宣偉 (SHW) 2006 Q1 法說會逐字稿

Good morning. Thank you for joining The Sherwin-Williams Company's review of the first quarter 2006 financial results and expectations for the second quarter and full year. With us on today's call are Chris Connor, Chairman, President and CEO, Sean Hennessy, Senior VP, Finance and CFO, John Ault, Vice President, Corporate Controller, and Bob Wells, Vice President, Corporate Communications. This conference call is being Webcast simultaneously in listen-only mode by Vcall via the Internet at www.sherwin.com. An archived replay of this Webcast will be available approximately two hours after this conference call concludes. It can be accessed at www.sherwin.com and will be available until Monday, May 1, 2006 at 5 PM Eastern Time.

This conference call will include certain forward-looking statements as defined under U.S. federal securities laws with respect to sales, earnings and other matters. Any forward-looking statement speaks only as of the date of which the statement was made, and the Company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. A full declaration regarding forward-looking statements is provided in the Company's earnings release transmitted earlier this morning. After the Company's opening remarks, we will open the session to questions.

I will now turn the call over to Chris Connor. Thank you, sir. You may now begin.

Thank you. Good morning, everyone, and thanks for joining us. The Company's off to another strong start in 2006 and we're very excited to share our results for the quarter and to take your questions. But before we do that, I'd like to take a moment to comment on an important change in our company's structure.

Earlier this week the Company filed an 8-K announcing a change in our reportable operating segments, and I'd like to clarify our reasons for this change. Financial Accounting Standard No. 131 establishes guidelines for the way companies report information about operating segments. The purpose of these filings is to help users of financial statements better understand the Company's performance, assess the Company's prospects for future cash flows, and make more informed judgments about the Company as a whole. The approach set forth in these guidelines is referred to as the management approach; simply stated, it means that segment reporting should be based on the way in which the Company is organized and managed internally to make decisions about company operations and assess performance.

During the last half of 2005 we reorganized our management reporting structure, reducing the number of operating presidents reporting to the CEO's office to three. Effective January 1, 2006, we changed the business segments that are used to make operating decisions, set goals, assess performance and allocate resources to align them with our new management structure.

This realignment resulted in three reportable operating segments -- our Paint Stores Group, headed by John Morikis, our Consumer Group, headed by Tom Seitz, and our Global Group, headed by Tim Knight. The Global Group consolidates certain business units that had foreign or worldwide operations that were previously part of the Paint Stores, Consumer, Automotive Finishes and, of course, International Coatings segments. Information about the composition of each of these three new reportable operating segments is included in the 8-K filed on April 18, 2006. For comparison purposes, the 8-K filing also included updated results for each calendar quarter of 2005, as well as five calendar years from 2001 to 2005, to reflect this change in reportable operating segments. This information can be accessed through our company Website, www.shewrin.com, under investor relations/SEC filings.

I'll now turn the call over to Bob Wells to review our first-quarter results.

Thanks, Chris. In order to allow more time for questions, we provided balance sheet items and other statistical data on our Website -- again, www.sherwin.com -- under investor relations, first quarter press release.

Summarizing overall Company performance for the first quarter 2006 versus first quarter 2005, consolidated net sales increased 14.9% to $1.8 billion, reflecting continued strength in domestic sales of architectural paints and industrial coatings, and strong growth in many markets outside the United States.

Consolidated gross profit increased $110.6 million for the quarter to $771.4 million. Gross margin increased to 43.6% of sales from 42.9% of sales in the first quarter last year, due primarily to the implementation of price increases during the past four quarters.

Selling, general and administrative expenses decreased to 33.8% of sales in the first quarter this year, from 35.2% last year, due to the increase in sales and tight expense control.

Interest expense for the quarter increased by $5.4 million to $17.4 million

(technical difficulty)

as a percent of sales improved to 6.4% in the first quarter this year from 5.4% last year, due primarily to improved operations that were partially offset by an increase in the effective tax rate.

You may recall certain favorable tax rulings that occurred in the first quarter of 2005 resulted in an effective tax rate of 22.4% for the first quarter. This year, our tax rate in the first quarter was 29.8%. For the full year 2006, we expect our effective tax rate to be in the low 30% range, compared to 29.2% for the full year 2005.

Diluted net income per common share for the quarter increased 41.4% to $0.82 per share, compared to $0.58 in the first quarter of 2005. The $0.24 per share improvement in the quarter resulted from approximately $0.33 per share improvement in operating performance, partially offset by a reduction of $0.09 per share due to the higher effective tax rate in the quarter that I just mentioned.

Looking at our results by segment, sales for our Paint Stores segment in the first quarter 2006 increased 20.5% to $1.1 billion. Comparable store sales -- that's sales by stores open more than 12 calendar months -- grew 18.5%. Sales growth for the segment was driven primarily by gains in architectural paints sales to contractors and do-it-yourself customers, and strong industrial coating sales compared to the first quarter last year. Regionally, in the first quarter 2006, our Southwestern division led the sales performance, followed by Southeastern division, Eastern division, and Midwestern division. Importantly, all four divisions generated solid double-digit sales gains.

Operating profit for the segment increased 51.1% to $133.3 million for the quarter. Operating margin increased to 10.7% of sales from 8.6% last year, due primarily to strong sales volume, tight expense control, and higher selling prices that partially offset higher raw material costs. Paint Stores Group opened 21 net new stores in the quarter.

In the Consumer segment for first quarter 2006, sales increased 1.1% to $329.9 million. Volume growth through many of our larger retail accounts and the impact of selected selling price increases was largely offset by the elimination of a portion of the paint program with a large retail customer.

Operating profit for the Consumer segment increased 8.1% in the quarter to $56.7 million. Operating profit as a percent of external sales improved to 17.2%, from 16.1% in the same period last year, due primarily to tight spending control, favorable manufacturing and favorable manufacturing absorption related to manufacturing volume increases through the Paint Stores segment.

Turning to our Global segment for the first quarter of 2006, sales in U.S. dollars increased 13.9% to $380.6 million. The increase was due primarily to volume growth in Mexico and South America and selling price increases. Favorable currency exchange rates increased net sales by 4.5% in the quarter. The disposition of a majority interest in an automotive coatings company in China last year reduced first quarter 2006 net sales by 1.2%.

Operating profit for the Global segment increased 56.3% to $32.5 million for the quarter, and operating margin improved to 8.5% of sales from 6.2% last year. This improvement was mostly attributable to increased sales, operating efficiencies related to increased volume, and tight expense control. Currency exchange and the disposition of the automotive coatings business in China had no significant impact on operating profit.

I'd like now to briefly comment on some of our balance sheet items. Our working capital ratio -- that is accounts receivable plus inventory, less payables to sales -- came in at 13.7%, versus 15.7% for the first quarter 2005. Our total debt on March 31, 2006 was $1.21 billion, including short-term borrowings of $701 million. Our invested cash balance at March 31, 2006 was $494.3 million, compared to 7.5 million in 2005.

Total borrowings to capitalization were 39.8% at the end of the quarter, versus 38.5% at the end of the first quarter 2005. Long-term debt to capitalization was 21.8% at the end of the first quarter this year, compared to 23.8% last year.

In the first quarter 2006, the Company purchased 400,000 shares of its common stock in the open market. At March 31, 2006, the Company had authorization to purchase approximately 18 million shares of its common stock. We expect to continue from time to time our opportunistic purchases of company stock for treasury, since we continue to believe our stock is a good value.

In first quarter 2006, we spent $41.5 million on capital expenditures, depreciation expense was $29.7 million, and amortization expense was $5.6 million. For the full year 2006, capital expenditures will be approximately $160 million, the predominate share of which will fund incremental increase in -- will go toward -- I'm sorry -- manufacturing expansion and the completion of a new emulsion plant in the Western United States.

Depreciation will be about $133 million, versus $120 million in 2005, and amortization will be $24 million, versus 23 million in 2005.

I will conclude this review with a brief update on our status of lead litigation. The retrial of the Rhode Island public nuisance suit against four lead pigment manufacturers began back in November of 2005. On February 22, 2006 the jury returned a verdict in which it found that the cumulative presence of lead pigments in paints and coatings on buildings throughout the state of Rhode Island constitutes a public nuisance, and that Millennium Holdings, NL Industries and Sherwin-Williams caused or substantially contributed to the creation of the public nuisance, and should be ordered to abate it. The court ruled that the safe claim for compensatory damages was insufficient, and therefore was excluded. The court subsequently ruled against assessing punitive damages on any of the defendant companies.

Following the verdict, the court requested input from both the state and the defendants as to what the abatement remedy should entail. On March 31 of this year, the state resented their position paper on abatement. The defendants have until April 21, or tomorrow, to respond with their position for an abatement. We do not know the timing of the court's decision on the abatement remedy following those presentations.

This verdict is only the first part of a long legal process. After seven years and two trials, there still remain a number of legal issues to be resolved in Rhode Island, including a number of motions before the court and appeals to the Rhode Island Supreme Court.

Separately, on April 3, 2006, the Rhode Island Supreme Court heard oral arguments on whether the contingent fee agreement between the Attorney General and the outside lawyers representing the State is legally permissible. We do not know when the court will rule on these arguments.

In California, an appeals court recently reinstated certain claims of public nuisance, strict liability, negligence and fraud against a group of defendant companies. These complaints were originally dismissed by the Superior Court for Santa Clara County in July 2003 on statute of limitations grounds. No trial date has been set and the defendants have requested that the Supreme Court of California hear an appeal of this restatement.

In Milwaukee, the Circuit Court rejected the defendant's motion for summary judgment in the City's public nuisance lawsuit against two former manufacturers of lead pigments and paint, Mautz Paint and NL Industries. The court set a trial date of January 8, 2007.

The case in New Jersey brought on behalf of a number of cities and counties is now on appeal by the defendants to the New Jersey Supreme Court. The appellate court had previously ruled that the plaintiff cities could proceed in their public nuisance claims against former lead pigment manufacturers. The defendants asked the State Supreme Court to review the appellate court ruling and the Supreme Court agreed. We do not know the timing of this review.

Finally, in St. Louis, the defendants' motion to dismiss the City's public nuisance case against former manufacturers of lead pigment and lead-based paint was granted by the Missouri Circuit Court. The City has appealed this dismissal.

That concludes our review of the quarter, so I'll turn the call back over to Chris Connor.

Thanks, Bob. If you had any concerns about the ability of our people to stay focused on our business in the midst of some pretty significant distractions, I hope this quarter puts those concerns to rest. In spite of the constant barrage of media reports on the trial and unfavorable verdict in Rhode Island, our operating segments continued to aggressively open new stores and new accounts, take care of their customers, and importantly, do what we do best, namely to make and sell paint. I'm proud of the men and women of Sherwin-Williams, and I'm confident that they will continue to focus their efforts on the things that they can control to build value in this company.

I think our numbers for the quarter speak for themselves, but I would like to take a few moments to comment on some important issues that Bob covered.

First, the 70 basis point improvement in our consolidated gross margin for the quarter is encouraging after nine consecutive quarters of negative gross margin comparisons. This is primarily the result of a lot of hard work and determination by our sales organization in implementing prudent, selective price increases; it is not, however, an indication that raw material cost pressures are behind us. The run-up in raw material costs last year, and particularly in the fourth quarter, was driven by the rising cost of oil, natural gas and very tight global raw material markets. Most of these factors did not improve in the first quarter of 2006, and raw material pricing remains high.

Looking ahead, the signals are mixed. Crude oil closed above $72 per barrel yesterday, which will continue to adversely affect materials like resins and solvents. On the other hand, natural gas prices have fallen to the $7 to $8 per million BTU range, well below their peak of around $14, and this will benefit us in some other raw materials.

We're also beginning to see signs of improved availability of some commodities such as titanium dioxide, latex and polyethylene. At this time we are cautiously optimistic that pricing for these commodities may have peaked. While it's difficult to forecast in the current environment, our outlook is for the industry to incur raw material cost increases in the range of 8 to 10% for the year.

I can't let this call pass without commenting on our Paint Stores segment's 18.5% comp store sales increase. And what makes this number even more noteworthy is the fact that during the past four rolling quarters, the Paint Stores Group has opened 111 net new stores -- clearly the strongest pace of new store openings in the Group's history. Our retailers often talk about the effect of new store cannibalization on the performance of their core comp existing stores. And while cannibalization certainly occurs in our format as well, our Paint Stores team is clearly selling through it.

The other concern often expressed is the impact a slowdown in new home construction might have on our comp stores' performance. This slowdown, which began in the third quarter of last year and has been well-publicized in the first quarter of this year, has had little impact on our comp store sales.

Although less obvious than in Paint Stores, our Consumer segment also delivered a solid quarter for the Company. Many of our Consumer segment's customers and brands performed very well; most notably, our Pratt & Lambert brand had perhaps the best quarter since we acquired them back in 1997. Unfortunately the segment's results for the quarter also reflected the impact of a large retail customer's decision to move a portion of their private-label paint business to another supplier. We will continue our efforts to grow the business of our consumer segment by increasing our penetration in existing accounts, pursuing new channel partners and introducing innovative new products.

