Good day, ladies and gentlemen, and thank you for standing by. Welcome to the NN, Inc. Third Quarter 2012 Conference Call. [Operator Instructions] This conference is also being recorded today, Thursday, November 8, 2012. I would now like to turn the conference over to our host for today, Mr. Joe Calabrese of the Financial Relations Board. Please go ahead, sir.

Thank you, and good morning. Welcome to NN's conference call today. If anyone needs a copy of the press release, please call my office at (212) 827-3746, and we'll be happy to send you a copy. Before we begin, we ask that you take note of the cautionary language regarding forward-looking statements contained in today's press release. The same language applies to the content -- comments made on today's conference call and live webcast available at www.earnings.com. With us this morning is Rock Baty, Chairman and Chief Executive Officer, and members of NN's management team. First, management will give an update and an overview of the quarter and then afterwards, we'll open up the lines for your questions. With that said, Rock, I'll turn the call over to you.

Thank you, Joe. Good morning, everyone. Thanks for joining the call this morning. With me in Johnson City, I have Jim Dorton, our Senior Vice President and Chief Financial Officer; Will Kelly, our Vice President and Chief Administrative Officer; and Tom Burwell, our Vice President and Chief Accounting Officer. Today, Jim is going to offer an analysis and commentary on the third quarter and year-to-date results through September 30, 2012. And then I'll conclude the call with additional comments regarding the quarter performance, as well as our outlook for the remainder of the year. With that, I'll turn the call over to Jim.

Thanks, Rock, and good morning, everyone. Well, the story for the third quarter for NN is similar to the first half. Lower European demand, offset by growth and profit recovery at Whirlaway, plus good global cost control. We had revenues of $86.6 million and net income from normal operations of $3.8 million or $0.22 per share in the quarter. Excluding currency effects, international revenue was down 20% in the third quarter and 18% year-to-date versus 2011. And this is due to automotive demand and destocking by our major customers. However, Whirlaway revenue, which is primarily U.S., was up 5% in the quarter and 13% -- up 13% year-to-date versus last year, and the profit turnaround there continues to partially offset the lower European and Asian revenue. As mentioned in the previous 2 quarters, even though international revenue was down dramatically due to the restructuring we undertook during the recession and our added ability to flex marginal costs, we are still profitable at every NN international and domestic operation. And we are not able to accurately predict the timing but we continue to believe that destocking will begin to diminish in the coming quarters, although we don't know the timing or the scale of the inventory recovery. But when this does begin to occur, we should see an improving trend in international revenue and earnings versus the first 3 quarter of the year. During the quarter, we had an intercompany foreign exchange loss of $659,000 or $0.04 per share, which we are excluding from normal operations. This gain or loss fluctuates with the euro exchange rate and tends to balance out over time. Year-to-date, the adjustment is only $284,000 or $0.02 per share. Cost of goods sold as a percentage of revenue dropped during the third quarter to 79% from 82.6%…

Thanks, Jim. I'll begin my remarks with general comments on our third quarter results, as well as our year-to-date results and on into looking at year end. Revenues for the third quarter of $86.6 million were down, as Jim mentioned, 14% from the third quarter of 2011. Netting the impact of currency results in pure volume were down 10.3%. The geographic mix, however, was substantially different. Our North American businesses were essentially flat, while our businesses in Europe and China were down significantly from the prior year. The third quarter was also down sequentially from the second quarter of this year by $12.2 million or approximately 12%. As we've indicated before, historically, at NN, we expect a reduction from Q2 to Q3 based upon normal European seasonality in the range of 8% to 10%. So we were down more than we would normally have expected during the third quarter. The continuing softness in demand in Europe and Asia, coupled with the destocking Jim mentioned in our supply chain, were the primary drivers for the revenue reductions we experienced. With respect to our margins and profitability, gross profit margins were actually up significantly, 3.6%, from Q3 of '11 on the basis of continuing excellent operating improvements at Whirlaway and excellent cost control in Europe and China given what their top line revenue challenges are. Our Q3 net income from normal operations of $3.8 million or $0.22 a share was actually a record at NN for the third -- for any third quarter. Year-to-date, our currency adjusted revenues were down 8.4% or $27.4 million. Given the significance of our year-to-date revenue drop, the fact that we have experienced a gross profit margin improvement of 2.7% for the 9 months ended September 30, 2012, is again a reflection of our improved operating performance…

[Operator Instructions] And our first question comes from the line of Holden Lewis with BB&T Capital Markets.

