| Copyright: | CCBN, Inc. and FDCH e-Media, Inc. | | Source: | FD (FAIR DISCLOSURE) WIRE | | Wordcount: | 10547 |
PARTICIPANTS
. Mark Donegan, Precision Castparts, Chairman/CEO . Stephanie Wang, Merrill Lynch, Analyst . Peter Arment, American Technology Research, Analyst . Joseph Nadol, JPMorgan, Analyst . Robert Spingarn, Credit Suisse, Analyst . J.B. Groh, D.A. Davidson & Company, Analyst . Tom Marsico, Marsico Capital, Analyst . Howard Rubel, Jefferies & Company, Analyst . Gary Liebowitz, Wachovia Securities, Analyst . David Stauss, UBS, Analyst . William Larsson, Precision Castparts, CFO . Cai von Rumohr, Cowen & Company, Analyst . Eric Hugel, Stephens, Inc., Analyst . George Shapiro, Citigroup, Analyst . Tim Buneman, McAdams Wright Ragen, Analyst
OVERVIEW
PCP reported 4Q08 sales of just under $1.8b and EPS of $1.89.
FINANCIAL DATA
A. Key Data From Call 1. 4Q08 sales = just under $1.8b. 2. 4Q08 EPS = $1.89.
PRESENTATION SUMMARY
S1. Business Review (M.D.) 1. 4Q08 Highlights: 1. Ended up with record sales, EBIT, margins, and EPS. 2. Good solid sales growth of 16.6% for entire corporation, going from $1.5b in 4Q07 to just under $1.8b in 4Q08. 3. Operating income improved YoverY from 37.1%, going from $304m in 4Q07 to $417m in 4Q08. 4. Margin improved from 19.8% in 4Q07 to 23.3% in 4Q08. 5. All this contributed to EPS growth of 32%, going from $1.43 in 4Q07 to $1.89 in 4Q08. 1. $1.89 includes a $0.03 restructuring for closure of an
underutilized machining operation in UK. 6. Primary Drivers: 1. Continues to see extremely strong demand from two primary
end markets.
1. Aerospace.
2. Power. 2. Continues to see a lot of the growth coming on the platforms
where Co. has a strong position. 3. Continues to see good leverage of increasing volume across
all of Co.'s fixed assets.
1. This along with constant attack on costs continues to be
the primary drivers behind operating income growth and on
margin expansion. 2. Investment Cast Products: 1. Good solid YonY sales growth, going roughly by 25%. 1. Got $462m in 4Q07 to $578m in 4Q08. 2. Operating income grew by roughly 43.7%, going from $101m in 4Q07 to $145m in 4Q08. 3. Saw good margin expansion, going from 21.8% in 4Q07 to 25% in 4Q08. 4. Continues to see aerospace being a strong contributor from OEM and aftermarket. 1. Earlier demand is coming on good platform [as forth] in the
investment cast operations. 2. In 4Q08, saw demand slowing for 787 products vs. 3Q08.
1. Thinks basis of customers beginning to adjust to new
anticipated bill rates. 3. Expects good solid growth on base programs and strong
positions on key accelerator programs as Co. moves into
production.
1. A380 moving in the course of this year.
2. Following this with up with some of more significant 787.
3. 787 feels to be going in a bill rate probably in [4Q09 or
1Q09].
4. Bill rates continue to go on for the foreseeable future.
5. After that would be F-35 and KC-X. 5. Second significant driver for 4Q08 and continues to move on into the next 16 months is strong demand coming from IGT. 1. Currently has record production levels in both IGT
factories.
1. Co. is in the process of adding capacity at both
facilities. 2. Until Co. gets the capacity in; it can't make any
significant increases or volume output.
1. Coming up with ways of seeing small incremental
improvements until Co. brings the facilities up.
2. Both facilities are doing well on coming up to where Co.
had expected them.
3. At this point in time Co. is looking at Deer Creek opening
up in 2Q09 and Ohio facility coming into production in
4Q09. 3. Continues to see strong demand on development programs in
IGT front.
1. Has good success in expanding customer base. 3. Forgings: 1. Saw YonY growth of roughly 9.5%, going from $739m sales in 4Q07 to $810m in 4Q08. 2. Operating income, growth of just under 23%. 1. $150m in 4Q07 to $184.5m in 4Q08. 3. Saw good margin expansion, YoverY going from 20.3% to roughly 22.8%. 4. Major Drivers: 1. As with investment cast products, saw strong demand from
aerospace, across:
1. Disk operations.
2. Landing gear.
3. Structural components. 2. As with in investment cast, saw some slowing on 787 hardware
in forging group in 4Q08, mainly coming from engine
components. 3. Expects a strong impact from both of the major programs out
there, 380 and 787 as they implement a production schedules
comparable to what Co. sees in the investment cast side. 5. Seamless extruded pipe continues to be a strong growth engine for Co. 1. Has been able to see output continue to grow and well under
double-digits.
1. Backlog now is in excess of $800m.
2. Gives PCP a solid platform and a baseline for next 24
months. 2. Co. was able to continually put in surgically capital
equipment that lets it continue to grow output without
making a major press expansion. 3. Sees the opportunity and continues to do this throughout the
course of the year. 4. All lines continue to grow sequentially and YoverY. 6. Continues to see YonY material pass-through increase in 4Q08 YoverY is roughly $17m, mainly in the one Boeing side of business. 7. Effect on sales line of both lower nickel prices and increasing internal sales is roughly $70m. 1. Comparable sales number of roughly $880m vs. last year. 2. There was an effect of both lower nickel prices and
increasing internal sales to [own businesses]. 4. Fasteners: 1. Saw good solid growth YonY, going by roughly 20% from $334m in 4Q07 to $402m in 4Q08. 2. Continues to see good improvement in operating income, going from $78m in 4Q07 to $108m in 4Q08. 3. Expanded margins YonY from 23.3% in 4Q07 to just under 27% in 4Q08. 4. All of the growth continues to be fueled by aerospace business. 1. Continues to benefit from the overall cycle. 2. Has been able to add good inroads in catching additional
opportunities as they come up.
1. Share gains.
2. New programs. 3. Going to be moving over the next year into capitalizing on
utilizing some of critical automotive capacity and
capability. 4. This comes on to forging presses and headers and moves that
more into helping support the aerospace growth. 5. Has the assets available to make this transition.
