Graham Corporation

Greetings and welcome to the Graham Corporation Second Quarter 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tom Cook. Please go ahead.

Thank you, Kerry, and good morning, everyone. Welcome to Graham's Fiscal Second Quarter 2026 Earnings Call. With me on the call today are Matt Malone, President and CEO, and Chris Thome, Chief Financial Officer. This morning, we released our financial results. Our earnings release and accompanying presentation to today's call are available on our website at ir.gramcorp.com. You should be aware that we may make forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that 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 that are filed by the company with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. During today's call, we will also discuss non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, 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 reconciliations of non-GAAP measures with comparable GAAP measures in the table that accompany today's release and slides. We also use key performance indicators to help gauge the progress and performance of the company. These key performance metrics are ROIC, orders, backlog, and book-to-bill ratio. These are operational measures, and a quantitative reconciliation of each is not required or provided. You can find a disclaimer regarding our use of KPIs at the back of today's presentation. So with that, if you'll please advance to slide three, I'll turn it over to Matt to begin. Matt?

Thank you, Tom, and good morning, everyone. We appreciate you joining us to review our second quarter fiscal 2026 results. We delivered another strong quarter, continuing to execute our communicated strategy and demonstrating the resiliency and diversification of our business. Revenue grew 23% to 66 million, driven by solid performance across all of our end markets. The timing of these key project milestones, particularly material receipts in our defense business, as well as contributions from new programs and growth in existing platforms. Adjusted EBITDA increased 12% to $6.3 million. On a year-to-year basis, adjusted EBITDA margin expanded 40 basis points to 10.8%, underscoring our continued focus on operational execution and profitable growth. Bookings remain strong, resulting in a book-to-bill ratio of 1.3 times and driving backlog to a record 500.1 million, up 23% year-over-year. Our backlog provides excellent visibility, with roughly 35 to 40% expected to convert to revenue over the next 12 months. On the defense side, we continue to see strong momentum with our U.S. Navy programs. As a reminder, in July, we announced a $25.5 million follow-on order to produce mission-critical hardware for the MK-48 Mod 7 heavyweight torpedo program. More recently, I want to highlight an important milestone for our defense business and our long-standing partnership with the U.S. Navy. In October, we commemorated our new 30,000-square-foot advanced manufacturing facility in Batavia, New York. which represents a major investment in our capacity and capabilities to support key Navy programs. This purpose-built site is designed for efficiency, precision, and scale, and incorporates advanced technologies including automated welding, optimized product flow, and state-of-the-art machining. We expect the facility to be fully operational by the end of fiscal 2026, And once online, it will meaningfully expand our throughput, enhance quality, and strengthen our ability to meet rising demand across multiple Navy programs. As part of this, we were honored to host Captain Heath Johnmire, commanding officer of the future USSS District of Columbia, along with several strategic partners and customers during the event. Their participation underscores the Navy's confidence in Graham, and a critical role of our team and capabilities play in supporting fleet readiness as the Navy celebrated its 250th anniversary. This engagement reflects our position as a trusted supplier to some of the most important defense platforms in the world. In addition to expanding capacity, we continue to invest in advanced inspection and manufacturing technologies, including our enhanced x-ray testing and automated welding systems that are beginning to come online. These investments will further increase throughput, improve inspection precision, and support production scale as we execute the Navy's long-term modernization initiatives. Moving to energy and process. During the quarter, we saw increased sales of 2.0 million, or 11%, driven by the timing of large