ATI Inc (ATI) 2003 Q2 法說會逐字稿

Ladies and gentlemen, thank you very much for standing by and welcome to the Allegheny Technologies quarterly earnings conference call. During the presentation all participants will be in a listen only mode. Afterwards we will conduct question and answer session. And at that time if you should have a question, please press the 1 followed by the 4 on your telephone. As a reminder, today's conference is being recorded on Wednesday, July 23, 2003. I would now like to turn the conference over to Mr. Dan Greenfield, Director of Investor Relations of corporate communication, Allegheny technology. Please go ahead, sir.

Thank you, Pamela. Good afternoon and welcome to Allegheny Technologies Earnings Conference Call for the second quarter of 2003. This conference call is being broadcast live on our web site and AlleghenyTechnologies.com and on CCBN.com. Members of the media have been invited to listen to this call. Participating in the conference call today are Jim Murdy, President and Chief Executive Officer, Jack Shilling Executive Vice President for Strategic Initiatives and Technology and Chief Technology Officer, Doug Kittenbrink, Executive Vice President and Chief Operations Officer, and Rich Harshman Senior Vice President and Chief Financial Officer, after some initial comments we will ask for questions. Please note that all forward-looking statements made this afternoon are subject to various assumptions and caveats as noted in the earnings release. Actual results may differ materially. Here is Jim Murdy.

Thanks, Dan. Good afternoon. Business conditions in the second quarter were still difficult, as I'm sure you all realize. Our second quarter 2003 net loss was $26 million or 32 cents per share. Approximately 26 cents per share of our 32-cent loss is attributed to retirement benefit expense which is mostly non-cash, and I'll get back to that a little later. A few comments on each of our three business segments. (inaudible) products have an operating loss of $6 million in the quarter. Overall demand remained weak and prices than remained low. Higher energy and raw material costs contributed to the disappointing results which we were able to offset somewhat by nearly $14 million in cost reductions before the effects of of inflation. Domestic consumption of stainless steel sheet and strip decline by 5% in the first five months of 2003 compared to the same period last year, according to the latest industry data available. Average transaction prices to customers were basically flat in the second quarter compared to last year because of higher raw material surcharges; however, average base selling prices realized by ATI declined by approximately 5%. And as a reminder, 2002 was a weak year with domestic consumption considerably lower than the long had term growth trend.

In high perform an metals second quarter operating profit compared nicely compared to the 2002 second quarter. A strong performance from our exotic alloys business helped off set results in the nickel alloys and titanium businesses which contributed, I'm sorry, which continued to suffer from the weak commercial aerospace market. Our operating management teams in this segment also continued to do a good job reducing costs. We realized over $11 million in cost reductions before the effects of inflation in the quarter. The commercial aerospace business is really tough, despite these very difficult conditions we remained profitable in our premium nickel alloy and titanium business helped in part by strong demand by government defense and by medical as well as our cost reduction efforts. Sales and orders were strong in our exotic alloys business which continues to benefit from good sustained levels of demand from the government defense and high energy physics markets.

In our industrial products segment profitability improved at all three of our companies in the first six months despite difficult economic conditions. These companies have done an excellent job reducing costs and managing for cash. Even in these tough economic times we continue the see profitable growth opportunities, for example, unity, our titanium products joint venture with Russia-based VSMTO of Ishma(ph). Is up and running. Interest from customers in North America, Asia, and Europe has been strong. In addition, stall, our precision hold rolled joint venture in China continued to grow profitable during the first six months of this year despite the impact that SARS had on Asian economies. Stall shipment grew by 26% in the first six months of 2003 compared to the same period last year. We're convinced China continues to offer profitable growth opportunities for ATI specialty materials.

We started 2003 prepared for another difficult year. That's why in all segments of the company we continue to emphasize cost reductions in cash conservation. Company-wide cost reductions before the effects of inflation totaled $58 million for the first six months of 2003. This year our total year cost reduction goal is $115 million. This will be the third consecutive year we've reduced costs by more than $100 million. Managed working capital as a percent of sales improved to 32% at the end of the second quarter 2002 compared to 34% at the end of 200 -- at the end of the second quarter 2003 compared to 34% at the end of 2002. So we continued to make solid progress in these important areas. Most of our markets are very tough right now. In some cases, the toughest we have ever faced. ATI's long-term fundamentals are strong, and we're determined to find ways to be profitable even in these times and even in the face of our non-cash retirement benefits loss which are running through the P&L statement. Given the uncertainty in the economy and the limited signs of any near-term recovery in most of our markets we'll continue to improve productivity, accelerate cost reductions, reduce manage working capital and conserve financial liquidity.

