Terex Corporation (TEX) Q3 2008 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. My name is Laurie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Terex Corporation Third Quarter 2008 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions]. At this time, I'll turn the conference over to the Chief Executive Officer, Mr. Ron DeFeo. Please go ahead, sir.

Thank you, Laurie, and good morning, ladies and gentlemen, and thank you for your interest in Terex Corporation today. On the call with me this morning is Phil Widman, our Senior VP and Chief Financial Officer; Tom Riordan, the company's President and Chief Operating Officer; and Laura Kiernan of Investor Relations. Also participating on the call and available for your questions here in the room will be Rick Nichols of the Crane segment, Steve Filipov of Developing Markets and Eric Nielsen for the Materials Processing and Mining business. Bob Isaman is on the phone for the Construction segment; Tim Ford for Aerial Work Platforms; and George Ellis for Roadbuilding and Utilities. To accommodate our audiences in earlier time zones or anyone unable to listen, our replay is available shortly after this live call and will be available through the 30th of October at 5 P.M. Eastern Daylight Time. To access that replay, dial 1-800-642-1687. International participants, 706-645-9291. The conference ID number is 69096538. And obviously, this information can be accessed at the Investor Relations portion of the company's website. So let me get started. These are unusual times, and they do call for some unusual actions with the most straightforward communications we can provide, given the uncertainties that clearly surround us. We remain confident in our business, aggressive in our actions and flexible to respond to the changes that are certainly in front of us and some that we yet cannot see. So, let me make some overall comments, then Phil Widman will detail the quarter and balance of the year, and Tom Riordan will get into some granularity regarding some of our cost reduction, rightsizing and cash generation initiatives that are underway. Terex is prepared for the current environment and is managing with a focus on cash, not because we have liquidity concerns, but rather because it is simply the right thing to do given the financial crisis underway and the importance of aggressively attacking the build rate changes that are needed. This best positions us for the next two years. Many of our customers do not buy on floor planning, but rather for immediate sale or usage. Consequently, the shock absorber that exists in a more dealer-oriented model that is financed by manufacturers does not apply for Terex. We see the retail effects rather quickly, and we know that retail is, in fact, down more than wholesale generally across our businesses. The Aerial Work Platform business, the Materials Processing piece of our Materials Processing & Mining segment and the Construction businesses frankly hit revenue walls in the third quarter. When we last spoke at the investor conference of September 4th, we did see some of these changes underway, but not the severity that became more obvious in the month of September, and as we ended the quarter, in general. It also became more obvious as we began the fourth quarter. Similarly, we understood the strength that was in our Mining and Crane businesses and expected these to remain strong. We still do, although the views of the financial markets suggest skepticism with this point of view. At this moment, we do not agree, but we will be prepared if the current financial crisis continues without abatement. We are suggesting that 2009 will have revenue about equal to 2008, inclusive of currently announced acquisitions. This means that Mining and Cranes will have good years, and we will have rightsized the other businesses sufficiently. This is how we see it. And frankly, this is our responsibility. If you believe credit availability will return to the U.S. and European markets, and I do believe this, then developing markets will continue to grow and we will have opportunity in front of us without as draconian a perspective as some may believe. But we will take aggressive actions if the negative comes true. But why do we continue to have confidence in our business? It's because we are aggressively changing our cost profile. We're managing our liquidity. And we are continuing efforts to compete for business in developing markets. We will resume our share repurchase when capital market risks are reduced. And we will close on Fantuzzi using cash and available sources as previously planned. We have the financial strength to manage through this period and continue to build the capabilities of the company for the future. Can we be wrong in our view of 2009 and our business? Certainly. However, if we examine all the competitors and our customers, plus some of our customers' customers, what we see is really quite clear. Cranes are strong. Mining remains solid and growing. Incremental mining capacity continues to be added, even if the rates have come down, and frankly, capacity growth rates, some of which were probably unachievable. Developing markets remain strong with some exceptions, though. Russia is an exception. North America will likely recover before Europe. And big cranes and mining shovels and trucks continue to be mostly sold out, although small cranes are clearly slowing and will slow. The depression scenario for Terex would have all these segments roll over all at once and we do not see this, nor do our customers and competitors. The only group that seems to believe this is the traders of our stock. Someone is wrong here, and we do not think it is us, although we readily admit uncertainty remains in this environment. But we have seen these market cycles before and managed to steadfastly build the company effectively. And even if the worst becomes our reality, I have faith in the team members of Terex, our customers, and our investors. And I know we will face these challenges head on aggressively with liquidity in mind and with the interests of all protected as best we can. Now, let's get specific. And I'd like to turn it over to Phil who will specifically cover the numbers, and then Tom, of course, will get into some of our restructuring actions and operational updates. Phil?

