Simpson Manufacturing Co Inc (SSD) 2010 Q3 法說會逐字稿

(Operator Instructions). Good day, and welcome to the Simpson Manufacturing Company Third Quarter 2010 Earnings Conference Call. I would like to turn the meeting over to your Chairman, Mr. Barclay Simpson. Please go ahead, sir.

Thank you, Kevin. Good morning, everybody, and thank you for joining our CFO, Karen Colonias, and myself. Once again to please our lawyers I must tell you that despite my initials, we will not give you any.

The third quarter was a real mix with the US housing market and general economy, and the housing market in particular not showing signs of a significant increase. But our Asia-Pacific and European operations both showed significant increases financially and in sales. Asia-Pacific broke even financially after losing over $1 million in the third quarter last year, and sales were up 71%. Of course, it's easy to show a big increase when you start out with a low number. But quarterly sales of $2.6 million are starting to be a real interest.

Sales in Europe were up 7% in the quarter, and 10% year-to-date. Profits went from $120,000 to $2.2 million in the quarter, and $2.1 million year-to-date versus a loss of $5.4 million. While the European economies tend to be struggling, our European acquisitions, except for Lebig, which now is being integrated; the other are integrated and contributing to sales and profits. And it is a -- and including a now efficient German operation. A whole new area is South Africa, where we now have a sales office.

Another area is not brand new, but where we intend to be much more important is Eastern Europe. Anchor Systems sales were up 9% for the quarter, and we're just getting started with Anchor Systems products in Europe. SOCOM, a French acquisition that we are in the process of signing the final papers, is a real key, along with Lebig's mechanical anchors. With the addition of SOCOM's adhesives, we have a product line that by mid 2011 should be doing substantial business in Europe. We are also looking at a German company that could give us a start in the fastener business there. Another substantial possible acquisition in the US is not at all sure yet, but negotiations are proceeding. As most of you know, we've been looking hard this year for acquisitions throughout the world without success. So it is a pleasure to make some progress. We continue to look hard in China, as well as elsewhere.

While total home center sales were down 2% for the quarter, Home Depots were up 7%. Simpson's Strong-Tie sales in California were down 6% for the quarter and are somewhat worse so far in the fourth quarter. Other three quarter numbers include the west down 13%, the south-southeast down 7%, and, hooray, for a couple of pluses, midwest up 3% and the northeast up 4%. These numbers are not happy ones, but they are not because of losing market share. Our people believe that our shares have gone up, if anything. These numbers are why we are concentrating on increasing our sales internationally.

While most pundits feel that US housing starts and the economy will come back, the predictions as to when vary all over the lot. So we are after other markets, although we are more than ready whenever the US markets turn back up. On a different subject, our sale of Dura-Vent is complete and the financial losses were shown in the second quarter statements. We still own the Vacaville property and are leasing it to the buyer for just under $1 million a year. Because we had a bunch of first-class people there who had been with us, some of them for over 20 years, selling it was a wrenching decision. And it really was. But we simply could not get the operation to provide a good return on capital.

After a big first half, Quik Drive sales were flat for the quarter, and Swan was down 8%. These product lines are part of our determined effort to get a part of the something like $10 billion fastener market worldwide. And we're really going after that. The long-term future looks good, but it will take time to get our efforts outside of the US to make enough profit to offset our lessening but still substantial dependence on US housing starts. But we have the people and the resources to make Simpson Strong-Tie a successful long-range company. Questions. Are there questions out there?

(Operator Instructions). Sir, we have several questions. Let's go first to the site of Garik Shmois from Longbow Research.

Good morning.

Hi. Thank you. Good morning. First question is in the press release you did say you had some stronger sales through the lumber dealer channel. I was just wondering if you could provide some color as to your success there, and if this is something new that we should be paying attention to.

No. It really isn't anything new. And it's so hard to figure out why sometimes. And this one is tough. They just -- it must be, I think, with the market the way it is in the US, it must be that they're getting much more -- much more sales from people doing some work themselves.

Okay. So stronger perhaps DIY channel?

Yes.

Okay. And then you mentioned in the prepared remarks sales were somewhat worse here in the fourth quarter. Is that on a year-over-year basis?

Yes.

Okay. And you also mentioned you're planning to open up a sales office in South Africa. Can you talk about what products you're targeting there and how you plan on deploying assets down there?

We're still figuring that market out.

