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’ Third Quarter 2015 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Richard Goodman, the company’s General Counsel. Please go ahead.

Thank you, operator. Good morning and welcome to P&F Industries’ third 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 would 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, 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, automotive, 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 statements 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 precedes the release of our quarterly report filed on Form 10-Q for the three-month and nine-month periods ended September 30, 2015, I will begin today’s call as always with a brief summary of the company’s results of operations and earnings per share for the three-month and nine-month periods ended September 30 of this year and how they compare to the same periods last year. 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 time, we will move to the Q&A session. Once again, however, before I begin, I wish to remind all of you on the call that the purpose of this call is to discuss and review the company’s third quarter results for 2015. As such, I kindly request that any questions asked focus on our results only. I appreciate your help. The company’s consolidated revenue for the three-month period ended September 30, 2015 was $21,678,000 compared to $22,932,000 for the third quarter of 2014. I wish to note here that as has been mentioned on previous earnings calls and stated on our filings with the SEC, we elected not to shift certain promotional type products to Sears this year, and it was a third – it’s usually a third quarter event. This decision was the primary cause for the revenue shortfall. Additionally, promotional type orders shipped during this quarter generally to the Home Depot, which were shipped last year did not ship this year. Both of these customers are included in Florida Pneumatic’s retail category, which is within our tools group. For the nine-month period ended September 30, 2015, the company’s revenue increased to $64,064,000 from $57,132,000 during the same period last year. Current revenue is broken down by segments as follows. Our tools group revenue for the three-month period ended September 30, 2015 was $15,924,000 compared to $17,865,000, the cause of which I just explained. The decline in retail revenue was partially offset by increased revenue from Florida Pneumatic’s automotive product line and increased revenues at Hy-Tech. The tools group year-to-date revenue was $46,541,000 increasing from 2014’s nine-month total of $41,749,000. The improvement was driven primarily by the addition of the AIRCAT product line during the third quarter of 2014 and to a lesser degree, UAT and ATSCO. Our hardware group, which today consists of only Nationwide had third quarter 2015 revenue of $5,754,000, up from $5,067,000 reported for the third quarter of 2014. This 13.6% increase was driven primarily by Nationwide’s Fence and Gate hardware products. We continue and we will – we intend to continue our current strategy, which is to develop new innovative products and accessories for this product area. The company’s consolidated gross margin for the three-month and nine-month periods ended September 30, 2015 were 36.3% and 37.2% respectively compared to 35% and 36.2% for the same periods in 2014. Specifically for the tools group, third quarter and year-to-date gross margins were 35.4% and 36.4% compared to 33.4% and 34.9% respectively for the same periods last year. The improvement in the tools gross margin was primarily driven by the added automotive tools revenue. Our hardware group’s gross margin for the three-month period ended September 30, 2015 was 38.8% compared to 40.6% during the same period last year. This gross margin for both nine-month periods ended September 30, 2015 and 2014 was 39% and 39.7%, respectively. A contributing factor to the three-month and nine-month decline compared to the same periods in the previous year was Nationwide’s decision to service a lower gross margin OEM customer. Our selling, general and administrative expenses for the three and nine-month periods ended September 30, 2015 was $5,962,000 and $18,510,000 compared to $6,438,000 and $17,221,000 for the same periods last year. Stated as a percentage of our total revenue, our third quarter 2015 SG&A declined to 27.5% from 28.1% and for the nine months, as a percentage of revenue, was 28.9%, down from 30.1% for the same nine-month period a year ago. Significant factors contributing to the quarter-over-quarter change included reduction of $410,000 in our professional fees and transaction expenses due primarily to the three acquisitions that we acquired – the three companies we acquired in 2014 with minimal activity this quarter and two, our variable expenses declined $172,000 and three, an increase of $75,000 in depreciation and amortization. The company’s interest expense for three and nine-month periods ended September 30, 2015 was $173,000 and $566,000 compared to $158,000 and $335,000 for the same periods last year. These increases are due to the use of funds during the third quarter of 2014 to complete the three acquisitions. Included in our three and nine-month 2015 interest expense is amortization of debt financing cost of $28,000 and $83,000 compared to $23,000 and $67,000 in the same periods in 2014. Lastly, in connection with the Universal Air Tool Company Limited, or UAT acquisition as we call it, there was the possibility that we could pay as conditional consideration or an earn-out, a maximum of £250,000 to the sellers. The earn-out is computed on UAT’s net earnings adjusted for among other things, interest, taxes, depreciation and amortization for the period from date of acquisition, which was July 29 of last year through the first anniversary date, which was July 29 of this year. At the time of the acquisition, we believe that based on a range of possible outcomes, it was more likely than not that the UAT would achieve the amount of adjusted net income that would entitle the sellers of UAT the maximum amount, which at that time when converting into U.S. dollars was $425,000. At June 30 of this year, we adjusted the estimated contingent consideration payable to the sellers to $224,000. Subsequently at the end of the anniversary, we and the sellers have agreed of a contingent shall be £193,435 or approximately $299,000 which we paid in October of this year. As a result of finalizing the earn-out, we made a final adjustment to the accrued earn-out liability, which caused us to record $75,000 as other expense in the three-month period ended September 30, 2015. The net income of – the net impact of this earn-out was a non-taxable gain of $126,000 during nine-month period ended September 30, 2015. Taking all of the above data into consideration, our income before taxes increased 15.6% to $1,655,000 from $1,432,000 for the same three-month period in 2014. And our income before taxes for the nine-month period ended September 30, 2015 increased 56% to $4,853,000 from $3,110,000 for the same period a year ago. Lastly, our net income for the three months period ended September 30 of this year improved 28.7% to $1.05 million from $816,000 reported during the third quarter of 2014, with our nine months net income improving 69.9% to $3.143 million from $1.85 million for the same period last year. And lastly, our basic and diluted earnings per share for the three months period ended September 30 of this year were $0.29 and $0.28 compared to $0.22 and $0.20 per share compared to the same period in 2014. Our basic and diluted earnings per share for the three months period ended September 30 of this year, were $0.87 and $0.84 compared to $0.50 and $0.47 per share for the same period in the prior year. At this time, I would ask Joe Molino to provide us some insight into the cash flow. Joe?