1. One will see this occur over the next 12 to 16 months. 5. Has not seen to date any significant changes in demand for 787 hardware. 1. This has yielded in aerospace operations YonY growth of
roughly 39%. 2. Aerospace tends to be a strong platform for Co. in fastener
side of business. 6. Continues to experience anemic automotive activity. 1. Seeing flat sales. 2. Offsetting North American decline with new opportunities. 3. Expects to move some of critical capability into auto world
into aerospace over the course of next 12 to 16 months. 5. Cash: 1. Had a net cash flow positive of $336m with cash increasing by $45m and debt declined by $292m. 2. Still has plenty of opportunity to continue to reduce cash. 6. Expectations: 1. As Co. moves into FY09, continues to see solid aerospace demand. 1. Thinks, Co. is on the right base programs. 2. Thinks Co. is in excellent position as growth platforms move
into production and moving into mid-to-latter half of this
FY and going into next year. 3. Primary drivers, 380 and 787. 2. IGT demand continues to accelerate. 1. As Co. moves through the year, it will be bringing on in end
of 2Q09, capabilities (indiscernible) as it moves into 4Q09
and will be able to bring in Ohio operations.
1. Will be able to generate additional outputs to support the
market that point.
2. Timing of new facility in Ohio works out well.
3. Has had good success with expanding customer base and
getting some good positions on new programs. 3. Expects to see vigorous pipe demand continue. 1. Does not see any letup at this point in time. 2. Expects to increase the output across Houston operations and
UK operations. 4. Does see an opportunity and Co. continues to capture in alloy operations. 1. Tacts on cost and yields and a good competitive position has
allowed Co. to win and take positions across non-aero
businesses. 5. There were numerous opportunities across all of operations to continue to drive improvement and fuel objective of roughly 30% incremental margins. 6. Staying focused on all opportunities, both top and bottom line.
QUESTION AND ANSWER SUMMARY
OPERATOR: Very good. Thank you. (OPERATOR INSTRUCTIONS) And,
our first question will go to Ron Epstein at Merrill Lynch. Please
go ahead, sir.
STEPHANIE WANG, ANALYST, MERRILL LYNCH: Hi, this is actually
Stephanie Wang. How are you guys?
MARK DONEGAN, CHAIRMAN/CEO, PRECISION CASTPARTS: Hi, Stephanie. How are you?
STEPHANIE WANG: Good. Could your just provide a little bit
more color on the shutdown of the machining operations in the U.K?
MARK DONEGAN: Yes. We basically had -- we have three
facilities that fall underneath the umbrella of our ATC operation. One is a casting, two machining. What we're able to we've been able
to drive efficiencies really across one of the machining operations
and the casting, which created additional space. So, we found
ourselves in a situation with three facilities, where we really
needed two. So, what we're doing is consolidating into two
facilities, and what you're looking at is really the cost of shutting
down and the bulk of that is severance to the employees located in
the U.K.
STEPHANIE WANG: Okay. And, then related to I guess -- given
kind of how evaluations have come down a bit, are you seeing
properties that are a little bit more appealing? Should we still be
expecting a quote-unquote needle moving acquisition?
MARK DONEGAN: Well, gain, I think that -- that we -- what we're
looking at in the opportunities we're focused on have kind of
remained unchanged.
STEPHANIE WANG: Okay.
MARK DONEGAN: I certainly think that -- that we are focusing on
the right things. They certainly capitalize on utilizing all of our
core competencies. And, certainly, that, as the market has
stabilized, I think it provides a platform for us to -- to engage in
more fruitful conversations.
STEPHANIE WANG: Okay. Thank you very much.
MARK DONEGAN: Okay.
OPERATOR: And, our next question goes to Peter Arment at
American Technology Research.
PETER ARMENT, ANALYST, AMERICAN TECHNOLOGY RESEARCH: Hi, good
morning, Mark.
MARK DONEGAN: Hi, Peter.
PETER ARMENT: Nice quarter.
MARK DONEGAN: Thank you.
PETER ARMENT: Could you talk a little bit about what you're
seeing in the airfoil's demand? I mean, you've historically
(inaudible) you're not going to see any contraction in the
after-market. You'd see it there first. How is the growth on that
side?
MARK DONEGAN: It kind of has been a little choppy. If you had
asked that question a couple weeks ago, I probably would have told
you that we're good. But, we're not seeing the type of growth. And,
then, over the last two weeks we saw a tremendous influx. So, at
this point in time, it's certainly maintaining the same feel as it
has over the course of the last six to eight months. We've seen good
demand on the -- the base programs. We're seeing the after-market
remain strong. And, the biggest change we did see in the quarter,
they would have been affected by these -- kind of the rescheduling or
re-forecasting of the 787 because they do have a substantial position
on that. So --
PETER ARMENT: Okay.
MARK DONEGAN: Overall, the airfoil to us now still feels very
solid and kind of where it was over the last six to eight months. Okay.
PETER ARMENT: And, could you sort of also remind us how much
you're now, I guess, on switching over to Forged. What -- how much
you're internally supplying versus external?
MARK DONEGAN: We're probably about 40% internally supplied now.
PETER ARMENT: So that hasn't changed much.
MARK DONEGAN: No, not really. But, we're able -- what we're
doing is actually opening up additional opportunities and finding new
ways of utilizing some of their output to move across our current
operations, and that's given us a pretty good utilization of their
facilities, too. Okay, and then just quickly.
PETER ARMENT: Regarding nickel prices, I guess, previously, you
indicated you were still blended at prices that were, I guess, a
little north of $20. And, how should we expect the current fiscal
year -- how that's going to flow through?
MARK DONEGAN: That's a good question. It's moving, and why I
say that is suddenly nickel has stabilized, but as you can well
imagine cobalt has now become a pretty wildcard going through quite a
bit. We're probably looking at a number in the $17.00- to
$18.00-type of range. And that would assume cobalt in the $28.00 to
$35.00 range and nickel in the $14.00 to $15.00 range, and that's
kind of a blended rate that we move forward with.
PETER ARMENT: Okay. So, we should see that. The top line will
still be impacted, but it should be less over time.
MARK DONEGAN: Yes, and again. As the elements stabilize --
it's like we're trading out, though. Nickel goes down. Cobalt goes
up. We haven't seen any -- any sustainable overall downward trend. There's one of the elements that are significant to us. Certainly,
cobalt is not as big as-- as nickel, but it's a significant
contributor. And, now we're seeing steel move the other way.
PETER ARMENT: Okay.
MARK DONEGAN: So, it's kind of a moving target for us.
PETER ARMENT: Okay, thanks. I'll jump back in the queue. Thanks again, Mark.
MARK DONEGAN: Okay, thanks.
OPERATOR: And, we'll go next to Joe Nadol, JPMorgan.
JOSEPH NADOL, ANALYST, JPMORGAN: Thanks, good morning, Mark.
MARK DONEGAN: Hi, Joe.
