Park Ohio Holdings Corp (PKOH) 2009 Q4 法說會逐字稿

Good morning and welcome to the 2009 year end results conference call. At this time, all participants are in a listen only mode. After the presentation, the Company will conduct a question and answer session. Today's conference is also being recorded. If you have any objections, you may disconnect at this time.

Before the conference call begins, please remember that the Company will be discussing some issues that are historical and some issues that are forward-looking. When the Company speaks about future results or events, there are a variety of factors that may materially change their actual results from those projected. A list of relevant factors may be found in the earnings press release as well as in the Company's 2009 10-K filed with the SEC on March 16, 2009. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Additionally, the Company may discuss EBIDTA. EBIDTA is not a measure of performance under generally accepted accounting principles and is considered a non-GAAP financial measure as defined by the SEC. The Company may present EBIDTA because management believes that EBIDTA could be used to investors as an indication of their ability to incur and service debt and because EBIDTA is a measure used under their credit facility to determine whether they may incur additional debt under such facility. For reconciliation from income before income taxes from EBIDTA, please refer to the Company's current report on Form 8-K furnished to the SEC on March 8, 2010.

Now, the meeting will be turned over to Mr. Edward Crawford, Chairman and Chief Executive Officer. Gentlemen, you may begin.

Welcome, ladies and gentlemen. We would like to review the Park-Ohio 2009 financial activities. We would like to begin this morning with comments from the president of the Company, Matthew Crawford. Matt. Thank you very much. We are pleased to report a substantially improved fourth quarter results. Also announce the amendment of our credit agreement extending it through June 2013.

Fourth quarter total revenue was down 25% from a year ago, perhaps more informatively is that sequential revenue expanded more than 11% from the third quarter as all three business segments enjoyed a slightly better business environment. EBIDTA adjusted for both one-time charges and excluding gains associated with the purchase of the Company's senior subordinated debt was about $8.5 million down from $9.8 million in the fourth quarter of 2008 but up significantly from the third quarter results of about $3 million. Adjusted EPS was $0.17 versus $0.16 in the prior year or a $0.29 loss during the third quarter.

Looking at supply technologies, revenue was down 29% year-over-year but adjusted for revenue relating to Navistar which is a customer we chose to exit from at the end of 2008, revenue dropped to about 14%. Comparison to the third quarter, sales actually improved by over 4% with end market showing strength in truck, consumer electronics, agriculture and construction equipment and auto. Adjusted EBIDTA was up significantly from $1.2 million last year to $4.8 million, or a margin of 5.6%. We continue to expect improved performance as incremental revenue should have a leveraging effect on the bottom line.

Aluminum products, although revenue was largely flat from the fourth quarter 2008 , sales were up 13% from the third quarter as we enjoyed strong overall demand as auto companies began to restock their inventories. We expect this strength to largely continue into the beginning of 2010, particularly as we launch new additional business. EBIDTA for the quarter was approximately $1.6 million which is up strongly from last year's performance of a loss of $1.5 million or an adjusted third quarter performance of just above break even. We expect continued stable profit performance in this segment as we move deeper into 2010.

Manufactured products, revenue was down sharply from last year to $66 million but as we forecast and discussed in the third quarter call, we began to see improved demand as compared to the third quarter trough of $54.5 million. We believe this segment will continue to show signs of improvement but it will take some time to get back to the 2008 -- excuse me, 2007 and 2008 levels. EBIDT was also down sharply from last year to about $6 million but, as expected, showed considerable improvement from the third quarter results of $3.4 million. We expect this business to continue to show some volatility as the lumpy nature of global new equipment orders fight to improve but expect the trend to be positive going forward.

Turning to the balance sheet looking at net debt, net debt was down again in the fourth quarter by $14.7 million which brought our total for the year to almost $46 million. CapEx for the year came in as expected at about $7 million.

