Q4 2019 Earnings Call
And it and it expands and involves with new packaging whether that is shrink-wrapped for shipping your own container programs protective mailers or on-site Packaging Systems. We intend to expand our e-commerce customers. We we intend to expand with our e-commerce customers as they grow with increased penetration and markets around the world.
and we are
Listening the business to ensure that we can effectively serve those customers with the right products and meet their packaging needs.
E-commerce retailers and their end customers are increasingly increasingly conscious of the impact their choices have on the environment last month. We outlined a series of sustainability measures. We have taken at ipg to enhance our product offering operations and Supply Chain management. We believe this program is so fundamental to the e-commerce Market not mention our other markets that we have updated our corporate strategy to include sustainability as one of our four pillars. We believe that packaging and protective Solutions providers that Embrace sustainability and offer viable sustainable Alternatives that deliver both value and performance can expect to experience outsize growth in this important market and we're taking steps to be at the front of this Market change or water activated tape achieved cradle-to-cradle certification. This is a global program with recognized protocols for environment.
And social performance. We also certified or water activated non reinforced tape as the first recyclable curtain sealing tape to a past the Western Michigan old corrugated cardboard equivalency test. This test is recognized by the fiber box Association as the standard and the association represents 95% of the coordinators in the US.
Those are offerings that are in the market today. We are also actively launching new products that deliver meaningful benefits on recyclability and waste reduction in November. We announced the launch of the Kirby family of products. This offering is produced with sustainable sustainably-sourced materials and designed to securely ship products and then be curbside recyclable. One of the most exciting products from this line will be a new paper-based protective mailer designed to replace plastic bubble mailers and, Nate Anna, and combination paper and plastic bubble mailers wage are universally used today, but not curbside recyclable.
As part of these initiatives and our broader sustainability strategy. We are collaborating collaborating with William McDonough of McDonough Innovation bill is the thought leader in the space with one of the principles behind the circular economy his insight and network will be invaluable in helping us with product design and strengthening our customer relationships and visibility as a leader in sustainable products and operations.
These are initiatives that directly addressed both growth in the e-commerce Market as well as our broader markets.
Last month, we announced the acquisition of nortech packaging nortech manufacturers assembles and services Automated Packaging machines under the nortech and brand name. This is an example of a strategic acquisition that expands our product bundle with a new product offering and vertically integrates are offering to the customer as Distributors and e-commerce retailers increasingly utilize automation to streamline their operation nortech possesses the engineering design and Manufacturing capabilities that enable us to offer a comprehensive solution with the customers in their packaging facilities and distribution centers. This acquisition positions us to both installed nor Tech machinery and then supply ipg consumable products such as tape film and protective packaging for use in that Machinery. We believe this represents a great opportunity for us both in New Markets like pharmaceutical and personal care that nor tech service.
today but also in two of our most important verticals food and beverage and
Farmers are scale and customer relations relations have the potential to open up new opportunities for nortech that they did not have the scale or reach to achieve independence off since the announcement. We've been asked how the acquisition fits with our priority to aggressively pay down debt. This is a very important point when we completed the black 2018 it provided us with the flexibility to be either defensive or offensive defensive in that it reduced our secured leverage ratio, which is the core Covenant wage Capital stack in the event of a downturn but it also allowed us to be offensive when we see an opportunity at the right price that can deliver meaningful returns to shareholders with faith in our platform. Depending on the economic Outlook We Believe additional opportunities may arise that meet our investment criteria tuck-in Acquisitions like my weave, Arkansas birth.
Opportunities that allow us to cash checks immediately from our buying power add customers and deliver cost synergies overtime through effective operations are strategic product Acquisitions, like nortech that strengthen our bundle and meet the needs of customers in adjacent areas that are new to our business and provide growth opportunities. We believe we've demonstrated the ability to walk and chew gum at the same time free cash flow improved dramatically in 2019 debt repayment is the highest priority for us. We have driven down our total leverage ratio to 2.9 as of the end of 2019 and we intend to continue to pay down debt and 2020 at the same time. We will be opportunistic from time to time when appropriate and for the right assets we've assembled a world-class low-cost asset-based that can compete as a leader in our market. We've completed our strategic capex programs wage.
