Ladies and gentlemen, thank you for standing by, and welcome to the Actuant Corporation's Second Quarter Fiscal 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, March 21, 2012. It is now my pleasure to turn the conference over to Karen Bauer, Actuant's Communications and Investor Relations leader. Please go ahead.

Good morning, everyone, and welcome to Actuant's Second Quarter Fiscal 2012 Earnings Conference Call. On the call with me today are Bob Arzbaecher, Actuant's Chief Executive Officer; Mark Goldstein, Chief Operating Officer; and Andy Lampereur, Chief Financial Officer. I would like to point out that our earnings release and the slide presentation supplementing today's call are available in the Investors section of our website. Before we start, let me offer the following cautionary note. During this call, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Investors are cautioned that forward-looking statements are inherently uncertain and that there are a number of factors that could cause actual results to differ materially from these statements. These factors are outlined in our SEC filings. Consistent with prior quarters, we will utilize the one question and one follow-up rule in order to keep today's call to an hour. Thank you in advance for following this practice. And with that, I'll turn the call over to Bob.

Thank you, Karen, and thanks for taking the time to join us on our second quarter call today. We are very pleased with our performance in the second quarter, including robust core sales growth and a new record in terms of second quarter EPS. Our financial performance topped our expectations on a number of fronts including EPS, cash flow and higher core sales in Electrical. We had great execution, as evidenced by a 190-basis-point improvement in EBITDA margins. The recently acquired Mastervolt and Weasler businesses both exceeded expectations on the top and bottom line and Jeyco, which was acquired in February, added $1 million in sales in February that was not in our original guidance. As I reflect on the first half of fiscal 2012, multiple factors are driving our performance right now and they bode well for the future. Our top line is experiencing strong growth. A combination of acquisitions, growth and innovation initiatives and a great mix of the Actuant portfolio of later cycle, Energy and Industrial businesses. We are generating strong year-over-year margin improvement driven by our lead OpEx process for continuous improvement, the benefit of our lowered cost structure from the 2009, 2010 restructuring initiatives as well as incremental growth contributions from our higher-margin businesses. Finally, the combination of solid margin improvement and our asset light business model is driving huge cash flow, up significantly from last year. The strong cash flow has reduced our net leverage down to 1.6x pro forma EBITDA, giving us ample financial flexibility to fund our future growth. With that overview, I'll turn it over to Andy to go through some specifics for the quarter and then I'll come back and go into a couple of other topics in detail. Andy?

Thank you, Bob, and good morning, everyone. We're really happy, as Bob mentioned, with the strong second quarter results from our businesses, and we're pleased to have momentum in our favor as we move into the second half of the fiscal year. Sales of $378 million were above our guidance range despite currency headwind. Three of our 4 segments generated double-digit core growth, each slightly better than forecasted. Our operating profit grew 33% year-over-year which is faster than sales, meaning we once again had profit margin expansion. Importantly, our 2 highest margin segments, Industrial and Energy, continued to generate year-over-year margin expansion. Now similar to the last several quarters, the combination of the top line growth and the margin expansion resulted in strong EPS growth. We generated second quarter earnings per share of $0.43 a share compared to $0.30 a year ago from continuing operations, which was a 43% improvement. So let's get a little bit more granular now on the income statement, starting first with the sales line. Our second quarter sales, in total, were up 14%, which included 8% core and 7% from acquisitions as well as a 1% headwind from currency. Our 8% core growth was a modest acceleration from the first quarter. Overall sales were ahead of our forecast, with favorable core variances from Industrial, Energy and Electrical. From a geographic standpoint, North America led the way with double-digit second quarter sales growth. Europe grew in mid-single digits on a core basis, while the growth in the Energy -- with growth in Energy more than offsetting the declines in Europe that we saw in Engineered Solutions from the automotive and truck markets. Acquisitions added about $26 million to our second quarter sales, which included Weasler, Jeyco and Mastervolt, the latter of which has now passed its…

