Good morning and welcome to the Park-Ohio Third Quarter 2016 Results Conference Call. At this time, all participants are in a listen-only mode. After the presentation, the company will conduct a question-and-answer session. Today's conference is also being recorded. If you have any objections, you may disconnect at this time. [Operator Instructions] Before we get started, I want to remind everybody that certain statements made on today's call maybe forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A list of relevant risks and uncertainties maybe found in the earnings press release as well as the company's 2015 10-K, which was filed on March 14, 2016 with the SEC. Additionally, the company may discuss as adjusted earnings and EBITDA as defined as adjusted earnings and EBITDA as defined are not measures of performance under Generally Accepted Accounting Principles. For a reconciliation of net income to adjusted earnings and for a reconciliation of net income attributable to Park-Ohio common shareholders to EBITDA as defined, please refer to the company's recent earnings release. I'd now like to turn the conference over to Mr. Edward Crawford, Chairman and CEO. Please proceed Mr. Crawford.

Good morning, ladies and gentlemen. Welcome to the third quarter 2016 Park-Ohio conference call. I would like to being this session by introducing Matthew Crawford, the President of the company.

Thank you. And good morning. In the third quarter, we continued our trend of improving profitability throughout this year as measured by several key metrics. First on the bottom line, we delivered adjusted EPS of $1.13 per diluted share, compared to $0.76 in quarter two and $0.46 in the first quarter of this year. Second, our gross margin was 17.4% which was higher than the 16.5% and 14.6% that we achieved in Q2 and Q1 respectively and was also our best gross margin percentage in the last two years and third, operating income margin came in at 6.7% for the quarter, which is higher than 6.2% and 4.7% that we posted in Q1 and Q1 of 2016 respectively. On the top line, our or net sales of $313 million were down approximately 5% compared to Q1 and Q2 as a result of continuing weaker customer demand. However we were nonetheless able to deliver improved profit margins and adjusted EPS in the quarter through a combination of strong performances in our faster manufacturing, fuel products and rubber products businesses, as well as aggressive cost reductions in certain businesses, which have been implemented throughout the year. Our cost reduction actions included reducing headcount in response to lower customer demand, producing discretionary spending and streamlining manufacturing processes were possible. While these were challenging actions, our improved profitability in Q3 confirms that our strategy of lowering our overall cost structure in the short-term while positioning ourselves for further improvements in profitability when revenues return to more normalized levels is working. As already mentioned, during Q3 we continue to face weak macro economic conditions in several of our key end markets as well as from the loss of volumes in the accelerated wind down of Dodge Dart and Chrysler 200 programs that we announced earlier…

Well, thank you Matthew. Let's take a quick look at 2016, all know that we got out to a terrible start in the first quarter. We've discussed that particularly around the subject around the Dart and Chrysler, but to that point on, we've taking all the necessary steps. We've taken all the operating expenses down the company across the Board and we're trying to make this guidance and will make this guidance because we done it through operations, cost efficiencies. From a revenue viewpoint, we have not lost any customers. What we're dealing with is a major, economic, across the board, trucking people like Volvo, gas and oil, recreation vehicles like Polaris, Ag customers like Caterpillar and John Deere, the real industry, the military. We're a very diversified company. Fortunately we're not deeply in one particular area. So although -- and our markets are all been impacted and with situations like this can only be dealt by running the company better, tighter and just for cash and cash flow, which we are accomplishing. This looks very much like '08 and '09 with additionally '09 we ramped down the company, the operational and made it more efficient and when we got the balance in revenue and we expect a bounce in revenue. These customers did not go out of business. We did not lose business. We've been writing business. Things are improving and we'll talk later about hopefully Gamco and others where we're writing new business and our expansion in China. So the revenue side of this business will come back and we'll be prepared as we were in 9, 8, 9 to take advantage of that. So I'm disappointed in the revenue. I never expected the truck to get to the lower level they are, but that's where we are, but that's the kind of company we are. We run the business as needed. From the first quarter on through the third quarter, we are I think completely finished with the things we could do. We are preparing for the future and the future is all about revenue, it's all about sales and we're going to have the same success we had '08, '09 coming out of a compression as our customers are going through each and every one of very diversified. We are ready here and we've accomplished I think a great deal in getting the company stabilized, meeting this guidance and doing it out of operations only, not at any revenue, but the revenue is there. We have new business and we still have our great customer base. So I would like to open the lines for questions.