Okay.

I really don't have an answer for you yet that makes sense. Another six months and we'll know.

So this is more of a 2011 story, maybe even 2012 before you have the office up and running?

That's correct.

Okay. And just lastly on your cash balance, you talked about the M&A opportunity you're pursuing now. It appears like this is the most cash that you've had on your balance sheet. And is it mainly you're going to target M&A opportunities as they arise, or could we see some other targets for the cash maybe upping the dividend or something along those lines?

Well, the major purpose we have all that cash, of course, we're a long-range company and we want to build it several ways, including acquisitions. But it proves if you really examine these companies very carefully, so often you get surprises at the last minute. And so we have been very careful with our acquisitions since a couple of years ago we didn't look carefully enough at one or two and they cost us quite a bit. So the point is that we are looking extremely carefully. We have several we're looking at now. We always do. And, fortunately, I was at least able to say one that we'd already done. And we have a couple of others that really look interesting.

Are you seeing any change in the way that potential sellers are coming to the market with respect to valuation?

Well, yes, I think that's true.

Okay.

As far as your question, as far as doing something else with the cash, it is at a point where, of course, these days you don't make any money off your cash if you're careful with it. And we certainly are. We have discussed -- we had a meeting yesterday, as a matter of fact, of the Board of Directors. And we discussed maybe taking a portion of it and either using it for raising the dividend a little bit or thinking about buying more stock. And I think it's likely that at the first of the year, the Board may decide to raise the dividend a little. Whether we'll buy any stock or not is still up in the air.

Okay. Thank you for the color. And good luck.

Thank you. But I don't think it's luck that's going to do it. It's us.

And we go next to the site of Arnie Ursaner from CJS Securities. Your line is open.

Good morning, Arnie?

Hopefully you stayed up and watched your Giants win last night?

I saw part of it, just the last. Yeah, it was exciting.

I think it's new information that you're describing on this call. The company I assume you're referring to is the French company, SOCOM?

That's correct.

Okay. Can you share any more broad numbers about this company? Potential revenues or any additional information you can share with us?

Well, it's a very small company. And I can get you some numbers here. But that isn't the reason; it's the product. The product is one that they don't have big sales of, but we think given a little time, that it really fits in with us and it gives us the opportunity to get Anchor Systems going in Europe. Their adhesives. So in that way it's important to us. Numbers? What do we got here, Karen? How much did we pay for that?

The purchase was EUR4.2 million

Okay. Obviously, it's a very small company, but we think we can make their products big.

Okay. The other series of questions I have all relate to international. Obviously, you mentioned in Asia-Pacific you achieved break-even in Q-2. That's a tremendous improvement in performance. In Europe you mentioned you made $2.2 million in the quarter --

Correct.

-- and had losing money there. So I guess my question relates to both Asia-Pacific and Europe. How much -- did currency impact this, and is the improvement and profitability in your opinion sustainable?

I haven't checked that currency thing. You, you have anything --

Yeah. The currency effects for this year -- or excuse me for this quarter was a negative impact of $2 million, and it was negligible on the net income.

So it would have obviously done better ex the currency issue. In your view, Barc, the actions you've taken, should we expect more sustained profitability from these regions?

Certainly from Europe. Asia, we're still finding out what products to sell there, particularly in China. And we'll spend the money to provide the conditions that will make it better in the future. So I don't want to predict profits there yet.

Okay. And Karen, can you remind us what percent of the current revenues are from international?

This quarter, 29% were from international sales.

And there now it's -- and that makes it 29% overall for the year.

Okay. Thank you very much. I'll let others have an opportunity.

And we go next to the site of Trey Grooms from Stephens, Inc. Your line is open.

Yes, sir.

Good morning.

How are you?

Doing great. How are you, Barc?

Good.

Hey, could you -- you touched on Lebig for just a minute saying that it was beginning -- I guess, the integration process had begun and everything, but when do you guys think that that one's going to turn the corner to profitability like some of the others have sounds like?

Well, it is finally getting integrated, and of course, they're making metric mechanical anchors which with the adhesive on this new acquisition, we think it will get us going with Anchor Systems products in Europe. So Lebig, the reason we bought it is going to start to be realized, and it's cost us a lot more to get it there than we thought it would. And it's made us so much more careful looking at acquisitions. But now, now Lebig will be an important part of our European sale of Anchor Systems products.

Do you think next year we might be to a point where it can turn the corner or is it still a little bit further out, you think?

Oh, I think it's a little bit further out, probably.

Okay. I guess sticking to the acquisitions, you also touched on a German fasteners company and other possible US acquisitions. Are any of these other things that you're looking at of any size?

Yes.

Could you --

That's all I can say right now.

Okay. Fair enough. And then also, Karen, could you give us some color on how much of an impact the lower steel costs have on margins in the quarter? Because it looked like utilization rates might actually be down a little bit, but you still had some really impressive margins. Is that mostly a function of steel or --

No. No. Not anymore. It's a whole bunch of things. Mostly -- mostly things which are, you know, hard to describe because what you do is you turn off the lights instead of leaving them on all night. And just these little things that put them together and they add up to big savings. And our people have been great about that all over the world. So our margins, yes, steel has been of some help, not much.

Okay. And then kind of looking forward, I mean, do you think we're at a level here where -- I mean, it seems like next year if we were to get -- if we were to see some improvement in demand, I mean, it sounds like with improved utilization rates looking in the next year, you could have some pretty decent margins. Do you think that whatever you guys have done and put in place is something that will continue and that this level of margin is sustainable and actually could improve looking forward?

No. I think the margins will go down a little bit. What do you think, Karen?

Well, obviously, if we have more sales then we could have an impact from a labor standpoint. So the increase in sales would certainly help our utilization, but then our labor rate would increase. So I think it would be pretty consistent on where we would be anticipating the gross margin to be.

With where we are today, roughly?

Well, I think we'll see certainly the gross margins slightly drop in fourth quarter because of that factory utilization. We are definitely seeing a slowdown. We're not seeing a lot of requests from our customers. They're not seeing much uptick in the market. And so we have started to have to lay off some factory employees, and certainly not taking advantage of much of that factory as we have. So I think we will see a little hit in our utilization and our absorption on the fourth quarter.

Okay. And then that's very helpful. Here's my last question. You mentioned labor would go up. Looking back, I guess to the first quarter of 2009 when you guys, unfortunately, had to lay off a substantial amount of the workforce, looking forward you mentioned that labor would go up. That's kind of expected. But just thinking about how much of that labor that you guys had to take out would have to come back in a normal kind of environment, could you give us a guess on that?

Well, the only problem is guessing what is a normal environment. We have so many different sections as to when this economy will turn around. And you should know that we are definitely not waiting for that. We're ready whenever it does, but we're not waiting for it. And it might not come for quite awhile.

Yeah, I understand that. But regardless of when it comes, I'm just trying to get a feel for how much of that, and I believe the number at the time might have been somewhere around $57 million or so would have to come back. Just, you know, was it just [big paths] maybe have to come back? I'm just trying to get an idea.

What do you think, Karen?

Well, I think from the standpoint of labor that we have certainly taken the downturn to improve our efficiencies. And we've worked very hard in our manufacturing facilities to improve our efficiencies. So I believe we would be able to certainly look forward to those increased sales and be able to meet our customers' needs with slightly less labor force than we needed at our peak time.

Okay. Well, that's helpful. Thanks, guys.

Right.

We go next to the site of Robert Kelly from Sidoti. Your line is open.

Good morning, Bob.

Good morning, Barc. Good morning, Karen. A question on Asia. As I understood it, you were shipping product from Asia back here to the states. Is that still the story in Asia?

Well, not much. Some.

So your break even in Asia is Asian-Pacific sales?

Yes. Okay.

So now when Asia --

Excuse me. But Asia-Pacific, we include Australia.

Okay. So when Asia and Australia get over and above your break even run rate, are the margins there accretive to the corporate average? Are they below? How do we think about the incremental contribution from Asia?

I've been trying to make a guess on that. And it just -- we don't know enough yet. I think that you have things -- it's probably going to be better than Europe. Europe you don't have, Western Europe, at least, you don't have the scare factor. By scare, I mean in Western Europe, except for Italy, there are no seismic problems or high wind problems. So you don't have that fear factor. Now, in China, for instance, you do have. As I don't have to tell anybody, they have big earthquakes there. So I think eventually our products are going to be, when they're specified, it's going to be like it is here. You don't break the spec.

Understood. As far as the North American market, if we were to strip out what happened internationally, a pretty weak read for North America, yet your Home Depot sales were up nicely. What explains the strength in Home Depot versus the rest of North America?

Boy, over the years, I've had a lot of trouble figuring that out. And I've tried to get the answers from our people. And it just comes down to at this particular quarter, why they decided their inventories were way too low, and the next quarter they decide they're way too high. And it really is; that's the major factor.

What is your sense of inventories in the pro-dealer lumber channel as opposed to what's going on at Home Depot?

I think maybe right now, because of the way the US economy looks right now, I think they're not going to be increasing them. If anything, maybe down a little bit.

Okay. Great.

In other words, I'm not very optimistic about the US economy this quarter, at least.

Right. As far as beyond this quarter, longer term, demand as it stands today, not good in the historical sense, slightly better than last year. We've seen a big improvement in the gross margin line. Is there potential for the gross margins you're producing here in 2010 to improve further once volumes rebound given the cost restructuring actions here and abroad and the greater contribution from Asia? Do you think about long-term where the gross margin could shake out?

No. I think that a 45% -- anything 40% or above is a terrific gross margin in our industry. You find another company in our industry that has that kind of gross margin.

There aren't any, Barc.

So I don't see that getting better. In fact, I think as business improves, why, our efficiency will go down a little bit unless, as we've done before, we're able to find more and more ways to improve manufacturing. But I don't expect gross margins to go up. If anything, I think maybe in this quarter they might be down to maybe 40%.

Right. I understand the concerns about this quarter with the seasonal and what not. But higher fixed cost absorption, you don't see any upside to the current margins you're doing in the future if demand rebounds?

Well, I guess I don't see -- and I'm speaking personally. And when you predict the future, man, it's like predicting the stock market. Nobody can over time. And I think that as we increase our sales that I would not expect our gross margin to go up.

To maybe gross dollars improve, the margin stays steady to where it is now. Okay. Thanks, Barc.

I would hope it stays close to where it is now. But I think probably, when we get back to having a lot more business, whether it comes from the US or international, I would suspect that the gross margin won't go up, it might go down a little.

Understood. Thanks, Barc.

Okay.

And we'll go next to the site of Barry Vogel from Barry Vogel & Associates. Your line is open.

How are you Barry?

Good morning, ladies and gentlemen

Good morning.

I have a few questions to Karen, Barc. On the SG&A expense line, if you look at the first, second and third quarters, this quarter had a bit more SG&A expense in terms of percentage of revenues than I would have expected. Is there any reason for that, you know, in particular compared to the first two quarters?

The increase in SG&A is because of the company profit-sharing. That's the main increase. There's not really been an increase in the head count or any other expenses.

Okay. And could you give us, excluding the discontinued ops completely, what the effective tax rate is going to be this year?

We're anticipating that will be somewhere between 43% to 45%.

43% to 45%? Now, in this quarter, again, if you just add the P&L together, it was a 37% rate.

That's correct. And as you know, in fourth quarter, it's a little hard to estimate where the tax effect would be based on the fourth quarter sales. And also we've had the benefit of the foreign operations doing well this year. So we've been able to take advantage of that tax benefit. So that's why you're seeing that number at 37% for third quarter.

So you're saying that when all the dust settles, the actual rate on your annual P&L will be 43% to 45%?

That's where we're estimating.

All right. Now, can you give us some color on the gain on the asset sale? First of all, what was it, number one; and was that $5.217 million a pre-tax number or tax effective number?

That's the gain on the sale of our buildings in Brea.

In Brea.

Yes. We had six buildings that we sold in Brea in our Southern California location that closed just at the end, the very end, or the first part of the third quarter.

Okay. And was that a pre-tax number?

Yes, it is.

Okay. And what about San Leandro? Is that sill for sale?

San Leandro is still for sale and it is in contract.

Oh, it's in contract. And can you tell us what it's on the books for?

$7.8 million.

Okay. Do you think you'll have a gain on that sale?

Not sure we'll have a gain.

Okay. So the asset for sale on your balance sheet $7.887 million, is that San Leandro?

That's correct.

Okay. And as far as capital expenditures for this year, what's your best guess right now?

We're anticipating about $37 million.

That excludes acquisitions, I presume.

Yes.

And if you converted from Euros, what would be the SOCOM acquisition cost in dollars?

Sorry. One second.

Sure. Take your time.

About $6 million.

And what will be the D&A this year?

Looking at $23 million.

Okay. And as far as inventories, you've done a nice job in lowering the inventory as the year has progressed. What's your best guess for your estimate at the end of December for inventory levels?

I think our current inventory levels will remain pretty consistent. We are -- again it's a slower time of the year. We are really looking very closely at our inventories. I think they will stay fairly consistent.

All right. That's great. You guys have done a enormously great job under the fact considering we've had a depression, a full-bore, total depression in your main market. And so I've got to believe that incremental margins when things improve certainly in the United States will be good. And I think you guys are being a little conservative about that. One other small question. What happened to Strong-Wall sales in the quarter? Were they up?

Strong-Walls were down 14%.

Thank you very much.

And Strong-Wall, you have to know, Strong-Wall goes into housing.

I know that, Barclay.

I thought you might, Barry, but maybe somebody else doesn't.

Okay. That's true. That's true. Right. Okay. Thanks a million.

Okay.

Thank you.

And we'll go next to the site of Steve Chercover with D. A. Davidson. Your line is open.

How are you, Steve?

Good morning. Good morning to you both. First question is also along the line of the transition of sales from home centers to the lumber dealers. I have another company that experienced that in the quarter just ended. And they endured kind of lower margins as a result, I guess they had to push product in. I just want to determine whether you were pushing it in or it was pulled, and whether the margins were the same.

Well, I guess depending on your definition of pushing it in, I think our sales effort has been very strong. We've got a great sales force. And so it wouldn't be an increased effort in that particular group. Pretty much their choice, not ours.

And so the margins are similar to what you get from the home dealers or the big boxes?

Yes.

Good. Second question, I believe you were trying to push through some price increases in Q3. Did they stick? And what's going on with steel now?

Well, they stuck. And steel is pretty much unpredictable. Right now, the suspicion is that it -- actually, I hear it both ways, it may go up or down. Kind of like the stock market.

Indeed.

And you should know that over time, we have a very smart steel buyer. And consequently, more often than not, we have been able to take a little advantage from steel price changing. But also it's been the other way, that you can guess wrong like you can on the market. And we have occasionally and it's cost us. So over time you just say that steel -- it will contribute something but we'll be blind lucky if we make any money because of steel price changes.

Great. And my final question, I'm always a little reluctant to discuss this, but I believe there might be changing rules for both you and Tom. Can you tell us what's going on in terms of the succession planning?

Oh. You don't have to be reluctant about that, Steve. Thank you. Actually, it's a little bit unpredictable. Tom has done a great job. He's still doing a great job. And as yet, hasn't set an exact time. Now, I think it's -- and this is just my guess right now. I think it's fairly likely that the end of next year, we'll see him decide that he wants to retire. But I'm not sure of that.

So 2011.

Yes. But I'm not concerned, because whenever it happens, because we have some very strong people internally here who can take over his job. And you get -- you get somebody who's been with the company a long time, so the company culture, which has built us, is within that person. And the experience is there. And then, of course, anytime you get somebody new you get some new ideas. So I'm not at all concerned. I think it's great that the job he's done and he is doing. And when he decides to go, we'll have a great replacement.

Okay. Thank you very much.

(Operator Instructions). With that, we'll go next to the site of Peter Lisnic with Robert W. Baird. Your line is open.

Good morning, everyone.

Good morning.

I guess quick modeling question, if I heard you right on the tax rate, 43% to 45% is that fourth quarter?

That would be for the year.

Okay. So the implication is you're going to have some pretty significant tax rate in the fourth quarter alone, is that right?

That's the unknown based on how, again, the revenues will be for fourth quarter and what will happen with those foreign operations in the fourth quarter.

Okay. All right. And then Barc, you had mentioned acquisitions and you've got some things in the pipeline. Do you see at all perhaps going through all the cash and levering up the balance sheet, do you have a pipeline of acquisitions that would maybe foresee you doing that?

Not at the moment.

Okay. That's fine.

Yeah. We have certainly some that could use up quite a little bit of it, but nothing we're looking at that would, you know -- $100 million or more.

Okay. Perfect.

But with that cash, if the right opportunity comes along we can take it.

Okay. Understood. And then you mentioned some of the weakness that you've seen coming into the fourth quarter. Can you give us a little bit of color commentary of where that is exactly?

Well, in the States, it's in our biggest market which is California.

Okay.

California is not looking good right now.

And any -- if you look at the rest of the states are you seeing broad acceleration or are things kind of status quo? Any improvements? How do you look at the rest of the country?