Thank you, Richard. Capital expenditures during the first nine months of 2015 were $1.144 million compared to $713,000 during first nine months of 2014. Significant non-cash items affecting our cash flows during the nine months period ended September 30, 2015, were depreciation and amortization of $1.279 million, amortization of other intangible assets of $971,000, a reduction of the contingent consideration of $126,000, stock-based compensation of $72,000 and amortization of debt issued costs of $83,000. Significant components impacting our cash provided by operating activities were increases in accounts receivable and accounts payable of $1.548 million and $1.064 million respectively. With that, I would like to turn the call back over to Richard. Richard?

Thank you, Joe. And lastly, I would also like to acknowledge all of our employees and the management of our companies for doing – continuing to do such an outstanding job. All of us continue to work hard and believe in our company’s products and customers. And with our hard work and perseverance, P&F will continue to do its utmost to improve performance and shareholder value. That’s the end of our report today. We will be happy to answer any questions anybody may have. Operator?

Thank you. [Operator Instructions] We will go first to Andrew Shapiro at Lawndale Capital Management.

Hi guys, I got several questions. I will ask a few and then jump out into the queue if someone is behind us.

Thank you.

Regarding the ATSCO-Hy-Tech integration, which seems to be the only of the three acquisitions where you still got work to be done, what’s left to be done because the timing seems to be a little bit behind your expected schedule and I am wondering why – does it seem delayed and when you expect to get to your milestones?

I will let Joe answer that Andrew, but it’s not behind schedule now. We have said on the last two calls I believe, that we were looking at the end of the year as the – really, as the target for us to be complete. And I would say that we are essentially, for all intents and purposes complete now, not to say that they were not things along the way that could still pop-up on an ongoing basis. But we have our arms around it and the integration is essentially done at this point. But Joe, you may want to add a little color to that?

