Steel Dynamics Inc (STLD) 2011 Q4 法說會逐字稿

Good day, everyone, and welcome to today's Steel Dynamics' fourth-quarter and full year 2011 earnings conference call.

Today's conference is being recorded.

Joining us today are Mark Millett, President and Chief Operating Officer of Steel Dynamics Inc.

(sic- Company website), Richard Teets, Executive Vice President of Steel Dynamics Inc.

and President and Chief Operating Officer of Steel Operations, Russell Rinn, President and Chief Operating Officer of OmniSource Corporation, Gary Heasley, Executive Vice President of Steel Dynamics Inc.

and President of New Millennium Building Systems, Theresa Wagler, Executive Vice President and Chief Financial Officer of Steel Dynamics Inc., and Fred Warner, Investor Relations Manager.

For opening remarks, I will now turn the call over to Fred Warner.

Please go ahead, sir.

Good morning and welcome to today's Steel Dynamics' conference call for the fourth quarter and full year of 2011.

This call is being webcast live on January 25, 2012 from Fort Wayne, Indiana.

Later today you'll be able to replay the call from our website or download the call as a podcast.

During today's call, our Management will be making some statements that are forward-looking.

All statements regarding anticipated future results or expectations are intended to be forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Such statements, which by their nature are predictive and are not statements of historical fact, are often preceded by such words as believe, anticipate, estimate, expect or other conditional words.

These statements are not intended as guarantees of future performance.

We caution that actual future events and results may differ materially from such forward-looking statements or projections that may be made today.

Some factors that could cause actual results to differ include general economic conditions, governmental monetary and fiscal policy, industrial production up levels, changes in market supply and demand for our products, foreign imports, conditions in the credit markets, the price and availability of scrap and other raw materials, equipment performance or failures or litigation outcomes.

You may find additional information concerning a variety of factors and risks that could cause actual results to differ materially from today's forward-looking statements.

Refer to sections entitled forward-looking statements and risk factors in our most recent annual report on Form 10-K and in our quarterly reports on Form 10-Q, as well as in other reports we file from time to time with the Securities and Exchange Commission.

These reports are publicly available on the SEC website, www.sec.gov and on our website, steeldynamics.com.

Now, to begin today's discussion I would like to introduce SDI's President and Chief Executive Officer, Mark Millett.

Super, thank you, Frank, Fred, sorry.

In the lead in there, I didn't realize I've only been on the job for three weeks and I was demoted already, but thanks for pointing out I still am the CEO, Fred, thank you.

So good morning, everyone, thank you for taking the time to join us on our call to discuss SDI's fourth-quarter and 2011 results.

I will provide some commentary which hopefully anticipates some of your thoughts and your questions, after which Theresa will present more financial color.

We will then open up the call for our whole group here to answer your questions.

As virtually all of you know, this is my first earnings call in my new capacity as SDI's Chief Executive Officer.

So, before I begin my review, I think I'd like to step back for a moment and just offer some initial thoughts.

The call, obviously, signifies a milestone in our history.

Since Keith, Dick and I co-founded Steel Dynamics in 1993, our Company has seen considerable growth and considerable success.

We've grown from a fledgling Company to the fifth largest steel producer and a leading recycler of both ferrous and non-ferrous materials.

Keith has obviously been the principal architect of these accomplishments.

He leaves an enviable legacy, a broad foundation upon which I and the team can further build.

As the great leader he is, he has made the transition smooth and very, very seamless, relinquishing the leadership of the Company, the direct leadership of the Company, yet being readily available for us to seek his wise council when needed.

I would like to thank him sincerely for that.

Our styles are invariably our own, but Keith and I share the same values, the same vision for our Company.

The transition will be an evolutionary one, building upon the past while recognizing and adapting to the changing markets and the change in business environments that we see today.

The Company is in great shape.

Each time I tour any of our facilities, I leave incredibly energized.

We have a passionate team that strives to be the safest, lowest cost operators in the world.

Those of you that have toured our facilities I think would agree.

We have always had and will continue to have a very, very special culture.

It is this culture and the esprit d'corps it generates that differentiates us from our competition.

It is this culture that drives the positive results even in difficult economic times such as we saw in 2011.

So, turning to the subject at hand.

Looking at our performance, for both the fourth quarter and 2011 as a whole compared to 2010, we showed strong revenue and bottom line improvement.

Sales growth for both the quarter and the year exceeded 20%.

Annual pre-tax earnings almost doubled.

Fourth-quarter net income was $30 million, or $0.14 per diluted share, on net sales of about $1.9 billion.

And for the full year, net income increased a considerable 98% to $278 million, or $1.22 per diluted share, on total sales of $8 billion.

We believe this puts us in a position to maintain the leading operating margin position we established over our domestic peers during the first three quarters of this year.

While our fourth-quarter operating income increased 76% over the prior years' performance, it was nonetheless down 24% from the third quarter of 2011.

As we described, Flat Rolled margins compressed quarter-over-quarter as pricing receded earlier in the quarter, and was not matched by an equal reduction in raw material costs.

Additionally, costs and reduced volume associated with the planned three-week outage at Iron Dynamics reduced operating income by a further $10 million.

The OmniSource recycling divisions experienced typical seasonality with fourth-quarter ferrous shipments dropping 11% to 1.3 million [tons].

Fortunately, non-ferrous margins expanded and more than compensated for the reduced shipments.

Operating income for OmniSource was $16 million for the fourth quarter, an increase of $7 million over the prior year and an increase of $4 million compared to Q3 2011.

For the full year 2011, operating income was some $95 million.

New Millennium building products, our joist and deck operations saw losses in the fourth quarter edge up a little, but year-over-year improved by almost $6 million when excluding the $13 million charge that we took in 2010.

The shipments increased by 53,000 tons to total 218,000 tons, up 32% for the year.

Our Minnesota iron-making operations reduced our consolidated after-tax earnings by $10 million, as compared to $8 million loss in Q3.

As we talked about in our previous call, the increased loss was somewhat expected, as our inventory draw down of higher priced iron concentrate resulted in some anticipated margin compression.

However, the decline in pig iron market reduced (inaudible) values more than we had thought.

For the quarter, Mesabi Nugget shipped 53,000 metric tons, up 63% from Q3.

But even so, production did not really meet our fourth quarter target.

Having operated for almost two years now, we still struggled in December with some new equipment issues which carried into January.

Special equipment problems as you might imagine are pretty frustrating for us as the process, when operating with reasonable uptime has clearly demonstrated its ability to run in excess of a thousand metric tons a day or in excess of 75% of its design capacity.

