Good morning, ladies and gentlemen, and welcome to the EnerSys Third Quarter 2015 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to your host, Mr. John Craig, Chairman and Chief Executive Officer. Mr. Craig, you may begin.

Thank you, Bridgette. Good morning, everyone, and thank you for joining us today. Joining me on the phone this morning is Dave Shaffer, our President and Chief Operating Officer; along with Mike Schmidtlein, our Chief Financial Officer. Last night, we posted on our website, slides that we're going to represent during the call this morning. So if you didn't get a chance to see this information, you may want to go to our Investor Relations tab on our website at www.enersys.com. Before we get into the details of our third quarter results, I'm going to ask Mike Schmidtlein to cover information regarding forward statements. Mike?

Thank you, John, and good morning to everyone. As a reminder, we will be presenting certain forward-looking statements on this call that are based on management's current expectations and are subject to uncertainties and changes in circumstances. Our actual results may differ materially from the forward-looking statements for a number of reasons. Our forward-looking statements are based on management's current views regarding future events and operating performance, and are applicable only as of the dates of such statements. For a list of factors which could affect our future results, including our earnings estimates, see Forward-looking Statements included in Item 2, Management's Discussion & Analysis of financial condition and results of operations set forth in our quarterly report on Form 10-Q for the fiscal quarter ended December 28, 2014, which was filed with the U.S. Securities and Exchange Commission. In addition, we will also be presenting certain non-GAAP financial measures. For an explanation of the differences between the comparable GAAP financial information and the non-GAAP information, please see our company's Form 8-K, which includes our press release dated February 4, 2015, which is located on our website at www.enersys.com. Now let me turn it back to you, John.

Thanks, Mike. Please refer to Slide 3, and you'll see the reported details of our third quarter results. Our sales for the quarter were down 5% to $612 million compared to the prior year, mainly due to the impact of foreign exchange rates. In spite of the lower revenue, as well as higher lead cost, we were able to achieve a record third quarter adjusted earnings per share of $1.09, which exceeded our guidance of $1.04 to $1.08 per share. On a year-over-year basis, our earnings per share were up $0.02 or 2%. I continue to be impressed with the record results from our Europe, Middle Eastern and Africa business. Year-over-year, our third quarter organic volume in EMEA was up 6%, driven by strong reserve power sales and positive pricing of 1%. EMEA's operating earnings are up 30% for the quarter as compared to the prior year third quarter to $28 million, and up 57% for the first 9 months of this year -- fiscal year, at $83 million. And I want to focus on our current business activities and fourth quarter guidance. Our in current -- coming order rate for motive power are up in the Americas and Asia and are flat in the EMEA region. The 3 months electric fork truck orders for October through December are up 13% globally compared to the prior year. In reserve power, we continue to see sizable telecommunications orders for replacement in 4G in our EMEA region. In the Americas, reserve power orders are down year-over-year, mainly due to reduced orders from a major telecom company. As noted on prior investor calls, our Asian operation continue to have reduced volume versus prior year, given our exit from a large low-margin contract we have. Also in Asia, during fiscal 2015, we have experienced…

Thanks, John. For those of you following along on our webcast, I am starting with Slide 4. As John mentioned, our third quarter net sales decreased 5% over the prior year to $612 million. This resulted from a 2% decrease in organic volume and a 6% decrease from currency translation, less a 2% increase from acquisitions and a 1% price increase. On a regional basis, our third quarter net sales in the Americas were down 4% to $314 million, while Europe's decreased 4% to $242 million, and Asia decreased 15% in the third quarter to $55 million. In the Americas, 3% was from negative organic volume in our enclosures business and 2% was from currency devaluation, while acquisitions contributed 1%. Europe had a 6% increase in organic volume due to a strong showing in reserve power and a 1% increase in pricing, overcome by 11% in currency devaluation. In Asia, organic volume was down 26%, with sales to China's telecoms remaining down and the impacts from the transition of motive power production to a new facility. Currency was also down 3% in Asia, while the new UTS acquisition contributed 14% to net sales. On a product line basis, net sales for motive power were down 3% to $305 million, while reserve power decreased 7% to $307 million. Motive power had a 1% pricing gain and a 2% gain from acquisitions, less 6% negative currency translation. Reserve power obtained 1% from acquisitions, while organic volume and currency translation were down 3% and 5%, respectively. Please now refer to Slide 5. On a sequential quarterly basis, third quarter net sales were down 3% to the second quarter due to 3% lower currency translation. The Americas region was down 6%, and Asia was down 13%, while Europe increased 4%. On a product line…

Thank you, Mike. And with that, I'd like to go ahead and open up the lines for questions.

