Good morning, my name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Kennametal's First Quarter Fiscal Year 2012 Earnings Call. [Operator Instructions] I would now like to turn the call over to Quynh McGuire, Director of Investor Relations. Please go ahead.

Thank you, Regina. Welcome, everyone. Thank you for joining us to review Kennametal's first quarter of fiscal year 2012 results. We issued our quarterly earnings press release earlier today. You may access this announcement via our website at www.kennametal.com. Consistent with our practice in prior quarterly conference calls, we've invited various members of the media to listen to this call. It's also being broadcast live on our website, and a recording of this call will be available on our site for replay through November 28, 2011. I'm Quynh McGuire, Director of Investor Relations for Kennametal. Joining me today for our call today -- joining me for our call today are Chairman, President and Chief Executive Officer Carlos Cardoso; and Vice President and Chief Financial Officer Frank Simpkins. Carlos and Frank will provide further explanation on the quarter's financial performance. After their remarks, we'll be happy to answer your questions. At this time, I'd like to direct your attention to our forward-looking disclosure statement. The discussion we'll have today contains comments that may constitute forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of assumptions, risks and uncertainties that could cause the company's actual results, performance or achievements to differ materially from those expressed in or implied by such forward-looking statements. Additional information regarding these risk factors and uncertainties is detailed in Kennametal's filings with the Securities and Exchange Commission. In addition, Kennametal has provided the SEC with a Form 8-K, a copy of which is currently available on our website. This enables us to discuss non-GAAP financial measures during this call in accordance with SEC Regulation G. This 8-K presents GAAP financial measures that we believe are most directly comparable to those non-GAAP financial measures, and it also provides a reconciliation of those measures as well. I will now turn the call over to Carlos.

Thank you, Quynh. Good morning, everyone. Thank you for joining us today. I'm pleased to report that Kennametal again delivered strong results for the September quarter for fiscal year 2012. During the period, we had organic sales growth of 17% year-over-year. This increase is on top of 34% organic growth in the prior-year period. In addition to a positive economic environment, we continued to successfully execute our strategies to realize additional sources of growth. Those initiatives include enterprise selling, new product introductions, emerging market expansion, pricing actions and our indirect channel strategy, which includes the WIDIA brand deployment. With global industrial production at 3.9% for the September quarter, we are demonstrating that Kennametal's specific strategies drove our revenue growth at a pace that significantly outperforms the industrial production index. During the quarter, we continued to experience growth in customer demand across our served end markets and geographies. This supports our continued expectations of a manufacturing lag [ph] recovery at least in the United States. Our expectations are in line with recent data showing that U.S. manufacturers grew faster than expected in September as production and hire increased. Additionally, there continues to be growth in emerging markets such as China, India and Brazil. At September 30, our rest of the world markets represented 26% of our total sales. We are continuing to leverage our indirect channel strategy through the launch of our WIDIA brand. We are increasing our presence in distribution channels and showcasing our market-leading technology capabilities. WIDIA product sales increased 22% year-over-year reflecting continued strong growth. Clearly, we are increasing our addressable market, moving into more of the white space and gaining share. Regarding other key performance metrics for the September quarter, Kennametal's operating margin reached 15.4% with earnings per share of $0.88. Both of those represent all-time first…

Thank you, Carlos. I'll provide some comments on our performance for the September quarter, and then I'll move on to our outlook for the remainder of our fiscal year 2012. Some of my comments are non-GAAP, so please refer to the reconciliation schedules that we provide in our earnings release and related Form 8-K. So let me start off. The September quarter highlighted our further progress toward our commitments we made regarding our goal of achieving 15% EBIT and 15% return on invested capital this year. And as you know, this is one year ahead of schedule. We continue to drive our profitability by continuing on our focus on key metrics, such as our strategic initiatives, Lean productivity, as well as realizing the benefits from our restructuring programs that I highlighted recently in New York at our Analyst Day. As Carlos alluded to, our September quarter was another record quarter, and it included one, solid top line growth as evidenced by 17% organic growth, record operating margin, earnings per share and return on invested capital despite uncertain macro conditions and significant raw material cost increases. We did not have any restructuring charges. I'd like to characterize it as a very clean quarter. We strengthened our financial position and enhanced our operational flexibility. And as I commented on in New York recently regarding our commitment to our priority uses of cash, we purchased 2 million of our shares during the quarter. Subsequent to the quarter, we amended our revolving bank credit facility. And we increased our dividend 17% to $0.14 per share, or $0.56 share on an annual basis. Now I'll walk you through some of the key items on the income statement. Sales for the quarter increased $130 million, or 25%, to $659 million. This compares to $529 million in…