Yes. What you are saying before Joe goes on, what you are saying is what I expected, but your press release implied that it was going to be longer, you didn’t mention that, okay it’s now done here in the middle of the fourth quarter, so that’s good to hear, but go ahead Joe?

Yes. I don’t see that, but we will look at that, Andrew.

Let me just kind of give you a little more detail. We inherited quite a few product lines in that acquisition and while we are shipping the bulk of what was being shipped maybe just prior to the transaction, there are a number of SKUs and tools that we are working through reintroducing ourselves to that customer base, which had been for lack of better words, somewhat abandoned. And as we work through those and make those tools for the first time, I guess I would call that continuing – you could call that continue integration, but I am not sure it’s not black and white. Having said that, I think the bigger story for the quarter is not so much where we are in the ATSCO transition, but really the headwinds we are seeing in oil and gas, frankly.

I would just add to that Andrew, that the machining problems, the machine problems, the labor problems, the training of our labor and all those things at this point are pretty much – again, not to minimize that we always have work to do, but we have – and the biggest part of that is done. But of course, what Joe was alluding to in the ATSCO and in the Hy-Tech regular businesses, the oil and gas business, which is down in the 40% range or something like that and we are seeing that in much, much slower orders.

Okay. Just so you know I drew that conclusion, I am glad to hear what you have to say and it is consistent with what I expected, but your press release says and it’s as of today’s date, we continue the process of incorporating it and it’s difficult to predict exactly when the entire suite will be produced, which implied to me that you are not yet producing the entire suite?

Well, I think that is true. But again, some of those products weren’t even being sold when we bought the company. So maybe we are splitting hairs on the words, but I think for what we bought, we are comfortable with what we are selling. And we have lots of opportunities for products that were dusting off and cost savings that could be generated for some of the bread-and-butter products they were making. So I am not sure there is a perfect answer to when we are done, maybe we are never done.

Yes. I would say maybe our wording is slightly misleading, but when we first bought the company, we were concentrating on our biggest customers and that’s – and so now we are getting – as we have gotten that under control, now we are getting on to our smaller customers, which are also very important to us. And so we are making certain products for the first time. It doesn’t mean that we are not equipped to do it at this point, but it perhaps was a bad use of words.

Okay. And then I have another integration question here and then I will back out. But with the integration done in Universal and Exhaust acquisitions and pretty much you are in ATSCO, but you have kind of explained your next steps there. But with Universal and Exhaust, what additional steps if any, are you now doing to pursue to build on and accelerate growth, you had talked about assimilation of engineering strengths of certain acquired products was going to take a back-burner to the marketing and sales resource allocation. But where do things stand now and your thoughts on the timing of such assimilation and potentially new product development, etcetera?

Well, new product development is underway using the Exhaust technology platform. we have got ongoing projects right now to not only incorporate the technology in different brands, but while we have also discovered to our pleasant surprise, that in situations where the AIRCAT products satisfied the technical specifications for something in the industrial tools segment, we are just selling that product straightaway as an AIRCAT tool, even though that wasn’t the original market, but we are very happy with the reception we are getting. So we are getting what I will call some spillover of that brand outside of automotive, which we are excited about. So that’s all continuing and will continue. I am not sure, did that answer your question?

Yes. No, it does. And lastly on that same thing is, you guys talked about introducing the AIRCAT and NITROCAT, etcetera, into the UK market, into the UAT, and as a distributor it would be generally a substitution or replacement of legacy third party products, so it wouldn’t necessarily be a revenue growth item, but basically from being outsourced in a sense or third party to internally produced, you thought you would have a margin benefit from it, have you seen that replacement maintain the revenue streams and have you seen any expected margin benefit from that, I guess move over?

