Good afternoon, and welcome to the Ethan Allen 2019 Fiscal Second Quarter Earnings Release Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Corey Whitely, Executive Vice President, Administration and CFO. Thank you. You may begin.

Thank you, Rafael. Good afternoon and welcome to Ethan Allen's conference call for our second quarter ended December 31, 2018. This conference call is being recorded and webcast live on ethanallen.com, where you will also find our press release which contains supporting details, including reconciliations of non-GAAP information referred to in the release and on this call. As a reminder, our comments today will include forward-looking statements that are subject to risks and uncertainties that could cause the actual results to differ materially. Please refer to our SEC filings for a complete review of those risks. The Company assumes no obligation to update or revise any forward-looking matters discussed during this call. After I provide some brief details on the financial results, our Chairman and CEO, Farooq Kathwari, will provide updates on the business and on our ongoing growth initiatives. We'll then open up the telephone lines for questions. Our consolidated net sales for our fiscal 2019 second quarter of $197.2 million compared to $198.5 million in the prior year. And we ended the first six months of the fiscal year with a consolidated net sales increase of 1.4%, despite challenging macroeconomic conditions. Our strong retail net sales of $158.5 million compared to $153 million in the prior year and resulted a net profitability for the retail segment for the second quarter and the first half, demonstrating opportunity our retail segment has an driving increased profitability. Wholesale net sales of $107.7 million compared to $118 million in the prior year quarter. During the previous year, second quarter wholesale sales were at elevated levels as the shipping delays and high order backlogs in the prior year first quarter were getting caught up during the second quarter. This year the Wholesale segment order backlog levels in the first quarter were at normal…

All right, Corey. Thank you. As mentioned in our press release, our unique vertically integrated structure provides us an opportunity to differentiate and grow both sales and profits. Our key initiatives include: expanding reach through new products, recent introductions include artisan, more modern style, smaller in scale, simpler and linear, uptown, transitional updated take on traditional, dressier in style, passport, global in style and distressed finishes. This spring, introducing Relaxed Modern, which is transitional in style with classic forms reinterpreted in a casual manner. These designs project a diversity of style in an eclectic fashion to attract a larger audience. All our products are developed in a consistent -- with a consistent level of superior quality. These new products gives us an opportunity to expand our customer base. Our next important focus is always on talent. Our vertically integrated structure requires talent in many diverse areas from managing a sawmill in the Northeast Vermont to manufacturing locations in North America, to our retail network, logistics network and teams to develop various aspects of marketing, merchandising and also managing operations. A major strength includes our 1,500 interior design associates who take a customer and convert them to a long-term client. The continued positioning of design centers to more relevant locations is ongoing. During last 15 years, over 60% of the 200 design centers in North America have been relocated. The Company operates 150 of the 200 locations. Recently opened new design centers in Denver, Colorado and under construction our design centers, all relocations in Albany New York; Coralville, Iowa; Tysons Corner, Virginia and Ann Arbor, Michigan. Internationally, last three months, we opened a large flagship design center with a licensee in Wuhan, China and also new design center in Phnom Penh, Cambodia. Expanding our integrated marketing initiatives are critical. These include continued utilization of Direct Mail. In fiscal 2019, this last six months, we mailed about 10 million copies of our Direct Mail magazine, also expanded reach through digital campaigns. We are also implementing an advanced version of a CRM, a customer relationship management program. Continued focus on improving efficiency of manufacturing and logistics with 70% of furniture made in our North American workshops our national logistics delivers products in North America at landed costs and our retail logistics delivers in a white glove service to clients, resulting in excellent service and control on returns. We believe that our manufacturing and logistics gives us a competitive advantage. We also continue to focus on conducting our enterprise in a socially responsible manner, including environmental, health and safety management. With this brief introduction, I am pleased to open for questions or comments.

Rafael, we will go ahead and open the lines.

Yes, sir. Thank you. [Operator Instructions] Your first question comes from the line of Jeremy Hamblin from Dougherty & Co. Your line is open.

Yes, hello, Jeremy.

Hi. Good evening. Thanks for taking the questions. I wanted to start by seeing if we could get some color here on the wholesale division. It looks like that was probably just significant difference between expectations and final results. In terms of the GSA contract, I had two things I was hoping you could provide color on. The first is you noted that that the Drexel or the Heritage bankruptcy led to some discounting to continue to win that contract. They’ve kind of gone through their bankruptcy proceedings at this point in time, but what type of impact is that going to have going forward on Q3 and Q4 results? That’s part one. And then part two is, obviously the -- with the government shutdown over the past month, what type of impact is that going to have on Q3 results, if any? Hoping you can provide some more specific color.