Thank you, Frank. As we move forward, we will continue to execute our strategies in order to stay in the path to become a breakaway company, one that can be profitable throughout the economic cycle. We will capitalize on our strong foundation to maximize margins, earnings and returns. We'll continue to balance our served end markets, business mix and geographic presence, as well as manage our portfolio to maintain strategic relevance. As proven by our September quarter results, our top line growth continues to outperform the industrial production index. In addition to benefiting from a positive demand environment, we are successfully executing our strategies. Kennametal is realizing additional sources of growth from initiatives such as enterprise selling, new product introductions, emerging markets expansion, pricing actions and our indirect channel strategy. In summary, we will maintain a strong financial position to provide enhanced operation flexibility. Also we'll continue to evaluate further opportunities to streamline our cost structure on an ongoing basis. We will remain disciplined in our allocation of capital with priority uses of cash to include making acquisitions, reinvesting in our business, paying dividends and buying back shares. Our global team remains highly focused on achieving our milestone target of 15% EBIT and 15% return on invested capital for fiscal year 2012. Thank you for your time and your interest in Kennametal. We will now take your questions.

[Operator Instructions] Your first question comes from the line of Steven Volkmann with Jefferies. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Curious, are we still supposed to be thinking of this year as kind of 40% EPS in the first half, 60% in the second?

Let's see, I'll start and then if you have any other questions. That's the guideline. And let me start off. That's -- historically, that's kind of how we've tried to position when we come out in fiscal -- the new fiscal year because we always have the second half coming in to a new calendar period. So for example, we said last year, we expected approximately 40%, 60%, very similar to this year. The last year ended up 35%, 65%. So that's just like a guideline that we're basically talking about at this point. But it could be higher in the first half this year than the second half or it could revert back to the prior year. So at this time, it's really kind of a guideline. And we're going to be in a tight band, plus or minus 5%, on the side. That's reflected in our EPS guidance. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Let me just ask you another other way, then. If we hew to that rule, the next quarter looks like it's down potentially fairly meaningful over this quarter and below, I think, what the Street's looking for. I guess I'm trying to figure out if you're trying to send that message or if there's anything we should be thinking about, about this next fiscal quarter.

Yes, what'll be unique in the second quarter was the potential refinancing of the debt, and we may have a lot more higher interest expense. Kind of the make whole that we talked about in the last call. So that would be something that could skew the -- I'll call it the past patterns. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Okay, so that's in your forecast then?

Correct. Stephen E. Volkmann - Jefferies & Company, Inc., Research Division: Got it. And then just real quickly, on share repurchase, should I be thinking of that more sort of opportunistically? Or do you think this is just kind of a slow and steady continuing process?

Opportunistic, Stephen. And I think that, obviously, we bought the million shares because we thought the price was great for us to buy.

Your next question comes from the line of Henry Kirn with UBS.

Good quarter, but the infrastructure incremental margin was a little light of what we had modeled. Could you talk a little bit about what you'd expect for flow-through with infrastructure over the next few quarters?

Yes, I'll start, and then Carlos wants to add on something. The driver there, as you guys know, is the infrastructure has higher, I'll call it tungsten-content products. So the driver there is most of the cost on the tungsten goes to the infrastructure side. So it's a kind of a game where we think we're catching up on the price. We put some pricing increases in the fourth quarter to try to position us to catch up to the raw material costs. Now, as I said in the script, the tungsten has temporarily stabilized, but we need to watch that going forward. From a steady state, now going forward, we expect the infrastructure margins to continue to improve, particularly with the stronger performance in the second half of the fiscal year.

Yes, I will also add, relative to the margins, I mean, the reason we have 2 businesses is for diversification purpose. And so if you -- those 2 business act differently at different types of -- times of the cycle. So if you look at the low end of the cycle, the decremental margins in the infrastructure were a lot lower. So the industrial were a lot higher. So when we came back to the recovery, the industrial margins, the incrementals would be higher than the infrastructure. And that's kind of -- that's been our 5-year strategy, is to have 2 businesses that, ideally, when one is at the peak, the other one can be in the bottom and vice versa so that we can continue to grow our margins.