[Operator Instructions] Our first question is from William Bremer with Maxim Group.

Let's go right into China, if I may. You voiced the fact that telecom there, volume is down, what's the strategy there? And how are the new products that you voiced last conference call, where are they in terms of being rolled out?

Yes, I'm going to ask Dave Shaffer to pick up on that question.

Thanks for the question, Bill. We've got 2 new products that are in final approval stages with some key customers. And we expect to see incremental revenue from these products coming in the coming quarters.

Okay. So you're saying maybe the first half of '16?

Yes, that's when we should ramp from there.

Okay. Great. John, can you give us a like a little bit more granularity on these new products? What type of -- and I know that your operating margin target is approximately 10%. Will these get you there?

I believe they will, eventually. Let me go in a little bit more detail on the whole Asia market, and I'll start with China. The tender offers that went out last year were so low that we were going to lose money on them. And we had a very tough decision to make on this thing. And what we've decided was, walk away from that business. You can't stay in business and lose money. It's a very tough and competitive market. We then benchmarked our products against our competitors. And as I mentioned in the last conference call, we are looking at major cost reductions, our cost reductions on the products to become more competitive. We have 2 products right now that are in testing with 2 very large customers. We also have a change that's taken place in the China market, where the 3 telecom companies have formed a joint venture to really put up the towers and buy batteries. We are putting a lot of emphasis on going to that joint venture and working with the people on establishing relationships there. And what we're hoping for, and there's no guarantees, is that these products will take off and put us in a better position than we have been in the past. That's a very tough environment that we have there. I think the second point to take a look at it is our India business, is one where we continued to invest in it, and get it up and running at the level we want, some of the products that have been there from the prior ownership were not to the standards that we want. We have redesigned the products, have put our designs in there, and we're hoping that one picks up also. Long term, and these are long-term decisions we've made, that we can't stay in businesses that are very, very low gross margin and ultimately, not make money with them. I do believe, very strongly, that we will be back above 10%, of which sometime in the coming quarters. Hopefully, second or third or fourth quarter next year.

Okay. Great. Let's go right to Europe. Very nice margins there in Europe. And given what you've gone through there in the past, I take my hat off to you in terms of the restructuring initiatives that your company has done there. Can you sustain this type of margin in Europe? Or what are you seeing -- sort of break it down between East and West for us in terms of -- as well as, if you could, between motive and reserve, where you're getting the demand?

Well as you know, recently, we promoted Dave Shaffer to President and Chief Operating Officer. His prior job was President of the European operations. So I'm going to toss that one to Dave.

Well, thanks, John. The -- in terms of the outlook, the motive power business appears to be very stable in the Western markets. The business in Russia, obviously, is a bit questionable going forward, but it's not a substantial part of our business. So it shouldn't present too much difficulty. With regards to the reserve power, John touched on this in his script, that the -- we still see a lot of upside in the 4G markets. We're still in early innings there. The subscriber and roll out rates are still in the very early stages. So we look for growth in those markets as well. So -- the focus has to continue to be on aggressive price leadership in the market. And we're not going to stop. If there's accretive restructuring opportunities, we're going to look at them. That's going to continue to be part of our activities there. But I have a lot of confidence, and I'm very proud of the team over there, and our new leadership will take us to new levels.

The only thing that I'd personally get really excited about over there, you've heard me talk about this in the past that if someday 4G will take and kick in, Europe cannot continue to run with 3G. And if you're -- for those on the call that have been over to Europe and use their cellphones to try to get on the Internet, it's terrible compared to what we have here in the U.S. We are starting to see that take hold. We are starting to see shipments going into 4G. And as Dave alluded to, we're in the early innings of this thing. So -- and I said in the last conference call, I think we've got a couple of good years here with telecom buildout in the European market. And you're starting to see it in our third quarter.

