Crane Co (CR) 2007 Q4 法說會逐字稿

Good day, everyone and welcome to today's Crane earnings release conference call. Today's call is being recorded.

At this time I'd like to turn the call over to the Director of Investor Relations, Mr. Richard Koch, please go ahead, sir.

Thank you, Operator. Good morning, everyone. Welcome to Crane's fourth quarter 2007 earnings release conference call. I'm Dick Koch, Director of Investor Relations. On the call this morning we have Eric Fast, our President and CEO. We will start off our call with a few prepared remarks, after which we will respond to questions. Just as a reminder, the comments we make on this call may include some forward-looking statements. We would refer you to the cautionary language at the bottom of our earnings release and also in our annual report, 10-K, and subsequent filings pertaining to forward-looking statements. Also during the call, we will be using non-GAAP numbers, which are reconciled to the comparable GAAP numbers in the table at the end of the press release, and in additional tables which are available on our website at www.CraneCo.Com in the Investor Relations section and right in the website log-in area for the conference call.

Before turning the microphone to Eric, I would like to invite you to attend Cran's annual Investor Day conference on February 21. Please call my office to sign up or e-mail me at RKoch@CraneCo.Com. Now let me turn the call over to Eric.

Thank you, Dick. Last night we reported fourth quarter 2007 net income of $45.2 million or $0.74 per share. Excluding special items net income was $47.3 million or $0.70 per diluted share compared to $38 million or $0.61 in the fourth quarter of 2006, representing a 26% increase in earnings per share.

Let me now highlight several key items for the fourth quarter. Looking at operating results, excluding special items, we effectively leveraged our 15% sales increase into a 21% operating profit increase, and our operating margin increased 50 basis points over the fourth quarter last year. This was in spite of our continued heavy investment in products for the Boeing 787 program. Fluid Handling had record sales and operating profit. Sales increased 18% of the quarter to a record $300 million. Operating profit increased 68% excluding the gain on the foundry restructuring. Operating margin reached 12.7% which is strong progress towards our goal of 15% margins for this segment. The restructuring of our foundry operations is an important step toward our margin goal. Merchandising Systems operating profit increased $8 million with strong improvements in both vending and payment solutions. Free cash flow of $186 million was better than we expected and came in near the upper end of the range of our guidance. We have provided for taxes if we decide to repatriate cash for acquisitions in the United States. We generated $70 million in cash from the timely sale of the plant in England and our IMC joint venture, and ended the year with 283 million in cash, a key asset in these uncertain economic times.

Turning now to specific segment comments. Aerospace and Electronics. Aerospace Group sales of $106 million increased $8 million or 8% from the $98 million in the prior year period. OEM and after market sales were higher than last year with OEM sales growing 13% and after market sales growing 2%. The OEM after market mix was 59%/41%, compared with last years fourth quarter mix of 57%/43%. Operating earnings in Aerospace declined by $9 million reflecting in part the $10 million increase in engineering expense reflecting heavy investments in new programs and technology. Absent the heavy investment in new programs for future growth, operating margins were at our long term goal of 20%. I point this out so that you will understand that the balance of the business in Aerospace is performing well and in line with our long term expectations. Our engineering spending all of which is expensed as a key investment in Aerospace's future.

As we described on our earnings call this year, in 2007, we are spending heavily on three major landing solutions programs. The Boeing 787, with our next generation brake control technology, the Airbus A400M, and to a lesser extent, the Joint Strike Fighter. This spending also includes the A320 landing gear indication and control unit and our new wireless technology and Smart Stem which we believe has considerable potential.

Our engineering spending in the fourth quarter of '07 was $22 million compared to $15 million in the first quarter, $17 million in the second quarter, and $19 million in the third quarter. The total engineering spend in 2007 was $73 million compared with $43 million in 2006. I expect this spending to remain high through the first half of 2008 and then to start to decline later in the year. As you may know, Boeing recently announced that they were delaying the first flight of the 787 from the end of the first quarter to the end of the second quarter of this year. Electronics Group sales of $55 million increased $7 million or 15% due to higher sales and microwave and electronic manufacturing solutions. Electronics Group operating profit increased from the fourth quarter of '06 driven largely by the improved sales volume in the electronics manufacturing solution.

