Myers Industries Inc (MYE) 2005 Q2 法說會逐字稿

Greetings, ladies and gentlemen, and welcome to the Myers Industries’ Second Quarter Earnings Conference Call.

(OPERATOR INSTRUCTIONS.)

It is now my pleasure to introduce your host, Mr. Max Barton. Thank you, Mr. Barton, you may begin.

Good afternoon and welcome, everyone, to the Myers Industries call for the 2005 second quarter and first half financial results. With me today are, John Orr, President and CEO, and Greg Stodnick, Vice President of Finance and CFO.

This morning we issued our news release with the financial results for the 2005 second quarter and six months. If you have not received a copy, please call our offices at 330-253-5592, and ask to speak with Marsha. She will fax you a copy immediately, or you may access it from the website, www.myersind.com. It’s at the bottom of the page.

This call is also being carried as an audio webcast from our site, and it will be archived there along with the transcript within 24 hours following conclusion of the call.

Before I turn this over to management for remarks, I want to remind you that we may make some forward-looking statements during the call. These comments are made pursuant to the Safe Harbor provisions of the Securities Reform Act of 1995. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements.

Among other things, these risks include various economic conditions that influence the Company's markets, the development, introduction and acceptance of new products, competitive products and pricing, reliance on key customer relationships, dependence on foreign suppliers, supply and manufacturing constraints, fluctuation in raw material prices, cancellation or reduction of orders, and other risks and uncertainties as detailed from time to time in the Company's SEC filings.

Following management's remarks this morning there will be a brief question and answer session. And I’m now pleased to introduce John Orr, President and CEO. John?

Thank you, Max, and good morning everyone. It’s a pleasure to have you with us. Going forward, conference calls are now going to be a regular part of our investor communications. It’s part of our goal to further the ongoing dialogue we have with the investment community.

As you’ve no doubt seen from the release, sales were very strong across our five business segments. And even factoring out acquisition and currency effects, we were very pleased with the organic growth.

That being said, everyone’s focus is on the bottom line, where earnings were lower because of the higher cost for plastic raw materials compared to last year. In fact, the fact is that resin on average for the quarter was 27% higher than in the second quarter of last year. And for the first half of this year, it’s 39% higher than last year.

What have we done and what are we doing to offset raw material costs? Higher selling prices and cost control. Higher selling prices is the key, and we’ve been steadily implementing these across our business segments since last year. However, as we said in the release, we estimate that we’ve been successful in getting approximately one-half of the resin increase in the second quarter passed on to customers across their different business segments.

Resin prices fell back a few cents mid-second quarter, due to reduced requirements in the industry. Resin suppliers reacted to that. Major ethylene, polyethylene and propylene plants began to go down for maintenance or other reasons. As we speak, four crackers, with over 2 billion pounds of capacity per year, are currently down. Right now in the marketplace, resin suppliers have announced $0.06 for August and another $0.06 for September. The dynamics of the marketplace say that some of it will stick, but how much is anyone’s guess.

Part of our efforts now are to continue to educate customers about the forces at work in the market that impact resin costs -- natural gas prices, crude oil prices, changing economic forecasts, resin capacity worldwide, and demand. We value the relationships we have with our customers and want them to understand that we’re not just raising prices on a whim, that we must recover the costs imposed from the steep increases in raw material prices in order to service them with the value they expect from our products.

Unfortunately, price increases for resin come from some of the largest manufacturing companies in the U.S. For example, Exxon Mobile we buy resin from, and we sell our products to another large company, General Motors. So as you can see, we’re kind of the cheese in the sandwich. I think -- also, I think resin supply is likely to remain tight as supplier’s feed stock costs increase and demand rises. And with no capacity coming on-stream in North America for polyethylene or polypropylene.

Another area for us in terms of offsetting the resin factor is cost control. We’re gaining momentum across the business, as you can see, with operating expenses continuing to be reduced. They were 21.2% of sales in the quarter, down from 23.3% last year, and for the first half were at 20.7% of sales, down from 23.5% last year. This is happening through simple management of expenses at all levels of the company. I’m very proud of our people’s continued focus on cost controls.

Right now, I’d like to turn it over to Greg Stodnick to review the second quarter and six-month consolidated results, then we can get into the performance of the segments and some key factors at work there. Greg?

Thank you, John.