That's helpful. And on Europe, how did quoting activity trend over the last couple of months especially since your Investor Day? And how does that tie into your visibility at this point versus what you had a few months ago?

Yes, I -- our quoting activity on orders are in line or slightly better than anticipated. I mentioned to you that I went to the imX show in Las Vegas. I went to IMO. I just came back from China this past week. And the customers continue to be -- I met probably with about 600 customers in the 3 continents, plus. I haven't found a customer that is not consistent in their projections of moderate growth in the U.S. and Europe and strong growth in the Asia area.

Your next question comes from the line of Eli Lustgarten with Longbow Securities.

Follow up and talk about margin. You had a terrific margin in the industrial sector in the first quarter. Now is that sustainable for the rest of the year? Or is that sort of a -- slows down in the rest of the year because it's sort of higher than I think we expected for the year and clearly much higher than anything we've seen in quite a while?

Well, let me go back to what I've said, Eli. I mean, we expected in the recovery for the industrial businesses to have a higher incremental margin. Obviously, as they get to the peak, those margins will start to moderate and the reverse on the infrastructure. If you remember, you and I talked about this during the downturn, people were -- or in the previous cycle, people were concerned about the industrial margins being low, could we ever recover that. So this is -- the businesses are operating the way we expect them to behave. And the bottom line is that we delivered 16% EBIT margin, I mean, as a company. I mean, so the strategy is working. Those business will not have the same margin at any one point in the cycle. I mean, that's been our strategy all along with this business. And that's the good thing about the strategy, is that we're delivering higher margins, record margins, and the 2 businesses are in different levels of delivering their potential.

Well, I guess what I'm trying to get at is the profile on the next couple of quarters. Is the 17.4% sustainable in the second and third and fourth? Or do we get down a little bit and then up a little bit because of seasonality? I mean, what kind of profile should we expect in the industrial sector for the rest of the year?

Yes, Eli, I would say, I think you're pretty much on. I would expect a little bit of a dip in the second quarter, and then -- in second half, just on a pure number of work days because of the seasonality there. And as you may or may not remember, every October 1, we put merit increases in place, so we get a little bit a of cost in the second quarter with the less work days. We typically have that. And that's not unusual compared to our normal path. And then we'll get the corresponding benefits from capacity utilization and the benefits in the second half.

Okay. Just a clarification, the number of shares outstanding, your basis is down about what, about 81.5 million or something like that for the year?

Well, yes. Let me answer that 2 ways. As you know in the press release, it's 81.8 million, I would say it's -- the actual shares at the end of the September quarter is probably 1 million less.

So you're a little under 81 million?

Correct.

And now you expect that to stay that way for the year? Or there's some share creep because of stuff or...

Well, I think as Carlos addressed these questions, we'll be opportunistic and we'll evaluate consistent with our priority uses of cash.

We still have a large number authorized from last year. I mean, we got 8 million authorized and, I think, we've used 3.5 million so far. So we have tons of flexibility.

And just one final question. You talked -- Europe is probably the big concern, 28% of sales. I mean, are you assuming that Europe really go through effectively very, very slow growth as your growth -- as the ISM is indicating by the end of the fiscal year?

Again, if the ISM -- let me go back to the IPI because it's sort of -- if you go back to the IPI -- the new projected IPI is in line with our current guidance and with our plan. I mean, the IPI in Europe is about 1.2 forecasted for our fiscal year, just to our fiscal year of 2012. And again, it is consistent with both our guidance, our plan and our expectations.

Your next question comes from the line of Ann Duignan with JPMorgan. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Could you quantify the incremental profits in both segments? At least could you quantify the drag from higher input cost?

Well, Ann, we typically don't put the breakdown between the 2 functions. But with the infrastructure being a little bit more skewed with the raw materials, they were a lot lower until the price catches in. And then, stating the obvious, but the industrials were much higher on that one. But I would say, in the first quarter, the infrastructure, I would put it in the low double digits, and the infrastructure higher to pull it up to the overall 31% range. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Right, but you can -- you're not willing to quantify the negative impact of higher tungsten prices?