Before we go to Q&A I'd like to take a couple of minutes to again focus on the earnings impact of our retiree obligations and our on our cash position. While we try to be very clear in our release, let me repeat. 26 cents of our 32-cent loss per share results from accounting rules for retiree benefit expenses. In the second quarter of last year these expenses on the per share basis were 5 cents. Essentially all of this increase is non-cash. In fact, our current outlays for retirement benefit expenses are limited to retiree medical and life insurance. These cash outlays from operations are approximately $15 million for the first six months of this year, essentially flat with the outlays for the same period in the first six months of 2002. Next, a comment on pensions. As we've said previously, we are not required to make cash contributions to the defined benefit pension plans for 2003, and based upon our updated actuarial studies, we don't expect to be required to make cash contributions to the pension plan during the next several years.

Now let's take some time to talk about liquidity and cash. First, during the second quarter we determined that it would be prudent to arrange a $325 million four-year senior secured revolving credit facility to replace our $250 million unsecured facility. This decision on our part provides ATI with an added measure of stable financial liquidity which is important in these uncertain times. The new facility is quite competitive and is secured by our domestic inventory accounts receivable. It includes capacity for up to $150 million of letters of credit. There's only one financial covenant, and it does not go into effect if our undrawn availability stays about $150 million. We currently have no borrowings outstanding other than new facilities and we are well above the $150 million undrawn availability level.

Let's turn to cash. Cash on hand remain at a healthy level with $66 million at the end of the second quarter. That was $7 million higher than at the end of 2002. Cash on hand at the end of the quarter was $45 million lower than at the end of the first quarter this year. Most of this use of cash relate to the recent rapid increase in the cost of raw material which will largely be recovered through surcharges in the next quarter or two. This rise in raw material costs is the primary reason managed working capital increased by $32 million in the second quarter, along with higher receivables due to higher sales. We also used cash for three one-time payments. Debt repayments of $5.2 million primarily related to foreign credit lines, up front fees of approximately $4 million associated with a new secured credit facility, the $5 million payment resolving the profit sharing dispute with the United Steel Workers of America which we announced last January. As for long-term debt the two largest pieces of debt are our publicly traded notes totaling $450 million, $300 million of that total is non-amortized and due in 2011, that’s eight years away. The remaining $150 million piece is non-amortized, due in 2025. That's 22 years away.

The balance of our debt includes industrial revenue bonds, capitalized leases, and separate debt arrangement in China and Europe which present little pressure, if any, on our liquidity. So our long-term debt maturity picture is quite comfortable, and I remain confident about our liquidity position. A quick comment on current business conditions. At this time we see few signs of a recovery in most of our end markets, although the summer months are normally slow. With or without a recovery, we remain aggressively focused on continuing to improve productivity, accelerate cost reductions, reduce managed working capital, and conserve financial liquidity. Before we go into Q&A, let me talk briefly about A team management move. Two weeks ago AT announced by plan to retire at the end of September. We also announced that Pat Hasy(ph) was elected to the ATI board of directors and he's been selected to become president and CEO of ATI on October 1st. Pat's an excellent choice, many of you I know Pat from his impressive 35 year career at ALCOA. At the time comments from many of you Pat comes into this position already highly regarded. We as a management team have had a chance to work with Pat as a consultant over the past several months, so this team is convinced he will do a great job. Operator, please open the lines for questions.

Thank you, sir. Ladies and gentlemen, if you would like to register for a question, please press the 1 followed by the 4 on your touch tone phone. If your question has been answered and you would like to withdraw your registration, please press the 1 followed by the 3. We'd like to ask that at all times possible please refrain from using the speakerphone and lift your handset when entering your request. Once again, ladies and gentlemen, to register press the 1 followed by the 4. Our first question comes from the line of Robert Schenosky of CIBC World Markets. Please go ahead.

Thank you, good afternoon. Couple questions for you. One, you talked about the cash outlays related to employee life insurance in the first half. How will second half compare?

It will be the same. Those levels are very consistent from quarter to quarter.

Okay. And then secondly, if I could, the working capital you mentioned you're going to see some improvement in the back half of the year. Can you be more specific?

