Energizer Holdings, Inc. (NYSE:ENR) Q1 2025 Earnings Call Transcript

Energizer Holdings, Inc. (NYSE:ENR) Q1 2025 Earnings Call Transcript February 4, 2025

Energizer Holdings, Inc. misses on earnings expectations. Reported EPS is $0.3046 EPS, expectations were $0.64.

Operator: Good morning. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to Energizer’s First Quarter Fiscal Year 2025 Conference Call. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Also note that this call is being recorded. And now I would like to turn the conference over to Jon Poldan, Vice President, Treasurer and Investor Relations. You may begin your conference.

Jon Poldan: Good morning and welcome to Energizer’s first quarter fiscal 2025 conference call. Joining me today are Mark LaVigne, President and Chief Executive Officer; and John Drabik, Executive Vice President and Chief Financial Officer. A replay of this call will be available on the Investor Relations section of our website, energizerholdings.com. In addition, the slide deck providing detailed financial results for the quarter is also posted on our website. During the call, we will make forward-looking statements about the company’s future business and financial performance, among other matters. These statements are based on management’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these statements.

We do not undertake update these forward-looking statements. Other factors that could cause actual results to differ materially from these statements are included in reports we file with the SEC. We also refer our presentation to non-GAAP financial measures. A reconciliation of non-GAAP financial measures to comparable GAAP measures is shown in our press release issued earlier today, which is available on our website. Information concerning our categories and estimated market share discussed on this call relates to the categories where we compete and is based on Energizer’s internal data, data from industry analysis and estimates we believe to be reasonable. The battery category information includes both brick-and-mortar and e-commerce retail sales.

Unless otherwise noted, all comments regarding the quarter a year pertain to Energizer’s fiscal year and all comparisons to prior year related to the same period in fiscal 2024. With that, I would like to turn the call over to Mark.

Mark LaVigne: Good morning, everyone, and thank you for joining us today. We had a great start to the year and delivered strong results in our first quarter of fiscal 2025. Specifically, we delivered organic net sales growth of nearly 4%. We expanded adjusted gross margin by 50 basis points. We grew adjusted earnings per share by 14%, and we paid down $25 million of debt. We entered the year positioned to drive growth through our strategic initiatives and our investments are paying off. We achieved organic growth in batteries of 4% and Auto Care 2%. As Jon will discuss more in a moment, our strong start to the year has given us the confidence to increase our organic sales outlook for the full year. We were able to achieve this growth while continuing to improve our adjusted gross margins, which reached 40% in the quarter.

The top line growth and margin expansion have been enabled by Project Momentum, which reestablished our margins and provided us the flexibility to invest. With three quarters remaining in the program, we expect it to enable continued investment in growth as well as margin improvement. The combination of our strong top line performance and margin expansion drove meaningful earnings growth, enabling debt reduction for the tenth consecutive quarter. Our results are certainly bolstered by the health of our categories. Battery category volume remained positive, both globally and in the U.S. Importantly, we are seeing improving value trends as well. This is resulting in volume and value converging in a manner consistent with our expectations. The auto category also continued to show growth.

We are seeing strong category fundamentals, including a steady increase in the age of the car park and a continued consumer shift towards do-it-yourself car care activities. These category underpinnings, combined with international expansion drove solid growth for our brands in the quarter. The first quarter highlighted how we are leveraging both project momentum and our strategic growth initiatives. And before turning it over to John, I would like to provide a forward look on how both of these areas look for the rest of the fiscal year. Let’s start with Project Momentum. We generated significant savings over the life of this program and this quarter was no exception. Project Momentum generated nearly $20 million of savings in the quarter and helped to drive very strong earnings growth.

There is more to come in the balance of the year, and we expect to finish fiscal 2025 with roughly $60 million in total savings for the year and approximately $200 million for the program. We will capitalize on the success of Project Momentum and invest for consistent ongoing growth. We’ve previously identified five areas where we expect to capture growth going forward. Distribution, pricing and revenue management, market expansion, innovation and digital economy. This quarter demonstrates the progress in several of those areas with the biggest impact in Q1 coming from distribution. In the quarter, we expanded our business with existing customers and on new ones. These gains were broad-based across channels, both in the US and in international markets.