Well, the east and the midwest, they look like they're continuing to be up a bit. Texas pretty hard to project it. Maybe flat. It's not -- it's not a strong-looking market. We don't see those changes. And our people out in the field don't see their customers being very optimistic for the short run.

Okay.

So as you've heard me say many times, you buy our stock for the long-run because it's going to take us awhile to get all our international business really making money and being enough of a percentage of the total. And if the US market continues to stay down. And you can't count on it moving any particular time. If you do, you're going to be in trouble. So we're determined to get our dependence on US housing down, not up. And when it turns, man, we'll be ready.

And that seems to be -- that approach seems to be working. And that's my last question, I guess. If you look at the Asia-Pacific business and Europe, what did you do to kind of turn these around relative to the last couple of quarters? Was it just simply more volume pumping through the plants? Or were there some cost levers that you pulled or mix? Just kind of, how did you get the profitability to kind of swing this quickly in positive territory?

We will have really good managers in both areas. And they have been doing things designed to get that market -- those markets turned around in the long run and it's taken a year or two to get them done. But now, particularly in Europe, it has turned. And it looks as if it's going to stay that way. And probably keep going up. And of course, in Asia, China in particular, we're just getting started.

I hate to say that Asia's probably more volume-driven versus Europe being more operational changes that are driving the margin improvement?

Well, I think it's up to us. Like we have a 15-person sales office in Beijing, and we have four in Shanghai. And it's up to them to figure out what products that we need to make there or bring in or buy there. And we're getting along. We're making progress. But it takes time.

And you don't -- when you put together a sales force in particular, you don't end up two years later with all the same people. There are some who just don't work out. And we've had that happen there in China. We've had to let quite a few people go. So we're gradually getting it organized and it takes time.

That is very helpful. Thank you for your time and your help. I appreciate it.

Okay.

We'll go next to the site of Keith Johnson from Morgan, Keegan. Your line is open.

How are you, Keith?

I'm good. How are you guys this morning?

Good.

Just a couple of quick questions. Maybe first off, regarding your comments on sales patterns going into the fourth quarter. I know it's early into the fourth quarter, but would you say -- how would you characterize the slowdown relative to the normal seasonal slowdown? Are you guys seeing it slow down a little bit more than what you would have considered from a seasonal standpoint, or is this just more of the seasonal trends going into the end of the year?

Well, this is just my view, but I think it's a little worse than I thought it would be. What do you think, Karen? What's your opinion?

I think we're seeing a combination of things as we go into the fourth quarter. Certainly the seasonal change. But I also believe that based on our conversations with our customers and our branches that people are just not seeing a lot of positive things going on in the industry.

Okay. And then, of course, as you guys talked about on the call with some previous questions, gross margins have done well this year. Could you help me understand what drove the change in the margin as we came from the second quarter of around I guess 46.5% to where we were in the third quarter this year of around right under 45%? What was the main driver in that sequential decline?

That would be -- the main impact there would be the, again, reduced absorption.

And you've taken absorption or utilization rates down further as you've come through October? Is that what I understand?

Yes. That's very typical for us in the fourth quarter.

Now, in the third quarter, could you help us understand a little bit? I mean, was the sales price increase fully implemented during the third quarter? In other words, that would have helped that margin line? Or was it being phased in, and will be more of an impact in the fourth quarter? Or how should we think about that?

Yes, any price increase takes a little while to phase in. That price increase was July 1. And so it would typically take through the fourth quarter to phase that in.

Okay. And then I guess final question just want to make sure I understood correctly. You said Anchor Systems showed an increase year-over-year. And I know that you're working on the French acquisition and those type of things. But what was the underlying driver in the quarter for that improved Anchor Systems sales?

What do you think, Karen?

Well, our sales force has been very, very busy in the Anchor Systems area looking for jobs, commercial jobs. And so they've done a great job this year at being able to increase our market footprint on those commercial construction types of jobs. And that's been the main driver.

Okay. So not really more of a market share gain versus maybe showing a little underlying bottoming in that market or maybe slight improvement in some regions?

No. I think it's internal improvement.

Okay, great. Thanks a lot.

We're doing a better job.

Thanks.

And I'm showing no further questions at this time.

Okay. Well, whoever is left, if anybody, thank you.

And this concludes today's teleconference. Have a great day. You may disconnect at this time.