Engineered materials. In the fourth quarter, engineered material sales increased $5.5 million reflecting the sales of the composite panel business we acquired from Owens Corning in August. This business is performing in accordance with our expectations. Sales from Noble Composites which we acquired in 2006 were the same as for the prior year period. Demand for high gloss FRP which both of these acquisitions make, continues to remain solid. Our expansion of Noble Composites is on track and should be complete near the end of the first quarter of 2008.

While high gloss FRP sales remain solid, we saw a 16% decline in sales to our traditional recreational vehicle customers in line with the continued softness in the RV industry. We experienced a 31% decline in our sales to transportation related customers consistent with reduced trail or build rates and a 2% decline in our building products customers. Operating profit declined 26% as a result of lower core business sales and higher raw material costs, which are largely related to crude oil and natural gas prices. We have announced price increases to our customers to reflect these higher costs.

Merchandising Systems, we had a very good fourth quarter. Sales increased 17% with improvements in virtually all business lines. Vending machine sales in Europe were strong, and we saw higher demand for coin and bill validation products. Operating profit increased $8 million reflecting very effective leverage of the higher sales and the absence of integration expenses for the Dixie-Narco and automatic products acquisitions in the fourth quarter of 2006. Improved performance from the four acquisitions we made in 2006 contributed significantly to the operating profit increase.

In 2008, Merchandising system was introducing a number of important new products, including this [Corenza] payment system for the Vending Channel and the new glass front BevMax 3 both of which are designed to improve profitability for the Operator. We are pleased with the progress we have made in strengthening relationships with the major bottlers and look forward to supplying them with high quality products in 2008.

Fluid Handling which represents about 43% of Crane's total sales turned in a record quarter with sales increasing 18%, operating profit growing 68%, with a margin of 12.7% excluding the gain on the foundry restructuring. Operating profit was notably higher across most business units in this segment as a result of higher sales. We have continued to see broad based demand from the chemical and pharmaceutical industries, energy which includes electric power, and oil and gas, and non-residential construction which resulted in core sales growth of 11%. Raw material escalation issues are affecting the entire industry and we are being disciplined on pricing and in fact have selectively raised prices. The restructuring of our foundry operations is a key initiative in our path to 15% operating margins in Fluid Handling. We have sold our manufacturing facility in Ipswich, England and will lease it back for up to two years as we transfer the [Malabo] arm foundry operations to China. We will also close our bronze foundry in Brantford, Ontario and move that production to China. These are important steps to increase our low cost country sourcing and improve margin. We expect to realize the benefits of these actions in 2009. Capital spending was $14 million in the fourth quarter of 2007 compared to $5 million in the fourth quarter of 2006 primarily as a result of our investment in the Noble Composites expansion.

Turning now to taxes. The fourth quarter reported GAAP tax rate of 32.2% was lower than our previous guidance of 39% for a variety of reasons but the single largest contributor was lower than expected taxes in Canada and Germany. Excluding the special items identified in our schedule of non-GAAP financial measures, the fourth quarter tax rate was 24%. Again, this is non-GAAP excluding the special items in the fourth quarter, the fourth quarter tax rate was 24%. Our guidance for the quarter excluding the asbestos was a tax rate of 31%. The difference equates to approximately $0.70 per share -- $0.07 per share, excuse me. Tax tables have been posted on our website to provide additional details on our tax rate for the fourth quarter and full year 2007.

The fourth quarter included the accrual of a deferred tax liability of $10.4 million related to the the future repatriation of approximately $194 million of overseas cash. This accrual was made in accordance with accounting rules which require us to record the tax costs of repatriating foreign earnings unless we intend to indefinitely reinvest such earnings overseas. Our significant overseas cash balance at year-end and the current lack of foreign acquisition candidates made it difficult to envision reinvesting all of this cash overseas.

Given all of these unusual tax items in our 2007 financials, we felt it was important to state in our earnings release that we anticipate that 2008 annual tax rate to approximate 31% with some variability quarter to quarter. This compares to the rate of 29% in 2007 excluding special items and the difference represents a head wind of approximately $0.10 per share. We are introducing earnings guidance for the full year 2008 of $3.45 to $3.60 an 8 to 13% increase compared with the $3.19 per diluted share which excludes the impact of special items and benefited from a lower tax rate than we expect in 2008.