We expect distribution to be a tailwind for the balance of the year. Innovation will also play a big part for us in fiscal 2025. On our call last November, we unveiled some of our newest and most innovative product lines, including the Armor All Podium Series developed in partnership with Oracle Red Bull Racing. We are pleased to report the early indicators are very positive. We have secured distribution at large retailers across the United States, Australia, UK and more. In total, Podium Series will be on the shelves in more than 15,000 retail locations across the globe. We also expect areas like market expansion, pricing and revenue management and our investments in expanding our digital economy business to drive growth in future quarters and fiscal years.

The benefit of having this broad-based pipeline is that we can invest and build each of them out over time to generate the consistent growth our financial algorithm calls for. We are excited about what we have already seen and the pipeline across each of these areas is very robust. I will wrap up and turn the call over to John. From a high level, we delivered a strong first quarter and entered the second quarter with even greater confidence in our strategic initiatives. Our strong start to the year adds to our confidence that we are executing the right strategies to deliver on our 2025 financial outlook. I will now turn it over John for more details on the quarter and outlook.

John Drabik: Thanks, Mark, and good morning, everyone. I am pleased to report solid first quarter results with both organic net sales and adjusted earnings per share above the guidance we provided in November and adjusted gross margins in line with our expectations. I will now walk you through our quarterly results in greater detail and update our expectations for the rest of the year. For the quarter, reported net sales were up 2.1% with organic revenue increasing 3.8%. Our battery business posted 4% organic growth driven by distribution gains and $10 million of hurricane-related sales, which we noted during last quarter’s earnings call. Even though the first quarter is the smallest quarter for our auto business, we were pleased to see strong organic top line growth of 2%, led by distribution gains, international market expansion and digital economy growth, partially offset by an earlier shift in holiday orders.

The volume growth in both businesses was partially offset by 1.9% of planned pricing and promotional investments in support of the holiday season. Adjusted gross margin increased by 50 basis points to 40%. Project Momentum savings of $16 million and an improvement in product input costs were the biggest drivers this quarter. These benefits were partially offset by pricing and promotional investments as well as the negative impact from the strengthening U.S. dollar. Adjusted SG&A as a percent of sales was 16.3% and roughly flat on a dollar basis. A&P as a percent of sales was 7.3%, and or an increase of $6.4 million. The increase year-over-year was primarily driven by an increase in investment behind our brands and business to support the key holiday season.

Interest expense decreased by $3.7 million due to lower average debt outstanding. We delivered adjusted EBITDA and adjusted earnings per share of $140.7 million and $0.67 and representing growth of 6% and 14%, respectively. We also generated north of $42 million of free cash flow or nearly 6% of net sales and paid down an additional $25 million of debt. Now turning to our outlook for fiscal 2025. Following our strong operating performance in the first quarter, we are raising our full year organic sales guidance to be up 2% to 3% and versus our previous call about 1% to 2%, while reaffirming adjusted earnings per share and adjusted EBITDA outlook. We anticipate consistent organic growth throughout the next three quarters driven by continued distribution gains in both the U.S. and international markets as well as strong performance behind multiple new product launches.

We also intend to continue investing in pricing and promotional activity, which will partially offset the projected volume gains. The U.S. dollar has also continued to strengthen, which at current rates create a headwind to reported revenue, resulting in reported net sales growth in the range of 1% to 2%. We continue to expect adjusted gross margin expansion of 50 basis points to more than 41%. Project Momentum savings roughly $60 million and adjusted and adjusted earnings per share EBITDA in our original range of $3.45 to $3.65 and $625 million to $645 million, respectively. We continue to expect debt pay down in the range of $150 million to $200 million and to end 2025 with a net leverage ratio of around 4.5 times. Capital expenditures are still expected to be in the range of $80 million to $90 million, driven by our continued investments across IT, operations and our plastic-free packaging initiative.

And we expect free cash flow to be in the range of 8% to 10% of net sales. I would also like to provide some additional color on the second quarter. We project organic growth in the range of 2% to 3%, driven largely by distribution gains, new product launches and international growth in our Auto Care business. And we expect reported net sales of flat to up 1%, as we continue to see pressure from the strength of the US dollar. We anticipate adjusted gross margin to be flat year-over-year at 40.5%, as Project Momentum savings are expected to be offset by pricing and promotional activity and foreign currency headwinds. We are forecasting adjusted earnings per share in the range of $0.60 to $0.70 compared to $0.72 in the prior year. The decline year-over-year is primarily being driven by increased investments in digital transformation and growth initiatives.