Jeremy, good questions. The State Department bidding, as Corey just mentioned, had an impact both on the top line and on the bottom line, because these were basically provided almost at cost with the result was that if it had our normal gross margins, the sales would have increased as well as operating margins would have increased. Now the good news is that most of this has already been delivered. So the orders that we've been getting in the last month -- two months and they have been pretty good. We're now getting them at our regular gross margins and they will be delivered in the -- our third and fourth quarter, which should help out the top line and the bottom line.

Okay. So can you give more specifics in terms of -- Corey, can you help us on the total amount of backlog on that State Department contract at the end of Q2?

You know, Jeremy, I don't think based upon our agreements with the GSA we are able to give all those numbers out. But I -- as I said, I can use the word it is good, it is strong and its going to help us both at the top line and at the we will be able to recoup our margins that we lost in the -- in our second quarter.

And maybe just to clarify a little bit on the volume hasn’t been really substantially impacted because of the government shutdown.

Yes, the government has not interestingly this whole area, this whole division was impacted to some degree, but not much. The good news is now they’re back, so they’re actually -- they were just a little bit slow in sending orders. But now starting actually -- even today they’re very busy, so I think that we did get -- they did not stop the orders coming in, they’ve just slowed them down.

Okay. Okay. So you're saying that you expect the State Department related contracts to be up on a year-over-year basis in Q3 and in Q4?

Yes, right. Both in terms of sales because as you know -- as we’ve discussed, let us assume that and let's say a million dollars and when you give it at cost, I’m sure you’re talking of -- taking of 30% on sales and 30% on operating margins. That's what it really means or maybe 30% plus, but that’s a impact of that.

And even with the discounts they were up for the second quarter. [Multiple speakers] too much of a margin on them. So they were just slightly up on the second quarter.

Yes, the sales were up, but overall …

Understood.

… and keep in mind the previous year also we were impacted because of -- that was the year when we were shipping the products where the sales were at a higher number, but the margins were impacted because we had to ship a lot of product, if you recall. In the second quarter, in the previous year, we had to ship a lot of products in a very short period of time which impacted our efficiencies and even deliveries to the rest of our retail network. That was not the case this second quarter of this fiscal year.

Okay. And then -- and just another -- a follow-up question here on the Wholesale segment, I think what I caught in your prepared remarks was that did you say the China sales -- sales in China were down 31%? And …

That would be the - sorry, Jeremy, go ahead.

… just could you provide some color or can you clarify that in terms of China? And then you also noted that you saw your business in Canada down at retail as well. I'm just hoping you can provide a little more color on the international side of your business?

Jeremy, let me give a basic overview and then Corey can add on. China was impacted as we know by a number of factors. First, Chinese economy has slowed down. Secondly, the tariff situation also created a big problem. They are held up. They were not sure whether it's going to be 25%. So we had to also work very hard in trying to determine what should we do, where should the product to be made in our operations, should it be made in Mexico, in Honduras. So all of this created a lot of confusion. And so the result was they were holding up orders, so we also had to determine the source of manufacturing. And so the combination of the government, I mean, this whole issue of the taxes and as well as a somewhat of a slowdown in China had an impact. Now -- so the good news is that, Chinese economy still is not as strong as it was, but there is somewhat of a less of concern on the question about these tariffs, because it looks like we did -- I mean, we didn’t go to the 25%, which was a concern last quarter is now about 10%. So 10% is a little bit more tolerable.

And then to clarify, Jeremy, on the wholesale at 31% referring to both China as well as Canada for the wholesale component of the -- of Canada. So Canada impacted wholesale and of course it also impacted retail at the retail sales level.

And Jeremy, just again in Canada, the same situation was there. For the beginning of the quarter, there was a lot of concern on the fact of tariffs, on American products to China. So people got concerned, they were holding up. On the second thing is in the -- in Canada, especially on the West Coast of Canada, which is the same situation in the West Coast of United States. Chinese residents also, for a number of reasons slowed down their purchases which have been a pretty good important customer base for the whole coastline from Vancouver down to San Diego. So that was another factor.

Okay. So the potential for 25% tariffs in 2019 slowed orders at the end of 2018, like in your second quarter?

