希悅爾 (SEE) 2006 Q4 法說會逐字稿

Good day, everyone and welcome to this JohnsonDiversey 2006 fourth-quarter and year-end earnings results conference call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the conference over to the Vice President and Corporate Treasurer, Ms. Lori Marin. Please go ahead, ma'am.

Thank you, good morning. This is Lori Marin, Vice President and Corporate Treasurer of JohnsonDiversey. I'd like to thank everyone for joining our investor call this morning. Today, we will discuss our results for the quarter and year ended December 29, 2006.

I'm joined on this call by Ed Lonergan, our President and Chief Executive Officer; Joe Smorada, our Executive Vice President and Chief Financial Officer and Clive Newman, our Vice President and Corporate Controller.

On this call, we intend to provide an update on the general status of the business and the financial results for the quarter and year ended December 29, 2006, an overview of the balance sheet at December 29, 2006, an update on our restructuring program and an update on the results for JohnsonDiversey Holdings.

Some of the statements that will be made in this presentation are not historical facts and are forward-looking. These forward-looking statements are subject to risks and uncertainties; some of which are beyond our control. Please refer to the risk factors and cautionary statements concerning forward-looking statements in our Form 10-Q and Form 10-K reports for certain risks and uncertainties we face.

The discussion today includes reference to EBITDA for various periods. EBITDA is a non-GAAP measure within the meaning of the SEC Regulation G in accordance with Regulation G. Our Form 10-K report includes a reconciliation of EBITDA for the year ended December 29, 2006 to net cash provided by operating activities, which we believe to be the GAAP financial measure most directly comparable to EBITDA.

Except for comments regarding EBITDA, net income and cash flow or words specifically indicated, today's discussion reflects the results of continuing operation. Excluding the divested polymer and Chemical Methods Associates businesses. Our Form 10-K reports for JohnsonDiversey and JohnsonDiversey Holdings were filed with the Securities and Exchange Commission on March 22nd, 2007. They are also posted on our website at JohnsonDiversey.com and can be found by clicking on the Investor Relations link and selecting the relevant company.

JohnsonDiversey Holdings is a holding company whose sole asset is its share of JohnsonDiversey. Other than differences in net income due to interest expense for the JohnsonDiversey Holdings in your discount note, provision for income taxes and dividends received, the consolidated financial results of the two companies are the same. Accordingly, we will address the results of both of these companies on this call.

I would now like to turn the call over to Ed Lonergan, our President and Chief Executive Officer, for a general business update.

Thanks, Lori, and thank you all for joining us today. 2006 was an important year for JohnsonDiversey as we executed the first tier of our restructuring plan, while also seeking solid growth in our markets and I'm pleased to report today that we finished the year with strong net sales growth in our core business and we also successfully managed our restructuring projects ahead of plan; albeit with much more still to do.

We saw net sales growth in virtually all our business units and continued to build our base for future growth through product innovations that are unique to our industry. Our net sales on the year grew by 3.8% when adjusted for currency and one-time effects. These one-time effects include the impact of acquisitions and divestitures and our decision to withdraw from the majority of the U.S. service-oriented warewashing business.

The net sales growth was driven roughly equally by pricing and volume. We experienced solid net sales growth in our core business across all our regions except Japan, which I'll address in a moment.

In North America, our core business grew in 2006 by more than 6%. The solid top-line growth for this business was driven by well-executed pricing plans, as well as volume growth generated by industry-leading distributor management programs and new product introductions.

Our overall net sales in North America decreased by about 2.4% on the year, which reflects our partial exit from the service-oriented warewashing business in the U.S. As we've indicated in prior calls, we expect this result -- we expected this result when we made the decision to pursue a new model for serving our North America warewashing customers.

In our Europe, Middle East and Africa business, net sales grew in the year by 3.8% over the prior year when adjusted for the impact of an accounting treatment for equipment leases. This net sales growth was the strongest full-year performance we've seen in Europe since the merger and was due primarily to robust growth in developing countries in Eastern Europe, Africa and the Middle East. We were also pleased to see improved rates of growth in the Mediterranean area with Italy, Spain, Portugal and Greece all posting gains.

In addition, we were pleased with the results we are seeing in the U.K. This important market-leading operation returned to growth in 2006 and showed a strong trendline on profits. Our European results also included improved performance in our TASKI machine business, reflecting strong market uptake of our 2006 innovations. TASKI remains an important component of our core building care offer.