In closing we are happy to report that we completed three important goals during 2009. First, we addressed significant declines in revenue by lowering our break even expenses throughout the business. We expected as business conditions improve, our results will demonstrate that we have emerged a better business. Second, we have continued to support and invest in our key business strategies during this downturn and expect to benefit in the future as some of our competition struggles and, third, we amended our senior credit facility to extend the maturity for more than three years and provide us the flexibility to seize opportunities for growth and improvement. For those of you who follow the Company closely, you know that we have been monitoring the credit markets closely and felt as though this was the right time to extend that agreement on the appropriate terms. Having completed these goals, we are guardedly optimistic about 2010 and expect earnings per share to be between $0.75 and $0.85 for this year. Thank you very much. Thanks, Matt. I would like Jeff Rutherford, the CFO to give additional color on some of the operating results. Jeff.

Yes, I would like to spend a couple minutes talking about the charges, the impairment charges. As disclosed, they were approximately $7 million that we took in the fourth quarter. $4 million of that will be within the supply technology segment, approximately $1.8 million of that will come through cost of goods sold. Those are two -- what we did is with two small operating units within Spy Technologies we adjusted their assets to a fair market value based upon negative cash flow experience at those business units. The same can be said of the manufacturer product segment, small operating unit within that group with negative cash flow. We adjusted their fixed assets to fair market value bringing that total adjustment to $7 million. As Matt indicated, we also had gain on purchase of bonds of approximately $1.2 million in the fourth quarter bringing our total for the year for bond purchases to approximately $6.3 million.

Additionally, during the fourth quarter we did sell our bonds that were held at the holding company level to a foreign subsidiary of industries. So all of our bonds now are approximately $26 million bonds are held at a foreign subsidiary of industries.

From a tax perspective, our tax provision continues to be hard to explain. We have a combination of domestic tax laws, foreign taxable income where we do pay taxes. We do have a full reserve on our net tax debit. In this year we have a combination of domestic loss and benefit of foreign taxable income and payments on foreign taxes and adjustment as a valuation reserve. So what we have done on the pro forma presentation within the release of earnings without the charges that I mentioned earlier is we look at it on a pro forma basis using an approximately 39% effective tax rate on earnings and because the permanent items that adjust down on losses to approximately 36%.

Thanks, Jeff. I want to point out a few things that I think are important. Obviously, 2009 was a dramatic year filled with lots of challenges. When I look at the overall picture, I'm pleased with two outcomes. Number 1, we have been able to reduce the bank debt and bond debt during that period by $38.6 million. That was quite a challenge. Our goal going in was to continue to reduce debt in the Company. Two, during these challenges try to set the Company up for the future as we did back in 2001, 2002, and 2003 when we had the last compression in sales of size and then roll off of $171 million of EBIDTA. This is a better Company than we had going into the crisis. I think we have been able to get through it, restructure again our three different business silos and again do this while paying down debt, meeting the challenges and holding together the core employees or the stakeholders in the Company. Getting through a crisis and being left with a weak team is not the goal. Getting through the crisis and having a better team going forward with a better profile and our silos each under control. I feel we are exactly where we were in 2004 when we came out of the last crisis. We are just a better Company and we owe that to the productivity and the attitude at Park-Ohio meeting challenges.

As far as the companies, at best, I can say they are simmering. We are all interested in more revenue and revenue to Park-Ohio will result in dramatic increases in the area of profits and cash flow and paying down debt which is still the primary goal of the Company. Supply tech, again, we haven't seen any great push in the bond yet but we are prepared. We have made a lot of changes. Reduced our warehouse, reduced our head count. We don't think we will go back to the original head count and we will still be able to accomplish -- we haven't lost customers. They are still there. They still need fasteners. They just need orders to build things to need fasteners. We are comfortable with supply tech. It is a better, leaner company going forward.