Now I’d like to turn the call over to Mark for closing remarks.

Mark LaVigne: Thanks, John. A great start to the year, and we’re excited for what’s ahead. Project Momentum has delivered strong results providing the necessary flexibility to invest for growth, which we saw come through this quarter. We are operating from a position of strength and have a high level of confidence in our ability to deliver long-term value for our shareholders. Now let’s open the call for questions.

Q&A Session

Operator: Thank you, sir. [Operator Instructions] Your first question will be from Bill Chappell at Truist Securities. Please go ahead.

Bill Chappell: Thanks, good morning.

Mark LaVigne: Good morning, Bill.

Bill Chappell: Hey, first question, the topic [indiscernible] on tariffs. I think in US, Latin America, Europe, you’re fairly local manufacturing for batteries or domestic manufacturing for batteries. And so maybe can you talk about what impact tariffs would have? Would it have a benefit, especially as you look at some of your private label competitors that that manufacture oversees? And then kind of same question for the auto business.

John Drabik: Yes, Bill, I’ll start with kind of the exposure. So yes, you hit it, we really, with momentum leaned into in market for market production. So helps us minimize some of that exposure. And I talked to last quarter our procurement from China for US consumption is about 5% of our COGS. So it’s not huge. If you throw in now Canada and Mexico into the mix, we procure less than 1% of our COGS from those two markets, so not really large. I think the way we’re thinking about it is we’ll continue to mitigate these tariffs by optimizing our sourcing strategy. And then anything that we can’t get out of the system we’re committed to taking pricing.

Mark LaVigne: On the competitive side, when you think about China tariffs or even Mexico tariffs, in particular, some of our competitors do produce, including private label is produced in China. So as tariffs would be implemented on those, we would have to see what the details would be how retailers would react to that. How pricing would react to that and what opportunities there may be as the tariff landscape becomes clear.

John Drabik: Bill, just to be clear, my numbers were consolidated. So that’s battery and auto.

Bill Chappell: Got it. And then just maybe characterize the overall — I mean, it looks like obviously strong top line results for the quarter and organic growth. Maybe you can kind of characterize the holiday season? Was it as expected? Was it better than expected in terms of the consumer and how that gives you kind of confidence going forward?

Mark LaVigne: Look, I think it was a solid holiday season for us. I think it was an interesting one in that we started in October with us with sort of hurricane tailwinds. November was not a particularly robust month from a consumer standpoint and then December really turned around nicely with the late holiday season, I think you saw a different shopping patterns of what you had seen in previous years. But we’re really pleased with the way Q1 played out for us. And again, it gave us the confidence to raise our top line outlook for the full year.

Bill Chappell: Great. Thanks for the color.

Operator: Next question will be from Peter Grom at UBS. Please go ahead.

Peter Grom: Thanks, operator. Good morning, everyone. Hope you are doing well? So I was just hoping to get some perspective on what you’re seeing from kind of an input cost perspective. Obviously, a lot can change just in reference to what Bill was talking about with tariffs. But just, would love to kind of get an update in terms of what you’re seeing across your key cost baskets and how you think about inflation and your kind of gross margin bridge through the balance of the year?

John Drabik: Well, we’re not seeing a big change from where we were last quarter when we gave the outlook. I would say it’s kind of mixed. We continue to see some cost pressure on like zinc, copper, nickel, corrugate, some of those areas, but we’ve got some offsets with things lithium silicone and some of the gas that we buy for the auto business. So net-net, we’re calling for a modest benefit from materials and input costs. I think where we are seeing some pressure continues to be on energy and labor. And then we saw a little bit of an uptick in some of the freight rates, especially coming out of Asia over the last quarter or so. So we’ll continue to watch that. But we feel good about our, call it, for 50 basis points of improvement for the full year.

Peter Grom: Great. And then just a follow-up on Bill’s question or your response to this question, just on the competitive landscape and sourcing differences, I mean, do you think this could be an opportunity to gain additional business with these retailers just given the differences? Or do you not really foresee that being kind of an impact to your business kind of down the road?