Latin America continues to be among our best performing business units, growing net sales in the year by 8.2% versus the prior year. This growth was generated across most geographies in the region with our food and beverage, retail and lodging businesses all delivering solid performances.

The region was also able to compensate for lost business as a result of the 2005 hurricane damage on the Yucatan Peninsula. We are now beginning to see that important tourism region return to pre-hurricane business conditions. And as a company, I want to note that we are proud of our Mexican team who responded with great compassion for the hurricane-damaged areas and went beyond the call of duty to support our employees and the stressed communities of the Yucatan.

Our Asia-Pacific business increased net sales by 6.8% over the prior year with the most rapid growth generated in the food and beverage, lodging and quick service restaurant sectors. We're excited by the opportunities we see in these important markets and we're making the necessary investments for long-term growth, including additional manufacturing capacity and increased sales penetration.

We continue to see a general increase in cleaning and hygiene standards in the region, driven both by public health concerns and major international events such as the upcoming Beijing Olympics. We're collaborating with our major customers and the public sector in China to help them prepare to meet the cleaning and hygiene challenges of this momentous event in 2008.

In Japan, our net sales declined 5.2% versus the prior year. As we've discussed in previous calls, the net sales declined as a result of planned actions to restructure the service relationship at a core Japanese retail customer and the move from direct selling to a joint venture for sales and distribution of certain foodservice customers. This third-party distribution model is resulting in lower top-line JohnsonDiversey net sales versus our prior direct business, but it provides better customer service and profitability for our business.

Now I'd like to briefly address our EBITDA performance in 2006. We saw a $161 million increase in EBITDA versus prior year largely due to the divestiture of our polymer business. The gain on that sale was partially offset by costs related to our restructuring program and certain raw material cost increases that were not fully recovered by pricing. We're taking the necessary steps to improve the EBITDA generated by our base business, including full execution of our restructuring program and Joe will comment on EBITDA in greater detail in a moment.

I'm pleased with the performance of our restructuring program. We made detailed promises about what this program would deliver in 2006 and we exceeded those promises. We took major steps in 2006 toward creating a more focused, cost competitive company and we're committed to full implementation of this program in 2007 and 2008.

We are implementing key outsourcing projects in IT and financial services. We've rationalized our manufacturing footprint. We're reorganizing major global functions and regions and we're addressing long-time cost drivers, such as SKU proliferation and decentralized purchasing of raw materials. And this is all being done with a clear view of our core business and a long-term strategy for growth.

Much of this growth will be driven by our innovation programs, which continue to deliver unique advantages to our customers. Our innovation is focused to a great degree on the sustainability movement that is gripping much of the industry. We're also seeing the news footage of iceblocks falling into the ocean from Greenland and experiencing what appears to be true climate change. These realities are the catalysts for our global drive towards sustainability, which is leading to demands for reduction in greenhouse gas emissions, less use of toxic chemicals and a thirst for water conservation. And this is all creating a real demand for our industry-leading sustainability solutions.

Let me give you a couple of examples of how we are addressing this dynamic both inside our business and with our customers. In 2006, we completed a three-year project to reduce packaging waste from our North American operation. Thanks to the creativity and passion of our team, we've reduced the use of virgin plastic from all our packaging in this region by 207 tons per year.

Just to put this into perspective, that translates into saving enough energy to heat 175,000 homes per year in the Midwest. These packaging improvements also result in a reduction in CO2 equivalence by more than 73 tons per year and this isn't theoretical. These are real results that can be calculated and measured.

For customers, we are developing cleaning and hygiene systems with remarkable environmental improvements. Our detergent solution (indiscernible) system for warewashing in Japan for example delivers as much as 70% reduction in water usage, while also significantly reducing energy costs. In our 2006 pilot, 1.8 million gallons of water were saved in only 27 restaurant sites that used the system.

For a customer in India, we have saved about 12 million gallons of water through a better clean-in-place system in a bottling plant. And our Aqua Check water management program continues to assist customers in identifying significant cost savings and water and energies. For example, Aqua Check helped one U.S. biotechnology facility to save $1.2 million annually for water and energy combined.

So as you can see, we're not just talking about green, we're taking substantive action both inside our Company and on behalf of our customers to advance sustainability in our industry.

Overall, after leading this business for a year now, I'm pleased with the progress we are seeing across the business. The growth in our core business achieved while executing an ambitious restructuring program shows the underlying strength of this business and the long-term growth potential in our industry.