General Aluminum, we all know it was a very unusual year for the auto business. Hopefully when you look into the details, this Company, General Aluminum, had a negative EBIDTA in the first quarter of $1.5 million and ended up with a positive EBIDTA for the year of $6 million. That just points out the things that can happen if you are prepared to restructure and get prepared for the future and clearly General Aluminum is prepared for the future and we are looking forward to turning in some positive results in the next upcoming three or four years and this Company has been structured not around 17 million cars, it has been structured around 10 or 12 million. We think we are ready to go there.

As far as the industrial equipment business and our manufactured products, again, that will flow with the economy. We like where we are in all three business silos. I can't point out any one that is going to do any better than the other. We know one thing, we are in a position as we have never been before to capitalize on revenues. The goal still is to be able to continue to pay down bank debt. We have the platforms we need. I surely hopefully the way we have responded to the CapEx programs would indicate that we are pretty serious about that and why we are serious is because we have the platforms. We threw a lot of money into our platforms, particularly General Aluminum and CapEx and 6, 7 and 8 as far as capital expenditures. We have it. We've got the platform, the aluminum company and probably close to double in volume year-over-year and still not have to make great investment.

So it wasn't a pretty picture in 2009. We took full advantage of the opportunities to restructure and build a better team going forward. We paid down bank debt and we are now ready for the future. I will like now to open up the phones for questions.

Your first question from the line of Richard Paget with Morgan Joseph.

Good morning, guys. Just to kind of summarize some of Matt's comments and, Ed, maybe yours were a little more cautionary. If I take them together, it almost sounds like you are calling a bottom here and that things have got a bit better and sequentially it is not just one quarter there was restocking and things were good. But first quarter so far seems to be trending positively and you expect that to continue throughout the rest of the year. Is that a safe assessment?

Richard, I'll jump in. It is Matt. Excuse my voice, by the way. Yes. I think that's a fair assessment. I think that in a couple of the businesses we called the trough sort of in the third quarter if you recall, particularly in our manufactured products segment. We spent some money in the third quarter preparing for what we felt would be a better fourth quarter. I think it is a fair comment that we think we have seen the worst of the current business cycle. The fourth quarter sort of was able to bear that out with increased revenue in all three segments and candidly as we go into the new year, we are continuing to see modest improvements in the business, in our supply tech business. Our average daily sales through the beginning of the year here are continuing to set modest improvements. I stress the word modest. As I mentioned in my comments I think many of our businesses 2007 and 2008 is not around the corner in terms of revenue but it is certainly nice to see trend lines that continue to improve.

I know the comps year-over-year should be a lot easier. Sequentially, are these adjusted margins kind of -- and I know there is probably some variability to manufactured products at least in supply tech and aluminum, does that kind of set the bar now going forward as long as volumes keep up we should see leverage and kind of incrementally higher margins?

Before we talk about higher, let's talk about stability. I think that there is some stability showing particularly in supply tech and in captive products. I think the manufactured product segment is a little more challenging. I mentioned in my comments that business is a little lumpy as associated with new equipment orders and candidly the part of the business that we rely on to see sustained margin improvement is in the aftermarket and that has continued to come more slowly than we expected. I'm less comfortable making that statement as it relates to the manufactured products business than I am with the other two. Richard, I'm not being too cautious here but what we want to make sure what we respond to is what I would call a real move in the demand. We don't really want to bid our balance sheet or our inventory dollars. Everyone gets excited. You talk for a period of time and take the fourth quarter and you get the little murmur and the first quarter kind of is different. Each quarter is different and we don't want to be going out and buying inventories and building inventories to prepare for our customers who think they are this the process of an upturn. We are going to play this very, very close, particularly in the first and second quarters. If we see the wind at our back then of course we will respond but we really don't want to get ahead of -- we have got this Company where we want it. It is going to have a better year, year-over-year, clearly as Matt has indicated but there is up side to that, but what is most important is the fact that we do not get ahead of ourselves here. We will play it tight. Concentrate on the cash flow, paying down the bank debt and when given the opportunity, you will see some pretty exciting results of revenue going through this Company at less cost.