Thanks, Ron, and good morning, everyone. Before I begin, let me remind you that we will discuss expectations of future events and performance of the company on today's call and that such expectations are subject to uncertainties related to macroeconomic factors, interest rates, governmental actions and other factors. A fuller description of the factors that affect future expectations is included in the press release and our other public filings. I encourage you to read them. Our third quarter was certainly a challenge given the volatility of external factors that Ron mentioned. We also had our own internal challenges to quickly respond to this volatility. Net sales were $2.5 billion for the third quarter, up 15% overall and 6% including the translation impact of foreign currency exchange rates and acquisitions. Our net sales demonstrated the continued strength of the Material Processing & Mining and Cranes segments where net sales increased by 18% and 26% respectively, excluding currency and acquisition effects. However, on a similar basis, the AWP and Construction segments were down 12% and 10% respectively, as Western European and North American market demand softened further for these products. Income from operations for the third quarter was $167 million, decreasing 29% from the comparable 2007 period as the favorable operating results of the Cranes, Materials Processing & Mining and Roadbuilding & Utilities segments was more than offset by the impact of the volume decline in AWP, coupled with input cost increases primarily in AWP and Construction segments; the $15 million pretax charge for the crane repair program; and $3 million charge for headcount reductions in the quarter. You should note that our Cranes and Material Processing & Mining segments, where we expect sustained strength in global end markets, contributed over 100% of the operating profit in the period. Earnings per share decreased to a level of $0.96, which included charges totaling $0.12 related to the crane repair program and headcount reductions compared to $1.45 in the prior year quarter. Cash provided by operating activities was $21 million in the quarter and a use year-to-date of $35 million which is fairly typical given the seasonality of our businesses. Return on invested capital was 23.6% for the trailing four quarter period, down from 27% in the second quarter, as the reduced operating income and the increased invested capital from recent acquisitions and working capital impacted the result. Our net leverage ratio of debt less cash and cash equivalents to last 12 months' EBITDA is slightly less than 1, an excellent position in today's environment. However, given the level of uncertainty in access to the capital markets and our expectations of future demand, we're taking a number of actions to reduce cost and maintain adequate liquidity. Tom will cover the cost and production level adjustments when I'm done, but let me address where we stand on liquidity, as this should be a focus for any business in the current environment. At the end of the third quarter, we had cash of $488 million and availability under our revolving credit facilities of $393 million; so, $881 million in total. We expect, as is normal in the fourth quarter, to generate cash from operating activities. This would be driven mainly by operating profit and inventory reductions as we reduce our production levels below the level of sales. However, continued vigilance on receivable collection activity and discipline on credit terms are also important factors. Although we repurchased $200 million or 4.2 million shares in the third quarter and $562 million or 9.8 million shares program to date, we're not currently purchasing shares until access to capital markets is clear. As relates to the liquidity and access to capital, I'd like to point out what is an important differentiator in Terex's approach to the market. As you know, we have been investing in Terex Financial Services, TFS, to ensure our customers have the needed acquisition solutions around the world. Unlike many of our large competitors, we have chosen a model for TFS that utilizes strong financial relationships to provide the funding for our customers. We ended the third quarter with less than $10 million of lease receivables related to customer financing on our balance sheet. Our funder selection is diverse. It allows us to align relationships based on geographical strength, product knowledge and risk appetite. Where our customers have chosen to use TFS, we have been and expect to continue to fund all approved transactions. We expect to use some liquidity to fund the acquisition of the port equipment businesses of Fantuzzi, which we anticipate will close in the fourth quarter. So, we're focusing on maintaining adequate liquidity through aggressive actions on many fronts to ensure flexibility to execute our key business plans. We have provided a backlog analysis in the press release to outline the impact of the level of cranes production for 2009 for certain of our products which have not yet finalized pricing. Also, given the significant movement in foreign currency exchange rates, particularly between the end of the second and third quarter of 2008, we have outlined the impact for the total company and specifically for the Cranes segment to provide for comparability. On an adjusted basis, total company backlog of $4.274 billion in the third quarter is up 10.2% from comparable 2007 levels and down 1.6% from the second quarter. As expected, the significant decreases are in the AWP and Construction segments, given softness in their end markets. However, the Cranes segment is up 50% from the comparable prior year period and up 8% from the second quarter 2008. Materials Processing & Mining backlog on a comparable basis increased 19% from the comparable prior year period, and is up 2% from the second quarter 2008, as some softness in the materials processing markets has partially dampened the continued growth in mining demand. Recall that we define backlog as orders that are deliverable in the next 12 months. Considering the challenges and opportunities in some of our end markets, the anticipated input cost pressures and our action plans to respond to the changing environment, we have updated our 2008 guidance to a net sales level of $10 billion to $10.3 billion and earnings per share of $5.69 to $5.79. While the earnings per share guidance includes the charges for the third quarter for the crane repair program and the headcount reductions of $0.12 in total, it does not include additional charges that may be required to implement further cost reduction activities. With that, let me turn it over to Tom.