JOSEPH NADOL: First question is on 787. You noted that you're
seeing the delayed impact on two of your three segments, but not yet
in Fasteners. What are you looking for in the next six months? Do
you think you'll start to see it in Fasteners? But, do you think the
other segments just had a -- are going to start picking up a little
bit?
MARK DONEGAN: Well, again, I think that suddenly if your look
at the value of a component, you start looking at powdered disk and
just the normal [tiluminites] and just the normal disk they tend to
be very expensive components. So, it tends to be an area that we
would see a pushout very quickly. I think, on the Fastener side,
there's still opportunities. And, we can -- we may be seeing some
slowdown in the base 787, but, at the same time, we're seeing
opportunities from our qualifying new assets as well as additional
new designs are coming out that kind of holding us flat. So, I think
we probably are seeing some easing in some of the 787 demand, but
overall opportunities on that program continue to go. And, right
now, it's kind of holding up pretty strong, and we don't see a whole
lot changing at this point in time.
JOSEPH NADOL: Okay. One of your smaller competitors noted that
they saw some pretty significant slowdown in the A380, relative to
their expectations because one of their customers had a lot more
inventory in the channel than they expected. Are you seeing any of
that? Or, are you really seeing that pick up?
MARK DONEGAN: We have -- we have not seen any A380 demand for
probably two quarters -- two or three quarters. So, at this point in
time, what we are really seeing is anything that would happen in
terms of a bill rate, be it one a month or two a month or whatever
they -- half a month, would be up-side opportunity for us. We have
some of our operations that literally haven't seen anything in six
months.
JOSEPH NADOL: Okay. Over on SMC, you already noted your -- the
degree to which you are internally supplied. I was wondering if you
could just look at it from the other standpoint. How much of SMC
sales are now internal? Because you noted that's been changing.
MARK DONEGAN: It's still -- it's still a very, very, very small
-- in total SMC sales, we're probably 10%, 12% of SMC at best.
JOSEPH NADOL: Okay. And, that's up from lower to mid-single
digits a year ago.
MARK DONEGAN: Yes, and, it's changing. And, why I say that,
you got to remember that in that segment is Caledonia, which supplies
across all of our -- it goes into the Casting, in terms of airfoil. It's going into structural. It's going to [Canon Skeegan]. So, a
lot of what we've been able to do with Caledonia is to use them to
provide lower input costs into all our operations. And, again, those
sales do fall under the Forged segment, too. So, it's just not SMC.
JOSEPH NADOL: Okay, and then just one more. You noted that SMC
-- your top three facilities, volume was up 7%.
MARK DONEGAN: Yes.
JOSEPH NADOL: And, obviously, the sales -- okay -- took a hit
because of the decline in nickel. I'm wondering if you could tell us
if EBIT was up or -- up more than 7% or less.
MARK DONEGAN: Well, I don't break it out as you know. But, you
can see that SMC is a very significant portion of the Forged group. So, if you look at what the Forged group did, it would be hard to
overcome something that big that was going in the wrong direction.
JOSEPH NADOL: Okay, fair enough. Thank you.
MARK DONEGAN: Okay.
OPERATOR: And, our next question goes to Robert Spingarn at
Credit Suisse.
MARK DONEGAN: Hi, Rob.
ROBERT SPINGARN, ANALYST, CREDIT SUISSE: Morning, Mark. Good,
thanks Quick question on the just trend in the SG&A which was down
somewhat in the marketedly in the quarter. You may have touched on
this earlier.
MARK DONEGAN: The biggest driver in SG&A is kind of the -- the
preferred comp and the -- kind of the position the people have in the
PCC stocks was the stock comes down from the 150 high to where it is
kind of now has a positive impact on this line item.
ROBERT SPINGARN: I see. So, we could see it return to the kind
of run rate that it's been at before.
MARK DONEGAN: Well, I think there's a pretty significant
correlation as the stock price goes up or down, you'll see that move
up or down, too.
ROBERT SPINGARN: Okay. And, then just a larger view question. You talked about this earlier a few different times. Boeings now
implementing -- implementing this slower 787 schedule going forward. And, with that in mind and the fact that KCX could take a while to
ramp up, how comfortable are you with the street looking for 13%
sales growth in '09 and maybe something close to that 11, 11.5 in
2010.
MARK DONEGAN: There's not a lot from the standpoint of what
we've -- what we have feel -- I think we've been really well dialed
into what we've seen. It's hard for me to know all of what the
street and you guys have put in your numbers. I mean, some of them
have changed as the bill rates have gone from that combined 110
between '08 and '09 on the 787. And, some have not moved yet. I
think kind of what we saw last quarter kind of feels like maybe an
ongoing run rate of 77. I think -- I think we did see some -- some
very good re-establishing from our engine customers and certainly on
the landing gear and a lot of the other parts, we've seen kind of a
re-baselining. So, if I look at where we are today and you start
looking at what the base business is going to grow, and you kind of
put in when the 787, I think again we've been saying 8% to 10% or a
little higher is probably reasonable. And, I don't see that changing
at this point in time. Now as the 87 comes into play it's certainly
is a big number, and it is certainly capable by itself of moving that
growth rate, ramping that curve up differently. And, that's kind of
what -- as that comes into play, I think we'll change it at that
point --
ROBERT SPINGARN: Well, just to focus on that, we're still
talking about 4 to 5 million per aircraft?
MARK DONEGAN: We're well positioned at 5 million and probable
have an opportunity to go north of that.
ROBERT SPINGARN: So, that's -- you really -- is that because
you keep gaining share here?
MARK DONEGAN: Yes, we have. We continue to see good
opportunities. We have continued to see, as parts have been
redesigned, we continue to see opportunities open up, and, again, I
think that the 87 for us is by far the most significant platform that
we've ever had. And, I'm not ready to say yet we're tapped out on
what that program can offer us in terms of growth and gaining
additional market share, too.
ROBERT SPINGARN: But, certainly long term we could be talking
$0.5 billion a year in revenues?
MARK DONEGAN: Yes. And, again, as you move up to a bill rate
of 10, 12, it's a very substantial number for us.
ROBERT SPINGARN: Okay. And, then, just last thing I don't know
if Bill is there with you.
MARK DONEGAN: He is.
ROBERT SPINGARN: Perhaps either you or he could walk us through
in a little bit more detail the impact of the nickel prices and the
internal sales on the growth rate at Forgings. Some of the
components there so we can actually do the math.
