Greetings and welcome to the Columbus McKinnon Corporation First Quarter Fiscal Year 2018 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Deborah Pawlowski, Investor Relations for Columbus McKinnon Incorporation. Thank you, Ms. Pawlowski. You may begin.

Thanks, Dough, and good morning, everyone. We certainly appreciate your time today and your interest in Columbus McKinnon. On the call with me are Mark Morelli, President and CEO; and Greg Rustowicz, our Chief Financial Officer. You should have a copy of our first quarter fiscal 2018 financial results that were released earlier this morning, and if not, you can access those at our website, cmworks.com. You will also find there the slides that are accompanying today's conversation. If you’ll turn to Slide 2 of the slide deck, I will review the Safe Harbor statement. As you’re aware, we may make some forward-looking statements during the formal discussions as well as during the Q&A session. These statements apply to future events, which are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with the Securities and Exchange Commission. These documents can be found on our website or at sec.gov. During today’s call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliation of the non-GAAP measures to comparable GAAP measures in the tables that accompany today’s release and slides, for your information. So with that, please turn to Slide 3, and I’ll turn over to Mark to begin. Mark?

Thank you, Deb. We had a great quarter indicative of the strength and potential of our franchise. Since our last call, we've been making progress on our near-term priorities and we’re gain momentum with our efforts. I will start by discussion our implementation of our new operating system as we credit a new cadence in the organization. By putting structure and discipline around a regular review process and deep deployment in the organization, we've clarified our target and developed roadmaps to achieve our goals. This structure reflects more effective prioritization, better decision making and improved execution. Providing clear targets and expectations is also driving accountability, and our team has developed clarity around our process. The new operating system provides for more frequent checkpoints along the past so we can monitor and manage both risk and our opportunities. I'm excited about how well the team has embraced this new approach. They are fully engage in the process and are really putting their back into it. I'm impressed with the professionalism of the team, and I believe our approach is sustainable. I'm also encouraged that we are making significant progress improving the financials, yet the company has a significant runway of opportunities in front of us. Secondly, as a company, we're accelerating evolutional of Columbus Mckinnon from a legacy industrial company into an industrial technology leader. In our quarterly results, you can see that our businesses, with more highly engineered products, perform the best. Recent acquisitions, such as STAHL and Magnetek, increased our product portfolio of engineered products and solutions. For example, STAHL has a leading wire rope hoist design that is highly featured and customizable with important options, such as explosion protection. These are also very cost-effective designs contributing to stronger gross margins. Magnetek's growth is driven by penetration in its…

Thank you, Mark, and good morning, everyone. Turning to Slide 5, consolidated sales in the first quarter of $203.7 million were up 36.7% from the prior year. STAHL added $42.7 million of sales in the quarter, which represented 28.7% of the quarter’s sales growth. We also grew organically $12 million, or 8%, despite a slight foreign currency headwind of minus 60 basis points. Sales volume was up $12.3 million or 8.2 % and pricing was up by $600,000 or 40 basis points. We expect positive pricing for the year to be approximately 50 basis points, as certain promotions abandoned and we have also announced another price increase in the US, effective in July, on select products. Overall, we saw a solid organic growth in the quarter and STAHL was the strong contributor. We saw markets improved in the US, Latin America and APAC, but EMEA and Canada were weak. For the quarter, US sales were up $16.8 million or 17.9% compared with the year-ago period. STAHL contributed $3.6 million to our US sales. Sales outside of the US were up $37.9 million or 68.8%. STAHL contributed $39.1 million to our international sales. Both Latin America and APAC saw a double-digit organic growth, while organic sales in EMEA were down in the quarter as a result of three less shipping days in Germany, the company's largest European market, than anticipated weakness in the UK. Sales in Canada were also down, but we are seeing signs that the business environment is improving with orders improving in Canada in June and July. On Slide 6, our first quarter gross profit increased by $21.3 million or 44.3%. Adjusted gross profit was $69.5 million, an increase of $31.4 million or 44.6% compared to the prior year. Our adjusted gross margin was 34.1% compared to 32.2%…