Thanks, Phil, and good morning, everyone. I will cover our current views of end markets and business conditions and discuss in detail the changes we're making to address how Terex is adapting to this rapidly changing economic environment. Our Aerial Work Platform business had a tough quarter with revenue down 8.9% and orders down 20.6% versus prior year. Western Europe has been particularly affected in the last eight weeks. Profitability in Q3 was significantly impacted by lower sales volumes, cost pressures primarily from steel and reduced build rates. We estimate the material cost increase has negatively affected this business by $34 million in the quarter or over 6 points of margin. Using the last several months' order rates and the detailed conversations with our customers as a barometer, we have announced significant reductions in staffing levels across the organization in an effort to lower SG&A and overhead costs to levels commensurate with expected volume reductions. We have already adjusted build rates to reduce inventory even at these lower sales levels using shutdown days while staffing levels are adjusted. We have announced and implemented reductions of 24% of our workforce compared to June 2008 in addition to the elimination of a sizable force of temporary help in July. If additional reductions are required to stay in balance with our customers, we will quickly address that. Additionally, we're reviewing major structural changes to our global logistics and warehousing system with the goal of reducing cost and working capital while improving customer responsiveness. Net inventory was reduced by $77 million in the quarter, a very positive step. Based on competitive pressures, pricing is proving challenging. While our customers understand the implications of higher material costs and the need for their suppliers to remain financially healthy, industry data suggests we're maintaining and in some cases slightly growing share. We intend to defend our market position vigorously while working to secure the price increases already announced for next year. We have seen from our suppliers some recent token price reductions on steel and other components. Based on that and other reasons, we believe we may be near the peak of the raw material cost impact at AWP. We expect to turn these token decreases into meaningful reductions which will start showing meaningful results early next year. Let's move on to construction. Our sales were up modestly, although when we exclude foreign exchange and acquisitions, we were down about 10%. Order rates in Asia and Africa remain solid, but not enough to offset softness throughout Europe. The U.S. market continues to be depressed. Profitability was impacted by a tough pricing environment as we push to sell already built units; continued material cost pressures; purchase price variance was $11 million in the quarter; and by reduced build volumes. Inventory was lowered by $46 million in the quarter, most of which was exchange rate, and we expect the inventory reductions to continue. Our belief is that the market environment of pricing will remain difficult, and we're focused on reducing cost as a primary method of restoring profitability to this business. Reductions are being made in staffing throughout all parts of the organization, along with significant shutdown days. We have a number of facilities that are under review as part of the structural changes needed in this business along with aggressive product cost reduction programs and supply chain rationalization. While speed is critical in reducing costs, we also need to ensure we manage the structural changes, so we position the business for true improvements. We expect to have a further 17% workforce reduction in the next several quarters as we change our cost structure. On a more upbeat note, our Cranes business had another terrific quarter with revenue up 36%. Excluding the charges for the crane repair program mentioned in the press release, the operating margin in the quarter was 14.4%. Demand and order rates continue strong, and product pricing and material cost increases continue to approximately balance each other. The press release has a detailed backlog presentation showing adjusted backlog of 50%, as Phil had mentioned. We continue to see a shift towards higher capacity of higher value products. Investment in engineering and development of new products continues to be very robust, and we're being judicious on capital for capacity expansion. We're seeing some signs of caution with some of our customers, but more on the financing availability than a change in marketing conditions for crane usage. We have demonstrated we can successfully secure financing for our customers as needed, even during these past several weeks. The Materials Processing & Mining segment also had a terrific quarter, mostly led by the mining business. The recent MINExpo show was very well attended with the majority of customers being very bullish despite recent commodity pricing changes. We believe that current commodity prices are still in the range to support future capital investments. Order rates continue to be strong, and there are no real indications of reduction in capital spending by larger customers, although we are seeing some slowdown in orders from independent smaller customers due to financing availability. As I mentioned earlier, when customers have gone through Terex Financial Services, we have not had a problem in securing financing. Backlog continues to be at historically high levels, and similar to our Cranes business, we remain optimistic in the medium-term outlook. Our material processing business has historically been tied to the construction cycle. We have seen a substantial slowdown in orders in this business in Q3 with some order cancellations. This is particularly true with many of our European customers and dealers who tend to be smaller entrepreneurial businesses. We have aggressively reduced our contract workforce and build rates and are taking steps to lower our cost structure, both short term and long term, by reductions in force along with structural changes. As noted in the press release, we have cut production rates by as much as 50% compared to the first half 2008 rates. Net inventory went up $11 million in Q3, and we expect to be back to more traditional inventory turn levels by Q1. This business traditionally has been very flexible in responding to market inflections, up and down, and we expect this time to be no different. The Roadbuilding & Utilities business has continued to gradually improve with some exceptions. Our concrete mixer truck business continues to be very challenged and the roadbuilding business in the U.S. continues to search for signs of increased activities from its customers. Utilities continues to do well, although there are signs of financing being much more challenging for some of our customers. Our Brazilian roadbuilding business is having a terrific year and other U.S.… non-U.S. markets are doing just fine. We will continue to invest in diversifying our customer base in developing markets, which represents 26% of our revenue in Q3, up from 22% in 2007. We're achieving this growth through enhanced local distribution and dealer development, dedicated in-country resources to leverage the overall Terex portfolio of products and signs of success in local manufacturing, such as our facility in Brazil. In addition to the cost reductions I covered already, we will continue to look for opportunities to reduce overhead in all areas. After the 1st of the year, the Roadbuilding business will be moved into the Construction segment and the Utilities business will become part of the AWP segment. In each case, there are synergies for sharing facilities in overhead structure, along with being able to redeploy the RBU, Roadbuilding & Utilities, segment team who has done a very nice job into other value-added activities. In line with appropriate accounting treatment, our financial statements will reflect this change starting with Q1 2009 financials. We're also reviewing other key initiatives and programs at every part and every level of our business to ensure we're eliminating waste and prioritizing resources in light of current market realities. Terex continues to have significant opportunities to improve, and we will be judicious in balancing short-term cost reductions versus continuing to invest in long-term improvements. As I mentioned earlier, there are some early signs of progress on reducing material input costs, steel primarily, with our supply management team. Fully, 50% of our supply management team is deployed full time on raw steel and fabricated part cost reduction. We're finding a great deal of interest from offshore steel mills and fabrication suppliers with numerous projects, sampling and qualifying production parts are underway. It is too early to declare victory on material inflation, but the signs are promising. At this point, I'll turn it back to Ron.

