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Beijer Alma

Interim / Quarterly Report Oct 28, 2011

3006_10-q_2011-10-28_797c83d3-8eba-4ad4-9541-cdcddcdbd1d2.pdf

Interim / Quarterly Report

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Interim report January-September 2011

Strong sales and profit trend continues

  • Net revenues amounted to MSEK 697 (575) for the third quarter and MSEK 2,162 (1,671) for the January-September period
  • Profit after financial items amounted to MSEK 105.3 (100.2) for the third quarter and MSEK 337.1 (303.8) for the January-September period
  • The operating margin was 15.6 percent (17.8) for the third quarter and 16.0 percent (18.6) for the January-September period
  • Earnings per share totaled SEK 2.47 (2.39) for the third quarter and SEK 8.05 (7.40) for the January-September period
  • The balance sheet remained strong and the net debt/equity ratio was 1.2 percent (neg: 3.6)

Group

Demand remained favorable during the quarter. Invoicing in comparable units rose 15 percent. All three subsidiaries grew organically, with the highest growth reported by Habia. Order bookings in comparable units rose 9 percent.

The increase in volumes had a positive impact on profitability, while higher prices for input materials and price pressure in certain customer segments resulted in weaker margins. Profit after financial items amounted to MSEK 105.3 (100.2) for the quarter.

During the third quarter, order bookings amounted to MSEK 677 (589), up 15 percent. Invoicing rose 21 percent to MSEK 697 (575). In comparable units, order bookings increased 9 percent and invoicing 15 percent. Adjusted for currency effects, order bookings in comparable units rose 11 percent and invoicing 17 percent.

Operating profit totaled MSEK 109.0 (102.2) and the operating margin was 15.6 percent (17.8). Profit after financial items amounted to 105.3 MSEK (100.2). Earnings per share after tax totaled SEK 2.47 (2.39). Cash flow after capital expenditures amounted to MSEK 77.6 (54.8).

During the January-September period, order bookings increased 29 percent to MSEK 2,199 (1,707). Invoicing amounted to MSEK 2,162 (1,671), up 29 percent. In comparable units, order bookings rose 11 percent and invoicing 12 percent. Adjusted for currency effects, order bookings in comparable units rose 16 percent and invoicing 17 percent.

Operating profit amounted to MSEK 346.4 (310.2) and the operating margin was 16.0 percent (18.6). Profit after financial items totaled MSEK 337.1 (303.8). Earnings per share after tax amounted to SEK 8.05 (7.40).

Cash flow after capital expenditures totaled MSEK 123.6 (127.3). Cash flow was charged with corporate acquisitions amounting to MSEK 71.9 (65.0). Net debt at the end of the quarter totaled MSEK 17.3 (net cash: 48.4).

Subsidiaries

Lesjöfors AB

Lesjöfors AB is a full-range supplier of standard and specially produced industrial springs, wire and flat strip components. The company is a dominant player in the Nordic region and one of the largest companies in its industry in Europe. Lesjöfors has manufacturing operations in Sweden, Denmark, Finland, Germany, Latvia, the UK and China.

During the third quarter, order bookings rose 19 percent to MSEK 337 (284). Invoicing amounted to MSEK 336 (282), up 19 percent. In comparable units, order bookings and invoicing increased 9 percent. Adjusted for currency effects, the increase was 11 percent. Operating profit totaled MSEK 78.8 (79.4).

During the January-September period, order bookings amounted to MSEK 1,100 (957), up 15 percent. Invoicing rose 16 percent to MSEK 1,087 (934). In comparable units, order bookings increased 5 percent and invoicing 7 percent. Adjusted for currency effects, order bookings in comparable units rose 9 percent and invoicing 10 percent. Operating profit amounted to MSEK 276.0 (274.0).

Lesjöfors' operations are conducted in three business areas: Industrial Springs, Flat Strip Components and Chassis Springs. While invoicing and earnings for Industrial Springs and Flat Strip Components increased, earnings for Chassis Springs were lower than in the year-earlier period.

Habia Cable AB

Habia Cable AB is one of Europe's largest manufacturers of custom-designed cable for customers in the telecom, transport, nuclear power, defense and other industries. Manufacturing and product development are conducted in Sweden, with additional manufacturing carried out in Germany, China and Poland.