MARK DONEGAN: Hold on a minute. He's pointing to the math. Yes, what we basically did is we took in terms of material, and
,again, it's a blended overall rate for the quarter of what kind of
our prices were going out the door Q4 of last year to Q4 of this
year. And, that gave us a price delta, and we multiplied that times
the pounds that were shipped. So, it's kind of a comparable if
everything was equal what would the sales value have been for the
same shipments. Okay. And, that give us a dollar number. In terms
of the volume, and, again, these are out of the three primary mills,
we looked at the volume we put out last year and the volume we put
out this year kind of times the current sales price and what would
that have given us. And, those two gave us roughly the $70 million.
ROBERT SPINGARN: And, what's the -- if we strip out the
pricing, what kind of volume increases are we looking at?
MARK DONEGAN: Well, on those three primary mills, we're in --
we're in, again, that 7% to 10% range is probably where we were.
ROBERT SPINGARN: Okay.
MARK DONEGAN: Okay.
ROBERT SPINGARN: Thank you for the help on that.
MARK DONEGAN: Yes.
ROBERT SPINGARN: Appreciate it.
OPERATOR: And, we'll go next to J.B. Groh at D.A. Davidson &
Co.
J.B. GROH, ANALYST, D.A. DAVIDSON & COMPANY: Good morning,
guys.
MARK DONEGAN: J.B.
ROBERT SPINGARN: I had a question on -- you talked about
repositioning some fastener capacity. And, I think, in the past the
automotive has been under, what, say under 10% of total sales.
MARK DONEGAN: Yes.
ROBERT SPINGARN: Could you maybe quantify the amount of that
capacity that could be turned into aerospace Fastener capacity?
MARK DONEGAN: Well, we could probably 35% to 40% of that comes
out of a facility. And, the primary facility, we could do this,
that's not our first thing. We're probably looking at a number
closer to 50%. The two primary facilities where we could do this. And, when I say do this, that's the heading equipment, the threading
equipment is all capable of manufacturing the tolerances and the --
the metallurgical characteristics which are required. And, what
you're looking at is plants that are making critical automotive
Fasteners. Two primary plants for us is in the Cleveland operation,
and then we have our Brazilian facility.
And, kind of what we're looking at, is being able to take that
Cleveland facility and move some of that critical automotive into the
aerospace, kind of, North America. And, then we actually position
down in Brazil helps us, and we're looking at potentially taking some
of the Brazilian capabilities and moving into the Embry air world. So, the combination of those two probably like I said 40ish% of what,
maybe 35%, of what comes out of that business.
ROBERT SPINGARN: So, of that automotive, half of what's
automotive now could potentially be turned into aerospace
capabilities --
MARK DONEGAN: Then again, if we continue to have success we
could continue moving it. So, it could be an evolution. And,
eventually, we could move all the equipment over. Because there are
-- there are some types of aerospace Fasteners -- you hate to say say
the lower end, but there's certainly non-complex aerospace Fasteners
that today we really don't have the competitive means. And, I think
that these operations also offer us an opportunity to go after that
market that we've not been able to capture, too. Not only can it
potentially do some of the -- the demand we have today, but it can
also go and compete and gives some other openings in the aerospace
side, too.
ROBERT SPINGARN: So, what are the barriers to getting there? Is it just certification? Or, is it the -- ?
MARK DONEGAN: Yes, going through -- going through, positioning
over, putting the quality standards in place. Again, the fact that
it is a critical automotive. I mean, the automotive inspection
standards, their quality requirements, the tolerances are very
comparable to the aerospace. But, again, they are different systems
and we will have to qualify the actual assets through. But, if you
look at technology, capability, machinery, and equipment, it's --
it's very comparable to what we would do in our aerospace facility. It's not as if we're taking out a hollowed, hallow building and
saying, okay, we've got to begin from scratch. There are people,
resources, engineering talent that are very capable of making this
transition, and now it's just a matter of kind of laying it out and
moving in that direction.
ROBERT SPINGARN: So, very little incremental CapEx.
MARK DONEGAN: Very little. I mean we may have to different
heating coils, but it's something you would see as a rounding error
in our total capital expenditures.
ROBERT SPINGARN: Great. Hi, thank you for your time and
congratulations on the quarter.
MARK DONEGAN: Good, thanks.
OPERATOR: And, we'll go next to Tom Marsico, Marsico Capital. Please go ahead.
MARK DONEGAN: Hi, Tom.
TOM MARSICO, ANALYST, MARSICO CAPITAL: Hi, I was wondering if
you could give us a little bit of scope out two, three years on the
Joint Strike Fighter Program.
MARK DONEGAN: Well, at this point in time, sorry go ahead, can
you give more.
TOM MARSICO: No. No, that's it.
MARK DONEGAN: Well, at this point in time, what we're really
seeing in JSF, it's really a development program for us, and that
would be both on the engine side and on the structural side. This is
the platform for us that would probably be in the $1.5 to $2 million
range. All in as it moves to production, so it's comparable or
higher to what we would have on any other production program. We
continue to see basic redesign, but nothing that's out of the
ordinary. So, at this point in time we're seeing where that program
will be, and I think we're positioned very well if that program moves
into production.
TOM MARSICO: When you're looking at capacity requirements, so,
how far in advance do you have to plan for the eventual startup of
that program? And, then just one follow-up question. On the
Fastener side, do you still have an opportunity to take more market
share from a competitor whose has a number of different facilities
that's producing that Fastener? Probably doesn't have as well a cost
basis as yours.
MARK DONEGAN: Let me answer the first question. If I look at
the Joint Strike Fighter, there's really nothing that comes into
play. So, if I look at the capital that's required. There's nothing
technology or size wise that would really push us in any direction
that we would have to add any capacity equipment in relationship to
the Joint Strike Fighters. So, we really don't need to do a whole
lot different. It just kind of falls into place with our overall
demand, and what you'd really be looking at is in the airfoil-side is
would we need additional casting furnaces. But, from the standpoint
of brick and mortar and major capital and castings for furnaces, we
don't see any need to do that. It fits very well within the envelope
that we have today.
On the Fastener side, we continue to see opportunities. And,
again, I think we need to be very aggressive. I think we need to
attack -- to attack all costs on every front. But, when that group
stays focused, yes we see really no end, at this point in time, to
being able to continue to grow our market share. And certainly with
the weakness of the dollar, it comes into play and provides us
additional opportunity, not just from our standpoint of trying to be
the low cost best quality supplier. But , it also gives us an added
advantage, and I think we'll see some opportunities come in from that
over the next year and a half or
TOM MARSICO: Thank you.
MARK DONEGAN: Okay.
OPERATOR: And, we'll go next to Howard Rubel at Jeffries.
HOWARD RUBEL, ANALYST, JEFFERIES & COMPANY: Thank you very
much. We've been talking about capital. And, yet, some of your
commentary seems to be, Mark, that you'll be spending less capital
this fiscal year than last. Is that a fair assumption?