No. I mean, it's so fluid. And from a competitive standpoint, we prefer not to. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Okay. Then my second question really is about DDI [ph]. Could you maybe characterize the 22% sales increase? How much of that was kind of dealer stocking versus pull-through by dealers because of their sales? It would be good for us to understand what's driving the 22% sales increase. Is it just stocking the shelves at dealers or is it real pull-through?

Yes, Ann, we have one distributor that carries the inventory. You guys know all of that, is MSC. They represent 4% of our total sales, okay? All the other distributors is truly pull-through. As a matter of fact, some of our distributors, a lot of our distributors, don't even carry inventory. The product gets shipped right from our warehouse to the end customer. So there is really no inventory that we know of in the shelf. There's no pent-up. Ann P. Duignan - JP Morgan Chase & Co, Research Division: So in other words, the 22% sales increase or whatever absolute number that is, that should be sustainable. It's not like we should see a decline as we go through the end of the year.

No. I mean it's just a matter of the comps. I mean, so the growth is there, is the comps get harder, obviously. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Totally, but the absolute level should remain at least...

Yes, absolutely. Again, I want to remind everyone that our -- as low as the number, the IPI number, the world number for our fiscal year is 4.0, okay? We just came out of a quarter that we outperformed by 4x. So again, even if that number comes down slightly, our guidance is -- we still feel very comfortable and confident about our guidance. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Well, Carlos, that obviously begs the question then, why didn't you have the confidence to raise your guidance by more than just the share repurchases?

Because I'm damned if I do and damned if I don't, okay? So if I raised the guidance, then I have to deal with the fact that, am I naive? Or if I don't, I'm dealing with the situation that I'm dealing with now. So, obviously, we are on the conservative side. We've always done it, and we'll continue to do that. But again, I don't know what else we can do. I mean, if you go back to every quarter during the recovery, we outperformed the IPI by a significant factor, between 4x and 5x. And historically, we can outperform that by 2x to 3x. So I can't really give you any more confidence than that.

Our next question comes from the line of Adam Uhlman with Cleveland Research.

I guess, just first with a clarification on tungsten cost. The price increases that are out in the field now, are those sufficient to offset the cost outlook that you have for the remainder of the year?

Yes. And I mean, we said that in the -- sort of in the last, the end of last -- at the beginning of the quarter, most of our pricing actions had been deployed. It was just a matter of recovery and achieving those.

Okay, got it. And then secondly, the working capital targets for the year, I might have missed it, but it sounds like you're seeing some inventory creep. Could you -- Frank, could you maybe just go through why the cash flow outlook has come down?

Adam, you're spot on, it's inventory. And I want to take that inventory down by the -- throughout the rest of the next quarters. And that's where I think we'll give some back to the overperformance in the quarter. But it's solely isolated to the inventory and some of the raw materials that we wanted to take advantage of. And I will continue to work that down as we get a little bit more efficient with some capital we put in the fourth quarter as well as leverage in the SAP. We have some that we put in back a year ago. So we're getting a little bit there. Still some runway to go. But that's the main driver. It's solely related to inventory, and we know what to do on that.

Yes, it is a delicate situation. Obviously, the price of the tungsten is fluctuating. I mean, we have pricing in place and so forth. Sometimes, you have an opportunity to acquire more raw material than we actually need at a good price and we do some of that from time to time. So -- and from quarter-to-quarter, we'll see some fluctuation in the inventory.

Okay, got it. And then just a quick one. Was there any earnings impact from currency this quarter?

Yes. The currency impact was about $0.02 from our guidance from the beginning of the year.

Can we move to the next person in the Q&A queue, please?

Our next question comes from the line of Sheila Kahyaoglu with Credit Suisse. Sheila Kahyaoglu - Crédit Suisse AG, Research Division: So just to elaborate on Carlos' trip to China. ABB said they saw soft orders this morning, and some of the other industrials have also highlighted a big slowdown. What's kind of metal seeing? And what are you seeing in the different end markets in Asia?