While we're cutting costs, we're doing so in a manner that protects our competitive position and our ability to provide differentiated innovations to our customers. We've won major new customers versus tough international and local competition and experienced no material customer losses in our core business.

We're also building a strong team at JohnsonDiversey, upgrading our skills and recruiting some of the finest professionals to our industry. 2006 was a pivotal year for us to return to growth and launch our restructuring and I really look forward to continued progress in the year ahead.

Now I'd like to turn it over to Joe Smorada for more detailed comments on our financial results.

Good morning. Thank you, Ed. I would like to remind you that a reconciliation of EBITDA to net cash provided by operating activities can be found in our 10-K reports for the year ended December 29, 2006, which can be accessed from our website.

On an as-reported basis, net sales in the fourth quarter of 2006 were $740 million as compared to $713 million in the same period last year. Excluding the impact of foreign currency exchange rates and acquisitions and divestitures, our net sales for the quarter were up 1% as compared to the fourth quarter of 2005. This increase primarily resulted from pricing growth offsetting volume increases related to our withdrawal from the majority of the service-oriented laundry and warewashing businesses in the United States. After adjusting for this impact, net sales for the fourth quarter of 2006 increased 4.4% compared to the fourth quarter of 2005.

For the fiscal year ended December 29, 2006, net sales were $2.93 billion as compared to $2.95 billion in 2005. This slight decrease is due to the same factors I mentioned for the fourth quarter along with the $6.9 million impact of partial termination fees related to our masters sales agency agreement with Unilever and the $15.3 million impact of the previously disclosed lease accounting adjustment, which had the effect of increasing net sales in 2005. On a constant currency basis and after adjusting for these one-time impacts, net sales increased by 3.8% for the full year.

In our professional segment, net sales in North America decreased by 5.2% in the fourth quarter versus the same period a year ago. For the full year, net sales decreased by 2.4% as compared to 2005. This reflects the impact of our withdrawal from the majority of the underperforming service-oriented laundry and warewashing business in the U.S. This impact was partially offset by strong growth in our core American business driven both by volume and the impact of price increases implemented in 2005 and in 2006. Excluding the impact of the withdrawal from the service-oriented laundry and warewashing business, our U.S. operations grew more than 6% in 2006.

In our Europe, Middle East and Africa region, net sales in the fourth quarter of 2006 grew by 4.2% as compared to the fourth quarter of 2005 and grew by 2.7% on a full-year basis. Excluding the impact of the 2005 lease accounting adjustment, net sales grew by 3.8% on a full-year basis. This growth was primarily due to price increases taking hold and increased sales volumes in our central European area, as well as the developing countries in eastern Europe, Africa and the Middle East.

Both our Latin America and Pacific regions continued to report solid net sales growth. Latin America posted net sales growth of 12.4% in the fourth quarter and 8.2% on a year-over-year basis driven by increased net sales in most geographic areas with growth from the food and beverage business, the retail and lodging sectors and distribution. This more than offset lower health and hospitality sales in Mexico where tourism had been adversely affected by hurricane damage and our decision to exit direct sales to the cruise business in the Caribbean.

Asia-Pacific posted net sales growth of 3% in the fourth quarter and nearly 7% on a year-over-year basis primarily due to growth in the food and beverage business and the lodging, retail and quick service restaurant sectors.

In Japan, net sales decreased by 4.3% in the fourth quarter and by 5.2% on a year-over-year basis largely, as stated heretofore, as a result of the restructuring of the service relationship at a core Japanese retail customer, our planned withdraw from low-margin filter sales in the food and beverage business and a change from direct selling to a joint venture for sales and distribution to select foodservice customers in the Tokyo metropolitan market.

Our gross profit margin in the fourth quarter of 2006 was 40.6%. It compares to 40.8% in the fourth quarter of 2005. On a full-year basis, our 2006 gross margin was 41.8% as compared to 42.6% in 2005. As we have been discussing in considerable detail for the past year, this was primarily the result of raw material transportation cost increases that were not fully offset by price increases taken in 2005 and in the first half of 2006.

As reported, SG&A expenses as a percent of net sales were 38.6% in the fourth quarter as compared to 40% in the same period a year ago. This includes period costs associated with our restructuring program of $15.5 million in the fourth quarter of 2006 as compared to $21.7 million in the fourth quarter of 2005. After adjusting for these period costs, SG&A expenses were 36.5% of sales in the fourth quarter of '06 as compared to 37.5% in the same period last year.