MARK DONEGAN: No. Again, the -- what we're going to be
spending this year, what's taking up the bulk of it, in terms of one
big capital expansion, is the new expansion in the Ohio IGT facility
and the expansion in -on the Oregon business. So, that's probably
the single biggest piece that we have to put in play. Without those,
I would, yes, say it would be comparable to those will make the
additives, kind of over where we were this year.
TOM MARSICO: So, kind of 2 -- a little over $250 million then?
MARK DONEGAN: Yes, that sounds -- feels like a pretty good
number.
TOM MARSICO: Then just to follow that up though. Given
probably the way you're running the business a little tighter and
slightly slower growth, your working capital growth should also be a
little more moderate.
MARK DONEGAN: Yes, again, the working capital tends to take a
feel of about a quarter ahead of whatever the proceeding sales is. So, certainly we've been on a very aggressive trajectory in terms of
sales growth. So, I do think that -- that our opportunities to take
that down still exist. And again, whether the -- even the line
before been on we still have opportunity to take working capital out. So, am I pleased with where we are in terms of working capital? No,
I'm not. I think if you went out to the operations and thoroughly
sat through our quarterly reviews, you'd get a good sense for where I
think the opportunity is. So, even as we grow and the 787 comes into
play, my goal is to continue to attack that operating working capital
as a percent of sales, and I'm not satisfied with where we are at
this point in time across our business.
TOM MARSICO: Do you -- I mean I'm going to set you up here a
little bit. I don't think you'll fall for it. But, it looks like
you'll become very close to $1 billion in free cash flow this year.
MARK DONEGAN: Well, you know that I won't answer that question. But, certainly, if you kind of look, there's nothing abnormal in
where we were last quarter in terms of that number. And, as I said,
I think we have opportunity in terms of taking working capital out. If you put those together, you can probably get pretty darn close.
TOM MARSICO: I'm two last things. One is -- could you talk
about your hiring plans. I mean, maybe that will help us realize how
much in the way -- as you do more work inside that may kind of help
us understand or appreciate the way you're growing the business.
MARK DONEGAN: Well, again, we're always hiring, and there's
certainly a rate of attrition that goes on in our work force, so that
-- and that's probably in the 3% to 5% range just overall natural
attrition. So, I think you're always going to see that particular
baseline. What we really focus on the our sales per employee, which
kind of says are we continuing to improve quarter-over-quarter,
year-over-year, are we growing that line? And, that line has
continued to move in a very positive direction over the course of the
last two years, and we don't see any reason why that would slow. So,
again, that may not quite answer the question, but I look at it more
sales per employee than I look at, in terms of, actual hard numbers. Because that tells me are we being more productive, being more
efficient, are we getting better at fixed utilization. So, that's
why we look at that number.
TOM MARSICO: And, then last is on scrap rates. I know you
working -- I mean, part of the incremental profitability is to lower
scrap rates.
MARK DONEGAN: Correct.
TOM MARSICO: Can you give us a sense of where you've got the
biggest opportunity and maybe talk about a couple of successes.
MARK DONEGAN: Well, in terms of sheer dollars, you're always
going to one particular grouping of businesses. You're going to come
back to SMC pretty quick. And every pound of material you get in
terms of saving, and it can be metallurgical fall out or overruns or
croppings at the end. There's nothing that we have in any single
business that has as much up side as that goes. I'm going to not
give you specifics on that. But, we have continued to improve our
yield pretty significantly, which yield is really the same as scrap
rate in the Casting, Forging world. Again, I think we're probably
60% to 70% of the way there of where we should be. So, I think it's
probably 40%. And, then, the next biggest scrap rate we always said
would be in the airfoils operation.
And, a lot of what we've been able to get in the course of the
last year is we pretty much held flat or improved as we're bringing
all the development on of these new programs. So, I think that
airfoils team continues to do a good job. So, those are probably the
two most significant areas to improve in.
HOWARD RUBEL: Thank you, Mark.
MARK DONEGAN: Okay.
OPERATOR: And, we'll go next to Gary Liebowitz at Wachovia.
GARY LIEBOWITZ, ANALYST, WACHOVIA SECURITIES: Okay, thanks. One question. Mark, you continue to talk about a 30% incremental
margin
MARK DONEGAN: Right.
GARY LIEBOWITZ: on the higher sales. In the second half of
fiscal '08 you were doing somewhat better than that. Is there a
change in mix that's happening over the next year or so that makes
you -- keeps you cautious down at 30% incremental margins?
MARK DONEGAN: No. No. We've stated that as our primary
target. I think we're focused clearly on that, and there's nothing
in the results that we've gotten that -- that's skewed for any wrong
way. And, there's no change in mix moving forward to any great
degree that would change that either.
GARY LIEBOWITZ: Okay. And, also do you have a breakout of what
the acquisitions contributed to the quarter? Or, will we have to
wait until the 10-K comes out?
MARK DONEGAN: I don't have them with me. So, you'll have to
wait until the 10-K comes out.
GARY LIEBOWITZ: Okay. Thank you.
OPERATOR: We'll go next to David Strauss at UBS.
DAVID STAUSS, ANALYST, UBS: Thanks. Good morning, Mark.
MARK DONEGAN: Hi, David.
DAVID STAUSS: Going back to the revenue growth question, you
talked about 8% to 10% growth. What does that assume for your
internal sourcing of metal from SMC first of all, and second of all
what is assumed for metal pass through? I think this year between
Forge and ICP you did about $450 million in metal pass through.
MARK DONEGAN: Again, well, I think I may not -- I want to make
sure I hear your question properly. I think we said that we're
probably in that 40ish% range for internally supplied material. So,
I am hoping that answers your question.
GARY LIEBOWITZ: Yes. Well, what I'm trying to understand is
you talked about an 8% to 10% revenue growth number going forward
before 787 comes online and kicks in.
MARK DONEGAN: That would assume that. So, that would assume
that we continue to provide ourselves internally. It is probably
growth to that 40%, maybe moving up to maybe 45%. But, that would
all be baked in there.
GARY LIEBOWITZ: And, that would include the pass through number
coming down?
MARK DONEGAN: In reality if you look at the blended rate and
even on nickel's come down and the effect of cobalt and steel going
the other way. Overall, in terms of Casting, in the Wyman-Gordon
business that's not a whole lot (inaudible). Year-over-year, we're
kind of flat in that pass-through.
GARY LIEBOWITZ: Okay, okay. And, then it looks like at least
for one quarter in terms of SMC and prices you're going to have a
difficult comp still in the first quarter in terms of nickel prices.
MARK DONEGAN: Yes.
