Richard Goodman - General Counsel Richard Horowitz - Chairman, President, and Chief Executive Officer Joseph Molino - Chief Operating Officer and Chief Financial Officer

Andrew Shapiro - Lawndale Capital Management

Good day and welcome to the P&F Industries Inc. 2015 Second Quarter Earnings Call. Today’s conference is being recorded. And at this time, I would like to turn the conference over to Richard Goodman, General Counsel. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to P&F Industries second quarter 2015 earnings conference call. With us today from management are Richard Horowitz, Chairman, President and Chief Executive Officer; and Joseph Molino, Chief Operating Officer and Chief Financial Officer. Before we get started, I'd like to remind you that any forward-looking statements discussed on today's call by our management, including those related to the company's future performance and outlook are based upon the company's historical performance and current plans, estimates and expectations, which are subject to various risks and uncertainties, including, but not limited to the strength of the retail, industrial, housing, and other markets in which we operate; the impact of competition, product demand, supply chain pricing; our debt and debt service requirements and those other risks and uncertainties described in the reports and statements filed by the company with the Securities and Exchange Commission including, among others, as described in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our subsequent filings. These risks could cause the company's actual results for future periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the company. Forward-looking statements speak only as of the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. With that, I would now like to turn the call over to Richard Horowitz. Good morning, Richard.

Thank you, Rich and good morning everybody. Thank you all for joining us this morning. As this earnings call proceeds, the release of our Quarterly Report filed on Form 10-Q for the three-month and six-month periods ended June 30, 2015, I will begin today’s call with a brief summary of the company’s results of operations and earnings per share for that period and how they compare to the same periods in 2014. I will then ask Joe Molino to briefly review key cash flow information and provide an update on key events affecting the company, after which we’ll move to a Q&A session as always. However, before I begin, I wish to remind all of you that the purpose of this call is to discuss and review the company’s second quarter and six-month 2015 results. As such I kindly request that the questions focused on our results only and appreciate your cooperation. The company’s consolidated revenue for the three-month and six-month periods ended June 30, 2015 were $22,560,000 and $42,386,000 respectively compared to $18,268,000 and $34,200,000 for the same period in 2014. Current revenue was broken by segment as follows: Primarily driven by our third quarter 2014 acquisitions are Tool Group revenue grew to $16,058,000 and $30,617,000 respectively for the three-month and six-month periods from this year from $12,693,000 and $23,884,000 for the same periods in 2014. Stated as a percentage we grew the Tool Group revenue more than 26% on a quarter-over-quarter basis and more than 28% on a year-to-date basis. Specifically second quarter 2015 revenue Florida Pneumatic increased $12,003,000 and $8,887,000 in the second quarter of 2014, with this automotive Air Tool product line accounting for more than 87% of this quarterly growth. Hy-Tech’s during six-month revenue for 2015 of $4,055,000 and $8,360,000 was up from $3,806,000 and $7,522,000 over the same periods last year. This increase was due in large part of the acquisition of essentially all the operating assets of Air Tools Service Company with other aspects of that business down. Revenue for our hardware group which consists only of Nationwide Industries was for the three-month and six-month periods ended June 30, 2015 $6,502,000 and $11,769,000 compared to $5,575,000 and $10,316,000 for the same periods last year. The largest contributor to Nationwide’s improvement over the prior year comes from its fence and gate hardware product lines. We intend to continue our current strategy, in this regard which has developed new innovative products and accessories for this product line. The company’s consolidated gross margin for the three and six month periods ended June 30, 2015 with 37.3% and 37.6% respectively compared to 36.1% and 37.0% for the same periods last year. Specifically for the tools group, second quarter and year-to-date gross margins were 36.3% and 37% compared to 35% and 36% for the same periods a year ago. The improvements in the tool margins, was primarily driven by the added automotive tools revenue. Our hardware group’s gross margin for the three month period ended June 30, 2015 was 39.8% compared to 38.7% during the second quarter in 2014, its gross margins were both six month periods ended June 30, 2015 and 2014 were 39.2%. The second quarter improvement was due primarily to product mix. Our selling and general administrative expenses for the three and six month periods ended June 30, 2015 were $6,452,000 and $12,548,000 compared to $5,556,000 and $10,783,000 for the same periods in 2014. Stated as a percentage of total revenue our second quarter 2015 SG&A declined to 28.6% from 30.4% and the six month total was 29.6% down from 31.5% for the same six month period a year ago. Although our SG&A as a percentage of revenue declined there has been an increase in the actual dollars spent primarily the result of the three acquisitions made in Q3 of last year, some of the significant items contributing to this quarterly increase were $284,000 of additional depreciation and amortization, increased compensation related expenses of $264,000 primarily due to the added staffing requirements I just mentioned and an increase in variable of expenses of $310,000. The company’s interest expense were three and six month periods ended June 30, 2015 was $201,000 and $393,000 compared to $88,000 and $177,000 for the same periods last year. Obviously these increases are due to the use of funds during the third quarter of last year that we use to complete our three acquisitions. Included in our three and six month 2015 interest expense is amortization and debt financing course of $28,000 and $55,000 compared to $22,000 and $43,000 in the same period last year. Lastly in connection with the UAT acquisition there was the possibility that we would pay an additional consideration to the former shareholders up to a maximum of 250,000 pounds. Should UAT’s net earnings adjusted for among other things, interest, taxes, depreciation and amortization for the period from the date of acquisition July 29, 2014 through the first anniversary of that which is July 29 of this year. At the time of the acquisition we believe based on a range of possible outcomes that it was more likely than not that UAT would achieve the adjusted net income that would entitle the former shareholders the maximum amount, and we recorded a $425,000 obligation as a contingent consideration However, we now estimate that the adjusted net earnings applicable to UAT’s for the year ending July 29, 2015, will result in a probable payment to the former shareholders of approximately $224,000. As such we have adjusted our estimate of this payment. This lowering of the estimated payment as close to record a $201,000 as our other income in our quarterly numbers. The final determination of the exact amount of this payment to the former shareholders of the UAT should be completed during the third quarter of this year. As such it’s possible that further adjustments up or down may be necessary. It should be noted that this income is not subject to federal or state income tax. Taking all the above data into consideration our income before income taxes for the three and six month periods ended June 30, 2015 was $1,967,000 and $3,198,000 respectively compared to $959,000 and $1,678,000 for the same periods in the prior year. And our net income was $1,312,000 and $2,093,000 for the three and six-month periods this year compared to $572,000 and $1,034,000 for the same period last year. Our basic and diluted earnings per share for the three-month period ended this June 30 with $0.36 and $0.35 respectively compared to $0.15 from both basic and diluted earnings per share for the same period last year. And lastly, our EBITDA for the second quarter of 2015 was $2,925,000 compared to $1,471,000 in the same period last year. As our six-month 2015 EBITDA was $5,088,000 compared to $2,711,000 during the first six months of 2014. I will now ask Joe to provide a brief insight into our cash flow. Joe?