Thank you. At this time we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Edward Marshall with Sidoti and Company. Please proceed with your question.

Hey guys how are you doing this morning?

Hi Edward.

So the question I guess is that the $4 million or the $0.21 of tax benefit was originally in the guidance and I am wondering if there's any other one-time events that you might include in the guidance for the year that we should know about coming in Q4. Is this tax rate going to repeat or the other one-time events that may be we should be aware of?

This is Pat Fogarty, we don't expect any further reversals in the fourth quarter of this year and the $4 million was really a one-time item and we expect our effective tax rate as Matt mentioned to be approximately 25% for the current year.

For the full year okay. Did you know that was going to be originally in the guidance when you gave in the beginning of the year or is this kind of a surprise to you?

No it definitely wasn’t a surprise. We anticipated some of these accruals based on our tax positions to come down and be reversed in the third quarter and this isn’t all that unusual and we look at our effective tax rate every year. We continue to put a strategy together to keep our effective tax rate as low as possible and although the number was a little larger than -- slightly larger than what we expected, it's not unusual for those types of accruals to be reversed once the statutes run their course.

You're talking about operating margin and when I look at it as the strongest in the third quarter that it was all year and it's impressive when you look at decline in revenue, especially sequentially first half to the third quarter, was there anything that was mix related or if you have to parse it out between mix and say cost actions and I know you mentioned something about rubber. Can you talk about where the bulk of those advantages came from?

This is Matt Crawford. I'll talk about in the context of the year-to-date numbers. Clearly the largest has been a reaction to this process to stabilize general aluminum. That was clearly impacted -- it's the only part of the business where we had lost business. We lose competitively, they abandoned the products, but that clearly was the area that was influenced the most by cost cutting. Having said that, there was cost-cutting in several of the businesses. It's been an interesting year. Clearly we have businesses that are growing, but those businesses like supply technologies, like general aluminum, specifically in the forge group have been affected, which is a business in each of the segments have been affected the most. And those have been offset in some cases by increased expenses in areas that are growing quickly. So it's been a mix across the Board and it's been a mix in each segment.

And there was nothing strange in the corporate level, no compensation accruals, adjustments or anything like that, this was strictly, we had some adjustments to make an our cost structure. We did that and then we're seeing the benefit of that now.

Yes, there was nothing unusual happening in the quarter.

Okay. When I look at the inventory, I would've thought that with the spike, that with the drop in sales we were seeing inventory come out a little bit and I'm curious if you could help me identify is it a function of unique parts in inventory maybe left over supply from Chrysler and Dodge or are you building for inventory for new programs that begin startup in 2017 and beyond. I am just curious how that plays out.

I'll start and then perhaps Pat can help finish, this is Matt again, probably tell from the cold in my voice at this juncture, we have had a challenge reacting to the volatile the point we're saying it, demand request from our customers. So when you look at throughout the year, the adjustments that have happened and we'll focus for a moment on supply technologies, those in the power sports market, those in the truck market and then I'll jump over to the forging space and talk about rail. Those businesses we expect it to be a little soft coming into the year. Our customers expect them to be little soft but their adjustments really beginning, they're either very negative variances to forecast every month of the year with one exception. So one of the problems is for us and we'll focus on Supply Tech for a second is much of that product comes from offshore. Our system I think is very good at trying to cancel and defer volumes or parts that are coming in from offshore, but some of that lead times three, four, five, six, months. So while I think our system adapts very quickly and we don't see obsolescence as an issue, but we do can sometimes have in a particular volatile environment is longer hold times. We anticipate unquestionably the fourth quarter as being our strongest opportunity to reduce inventory and that's not by accident. That's because we are playing a little catch-up as they've adjusted production schedules up to and including the last month for the remainder of the year. So our hands have been a little tide in parts of the business. Clearly another area we've seen that are some cancellation and defers on the -- in the induction business relative to capital equipment orders. Those have continued to struggle throughout the year. So we're adjusting as quickly as we can, but inventory will hopefully be affected more aggressively in the fourth quarter as we play catch-up.