Yes, right, because that's really when the whole thing was implemented or they were talking about the question of having a 25% tariffs and this was -- the tariff was supposed to start on January 1, then later on they decided to hold off implementing the 25% tariff. It created a lot of confusion.

Okay. Thanks for taking the questions. I will hop back in the queue.

All right. Thank you.

Your next question comes from the line of Cristina Fernandez from Telsey Advisory Group. Your line is open.

Yes. Hello, Cristina.

Hi, good afternoon. I wanted to ask about the cadence of the order intake during the quarter, it was down 3% to 4%. Can you walk us through what you saw just given that you had ended the prior quarter on an increased note it seems like it was a little bit more volatile here?

Yes, it's a good -- its an interesting situation that developed that we were up in November. We were doing extremely well to the middle of December and then all of a sudden with the issue of number of factors, the stock markets were down substantially, the government shutdown, the tariffs, you could -- we could see it that customers really held back in the last and most of this change took place in the last two weeks of December. And as we said in our press release, the good news is that in January people started coming back and we’ve had sequentially increase in traffic in our design centers so far in January.

Okay. Thanks. So a second question was on the gross margin it was up 90 basis points even with a lot of that pressure from the government contracts being low margin. Can you help us understand what were the drivers of that expansion?

As Corey mentioned, one of the main one was the relative increase, a percentage of retail sales to total sales, when that happens, Corey said was 80% …

Yes, 80.4%.

80.4% versus …?

77%.

Versus 77%. So as you know the retail gross margins are much, much higher and that had an impact. And other factor is, I will just mention it that our operating margins were impacted also by not only is somewhat lower volume, but also higher freight costs that we have to - somehow towards the end-of-the-year there was a lot of freight costs that we have to incur. But having said all this, and while the important thing is this which show the leverage of our business that our retail sales increased during the quarter there's a delivered sales by 3.6% and our operating margin went to a positive 2.2% versus a negative 2.1%. That's a major thing, because I’ve always said that our business has leverage on both sides. So similarly, our operating margins at 8.3% is for -- in our industry that’s on the, more or less towards the middle of the higher side, but for us it's on the lower side. So I think that leverage we have on both sides, on operating side as well as on our retail division, it’s pretty good leverage. And being a vertically integrated company, we get impacted both ways. When sales are somewhat down it impacts our operation. Retail it affects our manufacturing, our sawmills, everything. But on the other hand, even a slight increase we have an opportunity and ability to take our operating margins, and I would say that many years back our operating margin was much, much higher, but going from 8% -- I mean, going after 10% or so with some increase in volume is within reach.

Okay. And one last question for me. Marketing spend based on my calculation it seem like it was down about over 20% this quarter. Can you confirm that and how shall we think about the marketing spend going forward against the pretty big increase as you saw last year?

Yes, I mean, this quarter we spent about 3.8% versus 4.3% in the previous year quarter. And if you go to the first, the third quarter of last year, we spent 7.6%. So it will be lower and it will be closer to 4% or in that range as against 7.6%, because that was a very -- we spent a fair amount of money last year in the third and the fourth quarters.

Okay. Thank you.

[Operator Instructions] Your next question comes from the line of Justin Bergner from Gabelli & Company. Your line is open.

Yes, hi there Justin. How are you?

Good. How are you doing, Farooq? How are you Corey?

Yes, good.

You disappeared, I know where you’ve been.

These things happen. So I wanted to ask about the comment in the press release about January traffic or January activity improving. Is that suppose to suggest that January traffic for -- Jan -- some sort of comp or orders number was positive in January or just that it was sort of less negative than what you saw in the second quarter.

January, we compare it to the January of the previous year. And when we say it's positive, its positive to the January of the previous year, not to this last -- not to our second quarter. And now as you know, the law in the next three, four days are critical because that’s when a lot of our business is closed, but the positive trends have been.

As I said in December last two weeks in December, we just saw people just held back. So in January progressively they’ve started to come back or traffic has increased and this increase compared to the previous year not to the second quarter.

Okay, great. So it is a traffic metric, that’s helpful. And then are you able to quantify how much higher transportation costs or how much higher transportation costs net of what you were able to recover impacted margins in the quarter?

Corey, will tell you, but the impact of this was on several fronts. Impact of it was, for instance, on the transportation or products from the East Coast to the West coast. So that is taken by our logistics division. The costs also increased from some of the shipments from Mexico and Honduras to the United States. The costs increased also at the retail level in terms of the additional costs that our retail had to pay in delivering the products for the consumers home. So if you take it at all different levels -- Corey, you have -- you given any numbers?

