Park Aerospace Corp (PKE) 2007 Q4 法說會逐字稿

Good day, everyone, and welcome to the fiscal year-end earnings release call hosted by Park Electrochemical Corporation. Today's conference is being recorded. At this time I would like to turn the call over to Brian Shore. Please go ahead.

Thank you, operator. Hello, everybody. This is Brian Shore. Good morning and welcome. I have with me Jim Kelly, of course, VP of Planning and Taxes, and we're here to do our fourth-quarter year-end conference call.

Why don't we start with Jim Kelly's remarks on the financials? And, just so you know, Jim's introductory remarks are fairly lengthy as usual, but these remarks are already posted on our website. So if you want to go back and check the details, you can do that whenever you want.

Go ahead, Jim.

Thank you, Brian. Good morning, everyone. Certain statements we may make during the course of this discussion which do not relate to historical plans reformation may be deemed to constitute forward-looking statements. Any forward-looking statements are subject to various factors that could cause actual results to differ materially from our expectations. We have set forth in our most recent annual report on Form 10-K for the fiscal year ended February 26, 2006 various factors that could affect future results. Those factors are found in Item 1A and after Item 7 on Form 10-K. Any forward-looking statements we may make are subject to those factors.

In this discussion I will describe results of operations based on non-GAAP financial measures, as well as financial results determined in accordance with GAAP. We believe that the disclosure of non-GAAP operating results as a supplement to GAAP financial results will assist the listener in assessing the Company's performance and prospects.

I would first like to summarize the financial information included in the news release for the fourth quarter and fiscal year ended February 25, 2007. Net sales for the fourth quarter ended February 25, 2007 were $59.8 million compared to net sales of $57 million for the prior fiscal year's fourth quarter. Park sales for the fiscal year ended February 25, 2007 were $257.4 million compared to sales of $222.3 million for the previous fiscal year.

Net earnings for the 2007 fiscal year's fourth quarter before special items were $8.1 million compared to net earnings before special items of $10.9 million for the prior year's fourth quarter. The Company believes it is important to highlight that in evaluating the quarter to quarter net earnings comparisons the income tax provision before special items for the 2007 fiscal year's fourth quarter was $2.4 million compared to an effective -- I'm sorry, compared to an income tax benefit of $.4 million for the prior fiscal year's fourth quarter. Similarly the effective tax rate for the 2007 fiscal year's fourth quarter before special items was 23.1% compared to a tax rate of negative 3.8% for the prior year's fourth quarter.

In the fourth quarter ended February 25, 2007, the Company recorded a tax benefit of approximately $.7 million, relating to the recognition of tax credits resulting from operating losses sustained in prior years in France. In the prior year fourth quarter, the Company recorded a tax charge of approximately $3.1 million in connection with the repatriation of approximately $70 million of the accumulated earnings and profits of the Company's Nelco Products Pte. Limited subsidiary in Singapore, an asset impairment charge of approximately $2.3 million related to the write-off of construction costs for the installation of an advanced high-speed treater at the Company's Neltec Europe SAS facility in Mirebeau, France, and a benefit of $0.2 million relating to the reduction of a portion of a $1.1 million charge for employment termination benefits related to the work force reduction at Neltec Europe in the first quarter of the 2006 fiscal year. The treater, which was installed at Neltec Europe facility, when the business environment in Europe was more suited for such a treater, had been moved to the Company's facility in Singapore. Accordingly, net earnings after special items for the fourth quarter ended February 25, 2007 were $8.8 million compared to net earnings of $5.7 million for last year's fourth quarter.

For the year ended February 25, 2007, Park reported net earnings before special items of $35 million compared to net earnings before special items of $31.6 million for the prior fiscal year. The Company believes it is important to highlight that in evaluating the year-to-year net earnings comparisons the income tax provision before special items for the 2007 fiscal year was $10.5 million compared to an income tax provision of $3.9 million for the prior fiscal year.