For 2008 we are expecting improved operating results, from each of our five segments in spite of what we see as a difficult economic environment here in the U.S. We expect continued strong results in Fluid Handling from solid global demand. We expect our long cycle Aerospace and Electronics businesses will continue to have strong demand and will benefit in the last half of 2008 as engineering investments flows from delivery of the 787 and A400 program. Both Merchandising Systems and Engineered Materials industry leading positions, strong growth initiatives, and disciplined cost controls should allow them to improve profit. We expect free cash flow, cash flow from operating activities less capital expenditures in 2008 will be approximately $170 million. Cash flow in 2007 was favorably impacted by collections of $31.5 million in escrow funds from the Equitas settlement. Capital expenditures in 2008 are estimated at $50 million. EBITDA is estimated to be 411 million to $425 million. Now, back to you, Dick.

Thank you, Eric. This marks the end of our prepared comments. Operator? We are now prepared to take questions.

Thank you, sir. Today's question and answer session will be conducted electronically. (OPERATOR INSTRUCTIONS) We'll go first to Deane Dray of Goldman Sachs.

Thank you, good morning.

Good morning.

For the Engineered Materials business, could you give us some insight into the margin decline? You mentioned raw materials and also volume declines. How much of each was weighing on that margin decline year-over-year?

I don't have that broken out, Deane. I would say that as we look to 2008, looking forward here, we're looking for -- to gain market share, particularly in the RV market. As I said, we are looking to -- for some price increases to offset the material costs that we've had here and then also importantly, we look to finish the Noble expansion by the end of the first quarter.

How much of a price increase are you looking for in that business and if we're entering a stage of economic decline, especially in the U.S., how realistic is it to expect a price increase to go through?

Well, again, I think we have a demonstrated record of providing by far the best products in the marketplace. We've stood behind our products which our competitors haven't and we've got almost perfect on time delivery, so I think our customers respect both our product and level of service. We have pretty sharp material cost increases here and we're currently engaged in those discussions, I think for competitive reasons I'd rather not comment on exactly how much.

Sure, and over in Fluid Handling, can you give some more color regarding the foundry restructuring, so what was the cost and if you're thinking about a payback, what that benefit might be and over what time frame? I think you said it was 2009. Can you give your position yet where that could be quantified?

The foundry restructuring included both the Ipswich malleable foundry and the Brantford bronze foundry, included in that net gain is about $9 million of potential severance cost that we'll have to take, that reduces the amount of that gain. We obviously are going to have some ongoing costs here this year as we transition both to the (inaudible) and as we consolidate parts of Ipswich, the non-foundry parts of Ipswich with Hitchin and those are included in our -- those are ongoing costs included in our plans for next year. I think this is, we haven't highlighted the details of what the benefits are in 2009 but it's important. I think we'll try to lay that out for you in our investor conference in February.

And over in Aerospace, when you talk about the 787 delays , just quantify it for us or just give us a sense of what drives the additional costs? Are you carrying higher engineering expense longer than what you were expecting or is there any product rework and just what is the nature of

We're employing a lot more engineers than we had planned and we need to employ them to make sure that we meet the scheduled deadlines which I expect us to do. There are some changes that we're getting from Boeing and GE, as we work through this that ultimately we would expect to get reimbursed from, but I think that the schedule delay has allowed us to go about our work in a more orderly fashion but I don't think it changes the overall dollar impact.

Got it and last question, Eric, and I missed the very intro remarks and maybe you addressed this, but just the timing for the CFO replacement and with all of the puts and takes going on in the tax side, is this a particularly sensitive area or should we view these tax changes versus expectations as more routine?

This is all routine. Our tax guy has been here for 20 years, we've been audited by the IRS through 2005, we're rock solid on the taxes. That will cost me money, probably, but.

And the expectation on the replacement?

On the CFO? I hope to have him by this Spring.

Great, thank you, Eric.

Certainly.

We'll take our next question from Scott Graham of Bear Stearns.

Yes, good morning, Eric, good morning, Dick, a couple questions for you. The Aerospace after market sales were only up nominally. Could you explain why and then also tell me if my calculation is correct that the Aerospace margin was only about 12%?

Well, we don't break out margins between Aerospace and Electronics. The whole segment margin was what, 11 point something. I don't break out the detail in between. You can probably calculate it with the data I've given you, 11.0% for the whole segment.

Right, I'm aware of that but what i'm -- you used to break those margins out but if we just assume a little bit better margin in Electronics, maybe we can get to maybe a 14% Aerospace, actually, no, it's the other way.

Scott, the way I would--?

A 12% margin.

