TriMas Corp (TRS) 2010 Q1 法說會逐字稿

Good day ladies and gentleman and welcome to the TriMas First Quarter 2010 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions on how to participate will be given at that time.

If anyone requires operator assistance during the call, please press star and zero on your touchtone telephone. Please also be aware that today's conference call is being recorded. I would now like to turn the conference over to your host Ms. Sherry Lauderback. Please go ahead.

Thank you. Thank you and welcome to the TriMas Corporation first quarter 2010 Earnings call. Participating on the call today are Dave Wathen, TriMas' President and CEO and Mark Zeffiro, our Chief Financial Officer. Dave and Mark will review TriMas' first quarter operating and financial results, in addition to providing an update on our 2010 outlook. After our prepared remarks we will then open the call up to your question.

To facilitate this review of our results we have provided a press release and a PowerPoint presentation on our Company website www.trimascorp.com under the Investors section. In addition a replay of this call will be available later today by calling 866-837-8032 with an access code of 1450908.

Before we get started, I would like to remind everyone that our comments today, which are intended to supplement your understanding of TriMas, may contain forward-looking statements that are inherently subject to a number of risks and uncertainties. We caution everyone to be guided in their analysis of TriMas by referring to our Form 10-K and Form 10-Q for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements Also we undertake no obligation to publicly update or revise any forward-looking statements except as required by law. We will also direct your attention to our website where considerably more information may be found. At this point, I would like to turn the call over to Dave Wathen, TriMas President and CEO.

Thanks Sherry. And good morning. Here at TriMas, we certainly appreciate your interest in continuing support as we transform the Company and improve for the future. Our agenda today is that I will share a few overview comments about what we feel was a very strong performance for TriMas in the first quarter. Mark will then discuss our first quarter performance in more detail and then I will look forward and comment on what we expect for 2010 for TriMas. And we'll wrap up with answers to your questions.

My main message about Q1 2010 for TriMas is about speed. Several of our markets are recovering faster than expected and we have many growth programs gaining traction quickly. We have been able to respond very well to short term customer demands and the supply chain disruptions. And our productivity programs continue to bring through savings and profit improvements at an encouraging pace.

Proof of all of this is in the numbers, with sales up 9% and operating income more than double compared to Q1 2009. I'm a strong proponent of improving every business process to provide faster responses of changes and to eliminate wasted time. This earnings call is a week earlier than last year, another indicator of our ongoing process improvements. In addition to improvements in sales and earnings, working capital as a percentage of sales is down over 500 basis points compared to Q1, 2009, as reduced cycle times drive higher returns of capital.

Overall, it's a little more than a year since I joined the Company and we put our TriMas operating model in place, I believe our results prove that our processes are working. TriMas is a leaner, faster and more focused Company. However, it is not time for a sigh of relief, it's time to capitalize on improvements and to find and execute on more opportunities to grow and improve TriMas.

Now I will turn to our year-over-year sales trend chart on Slide 5. The message here is that four of our five segments have now crossed the zero line with sales levels above a year ago and the Aerospace & Defense trend line is heading up. Packaging is our growth star with a combination of strong demand, fast responses to opportunities and successful growth programs, driving a 44% increase this quarter.

Cequent has two quarters of positive growth proving that we have done more than just improve our cost structure. Energy is up 9% with some great growth programs and Engineered Components is up 2%. Aerospace & Defense is later cycle but order rates show the trend is off the bottom. I'm very encouraged by our progress in 2010.

Now I'll hand off to Mark to share our financial and segment highlights.

Thank you, Dave and good morning. Now let's turn to our first quarter financial summary on Slide 7. As Dave mentioned, our first quarter sales were $220 million, up approximately 9% compared to the first quarter of 2009. A significant improvement compared to a year ago at this time and was really supported by new products and signs of more normal local and global demand levels.

Foreign exchange did have a positive impact of exchange rates of $6 million on the results, but the real story here is the momentum of our growth programs. Our Q1 results were much improved across TriMas and better than anticipated. Gross margins in the quarter were 28.7%, up 570 basis points compared to Q1 2009 and up 50 basis points compared to Q4 2009.