In our year-end call, you may recall that we gave guidance that our Consumer segment would generate revenue growth in the low to mid single digits for the year. And despite the softer first quarter, we continue to stand by that guidance.

I think it's also worth noting that all three of our segments improved their operating margin in the first quarter. This was primarily the result of tight expense control, productivity improvement and the successful implementation of selective price increases.

Finally, I think it's appropriate for me to comment on the developments in lead paint litigation that have occurred during the past three months. Contrary to the opinions often expressed in the media and by emboldened plaintiff attorneys, we continue to believe these suits are without merit, and that the facts and the law are on our side. We will continue to vigorously defend these suits in all jurisdictions where they may arise.

At the same time, we've taken some really appropriate and important steps during the past few months to ensure the Company's access to capital. The Company has continued to ensure financial flexibility by maintaining an increased balance of interest-bearing cash equivalents, modifying existing borrowing arrangements, and by obtaining additional sources of funds to renew borrowing facilities.

I think it's safe to say that our balance sheet is in as good a shape as at any time in my 23 years with the Company, and our liquidity and access to capital should be more than sufficient to support continued investment in the Company, while satisfying any potential bonding requirements of the court should the need arise.

I will conclude my remarks this morning by updating our outlook for the second quarter and full year 2006. We expect the second-quarter sales to increase in the range of 10 to 13% over second quarter of 2005. With sales at that level, we expect diluted net income per common share to be in the range of $1.25 to $1.30 per share, compared to $1.08 per share for the second quarter of last year. Our original guidance for the full year 2006 was for sales growth in the high single to low double digits over last year, and diluted net income per common share in the range of $3.60 to $3.75 per share. We now expect sales to increase in the low to mid teens over 2005. (indiscernible) this revised sales range, we have raised our expectation for diluted net income per common share for the year to a range of $3.75 to $3.90 per share, compared to $3.28 per share last year. Again, thanks to all of you for joining us this morning, and now we will be happy to entertain your questions.

(OPERATOR INSTRUCTIONS). Chuck Cerankosky, Key McDonald.

Chris, I was looking at the great comp store sales performance in the Paint Stores Group, and I don't want to belittle it at all; I think the cost increases pass-through is extremely important, and hats off to you guys. But can you break that down between price and volume?

If you take a look at it, slightly more than half of that increase was (technical difficulty) increase, unit increase, and the rest was price. So, price was less than half.

And Sean, a question specifically for you with regard to the balance sheet. Cash was up more than debt. And when you look at those short-term borrowings, I'm just wondering why you let the cash move up. And I'm guessing it might be related to maintaining some balance sheet flexibility.

You're absolutely right. We allowed the cash to grow. As you noticed, the net short-term borrowings were right around $206 million, which is sort of comparable to this time of the year because we're building working capital. But during this first quarter, just to maintain the flexibility. And as it worked out, it worked out pretty well. Because when we pre-funded a lot of the cash needs for the first quarter, we were able to invest in (indiscernible) funds, and actually it turned out to be almost like a natural hedge. So, the P&L was not hurt at all.

Great. Chris, given the good weather you had in the first quarter, are you perhaps seeing any of the second-quarter sales moving to the first? Was any of that going on?

No, we are off to a good start in the second quarter as well. We were blessed with some warmer-than-normal weather in the Northern half of the United States, but that wasn't necessarily true in some of our Southern markets, where there was significant rain and other impacts. So, as usual, we really don't use weather as a crutch or an aid in any of our conversations.

Eric Bosshard, Midwest Research.

Two things. First of all, the full year guidance -- you beat the quarter by roughly $0.24; you raised the full year guidance by $0.15. Why not raise the full year guidance by the full $0.24?

We've taken a look at that. You take a look at where we believe we're going to be in the first quarter, what we did perform in the first quarter. And if you go back to the range we've given you, 3.75 to 3.90, if you take a look at the midpoint of that of 3.83, we still have to go up against the $0.08 that we're going to increase, or the increase of stock option expensing. We still have some -- the Western emulsion plant will come in stream late second quarter, early third quarter. And suddenly, you put those things together, you're talking about another 20% increase in EPS. We think that's pretty strong. We understand the timing of the first quarter is a little higher than that, but when you look at the full year, we feel that's a pretty strong year.

Was the $0.08 not in the original guidance?

No, it was in there.