Yes, it's over a million dollars …

In the wholesale.

… in the wholesale side. Then because of the volume at retail, the variable component for their home delivery that also increased. What we’re seeing is higher costs and drivers and contract carriers and then the fuel. So it's kind of across the board. We also have shipped a little bit more on a ground basis versus on a real basis just because of the service levels and the timing that rail has grown to.

Also Justin, as we were talking earlier about the State Department contract, so we shipped a lot of this products because of course we’re taking at lower margins, but we pay the freight from our distribution centers to the ports. And so with very little margin, we have to bear that too. But going forward with the higher margins, we will be able to take it in.

Okay, great. But have any of those shipping pressures eased or not yet?

It's a little bit too early, but I think that -- I’m just making the judgment that business overall I think people are somewhat more -- somewhat softer and we are doing all right. I mean, our business as I said January was positive. It depends on how the overall economies of the business is. Of that is the case, and there will be less pressures in the second quarter, there was a lot of demand for shipments. And so we will see. At this stage we are just counting on whatever we spent in the latter in the first in the last two quarters.

Okay. And then lastly just could you maybe say a few more words about the Relaxed Modern product line that’s coming out this spring?

Yes, well I hope you’re able to come next month through January which you really should, because this is a beautiful, beautiful program and I think that is good that you raised it. Our objective really has been to expand our reach, so that we -- our brand is similar. I’m just using an example of BMW or Mercedes, these great companies have taken a brand and expanded their reach. Two, you might say, younger people are even folks who are interested in products that are somewhat smaller in scale. Similar to that there's a -- products that we’ve been introducing, whether it's an artisan or whether it is this new modern, it reflects an attitude like those great automobile companies created a 3, and a 5 and a 7, this you might just say is a 3. We had already a 5 and a 7, so this will expand our reach and we’ve go-to-market in a very -- in a manner, so people will understand that today at Ethan Allen given opportunity of reaching a wider consumer base, but maintaining our quality and great design.

Okay, great. Thank you so much for taking my questions.

Thank you. Thanks, Justin.

And we have a follow-up question from the line of Jeremy Hamblin from Dougherty & Company. Your line is open.

Yes, hello Jeremy.

Yes, thanks for taking the follow-up. I wanted to just ask about the operating expenses $92.7 million. In terms of the increase, could you quantify that’s about $2.5 million up year-over-year. Of that increase how much of that was related to the wholesale distribution costs versus the increased variable costs at retail. Corey?

Yes, retail had about $1.1 million of increased costs. Much of it was variable and then you could take -- if you take million of the distribution expenses on the wholesale side and then there were some other minor costs at a high level, that’s how I would at it, Jeremy.

Yes, Jeremy, as Corey said, half of that is due to the increase in sales and deliveries of retail, and other half from is basically as we mentioned increased logistic distribution and trucking costs.

Okay. And where does the distribution cost stand today compared to where they were in Q2. That there has been some tightness out there in terms of the trucking systems across the country.

I think it's more or less similar. We are watching it very carefully. We did -- just to give you a -- I mean, I’m not giving you too many details, but we decided also in the second quarter to ship products from the East Coast to the West Coast by rail, because of Christmas holidays and everything else, so we decided that that was an important thing to do that most probably added $0.5 million to our costs in the second quarter. Right now having no Christmas in this quarter, we are not going to do that.

Yes, that was my truck versus rail and the truck is higher than the rail.

$0.5 million costs Jeremy on that, just in the last quarter.

And that’s all part of the demand. Rail was taken longer and to those holiday deliveries, we were really wanted to wow the customer with a very speedy delivery.

So in terms of looking forward here back half of the year, it's kind of baseline SG&A run rate closer to this 92 to 93 range or closer to the 90 million that you saw in Q1?

Jeremy, just keep in mind, of course everyone make an assumption, it also is a factor of how much if you -- whether you’re considering flat business, because our operating costs especially at the retail division are variable, especially both in terms of the compensation to our designers as well as the delivery costs is based upon -- is a variable cost based on sales. It depends on what you use, you can then use your judgment based on that you can use the numbers, because they’re variable costs.

Understood. If all else is equal, if your sales were exactly the same and the split between retail and wholesale were exactly the same as last year for Q3 and Q4, what would that translate to?

It will translate in the wholesale side at least $0.5 million less and on the retail side about the same.

On a year-over-year basis?