capital projects and continued strong aftermarket sales. Further, we are seeing meaningful momentum in small modular nuclear reactors and cryogenic applications, where customers' interest in our mission-critical equipment continues to expand as those markets slowly transition into commercial deploy. Demand fundamentals across all of our end markets remains healthy. Though we are observing extended decision cycles on certain large global capital projects, Overall, our position remains strong, and we continue to execute well against opportunities in both mature and emerging applications. In space, as we announced earlier this morning, we continue to see meaningful momentum. In the second quarter and first month of our fiscal 2026 third quarter, our Barbara Nichols subsidiary booked a series of new orders from six industry-leading customers in the commercial space launch market. These awards were for advanced turbo machinery and precision engineered components supporting next generation commercial launch in in-space systems and totaled $22 million. These orders are expected to convert into revenue over the next 12 to 24 months, further strengthening our visibility and reinforcing the value we bring to these mission critical space applications. We encourage by the breadth of programs we are involved in and the growing activity across customers who are scaling production to meet increased launch cadence and orbital infrastructure needs. To support this demand, we are continuing to invest in capacity and capabilities at Barber Nichols, including additional CNC machining centers, expanded testing infrastructure, and our new liquid nitrogen test stand. These investments build on our previously announced cryogenic test facility in Florida, which remains on track to come online later this year. Together, these enhancements strengthen our ability to deliver with speed and precision as our customers move from development into higher-rate production. The momentum we are seeing in our space and markets reflects the strength of our technology, engineering expertise, and decades-long reputation for performance in high-speed rotating equipment. As the commercial and government space markets continue to expand, we believe Graham is well-positioned to support the industry's long-term growth and advance our strategy of building a diversified portfolio across high-growth, innovation-driven end markets. Finally, I want to touch on the recent acquisition announcement of X-Dot Bearing Technologies, an engineering-led firm with patented foil-bearing technology and deep expertise in high-speed rotating machinery. This is a highly strategic technology acquisition that strengthens our competitive position in an area where performance, reliability, and efficiency are becoming increasingly critical across aerospace, defense, energy transition, and industrial applications. X-DOT's proprietary foil-bearing designs deliver superior performance while reducing development and production costs. And when combined with Barbara Nichols' turbo machinery capabilities, significantly expand our ability to engineer and deliver advanced high-speed pumps, compressors, and rotating systems. This acquisition not only broadens our product portfolio, but also positions us to move into adjacent applications and emerging high-performance markets, where we are seeing growing customer interest. Importantly, this is a disciplined, strategically aligned investment that fits squarely within our capital allocation framework. xDOT brings proven technology a respected technical founder and team, and complementary customer relationships. We expect the acquisition to be slightly accretive to our fiscal 2026 results. Overall, this acquisition underscores our commitment to investing in differentiated technology, expanding our engineered solution offerings, and creating durable competitive advantages across our growth platforms. More broadly on the M&A front, we continue to see a strong pipeline of acquisition opportunities that align with our strategic objectives and remain focused on pursuing opportunities that offer risk-adjusted returns and can help us accelerate our product lifecycle strategy. In closing, our fiscal second quarter results demonstrate continued business momentum across our diversified portfolio. With our record backlog, strong market positioning, and progress on key growth initiatives were well-positioned to capitalize on the opportunities ahead. With that, I'll turn the call over to Chris for a detailed review of our financial results. Chris?

