Daktronics achieves 12% order growth and $21.6 million operating income, while expanding manufacturing capacity in Mexico to support future growth.

I'll turn the call over to Brad Wieman, Daktronics Interim President and CEO.

The second quarter of each year is typically marked by a heavy slate of project completions and our team's performance with respect to manufacturing, installation and service execution was excellent with overall efficient project production and delivery supporting our progressively strong results. During the quarter we completed a number of large scale installations including Miami Freedom park in Major League Soccer, Baltimore Orioles, Major League Baseball, Aramco Stadium in Saudi Arabia, Zayed Sports City in Abu Dhabi, Philly Airport, San Antonio Spurs, University of Buffalo Football and a nice digital signage project in Cincinnati Convention These efforts together produced 12% fiscal second quarter order growth from last year across all business segments. Through our effort, we delivered our third consecutive quarter of top line growth. We continued to improve our profitability in the quarter through both value based pricing bounded by guardrails and a sharp focus on operational and cost efficiencies. These efforts produced our second quarter of driving operating income over $20 million. While tariff expenses continue to be dynamic and impactful, we are maintaining flexibility and being responsive to this changing environment. We ended the quarter with product backlog of $321 million which grew 36% year over year giving us a multi quarter revenue Runway for revenue growth. Turning to slide 4 in our live events business, as I mentioned, we won six major league sports projects this past quarter, three major league baseball and three major league soccer, driving 26.5% order growth from last year. As I mentioned, we are 5 for 5 on large Major League Baseball projects in fiscal year 26. Additionally, we won several other stadium and arena display enhancements. As customers continue to expand their digital display footprint throughout the venue, we continue to enhance our product and service offerings to align with customer needs and desires such as our narrow pixel pitch product lines, advanced control system capabilities to engage fans and improved seamless control and management of display content from anywhere, giving venue operators greater flexibility and control over their digital assets. Pictured here is Chi Health in Omaha, Nebraska. In our commercial business. Growth in our on premise advertising business remains strong and up double digit year over year after a strong performance in the first quarter as customers continue to successfully transition to next generation fuel price products which are short term in nature and offer quick deliveries and feature rich enhancements in our out of home business, our pipeline of opportunities is expanding as optimism and sentiment continue to rise with independent billboard operators as we further develop our perception their perception of our value proposition through recognition of our brand strength, image quality, reliability, service responsiveness and reputation for innovation. With the release of our new billboard product offerings, the outdoor spectaculars projects in city centers continues to be highly competitive and variable in available projects. However, our indoor spectacular projects sold through AV integrator channels are growing. Through narrow pixel pitch product line introductions with streamlined tools and services, we are seeing growth in the government and military space as well as out of home advertising in transportation centers. Orders in this segment decreased 5% year over year, primarily driven by fewer large projects awarded in the outdoor spectacular business during the quarter. Pictured here is Park Outdoors. This is their 50th install of a Daktronics digital billboard in Syracuse, New York. Transportation business orders grew 15% from last year driven by increased demand in our intelligent transportation systems and aviation along with strong demand for full matrix parking solutions. We were awarded a five year procurement contract from the Utah Department of Transportation for intelligent transportation message displays. Through focused marketing and partner network growth, we have also improved our brand position for indoor solutions leading to quarter over quarter opportunity growth. Pictured here is Spokane International Airport Parking Application Display. This is a nice combination of our strengths in roadway displays, airports and parking solutions. Our international business which serves all the end markets of our domestic segments served outside of North America is developing well as our efforts to realign our focus on key geographies over the past several quarters is paying off. Second quarter orders in this segment increased 23.6% from last year with strong demand in the Middle east and European regions from advertising, stadium and transportation customers. We are also seeing strong uptake of our indoor solutions across multiple markets, especially government entities through growing AV Integrator channel partners. Pictured here is a large digital billboard installed at the Metropolitan in Dubai in partnership with Media247. In our high school park and recreation business after a record first quarter, our second quarter orders were comparable with orders in the second quarter of last year. We have expanded our presence among the 30 some thousand high schools in the US and continue to win projects by leveraging our strong value propositions and market differentiators. We expect continued strong uptake of our leading solutions and adoption of professional services, particularly in curriculum development and sports marketing going forward. In the picture. Here we have Dak Prescott being recognized for his generous contributions to his high school alma mater Haughton High, Haughton, Louisiana, part of which included a Daktronics video system. Turning to slide 5. We announced this morning that we are enhancing our global manufacturing footprint with the opening of a facility in Saltillo, Mexico with a target for production operation in late April 2026. This location is strategic in that it offers a broadened network. Increasing the agility of our global production capacity provides opportunity for growth in line with our growth projections, favorable trading relationship with the United States and trading relationships with key supplier countries. Overall, the new facility will complement our existing footprint and offer optionality as we optimize production going forward. Moving to slide 6 our commitment to innovation continues to drive market differentiation and value for our customers. In the second quarter, we've made significant progress in the following areas, delivering solutions that address evolving market demands. First, we expanded our narrow pixel pitch offering in the US market with an additional 2.5 millimeter chip on board model. This new model is more robust and lighter weight than previous product offerings and delivers superior image quality at close viewing distances, making them ideal for high end retail corporate environments and venue applications where visual excellence is non negotiable. Second, we introduced our new Billboard Product series, a next generation entry level digital billboard designed and cost optimized for the out of home advertising market. This product brings enhanced performance and operational efficiency to outdoor applications, expanding our competitive positioning in the billboard space. Third, sports venues are demanding easy to use integrated and mobile technology solutions. Our new All Sport Lite mobile scoring app delivers a modern approach to entry level scoreboard control designed for youth sports practices and community events. It makes scoring simple and intuitive for everyone from coaches to volunteers. Last, we launched our Venus Control Suite Live, our cloud hosted content management system. Purpose built for live event venues, this platform enables seamless control and management of display content from anywhere, giving venue operators greater flexibility and control over their digital assets. For the remainder of fiscal 2026, we have three significant product launches planned. A next generation LED street furniture featuring our enhanced LED technology that targets the premium out of home advertising market and delivers improved visual performance and operational capabilities for urban environments. We are also developing a next generation advanced indoor video display that incorporates customer and market feedback to offer improved visual experience, improved robustness and greater cost efficiency. We are also preparing for the launch of our specialized Large Digit Fuel Price system which expands our product line offering for high rise signage for long distance viewability. The photos shown here are an example of our indoor Pixel pitch at a Major League Soccer stadium sporting Kansas City's Children's Mercy park, an 18,000 seat stadium designed specifically for soccer. And below that, a shot of our All Sport Lite mobile scoring app which makes it easy and intuitive to run a daktronic scoreboard with just a mobile device, our progress down the innovation roadmap is on schedule. Turning to slide 7. The implementation of our transformation plan remains on track and continues to deliver tangible benefits to the business and our reported results. Here is an update for the second quarter on initiatives in progress. The strategic price adjustments we have implemented align with our value selling approach, allowing us to maintain our premium positioning while protecting margin in the current challenging environment. This initiative is on track and results to date continue to show customer acceptance of our value propositions. The Software as a Service Product trial was launched successfully. This initiative was designed to help identify priority areas for a broader subscription management strategy that we continue to expand upon and will further develop over the next several quarters. The Software as a Service initiative augments how we serve the market, developing recurring revenue subscription models and simplify customer engagement. Our disciplined approach of prioritizing high growth international geographies market segments as concentrating our resources where we see the strongest demand and best returns Our digital transformation projects are improving our process efficiency modernizing our technologies, driving data insights that improve decision making and create value for our customers. We are overhauling our quoting platform to make it easier and more efficient for our customers to do business with us. Additionally, as part of our digital transformation, we are building out our AI experimentation, roadmap and governance, upgrading our ERP system and making service platform enhancements and as part of our strategic planning process, we are proactively aligning our operations and product designs with the evolution we anticipate in the underlying technologies that drive customer experience and demand. Actions that we have completed include the following drivers of cost, benefits and customer experience Achieving faster inventory turnover and improved inventory efficiency Enhancing our customer experience with our modernized service system launched in May Deploying AI guided troubleshooting tools with our technical services team to speed resolution of customer issues Improving our input costs through leverage of our purchasing power reducing product complexity and time to market and aggressively. Renegotiation of key supply contracts to secure better terms and pricing. Now I'll turn the call over to Howard Adkins, our Acting Chief Financial Officer, to review our financials. Howard thank you Brad and good day everyone.

