Worthington Enterprises Inc (WOR) 2006 Q1 法說會逐字稿

Good afternoon and welcome to the Worthington Industries first-quarter 2006 earnings results conference call. (OPERATOR INSTRUCTIONS)

This call is being recorded at the request of Worthington Industries. If there are any objections, you may disconnect at this time.

I would now like to introduce your first speaker, Ms. Allison Sanders, Director of Investor Relations. Ms. Sanders, you may begin.

Thank you, Mark, and good afternoon, everyone. Welcome to our quarterly earnings conference call.

Before we begin our presentation I want to remind everyone that certain statements made in this conference call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties which could cause actual results to differ from those suggested. Please refer to the press release for more detail on factors that could cause actual results to differ materially.

For those who are interested in listening to this conference call again, a replay will be available on the homepage of our website at www.worthingtonindustries.com.

With me in the room are John McConnell, Chairman and CEO; John Christie, President and Chief Financial Officer; and Richard Welch, Controller. John McConnell will open today's call, followed by John Christie's review of financial and operating performance. The session will then be open to questions from the audience, followed by concluding remarks from John McConnell. John?

Allison, thank you. And good afternoon, everyone. Thank you for joining us today.

We faced a challenging first quarter due to sharp (indiscernible) in steel pricing, but we were very pleased this morning to announce that we produced results of $0.32 per share, equaling the second-best first quarter in our Company's history. Taking into account, as you should, the benefit we received on July 1st from a restructuring of Ohio tax code, I'm very happy with our Company's overall performance.

I believe it's important to emphasize that while most of the $0.06 recorded this quarter is a onetime adjustment to our deferred tax liabilities, this is only the second year of a five-year period in which the new structure will be put in place. As an Ohio business, we applaud the Legislature and the Governor for their efforts to make Ohio's business environment more competitive on a national basis.

As you know, we've maintained a very sharp focus on managing raw material inventory for some time. We have been tested over the past 18 months by the most radical swings I am aware of in steel pricing, and our people and our processes performed very well. We maintained our discipline during fiscal '05 when rapidly rising steel prices provided the temptation to buy all the material we could get in the door. As a result of that discipline, when pricing turned down we were able to keep our raw material costs close to the market selling prices moderating margin compression. As pricing began to stabilize following three months of more severe decreases, we were well positioned to isolate those severe margin compression into approximately a 30-day period. Most of our highest-cost inventory to market has been pushed through by early August, allowing margins to begin the rebound.

We look to the remainder of the fiscal year confidently as our improved execution in managing the inventory levels is indicative of an improving focus and execution throughout our Company. I will speak more on our broader view and areas of concentration following John Christie's talking you through a more detailed view of our performance this quarter, and at that time I will respond to any questions you may have. John?

Thank you, John. Good afternoon, everybody.

For our first quarter of fiscal 2006, which ended on August 31, 2005, we reported earnings per share of $0.32. These results represent our second-best first quarter ever and were surpassed only by last year's record first quarter of $0.66 per share.

First-quarter sales of $694 million were 10% below the record first-quarter sales of 769 million for the same period last year. The sales decrease was due to both lower pricing, which reflected the lower steel prices that prevailed this year versus last year, and lower overall volumes. The volume decline was due to reduced volumes in Processed Steel, partially offset by improved demand in both Pressure Cylinders and Metal Framing. Narrower spreads between raw material costs and selling prices in all three business segments cut our gross profit margin nearly in half from 20.8% to 10.9%. As prices fell during the quarter, and relative to the year-ago quarter, we were hindered by higher priced inventory while exactly the opposite was true last year. We estimate that last year's first quarter may have been negatively impacted by $0.24 per share in inventory holding losses compared to the inventory gains of a similar magnitude last year, a swing of nearly $0.50 per share. We believe that attaining second-best first quarter status was a major accomplishment given the severity of the contrast between the two time periods. The good news is that given our well-controlled inventory and a recent pricing shift we don't expect to see any significant inventory holding effect in our second quarter.