Thank you, Richard. Capital expenditures during the first six months of 2015 were $372,000 compared to $446,000 during the first six months of 2014. Significant non-cash items affecting our cash flows during the six-month period ended June 30 2015 were depreciation and amortization of $850,000, amortization of other intangible assets of $647,000. Our reduction of the contingent consideration which was discussed earlier of $201,000. Stock-based compensation of $59,000 and amortization of debt issue cost of $55,000. Significant components impacting our cash used in operating activities were increases in accounts receivable and inventories for the period up $292 million, $959,000 and $625,000 respectively. With that, I’d like to turn the call back over to Richard. Richard?

Thank you, Joe. As I often say and certainly cannot overemphasize at this time I would like to acknowledge all of our employees and the management of each of our divisions for doing such an outstanding job during these continuing sluggish economic times. All of us always believed in our company’s products and our customers and our management and with hard work and [indiscernible] P&F continues to improve. That’s the end of our report for today. And we’d be happy to answer any questions anybody may have. Operator?

Thank you, sir. [Operator Instructions] And we will take our first question from Andrew Shapiro from Lawndale Capital Management.

Hi, thanks. I got a bunch of questions I’ll ask a few and back out, you guys had another good quarter so take my questioning here with - in an appropriate focus here on what could we do better, what is remaining that’s going to come from these things et cetera. With respect to the acquisitions that were closed over the last year, what integration is left to be done? Your press release implies as of the June quarter end it wasn't completely done yet and so I was just trying to understand whether or not the revenue profit cost figures in this most recent Q2 release fully reflect what the business will look like going forward?