The frustration aside, we do continue to see forward progress there.

Again as mentioned on our previous call, and assuming that pig iron market does not deteriorate further and modest production gains are achieved, the financial impact of the Minnesota operations in total will remain somewhat constant until our mining resource venture is operational and lower price concentrate is available in the fourth quarter of 2012, later this year.

Construction at the new magnetation facility has begun and we anticipate start up late Q3.

Returning a second to 2011, I think as we pointed out in the press release, our operations recorded some notable accomplishments, and I think it's worth restating them.

Relating to safety, while the steel and recycling platforms both operated below their respective national average incident rates in 2010, and when I say below, I mean better than national average rates, they further reduced their rates during the year.

The steel platform reduced them by 21% and recycling reduced their incident rate by 38%, so my congratulations to all those involved.

We are truly proud of the improvement but will not be content nor will we lose focus until we achieve our ultimate goal, which is zero accidents across the Company.

As we stated our Flat Roll Engineered Bar Product divisions both achieved record annual production in shipping volumes.

Engineered products continues to improve productivity and is the beneficiary of increasing market share resulting from its exceptional quality, its downstream processing and their focus on superior on-time delivery and value-added products and just the general value that we give to our customers.

The Flat Roll mill has similarly gained market share as it ramped annualized production capability up over 3 million tons to a systematic expansion plan.

For the good utilization at Roanoke Steel in West Virginia, the steel platform as a group posted record shipping volumes for the year.

A phenomenal achievement to gain in a tough market environment.

Engineered Bar Products and Steel West Virginia both achieved record annual income for the year.

Our Metals Recycling operations achieved record annual ferrous and non-ferrous shipping volumes, as we leveraged improving scrap flows through additional retail yards and increased shredder capacity.

2011 we opened or expanded 10 retail facilities to increase the proportion of the higher margin retail material.

And shredder upgrades throughout our system increased process capacity by approximately 150,000 tons on an annualized basis.

We significantly increased the market share of Rail Business.

We shipped 117,000 tons in 2011, more than double that of 2010.

Mill utilization saw progressive improvement through the year, increasing from 43% in the first quarter to 56% in Q4.

In fact, if you look back to the first quarter 2010, I believe our utilization rate was some 29%, and quarter-over-quarter since then, we've improved that number.

So, a great performance by the team.

We see continued interest in our products and we targeted 180,000 tons of rail shipments for 2012.

Looking at Iron Dynamics, they produced a record 198,000 metric tonnes of liquid pig iron in the year with the lowest cost structure achieved to date.

Iron put there is 100% recycled mill scale and other steel mill waste oxides.

The liquid pig iron there continues to contribute to the high productivity of our flat-rolled mill.

In fabrication, New Millennium Building Systems continued to provide a good base load to the Roanoke Bar division, helping it maintain an 85% operating rate for the year.

Three new joist fabricating facilities located in the South and Southwest were started up.

They will provide geographically strategic market expansion and open up more national account business for us.

So once again, I'd like to stress the phenomenal job the team has done in the challenging environment.

It is a continuing testament to our business model, our customer commitment, our innovative low cost operating culture and our diversified product portfolio of value-added products.

All of this puts us in an enviable position I believe to take advantage of improved market conditions as, and when, they occur.

In looking forward a little, we're seeing more positive market sentiment and somewhat improved market conditions in many of the markets we serve.

Auto continues to be strong, along with energy, heavy equipment, trailer and agriculture.

The non-residential construction markets remain dormant, although directionally, the recent two month uptick in the ABI numbers is positive.

And I think as Gary would attest, our ordering inquiry rate has picked up and could parallel that uptick.

Related to the sheet market, beginning mid-fourth quarter, both order entry and pricing increased at the Flat Roll division.

This should benefit the first quarter as we consume the lower-priced raw materials that were in inventory at the end of December.

We have maintained our backlogs to four weeks for coated products and between two to three weeks for hot band.

Although recent MSCI data showed its normal December uptick, customer inventories still remain lean, and in combination with the recent apparent demand, it should support pricing in the near future.

However, there might be a short-term headwind as some additional capacity comes on stream in addition to possible import activity arriving late March, April and perhaps into May.

And that's been attracted by the expanded spread between domestic and global pricing of late.

And I think although the spread is tempting to large buyers of hot band, I think consumers are still wary that given the volatility of the markets, they will be leaving themselves exposed, and are more reluctant than they would have been in the past to place large orders.

Considering long product business, both Engineered Bar Products and Steel West Virginia have solid backlogs, as their respective OEM consumers are still seeing strong demand.

There appears to be a pent-up demand for cars and build forecasts are up year-over-year.

Heavy equipment is still in good demand and freight is moving across the country.

Trailer build forecasts are up year over year as deteriorated truck, trailer and fork truck fleets are being replaced.

The soft spot in our steel platform remains in the structural arena.

Non-residential construction continues to be in a state of malaise.

The increased order activity seen in late December and early January has dissipated a little as consumers perceive a moderation in the scrap market ahead.

Fortunately, I believe that the structure mill has benefited from the heightened interest in rail, which should further help mill utilization going forward.

Also of worthy note is that even with the utilization rate of only 49% in 2011, the structural mill achieved a positive pre-tax income, again testament to our culture and highly variable cost structure.

Relative to raw materials, the scrap market, as you might have seen, has experienced some confusion in January, as the strong uptick in the anticipated $50 move in December and anticipated still yet early January, dissipated and fizzled to perhaps up $20 to $30 a ton as more supply was available than anticipated.

Milder weather in November and December facilitated strong scrap flow and well- established inventories were liquidated in the January up market.

Supply was further augmented by stronger imports, particularly prime grades.

Our supply strengthened demand during the month was suppressed by a weak export market.

You saw that the strength of the dollar relative to the Euro made European scrap more attractive to Turkish buyers.

And additionally, with an anticipated up market, we saw several consumers complete deals prior to the holidays, which took some steam out of the January market.

Moving into February, we have competing forces in play.

Good mill operating rates, coupled with low mill inventories, ought to help support pricing, as should the recent strength in steel prices.

However, supply will remain healthy as export programs will most likely remain weak.

Scrap flow continues to be fairly good and there's reasonable inventory in the dealer supply chain.

Good, prompt industrial flow and low price pig iron market will also tend pressure of prime grades through the month.

Although it's important to consider such short-term market trends, I think I'd like to emphasize that our focus is very much on the long term.