GARY LIEBOWITZ: Okay. And, then, as far as 787 inventory,
obviously, with the slowdown in the production ramp, where do you
think that inventory is going to sit in the supply chain? Are -- are
you going to be holding, kind of, excess inventory until you start to
ramp up?
MARK DONEGAN: There's only one area, at this point in time,
that I know of we're actually holding inventory, and it's in the
alloy side in our airfoils operations. Shy of that, we really have
no inventory to any great degree in our pipeline at this point in
time. It's there, but it's not that significant.
From our standpoint, the way what we did with our customers is,
we kind of ramped down over a four to six month period of time, and
that's kind of where we are today. So, I would expect, -- and we're
probably carrying that alloy $4 to $5 million of inventory. So, it's
not a massive chunk of -- of business. And, we are pretty tied
closely with our customers that when we finally either pour it in the
Casting world, hot forge it in the Forging world or head it in the
Fastener world that there's a home that it's going to go to.
GARY LIEBOWITZ: Okay. And, then looking at SMC, you're,
obviously, selling into the aero, into the oil and gas and, kind of,
the industrial markets there. Are you seeing any slowdown at all in
terms of demand from the industrial side of the business?
MARK DONEGAN: No. And, again, for us, it's been market share
opportunity. So, I can't answer that question. If I had 90% market
share, I couldn't answer that. But, the fact that we have market
share opportunities, and we really kind of attacked our cost
structure and put the proper capital in place. What we see at this
point in time, it's really quite an opportunity for us to continue to
grow because of where our position is and what opportunities we have.
GARY LIEBOWITZ: Okay. And, then, two quick last ones. What
were your extruded pipe sales this year, and what do you think
capacity is for that business in terms of annual sales? And, then
what do you think about tax rate for '09? Thanks.
MARK DONEGAN: If you give me one second. Yes, our pipe sales
for fiscal year '08 were roughly $330 million. And, again, I think
we should be seeing double-digit growth as we move into this year. And, then the tax rate I got to look. I don't see anything really
changing dramatically.
WILLIAM LARSSON, CFO, PRECISION CASTPARTS: About 34%, which is
the same as where we ended fiscal year '08.
GARY LIEBOWITZ: Great. Thanks a lot.
MARK DONEGAN: Okay.
OPERATOR: We'll go next to Cai von Rumohr at Cowen & Company.
CAI VON RUMOHR, ANALYST, COWEN & COMPANY: Alright. Thank you
very much. Good quarter, Mark. Maybe refresh our memory. How many
more working days were there in the fourth quarter than the third? And, how many will there be in the first quarter? And, any impact
that we might have seen many the quarter and comps from any
maintenance related shutdowns?
MARK DONEGAN: There were three more manufacturing days from Q3
to Q4. Q4 to Q1 had the same manufacturing days because I think we
have Memorial Day in this quarter. And, there was no major
maintenance -- there's always maintenance surcharges, but there was
no one significant event that would have been a major driver as there
was in Q3. But, we did have presses go down, and that's kind of the
normal course of action inside our business.
CAI VON RUMOHR: Got it. You talked of nickel poundage being up
7% year-over-year. As we look at fiscal '09, is that kind of what
we're talking about? Or, should we be up a little bit more as you
get more internal [floors man]?
MARK DONEGAN: Well, I think that the opportunity is certainly
there for us to -- to grow. I don't see anything that's going to cap
us. So, if you kind of look at the poundage growth, I think the
opportunities are there, and our expectations would be kind of that
or more in terms of poundage.
CAI VON RUMOHR: Got it. Okay. And, going back to the 787. I
recall on the third quarter, you indicated that, I think, about half
the $5 million was in Fasteners, so the rest was in Forgings and
Castings. And, I seem to recall that you also indicated that you
were going at a one per month rate, which would have fed,m maybe $10
million of volume like not much volume in the fourth quarter. Where
are we in the run rate? And how should we think of that business
ramping?
MARK DONEGAN: Well, I think that your math is pretty accurate. If you look at the non-Fastener side of the business, we were in a
fairly low state, probably $15 to $20 million in terms of Castings
and Forgings. For now, what it feels like is maybe a couple quarters
like that, and then, as we start coming into the latter half, so the
end of Q3 and Q4, we'll have to start ramping up and getting back
into it. So I think we're probably looking today it feels like more
of a static rate of that and then kind of ramping up as we will, kind
of, exit this fiscal year.
CAI VON RUMOHR: Okay. Great. And, you'd mentioned potential
for more gains in non-aerospace markets at SMC. Could you give us a
little bit more color on some of those opportunities?
MARK DONEGAN: Yes, oil and gas tend to be it. We look at it in
terms of, certainly, tubes, rounds, again, areas we've not been able
to be competitive. We've had good success. And, again, even though
the market is -- the automotive market is not real strong, I mean,
we've had some very significant wins in valve bar. So, again, as
long as there's market share for us to gain, even in an anemic
market, it provides opportunity. But, the primary runs are power,
oil and gas and chemical, and then probably the last would be the
automotive.
CAI VON RUMOHR: Great. And to go back, I guess the last one
would be on M&A. The prices have come down. There are more concerns
amongst some about the demand. How should we think about M&A? How
do you think about it as you look at your business in terms of when
you might do a deal? Things you're looking for. Update us on that
if you would.
MARK DONEGAN: Well, again I think that there are some good,
solid strategic tuck-ins that I would like to see us have that we in,
kind of, various conversations. There are only extremely solid
businesses that make sense on a larger scale for our corporation. Again, I feel as though that the environment is certainly a lot more
conducive now, and it's just a matter sometimes of finding the right
mechanism and the right thought processes to be able to get there. And, I think that's kind of where we are. Are we at a loss for what
we think makes sense? No, not at all. Again, I think that there are
abundant opportunities that would fully utilize our cash and any
future cash for the foreseeable future. So, it's just a matter of
finding the right timing and mindset to be able to get some of those
dealing done.
CAI VON RUMOHR: And, therefore, as we look at your cash
position, which is approaching a net cash position, there's no
likelihood of a share repurchase. You're going to let the cash build
until you find the right opportunity.
MARK DONEGAN: Yes, the right opportunities are there. It's
just being able to deploy that cash. And, if the right opportunities
come through, we would need every ounce of cash plus more. So, it's
just a matter of, kind of, being patient.
Could we execute a transaction today? Sure. There's a price
for anything. But, again, making sure we find the right value for
our shareholders and adhere to the discipline that has worked very
well. Again, that's -- that's certainly one of the challenges
sitting in my role. We know what's out there. We know what makes
sense. We know what will add great value for our shareholders. But,
making sure it's -- it's the right combination of price and value and
future growth for our shareholders, and also that it's the right
value and creation for the particular operation we may be looking at. That's kind of the conversations you engage in at this point in
time.