Well, Andrew I’ll let Joe to discuss that, but I’ll give you the - my 40,000 foot view. The only integration at this time that’s really not really fully integrated or mostly fully integrated as the ATSCO Hy-Tech integration which as we said on our last call it’s an ongoing effort with steady improvement and we don't expect the full impact of that acquisition and the blending of the companies to really be fully in hold to close to the end of the year. Showing great improvements now, but we expect greater improvements as the year goes further down the road. As for the other companies we’ve done our management Florida Pneumatic is done an extremely good job of integrating both caution you and I know you notice ATSCO was a different kind of a challenge being it’s a manufacturing facility, engineering facility, machinery, equipment all our stock removed into a new place and so what’s a different kind of a set of parameters. Joe you could comment further if you like.

I just what I had may be I’ll just comment this is a little differently in terms of maybe further opportunities going forward. While the physical integration of ECI or AIRCAT into Florida Pneumatic is done and there was no in physical integration for the UK acquisition. We continue to develop the markets for the year AIRCAT products here in the U.S. so we you think are still opportunity there, but we certainly have anniversary the - all the numbers because that was July 1 acquisition, but that doesn't mean that we don’t take we can continue to grow the business. On UAT side which is the UK acquisition while physically there was no integration we really just started shipping the AIRCAT product over there and reselling it in later in Q1 to any kind of volume. So were quite a ways offered anniversary of that integration so to speak of their other initiatives are also working on. In addition to looking at additional countries in Europe so there are things opportunities going forward that we continue to attack and I expect that will be successful on a number of fronts. And then which is obviously right on the ATSCO deal, physically they were integrated in February but we have a ways to go in terms of learning how to most efficiently build all that product in Cranberry training fairly large number of new hires to not only get comfortable with our typical manufacturing procedures but the ATSCO product and then lastly fully integrating some of the new machine - or the machinery that came on board giving all that properly programmed and also adding additional machinery going forward that will also help it will help us take down some of the backlog. So and then what’s that even done that it will be time to go back to some of the customers that we've inherited and asked them what else we can do for them and we fully believe that there are opportunities there as well, but we have not been able to take full advantage of that yes because we don’t see were positioned to deliver with our typical style so to speaks. So there's probably a lot more opportunity there and then lastly of course that has an anniversary read until that acquisition will even anniversary into the third quarter.

Right. Following up on the ATSCO Hy-Tech thing. One of the things you mentioned last quarter was the issue of the programming and it's been three months and is this an issue of programming the acquired equipment that still ahead or you have new equipment coming in that's got to get programmed and optimized?

I would say yes about there.

So we have new machinery actually that was delivered unless weaker two in the middle of being hope that with programming et cetera, et cetera and should be up and running and I am guessing next week that’s our goal I think and we have another piece of machinery coming shortly and we’ve had a few niches with some of their old equipment which was really quite [indiscernible]. So the manufacturers have been working with us believe or not for quite sometime to get these things they are very complicated CMC type machines and to get them back to running. And we just got to the point that they're running, but they are not running at full speed because it's been recommended to us that we get the machines like slowly working to make sure that - all the working parts are going for a period of time and then slowly increase the capacity of the speed of those machines. So, yes on both those answers Andrew.

So here we are talking about Q2 and we’re in the middle of Q3. So when we talk about this three months from now after Q3 has closed and will be in the middle of Q4 is that that's around the time you think you be able to say you have just gotten everything smoothly working set up, sound about right?

Yes, that’s our goal, that’s our goal absolutely.

And then going back to the other comment and then I’ll back out in the queue here you said AIRCAT and NITROCAT are the CAT brands, were going to be introduced in the UK. You said that in the last call you now said, it’s been introduced. So in the last three months since the last call and you've been - you have introduce them what's been your experience with these AIRCAT and NITROCAT product lines in the U.K. and their adoption and since these products were placed. I think you said they were going to really replace legacy third-party products, our observance of any revenue growth wouldn’t be an adequate indicator of this market penetration of these brands. Can you comment about the amount of quarterly revenue these internal products have replaced these legacy products and if you got the expected margin benefit on those revenues?