Yes. I mean, if you look at the quarter that we just ended, the order growth, the sales growth in China during the past quarter decelerated a little bit. However, as I said, I was there just -- I came back actually Saturday, this past Saturday. Our -- we feel that this quarter that we're in and potentially for the rest of the year, we're going to see an acceleration in the industrial production there. And we are actually seeing that in our orders. It's reflected in our orders already this month. So if you're talking about Q3 that we just ended, we saw a little deceleration in the growth. And as we go into this quarter -- only in industrial. And as we look into the -- into this quarter that we're in, we'll see the industrial coming back. Sheila Kahyaoglu - Crédit Suisse AG, Research Division: Okay, perfect. And then on the automotive customers, what have you seen in terms of what your U.S. automotive customers are saying to you? And then on the aerospace side, just given the strong commercial aerospace number, or OE [ph] numbers, are you still projecting an acceleration from the 8%? Because it's been 6% to 8% for the last 2 or 3 quarters now.

Yes, I'll start with the easy one, which is the aerospace. I don't think this year we're going to see an impact on the overall. I mean, we're going to grow in aerospace, but the other markets are going to grow as well. So we're not going to see that number change significantly, one way or the other. As the aircraft, as we produce more composite aircraft going forward, then you'll see that number accelerated. And the 787 is really the big composite of aircraft, and they just flew, I think, yesterday or day before yesterday. So we'll anticipate that production is going to start kicking in, and we'll see a positive effect on our revenues -- that you can see in the number. It will change that number. Relative to the automotive sector in the U.S., we continue to feel that there's growth. And as I said earlier on, the Global Insight figures show continued increase both in 2012 and 2013. So we continue to -- our quoting activity continues to be high. We continue to see new projects for more efficient, fuel-efficient engines. Obviously, those are great opportunities for Kennametal. Sheila Kahyaoglu - Crédit Suisse AG, Research Division: Perfect. And then just one last question. On balancing hiring needs and just higher compensation cost given the strong order rates, how are you thinking about that for the rest of the year?

Sheila, I would say it's pretty much -- it'll be in line with our plan. I mean, one quarter may be a little bit ahead of the other but nothing that I'm worried about.

Your next question comes from the line of Walt Liptak with Barrington Research.

My question is basically on -- similar to what Ann was talking about with the revenue. And so your organic volumes have been coming through this quarter surprisingly strong. And when you -- so your guidance for organic volumes look conservative for the full year. But so you're growing at 4x industrial production. Why? I mean, is it the channel strategy? Is it something competitive with Sandvik or Iscar? Or is it perhaps some other market share benefit that you're getting?

Good question, Walt. I mean, we talked about this, and we actually had a chart at our Analyst Day in New York. So out of the 5 -- out of the 6 drivers that we have for growth, one of them is obviously the growth, the economic environment. But one of them was new products. We're introducing new products at record times -- record numbers. And our business is growing as a result of that. We're gaining market share as a result of that. Is the channel strategy the brands? Again, WIDIA is going into places, the white spaces that we didn't play before. So it's only -- majority of it is incremental sales. We talked about the continued balance of the geographies. Again, the developing economies continue to drive higher growth as you've seen by our results in here. And so those are -- we have some very, very specific strategies that are driving incremental growth to the economic growth. So this is why, my conversation, even with them, it is a fact that we've been able to get a multiple of the IPI growth. And it is -- I believe that we'll continue to do that.

Okay. Right, those things are in place. They seem controllable. And so, I guess, to just address the organic growth for the full year again, it's just basically damned if you do, damned if you don't. You're just being conservative. But with the way these initiatives are trending, you would expect higher revenue.

Yes. I'm mean, just think about December. This second quarter is sort of a telling quarter because we don't know in December how many plants will -- if any, shut down and all that stuff. So -- and again, the debt crisis and all that stuff in Europe. But the bottom line is the IPI is at 4%. We typically get 2% to 3%, although we've been getting more. So again, if you go at 3x the IPI, it's 12%, and if you go at 2x, it's 8%. So we are pretty close.

Okay, and just a second question, on pricing, I think it was in May the last time that you raised prices. Are you expecting a price increase in January or sometime before that?

I think in -- yes, I think there was one in North America in October, consistent with past practice. And then what we typically do is we'll evaluate the situation in Europe, obviously, see what the competition does in January. That's typically when a number of our competitors go, so we'll watch developments quarterly.

Okay. Was the October price increase for -- across the board or was it North America infrastructure?

More industrial.

Your next question comes from the line of Andy Casey with Wells Fargo Securities.

Couple of questions. On the gross margin, pretty impressive 47% incremental. Would you expect that to start coming back down towards the 40%, 45% range through the year?