If you take out the engineering spend in Aerospace, in the Aerospace Group the way I said it was we're running at 20%, so we've got a good, healthy business that is going to go through, we're investing substantially in this brake controls technology as well as the Smart Stem and I think it's going to give us the leading technology, brake control technology for the next decade, and I expect as we go into 2009 this is going to be largely behind us. So there's nothing wrong with our core business.

All right, well, I guess I'm not suggesting that there's something wrong with the core business. It just seems that mix had an extraordinarily negative impact on the business.

Mix, that's why I highlighted the OEM after market because OEM is so strong here that it's -- the next step put some pressure on margins.

Right, and so if we move into 2008, it would seem to me as if that's not going to go away any time quickly, yet you're assuming sort of at the mid point of your guidance about a 50 basis point improvement in the operating margin and I'm wondering if you can put some color around that, Eric?

You're asking the question on the segment or the Company?

On the Company. Aerospace is the most profitable business by far, at least until this quarter at the Company so I'm wondering what is it with OEM is growing faster than after market right now, a trend that probably continues into 2008, yet you're assuming on a total Company basis that the margin is going to rise roughly 50 basis points at the mid point, so kind of how do you get there? Where you're assuming operating improvements for all four businesses but it looks like Aerospace might already be starting a little bit in the hole.

As I said, first off, we will give in three weeks at our investor conference, sales and operating margins by the segments so we'll lay this out for you in relation to the overall guidance that we give. Secondly, as I said in my script, we do, we currently expect each and every one of our segments to have an increase in operating profits next year. So that being said, we are planning on as I said, a higher level of engineering spend in the first half of the year from Aerospace, which is going to impact our growth during that period and then it will start to trail-off in the second half, as I said, be largely behind us as we go into 2009. We'll try to flesh all of that out for you in three weeks at our investor conference.

That would be helpful.

Okay.

My last question is on -- what was the Dixie-Narco acquisition contribution this quarter?

Okay, here is what I would say, Dixie-Narco made money in the third quarter. We now, the way we're running this business, Dixie is fully integrated in the North American Vending. We've got integrated sales channel here in North America. We've got integrated sales channels in Europe. We are actually going to start making other products down on Dixie's automated foaming line so going forward, we've got a fully integrated North American Vending business which Dixie is part of it and I'm going to refer to if we are going to get the profitability I'm going to talk about North American Vending because it's going to be increasingly difficult to point to just exactly what was Dixie in the original acquisition but I can tell you in the fourth quarter, it made money.

That's fine. And I do understand that. I was just asking for the revenue contribution, not the profit.

We don't break it out.

Okay, thanks.

Thank you.

We'll take our next question from Ron Epstein with Merrill Lynch.

Good morning, guys.

Hi, Ron.

When we think about '08 and your R&D spend, how should we think about that particularly in the Aerospace businesses ?

I think we'll probably try to lay this out a little bit more detail but all we have said at this point, ran at $22 million in the fourth quarter and we expect it to continue to run heavy through the first flight and start to taper off and then accelerate in terms of how it declines in the fourth quarter and then into '09.

Okay, and then when we think about, I guess the outlook for commercial construction, maybe a little murky. What impact do you think that could have on the Vending business?

I'm not, I think a bigger, I'm not really worried about commercial construction on the Vending business. I think the need to be sensitive that food prices have gone up a lot here, so it's very difficult for the Operators to pass along those prices. There's a lag time that they need. They often times need to get permission from the site. It takes about 45 minutes a machine to change their prices, so we have to be very sensitive that those additional costs that the Operator is going to have. That being said we just -- we have a very strong leading market position here. We've got a lot of new products, and I think there's -- we've got, we're expecting solid success from the BevMax 3 to vend all of the new bottle shapes for Coke and Pepsi.

Okay, and then just I guess one last question. On the M&A front with kind of what we've seen in terms of valuations, pull back particularly on the commercial Aerospace side of the house, do you think there's going to be some opportunities there for you to build out that business?

I don't know if we'll see them in Aerospace, but I would expect that we have a much better friendly field to play in than we have in the past. We are seeing more supply, not yet clear to me that the valuations have come down. I think people are still trying to figure out where they're going to settle here and you're going to see some broken processes, but with our cash position, I would hope we could find some opportunities and be more aggressive this year.

Okay, great. Thanks, Eric.

Thank you.

We'll take our next question from Wendy Caplan of Wachovia.

Thanks, good morning, Eric.

Good morning, Wendy.