Thanks, Andy. So I wanted to start with a quick overview of Jeyco, a tuck-in acquisition we completed in the quarter. Jeyco is located in Perth, Australia and generates about $20 million in annual revenue. They provide highly engineered mooring, rigging and tolling solutions for the oil and gas, commercial marine, defense and mining industries. We like Jeyco for a number of reasons. First, they serve the fast-growing end markets, markets that align with our macro trends we've been focused on. Their geographic footprint in Southeast Asia is attractive to us as a base for many of our Energy product lines. And they have a strong technical and management team, who work closely with their premier energy customers. Finally, we see lots of opportunities to tie this geographic location and product line into many of our energy-related businesses and even Enerpac engineered -- Integrated Solutions product line as well. Jeyco's margins are attractive, just above Actuant's line average. We've been adding some cost initially to bolster the sales and finance teams at Jeyco, but believe the revenue and margin profile of this business will justify that investment quickly. Jeyco is our second Cortland tuck in. The first was Selantic. I thought it'd be good to spend a minute to talk about the Cortland platform and the opportunities we continue to see for this business. When we acquired Cortland in 2008, we talked about the positive macro view of deepwater oil and gas, as well as the diversity of the end markets that Cortland participated in. As you can see on the graphic here, Cortland participates in a number of different areas of offshore, energy and marine markets. From exploration to construction to production and maintenance, our umbilical and rope solutions are critical to the asset owners. Bottom line, we're excited…

[Operator Instructions] And our first question comes from the line of Deane Dray with Citi Investment Research.

Those are solid numbers, and I apologize to focus in on the one area that's soft. And I know it's not surprising to see the weakness has been well forecasted in the Engineered side. But what's the visibility on the European truck and car production? Because we see that there's been some more cuts to this, and just give us a sense of is this a quarter-to-quarter phenomenon. Or how do you project for the balance of the year?

So let me give an update and then maybe Andy can just talk about our process of coming up with guidance and a reforecast for the back of the year. But the first -- we saw quite a bit of slowdown in our second quarter we just finished. A lot of the truck guys took account of the opportunity to take an extended Christmas vacation. So we saw a fairly significant drop. We're seeing orders that are out, Deane, usually 2 to 3 months ahead of what they're actually in sales. That's kind of the lead time we get. So we get some visibility of what they're doing. They can change at the last minute, but when you go across a whole portfolio of customers, it gives you some confidence. So I think we've seen that. I think we expect another quarter of kind of high single-digit, low double-digit declines and then starting to get a little bit better in kind of the back half of calendar 2012. Andy, anything you want to add to that?

Yes. I would say that I definitely echo Bob's comments. I think the guys went out of their way to -- around the holidays, to reduce the build rate. I would say near the end of the quarter, we were having a little bit more optimism that they were inching up the build rates from where they had been. Part of what we're seeing in truck right now is China as well and a lot of focus on Europe, but China was down quite a bit more than you're hoping. It also had to do with build rate schedules there. On the auto front, it's a combination of the market production rates being down. First half last year, we had some new platforms that ramped as well. There was a couple of platforms that wound up on power lift gate as well, which are impacting our revenues. But for the balance of the year here, I think you're still going to see down year-over-year. I don't expect it to get noticeably different than where we're at right now in terms of the pace that we came out of the quarter with, which was a little better than the overall result for the quarter.

And just to size this for people who might not be as accurate with our businesses, we're talking about $200 million of $1.6 billion Actuant platform here between those 2 European truck businesses -- truck and auto businesses. And it -- while meaningful in total, it gets overwhelmed by Energy and other segments.

Absolutely. And then just my follow-up question, on the Industrial side, in Enerpac in particular, just any additional color of what you're seeing through distribution? Is this still MRO activity? Are there any new projects that you would highlight, anything that might be in the funnel in terms of bidding on?

The strong MRO quarter that we just completed, strong order patterns for the third and fourth quarter, very diverse, Deane, from a geography point of view and a product line point of view. I have had a reasonable quarter, but a lot of the bigger projects we've talked about are more in the future than in the past.

Our next question comes from the line of Charlie Brady with BMO Capital Markets.

On the Electrical side, can we get just a little more color on the DIY channel and kind of your commentary around potentially seeing the beginnings of a pickup of commercial construction and resi construction?

Yes. I would say when you talk about retail, it was pretty solid across all customers. This wasn't a situation where any single customer had a special promotion going on, end cap or something that drove a lot of volume. We saw a decent core growth from the big boxes, the Home Depots, the Lowe's, the Menards of the world as well as the hardware co-ops, Ace, True Value, as an example of those as well, some of the bigger retail merchants as well. So it was pretty broad based across it, which is encouraging to us. Certainly, some of it is price. We talked about that last quarter, but price is probably 20% of what we're seeing in growth in that segment. So very encouraged right now by what we're seeing.