Similarly, the effective tax rate for the 2007 fiscal year before special items was 23% compared to a tax rate of 11% for the prior fiscal year.

During the 2007 fiscal year, the Company recorded a tax benefit of approximately $0.7 million relating to the recognition of tax credits in France mentioned above, recorded a pretax charge of $1.3 million in connection with the termination of the life insurance agreement with Jerry Shore, Park's Founder and former Chairman, and recognized .5 million of tax benefit relating to insurance termination charge. During the 2007 fiscal year, the Company also recognized tax benefits of $3.5 million relating to the elimination of certain valuation allowances previously established related to deferred tax assets in the United States and of $1.4 million relating to the elimination of reserves no longer required as a result of the completion of a tax audit.

During the 2006 fiscal year, the Company recorded a $3.1 million earnings repatriation tax charge, the $2.3 million asset impairment charge and the [$.9] million net deployment termination benefits charge mentioned above and recognized a tax benefit of $1.5 million relating to the elimination of certain valuation allowances previously established relating to deferred tax assets in the United States.

Accordingly, net earnings were $39.8 million for the year ended February 25, 2007 compared to net earnings of $26.9 million for the fiscal year ended February 26, 2006. During the current fiscal year, the Company recorded diluted earnings per share before special items of $0.40 for the fourth quarter ended February 25, 2007 compared to $0.54 for the prior year's fourth quarter. Diluted earnings per share after special items were $0.44 for the quarter ended February 25, 2007 compared to $0.28 for the quarter ended February 26, 2006. Diluted earnings per share before special items were $1.72 for the year ended February 25, 2007 compared to $1.57 for the year ended February 26, 2006. After special items, diluted earnings per share were $0.96 for the year ended February 25, 2007 compared to $1.33 for the year ended February 26, 2006. The Company believes it is important in evaluating the quarter to quarter and year to year earnings per share comparisons to consider the significant differences in income tax provisions and effective tax rates for the respective periods.

Now I would like to briefly review some of the other significant items in our fourth quarter and fiscal year P&L. Comparing the 2007 fiscal year's fourth-quarter sales to the prior year's fourth-quarter sales, Park's North American sales increased 9%, European sales decreased 19% and Asian sales increased 11%. For the fiscal 2007 year, Park's North American sales increased 13%, European sales increased 1% and Asian sales increased 29% compared to the prior year. For the 2007 fiscal year, North American sales comprised 55% of total sales, European sales were 13% of total sales and Asian sales were 32% of total sales. For the 2006 fiscal year, North American sales comprised 56% of total sales, European sales were 15% of total sales and Asian sales were 29% of total sales. Worldwide sales of Park's high-temperature printed circuit materials comprised 97% of total laminate and prepreg materials sales for the fourth quarter of fiscal 2007 compared to 96% for the fourth quarter of the 2006 fiscal year. For the fiscal year ended February 25, 2007, worldwide sales of high-temperature printed circuit materials comprised 97% of total laminate and prepreg materials sales compared to 96% for the fiscal year ended February 26, 2006. Worldwide sales of Park's high-performance non FR-4 printed circuit materials, which are a subset of high-temperature printed circuit materials, were 45% of total laminate and prepreg materials sales for the 2007 year's fourth quarter, up from 41% in the fourth quarter of the prior year.

For the fiscal year ended February 25, 2007, worldwide sales of high-performance non FR-4 printed circuit materials were 42% of total laminate and prepreg materials sales compared to 39% for the fiscal year ended February 26, 2006. Advanced composite materials sales comprised 9% of the Company's total sales in fiscal 2007 fourth quarter and 8% for the year compared to 7% for the prior year's fourth quarter and 8% for the prior year. The gross profit for the fourth quarter of fiscal year 2007 was 24.2% versus 27.5% for the prior year's comparable period. This fourth-quarter year-over-year decrease in gross profit was attributable to among other things higher copper foil costs compared to the prior year's fourth quarter, offset in part by increased sales of higher margin high-performance products in the 2007 fourth quarter.