SG&A expense decreased both in absolute dollar terms and relative to sales, falling $17 million to 6.9% of sales compared to 8.4% last year. The decline is almost entirely due to profit-sharing expense, which was down significantly due to lower earnings.

Quarterly operating income declined from $89 million to $28 million or 4% of sales. Please note that operating income excludes the equity income of our seven unconsolidated joint ventures which continue to be a significant and consistent contributor to earnings. Quarterly results for the joint ventures were very strong at 13 million and were about equal to last year's record first-quarter equity income. As a group, unconsolidated joint ventures generated approximately 205 million in sales during the first three months corresponding to our first quarter. Collectively unconsolidated JV pre-tax return on committed capital continues to average nearly 40%. We emphasize their performance because of their significance and because it is too easy to overlook that single line item, equity income, in our financial results.

Now to continue the remaining income statement line items, miscellaneous income expense category favorably impacted comparative results by nearly $4 million due to reduced minority interest elimination of our consolidated joint ventures and investment returns on cash and short-term assets.

Interest expense was up $1 million due to higher rates and borrowings this year compared to last.

Income tax expense was down significantly due to lower net earnings and to modifications in the corporate tax laws for the state of Ohio. The tax law changes, while ongoing in nature, resulted in a $5 million favorable benefit this quarter, the majority of which is due to their onetime impact on deferred tax balances. We expect that our effective tax rate for fiscal 2006 will be about 35.5% excluding the onetime benefit from the Ohio tax law changes and audit resolutions that occur in the normal course of events.

Now to the balance sheet. Net total debt was 237 million, which is net of 151 million in cash and short-term investments at the end of the quarter. Net debt is down 41 million for August of 2004 and 94 million from May 2005 fiscal year end.

Our debt to total capitalization ratio was 31.6%. The sizable cash position was a result of strong operating cash flow generation during the quarter as higher priced receivables and inventory converted to cash.

Inventory was reduced in both dollar terms and on a ton basis during the quarter. Days in inventory declined to 58 days at quarter end, in line with the prior quarter end and down substantially from the 70 days last year.

Capital spending was 13 million, in line with depreciation of 14 million. After five years of under-spending depreciation, we expect that CapEx, excluding any acquisitions, will be somewhat greater than that annual depreciation of 60 million.

Free cash flow -- that's operating cash flow after CapEx and dividends -- was nearly 100 million for the quarter.

Now to talk more specifically about the first-quarter financial and operating performance of each of our three business segments, beginning with Processed Steel which represents 54% of our revenues this quarter, Processed Steel's quarterly sales fell 18% to 373 million from the 454 million in last year's first quarter. The decrease was due to lower pricing, down 6%, and lower volumes, down 13%, about half of which was due to the sale of our Decatur assets.

As most of you know, July is traditionally a very slow month for this segment because of automotive shutdown and model changeovers. This July was one of the worst ever for our Processed Steel customer base. August, however, was much improved and the quarter ended on a stronger note.

Inventory was very well controlled, as evidenced by days in inventory, which decreased from 63 days a year ago to 51 days at quarter end.

Operating income from Processed Steel fell to $9 million from 41 million in the year-ago quarter. As a result, operating margins also fell to 2.4% from 9.1%. The decrease was due to a narrowing of spread between the average selling prices and material costs as a result of higher priced inventory in a falling price environments. This of course contrasts with last year's record first quarter where the reverse was true. Well controlled inventories and a period of stable pricing should reduce this volatility.

Turning now to our Metal Framing segment, which represented 30% of revenues for this quarter, year-over-year volumes were up 3%, but not enough to offset the impact of lower pricing. As a result, first-quarter sales of 209 million were down 12% from last year's August quarter when sales reached 238 million, an all-time record.

Dietrich Metal Framing's customers have by and large finished a nearly year-long period of destocking and demand has picked up generally. Hurricane Katrina has damaged or destroyed the operations of several customers in the Gulf region, and we estimate that 2 to 3% of Dietrich's business is impaired at least temporarily. For the region in general we believe that after the initial slowdown of perhaps a year or so a significant rebuilding effort will most likely benefit our business for some time.