Wanted to ask a little bit about the balance sheet. Specifically, it looks like, despite all of the declines on the revenue side, it doesn't look--- your inventories have remained very high. Is that -- does that help to explain the gross margin holding up the way it has? You still have been producing at kind of past levels despite the weak demand, and does that represent a big risk to gross margin in Q4 as you, I presume, you start working off those inventories?

Holden, it's Tom Burwell. No, what you're saying is we have a normal seasonality in our inventory into Q3. There's specific customers that order more heavily in the first and second quarter and we do build some inventory in the third quarter and the fourth quarter in order to meet that excess demand and manage it. But that's primarily in the worldwide business and also in Europe, too. So it's strategic inventory builds that we're doing in order to get ready for Q2 and Q1. The majority of it would be in Whirlaway, though, as opposed to Europe. And so, I don't think that you can expect, as we mentioned, the strategic inventories being built, particularly at Whirlaway, and that's on the HVAC side for the ramp up, that always begins in the first quarter and the second quarter. Historically, before we made those strategic builds, we had very, very high levels of expediting over time and related cost at Whirlaway. If you look at it quarter-to-quarter, there's not much of an impact on the P&L from the building. It was very consistent year-over-year in the level of inventory build.

Very well. In inventories, and I assume production were relatively steady, but revenues have still come down and it sounds like you're sort of thinking in the neighborhood of flattish-type revenues for next year, flat, maybe slightly down. I mean, wouldn't that mitigate the need to build the inventories in Q3 and Q4, at the same levels that you had in Q1 and Q2?

No. I mean, as Tom mentioned, most of this build is associated with Whirlaway, not in Europe. And again, and therefore, I mean, Whirlaway's revenue, I guess, in terms of -- for planning purposes, it's slightly up. But this issue, the new management team at Whirlaway got their arms around very quickly this issue of -- the overtimes and working overtime in the high season associated with HVAC to level load the facility over an annual basis. And that's really taken -- that has improved margin, but it's improved margins by eliminating over time and expediting. It's literally a bell-shaped curve, that if you look at the demand, it's a very, very tight, they have very high demand for these products in March, April, May, June and July and then it pretty much dries up. So in order to really level load, they have to plan for that strategically.

So there's been -- so 2 things are kind of happening. First, you do expect demand to be decent within Whirlaway and then secondly, you're probably actually building extra inventory versus the past, just to sort of be able to get rid of some of third-party activity. Those are the 2 things playing out?

Not sure what you mean by third-party, Holden, but...

[indiscernible] you don't have to do overtime, you don't have to expedite stuff, things like that, you're building more...

Yes, correct. Yes, that's both -- yes, that's exactly right.

Okay. And then just last thing, it sounds like your expectations for Whirlaway next year are actually positive. Is that new projects that are coming on? Are we ready to take on new projects? How do you feel about that?

Well, we're definitely ready take on new projects and new programs on the basis of their continuing improvement on the new existing programs from '10 and '11. And we've actually been awarded a new program that deals with power steering technology, similar to one of the programs that is new for '11 and '12 with a new customer, and -- but that business does not really begin in earnest until 2014, early 2014. And so there's not any real new big program for Whirlaway for '13, they are just marginally going to be up a little bit versus '12.

Okay. So yes, there is no incremental step up in revenue anywhere in Whirlaway in '13? Your shipment [ph] starts in...

We're anticipating it on '14, though based on this one new program and of course, they're active as we speak on trying to develop new programs for '14.

Okay. So there's 2 more things on Whirlaway, I'll jump back in. So that means that 2013 will be dependent? I think your big markets are HVAC heavy-duty truck and auto, is that correct?

Yes, it is.

Okay. And then is there any risk in 2013 that as we prep for this thing in 2014, we're going to have a sort of a backing up of the profitability much like the issues that we had in -- before we got these existing programs up and running?

Holden, that's not going to happen. We've got an excellent management team that's been in place since early 2011. And they are all over the program management processes in terms of ensuring that it's not going to happen again. I think the other point here is that on this new business, it happens to be a very similar product to the existing 1 of the 2 existing program, different customer but similar product. And so we've -- the learning curve on the product itself is good, and -- but again, the program management and development of new programs and the manufacturability of it and coming right out of the chute in terms of an efficient run, right out of the shoot is quite different with our existing management team, our new management team up there.