Mark LaVigne: Peter, I appreciate the question. I think it’s an interesting one. And one we think about a lot. I do think it’s a bit of a multivariable equation that we’re trying to solve for there. And a lot of it is going to come down into what the details of any trade tariffs or trade restrictions might be. So I think the details are going to matter in terms of how they play out and what the impact would be. Certainly, it’s our job to continue to look at any changes in the landscape and make sure we turn these types of situations into opportunities, and we’ll continue to work toward that. I think first order of business is where John started with Bill’s question, which is we have to make sure we mitigate any impact that these may have inside our four walls and make sure that we react accordingly. And then once we’ve done that, I think it’s time to turn around and look to see where we can expand and create opportunities above and beyond that.

Peter Grom: Thanks, so much. I’ll pass it on.

Operator: Next question will be from Andrea Teixeira at JPMorgan. Please go ahead.

Shovana Chowdhury: Hi. This is Shovana Chowdhury on behalf of Andrea. Thank you for taking our question. You raised the top line, but then you maintain the bottom line. So are you anticipating a higher than expected investments back into the business? And does this mean, can you please also elaborate on what you’re seeing on the consumer front on behavior with value-seeking behavior, like pricing promotion was a negative in the quarter. And how do you see this trending the rest of the fiscal year? Thanks.

Mark LaVigne: Sure, Shovana. I’ll start with your last question, and then I’ll turn it over to John for the first part of your question. I think from a consumer standpoint, as you’ve heard from many of our peers, I think you’re seeing a stable, but cautious consumer. And I think the level stability and the caution really depends on where that consumer resides within the income levels. And I think there the habits you’re seeing out of consumers have been pretty consistent over the last 12 to 18 months, which is they are they’re value seeking, and they are looking for innovation. They’re looking for value, and they will respond accordingly when you deliver that to them. So, I don’t know that the consumer landscape is changing dramatically.

It does shift quite a bit with some of the macro events that are occurring. But all-in-all, I think it’s a stable but cautious consumer environment. And I think that that lends itself well, at least from our portfolio because we’ve got a full portfolio, and we have the advantage really meeting consumers where they are and leveraging different brands within our portfolio to make sure we’re responding to any needs they may have.

John Drabik: Yes. And then I know you asked about the investments, but maybe I’ll just talk about the splits for the rest of the year and kind of how we’re thinking about the outlook. So, 2% to 3% organic top line growth, we expect that to kind of be quarter-over-quarter for the rest of the year, pretty solid growth as we’ve got those distribution expansion, good category trends in some of those new product launches that we’ve talked about. And then we expect — when you talk about investments, we do anticipate still having a little bit over 5% on A&P, although I would expect that to be heavy in the second and third quarters as we do those launches. So, I think that will be a little bit of an impact that we’ve talked about today.

And then also kind of what I’ve been talking about for the last couple of quarters, I had given some color to SG&A and some of the investments we’ve been making on our digital transformation and some of these growth initiatives that is going to continue to be seen in the SG&A number. So, we’re expecting probably more like $120 million a quarter. So as you kind of think about that going forward, that’s more of the run rate. And then the other areas that we kind of gave outlook on, whether it was interest reductions or tax rate, all of those are pretty consistent. The other one thing that I would add to that is that we have seen the dollar continue to strengthen and so that’s kind of flowing through. So, some of the organic growth that we’re getting is getting offset by the increase in the dollar.

Shovana Chowdhury: Thank you. I’ll pass it on.

Operator: Next question will be from Rob Ottenstein at Evercore. Please go ahead.

Rob Ottenstein: Great. Thank you very much. You mentioned that the consumer looks pretty stable in terms of behavior. So, should we take that to be that there’s not much change at this point, at least sequentially in terms of channel, pack size, private label? Just want to be kind of specific on those things. And then looking more forward, can you give us any more color about — and I know you’ve touched on it, but any more color on the new distribution? Any way to quantify that, what quarter that comes in? And any color around additional shelf space? Thank you.