My final question is on the lead hedge forward contracts. So that tick up a little bit. Lead's approximately $0.84 now. Where are you hedged pricewise?

Well, I think it's in our Q. I can't remember the numbers correctly. We have 23% of our trailing 12 months, and guys correct me if I'm wrong on this. 23% of our trailing 12-months, and I think it's at $0.92 a pound that we have right now. As you'll recall, that we hedge out usually 3 to 4 months, and that -- so all of that 23% I'm referring to, it really takes it to about 50% of the lead requirements in the next 3 to 4 months. And you look at it -- when you really look at the total flow through with FIFO and the hedges and everything, it's going to take 4 to 6 months before you flush all that through. In the fourth quarter, we're going to have a slight headwind because of lead versus the third quarter. Our lead is going to go up to fourth quarter versus third, and for a lot of reasons. And I can comment a little bit more detail then in a second. But when you look at how it flows through, we believe that we'll start to see the real benefits of this hit our first quarter. Now the other thing to keep in mind, is in Europe, where with lead going down, we're really not getting any advantage because of what's happened to the euro. The stronger the dollar gets, the more euros it takes to buy a pound of lead. So the effects of lead going down, the LME going down, with half of our business approximately in Europe, we're not going to get any benefit from that. The only way we're going to get that benefit is if lead stays constant and euro gets stronger. Then we would pick it up.

And our next question is from John Franzreb with Sidoti & Company. John Franzreb - Sidoti & Company, Inc.: Reserve North America, we had the issue with the large telecom supplier. Have you gotten any indication on when that situation may change?

John, we've seen a little bit of activity, and I'm going to emphasize, there's been very little bit of activity. It's been a very big disappointment, not only for EnerSys, but for many companies that supply that particular company. I will tell you right now, just to jump to the bottom line, if we had the volume this year with that one customer compared to what we had last year, we had last year's volume this year, we would be looking, on an annual basis, for fiscal year '15, that our EPS would be at somewhere between 20% to 30% -- or cents, I'm sorry, $0.20 to $0.30 per share. It's that big. And one of the reasons that it's so large for us is the acquisition of Purcell. A large portion of Purcell's business was tied to that one particular telecom company. Now if your question, when is it going to come back? We don't know. I think that each of you will probably have read some of the things in the press as what's going on with that company. And we're going to have to see how it shakes up. But as far as getting inside information, I know there's one thing I've pushed very hard on our sales organization, is find out what's going on. It's very closed lip. John Franzreb - Sidoti & Company, Inc.: Okay. And you mentioned lower pricing in the aerospace and defense part of the business. Can you just provide some color on what's going on there?

Well, what's happened is that if you back up, you look at our tin plate pure lead product, and the military absolutely fell in love with it because it outperform everything else. And when you're in battle with boots on the ground and you have tanks, you want the very best you can get in there. Now the other side of the fence, if you've got tactical vehicles that are in the United States that aren't in a war zone, they can put a cheaper battery in there. So what's happened with it is, there are 2 sources now. We used to be -- it's just about sole source on it. Today there are 2 sources. Because of that, we have to take in -- come down on our pricing. So we're not getting the margins that we used to get on that business. Still a very good business. But it's not near where it was.

But John as a result of that price change, we are seeing more volume. John Franzreb - Sidoti & Company, Inc.: Okay. And, I guess, one last question. I guess back to the commodity cost issue, John. Is it all -- is it entirely lead that's the headwind in the quarter? And secondly to that, you mentioned that you should recapture something -- some benefits in the first quarter. Even at the current euro level, would it be a significant recapture? Can you just walk us through what your expectations are?

Go ahead, Mike.