For the quarter, we had net sales of $225 million. They were the highest second quarter revenue -- second quarter revenue in the Company’s history. They we’re up 14% over last year’s second quarter. Contributions from acquisitions increased net sales by $15 million, while the Euro increased net sales by $2.3 million. So, factoring out the effect of the non-operational issues, our sales for the second quarter would have increased $10.9 million or 6%.

Our net income for the second quarter was $5.1 million, which was a decrease of 16% versus last year, and our net income per share for the second quarter was $0.15, down 17% from last year.

For the six months ended June 30th, our net sales were $461 million, which was an increase of 21% from the first half of last year. Again, factoring out the effects of foreign currency and acquisitions, our net sales for the first 6 months were up $34.9 million or 9% for the quarter -- or a 9% increase for the six-months. Net income for the six months was 12.9, a decrease of 14% compared to the first half. And net income per share of $0.37 was down 18% in the first half.

Through our continued -- again, John had just mentioned, but through our continued focus on cost control, operating expenses for the quarter decreased to 21% -- 21.2% from 23.4%. Also, for the six months, operating expenses decreased from 20.7 to -- to 20.7% from 23.5%

We also benefited from a lower tax rate -- a lower effective tax rate due to foreign tax differences, including the utilization of a foreign tax loss credit which we had previously reserved. During the quarter, our effective tax rate was 27% versus 37% for the second quarter of last year. And for the six months, our effective tax rate was 33% compared to 37% for the first half of 2004.

On an individual segment results, distribution, our sales increased 13% to $49 million, and our product mix was very favorable with both equipment and supplies for many of the tire markets for which we sell. Also for the six months, our sales in this segment increased 13% to $91.5 million.

More importantly, our income before taxes in the distribution segment increased 23% to $5.3 million; again, basically due to higher sales volume and effective cost controls. For the six months, income before taxes increased 22% to $9 million.

In the Material Handling North America segment, we had a sales increase of 6% for the quarter and 10% for the YTD. However, income before taxes declined 69% to $1.1 million compared to last year. Again, this is -- as John said, without sounding like a broken record, this was primarily due to the impact of the higher raw material costs which we were unable to totally offset through the higher sales volumes and lower operating expenses. So, for the six months, income before taxes was $6.1, a decline of 43% compared to last year.

In our Material Handling, Europe was an outstanding performer this quarter, both in sales and net income. Sales were $45 million, an increase of 5% from 2004. For the six months, sales were $89.4 million, an increase of 9%.

Excluding the favorable foreign currency translation, they still had an increase of sales of 2% in the quarter and 5% for the [month]. But the real positive is income before taxes increased 242% to $2.8 million compared to last year. Basically, this came from the increased sales, lower operating expenses, and the acceptance of significant price increases throughout our end markets.

In Europe, we seem to be having much more success than we have in the United States in passing on our raw material costs, strictly because of -- in the past couple of years before that, we had not -- you know, we had not increased prices. So, for the six months, income before taxes was $3.6 million, which was an increase of 59% over the first half of last year.

In the Automotive and Custom Segment, second quarter sales were $49.7 million, which was a small increase of 1% over the last year. And for the six-month period, sales were $97.7 million, which was an increase of 19% over the year ago. However, factoring out the acquisition of Michigan Rubber WEK, which we made in March of last year, sales increased $5.1 million or 6% for the three months.

Income before taxes for the quarter was $3.3 million, which was a decrease of 43% compared to last year. And for the six months, income before taxes was $6.5 million, which was a decrease of 29% for the last year. The key factor impacting this segment for the quarter, basically was the softer OEM demand, which was reflected in the slowdown in the North American auto and passenger truck builds, and higher rubber and plastic raw material costs.

In our Lawn and Garden segment, sales were $39.6 million, which was 17% above the second quarter. For the six months, sales were $90.3 million, which was 67% above the same time. Again, here we have to factor out the acquisition of last July’s Pro Cal. So without the acquisition, sales would have increased 8% for the quarter and 14% for the six months.

Income before taxes was $2.1 million in the second quarter, an increase of 23%, while in the six months it was $8.8 million, which is an increase of 9%. The biggest factor, again, in this segment was higher raw material costs. However, basically, our increased volume and higher selling prices offset this.

On a cash flow basis for the six months ended, our cash flow from operations was $31.9 million versus $34.4 million last year. That’s -- this small decrease is basically our decrease in net income for the six months. However, we were able to pay down $4.3 million in debt during the quarter, bringing our total debt at the end of the quarter down to $273.1 million. And total debt as a percentage of total capitalization was 45% at June 30th compared to 44% at the end of the year -- at the end of 2004.