CAI VON RUMOHR: Thank you very much.
MARK DONEGAN: Okay.
OPERATOR: And, we'll go next to Eric Hugel at Stephens Research
ERIC HUGEL, ANALYST, STEPHENS, INC.: Hi. Good morning, Mark. Good quarter.
MARK DONEGAN: Hi, Eric. Thanks.
ERIC HUGEL: Hi, can you talk about on the IGT side of the
business? You have this new capacity coming online. Can you put
some dollars to that in regards to how much should be coming in? Sort of the middle of this year and by the end of this year?
MARK DONEGAN: Yes, I think that what we've said is that the one
coming in the middle of this year is in the $20 to $25 million range
as we ramp up, and then the one that's coming in Ohio has the
capability in its current state to reach that roughly $65 million
annual run rate.
ERIC HUGEL: Great. And, just a follow-up on the J.B.'s
question with regards to redeploying some of this aero capacity --
some of the auto capacity to aer. You were saying 35% to 40% in
total of your auto business could be redeployed?
MARK DONEGAN: Of our auto Fastener business.
ERIC HUGEL: Of your auto Fastener business.
MARK DONEGAN: We have other -- we have other. We have AFT that
would be in there. But of our automotive Fastener business. Yes,
our largest capability really falls into our Cleveland operation,
and, probably, second to that would be the metal act operation, which
is down in Brazil. Those are our two largest operations, and
certainly the Cleveland operation from us looks like a very good
property, again in terms of capital and people and skill sets, to be
able to make that transition. So, that's kind of what we're
targeting right now.
ERIC HUGEL: Is there anything inherent in that transition that
once you're doing aero, I mean because it depends on how the volume
would ramp, I mean that would preclude you from doing the auto?
MARK DONEGAN: No.
ERIC HUGEL: Or, would you just be doing both?
MARK DONEGAN: We'd be doing both. It doesn't necessarily
require a separate set of skills or a separate set of equipment. We'd have to upgrade some of the heating, cycles, and that, but it's
nothing that wouldn't benefit the auto. So, we would not be
precluded from maintaining critical auto if the customer deemed us
being the best value out there, and, then, it's the same model
additive, and we could better utilize the assets that we have today.
ERIC HUGEL: Would you say on the auto side that there's
significant excess capacity?
MARK DONEGAN: Without a doubt. Without a doubt.
ERIC HUGEL: Yes.
MARK DONEGAN: Again, we've been effective in maintaining a flat
trend now for basically two years, which we have operations that are
nowhere near being utilized. That Cleveland facility has got all
sorts of capability And, the nice thing is, we -- where a lot of our
aerospace facet plants are, being able to get three shifts around the
clock is kind a tough challenge. And, certainly in our Mid-west
operations, our ability to bring on three shifts we have a lot more
success. If we could get those plants up to speed, we have quite a
bit of head room to continue to grow.
ERIC HUGEL: I was going to say that would be a nice next leg
both in terms of top line as well as margin expansion. With regards
to the capacity that you guys have been putting on line over the last
couple of years in regards to the 797 if you look at the build
schedule sort of being revised downward now. I mean I guess in
regards to the next year or two, sort of, how would you sort of think
about how much potential overcapacity you might have in the near
term?
MARK DONEGAN: Well, I think that the rates you're seeing --
most -- I'm trying to think. If you look at the major capital
expansion we made, the airfoil side, the structural side, and the
isothermal press. Kind of what you're seeing in Q4 has all that
hanging over it. So, with the base volume we have and the
efficiencies, we've been able to get I think we've been able to
overcome that extra depreciation. So, as we move forward, as bill
rates towards the end of this year. I think that's where you start
to see some positive. I don't see any real negatives that will drag
us down from that standpoint, heavy at where we are and what we see
today.
ERIC HUGEL: Are you seeing strong demand, I guess maybe a
potential offset on the isothermal side would be strong military
demand. Is that healthy?
MARK DONEGAN: Yes. That and the base programs, again as Boeing
and Airbus continue to ramp up, we have good positions in all the
programs that are growing today. So, today we're able to utilize
that iso with kind of what's out there and again as the GP 7200 comes
online, that's a good program for us. So, it doesn't take a 787
coming on full board. Again, if we get the bill rate of one and go
to two, all that will be very helpful as we go through it. But,
again, a lot of that depreciation is in our numbers right now. So,
it's not as if we have this big wave of depreciation coming at us
from the aerospace side of our business. Really the biggest
depreciation we have coming at us in one single event is the new
plant in Ohio, and that will come in and Q4 or Q1.
ERIC HUGEL: Are there any significant head count additions
coming online?
WILLIAM LARSSON: No. Nothing out of the ordinary. The growth
rate in head count your saw in Q4 should be comparable with what
we've seen before.
ERIC HUGEL: And, I guess, my last question, I guess that this
is a good problem of the with regards to your margin rates. How do
you -- I now you guys that every time you talk to your customs you
told us the story that they whip out your financial statements, and
they point to the profit margins and all that fun stuff. How do the
discussions go these days when you're making 25% profit margins on
Castings and all that stuff? And how does that sort of work in terms
of as you're negotiating contracts and stuff like that with the major
OEMs? Well, I think that it's important for us as an organization
that we have got to continue to find a way to add value to our
customers. So, certainly, what our model has been is not necessarily
to go out and price our way, but try to operationally find those
levers in a we can pull that allow us to satisfy our employees, our
shareholders and our customers. And that is a model that continues.
MARK DONEGAN: So we -- are your customers ever happy? No. And
they shouldn't be. I mean, that's their job to extract the maximum
value out of us that they can, and I think we as a team accept that
wholeheartedly.
What I try to make sure we're staying focused on is the how are
we going to continue to reduce our cost structure today, tomorrow,
six months from now, a year from now, recognizing that our customers
expect us and have a right to expect us to find ways to continue to
add value to them. And, it's a job. It's what U.S. shareholders
pay us for, and it's a job we stand up to. I think the day that we
sit back and rest on our laurels is the day that -- number one you
need to find a new CEO. And number one, the day that our
shareholders -- our customers will say you're not the operation we
need. So finding new ways, be it more efficient and and productivity
lower material-in put and finding machining sources that are lower. It's just an endless, endless battle to drive those costs out to make
sure that we can create value for our shareholders and our customers,
and that's what we have to do. So, I think that as long as we do
that we'll be okay. And, I will never let this operation sit back on
its laurels because the day we do that is the day that we're going to
get sucked up, and that's kind of what I believe from every ounce of
energy that I get.
ERIC HUGEL: Appreciate it, Mark. Thanks.