Thank you, Tom. And Laurie, let's open it up for questions. Question and Answer

Thank you very much. [Operator Instructions]. We'll take today's first question from Henry Kirn with UBS.

Good morning, Henry.

A quick question on your leverage. How comfortable are you with the leverage post Fantuzzi? And is there anything that you would consider if credit markets were to shut down for an extended period of time?

Well, Henry, it's Phil. I think the leverage of roughly one-time trailing EBITDA is certainly a conservative position on the balance sheet. And with the Fantuzzi acquisition, we feel comfortable with our approach on inventory reductions in the other parts of our business that assist in that funding as well as other sources that we have. And I think the key here… typically, we have a build in the first quarter on working capital in seasonality-wise. The businesses where that tends to occur, construction and AWP, I think that we have taken our production levels down to the expected demand level. So, I wouldn't expect that same kind of build in the first quarter. Certainly Cranes and Mining, we need to manage very effectively. So I think we've got enough flexibility to manage through the Fantuzzi situation and successfully within our control.

Okay. And on Aerial Work Platforms, if you normalize for some of the actions you took in the quarter and the raw materials, what would margins have been? And can you talk a little bit about how we should think about margins going forward if sales declined as much as you're expecting?

I want you to handle that, Tom?

I'd be happy to. I think the… as I mentioned, the cost inflation from steel looks like it's beginning to moderate. But as you know, it takes some time to work itself through the supply chain from the standpoint of going through inventory turns and showing up on the financial impact of the business. As it relates to the ongoing levels of reduction we're going through from an overhead standpoint, our intention is to make sure that we have a business that is modeled appropriately from the standpoint of overhead at all levels of the organization within AWP such that we have a solid, robust profitable business. I'm not going to get into specific guidance or margins for next year, but I do think that you'll see reasonably profitable business at this lower level that we're suggesting this business will be in 2009.