And the next question comes from the line of up Steve Barger with KeyBanc Capital Markets.

This is actually Thaddeus [ph] filling in for Steve. Wanted to get a couple of questions in here. In the press release, you guys had $1.1 million that was related to positive pricing and raw material pass-throughs. I was wondering if you could break that down. And then also, would it be fair to assume that the realized pass-through is related to the contracted business versus just the regular?

It's Tom. I'll answer that real quick. The pass-through was actually not very large in the quarter. Most of the positive impact was from mix, both foreign exchange rate and actual customer mix. What we did see is we saw some of the volume decreases that happened in the quarter were actually more lower-priced products, so we have favorable mix effect from that. The actual tier [ph] price in raw material pass-through was not as high as in other quarters. It was mainly a mix issue.

Got you. And then with regard to revenue being down in 3Q and then a lot of that being related to destocking and production cuts, just wondering if you could kind of talk about what your sense is on the destocking that contributed to that lower revenue versus production cuts? And then also kind of frame up the same thing for 4Q?

Yes. Honestly, the only thing that we have to go by looking at the destocking issue is what happened historically in 2009, where there was a big level of destocking as well. And it took 3 to 4 quarters for the destocking to run its course in 2009 on into 2010. And we're -- this is -- in the fourth quarter, we're entering into the fourth full quarter where we really started to see evidence of destocking. So if you look at it historically, you'd say, well, then that can mean new good things for the first quarter of '13 in terms of upside potential. But we haven't seen any evidence of it. I mean, there is just no real evidence that -- and then my comments, I in fact said there is an acceleration in terms of the reduction percentage-wise of our revenues from Q3 to Q4. Again, something that we don't normally see at NN from a seasonality perspective, Q3 being the lowest quarter of the year. We expect a bump in Q4 and that's not happening this year. As a matter of fact, we're going to be down in Q4 versus Q3. And so -- and then I think the last thing you mentioned is the production rates and build rates, particularly in automotive, particularly in Europe. I mean, overall, the European market is down 6%, 7%. But if you look at it based upon platforms and OEMs and ultimately, for our customer,-- the customers that our customer sell into from an OEM perspective, a lot of the higher volume OEMs on the light vehicle automotive front are down 15% in Europe right now year-over-year. And so that's a big issue versus the 7% to 8%. It's the whole -- the total market is down because some of the luxury brands are either up slightly or just flattish. But the real revenue drivers in terms of pure volume and -- are with OEMs that are down 15-plus.

Okay, that's great color. Now just following up on that. Earlier, Holden asked about the question on inventory. Given the potential restocking were to occur, what would the timeline look like to ramp production back up?

Well, we're -- I mean, we've got lots of ready capacity in place in all of our global operations today. And I think that again, historically, when -- in '10, beginning in the first and second quarter of '10 when we saw dramatic increases in revenue and demand and production based on the restocking as well as just improvements economically, we were -- it was really -- we responded very quickly and we were at an able and ready employment situation to draw from, as well as the actual -- the physical capacities in place. So I mean, we aren't overly concerned. It would be a nice problem to have, but we aren't overly concerned about our ability to meet the demand when it comes back.

Okay. And now shifting gears to Whirlaway. Could you comment on the contract/quoting activity in 4Q thus far? And also given the large HVAC component there, how should we think about the impact arising from hurricane Sandy there?

That's a good question and something we hadn't really considered, in the shortest of short term, hadn't thought of it, and so I -- who knows. I mean, if you look at housing starts and new home sales and that trend is something that will positively impact HVAC for 2013 if it continues. And so I mean, I think that if you just look at it all combined, it could be a potential upside for us in '13 versus kind of where we think about it as of today. And then other part of your question was what, I'm sorry?

Yes, the other part was just related to hurricane Sandy.

Yes, I'm sorry, the quoting activity in Q4.

Yes, exactly.

Yes. And that -- they -- we've talked about this absolutely since we acquired them in early 2007. Their competency is relative to this precision, the precision metal components business are outstanding. And as a result of that, they're viewed very favorably in the marketplace. Not only by existing customers, but new customers in new end markets as well. And so their activity remains high in comparison to our other businesses, for sure. And so there's lots of activity in existing end markets, new technology of existing end markets, specifically in automotive, but lots of activity.