Okay. And then with aluminum products, any changes -- can you give us an update on the competitive landscape? I think -- are there some people starting, some of the PE guys thinking well, maybe we should put some money in? Anything happening there recently?

I'm hoping that the private equity groups got burned up so badly in the last, when things were good and entered the market, we have a couple -- one really qualified person in the business which is what I call a financial investor. Other than that, we are still pretty well skinnied down from the standpoint particularly of the people that can produce the critical safety parts which we are anchored in. We think we are in a great position with our costs and our investments in buying those assets at discounts. We are prepared for this but it is -- I'm seeing in the last ten-days the first new RFQs coming out in the three domestic manufacturers where they are going ahead. Particularly Chrysler looks solid -- their decision on exactly what platforms -- I went to a briefing in Detroit by Chrysler.

I thought it was aspiring how they really put it on the blackboard for us, a private meeting talking about where they are going, what is their cars, what needs they will need for knuckles and so forth. It felt like a real partnership meeting and maybe we have all learned lessons but we are really starting to see some new business coming out. We have done very well in the take-over game of taking over business from people who were in trouble or getting in trouble. Right now we are ready and concentrating on new platforms going forward because that's where we really, really can shine. We want to be competitive and we have the quality and the service. When the new knuckles come out and the new programs come out and they are three or four or five years in nature, they are around cars that have been skinnied down by these companies so they are all going to have pretty good volume. Get on the new cars with new knuckles and be competitive and it could be fun for a change.

Okay. Great. Jeff, I appreciate the granularity of the impact of the charges in the press release. Have you guys, assuming we don't get into a double dip, you have taken everything you think is necessary at this point. We shouldn't see any more charges going forward? Most of the restructuring has been done?

There are no guarantees but, yes, we have taken every opportunity we can relative to impairment.

Okay. And then with guidance, the 75 to 85, can you let us know about maybe a couple of the non-operating assumptions like tax rate and maybe with the new credit agreement what is the interest rate so we can get a handle on interest expense?

Yes, well, let's talk about interest. On bank debt, we will experience generally a 225 basis point increase in the revolver debt for the period time. Through the end of September that number will actually be 250 basis points. What we are looking from a modeling perspective is for interest expense to be flat in 2010 compared to 2009. The reason we say that obviously is through the reduction and the bond debt and additionally the continued decline in the revolver debt. We will have, obviously, when we file the agreement there will be a significant amount more detail relative to what the bank debt components are.

Okay.

As far as tax rate, it is difficult to model our taxes because of the issues that I spoke of earlier. What we are modeling -- we are going to get some benefit of the reversal of the valuation allowance as we recognize provision for US tax. What we are modeling as a benefit for GAAP purposes is approximately 31% benefit in 2010 but, once again, I would stress that our effective tax rate should be, on earnings, should be a higher rate, 39%. The Delta is strictly due to the anomalies of the reversal of that valuation.

Right. But just to be clear, that 75 to 85 is predicated on the 31% or --?

Yes.

Thanks. I will get back in queue.

Our next question comes from the line of Matt Vittorioso with Barclays Capital.

Good morning. Good quarter, guys. Was hoping, Jeff, maybe you could talk about other amendments to the credit agreement, specifically around any kind of maintenance covenants that you guys have to comply with going forward.

From a financial covenant perspective, it is the same as the previous agreement.

The same, was it 1.1 times fixed charge coverage ratio or 1.0?

Right. There are some changes -- we must confess there are some changes in EBIDTA definition. Perspectively, we won't see bond gains in EBIDTA going forward. That's one of the major changes. As far as other components, we can run through a couple of them very quickly. There is going to be specifically term debt. Two terms, term A that is secured with real estate and a term B that is unsecured. The numbers are going to be term A 28, term B 12. The term A will amortize over a ten-year period and balloon at maturity, the B over a two-year period. The total commitment will be reduced, I probably should have started there, from 270 to 210. So the revolver component really adjusts from 220 to 170. That's based upon our projections of current needs and since our borrowings are down it is certainly sufficient based upon our current modeling over the life of this agreement.