For the full year and on an as-reported basis, SG&A expense as a percent of net sales was 39.6% as compared to 37.5% in the prior year. This increase reflects the inclusion of period costs associated with our restructuring program of $122 million in 2006 as compared to only $44 million in 2005. Such costs as asset impairments, consulting, professional service fees, IT project costs, employee benefits, retention, relocation, etc. represent the myriad of the types of expenditures I am talking about.

After adjusting for these period costs, SG&A expenses were 35.4% of net sales in 2006, which compares favorably to 36% in 2005. This decrease was due to controlled spending and accelerated savings from our restructuring program primarily in our North America and European business segments.

It should be noted of the $122 million of period costs incurred during 2006, almost $53 million of those dollars related to tangible and intangible asset impairments primarily associated with our decision to withdraw from the majority of the U.S. service-oriented warewashing business.

Restructuring expenses in the fourth quarter of 2006 were $6.3 million compared to $5.3 million in the same period last year. On a year-over-year basis, restructuring expenses in 2006 were $115 million as compared to $17.7 million in the same period a year ago. These costs consisted largely of involuntary terminations incurred by our North America and European business segments, as well as our corporate center.

In 2006, our EBITDA was $465 million. This compares to $304 million in the same period in the prior year. This change is largely the result of a $353 million pre-tax gain recorded on the divestiture of our polymer business, partially offset by a $130 million increase in restructuring expense and period costs, as well as certain raw material cost increases not fully offset by pricing.

The Company reported net income of $15.6 million in the fourth quarter of 2006 compared to a net loss of $172 million in the fourth quarter of '05. This difference was primarily due to the establishment of a valuation allowance against our U.S. deferred tax assets in 2005. On a full-year basis, the Company reported net income of $118 million in 2006 as compared to a net loss of $167 million in 2005. This difference was largely due to the gain on the sale of polymer, which included a reversal of the aforementioned valuation allowances as the deferred tax assets were able to be applied against the polymer gain, partially offset by an increase in costs related to our restructuring program.

JohnsonDiversey Holdings reported net income of $98 million in 2006 as compared to a net loss of $221 million in 2005. As previously mentioned, the main differences between the results of JohnsonDiversey Holdings and JohnsonDiversey are interest expense, provision for income taxes and dividend income. Capital expenditures in 2006 were $93 million compared to $92 million in 2005.

At this time, I would like to ask Clive Newman, our Vice President and Corporate Controller, to provide you with an update on the status of our restructuring plan.

Thank you, Joe. 2006 was a very positive year for our restructuring program. We comfortably exceeded our internal cost savings target within cost budgets. Incremental cost savings to date are estimated at about $70 million. We continue to expect annual savings of approximately $150 million to $175 million by the end of fiscal year 2008 from the program.

During the year, we completed four divestitures with gross proceeds of over $500 million. On June 30, we completed the sale of Johnson Polymer to BASF for approximately $482 million. On September 30, we completed the sale of our CMA subsidiary to [LESBA] for $17 million.

Further, on November 3, we completed the sale of a major southern territory of our Auto-Chlor kitchen service business to a regional Auto-Chlor dealer for $9 million and in December 2006, we completed the sale for $10 million of the second phase in the two-step process to divest of our European commercial laundry business.

A number of key elements of the operational restructuring of our Company were progressed or announced in the year including, the outsourcing of our IT support work and the announcement of our intention to proceed with the outsourcing of financial services in Western Europe.

In addition, we also announced significant restructurings in our European manufacturing footprint, including the intention to close the JohnsonDiversey powder factory located in Bobigny near Paris, France, and the Polinya factory in Barcelona, together with the reorganization of the Valdemoro factory in Madrid, in order to improve capacity utilization of our manufacturing assets in Spain.

Headcount reductions to date under the restructuring program are about 1700, of which about 650 are related to cost-reduction initiatives and organizational redesign, and the remainder related to the exit from the service-oriented laundry and warewash business in the United States and divestiture activity, including the polymer divestiture. These reductions are broadly in line with our expectations.

Fourth-quarter costs associated with the restructuring program includes $6.3 million of restructuring expenses. These costs primarily related to involuntary terminations. In addition, in the fourth quarter we recorded $15.1 million of period costs from selling, general and administrative expense, and $4.3 million in cost of sales related to restructuring actions.