Capital expenditures for the quarter were $6.7 million, and then for the six-month period they were $10.5 million. And basically, we’re expecting them to be in the range of $20 to $25 million for the year.

Basically, this wraps up the financial overview. Now, I’ll turn it back to John for a summary.

OK, thank you, Greg. Just a few more items before we go to the Q&A phase of -- or portion of our call.

Hopefully, most of you have read about the resolution of the Department of Justice investigation. We were very pleased with that news. It was very positive.

Now, I would like to give some background on what’s happening in our new segments and, initially, the top strategic areas for focus at Myers.

As I said before, we’re constantly evaluating our businesses. Part of the biggest change in the last two months was the recent reorganization of the Company into five segments. We moved 14 operating units into those segments, named managing directors for each of them, and charged those managers with devising a complete operating strategy for their respective businesses.

They’re focusing on new products, synergies, price increase initiatives, cost controls, customers, and markets to emphasizes or not emphasize, and obviously growing their business to move Myers forward. These are seasoned managers selected from within Myers. We’re very bullish about what they can accomplish. They’re putting their strategies together now for review over the next few months, and that will then dovetail into the overall Myers strategy for the whole company that I want to see developed.

It’s safe to say that in all of these strategies, we’re focusing on what will contribute the best value to our shareholders, customers and employees. Some of those areas of focus are obviously aggressive pricing initiatives, and those have to be different by each segment. The financials, metrics, debt reduction, cost reductions.

We want to maintain readiness for growth or expansion, investment, fortifying the core business for accelerated growth, if it’s there. We’ve always been an opportunistic acquirer, and I can also say we’ll be an opportunistic seller if necessary. People. we want to make sure that we have the right people in place in the right positions for each of our businesses.

Strategic initiatives common across the segments that are in progress now is pricing again, cost controls, maintaining gains and expanding on those. A focus on new product innovation, unique products. What we’re asking for is that each of our business segments come up with at least 10% to 15% new products in the next year.

We want to exit price-driven, low margin business, identify and take full advantage of the synergies between the segments and between the businesses that we have. And obviously, end up with customer satisfaction. We want to be more customer centered. We need to build and strengthen our relationships, be easy to do business with, and make our customers successful.

Another area that we’ve spoke of is rationalization. This is an ongoing process for us to evaluate each segment for areas of improvement and growth, as well as their strategic fit within the overall core business focus. However, it’s important to remember that strategies need to be evergreen documents to accomplish our objectives. We’ll constantly revisit and evaluate the segment strategies as we move into 2006 and as we establish longer range plans.

Our key objective, which we believe can be achieved through all of the areas just outlined, is to deliver sustainable, profitable growth across our markets and improve the financial health for our customers, shareholders and employees. I guess you could say that’s our Mission Statement at Myers.

With that, I would like to move on to the question phase of our call, so I’ll turn it back to Max.

Actually, I’ll turn it back to the operator. We’re ready for the Q&A for anyone, so whatever the instructions are, please go ahead.

(OPERATOR INSTRUCTIONS.) Chris Manuel of KeyBanc Capital Markets.

Thank you for our quarterly conference call. It’s a nice help.

Greg, could you walk us through -- you know, it looks like volumes -- you know, if I dissect back the acquisitions and the Euro impact, it appears that revenues were up about 5%. Can you help us -- and I’m assuming price was a big piece of that. Can you help us with the volume picture? It would appear as though volume may have actually been down. Is that fair?

No, because in some cases, like in the Distribution segment, that was almost entirely unit gain. OK? Maybe half and half. Maybe 60% price, 40%. But in that area.

OK. And can we go through a few of the segments here, particularly I’m interested in Materials Handling North America and Material Handling Europe, where there was a sharp movement in margins. In Material Handling North American, you know, these are some of the lowest levels -- well, at least in the historical data I’ve looked at. It looks like they were about 2.3% down from 8.7 in the first quarter and, you know, [considering] 8 last year. Can you help us with what’s changed so drastically there?

Well, Chris, what we’re--what, again, we’re still seeing is in North America is still the catch up. Price increases started last September/October timeframe, and dramatically increased by the resin suppliers over that period of time out through March/April. There was no way we could gain fast enough our price increases to our customers.

And as I said, you know, it went down a few pennies here or there on the last -- mid part of second quarter, but now it’s on its way back up. What we’re trying to do is still catch up. We’re still halfway behind. And it’s just a reflection of a comparison of second quarter to second quarter last year that we’re still way off. But you know, we’re working hard on that in North America. Certainly, customers in the North American automotive business, plastics part of the automotive business, we’re seeing virtually no price increases being given there. In fact, it’s a battle every day to not take prices back.