We've been talking about the impact of stock option expensing at $0.01 to $0.02 a quarter.

$0.08 (indiscernible). I guess what I'm saying is from -- if the midpoint of 3.75 to 3.90 is 3.83, which is a $0.55 increase; add $0.08 to that is 63; you're close to 20% EPS (multiple speakers)

I understand the 20% year-over-year. I guess I was just trying to understand the difference of the full year change versus the 1Q performance. I guess that leads to my second question --

I don't think we're forecasting 18% comps for the rest of the year either. This was just a terrific quarter for the Company.

Which is very clear. In terms of the emulsion plant and the overall CapEx number, the 160 this year, which I think is the most you've spent on CapEx in quite a while, does that take -- explain -- I guess I understood the capacity for that plant being coming out of maybe an Oakland facility that was being closed. How does that work, or do you have to grow into the capacity that's coming from that plant?

You're absolutely right. A lot of that capacity, initial capacity of that plant will come from the Oakland plant. But I will tell you that the capacity that we're building in that plant is tremendously higher than what we had the capacity at the Oakland plant. And you have to realize that Oakland plant -- the age of that Oakland plant, you could imagine, that was fully depreciated.

So that creates the (inaudible). Lastly, pricing in the quarter sounds like it was 8 or 8.5%, which I think is a smidgen above where it what was in the fourth quarter. Is your expectation, or your guidance or whatever, consider that you maintain that level of pricing through the last three quarters of the year? Or how should we think about the pricing contribution within the store comp as we work through the rest of the year?

Our forecast does not show as strong as that in the remainder of the year, just by the way the different price increases rolled in. But if you take a look at it, we still believe it will be strong. And then we go back to the gross margin, and we had a $0.07 increase. And what we've been saying for a while is when it takes us a while to cycle through, we believe our gross margin will be up this year.

And even as the pricing contribution weakens and the material cost, as Chris outlined, remains in place, you still think you'll maintain a quarterly expansion of gross margin? Or will 1Q be a lot of what we'll get for the year?

No. We expect it to be stronger each quarter.

Jeff Zekauskas, JP Morgan.

A couple of questions. Will your insurance cover possible abatement costs in Rhode Island?

As you know, we haven't commented (multiple speakers). We won't comment on that.

Is that because you don't know?

No. We've never commented on the insurance ramifications. We don't intend to provide a target for the courts or the plaintiff (indiscernible), and we have given guidance over the last couple of quarters (technical difficulty) give some comfort that there is insurance coverages, as you would expect a company of our age and conservative management to have in place. And that's all we'll say about that.

But I will tell you what's out there publicly is that there is litigation between our insurance company and ourselves. They have filed suit in New York, basically questioning whether that abatement is covered. But they also said if it is covered, they want to get the portion between themselves and the [excess] carriers taken care of. We've come back and counter-sued them in the State of Ohio. We fully believe that our suit will be brought to Ohio, and that will be decided.

Would you be surprised if other states filed suit on a public nuisance basis this year?

No.

Lastly, in the Consumer Group, can you give us an idea of volume and price changes, excluding the lost business or including the lost business, however you wish to do it?

(indiscernible) this metric (indiscernible) we've heard others give a metric that shows volume and price. And what we've tried to do is to give you a flavor of where we are over the last six quarters, because I know it's been such a hot button. But there are so many different -- especially now with the [pretty] acquisition and some of these other things -- our units, when you start trying to do units versus gallons versus so forth; we don't feel it's a meaningful metric, and we just don't have our arms around it to give you any kind of public -- to give you any kind of public answer on that.

It's a little hard for Consumer, because since we don't the size of the customer that you lost, it's very difficult even to have a rough view of what --

We've commented on the customer. This is the private-label business at Wal-Mart, and we have indicated for the year that that would be in the 30 to $35 million range.

The other thing that I will give you with the flavor with the Consumer segment, if you take a look at the ROS, the ROS is up 1.1%, from 16.1 to 17.2. I think you're starting to see that we're starting to recover some margin there.

Lawrence Horan, Janney.

Thank you. My question has been answered. Good quarter.

Barbara Allen, Avondale Partners.

Congratulations again on a superb strategy and execution of the strategy, which oftentimes I think is the hardest part. I did want to ask one question about -- everything was just so good. Was there any portion of your target end markets that was weaker or extraordinarily stronger than any of the others?