Okay. And just one last one. If you could kind of frame up the demand, and how that progressed on 3Q on a monthly basis and then as well as what you're seeing so far in 4Q.

I mean, fairly normal in terms of beginning in the quarter versus the end of the quarter based on the seasonality of what we are normally see as well. As you know, most of -- or you may not know but anyway, most of the seasonality occurs in the month of August in Europe. And so, we saw that again and saw no real difference other than it's being down in total than prior periods or prior years. And the demand in terms of -- on a monthly basis and how it's stacking up in the fourth quarter, it's too, honestly, too soon to tell. We have such little visibility in an environment like this. October came back kind of as it would from a perspective of seasonality. I mean, it was up versus -- slightly versus September. But again, November and December, based upon what customers are telling us, is that -- it would be -- we'd see a decline.

And our next question comes from the line of Bruce Galler [ph] with [indiscernible] Mar and Company.

I was wondering, you gave some directional revenue guidance for the fourth quarter and for next year. I was wondering if you could just kind of mention directionally how you would expect earnings in that kind of environment. Would earnings also be expected to be down sequentially from the third quarter or is it possible that they can be flat to up relative to the third quarter in Q4?

That's a good question. We don't give earnings guidance, but I think that it's fair to say that if the revenue in the fourth quarter plays out the way we think it's going to today, as of today, and that will be down sequentially, that you could expect that our earnings would be down on a volume adjusted basis.

Okay. And then kind of similarly looking into next year, again, not asking for earnings guidance per se, but based on the revenue expectations that you kind of guided towards, just directionally on the earnings for the year, previously, you had said that you expected that 2013 would see favorable earnings relative to 2012. I'm just curious if based on your current view, if that was would still hold.

I think, Holden said it in his comments, relative to what -- the way we preliminarily have guided here on the revenue front. Of course, as I mentioned in my comments, we really don't guide with a revenue range, an annual revenue range, until we release our fourth quarter and full year earnings, and that happens sometime late in the month of March. I think it's been in the third and fourth week of the month of March, so -- and we'll know a whole lot more than we know today in terms of providing revenue guidance than we do as of now. I mean, I think 3 months, 3 to 4 or 5 months will mean -- be very meaningful in this kind of environment relative to having some visibility. But as our comments were that -- at right now, it would be flattish if we had to put a stick in the ground -- a stake in the ground, we'd be flattish for '13 versus '12. But that also implies no improvement in the whole destocking situation. And so to the extent that customers restock, there's upside that would take that the flattish kind of feeling that we're having as of today to something that would be positive earnings growth in '13 versus '12.

And this is Jim. I might want to add a couple of modeling points, if you're -- not that we're trying to guide you to any particular number, but 2 things to think about. One, as I already mentioned, that our interest rates are lower, so we'll have a benefit on interest expense versus this year, plus our overall debt will be lower. And I just want to remind you of what we have in the 10-Q every quarter and what we mentioned here about our tax situation. We are approaching the point where our U.S. taxes -- right now, we're not taking any expense for U.S. taxes. But once we cross that threshold that says we can clearly see that were going to use those NOLs, then we'll have to start taking the U.S. tax hit again. And I think it's a -- there's good likelihood of that for next year. And the impact of that would probably be something between 5 and 8 percentage points added to our tax rate. I can't give you any better guidance than that. But that's likely to be an a factor for next year, but it's not -- it's fact based and we have to see if we get to where we need to be.

Sure. I understood, and that would be high class problem. But to the point about earnings potentially being flattish, would that include the higher tax rate or is that more on an EBITDA basis?

Yes. It generally includes our current estimates on where taxes would be.

Okay. So pretax income, even in the revenue environment, you're currently projecting, what sounds like, based on your comments, would likely be favorable relative to 2012?

Slightly, yes.

Great. And then just to follow that up with free cash generation, you guys are certainly doing a good job of generating free cash this year in a tough environment. And my impression has been that next year was expected to be even better and I'm just curious if that expectation holds as well.

Yes. I mean, as the -- if it's a flat year on revenue, then the cash flow model won't look a whole lot different than it does this year, but we'll still...

Although I would say that we probably, depending on what happens in the year and of course, we're doing our business plan right now as we speak for 2013, but the budgeted CapEx, you could expect, would come down from '12 -- or from '12 numbers. And so in terms of free cash flow and either debt retirement or application of some of the free cash flow to the things Jim mentioned, on organic growth opportunities as well as acquisitions, as well as potential dividends or share repurchases, we would expect that to be where we were this year or slightly better on the basis of kind of flexing the CapEx depending on what happens with revenues and earnings.