Well, certainly we’ve got in the expected margin benefit because maybe this goes without the saying. But the AIRCAT product is marked up really, really twice we've got our U.S. sub selling it to our foreign sub. And then the foreign sub sells it to the markup beyond that. So typically the - before we bought the UAT business, they were sourcing product directly from Asia and paying the markup and then reselling the product. We’re actually getting a little bigger piece of the total available markup in the products. So yes we’re happy with the margins we’re seeing all into the corporation. It's still - I would say preliminarily we’re happy with the sales of our product with respect to the similar product that it's been replaced that has it has replaced. But that’s really, that date is only a couple of months old. So we have quite a ways to go at really - fully evaluate it. But I am optimistic.

Okay, and actually the last question here on the simulation of acquisitions then I will pull back out here. On the prior quarters call you said the assimilation of engineering strength of the certain acquired products was still taking a back burner to the marketing and sales, resource allocation. And also the Hy-Tech’s integration of ATSCO obviously Hy-Tech’s integration of ATSCO you’ve already discussed is still ongoing where do things stand now and your thoughts on the timing of assimilating the engineering strength into your Florida pneumatic and other product lines or are we still on the focus of marketing and sales opportunities first.

I think Andrew, are you talking about the muffling technology or?

Yes, I think it was muffling technology in particular from UTI but it might've been with anything else acquired. But I think that was the main technology or engineering enhancements you thought you were acquiring when you bought it that could be permeated across some of our P&F’s product lines. But it was on the checklist of things to do. But first you were building out in making and devoting resources towards marketing and sales opportunities with what you bought. And then you were going to revisit and focus more resources on engineering enhancements across all your product lines from what you acquired?

Yes, Hy-Tech we are still concentrating on the basic integration. So we have not still a whole lot with the muffling technology there because we’ve kind of got our handful in engineering as it is building - programming and building some products for the first time from drawings that we inherited. With respect to Florida Pneumatic what we've chosen to do in many cases is take the products that’s existed and sell them under our Florida Pneumatic label while at the same time also looking at redeveloping or adding on to the development process. So we are already selling product with must win technology in it where we were not selling it before that’s not necessarily labeled AIRCAT.

Okay. And have you noticed a favorable impact from it?

It’s a little too early to tell whether it's really just a pilot program right now, but yes people like the concept of acquired tools so it's one more thing we can add to the attributes that will help us sell.

I got another question.

Okay, but I think before we that I’ll just tell you that between technology and also to look at the tool which is younger, more modern look is got more attention and resulting in more sales.

Because you said that today a follow-on that - any of this have potential application or deployment into your large customer OEM manufacturing opportunities with Sears and Home Depot?

We are looking at that.

We are looking at that. It’s up to the customer we would most likely offer to them, but the question is will they want that or do they want to tried-and-true that will be their decision, but we certainly going to present it to them.

Yes, okay. I’ll back out and come back to you with more questions.

[Operator Instructions] And we’ll now take the question from [Henry Dubro from Private Investor].

Good morning.

Good morning.

Complement you on your results I think it’s proven and thanks for very nice acquisitions a year ago. Two questions. In the current quarter you mentioned that your bad debt expense went up over the corresponding second quarter in 2014 primarily due to an adjustment in the second quarter of 2014 to lower bad debt expense. Could you just give some clarity into what happened in 2014?

Yes, what happened Henry is over time we had accumulated a fairly significant reserve NAR I’m sure at one point it was probably warranted - frankly probably only goes all the way back to the financial prices to be honest and its specific to the subsidiary that had the most exposure in building products where we tended to see the most weakness in our customer base. So frankly just not believe that…

You are over reserved.

Yes, we are over reserved, we cleaned it up got it to a more appropriate level and that’s basically yes and nothing more complicated than that.

At the accounts direction.

Okay. Let me just ask you a question in the same field of bad debts and credit, do you have customers that overlap each of the product lines. My question is if various customers are granted credit or have credit lines is there some global reviewable overall credit line per customer?