Look, John, we would expect those hedges are going to roll out in 4 to 6 months. Most of the hedges that were out in placed in, say, the end of the second quarter what's in our P&L now in the third quarter. So we'll see a little more headwind in the fourth quarter. With regard to the euro, as John mentioned, the -- even though lead, which is traded in U.S. dollars, is down, it's about the same number of euros to buy. So you don't get the benefit so much out of our European operations. We will see it out of our Americas business. Not quite certain yet on how big that reduction will be, but I think it's safe to say that it will probably be $0.03 or $0.04 less than where it was, which would mean instead of maybe -- you'd probably see a 40 or 50-basis point improvement in gross profit margins.

Yes, and John, the big hit is definitely lead. So the other commodities you know -- we're offsetting that. But it's really a lead story. And just to summarize it, 3 things. Not getting the benefit in Europe because of the FX effect. The second thing is whenever lead is coming down and you're in a hedging program, our hedges right now are higher than what the LME is. That's hitting us, and that will flush through. On the other side of the fence, when lead goes up, by the way, we will -- those hedges will be in money or will be in the money. And the third thing is that in the U.S., and I've touched on this in the past, that junk batteries, which scrap or recycling batteries, it usually is cheaper to buy those than it is to price on the LME. That's not the case anymore. Junk batteries have gone way up. So there's a new way of pricing lead in the U.S. market, which is not tied just directly to the LME, it's tied to the price of junk batteries. We have a percentage of our business in the U.S. or lead in the U.S. that we have to buy on the junk battery price. Junk battery prices is higher than LME. Now that being said, we also take that into customers that our lead cost has gone up versus the LME. And they understand that now. So the outset of what I'm talking about on junk batteries going up, we get that back in pricing. So it offsets. John Franzreb - Sidoti & Company, Inc.: So John, how much of your lead purchases are recycled batteries? Give us a sense of magnitude here.

You're looking at about 20%.

Our next question is Michael Gallo with CL King. Michael W. Gallo - CL King & Associates, Inc., Research Division: A couple of questions. First, an easy one for Mike, the convert. I think is callable in June. Should we assume you'll probably call out at this point? Obviously, given the strong cash balances you have?

Well, Mike, we have, really, 3 choices on that. The holders may convert. There's also a put option. And as you noted, we have a call right. It's unlikely, but possible, that, that convert may continue on. It's a 40-year note. But let's assume that for this example, that it is by June of next year, it is converted or called. We have 2 other options. One is the high-yield debt market, and that market is open and very attractive in terms of rates right now. The other option that we have is with our existing bank credit facility. We have a $300 million accordion feature that we could expand out. So if we want to take this convertible debt out, we would either issue high-yield debt or we would expand on our current credit facility. We haven't made that decision yet. We'll probably be making that decision in the next 60 days. But as of yet, we do not know. But we kind of like the alternatives and options that we have. Michael W. Gallo - CL King & Associates, Inc., Research Division: All right. And obviously nice to be able to really get away from the dilution. Second question is for John. You mentioned you're starting to see 4G perk up in Europe. I was wondering if we could put some more commentary on that in terms of what you're seeing in order trends. Is it just a couple of countries? Are you seeing it broaden out? And how should we think about how that might ramp over the next couple of years?

What you're seeing is happening in the cities in Europe right now. Paris, London, you're seeing it in the large cities. You're not seeing it -- it's just at the early stages, very early stages. But I can't break out exactly how much in the quarter was there, but I'll tell you that when you look at our European business up, the star of this quarter, the star was reserve power business in our European operations. It's up, the earnings are up. And as I said earlier, it's -- the turnaround over there has been a tremendous thing for us. If you go back in time, and one of the things that we talked about in the past, when the Americas, we were running up 15% operating earnings, and I'll start way back when it's going to be very tough for us to maintain that level. What we've got to do is we've got to get Europe from the 6% to 8% operating earnings up north of 10%. Because the Americas, the whole debt level of 15% is going to be tough to do because we're going to price ourselves right now. And in fact, unfortunately, it's happened. The Americas have come down, Europe has offset it. But what's really offset it in Europe? It's been the reserve power business. And the beauty of it is, we're just at the start to 4G, and I think this thing is going to spread. Dave, do you want to add to it?