Through the recent downturn, we've continued to position ourselves for the eventual economic return.

Significant capacity increases have occurred at Engineered Bar Products and both the structural mill and the sheet mill.

As a steel platform, we have over 1 million tons of steel making capacity that has yet to be fully exploited.

In keeping with our entrepreneurial spirit, and that spirit emanates throughout our Company, we will continue to assess opportunities for growth whether in new products, new technologies or new investments, with a focus on enhanced, more consistent margins and additional top line growth having effective margins and returns.

Leveraging existing facilities through capital effective organic growth will further our goals there.

But beyond aspiring to financial success and the appreciation of shareholder value, we recognize, I think, that that's not a strategy unto itself.

It's just the result of who we are.

Our success is going to be driven by the provision of quality products and exceptional value to our customers while we retain an innovative, entrepreneurial employee culture which is performing on a healthy financial foundation.

So with that, Theresa, can you update us on our healthy financial foundation?

Certainly.

Thank you, Mark, good morning, everyone.

During 2011, our gross margin percentage improved 93 basis points.

Margins and volumes generally improved in all areas, however, much of a benefit contributed from the Flat Roll operations was experienced in the first half of the year.

This has been the trend over the last several years.

Our year-over-year operating margin also improved.

Excluding 2010 impairment charges, margins improved 132 basis points, caused by reduced amortization and improvements of 30 basis points in SG&A costs.

Within Steel, our annual average sales price out-paced increased raw material costs.

Our operating income per ton shipped increased 36% from an average of $86 in 2010 to $117 in 2011.

Non-US sales were consistent year over year at 6% of total revenues.

Over 50% of our exports are from our Metals Recycling division, and most of that is from non-ferrous.

As Mark noted, though we out paced our 2010 fourth-quarter results, when comparing to the third quarter of 2011, our gross margin percentage decreased 113 basis points as Flat Roll margin compression occurred.

Our operating income per ton shipped for Steel Operations declined $14 when compared to the third quarter of 2011.

However, our operating margin only decreased 88 basis points as reductions in amortization and SG&A also benefited the quarter.

In addition, the maintenance of this emerged arc furnace at Iron Dynamics resulted in reduced quarterly pre-tax earnings of $10 million, or approximately $0.03 per share.

Gross interest expense for the year was $179 million compared to $177 million in 2010, a $2 million increase in gross interest, while net interest expense increased $7 million due to reduced capitalized costs.

Our fourth-quarter effective tax rate was lower than originally expected.

Including non-controlling interest, the rate was 37.1% compared to our original estimate of 39%.

This reduction benefited the quarters' net income by about $760,000.

The lower rate was primarily related to a lower State income tax rate which was recognized upon the completion of certain State filings.

Our annual effective tax rate for 2011 was 37.4%, a reduction of 191 basis points compared to 2010.

Given that there were several discrete items included in the 2011 rate, our current expectations for 2012 would be between 38.5% to 39%.

You might have noticed that our diluted shares in the fourth quarter were also lower than usual.

There seems to be a little bit of confusion about how that impacted EPS.

We excluded the share impact of our convertible notes because the result would have been anti-dilutive.

In other words, it would have increased diluted earnings per share.

At December 31, there were 218.9 million shares of common stock outstanding, 8.6 million stock options and 16.4 million shares underlying our convertible notes.

Regarding our cash flows, cash generation strengthened significantly during the year.

Cash flows from operations provided $486 million of funds, an increase of $317 million over 2010 results.

For 2011, working capital required about $80 million but was neutral for the fourth-quarter results as funding from the decrease in receivables related to our lower selling values were generally offset by increased raw material and supply inventory.

Our annual 2011 capital investments were $167 million.

$75 million was spent in the fourth quarter.

About 25% of fourth-quarter investments were related to our copper rod and iron concentrate joint ventures.

On an annual basis, approximately 31% were for our Metals Recycling operations, 20%-- 26% for Steel, 15% for Minnesota and 14% for the copper rod joint venture.

2011 depreciation was $177 million.

Regarding our expectations for 2012, we currently anticipate capital investments in the range of $225 million.

Over 60% of that could be spent in the first half of the year due to project timing.

We also currently expect depreciation to be about $195 million and amortization of intangible assets to decrease to about $36 million.

Regarding our capital structure, we are very pleased with the execution of the partial tender offer for our 7 3/8% senior notes due in November of 2012.

As of the early tender deadline, nearly 40% of holders had tendered their notes representing $278 million.

We refinanced the tender through net proceeds received from the expansion of our senior secured credit facility in the form of a $275 million term loan.

The term loan has minimal amortization requirements with a final maturity in the third quarter of 2016.

Expenses related to the refinancing, net of interest cost savings, are expected to decrease our first-quarter 2012 earnings by approximately $10 million on a pre-tax basis.

Given the more cost effective nature of the term loan, we expect savings related to the refinancing of approximately $4 million in each of the second and third quarters of 2012 followed by a little over $1 million positive impact in the fourth quarter.

We have numerous options regarding the remaining outstanding 2012 notes of $425 million.

At December 31, we had $476 million of cash on hand, driven by solid cash flows from operations of $486 million.

Our low cost, highly variable operating structure supports continued strength in our cash flow generation.

Additionally, we have taken advantage of the bank and bond markets historically as appropriate.

We are continually monitoring our capital needs, our access to funds and the market environment and we will take advantage of the markets as appropriate.

Our credit metrics during the year also strengthened.

At December 31, we had no outstanding borrowings on our $1.1 billion revolving credit facility.

Pro forma the refinancing, we had liquidity of nearly $1.6 billion at December 31.

Funds that were available to us, after our minimum liquidity covenant, were $971 million.

Our ratio of total debt to trailing EBITDA improved from 3.7 times at the end of 2010 to 2.8 times.

Our current net debt is 2.4 times.

Our interest coverage ratio also improved year over year from 3.8 times at the end of 2010 to a current level of 4.9 times.

Looking forward, our current 2012 cash allocation plans includes the ability to invest the $225 million in our existing and announced operations.

It includes reducing a portion of our outstanding debt while maintaining sufficient liquidity for growth and for providing for cash dividends to the shareholders.

We believe the framework for strong cash flow generation, coupled with our strong capital structure, has the flexibility to sustain our current operations and to support our future growth.

Lastly, for those of you who use the break down of our Flat Roll division shipments for your financial model, I'll now give the fourth-quarter break down.

Flat rolled was 296,000 tons, P&O 98,000 tons, cold-rolled 30,000 tons, hot-rolled galvanized 98,000 tons, cold-rolled galvanized 58,000 tons, painted products 80,000 tons and Galvalume 19,000 tons.

Mark?

Super, thank you, Theresa.

Well, Aldra, we will eagerly await everyone's questions.

(Operator Instructions) Kuni Chen at CRT Capital Group.

I guess just first off, on Mesabi Nugget, can you perhaps give us a little bit more color on some of the equipment issues that you're having there?

And if we look back to the last quarterly conference call, you guys gave a lot of detail on kind of your ramp up goals for 2012 and some financial targets, if you could refresh us on some of those metrics that'd be great.

Okay.

Well the equipment issues, two principle issues.

One, the product cooler which is a very long large diameter cylindrical device that takes the hot nuggets and obviously cools it down to about 200 degrees.

We had some seal issues there and it gave us a safety issue to be honest because we had a pretty severe over pressure.

So we took some time to evaluate the process of the controls and ensure that was taken care of from a safety standpoint.

Hopefully that will not be recurring.

And then secondarily, we had some premature failure, refractory failure, on the flue leading to the off gas system.

Again that's been seeing operations for two years now, that material has been patched, we anticipate a shut down in April to complete that repair.

I think back in the last call, we suggested that Mesabi operations in general will, or the financial performance, will remain somewhat as they are today, perhaps a little improved on a cash basis until the Magnetation operation comes online to provide the chief concentrate.

That actually has begun as I said earlier, construction has commenced and should be online here in the third quarter.

With the Minnesota operations and Mesabi Nugget operating with the concentrate and it's projected to be around about $50 in total, we would expect and do expect that the operations in total would be profitable.

But one must remember that there's going to be some carryover in the fourth quarter of more expensive North Shore concentrate, and so our results will not be substantially changed in 2012.

As we said in the last call though, 2013 is where the turnaround will be and profitability will more than likely occur.

Okay, great, and just as one-- as a follow up, can you remind us on your goals ahead as far as utilization rate and just remind us where you are with any outstanding permitting issues?

The-- we're projecting again it's a subject to a lot of contingencies I guess, but we're hoping for about 280,000 tons of production this year.

From a permitting standpoint, obviously Magnetation has been permitted and construction is under way.

The actual permit for the mine itself is still languishing.

We would hope to see something in the first quarter 2013, but in honesty, your guess is as good as mine at this moment in time.

But again, I think as we mentioned in the past, having Magnetation and the production of concentrate from that operation, that's more than a bridge to any of our own mining activities.

Okay, thanks a lot.

As we said, that operation would be about 1 million tons a year.

Our take will be 800,000 tons which is more than sufficient to supply the nugget operation.

Okay, thanks.

Evan Kurtz at Morgan Stanley.

You talked a little bit about some competing kind of forces here in the scrap market, I was wondering if you'd venture a guess for February estimates on prime and obsolete?

Well actually, I'd prefer to refrain from that giving specific guidance there.

Again, from a marketing standpoint, our folks are currently negotiating their own buys and their own sales and so specific movement, I'd prefer not to.

Okay, so--

Other than I think the drivers I outlined which suggest there is going to be moderation in February.

Got it.

Okay, thanks.

And Nucor is out this morning with an announcement they're going to put in another 1 million tons of SBQ/wire rod capacity, Gerdau has announced some capacity additions there.

I was wondering what you were thinking along those lines, is there any concern out there that maybe this market, I know it's tight right now, could we get to a point a couple years down the road where we run into oversupply?

The supply and demand balance obviously will radically change with-- if all those added capacities do come on line.

I think Barry and the team and Dick can outline in greater detail but have done a phenomenal job penetrating some very high-quality applications, what we've got certification and approvals through the likes of Caterpillar and other heavy equipment manufactures and it will not be an easy or at least a short-term market penetration for that new competition.

Dick?

No, I would agree, and you always have to worry about the total supply coming on stream but I guess I'd also like to think that each of the SBQ facilities, ours included, have a great flexibility and product capability.

There's products that we don't currently make and that if this oversupply would affect all of the SBQ producers, each one of us will be looking to cascade into other products and then it'll become a-- well there are some, let me just say some weaker suppliers, leave it at that, that are going to have to worry about it and I don't believe it will be the strong and efficient SBQ producers.

Right, okay.

And do you have a sense just what the actual market was in 2011 for SBQs demand in the US?

I do not.

Dick?

I don't off hand.

I know that the products that we produce down in Pittsboro, our Engineered Bar Products division that market tends to be year over year anywhere between 7.5 million and 8 million tons.

I can't speak for the whole SBQ market.

I can't either.

Okay, great.

Thanks, guys.

Brett Levy at Jefferies & Company.

First question relates to sort of a follow up on SBQ and then second one is more about capital structure.

Is there just sort of an inherent displacement of a lot of foreign SBQ that's been going on over several years?

And do you expect it to continue and that would some way accommodate some of this additional capacity?

I think there's some truth to that but I would tell you that there's an ongoing improvement in the build rates and so forth that is keeping pressure on us as suppliers in providing marketing opportunities.

How far out is your order book for SBQ and MBQ right now?

Oh, I would say well into the second quarter.

It's a different type of market where we're-- we almost sell capacity and we have commitments from people and then they fill them on a monthly basis.

But we have a very strong backlog position in both those products.

All right and then back to the capital structure, with the plans for the Southern sheet mill now back burnered and it looks as if-- and a lot of your bonds coming to call dates, it looks like you have some decisions to make as to whether or not you choose amortizable debt or non-amortizable debt, whether you delever a little or whether you delever a lot.

And then the last one was I notice you didn't mention anything about share buybacks, just cash dividends, can you talk about whether or not that's something you're thinking about as well?

So I know that's a broad question had a bunch of pieces to it, but can you talk around those points?

Certainly, yes.

Considering the deleveraging and the idea about projects, I never in my history here at Steel Dynamics have been able to necessarily keep up with all of the growth plans that the guys have, and so I would anticipate that we're going to continue to grow.

And so as we do that, we'll evaluate our needs.

We do anticipate deleveraging somewhat during this year and that's to try to maintain a more-- a better, stronger cost capital structure for going through the downturn.

But saying that, I do believe that we will be having growth initiatives throughout the year, so whether or not we use amortizable or unamortizable debt, I can't speak to that.

We do have some callability of our notes coming up.

We do have a very strong bond market now, and as I mentioned earlier, we're continuing and we always have monitored those markets.

So I feel pretty good about where we're at.

And the last piece of the puzzle was-- go ahead-- was share buyback.

My comment to share buyback could be if it becomes the best return to the shareholder, then it's obviously an option.

But if there's other growth opportunities for the Company to spend their cash flows, then I think we would choose something else.

Thank you very much, guys.

Brett, if I could add as Theresa suggested we always have been a growth Company and we always will continue to be a growth Company and there are certain projects that internally at OmniSource they've done a pretty comprehensive overview of what they can do and certainly both organic and perhaps acquisitional, as has Dick and the Steel team have identified many internal growth, capital effective growth opportunities.

So I think you see that we will continue on a growth path going forward.

Thank you, Mark.

David Macgregor at Longbow Research.

I guess Mark, last quarter there had been some reference on the call to expansion at Pittsboro, and the plan was being put before the Board for the SBQ operation there.

Can you update us just on where you might be in terms of that expansion?

Well I think the Pittsboro expansion is just as I said earlier, well just moments ago, just one of several great ideas Dick and his team have identified in the Steel platform.

In addition, Russ, Gary, they also have some plans or some dreams.

I think we are continuing to evaluate those projects across the Company but it's a matter of determining which projects will generate the best returns for the cash deployed.

Can you say if the plans are still before the Board or if you've turned them down?

The plans have not been put before the Board and have not been turned down therefore.

Okay.

Second question was just reflecting back on the price outlook from last quarter, it seems like the recent increases in prices are maybe a little stronger than your team had initially anticipated.

So I guess the question is, just how sustainable do you think this recent upturn in pricing is given the current read on demand, scrap pricing trends, et cetera?

Well, as with any prediction, it's subject to being incorrect, but there does appear to be an improved underlying demand across the sectors that I mentioned earlier.

Agriculture is still very strong.

There really is pent-up demand on the auto side.

Energy is good.

So there seems to be across our customer base, not just a positive market sentiment but an actual planned increase onto itself, so that would support I think continued market strength.

The customer inventories across whether it be in service center distributors, OEMs, is still tight and so any further pick up in demand will be a little more exaggerated as restocking or inventories get rebuilt a little bit.

So that's a very positive I think for the sheet market in general.

But the headwind obviously is a potential increase in capacity, RG maybe you got a few more tons that have come out of TYK, and you have SeverCorr operation ramping up it's caster.

That will obviously in the short term, I think, give you a little bit of a headwind but we're pretty bullish mostly on the increased demand prospects.

And can you just comment on the extend to which you may be seeing a discounting in the market right now?

Well, I don't think necessarily we're seeing a great deal of discounting, at least from our perspective.

That's a good thing.

Thanks very much.

[Shaneer Grashooney] at UBS.

Most of my questions have been asked and answered so just a couple of quick ones.

I realize that some things have been off-- there were one off items with Iron Dynamics this past quarter, but I was wondering if you can sort of walk us through the steps that you're taking to sort of improve the results there in general?

And maybe if you can also talk to this capital redeployment change at all now that you are sitting as the CEO or should we think that the plans that were in place last year are still the plans that we should be thinking about going forward?

You were breaking up a little bit there, I think the first part of the question was how we are going to improve Iron Dynamics.

In all honesty, they have been operating incredibly well.

They continue to optimize the process there, and that cost was purely associated with I think it was 2, 2.5 week shut down to replace (inaudible) furnace refractory.

That refractory had been in operation for I think over two years or more, so that was just a standard regular shut down, and we wouldn't anticipate a lengthy shut down like that for some time to come.

So Iron Dynamics will obviously come around.

The pig iron market NOLA today is $480, $485, that may suppress the earnings a little bit compared to earlier last year.

But nonetheless, I think they will be very, very healthy for the rest of this year.

To be honest, I don't think we caught the second part of your question.

The second part, was there going to be any shift in direction on capital deployment, like given that you're now sitting in the CEO seat or like for example, with respect to Black Beauty and so forth, or is kind of all the ideas that you laid out with us-- for us last year is kind of still the same course that you're headed now?

Well as I said, we first and foremost we've always been a growth Company and we will continue to be that way.

From a standpoint of actual projects, no, we are evaluating everything internally.

We're going to be focused on capital effective organic growth.

Obviously, we've got a lot of steel making capacity that is yet to be utilized fully and we will be looking towards avenues to exploit that.

And if you look at the structural mill, that facility is essentially non-residential construction based and part of the reason that it's doesn't have as full of order book perhaps as our other facilities, is that we have very little diversification market sector there.

The rail obviously is helping that and we will continue to look at the opportunity to diversify its markets.

The organic growth for sure and we will continue to look at both Greenfield and other opportunities as they come back.

Great, one final question, if I may.

It sounded like in your prepared remarks, you were talking about a softening scrap market but you sort of said it's probably kind of short term and not to view it as a long-term trend, so how do you think we should be thinking about margins beyond the first quarter?

Is it going to kind of look similar to the back half of last year and the real opportunity in earnings growth is going to come from volume and fixed cost absorption and sort of an expansion of specialty products, or do you think that we can see a return to some of the margins that we saw in previous years past where scrap and the flat-rolled price kind of widened out relative to where it's been?

Well, I guess we're certainly optimistic for the start of the year and at least right now, it appears to be that the cycle is going to be somewhat similar to 2011 with a good first half and who knows where the second half might be.

But I think our focus internally is several fold.

One is to expand on the margin of our existing businesses.

Obviously, the Metals Recycling arena has been under a lot of pressure the last 18 months, 2 years with compressed margins and I think Russ is vigilantly pursuing improvement there.

Russ, do you want to give them an outline as to some of the things you're doing to increase margin there?

Sure, be happy to do that.

Again, I think part of the issue as Mark talked about in the call was we spent some much needed funds last year in upgrading some worn out shredder capacity we had particularly in the southeast.

And as we bring that online, we think thought brings us additional 150,000 tons or so of additional shredding capacity at our existing locations.

Again, certainly at a better cost, not only from the throughput but because they were older worn out machines.

We continue to look at other opportunities including some downstream separation that will start this year with the Recycling division, again taking more metals, more metallics out of our existing flows so that we can garner more from those streams as they come out of the shredders.

And Mark mentioned also the retail expansion that we've done.

Again part of that is a cost reduction area for our own existing facilities because we take some of that congested flow out of them and give-- and put it in an environment that's much more conducive to customer service.