I understand the question I can’t say that there is never been a time where we had one customer for two subsidiaries. However, I think that situation was probably more maybe the end customer and I’m just going to give you an example that certainly we felt that Home Depot through Florida Pneumatic, it’s possible, it’s some of our fencing product may end up in Home Depot through some other customer or did at one point in time, but they would have never been our direct customer for that and frankly I’m not even sure that has happened, but it’s possible and it could have so if that they ever occur we would have certainly been aware of it. We look at the accounts receivable situation kind of across the board from New York. So we are aware of the big exposures everywhere and if…

Yes, that was the question. Okay, my last question related to the contingent consideration if I go back to your 10-K when you describe the overall purchase price and the 425 relates to UAT.

Yes.

And considering that particular amount it cause you’d have goodwill of $234,000 why wouldn't this adjustment adjusts goodwill and not income.

Just gap I mean I understand your logic.

Right.

The guidance at this point in time does not allow you to make an adjustment to goodwill it just flows through the P&L that guidance is probably not terribly old, but as probably in the last five years or six years in the old days that is what would've been done?

Yes, I am looking that you recorded goodwill of 234 and just it's a coincidence that’s the amount of your adjustment. So if we didn’t have this - if you would of set the contingent amount at the 225 they would be no goodwill. Now a year later there is a P&L effect.

I have to check on the goodwill number that doesn’t sound exactly right to me, but I don’t have in front of me and it would be purely a coincidence by the way in the best information.

Yes I am reading from your footnote number two and okay.

Okay. Thank you.

You’re welcome

And ladies and gentlemen we will now take a follow up question from Andrew Shapiro from Lawndale Capital Management.

Hi, okay in terms of some segment questions but could ask on the tool side in Q1 Hy-Tech had a large order of nonstandard products specific to a customer and you saw you might get a second order to that occur in the Q2 and it’s not might this order still occurs are is the opportunity and the time passed away?

We did not get an order to my knowledge on in Q2 the opportunity has not passed away its certainly still a viable customer I don’t say we expect another order but we are helpful for another order, but we don’t have it yet.

And as far as Florida Pneumatic you experience year-over-year uptick Q1 from Sears what was your experience with them in Q2 and to see if it reinforced the thought that maybe with respect to the products P&L provides them there's been a stabilization of activity?

The product - that’s not quite accurate I don’t believe Andrew the first quarter of this Sears business was down, but it was over our budget and that it was down was because we pulled out a certain low margin products that were not really - they were ancillary products to our main business with them and so we pulled those at the beginning of the year we don’t shift them any longer. So we had a reduced budget to begin with and we exceeded that budget in the first quarter and we continue to exceed that in the second quarter and they have been very happy with the results and I think they feel and I can to test this but they feel that there has been modest rebirth in this product line for them in the marketing, but it comparable last year’s numbers we’ve had other products in there so we would down - were slightly down.

Okay. And then what’s your current experience in visibility with respect to our large relationship also with Home Depot.

We are doing very, very well with them the very happy with us we are hitting our budgets and our numbers…

I would say we continue to look for way to expand the relationship.

Yes, we are looking [indiscernible] products and other areas my perhaps Canada is an example we are talking about this they willing to talk to us about mostly anything in our area.

And absent the specialty kits you mentioned in your press release the catalog side was down clearly certain sectors like oil and gas are a headwind. But in prior quarters you also mentioned that there had been some decreases in the catalog pages and that obviously the catalogs don't come out all that often maybe once a year twice a year. But it's been a while since we asked about that I was just wondering if while the volumes may be down whether our catalog pages and our presence has stabilized or if it's still on the downtrend?

It’s been basically flat, but we also have AIRCAT in the catalogs and a lot of customers now as well.

Yes, let me sort of correct the misnomer. In 2015 catalog drops as they say don't really matter as much as they used to a decade ago the catalog can be updated 24/7, 365 days a year with the advent of the Internet. So the actual paper catalog is becoming a bit of a dinosaur to be honest. So we put AIRCAT in there with without a catalog drop. So, yes, it’s just a further Richard’s question. Yes, it’s still weaker but we’ve gotten a little bit of a, we think we’re going to get a little bit of a pump with AIRCAT now going in there.

When did AIRCAT’s get inserted since you mentioned that it can be inserted almost instantaneous?

Beginning of the year or more…

More recently.

Like maybe end of the first quarter maybe. And it’s not complete yet of course. But it's a starting.

All right. Within the tool side can you discuss any new notable new product rollouts in particular in the last call you are excited about a new aerospace tool that was to be introduced to that introduction yet take place and what has been your experience so far.

