Q1 2020 Earnings Call
Good morning, and welcome to the need not first quarter Twentytwenty earnings Conference call. All participants will be in listen only mode should you need assistance. Please take only comfort special works by pressing the Starkey followed by zero.
Today's presentation, there will be an opportunity to ask questions Laski question in the press Star then one on her telephone keypad withdraw your question. Please press Star then too.
Please note. This event is being recorded I would now like to turn the conference over to you Bill Mccarthy Vice President Investor Relations. Please go ahead.
Quarter earnings call with me today, our jewelry Shortell, Chief operating officer, and Bonnie when Chief Financial Officer.
Julien Bonnie will comment on business and financial results for the quarter as well as spend time discussing impacts from the Corona virus pandemic and actions, we're taking to address this fluid situation.
After our prepared remarks, well open up the call for questions.
Let me briefly cover a few headlines first quarter sales of 234 million were down 3% from year ago have strong volume growth and technical products was offset by declines in fine paper and packaging.
Earnings However increased significantly.
Adjusted earnings per share rose more than 60% from 69 cents last year to $1.12 well GAAP earnings of 97 cents per share up 40%.
Adjusted earnings this year excluded unusual costs of 3.5 million or 15 cents per share while there were no adjusting items last year.
Barney we'll talk more about these items later in the call and it's always complete details along with a reconciliation to comparable GAAP figures can be found in our press release.
Finally, I'll note. Our comments today will include forward looking statements actual results could differ from these statements due to the risks outlined both on our website and in our SEC filings with that I'll turn things over to Julie Excel and good morning, everyone.
Let me start with a word of appreciation for all first responder and essential worker, our condolences for those affected by the crowd of Iris and our best wishes for everyone's health and safety, obviously, the world to save quite a bit since our February call. However, the strong performance, we expect that for the first quarter did not change before.
Discussing results I also want to take a moment to recognize our employees for their commitment and agility and adapting to this dynamic environment. While at the same time remaining focused on delivering strong results. Our top priority is always the health and safety of our employees and I'm, especially grateful to our manufacturing team.
We had to adjust rapidly to new ways of operating that included and had sanitation and cleaning practices temperature Chuck employs zoning additional personal protective equipment and social distancing.
While navigating through these challenges in changes Rpls never missed a beat.
Turning now to performance in the quarter, despite a weakening external environment. Our teams delivered solid volume games and our target growth categories, a filtration performance label digital transfer and premium packaging, let's topline performance along with improved manufacturing efficiencies and continued price discipline help drive.
A significant year on year increases and profit and margin and both business segments.
With higher profit and disciplined asset management return on invested capital increased double digit level.
Cash flows for the quarter increased more than $10 million versus last year further bolstering our liquidity. We ended the quarter with liquidity of just under $200 million and are committed to taking appropriate actions to preserve our liquidity as strong financial position as we work through this year.
Well I'd like to spend more time talking about our great first quarter, what's more important now is fair I mean actions underway to address expected negative impacts from the covert lighting pandemic.
I've been extremely pleased with the combined all collaboration and rapid response of our team during this challenging period.
As I noted earlier, our top priority is the safety and health of our employees.
The new protocols, we implemented to protect employees and contractors have been effective and we've had no disruption to our operation.
I'm also very pleased that our safety performance in the quarter improved building on the trend started late last year.
With changes in the external outlook, we quickly began assessing potential financial impacts and proactively began reducing costs.
These actions included significantly cutting spending and areas like maintenance marketing and S. DNA, reducing operating labor and machine schedule, we organizing to enable salaried headcount reduction deferring annual salary increases.
Using travel new hiring an internship program and idling of fine paper machine, which I'll talk about shortly.
Further to maximize cash flow, we implemented additional measures, including reducing capital spending by 50% from our prior guidance driving working capital efficiencies, reducing pension contributions and suspending share repurchases.
Well unable to fully offset the impact from Cobot 19, we believe these actions valued at over $50 million will enable us to maintain ample liquidity.
We also exited our planned acquisition of vector apply between the time Weve tender offer until one the agreement was terminated there was clearly a material change and conditions. This was a prudent decision for Nina, allowing us to maintain our strong balance sheet going into an unexpected economic downturn and more importantly coming out.
Out of it.
Let me turn to our efforts with customer.
As you might imagine many customers are currently focused on their immediate needs versus longer term projects or new opportunities. We're working with them to meet these days while at the same time never losing sight of being prepared with new capabilities in ways of doing business.