I think -- go ahead, Charles.

So I was going to ask what kind of visibility are you getting from the big-box retailers.

You don't get a lot of visibility I guess is the bottom line.

Yes. Mostly EDI orders. So we're refilling, replenishing based on activity at the tape.

If they're resetting something, certainly we know that's coming because there's a lot of logistics that goes into that. But day-to-day, we -- essentially, we can watch that point of sales for our products and see what is moving off the shelf. But beyond that, it's not something that they order far ahead that gives you a lot of visibility.

Our next question comes from the line of Ann Duignan with JPMorgan. Ingrid Aja - JP Morgan Chase & Co, Research Division: This is Ingrid Aja standing in for Ann. Can you talk a little bit more and with a little more color about your outlook by region? I mean, the recent macro data says -- suggests that industrial activity is gaining momentum and Europe is likely stabilized. And maybe a little bit of what you're seeing and what you're seeing thus far in March.

Yes, I'm probably not going to swing at the March comment just because we're so close, and we're in the middle of a month. I think our guidance incorporated what we're saying, moderating growth, and I think March will play out that way. When I look regionally, I think we're feeling pretty where -- pretty much where we thought we were going to be. I think if you go back to the last conference call that we had with you, I would tell you most investors had a more dollar view of Europe than we did. And maybe that's because of the fact that you were looking at overall Europe. Most of our sales are in Northern Europe, so we do a lot of U.K., a lot of North Sea with the oil and gas, Germany, Holland. These countries are just doing more robust than some of the southern countries. We don't do as much down there. So I think we went into the quarter feeling like -- and I think you're probably going to hear my comment from the last script, where I said I didn't think Europe was going to go into a recession. And I think I was pretty much -- most people were saying that's too optimistic. I think now, people are looking at that as probably the likely outcome, slowing growth but still growth, probably not a recession, particularly if you have the right mix at the top. So that's how we look at Europe. I think it's tracking what we thought. I don't think there's been really much change in the last quarter from us. China has been tough for us on the truck side and in some of the Industrial. I think they tapped on the brakes 6 months, 8 months ago, and they are starting to -- it feels like it's starting to free up a little bit. So I think we -- we're kind of through the worst of that and feels like that will get a little stronger. Southeast Asia doing quite well, and I think all of our due diligence around Jeyco gets us excited about that part of the region. Doing good in the Americas is really a strong region, and it's absolutely in a broad-based recovery. And we feel that across most of our businesses, already talked about Electrical, but we're feeling that in Enerpac and vehicles, off-highway vehicles, our major businesses. Hopefully, that answered your question. Ingrid Aja - JP Morgan Chase & Co, Research Division: Yes. That was very helpful color. And then if we could just turn maybe to the Energy business. I mean, nat gas rig counts are down in the U.S., but offshore exploration is very strong. Can you just maybe give us a rough color on what you're seeing in the gas industry versus the oil industry overall?

Very hard for us to split that, because we don't really do that much pipeline, so to speak, in natural gas. Most of our nat gas would be coming into either a chemical processing plant or some kind of refinery-type operation. So I would say the lion's share of our activity is oil, not gas. I don't think I can give you much granularity between the 2. Ingrid Aja - JP Morgan Chase & Co, Research Division: But overall, customers seem positive about their future spending plans.

Absolutely.

They absolutely are, and I think we're in the time of the year here where this quarter, a lot of our MRO-type sales are based on annual plans. So you got a lot of December 31 customers that are finalizing their budgets and their maintenance schedules for the following year, and I think that's what gives us confidence. We saw some of that in this quarter, but probably more in the future quarters. We feel pretty good about that. I think most of the asset owners are reasonably happy with their lot in life right now.

Our next question comes from the line of Robert Barry with UBS.

I had a question on the gross margin. It looks like for the first time in 10 quarters, it's ticked down a little bit year-over-year and I was just wondering if there was anything you wanted to flag there, what the outlook is for that, the gross margin.