Adjusted EBITDA was $34.1 million, up 64% compared to Q1 2009 excluding special items. This improvement demonstrates the positive impact of our cost and productivity actions on our results. Operating profit and adjusted EBITDA margins improved 550 and 520 basis points, respectively compared to the first quarter of 2009. While we are quite pleased with the conversion rate we achieved during the quarter, it was aided by the top line improvement. We are convinced that the lower cost structure we have achieved will continue to leverage quite well as our end market demand improves and our growth initiatives accelerate.

Income from continuing operations for first quarter of 2010 increased 24.5% to $5.8 million or $0.17 per diluted share compared to income from continuing operations of $4.6 million or $0.14 per diluted share in the first quarter of 2009.

Excluding the impacts of special items, first quarter of 2010 income from continuing operations would have improved $5.8 million as compared to a loss of $700,000 or $0.01 a share in the first quarter of 2009. These results also include an approximate impact of $0.02 from tax changes and the Company's tax provision in the first quarter of 2010 of approximately $1 million and higher tax expense resulting from the expiry of certain US tax legislation. Despite this additional charge in Q1, we still expect our tax rate for the year to be between 37% and 39%.

Our first quarter is traditionally a cash flow used quarter, so we are pleased to minimize the use of cash in Q1 to $3.5 million. Our use of cash was most directly affected by the 9% sales growth, which resulted in a higher level of receivables. I will provide more detail on working capital in a couple of slides.

I would now like to spend a few moments discussing our margin improvements on Slide 8. As you know, 2009 was a year of significant fixed cost reduction in business restructuring at TriMas. We believe that the majority of these actions have permanently lowered our cost of doing business and provide sustainable margin opportunities for 2010 and beyond. As I mentioned on the previous slide, our cost reductions and productivity initiatives drove enhanced margins in Q1 2010 compared to the prior year.

In 2008, quarter one, prior to the recession and where volumes were [$48 million] more, our Q1 2010 comparison is still very positive with growth in both operating profit and adjusted EBITDA margins. We have plans in place to continue to drive additional productivity to fund our future growth and enhance margins. This continuous focus on productivity is now well understood and embraced by our business units.

Moving on to Slide 9, in addition to our focus on improved profitability, we are also focusing on improving working capital to maximize cash flow. In Q1 we achieved a 510 basis point improvement in working capital as a percent of sales, compared to Q1 of 2009. In comparison to Q4 of 2009, working capital increased driven by increased receivables resulting from our growth in sales in the quarter. Inventory levels compared to Q4 of 2009 declined in the quarter $6 million supported by continued efforts by our businesses to be more efficient. While we are pleased with these results, we are not done making our businesses more capital efficient and we will continue our intensity on improvement programs.

Moving on to Slide 10, we ended the quarter with $518 million in total debt, a slight increase of $4 million compared to December 31, 2009. This was attributable to the increase in working capital supporting our sales growth. We remain committed to reducing our debt levels and leverage ratio over time. As of March 31, 2010, we had $157 million of cash in aggregate availability under our revolving credit and accounts receivables facilities. As a result of our successful debt refinancing in Q4 2009, we are able to accelerate our growth and productivity initiatives with sufficient covenant headroom and adequate liquidity and flexibility under our credit agreement.

At this point, I would like to shift gears and review our business performance by operating segment, beginning with the Packaging segment on Slide 12. All my segment discussion will be excluding special items to provide you with a better understanding of the underlying business trends. Packaging sales for the first quarter increased over 44%, compared to Q1 of 2009. This was driven by growth of new products in specialty dispensing market. The industrial customers have shown better demand as well supported by sell-through and to a lesser extent restocking.

We continue to get good traction of launching new dispensing products into growing end markets such as medical, pharma, and personnel care. In addition to the outstanding sales growth another highlight is the growth in adjusted EBITDA of 73% and the doubling of operating profit compared to a year ago, resulting from higher sales and cost reductions.

Margins improved substantially with operating profit margins improving 930 basis points to 27% compared to Q1 2009. Packaging is well positioned for continued economic recovery and our focus will be to maintain margins and grow the top line. Key initiatives for the segment remain product extension and geographic expansion.

Moving on to Slide 13, energy sales increased 9% with margin enhancement in Q1. We experienced an uptick in our Lamons Gasket business as refinery turnarounds and maintenance activity began its return to more normalized levels. We are seeing the positive contribution of our new Lamons branches opened in 2009 in Rotterdam and Salt Lake City. We will continue to expand our customer regional footprint.