One of the ways, we're doing that is by continuing to invest in R&D capabilities. Our R&D work contributes to our long term growth. It has led to the launch of several new products. This year. Many of these products such as low emission filtration media fiber based plastic alternative and digital trip for media for natural textile.
I'll have both in Boston use and environmental benefits the customer.
In addition to customers. We also developed plans and worked closely with critical suppliers to safeguard our supply chain.
Well, we've had no mandated or supply driven disruptions to our businesses as always we merits operations in line with customer demand with softening economy is a market we began to see weaker demand in mid March, especially in printing papers.
Consequently, we decided to idle one of our fine paper machines in Wisconsin, beginning in early May.
Well these are never easy decisions. It allows us to more fully load our other machines and optimize our asset footprint, helping to ensure that we stay cost competitive we expect this action to save over $1 million annually starting in the second half of the year and we'll book or related one time, mostly non cash charge of a proxy.
Like $2 million in the second quarter.
As you can see we've reacted quickly and taken aggressive prudent actions to protect our strong financial standing well steady fully engaged with our employees customers and suppliers and with a view towards short short term and long term success.
I'll talk about our outlook later in the call, but we'll now turn things over to Bonnie the cover financial result in more detail.
Thanks Julie.
Good morning, everyone.
I'd also like to add my appreciation for everyone, who is fighting the fight during these challenging time and similarly recognize the amazing job by our employees responding to these conditions.
We had a very good first quarter across all financial metrics top and Bottomline performance wasn't impressive margins improved significantly cash flow and look what it liquidity, we're very good and return on capital increased.
Solid data sales of 234 million were down 3%, but we delivered strong volume driven increases in technical products and solid growth in premium packaging.
No not enough to overcome declines in a very challenging paper market and headwinds from currency.
GAAP operating income was 24 million and was 27 million on an adjusted basis. This was up from 17 million a year ago. While there were no adjustments in 2019, if there were three and a half million of unusual costs. This year.
These are adjusting items were.
Onetime payment of about a million dollars to our operations workers to compensate them for hardships related to covert 19.
Corporate costs related to the terminated vector apply acquisition also around a million dollars and then finally 1.4 million of cost for restructuring following implementation of our new functional organization and for minor other items.
As a reminder, details on adjusting items and the breakdown by segment is included in our earnings release.
The corner would've been even more impressive except for two things like most companies, we saw orders and shipments start to fall off significantly in the second have March as he economic outlook worsened. This was especially true in our fine paper segment.
We therefore made changes to increased reserves for uncollectible accounts receivable in both segments to reflect this worsening outflow.
I'll start with a review of business results and adjusted income before turning to corporate items, including liquidity and capital allocation priorities.
In technical products quarterly sales of 142 million grew 2% and were 3% higher on a constant currency basis. The increase was driven by 7% volume growth with increases in both filtration and performance materials filtration grew in the low to mid single digit.
Yes with gains in transportation and other filtration products and an improved mix and new business.
Performance materials growth was led by double digit increases in Backings as we gain share with the launch a new products in North America and grew volume in Asia and Latin America.
Performance materials also increased in key categories like die sublimation and labels.
Partly offsetting favorable volume were lower net prices, mostly in performance materials due to selling price adjusters for some customers and a lower value Matt.
Adjusted operating income was 17 million up almost $6 million, while operating margins were an impressive 12% compared to 8% last year.
In addition to higher sales income increased due to improved manufacturing costs, including fixed cost absorption benefits from higher production volumes and lower input costs versus a year ago.
These positive items were partly offset by 1.3 million up higher F G and H, which I'll talk about a little later.
Turning to fine paper packaging quarterly sales at 91 million were down 8%. This was mostly due to a 6% decline in volume, primarily commercial print where market demand fell by more than 10%.
Commercial print is a short lead time category and reflected a more immediate impact from the cobot crisis.
We also had lower sales related to the transition from a major distributor we began last year.
Partly offsetting the commercial print decline with growth in premium packaging led by double digit gain and labels and in our consumer channel where sales of our Astra Brights brands grew by double digits as at home activities increase.
And online sales group.
Adjusted operating income was 16 million of almost 4 million and operating margins remained in the upper teens.
The increased cost was due to lower input costs.
As well as cost improvements, which combined offset the impact of lower volume.
Looking back at corporate items.
Consolidated yesterday was 26.6 million.