Yes. Yes to both. Again, we are seeing both. We are actually flat-out replacing some of the tools that were there with an offering from AIRCAT. In some cases, it’s an AIRCAT tool that doesn’t have a direct legacy product associated with it, so that is incremental. It’s a little hard to know which of those is the bigger driver because if you have replaced the tool with an old tool and the sales are slightly more, is that the market changing, is that the tool that’s driving it. I don’t really know, but we do know that the margins are better with this increasing portion of the sales there being driven by AIRCAT tools inside of the UAT product suite.

Got it. I will back out. I have other questions on the divisions...

Yes. Andrew, you don’t need to back out, there is no one else on the queue. So you can keep going as of now.

I wish I had company, but I will ask some more and I will give you another shot at telling me about that.

Okay, thank you.

On individual divisions, well, Hy-Tech’s year-over-year revenue growth was almost 8%, do you have a feel for what is accountable to the acquisition and what is organic growth or organic decline?

Sure. I mean, Joe, you can answer that specifically.

Well, we don’t report that information. It’s again a little confusing when you look at the total, because of the tremendous drop-off we are seeing in anything related to oil and gas, which pretty much affects almost every other part of the business and also affects the ATSCO product line. So, ATSCO is not making up for ultimately the falloff we are seeing, I mean, we – year-to-date, it has, but the headwinds seem to be continuing. And we certainly have some concern that the ATSCO product line growth is going to get lost in the falloff with everything else.

Okay. Well, in light of that, you have competitors and P&F has a pretty strong financial balance sheet and financial position. Are you in light of the weak markets that your competitors are facing just like we are in our strong position, are you seeing any weakened competitors or synergistic acquisitions to further enhance Hy-Tech’s margins and eventual growth?

I mean, we are among the smallest of the players in the markets we serve, unfortunately. So, while there maybe a niche here or there and we are just maybe at the point where we are starting to open our eyes, nothing is on the horizon.

But our competitors who as Joe says essentially are much bigger than us, they are experiencing worse results than we are with the oil and gas situation.

Right. Any of them interested in maybe divesting and letting you pick up some of that?

We have. We have had conversations with couple of them, but there is nothing that is very – that we are focused on at this point.

And there is nothing...

Though it’s ongoing.

There is nothing of a size that we could just bite off and consume. These guys are just...

They are much bigger than us.

Multiples of our size. Anything they would spin-off would be too big for us to purchase.

Yes. We are a niche player. So if anything, it would just be the opposite.

No. At the right price, I guess you have got to consider it even though we just bought it.

Yes.

I guess so.

Again, we are really just getting to the point where we would think about that again and it’s not been the focus to this date, but as we move in...

As I stated – I don’t mean to interrupt you, Joe, but as I stated on a couple of other calls, we really want to take this year to take the three acquisitions and make sure they were all really comfortably integrated into our business and now we are getting to the point that we will start looking at that stuff though we do always look, but we have been looking like with half an eye, but now we are going to start looking more intently, I guess.

Okay. And regarding your comments about the major Hy-Tech customer that maybe exploring overseas sourcing for certain products do you feel this is a temporary or a permanent move with that sourcing?

I think it’s kind of like we don’t really know what’s going through their head, but – and we hear all different things from different parts of their company. So, it’s who do you believe and who do you trust in all that stuff, but if they do, what I think it would be a strategic move for them, but it’s conjecture on my part. I don’t know if you feel any differently, Joe?

We don’t have enough distant data from them just to…

So, you have said certain products, how much of the selection do you expect they might move away, if they did?

It’s at least half.

Okay. And when and if this major customer drops below the percentage of required separate disclosure to which category within the Hy-Tech segment disclosure will this revenue and margin then be allocated to ATP, Hy-Tech machine or other?

ATP.

Okay. Regarding the tool side still, regarding Sears and you electing not to sell certain promotional type products this past quarter that you did in prior years, has that type of election by P&F been made before from time-to-time without disruption of the relationship or is this a new dynamic?