Thanks, Greg. Turning to Page 13, I'll provide some considerations as we look at fiscal 2018. We had strong year-over-year order growth with double-digit improvements in all regions. Sequentially, the fourth quarter was tough to match for our US market, and typically, we do expect that the first quarter is softer than the fourth. Encouragingly, orders in Europe picked up for engineered products. Sequentially, backlog was up 12.2%, driven by a large increase at STAHL from a nearly 22% increase in longer-term product orders. Year-over-year, excluding STAHL, backlog was up almost 14%. As we look at fiscal 2018, with the strong start and solid backlog, we're expecting solid results for the year. Our second quarter revenue, we believe, will be comparable with this quarter, although operating income will be negatively impacted by sales mix. As a reminder, our third quarter is seasonally our weakest quarter, and we would expect the fourth quarter to rebound from there. However, it's difficult to tell how much Q4 will uptick, given the uncertainty on sustainability of this industrial recovery. Turning to Slide 14, let me update you on the progress we are making with regard to our near-term priorities. The STAHL integration is on track to provide $5 million in synergies in fiscal 2018. There are several supply chain initiatives that we will expect will support that goal along with other action items. Among many actions in progress, we’re busy carving the US operations out of Kone’s Springfield, Illinois facility under an accelerated deadline that Kone requested. STAHL was also actively bidding on projects it could not under previous ownership, and we are excited about their competitive positioning. Our tighter team for leveraging Magnetek technology has analyzed its market research. We determine that within our North American tower hoist product line, roughly three quarters…

Thank you. [Operator Instructions] Our first question comes from the line of Mike Shlisky from Seaport Global Securities. Please proceed with your question.

Good morning, guys. So it appears as you increased your SG&A guidance on a dollar basis as that’s mainly based on higher incentive comp. So I feel you had some kind of plan for that at the start of the year, so this increased guidance mean that that business is now tracking above your first expectations? And I also wanted to ask as a quick follow-up to that. Even though SG&A was actually below $46 million in Q1, does that include an accrual for higher incentive comp? And what was the reason why the rest of the business may have been low on the SG&A side in the quarter?

Hey, Mike. This is Greg. So you are correct that it is due to higher incentive cost that we expect for the year and it is above what our budgeted levels are from a performance perspective, and the first quarter results did include a pro rata share of the high incentive cost.

So it does suggest that you feel better now rather than you felt last quarter when you put out your original SG&A guidance?

Yeah, I would definitely say that we have pretty strong quarter.

Okay. I also wanted to perhaps turn to STAHL for a second. Despite this accretion you got in STAHL in the quarter, did that meet your expectations or perhaps exceed them? And is this the right quarterly run rate to look at going forward? Or are there any expected seasonal you want to seize after the rest of the fiscal year here?

Yes. Mike, last time, on the last call we talked about we expected accretion of $0.12 a share for the full year. So having the first quarter come in at $0.05 accretion would indicate that we would expect accretion for the full year to be in the $0.15 to $0.20 range, so up from the $0.12 per share guidance that we gave on the last call.

Super. I guess one last. You’ve kind of said that Q2 have similar sales to Q1, which is certainly above our expectation but the mix might not be quite as robust. Could you kind of give some little more color as to what might be going on there? And is it perhaps may be a 10%-plus kind of decline in operating profit or perhaps a little bit more modest of a headwind in that in the second quarter?

Yeah. So the strength in the quarter really happened on North America, and we get some pretty strong margins from our core business there. And that obviously did quite well. We don't anticipate it to do as well in this next quarter, the quarter that we're currently in now. And so we do anticipate that that will have a sequential decrease on operating margins. I think what you indicated seems to be a reasonable number.

So around 10% range might be where you look at and will see how things turn on currency, et cetera?

Yeah.

Okay. If I can kind of squeeze one last one in here about your inventories? So you got pretty strong orders. Backlogs are up. Just wanted to [indiscernible] how you plan to reduce your inventories even though you might have quite a bit of sales still over the next few quarters. Are there any targeted changes you're making in your operating system to better manage inventories or kind of just some more color as to how you plan to get the inventories down?

Yeah, it's one area that we focus on in terms of how do we make sure we have better sell-through, enhanced lead times as an example through working with our suppliers is a great way for us to continue to be responsive to our customer base. We know that from working with customers through the time period that availability has been one of our biggest issues. So we’ve purposely took on about 10% more inventory at the beginning in this quarter, and we are able to sell that through and that also sold through the channel. And so we will take on the appropriate amount of inventory that we need, but we think there's plenty of opportunities to be more responsive to our customers by working with our supply chain to reduce lean times to our customers. So that's our predominant shift right now, and our management inventory is to reduce it in that way.