Mark LaVigne: Sure. Let me start to address those, and if I miss one, just let me know. I mean, so I would say color on distribution, all the distribution wins are sort of known decisions built into the consolidated guide that we provided today. It’s really broad-based. It’s both in batteries. It’s in auto. It’s in dollar channel. It’s in the club channel. It’s in the US. It’s an international market. So pleased with the distribution gains that we’ve been able to make as we really focus on those, sort of, five strategic growth initiatives that we have internally. In terms of the consumer question, I would not — look, consumer is stable, cautious, but embedded in my answer was also the value-seeking behavior. And that — there is a new found muscle that the consumer has, which is they’re very comfortable shifting channels.

They’re very comfortable shifting where they make their purchases. And so that’s where I think both the consumer as well as correspondingly, CPGs have to be very nimble terms of how they meet consumers with promotions, with innovation and investment to make sure that you’re driving the top-line sales. So there is a new found muscle that we’re seeing out of consumers, and I think it’s likely here to stay. What questions did I miss, Robert?

Rob Ottenstein: Yes. I think you hit on it, but I would like a follow-up, if that’s possible. So you mentioned that the distribution gains are very broad-based, right? It’s kind of across the board, which is terrific. So anyway, number one, to quantify that in any sort of way. But also, and I think more importantly, can you talk a little bit about what you’re doing internally that’s working that’s repeatable to get those distribution gains? And is this something that you can kind of expect at this rate in the next few years going forward? Thank you.

Mark LaVigne: Robert, I’ll start with kind of a qualitative view of this. And then John can give you sort of what distribution looks like over the balance the year. I think what we’ve done internally is we went about this the right way. We first started with Project Momentum. We had to make sure we recovered the margins in our business. We had to make sure that we were building in the flexibility in our P&L to be able to invest. And we’ve done that with Project Momentum. About midway through Project Momentum, we knew that we had to, sort of, finish the play on the other part of the P&L, which is make sure we get back to consistent growth in top-line. And so our algorithm calls for roughly 1% to 2% top-line growth year-over-year basis.

That’s what I would look for us to achieve. And what we’ve highlighted are sort of those areas which is basic blocking and tackling within our business, which is distribution, innovation, pricing and revenue management, market expansion and the digital economy. Those are areas that we’ve continued to focus on. We focused on them even before we started highlighting them externally. And what that does is it just gives us areas of focus where we can drive that 1% to 2% growth consistently. Now not all five of those are going to deliver the exact same every single year. So it gives us the ability to invest, to spread the investments out and to make that both in the short, medium and long-term so that we do get back to that ratable 1% to 2% growth.

And we think these five areas are going to deliver that not only this year, but in future fiscal years as well. And then, John, on kind of the quantitative view of things.

John Drabik: Yes, Robert. So I mean, the big driver to Mark’s point, in our roll forward this year is distribution, digital commerce growth and then innovation launches. Distribution, we’re expecting to kind of generate about 200 basis points of growth this year.

Rob Ottenstein: And is that something as we kind of do our long-term model, would of 1 to 200 be the right range over the next three years, let’s say?

Mark LaVigne: In total?

Rob Ottenstein: Yes.

Mark LaVigne: That’s what the financial outgrowth calls for is…

John Drabik: That’s right.

Mark LaVigne: 1% to 2% per year.

Rob Ottenstein: Right, but coming from distribution specifically?

Mark LaVigne: Well, look, I would not — what I would do is that a consolidated 1% to 2%. I would — we’re going to pull from these five areas. They may — the composition of that growth may change year-over-year. It could be a heavy digital economy year and a lighter distribution year. We will update that on a quarter basis or even on a fiscal year basis in terms of where we expect the growth to emerge from. But I would not build in growth rates for each of these five. They will, in total, deliver 1% to 2% on a consistent basis year-over-year.

Rob Ottenstein: Terrific. Thank you very much.

Mark LaVigne: Thank you, Robert.

John Drabik: Thanks, Robert.

Operator: Next question will be from Brian McNamara at Canaccord Genuity. Please go ahead.

Brian McNamara: Hey, good morning, guys. Thanks for taking the question. Don’t mean to beat a dead horse on the distribution gains, but it’s been a pretty consistent theme over the last several quarters, and it’s just very difficult to track. So I think you answered some of this already, but are these gains coming as retailers are expanding shelf space to your categories? And if not, who or what are you kind of displacing? Because I know retailers are being pretty selective with shell space lease from some of the other companies that I cover. Thank you.