In 2006, the Company recorded $150 million in restructuring expenses and $122 million of period costs in selling, general and administrative expense, and a further $4.3 million of period costs in cost of sales related to restructuring actions. Of the amount recorded as period costs, $41.8 million related to long-lived asset impairments of $11.1 million related to impairment of other tangible-related non-cash items, largely related to the withdrawal from the majority of the service-oriented warewash business in the United States. Of the total asset impairments, $41.8 million were recorded as adjustments to depreciation and amortization, and are therefore not included in EBITDA.

Tax spending for restructuring related activities totaled about $30 million for the fourth quarter of 2006, and $120 million during the full year of 2006. I would advise investors on the call that in determining the cash spend on restructuring related activities we make the assumption that all period costs are paid in the period in which they are expensed. Restructuring reserves at the end of the year were $70.2 million.

I will now turn the call back to Lori Marin who will discuss the Company's cash and debt position.

Thank you, Clive. At December 29, 2006, our total debt balance was $1.1 billion. We held cash and cash equivalents of $208 million, as compared to $158 million at December 30, 2005, for an increase of $50 million. Net cash proceeds from divestitures of $490 million plus the proceeds from borrowing under the Company's $100 million delayed draw term loan facility and cash from operations contributed to this increase in cash balances.

This enabled us to pay down $420 million of our term loan B facility, financed our capital expenditures, and funded a $47 million decrease in the utilization of our accounts receivable securitization program. Usage under the securitization program at December 29, 2006 was $64.3 million.

JohnsonDiversey Holdings consolidated debt balance at the end of the fourth quarter of 2006 was $1.5 billion, which includes $361 million of senior discount notes. As of December 29, 2006, the Company had total credit availability of $167 million under our revolving credit facility. Of the total credit available at the end of the quarter, we could borrow this full amount and still be in compliance with our financial covenants.

This concludes our presentation. I would like to remind you that our investor relations website can be found at johnsondiversey.com. We consider this website to be a key communication tool with the investment community, and we encourage you to periodically access this site. Documents related to the JohnsonDiversey senior subordinated notes and the JohnsonDiversey Holdings senior discount notes, as well as both companies' financial results, can also be found on the investor relations site.

A recording of this conference call will be available for replay for the next two weeks by dialing into the numbers listed on the press release announcing this call. Please direct questions related to our financial results to Kathy Powers or to me. John Matthews will continue to be the contact for all non-financial matters. Our contact information can be found on our website. We will now move on to the question-and-answer session.

(OPERATOR INSTRUCTIONS) David Pearson, Jefferies International.

Good morning. Just a quick question about market share. Can you tell me what your estimated market share was for the year?

That is a number that would be virtually impossible to compute, and in fact since I've been in the Company over the course of the last year, I've focused on making our market share smaller relative to a bigger market pie. You've heard from our core competitor that they estimate their d market at about $40 billion. We estimate our market at about $40 billion. It's a different market. They are in different segments of business than us and in some different applications. But I think what it signals is that there is a huge industry out there available for both of the key global competitors as we both seek to grow our business.

Okay, then. A separate question related to your restructuring. I know that in Q3 2005, in your 10-Q, you stated that you're going to spend somewhere between $150 million and $175 million in cash restructuring charges for fiscal year 2006. Now you've mentioned that you spent a little bit less than that. Does that suggest that you have more cash restructuring coming down the pipeline or does that mean that we should actually take the difference off of the total $345 million to $370 million that you were expecting to spend?

David, no. It really just reflects a different timing and pacing. We would still expect costs to land in that $345 million -- cash costs to land in that $345 million to $370 million zone.

Okay, so would you expect then I guess the difference of $45 million to come out in the next couple of quarters in 2007?

Probably a little longer than that.

I think you should expect it to come out and little bit longer than that.

Okay. All right. That is all. Thanks.

Kevin [Zykes], Goldman Sachs.

Good morning. Just following up on the cost savings here. Just to make sure I got the number right, you said $70 million of run rate cost savings actions have been taken. Is that correct?

That's Correct.

Okay. And then I guess of the -- what would you have realized in 2006 in your actual P&L and what would you expect to realize in 2007?

I am not sure I want to give specific guidance on 2007. What I think I said in the call was that we quoted a year or so ago now a savings expectation in the $150 million to $175 million range. We don't see that any differently today. The $17 million, as you correctly identified, is our run rate from the start of the program. We started in the fourth quarter of 2006, so a significant percentage of that $17 million was delivered in 2006.

Okay, that is helpful. And then just to make sure again that I got the numbers right. Did you say that of the period costs, that $41.8 million would be running through your depreciation and amortization?