No new Greenfield facilities in our current plan and we've selectively reduced our rooftops where appropriate to ensure the most effective Assets in our Fleet are being utilized effective. It's a disciplined approach that we're executing to deliver sustainable long-term growth to shareholders leave a clear action plan ahead of us in 2020 number one grow with an e-commerce by tracking our customers as they grow around the world and launching new products that meet the changing needs in their market number to utilize our platform to embrace sustainability as our customers and their end users increasingly search for packaging and protective solutions that deliver value and sustainable attributes, like curbside recyclability wage reduced waste and number three continue to execute on the integration of our Acquisitions, like nortech taking advantage of our scale and operational efficiency to leverage their full potential.
Delivering on these initiatives should continue to deliver improved.
Explode generation our number one priority for this cash flow is debt repayment at this point. I'll turn the call over to Jeff who will provide you with additional insight into the financial results Jeff. Thank you. Greg on page twelve of the presentation. We present an analysis of our revenue for the 2019 fourth quarter and fiscal.
Revenue increase to 291.5 million in the quarter. The 3.8 million increase was primarily due to a seven point five million increase from the my leave acquisition which was part all set by volume mix and price drivers on an annual basis Revenue increased to almost 1.16 billion up one hundred five point five million or 10% compared to fiscal 2018. The increase includes a hundred seven point five million from the poly are my leave and are tracks Acquisitions, which was partially offset by Foreign Exchange changes.
From an organic perspective contributions from volume mix and price combined were down slightly by 1.2% in the quarterly. And relatively flat at positive 2% in a manual. Compared to the same period in 2018.
We continue to see above-average growth and product categories that we supported with capacity improvements to our strategic capex program specifically water-activated tapes and films. We believe our own no sense in these product categories will continue to deliver positive momentum a certain retail tape and Industrial tapes where the segments most under pressure in both the quarterly and annual periods turning to page thirteen gross margin was 20.7% up 100 basis points in the fourth quarter and 21.3% up 52 basis points in the annual. It to the corresponding periods in 2018, the improvements in both. Were primarily due to the increase in spread between selling prices and combined raw materials and freight costs.
The Improvement in the annual. Was partially offset by the dilutive gross margin impact of the poly air and my leave acquisitions.
Adjusted ebitda increased by nearly 14% to 43.8 million and almost 22% to 172.2 million in the fourth quarter and fiscal 2019 respectable compared to the corresponding periods in 2018 the Improvement in the quarterly. Was primarily due to organic growth in gross profit the impact of now capitalizing operating life payments, totaling 1.8 million dollars and the my leave acquisition the Improvement in the annual. Was also driven by organic growth and gross profit the capitalization of lease payments of 7.1 million and both of my weave and Polly are acquisitions.
Adjusted ebitda margin was 15% up 160 basis points and 14.9% up one hundred fifty basis points in the quarterly and annual periods respectively off at the 2018 these improvements reflect effective management of the spread between pricing and raw materials and Freight as well as incremental improvements in our margins in our acquired businesses Thursday. We have increased our disclosure on m&a integration costs in our filings. M&a costs were 3.3 million dollars and eleven point two million in the fourth quarter and annual. Actively. These costs can be broken into two categories one integration costs and to due diligence costs and professional fees on deals that were completed as well as deals that did not reach the stage.
In 2019.
The primary components of these costs were five point 1 million dollars for Polly are two million dollars for my weave and one point three million in other due diligence including nortex. Looking ahead. We anticipate approximately 3 to 4 million dollars in m&a integration costs during twenty-twenty based on the deals completed to date. This range does not include non cash purchase price to Thursday. It's or any due diligence or integration costs on any potential new deals in 2020.