During the third quarter, order bookings rose 14 percent to MSEK 159 (140). Invoicing amounted to MSEK 180 (135), up 33 percent. Adjusted for currency effects, the increase was 19 percent and 40 percent, respectively. Operating profit totaled MSEK 20.2 (16.6).

During the January-September period, Habia's order bookings amounted to MSEK 527 (414), up 27 percent. Invoicing rose 25 percent to MSEK 503 (404). Adjusted for currency effects, order bookings increased 36 percent and invoicing 33 percent. Operating profit totaled MSEK 43.2 (31.1).

Habia experienced favorable demand from the telecom sector and engineering industry. The year has been turbulent in terms of purchasing plastic used as an insulating material in the company's products. High demand combined with a fall in production after the catastrophic earthquake in Japan resulted in a material shortage and major price increases. The situation has stabilized since the summer.

Beijer Tech AB

Beijer Tech AB specializes in industrial trading in the Nordic region and represents several of the world's leading manufacturers. The company's operations are conducted in two business areas: Industrial Products and Fluid Technology/Industrial Rubber.

During the third quarter, order bookings and invoicing rose 15 percent to MSEK 181 (158). The increase in comparable units was 11 percent. Operating profit totaled MSEK 14.5 (12.8).

During the January-September period, order bookings and invoicing amounted to MSEK 571 (478), up 19 percent. The increase in comparable units was 13 percent. Operating profit totaled MSEK 45.8 (33.4).

Demand remained favorable for both business areas. The Industrial Products business area, which is in a somewhat later phase of the business cycle, has had the highest growth rate this year. The acquisition of Karlebo Gjuteriteknik AB was completed at the beginning of the fourth quarter. Karlebo, which has annual revenues of MSEK 50, will be consolidated as of October.

Parent Company

The Parent Company, Beijer Alma AB, is a holding company that does not conduct its own operations or external invoicing. During the third quarter, the Parent Company posted an operating loss of MSEK 4.8 (loss: 4.3). The operating loss for the January-September period was MSEK 18.6 (loss: 17.6).

Revenues and earnings per operating sector/segment

Net revenues
MSEK 2011 2011 2011 2010 2010 2010 2010 2010 2009
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full-year Full-year
Lesjöfors 336.5 370.8 380.1 272.6 281.9 342.9 309.3 1,206.7 1,046.5
Habia Cable 179.6 171.9 151.1 154.4 135.4 136.6 131.7 558.1 522.6
Beijer Tech 180.9 199.8 189.9 191.9 157.8 175.6 525.3
Parent Company and intra-Group 0.1 1.1 0.1 –, 0.1 –0.2 0.1 2.1
Total 697.1 743.6 721.2 618.9 575.2 654.9 441.1 2,290.1 1,571.2
Operating profit/loss
MSEK 2011 2011 2011 2010 2010 2010 2010 2010 2009
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Full-year Full-year
Lesjöfors 78.8 99.6 97.6 75.3 79.4 104.6 90.0 349.3 242.9
Habia Cable 20.2 19.2 3.8 15.1 16.6 6.5 8.0 46.2 11.5
Beijer Tech 14.5 16.9 14.4 14.5 12.8 14.3 41.6
Parent Company and intra-Group –4.5 –9.6 –4.5 –8.8 –6.6 –5.8 –9.6 –30.8 –16.2
Total 109.0 126.1 111.3 96.1 102.2 119.6 88.4 406.3 238.2

Corporate acquisitions

During the first quarter, Lesjöfors acquired the German spring manufacturer Velleuer GmbH & Co KG. The acquisition has been consolidated as of January 1, 2011. Velleuer generates revenues of about MSEK 120 and has 110 employees. The company's customers operate in the German engineering and automotive industry. The acquisition provides Lesjöfors with local production in Germany, which is Europe's largest market for springs.

Preliminary acquisition calculation
Purchase consideration (cash) MSEK 70.2
Acquired net assets measured at fair value MSEK 47.8
Goodwill MSEK 22.4

All of the acquired receivables, which total MSEK 33, are expected to be received.