Thanks, Matt, and good morning, everyone. I will begin my review of results on slide six. For the second quarter of fiscal 2026, sales were $66 million, an increase of 23% compared to the prior year period, reflecting broad-based strength across all our end markets. This performance demonstrates continued execution and healthy demand across defense, energy and process, and space, and is consistent with our full year expectations. Sales to the defense market increased by 9.9 million, or 32%, primarily reflecting timing of project milestones and particularly material receipts, as well as growth across new and existing programs. Sales to the energy and process market increased by 2 million, primarily driven by the timing on larger capital projects. Aftermarket sales to the energy and process and defense markets were 9.8 million for the quarter, slightly above the prior year period, but when combined with our first fiscal quarter, are up 15% year-to-date and continue to reflect resilient demand for aftermarket support across our global installed base. As a reminder, our fiscal third quarter is typically our seasonally lowest revenue period due to normal holiday-related production schedules. Turning to slide seven, gross profit increased 12% to $14.3 million. and gross margin was 21.7% for the quarter. The lower margin in the quarter reflects the sales mix in the period, including an unusually high level of material receipts that carry lower margins. We estimate that this higher than normal level of material receipts impact our gross margin by approximately 180 basis points in the quarter. As a reminder, The prior year period benefited from approximately $400,000 from the Blue Forge Alliance grant income that did not repeat this year. Finally, for the first six months of fiscal 2026, we estimate the impact of tariffs to be approximately $1 million compared to the prior year. As we look at the full year, we have narrowed our expected tariff impact range to $2 to $4 million. reflecting continued sourcing discipline and contract language that protects us. On slide 8, you can see how this operating performance translated to the bottom line. Net income for the quarter was $0.28 per diluted share, and adjusted net income was $0.31 per diluted share. Adjusted EBITDA was $6.3 million, up 12% from the prior year, and adjusted EBITDA margin was 9.5%. On a year-to-date basis, our adjusted EBITDA margin is 10.8%, up 40 basis points over the prior year and in line with our full year guidance. As a reminder, the Barbara Nichols Earn Out Bonus will phase out by the end of fiscal 2026. Excluding this item, we remain confident in our ability to achieve our fiscal 2027 goal of low to mid-teen adjusted EBITDA margins. Moving to slide nine, it was another very strong quarter for orders, which totaled $83.2 million, driven by strong demand across defense, space, and energy and process. This included a $25.5 million follow-on contract for the MK48 Mod 7 heavyweight torpedo program, as well as new orders from leading space and aerospace companies that Matt discussed and that we announced in our press release this morning. Aftermarket orders were 9.6 million, moderating from the record levels of last year, but remaining strong on a historical basis. The resulting book-to-bill ratio was 1.3 times, driving backlog to a record 500.1 million, up 23% year over year. Approximately 35 to 40% of this backlog is expected to convert to revenue over the next 12 months, and roughly 85% of the total backlog is attributable to the defense market. As a reminder, orders remain inherently lumpy given the multi-year nature of our defense programs and our large commercial contracts. To illustrate this point, since fiscal 2020, our annual book to bill ratio has ranged from 0.9 times to 1.4 times revenue. However, our quarterly book to bill ratio over the same time period has ranged from 0.5 to 2.8 times revenue. Over the long term, we target a book to bill ratio of 1.1 times each year in order to support our long-term growth goals of 8% to 10% per year. For the fiscal 2026 year-to-date period, our book-to-bill ratio is 1.7 times. Turning to slide 10, we remain in a strong liquidity position. We ended the quarter with $20.6 million in cash and no debt, and $44.7 million available on our revolver. providing significant flexibility to support future growth investments. Operating cash flow was $13.6 million for the quarter, reflecting strong working capital conversion tied to milestone receipts and advance payments, as well as strong cash profitability. Capital expenditures were $4.1 million in the quarter, focused on capacity expansion, automation, next generation x-ray technology, and our new cryogenic testing facility in Florida, all of which Matt discussed earlier. All major projects remain on schedule and are expected to deliver returns above 20% ROIC. Turning to guidance on slide 11, based on our performance through the first half of fiscal 2026 and our outlook for the balance of the year, we are reaffirming our full-year guidance for all key financial metrics. The recently announced XDOT technology acquisition does not materially affect our guidance for the year, as our annual revenue is only about $1 million per year. Again, we would like to remind everyone that our fiscal third quarter is typically our seasonally lowest revenue period due to normal holiday-related production schedules. Overall, With strong execution, robust end market demand, and a record backlog, we remain confident in our full-year outlook and our ability to continue delivering consistent performance. The 20% plus ROIC investments coming online in the next two quarters, along with the continued momentum that is building within our company, gives us confidence we are on track to achieving our fiscal 2027 targets of 8-10% organic revenue growth and low to mid-teen adjusted EBITDA margins. With that, we can now open the call for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from Bobby Brooks with Northland Capital Markets.