This was up 1.3 from last year as we incurred 1.7 million of increased cost need or higher reserve, Frank collectible accounts receivable and timing of leap legal expenses.
The majority of this increase was in technical products.
We expect consolidated SGN eight averaged a little over 23 million per quarter for the remainder of this year, which is down from our historical run rate of about 25 million per quarter.
Unallocated corporate costs on an adjusted basis were just over 6 million and up less than 300000 from last year.
Quarterly interest expense was $2.9 million down from 3.2 million last year as a result of lower average that.
Our tax rate in the quarter was 21%.
This was up from 17% last year, when we benefited from a reduction to our reserves for uncertain tax position following completion of an audit in Germany.
We currently believe or for your rate will be no more than our previous guidance of 22%.
In late March as a precaution, we drew down 65 million from our revolving credit facility and so we ended the quarter with debt of 272 million and cash 78 million.
This a net debt of just under 200 million resulted in a net debt to EBITDA ratio of 1.5 times.
Along with other quarterly financial data EBITDA is reconciled to GAAP on schedules posted on our website if youre interested.
Most of our debt is comprised of a 175 million senior unsecured note due in may of 2021.
Well, we have plans early in the year to refinance that market's tightened as economic projections worsened and we've decided to delay.
We continue to actively monitor debt markets I feel comfortable on our ability to refinance. This later in the air with terms more favorable than what available in the market today.
I'd also like comment briefly on our global revolving credit facility, where we have longstanding relationships with the high quality banks that comprise this facility.
The revolver is asset base and sized at a maximum of $225 million as of March 31 availability was 117 million and with cash on hand of 78 million provided us with a strong liquidity position going into the crisis.
Covenants are not expected to be an issue.
Under the senior note covenants generally come into play only if we incur new debt.
While revolver covenants are triggered only if availability falls below 28 million.
Cash generated from operations was 14 million in the first quarter. This is up significantly from 3 million last year.
First quarter operating cash flows typically lower as accounts receivable in inventories increased from your end lows.
For example, in 2020 or first quarter cash flow included a 14 million negative impact from increases in working capital.
Capital spending the quarter was 5 million that's similar to last year.
Next I'll talk about our liquidity outlook and capital deployment priorities.
As mentioned, we had it in second quarter with a strong balance sheet and fans will available liquidity on existing credit lines.
Expectations are for global economic activity to declined significantly in the second quarter, and we will work to flex our cost as much as possible to match demand. However, as manufacturing company, we have a sizable amount of fixed costs and shedding cost for a short term decline is often not prudent or even possible.
In general I'd estimate our variable margin to be around 35%.
Capital spending this year is expected to be around 15 million well below our normal expected range.
Weve minimized maintenance projects being cut nonessential spending while still proceeding with projects that deliver meaningful cost savings in a short run them or four key to long term growth objectives.
Our retirement plans have been well maintain given us the opportunity to reduce pension contribution.
Total cash outlays for all retirement plans are projected to be $7 million. This year, that's about 6 million less than we contribute in 2019.
In the U.S., we're utilizing government plants, such as the cares acts to defer payroll and other tax payments and estimate that will differ about 5 million of cash this year.
Operations outside the U.S. will benefit from government subsidies as well and that could be up to an additional 3 million.
Finally, working capital can be a significant source of cash in a downturn just as they increased 14 million in the first core it could quickly decreased by at least that an out.
And as always we continually work to minimize our working capital needs.
Our culture of capital discipline, it served us well in the past and we learn from the great recession in 2008 nine our teams know what the deal and our short term priorities are clear preserving our capital and our flexibility. So that we can move aggressively and opportunistically when things begin to turn.
On a personal note you may have seen our announcement last week that I will be retiring from Nina succession planning has been underway for sometime and my October 1st retirement date will help ensure an orderly transition of duties at more than 60 60 earnings call I think I've set the company record and hopefully.
No longer sound like a robot.
It has been an honor and privilege to be a part of the evolution of Nina over the past 16 years and I've enjoyed the opportunity to get to know many of our stock in bondholders and many of you on this call I'm looking forward to watching the team here continue to grow that company in the future with that I'd like to turn it back.
Thank you Julie Thank you Bonnie.
I'd like to start by talking a bit more about how we're managing through the current situation and then add some thoughts on near term impact and recovery.
Obviously, it's a very fluid and uncertain period for everyone, making accurate forecast challenging.