Yes. I don't think it's any kind of a predictor of what's going on. I think the piece that you're seeing come through there is probably the influence from Engineered Solutions, where the absorption came off quite a bit, because they had a weaker result in older zone [ph] in particular, which is our truck and automotive plants. So I guess I would not read into that. Again, we also had a big service bent toward our revenues within Energy. Service does not carry as high a margin. And then to also remind you that sequentially, when you look at that margins in the second quarter, particularly in Energy, are going to be quite a bit lower than the other quarters of the year. So I think it's a combination of those things, but certainly nothing that I'm flagging internally that I'm concerned about based on the trends I'm seeing right now.

What I would add to Andy is it -- with our diversity, it's not a metric that, on a consolidated basis, I'd spend a lot of time looking at. We look at it individually by business, and there aren't any glaring things that I've seen in any of those metrics that worry us. When you look at unconsolidated, I think our approach has always been you really got to look at operating profit and EBITDA margins, because that tends to do. The thing I'm thinking about is we had very good results in Energy -- in Electrical, and that is a segment that carries lower gross margin but accordingly, lower SAE. And when you boil it all together, it comes together. So the mix just affects you a lot on that, Rob, and I wouldn't draw a whole lot of negative conclusions to it. I'd get focused on the bottom line, EBITDA and operating margins. You'll feel better.

Yes. Yes. No, I think that sounds like a fair comment. Just to drill down then as the follow-up on Industrial and Energy margins. I know in the past, I think Andy has talked about seeing maybe 100 to 200 basis points of additional room for improvement there, and of course, that was much larger this quarter. I understand there's some lumpiness, but I mean is there a reason to think that for this year at least, there's optimism around more than 100 to 200 basis point margin improvement in those 2 segments?

No. I think that's still a fair comment. I would say all the stars aligned this quarter, in particular with regard to Enerpac. And yes, that they had a blow out quarter margin. Mix was very good for them. I know they will be investing more in some of our growth and innovation in the back half of this year. So I still feel good with that -- my comment, 100 to 200. You should not straight line off of the 400.

Our next question comes from the line of Ajay Kejriwal of FBR Capital Markets. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: So on Energy, really a strong organic, and I know you mentioned lumpiness and nuclear maintenance. Maybe a little bit more color on the lumpiness. What's -- is there anything going on in the Gorgon project? Or any impact from the milder weather in Europe?

Yes. I don't -- I mean, certainly Gorgon is coming on, but it's been -- we've been recognizing revenues on it for 6, 9 months now. So I think it's that factor. It's just our comment on lumpy is our core sales in the first quarter I think were up 12% or 11% or 12% with Energy and then boom, we go up to 27%. It's really that item. I think the Energy business, because of the project-oriented nature of it, you can have maintenance pushed out a quarter or pulled in, and that just tends to make it pretty lumpy. If you have a big subsea connector or a couple of them happening at one time, that can pop sales as well. So we've got some pretty nice long-term contracts that we're working our way through down at Gorgon, as you mentioned, and also down in Florida and a couple of different power gen and nuclear plants. So we feel pretty good about that going forward. But I wouldn't bank on 27% growth, straight line that either going forward, because that's how we came to our original 10% to 15% growth was, gee, first quarter you were light, and now we're a lot heavier. So it's just the nature of the business.

Yes. Just to amplify Andy's comments, because this is a business that's lumpy, and it will lump the other way in the third quarter. If you go back to last year, we grew 4% in the first, 5% in the second, 22% in the third, 27% in the fourth. So we're up against much tougher comps in the back half of this year and thinking that 27% that we just did, that's just not a realistic assumption to be in that kind of range in the back half. So some of the lumpiness is due to the fact that it was a seasonally pretty weak second quarter last year, much stronger this year. Ajay Kejriwal - FBR Capital Markets & Co., Research Division: And then just on Electrical, good to see business coming back. It's been down for a long time. So maybe if you can remind us where revenues are versus where they peaked last cycle. And then what's the margin potential as these revenues come back? You've obviously done a very good job of taking cost down in that business over the last couple of years.

Okay. So I'm going to let Andy spend a second and noodle about how he's going to answer that. It's tricky, because we -- does the peak include Europe Electrical last year, which we discontinued or not include it? When I look at it in total, we kind of traded assets. We traded the Europe Electrical asset for Mastervolt, and that -- we are very happy with the trade we made there, but that does affect the numbers and I don't know if you're talking pre or post discontinued... Ajay Kejriwal - FBR Capital Markets & Co., Research Division: Yes. Just the North America Electrical, if you will, please.

Just North America.

Yes. We're still down. And Karen's running to get some precise numbers here, but we're still down probably 25% from the peak in this business. And it's coming back certainly in some of the end markets, I would say, for some of the product lines. The one in particular that's doing well, as I called out, is the transformer product line. This business peaked out in '07 at about $360 million or so, and we're still well off. That's why I think this -- the 20% or so is -- 20%, 25% down right now off of peak is still good. In terms of the margins coming back, this thing does not carry the same incremental margins on the way back up as, say, some of the other businesses, because it tends to be more of a buyout type product, a buy and resell type product as opposed to something that you're going to get tremendous leverage from an absorption standpoint. It's really the manufacturing plants. So you're probably looking at, realistically, a 20% incremental EBITDA coming up on this side.

But there's nothing in there that tells us it can't get back. I mean, I'm trying to think across the portfolio. There might be a couple of product lines we've discontinued or things, but that's -- I think that's just where we're at on the housing, commercial, construction cycle, and we've seen modest improvement a couple of quarters in a row here. But compared to where it went, a very gradual decline that started a year earlier than the recession, we've got good opportunity in this segment to see incremental sales and margins.

Our next question comes from the line of Jeff Hammond with KeyBanc Capital Markets.

I just had a few cleanup clarification items. Are you able to quantify the earn-out and the onetime items in Electrical?

Sure. Yes. The -- we're talking about a couple of million, $2 million adjustment or so on the earn-outs, restructuring going the other way. It was a little bit more than half of that. Then we had some items in some of the other segments as well kind of chunky, $0.5 million here, $0.5 million there. So they pretty much offset the pickup, pretty much offset the other onetime items.

Okay. And then just a clarification on the core growth number for Electrical. How is Mastervolt a negative number on that -- in that bridge?

Yes. That's a great question. We kind of struggled on how to show that in -- or how to communicate with it, because how do you have carryover, negative acquisition carryover? Essentially, what it's saying is we are up against some very strong numbers right when we bought it a year ago and then it started falling off. So we've got 3 months of results in this year. Last year, we had 2.5 months of results. The 2.5 last year were stronger than the 3 this year, and it was -- primarily the difference was December. This is a business where you will see positive. You will see core growth in the back half of the year coming through, because we were up against -- we were falling significantly last year as solar...

There's inventory correction.

With the inventory correction, and now we've had more stabilized. I think we feel pretty good right now about the direction that this thing is going. I would say it's -- not to sound like it's where we want it to be, but it made, in my view, quite a turn in the last 90 days.

It's -- and you guys have lived this with us, but it did not have the first year we had expected. Most of that is inventory correction in the entire industry. It is not a Mastervolt-specific item. It started with some feed-in tariffs in Germany and in France and then led to some overcapacity in the industry. It hurt the panel guys a lot worse than the inverter guys, which is the brains of the system. I think that inventory's pretty well cleared through the system. There might be a few pockets that are still out there but as Andy says, now we're on the other side of that. We're up against some very forgiving comparables, and we think this thing will be contributing fairly meaningfully to the electrical core growth going forward, not as meaningful to Actuant's, but it will add a little bit to Actuant in each of the quarters going forward.

Our next question comes from the line of Scott Graham with Jefferies. R. Scott Graham - Jefferies & Company, Inc., Research Division: So the questions are just surrounding really twofold. The first one is surrounding the big 3 businesses: Industrial, Energy and North American truck. We've covered European truck, so that's fine. I was just wondering if you could give us anything, as far as the orders as the quarter progressed, anything to call out there specifically, and any additional color you can give would be great. And the other thing, of course, is the acquisition pipeline, been a little slower than what we've seen. I know that there's been more of a strategic effort to find more growth-y types of acquisitions. I was wondering if that was maybe slowing down the pace.