For the 2007 year, the gross profit was 24.9% compared to 24.6% for the 2006 year. The year-over-year improvement in gross profit was due to the higher sales volume in the 2007 year and increased sales of higher margin high-performance products, partially offset by the higher cost of copper foil. Selling, general and administrative expenses as a percentage of net sales was 10.6% for the 2007 year's fourth quarter and 10.4% for the 2007 year compared to 11.9% and 11.3% for the 2006 year's comparable period. The decrease in expenses as a percentage of net sales was largely due to the higher level of sales volumes achieved in the current year. Included in SG&A costs for the 2007 year is $1.3 million of stock option expense which the Company recorded pursuant to statement of Financial Accounting Standards 123R.

As a result, pretax operating profit before special items was 17.6% of net sales for the 2007 year's fourth quarter compared to 18.5% for the prior year's fourth quarter. For the 2007 fiscal year, pretax operating profit before special items was 17.7% of net sales compared to 16% for the prior fiscal year. The effective tax rate was 9.9% for the 2007 year compared to an effective tax rate of 17% for the prior year. Included in the 2007 effective tax rate is the benefit relating to the recognition of tax credit in France, a benefit in connection with the termination of a life insurance arrangement, a benefit related to the elimination of certain valuation allowances previously established related to deferred tax assets in the United States and a benefit relating to the elimination of reserves no longer required as a result of the completion of a tax audit.

Moving to the balance sheet, Park's working capital at February 25, 2007 at the end of the 2007 fiscal year was $233.8 million compared to $214.9 million at February 26, 2006, the end of the 2006 fiscal year. Cash and temporary investments were $208.8 million at the end of the 2007 year compared to $199.7 million at the end of the prior fiscal year. As we have in the past, we invest available funds on a conservative basis in short-term fixed-income securities and money market funds.

Stockholders equity was $264.2 million at February 25, 2007 compared to $245.4 million at the end of the prior fiscal year. This increase in stockholders equity was the result of the Company's net earnings during the 2007 fiscal year, largely offset by cash dividends paid, including the special dividend in August 2006. Finally, stockholders equity per share at February 25, 2007 was $13.08 per share compared to $12.20 per share at the end of the prior fiscal year.

Okay. Thanks a lot. Nice job. This is Brian again, and let me offer a few more comments to give a little perspective on maybe the financial results and then some comments on just some general updates and news items for the Company. Jim alluded to the difference in tax provisions Q4 versus Q4 and year-over-year which are significant. I want to remind you what was going on here.

In the fourth quarter of '06, we had essentially a catchup situation which resulted in our tax provision for that quarter being actually a negative tax provision. If you remember what happened was, just at the end of the quarter, we had received the approval from the government of Singapore relating to a lower -- an advantaged tax rate, which we were not accruing at that rate until we received the approval. But that rate was granted retroactive at essentially the beginning of the second quarter.

So we had a catchup adjustment, and that is not a special item. So when Jim talks about the special items, that is not a special item. But, of course, it had a major impact upon the tax provisioning rate in the fourth quarter of '06, and it ended up being a negative tax provision, a negative tax rate.

Year-over-year there also was a pretty big difference in the tax provision and rate, meaning '06 period to '07, and the reason for that is that in '06 we were still benefiting from many NOLs which we still had in the US from I guess the early -- what is it, 2000 -- probably 2002, 2003 years where the US operations were losing money. Now all those NOLs were used up in the '06 fiscal year. In the '07 fiscal year, we are a full tax payer. So again, quite a big difference in the tax provision and the rates for the fiscal years of '06 and '07. I think you need to just take note of that when you're doing the quarter to quarter year-over-year analysis.

Just don't miss that because those items are not listed as special items. But nevertheless, they have a huge impact, of course, in our tax provisions.