Got it. Excellent. Thanks, guys. I'll pass it along.

Our next question comes from the line of Joe Mondillo from Sidoti & Company. Please proceed with your question.

Hi, guys. Good morning. Just, Mark, I was hoping to sort of take a -- you started off with a lot of the sort of vision, changes that you've been making. You actually finished your prepared commentary with some of that. I was hoping -- and thank you for that. I appreciate that and at least the candid outlook there. I was hoping, though, if you could maybe take us back to the beginning of your tenure and maybe give us a little more context regarding some of the changes you're making. In other words, how -- what are the most significant changes to what Columbus McKinnon was? Or what are the most significant opportunities relative to the structure, the business that the company used to be? Anyhow, if you could highlight the opportunities that you think really are the biggest things and what they used to be, what was the structure in place before you got there, if you could give us a little context?

Sure, Joe, let me comment on that. First of all, when I joined the company, I was very impressed with the level of penetration that it had with very relevant products and important end-user market verticals. But the opportunity was really to kind of clarify our decision-making process on what was a priority. It’s a company that has an excellent runway of opportunities in front of it, but sometimes you get a little bogged down with digesting all those opportunities and perhaps chasing too many. So we really identified and put in place an operating system that allowed us to focus on a critical field and execute much better on our critical field, and then deploying this operating system within 12 distinct businesses within our organization globally so that we really had a more solid identification of key metrics and how we intended to go attack the targets and goals. And then the report outs and cadence of that operating system deployment, I think, has really paid off and picked up some loading through. At the same time, we've identified really some key initiatives in projects that we need to dive deeper on, and I've discussed them quite a bit also in my prepared remarks, but I think they make a lot of sense that we spend a lot on money on STAHL essentially in the same month that I joined the company, how to make sure we focus on that, make sure we do a really good job on that integration and get the synergies that we anticipate, and I feel really good about that. And then, of course, Magnetek was a sizable, really important acquisition for us, and I think we can do better there. So we've really focused on that as well. Also you’ve seen Magnetek rebounding this quarter with above 10% increase over prior year. So we’ve - while that’s a lot more work that has to be done with embedding controls, we feel pretty good that we are on a good path. And then the other aspect is, it strengthened our core business. We've got some outstanding brands and I’ve made some prepared remarks there as well that it's really indicative that our core can also perform a lot better. And of course, we are going to focus on paying down debt. So it’s really, I think, focusing on what our clear priorities are with a really solid deployed process in the organization to go get it. So hopefully that helps provide a little more color, Joe.

Yes. No, definitely. I appreciate that. In terms of on timing a couple of things, number one, integrating Magnetek with the core business, and you've just acquired STAHL, so I'm sure you’re thinking about eventually integrating Magnetek with STAHL, what's the timing on all of that? Where are we? How much more work do you have to do integrating Magnetek's technology? How long is that going to take? And then also in terms of STAHL, there was a lot of synergies related to bringing STAHL's strength to the US and also bringing Columbus' strengths to Europe. I know these are all sort of long-term type of things. But could you sort of put maybe a timeline on how long we should expect and where we are on some of the progress with all these different things?

Joe, I think we are in early innings there. Magnetek was a pretty significant acquisition for us. So that really gave us some technologies and competencies that were not part of Columbus McKinnon. So these things sometimes take time. And as I also said, I think both of these companies are outstanding examples of us being more of an industrial technology focused company, but it will take some more time both on Magnetek because we are about 75% of our product line in North America really pertains to us embedding controls, but we’re fairly in early innings. I anticipate by the end of this calendar year to have about 30% of that penetrated, which means that we've got a lot more runway in the business to go with embedding those controls and relevant deploys where it makes sense. So to answer to your question how long does it take for us to really get to that sort of the end of that, we don’t pad a timeline on us right now, I'm just looking at how we can accelerate it, but we will be running that out as part of our strategic plan. We have put Magnetek and our North American hoist and rigging business, actually more of the hoist business into something called the crane solutions group, and we think this is going to add a lot of value for our customers, because by selling side-by-side and working more in tandem, we can provide a better solutions to customers both Magnetek sales force that has historically sold just the controls came now sell more crane solutions and also by its process. Do this is an example of bringing the companies closer together. We launched that on April 1st of this year and we worked through some of refinements this past quarter, but we feel really good about that approach. In terms of how we further bring Magnetek and STAHL together, we have more discussions on how this is going to roll out globally, and we're discussing that in our strategic plan. I think we got a lot of runway in front of us. I think we're at early innings. But in terms of how that will play out over the next year or two, we'll be in a better position to articulate that probably in our next earnings call and the following one when we fully digested the opportunities from our strategic plan.