Dietrich's tons in inventory decreased 10% in the year-over-year time period. Days in inventory also declined from 90 days to 60 days.

Operating income declined from the record 52 million to 10 million as a result of narrower spreads that resulted from the falling price environments in sharp contrast to the market conditions in the year-ago period. The operating margin fell to 4.9% from a record 21.6, which was well above historical averages of 8% in this segment. With steel prices rebounding and Dietrich's recent announcement of a 10% price increase we expect margins to stabilize.

Finally, in our Pressure Cylinders segment, which represented 15% of the Company's revenues, sales for the quarter were up 46% or 34 million from last year. 19 million of the increase was due to the September 2004 acquisition of the cylinder assets of Western Industries. Improved European operations contributed another 6 million. Total unit volumes were up 9%. That's excluding the acquisition impact due to the strength of the 20 pound propane, helium and air tank product lines.

Operating income was up 5 million, increasing from 3 million in the year-ago quarter to $8 million. Consequently, the operating margin rose from 4.4% to 7.4%. The improvement in profitability is primarily due to the European operations and to the accretive acquisition.

Before I close I want to comment on Hurricane Katrina. There was no direct impact to Worthington or to any of its 65 facilities. Any effect will be indirect and is difficult to quantify beyond the small initial impact I mentioned for our Metal Framing segment. At this point we believe that the effect will be primarily energy and transportation related.

To conclude, this was the second-best first quarter in the Company's history, despite absorbing the negative earnings impact from significantly declining prices.

John, do you have any closing comments?

John, I do. Thank you. As I said earlier, we remain very positive in our outlook. We believe that we are continuing to improve in all areas that we control as a business and that the pace of improvement is accelerating. That is why we've asked couple -- that is what we have asked of all of our people here, and that's what they're delivering.

Let me give you just one example of where we've been gaining traction and have gotten over the tipping point of changing behaviors. One of the concepts in our decision back in 2000 to restructure the Company including the disposition of all non-performing steel assets was around the consumption and further processing of flat-rolled steel was its ability to provide a baseload of business to our steel processing company.

We first concentrating on the purchase of (indiscernible) material between the businesses. We have moved to include all internal processes performed by our companies, taking into account their respective expertise, their capabilities and their logistics involved. More importantly, we have a process in place to ensure that the improved alignment and use of our assets occurs.

We are on a course this year to increase the amount of baseloading (indiscernible) steel company in excess of 30% increase this fiscal year. That will be approaching a 10% baseload of Worthington Steel's business and capability. This initial effort to further improve baseloading of our steel processing plants and the utilization of all our assets across the board is several years from completion and will remain an ongoing effort even at that point.

Two quarters ago in our conference call of March of 2005 I briefly listed a number of growth initiatives we had undertaken. I'd like to highlight and update just a couple of those for you today.

One of the projects I mentioned involved the licensing of a patent right on the process that I said at that time would provide a unique marketing advantage to our Metal Framing company. At that point we had run focused groups which were enthusiastically reviewed -- where the product was enthusiastically reviewed and have since had it in the field on a very limited basis. The construction company using this new stud simply states they would not use a traditional stud again.

Tomorrow we will be formally announcing a licensing arrangement with Hadley UltraSTEEL technologies. This technology work hardens the material, improving its strength by dimpling the material. And dimpling, by the way, is not a technical term, but I think the best term I can give you to get a visual on what this stud looks like.

Beyond adding strength, UltraSTEEL imparts many other benefits. It quickens the erection process, which is a key element penetrating new residential markets for us, and because -- and that happens because the dimples, the raised surface, allows the screw to grab quicker. Its edges are smooth, lessening the possibility of cuts, and is very easy to handle as a handle as a result. Two very important additional benefits are that its sound transmission qualities, meaning it doesn't carry sound well, are greatly reduced, and UltraSTEEL performs better in fire test than traditional studs. So combine faster site erection, better safety, lower sound transmission, and better fire test results and you can see why contractors immediately see the benefits of this product.

Currently UltraSTEEL studs are available in Florida on a limited basis, but will soon -- we will soon begin to employ this technology across the country. That's a process that could take between two and three years to convert all of our lines in the United States. This is something we're very excited about and this product launch. And again, I hope you'll watch for a formal release with a few more details tomorrow.

I also want to take a minute and update you on our construction efforts in China. We will break ground on the first of two of our proprietary mid-rise building designs in China in October. These prototypes are our ability to start to go after what is a huge opportunity in China. But they only represent the beginning of a long road towards acceptance. So we're going to have to continue to stay on top of that for you and keep you informed as our progress continues.

I'm also pleased to report while we are talking about mid-rise that in United States this project -- product continues to grow in acceptance. And more importantly, we've turned the corner and are generating a profit in this business.

Lastly, a quick update on Steelpac, our specialty steel packaging company. I previously mentioned we were working on pallets aimed at the commodity end of the container and shipping business. We now have three skid designs that meet or exceed all the current standards for this product. We will begin production of a several thousand piece trial order in November that will be field tested next spring. We remain encouraged by our progress to date and we will let you know the results as the field test gets completed.

In closing, we remain very optimistic in both our near and long-term views. We are performing very well in the areas that we control, and we're going to continue to improve. Before I go on to any questions, I think John might have one thing he wants to clarify in his comments before we take your questions.

Yes, thanks John. I think maybe I may have confused somebody, so let me make sure everyone is clear that we estimate that this year's first quarter may have been negatively impacted by about $0.24 a share in inventory holding losses compared to inventory holding gains of a similar magnitude last year, a swing of nearly $0.50. I think that I said it was positively impacted this year.

Okay, at this point we would be happy to take any questions you might have.

(OPERATOR INSTRUCTIONS) Mark Parr, KeyBank.

Good afternoon. I had one question. I was looking at the supplemental data in your release, and looking at the reduction in the material cost for Processed Steel, and then looking at almost a similar increase in material cost in the Metal Framing side, and I was wondering if you could address that and give us a little color in terms of what were the factors that resulted in that.

We had about high-70s, low-80s of inventory going into this quarter in the process -- or in Metal Framing. And we have continued to control the inventories in Processed Steel to 60 days and under going into this quarter. So we had a little more high-priced inventory going into this quarter in Metal Framing.

Thanks. If I could ask one follow-up question. John, you had mentioned the reduction in minority interest as one of the -- or minority interest losses as one of the factors that enhanced the non-operating income. Could you go into a little more detail on that please?

That again is our consolidated joint ventures. The more we make, the more we pay out; the less we make, the less we pay out. So that swings back and forth on that number.

I was just looking at the reduction in minority interest losses in the context of stable equity earnings, and I guess I was a little confused with that. That's all.

John Novak, CIBC.

Can you give us a sense of why cylinder pricing and operating profits were down sequentially? I think it was sales that were down.

I know that we -- and I guess sequentially over what timeframes. Clearly selling prices, I don't believe, have declined in almost any of our product lines that I recall. As a matter of fact, I now we just had another price increase out in several of our product lines in cylinders. We certainly had to absorb through fiscal '05 some of the price increases in the field and did not pass them all along. But the initial price point in the marketplace -- where are you looking at the data that you're getting?

What you're seeing probably is our average pricing has changed with the inclusion of the Western cylinders assets. Those tanks sell several thousand units at a less average selling price than the product line we had. So we're trying to shift a better way to measure that. But the large number of units at a lower average selling price skews the average selling price of the whole line.

And in the processing, can you give us a sense on the shipments how much were toll and how much were direct?

We were about 55-45.

55 toll, Dole, 45 direct?

Other way around.

Do you see that staying?

It has stayed fairly stable over the last several quarters. I would say last quarter it dipped a little bit lower and the tolling dipped down to just above 40.

Okay. Can you give us a sense of customer buying patterns as you go into your next quarter? A few distributors that we've talked to have indicated that they have seen a bit of weakness in the tier one automotive suppliers. I am just wondering what you're seeing in that processing business.

When you say buying pattern you just mean demand levels?

Correct.

We think demand was improving throughout August.

And more -- demand was improving more than seasonality would indicate or outright incremental demand excluding seasonality?

Normal seasonality. We did see a tail off in late June. And as we indicated, July was a very poor month in that area as people adjusted and the shutdowns took longer. But we did see normalized supply pick up in the very latter part of July and through August.

At what point in that business did you actually have to start paying the higher prices for steel? Were you able to continue buying at the lower prices before the increases were put in place all the way into September?

We buy steel continuously, so we're buying steel every month. Every day, really. So we're buying all along.

Did you take advantage of the opportunity to buy more before the price increases were put in place?

As Mr. McConnell said, we're not in the steel speculation business. We try to control our inventories in a way that match up with our orders. And the last time in the year 2000-2001 when prices really not to the magnitude they're doing now in the short cycles, we had 101 days of inventory and got clobbered. We have put a lot of discipline into inventory. And so we're going to continue to monitor through inventory and not try to speculate.

Sal Terani (ph), Goldman Sachs.

Can you give us some color on the inventory? Service center data which came out yesterday shows inventory at the service centers has declined dramatically. Are you guys seeing the buying pattern increasing; you're accumulating inventory at this stage or are you still destocking at your plants?

We've talked about the inventory pretty much all the way through the call. And we work very hard to keep our inventories in line with the demand we have in front of us, keeping our days of inventory fairly constant. And we want them fairly low, as low as we possibly can.

What else is going in service centers or other parts of the business sectors, you would have a better idea than we would.

Mark Parr, KeyBank.

My question has been answered for right now.

(OPERATOR INSTRUCTIONS) Lloyd O'Carroll, BB&T.

Looking forward, reconstruction of Hurricane Katrina damage, and maybe hurricane Rita depending on what happens this weekend, is going to be one of the great sources of demand for steel and other construction materials over the next one to two years. You talked a little bit about in Metal Framing. Can you remind us what the mix between commercial, residential type market mix you have.

And then in the unconsolidated subs, the largest portion of that is the WAVE joint venture should be exposed to any improvement in construction. Can you give us any feel for what percentage, maybe in a broad range, that that might represent so that we can have some idea of what the broad exposure to an improving construction market might be?

First of all, going back to your first question with Hurricane Katrina and the Gulf Coast, as with Florida rebuild from a year ago, it took about a year to really -- this is a much larger area of devastation and I think our first reaction would be that of every American was just how can we help, and we did so with our cylinder products and we're looking at different ways. That also can certainly combined the marketing of steel with ways that we can do things perhaps with other organizations to get shelter and some structure up quickly for people.

We are going to be looking at this area much differently then we did a year ago, and we will be on the ground really working with people to understand if we're going as a country invest an awful lot of money and time and effort in rebuilding this area, as we should, that they should really be looking at building a superior products that would not have the same result in the face of a hurricane that did occur. So we're going to put a lot of energy into making sure that people understand (indiscernible).

This goes hand-in-hand with your second question, which is our mix between commercial and residential, which still remains very high commercial, over 90% commercial to residential. But that's a number that's been shifting and growing, the residential side building up, gaining momentum every day as we talk.

I think UltraSTEEL and our efforts with analyzing that we just entered last year have taken another step toward greater acceptance in the residential side. We have homebuilders that have adopted our pouring (ph) system for all of their homes in large tracts of the country. We have made a lot of headway with some of the residential construction that's going on on military bases. I think we mentioned that last week.

This side of our business is growing fairly rapidly, but starting from a very small base. I think we will answer that question differently and hopefully we can convince some people that there are stronger, better building materials available as we approach the South Gulf Coast area that you will help -- you will see those numbers move even more so.

Your last question I think had to do with equity, and I can't remember what --

Can you give us some at least rough feel for what portion of the unconsolidated subs that is construction related, whether its WAVE or any of the other smaller subs? And you haven't broken that out in any specificity, but if we can get some feel, is it 50%, 75%, some broad measure because of the sealing systems are going to be as part of the new construction effort because it wasn't just houses that were damaged (multiple speakers)

We're running -- in our EBIT percentages we're running mid-50s of our EBIT is coming from framing and grid products as opposed to our EBIT about -- the rest is coming from the cylinders and the Processed Steel. So we're running above 50% of EBIT coming from building products and grid.

I think that helps. And this is an extraordinary event. A lot of things are going to be having. And so think we're going to be looking for who is negatively impacted and how and who might have some positive impact.

I would also say when people talk about residential they talk about single-family. We're trying to get better feedback back from the distributor network as to how much of our products that we are now counting is commercial is going into mid-level high-rise residential, condos, apartments, dormitories. We would like to give you a figure, but we don't have that exact. But there is more going into that that we are included in commercial than we are giving ourselves credit for.

Okay, thank you, and we will be looking forward to numbers getting a bit better in the future.

Mark Parr, KeyBank.

John, could you give us a little more color on this dimpled product, this UltraSTEEL? Maybe it would just be -- is it on your website or on Dietrich's website where we could take a look at it? And what kind of mix do you expect this product to represent over the next 12 to 18 months?

First of all, as I said, we are going to formally announce it tomorrow. So otherwise, it's not out there for you to get to any other place. And we'll probably be not too much behind it some better materials that we can get to you that really explain the product, give you visuals on it more clearly than we will probably have available for the next first couple of weeks that it out there.

A little more color on it, I don't know what else I can tell you other than kind of the broader-based things that I said. (multiple speakers) through an introduction to a number of our key distributors across the country anxious to for the first time for me to see firsthand their reaction and what they thought the impact of this was. And I can honestly say I think they were fairly overwhelmed with the possibilities in front of them with this product.

What, is it just it's a lot easier to put together than the traditional studs?

It is easier to erect both because it easier to handle and because -- and you have to -- if you were screwing something into a surface, if it was hard and flat, and you know that sheet metal screw has got to find an entry point, so it has to get forced in with some pressure. When you're going into the dimpled system, it actually nests itself quickly and is almost pulled in on its own as it rotates very efficiently and effectively. Pull outs were almost eliminated in all the tests that we did concerning this product used so far.

So it just has a ton of benefits, and we are anxious to reach this point to get a broader exposure for everybody out there to this product and aggressively roll it across the country. I said earlier that it could take up to two to three years or initial production with three years (indiscernible) in the lower side because I believe there are things we can do to accelerate that process, and we're going to be working hard at doing so.

Did you mention anything regarding the price point of the product?

The price point at this point -- a lot of points in there. It's probably a little premature to say, but I would anticipate it not being significantly different than what's in the market today.

But the material -- does it require additional processing to manufacture the product?

It requires really equipment. There is an additional process, but it actually -- and the reason it takes a while is we have to put this in as an integral part of our continuous (indiscernible) lines today. So we have to break them apart, insert this piece. So it won't really change any material handling. Once the coil starts to come in to be roll formed, it will receive this process and then it will be roll formed just like it was. And we'll have to change some of the tooling on the roll former obviously because this is a stronger, more rigid, resistant material. So we have to give a little strength there. But it won't add any other steps. It will all be part of the continuous process we have in place now with the insertion of this rolling process.

One last question. Does it require a thinner -- does it allow a thinner input gauge?

As I said, it's a stronger product. How that ultimately gets used in the marketplace we will see because it has a lot of different applications, including we're doing some experimenting with our skid products with this. So it all depends on the end application, what you're able to do with, what might happen with it.

David Taylor, David P. Taylor & Co.

I also have some questions on the new UltraSTEEL product. First off, is the process patented?

It is. I mentioned that in my remarks. We're licensing the use of a patent.