Well, first of all, it’s not for the quarter, it’s a yearly product, but it’s usually bought once a year in this quarter – in this past quarter. So, that’s what it is. And we made the decision a year ago with them and it didn’t affect anything. Actually, our relationship is quite good there. They have a new supplier of that particular product and they are fine and happy and they are happy with us.

No. We have had from time-to-time discussions about promotional items that we have chosen not to pursue with them over the 30 years of the relationship. So, I don’t think they hold it against us, so to speak.

And it goes the other way also. They come in and out of the promotional items as well.

Yes, just like Home Depot, for example. But I would...

Exactly, just like Home Depot and yes, so I mean...

Just you guys highlighted this time that you elected and I didn’t recall in my many years as an investor the direction from the election and I didn’t know if it was a new dynamic, that’s all.

I think it is, but I think it was really a lot of the fact that it was a large chunk of credit in a very short period of time and we just chose with the margins that were associated with it, we just thought better to be prudent, conservative or – however, whatever the word is you want to use.

The only other thing I would add is in that particular case, the concern that might exist about handing over that opportunity to a competitor isn’t really the case, because there was a partner involved in that transaction, who is really the one managing the factories dealing with that particular product. And Sears just went direct with them and that partner is not a threat to our operation there.

Okay. And no program – promotional program this Q3 was what you described in your script regarding Home Depot. We are now in the middle of Q4. Is that the same kind of status? Is that if you were going to ship for presumably the holidays are booked in order that it would be Q3 or sometimes does that promotional program occur in Q4 and has one occurred this quarter?

There is no other promotion that I am aware of. It would have shipped by now. Those decisions are made many quarters ahead of time and there isn’t anything of consequence.

And I might mention to you, Andrew, that despite that we are not selling, you should know it was not an Air Tool, it was an accessory type of an item. It’s not our main business or focus of our business. Air Tool’s...

Okay. I have more questions, but again, is anyone in the queue?

Why don’t you back out, because right now we don’t know, so back out and operator let us know.

Thank you. [Operator Instructions] And we will go back to Andrew Shapiro.

Great. In describing your other revenues, Berkley air filters and other OEM parts, this is still a question on your tool segments. You said the declines were as a result of the decision to place greater emphasis on expanding other portions of Florida Pneumatic. Does that mean less resources are being deployed to promote sales or why are organic revenues down?

The answer is yes. I mean, we have gotten a person or two that spreads their time across filters, Berkley in industrial and we felt that the opportunity was greater in industrial, especially with this infusion of the AIRCAT brand as a possibility in there. Then the opportunities are just so much larger and we are starting to really build a bit of a brand. So, that – really, it’s one gentleman has really shifted a great deal of his focus. And plus, there is just not as great an opportunity to grow those things. They are really more in a harvest mode at this point. We are happy to have the revenue and the associated margin, but his time is better spent with much larger opportunities.

Okay.

And I should mention to you Andrew, that this whole sector that you are discussing is on an annualized basis or the nine-month basis – for the quarter, it’s $300,000 on $11 million, almost $12 million. So it’s not a big dramatic thing, just to keep it in perspective.

No, I’m just trying to follow your language.

Right. Not that everything is not important, but I am just trying to give you a perspective, that’s all.

Okay. Now you discussed in the past quarters, new aerospace tool that you rolled out and was received well in the rollout, has the tool performed well post-rollout as well as you have hoped since then. And more importantly, can you discuss any other notable new product rollouts in the tools segment that have recently taken place or are in the works?

Yes. That product is performing as expected. These things take a while to gain acceptance, both at the national level for some of these manufacturers, as well as at the local manufacturing plants. In some cases, the central purchasing arm will dictate what can be bought and in many other cases the local manufacturer – the local facility makes their own decisions. But it takes a while, it took a while. It’s taken a while with every tool we have introduced, but we are excited about this one because there is a very – a competitor that has a sizable part of the market that is relatively unchallenged. But we are comfortable with the technology that we have got there and we are confident over time we are going to take some of that share. There are plenty of other things in the works, but nothing that’s of a size that I would like to talk about. Lots of nice sized projects, but there really is nothing to talk about. But as soon as there is, we are happy to discuss it. We will discuss it as soon as it moves into the channel, but probably before you really see the impact of the sales. But there are many projects we are working on.