Hey, good morning, guys. Thank you for taking my question. Just wanted to get a little bit more clarity. It seemed like the 22 million in space and aerospace orders announced this morning. It seems like some of that was recognized in 2Q results and some of it will be recognized in 3Q results. Am I thinking about it right? And could you parse that out for how much was in 2Q versus 3Q?

Thanks. Yep. Nope, you're spot on there, Bobby. As you saw from the release today, we had 15 million of orders in Q2, and the other 7 million came in after quarter end, so they'll be in Q3. Got it.

And then, so excellent results for revenue in the quarter, but guidance is maintained. So I was just curious, could you discuss why maintaining the guidance made more sense than raising? Is it just simply some stuff was scheduled to go out maybe in the back half and got pulled forward and occurred in the second quarter, or maybe it's tied to some dynamic with the manufacturing footprint? Just hoping to get more insight there.

Yeah, it's just all timing, Bobby. You know, the results for the first half of the year are consistent with our expectations. You know, we're tracking right on plan, so we just maintain the guidance.

Got it. And then, uh, you know, I, the, it's great to hear that the cryogenic facility is on, is on track. I saw some updates from the Barbara Nichols, LinkedIn inter quarter. And I think I've read somewhere that you're starting a book, uh, slots there. So just curious to maybe hear an update there and how things are going.

Yeah, so I'll answer two things. The first is we did successfully commission and execute testing at the Barbara Nichols location in Colorado with the liquid nitrogen stand, which is a smaller stand that supports a critical space program. In addition is the propellant test facility, which is obviously on a much larger basis down in Florida, which is what you're alluding to. We actually expect to get the occupancy here any day, at which point we'll be commissioning with our product. So we'll be testing an internal product. Simultaneously, we do expect within this calendar year to start testing customer product. With that being said, yes, I'd say that the The backlog in customer conversations are healthy. And as we pivot from actually getting the test stand operational, we are shifting full focus to booking the customers into the backlog. So, you know, it's coming along just as we expected.

Appreciate the call, guys. And congrats on the strong quarter. Our turn to the queue.

Thanks, Bobby. Thanks, Bobby.

And moving on to Russell Stanley with Beacon Securities.

Good morning and echo the congrats on the quarter. Maybe just on orders, surprisingly strong in the quarter, given how strong Q1 was, understanding the lumpiness going forward. But can you talk to, I guess, how much of the Q2 defense orders were Navy-related or specifically related to the Southern Carrier programs? Just wondering what kind of opportunities you're seeing outside of those core programs you're already on.

Yeah, Ross, it's a great point, and I think it's worth a little bit of expansion. You know, actually, the bookings primarily this last quarter weren't in connection to the actual strategic platforms themselves, but in some way are connected to the larger defense scope. So as mentioned, we saw the torpedo side. We saw the... Some of the aftermarket, you know, pick up on the defense side. We saw the space bookings that were announced this morning. So it was really a host of opportunities that we've been nurturing sort of in the background connected to the strategic programs without providing too much additional color that I really can't go into. So, yeah, it was a nice diversified bookings, but very strong as you alluded to.

Great, congrats on that. Maybe I can ask, obviously excellent order numbers, the customer advances look strong, but just heard from the major shipbuilders a few weeks back, wondering if you could talk to any sort of impacts you're seeing in your business around the government shutdown, be it in customer conversations or order flow looking a little further out. Thank you.

Yeah, so fortunately for us, as you follow this closely, You know, the programs that we're involved with are extremely long standing and have great confidence long term. So what we're seeing is in terms of impact, it's pretty minimal, both in the near term and long term. What we do feel just to break it down to a very narrow window is we obviously have quite a bit of components, you know, working their way through the factory. And so the support from government reviews and reviewing deviations and other things that are much more tactical are taking some additional time. Fortunately, a unit like this takes years. And so days doesn't end up disrupting the outcome. So I think we're really well positioned despite the shutdown. The other area that we're feeling some impact is just appropriations and then actually sending out the sort of defined POs for what are more development-like programs. So we have gotten all indications that everything's moving forward, but just some delay in actually issuing the work.

That's great.

Maybe one last question just around the x.transaction. I understand. I think you're already doing business with them. But can you can you talk to, I guess, what kind of customer feedback you've received around a transaction with it, what they've said to you and and secondarily, I guess, the tech has applications, I think, across your main business lines, but wondering where the most significant impact might be. Thanks.