Thank you for your interest in Daktronics. The Daktronics team produced another solid quarter in the second quarter with double digit year over year growth in new orders, in sales revenue and in operating income. This slide compares the second quarter with both last year's second quarter for the year over year comparison and also the first quarter in fiscal 26 for the sequential quarter results. Let's start with the bottom Line net income Daktronics second quarter 26 net income after tax was $17.5 million or $0.35 per fully diluted share. Last year's second quarter net income of 21.4 million included a $10.3 million fair value adjustment on the convertible note that has since been converted and it also contained $2.8 million of consulting related expenses associated with the business transformation initiatives. Adjusted net income a year ago therefore was 13.9 million after removing these non recurring expenses and non cash benefit. So our second quarter 2026 net income rose 25.4% on a fully adjusted basis. Our effective tax rate in the second quarter was 20% compared to an average statutory tax rate of 25%. Since we've had solid earnings so far this year, we're able to start we're able to start starting this year to take advantage of the new tax laws that permit accelerated depreciation of RD and other expenses. On a pre tax basis. Operating income for the quarter was $21.6 million compared with 15.8 million earned in second quarter of 2025 which if you remember included 3.3 million of transformation related consulting expenses. Our bottom line results were driven by revenue growth at the top end of our 7 to 10% target range and our capture of the pricing benefit and structural cost savings from the implementation of our business transformation initiatives. Our gross Profit margin was 27% in the second quarter and operating margin was 9.4%, both improved from last year and operating margin within striking distance of our target 10 to 12.5% range. These key margins are being driven by several factors. First, the impact of strong order growth, the backlog revenue tailwind we've have generated now for three consecutive quarters and our efficient order to revenue conversion. Second, the benefit of fixed cost operating leverage as total revenue grows relative to fixed costs. Third, of course we've talked about value based pricing initiatives which are now built into our product and project pricing across the board. And finally, operating efficiencies as Brad mentioned previously, up and down the supply chain from the business transformation work started late last year and other initiatives to reduce structural costs. These benefits of course were all were offset in part by the tariff expense we have this year that we didn't have last year. This year we incurred 8.8 million of tariff expense gross in the second quarter compared with 1 and a half million dollars of tariff expense in the second quarter of fiscal 25. Let me now turn to slide 9 which shows you our business segment revenue. One of our key objectives has been to diversify our revenue sources, making us less dependent on any one business segment and generating more organically recurring total income. This table shows you the contributions to our revenue growth from each of our business segments for the second quarter quarter of this year and last year and sequentially from the first quarter of fiscal 26. It also shows you all the way on the right the gross profit margin earned by each business segment in the second quarter. There are a number of factors of course which drive revenue in each of the business segments. In various ways including among other things, order growth which as you know has been very strong, our value based pricing initiatives. Increases in the size and breadth of our sales and marketing teams, our ongoing focus on control systems servicing and customer experience efforts and of course as Brad mentioned earlier, our leading edge in product innovation. We've had solid growth in either or both of the year over year and sequential. Revenue as you can see in this table. Table also shows you as our mixes changed from the first quarter to the second quarter. If you remember, we had a higher concentration of HSPR revenue in the first quarter at a higher margin. As we go forward, as you'll see in a second, we're going to have a little bit greater concentration in live events. Let me now turn to the segment product backlog experience. In terms of order to revenue conversion, Product backlog stood at $321 million at mid year, up nearly 36% from a year ago. Now our product order to revenue conversion. Is a factor of a number of variables including for example Mix. As our mix changes, the product backlog can either take longer or shorter to come through. I just reported that our order mix in the second quarter for example was live events was about 35% 36% of our order mix. But as you can see on this chart, Live events will be currently is currently about half of our backlog mix. What that means is that as it's weighted towards live events, some of the major products will be that we've announced and Brad talked about earlier will be expected to start converting through next spring. And converting that full amount or backlog will take some time, but also results in more predictable growth and better revenue recurrence, giving us a multi quarter revenue Runway. Another factor here is timing. As we've previously disclosed, the Tennessee Titans order for example that we took booked in the late last year will only start up and won't start up until after the third quarter that we're in right now. So when orders start actually has an impact on this revenue conversion. The third factor I'D point out would be holidays. As a technical matter in the third quarter, as you may remember, third quarter revenue and income patterns typically are seasonally low. We have, as you know, in the third quarter, the Thanksgiving holiday, the Christmas holiday, New Year's, all of which reduce the time in which orders actually do get converted to revenue. So that's the principal reason why we have this typically slower third quarter. Now move to slide 11 which discusses our inventory efficiency. One of the key initiatives undertaken as a result of our business transformation analysis late last calendar year has been a program of increasing the efficiency of our inventory management. This was an early win idea and the results have been very successful. This chart shows you our inventory to sales ratio over the past five quarters and indicates that as revenue has grown, we have successfully operated the company with leaner inventories. This has in turn improved our overall balance sheet strength, giving us higher investable cash position and has also helped contain tariff cost on excess inventory. Let me now turn to our balance sheet. Balance sheet strength has been a hallmark of the company and will remain a hallmark of the company going forward. We ended the second quarter with a net cash balance of $138.3 million, an increase of about 20%. From the Comparable year end position of 1:15.5 million. The increase in our cash position, of course is a consequence of our strong earnings as well as our working capital management. As I previously disclosed, as of today the Company can repurchase up to 25.7 million worth of shares, including 5.7 million of previously authorized unused share repurchase capacity, plus an additional $20 million of share repurchase capacity just authorized by the Board. We also announced in an 8K that in late November we have converted our commercial bank backup credit line from an asset based facility to a cash flow facility which reduces its cost and provides the company with additional financing flexibility if necessary. So all in all, as our cash balance has increased, the company is in terrific position to optimize its capital position and invest for high return for our stakeholders and particularly for our shareholders. We have no borrowing swings by the way, under our capital company's bank line of credit and under contemplated. Let me now summarize our financial position and give you some ideas about the outlook. Again, we delivered a solid quarter of double digit order revenue and income growth while maintaining stronger levels of operating profitability. With the help of improved sales tools and processes and having more sales boots on the ground, we've built a strong backlog entering Q3 that gives us a good tailwind with a lot of. Capacity and potential revenue Runway for the next few quarters and smoothing out our revenue generation over time. Our strengthened balance sheet offers us increased flexibility for capital optimization Looking ahead the third quarter of our fiscal years, as I mentioned earlier, are typically seasonally slower, largely due to the fact, as I mentioned before, on the holidays. Though we continue to target year over year revenue growth. We continue to invest in innovative products and services to extend our technology leadership and our focus on increasing the contribution that our services suite makes to consolidated revenue creates more recurring and less capital intensive revenue streams which is additive to our return on invested capital. Finally, we've again strengthened the balance sheet and have increased our share repurchase capacity to minimize the dilution in shares and contribute to investor returns. We are planning an Investor Day in early April and will provide you with more specifics as they become available now. I'll turn the call back to Brett.