Okay. Correct me if I'm wrong, the 270 you had you weren't able to borrow all of that anyway. Maybe you can tell us what your current availability on the revolver is so we can get a better picture of your liquidity today.

The current availability is going to be, after the agreement -- well, now that the agreement is done we are obviously going to pay some fees on this. We will end up in the mid-30s, about where we were at year end.

Okay. So no real change in liquidity. Do you have in front of you where that fixed charge coverage ratio was or where it will be based on the new definition of EBIDTA?

It will not change history. So the time covenant we will have sufficient EBIDTA cushion probably around $20 million.

Okay. Great. I guess I just wanted to clarify you had talked, Jeff, about with what you have done with the bonds you repurchased, the $26 million. Can you explain it to me? It sounds like you have not retired or cancelled those bonds out. What are you doing with that?

For our purposes they are -- we haven't legally redeemed the bonds but for our purposes they are within industries and we treat them as redeemed for accounting purposes.

Okay. Is there any advantage to holding onto them at this point or at some point do you actually go through the motion and actually -- ?

It is for tax reasons.

Okay. And then just lastly, you are sitting with some cash today. Do you expect to remain -- it looks like certain segments are starting to see pickup. The working capital benefit to cash flow is probably not going to be what you saw in 2009. Do you expect to generate cash in 2010 and, if so, what are the primary uses for cash? I think you did talk about continuing to pay down debt. Is that the priority?

Well, the first approximately $8 million to $9 million will be to retire the term debt, the amortization of the term debt. So we would anticipate domestically, we are looking at $15 million to $20 million of cash. All of that will go to debt pay down. First to term based on amortization and the rest would go to the revolver.

Very good. Thanks, guys.

Thank you very much.

Our next question from the line of [Michael Lavene] with BB&T.

Good morning. Just to continue on the debt discussion just a little bit, paying down the bank debt, is that something that is part of the agreement going forward or is it just more attractive now, more attractive use of cash than, let's say, bond repurchases?

Well, here is what I would say on that, that right now the bond repurchase is not as attractive as it was obviously during periods of 2009. Although on a strict basis, it continues to be attractive at 8-3/8. I don't know what it's -- I saw something today at about 84%. We do have some restrictions within the current agreement relative to our ability to buy back bonds which is dependent upon our bank availability and our tolerance within the fixed charged covenant. So we will continue to measure that. Our first priority would be to pay through that term B, that unsecured portion of the new credit facility, the $12 million, that would be our initial priority and then we will look at from an arbitrage perspective we will have to live within the current agreement. There are going to be some restrictions relative to availability and tolerance within the covenant for us to buy back bonds in the future.

Okay. Going over to your businesses a little bit. Matt mentioned new launches at least in aluminum and you talked a little bit about increased level maybe of RFQ. I hope I heard that right. Can you talk about timing? It sounds like you will do better in sales this year in new launches and how does that come on? The stuff you are quoting on now, is that end of this year into next year kind of stuff?

We have been able to, during the last couple of years, one of the areas what I call the disciplines of the aluminum business is die casting and we have been able to do some acquisitions of equipment and so forth. Been able to branch out into a new area and -- which would give us an opportunity to sell additional products to our same customers. We see this as a growth opportunity for the Company, those particular processes are die casting is fundamentally different from permanent mold and safety critical parts. They are different parts. It is something we have been interested in and we are getting into it slowly without making a big investment. We are doing it on a basis of a piece of equipment at a time. We are, quite frankly, making interesting progress. We would like to be, when these RFQs come out from customers, we don't want to be shut out because we don't do a particular phase of it. I really thought that we would never be in this die casting side of the business but on a fundamentally smaller basis it gives us another technology and another platform to sell.