Yes, Michael. Certainly, John is right. The initiative began in the cities, but we are seeing it now broad-based. I think almost all of the major carriers today have announced their LTE programs, and we hope to see continued growth in all parts of Europe, especially in the rural areas. Michael W. Gallo - CL King & Associates, Inc., Research Division: Okay. That's great. And then just one more for Mike. I was wondering what the year-over-year impact on operating earnings was in the third quarter from currency? And where are you kind of expect that will be? And what you have embedded in the guidance for Q4? Should we assume kind of currency rates where they were as of yesterday or a week ago? Or do you have some embedded forecast for any changes there?

So I believe the impacts for third quarter compared to the prior third quarter are broadly neutral. We did receive -- while we had headwinds above the operating earnings line, and as you -- we noted that year-over-year currency was -- had a negative 6% impact on sales and that lower translation kind of obviously filters through all elements of the profit and loss statement. And in the end, your operating earnings decline, in this case, theoretically by 6%. Fortunately, for us, typically, when we see pressure above the op earnings line from currency, we tend to get benefits below the op earnings lines and foreign currency gains from our intercompany balances. So for the third quarter, we assume that we were broadly neutral. For the fourth quarter, I'm assuming, as we have normally said, in any given quarter, we can get a $0.02 to $0.03 benefit or headwind and our thoughts for the fourth quarter is we're going to assume it's a headwind.

And our next question is from Tim Mulrooney with William Blair.

John, you gave the fork truck orders were up 13%, globally. Could you break that down by your 3 major regions?

Yes and let me qualify the 13% that were up. The 13% is really, once again, looking at back 3 months and looking at the same period last year, 3 months trailing. And it's up 13%. In the European region, it is up 7%; in the Americas, it's up 22%; in Asia, it's up 16%; Middle East and Africa are 14%, for a total of 13% increase.

Got it. Most of my questions have been answered, but can you maybe just touch on the traction that you're getting with some of her new products? Or your new product development? How that's coming along? Just talk about maybe nickel–zinc and OptiGrid and those products?

Okay. Yes, let me start out with our new charge of line. We did a complete redesign of our chargers and the features and benefits on them are significantly better than that we had in the past. There are very good margins on these products. The reception and feel has been just fantastic with it. So we're very excited about the new charger line. And that's for motive power products. On our nickel–zinc product, that's a development product. I said over the years that we're not really an R&D company, and we run on a little bit on the limb with this one from a standpoint that it's -- the designs that we have, that we're working on with another company, it wasn't ready for production. It needs a lot of work on it. We've done development on it. But we've invested $3 million in a small facility to do prototype sales or really sales that get you customers. The acceptance of it so far has been extremely well. The performance of it has been good. We're very pleased with what we're seeing. We think that's potentially -- if it works out the way, this could be one that would be a game changer for us, that we'd be into something that's totally new that no one else in the marketplace has. It would be something that, to make it simple, in layman's terms, it's better than lead acid and -- but it's not as good as lithium-ion, but it doesn't cost near as much as lithium-ion. It's in between. So it's something that, we think, that the customers are going to be very interested in because it's got a good price on it. Do you want to add to it, Dave?

Yes. And I think the other product that we're really excited about, and the quote activity is really improving, it's on the OptiGrid systems. And specifically, in the markets, in the urban markets, where electricity demand charges are very high, we seen some tremendous opportunities and realistic business cases for our customers with hard paybacks. So that's on the uptick as well. Nothing ever happens as fast as you want it to, in terms of new product development. But that -- all trends are positive on that particular project.

[Operator Instructions] And our next question is from Sven Eenmaa from Stifel. Sven Eenmaa - Stifel, Nicolaus & Company, Incorporated, Research Division: A couple of quick ones here. Just regarding the next quarter here and then there's, obviously, a number of moving parts in the guidance across the lead price and currency, what are your organic growth expectations in terms of motive power versus reserve power?