Well, that's why we're making the changes that we're making now in order to aggressively deal with where we are.

Great. Thanks a lot.

We'll take our next question from Robert Wertheimer with Morgan Stanley.

I wanted to ask first on developing markets continuing to grow. Is that sort of specific to mining and heavy cranes or is it more broad than that on the product portfolio?

Yeah, I'll turn that over to Steve. And I think Steve, you could probably give some examples of major projects around the world which will continue to be strong.

Yeah. Good morning, Robert. I think it's really all of the segments that are participating. As an example, let's take a look at Russia. Russia in 2007 so far has built 15,000 new roads. They've built over 400,000 new railroads. There is a lot of projects in Latin America that are coming up. The Middle East continues to develop oil refineries, natural gas, LNG projects. So I think it's really all of the products. Now, AWP tends to be a little bit later cycle in these markets as rental and safety requirements get into… get developed. So, I think that's really the only product that's probably a little bit later cycle in developing markets.

Yeah, although I would… Robert, this is Tom. I would add in that actually our AWP business in Latin America, in the Far East actually is up solid double digits, recognizing it's a smaller base than Europe or U.S. markets, but we are continuing to see in most of the developing markets, again, as Steve mentioned, throughout the whole portfolio, reasonably solid growth.

Well, you know, you've got to look at it and say is the Panama Canal project going to continue? Yes. Okay? Is that going to use a huge amount of equipment? Yes. Are the roads that need to go into India going to continue? Yes. Are the waterway and projects in China going to continue? Yes.

Energy projects throughout the world.

And energy projects. So, yeah, I mean we may see some backing up in particular areas given the current financial crisis that's going on, but there is a tremendous amount of inertia behind some of the projects that are already underway. I hope that helps, Robert. It's not a quantitative analysis. It's more qualitative, but it's the general sense we're getting from our customer base.

Okay. Let me… if I can ask a follow-up, sort of unrelated, both quantitative and qualitative. On receivables, have you seen any issues with aging of receivables and how you look at that? And then, Ron, you've obviously managed this company through a lot of tough times. And has that been a problem historically in the past or is that something that's… it's more of your focus on cost in the business, right, and volumes rather than issues like that?

Well, I'll answer the historical one, and Phil will give the specific one. Receivables can become a problem. And if you are not careful, your customer base wants free equipment. Basically, it wants to take the terms and have the free option. And we're just not going to let that happen. And so, I think bad debt will be an issue. You just don't know where. The order of magnitude of the bad debt issues, though, I think we can manage and we can control. And we are so much better off at this today than we ever have been and we have such a better financial organization than we've ever had that I think we'll be in much better shape here. But, Phil, you want to talk about it specifically?

Sure. In the days sales outstanding in Q3 '08 are at 45.7. To give you an example, a year ago in the third quarter, we were at 47.6; so some improvement. And this has not been certainly pretty vigilant on it, but receivables don't tend to be where we have a challenge on cash. As long as we stay on top of it and have access to the equipment, we have very few losses. Certainly, our process changes in inventory are more of the issue related to cash flow.

And so, you're not seeing anybody stretch out receivables as yet?

We're staying on top of them. Certainly… we always have customers that are in different situations, but we don't see that getting any worse than it ever has. And again, we've been on top of it, so --.

Perfect. Thanks, everybody.

Okay, Robert.

We'll take our next question from Jamie Cook with Credit Suisse.

Thanks. My first question is just a follow-up on the previous one. Phil, can you just speak to… I remember in the last cycle, specifically with JLG, they had a lot of issues in Western Europe on the receivables side. And if memory serves me, I think it got into the high 90s or 100 days. Now, I realize JLG isn't you, but you have Genie. So, what are you seeing on the European side within Aerial Work Platforms? How are those DSOs trending at this point relative to last year just so we can get a feel for it?

I know you've asked me the detail on it. I don't have it at my fingertips. But basically in Europe, we do use a lot of financing of the Aerial Work Platform products. So that tends to go through financial partners. There is a certain amount of open account activity. And traditionally, Europe terms or payables as well as receivables are a little longer than they are in the U.S. But we work through our top 10 hot list type situation on receivables. And I would say that in Europe, it's not been an issue thus far, and we don't have the concentration that we did with Access Industries back in the 2001, 2002 timeframe.