Great. With that CapEx coming down, would you expect to be able to free up some working capital as well? Could that be a positive cash driver next year or would it be flattish as well?

It might be slightly more positive than this year because we started this year with a headwind in accounts payable for some kind of technical reasons, but -- so there could be a little bit of hit there.

And then there was also some discussion that the -- your new credit agreement allows you to potentially buy stock or pay dividends. And certainly, with the stock trading where it is, I would imagine all options are on the table and all options look pretty attractive at this point. And I'm just curious if you could elaborate on that at all and kind of when the board will next be meeting to discuss some of those options.

We are actually meeting next week as part of our normal quarterly cycle process in terms of our board meetings. And the dividends and stock repurchases, based upon our improving credit profile and our liquidity situation and our improving balance sheet have been an ongoing discussion going back to really the first quarter meeting of this year and it will continue. I think the only issue, of course, relative to the board taking any action on either a stock repurchase or a dividend is a sense that what's going on in the global economy, and ensuring that the $20 million to $25 million of free cash flow that I just mentioned is real for 2013 on the basis of no further deterioration than where we're at today on the revenue side. And I think that as soon as that there's comfort level there, you could, I think you could expect to see, at least, a continuing discussion and potentially some action on it.

Sure. That's fair enough. And I'll just ask one final question, if I could and that is, can you give an update on the status of the CEO search, please?

Sure. We have said publicly that the board established a special search committee, a subcommittee of the board, back in June and retained a search firm in Chicago to vet 2 internal candidates, as well as external candidates and that process is ongoing. And from a timing perspective, in our public announcement, we said that my timing in terms of a departure would be late in the -- right after the first quarter on until around the timing of our Annual Shareholder Meeting, so sometime April, May. And I think the timing is still good. And having said that, I'm not going anywhere, obviously until a successor is named and then -- and only then will I leave.

And our next question comes from the line of Keith Maher with Singular Research.

This is a question about the Metal Bearing Components area. And I know part of the growth there will come from capturing a greater portion of customers' in-house production. And I was wondering if you could provide any color on any developments with regard to that.

Yes. That was, as you know, a huge driver of our growth in that area. And that trend has certainly slowed down dramatically over the, say, last half decade or so. There are opportunities out there that we continue to look at opportunistically. But in general, we would say those are less likely than finding a good acquisition in the Precision Metal Components area where there's a lot more targets out there and maybe a lot more profitable targets to look at, so -- but it remains a part of our strategy. We would still be the go-to firm if one of these bearing manufacturers wanted to deconsolidate some of their component capabilities. So it's possible kind of where it stands.

All right, that's helpful. And I know you've touched on guidance a little bit. But I had a question really about longer term guidance, which I think in the past, you said over the next few years, you were targeting 8% compound annual growth in revenues and 15% in EPS, and I'm assuming that's changed in light of the economic environment. Do you have any update to those?

Yes. I mean, it probably has changed on the basis of '13, for sure, if the economies in Europe and Asia continue to kind of respond the way they held. And so I think that we still -- this is a 3-year outlook in terms of the 8% and the 20% that you mentioned, the compound annual growth rate. So I would say, as a company and as a management team, as a board, we haven't given up on those growth rates yet, and -- but it's obviously dependent upon kind of what happens in '13 relative to both Europe and Asia.

Okay, that's helpful. Also, I mean, circling back to the use of cash, is there any -- have you thought of kind of maybe the priority between things like dividends and share repurchase, debt repayment, acquisitions? I mean, is there anything in that list higher priority than other things?

I think that if -- once again, to the extent that our free cash flow is in the area, around the number that I mentioned, the priority is not one or the other. I mean, honestly, on acquisition that -- like Jim mentioned, in the Precision Metal Components, along with the reinstatement of the dividend can both occur based upon the free cash flows for '13, '14, '15. And so in terms of our prioritization of a dividend versus a stock buyback, I think that in talking to investors, and we've just spent a whole lot of time doing that over the last couple of months, there is a preference, I think, toward a dividend, reinstatement of our dividend. We've traditionally paid our dividend up until the fourth quarter of 2008 when the global recession hit us a company. So I think the reinstatement of a dividend would probably have a higher priority than a stock buyback at this point.