Well, let me break it by region. I think I touched on it already in Europe, that we're going to continue to see the growth take place in reserve power in Europe. I'm very pleased with that. I think in the Americas, it's going to be flat, and the reason that it's going to be flat is because of that one major telephone company. Now when you take that one major telecom company out of our business and you look at it and we're going to be flat. That implies that the other telecom companies are spending at a higher level. The offset, what we've lost, was that one major company. So I think that's a good news story, because I do believe that one major company -- that one major telecom company will come back some time. I just don't know when. So I think it's going to be flat with some potential upside whenever the customer comes back. The Asia market, I think we're going to continue to be down. And the reason we're going to be down until we get those new products in and win some of these contracts back, we're going to be at a lower level. But I do believe it will come back. As Dave alluded to earlier, we've got the new products in for test right now. The feedback we're getting from the customers is very good on it. And I think, eventually, it's going to comeback. But it's going to take a couple of quarters for that to happen. Sven Eenmaa - Stifel, Nicolaus & Company, Incorporated, Research Division: Got it. Staying on the theme of kind of the telecom spending. There, obviously, has been now completed a very sizable wireless spectrum auction in the United States. And obviously, we are early in the process here at most as results. When you think about your market opportunity in North America, how -- what would spectrum auction like this presents in terms of reserve power opportunity?

Sven, this is Dave again. More spectrum means more data, and more data means more power. We can't tell you when it's going to happen, but we're optimistic that, that spectrum is going to require additional antenna cell sites, and power to back -- back-up power to sustain that network. So it should just -- it can only help.

The game doesn't end at 4G. It will continue. We will see a 5 or 6 or 7G. It's going to continue, we believe. And as Dave alluded to, it doesn't matter what the technology is, they all need back-up power. And that's where we come in. Sven Eenmaa - Stifel, Nicolaus & Company, Incorporated, Research Division: Got it. And finally, just on the Asia side, there was, obviously, the organic growth decline year-over-year basis, here at 26%. How much of that was driven by just you guys having a 4G business last year versus just not being able to ship some of the products because of plant migration.

Sven, this is Dave again. All of the drop is associated with the telecom business we've discussed prior. Not any particular one account, but the overall organic growth rates in Asia continue to be positive.

Yes, we -- just to add a little bit to that, on the reserve power side -- I'm sorry, the motive power side, by moving from one plant to another plant, we've had some disruption. Disruptions in terms of not being able to get product to customers where they want it. So we have seen a dip there. The motive power business in China is a very good business for us. If you go back in time, you go back about 2003, 2004, we were about, over the first year we got into, we were $4 million in motive power batteries. This year, we should be in $100 million range, in motive power batteries in China. It's a very good growth business for us. Unfortunately, this is the year we had the transition on moving from one plant to the other, and it has caused us some disruption there. But I will say it, that we're back on track now with it. The problems that we've had, they're behind us, but they did impact the prior quarters. Sven Eenmaa - Stifel, Nicolaus & Company, Incorporated, Research Division: Got it. So that -- it's fair to assume that the motive power growth is improving in China in the coming quarter. And in terms of the margin cost on the China side, is that behind as well? Or do you expect the next quarter to see still some more headwinds on [indiscernible]?

Margins on motive power are good. Margins on reserve power are not as good.

And our next question is from JinMing Liu with Ardour Capital.

This is Yuzhu stepping for JinMing. So basically, I have 2 questions. I'll just start off with the first one, which is so I've heard that China is starting to like announce the plan to collect consumption tax on that acid battery, starting from January next year. So can you give us some color on like the price of that and how would you -- how would it like affect your strategy in China and about like your new product promotion in China?

It's good news and bad news for us. The good news is by adding that added tax on it, it means that the export out of China is going to cost more, and it's going to keep the Chinese products batteries out of -- or is going to tend to keep them out of Europe and the Americas. It's going to make them more expensive in those areas. That's the good news. The bad news is that we're exporting product out of China, like to Australia. That's going to increase our cost. So one thing we're going to have to evaluate is when we manufacture batteries, motive power batteries and reserve power batteries in China, we ship them to places like Australia or Japan or wherever. We're going to have to reevaluate, look at where the most cost-effective place to manufacture them. In other words, we might be making batteries in Poland and ship them to Australia, instead of making batteries in China and shipping to Australia. We have to sort that out. But that's the beauty of our company. By having the diversification, we can take the most cost-effective way of doing it. Want to add to it, Dave? Go ahead.