The effective tax rate was 17.3% and 28.3% for the fourth quarter and annual periods respectively. The annual figure is with within our guidance range. The higher annual rate is due to the elimination of certain tax benefits as part of the tax reform under us tax cuts and jobs act and a proposed state tax assessment.
For 2020 we expect the effective tax rate to remain between 25 and 30% excluding the potential impact of changes in the mix of earnings between jurisdictions. We accept cash taxes to approximate a good tax expense as a result of us having utilized most of our tax attributes in the form of tax credits and loss carryforwards.
Cash flows from operating activities where seventy three point three million dollars up 4% in the quarterly. And $135 billion up 49% in the annual. Compared to the corresponding periods in 2018. The Improvement in the quarterly. Was primarily due to a reduction in inventories as part of a plan initiative a 2019 a larger decreasing accounts receivable and an increase in gross profit partially offset by a smaller increase in payables.
The Improvement in the annual. Was primarily due to increased gross profit a decrease in cashews for working capital items and the non recurrence of a discretionary pension contribution in 2018 month free cash flows increased to sixty three point seven million dollars up 23% in the fourth quarter and increased to eighty six point eight million dollars up nearly five times in the annual. Compared to the corresponding periods in 2018. The improvements are a direct result of the increases in cash flows from operations and the reduction in capital expenditures with the completion of our strategic capex program in 2018.
Capital expenditures and 2019 were within the range we outlined on our March 2019 call at $48. We have proactively reduced our capex plan for 2020 to arrange a thirty to forty million dollars, which is aligned with the Outlook Greg address earlier as Greg mentioned earlier are unsecured senior note offering in 2018 enables us to lower our secured net leverage ratio, which was 1.4 times at the end of 2019. The secured that leverage ratio is the most important ratio that is relevant to our covenants. Therefore, we view it as the highest priority off our total leverage ratio, including the unsecured debt decreased the two point nine times down from 3.2 times in the sequential.
as Greg mentioned earlier
Our highest priority for Capital allocation at this stage is debt repayment. We expect to continue to repay debt in the second half of 2020 as the seasonality of our business unwinds and throws off more cash now, I'll turn it back over to Greg for his closing thoughts Greg. Thanks Jeff and closing we continue to execute on our vision to be a global leader in packaging and protective Solutions. We've made significant investments in our asset-based during the past three years. The benefits of those Investments are showing up with adjusted ebitda growth that is outpacing our top-line growth increased adjusted ebitda margin nearing 15% as well as improved free cash flow, which we expect to continue in 2020. Our confidence in this outcome is dead by the addition of free cash flow to the Outlook metrics. We are focused on strengthening our product bundle continuing our pursuit of operational excellence and maintaining High wage.
Customer service standards. We believe more Runway exist to drive operational efficiencies across both our Legacy assets and our recent acquisitions through reduced waste package appointed here insta process and the continued engagement of our dedicated team on performance We Believe sustainable offerings represent growth opportunities to packaging and protect the solution providers that move quickly make credible claims and deliver products that meet the needs of customers. We have taken proactive measures with a goal of ensuring the businesses competitive independent of macroeconomic environment building a world-class low-cost manufacturing base producing products of value for and markets. We are executing a strategy to deliver long-term value for our shareholders with that. I'll turn the call back to the operator to open up for questions. Thank you.
Ladies and gentlemen, we will now conduct a question-and-answer period for analysts. If analysts would like to register a question, please press star followed by the number one on your telephone keypad. You'll hear a prompt to acknowledge your request if your question has been answered or you wish to withdraw your registration, please press the pound sign on your telephone keypad. If we're using a speaker phone, please pick up your shift your handset before answering your request. One moment, please for the first wash
first question comes from Michael do with Scotiabank.
Hey, good morning, guys. Are you Michael? Yeah, look, I mean, we're all trying to to Grapple here with the macro. Now you guys had to put out guys. So I want to get your thoughts there like similar to last year. You have some projects startups and ramp-ups that are going to drive growth like you guys talked about it. But as you indicated, you've Incorporated potential macro headwinds a guidance, so I'm wondering, you know, what assumptions you've taken specifically and whether it would be an over-simplification to to think about the top end of the revenue and even a guidance materializing in a world where there isn't any sort of macro impact from covad nineteen and at the bottom and obviously something materialising just just to set up some goal post for us to age. Well, I'll let you get some color from my perspective. And listen. We're trying to we're trying to give guidance based on what we know today certainly if it was not for the virus or
Range would be tighter and more to the upper end. I can't say that it would be the upper end but certainly would be more towards the upper end and we'll have to
Manage on the way through as as things unfold like you said, it's a pretty fluid situation. Certainly we've taken steps to secure facilities and our people and also taking approach and some of our plants to ramp up production as a security blanket. We've seen Demand on the e-commerce side pick up our order book as well here today is you know, relatively similar to where we were last year at this time and and certainly we haven't seen any changes but I think we probably will in the next month or two ago. So I don't know if you have any other color around that I think that covers the Michael. I mean, I think you know that that's kind of the way we tried to set up the guidance is saying, you know, if if things somewhat play out normally would be towards the upper end of that and if things are worse, you know, we'd be towards the lower end of that. Okay, is that that sort of makes sense and the first impression too that I got home?
Yes, just maybe moving over. I mean the stock price and the last couple of days weeks, you know versus the, it's it's declined much more significantly. So I think it's fair to say that, you know, the markets obviously nervous about the potential profit decline or The Leverage ratios. I mean, what are the views internally, you know in terms of how much sick of quality you guys actually seeing a business, you know, it looks like on the low end of your Revenue guidance, you're effectively calling for a Max decline of 3% on on the organic side margins a Max decline a hundred basis points versus this year. You know, I mean, you've elaborated it we've talked to this already, but you know, how resilient do you think this business is today vs previous Cycles?
Well, look, I think I think the landscape, you know in my experience with other Cycles, I think the Landscapes a little different from a competitive intensity perspective to start with I think you got much more disciplined businesses in that competitive field. I think from a balance sheet perspective at least relative to the last cycle that we went through as a company that balance sheet is in fantastic shape and that's secure leveraging 1.4 gives us a lot of room to operate and and certainly proved that what we did in 29th 2018 with the bonds and lock the biggest shock absorber you have and in situations like this is dead is your margin right and your balance sheet. So so certainly the margin profile of our business is much different than where it was in the last recession much higher or last downturn was put that way and the balance sheet is in much better shape as well certainly from a guidance perspective. You know, we're taking some proactive steps right now on capex and you've seen some reduction in that from from prior,
And will act accordingly on the way through this but again, I think that the company, you know, we said it from day one when we did the bond offering, you know, we positioned the company and the balance sheet to do well in a growth economy and to do well in a downturn and and certainly looks like we're in a downturn mode here.
Okay.
And maybe just a sneak one other one in just a quick one, you know if volumes do come in at the lower end of the guidance. I mean as we think about the margin pressure is that in your view a gross margin issue or a negative operating leverage issue?
Or a little bit to start with I think the number one goal in our business is to keep the dollar spread between raw materials and revenue, right? So so on a what we would call a value-added percentages, you know, when a falling raw material environment, you expect that percentage to go up but you expect to protect the dollars of spread, you know, as it relates to the leverage a little bit. It's hard to articulate. Yeah. I mean, you know, it's like again, I think it comes back to what Greg saying it's like basically, you know, we would expect if raw materials are going to fall off that is very likely possibility. You know that we're going to see some good leverage in terms of our margins on a revenue, you know, both at the gross margin level and potentially at the ebitda margin level that could translate.
Okay, and those are helpful comments guys will pass it over there?
Your next question comes from Steven McLeod with BMO Capital markets.
Thank you. Good morning guys morning morning. I just wanted to follow up quickly you talked about the inventory levels and you know, you've taken some down time and you expect it. I think you're still in some downtime and I got into can you just talk a little bit about what the impetus is for that is that sort of in response to at least, you know, where you sit today is that in response to a potential for lower volumes going forward or is that just a normal course of business? Yeah. I know. I mean, you know we talked about this it was probably last year, you know, we were carrying quite a bit of inventory if you look back and there was certainly a big uptick from Q4 2018 and 61 and 2019. And you know, so we we took some some measures throughout the year really to reduce that inventory and certainly a lot of that played out for which is what we were discussing in in the in in the speaker notes here. So basically that's what it was. It was essentially a reduction inventory and you could see on our balance sheet. We'd actually came down which is like dead.
So that's been something we we're pretty proud of and at the same time we were able to manage our order book and our shipments and and service levels very effectively.
Okay, and then so that's the same initiative that's continuing into q1. Yeah. Yeah, and I'll make one other comment look in the last week or so in certain plants. We've met a conscious decision again just in the last week or so to potentially build inventory in certain key product areas from a security perspective with dealing with the unknown from the virus in the Box.
Okay. Okay. So just turning to the e-commerce business, you know, obviously that is a potential opportunity as people maybe stay at home and and and go out less wage. You know, can you talk a little bit about future reminders what what what level of revenues the e-commerce business represents in terms of water activated tapes and protective packaging and maybe other exposure you have to that segment of the market wage. Yeah. So we we haven't given those numbers out, you know, as you know, I mean, we do have some visibility, of course in certain direct relationships. There are a portion of relationships that go through distribution, which we have less damage on so we have not disclosed the number what we have said though is it's not a large percentage of our Revenue but it is a significant percentage. So, you know something that is Meaningful to us, but not the majority of our Revenue, right?
Okay, and could you just give a little bit of color? I'm not.
Sure, if you've disclosed in the past, but just in terms of you know, if you look at the business eCommerce, I mean the the the majority of your business. What end markets do you like? What's the brake Market?
That you service so so we because we go through distribution. We don't have an exact idea because we don't get off in general manufacturing transportation and food and beverage. Those are our biggest and markets from a consumption perspective, right? Okay. Okay, that's Thursday and then maybe just finally talking about leverage, you know in in in in an Ideal World, obviously notwithstanding the fact that there's a lot of uncertainty right now. Where would you have have expected your leverage to Trend down to giving your free cash flow acceleration in generation plans for 2020. Where where would you expect leverage to have trended to in 2020?
Yeah, we we haven't given guidance, but certainly, you know, we would expect that to come down. I mean with the north Tech acquisition, of course, you know that that pops it up a little bit and see one but you know, we would expect to see some strong free cash flow and bring that back down by the end of the year and we would expect that Trend going forward.
Okay. Okay. That's right. Thank you. Next question comes from Walter spracklin. Good morning. Everyone else. You mentioned. You saw signs of e-commerce Improvement. Can you elaborate a little bit on on what signs you've seen and and and discuss, you know kind of the metrics or indicator that you follow to suggest that that e-commerce is rebounding and then on the flipside, I got to think there are some end markets that you serve that will be substantially down as we move, you know through through the year. And and and are you seeing any I know you said generally wage they say that it wasn't uh down a lot or you didn't see any signs of it. But it I gotta think that there are some segments that you know, we'll we'll see dead.