No, in the quarter. Just in the -- just in one quarter, right Corey?

As compared to Q2?

Compared to Q2.

Okay. So about $92 million, it seems to be the baseline run rate?

Yes, that 91 to 92. It's going to depend on where freight actually finally comes in at and …

Jeremy, 92 is fine. It's all right.

Okay. No, I’m just trying to clarify, so that we can …

It's going to be a little bit lower, Jeremy.

Understood. Okay. Thanks for taking the follow-up, guys. Good luck.

All right. Thanks.

Thank you.

[Operator Instructions] Your next question comes from the line of Ian Dominguez from Schonfeld. Your line is open.

All right.

Thanks for the question. Two -- I guess, two actually. One is on -- I guess, in the Q, it mentioned a release of intercompany profit previously held in inventory that serve to increase gross profit by $1.1 million. Can you just explain how that works? And then, second, on lease accounting the ASU 2016-02, I also noticed in the Q, it says, expects -- company expects to have a material impact in our consolidated balance sheet. Can you just outline early thoughts as to what that exactly looks like in terms of the material impact? Thank you.

Sure. Ian, this is Corey. On the inventory side, it's really what kind of drives the release of that intercompany profit. So our inventory that we held at December 31 was about $6.5 million less than where it was at the end of the prior quarter. So when we leave that inventory, we captured the embedded wholesale profit at that time that retail release at. So that's the capture. So as inventory decreases, we get the capture of the profit as inventory increases, and then it kind of works the other way and the profits that held until it's sold. On the lease accounting, in our 10-K, we have about $175 million of lease obligations. So under the lease accounting rules, we will net present value that and throw it up as an asset with a corresponding liability on the balance sheet. There's really no P&L impact as a result of the lease accounting change, just primarily be the asset and the liability basically had a net present value at a high level.

Thank you.

Okay. All right. Thanks.

Your next question comes from the line of Brett Reiss from Janney. Your line is open.

Yes, thank you for the opportunity to ask a question or two. Do you give out net store count figures and is in a metric that even one should pay attention to?

The numbers …

Yes, we give out our counts. It's -- it was in the press release also, but at the end of the quarter, our company operated, we had 146 design centers and 305 in total with our independence and that compared to last year, our retail had 148. So there was also a difference in total store count, which had an impact on the difference in total written sales.

Okay. But you mentioned the three or four that you're planning to open. Do you -- at year-end, do you think you're going to wind up the year with more or less design centers?

Yes, it's a good question, because our focus has been to reposition the design centers in the right places. So all these locations that I’ve talked about are basically relocations. Keep in mind that our -- historically all the design centers of are almost 95%, 98%, 15 years back were operated by licensees. And then as they retired and we took them over, then these stores had been opened up in the 1960s and 1970s and we've started relocating them. So the total number would more or less stays the same. In some cases, when we close, we determine that we may have another location close by, which will get the business, so we don't -- we look at it very carefully whether it is going to have any major negative impact. If we don't, then one location is better than two, if it can do the business. So that’s we’ve also been consolidating that way. But all the ones that we’ve listed today that we’re going to open are relocations.

Okay. Could you talk to me a little bit about your design consultants? You’ve 1,500, is there a great -- is there low or high turnover of these people? And with unemployment being so low, if somebody leaves, are they hard to replace? And what’s the timetable on a learning curve for a design consultant to come up to speed?

Again a very, very important and relative question, which we deal with all the time. The 1,500 designers, our turnover is very, very low. These designers are, I would say, the vast, vast majority have come through many years of being associated with Ethan Allen. And we’ve also been able to get many interior designers, who ran their own businesses. And they come and join us, because under our umbrella they’ve the ability to operate a business for interior design in an entrepreneurial manner, but also disciplined. They get the benefits of being an employee but they also have the benefit of being an entrepreneur, because their compensation is based on the business that they do. Yes, there has been some pressures because of the economy. On the other hand, there are many businesses that were involved with interior design are no longer existing, so they’re not that many companies left over there that do what we do. And so, we’ve the opportunity of getting a really strong interior designer, they come and join us.

Right, right. That’s helpful. I appreciate that. And how correlated is your business to new housing sales? They’ve been soft the last couple of reported data points on that. Is -- are you -- is there a one -- what’s the correlation there in your experience?