Edward, the majority of the inventory was held as you know in the supply backed category and we've talked about this and we're able what I call it no-fly zone. Every one of these customers we've been at the door looking to reduce the inventories and they have kept the pressure on us for the rebound. They always thing they're going to rebound global and never thought they were going to get to where they are. So it's continually -- and our responsibility in this relationship as you know -- the reason it's sticky is because they depend on us. So we're down in an area now with people if anyone in the company wasn't actually needing going forward that's how you reduce the ops cost. But we're a position now where we have to hold our ground to make sure when there is across all this Board if it was just one industry was down, they're all down. Players are down, there dear is down, the Ag is down, gas oil is down, but they don't think it's going to stay down and they're anxious to get going like fortunately at this point, all the decision made for '16 years are in place now. So we got our real handle on this as much and should be able to make some improvements in the fourth quarter.

Right.

The knowledge we have. I am not changing their troughs in the year and saying they're giving up, but they're doing the same thing we're doing, cutting cost, getting down, getting ready.

Right. Right, the operating levers look pretty good, if you can get the rebound in revenues for next year I think you see some nice, nice leverage coming out of the business.

Look at '08 and '09 when we rolled -- when the economy started back after that compression over there, we had our cost down and the rebound was terrific, and that's what's going to happen again. So when this rebound starts we'll have, I'll have the company ratcheted down in terms of low cost operating bases we're going to get a lot of benefit. Everything we're giving up now, we're going to get back in earnings on the turn. I've been doing this a couple times and this is the way that operates. You have to get ready for the future. Our customers are big customers, they're not going out of business. They want us ready. It also take up little extra inventory, but where we look at the numbers but I think there will be some improvement here yet as their clarity and where they're going, they're planning already for the like how these roll over we'll do better, we'll get some of that there, but we're not going to go into the fly zone because we have to be ready.

Got it. It's good to hear. Thanks, guys. I really appreciate it.

Thank you.

Our next question comes from Brian Sponheimer with Gabelli and Company. Please proceed with your question.

Good morning, Matt. How are you?

Great. How are you doing?

Great. So you talked a lot about talking the cost side -- the fixed cost out of the business and comparing it to a very rough time in '08, '09. Looking back on that time what was the first signs of life that you began to see in some of those end markets that would give you some confidence that things were about to turn and then potentially add some cost back to the business?

The most interesting one and one that turns fastest is over and our engineered products where we have all those capital equipment and is really hurt the company as you know that's our biggest margin business, it has been for years that's been flatten out for year and half. The first things is start to happening is all those equipments out there, they keep running it, it's way passes maintenance time and always first thing they got to do they sense something happening good, they have to get this equipment up. So that is more parts and service, service model. This is big margin business. It starts with that and follows with the capital equipment. The first thing that happened is that's the good thing. When they start repairing this equipment the steel mills and he is talking like anyone who is making something once they start -- they put up that, they put up that. They have people which people ops down, please keep our cost down for the first quarter, second quarter, third quarter. All the sudden they still have to buy and keep equipment running. It's way over time parts and service that's where it stars.

Okay. And just along those lines we’ve some pretty high profile programs get cut on the light vehicle side, have you seen anything that would indicate that some of that business is coming back in other programs or I guess on the other side, are you seeing any other programs whether it be a data OEM or any other that maybe some step down potentially as you look into 2017?