Your confident comments about margin expansion in each segment in '08 despite the expectation of a challenging environment, is it fair to assume that your view reflects Crane Co's controlled activities with -- in which you are in control and that you're not really counting on much from the economy in '08?

I'm not counting on much from the economy. We think the U.S. economy is going to be difficult.

Right. And that gets me to kind of your read geographically in Fluid Handling. Can you comment on demand internationally versus domestically? What pricing looks like in those markets for you and what, if any changes you've seen in the competitive environment?

We continue to see -- in Fluid Handling, we continue to see solid demand in the Middle East, Asia, Eastern Europe, I would even say in Western Europe, a solid MRO business. The U.S. is the only place that we've kind of seen it off here is in ethanol which is well publicized and at the end of the day is not that big of a deal. So I would describe it in the U.S. as steady to solid but again, the real benefit is from the global demand as they build these big chemical process plants and refineries overseas.

And pricing for those products?

Well, the projects are alway pretty price competitive but again, I don't see a, we haven't seen a change in that environment, let me say it that way.

Okay, that's fair. All right, thank you very much. I appreciate the answers.

Sure, thank you.

We'll take our next question from Matt Summerville with KeyBanc.

Good morning. Back to one of Scott's questions, Eric, why was the after market business in Aerospace only up 2%?

I don't really have a detailed explanation as to why it was only up 2%, frankly.

Okay, and then--.

We might have to so some work on that.

As far as the things you're doing with the foundries and the Fluid Handling business, when do you anticipate the level of expenses that you've talked about continuing into 2008? When does that all go away? And then can you quantify the cost savings you anticipate from these moves? Kind of put that into the context of bridging from almost 13% of margins to 15. I guess how big of a component is this latest round of restructuring?

Well, first off, I expect the move of these two foundries is going to take us this year. We're finishing out the build of our (inaudible) in China this Spring and we'll be starting to transfer our manufacturing there and that will take most of the year. The same way with Malabo Iron to third party sources in China so I expect we'll incur those expenses in 2008 and by far, the vast bulk of them will be finished in 2008. So we should have pretty clear sailing as we move into 2009 and for the investor conference, I'll highlight what the number and we'll have Max spell it out a little bit more quickly. It's a piece of getting the improvement to 15% but it's just one of the legs in the stool.

Okay, let's see and then just as far as the development costs in Aerospace, your $22 million on a quarterly run rate in the fourth quarter. Is that the type of run rate we should be thinking about through the first half of the year? Is there another leg up from that $22 million?

I'm just not going to comment, Matt, beyond what I've already said here.

Okay.

It's a pretty fluid situation.

All right, that's all I have.

Okay.

(OPERATOR INSTRUCTIONS) We'll go next to Scott Graham with Bear Stearns.

Yes, Eric, I'm sorry I forgot to ask one of my questions .

That's all right

It's on merchandising which continues to be I think a very interesting business for you guys going forward. If you were to look at some of the underlying trends there, maybe share with us what the you're hearing out there as far as the Vending, routing off, not those beverage side but more the snack side, the core business. Are you hearing any improvements in that market? And are you doing things like taking some of your coin mix and retrofitting them with maybe some more seed these days, retrofitting them on to the installed base out there to help these Operators make more money?

What we're seeing, Scott, is I can't say we're seeing improvement in the overall market environment. We're not seeing that. What I'm seeing is a recognition by the largest and most sophisticated operators, that the we're bringing a full solution to the channel to revitalize it through our software, through our new machines, through our Payment Systems that recycler, all of which increases the revenue per machine, gives them cash accountability. So I'm seeing the larger operators move towards that which means that we're taking share on the part of the -- taking market share at the most sophisticated level. We're seeing the large operators when they win new site mandates from say a large retailer that they're winning that on the basis because they're going to put in new machines, and we're the market leader with the new machines that are winning.

We also, as we've talked about, have an important initiative where we're taking our new Payment Systems, Corenza, the C squared Corenza and the Recycler and again packaging those with our Vending machines out of our North American operations, that's an important initiative and our experience is, is that the recycler which gives both coin and a bill change when you put in a 5 or a 10, which is a first for the industry, increases the revenues per machine at a minimum of 15%, so I like what I'm seeing in terms of our market share gains. The concern is, is that the overall market environment and the food cost of these guys.

And if you wouldn't mind maybe commenting on the second part of that question with the retrofit? Obviously there's a huge installed base out there with the inability by, at most snack machines and even soda machines to put in a $5 bill and get anything other than a whole bunch of quarters out there.