We remain committed to expanding the gaskets business to support our global customers and grow them in new markets. While this segment has also been directly affected by the cyclical lows of natural gas, Arrow began to see growth resulting from a series of initiatives including product expansion into additional well-site content and the launch of natural gas compressors for the vehicle fueling market. This incremental growth in Q1 leveraged well. Operating profit margins improved 260 basis points. As demand for the well-site content returns, we will be well positioned to take additional market share from some of our newer products such as meter runs, compressors and engineered solutions.

On Slide 14, aerospace and defense sales declined 23% in Q1 2010, compared to Q1 2009, representing continued actions in the supply chain to reduce inventory and the consolidation of distributors. Distributors are still wrestling with the uncertainty of airframer demands and therefore appropriate levels of inventory to stock. Operating profit and adjusted EBITDA margins declined due to lower sales volumes and lower absorption of fixed costs.

Our product portfolio is well positioned to take advantage of the trend to build aircraft out of compartment structures and our plans support increases in our content per aircraft. Our improved cycle times, service level commitments, and product innovations are aligned to support our customers when demand improves. We firmly expect this business to rebound to its historical return levels.

Moving on to engineered components, Slide 15. While the segment was most affected by the industrial recession, we experienced signs of improvement during the first quarter in our order rates and backlog levels. First quarter sales increased 2% compared to Q1 2009, due to improved demand in the specialty fittings and precision cutting tools businesses partially offset by lower sales in our industrial cylinder business. Our cylinder business however has experienced improvements in sales on a sequential quarterly basis and we're seeing increases in order rates across the businesses in this segment. Operating profit for the quarter improved with margins increasing 670 basis points compared to first quarter 2009, due to our productivity initiatives. Longer turnkey initiatives will support customer needs by the application of our technology per product and focused regional expansion.

Lastly on Slide 16, Cequent sales were up 7% for the quarter versus Q1 2009, resulting from sales improvements in the Australia, Asian-Pacific business and North American performance products and the favorable impact of currency exchange. These sales increases were partially offset by a decline in sales in the retail business as Q1 2009 results included a retail pipe fill as a result of share gains, which did not repeat in Q1 2010. Cequent experienced significant improvements in margins during the quarter.

This business has been most positively affected by the profit improvement program and has seen significant changes in its relative profitability. As such we are able to improve operating profit margins by 840 basis points. While this performance demonstrate progress to deliver on improved profitability levels, we still need to improve the absolute profit level to higher than the current adjusted EBITDA margins of 12%. We believe that this business has embraced the continued need for our productivity and will continue to drive for further improvements in 2010 and beyond.

Before I turn the call back over to Dave, I'd like to leave you with three messages. TriMas is a leader enterprise in 2007 and 2008 with sustainable improvements in margin rates and profitability. We'll drive for additional productivity to enhance these levels. Two, we are beginning to see the benefits of our growth programs. We have specific initiatives by business to launch new products and expand geographically. Growth initiatives are a collection of small opportunities individually, but together they will provide us with significant opportunity to increase our earnings. And lastly the TriMas operating model and related processes implemented in 2009 have changed what we expect from our businesses as well as how we run them. These results have taken hold and the processes have just begun to deliver the expected results.

That concludes my comments, now Dave will discuss our expectations for 2010. Dave?

Thanks Mark. Now I will turn forward to our outlook starting with the reminder of our strategic aspirations. You will recognize this chart from previous calls. We keep this in front of ourselves to help prioritize our activities. At TriMas, we have just finished our 2010 strategic planning process where we prioritize programs and allocate resources targeting these aspirations. We make sure that we have programs and activities that over time, grow our top line at high single-digit percentages and our bottom line considerably faster. We utilize ongoing total cost productivity activities to both generate these improving earnings and to fund multiple growth programs in each of our businesses.

We are increasing and accelerating these growth programs, especially now that we have refinanced our balance sheet and our operating earnings are on the improvement track. I am encouraged by some early successes with programs focused on high growth end markets. Our energy businesses had new Arrow brand compressor packages going into shale natural gas applications, which as you know have been generating major gas lines. And our Lamons business is expanding their customer sites outside the US. We are also working towards a new footprint in the Middle East.