Yes, that introduction took place and it's been really positively received but that's just the introduction, so we have ways to go but we are excited about it.

Okay. On hardware you said Nationwide's margins last quarter were partially squeezed from competitive pressures. Did those pressures subside in Q2 margins, which we saw improved was that improvement a result of some of that benefit or just revenue growth and overhead absorption?

I would say it was revenue growth and very, very good marketing. Marketing by our team in Tampa that they really, they are very, very good at what they do. And I think it’s a function of that in getting a lot of smaller customers that you know that have higher margins attached to that.

Our growth rate in what we call our other customer category which is actually the smaller sort of everyday bread-and-butter customers which are particularly large I mean they might average $10,000 a year. But we have many, many, many of them on that category grows fair amount faster than the market and the rest of our business at a higher-margin because we’ve got more leverage in that channel, of course.

Okay. So as I look at it right now we've had a nice move in the stock price long deserved but still not sufficient move I am looking at a $35 million less than a $35 million market cap on our company here. You are in the third quarter of three synergistic acquisitions and you are generating a bunch of cash probably as we speak a whole lot more, because it looks like the end of June might've been the seasonal peak of your cash working capital needs? Yes.

Yes.

Okay. So you are generating a bunch more cash you are paying down that acquisition debt at a probably a faster pace and your bankers even expected when or are you already turning your focus again on additional acquisitions or what other strategic alternatives have you been discussing or thinking of doing with respect to fueling additional growth getting larger gain evaluation, multiple expansion or allocating capital accretively to deal with very low valuation of our own shares. In other words if you're looking for a business out there that's cheap, you don't really have to look further than the mere to find a business in a line of industry and product manufacturing that you're familiar with that is available at a great rate of return?

You’ve asked a lot of stuff I’m not really quite sure where - what you want to me to answer, but I’ll answer you as best as I can and if I don’t give it you the way you want and please ask another part of it. We still have pretty fair amount of debt to the bank coming down yes and coming down quite dramatically yes, but still with three acquisitions we’ve got a pretty good sizable amount debt last year at this time. I believe we basically had mortgages and maybe a slight bit of other debt or maybe none, but it was very, very small. So we still have the debt and I think I said on one of the other calls that I really want to assimilate everything going on here. I don't think though we are always looking and we are always looking, it’s not just a cliché, we are always looking and examining and acquisitions et cetera, et cetera, but I think it’s very prudent of us and for our stockholders to problematically if that’s the right word grow. So I think I would like to - I think it’s our sense that we would like to have these a full calendar year I think this certainly at Hy-Tech with the ATSCO before we start endeavoring on something that's going to challenge. There is a small little acquisition and we could slide into something of course that’s what we look for and we’d do that, but I don’t expect that we are going and this is something really - that’s a perfect fit for us. I don't expect that in the next several months we are going to be buying something, but we would be actively in that market come the first of the year and you just don’t turn it on so we are always looking and we will continue to look, but it will have to be very compelling for us to do something between now and the end of the year is from Hy-Tech and from what I see from the board as well. Joe if you want to…

The only other I’d add where the different comment you made, yes the stock is cheap and it is certainly in evaluation where if I were a buyer of the company just like this I would be looking at it. Our experience in terms of doing a buyback out of the market is it just takes a really long time and it's hard to accumulate a lot of stock, but it certainly is something the board will continue to monitor, but your point is well taken.

Yes, certainly we would buy stock, we will entertain something by the end of the year be it perhaps stock buyback, perhaps a dividend I mean it’s perhaps an acquisition. We are not really quite sure where it will go, but we may be in a place to do that at some points as the year, if the year develops it continuously develop the way it has. Is that answers your question?