With the phenomena that hit us here in the second quarter was primarily the increase in the cost of nickel, and so that built into our inventory, and through the surcharge mechanism we'll see that come back here over the next quarter or two -- it will go through, of course, the receivable phase, but we, you know, we think that the step up in nickel price will probably mitigate with the settlement of the (inaudible) strike when that occurs, so that's what I had reference to when I said I expected to see some of that come back to us later in the year.

and then related to that you talk about the surcharges. Now, in your stainless business you passed from surcharges through which offset the 5% price decline. Net-net how does that look in the back half of the year? Do you anticipate that you will get further surcharges so we might see a little bit of margin improvement or will any surcharges continue to offset the price reductions?

Well, of course, the surcharges are a function of the price of nickel, essentially, and cobalt and (inaudible), but the past-due aspect of that is -- is at the heart of the surcharge mechanism. Whether we see margin improvement over -- in the third and fourth quarter in this part of the business, I think at this point it still would be speculative. That's why we stay so zeroed in on costs, Bob.

Right. I guess what I was trying to get to was is there still some amount of that that had been a delay of when you can realize it, so maybe it didn't hit in Q2. In fact it may hit in 3Q.

the surcharge has a little bit of a delay in that, but it's not -- I don't think that the trade-off at this point that we would predict that the trade-off in price is going to result in better margins.

Okay. Great. Thanks, Jim.

Thank you.

Thank you. Our next question comes from the line of Chris Olin(ph) of Long Bow Research. Please go ahead.

Chris Olin Good afternoon.

Hi, Chris.

Can you talk a little bit about the Barry amendment and the (inaudible) changes to the rules? How do you see some of your businesses going forward given that some of this goes through?

Well, the Berry amendment we think is an important element here in our legislative setup and as it impacts especially materials, and we support its continuation and its enforcement. You know, you're well aware that this is a subject of quite a bit of political maneuvering now in Washington, and we are very close to that situation, and I really can't say any more about it at this point, Chris.

Okay. Thanks.

Thank you. Your next question comes from the line of John Tumazos of Prudential. Please go ahead.

Good afternoon.

Hi, John.

Two questions. First, clearly stainless consumption appeared to be a little better in the March quarter than in the second quarter for the industry, April turned down sharply. As best as you can determine, were there any distribution or manufacturing customers that had balance sheet setbacks that caused abnormal inventory liquidations, events aside from regular consumption that might have caused the second quarter drop-off in the market?

I think everybody's paid an awful lot of attention to their balance sheets at this time but I'm not aware of anything that would have been, you know, so significant that it would have affected the entire industry in that regard, John. I haven't seen anything that would be that extreme.

Second question, as it relates to the high performance alloy segment, the selling prices in your spread sheet on page 13 of your release show prices ranging in the $6 and change in all the different quarters, probably varying a little quarter to quarter with mix, and it doesn't appear to be recovering the nickel price escalation. When you essentially hedge the nickel as you receive the aerospace order or engage in the long-term contractual agreement, could you explain how that accounting works, whether the customer owns the hedge fluctuation or you do and if that -- I'm wondering if there's revenues from hedging that we don't see in that row on page 13.

Well, first, you referred to the fact that that row, and actually the next one, also, has quite a bit of mix impact, which it clearly does. On the -- but in this area the couldn't of contractual arrangements we have, have allowed us to cover those increased nickel costs, and when we hedge, as we do on those long-term agreements, we keep those on our books, so it's not -- the hedge is not on the -- is not on the customer's account, but we are not suffering a lack of recoverability of material cost fluctuation in that area.

So that, Jim, if the prices in that row look relatively stable, maybe the mix was becoming slightly less rich which is why we can't see the nickel price escalation?

Well, when you see it in the product-by-product analysis we have, yeah, there is a lot of variability, but, again, the arrangements we have, have the customer at full risk on that, on that nickel because as far as the contractual arrangement, so I don't see that as a -- we haven't seen that as an issue here in the high performance results. Now, those markets are under pressure from a price point of view, so that's where, I think that's where the margin contraction is coming from. It's not a raw material management issue.

Thank you very much.

Sure.

Thank you. Our next question comes from the line of Mark L. Parr of McDonald & Company Securities. Please proceed, sir.

Thanks. That is the most formal introduction I've had in quite a while.

You deserve it, Mark.

I don't know about that. How are you doing, Jim?

I'm doing fine.

A couple questions. First of all, on the USW contract reopen initiative, can you give an update there? Also, is there anything that you can share at this point in terms of potential incremental cost reductions or competitiveness or competitiveness enhancements coming from a new contract if you're successful with it?

If you will let me have, Doug had it end brink talk about that because Doug has the lead on those negotiations in our company.

Hi, Mark. As we talked before, we're not in a position really where we want to, shall we say, negotiate through this channel. The process has begun. We officially requested to reopen the contracts. The united steel worker contracts in mid-June, and the process is underway. We've had a number of meetings with the international, and some discussions at the local level, but the process is going to take a fair amount of time, and it is -- we're in a different position than the U.S. deals and the ISGs, if you will, not having done an acquisition and not having been in a position to, shall we say, offload some legacy costs through that process, so the process is going to be unique in our case in, our view, and it's going to take some time. We're not in a position to set a bogey in terms of what we think we need to accomplish there, but certainly, you know, the pension-related issues and the health-care related issues are at the top of our list.

Do you think from a conceptual standpoint that your bargaining position with the USW would be enhanced if you were to acquire J&L specialty ?

the answer to that is a real simple no because that's a speculation, Mark, that is really not really relevant to our thinking today.

Okay. I just something that came to my mind so I'm thinking out loud here. Maybe I shouldn't have said that. One no, other question I did have, and that relate to the new melt shop that you are in the process of bringing on line. Can you just give an update on the timetable for commissioning of the melt shop, and also potential cost reduction impacts from that moving into '04?

I will have Doug comment on that again.

That project involves the installation of two new electric Hearth furnaces in our existing melt shop. It is on schedule and from a capital expenditure perspective it is slightly below budget so the project is well underway and we're doing well. The first furnace is scheduled to start up in December of '03, and the second furnace would be in December of '04. We expect to have significant benefits from the first furnace in 2004. The announcement when we announce the project, we indicated that once we have both furnaces online and fully up to speed, the savings will be on the order of $20 million per year, and with one furnace online we would expect to see roughly half that.

All right. So the '04 number, the cost reductions in '04 would be something less than $10 million because the furnace would not be fully optimized for the full year; is that fair?

That's correct. I think we would expect that the first quarter probably will be -- you know, start up in the debugging phase, and then for the last three quarters of year we would expect it to be pretty much up to speed.

Okay. All right. Thank you.

Our next question comes from the line of Michael Morrisroe (ph) of Bear Sterns and Company. Please go ahead, sir.

Thank you. Good afternoon.

Hi, Michael.

I just wanted to see if I could get some further background on the appointment of Pat Hasy and more specifically I guess why the board chose to look externally in the past it seems it's been more of a promotion from within of more experienced personnel. Just if you could shed some light on the thinking.

Well, number one, it started with the fact that I turned 65 this past April, so retirement was coming up at some point here fairly soon, and the board, you know, conducted a search that involved both inside and outside candidates. We made reference in the announcement of Pat's selection here a couple of weeks ago, and I commented again this morning, you know, actually, since his early retirement from ALCOA in February, he's been doing consulting for us, and we've gotten to know him there. I think the board had some good choices, and they selected Pat. I think there are some very good solid reasons for doing that, but there certainly were internal candidates, and that's why I think we have a management team that can respond very quickly and effectively to a new leader and if you had a chance to look at more of Pat's background, an awful lot of that relates to markets that we deal in and he has the deep metals background. So, you know, these are calls that are awfully important calls for a board to make, and I just want to be sure people do have the sense that this was one that was a considered search by the board and has actually been going on for several months, and I think the board, as I've just said, the board had some good choices, and that's the choice they made. And I don't know, Michael, if you've had any exposure to Pat at his time at ALCOA but he'll be getting into the entire investor relations process here when he comes on board October 1st, so if you haven't met him before, you'll have that opportunity.

Very good I look forward to that. I just wanted to touch on another organizational change when Brian Simmons resigned from the board after less than a year of service. Perhaps you could shed some light on that and if it at all was related to the Dick Simmons' filing of the 13D and just maybe shed some color on that, also.

Well, Brian made his decision, he didn't comment any further on that publicly, and neither have we, but I'll just say I think Brian was a very good director and his feelings and his relationship with this board and this management were on a positive footing.

Very good. Thanks.

Thank you. Our next question comes from the line of Dan Roling of Merrill Lynch. Please proceed.

Thank you. A couple questions. In the flat rules area you made the comment that prices to customers were flat due to the higher raw material surcharges, i.e., the price went up due to that, but the average base selling price declined. Can you tell us, I mean, you say down by 5%. Can you gives a little more feel for that? Was it the declining orders that are driving it or is it increased competition?

Well, I think you probably have both of those elements, but the piece that we see as really overriding right now, Dan, is the weak economy and weak demand. So this is a period where to the extent that there is any increased capacity from domestic or input producers, you know, it's awfully tough for this market to absorb that without seeing its effect in prices, and that's what's happened.

Okay. So we shouldn't read much into the fact that tons shipped were up 6%?

No. I mean, I don't know how to answer that. What I read into that is we're doing a pretty good job in a lousy market. We're trying to get the business that we can get. But you clearly, we have to stay competitive across all our products.

Would you say you're gaining market share?

I don't -- I wouldn't make -- across the board we're not gaining market share. I think that we've made some nice market share advances in areas that we've tried to select to get ahead.

Okay. And one other question. In your presentation and in the release there was a lot of stress about how you're focused on reducing working capital and conserving financial liquidity. Last year you reduced it by about 50%. Any comments this year on dividends or thoughts some.

It's a quarter-to-quarter decision by our board and it's a decision the board takes quite seriously. So we'll -- we have tried very hard to generate the kind of liquidity that gives us options here, but that call will be made at the next board meeting.

So the next board meeting that would a address it is August?

August, yes.

Thank you.

Thank you. Our next question come from the line of Alexander Lasser of Merrill Lynch. Please proceed.

I told you I wouldn't be back to back but thank you for the opportunity to ask a question here. I was wondering on your orders, defense orders in the high performance metal as well as the energy on the special physics, and I was wondering what is your order trend or what are you seeing in the high performance metals area? Can we infer that you might see more in the way of operating profit and improvement going ahead?

Well, we're not -- yeah, we just don't predict earnings, Alex, as you know, so that's a part of our business that probably has the widest swing of some very weak markets but also some very strong market, and so it's a question of what the balance is there and what the mix is. So we are clearly trying to do the best job we can of getting all the business available to us on the -- on the high demand side, and this is a period where we think we have definitely benefited even on some of the lower demand markets with our long-term agreements, which have helped us through this period, but it's a -- it's a complicated market outlook here, and I think our high performance people, both in the titanium, the nickel side and the exotics have done a very good job of pinpointing their opportunities. They've also had major cost reductions, so that has cushioned the effect that would actually be very devastating in some of these markets, particularly power generation.

So you've -- after the strike and the ramp up, and the ramp up again of your operations, you have pretty much reached a level now where you're taking on -- you've reached, recovered pretty much the full level of your business.

You're talking about waw Chang(ph).

Yeah, waw Chang.

Yeah, waw Chang is humming.

and again if we look at your orders, say from the defense side, have they increased, stable over the last quarter or two or what have they been doing?

Well, the nature of the orders that are placed in that business have a fair amount of variability to them because they are more of on a program basis, but -- so the pattern of order entry is one thing that has a lot of variability but they do tend to result in orders that have a fair amount of predictability in terms of how they're actually produced and shipped. The physics side is a little less so that way but on the defense side basically in some of these materials as they are being shipped as soon as we can make them.

Okay. All right. Good. Well, we'll look forward to more.

James Murdy; the point is we've been doing de-bottlenecking in that area just to stay as ramped up as we can be.

Any chance you're looking at expanding capacity? What is the operating right there? You have a variety of different products, can, so it would be hard to come up with a blended operating rate, but have you reached the point where you're fully utilizing your production facilities there?

Well, I think Doug can answer some of those comments.

There are some individual specific processes within waw Chang that are basically running at capacity, not the entire plant by any stretch, but some of the defense-related processes are pretty much full, and through both the lean manufacturing process where we're pressing to flow product through those bottlenecks more quickly which in effect generates free capacity as well as looking at some modest capital investments, we certainly intend to, you know, break those bottlenecks and flow those products through that plant faster than we are today, but those investments are fairly modest. They're not anything major or strategic. But certainly we do have the opportunity, if we can flow, to the extent we can flow material through those processes more quickly, we can accelerate that revenue and accelerate that income.

Alexander Lasser Great. Thank you, good luck.

Thank you.

Continuing on, our next question comes from the line of Aldo Mazzaferro of Goldman Sachs. Please go ahead.

Can you take us through the analysis on the managed work capital? I am just wonder regular if there are other items in there besides receivable, inventories and payables, and I'm wondering what denominator you would use for the revenues.

Well, I mean, those are the elements that we include in managed working capital, and if you look at the last page in the release, we have added this over the last quarter or two to try to give a little more visibility as to how those elements flow through, and, again, I'll repeat that we don't -- when we talk about managed working capital and as we address that issue, we ignore various valuation reserves, and the biggest piece of that being the LIPO reserve. So ...

I got it. I missed that last page there.

If there is a further question on that, you can give Richard and Ann a call, and we'll address it.

Thanks.

Ladies and gentlemen, as a reminder if you would like to register for a question, please press the 1, followed by the 4. Thank you. Our next question comes from the line of Leo Larkin, Standard & Poor's. Please go ahead.

Good afternoon. Can you give us some guidance on CAPEX and depreciation for this year and also for 2004 if that is available.

Well, the depreciation charges here will be around $80 million, and we have -- we've announced that our capital program will be something less than $70 million this year. When you look at next year, depreciation will probably go up if some of these new facilities come on. We've talked about the electric hearth furnace and then also, although no one has mentioned it, we also of more facilities coming on at Richburg, so I would guess that the 2004 depreciation is probably 84, $85 million. It's way to early to come on what will what we'll be deciding the right level of capital spending is, though can for next year. The planning process gets underway this fall. We'll still have some carryovers, some at Richburg and we'll still have some pretty descent on the electric hearth project, but those are the only significant projects, maybe a little over in the UK, and Rich says there will be less than $25 million of carryovers next year, so that would be very different from this year where we, I think where we ended the year, we had about $55 million of carryovers.

All right. Thank you.

Sure.

Thank you. Our next question is a follow-up from Mr. Chris Olin of Long Bow Research. Please go ahead.

Can you talk a little bit about the titanium joint venture with VSMPO. What markets you see as opportunities ahead? Is there actually room for supply in North America or do you actually think you can knock somebody out of the market here?

Well, yeah, we're very optimistic about the possibilities with that joint venture, and, yes, we do believe that there are some very good growth opportunities in the market that that joint venture was formed to serve. The CPI and (inaudible) markets being some obvious ones, but we think that over time there are a number of markets that may be of little or any consequence today that will develop on the titanium side, so we feel very good about what's been formed here, and its initial weeks of operation haven't done anything to give us a different view of that. We're not out to knock anybody out of the market, Chris. We hopefully these are markets that will grow and should grow, and we want to be in as good a position as we can to take advantage of that growth. Remember, that's a global join venture, so we're teamed Um up with VSMPO avisa(ph) on a worldwide basis for these markets.

Does DSMPO supply most of the titanium or the melted product for this joint venture?

Well, I don't think we've gone into a lot of details as to who's doing what, but the ventures was set up in the way that we feel does the best job of capitalizing on the strengths of their operations which are particularly strong in the front end and the hot end and cap capitalizes on the strength that Allegheny Technologies has in more of the finishing operation, that said, we have some hot end contribution to that, and they have some finished product contribution, so it's a kind of an intriguing and interesting arrangement that we finally worked out here, but we are not disclosing how the various pieces break down between the partners.

How would it work theoretically with the sponge supply? Do you get around the 15% import taxes?

I really don't -- sponge is not the key to this. I mean, we're really looking at slab supply, both from their side and our side, and as you know, we don't -- we don't produce titanium from sponge in the United States after we close the armet (ph) facility. We have the electron beam facility up in bitch Monday, Washington, but that's scrap oriented. So the whole business works together we think in a very coordinated way, but, again, we don't go into any discussion of the pieces of that.

Okay. Thanks.

Thank you. Gentlemen, there are no further questions at this time from our audience. Mr. Greenfield, I'll turn the conference back to you. To continue your presentation orator for your concluding remarks.

Well, before Dan wraps it up I'd just look the say thanks for listing this afternoon and thanks for your continuing interest in Allegheny Technologies. I'm confident that ATI remains well positioned to emerge from a position of strength when our markets recover, and I we have Pat Hasy and the entire ATI management team will do a very good job going forward. Thank you. Dan.

Thank you, Jim, and thanks to all of the listeners for joining us this afternoon. As always, new releases may be obtained by e-mail and are available on our web sight at AlleghenyTechnologists.com. Also a rebroadcast of this conference call is available for the next 30 days on our web site. That concludes our conference call.

Ladies and gentlemen, once again, we thank you all for participating on today's conference. We ask that you please disconnect, and once again have a great day.