So now is this with your joint -- this is a joint venture, or no?

No. We have a very good working relationship with this group. We are doing a number of different things with them that we haven't progressed into any formal arrangements with. But it's a very respectable joint effort in most of our development efforts around the use of their patented technology.

Another question I have on UltraSTEEL -- well, it's not so much on UltraSTEEL as more broadly on Dietrich -- is I know that Dietrich obviously has a number of competitors around the country. Do you have some general idea of what your share of market is for steel studs?

I'm not going to give you a specific number as (indiscernible). One of the reasons for that it's obviously using the best data you can obtain and taking your stab at where you believe you are to that number. We know what we do. It's sometimes difficult to get (multiple speakers) otherwise. So it's a significant share.

Not to pin you down too broadly, but are you more than half or less than half?

I think if I take you back to the acquisition of Unimast, we believed at the time we had the largest market share in the country and we believed they had the second when we joined these two companies together. So that would give you some sense, I guess.

The other side of that is that we had probably up to -- and this is again using our internal methodology and what we look at -- we probably allowed during the rapid rise in steel prices some of -- we probably (indiscernible) about 3 or 4% share in some areas which we had just gotten back through aggressive pricing, more aggressive pricing. Our share stays about the same as it has been sense. About a year post Unimast (multiple speakers)

You're just not going to tell us how much that is.

It is something north of 40% and not greater than 60. How is that?

That's fair. So in the best of all possible worlds with this process, if you knock everybody out you might double your volume. Is that fair?

I think we're going to be -- yes. I don't know what the outcome of that is going to be. (multiple speakers) our customer base won't want to use another product besides this one. I don't think it is easily duplicated. It's not embossing. It's not just putting a pattern in the steel. This is actually a work hardened product that really is quite ingenious in properties in parts and the material.

To kind of add to what Mark Parr requested, or nearly requested, I think it would be a great idea if you could send out to your investor mailing list some info on UltraSTEEL when you get it together for publication. I would certainly like to see it.

Another piece that I'm going to ask Allison to mentioned to you here is we have a kind of a focus on Metal Framing coming up to make sure that -- because most of you are grounded really in the steel industry, to get you better opportunity to really see what we're doing in this product and maybe get a deeper understanding. Do you want to talk about that a little bit, Allison?

Yes, David, and to others that are listing, we're having an analyst day at a Dietrich Metal Framing facility that is in the Atlanta area on November 11th. It's a Friday. In fact, we will be able to see how the product is manufactured there, plant stores (ph) and management discussions for a good part of that day (indiscernible). So I will be sending invitations out if you haven't already received them. But do contact me if you would like to attend.

I have a Processed Steel question. Maybe you still have some Processed Steel.

Yes sir, we do. It's most of what we have.

You mentioned that volume was down 13% in the division, and 6% of that 13% was to due to the sale of the Georgia facility. Then you mentioned that pricing was down 6% year to year. If the Georgia facility weren't in the prior year's numbers, how much would pricing in the division have been down?

First of all, (indiscernible) I don't know if we have an exact comparison if-if not. We are talking about Decatur, Alabama I assume.

Yes. I'm sorry, Decatur.

That's fine. Just to be clear for all of us involved in the call one way or the other.

That would be very hard -- we could find, but that was a much higher value added product that we sold in Decatur. It was a cold-rolled product. So even when you take the average pricing of that product out of the mix it drops our overall pricing on our average product going out the door. I couldn't tell you exact, but that does have a bearing on it.

So the pricing would have been down a smaller number?

If you took that (multiple speakers) would be correct.

(OPERATOR INSTRUCTIONS) We're showing no further questions. We'll turn it back over to you for further comments.

Thank you very much, Mark, and thank you all again -- once again for joining us today. We have a lot of very good momentum in this Company. And again, we feel very good about decisions we have made over the past five years, our accelerating execution and focus on that direction. And we will look forward to talking to you again next quarter and in between. Thank you.

Thanks for participating. This conclude today's conference call. You may disconnect at this time.