After the end of the period, Beijer Tech completed the acquisition of Karlebo Gjuteriteknik AB, which will be consolidated as of the fourth quarter. The acquisition calculation will be presented in the next quarterly report.

President's statement

Despite a turbulent operating environment, the trend during the third quarter remained favorable. The Group entered the quarter with a healthy order stock and order bookings remained satisfactory. However, the order stock declined during the quarter, mainly due to Habia's telecom operations. In the Group's other business areas, a favorable balance was achieved between order bookings and invoicing. Order bookings rose a total of 15 percent and invoicing increased 21 percent. Some of this growth was the result of the acquisitions carried out by Lesjöfors and Beijer Tech in the past year. Adjusted for these acquisitions, the rate of increase was 9 percent for order bookings and 15 percent for invoicing. Profit before tax amounted to MSEK 105 for the quarter, up MSEK 5 year-on-year. The operating margin fell from 18 percent to 16 percent, almost exclusively due to lower margins in Lesjöfors.

The Group maintained a strong balance sheet. Net debt at the end of the quarter was a low MSEK 17, which indicates that the Group's financial capacity to grow and implement corporate acquisitions remains strong. The number of employees continued to increase during the quarter, primarily as a result of the Group's expansion in China. In total, 34 percent of employees in the Beijer Alma Group are located in low-cost countries, primarily China, compared with 25 percent at the beginning of the year.

Lesjöfors' invoicing rose 9 percent during the quarter to MSEK 336 in comparable units. Industrial Springs and Flat Strip Components reported the highest growth, while sales in Chassis Springs remained unchanged compared with the third quarter of 2010. The results of Flat Strip Components were also impacted positively by increased sales volumes of components for mobile phone manufacturers in China. Operating profit amounted to MSEK 78, which is largely unchanged compared with the year-earlier period. The operating margin declined during the quarter as a result of the price pressure in Chassis Springs and lower margins in the newly acquired German operations.

Habia's invoicing rose 33 percent to MSEK 180. Although most of the company's customer segments contributed to this increase, sales to the telecom segment had the highest growth rate. However, order bookings from telecom customers were lower than invoicing, which caused the company's order stock to decline from a high level. Operating profit increased to MSEK 20, compared with MSEK 17 in the year-earlier period.

Beijer Tech's sales rose 15 percent year-on-year. The increase for comparable units was 11 percent. While both of the company's principal areas, Industrial Products and Fluid Technology, reported favorable trends, Fluid Technology had the strongest earnings. Operating profit amounted to MSEK 15, up MSEK 2 compared with the year-earlier period, and the operating margin was unchanged at 8 percent.

The demand trend was positive in the third quarter, and with the exception of Habia's telecom sales, a favorable balance was achieved between order bookings and invoicing. Nevertheless, the future demand scenario is uncertain and we are prepared for the possibility of a decline.

Events after the end of the period

Beijer Tech has completed its acquisition of Karlebo Gjuteriteknik AB, which generates annual revenues of approximately MSEK 50.

Risks and uncertainties

The Group's material risks and uncertainties include business and financial risks. Business risks may include major customer exposures to individual industries or companies. Financial risks primarily pertain to foreign currency risks that arise because more than 84 percent of sales for Habia and Lesjöfors are conducted outside Sweden, while approximately 55 percent of production takes place in Sweden.

Management of the Group's financial risks is described in Note 29 of the 2010 Annual Report. The Group is deemed to have a favorable risk spread across industries and companies and the assessment is that no material risks arose during the year.

Accounting policies

Group

This interim report was prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union (EU). The presentation of the interim report complies with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.

No new or revised IFRS that took effect in 2011 had a significant impact on the Group. Accounting policies and terms of calculation are unchanged compared with those applied in the 2010 Annual Report.

Parent Company

The Parent Company, Beijer Alma AB, applies the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. These accounting policies correspond with the preceding year and with the consolidated accounting policies where applicable.