No, I understand. It is not necessarily one to one, because in our case really the more important factor is consumer confidence. If consumer confidence is impacted as it was with, for instance, whether there is the stock market being down or this shutdowns and all these external factors makes -- help people hold up. Obviously, we do have an impact, a longer term impact with the housing, but it is not immediate for us, because we are not dependent on necessarily only new homes. A lot of our business does -- comes from existing homes where people are redecorating. So we don’t see it -- immediate impact, of course, longer term, it does have some impact.

Right. Right. Now in my own business, it's been a challenge to reach out and curry favor and win business from millennials, it seems in looking at your business you’re having the same challenges. Can you talk to me a little bit about how that's going and how are you going to hit the right buttons there?

That’s an important issue certainly and I was referring to it, earlier question, I think it was Justin when he talks about the -- asked me the question about our newest product program that we introduced last year, this last quarter called artisan and he asked about that. And I answered that our objective has been to expand our reach. And our objective has been to expand our reach in a manner that is consistent for us in our industry and many, many industries. I’m just using the auto industry and many years back, General Motors to expand the reach they developed through a lot of different brands. Similarly some furniture -- home companies have developed a lot of different brands. We felt that with our one brand, Ethan Allen is a brand that is well desired, is well know, and obviously, it has been known somewhat for you might say that folks not necessarily, the millennials or the younger folks. So our objective has been to reach them, but to reach them in a manner that would be consistent in maintaining quality, maintaining good design, but an offering folks design and a price point that will be somewhat more compatible without taking of quality, similar to as I mentioned earlier, good companies like Mercedes and BMW and Audi have been able to do. So you’re going to see us being much more focused in reaching out to folks, millennials as well as everybody else that today Ethan Allen has the opportunity of reaching a larger consumer base with our offerings in design, in quality, price points, yet we're going to maintain great quality and you're going to see a lot more of that as we go forward.

Great. Thank you for answering my questions. I appreciate it.

All right. Thanks for good questions.

And we’ve a follow-up question from the line of Justin Bergner from Gabelli & Company. Your line is open.

Hello, Justin.

Hi, again. Just a quick couple of clarification questions. The adjustments that you took to your adjusted results in the quarter, it seems to include, I guess, asset purchase cost in your -- I assume your retail asset purchase costs. What's that?

[Indiscernible].

Yes, that was associated with a location where we had a retailer that retired and we acquired some of those assets and are continuing to operate in that market, so there's certain costs that are incurred during that process.

So an independent became company-owned?

Yes. Yes, that’s the one that shows as a transfer on the design center chart in the back of the …

It was a very great family in San Jose for the last 50, 60 years, the second generation retired. I've known them for a long time. We sat down and like we've done with all these other folks. So we took it over just last, I think on December?

In December, end of the month. Yes.

And so that $160,000 that represents the entire cost to bring them in?

No, that just represents certain costs that go around the acquisition related activities, not -- the other costs, it's really just purchasing inventory.

Yes, that's the main cost, it's inventory, and that we’ve of course taken to inventory.

Yes, That's a -- this is a basic asset purchase.

Okay.

That goes In our operating cash flows.

Okay. And then the wholesale -- sorry, the international being down 31%, that is mainly China and Canada, but there are some other markets in there too, right?

There are, especially the Middle East. They’ve been down to. As you can see the situation in Saudi Arabia and Dubai, Qatar, Kuwait, Jordan, they all have been impacted. The good news is, they’re all motivated, they want to -- they’re still operating it. They want to keep it going, but they’ve had a tough time in the last -- with all the problems that’s taking place in the Middle East.

Okay. And then, lastly, the special dividend obviously was just paid out $1 per share, does that sort of exhaust your cash return for this current fiscal year or is it still possible that we could see share repurchases pick back up?

Well, we just declared our -- we just also announced our -- today, our regular dividend, so we will continue with the regular dividend. Then we will see what we need to do. We have continuously purchased -- as you know, we purchased 42% of the company back. I just got to make sure that we’ve no -- we've got to also watch the float over there, but we’ve been doing both things; we’ve been buying shares, we’ve been paying -- paid half a billion dollars of dividends since we took this company private. We invested about almost $800 million in capital expenditures. So we’ve been fortunate so far. We've been able to buy our shares back, pay a lot of dividends, invest in the company and, at this stage, -- yup, at this stage basically we’ve used up more for the cash. Justin. So, we’ve got to build the cash back up.

Okay. Thank you.

All right.

And there are no further questions at this time. Presenters, please continue.

All right. Thanks very much, and good to have everybody on the call. And if there are any questions, please let us know. Thanks very much.

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