Our packaging business started a new project a few months ago, to capture sales within China and it's already ahead of our forecasted order rates. Our Cequent businesses have added new products and are also reconfiguring their pricing and ordering systems to grow share with nice results. You know that we aspire to generate continuous improvements of cycle times and capital turns. And we have continued to deliver strong results in these areas. And we will certainly keep after our leverage ratio.

On the next chart, our updated 2010 outlook shows why I believe TriMas is making good progress on our aspirations. As you will note, we have raised our outlook based on our Q1 results and the current outlook for the remainder of the year. All of our outlook metrics are up, with our sales outlook up due to the faster successes of many growth programs like those I described.

Our operating profit is leveraging up more than our previous outlook, even with our increased spending on growth programs. We have also successfully concluded the sale of our non-core real estate property in California, which will provide a nice increase in our cash flow in Q2 2010. The free cash flow range here will depend on the levels of required working capital dollars to support sales growth throughout the year. Regardless, we'll keep improving turns and with the growth and leverage we are getting, we now expect a 2010 diluted EPS range of $0.65 to $0.75 per share compared to the previous guidance of greater than $0.60 per share.

I will close with a reminder that our operating model is a circular constantly refreshing balance of key business processes, working together to keep all our efforts aligned on improving value. All of us at TriMas thank you again for your support, and now we will gladly take your questions.

(Operator Instructions). Your first question is from Tom Klamka from Credit Suisse. Your line is open.

Good morning.

Good morning, Tom.

Can you talk a little bit about, on the packaging side, the sales growth is a bit huge, I guess that's the only way to put it. Can you talk a little bit more about where that comes from? Clearly the market wasn't up that much. I don't know how much currency was as part of that, but maybe you can kind of break that out a little bit.

Tom, there is probably, there is a couple of extras going on in the industrial part of the business, the closures business and that sort to thing. We are definitely seeing a restocking of inventory, I mean like you're seeing on -- across all kinds of industrial related businesses. So we got a real boost as that just took off. We also probably had our -- it's got to be the final runs of hand sanitizer related stuff back from the flu epidemics. So, there were a couple of extras in there. But other than that the fundamentals of new products and the team has just done a fine job of targeting the right end markets that have got growth.

You know it's an industry with a lot of turnover in packaging and the look and the size and the technology. And we have been willing to keep some growth funding going in this business. And like I say I am -- it reinforces why it's worth doing that, because it's a business that can capture, share quite well, and we are seeing it. It won't be 44% for the rest of the year. Don't leave with that impression though.

Yes, I mean to an extent that was a bit of an easy comp because it looks like last year you were down 25% and this kind of puts you back to where you were in Q1 '08, when you were 41%. So it gets you a little bit of growth over that. But I guess sort of prior year comparisons aside, do you see continued, call it strong growth in that sector under demand there, not just from restocking?

Yes.

Okay.

So Tom, to put a finer point on it, half of the growth was really new products. Half of it was either restocking or industrial demand combined with a better favorability due to the FX.

All right. Okay. And on energy, did that business come back a little bit quicker than you had expected? I mean that's been kind of in the dumps for a while now? And any sign of OE demand or is it really all sort of a MRO recovery?

Well the number -- in the numbers most of it is MRO kind of recovery. Because most of our increase is in the Lamons business and it's the -- it is the refineries and the petrochem plants turning back on and reconfiguring and all that. The Arrow engines business, there's still inventory in the channel because they are big you can count them. And that has not run out yet, that will run out in a matter of months and then we will start seeing that business tick up.

And of course we'll keep reminding you, we've become bigger in the gas compressor, especially the systems business and I was in Tulsa last week and saw several systems being built. Some of them going as injectors into shale fields and some of them going for compressing gas to refill vehicles that run on natural gas. So, that piece of it is growing nicely and we'll see that in the rest of the year.

Okay. What do you think as far as on input costs, as far as steel and plastics and resin?

I mean resins started increasing last year and have continued some and we're of course raising prices accordingly. Steel, as you'd expect the real specialty materials, like the billets that you could draw a cylinder from, like 20% increases are starting to show up. Across the board, it's more like 10 and 15% in steel and there's continuing to be rumblings about them trying for more.

Right.

And of course that's a global comment and like everybody else we have to pass a portion of that through in price and we are proving to be able to achieve that. We, you know we have quite a bit of, because we are important to our customers, we do have some pricing power and we are never going to take advantage of that so much, but I mean when it's fair we will pass it through.