And it also makes an area that is I guess conducive to even the soccer mom to come in and bring her bag of aluminum cans for recycling in, in a safe environment where it is much more user friendly for her.

So again, I think those and a lot of our focus on working on our costs from a top to bottom basis point, we think that will pay dividends for us.

Great.

Thank you very much, guys.

Michael Gambardella at JPMorgan.

I have a question that I know hindsight is always best, but if you were looking at it again today in terms of the Mesabi Nugget project, would you just put in a conventional DRI facility?

I would not.

I believe, again if you look at the Minnesota operations as a whole and once we have low cost concentrate going into that facility, I think the profitability and the returns will be as we anticipated originally, it's a lot more forgiving and a flexible operation than a fully sort of integrated blast furnace facility as well.

And then just a question on the cost and the results coming out of Mesabi Nugget.

We've had a pretty significant drop in natural gas costs.

I would have thought that would have flowed through or helped the performance and we must be seeing some other extra overruns on the cost side, can you talk about that?

Well obviously, Mesabi Nugget today is running with iron concentrate purchased from the likes of Cleveland-Cliffs and others, and that's purchased at market pricing which is a lot higher than sort of the premise of Mesabi Nugget originally.

Also, coal is-- remains strong.

The coal market pricing income is strong there.

And the facilities is more coal based than natural gas based.

So although we're seeing some benefits from lower natural gas cost, it's not a massive part of the cost structure there.

Well, if one of your competitors opted to go with a conventional DRI facility that's all natural gas based, would they have a cost advantage over Mesabi Nugget right now?

Well right now, with the volume going through Mesabi Nugget I would say a considerable advantage.

But as we have compared operating expense and cost structures between Mesabi Nugget running at 500,000 metric tons a year with concentrate coming from our own facility, and we compare that with a DRI facility located here somewhere in the US, we do believe that the iron generated at Mesabi Nugget is going to be at a lower cost structure than DRI.

Given the concentrate feed?

Given concentrate coming out of the ground at whatever, $49, $50 a ton.

Okay.

All right, Mark, thank you.

Timna Tanners at Banc of America Merrill Lynch.

Hi, good morning.

Good morning, Timna.

Hopefully my tone wasn't too cautious.

You are reading our notes.

I wanted to ask just on lead times in the flat-rolled market in general and how would you characterize in addition Sparrow's restarting in the Midwest.

We hear a lot about it here in the Northeast, but I was just wondering how disruptive you think it might be in the broader markets that you serve?

Well, I think with any additional capacity, even if it's not right at our doorstep, there is a sort of a ripple down effect.

But, and correct me if I'm wrong, but we're not necessarily seeing major impact here in the Midwest.

No, I would tell you that even going back to last year that their shut down was actually at a very opportune time when the market was slightly softer due to seasonality, inventory control, end of the year issues.

And then as we see the market improving in flat-rolled, their reentry as well as some other capacities, I think is fairly well timed.

I honestly would tell you that I believe there's more chatter about that capacity than market impact and I mean that's to be expected but because it has a big name plate capacity and it isn't being realized, at least not now.

Okay, great and then how would you characterize lead times in the flat-rolled market and how much might they have changed over the last couple weeks?

Well, since when the market took a slight dip in the end of December and in the beginning of January, it's substantially improved and our-- we're building our backlog and very comfortable with it, it gives us a lot of flexibility as far as scheduling.

And the value-added products that we actually specialize in are very solid and much-- and probably double in the backlog in duration.

I think Timna, we've maintained our sort of goal of three to four weeks of inventory.

We even in great markets will not go out much further than that.

I would suggest though that the integrated mills, their lead times have stretched out with the increased automotive build.

That makes sense.

Okay, last question for me is on head, heart and rail.

I know you've talked about it over time, maybe partnerships and ways to get into that market, is there anything new to update us on or does that fit into your strategic plan for CapEx spending?

That's actually-- you're correct from the aspect that we have monies that are being discussed for capital improvements in that arena.

Some of them are internally generated.

We're running trials and have had great successes, although not ready to deliver a full blown commercial product at this time, but it's a developmental process.

But concurrently, the team in Columbia City has been having ongoing dialogue with some potential partners in that arena and we will continue to explore those.

Okay, thanks, guys.

Sal Tharani at Goldman Sachs.

Thanks.

Dick, staying on the rail, what do you think the standard rail market for you will be eventually?

I mean you're going from 117,000 ton I believe to 130,000 ton in 2012.

Do you think you have reached the limit where you think the market share you can gain or is there more opportunity there?

Well there is more opportunity there today and we believe there is developmental opportunities in the rail market for improved products.

We-- I guess to summarize things, we use terms head hardened and premium rail and sometimes interchangeably, for each customer, those are actually different definitions.

There's different [rail] hardness's that are required, some are more achievable than others.

And so included in that build rate, I would tell you is not only an improved market share but also some developmental opportunities.

Okay, and there had been an issue we have heard from in the past from you that the 260 or 240-foot length had been less success and you had put in a cutting machine over there to cut it back in the 80 foot.

I actually read recently that you had actually sold some longer length rails to I believe it was the V&M facility in Youngstown, Ohio, so are you selling those longer length rails or have you seen some more penetration versus what we heard like last quarter from you guys?

Well I would tell you that we continue to expand both our welded rail which is extremely long sections let's say 1660 feet or so depending upon what the customers order, that's been expanding.

As well as shorter length rail.

240-foot lengths that we produce in and we do have a plan to go to 320 feet, but we're not ready to execute that.

Those are only really for internal use in our welding lines because there's nobody else that really has the capacity or capability to take anything longer than 80 feet into their welding facilities located around the country.

So it makes no, almost no sense to make them long, cut them short and weld them long again hence we're out selling our welded rail applications to as many people as possible.

Okay, great.

One last question on Mark you made a comment about New Millennium that New Millennium is providing a good base load for Roanoke, I was just wondering we have this issue with another mini mill that the downstream business is under tremendous pressure because prices move up and-- but it does provide a base load to the upstream of the mill business, and I was wondering if, I don't want to use the word subsidized, but is that the case here also that you have to take losses in the fabrication to run the Roanoke and others at a better utilization rate?

Well Gary will expand on that but no, we don't believe in one platform subsidizing another platform, Sal.

That's right.

We've got a great working relationship with the folks at Roanoke and between Roanoke and New Millennium, its been-- I think both have done better working through tough markets by working together.

But when you look at New Millennium specifically, if we were just running the three plants that we had in place five years ago, three years ago, we would have been making money this year.

The decision to invest in that business in a tough market may not be intuitive and obvious, but when you look at where the business is going, our backlogs were up 62% year over year, the joists up 16% for deck.

We've had sequential improvements from October to November and November to December again in booking.

So the investments we've made in these plants, now we have all three of the new plants started up, they've been completely reconfigured, we invested a lot of money in those plants this year.

About $5.6 million of New Millennium's loss was actually caused by the construction cost, the reconfiguration costs and start up costs in those new mills-- or those new plants.

So this is really, Sal, more of positioning New Millennium to be successful going forward than it is having New Millennium sell a loss in order to subsidize or support the mill.

Nonetheless, the vertical tie in with the mill has been a tremendous advantage I think for both.

Great.

Thank you very much.

John Tumazos at John Tumazos Very Independent Research.

Mark, congratulations on everything.

(Audio difficulties) earlier questions and I know you emphasized twice already in the call at least that your emphasis is on growth, could you elaborate on your attitude toward balance sheet risk?

And just to take a couple of numerical ratios, your total assets divided by tangible equity is 6 divided by 1.1 where a common ratio for a manufacturing company might be 2 to 1, and your debt is-- and other liabilities is about $2.4 billion which is about twice your tangible equity of $1.1 billion, and excuse me, I erase intangibles and goodwill, it doesn't matter if somebody buys David Joseph or OmniSource near the top of a cycle and we don't use EBITDA ratios because we're not smart enough to figure out commodity prices reliably, so we like to look at the balance sheet.

So could you talk about your attitude toward growth in the context of how far you would stretch your debt to tangible equity or assets to tangible equity ratios?

The-- John, I would suggest that we've been relatively prudent in the past and we will remain I guess conservative going forward and that there will be times when we stretch things when there's a very good strategic opportunity for ourselves.

But I think what we're approaching a capital structure today that we would like to maintain in the most part going forward.

When you look at, and I know you've suggested that you don't look at EBITDA and unfortunately we do, as do most of our lenders, and what I would tell you that we really want to stay under the 3 times leverage through the cycle.

So that's one of the things that we'll point to is what we're managing to.

In addition to that, I know often in the past, we had talked about debt to equity ratios and where those were.

And I know you're talking about tangible assets as well and I understand why, but we definitely want to keep it so that our equity position is much greater than our debt position and there will be times when Mark suggested that we may need to get outside of those parameters for growth but only if we know that there's the very reasonable ability to get back within those parameters very, very quickly.

Thank you.

Mark Parr at KeyBanc.

A couple of questions.

First, I was, I guess pleasantly surprised with the improvement in profitability in the fourth quarter and it looks like the source of that was on the long product side.

And in looking at the nice improvement sequentially in beams, just wondering if you could give a little color about where those beams ended up?

Is it-- are they specific projects, was it service center restocking, could you give us some more color on that?

I'll answer that, Mark, but I would tell you the vast majority-- we-- there were not major projects that were being supplied like we have in the past, these were basically I think just rebuilding some inventories, not to excessive levels but we have a good price.

We have a-- there was not-- and maybe tested a little bit spread between imports and domestically supplied and therefore, I think there was a little bit stronger market at the end of the year in our-- on the beam side.

And that we actually had cut back on rail to supply to that, but-- and now we're going forward with our new rail finishing facility and we'll refocus in this quarter on expanding our rail quarter over quarter.

Okay, thanks for that.

The rail mix that you guys expect in 2012, could you give us some color on how much of the-- of your shipments you expect to be Class I material?

Well the vast majority is Class I already and so I'd have to look at what the exact ratios are from last year.

So there's-- so-- okay.

I guess I'd say that last year about 15% of the total shipments was industrial quality and that's the lowest quality product that's marketable and we are focused on reducing that.

Much of that was not due to the-- you never sell an inferior grade of rail into the market.

So what causes a product to become industrial grade are items like the stamping machine failed to do imprint on the rail and there was a requirement of that.

And so therefore, because of that aspect, nothing to do with the quality or the geometric shape, it becomes an industrial.

And we still have been working through, because we again only roll rail occasionally, we occasionally have these fits and starts and develop some industrial.

But our mission is to eliminate that as a category of products and so we don't plan for that in our forecast as a result.

All right, that's helpful, thanks.

I had one other question, if-- do you have a sense of what the mix is at Pittsboro between service center and OEM contracts?

I actually don't.

I don't get into that detail with them.

I look at the backlog and the shipments and I've never really looked at that.

I think Mark, the service center distributer outlet is around about 20% if I'm not mistaken.

A rule of thumb about that, but I don't know exactly what it would be, right Mark.

Okay, terrific.

Well, congratulations.

Look forward to-- Mark, just one last thing, I don't know if you mentioned anything or if you did I missed it, will you be planning on updating quarterly guidance in March just similar to how you've been doing it?

We will continue to do that, Mark.

Okay, terrific, thanks.

Thanks again.

Thank you.

Luke Folta at Jefferies & Company.

We consistently hear when we do our survey work in the recycling space that because that there's not a lot of flows, incoming flows on the obsolete side that recyclers are having to pay more to track material and that's had an in effect compressed margins for recyclers on that side of the business.

Since we've seen a pick up in flows here over the December/January time frame, I'm just wondering has that offered you any opportunity to reduce your buy prices and maybe get some of that margin back on the obsolete side?

This is Russ.

I would say we continue to monitor the market and we're in the market every day on the buy side and trying to monitor and read those flows as best we can.

I don't know that I would say there's a huge opportunity.

I think the market flow we saw in-- that started picking up late in the year and transferred over into January, a lot of it was a factor of pent-up demand or pent-up inventories that had been built up over November and December.

So I think the flow side of it while it was good, we also had what I would characterize as extremely mild weather which allows those flows to continue, and if winter sets in that's just going to shut them right back off again.

Okay, but would you think that longer term that there would be an opportunity there that as economic activity picks up and flows increase that you should be able to restore that metal spread or do you think that's kind of a stretch?

Well, I think the possibility there, I think again there's an awful lot of factors that bear on it, whether it's the level of the export market which Mark referenced in his remarks earlier, the mill utilization rates.

And so all of those things I think are going to factor into the flows and again we're going to stretch for every dollar margin we can get as we always do.

I think in the Midwest we have a pretty strong position where we are somewhat frustrated is in the Southeast area and they compete with the export market pretty dramatically and-- as you've suggested and we've suggested in the past.

The additional shredder capacity, a lot of that was built in the Southeast arena.