Yes, that is correct.

Okay, because there is a disclosure I guess in your K that says that I think it is like -- I want to say it's $21.9 million -- was run -- of the impairments were run through amortization of intangibles. I just want to reconcile that number.

It is $41.8 million. There is both tangible and intangible asset impairment in that $41.8 million number.

Okay, great. And then just to follow on on the last question. How would you characterize the state of competition in your markets these days, particularly your largest competitor?

I will answer that one for you. As I mentioned earlier, we've done quite a bit of research over 2006 to understand what we believe to be the true scope of the market. We find that about 80% of the available market today is not held by JohnsonDiversey or our primary competitor. So while we consider our competitor to be quite strong, we also believe there is a huge market available out there that is primarily occupied by local, regional and multinational competitors, but not global players. And our belief is there is room for both major global players to grow in that kind of a fragmented market space.

Okay. You've mentioned or at least in your filings, you've mentioned companies like P&G and Kimberly-Clark. What about a company like an ARAMARK? Are they a competitor or a customer or both?

ARAMARK is actually a valued partner.

Okay.

Just one other common. There are areas where we clearly compete with our major global player and when we assess our results by market, they seem -- clearly, we're in the middle of restructuring and our competitor has a very strong growth rate across the course of the world. But if you take the professional market in the United States, which has just been merged into their institutional business, I think they declared in quarter four an 11% decline in that business and we told you today that our core business in North America is well over 6%.

The gross margin I guess for the quarter was back at the level of fourth quarter of '05. I just wanted to -- as sort of the year sequenced, you talked about achieving better gross margins than that sort of initial quarter. Are you disappointed that we're back at this level or is it just a seasonal effect?

We're viewing it as a seasonal effect at this point. I think what I would suggest that we focus on is the fact that in the couple of years prior, our margins declined by 250 to 300 or more basis points. And in the course of the latter part of last year, we find ourselves finally stabilizing and I think we're getting a good grip on how to deal with our pricing and how to deal with our contractual situations without losing our customers. We believe we've got it well-focused at this time.

Okay. And then your outlook in terms of additional price increases and the cost environment that you face in '07 versus '06?

We fully would expect where appropriate to take price increases and we are actually out in the marketplace with one now.

Okay, great. Lastly on the [wholeco] discount notes that go cash pay I guess starting in May with the next payment. Can you give us an update on your intention on whether you will be paying that in cash? And if not, or maybe in addition, just on your ability to pay it in cash regardless of whether you choose to?

You are correct. They do go cash pay in May and the first interest on the discount note is due in November and we will pay the cash interest if allowed under the bond indenture. You can access that bond indenture on our website and you will see that there is a fixed charge coverage ratio that we (multiple speakers).

You mean the subnotes indenture?

Yes.

Okay. And it is just a fixed charge coverage test that would govern that?

Yes it is. And again, you can take a look at that. The document is out on our website.

So I guess there is not a restricted payment kind of carve-out that we need to be looking for?

Again, you can go through the indenture, but you will see that it is a fixed charge coverage.

Okay, Great. And then I guess also this year starts I guess the potential for contingent payments under the Unilever agreement. I don't think that you would be in excess of the cumulative cash flow targets, but I just wanted to doublecheck.

You are correct. We do not have the cash flow that would trigger that.

Okay. Thanks very much.

(OPERATOR INSTRUCTIONS) [Duncan Vife], AIG.

Thanks. Just a couple questions. One, just on CapEx. Can you give us expectations for '07?

I think we spent about $93 million in 2006. We would expect 2007 spending to be a little ahead of that, probably in the $100 million to $115 million type range.

Okay. And just from a top-line perspective, what should we think of as a top-line growth rate for '07? Are there still businesses that you intend to divest? Given the changes that have taken place in '06, I guess what is a good thought in terms of what the business should grow at in '07?

We don't provide guidance, forward guidance on (multiple speakers).

Can you give a range? Is it going to be -- I would assume it would be top-line. It would be positive growth.

Prefer not to.

Okay, thanks.

At this time, there are no further questions. Ms. Marin, I'll turn the conference back over to you.

Thank you again for joining us. On behalf of everyone at JohnsonDiversey and JohnsonDiversey Holdings, we would all like to thank you for attending this conference call and for your continued interest in and support of our Company. Have a terrific day and weekend.

Ladies and gentlemen, this will conclude today's presentation. We do thank you for your participation and you may disconnect at this time.