A few hardware questions, you discussed marketing efforts for Nationwide products outside of the U.S., what regions or countries are you focusing on and has currency movements with those countries been an important issue for you to deal with?

The main country of sale outside of the United States is Australia. Currency has not been a big factor in that situation for a decade or for however long we have been there. The price, the – you don’t see – there is a pretty tight band around the U.S. dollar, Australian dollar exchange rate, so it’s not really a factor.

Okay. I have some investments down there, I don’t know this last quarter year-over-year, you have got pretty sizable currency shift?

Well, I believe we are getting paid in U.S. dollars. So ultimately, I suppose if it moved too much against one party or the other, there would be a renegotiation, but it has not moved to that extent.

It would just potentially impact the volume you sell down there though?

Yes, it could, but we have not seen it.

Good. Your release is worded in a way that implied either or both of Nationwide’s growth strategy, as you put it focused on developing new innovative fence and gate hardware and/or the marketing efforts outside the U.S. and I quote in your release, impact the performance of Nationwide’s other products lines, can you explain how or why you say that, is that again a personal resource allocation issue?

Yes. Same – almost the same answer that I gave you for Florida Pneumatic. We have got some smaller product lines there, patio and OEM. We are happy to have the revenue, but we just do not assign a lot of personnel to that. We don’t assign a lot of engineering time to that, they are pretty much again, in harvest mode.

And these are things that we say pretty much every quarter in our leases or FQs or something.

And if you were to go back in time Andrew, to the breakdown, I don’t know – I forget how many years we have been breaking out the segments at Nationwide. You will see that Nationwide’s fence portion of sales is a fair amount more than it was 5 years ago and the other two are less. And that will continue.

Alright. I have some more questions on the corporate side, but in case someone else is in the queue, what do you want me to do?

You are still on, Andrew.

Alright. So you mentioned in recent calls, including the last call in terms of the timing, that incremental Investor Relations and communications to address the company’s below average valuation multiple was to be a topic of the Board meeting surrounding the Annual Meeting, did that discussion take place and what if any were the action items to address this Investor Relations need?

No. It was not – it was discussed, yes. It was not – there was no action taken on it. And it wasn’t at the Annual Meeting, it was our Board meetings. And generally, the feeling is that the stock is performing nicely. And when we have good earnings, the earnings come up and that there is – it’s very little value – there is very little slope on our stock as of now. So the value that we feel that we would be getting out of spending a certain amount of money to market when people don’t really want to get into the stock because they may – they feel, I mean we have heard this so often, they feel they can’t get out of this stock so fast. It’s easy to get into it, but not so easy to get out of it. So it meets with resistance at the levels whenever we talk to people. So as of now – of course, we continue to look at it, but as of now we are not doing anything in that – within financial marketing, if that’s what you are asking.

Okay. Well, you don’t have the benefit that I do of seeing things, but you should know that on eight times your normal volume today, unfortunately the stock is off 15% and is offered below $9 a share. So obviously, from a valuation point of view and such it’s cheaper now. And in terms of maybe addressing that, you talk about in terms of the float. Now I guess, there are three things to put in front of and for consideration for the Board regarding that, is that if the company as it’s deleverage or deleveraged or deleveraging, were to institute a small, but sustainable dividend stream, you would be creating a new incentive, a compensation, so to speak for investors to buy and to hold said shares and that would in and of itself, enhance liquidity as well as be an item that might be of a strategic value. Secondly, there are many funds that are limited and only allowed to invest in companies that are dividend paying companies. And so a small sustainable dividend within the company would widen the buying population and thus the ability of others to get out, the buying population, that could participate and would be interested in the stock. So has in the last few meetings, the concept of the idea of establishing a small sustainable dividend, one taking place and two the items I have just described been part of the rationale as a pro for adopting a small dividend?