Mark LaVigne: Yeah, Brian, a bit of a frustrating answer for you probably, but it is really specific to the given retailer. In some instances, we’re getting expanded distribution. In some instances, we’re getting new distribution, at some point is coming from our main competitor versus some is from more value brands or private label. So we are — we do look to drive overall and leverage our full portfolio to do so. We built it all into the financial outlook. We saw nearly 4% organic growth this quarter. You’re going to see 2% to 3% for the fiscal year. So we’re tracking it that way, and that’s the way we’re looking at it. And then I would say in terms of — we like to let our brands and our retail partners be the one that showed this off and announced this to their shoppers. So you’re going to see a lot of these things show up in retail, if not already been very soon.

Brian McNamara: Great. Thank you.

Mark LaVigne: Thanks, Brian.

John Drabik: Thanks, Brian.

Operator: Next question will be from Carla Casella at JPMorgan. Please go ahead.

Carla Casella: Hi. Follow-up question and then one question. So the one — the follow-up on the sourcing. Can you give us just a little bit more color what key products are made in China or Mexico for both you or the industry? Is it batteries versus lighting versus Auto Care?

John Drabik: For us specifically, a couple of the bigger areas are still lights which is something that gets produced in China. And then some of the auto components, especially like hoses and gauges, things like that, that we’re acquiring out of China. There’s some smaller categories around battery. But — those two are probably the biggest — yeah. And there are some raw materials that we do out in China that we’ll keep an eye on.

Carla Casella: Okay. That’s great. And then just you’ve talked about all your internal potential growth opportunities. Have you looked at or can talk to the M&A environment and whether that would be a pillar for growth as well?

Mark LaVigne: It’s something, Carla, we always look at, and we continue to sort of keep a pulse on what’s out there, what’s hitting the market. But our emphasis is going to continue to be to pay down that in the near-term. But we’ll continue to look for small bolt-on acquisitions. And what we’re seeing is there are some things out there. But I would not look for anything larger scale from us. I think it would just continue to be on a smaller scale, so we can focus on debt pay-down.

Carla Casella: Okay. That’s great. Thank you.

Mark LaVigne: Thanks, Carla.

Operator: [Operator Instructions] Next, we will hear from William Reuter at Bank of America. Please go ahead.

William Reuter: Good morning. My question is on e-commerce, one of the five growth pillars. Can you talk about where the industry is in terms of penetration in the US, and how it is growing relative to the brick-and-mortar market? And if you’re seeing any increases in private label competition in that channel?

Mark LaVigne: E-commerce continues to be a source of growth in our categories. And I think, overall, I would say you are seeing stable shares from a private label premium standpoint. And so you’re not seeing any shift to private label, but you are seeing nice growth opportunities, both in the US and in international markets. For our aspirations for this year is we talked about it in November, roughly 30% growth in that business for us in fiscal 2025. So we’re certainly going to participate in and exceed the category growth that we’re seeing in e-commerce.

William Reuter: Got it. And then secondarily, the pricing and promo that you’re investing, is that related to the new distribution? And is it somewhat onetime-ish in nature such that once you lap those promotional offers that you’ve given to customers if you retain the shelf space that you could have some gross margin expansion in fiscal year 2026.

John Drabik: Yeah. There is some related to the new distribution and the new product launches. I think the way we’re thinking about it this year, Bill, is that we’re looking at about 100 basis points overall for the full year, but I expect that to be more front-end loaded from holiday and then work our way down to less investment as we get to the back end of the year.

William Reuter: Got it. So just to be clear, the increase in promotions, that’s a headwind to gross margins when you said the 100 basis points? Or what did that refer to quantitatively?

John Drabik: Yes. Yeah. That would fall through into our margin. That’s top line. We’ve got about 100 basis points of pricing investment. I think for the margin that probably turns into about 70 basis points for the full year.

William Reuter: Got it. That makes sense. Okay. I’ll pass it to others. Thank you.

Operator: Thank you. And at this time, Mr. LaVigne, we have no other questions. Please proceed.

Mark LaVigne: Thanks for joining us today, your interest in Energizer. I hope everyone has a great rest of the day.

Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines.