DMC Global Inc (BOOM) 2008 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Dynamic Materials fourth-quarter review conference call.

All lines have been placed on mute to prevent any background noise.

After the speaker's remarks, there'll be a question-and-answer session.

(Operator Instructions).

Thank you.

I would now like to turn the conference over to Geoff High of Pfeiffer High Investor Relations.

Please go ahead sir.

Thank you, Tasha.

Good afternoon, and welcome to Dynamic Materials fourth-quarter conference call.

Presenting on behalf of the Company will be President and CEO, Yvon Cariou and Senior Vice President and Chief Financial Officer, Rick Santa.

I'd like to remind everyone that the matters discussed during this call may include forward-looking statements that are based on management's estimates, projections and assumptions as of today's date and are subject to risks and uncertainties that are disclosed in Dynamic Materials filings with the Securities and Exchange Commission.

The Company's business is subject to certain risks that could cause actual results to differ materially from those anticipated in its forward-looking statements.

Dynamic Materials assumes no obligation to update forward-looking statements that become untrue because of subsequent events.

A webcast replay of today's call will be available at dynamicmaterials.com after the call.

In addition, a telephone replay will be made available beginning approximately two hours after the conclusion of the call.

Details for listening to today's replay or webcast are available in today's news release.

And with that, I will now turn the call over to Yvon Cariou.

Yvon?

Thanks, Geoff.

Thanks to all of you who have joined us for today's call.

I want to start by saying that in spite of the market's view of our stock in recent weeks, Dynamic Materials business is solid and its financial condition is very strong.

While the broader economy spent 2008 sliding deeper into recession, we delivered a year of very solid financial reserves which included revenue in excess of $232 million, more than $24 million in net income, $1.91 in diluted earnings per share, adjusted EBITDA of more than $53 million and reporting cash flow of $34 million.

We also reduced our net debt by $21.8 million or 32%.

Although fourth-quarter revenue came in a bit below our expectations, this was primarily the result of third-party administrative issues that affected the timing of certain shipments from our European operations.

On the positive side, the fourth quarter also brought the booking of some very noteworthy orders.

One, a $14 million order from the alternative energy sector who presents the largest contract in DMC's history.

Another was a $6 million contract that stands as our largest ever order from the aluminum production industry.

I should mention that subsequent to the end of the quarter, we closed three orders from the power generation industry with a collective value of approximately $10 million.

Although we have witnessed a pull back in demand from the chemical, petrochemical and hydrometallurgy industries, we obviously are seeing very strong activity throughout several of our order end markets, and we are currently tracking a broad mix of prospective orders.

As we have said many times, predicting the timing of order executions can be very challenging.

Nonetheless, the dialog we are having with both fabricators and end market users remains active and encouraging.

During fiscal '08 we took an important step toward expanding our domestic shooting capacity when we signed an agreement to utilize high quality underground facility very close to our Dunbar shooting site in Pennsylvania.

This new facility gives us significant room for long-term expansion and provides us with important redundancy to our existing shooting operations.

We also made significant progress during the year in diversifying our supply chain for pressure vessel quality carbon steel.

While there is some additional work to be done with some of our new suppliers, we are pleased that we are much less rely on a limited number of PDQ metal sources.

We are also currently working on product development efforts that could ultimately position DMC within various new end markets, such as transportation, nuclear energy and certain defense-related sectors.

While it is premature to provide detail on these programs, it is worth noting that we have a track record of expanding our product applications and are regularly exploring new end market opportunities that could adhere to our long-term growth objectives.

I will now turn the call over to Rick, who will give you some color on our financial results.

Rick?

Thanks Yvon.

Fourth-quarter sales came in at $59.6 million.

This was approximately $4.6 million or 8% below our original expectations.

As Yvon mentioned, the shortfall was due to delayed shipments from our European explosion welding operations and those shipments are now out the door.

For the full fiscal year, sales increased 41% to $232.6 million versus $165.2 million in 2007.

If you strip out our acquired operations, we reported year-over-year sales growth at our core explosion welding operations of 9%.

In addition, sales from our AMK welding segment increased 36% year-over-year.

The growth within our legacy operations was encouraging when you consider the state of the global economy.

Q4 gross margin was 29% compared with 32% in the 2007 fourth quarter.

Full-year gross margin was 30% versus 33% in 2007.

These declines are primarily related to a higher proportion of sales by our European divisions as a result of the DYNAEnergetics acquisition.

Income from operations was $9.2 million versus $12 million in the fourth quarter last year.

For the full fiscal year, operating income was $38.1 million versus $38.9 million in 2007.

Fourth-quarter net income was $5.4 million or $0.43 per diluted share versus net income of $6.9 million or $0.56 per diluted share in the 2007 fourth quarter.

Full-year net income was $24.1 million or $1.91 per diluted share versus $24.6 million or $2.00 per diluted share in 2007.

Q4 adjusted EBITDA was $12.1 million versus $14.3 million in the fourth quarter of '07.

Full-year adjusted EBITDA was $53.2 million, a 22% increase from the $43.5 million achieved in 2007.

Since adjusted EBITDA is a non-GAAP disclosure, we encourage you to read the section in our news release regarding our use of such measures.

We ended the year with an order backlog at our explosive metal working segment of $97 million.

Our balance sheet at December 31, 2008 included cash and cash equivalents of $14.4 million.

We also have eliminated any borrowings on our $35 million in revolving credit facilities.

As Yvon mentioned, we generated operating cash flow in 2008 of $34 million.

This represents an increase of 82% versus fiscal 2007.

Looking forward, we expect first-quarter sales will be down from 15% to 20% from the 2008 fourth quarter.

The expected decline is related to the makeup of our year-end backlog which consists of several orders that came in late in 2008 and are not scheduled to ship until later in 2009.

Q1 gross margin is expected to be in a range of 27% to 29%.

Due to the inherent challenges of predicting the timing of large orders combined with the slowdown in the chemical, petrochemical and hydrometallurgy sectors, as well as the uncertainty associated with the broader economy, we are forecasting that revenue for fiscal 2009 will decline between 12% and 20% versus fiscal 2008.

Even at these lower sales levels, we expect to report strong operating cash flow for fiscal 2009.

We anticipate that our full-year 2009 operating income will be impacted by various non-cash charges including approximately EUR3.6 million of amortization expense related to our DYNAenergetics acquisition, $4.5 million of depreciation expense, and $3.8 million of stock-based compensation expense.

Our blended effective tax rate for 2009 is expected to be in a range of 30% to 32%.

We are now ready to take your questions.

Tasha?

(Operator Instructions) We'll pause for a moment to compile the Q&A roster.

Your first question comes from the line of Mark Parr with Keybanc Capital Markets.

Good afternoon.

Hi Mark.

Good afternoon, Mark.

Hey Yvon, hey Rick, hey Geoff.

I want to congratulate you on the quarter and Yvon, your comments are really a whole lot different than what we've been hearing from a lot of other companies.

That's for sure.

So congratulations on your outlook as well.

One thing, I was curious, is there any possibility you could give us color on what you would expect the full-year margin to look like?

Or -- I don't know if you can talk about the profitability or some of the bigger numbers that you booked recently or if you can talk just in general about the profitability of new business you're booking compared to business that was going on the books six months ago.

I'll let Rick make a general comment on the margin.

As far as the large order that we referred to, we can say that the profitability is nominal, completely nominal in line with our portfolio.

Okay.

On the margin side, it's always challenging because as we've discussed in the past, most of our orders are custom orders and they're custom priced, there's a wide range of pricing and contribution margins on given orders.

Right.

We've also seen, as you very well know, a fairly significant decline in metal prices and that may cause a little bit of the top-line decrease that we mentioned a few minutes ago.

Right.

But we try to price so that even if metal prices are down somewhat, we get the same value for the value-added services that we provide.

So you know, we're very hopeful that margins can be sustained at close to the levels that we reported in 2008.

Okay.

We can see the margins in our backlog, we can't see margins yet on what we haven't booked.

Right.

Well, so from that perspective then, the first quarter looks to you to be one of the lower quarters for the year, based on what you can see right now.

Again, I'm not asking you to make a forecast, but that's the general sense that you have?

Right, and a piece of that relates to the margins in our clad business, but some of it relates to reported revenues by the other business segments, AMK and oilfield products.

And with the 15% to 20% decline from Q4, it's also a quarter where the absorption of manufacturing overhead won't be as favorable as it was throughout 2008.

So that has an impact as well.

Okay.

All right, and that absorption issue could ease as the year progresses.

Do you have any -- are there cost reduction things you can do to scale back your fixed costs in line with the weaker revenues?

Or is really the revenue number just more exclusively a function of the reduction in metal prices?

There will likely be some volume reduction, and we've made an effort as we've grown over the past three or four years to very carefully control our fixed cost investment.

A lot of it comes down to headcount.

So we run a fairly tight operation, we try to operate as lean as we can.

But if there's declines in business volume, there's always room to reduce costs.

Definitely, we will adjust the best we can cost to volume.

Also, we would want to preserve the teams that we have assembled over the past years to prepare for the future.

So, we will be very sensitive to both aspects.

Okay.

If there was one other question I could ask, then I'll pass it on.

I'm sure there's other people that want to get on.

Your operating cash flow outlook for '09 would imply some further free cash generation.

I'm just wondering if you could talk about plans that you might have for deploying that cash over the next 12 months.

I think the first priority is supporting the business operations, supporting capital spending, which will be reduced from what we've seen over the past two years, but there will still be spending perhaps in the $5 million to $6 million range.

Dealing with the -- our debt load is very manageable, but obviously in these times, you want to make sure that you're dealing with your outstanding debt obligations in the appropriate way.

There's also opportunities that we continue to pursue for business development.

And we'd like to preserve some of the free cash flow that we generate for those types of activities as well.

Okay, terrific.

Thanks for all that color, Rick and Yvon, I'll get back in queue.

Congratulations again.

Thank you

Your next question comes from the line of James Bank with Sidoti & Company.

Hi good evening.

Hi James.

Good evening, James.

Hi.

If I could ask, what's really driving the revenue declines that you're speaking of, 12% to 20%?

Is that more in the clad welding space or is it just on the aggregate?

It's in our explosive metal working, the clad business.

Okay.

We expect at this point modest growth in the other two business segments during 2009.

But mainly it's the clad business?

Yes.

Okay.

Any risk to backlog at this point?

I could assume -- you know what, let me ask this.

Were there any cancellations in the backlog number that you posted?

There's one cancellation that we have seen some time ago which is less than $1 million.

It's around $900,000 or so, and it was related to an R&D project by a company regarding processing of dirty oil or something like that.

And so it was again an R&D project that a customer of our fabricator decided to cancel temporarily, at least, and we have actually recovered a significant amount of that cancellation in the -- in cancellation fees.

Okay, so it seems --

But that's the only instance.

We have not seen anything else in our traditional business.

That's not too bad.

So I guess at this point, if someone was to cancel potentially, they would have already done so?

We have no signal or indication telling us that anything in our backlog is at great risk.

Okay, great.

No, I guess, just, piggybacking on the earlier questions, given the high value of orders you did discuss in your backlog in the press release, I guess we then can assume that the gross profit would be a little bit more attractive in the back half than from what you were telling us in the first quarter?

Yes, we -- that could be the case.

We always see some fluctuations from quarter-to-quarter.

Okay.

And hopefully those fluctuations won't be too significant as we go through the year.

Okay, fair enough.

Now circling back on AMK, I'm curious why it was really only flat year-over-year more or less, but even more importantly, there was some significant pullback in the profitability.

I was wondering if you could clarify that.

Well, the fourth -- year-over-year, they had a tremendous increase in operating income.

I think -- I don't have the percent in front of me, but I believe it was in excess of 60% in operating income.

They had a lower fourth quarter of 2008 than 2009, and that had to do with 2008 as opposed to 2007.

2007 included a lot of shipments under production orders at very favorable margins.

The blend of business in the fourth quarter of 2008 included more development work at lower margins.

Okay.

But for the full year, AMK reported very impressive year-over-year growth in sales, in margin, in operating income.

We also have been developing AMK and positioning the structure for the future, so there's some additional overheads in the engineering department there.

So just for 4Q '08, that's more of an anomaly then than what would set the trend for the year in terms of operating income?

For the full year, yes, but we don't necessarily expect a big change in Q1 from what we experienced in Q4.

Okay.

And again it relates to the mix of work that they expect to ship in Q1 versus the remainder of the year.

Okay.

Now Rick, in the press release you mentioned some various expenses, $4.7 million US versus I think what was guided toward previously, $5.3 million for amortization expense.

So it's a good thing, right?

Well, it's all measured in euros, so it's really the impact of the euro versus the US dollar exchange rate and as you know, the US dollar has strengthened in the fourth quarter --

Of course.

-- and into the early part of this year versus the earlier quarters of 2008.

And then the $3.8 million option expense, that's nothing new and then the $4.5 million of D&A, that was really nothing different than what was in '08.

So was that just being put in the press release to be put in the press release, or did I miss something?

No, just to help understand the magnitude of the non-cash expenses and why -- I know that usually you're asking those questions relative to some of the modeling you do in our business and also to indicate why we generate positive cash flow even if there's a decline in top-line results.

Right.

We've got a significant amount of non-cash charges.

Okay, great.

And CapEx, I'm sorry, you said that was --

We spent just shy of $10 million in 2008.

Right, but what will it be for '09?

50% to 60% of that amount.

Wow.

Around $6 million or so, plus, minus.

Okay and then lastly, I promise, the debt.

The $46 million that was left over, was that just the -- I apologize --

The -- yes, it's a little bit --

the syndicated loans?

-- the $46 million (inaudible) balance, so there's roughly $60 million of outstanding debt which relates to the five year term loan agreements in connection with the acquisition of DYNAEnergetics.

Okay but the --

[There was] the US piece of $40.5 million and the European piece of EUR12.6 million.

Okay, but the --

And there's annual principal payments that are due in November.

There's also payments that are due out of excess cash flow for the proceeding year, so in March, there will be some additional pay-down of term debt associated with the excess cash flow that we generated in 2008 --

Okay well --

-- as defined in the bank agreement.

Well I guess with the expectation of the term loan and the two syndicated loans, the bank lines of credit were paid off?

Yes, there were no outstanding borrowings on our bank lines of credit at year end.

Great.

And $35 million of expense -- okay.

Terrific, thank you very much.

You're welcome.

Your next question comes from the line of Avinash Kant with DA Company.

Hi, Yvon and Rick.

Hi, Avinash.

Hi, Avinash.

A few questions, just to follow-up a little bit on the debt side.

So you said there is some payout due in March.

Do you know what's the amount?

It's in the $4 million range.

And you said there'll be something due in November timeframe, too?

Yes, which is -- which will be 15% of the original principal.

Okay.

So that would be EUR2.1 million and let's see, $6,750 million for the US term loan piece.

So roughly EUR9 million?

If you look at the balance sheet that was in the press release, we have current portion of long-term debt of $14,450 million, so that converted at the year-end exchange rate of 1.4097 I believe, which is a little bit lower than the conversion rate -- little higher than the conversion rate today.

Okay.

That reflects the roughly $4 million of payment of excess cash flow, and then the $6,750 million and the US dollar equivalent of the EUR2.1 million.

So those added together or no, separate?

EUR2.1 million plus --?

No, no, that's added together based on the year-end exchange rate to add it up to $14,450 million.

Obviously, the US dollar impact will be based upon the exchange rate in effect when the principal payments are made.

Okay, and can you give us, how much was the stock-based comp in calendar year '08?

Let's see, it was $3,237 million.

So roughly $3.3 million -- $3.2 million right.

And depreciation for the year, we had --

It was $4.5 million.

Okay, so -- yes.

That's pretty much similar to what you were guiding to in '09.

That's correct.

Okay.

Now another question I had was it seems like some of this -- some of the roll bonders may have a lot of empty capacity right now.

Two things.

First of all, in how much of your business do you think you complete with the roll bonders?

And have you seen a competitive order pricing pressure because of them?

Well Avinash, we -- as you know, we each have our respective space domain in the industry, and we do compete when those domains overlap, and so we have been competing occasionally with those guys and yes, we do see that they have capacity and yes, we do see some pressure on price.

And so we try to -- as always, it's a case by case story.

Delivery may be a critical component where we, despite their added capacity, we still might have an edge.

There could be other considerations, but clearly, they have capacity and we meet more of them around the world.

But would you say you compete with them on 20% of your business or 60% of your business?

What would be the rule of thumb there?

Oh, maybe 20%, 25%, maybe -- it's not a bad picture.

Again, it's so product mix dependent, project-dependent.

So it's hard to give you a hard number.

But your initial guess, 20%, is probably a decent one.

Okay.

Okay and one qualitative question of course, when you talk about calendar year '09, I know it's very hard to predict something at this point, but linearity or given what you have seen?

Now, could you -- you did say that some of the larger orders that you have seen at this point may extend into 2010.

Can you give us a rough idea of how much is that order in the backlog?

What portion of the backlog would extend beyond '09?

Yes, in the -- at the end of December, January 1, approximately 5% of our backlog was scheduled for 2010.

Okay, so 95% was for '09?

Yes.

Okay, and in terms of linearity of the quarters, you have talked about Q1 being down 15% or 20%.

Now, do you see further declines in Q2 and then improvement some?

Or any commentary there?

Any color would be helpful.

Well the second part of the year, we are like everyone else.

It's hard to read, we are no better than some of those economists out there, a crystal ball, it's difficult.

What we see though, I think the one indication that is clear and positive is that our hot list that we keep referring to remains strong, of the same quality that it was a couple of months ago or three months ago.

And you would think that these people are asking to quote that at some point something would happen.

Now that the year is over, calendar year '08 I'm talking about, could you give us some idea in terms of revenues or backlog, whatever at the end of the year, what percentage of that was from oil and gas, petrochemical, any color on that?

Just about, I think it's fair to say 50%, the combination of oil and gas and petrochemical.

Now that statistic may be distorted now given the alternative of very large booking with did at the end of the year, so, it might be down to 40%.

Something like that.

Okay.

40% in '09?

If oil and gas --

In '09?

In '08.

You're asking about '08.

Right, so you're talking bookings or revenues?

Yes, bookings.

Bookings '08.

Okay, bookings '08, okay.

And all energy, roughly, how big is that now?

Is it more than 10% now or not?

Well with this (inaudible) will be.

Alternative energy?

Yes.

I'm sorry, you said alternative energy in '09?

In '08, on revenue basis.

In '08, about 10%.

10%?

20%, 20%.

That's on the revenue basis or bookings basis?

I'm sorry, I don't get that.

He asked if it was on a revenue basis or booking?

Oh booking basis.

We're talking about booking here.

Bookings.

Okay, and of course, you do see this growing now further in '09?

Well, we are present in this space, we are active there.

It's again, difficult to predict where it's going to go, but it seems to be a general segment that is active and going, so we'll be there.

Perfect.

Thank you so much.

I'll let other people ask questions.

Your next question comes from the line of Dick Ryan with Dougherty.

Good afternoon.

Just a clarification on my part regarding the expense structure.

Did you say you've made some cuts or controls in the expense side?

Any layoffs, or did I misread that?

No, nothing unusual to this point.

You always have your regular low turnover but no, what you would qualify structurally as of this stage.

No, people are busy.

Okay, okay.

You indicated 95% of the backlog at the end of the year would be delivered in the '09 timeframe.

How about the $10 million that came in after the first of the year?

Is that an '09 delivery schedule, or would that slip as well?

Those power generation orders would be -- some of them would be 2010, some would be 2009.

So there would be an addition into -- going into 2010 from what we had at the end of the year.

Okay, okay.

That should be it for me, thank you.

Your next question comes from the line of Harry Kay, a private investor.

Hi, gentlemen.

I have several questions that require very short answers.

I'm looking at the cash flow.

Hello?

Okay, we are too.

Okay, $18.7 million in '07, $34.0 million in '08.

What will it be in '09?

We do not provide that guidance.

Okay, and how about the overall earnings per share from $2.00 to $1.91 how about for '09?

Again, we don't provide earnings per share guidance.

We provided some information concerning the top line, expect a decline in sales from 2008 to 2009.

Okay, how about debt?

From $78 million to $46 million to -- what do you predict for '09?

Well again, the schedule debt repayments based on the year-end exchange rate are $14,450 million which would leave us with outstanding debt obligations of $46 million at the end of 2009.

I had a figure of $46 million at the end of '08, from $78 million to $46 million.

Right, but you have to add the $14,450 million of current portion of long-term debt.

Yes, okay.

So we pay that off, that's what's due in 2009, so if we pay that off, we'll still have $46 million at the end of the year, some of which will then become current.

Okay, how about cash on hand?

Any prediction for that?

We would hope that it grows.

We expect to generate additional free cash flow in 2008, which means cash flow beyond what's required to pay the scheduled principal on outstanding debt.

Do you have any plans to use any money to purchase other companies?

Our strategy has not changed.

We are interested to grow our principally our global businesses, which is a clad metal and the oilfield business.

So we'll be looking for opportunities, we have been -- it doesn't mean there's anything imminent and we will, of course, be managing cash carefully, given the general uncertainty in the economy.

How about any plans to purchase shares of your own Company back?

That is something that is really not being discussed very much by the board for the same reasons that we may need cash flow opportunities and manage cash conservatively and pay some CapEx and things like that.

Other question, do you have -- is there any relationship between the price per barrel of oil and the prospect of getting new work?

It's a very difficult correlation to establish, because it goes through oil companies, making CapEx plans which are in a multiyear program and so it's very, very hard for, for us plate metal supplier to establish a very strong correlation there.

I have one last question.

Defense Department work, the United States Defense Department --

Yes?

Are -- what percent of your work is related to that?

It's extremely minimal.

We are not really present there.

It would be beyond some development projects that we refer to.

We are looking at opportunities possibly to develop products everywhere we can, and we mentioned in the conference nuclear transportation and Defense Department, but in our existing sales, there's nothing particularly of significance to defense.

All right and I just have -- I just thought of one last one, and I thank you very much.

Would any of your applications be -- could be used in bridges?

Construction of bridges?

In general, not really.

You could always, I'm sure, find some product of some sort, but in general, that part of the stimulus package will not benefit us greatly.

Okay, thank you very much, and keep up the good work.

Thank you, sir.

Welcome.

Your next question comes from the line of Debra Fiakas with Crystal Equity Research.

Thank you.

My question was partially answered in the course of the previous questioner's time period.

I wanted to know what you would consider a higher priority, continuing to make acquisitions or keeping your leverage low given the current credit environment?

I would answer keeping the leverage low.

We wouldn't be very prudent at this point in pursuing acquisitions.

Okay, and then you mentioned, and again, in response to another question, that there's nothing imminent in terms of the acquisitions, and I take it then that you may not be as active in the market, but I wondered if you could give us some color on if you are seeing anything, what the valuation levels are, if they're becoming more interesting or if you're seeing the valuation of private operations are still (inaudible) they had been last year.

Yes, I don't think we can discuss specifically on valuation and multiples, things like that.

I think what we can say is that for a number of years, we have been active in the clad space worldwide, establishing relationship and looking at opportunities.

We are continuing that work and we are probably expanded it in other activities of the companies, the oilfield and to a degree, possibly MK.

So we have an open mind, that's what I want to say.

But we could not be specific, giving you specific on valuation opportunities.

And as Rick said, the priority will be conservatism, management of cash, but we are not going to stop our investigation of our space in terms of future opportunities.

All right, thank you.

Your next question is a follow-up from the line of Mark Parr with Keybanc Capital Markets.

Thanks very much.

One thing you -- Rick, we haven't talked about much is just the reported SG&A line.

And I was wondering, would we expect to see some downward movement in that given the expected downward momentum in revenues or -- what kind of color can you give us as far as what to expect there?

Let's break it into three components.

G&A first.

I would expect that to be relatively flat except a portion, because you have salary increases maybe being offset by some foreign exchange impacts and if sales are lower, earnings are lower, incentive compensation would be lower, but I would expect G&A to be relatively flat year-to-year.

Okay.

Selling expenses should be down somewhat, because selling expenses contain a component that's directly tied to sales with a portion of sales that involve outside agents and thus, commissions.

Yes.

And then we have a decrease in amortization expense of purchase intangibles because we fully amortize during the first half of the year, the amount that was assigned to the beginning order backlog of the cladding business of DYNAEnergetics.

So that's bringing our expected amortization expense down from $7.3 million to $4.6 million to $4.7 million based on current exchange rates.

Okay so --

So the aggregate of all that is a decline in total SG&A.

May come down $3 million or something like that.

Yes, a slight decline in the aggregate.

Okay, all right, thank you.

Your next question comes from the line of James Bank with Sidoti & Company.

Oh hi, could I get the segment breakdown for gross profit?

I don't have the details in front of me.

We didn't include it in the press release.

It'll be in the 10K once the 10K is filed, which needs to be done by March 16.

Okay.

And then last question.

If there is with the impairment testing that's going on with our oilfield service product line, if there is an impairment, would that cause the amortization of intangibles to come down even further heading into '09?

No, goodwill is not amortized currently.

That's one reason why you test it --

So it's just the goodwill --

-- for impairment.

So it's not like the customer relationships or any of the other intangibles, it's just the goodwill.

No.

Yes, the only time you would touch the other intangibles if you had such a significant decrease in value that you totally wrote off the goodwill, then you'd have to look at the carrying value of the intangibles.

Thanks for --

There'd be no impact on amortization expense.

Okay, great, thank you, Rick.

Thank you all.

You're welcome.

Thanks.

(Operator Instructions) And there are no questions at this time.

Okay, thank you again for joining us for today's call.

We are obviously pleased by our achievements in fiscal '08 and by the overall financial strength of the Company.

We believe DMC is well-positioned to weather the current market conditions and maintain its position as the world's leading provider of explosion welded plates.

As always, I want to thank the members of the DMC team for their dedication and success of the Company as well as our Board of Directors for their guidance and support.

We look forward to speaking with you at the end of the first quarter.

Thank you.

This concludes today's conference call.

You may now disconnect.