Okay. And relative to the competitive product offerings, where once you get Magnetek integrated with along the Columbus’s and then eventually STAHL, where does that -- how far ahead does that put your product offering ahead of a lot of the competition?

Well, we think what really drives us being a leader is really two things, one of which is we've got some really solid IP on a way that products are being lifted, and also the other aspect of this is how we're embedding that into our control systems is going to be a very cost effective way to do it. So we think by leveraging both of those, we will have a decent, solid, competitive offering in the marketplace and an advantage. The issue is we need to make sure that we prosecute this in relatively short order that we get on with it, and we bring these effective products to market. And so that's going to be our focus right now to make sure we do a really good job with that.

Okay. And in terms of the STAHL synergies, I know you reiterated that you're anticipating the $5 million like you've guide to for this current fiscal year, what exactly are you doing in terms of the cost synergies? And do you still foresee at this point in time realizing the total $11 million over the fiscal 2018 and 2019?

So, Joe, we focused a lot on this $5 million first, and coming out of the gates, I must say we had to provide a couple of things that we originally thought. But as we've dug into it deeper, we really have found a lot of opportunity in the subsidiary, consolidation into supply chain rationalization and also into rationalizing some of our product lines, and this is where most of it is really coming from. Also, our integration costs from the carve-out from Kone are a little bit less than we have thought as well. So while we were surprised with some things, we also sort of dug in, found some other areas of opportunity. So we - the team has worked really hard on that and we feel very good about this $5 million of operating income synergies for this year. I am also pretty optimistic. I think there is a lot of areas that we can also dive in to that we should probably not get into on this phone call, because we're still further exploring them. But we feel pretty optimistic we'll be able to hit that number as well, although we don't have as much detail around that clearly.

Okay. And then just last one from me. The core Columbus gross margins, if I am doing the calculations correctly, it looks like they were flat year-over-year on the revenue -- the organic revenue volumes that you saw, just wondering would that maybe Magnetek mix or what was going on with the core gross margin?

Yeah, so the core gross margin for the business was 33.2% this quarter and a year ago it was, I believe it was slightly - it was 32.2%. So we picked up 100 basis points in margin. And actually, the core business shows that the 33.2% would have been an all-time record gross margin as well for the company, and this isn’t better than that with STAHL.

Okay. Alright. Great. Thank you. Appreciate it.

Our next question comes from the line of Matt Koranda from ROTH Capital. Please proceed with your question.

Good morning, guys. Just wanted to start off with the outlook for Q2. Is the US outlook down sequentially because of demand, or is that just channel fill that happened in Q1?

Yes, so the -- we think that the channel did take inventory in our first quarter, but we also are pretty confident that that inventory has flushed through. But we think it’s a little bit more some seasonality that's really crept in here and that's really due the some of these construction projects that are predominantly going to run mostly in the summer time. We’ve also gotten some good orders in pipeline work and in transmission and distribution work and we think that folks are often running on these projects. But we've also noticed the booking level come down sort of sequentially since April, May through June, and we're not overly concerned by that. Backlog obviously is nice and strong, but we think that it's more just a seasonal adjustment through the summer.

Okay, that's helpful. And then just a little more color on the pricing increase you guys mentioned in July. Was that specific to certain brands or products? And then is that just driven on kind of recapturing some of the material cost increases that you're seeing? And how does that fit into your outlook here?

Yes. So the price increase is effective in July. It's on select products, mainly our wire rope hoist products. One of our largest competitors has also raised prices as well, effective in July, and we think in total that has probably worth about 15 basis points for price for us, which will get us back to that 50 basis points guidance for the year.

Okay, got it. That's helpful as well. Mark, you mentioned kind of in your concluding remarks that 75% of our hoist products are essentially now addressable with the Magnetek drives. Can you just give a little bit more clarity on what enables that large increase from the 40% you guys have provided prior? Is that just lower cost integration of the drives into the hoists? What else is sort of bringing that addressable segment up?