All right, thank you Howard moving to slide 14 the forward looking plan that we created three quarters ago was designed to materially improve our sustainable growth, market penetration, overall profitability and return on invested capital that our business model delivers. To date, our efforts are successfully accruing margin benefits and we are tracking overall toward our objectives of operating margins of 10 to 12%, operating in the top quartile return on invested capital target of 17 to 20% and achieving a compound annual growth rate of 7 to 10% by fiscal year 2028. Our plan is in place, we are executing on it, we have work to do and our team is committed to its success going forward. We will continue to implement improved financial planning protocols and incentive compensation plans that better align compensation with shareholder value and with annual operating performance, enhancing our ability to drive business results and compensate accordingly. Turning to Slide 15. As we look toward the second half, our product backlog, as Howard mentioned, is 321 million up 36% year over year, capturing demand and driving multi quarter revenue tailwind. We have demonstrated our increased efficiency in revenue conversion and successful inventory, supply chain, manufacturing and cost management. Our pipeline of market opportunities is supporting our growth objectives. We are adding manufacturing capacity in Mexico and in Ireland to increase our flexibility and complement the 80% of product fulfillment currently completed in the U.S. we are staying responsive and flexible in a dynamic environment. We are focused on differentiated industry, leading product introductions and supporting growth through high return product research and development and we are executing our transformation plan with its benefits demonstrated in our results. We are on track with our roadmap and our three year growth, profitability and return targets. I want to thank the entire Daktronics team for their continued focus, strong performance, ingenuity and dedication.