I would just like to remind the audience, it's a painful reminder for our Aerial Work Platform team, I'm sure, and maybe Tim can comment on the specifics if he has anything more. But I'd remind everybody that we really bought Genie in part because of an open account sale to a company called Access Industries of $70 million of equipment that was shipped on open account to a French company that never paid them. It made Genie vulnerable at the last downturn. That kind of business practice just is not going to happen today, and we're not going to allow it, and I don't believe our competitors are going to allow it. And I think it's a huge difference compared with the last downturn. And frankly, there were many more manufacturers of Aerial Work Platforms back there. And why that decision was taken? I don't know. But it was taken with the belief that Access products in Europe would continue to be strong for the future period. It wasn't, and that really caused Genie to be sold.

Jamie, one follow-up just after the AWP detail. We're down 24% in dollars year-over-year third quarter to third quarter on receivables.

Okay. My follow-up question, Ron. You put out a while ago the goal of 12 by 12 in '10. And obviously, given that was under different macro… you had different assumptions on the macro front which no one can control. But I guess as I look at it today and I look at where your stock price is, people have no confidence or no idea what you guys think internally that you could do with the trough, assuming global recession. Is there any way… given the cost initiatives you have underway in terms of reducing headcount, cutting production, the changes with TBS, is there any way you can help us with… I can make my own assumptions on what I think the market will do. But how I should look at decrementals, so I can have a better idea what you can do at a trough, which perhaps, could help your stock price?

Well, the real question is, do all our businesses hit a trough all at once. And I think our stock price is trading like that's the case. I mean you are a better… you have better expertise at that than I do. I think you got to come back and back up and say what will be the effects of the current liquidity injections that are taking place. And if you believe they have virtually no effects and we're going to continue to have an environment where economic activity grinds to a halt and that is the new normal, well, then obviously we're going to end up with reductions in all of our businesses, and we're going to have to manage aggressively just like we're managing aggressively with the AWP business and the Construction business. And I think there is six months of dislocation as that happens, as you adjust all of your cost structures. But you end up with a business that's downsized at attractive margins in the 8% to 10% range, depending upon the business and you keep going and you manage for cash in the short term, not for EPS. And that may be a hard thing to say to a financial community, but it is the right thing to do to manage a cyclical business. And you manage also for returns on capital. I personally believe that the liquidity injections that are taking place will make a difference. And I think answering that question really will help people determine whether or not the future is a depression or we have a different kind of recovery. I believe that liquidity injections will slow. We will see some slowing in some of our growth businesses, but nowhere near the kind of reductions that people must be handicapping. I didn't mention anything about 12 by 12 in 10 on the call, because it is, at this stage, impossible for me to get a view on. Can I put together a scenario where we can come close with the acquisition of Fantuzzi? Yeah, I think we can still come close. Will it be in '10 or '11? I don't know at this stage. And I think it's kind of irrelevant given where our stock is trading right now. So, I think my basic message to the financial audience is we're going to make the right decisions running Terex for cash and running it to take cost out and being aggressive, but we're not going to strip away the opportunity that still exists in our Crane business and the opportunity that still exists in our Mining business. But we're going to be vigilant.

Can you just… last, can you just sort of speak to… you gave a revenue forecast for 2009, not EPS. What are your pricing assumptions… price realization assumptions you are assuming in that forecast?

Well, I think it's a little early to kind of handicap price realization assumptions by business, but let me give you a general sense of what I think is happening here. We've announced price increases in a number of our businesses already. We believe generally that we will price to either equal in some of our slowing businesses material cost changes or exceed in some of our stronger businesses material cost changes. As you know, we hit a certain unusual place this current year where material cost increases were actually continuing to increase while our markets were slowing down. We are now seeing, as Tom mentioned, some changes in material costs. But we've already announced price increases that anticipated those material costs would be high. We expect to end up giving away probably some of those price increases, but not below the level of material increases that we have. So, I think at this stage, generally price realization equals material cost increases and not a lot of positive effects in the $10 billion to $10.3 billion range. But you also have to make sure you include the Fantuzzi anticipated revenue in that, which is in the range of $600 million or so. And that actually shows a reduction in total company revenue year-over-year.

Thanks. I'll get back in queue.

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

Thanks. Just with regard to the Mining segment and your outlook for the processing part of the MPM business down pretty significantly, I'm just trying to get a better sense of, given where we've seen commodity prices come down, what your visibility really is looking out into the Mining part of MPM. And then maybe you could just sort of give us an update of kind of commodity breakdown. Has that moved a whole lot from the 40%, coal; 40%, iron ore; 20%, copper, nickel and other?