Yeah, it's another great question. So, yes, we've been working with at Barbara Nichols specifically foil bearing technology for decades at this point on what I'll say is very focused applications. We've also been working with X-Stop for extended periods of time. With that being said, we've developed a great relationship and they have analytical capability that ourselves and others do not. So, in addition to this, the product portfolio, we get some additional capability. The customer conversations, you know, our customers don't necessarily know that we're using xDOT technology up to this point, but it's an enabling technology. So I'll just say it has allowed us to enter into areas like small modular nuclear, which we're using foil bearing technology in some other areas, like, for example, fuel cell blowers and such. but our customers don't necessarily know that connection and link. What we are seeing is their bearing end user, which is essentially buying spare bearings today or production bearings, are now looking to have conversations with Barbara Nichols about potentially machine upgrades or future opportunities. So I guess, Russ, that's the color I'd provide, but it really is around technology excellence.

That's great. Thanks for the color. Congrats again. I'll get back to you. Thanks, Russ.

And our next question comes from Joe Gomez with Noble Capital.

Good morning. Congrats on the quarter.

Thanks for taking my questions. Pardon me. On the announcement today on the space market, you did mention that orders that you're making some investments. Maybe you could just give us a little more color on the size and timing of those investments.

Yeah, no, you got that right on, Joe. We are going to need to buy some additional lathes and mills. That's factored into the CapEx guidance for the year. So as you saw, there was no change to our guidance. And we'll spill over a little bit into fiscal year 27. But, you know, as we've always said, you know, we're not going to make, you know, big capital investments unless we have the orders to support them. And they all have to have a greater than 20% ROIC that we've discussed as well. So, and we won't make those investments till it, you know, we have that in hand.

Yeah. And one quick add, Joe, just for some additional insight. you know, the orders really secure the investments that we've already been making. And so these orders really reaffirm a lot of our ROIC calculations that have been made in the past. So it's just really nice that it's sort of reaffirming our commitments in our budgeting process. So strategic direction, you know, the assets like down in Florida, Some of these orders impact that facility. The liquid nitrogen stand also has impacted the assembly and test area at Barber Nichols that just came online last quarter where this product is going through that facility. And so it's just a great memory of the current capability that we've already invested in as well.

That's a great point, Matt. And, you know, said a little bit differently as well, you know, the investments we made enabled us to win these orders to a great extent.

Okay. Thanks for that color.

And maybe the same, you know, you talked about some momentum in the small modular reactors. Maybe you can just give us a little bit more color on, you know, what you're talking about there and momentum and timing for that also.

Yeah. Yeah, so small modular reactors is a very interesting, you know, we've seen ups and downs with nuclear over decades. We're clearly in a bullish position right now. Barbara Nichols is well positioned with background on, you know, rotating machine that support both, you know, cryogenics that directly applies to, you know, thermal regulation of a nuclear reactor. In this case, Joe, we're in the early phases of development on a number of, I'll say, scaling programs or the potential to scale. And so we've already disclosed, but you can sort of see that the ramp's not going to happen overnight. So we are in the development phase. We're seeing some products that will go into the Idaho National Lab dome in the next coming months slash year, and then have long-term potential for scale. So I'll just, I'll state it as simple as we're in the early phases of that growth trajectory, as almost aligned with what the industry's feeling.

Okay.

And then just on the fence, the increase, the 9.9 million growth in defense revenues, and you mentioned there was, one was the timing, of some project milestones, new programs, growth in existing programs. I don't know if you could kind of, you know, size those for us as to, you know, what percent of that 10 million growth came from the milestones versus new programs versus the growth in existing programs.

Yeah. So, Joe, as you know, our revenue tends to be very lumpy. And part of what creates that lumpiness is, you know, when we receive materials, on some of these programs, we're allowed to recognize revenue since we're on a percentage completion basis. We had, you know, in our prepared remarks, we had an unusually high level of material receipts this past quarter, which was expected in this fiscal year. And that ranged from about 8 to 10 million. So the biggest, a large chunk of that increase was because of these material receipts, which also as stated in the comments today, Do carry with it a lower margin. As we stated, it impacted our gross margin by about 180 basis points. So that's the bulk of what you're seeing there. But we have material receipts every quarter. It's just not to this high level usually.

Right, right. Okay. Great. Thanks for that. I'll get back in queue. Thank you. Thanks, Joe.