I'll now turn the call over to Andrew Siegel, Chairman of the Board, for some further remarks. Brad, thank you and thanks to you and Howard for leading the team to. Another strong quarter as we'll execute on our plan to drive growth and shareholder returns. Both of you talked about the outlook, so it's an appropriate time for me to introduce Ramesh Jayaraiman, who officially starts work at Daktronics today and will assume the President and CEO role as of. The start of the fourth quarter in February. The Board's most important job is to make sure the person running the company has the energy, ambition, skills, experience, character, talent to lead the team to achieving the company's potential. Clearly, the steps the Board has taken over the past two years demonstrate how. Much your directors believe in and are committed to that potential. You saw last week's announcement, so I don't need to repeat any of that except to summarize that the Board selected Ramesh from among many highly qualified and interested candidates. Candidates for this position because he is a transformational leader. He's a proven operator, he's a business grower, he's built distribution channels all over the world. He's a high energy guy who sets his sights high and builds teams that deliver. He knows our industry well. There's time at Armand and Bosch, he's managed P&Ls our size and bigger and he's driven growth organically and through M. And A at higher than market growth rates. So although we just started today and isn't in a place to start answering questions just yet, we wanted to use this opportunity to have and begin to introduce himself to all of you. With more to come over the next few months, including at the Investor Day. Welcome Ramesh.