By taking swift and smart actions to maximize with liddy expects emerge in a position of strength that will allow us to take advantage of potential market opportunity.
Initial activities in a crisis are focused on containment and our number one priority was to protect the health and safety of employees as I mentioned earlier, we quickly initiated robust safety protocols at all sites to protect our people.
Our second priority was to ensure business continuity, we implemented a war room structure and our leadership team met each morning to resolve issues and provide guidance and directions to support global operations and safeguard our supply chain.
We increased the frequency and transparency of communications internally with employees and externally with customers and supply partner.
Our third priority was liquidity, we entered the crisis with a strong financial position and it was important that we developed an executed plans to maintain the.
We ensured we had clear and timely visibility to daily dashboards with critical information to help us make informed discipline decision and we developed plans and actions focused on things, we can control that would reinforce the resiliency of our business.
As I said earlier the steps we've implemented so far represent over $50 million of added cash flow versus our original plan.
On the revenue side with connected with customers and new ways, our sales and marketing teams are having regular virtual meetings with customers and we've implemented technology, enabling more streamlined automated ordering for portions of our business.
One example of how our efforts were successful was our ability to quickly develop and ramp up face mask capabilities.
Well, having only a modest financial impact we expect to provide the media this year to support the production of roughly 100 million face masks.
These efforts are not only the right thing to do to help fight the virus, but also provide new opportunities to partner with customers and innovative and collaborative ways that support longer term growth.
Despite the many actions our teams are taking it's clear the second quarter will be very challenging and the great recession of 2008 in 2009, our sales initially declined by roughly 30% before recovering.
Demand for many of our categories is correlated with GDP and published forecasts show second quarter, GDP declines ranging from 30% to 40%.
Our level of decline and pace of recovery will vary by business with technical products categories being more resilient, then fine paper and packaging.
Filtration and labels are likely to hold up well with transportation filtration rebounding as the economy recovers and miles driven begin to increase.
Our remaining technical products categories should also fully recover the likely at a more measured pace.
Commercial print papers will feel the most pressure, especially if the recession as lengthy as companies spend less on marketing and advertising or find alternative.
Input costs are likely to remain subdued, though favorable year on year comparisons will diminish as we move through the year. The major challenges. This year is clearly demand.
While short term earnings pressure is inevitable at the resolve or actions, we don't anticipate that thing magnitude of impact on liquidity, we've modeled several scenarios to analyze a range of potential outcome and if the outlook were worse than we've identified additional levers that we could quickly pool to further.
A reduced spending and improved cash flow.
Consequently, I'm very confident that Nina taking the appropriate steps to support our liquidity position during this time.
Crisis, often can bring opportunity, especially when operating from a position of strength as I believe we are.
During this time of uncertainty we will continue to build on what make neenah successful strong customer relationships superior product quality discipline decision, making a focus on capital efficient growth and providing a return to our shareholders through a meaningful dividend our strong financial position is valued by.
Customers and we benefit from a local footprint and supply chain in our primary market, we're collaborating with customers and suppliers and continuing R&D efforts to support short and long term growth.
Significantly reducing discretionary spending organic capital and have suspended share repurchases.
We will continue to identify acquisition opportunities that can add value, though during this current period of uncertainty we're clearly more cautious.
Last but not least we remain committed to our dividend and based on our modeling we expect to have ample liquidity through the downturn.
While this year will be challenging I'm confident we're taking the right actions and first quarter results clearly demonstrated the strength of our underlying business fundamental.
But ultimately it's our people that drive our success and Bonnie has definitely been one of those people.
Look forward to working with Paul to Santas, our incoming CFO and would like to extend my deep appreciation to Bonnie for all that she has done for Nina over the past 16 years.
You know has always had a talented and dedicated workforce their commitment to each other and Simeon as inspiring and it was demonstrated again by their ability to work safely and push all the way to the end to deliver strong first quarter I'm excited to be a part of this team and to grow our company together in the years ahead.
Thank you for your time today and I'll now open the call for questions.
We will now begin the question and answer session.
Yes. Good question you May Press Star then one on her touchtone phone.
If you're using these speakerphone, please pick up your handset before pressing the keys.
Withdraw your question. Please press Star then too.
How long, we will pause momentarily to assemble our roster.
The first question comes from Jones Holton of CJS Securities. Please go ahead.
Good morning, everybody. Thanks for taking my questions.
First I guess, congrats on a strong quarter and Bonnie also on your retirement.
Looking forward due to work.
I've worked with before.