And as a reminder, if you'd like to ask a question, please press star 1. And we'll go next to Tony Bancroft with Scabelli.

Good morning, gentlemen, and a great job on the quarter. You know, as I'm looking at all your numbers here and your backlog and your balance sheet, it seems like you guys, everything's going high and right. You know, a lot of orders, very sticky stuff, long-term secular stuff. You know, in five years, you sort of have, it seems like sort of three strong markets that you're in. and as far as growth, you know, how do you, in five years, how, how are you going to see yourself positioned? Are you, are you going to be focusing on the sort of the naval, uh, naval defense? Uh, you've got this sort of a real nice, nice space business that's growing nicely. And then you obviously have this, the commercial SMR, uh, business, you know, your, your funnel, what, what are you seeing as the best opportunities and maybe talk about, you know, the demand there, the pricing there, um, and sort of walk through that for me.

Yeah. No, Tony, great question. You know, I'm going to answer this a little bit higher level, and then we can go deeper if needed. We love the 50-50 target split between sort of the commercial segment and the defense segment. And what that allows us to do is be speedy and nimble. I'll say attuned to price pricing and specifically optimizing pricing on the commercial side and then bringing commerciality where possible and technology and speed to the defense market. So we really act as that long-term provider, but also that sort of technology disruptor in the defense space. So I'll just say fundamentally that is our focus is to keep that velocity in competitiveness from the commercial side and bring that to the defense side. And five years out, we see that same dynamic moving forward. What I will also say is, yes, there will probably be ebbs and flows to what that split looks like based on opportunities that come in the door.

Yeah, that's really good. Thank you so much, gentlemen. Yeah, thank you.

And we'll go next to Gary Schwab with Valley Forge Capital Management.

Yeah, thank you. And great quarter, guys. I just want to go a little further into the last caller's question, but I want to go into a different direction. You know, you have a proven success record so far for the MK-48 torpedo program. And this is for Matt. I've got a two-part question for you. Looking ahead for opportunities into 2027 on new torpedo programs, it has to do with the FCEPS, the Solid Chemical Torpedo Propulsion System, being developed for two new torpedo platforms. And it looks like those two new torpedoes will serve two distinctly different roles from the MK-48 program. I know we're already supplying a limited production run on this propulsion system. My first question is, can you add some insight into how the Navy plans to deploy these two new torpedo platforms and what gaps they're trying to fill? And then secondly, given XDOT's superiority in its foil-bearing technology, Do you see an opportunity that would give us the key advantage possibly of winning a role on either the propulsion side or the guidance system sides of either of these torpedo platforms? Thanks.

Yeah, Gary, thanks for the congrats. And yeah, you know, there's a lot of momentum building. First, I'll start off with the torpedo topic. I'm going to decouple X dot and I'll cover that sort of after, you know, independent of bearing technology, we're well positioned to be a key supplier on the platforms that you referenced. So I'll just keep it high level and say we don't need that technology to be a key supplier. We're already engaged in doing work in that arena. Once again, I can't sort of speculate on the Navy's plans for these products, and certainly it could be, you know, Army and other areas. But what I will say is, you know, the gaps that they cover, all the gaps you'd expect with such capability, and that's you know, sort of range, longevity, reuse, all the things that would add additional value to the defense portfolio. So, you know, yes, we are well positioned on those new technologies in the torpedo space, and we're working with Primes and the government to develop those technologies.

Can I just ask, is that going to be a much bigger program? Because I know that the problem with going after drones now, one of the programs is for multiple torpedoes, small torpedoes to go after drones?

So once again, you'll have to sort of read in depth because I can't disclose too many details, but I'll just say that there's a lot of practical uses for both the MK-48 torpedo as well as the new technologies. So yes, I think they're looking to sort of deploy such similar technology to adjacent capability within the naval platform.

And this now concludes our question and answer session. I would like to turn the floor back over to CEO Matt Malone for closing comments.

Thank you. We are pleased with our results through the first half of the fiscal year, which were in line with our expectations and guidance. We look forward to keeping you updated on our progress. As always, please reach out with any questions. Thank you, everyone, for joining us today and your interest in Graham.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.