Thank you, Andrew. Good morning everyone. I just want to take this opportunity. To introduce myself and say how honored and energized I am to join Daktronics. I have known Daktronics for the past nearly 10 years of association in the. AV industry and excited to join Daktronics. At this pivotal time. As we continue the journey of transformation for sustainable and profitable growth. I'm looking forward to working with the very talented Daktronics team and serving the team as their CEO. I'll be officially starting in the CEO. Role from February 1st and my time. Between now and then will be to. Be on a look, listen and learn and learn. More so I can hit the ground running in the fourth quarter. Thank you again for your interest in Daktronics. And I look forward to meeting you at the upcoming Investor Day in April. Brad, back to you.

Okay, thank you, Ramesh. And thank you, Andrew. I'll now turn the call back over to the operator for questions.

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q and A roster. Our first question will come from the line of Aaron Spicala with Craig Hallam. Your line is open. Please go ahead.

Yeah, good morning. Thanks for taking the questions first. Appreciate the continued disclosures in the presentation this quarter, especially on the backlog by segment. Can you just maybe talk about how you expect that to convert to revenue over the fiscal year? And just kind of the margin profile in there, I know it can kind of bear by segment. And then just you talked a little bit about order conversion. Just how does kind of book to ship? How does that look if we kind of think about backlog plus that? Well, a lot of factors go into.

Audit to revenue conversion. The one that we try to highlight on this particular call is the idea, and we've talked about this before, that a higher percentage of our backlog is now in the live events segment. I mentioned statistically, our orders, live events orders in the second quarter were 36% of our total orders, but in terms of the backlog, it's about 50%. So that gives you some idea of how the backlog is skewed a little bit more towards live events. And live events orders, as you may remember, are they typically don't start right away. So they're not standard orders. They're customized orders and they have different starting dates. We mentioned that the Titans order doesn't even start until after the third quarter. So that's not going to be revenue in the third quarter yet. And that. The stadium orders that Brad has talked about, which are fantastic and give us a good, you know, great Runway, those will be spread out over, you know, through the spring, actually. So. So it takes a while to get to order sometimes. But the good news is that that gives us more recurring revenue over a longer period of time and more predictable revenue over a period of time. So that's one, one big factor. I mentioned the, you know, seasonally slow third quarter. We'll have that again this year because we always have those holidays. The same holidays occur every third quarter. And so that'll be a factor. And then of course, the remaining factor is our potential order growth. So on top of the chart I want to make sure we're not misleading you by showing you that chart. That chart just speaks to the backlog conversion. Of course we're going to get new orders every quarter and that's also going to be converted to adding to revenue, revenue growth and revenue recurrence. So lots of factors, Aaron, go into this. The one that we try to highlight for you here is the distinction, if you will, between orders and. When they will start occurring as it pertains to live events in particular.

Maybe just to add on to that, Aaron, our standard order business typically turns in weeks, you know, four, six, eight weeks. And our large project business has all those variables that Howard mentioned. So we have room in our third quarter yet to bring in, bring in orders and convert it to revenue in our standard order business.

Understood, thanks for that. And then maybe, you know, can you just touch on the margins that you've been adding to backlog and maybe just looking at like year over year, the kind of margin improvement improvements, any way to just at a high level, roughly quantify the breakdown between some of the value added pricing or operating efficiencies just kind of to get a better idea and really good performance, especially considering the tariff impact as well.