Great. Thank you.
That's my first question is Oh I was wondering about the strike in your filtration media.
And kind of the comments you've made on Q2, we've seen some other consumables going to autos that are related to miles driven from foreign quite dramatically like 60% to 70% entering Q2, I'm just wondering what's giving you the confidence not business well not being down maybe that much to cover that quickly.
I think a couple of things John I think one thing is remember that about 50% of our business is in heavy duty versus passenger car and that volume has continued for the most part and then secondly about 80% of our media goes into the aftermarket not new car sales so even though.
Miles driven has falling in the short term, we have a little bit of a lag effect and we expect it to come back. So we're seeing datasets thought about 40% in the U.S. and similar rape and Europe, but we expect that to come back in the in the near term that's a shelter in place starts the exit.
Got it. Thank you for that color and then I'm just wondering about your expectations for import prices I think you mentioned modest declines.
Losing that you're benefited you get into the second Oh I'm, just wondering what why only decreasing that much as you know we've seen a lot of commodities and other inputs fall dramatically.
Is there anything special in the endure inputs that we should be thinking about that.
So that's sort of a have a replacement.
Yeah, John I only have like to word for you toilet paper [laughter]. So Virgin pulp is is in tremendous demand right now so even though you see other kinds of commodity falling because the lower demand, we're not seeing lower demand in that and the other thing that we have we used quite a lot.
Recycled office waste and as we all know who are not in an office that there's not nearly as much of that so pricing has gone on up for that so having we do not expect prices to go up as much as what we expected in when we had this call in February but we do expect us a graph.
Actual on change still favorable though versus prior year.
Got it.
Truly live an interesting times as I say.
Okay.
And just one more for you I'm just wondering what's the timing of your retirement as well learn to start with that I'm wondering between you and John.
Both retiring this year I'm wondering about the timing of the plan succession to kind of.
How that was impacted by what was going on in the economy.
Or maybe it wasn't just any color on LDL.
Sure I'll take I can take that one guy I think from a succession planning process neenah, how they really robust succession planning process, both internally and we and we use outside agency work as well. So body has a fairly long succession, we shall be here until October 1st So we'll have her expertise and knowledge and guidance for quite awhile.
And for John and I, we were part of a succession planning process for almost two years. So even though the you know just downtime happened right now it definitely wasn't expected, but it was up.
24 month type a succession planning process that we work through together.
Yeah, our succession wasn't what was unexpected though it was how old is right at the only thing unexpected [laughter].
Got it okay. Thank you very much.
The next question comes from C Sure Cobra.
Uhhuh Davidson. Please go ahead.
Thanks, Good morning, everyone.
The so.
My first question is with respect to that idle paper machine.
You didn't safe was temporary or permanent but can you talk about the capacity that machine and are all the capabilities of that specific machines duplicated elsewhere in your system.
Yeah that was one of our lower capacity machines and lowest capability machine. So all of the capabilities our duplicated elsewhere in our system and it was you know not 10% to 15% range of our total capacity and the system sell it it has been out without a current expectation of.
Restarting it.
Okay, and then since you're not integrated on the Pope side does that have a material impact on the balance of the paper mill in general.
I think what can you elaborate on that.
We really are just on them.
Volume to our other asset.
So it really improves our cost position and keeps us cost competitive, but better loading or more fully loading our other asset. It does it have a impact from a fiber standpoint.
Yes, I understand that I mean.
And then you take down a machine now you're.
Let me too much poll for your Digesters Your board right out of whack. So this is kind of just direct costs.
Right. Thanks, a lot of variable cost okay.
[music].
He told US is million dollar your savings with a $2 million <unk> and then right how big is that opportunity in face masks media. He said it took 100 million units.
You know, it's really moderate right now I think the bigger opportunity for so face masks is probably under you know $10 million in revenue this year, but the bigger opportunity for us as that's a great extension of our existing technologies and transportation filtration into air filters.
Jason.
What's as the growth platform for Neenah, as though it's just an acceleration of that growth platform with existing and new customers and we have great capabilities and technologies as we grow into that type of into that type of platform, but face mask I think is fairly small, but no was a nice.
The opportunity to support the the Cogs and to grow and collaborate with different customers as well as existing customer.
Sure. Okay. Thanks for that and then you know.
You kind of quantify.
Volume impact.
You're backing a great recession, and then on the paper side, you know somebody's your big commodity freesheet peers are looking at you know better administer their capacity.