Switching to the European side of the business, as Greg said, for several years, with the previous management group that we had we weren’t seeing price increases. The new management group that took over in January under the leadership of Mohsen Eskandar has been very, very aggressive at seeking price increases at customers and, in fact, walking away from business where we’re not seeing those price increases. And I have to take our hat off to them. They certainly have a fine second quarter, which made a good second -- a good first half. So, hopefully that answers your question and that’s kind of what we’re seeing at this point.

Well, but if I could just dig back in a little more to the North American Materials Handling. Is--you know, from first quarter to second quarter, I’ve got operating margins going from 8.7 down to 2.3. And as you pointed out, resins were at least stable, maybe down a bit.

Chris--.

Is there something that is different with mix that would cause that to fall off so much, or--? Help me understand that.

Yeah, Chris, you’ve got to compare the second quarter of this year to the second quarter of last year. I think if you look at second quarter last year, you’ll see the same drop in margin from the standpoint there is--not so much product mix as more customer mix and application mix. But there is a--we sell a lot more higher profit items in the first quarter and probably a larger percentage of commodity items in the second quarter.

Okay. That helps then. All right. Let’s see, as we look through the balance of the year, obviously you’re--I gather from your remarks you guys are working very hard to push the price pedal.

Absolutely.

At what point do you think the gross margin begins to bottom and we should in fact begin to get some improvement?

Tell me what resin’s going to be at three months from--I mean, you know, again, we don’t want to sound like a broken record--.

No, no. But let’s assume resins are flat.

But they’re--we don’t think they’re going to be flat. I mean, that’s--.

With $0.12--with a $0.12 increase in right now, we don’t think they’ll be flat. It’s just a very tough question, Chris, to give you a solid answer on. We’re not trying to dodge the question. We just don’t know.

You know, a real test here is going to be in a couple of days when we see whether this first $0.06 goes through or not. If it doesn’t go through, that’s a real good sign for us, that maybe we’re seeing some bottoming. But we’re just not sure at this point.

You know, fortunately we’ve not seen a kick in from China this year, which has allowed the resin guys to have a little more capacity. But then also, as I said in my little opening, that they’ve also begun to restrict supply. It just seems magical that four crackers could be down all at the same time with two billion pounds of capacity. But we just don’t know at this point what’s going to--what’s going to happen to that margin as we move through the rest of the year.

Okay. That’s fair enough. Let me--I’ll just back into queue. Thank you.

Brian Langenberg of Foresight Research Solutions.

Thank you and good morning gentlemen. If we could just dig down and take each of the segments and break out the -- you know, an understanding. It’s like that impacts the volume and price during the quarter.

OK. You want to go through that?

Yeah. Basically, if you want to go to the Distribution, it’s probably 80% volume.

So, it’s presented as volume. So two to three price, and the rest volume.

Yeah.

OK.

OK. And Material Handling. You’re probably looking -- North America, so you have the 6%. You’d probably get flat unit growth, or maybe even a 1 and 2% decrease.

OK. Flat to off one or two. So basically, Material Handling North America you were able to get between 6 and 8 points of price. Is that correct?

Yeah. Close, close.

OK. And Material Handling Europe?

Again, Material Handling Europe, basically it was up 2% for the quarter and we’re probably looking at -- that’s all price, and probably we had maybe a 5% unit decrease.

So, unit were minus 5. Are you--.

These are just approximate numbers.

No, no. That’s fine. So let’s say you had -- so you had [inaudible] currency at 2% core, so it was minus 5 volume prices, probably about 7 points.

Yeah.

OK.

And the Automotive and Custom, the 1% increase, it’s probably almost very little pricing in there.

And what was the deal on the quarter for A&C [inaudible]?

Pardon?

I’m sorry, I meant the auto and Custom. What was the impact of acquisition for the quarter?

Nothing for the quarter.

Nothing?

No. We had basically a 1% and--.

OK. You fully annualized that.

Yeah. There’s no pricing in there.

None at all?

No.

Okay.

In the Lawn and Garden, basically we’re up about 8% for the quarter, probably 6% is pricing.

And about 2 volume?

Right.

Okay. Now, the--you know, the--with those--the flower pot business, that’s something that pretty much maxes out during the second quarter, or do we think we could still get some good carry through in the--?