Well, that is the story evaluated pricing and the operating efficiencies coming off of the work that we've already done on structural cost savings have positively contributed to. Mostly to the operating margin. I focus your attention there because our gross profit margin has a number of other factors connected to it. That change from quarter to quarter. But the storyline here is that we got pretty close again to a 10% operating margin and that really is a value based pricing order growth, structural cost efficiencies coming off of the work that we did already last year, offset in part by the extra tariff. That's a big. Big item because our extra tariff expense this year is another, almost another $8 million worth of tariff expense that we had in the quarter this year that we didn't have a year ago. And we our margin is still up from where it was a year ago.

Yep, yep. Understood. Yeah, I was just trying to understand if you did kind of X the tariff impact. It's Almost, you know, 13%. Operating margin up 400 basis points year over year. We're just trying to understand any kind of breakdown of what that split could be between value added pricing and just maybe some breakdown of the operating initiatives. Maybe third on the Mexico plant. Can you just talk about how much that expands capacity by maybe in percentage terms or dollars terms? Are there any kind of segments you know, this is focused on in particular and, you know, seems like there's some benefits to the business from a tariff perspective, just how much investment might be needed for that plant.

Yeah, it's a small investment. We're leasing the facility in Mexico. We're putting some equipment in there. What we build and how we go about it is going to be determined over time. But this is complementary to our plants here in the US as well. So we're able to bring product in, have it assembled, manufactured and brought into the states. It's a small operations at this time. We have room for growth if we need to do that. And that leads into that comment I made about optionality earlier today, optionality into the future about, you know, our overall production capacity and where it's at, how it plays into tariffs and all the other things that come our way. So it's a small operations at this time.

No, I appreciate that. And then just maybe one last quick one, you know, appreciate again the slide on inventory management and just good to see the working capital management over the last year. You know, getting the cash conversion cycle down to kind of pre Covid levels. Just, you know, how do you see that trending moving forward? How much more room for improvement do you see from those types of initiatives. On working capital.

Aaron? It's going to remain a focus of the company, but we're pretty much, you know, where we tried to get to as a result of the analysis that we did last year and. Basically paring off, you know, excess inventory and putting in place the processes to keep it, you know, keep it managed efficiently. So I'd be misleading to say it's going to improve a lot more from where it is right now, but as revenue grows, that's going to have a positive impact.

Right? No, definitely understand that. Thanks for the color and for taking the questions. I'll turn it over.

Thank you. One moment for our next question and as a reminder, if you would like to ask a question, please press star 11 on your telephone. Our next question comes from the line of Anya Soderstorm with Sidoti. Your line is open. Please go ahead.

Hi. Thank you for taking my question and congrats on the nice performance here and welcome on board. Ramesh. I'm curious, given the strong backlog growth that we saw, how should we think about the third quarter softening?

Well, you mentioned it. We have great backlog coming in. The softening. Howard talked about it. As far as the holidays, you know, we have fewer days, fewer available work days to convert. Inventory or convert our backlog over into revenue. So that's the primary thing. But we are sitting in a nice backlog and we'll use the factories to the extent that we can and plan to have employees take some time off during the holidays.

Okay, thank you. And then in terms of the capacity now, when you adding the Mexico plant, how should we think about the capacity utilization in the US and, and in the other facilities? Are you going to move some production from there to Mexico or are you seeing the growth going into Mexico?

No, this is really fitting into our growth objectives. So the Overall plan, the 7 to 10% that we talked about over the next three years. This is complementary to that. So we don't plan to move any work from the US Factories over to Mexico. And so this is part of our expansion plans.

And how far is this expansion going to bring in terms of revenue before you need to expand further? Or is there any other way you could expand in terms of. How much revenue can this footprint facilitate before you need to expand further?

Yeah, this is a small footprint that we're bringing in over there. And about 80% of what we manufacture for for our customers worldwide comes out of our U.S. factories. And that hasn't, this isn't changing with that. So this is a part of our overall expansion plans of revenue and it's a small footprint like I mentioned. So I would still foresee as being around that 80% here in the US so just making up part of that growth expansion.

Okay, thank you. That was helpful.

Thank you. And I am showing no further questions at this time. And I would like to hand the conference back over to Brad Wieman for closing remarks.

Well, thank you everyone for joining the call today. And we will be appearing at the Sidoti conference in January. We hope you have a wonderful holiday season as we want our employees to do as well. And we look forward to speaking with you on our third quarter conference call, our third quarter call. Have a great day.

This concludes today's conference call. Thank you for participating and you may now disconnect.