Consolidated comprehensive income Condensed income statement

Group

MSEK 2011
Q3
2010
Q3
2011
Jan-Sep
2010
Jan-Sep
2010
Full-year
2009
Full-year
2008
Full-year
Net revenues 697.1 575.2 2,161.9 1,671.2 2,290.1 1,571.2 1,836.3
Cost of goods sold –459.9 –364.1 –1,407.3 –1,033.9 –1,426.2 –999.0 –1,187.6
Gross profit 237.2 211.1 754.6 637.3 863.9 572.2 648.7
Selling expenses –70.4 –59.8 –222.7 –171.6 –238.3 –190.7 –194.1
Administrative expenses –58.3 –49.1 –186.0 –155.5 –220.2 –142.5 –153.7
Profit/loss from participations in associated
companies 0.5 0.5 0.9 –0.8 1.5
Operating profit 109.0 102.2 346.4 310.2 406.3 238.2 302.4
Interest income 0.5 0.1 1.4 0.9 1.9 1.1 7.1
Interest expenses –4.2 –2.1 –10.7 –7.4 –9.4 –12.8 –14.5
Profit after financial items 105.3 100.2 337.1 303.7 398.8 226.5 295.0
Tax on net profit for the period –30.8 –28.0 –94.4 –80.6 –112.3 –64.1 –78.3
Net profit attributable to Parent Company
shareholders 74.5 72.2 242.7 223.1 286.5 162.4 216.7
Other comprehensive income
Income/expenses recognized directly against
shareholders' equity
Cash-flow hedges –6.1 12.2 –24.1 6.9 8.5 26.8 –14.6
Translation differences 7.8 –31.8 17.9 –36.7 –39.5 –25.7 48.0
Total other comprehensive income/loss after tax 1.7 –19.6 –6.2 –29.8 –31.0 1.1 33.4
Total comprehensive income attributable to Parent
Company shareholders 76.2 52.6 236.5 193.3 255.5 163.5 250.1
Net earnings per share
before and after dilution, SEK 2.47 2.39 8.05 7.40 9.51 5.92 7.90
Dividend per share, SEK 7.00 5.00 5.00
Includes amortization and depreciation in the
amount of, MSEK 20.6 18.3 58.9 54.0 70.7 71.4 68.2
Parent Company
MSEK 2011 2010 2011 2010 2010 2009 2008
Q3 Q3 Jan-Sep Jan-Sep Full-year Full-year Full-year
Administrative expenses –8.5 –7.8 –28.2 –28.5 –41.2 –30.8 –31.7
Other operating income 3.7 3.5 9.6 10.9 14.6 13.7 13.7
Operating loss –4.8 –4.3 –18.6 –17.6 –26.6 –17.1 –18.0
Income from participations in Group companies 116.0 85.0 75.0
Interest income and similar revenues 1.2 1.3 3.2 3.9 5.0 6.1 9.9
Interest expenses and similar expenses –1.9 –1.3 –4.6 –4.3 –4.4 –8.3 –8.5
Profit/loss after financial items –5.5 –4.3 –20.0 –18.0 90.0 65.7 58.4
Tax on net profit for the period 1.2 1.3 4.2 4.5 4.6 2.6 2.5
Net profit/loss attributable to Parent Company
shareholders –4.3 –3.0 –15.8 –13.5 94.6 68.3 60.9
Other comprehensive income
Other comprehensive income attributable to
Parent Company shareholders –4.3 –3.0 –15.8 –13.5 94.6 68.3 60.9