OPERATOR: And, we'll go next to George Shapiro at Citigroup.
GEORGE SHAPIRO, ANALYST, CITIGROUP: Yes, Mark, good morning.
MARK DONEGAN: Hi, George.
GEORGE SHAPIRO: If you look at Forged products and you take out
the pass throughs and you add -- take out the $4 million benefit that
you had in the margin last year, you effectively had about a 70%
incremental margin. Can you kind of walk through what gave you such
a strong margin in that sector?
MARK DONEGAN: Yes. I don't know if I would agree with the 70%. But, I think that the Forged group did have good incremental
margins. I think there are a couple things. I think that if I look
at the Wyman-Gordon operation and probably the Houston facility. Their ability to leverage the volume across that asset base without
adding a lot of people and a lot of incremental costs is huge. I
think that the extruded pipe growing at the rate it is continues to
have a very positive impact on that -- on the operation. I think
that the special metal team has done a good job of capturing the
opportunities in terms of putting more poundage across those
facilities, which is again huge as well as continuing to improve the
yields. And, I -- there are numerous operations, the Grafton
operation and the Soviet -- the U.K. operations, they've all found
ways to continue to put more value, more product across that assets
without really adding a lot of overhead. So, I think that that tends
to be a pretty strong driver.
GEORGE SHAPIRO: And, could you break out the $70 million that
you attributed to lower selling price and increased in company? Can
you break it out between the two issues?
MARK DONEGAN: Yes, it's probably $40 million of price and
$30ish million of incremental internal sales. Something around that. It's not exact, but it, probably, going to feel like.
GEORGE SHAPIRO: And, then in SMC. So, you're saying that,
despite the lower price is margin, was actually up in the SMC
business?
MARK DONEGAN: What I said is I don't break that out, but being
the size of the business, it's hard to move the margins without all
the bigger operations moving forward.
GEORGE SHAPIRO: Okay. So, effectively you're able to drop
costs faster than what the price came down to do that much better.
MARK DONEGAN: Well, I think they continue to find ways. They
get leverage across their assets. They have yield improvements. We're basically in year two and a half of this special metals
project, moving into year three project. So, we are certainly not at
a loss at all for finding things of opportunity in that world, and,
again, that's both top line and bottom line. I mean, the nice thing
about special metals is if I look at the opportunities from a sales
standpoint, there abundant in non-aerospace business and, again,
power, oil and gas. When I look at the cost structure yield, if it's
materials substitution, revert utilization. There's enormous
opportunities. So, we're getting it. We're certainly extracting out
of SMC what we've hoped to. And, there's certainly a lot more for us
to do in that business.
GEORGE SHAPIRO: And, at SMC, how much did the mix change this
quarter in terms of a percentage of the sales from aero?
MARK DONEGAN: Aero is about the same. Aero is about 33% or
something like that. At 32%, 33%. And, that hasn't moves a whole
lot. So, what's basically happened, we've certainly benefited from
the aero market moving up or whatever it's moving up, and we supply,
not only to ourselves, but we supply to the whole forging world in
that aerospace business. And, then, we supply plate and other
opportunities. And, what we're seeing is, since aero has not been --
become a bigger portion of it with the growth, aero is going on, just
kind of says that we're growing at that type of rate elsewhere in our
business.
GEORGE SHAPIRO: Okay, very good. Thanks very much.
MARK DONEGAN: Okay, George.
OPERATOR: And, we'll go to Tim Buneman at McAdams Wright.
TIM BUNEMAN, ANALYST, MCADAMS WRIGHT RAGEN: Good morning,
gentlemen. Quick question, not to beat the point on this, but on the
787 sequential slow down. You noted a couple of times. Is that
entirely related to the slower production rates at Boeing, or is
there something else going on?
MARK DONEGAN: No, it's all -- we've not lost any positions. We've not had any fall-off in our capability. We -- it's all
strictly to people readjusting to the build rates. And whatever
inventory they had, they've deemed that to be enough.
TIM BUNEMAN: Thank you.
MARK DONEGAN: Okay.
OPERATOR: And, Mr. Donegan, we have no other questions
remaining in the queue. So, on behalf of Precision Castparts, Mr. Donegan and PCC Management, I'd like to thank everyone for joining
the call today. As a reminder, the Webcast and call have been
recorded and will be available on Precision Castparts' Web site at
www.precast.com for approximately 30 days.
This does conclude today's meeting. We do appreciate your
participation. At this time, you may disconnect. Thank you.
[Thomson Financial reserves the right to make changes to documents,
content, or other information on this web site without obligation to
notify any person of such changes.
In the conference calls upon which Event Briefs are based, companies
may make projections or other forward-looking statements regarding a
variety of items. Such forward-looking statements are based upon
current expectations and involve risks and uncertainties. Actual
results may differ materially from those stated in any
forward-looking statement based on a number of important factors and
risks, which are more specifically identified in the companies' most
recent SEC filings. Although the companies may indicate and believe
that the assumptions underlying the forward-looking statements are
reasonable, any of the assumptions could prove inaccurate or
incorrect and, therefore, there can be no assurance that the results
contemplated in the forward-looking statements will be realized.
THE INFORMATION CONTAINED IN EVENT BRIEFS REFLECTS THOMSON
FINANCIAL'S SUBJECTIVE CONDENSED PARAPHRASE OF THE APPLICABLE
COMPANY'S CONFERENCE CALL AND THERE MAY BE MATERIAL ERRORS,
OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE
CONFERENCE CALLS. IN NO WAY DOES THOMSON FINANCIAL OR THE APPLICABLE
COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER
DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE
OR IN ANY EVENT BRIEF. USERS ARE ADVISED TO REVIEW THE APPLICABLE
COMPANY'S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY'S SEC
FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.]
[Copyright: Content copyright 2008 Thomson Financial. ALL RIGHTS
RESERVED. Electronic format, layout and metadata, copyright 2008
Voxant, Inc. (www.voxant.com) ALL RIGHTS RESERVED. No license is
granted to the user of this material other than for research. User
may not reproduce or redistribute the material except for user's
personal or internal use and, in such case, only one copy may be
printed, nor shall user use any material for commercial purposes or
in any fashion that may infringe upon Thomson Financial's or Voxant's
copyright or other proprietary rights or interests in the material;
provided, however, that members of the news media may redistribute
limited portions (less than 250 words) of this material without a
specific license from Thomson Financial and Voxant so long as they
provide conspicuous attribution to Thomson Financial and Voxant as
the originators and copyright holders of such material. This is not a
legal transcript for purposes of litigation.]
This is a news service of Thomson Business Intelligence Service ©2006. This content is for your personal use only, subject to Terms and Conditions. No redistribution allowed.
|