I guess I was trying to distinguish what you have kind of lined up coming on this year for new launches versus what is going on into next year?

I think clearly the revenues are going to increase in the aluminum business year-over-year. It will be a combination of take over business we took over in the last part of 2009 from crippled companies that really just starts to leak in when you take it over. Third and fourth quarter and that will be part of the increased revenue. There are new sales coming down the pipeline that will affect 2009 particularly in the latter part of the year.

Okay. You mean 2010?

Yes. These years get mixed up. When you try to fix 2009 it is kind of fuzzy.

Takes at least a quarter to catch up, right?

Exactly.

Matt, comments on maybe manufacturing, backlog and new RFQ activity for some of the large equipment coming on?

Yes, sure, I think I mentioned on the last call that we were beginning to see on the new equipment side of the business increased order signings. We did see that continuously through the end of the year. It was still not at 2007 and 2008 levels, probably still running at 50% of those levels. That was off of virtually no new signings going back to April or May last year. We feel good about that. Those numbers haven't moved meaningfully either way. It is lumpy, as you know, but haven't moved meaningfully either way. We are seeing new activity. We are seeing new signings. We are seeing new certainly conversations that are meaningful. Oil being at $80 a barrel has helped us get some new orders and see new conversations develop on the oil and gas drilling side.

I have characterized the signings as staying pretty level with what we saw during the fourth quarter. I would characterize the outlook as trending slightly better but still modest as to 18 months ago and perhaps even more importantly I would say that aftermarket continues to be a little bit better but still disappointing. What the softness in the aftermarket business tells us is that people are thinking the business is going to get better but still not running the machines hard enough to use the aftermarket business as hard as we like. That is not a piece of good news. To the extent I have been conservative at all in my comments this morning, that is something that still concerns us here but it is improving so I don't want to make it sound like it is not improving. It is not improving at the rate that we might have expected. It is a up trend line. It is just not as steep as we would like it.

Okay. Without giving guidance, 2010 will be a better year than 2009 in that business?

I think if you recall -- I mean, I want to say yes to that in terms of the mood of the business. I guess there are a couple things I would caution or say as a point around that yes as a mood to the business. One is the backlog we took into the beginning of 2009 was very robust. The first and second quarter performance of 2009 was very strong. Now, that was largely related to order bookings that were in 2008 so I would say we will have a better year for bookings. I think we will have a better outlook as the year goes on. Early 2009 was still pretty robust from a manufacturing and revenue standpoint. Having said that, I would expect things to incrementally improve somewhat dramatically from the middle to the end of next year. I don't know if that's helpful to you.

That's helpful. I understand how 2009 got started and where we are going from here. That's good. Thank you. That's it for me today. Thank you.

Our next question comes from the line of [Ben Phillips] with Lord Abbett.

Good morning. Congrats on the good quarter. I guess a couple cleanup items, I think Matt and Rich covered most of it. On the new bank agreement, is there a LIBOR floor on there?

No.

On the term line A the two-year amortization, is that a straight $3.5 million a quarter?

On the A?

On the A.

The B is two years.

I'm sorry. So the B is two-year with a balloon at the end. Is that 1% per year? I'm trying to get a sense of how much the amortization is.

The A is $28 million and it is going to be a 10-year amortization with the balloon at the end of the maturity.

Got those mixed up. So what is the annual amortization going to be on both of those?

In total approximately $9 million.

Great. Thanks. Just my second one on CapEx, how are you thinking about that for 2010? How much flexibility is built into that number?

We are modeling at something under $7 million. We would be flexible dependent upon what the returns are going to be but we want to see some continued progress in operations during 2010 and we could be flexible on that but not at the beginning of the year. Right now we will be flexible with hard cap.