We have had these conversations Andrew, at every single Board meeting, probably going back for the better part of 2 years or more. I don’t recall, but for a very long time, we all – everything you are telling us is we have learned in Economics and Business 101. We all understand it. It’s what it is. We understand it. We feel right now, the Board has continually felt that it is not something they wanted to do. But we have said we were going to visit it again year end when we saw what our earnings and cash flow were going to be for this year with the new acquisitions layered into it. And so of course, at our meeting next month, we will absolutely discuss as we do at every meeting and in quite depth or quite some depth. And we will act accordingly. And we talk about it at every meeting without one exception.

Right. Because if your issue is float, etcetera this would certainly enhance again the liquidity and the population and also if – as the company has deleveraged the reinstitution of company buyback plan, where you guys are basically on a 10b-5 or other status able to be and are in the market. Again, that helps address the issue and the concern when you have raised about you can get in, but can’t get out type of situation. So both from a dividend and the buyback perspective, they would and could address those issues. And frankly, as you do this efficiently and we attract an appropriate valuation, which should be somewhere in the teens, you start getting to the point that a small stock split of some sort actually might be appropriate and would also further address those issues.

Okay. So Andrew, thank you for your comments. So, we have talked about it regularly. We have taken a lot of time on this and I do understand what you are saying. I would tell you that if you look back as an investor, if you look back at the price of the stock for the last year or the last 18 months, I think you should be very happy as I am as a big stockholder of this company.

I am looking at valuation multiple, Richard. I am happy about the growth of the company. I am happy about the...

Well, Andrew, I am letting you – I let you speak, so let me – Andrew, I let you speak, so why don’t you let me speak now, please. Thank you. And so we have – we are pleased with that. We understand everything you are saying to us. We have been in buyback mode. Last year, we bought a fairly sizable amount of stock. And I exercised options over the market at the times when I did and we understand all the ramifications of what you are talking about. And as I said before and I will say it again, I as the largest stockholder would be the biggest beneficiary of the dividend, me. So, it’s an easy thing for me to say, yes, yes, yes, but if I don’t think it’s right for the shareholders in the company to – and the company itself, then I won’t do it. But I let – at every board meeting I let the board had to weigh on that conversation. I do not put my $0.02 into it unless I am asked. I let them do it, because I want to be – let it be in objective hands off kind of a thing. So, thank you for your comments. I understand it fully. Everybody on the call right now is on the board and they are all on the call, heard it as well. And we will absolutely – I can promise you, faithfully that we will talk about it once again at the meeting next month. And we do not take your words lightly, but we are well aware of your words and we understand it. And I am not saying we are in a disagreement about it, but so we appreciate it. And anything else you would like to talk about, we are happy to talk about.

Yes. Well, the only other thing I would want to talk about, because you are coming off a little overly defensive and unnecessarily...

I am not being defensive. I just want to – when I want to speak, I want to speak. That’s – I let you do it also. That’s all.

But yes, the stock price has appreciated. Although, the stock price has really not appreciated at the pace that the operating performance has appreciated or frankly it should appreciate at a better rate, because our valuation multiple of our company is still low and arguably lower, not fully reflecting the operating growth of the company and our valuation multiple in effect is the cost of capital to the board and to the company here. And if our cost of capital is high, the amount of accretive opportunities in your acquisition strategy, unfortunately, is a narrow population. If we could have a better valuation multiple, you have a wider population of accretive opportunities to select from in your acquisition strategy. So, we are all on the same page and I am providing analysis that any and all board members ought to be thinking about or commenting on similarly. So, that’s all I am coming from here. It’s not...

Okay, got it. Got it, and I appreciate it. Thank you.

Okay. I have no other questions. Thank you.

Okay. Operator, any other calls?

We have no other questions at this time.

Okay. So, thank you all for staying calm on the call today and we look forward to speaking to you after our year end numbers are released. Have a good day and a good holiday everybody.

And that does conclude today’s conference. Again, thank you for your participation.