Condensed balance sheet

Group
MSEK 2011 2010 2010 2009 2008
Sep 30 Sep 30 Dec 31 Dec 31 Dec 31
Assets
Fixed assets
Intangible assets 372.4 356.2 349.8 121.3 130.8
Tangible assets 489.0 434.6 440.2 462.7 483.5
Financial assets 48.8 30.5 30.3 32.6 43.0
Total fixed assets 910.2 821.3 820.3 616.6 657.3
Current assets
Inventories 502.8 402.3 427.6 288.7 325.8
Receivables 624.3 522.5 489.8 289.4 316.2
Cash and bank balances 201.3 222.9 238.1 195.5 161.5
Total current assets 1,328.4 1,147.7 1,155.5 773.6 803.6
Total assets 2,238.6 1,969.0 1,975.8 1,390.2 1,460.8
MSEK 2011 2010 2010 2009 2008
Sep 30 Sep 30 Dec 31 Dec 31 Dec 31
Shareholders' equity and liabilities
Shareholders' equity
Share capital 125.5 125.6 125.5 114.3 114.3
Other contributed capital 444.4 444.3 444.4 165.3 165.3
Reserves –7.7 –0.2 –1.5 29.6 28.4
Retained earnings, including net profit for the period 857.9 762.6 826.1 676.7 651.6
Shareholders' equity attributable to Parent Company
shareholders 1,420.1 1,332.3 1,394.5 985.9 959.6
Non-controlling interests 2.7 2.9 2.7 3.1 3.3
Total shareholders' equity 1,422.8 1,335.2 1,397.2 989.0 962.9
Long-term liabilities to credit institutions 112.7 91.4 89.0 66.9 80.7
Other long-term liabilities 37.5 40.9 51.2 33.1 26.9
Current liabilities to credit institutions 103.9 82.8 57.9 68.8 99.1
Current non-interest-bearing liabilities 561.7 418.7 380.5 232.4 291.2
Total liabilities 815.8 633.8 578.6 401.2 497.9
Total shareholders' equity and liabilities 2,238.6 1,969.0 1,975.8 1,390.2 1,460.8
Parent Company
MSEK 2011 2010 2010 2009 2008
Sep 30 Sep 30 Dec 31 Dec 31 Dec 31
Assets
Fixed assets
Tangible assets 1.0 1.1 1.0 1.3 1.5
Financial assets 530.3 533.0 533.0 203.0 210.0
Total fixed assets 531.3 534.1 534.0 204.3 211.5
Current assets
Receivables 147.6 160.9 313.5 340.1 368.4
Cash and cash equivalents 0.1 0.1 35.9 0.1 0.1
Total current assets 147.7 161.0 349.4 340.2 368.5
Total assets 679.0 695.1 883.4 544.5 580.0
MSEK 2011 2010 2010 2009 2008
Sep 30 Sep 30 Dec 31 Dec 31 Dec 31
Shareholders' equity and liabilities
Share capital 125,5 125,6 125,5 114,3 114,3
Statutory reserve 444,4 444,3 444,4 165,3 165,4
Retained earnings 62,1 94,5 178,4 164,4 209,1
Net profit/loss for the period –15,8 –13,5 94,6 68,3 60,9
Total shareholders' equity 616,2 650,9 842,9 512,3 549,6
Current liabilities to credit institutions 41,4 32,8 17,3 12,1
Current non-interest-bearing liabilities 21,4 11,4 40,5 14,9 18,3
Total shareholders' equity and liabilities 679,0 695,1 883,4 544,5 580,0
Condensed cash-flow statement
MSEK 2011 2010 2011 2010 2010 2009 2008
Full Full Full
Q3 Q3 Jan-Sep Jan-Sep year year year
Cash flow from operating activities before change in working
capital and capital expenditures 118.7 88.5 338.6 296.1 389.7 245.9 260.0
Change in working capital, increase (–) decrease (+) –26.3 8.3 –74.9 –71.3 –109.4 31.5 –26.4
Cash flow from operating activities 92.4 96.8 263.7 224.8 280.3 277.4 233.6
Investing activities –14.8 –15.7 –68.2 –32.5 –47.1 –61.6 –60.2
Acquired operations –26.3 –71.9 –65.0 –65.0 –23.3
Cash flow after capital expenditures 77.6 54.8 123.6 127.3 168.2 215.8 150.1
Financing activities –65.6 –7.2 –160.4 –112.8 –138.5 –181.1 –156.5
Change in cash and cash equivalents 12.0 47.6 –36.8 14.5 29.7 34.7 –6.4
Cash and cash equivalents at beginning of period 189.3 170.8 238.1 195.5 195.5 161.5 165.3
Cash from acquired/divested operations and exchange-rate
difference in cash 4.5 0.0 12.9 12.9 –0.7 2.6
Cash and cash equivalents at end of period 201.3 222.9 201.3 222.9 238.1 195.5 161.5
Approved but not utilized committed credit facilities 392.7 447.4 392.7 447.4 428.3 418.5 338.6
Available liquidity 594.0 670.3 594.0 670.3 666.4 614.0 500.1
Specification of changes in shareholders' equity
MSEK 2011 2010 2009 2008
Sep 30 Full-year Full-year Full-year
Opening shareholders' equity attributable to Parent Company
shareholders 1 394.5 985.9 959.6 846.7
Comprehensive income for the period 236.5 255.5 163.5 250.1
Dividend paid –210.9 –137.2 –137.2 –137.2
New issue 290.3
Closing shareholders' equity attributable to Parent Company
shareholders 1 420.1 1 394.5 985.9 959.6
Non-controlling interests 2.7 2.7 3.1 3.3
Total closing shareholders' equity 1 422.8 1 397.2 989.0 962.9