That is where margins, at least for us, are-- have compressed the most and again we will-- we're going to work very, very hard here this year to expand them.

Are they going to get back to where they were in 2006, 2007?

Probably not, not in the near term.

Okay.

Last question, just got one for you, Dick, as it relates to the cost side, we're understanding that there's going to be some pretty significant increases in graphite electrode prices for next year, can you give us a sense of what that magnitude might be and how you would expect that to impact your results?

Well, we don't normally comment on it.

I think it's in general that the electrode market is looking for improved pricing, but we have supply agreements in place with pre-determined pricing that will languish through.

I can remember when I was over at Columbia City we actually had a years worth of electrodes on the ground during a good market because we were trying to anticipate things.

And so I would tell you that it's going to be minimal, you won't notice it in our financials from even from the steel side.

And it's because mostly because you have excess inventory or because you have a multi-year agreement?

Those are-- I think those are mitigating factors and needless to say just like in the steel side, people announce price increases and then you have to wait and see and there is actually quite a bit of import opportunities that keep a lid on that, and so we'll have to see where it goes.

I'm not going to try to validate a price increase, our goal is to maintain our costs and improve them.

And I think over the years the team and to be honest, they have added the steel side a little bit and don't know the granular detail, but if you look at our electrode consumption, it's around I don't know, 3000 ton at Butler?

At Butler, yes.

Three and a quarter.

So again as Dick said, it's not going to be a material change to us.

All right well thank you for the color there, guys.

Aldo Mazzaferro at Macquarie.

This might be a question for Russ, kind of a high level view of the scrap business.

Russ, I heard your comments on how the flows are not helping you and the procurement expense is high, going forward, assuming those factories stay in place are you able to derive a benefit of owning the scrap Company by possibly transferring scrap into the steel mill at a more reasonable price, or is there-- is there some level of contribution that we might be missing by just looking at the operating income level of the division?

I think Dick wants to answer that.

I think as Mark talked about earlier, again there's no subsidies on either side of the equation here.

It's a market issue that as the markets flow, still flows, the cost of scrap to our own facility.

I think the one advantage that I think we do bring to our steel making opportunities is we do have a pretty extensive network of yards and facilities that we are able to secure the flow and make sure we've got the flow when we need it.

And our objective, as always as I said earlier, is to do that at the best economical cost for our own OmniSource location but also to make sure we're doing things that are necessary for the entire SDI Corporation as far as making sure we've got low cost metallics going into our plants.

Right, so how-- I'm sorry.

Currency into the market and if you would have compare our inventories with OmniSource and prior, we have contracted inventory (inaudible) with an associated reduction (inaudible).

Right, and then Mark one other high level question, this might be really kind of high level but your plans to do the Southern mill I know are on hold.

There's also some talk in the market about possibly Thyssen thinking about selling its division down there in Alabama, would that be something you might consider as kind of a buy and then build front end strategy?

Well, any opportunity we look at would be based on valuation and we wouldn't buy any opportunity that we would feel to be overpriced.

And given what they've put into that facility, I can't see that being an attractive valuation for us.

I guess you have to assume that they're not going to get what they put into it I guess.

Even if they-- even if they get $0.10 for $1 I don't--

Okay, all right the bidding starts I guess.

Just joking, but going back to the scrap question also, the one big benefit that you do have when you have that secure supply of scrap that Russ suggested, it gives you a big leverage when you're out there negotiating for other tons.

Right.

Other tons of scrap you mean?

Yes.

So when you negotiate and that-- having a base load allows you, as I think you recognize, scrap doesn't sell at a specific number, it sells through a range.

Yes, and it allows us to selectively pick up perhaps scrap at the lower end of that range and give us some financial benefit that way.

Do you think that's a sector that needs consolidation further?

It certainly remains a very fragmented market.

You still have a lot of small entities out there, Aldo.

One has to be careful that consolidation may help you on the one hand but it's very, very easy for people to get into that business, the price of entry to set up a small corner yard is very, very low.

Right.

Thanks.

So consolidation you'd need to be careful as to the direction you want to go.

Well thanks very much and Mark good luck in the new position going forward.

I'm happy, thank you.

Dave Martin at Deutsche Bank.

I have a couple remaining follow ups, if I may, the first being on iron dynamics.

Just thinking about the first quarter, should we expect an EBIT gain and/or benefit of approximately $10 million from that operation?

Off the top of my head, I can't put-- would want to give you an actual figure, but obviously it's going to be improved.

Pig iron, and it depends to some degree on what the pig iron price does.

It's going to be, as I said earlier, it's $485 NOLA today, that's lower than it was in the second and third quarters of last year.

So there's going to be improvement whether it's a full $10 million or not, I don't know.

Yes, okay.

And then secondly, just had a follow up on SBQ, I think you had said that your lead times for that product were into the second quarter.

Going back to your comments on your last call, I think you also stated that your lead times were into the second quarter of 2012 at that time, so I'm wondering if I should interpret that to mean your lead times have come in a little bit?

I would tell you those are both accurate statements and it's not a concern of ours, because there was such a robust and some of it being psychological, people are trying to make reservations that early and hence, we were accepting those commitments.

We have only seen an improvement from our customers from last year to the projections for this year, and it's not a concern that we claim that they were in the second quarter and not in the third quarter.

And we really are expecting improved opportunities in 2012 over 2011.

Okay, that's fair.

Thank you and good luck.

Thank you.

Tim Hayes at Davenport & Company.

Just a couple questions.

Mark, you have an expectations of shipment growth for Steel Ops for 2012 and if so, is-- if you could put a number on that, is it low single digit, high single digit?

We-- again, we remain optimistic across all our markets, Tim, and we are projecting some growth but I wouldn't necessarily want to put a number on it right this second.

Okay, that's fair enough.

Then I'm jumping the gun a little bit on the mid-quarter update, but last years' EPS of $0.46 in Q1, pretty strong comp, any chance that you hit that and/or how far below might we be?

As we said earlier, we will come out mid-March, May.

Okay, fair enough.

Just wanted to see if you had any thoughts on that, thanks.

And that does conclude today's question-and-answer session.

I'll turn the conference back over to our speakers for any additional remarks.

Well thank you, everyone.

I just would like to thank you each and every one of you for your support and also our customers that might be listening in.

And then finally, a huge thank you to each and every one of our employees.

You guys are doing a phenomenal job, be safe out there and hope to see you soon.

Thank you, all.

And that does conclude today's conference.

Again, thank you for your participation.