Let's see, if you want to do any analytical work, Jim and I, of course, do. What you will find is, if you look at Q4 of '07 versus Q4 of '06 and then you look at Q4 of '07 compared to Q3 of '07 and you want to look at the differences in the bottom line, they are pretty much completely explainable by a few things. One is difference in volume. The other one is the copper impact, the impact with copper foil. And the third one would be the mix. Obviously the greater portion of high-performance material, the better off we will be, and Jim covered the mix issues.

As of now, as of the first quarter anyway, we are basically caught up with this copper situation, the copper foil situation that we have been talking about I think every quarter for the last four quarters. Remember what we have been saying is that we are always behind a little bit, playing catchup because we will receive increase in our costs, and we don't deal with that immediately. We take two or three months before we will deal with it. We want to see if it is going to be for real. We want it to settle in. And we also try to be very considerate of our customers. We don't just hit customers with increases without discussing the increase with them in advance and giving them time to make adjustments.

We're pretty much caught up. So at this point the copper impact is pretty much neutralized, and that would be for the first quarter. And, of course, we don't know what will happen in the future. The copper situation, copper foil situation is very unstable. I don't know if you people follow the LME or [Pullmax], but if you do, you will see what we're talking about. We're only talking about where we are now. We're not really speculating about what will happen in the future, but I wanted you to be aware that it took about a whole year but we're basically caught up in terms of the P&L impact from the copper situation.

Okay. A couple of other comments. I just wanted to give you another percentage. In the fiscal year '07, about 53% of our sales were for FY '04 electronic laminate and in prepreg product. That is more the commodity end of the product line, and the 47% of our sales would have been in something other than that. The 40% number is a good number. The 53% number is not the so good number. The good number keeps going up, and the not so good number keeps going down. The 47% would be comprised of high-performance electronic materials, as well as advanced composite materials for structures.

And now for a couple of updates. Most of these things we have talked about before, and there are a couple of new items. First of all, we have a plant that we are building in Singapore. We call it our Pioneer Plant. It happens to be on Pioneer Road in the area [Jarong] of Singapore. This plant will be completed by the end of the year if things continued to go on schedule, which they are on schedule now, and that plant is to make advanced composite prepregs for aircraft structures.

I think I explained previously that we have a separate plant primarily because the operations, the electronic operations and the advanced composite prepreg operations need to be separated because of the concern about contamination of materials. But nevertheless, the advanced composite Pioneer Plant will be run as part as part of Nelco Singapore business unit. We also are installing PTFE manufacturing capacity in Singapore. That installation should be complete by the end of the fiscal year. The reason we are doing that is because a lot of the RF/microwave wireless market already has moved to Asia, India, China, and that trend continues. We have manufacturing operations in the US and Europe but not in Asia. We really need to be in Asia where the market is, so we feel that is the right move.

Just to back up, as far as the Pioneer Plant is concerned, that is more of a, let's call, it strategic -- I hate to use the word visionary because that sounds much too fancy for us -- but we're really trying to get ahead of the game with the Planner Plant. We're trying to get ahead of the market. We do anticipate a large growth of the Aerospace industry in Asia, but we want to be the first in. We want to be in on the ground floor, and that is why we're doing that. There is not a large market for Aerospace prepregs at this time in Asia, and we are okay with that.

Actually the strategy is almost identical to the strategy we employed when we built our first plant in Singapore in the 1980s. There was not very much business in Asia at the time for that kind of material, but it turned out to be a very good decision with the benefit of hindsight. So we are employing similar strategy. We want to be ahead of the game rather than play catchup.

Okay. We also would like to tell you that we are going to be building a major new factory in the middle of the country, most likely in Kansas. We are well down the road in site selection. We will probably complete that process within the next, let's say, month. Maybe by the end of May we should complete the process. We have had many, many, many man days and women days in Kansas evaluating the different alternatives. This plant will be to build composite prepregs through develop work and manufacturing work for composite prepregs for aircraft structures, particularly for the general aviation industry, which is very, very significant in Kansas. You know something about the general aviation industry.