Specification of shareholders' equity for the period

Other contributed Retained earnings, incl.
Share capital capital Reserves net profit for the period Total
December 31, 2010 125.5 444.4 –1.5 826.1 1,394.5
Comprehensive income/loss
for the period –6.2 242.7 236.5
Dividend paid –210.9 –210.9
September 30, 2011 125.5 444.4 –7.7 857.9 1,420.1

Number of shares

2011 2010 2009 2008
Sep 30 Dec 31 Dec 31 Dec 31
Number of shares outstanding 30,131,100 30,131,100 27,431,100 27,431,100
Total number of shares, after full dilution 30,131,100 30,131,100 27,431,100 27,431,100
Average number of shares, after full dilution 30,131,100 30,131,100 27,431,100 27,431,100

Of the total number of shares outstanding, 3,330,000 are Class A shares and the remaining shares are Class B shares.

Key figures

2011 2010 2011 2010 2010 2009 2008
Q3 Q3 Jan-Sep Jan-Sep Full-year Full-year Full-year
Number of shares 30,131,100 30,131,100 30,131,100 30,131,100 30,131,100 27,431,100 27,431,100
Net revenues, MSEK 697.1 575.2 2,161.9 1,671.2 2,290.1 1,571.2 1,836.3
Operating profit, MSEK 109.0 102.2 346.4 310.2 406.3 238.2 302.4
Profit before tax, MSEK 105.3 100.2 337.1 303.7 398.8 226.5 295.0
Earnings per share after tax, SEK
Earnings per share after 26.3%
2.47 2.39 8.05 7.40 9.51 5.92 7.90
standard tax, SEK
Cash flow per share after capital
2.57 2.45 8.24 7.43 9.75 6.08 7.74
expenditures, SEK 2.58 1.26 4.10 4.22 5.58 7.87 5.47
Return on shareholders' equity, % 22.6 22.6 23.5 25.8 24.7 17.2 23.5
Return on capital employed, % 27.0 27.6 29.2 31.6 30.6 21.2 28.3
Shareholders' equity per share, SEK 47.13 44.22 47.13 44.22 46.28 35.94 34.98
Equity ratio, % 66.4 67.7 66.4 67.7 70.6 70.9 65.7
Net debt/equity ratio, %
Cash and cash equivalents, including
1.2 –3.6 1.2 –3.6 –6.5 –6.0 1.9
unutilized credit facilities, MSEK 594.0 670.3 594.0 670.3 666.4 614.0 500.1
Capital expenditures, MSEK 15.6 11.3 58.9 32.6 55.2 60.5 89.1
Interest-coverage ratio, multiple
Number of employees at end of
25.9 46.1 32.3 42.2 43.4 18.7 21.4
period 1,837 1,389 1,837 1,389 1,435 1,107 1,243

Stockholm, October 28, 2011

Beijer Alma AB (publ)

Bertil Persson President and CEO

If you have any questions, please contact:

Bertil Persson, President and CEO, Telephone +46 8 506 427 50, [email protected] Jan Blomén, Chief Financial Officer, Telephone +46 18 15 71 60, [email protected]

________________________________________________________________________

Read more at: www.beijeralma.se

Visit our subsidiaries:

www.lesjoforsab.com www.habia.com www.beijertech.se

Next report date:

Interim report on February 21, 2012

Annual General Meeting

The Annual General Meeting will be held in Uppsala on Wednesday, March 28, 2012.

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