Yes, we make those decisions everyday, based on the arbitrage between the LME and the SMM. So, yes, that's one of the things John touched on in the final paragraph of his script, that by being a global company that's diversified across these regions, we have a little bit of flexibility in our supply chain that others might not.

Now in our China market, where we manufacture the products, it's really kind of a nonissue for us because what's going to happen, theoretically, is our competitors are going to have the same increase that we're going to have. So it's going to be the same competitive market.

And of course, the additional factor is the exchange rate.

Okay. I see. Okay. So the second question I have is that -- so I see there's a few firms starting to like produce gigawatt hour lithium battery, so I suppose that's going to put some price pressure on the like overall like battery market. And can you give us some idea about like the potential influence on your products and/or like on your lead-acid market of product?

Yes, I think what you have to take a look at is lithium-ion cost versus lead-acid cost. And just in rough numbers, you're looking at anywhere between $6 to $1,000 per kilowatt-hour for a lithium-ion because of the battery management system that has to be put on at the casing and everything else, versus the lead-acid battery, where you're looking at about $150 per kilowatt-hour. Even -- and then we've done studies on this. If you take the cost of our lithium-ion battery, and you cut in half, you cut it in half, we still believe that the competitive -- the customers will go with the lead-acid application for a couple of reasons. First off, if you're into a data center or you're into a telecommunications or standby battery, you don't cycle the battery. In other words, what's happening, is the only time that battery is ever used is when the electricity goes out. So is by cycling the battery, what I mean by that is, you charge it, you discharge it, you charge it, you discharge it, on a battery what's called on float, you hardly ever discharge it. So you really don't get the advantage of cycle-ability that lithium-ion offer. And its customers aren't willing to pay for it. So when you look at our base business, to make it easy, I don't see a major threat with lithium-ion on a reserve power, I don't see it on our motive power. At least I don't see it on motive power because weight is good. Lead-acid batteries are heavy, and you want that counterbalance. But where I do see it as a threat is in our OptiGrid. And the reason I say that is because if you're going to buy electricity or store electricity when it's cheap, at night time, at the low areas, let's say you're buying it for $0.25 a kilowatt-hour, and then when it jumps up during the peak period to $1 a kilowatt-hour, you're dumping it back, what that means is you're going to cycle these batteries a lot. 365 days in a year, if you cycle it every day, on the lead-acid battery, you got 4 to 5 years. On a lithium-ion battery, you probably got 10 to 15 years. So lithium-ion is one that could possibly impact our OptiGrid. Now that being said, that being said, we are working on a lithium-ion solution.

Okay. So you're actually working on that direction about like with your new products?

Yes. In fact, our OptiGrid solution is capable of handling any one of the technologies. If a customer come in and they wanted our OptiGrid, they wanted it with lithium-ion, what we would do, is we would buy from a lithium-ion company, the cells, and then we would manufacture the battery and put it in our OptiGrid system.

[Operator Instructions] Our next question is going to be from John Franzreb with Sidoti & Company. John Franzreb - Sidoti & Company, Inc.: Could you just go over the restructuring actions you plan on taking in the fourth quarter?

Sure, John. The -- what you would see would be charges that you have seen in the past. You could see due diligence or we expect to have some due diligence cost for some M&A activity that's ongoing. Restructuring charges pertaining to primarily our European operation, a little bit with regard to transition that we were doing in China that we've talked about. The one item that I didn't identify and I should and I'm thankful that you asked this question, we do expect to sell a facility in China in our first -- or excuse me, our fourth fiscal quarter, and that is probably the biggest reason for the increase that you are seeing from what would be perhaps a bigger one. And I'm going to correct myself, it's not in China, it's in Europe. And it could be about as much as $0.06 of the $0.12 we referenced.

I'm not showing any further questions at this time. Mr. Craig, please proceed with any closing remarks.

Sure. Thank you very much, Bridgette. Again, thank you, everyone, for calling in. We really do appreciate your interest in our company. And any follow-up questions you have, please feel free to call Tom O'Neill, he'll be more than happy to dig down further on the details of things for you. So again, have a great day, everybody.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.