As a matter of fact, our strategy for our advanced composite prepreg products is to focus on the general aviation industry, and please don't think of the general aviation industry as a small industry. That is quite a large industry with very -- quite a few very large customers and OEMs that make these aircraft. And that is our target market.

You probably want to know about how we're doing, and I can certainly tell you about that. The Q4 weakness continued from I guess the point where we did our Q3 conference call. I think that was probably toward the end of December. At that point we said that our bookings and our business levels were off in the -- I think we said during the first few weeks of December, maybe the last couple of weeks of November, off on the levels that have prevailed during the third quarter, which would have been the months of September, October, November, and that situation continued through the fourth quarter. That weakness we described -- and we are talking about the weakness in the electronics markets, the markets for our electronic product -- that continued through the fourth quarter, and it basically continues through today. There really has not been any recovery from the point -- you know the point of our last discussion, which would have been toward the end of December.

So that is the best we can do. We have about half the first quarter in the books already, and no recovery so far. And you know, of course, people always speculate about what is going to happen in the future. I don't think it would be very, very useful for us to spend a lot of time doing that. I'm sure you can speak to some more people than us about what might happen in the future. But we can talk to you with a high degree of confidence about what has happened so far in the quarter because that we do know. We know -- I think you all know we do weekly roll-ups of our P&L every week.

Let's see, as far as you probably also want to know about what we expect for our tax provision going into next year. Jim and I are sorry to tell you this, but we really don't have very intelligent guidance for you. I think it came in at about 23% of the rate before the special items for last year, and we are not in a position to guide you above or below that at this point. The tax provision has been I think one of the most difficult things for us to kind of really anticipate and predict as we go forward. There are so many variables which impact our tax provision, including the fact that we are somewhat of an international company, and a dollar earned in one jurisdiction does not have the same tax impact as a dollar earned in another jurisdiction, of course.

And I think I will leave it at that in terms of introductory remarks from Jim and from Brian. So, operator, can we now go to the questions?

(OPERATOR INSTRUCTIONS). Alvin Hoffman.

Brian, this plant you are building in the United States for composite material for general aviation, what state is it in?

It is called Kansas. That is kind of in between Oklahoma and Iowa.

Sure. Yes, there is a lot of small plane builders there.

Yes, you are right. I was just being facetious. But Wichita is basically the center of the universe at least today it is for general aviation.

That is the second question. Was it built in the Wichita area?

The answer is yes when you define area as, let's say, within about an hour and a half from Wichita. We're considering locations in Wichita and locations in surrounding towns.

Okay. When you have not started a building, you might even buy a building.

Well, we are pretty far down the road in our investigation. We have not found any suitable buildings to buy, so the chances are we're going to build a plant from the ground up. I probably should tell you it is going to be -- our guess is about 15 months to complete. But the long leadtime equipment has already been ordered. The whole deal was probably about $15 million, but that is really, really a rough number, about $15 million investment. And maybe about 15 months to complete from the point at which we complete the site selection, which I think is maybe a month down the road.

Complete meaning startup?

Well, at that point, we should be -- yes, we should be running the machines and making samples. Now when you supply the aircraft market, you don't just start making stuff for them. You have to (inaudible) qualified. So the first thing we would do is make samples to qualify the plant. Even though we may have prior qualifications from other plants, we still have to qualify the new plant.

Good. I may live long enough to see this.

Hopefully we both will.

I hope so. I'm done.

(OPERATOR INSTRUCTIONS). Jiwon Lee.

A few questions for you, Brian. The mix shift during the quarter, that is a welcome change and the percentage of non FR-4's continue to sort of move up. Drilling into that a little bit, which sort of end market area did you see sort of a resilience if you will, and how is that particular end market is trending?

Yes, I know you often are very interested in the end markets. But I think it really is any kind of high-end electronics are going to be using the non FR-4's, so that certainly would be telecom, datacom, high-end computing, military. And within those same markets, though, there also will be more, let's say, commodity-oriented product.