It maxes early in the second quarter, so--.

OK.

Our third quarter is, as you know, is always probably our worst quarter.

OK. And, you know, just--obviously, you know, the resin thing is what it is. I mean, I guess my question is this. You’ve been seeing resins come down the last couple of quarters. And when you said that China has not--has given a breather, does that mean there’s been no real change in what you would’ve expected, outside of those crackers all being down in terms of where you thought resins would have been a couple of months ago?

Well, I firmly believe--or firmly felt that it was going to be lower than it was, and I certainly didn’t expect to see a price increase on the horizon based upon what China was doing. So, I am a little bit surprised. But then when I pick up the newswire and see all of the cutbacks in capacity out there, then I guess I’m not surprised.

Understood. And when a cracker goes down, how long does it take to get them back up?

Well, some of them--some of them are a few days, and some of them are down on six week [inaudible] rotation.

OK.

It seems kind of interesting--in fact, right now there’s--Chevron Philips has one down for six weeks. They have another one down for four days, they have another one down for a 14-day maintenance turn around, Dow has one down for three to five weeks at the minimum is what the release says. So, I don’t know. You know, who knows?

Yeah. Oh, one--just one last thing. You know, we were talking about the ability to pass on price, and clearly there’s been a sequential improvement for Material Handling Europe. Everything else kind of seems good. Except that in Automotive I think you’re getting -- or Auto Custom, you’re getting like 2 to 4% price in the first quarter and it’s back to flat. Was that something where you had to give it back on some pieces of business, or--?

No. No, we didn’t give it back. I think it’s more in the mix. You know, generally in the first quarter, we were probably a little more successful with some of our larger truck customers and so on and some of our water works customers in getting price increases, whereas we were not so successful in the second quarter with other larger customer, primarily automotive.

Yeah. OK. And last question is -- just for now, is on Material Handling North America, you had a nice 8 to 9% volumes probably in the first quarter. We saw that go flattop. Is your thought that that’s mostly timing, that that can kind of rebound given what the overall industrial economy--?

Yes. Generally, it is. We saw more people with capital in the first quarter to spend. And those products, those Material Handling products are all bought with capital rather than expenses in a lot of cases. So, we saw some money out there. And going forward, we may have some opportunities where some people -- again, usually towards the end of the year, have money available to spend and we see a nice pickup.

So you think that [inaudible] might be more in the second half of the second half.

I hope so.

David Leibowitz of Burnham Securities.

A few totally unrelated questions, if I may. First, in discussing the business units you have and acquisitions, are you looking for tack-on acquisitions or are you looking for acquisitions in the same customers, but different products completely?

Well, we’ve strictly been an opportunistic acquirer. We’re not actively seeking any acquisitions to add -- to tack on at this point in time. But, if something comes across and it makes sense to us from our overall long term strategy, then we’ll take a look at it.

and second of all, did I understand or get the gist of the meaning that there are underperforming units in the Company which might be put on the block going forward?

No. I think what we’re trying to say there is that we’re constantly evaluating the units that we have, making sure that going forward we have certain metrics, financial metrics that we hope to put in place so that we can analyze those business to see whether or not they should be added to or left alone or put on the block. But, at this point, we don’t’ have any decision to do that.

And when do you expect to finish the metrics and get the study underway?

Well, the actual strategies by each of the segments is underway. As I said in my opening remarks that we expect over the next several months to have those strategies be put together and for us to sit down and go through them and make sure that we understand where those businesses would like to go in the future. So, you know, I guess the best answer to that is hopefully by the end of the year or in that timeframe.

Excellent. And can you pay down debt at an accelerated rate without having to incur penalty?

Oh, yes. We can pay down whenever we -- whenever we have excess cash, we pay it--.

We pay it down.

And do you have a target number for year end?

No, we don’t. Not at this time. I think we could -- we will end up between -- approximately 265

OK. And the very last question and then I’ll go back into queue. Is there -- beyond pricing, what are the other constrictions or problems that you face that would prevent returning after tax margins to where they used to be?

I don’t think there are, to tell you the truth, David. I think if you look at what we’re doing on costs, we’re making some very nice gains there. We have a lot of thought processes going on with new products that can add value to the businesses. Our single most hitter is the cost of raw materials. And we were talking yesterday, if we were making little small widgets, it would be great. But when you make a 300 pound plastic box that’s made out of 299 pounds of plastic, it really affects our costs. So, I think the answer is that we’re -- we feel comfortable that we have most things in hand, but certainly the material situation is one that we don’t have a lot of control over.