Ben, I would comment, it is Matt, in 2009 there was a initiative, sort of top down initiative to control that capital expenditure. In 2010 we made the kind of investments in 2008 and 2009 that were necessary to keep the capacity in place. The businesses at this junk tower are calling for a lot of capital. I think that is a natural number for the business at this point and if we see opportunities accelerate, then we will seek to feed them but this isn't -- there is only two businesses we have that take meaningful CapEx, casting and forging. It is not inappropriate for us to think that the business could maintain itself and invest in some high margin opportunities and still only do $6 million or $7 million in CapEx.

Excellent. That's all I have. Great job again on the amendment extend.

Thank you. We will take two more questions. Go ahead.

Your next question comes from the line of Douglas Ruth with Lenox Financial Services.

Good morning. Two questions. Could you talk some about an inventory goal?

2010 inventory goal?

Yes.

I think we have taken a position, we continue to have opportunity in inventory but we also need to understand that we have to support the business and the continued growth. We are planning for a reduction in inventory in 2010. It is similar to what we had planned for 2009. It is a modest amount and it is in that $10 million to $15 million range and hopefully we will exceed that. The majority of our inventories is tied up in supply tech. To my earlier comments what I called is the effort here, particularly in that unit, is a controlled decent. We are not interested in letting our inventories run away from us as we build that business back up. We are looking for more margin per customer and we are willing to not generate the revenue on that side as quickly as we might be available to us because we will are going to be particularly interested in margins as we come back from -- off that 645 down as we come back, the inventories will be more -- access to that capital in the building here and for them to expand their sales down there and get access to capital really has to come to upper management. So we are being very disciplined. We will do the best we can on that but we think we can effectively manage that well this year and still grow the business.

Okay. After a couple months now of 2010, are you increasing or decreasing your forecast for car manufacturing in North America?

We are still locked in at 10 to 12 million cars. All these discussions this morning are not predicated in anything other than 10 to 12 million cars which obviously is quite a realistic number. We are not thinking anything higher than that, although I could get guardedly optimistic about 2011 and 2012. Let's just work on 2010. We are working on 10 to 12 million cars and we are not thinking more than that.

What is the run rate currently in the industry? Is it still at 10 to 12?

I think 10.5, 11 is the number most people kick around and that is kind of a first quarter number if you blend them.

Yes, okay. Congratulations on getting that credit facility done. That was wonderful.

Thank you very much. We were patient with that. We have always had access -- the capital in this Company being supported by the same group of banks that have been around us for a long, long time, particularly some of the local banks in Cleveland have been supportive. We have been talking about that for a much longer time than we have indicated with our lenders and we are patient here and wanted to make sure earlier we thought we would be able to show everyone a much better Company based on what was going to happen in 2010. So we went short on the payment concept but, excuse me, we are in the right place at the right time with the banks. We really take this opportunity to thank them. It was a long discussion and it was there and it is all about pricing and getting prepared for the future. We are thrilled with it quite frankly.

You got a lower rate than many of us thought you might get. It is a terrific job and credit to the management.

Thank you very much. One more question, here.

Your final question comes from [Brian Riley] with Wells Fargo Advisors.

Good morning and congratulations on the quarter. Jeff, wondering if you have the cash flow statement available for the fourth quarter if you could give us the net cash provided by operating activities?

Say that again, Brian.

I was wondering if you could give us the cash provided by operating activities for the fourth quarter?

On a GAAP basis?

Right.

We will be filing our 10-K hopefully early next week.

Okay.

Why don't we wait and we can follow up with it after we disclose those numbers to everybody.

That's fine. I will wait for that. Congratulations again.

Well, I want to thank everyone for the patience. As I indicated early on, as we have spoken to, I think we are where we would like to be. We have a better company. We are ready for the future and a lot has been accomplished in a very dicey atmosphere in 2009 but we managed to get through it and pay down debt and get prepared for the future. The most important thing we have held together the core leadership at every level in the Company. We are pleased and prepared for the future and we thank you for your support and have a nice day.