Okay, great. And then this last question, can you talk about what's your availability on a revolver and the availability on the AR line?

$157 million in total with no amounts drawn on either revolver or the AR facility.

Great. Thank you very much.

You bet.

Thank you. Our next question comes from Joe Box from KeyBanc Capital Markets. Your line is open.

Hey, good morning all.

Good morning, Joe.

I was just hoping to dig in a little bit more into some of your segments. Obviously there is a lot of moving pieces that are going on in Cequent. I am just hoping you could get maybe a little bit more granular on some of the prospects for later in the year for your RV business versus retail versus some of the installers?

First off in the Cequent totals, the real strong business is the Australia business. And of course there -- it's fall there and they're coming out in the season, but they have had a very, very strong year across the board. That's showing in these numbers.

The retail channel -- I mean the operating word there is supply chain grief. Whether it be because of no inventory, attempts to expedite and us trying to expedite and all that and that will continue for a while. We're pretty darn good at responding to it, but even so there's a lot of bouncing up and down and you watch, you just watch any of the retailers and they're feeling it too and having trouble getting product. That will at least extend in the second quarter and we'll see how the economy looks for the rest of the year.

I keep reminding everybody RVs don't really matter much to us. We are much more driven by heavier towing applications, big pickup trucks and agricultural and all that sort of thing. You know that's all showing a nice decent sort of slow recovery. We are getting a nice -- we've got some new products that are rolling out, doing well, everything from super heavy duty Ford pickup towing and brake systems through new technology in the brake systems kind of anti-sway and all that, and all that there is demand for it and no inventory. And so my long rambling answer says, I'm kind of encouraged about the rest of the year. It's not going to be like packaging sort of increases but we will have a nice solid ongoing uptick in that business.

Okay, and Dave just a follow-up to that, you'd mentioned that the retailers are having a difficult time getting products. Is that a function of suppliers being relatively tight in Asia or not being able to find the appropriate workers? Can you just expand on that?

Joe, it starts right at -- it starts clear back at steel and raw materials and people trying to raise prices and balking at that right through what gets sourced in, particularly in China. There is more consumption going on within China, that's getting tougher. There is shortages of shipping capacity right through all the issues that come with inventories being stripped down, so far right from the point of sale clear back to the distribution warehouses. And it means people -- we're substituting products, I mean all the things you do in times like this.

I am imagining you're probably bringing some product back into Goshen then as well?

That's not really, -- we've kind of configured where that doesn't do us a whole lot of good. We have ramped up in our Reynosa facility. There is a touch of hiring has gone on at Goshen and not enough to matter overall. I mean no wonder unemployment rates still stay where they are at. I mean you can cut -- even with huge demand we wind up putting on a few more people. But no, it's more just the entire supply chain and it will take a while for that to replenish itself.

Sure. Switching gears to the aerospace and defense business, how should we think about the timing of a recovery given improving aftermarket demand, ramping 787 program and better OEM visibility?

Well, it is still a long cycle kind of an industry and even with 787 ramping up, which you know we love because we have got a lot of content in composite applications. The supply chain there has enough fasteners in it to keep building 787s for a while. So we are still a few quarters away from seeing genuine flow through of product for 787s, maybe a little earlier on some of the Airbus composite construction. So, I mean the business, it will continue to make a lot of money, but it's not -- we are not counting on an upswing for a while yet. The stocking inventory distributors still have a lot of inventory.

Okay, that's good color. A last one and then I'll turn it over. I think in the past you guys have talked about some of your businesses potentially being non-core. You know, given there is some better industrial visibility right now, and it seems like the M&A market is starting to pick back up. Do you see any meaningful portfolio shaping this year?

It could happen. I mean we continue to have linked businesses and there is businesses that are on the potential list for that. We don't -- we are not in a situation where we have to, but we do have a strategic responsibility to think through that. So yes you could see some shaping of the portfolio.

Okay, I don't know if --

I'd also add to that Joe, you obviously have -- saw the transaction of the Vernon property. We'll deal with disposable non-core stuff, namely if you'll [define] facilities and like but the SBU level kind of discussions are obviously part of the strategic plan.

Thanks for your time, guys.

Thank you. Our next question comes from Matt Vittorioso from Barclay's Capital. Your line is open.

Good morning. I apologize I joined a bit late but just real quick. Could you quantify the cash received from that real estate sale in Q2?