Okay. That's helpful. I guess just one final question, I don't know if anything has changed in light of the renegotiating that line of credit. But have you changed your target for debt levels for this year or even like longer term, or can you give any guidance on where you think that's going to be?

Yes. No, we haven't really changed the target. We have always tried to maintain debt-to-EBITDA ratios of between 1x and 2x. We made a specific goal for 2012 to repay a piece of our debt and this $20 million target and we're going to hit that. So that's going to put us in the midrange of the debt-to-EBITDA ratio. So I guess the bias would be to keep it on the low side unless we see just an outstanding opportunity on the acquisition front, and so nothing has really changed. We're a bit more conservative right now, but we are very much focused on growth and growth by acquisition is a key part of our strategy, so we can use the debt for that and we will.

[Operator Instructions] And we do have a follow-up question from the line of Holden Lewis with BB&T Capital Markets.

So it's, I guess, related to not looking for guidance for next year on margins. But this year, you had a nice pool of profitability coming because Whirlaway was there, that's allowed you to sort of boost revenues despite what's been happening on the revenue side. When you look towards 2013 and when we try to sort of get our heads around sort of leverage, deleverage, what have you, are there any similar sort of pools of margin that can be had that might be sort of independent of what you're expecting at the top line, whether that be more gains in Whirlaway, whether it be productivity expectations, just trying to get a sense of what we can expect independent of volume next year?

Yes, independent of volume, Holden, I would say that, of course, there is continuing margin improvement at Whirlaway. But absent the whole volume issue, as you mentioned, it's pretty difficult to do that in today's environment. I would say that there is not a big pool out there in Metal Bearing Components or in our Rubber and Plastics business that's going to drive our margins up substantially. Of course, our Level 3 program continues to deliver really nice results and we expect some margin enhancement there, but that's a somewhat offset by the inflation in our business as well. So I would say to you, slight improvements beyond where we were in '12 in Whirlaway would maybe nudge them up just slightly, but not a whole lot.

Okay. And then just a couple of [indiscernible]. What was the operating cash flow figure in the quarter? Do you have that available?

Holden, we'll be -- the 10-Q will be filed shortly after the call. So all that information will be out there around 12:30 to 1:00 if that's...

Okay. All right, great. So last thing is with regards to the interest cost, this quarter, you came in about $1.1 million in interest expense. On your new credit facilities and your new capital structure, what would -- how many -- how much basis points improvement would you expect if you had been under the sort of new capital structure regime?

Well, we have, currently, as I mentioned, by quarter end, it was $45 million of debt outstanding and that's going to get a 1.25 percentage point reduction. We have $65 million unused on the line and that's going to get a 20 basis point reduction. And then on the $11 million outstanding on the Prudential notes, we've got the 50 basis point reduction. So I threw out a number of $600,000 and you can work -- I don't have the percentage, but you can work through it there.

$600,000, that's what interest expense would've been in Q3?

No. That would be a full year reduction in interest expense if we had the same debt levels.

And I'm showing no further questions in the queue at this time. Please continue.

Okay. I'll conclude today's call with just some summary comments regarding '12. While the year has been disappointing on the basis of a lingering recession in Europe and a slowing growth in Asia, our earnings, leverage and margins reflect a much healthier company in terms of profitability. We actually had record third quarter profitability as well as for the first 9 months of the year. As a result of our Level 3 led cost reductions and continuing improvements as we've mentioned at Whirlaway, we're really positioned to withstand the current economic difficulties and deliver good returns given where we are. As I also mentioned, 2013 really remains an unknown, but we are poised to leverage our earnings further when demand improves to healthier levels. Finally, as Jim mentioned in his earlier comments, we are on track to reduce net debt by -- for the year 2012 by approximately $20 million. That net debt reduction will position our balance sheet to not only fund organic and acquisitive growth initiatives beginning in 2013, but also to consider potential stock buybacks or dividend -- reinstitution of the dividend moving forward. So with that, I'll say thank you for listening to today's call.

Ladies and gentlemen, this concludes the NN Inc. Third Quarter 2012 Conference Call. If you like to listen to a replay of today's conference, please dial (303) 590-3030 or the toll-free number of 1 (800) 406-7325 and enter the access code of 4571897. Thank you again for your participation, and you may now disconnect.