Yes. So the 75% we're talking to is really specific to our North American hoist product line, where we spent the most amount of time. I think that really goes to the change of how we're going to address, which products platforms that we're going to push forward with. We've got, as an example, about 13 electric chain hoists in our offering and it's really difficult with that fragmented volume across 13 very distinct platforms to be able to embed control across that fragmented range. So we've really identified is a better way to rationalize our platforms there so we can more cost-effectively embed controls and then we can add these, obviously, features that we talked about that folks are really interested in buying.

Okay. Is that brand rationalization you're talking about or just sort of rationalization across lifting segments? Or could you help us a little bit there?

Yes, sure. I'm glad you asked that, just to make sure we're very clear. No, it’s a platform consolidation and it’s going to drive back through supply chain, and it will effect even how many spare parts people could carry going forward. But it's not necessarily brand rationalization because we intend to keep the power of our brands in the marketplace with sufficient differentiation on why people buy, but we need a better leverage of platforms internally to be able to get more effective use of this control as well as better supply chain cost savings.

Okay, got it. And then could you just talk about directionally what that does to ASPs in those hoists that you’re integrating the drive in to?

Well, we anticipate to charge more for hoists with these kind of features in it, but I think the real secret is to charge not a whole lot more but marginally more so we can drive significant and disruptive volumes into our products, and that's what we are going to look to do.

Okay, all right. In the gross margin for the core business, and I think you've been pretty clear in your commentary, Mark, about the core can do better here, how sustainable is that 33% gross margin level from Q1? Can we sustain that into the next several quarters? And then longer term, could you help us understand sort of where you think the core Columbus McKinnon should be in terms of the gross margin run rate? I mean it seems like it should be relatively higher just given some of the synergies are bidding from supply chain, the ASP increases here? Could you help us understand that?

I certainly think there is an opportunity for us to increase some of these gross margins because of the runway of opportunities that we have in the company, and we are at a pretty decent level of gross margin now. But when I look inside the company and the opportunity further, I do think, like we said rationally some of the products levers some of that volume across the supply chain, we are on our lien journey, but I think we've got a long way to go to make some improvements there as well. So I don’t what to give specific numbers in terms of guidance. I think that will be better set for us to roll out our strategic plan. But I think in terms of operating margins, we anticipate even our margins of north of 15%, I think that's absolutely achievable. And I think there may be some fluctuations for the quarter on gross margins. But as we really dig in and get attraction, we should certainly see some margin improvement.

Okay. One for Greg really quickly on STAHL accretion, I think you guys said by a sense. My back of the envelope looks closer to $0.10. But I 'm wondering, if you guys are just tax affecting into the higher rate here, what are the puts and takes on that?

Yes. So what you might be missing is the impact of dilution of the -- the shares we issued as a result of the pipe to our existing shareholders, that's about a $0.05 negative. So you can guess what you’re missing in your calculation.

Okay, now that makes sense. I think that's the most exactly. So okay, thanks for that. And then just lastly, R&D, I just know that you guys are kind of breaking it out and we are going to track it on a quarterly basis, should we be kind of thinking 1.5% of sales on an ongoing basis? Or should we look for that to kind of up-tick as a percent of sales as you kind of make a greater push on the product innovation front?

Yes, we haven’t really thought of giving some specific guidance there yet. However, obviously the reason while we split it out is we want to put more attention on this. And as we get more into it, coming out of our strategic plan this week, we’re really just focused on generating our opportunity list to drive earnings growth. But we got to really rack and stack them better. I gave one example about the embedded control, but we think there may be some other IPOs that certainly have merit here or two. So it's difficult for us to really pin that number down. I can just tell you directionally what we intend to do. And as we get more into it, Matt, we'll probably give you the right kind of guidance to how we should think about it going forward. But we're just kind of laying the track for you right now on markers and areas we'd like to pay attention to.

All right. I'll jump back in queue, guys. Nice job.

[Operator Instructions] Our next question comes from the line of Robert Majek from CJS Securities. Please proceed with your question.

Good morning. You touched on in your prepared remarks, but can you just kind of break down the organic growth in the US a little bit more? Is there any specific product you really stand out here and/or did you gain market share? And then how did year-over-year sales growth trend by month?