Well, the flight out of small cars and into SUVs is all extension of the gas and low cost of gas run in America particularly. So that is not changed. Fortunately, we are not in any as you can imagine we might have learned a lesson. Fortunately we're not on any really in any volume on the small cars, okay. So we're after the trucking business, the transmissions. I'll say we've learned our lesson, but I thought that was going to be successful. Quite frankly that didn't work out that way. So we are not in those platforms. We are transmitting on the bigger platform all the aluminum business and we have as you know this great order coming with the new 10 speed which is starting to ship now. We just also received another great order for knuckles for the ram truck. We have a lot of good things happening is all bigger stuff. So I don't think were exposed to the light conversion from light vehicles to pickup trucks and SUVs.

Brian this is Matt. I'd also add I think those comments are especially appropriate for the U.S. market. One of our fastest-growing markets today and some of our fastest-growing technologies like direct injection are in China. And so were attached in many cases two engine designs that cover a broader spectrum of the car portfolio than we typically have in the past. So we see a lot of adoption of that technology throughout the world. We're growing very quickly in particular in China. So I do think there's some opportunity there sort of throughout the product cycle.

And that's also for diesel, right?

Yes, it's a significant adoption rate going on there and it positioned us pretty well for the future. Going on here as well we're shipping products as fast as we can from the U.S, to China right now.

Let's recap the strategy in the auto business, we were at one time -- five years ago we had one platform in the auto industry that's aluminum that we've added to that fuel filler pipe turbo-charging hosing and gas injections. We've four platforms on the automobile now. We're not just in the aluminum knuckles anymore with five aluminum plants. We are making product, the fastest growing segment we have in the business is right now with General Motors in Cheyenne, and in Shanghai It is an incredible opportunity there. They are building cars as fast as they can over there because the vehicle over there is Rolls-Royce. They don’t want their own cars, they want American cars. So we've got a lot of platforms. So if the cars down in America in car count we got more platforms. So it's really not going to hurt us. This is what we've been working hard to develop.

All right. Thank you, guys.

Our next question comes from Steve Barger with KeyBanc Capital Markets. Please proceed with your question.

Good morning, guys.

Hi, Steve.

Ed, we've talked on the call here about earnings leverage on a recovery and in the press release you said revenue in some key end markets could expand in early 2017, so are you -- do you think broader rebound is closed or what was that press release comment to specifically?

I believe just I spend a lot of time in the field recently and I believe that we are just at the beginning. I don't blame on a atmosphere right now, but I really do believe that the all these companies is broad based of customers we have. They're all really, really have been hurting and I just sensed the end of it. So I think this way -- when I think about 17 I'm comparing 17 to 15. I'm not comparing in my mind that 17 to 16. In other words I expect to get the win that back here. We've done all of things necessary to get our controls and cost in line we need revenue. And again which future shares as we have it doesn't take much, $10 millions extra EBIT on the rebound, tax it and divided by 12.2 million shares, the leverage is there. We know it's there. And we're prepared and I believe that the goal that I'm talking about is that can we can -- '17 exceed, not '16 exceed '15 revenue that's where they have goals round here, I think we can do that.

Do you -- what end market that would be a great thing to see? But revenues obviously been hard to forecast for a lot of companies, what specific end markets are you seeing is more positive that would give you the biggest swing in earnings and cash flow as you think about '17 or the odd year?

Well, it comes right back to the auto industry, I'm glad we are there. We have the 10- speed transmission. Now we've been talking about the 10-speed transmission after three years. And $18 million later we're shipping it now. We talked about this and how much money it takes a set up a platform like that, but it's up and running. We're shipping I was at the plant on Saturday morning and we're making the 10-speed transmission there, the pieces. It's up and running. This is going to be by '18 the $55 million business. We've just recently written another contract which will start about the same time and that particular unit major customer tier 1 another $25 million, China, we're shipping parts from Fort Wayne Indiana to China in a gas injection. We're setting up a facility there right this minute they make the product that we're shipping. We're shipping from Fort Wayne to Shanghai that the supply Buick. And we can make enough over in Fort Wayne. So we are shutting up a plant. Matt just came back, Matt and Pat were just in China for seven days starting not one but two plants. So I see a lot of very strong activity there. I also feel that the trucking business is at the bottom you know. And gas and oil maybe you'll forgot, but I'm not overly optimistic, it's not pie in the sky which means we got too many great companies they are all not going to stand on the floor. They're all going to pickup. Oh my goodness, the customers we have Steve we've got to $200 million to $225 million in revenue that choked up in the system. So if we got half of that back, half of it that's a $100 million. And I discovered another $75 million or $80 million, so is there a couple hundred million dollars flows around here, I say yes, and I think we're going to hopefully get it, which are ready. Maybe we'll do a transaction I don’t know but we're going to get the numbers here. We're going to get the revenue side. The first we'd to get through this year, very bad start.

