to a back to steady state on that?

Yeah. I think Q3 is largely in line with what our expectations are now. I think a little bit -- as we go into the first half of Q4, there might be a little bit of an uptick we drop off at the end of the quarter. But we’re maturely in line with what our expectations would be.

Okay, great. And then switching to ID solutions, I just had a question. I guess Zebra Technologies recently announced the acquisition of Motorola's scanner business. I was just wondering if you guys had a sense for how this combination was going to affect the competitive dynamics of the business?

The competitive dynamics of Zebra?

Yeah, right, Zebra as combined with Motorola's scanner business?

Right. Yeah, it’s a good question. They have been primarily focused on printing systems and labeling associated with those printing systems and some RFID systems. And this completely launches them into a full provider of auto ID solutions. And so they will be more of a force with regard to providing barcode and RFID solutions to end users and into their channels. So they’ll be able to take the mobile technologies and reading technologies that they get with Motorola and go with much a broader product line into their channel partners and into their end users. So it would be interesting to see how that plays out with their channel partners. And certainly those are clear indications they wanted to offer a broader solution into the market place.

Okay. Now, that’s very helpful, thank you. I just have a couple more quick ones. Does incentive comp continue to be a negative headwind in the fourth quarter, kind of, versus last year?

Yeah, not near to the level we saw in the third quarter.

Okay.

It should actually be relatively consistent.

Okay.

We did have some incentive complex during Q4.

Okay. All right.

Big issue we had in the third quarter was a reversal last year. Account this year has been pretty evenly spread throughout the year.

Okay, all right. And then last one for me. Any sense for how much the gross and net break proceeds from the second half of the die-cut sale are going to be?

We announced that the total purchase price was about $60 million. We received the majority of that already. So there is a not lot that remains.

Okay. All right. Great. Thanks guys. Good luck in the fourth quarter.

Thanks.

The next question we have comes from the line of Keith Housum from Northcoast Research. Please go ahead.

Great. Thanks guys. I appreciate you taking the call. Can you guys remind me what the product mix is of the proprietary versus third-party products in the WPS segment is?

Yeah. I don’t know that we’ve ever talked about proprietary versus non-proprietary. We have about the mix of make versus buy is about 50% each. So there are higher mix of make and buy in the U.S. and Europe. It’s the inverse but on average it’s about half is made by Brady and half is sourced. So that’s what we’ve talked about in the past.

Okay. And as you are adding new SKUs, is there -- are you leaning more toward the make versus buy?

In the first half of the year, a lot of the SKUs that we added and the vast majority of them were buy items. And as we talked in the second quarter, we are converting that too. And as we go forward, we trying to get that balance back and it will be adding many more make products going forward. And trying to find ways that we can customize and personalize the products that we do have rather than make or buy. So we’re increasing the amount of customize and proprietary differentiated elements -- whether they be make or buy going forward.

Got you. And then as you add new SKUs, is there a ramp-up period from which they start having an impact on sales or are they impactful perhaps immediately?

No, they ramp up and they usually hit a peak in about their third year. So it's a steady ramp. You will see a pickup in year one and then continue to accelerate in year two and about the third year they seem to plateau.

Got it, got it. And then changing gears maybe slightly, this quarter you guys obviously repurchased shares for the first time in several quarters. What's the thought process which we think about in terms of share repurchases going forward?

Our position has always been to repurchase units. If we look at uses of cash and we talked about its continued increases in dividends and we've done that through -- since we went public 20 consecutive years. So we’ll continue to do that. From a share repurchase, we went opportunistic when we think there’s a good value. And in a quarter, we saw an opportunity there. Now we thought that shares were a good value for us. We made that purchase. And then acquisitions continue to be part of our strategy but we have said throughout the year that our focus has been on integrating PDC and getting that fully operational within the company before we make any material new additions from that through acquisition.

Okay. And final question for you. You guys use a term in the past, I think, dynamic pricing. And trying to relate that to your comment, I think you had some changes to your pricing in the third quarter. When I think about the dynamic pricing, I think the fact that they change more often on the web. How should we think about pricing in the WPS segment? Is that what you're talking about?

Yeah. That is what we’re doing. And as we look at different segments, we’re building capabilities so that we can have more directed pricing for different segments that have different characteristics. And we may not be at a point where we’re changing prices hourly. We’re certainly testing more pricing both online and offline and with different segments with their different buying capabilities.

Do you think it will ever come to a point where you'll be adjusting prices on a daily or a regular basis or -- and if so, how long do we see that?