You mean the incrementals in -- I think I said, 30, mid-30s.

On the gross margin.

Oh, gross margin, yes. Yes, I would think a little bit, Andy, but I wouldn't say too much. I think it's twofold now. We'll take some inventory down. But as Carlos talked about earlier, we think with the pricing we have in place, that should compensate for it as well.

Okay. Was some of the sequential inventory build responsible for that? You had a similar effect last year.

There's some in there. There's always some in there. I mean, we wanted to make sure that we are opportunistic where we can, and obviously we want to make sure that we can service our customers with a focus. And then we'll have the normal seasonality, as you know, in the second quarter, and then we get the benefits in the second half. But I think you're in the ballpark.

Okay. And then kind of a hypothetical on the tax rate. Given all the macro stuff out there and your pan-European strategy, if the growth shifts more toward North America, does that cause the tax rate to drift up?

In that scenario, that would be correct. That would be higher tax jurisdictions, so that would be exactly correct.

Your next question comes from the line of Brian Rayle with Northcoast Research.

Just when we think about the $3 billion target, since most of the other questions have been asked, the CapEx that's going to be required -- you say no more CapEx up to $3 billion. How should we think about as revenue could potentially break that $3 billion revenue level, which, again, is a first-class problem? What should we think about CapEx? Should it stay the same as a percentage of sales? Obviously you have maintenance CapEx. How should we look at that?

You should look at it as same as depreciation, about $85 million.

But I think, Brian, you're right. It's -- I mean, post $3 billion, I think we'll be in that 3% to 4% of sales kind of range. That's kind of the -- unless there's a unique opportunity that we can take advantage of in an emerging market or something we want to do specific, which we would call out. But we think that's kind of about the right level to invest back in the business.

Okay. So it wouldn't push above your historic range again?

No, no.

It's a first-class problem, but if you went to $3.5 billion, using the 3% or 4% range on CapEx would not be anything out of...

Correct.

It all depends how fast we get there, right? Because every year we take about 6% -- 4% to 6% productivity out of our factories. So that means 4% to 6% freed-up space. So to the time -- if it takes us a little longer to get to $3 billion, then we'll have some more free space, so we don't have to invest as much. If we go to the $3 billion overnight, then it requires us to invest a little more.

Okay. But within that 3% to 4% range is not unreasonable?

Yes.

Right.

Your final question will come from the line of Joel Tiss with Buckingham Research.

So just trying to clarify, there's been a lot of questions about this. I wonder if you can just help us, and cut right to it. The September order, if you just -- you separated out the month of September and so far, the month of October. Can you give us an idea what that was just so -- because everyone's asking the same question about the trend, and I think that would be very helpful.

Joel, this is Quynh. We typically provide the orders rate at a 3-month rolling basis. So if we would have reported orders this month, it would have been at the 17% organic growth because our orders trend is a very close proxy to our sales trend. So that 17% of organic growth for sales would be exactly what we would've reported for the orders trend.

But on a rolling 3-month basis.

Correct.

So you can't separate it out for us, just September...

We generally, yes...

And October.

We can't quantify that, no.

Is the tone of people's questions that the September order run rate was materially or noticeably lower than what we saw in August and July, is that a fair sort of tone that people have in their voice?

I would say, if I'd characterize the quarter, I would say July was the slowest. It got better in August and September. Now you would expect that typically with the European vacation in August, September is always better on a daily rate. So that held true to form. But the one that was -- I'd say the unusual trend is that July was a little bit slower and August was much stronger, so sequentially, it got better.

And the follow-through into October still gives you guys confidence?

Absolutely.

And then last, just quick, Carlos, are you -- are acquisitions making more sense here valuation-wise? Or do we still need to be sort of cautious and measured?

No, I think valuations are beginning to look better. As we always say, we have a strong pipeline, but it's hard to predict or project when things happen. But I would anticipate that things are getting a little better.

At this time, there are no further questions.

So this concludes our discussion. Please contact me, Quynh McGuire, at (724) 539-6559 for any follow-up questions, and thank you for joining us.

Today's call will be available for replay beginning at 1:00 p.m. Eastern time today and lasting through midnight on November 28, 2011. The conference ID number for the replay is 12784135. The number to dial for the replay is (855) 859-2056 or (404) 537-3406. This concludes today's discussion. Thank you for your participation, and you may now disconnect.