Well, that's what I was going to say bring it back to the current quarter. Total revenue has been running down double digit for the first three quarters. The 4Q comp is a bit easier, do you expect it's more down single-digit in 4Q or could it be up sequentially?

Steve, this is Pat. I would say the fourth quarter looks very similar to the third quarter. And so I wouldn't expect any large increases sequentially or decreases sequentially.

Okay. But some of the gross margin benefits that you saw in 3Q should continue to flow through just from a cost reduction standpoint?

Yes, they should. One of the comments that Matt made was in respect to the launch of our business in our fuel rail business where we incurred a $1 million of excess costs in the launch we expect those cost to begin to look -- to end so we'll get the benefit of that.

Got it. And you mentioned some induction cancellations that happened earlier this year. At this point how firm our orders in backlog, do you see any potential weakness in there or do you feel like it's pretty much a good line of sight of those orders?

This is Matt. Steve, I'd say that with one significant exception on the oil and gas side the order sizes have become smaller and are less related to capacity building and more related to process improvement or related to stronger markets like automotive globally. So I'd say that unfortunately the size and nature of the items in backlog for the equipment business now is more reliable. But that's probably a function just that it's smaller and smaller sizes.

Right, right. Can you talk about how inquiry levels have been, have you seen any kind of inflection in the phone starting to ring more and people starting to ask about deliveries into '17?

I don’t know if I would make that job just as may every time there is some fluctuations in the oil and gas price. There is always interest and little more inquiry but in this environment trying to got the line to an order is very challenging. I would say that sequentially seeing the improved aftermarket revenue that Pat mentioned is and I mentioned in my note is important. Obviously the more activity we see on the aftermarket side the more of the equipment being used more likely either upgraded or replaced itself. I would say that at a -- that was a nice thing to see, I'm not sure how indicative of the current environment, but it certainly was a positive.

Hey, Steve. This is Eddie. Just I can't get ahead of you next question I think the transaction businesses is coming back to live here. These multiples and these pressure on this general manufacturing across the United States and particularly in euro zone is really brought some great opportunities relative to terrific companies that the type of multiples we're interested. So that's another positive thing and it gives me optimism for the future because all of a sudden when that collapses that I get the sense good time for us to be on the lookout.

Do you see more things in North America or Europe?

Both but particularly the euro zone, we've been very successful over there as you know and combining things good companies for the right reason. The company in Italy had it's rough start that we expected getting the labor out of there. But there are lots of opportunities in a tax basis , tax situations in Europe make it pretty interesting to pay attention to.

Got it. Couple of ones and then I'll get back in line. Supply technology Matt you talked about continuously sluggish activity in 4Q, do you think your customers are going to have extended shutdowns are on the holidays as we saw maybe last year or is this just kind of a normal seasonal thing?

I would like to believe that this point we have a pretty good handle on where we see the demand in the fourth quarter, but Steve there is no question that every production revision we've seen up to and including two weeks ago when a week ago have been negative. So I would like to believe at this juncture we got a good sense of that, but there's been no -- we've hoped throughout the year and I know you know this that we would see some elevation in activity as the year went on. And in those particular key markets we're discussing we have not seen that. So we've got a pretty handle on it now, but I'll tell you it's -- the pressure has been unrelenting. As we've discussed I know that our revenue comps year-over-year have been unfortunate, but when some of your key customers are down 30% and 40%, it makes it very, very challenging. I'm sure you're aware of the significant recall that Polaris has gone through this year. It just seems like that the hits keep on coming. So this is a function of customers like themselves working through either fundamental issues or market issues. But I have to believe the that the comps not just from that mathematical sense, but from a business sense start to improve here shortly.