Yeah, clearly you have that ability online. I don’t think that we are the same, quite a same sense that you really might have today that you might seen in a consumer business. But with some of the tools that we’re putting in place, we will have the ability to do that on our new platforms.

Okay. Thanks.

With the breadth of our product offering, I don’t know that we’ll be at a point that we will be monitoring them on a daily basis for a while here.

Okay. Thank you. I appreciate it.

The last question, we have, comes from the line of Joe Mondillo from Sidoti & Co. Please proceed. Joe Mondillo - Sidoti & Co.: Hi, guys. I just have a couple of follow-up questions, and they are sort of related to the previous questions. First off, in terms of pricing at WPS, have we seen the end, in the near-term at least, of pricing being a headwind? Was pricing a headwind in the third quarter, do we expect it to be in the fourth quarter? Where are we sort of on the comfort level of pricing at the moment?

I think we have seen -- the biggest headwinds are behind us. Joe Mondillo - Sidoti & Co.: Okay.

We’ve talked about making adjustments -- at the second quarter call, we’ve been making them and we should see improvements from pricing going forward. Joe Mondillo - Sidoti & Co.: So you expect some upside in pricing, or a slowdown from the huge expense that we've seen?

I think as we’ve seen, we’ll see sales. We already said that we expect sales to improve and pricing maybe a part of that growth that we’ve seen. Joe Mondillo - Sidoti & Co.: Okay. And then in terms of differentiation of the product, that's I think, one of your four basic strategies at WPS. What kind of vision do you have in terms of timeline? I know you've talked about 15,000 SKUs. Where are we in terms of that 15,000? And what is the sort of the vision in terms of this timeline of really differentiating it to finally start making a difference in profitability and topline demand?

We’ve said that we added about 9,000 SKUs here today. So, we’ve added quite a few that they’ve been. I also mentioned most of those products have been resale items and there have been margins that are below our average. As we go into the third quarter, we’ve changed our focus. And as we start launching products, really with the catalogs and the cycle that go into F ’15, we’ll see more proprietary products, more make products that should have -- it should impact the sales but should also improve profitability compared to products that we added in the first half of this year. Joe Mondillo - Sidoti & Co.: Okay. So is this sort of -- you think this is like, sort of a -- I don't know, 24 to 30 month sort of strategy? We’ve got 9000 and the 15,000 SKUs already out there. You’re going to implement the higher-margin self manufactured SKUs in the fourth and first quarter probably and then as they gain traction for the next 12 months beyond that. So is that sort of the timeline, sort of the benefits of this, I guess the big movements of the benefits?

I mean, we see some impact already from the products we have in the first half. And I don’t expect any step change in any one quarter. It will add to the growth as we start going forward. The products that we added in the first half of this year had more of an impact on -- you see the revenue, the margin is below our average, so you see that in our results. And the products that we add going forward should be more in line with our historical margin. So we’ll see both an impact on the top line and more of an impact on the bottom time that we saw from products we added in the first half. Joe Mondillo - Sidoti & Co.: All right, great. Thanks a lot.

We have one more question and that comes from the line of Charlie Brady from BMO Capital Markets. Please proceed.

Hi, guys. This is actually Patrick again. I just wanted to get your expectations for gross margins and sort of SG&A as a percentage of sales in the fourth quarter?

Well, we mentioned the G&A amount from a previous question. We typically don’t get down into that level of detail if you will. But as you heard Matt in the IDS business anticipates some increased selling expenses as a result of new sales personnel that have been added and will be added. And as Tom mentioned on the selling line in Workplace Safety, it’s primarily due to timing of catalogs that we would anticipate those costs to be down slightly in Q4 versus Q3. And beyond that, we haven't given much in the way of guidance on our gross profit margin.

Okay. Do you expect it to be maybe look at it another way to have sequential or even year-over-year improvement over the previous year and…

We certainly would not anticipate year-over-year improvement, particularly because of -- well because of some of the WPS headwinds that Tom mentioned as well as the facility consolidation costs. We do still anticipate that we will have some costs in Q4 versus benefits. So we would still continue to expect a year-on-year decline in gross profit margin.

Okay. Thanks.

Thank you.

At this time, I'd like to turn the call over to Aaron Pearce for closing remarks.

Thank you for your participation today. As a reminder, the audio and slides from this morning's call are also available on our website at www.bradycorp.com. The replay of this conference call will be available via the phone beginning at 11:30 a.m. Central Time today, May 22nd. The phone number to access the call is 1-888-286-8010 or 617-801-6888, and the passcode is 48693554. As always, if you have questions, please call us. Thanks and have a nice day. Mitchell, could you please disconnect the call?