I think we've seen -- we commented on the new housing market being a little soft. But industrial spending and manufacturing spending and DIY was just pretty solid all across the Company's segments.

(OPERATOR INSTRUCTIONS). John Roberts, Buckingham.

I assume your earnings guidance doesn't include any interest expense from an appeal bond or something like that?

No.

Secondly, you used to use a rule of thumb that a 2% price increase would cover a 50% increase in raw material cost. It was a relatively crude metric. (multiple speakers). With raw materials much higher, that must have changed now. The 2% doesn't cover 50% off a now higher base of raw material cost. Do you have any update on --

What we've said is that the raw material cost represents 50% of the selling price of a gallon of paint. So, for example, if the industry raw material cost raised in the 8 to 10% range, we would need an effective 4 to 5% selling price increase, or hold the gross margin dollars flat over that theoretical gallon of paint. The 2% number might have been an accurate number when raw materials were (multiple speakers) 4%; in this environment it needs to be stronger.

Jeff Zekauskas, JP Morgan.

Just a follow-up, or a couple of follow-ups. Do you expect industry raw material costs for paints to sequentially decrease in the second quarter?

Our view right now is that many of the raw materials that we use peaked in the first quarter, or perhaps in the fourth quarter last year, depending on the commodity. So, presuming that we don't have another natural disaster, or that -- and also, I would say, presuming that oil price [has ceilinged], it's safe to say that we would probably see a sequential decline in the second quarter.

So in general, do you think it's fair to say that your efforts to increase prices probably have halted now; that is that you don't expect, all things being equal, additional price increases in your product lines throughout the year?

I guess the way we would phrase that is that price increases announced throughout calendar year 2005, including those in the fourth quarter, are still working their way through the marketplace. So (multiple speakers) the need for the Company to recover pricing, and we'll continue to work on that. Whether or not we need to announce additional price increases later in the year, it is too early for us to make that call.

Chuck Cerankosky, Key McDonald.

I guess this is in light of the new segment reporting, Chris, but you've got 2950 paint stores in the Paint Stores Group listed in the press release. What did you pull out of there versus the old reporting?

In those numbers previously we had the Mexican stores, as well as the stores that were dedicated to selling chemical coatings, which have now moved into the Global Group.

Chemical coatings in Mexico. So, Canada is still in the Paint Stores Group?

Right.

John Roberts, Buckingham.

I wanted to ask a question about the Supreme Court case that's underway regarding the contract between the State of Rhode Island and their legal firm. Does that affect the timing on the case, the decision on remediation damages (indiscernible)? In essence, I want to know what the Supreme Court is going to rule before you go too far down the path and have to redo things in the damages case.

I don't believe it does. I think those two -- they're separate, and I believe that they're going to be argued kind of in parallel.

So, the Supreme Court case then is about process and going back to redo the contract. You wouldn't restart the original case.

We don't really know the ramifications of a decision either way by the Supreme Court on the argument of the legality of the contingency fee agreement. So, assuming that the Supreme Court agreed with our arguments, we're not sure what the ramifications of that decision would be.

Lawrence Horan, Janney.

Just a detail question. You say in the press release that the historical business segment information has been updated to reflect the new accounting. Is that -- are you speaking just to the quarter you reported, the historical quarter you reported? Or do you have somewhere the data, so that we can update and restate our models?

All the segment information for each quarter of 2005 and all prior years were recast in our 8-K that was filed two days ago.

(multiple speakers)

It goes all the way back to 2001. And you can actually, again, look at www.sherwin.com under SEC filings.

Jeff Zekauskas, JP Morgan.

Did industrial maintenance coatings grow faster than architectural coatings in the quarter?

No, they were comparable in the store segment.

Do you have any description or color on why the industrial maintenance business was strong? And do you have an outlook for that for the remainder of the year?

I think our outlook for the remainder of the year in our store segment is that we would see that business up in the low to mid teens, and that we would expect in that segment that the architectural and industrial products would both move in that direction.

Steve O'Neil, Hilliard Lyons.

Great quarter. Just a quick question on your 8-K. I saw the 2005 quarterly information, but prior to, I guess, 2005, is the only information available on an annual basis?

Yes. Just on an annual basis for years prior to that.

The only quarterly information is on 2005?

That's correct.

Gentlemen, I'm showing no further questions in queue at this time.

Thank you. We'd like to thank all of you for joining us again this morning and for your interest in Sherwin-Williams. As usual, I will be available this afternoon to answer any additional questions you may have. Thanks again.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.