Understood. Last one, just a modeling question for Pat. Any early look at tax rate for next year?

Steve, we're going through our planning process now, but I can tell you that foreign income is the larger part of our business than it was historically. So I would expect our tax rate to be lower than what I would consider normal year. So in that 33% range is probably not an unrealistic. But we'll have more on that once we come out the first quarter with our '17 forecast.

Understood. All right. Thanks for the time gentlemen.

Thank you.

Our next comes from Marco Rodriguez with Stonegate Capital Market. Please proceed with your question.

Good morning, guys. Thank you for --

How are you today?

Very well. I wanted to kind of follow-up a little bit. Most of my questions have been asked. On the supply technology side the areas where you're obviously being seeing weakness which is called out before the heavy truck in Boston Ag markets. I was wondering if maybe you could give a little bit more color in terms of the conversations you're having with those particular customers and their confidence levels or what they might be looking as far as risk as they head into fiscal '17?

This is Matt. Good morning. Honestly it's very difficult to focus on '17 when I just mentioned to see this question many of them are adjusting and have been adjusting their own production level down throughout the year. So that makes it a very challenging environment to really refocus a discussion on '17. Like I just said I think many of them believe things will flatten out or improve as a general matter of discussion, but I don't know that I've seen any anecdotal support for that at this point.

Got you. Would you characterize and then as passed the panic mode or they still not feeling too good about things?

There's some customers I think that have gone through fundamental business issues I just talked about one minute ago. I think that certainly they feel like they're through that, through their recall issues and building. And their volumes in the latter part of this year will reflect that. But, I think that there -- I don’t know if I would call panic, I just think that these are really good businesses with outstanding market share that are just trying to adjust their businesses. So I don't if I would call it panic I just thought that just would see to it as people try to adjust their -- adjust their business appropriately.

Got you. And could you talk a little bit about the gross margins that you guys are obviously pretty good improvements year-over-year, should business start to turn around here in short order, can you give us a sense I mean how much room do you have to add capacity and then at what point do you need to higher back heads or add capacity if you will?

I think that and we can take each of businesses one by one, but no, I think that supply technology is a business, where we've taken some aggressive action. But it's mostly been in areas that are more variable and temporary in nature. So we've tried very hard throughout the year to not cut into the bone. As I mentioned a few minutes ago the largest adjustment this year has been to the reduction of volumes related to the Dart and the Dart and the Chrysler 200. I do think that we made some adjustments on the engineered products side, but we haven't closed any facilities there. So I do think we made -- our original plan unfortunately was to see some bounce back in the second half. So I don't know that we're in a position from a capacity standpoint to not respond. I am not suggesting we'll need to hire back people at a reasonably aggressive rate but I don't feel as though we make any adjustments that would prohibit us from seeing the operating leverage on the way back up.

Got you. Thanks a lot guys. Appreciate your time.

Thank you.

Our next question comes from John Bown a private investor. Please proceed with your question.

Hi guys. How are you doing today.

Good morning, John. How are you today?

Good. Let's see, here we are Election Day and the only thing that may be seem to agree upon is we might be looking at some infrastructure spending in 2017. What if that comes through and a big era of what areas of the business might experience an uplift from that?

Well I'll say the fact that first clearly the spot we would love to see as some help there is in our forging business. We're not talking about a lot because from a revenue standpoint, it's a smallest of our businesses, but it is absolutely a driver of our margin mix and it's also one that have the largest fixed overhead. So infrastructure as it relates to any key customers like Caterpillar, John Deere or even on the government spending and defense side. I don't know if you're including that in that bucket, but those would be certainly the primary business to be influenced, but tangentially obviously we would think that would affect rail and truck as well. So I think we could see broad support to our customers. Once again we're leaders in their businesses if that would happen.

Great and one more kind of a little broad-based in terms of foreign currency and Brexit and Euro zone business positive or negative and obviously lesser than that takes care of my questions, thank you.