Yes. I'll handle the kind of the trend and then Bob can cover on the acquisitions. I would say, for the most parts, there was a pretty consistent trend across the quarter. We had a couple of exceptions. I called out solar just now, where solar was probably a little bit better in the last 2 months than the first month on a year-over-year basis. I also called out that truck and auto felt a little bit better as we were coming out of the quarter than going into the quarter, not so much that our sales were up but some of the signals that we were getting from changes in schedules that were coming from some of the OEMs. Enerpac ended probably a hair stronger in the back half of the quarter than the first half. The other call-out I would say, in general, which would impact for us our Industrial segment as well as Engineered Solutions and truck is we are seeing signs of life in China right now. Bob mentioned the fiscal constraints that were -- that had been clamped down for the last 6 or 9 months. And we're starting -- they had started to ease up on the reserve requirements in the banks over there. And we are seeing it not only in discussions and RFQs. We're seeing it in payment patterns from our customers as well. So I think we are optimistic that we're going to see a better second half in core growth in China, in all of our end markets that were in China, all the different product lines of China than the first half.

For the acquisition question, Scott, what you call slow I call robust. We had -- we looked at numerous assets, probably more than we've looked at in a single quarter in 4 or 5 years. We saw assets that are both from the strategic people in the industrial industry that are kind of cleaning up their portfolio, and we saw quite a few with PEGs that -- private equity groups that have had their investments underwater during the recession are now starting to peek out of that and are looking to monetize those things. So those people tend to get impatient with their assets on a 4-, 5-year cycle, and that's what we're seeing going on now. So there's plenty of items we're looking at. The funnel is quite full with things that could -- that can close in the foreseeable future. It's focused on Energy and Industrial, the 2 areas we've been telling you it's been focused on. And then the last comment would be there's some bigger deals as well as some of the tuck ins that have been -- that are in the funnel and also a part of that activity that I talked about for the quarter. So again, while it might look slow in terms of what's reported, it's anything but slow in terms of what's going on at the business.

Our next question comes from the line of Jamie Sullivan with RBC Capital Markets.

The -- on the Energy segment, that was the biggest change in the revenue outlook that you gave. Just wondering, I guess, Bob, maybe if you look at the slices that you broke out in the slide for end markets, which ones have -- the 1 or 2 that have kind of outperformed your expectations? And are there any that give you more visibility or confidence as you're going into the back half of the year?

So the first area I would say would be North American. That was a -- anything that was in that bottom chart there on North American was very robust. That tends from a product line point of view, was very strong in power gen, a lot of re-retrofitting and normal maintenance and repair turnarounds at power stations. And that's a big business for D.L. Ricci. I don't know if you remember that asset, our machining business, but that's doing really well in there. The second is nuclear, and it's not new nuclear. It is maintenance and repair of the existing nuclear. And I don't know if that's related to the tsunami and everything that happened in Japan or if it's just normal old maintenance and repair, but our activity there has been great. Biach really helped us on that. The timing of that acquisition was perfect for this kind of change in event. Outside of that, I would tell you Southeast Asia where Gorgon is and some of those projects continue to bubble along. There's just great activity going on there, lots of capacity, lots of things moving there. I wouldn't say we've seen much from frac gas. I think that's out in front of us still in terms of our initiative there. It'll probably more pipeline infrastructure on that for us, not really the actual generation of that. So that's the color I would give you on that.

That's very helpful. And then I guess just the -- a follow-on would be on the Electrical side. Andy, when you talked about the business activity relative to peak, were you talking about kind of the North American distribution retail business? Just wondering how much that portion of Electrical helped in the upside in the quarter. Was that sort of the big delta for you? And do you feel that the warm weather at all helped in North America, given it was an unseasonably warm winter?

I -- it was broad based. I mean, certainly, weather doesn't hurt DIY, and it can help. But if people, on a beautiful day like we have in Milwaukee where it's 80 degrees in March by the way, it -- that certainly gets people moving. It gets houses moving and whatnot. But our other areas are not impacted by that, like the utilities, which was up over 20%, which transformers, which has nothing to do with resi, it's about 20%. That stuff is doing well. We've got some new marine products that we rolled out, some new ship/shore power cords, EEL as an example that we rolled out. So it was pretty broad based across a lot of different end markets within Electrical. So it feels pretty good.