So I don't believe it is anyone market. I think it is all of -- it is the high-end aspect of all of the electronic markets that we supply into. So, a company like us, we are not going to be making any material at all for cellphones or for PC computers or anything like that. I mean even our so-called commodity product would not be that much of a commodity.

Right. Tagging along to that comment, could you share with us your top five, 10 or 20 customers the percentage of total sales, and especially for the top five who they were?

Sure. Jim could do that I think.

Yes. Well, in the fourth quarter, the top five were Sanmina, TTM/Tyco, Pegasus, Multek, and a company called [VIS] we have talked about -- I am sorry, [Tabgo], which we have talked about before. They are sizable distributor for us in the US.

In terms of 10% customers, we're talking Sanmina and TTM. Our top -- Sanmina is around 17%. TTM is around 11%. Top 10 customers were 73% of sales. The top 20 were 82%, and that is in the fourth quarter.

And then the top five in terms of their total percentage?

Top five in terms of total percent is 52%.

Great. Moving onto your margin projections and the copper foil impact sort of disappearing from the P&L. So how should we look at massaging your mix shift, as well as this copper foil impact going away in terms of your product margin?

Well, there was not much of an impact left in the fourth quarter. There was a little bit of a lag effect but not very much. So I don't think you will see a lot of difference in the first quarter, second quarter unless there's a change in the copper foil situation, which there may be. But assuming there is no further change, you probably don't want to look at a lot of additional margin going forward as compared to the fourth quarter. Maybe a few hundred thousand dollars. I mean it really was that limited to maybe $400,000 or $500,000 left as a negative impact in Q4.

And then the other question is the mix question. You know that seems to be a progression, maybe an evolutionary process. And it just kind of happens based upon how we run our business and what we focus on. But the margin difference between the high-performance product and the FR-4 product is considerable. And, as I think we commented previously, sometimes it is almost like we are looking at two different businesses, two different business models. But the FR-4, which is the type of thing where on a good day you are paying your bills and the light bills and then the money the Company makes in terms of the electronic product line, would be with a high-performance, more high margin product line.

Is there some indication that you might be gaining some shares with this non FR-4 product?

I think it has kind of taken on a life of its own. We have products -- I think I have mentioned that -13 is one of our more popular non FR-4 products in the last year, and the sales of -13 were about $7.0 million, and that continues to grow.

And I think the reason is that it has been around for a very, very, very long time. It usually goes on fairly sophisticated programs, infrastructure programs where the risk -- where the OEM is going to be risk adverse. The risk of going to an unknown and unproved material is just not worth it because there is too much at stake. These are not -- we're talking about infrastructure boxing that could be worth several million dollars out in the field somewhere where the OEM just does not want to take the risk with the unknown. And it evens surprises us how often we see -13 being put on new programs because it is not a new product. It has been out there about 10 years.

Especially the -13, and let's talk a little bit more about the first quarter as sort of a booking trend. You mentioned it is fairly similar to where you were in the fourth quarter. However, you probably have a little more visibility given that we're way into the quarter. Is that sort of a little bit better, just about the same? How would you see that? Sort of especially in relation to your hit product, -13?

I think it is about the same. I mean if you look at -- Jim and I spent a couple of hours yesterday just kind of updating ourselves. We look at the numbers typically everyday and then weekly, of course, as well. But we wanted to do a little bit of a [deck] ourselves, and it is really very similar. I think that is probably the best way to describe it.

So going into the first quarter, Brian, should we be expecting sort of a similar level of quarterly sales? I mean the last thing that I'm observing is things are slightly slower; however, it's getting a little bit better or no?

I did not understand the last part of your question.

Quarterly sales for your first quarter of FY '08, should we be sort of expecting similar run-rate as to fourth quarter?

What we can say is so far that would be the case, yes.

Okay.