$13 million on a gross basis.

Great and then just talking about the margin potential at Cequent, I think you had touched on that somewhat in your prepared remarks. Given the size of that segment, clearly margins in that business will have a big impact on EBITDA going forward. What did you talk -- did you talk about the potential margins there? Where do you think Cequent margins can go from what seem to be a pretty strong first quarter?

That's a great question Matt. When you think about it back to its heyday, back to 2007, 2008, it was still 300 basis points more profitable than it is on a total basis today. So, what I would tell you is that with the restructuring that we have done in the business will lower that overall breakeven point to the tune of let's call it about $20 million worth of fixed cost reductions within that segment. We don't expect it to get back to the heyday levels in terms of volumes but I would expect to see yet a 200 plus level of basis points in terms of improvement over the long haul in this business at a minimal.

And just remind me real quick, is there -- there is a certain seasonality in that business? I mean how should those margins trend over the balance of the years, is the fourth quarter typically a bit weaker?

Yes, exactly. If you think about front half, back half, Matt, it's about 60:40 in terms of the volume. Obviously offset a little bit by Australia just because of the natural seasonality down there.

Great. And then lastly from me, you've got a pretty solid free cash flow target here for 2010? Just maybe prioritize uses of cash, I mean, is lowering debt and leverage still the number one priority?

At the end of the day, it will be best and highest use, of course, Matt. But we recognize the level of [mutual] leverage that we have and the amount of pure dollar debt we have outstanding. So it is -- it's still a pretty high priority.

Great, thanks and great quarter.

Thanks.

Thank you. Our next question comes from Yilma Abebe from JP Morgan. Your line is open.

Thank You. Just one -- one quick one for me. In terms of real estate dispositions here, are there more of these non-core real estates that you're looking at? Did I catch that correctly?

That's the largest one. We have a couple of other facilities in discontinued operations that we are dealing with. But that's the lion's share, Yilma.

Okay, great thank you, and that's it for me.

Thank you. (Operator Instructions). Our next question is from Jordan Hollander from Jefferies. Your line is open.

Yes. You guys posted pretty solid results here in 1Q, can you just talk about how that relates with normal seasonality? I know usually this is a weaker seasonal quarter and you see demand pick up in 2Q, 3Q, are you continuing to see that or is 1Q a benefit of restocking?

Jordan, I would say it this way, is that we expect to see Q2 and Q3 yet to see strength versus Q1, but obliviously there is some level of restocking that is happening within Q1. I wouldn't consider it sizable enough to offset the natural seasonality of our Company.

Okay, great. Then just one question on the operating margin guidance. Seems like you are already, probably ahead of that target in first quarter's margin. Is there anything to think about that would push that down other than some raw material increases going forward?

Of course part of that going forward is a quarter-over-quarter comparison. Our big structural cost reductions didn't occur in the [fourth] quarter of 2009. So the comparison changes go into the year. We are also, like we have been saying, spending a little more on growth programs. And I mean it's time to be doing that. We've liked the successes so far; we have got a nice pent-up [set of those] to go after. So some of it is by choice, and you know that's what we all do, is try to make the highest value decisions about that kind of thing.

Okay, great. Thanks a lot guys.

Thanks, Jordan.

Thank you. Our next question in queue is from Akash Ghiya from Pine Cobble Capital. Your line is open.

Hi guys, thank you for taking my question.

Certainly.

I was wondering if you could tell me what you are assuming for GDP in your guidance?

We have been talking kind of a low single-digits. The original guidance, I think was 1 to 3.

Okay. If GDP comes in higher than that, how should we think about that growth translating into your sales trajectory and earnings power?

It will -- I mean if the GDP comes in higher, it would -- we will follow it some with all of the normal cyclical offsets that occur in the businesses. I mean there is some timing offsets between them. I mean I don't think GDP matters much in an aerospace and defense business, it certainly matters in a packaging and a [Cequent] business.

Okay, perfect. Thank you very much.

Thank you. At the moment I have no other questions in queue. (Operator Instructions). I am showing no further questions from the phone lines.

Okay, great. Again we really appreciate all of your support. We continue through a transformation of TriMas into the premier kind of Company we intend it to be, and we appreciate you sticking with us through it and we intend to keep making progress (inaudible). Thanks, everybody.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program, and you may now disconnect.