Some Decline and if if you've seen any indication in those micro segments of of of that, yeah, so let me kind of slice off those questions. So starting with the e-commerce, you know, what I would say, I mean certainly e-commerce isn't rebounding it. It's growing at a much more accelerated level than we would have thought at this point of the year. So the metric that we're off on that is strictly sales and and Order bookings, right and we're seeing that in our scope of products, right? So it's not just tape seeing that in our system sales. We're seeing that in a protective packaging as well and and from our customer checks with that segment, they expect that obviously to continue home and further potential accelerate with what's going on from a macro perspective, you know, the big issue that they have or that you hear from a risk perspective is their ability to get the supply dead.
um, so that
That should address your e-commerce question. And then when I look at the rest of the order book, so to speak either in open orders or order input, you know, we typically it's just time of the year have puts and takes and and I would I would just give you some color that those puts and takes are pretty similar to what we see in a traditional environment. But certainly we expect to see some demand destruction in certain areas as we move forward. So it's it's really too early to see and and just just in the last week in a situation, you know, our bookings have been pretty good. So we haven't seen anything just in a in a day-to-day basis over last kind of five booking days that would that would lead us to believe that we've seen any impact as of yet. Certainly we expect to see the impact though. It's very encouraging and in the in the event that we get the all-clear if you know if knock-on wage.
When we get the all-clear from Cove in nineteen, is it your view, you know, could we see a you know, actually it's my view that we're going to see a significant restocking accelerating. Is there any reason why in that environment, you know, is there any change in pattern in the way, you know tape is consumed when people are rapidly looking to restock off if you're not affected too much on the downturn. Could it be that you're not affected too much on the upturn as well or is there some reason to think that in a massive kind of restocking environment? We will see we will see some improvement in in in in the demand for your overall overall demand for your product.
Yeah, I I I I'd be reticent to answer that or even to predict the outcome of that. What it would say is from an economic perspective macro perspective as we see a downturn here. We will see a reduction in demand and and I would expect on the upswing on that turn around we would see an uptick in demand and and that's that's the expectation that we have as we manage through this month. And again, we don't know what we don't know and and we'll have to deal with it as we move forward. I I would just say that that you know that we do get some kind of benefit certainly from the activity and the continued growth within the e-commerce Market even in this situation as as we've articulated, but the rest of the business really hard to predict but I expect it to decline as macro declined and expect it to go up as the macro rebound. Okay, that makes sense. Last question here is on leveraging your m&a strategy understand, you know, you're going to and and and birth.
To to keep an eye on that but you mentioned your highest priority is on reducing your leverage you flag 2.9 times at the current level right? Now. What what level of a given the uncertain Outlook do you want to bring that down to so if you are you as you mentioned you're putting first priority on it clearly it it's going to come to a level where you're comfortable given. What is that, for level and what happens if you know a a good acquisition, there's going to be a lot of disruption here. And if the right acquisition comes in right now, do you just pass on it. Is there a leverage level given the current context that you'd be willing to support to take advantage of that that that that kind of you know that opportunity.
yeah, so in and
Oh environment with nothing going on either macro wise or or m&a wise we expect we want to run this business somewhere around 2 to 2 and 1/2 x lever. Total leverage certainly get comfortable where we are, especially on the secured leverage side at one point four and then as it relates to m&a what I would expect leaving aside our current turbulent time, I would expect the company to look at m&a similar toon or Tech or my we've as it relates to size and and certainly, you know be very very disciplined. It relates to value and and what we pay for those Acquisitions and certainly, you know, when we see a leverage, you know Leverage is one of our biggest key initiatives to reduce certainly the the bigger the size of the more leverage we're going to be very cognizant of that and certainly in this macro environment. So very cautious and and again as I've said the last couple dead
I expect the company to execute on bolt-on Acquisitions somewhat the size of a nortek or am I we've but certainly we don't need to do them unless they present that opportunity that our our goal here is to reduce that as we move forward. So if I were to just summarize perhaps your intention is, you know, given that you're 2 to 2 and 1/2 is your steady-state perhaps wage, you know all else equal coming down closer to the lower end of that range. But if Acquisitions do provide opportunity bolt-ons or your, you know are the ones that you'd like most likely thank you. Yes. Okay. That's great. Appreciate your time. Thank you. Thank your next question comes from Zachary evershed with National Bank Financial. Please proceed with your question.