(OPERATOR INSTRUCTIONS.) David Siino of Gabelli & Co.

Couple of housekeeping questions for Greg and one for John. Greg, what was the D&A in the quarter?

$19.0 million.

OK. That’s YTD, right?

Yeah, YTD.

OK.

That’s for the six months.

And for the full year tax rate, should we revert to the 39 or so for this--.

No, I think for the full year, we’re probably looking at 33, 34%.

OK. And that’s a good number to use going forward?

Well, that’s for the full year. That’s what it should work out to be effectively for the full year.

OK. And maybe -- do you have the actual average resin price I the second quarter?

Well, we’re paying around -- the average? Probably about 55.

OK.

Yeah, about 55. That’s an average.

For the second quarter, it’s probably about 51.

OK. And that’ll obviously go up -- likely go up in the third quarter.

Well, if it goes through, yeah. We’re going -- we’re fighting it and we’re very -- we’re not happy with them, obviously, but--. Those are pretty big companies.

Sure. And John, you know, given that natural gas prices may or may not be here to stay, similar to oil, does that have any impact on your review of the businesses? Do you have to maybe rethink the way you thought of the business historically, given what may be a new reality with high resin prices?

Sure, absolutely. You know, most -- 70% of the polyethylene and polypropylene is cracked from natural gas. So, yeah. You know, we -- in fact, talking about it just recently is -- you know, if there is a bottom to the price of resin, is it a new bottom? Just like gasoline, OK? Will we ever see $1.40 gasoline again. Probably not. So, we’re not sure what we’ll see as a bottom for resin, but we’re obviously putting that into our long term strategy process, you know, as we look at the business that are impacted there with resin.

Well, I guess you wouldn’t be -- you haven’t arrived at a price that you feel you can make an adequate return with the existing portfolio? In other words, a price of resin that would--.

Well, I don’t know, Greg. Do you--?

Well, it’s difficult -- you know, in the 50s, it’s difficult for us. You know, there’s--I mean, to achieve higher results. If it dips into the 40s, we’re more comfortable.

I mean, again, we use 375 to 400 million pounds a year. So, a penny a pound means an awful lot to us. As to what level -- like John said, you know, I mean we’re constantly looking, you know, from a strategic standpoint. And in all honesty, this is a very big part of it right now.

Sure. Understood. And last question. That two billion pounds that’s offline right now, what percentage of total capacity is that?

Well, it’s probably close to 10%, I would figure. Somewhere around 20 billion pounds of capacity is ethylene and propylene. You know, this will come and go. They’ll get -- one of these is supposed to come back online tomorrow. But it’s just very strange to me that all these things happened at the same time. It’s kind of like that fire yesterday at a refinery down in Texas and now the price of oil has jumped a dollar today. So, I don’t know. I mean, we’ll just have to -- we’ll just play that one by ear.

David Leibowitz with Burnham Securities.

Yes, turning to the product side of the equation, can you tell us what new products have been introduced thus far this year? And whether you’re satisfied with the level of revenue and, more importantly, the new products to come for the balance of this year and early next year?

Of course, one of the best ones in the Lawn and Garden group, David, is the Picture Pot at Home Depot. It’s been what we think is pretty much a smash hit for Home Depot, so much so that there’s a good size reorder.

We also have some other decorative pots from our Listo organization that are becoming -- been essentially booked as potential big hits, we think, at customers, big box customers. We have the liquid box in the Material Handling side of our business in North America, that handles processed tomato paste and so on. That looks like it’s going to be a good long term hit for us as well.

There’s some products in the Automotive and Custom area that will come on stream in August at the Big Three, and also the transplants that will be good, nice profit margin business. They’re air vent type products, unique to the WEK and the Michigan rubber.

So I think, overall, we’ve got some pretty neat products that are coming out. But again, we’re really pushing the envelope there with our businesses and requiring them to come up with new products, new niche products, where we can command the kind of margins that we think we deserve, based upon our R&D that goes into those products. So, you know, we have some -- still have some things in the hopper to come down the road.

We show no further questions in the queue at this time. I’d like to turn the floor back over to our speakers for any further comments.

If that’s it, ladies and gentlemen, we’ll wrap it up there. We’ll remind you that there is an archive of this on the Myers Industries website, and there will be a replay available as well by phone. You can access those numbers off of the last paragraph on your news release. Thank you for joining us this morning. Have a pleasant afternoon and weekend.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.