Demand going away in.
Q2.
This is basically office demand.
Uh-huh gone concern that might never come back, but I mean, your papers buying and larger non office paper. So your end markets do you expect them to have a permanent hit the way you office papers might have.
You know I think probably premature to speculate on it but permanent demand destruction in fine paper at this point, we recognized at the risk.
And we're working to manage that business in a responsible manner. Thus the paper machine that we shuttered and may the longer that the economy is weak the more detrimental. It is for fine paper. Our end use applications are they lean more towards advertising and marketing and.
There is the opportunity for switching and the marketing made I think the the twice as important though and what I would tell you about five paper as it's still a really financially strong business for Nina has nice margins as you could see the first quarter almost 18% margins on the first quarter.
And at throws off a lot of cash so I wouldn't want to discount the role of fine paper in our portfolio and but it is it's different little bit different end markets. Some of its use in the office. It's just kinda premature to determine if it's a permanent change and the dynamics of that that market.
Got it thanks and.
Good luck in his new role Bonnie Congratulations and Julie it's going to be interesting to see if you and Paul can finish each other sentences the wage [laughter] well have to work on it that was a classic Steve. Thank you well I'll Miss.
Thanks, Good luck all the best thing.
Thanks.
The next question comes from Chris Mcginnis of Sidoti. Please go.
Good morning, Thanks for taking my question on congratulations. Thank you I was much my first call. We'll just so [laughter] I know there were some good report there.
[laughter].
So nice quarter. It I was just wonder if there is there could be any potential kind of.
And in Costless told that someone coming in whether its external or internal due to the safety measures or maybe accidental just with some of the suppliers.
Well, we booked a million dollars that we had experienced in the first quarters that were direct out of pocket types of cost.
Going forward, we'll continue to isolate that for things that we might have to pay for like personal protection stuff like that.
Okay, but nothing that would I guess would would remain going forward, but you see us today.
No no nothing structurally different.
Okay.
It's been just talking about helping the customer base, a little bit of a write downs border just how do you see it and maybe how that plays over the last couple of months given the process. Yeah are you, suggesting like a from a credit standpoint health.
Yes, exactly exactly yes, we're managing it pretty tightly as you would imagine and our customers of have been very healthy so far so far but from what we can say, we're working very closely with them are perfect current hasn't really moved at all.
So we're working with them very closely and providing a little bit of flexibility of strategic customers. If we need to but we're clearly not a bank and we're not going up to five yes customer.
Working working closely with them, but we're not seeing significant risk at this time, we did increase our reserve I think his body mentioned in her portion of the prepared remarks, and ensuring that we're managing that tightly and and being conservative in how we looked at it.
Great and then just one last one just this kind of given the disruption.
Due to covert outside of the media from us.
Other opportunities you see taking advantage of some of.
Better position, we no longer than [noise].
You know I think it's probably more learning from how quickly we moved and then extending our face mask media into the broader.
The category of Air filtration, and then from a macro trend standpoint, there are some macro trends that will assess that will inform our longer term god. They so things like as awareness of health increases that likely lends itself to greater awareness of environmental stewardship, what's a lot of neenah products compete in areas where.
Where are they environmentally preferred alternate ever were competing with things like plastics or another area might game, where at a macro trends where consumers, perhaps just said there they're buying preferences do more online sales and ensuring that we're well positioned with our retailers like Amazon to staples or we have a strong presence in the right port.
Folio and basket mix for those shoppers I think I'm. The teams done a nice job you know getting more on the off that's in that regard and looking forward.
But more longer term.
Okay, Great and then.
I was just around volume or volume trends, you've probably seen.
It's just any noticeable change not noticeable maybe but oh.
Maybe a bottoming effort for April obviously is probably the most difficult I was saying I'm not are you seeing it will be stabilization and friends the difference.
In May yes are we mess I think it's still hard to call right. Now we're now I would love to tell you were saying stabilization, but I think it's still hard that's all right now you know if we definitely see more stability or.
There's always try to do the best for a bit more resiliency in our technical product category, it's not as much so and I find paper categories.
Fair enough. Thank you very much good luck in Q2.
Thanks, I don't think missile.
Thank you our thank you.
This concludes our question and answer session I would like to turn the conference back over to build Mccarthy for any closing remarks.
Okay. Thank you once again, thanks for your interest in Neenah today and as always please reach out to me just not physically for now if you have any questions. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
[music].
Mhm.
[music].