Morning, everyone congrats on the quarter. I was hoping you could give us a little bit more detail as possible on the inputs and sales flow that you have in Europe and off maybe highlight any particular concentrations.
Yeah, so where exposure to Europe is somewhat immaterial. We do have a manufacturing facility in Portugal that manufactures shrink film. And then we also offer for tape out of North America into Europe. You know, what we've seen out of sit specifically Portugal right now is actually high demand off the supply chain out of China gets disrupted. So we've seen our order book their increased significantly and and high demand at this point, You're going to see demand destruction in Europe as the factories continued to be shut but as of right now we've seen we've seen pent-up demand in that place that again that's not a mature Bill portion of our business size-wise.
That's great. Thank you. And then as you work towards that two two point five times targeted leverage ratio, would you at all be interested in a share buyback program?
I think at this point we're not I think our our goal is we've clearly stated is debt repayment. Certainly when we get close to to 2 and 1/2 certainly will evaluate the situation at the time, but but certainly right now we are not having that discussion.
That's it for me. Thanks. Thanks. Next question comes from Daryl young with TD securities.
Just one question for me. I was wondering if you just give a quick update on the Greenfield ramp-ups in India.
Sure. So on the the woven side, you know things have been continuing as we discussed in November. I mean they've been you know, basically doing extremely well, you know, so that side of things. You know, we're basically bumping up against our capacity over there. So we've certainly seen ourselves fill up that plan quickly, you know, we've stopped up to where we need to be and everything is going well with the the partners who are running that business. So all all else being equal if it's it's really good right now and then on the power bad side on the tape side, so there you know as we discuss Thursday in November through the same situation there with basically it being more profitable and and and better for us to be manufacturing the the acrylic art and ceiling tapes that we discussed. Um in in both, you know in North America and in India and the hot milk carton spilling say specifically in North America, so, you know, it's still some of the volume pressure there in our new plant and birth.
We have initiatives there to introduce some new products. But as we discuss we don't expect any material contribution in 2020.
Okay, great. Thanks. Once again, if you'd like to ask a question, please press star one on your telephone keypad, and we have a question from David Ocampo with security. Please proceed with your question.
Good morning morning. I appreciate that you provided the 30 to 40 range. Can we expect to catch up in 20 21 and kind of what I prefer?
At this point it's hard for me to say what's going to happen in twenty Twenty-One, you know, like we've always said our maintenance capex in the businesses around 20,000 certainly, you know, we pulled it in a little bit from our prior discussions around twenty twenty and and look what we're going to see how it plays out this year and provide guidance and I think a good wage rate for the business, you know, all things being equal. I think it's still the same of forty to sixty million. I don't know and I haven't gone through the exercise of of determining or the management team has whether that means 20-21 is going to be higher than that or not. So I'm reticent in in giving any further color around that but but look we can operate the business in this range 30 to 40 minutes pretty comfortably.
Yeah, that's great and kind of circling back on the e-commerce business.
When I think about you know, your water activated tapes, is there any significant competitive advantages that you have over your competitors or is it simply that you guys have a broad product line? And that's how you been a market share whole looking at product category. We've got a dominant share in that area and certainly from a logistics supply chain perspective. It's a very complicated supply chain structure certainly dealing with North America but also into Europe and into Asia and certainly from a capabilities perspective specifically found the marketing message with the tape. I think we have unique capabilities within our plants to execute on those marketing messages. So I think a combination of all of that leads us to our place in there.
Okay, that's great the call from you. Once again. If you would like to ask a question, please press star one on your telephone keypad. Once again, that's star one to ask a question.
We do not have any cell phone questions at this time. It will turn the call over to mister beale's. Thank you for participating in today's call. We look forward to speaking with you again following the release of our first quarter of 2020 results. Thank you. Have a nice day.
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Thursday