[Operator Instructions] Our next question comes from the line of Rob McCarthy with Baird. Mircea Dobre - Robert W. Baird & Co. Incorporated, Research Division: This is Mig Dobre sitting in for Rob McCarthy. I guess for me, it's kind of a high-level question. I'm looking at your full year core sales growth of 5% to 8%, which you guys have maintained. And year-to-date, you're performing at the very high end of that, and your commentary seems to point to acceleration in some end markets that are quite important. We're talking a little bit better trends out of China, perhaps some improved activity in construction in North America. And I guess I'm wondering here, as you're looking at that core growth guidance, what are some of your perhaps elements of conservatism that you're building for the second half of the year? And I understand that energy, for instance, has a lumpiness to it. That's clear, but I'm wondering if there's something else perhaps that we're -- we should be aware of.

No, I don't think so. I think it's a question of -- like you say, I think you picked on some items that were strong positive like China, but I also told you Energy is up against a very tough comp, highest comp we had last year. Enerpac's up against a pretty tough comp in Industrial against last year. So I think you're going to see absolute growth. We don't question that. It's just at a moderating area. I also talked about truck in Europe, probably got at least another quarter in auto. It's our first question that we probably got another quarter before those are turned around. So while you're picking on some positives, they're much smaller pieces than the -- half -- a lot of revenue that I just went through with Enerpac, Energy and truck and auto. So I think it's just the combination of that whole flux. And I think against comparable peers, 8% year-to-date, 5% to 8% for our fiscal year looks pretty darn good. I think our mix is performing as well and probably better than most of the diversified industrial landscape. Mircea Dobre - Robert W. Baird & Co. Incorporated, Research Division: Great. And also, perhaps a little more color in Industrial. You highlighted growth and innovation in that segment specifically, and I was wondering if you can provide a little more color there as well as progress in some of your other segments.

Yes. Growth and innovation initiative within industrial has been an area we've done quite well in. I think we've started with a much stronger emerging market focus in that space. We've added a new India leader to really try to drive both Industrial but really, overall Actuant area. We've brought out a number of new products in terms of products for that space. We've got a steel hand pump that is being launched as we speak. Emerging markets in South Africa added about $1 million, not the biggest number, but we're starting at a very low base. So it's up over 100%. Mining verticals is a big space for us. We've been really going through mines really globally, and what we're finding is we've got a lot of safety issues in mines. They're doing lots of maintenance and repair on vehicles and things in a very unstable environment, and they're very excited about some of the things we can do within Enerpac, both within Integrated Solutions on kind of a strand jack but also in just different jacking systems that is a core product for Enerpac. So I boil all that together, they've got a lot of activity in the growth and innovation in that segment really across all of Actuant. Mark, maybe any comments you'd like to add kind of about that initiative across the built business? Maybe talk a little bit about the worldwide meeting, what we focused on.

Yes. Sure. There's -- as Bob indicated, there's a lot of small victories going on at the various businesses that are contributing to some of the core growth you're seeing and to the cultural change that we're trying to drive here across the enterprise. We've got a standard growth and innovation process that's in place across the businesses. We put governance in place around prioritization. We've added people in sales, marketing, engineering and other critical customer phasing areas. We're on the second iteration of the strat plans under G+I. There's much more market segmentation, voice of the customer, that type of activity going on. We just came off of a worldwide meeting. We had 220 of our global leaders in and really focused around Growth + Innovation, 3 primary areas. One is growth in emerging markets. Second is innovation. Third is under leadership. So just a lot of activities going on, a number of pressure tests which are a lot of small tests going on, much more quicker to market thinking than we've had in the past. So a lot of small activities going on across the enterprise.

It doesn't come without a cost. We -- if you've seen our SAE cost, we have grown. We've been deliberate about it. We're looking at paybacks. We remain very careful where we add bodies, but our focus is on adding individuals in Growth + Innovation. We added a little over 100 people last year, probably on track for at least that amount of people this year and really excited about that initiative. We will probably -- by the end of the year, certainly by our investor meeting, I think we'll be quantifying some of those wins for you. Today, it's still a little early. You don't see a lot of sales, incremental sales revenue from these initiatives but boy, I do see a lot of requests for quotes, new products being shown to customers, lots of new initiatives and I'm really excited where that can go. I think we've told you guys that, that could be a couple of hundred basis points of core growth over the long term, and there's nothing to dissuade us today that that's not a realistic target.

And there appears to be no further questions at this time. I'll now turn the call back over to you.

Well, great. Thanks for joining our call today. Just a note. You see on the slide here, our third quarter call will be held on June 20, and I will be around all day to answer any follow-up questions you might have. So have a great day.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a good day, everyone.