I'll handle that John, this is Pat. Generally the level of exposure to the British Pound is relatively small. I think what will see if the dollar strengthens as we go into 2017 that we'll have an impact on our business that we have in the euro zone that's denominated in Euros negative impact, but right now we don't expect that to be material, but we'll keep closer eye on that.

That's it for me. Thanks guys. keep up the good work.

Our next question comes from Edward Marshall with Sidoti and Company. Please proceed with your question.

Hey guys. Just a couple of quick follow-ups. First I wanted to talk about the -- if you could quantify the fixed cost from the model and let's exclude the two lines that were discontinued in Q1. I'm assuming that those fixed costs aren’t going to affect the business but the revenues aren’t coming back either. So I'm just looking at the 6.8 margin that you did in this quarter versus what you did in let's say 1Q '15 but a much higher run rate in revenue. So if you got that $60 million $65 million revenue back what that operating leverage in the business where do you think margins could go and that's what I'm trying to get to?

Yeah I follow your question. I think it really depends on which segment of our business rebounds. Our Engineered Products group has the highest margins and traditionally, we've seen operating income margins North of 10%.

But that assumes revenue and energy right.

So I think that if we see a rebound in our business, our operating margins, that operating income margin level should be in that 2015 range 7.5% to 8%. Did you get that.

Okay. Thank you.

There are no further questions at this time -- oh, he's back in queue let me.

Okay. Let's get him back. WE don't want to give half answer.

Sure. Our next question is from Edward Marshall with Sidoti and Company.

No, I got the operating number but I wanted to ask a second follow-up if I could, if I annualize Q3, you're at $1.25 billion revenue. You talked about 2015, run rate revenue and that assumes $210 million worth of growth. I'm curious if you can -- you mentioned a lot of different programs in there and I assume some of that comes from a rebound in your business. But could you bridge the gap how do you get there when you talk about 2017?

Well between the business we've already secured the new business which is coming on stream and combine that with our activities I think we already have in position with any modest recover -- our new business is very close to $100 million. So the rest can be patched together. So I think we're often going to have a good year based on just the start up of some investments we made two years ago and particularly in the auto and truck business, not the Class A truck. So I think it's fair. I don't expect -- quite frankly I think with the private equity folks stepping away from nine times cash flow, there might be opportunity here or there for us to do acquisition we haven't done any one for considerable length of time.

So you're saying that $100 million of that business comes back from just the new programs that you already have purchase order for that? Is that what you're in 2017?

'17 if $75 million coming back maybe our facilities in China will get up faster we'll bill them as fast as we can, quite frankly this cash injection which we talked about a long time ago is very exciting and again we're shipping parts from Fort Wayne. So they want us to make in there. So that's as fast as we can do it. Now will that be in the last quarter. So let's put this way, the run rate would surely be that. It might now all hit right the first you might be exactly -- it might be $100 million and mostly if it comes in the third and fourth quarters.

Got it. So you're saying you might exit the year at 2015 run rate. You might not start the year at that rate on an annualized basis okay. Okay. And I'm also assuming just based on the math it looks like maybe you're assuming that there is a potential of $60 million $70 million in acquired revenue from the business as well, does that makes sense.

That's a nice round number. That would be traffic and when it comes back to the right price we're buyers, we're just not buyers without it.

So assumes the new business and some recovery in the additional maybe around $50 million in recovery an additional $60 million to $75 million in acquired business I guess what you're saying.

Well yes that's exactly what I am saying.

Okay. Thanks very much guys. I appreciate it.

Well, thank you very much.

Well ladies and gentlemen, thank you very much for taking the time to be on the call. We're working here to finish up the year and therefore the further, but considering that we haven't really lost any major accounts and we've got our cost probably zeroed in at this point, we'll finish up the year and we'll get on with '17 but I want to get a little optimistic here. The revenue side of this business with this many chances and again we only have 12.2 million shares out here. So we keep thinking about that. It doesn't take much for us to really do very, very. Well again thank you have a nice day. Go America.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.