You know, we always have trouble with forecasts, particularly because we still have a large portion of our sales going into the electronics industry, which we said this for years, but it is true, of course. We know this very well, the visibility is quite poor. When the market turned down I guess in December, we did not really know that was coming. And we know everything. I mean we know everybody. I mean more people -- what is the country thing about, country song that I forgot more people than somebody else will ever know, and we still didn't really see that coming. It is very, very difficult for us to predict. The visibility is poor. So for us to say we have confidence as to what will happen in the second half of the first quarter, it would not be based upon any history that we would have that confidence.

And final question for Jim. Your interest income sort of jumped nicely quarter over quarter. Was there any change in a way you invest your excess cash?

No, it is just we are investing in the same types of things. We have been getting as all the things fall off, we're getting a little bit of a better jump on interest rates at this point. But again, the overwhelming majority of what we invest in is short-term.

Shawn Hannon.

So if I can just kind of briefly touch on the copper topic. Have there been any changes now that we're kind of reaching what seems to be maybe more of a stabilized scenario today, but I think that copper may have been increasing again recently. Is there something that perhaps Park has done in reconstructing how it enters into contracts with its customers, or is there a different line of thinking in order to be more proactive if there were more movements going forward?

No, we have not done anything differently. We're very proactive with our suppliers. I think we said this, and we feel we have very good relations with our suppliers. I think we have earned that kind of relationship over quite a few years. Frankly, when the tables are turned, how do we treat them, and I think those things are remembered to be honest with you.

But no, we don't have any kind of acute or clever mechanism to deal with this. I just want to comment, you mentioned stability. We're talking copper, big copper suppliers. They are mostly Japanese people or Japanese companies I should say. Really at least weekly and maybe more often we don't have a sense of stability at all. There's a lot going on, a lot being discussed in the background. There is no change that we are prepared or we have to talk about now. But we don't have a sense of stability -- at least I don't -- based upon everything I know that is being discussed on an almost day to day basis, certainly on a weekly basis. And, like I said, I don't have anything to tell you about anything we know of, but certainly it is not the type of thing where we will talk next year at all.

Okay, I'm sorry. Maybe I came across the wrong way. But I guess more perhaps that we had trended upwards very rapidly in '06, and at least now we are slightly leveling off, but there still are some copper increases on the horizon?

Well, I think -- sorry, maybe I did not understand either -- but we were referring to more like the commodity price of the LME and the Pullmex, which anybody can look up on the Internet any time they want. That has been bouncing around.

I think you're absolutely right. There was a real steep spike up a year ago or so, and then the copper foil prices, of course, reflected that. We don't see that kind of steep spike or decline at this point, but it is sure bouncing around a lot though. It could rattle you a little bit if you watch it everyday. It could be a little disconcerting. But I was really referring more to the commodity prices. And, of course, those do end up being translated into copper foil prices as well.

Okay. And then separately, so there are two projects that you really have ongoing right now as it is focused on either aero or the aircraft or aviation I guess in general terms. Is there a way to characterize any sort of product differences or focus for your investments in Kansas versus Singapore?

The difference between the two?

Yes.

No, the focus would be really the same. And the strategy is that we want to really have the same kind of global presence with that product line that we have had for many, many years with the electronics product line. The market in Asia is still developing, but what we want to do is to be able to go to the OEMs and get qualified with the OEMs in the US, and as the OEMs start to source more in Asia or maybe even start to manufacture themselves in Asia, we want to be able to follow the program and support the program in Asia without having to get involved in international supply logistics where their supplier or they, if they themselves are manufacturing in Asia, have to source materials from across the ocean.

That is helpful. Thank you.

(OPERATOR INSTRUCTIONS). Mr. Shore, there are no questions at this time. I will turn the conference back to you for any closing remarks.

Okay. Thank you, operator, and thank you, everybody, for listening. Thank you for your questions. As always, it is very nice to check in with our investors, and we will be talking to you in the not too distant future. I guess within a couple of months we will be talking about our first-quarter results.

Have a good day, everybody, and we will be here the rest of the day if you need us. Take care. Good-bye.

That concludes today's teleconference. Thank you for your participation.