I think that we're just really starting to ramp up production here in January and February and March and introducing it into the market. We do think that there's a large retrofit opportunity with that product. We also think that there's a large replacement opportunity with the traditional stack vending machines that were used up, that were used without the glass front, and as you know, Scott, those old stack machines can't vend 18 different bottle sizes that the Coke and Pepsi have now for all of their different drinks but the glass front can and we're very pleased with the quality of the new BevMax 3 and the experience in the field there.

Your experience in the field includes conversations with the likes of Coke and Pepsi and the bottlers who are primary customers there, because they're excited about the increased revenue opportunity?

I think what I said is we have worked very hard this year to earn their trust and to create this partnership and based on -- we feel confident that we've earned that and that we've got a good long term partnership going here.

Last question on this, Eric. With the addition of Dixie-Narco, it's probably pretty likely that the historical operating margins of this business will probably not be seen because of the Coke and Pepsi, the capture of their market but I guess if we look at the rest of the business, is there anything out there right now in this business that suggests other than in Dixie-Narco that these businesses margins can kind of get back up to that sort of midteen level that we've seen, six, seven years ago?

First off our Payment Systems business has operated well above that as you know.

Yes.

So the challenge is to move vending up. We're going to talk about this at the investor conference but we are concerned about regulation changes in Eastern Europe and some at the international markets for the Payment Systems that could reduce those sales, particularly in the second half. And what we expect strong growth on the vending side. So there is a margin mix issue coming in here in 2007 but overall, we feel strong in the long term we're going to get very attractive margins in our core vending business.

That's fine, thanks, Eric.

Thank you.

We'll take our next question from Rand Gesing of David Greene.

Hi, Eric, how are you?

Hi, Rand.

I just wanted to get your sense for how you felt about taking some of the shares in, obviously, the balance sheet is rock solid and has a tremendous amount of fire power behind it. It sounds like you're warming to do some deals, but I just, with where the valuation is, with where your outlook is, for the businesses and the opportunities, I just -- I guess I'm a little at a loss for lack of, with the asbestos sort of contained I just wonder about what your thoughts are about share repurchase?

Well, as you know, our policy is not announce anything ahead of time. We talk about it at the each quarter end whether we bought it or not so I'm not really going to comment. I would say that if you look at our behavior over the last couple of years, we've looked to keep kind of the outstanding shares at a pretty static level, but not going to make any announcement at this point.

Yes, okay, well just as sort of a long term shareholder, I would ask you to strongly consider that as you make capital allocation decisions in the first half of '08.

Okay, thank you.

Okay, thanks.

We'll go next to Shannon O'Callaghan of Lehman Brothers.

Good morning, guys.

Good morning.

Yes, Eric, just on the fourth quarter, apologize if I missed this, I got on a little late, but in terms of the margin declines in some of the businesses, any of that take you by surprise? Can you give a perspective on sort of when you got to know about that and if it was sort of in line with what you were thinking or a lot worse and why?

This year, material sales were -- in the core business were a little softer than what we expected, a little bit. Otherwise, I think margins are generally pretty much in line with what we expected. You'll note that we gave guidance at the end of the third quarter that operating profits would be up 20% and they were up 21%, so I felt good about our -- the strong fundamental performance in spite of all of this investment spending in engineering that we got a full 0.5 point margin in the 20 to 21% increase in operating profit. So other than a little bit more softness in Engineering Materials, it came in as we thought.

And on Fluid Handling, was that significantly better than you thought or?

Well, it's on target.

Okay. And then in terms of, I know you're going to go through more at the meeting but are there any other moving parts to know about in '08 in terms of you mentioned the tax rate. Any other line items in miscellaneous or any other sort of things outside the businesses that shift?

Not really. I think we would have tried to say something. There were so many special items in '07 that I just, we really went to great lengths to do the non-GAAP tables in the back, we even laid out the EBITDA guidance and EBITDA for '07 so that we could get all of us on the same page in terms of how we're talking about the numbers. So and there's two more tax tables that we put on the website this morning. Again, if you got questions, call Dick on it.

Okay, thanks a lot.

Okay.

Gentlemen, we have no further questions at this time. I'll turn the call back over to Mr. Koch for any additional or closing remarks.

Thank you very much for joining us today. We appreciate your continued interest in the Company. Thank you, bye.

That does conclude today's conference call. Thank you for your participation. You may disconnect at this time.