It answered it partially, it opens up a little bit more discussion on a few items so as I look at it right now it looks like your debt is up about $6.7 million from prior year so basically in about two quarters as you have kind of talked about in about two quarters you are going to have that debt level down as a percent of things down to where it was low and in good place. So I understand the timing on that. Joe made a comment on considerations of the buyback a few items. One, I don't know, but I don't I think you guys have a buyback itself authorized or active in and in that sense [indiscernible] ready to go in place and whether or not you are able to acquire a lot of shares shouldn't be the rationale for which to have a plan in place and being in the market of acquiring shares on days, the people for whatever reason to worry about China or worry about Greece. Those are opportunities for the company to go retire a few thousand shares here and there. And so I think to have a plan established in place with particular rules and parameters you establish and adjust as the company's financial circumstances and leverage improves is something that I is probably a good and active and ongoing program to have their and not worry about the lack of shares out that you're not going to have another Tim Staples block okay. So you’re going to need to chew it up in the market slowly but surely and so I think it's just a question of having things and having it authorized and prepared. So do you have a program that's already authorized or my corrected whatever program there was as expired and certainly if there was a quantity amount that got chewed up when you go retire the Staples block.

Yes, so the answer is yes some that we certainly on our radar and thank you for bringing up again, but next board meeting and for the summer it will be definitely a topic of discussion.

Okay and then of course maybe it is time for a small sustainable dividend which would widen the population of managers or investors who are allowed to participate in own P&F shares because it had some form of a modest yield that exists.

Yes, we continue to review that as I told you I know many times we continue to view that it every single board meeting with our sale and we will continue to do that of course I think the sentiment has been that the dividend would not be meaningful enough to really mean anything in most cases. But we absolutely we will be looking at it and obviously as time goes on and our earnings continue to increase. And if we continue to do pay down our debt obviously it becomes more of a focus. So I mean it’s a developing thing. I would say.

Don’t get me wrong. I am not talking about some kind of high yield dividend where the dividend would be something that supports the shares, the share price and anything else and it's going to be this retirement vehicle. It’s the idea that if you are dividend paying, again small and modest, sustainable doesn't even have to grow. If you’re dividend paying you qualifying you are on the radar screens and you are in the checkboxes of a variety of managers or potential investors that today are not allowed to invest. And I think that's that comment is with respect to my next question which is an overall incremental investor relations and communications program. You mentioned on the last call the consideration of may be revisiting activity in attempts that you guys did many years ago in an environment when the Internet really was just nascent and microcap investing wasn't it was a much more difficult communication channel. Has the board had more discussions about incremental investor relations activity of management getting out there and telling the story? So that we might see an enhancement of our valuation multiple, which inherently is then a reduction of the company's cost of capital?

We have had those discussions in the recent past, I don’t know we haven’t planned for our next Board Meeting, but I’ll put on the agenda. But I’d say that the consensus has been at the board level that is - we don’t trade in a volume that people would want to get into it, get into the stock so readily, because they can't get out so readily. So I think that’s been one of the problems and the float is so small in between new Fidelity and me that the float is so small. But it doesn't gain a lot of interest, but we will you know, it’s there - there were lot of two sides to it….

There is certainly a few ways to address that first off an ongoing in regular buyback plan enhances the liquidity that one might see. Secondly, you know Investor Relations activity gets a higher valuation multiple and in this instance the higher valuation multiple and a higher stock price would also be get a greater trading volume. Look if you got your stock price to a fair value I might not end up holding 10% of the company like I do today, but I might be down at 5%, well that's 5% that would be trading again the same may go with Joel and Fidelity similarly and now you're talking about just for example a stock that is in the teens. Well, you're now starting to get to where you could even consider shares as part of acquisition currency all the sudden your float issue and all the other things you're talking about has a different story and perhaps if things go all right and earnings growth and et cetera you got yourself a very small stock split situation so…

Okay. Appreciated. I appreciate what you are saying as part of overall plan that we will continue to look at. I understand what you are saying.

I mean maybe it’s time that you maybe you have a capital markets professional added in it and included as part of your board in lieu of maybe some of the longer, older legacy directors there is to get someone with capital markets experience.

Okay. I appreciate all your comments.

You are missing an opportunity now and think that the time is right in this company is not making the efforts that it ought to and I think there's steps you can take, small steps when added together are shares would trade in the low-teens.

I hear you. Any other questions Andrew with the quarter?

I think I'm done. I'll back out.

Okay. Thank you for your time today.

And ladies and gentlemen no more questions in the queue. I'd like to give the conference back over to Richard and company for any additional or closing remarks.

Okay, thank you all for your time today on our call and we look forward to speaking with you in our Q3 call later on this year. Thank you all for your time.

And ladies and gentlemen, this does conclude today's conference and we do thank you for your participation. Have a good rest of your day.