Eric? Eric A. Nielsen - President of Terex Materials Processing & Mining: Yeah, Charlie, and this is Eric. Overall, the mining outlook for 2009 continues to be strong. We are constantly pulsing our customer base out there to see exactly what their capital plans look like. It's important to keep in mind that a lot of the activity for 2009 is already in place and underway. And the equipment needs that we're looking at supplying in 2009 are already booked in place and are required to make their operations go live. 2010, it's less clear right now. We're not seeing any negative sentiment towards 2010, but much like we've stated here, there is less certainty about 2010 on the viewpoint of our customer base. But bottomline is, is we continue to pulse it on a regular basis and feel that we're on top of it. And we'll make all adjustments accordingly.

And we are taking orders for 2010 right now. Eric A. Nielsen - President of Terex Materials Processing & Mining: Absolutely. And one of the clear positive signs is that the inquiry rate for new projects continues at levels that are consistent with the last 12, 24 months. So, we're seeing no slowdown in that. And that's the best indicator we have right now that interest remains active, that the projects that have been discussed will continue to be pursued. They might stretch out a little bit longer, but we're seeing no clear downturn at this point in time.

And the basic commodity mix really hasn't changed. Eric A. Nielsen - President of Terex Materials Processing & Mining: Not at all. It's across the board we're seeing that.

Thanks. And just on the headcount reduction charge, how does that break down by the segments? Is that mostly in AWP? Eric A. Nielsen - President of Terex Materials Processing & Mining: Well, we haven't detailed out what the charge is going to be. But obviously the preponderance of headcount changes will be in AWP and Construction and a little bit less so in Material Processing and some of our other businesses.

Just to be clear, we took a small charge in the third quarter, but there will be a larger charge that is not disclosed or specified yet in the fourth quarter, and it will be for AWP and Construction, but it will be reflective of the kind of cost reductions that are underway in those businesses. I think it will be important, but we don't have a number to give you at this point in time.

On the third quarter charge, though, is that all the AWP or are there other segments to that $2.2 million?

No, that's split between really three segments: Roadbuilding and Utilities, AWP, and Construction; pretty equal.

Thanks.

We'll take our next question from Ted Grace with Goldman Sachs.

Quick question. Does the new guidance assume any cancellations or deferrals of orders in cranes or mining? We understand that you've talked to your clients and have yet to see signs that '09 is going to be impacted on those conversations. But just would be helpful to understand what's in the numbers. And then if you could just kind of help couch it in history, help us understand what you saw in the last downturn for mining and cranes in terms of the pace at which you did see either cancellations or deferrals.

Rick, you want to take a part of that at least?

Yes, Ted. From a cranes standpoint, we have seen no order cancellations. In fact, we continue to book into 2010. Our backlog, as stated in the press release, has grown. And we are still at a point where customers are asking for more product than our production facilities are capable of delivering. So, from a cranes standpoint, we really haven't seen any order cancellations, both for the fourth quarter and for 2009. We are aggressively still trying to pursue some incremental capacity to build more product for 2009, and we are very optimistic at this point on 2009.

Yeah. Now, if I want to put this in historical context, the smaller part of our crane line will slow down, has already started to slow down. But the larger part of our crane line is really what is carrying the strength here. And it's carrying the strength, because fundamentally, there is a huge amount of infrastructure activity going on around the world in a rather diversified way. And we haven't seen cancellations. Historically, when markets turned down, what we had is nonresidential construction dropping in the U.S. and some small amount of crane cancellations we do sell to crane rental companies. But here is the difference. Cranes last a long time. And if you really have to go back… you really have to go back and look at 15 to 20-year period. And many of the cranes that are being put into the market today are modern versions of the big cranes that were made 20 years ago. And that's just the need that's just going to sit there and continue to be there with the projects that are underway. So, what we expect if there is a severe downturn is cancellations, some… smaller cranes, yes; bigger cranes, less so, developing markets continue to be strong. So net-net, the 50% increase in the backlog year-over-year, pretty good sign. We haven't even priced a good portion of it fully through our system yet. So, I'm pretty encouraged by the crane business. If it slows down, it will slow down, but it won't fall off a cliff in my opinion.

Okay. And just as a refresher, that business is about two-thirds rental houses in the U.S. and a third outside the U.S.?

No, it's virtually all rental.

And actually it's a fairly diversified customer base really on a global basis, Ted. About 60% would be U.S. and Europe. And of that 60% U.S. and Europe, a good portion, probably in the 30% range, would be resold out of the U.S. and Europe into developing markets. So, it's a very diversified customer base.