Yeah. So our North American core hoists and rigging business did quite well. These tended to be a little bit more of a higher-featured product for entertainment as an example that I spoke about. And entertainment really improved nicely. We have a strong position in entertainment. And we also, it’s a part of your question there as we gain share in that overall, particularly because of our penetration and the use of -- of products in the entertainment industry. It was a pretty strong uptick in sales really through -- April to May was really the strong uptick and June dropped off a little bit, but pretty strong mostly in May and June. But we think we're on a good path there, and I think some more penetrations in March so I could just talk about entertainment really contribute us to gain some share in the market as well.

Looking at preliminary July results, are you gaining the strength? Can you? And then maybe taking a step back, how indicative do you think this quarter is of perhaps more stable volume growth going forward?

So, Robert, we're just starting the closing process today being August 1st, so we really don't have anything to say about the month of July at this point in time. But we did talk about a weaker mix overall in the second quarter, and we would see most of that weakness actually in the North America hoist and rigging business.

Thank you.

Our next question comes from the line of [Christopher] with [RBH Capital]. Please proceed with your question.

Hi, good morning. I had a question, I guess, along similar lines and maybe a little bit more medium term. You had a number a long period of kind of below trend volume growth and I wanted to see if you could speak to where you see kind of the most solid opportunities for volumes to recover. Is it in your most kind of depressed areas? Or do you think it's in certain new products or geographies?

Well, we think there is areas of oil and gas that used to represent a really strong percentage of our business. Both installs about 80% of business and it was in low single digits in terms of total percentage - excuse me, up single teens in terms of percentage of our business in North American. And I think oil and gas, it’s in early innings, we’re about 10% now. And so I think if oil and gas were to continue to sort of stabilize, I think there is some pent-up demand there and that we're very sticky with some of our product lines, such as Chester, some of our product offerings installed are explosion protection. So I think that really represents a pretty strong runway for us. And as you know commodity prices around that space have not necessarily driven a lot of demand there, so I think there's a lot more runway. Head equipment is beginning to come back, Tom. Mining has been a sleeper for a long period of time, and we're now just beginning to see some volume pick up in mining as well. And entertainment, like we've talked about, we think will continue to be a strong segment for us. Dick, you know this, in the North American market, we're not really seeing much uptick for any infrastructure spending that is in tax or anything gotten through there. So we would be looking for actually more help if that were to come to pass. We're not actually counting on it, but if it were, that would be great and we would see projects going into next year and the following year, where we could get better in uptick from transmission and distribution build-outs as well as general manufacturing improvement. So hopefully we'll see some light to this. We're encouraged about some of the uptick in volume that we’ve gotten. And also what we haven't gotten a ton of volume of some of our new products, we have some new products coming to market now that we will be pushing further, and we can talk more about that as well, but we're pretty excited about some of them have variable speed or coming out the end of the year, and we hope to get some uplift there as well.

Okay, and then maybe one more quick one. If this recent weakness in the US dollar persists, how would that affect your business next 12, 24 months?

Yes, that should be a positive for us. Given our presence in Europe in particular, we should see a positive translation impact. And we'll have a much more significant impact on sales, but it will be also a positive impact on operating income as well.

Great. Thanks very much.

Our next question is a follow-up question from the line of Joe Mondillo from Sidoti & Company. Please proceed with your question.

Hi, guys. Thanks for taking my follow-up. I just have one quick one. Mark, just wondering, with the new sort of structured operating system that you talked about and everything else that you're sort of doing, do you anticipate efficiencies or cost management so that there's a resulting cost reduction at all in the cost structure?

Yes, absolutely. It's a better management of both our opportunities and drive top line as well as a more effective spill-down in management of our costs. It's early innings through this, so it's taking the team a lot of really hard work, and I'm very impressed with the folks just embracing this and going forward on it. So I think it's just kind of really getting deployed and really sort of sinking in in terms of how this plays out over time and what kind of things we can more effectively guide to/ I think we're going to be more specific after we get to a strategic plan, but absolutely, there should be opportunities to improve that, Joe.

Okay, great. Thanks.

There are no further questions in the queue. I'd like to hand it back over to management for closing comments.

Well, thanks for joining on today's call. I really appreciate the interest in our business and following our story, and we look forward to updating on our progress. Have a good day.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.