And it's not the rental companies of United Rentals, and these are specialty rental businesses.

Sure. I guess we just wonder as you see the turmoil continue in credit markets and banks pulling back lending in a lot of different ways, how that manifests itself through the rental channels, probably defined [ph]. But thank you very much.

Yeah, I think there is an important point though here. And one of our team members said it to me yesterday. And I said so what is it like trying to secure financing for our business? And they said well, it feels like it used to be, which means we got real equipment where there are real assets, where the lenders, through the TFS organization and others, are asking for real credit support, not necessarily from us, but from the customer. And so, there has got to be collateral and there has got to be a cash flow anticipated going forward. That's I think pretty reasonable. And why would our equipment end up being financed? It's because when you use our equipment, you generate cash. So now, when there is no credit, obviously it doesn't matter. But if you assume there will be credit, our business will see some ups and downs, but it will continue in our view.

Okay. And then… all right. That's very helpful. Thank you very much.

Our next question comes from Alex Blanton with Ingalls & Snyder. Alex Blanton - Ingalls & Snyder: Wanted to go back to the Genie numbers for a minute, just looking at the breakout of gross profit and sales. If you just look at those two numbers year-over-year, profit was down $83 million on a $50 million decline in sales, which is 154% [ph]. But you said that unrecovered material costs in price cost you $34 million. So if I add that back to gross profit, you're still off 97%. And that's the incremental… decremental margin, $49 million decline on a $50 million decline in sales. So what was the reason for that? I mean that's pretty bad. It doesn't seem to be the price. And then the second part of this is, I think you announced a few months ago that you were going to increase price in the AWP by I think it was 8.5%. In October, you were delaying it. So, clearly the delay cost you a lot of earnings in AWP in the quarter. But what's the status of that price increase that you announced? Is it going to go into effect or not?

Yeah, let me clarify this and then I will pass it on to Tim. First of all, we announced the 7.7% price increase -- Alex Blanton - Ingalls & Snyder: Okay. 7%.

Let me just finish, Alex. We announced a 7.7% price increase on orders taken after the 1st of October for delivery in January 2009. It was never expected, because our competitor decided that it would not increase prices until January 2009. Okay? Alex Blanton - Ingalls & Snyder: Okay.

We have some concerns that our competitor is having a little soft spots in how they are implementing their pricing. And I'm going to let Tim address that. But we never said an 8.5% increase. Alex Blanton - Ingalls & Snyder: I'm sorry. I misquoted you then, but it was an increase that was planned for October.

For orders taken after the 1st of October for delivery next year. Okay? So that… so we always knew that we would have a material cost variance. And it's just the amount of that material cost variance was hard for us to handicap. And there is 6.6 percentage point in the third quarter, which is the $34 million. Alex Blanton - Ingalls & Snyder: But if it was more than that?

Let Tim answer the question. Alex Blanton - Ingalls & Snyder: Okay.

Alex, this is Tim. To try and be a bit more specific, you are right. We did have a significant amount of cost increase from material that, as Tom articulated earlier, we also lowered production in the quarter, which, while we took some headcount action, also caused us some absorption and operating leverage issues. And the dollar strengthened as well in the quarter. And that's caused us a little bit of a decline as well. So, when you put those three things together, the material costs, the lower volume and the resulting leverage reduction as well as the strengthening of the dollar, those are the three things that really affected the gross profit in the quarter. With respect to the pricing, Ron is right. We did put the price increase in place for the fall for future orders. We are seeing some… customers are pushing back on price increase, because they think that steel is coming down, though when we sit and talk with them and explain to them that steel may be coming off of its peak highs, but it's still significantly higher than it was a year ago. And we have the discussion with our customers that they need to have a healthy and financially viable supplier. They understand the rationale. So, we're working through this. We will be working through the price negotiations with our major customers over the next six to eight weeks. We have not resolved any of those, but we're working through them. And I think we're going to find customers generally understanding the market conditions that are out there and working through this with us. Alex Blanton - Ingalls & Snyder: Just a follow-up on that steel price thing. Some companies have said that luckily their long-term contracts for steel ended in the summer, so now they can wait and renegotiate those at lower prices and get an immediate impact from steel price reductions. And others have said, we have long-term contracts and we are not going to see a very fast reduction in our costs, even if spot prices go down. So, in what situation is Terex on that as a company as a whole now address yourself?

Let me… let Tom address that. And I'd like to make one last point about AWP before Tom addresses that. What I'd like to say is that we are doing the right thing now, so that AWP can have a more balanced and capable and effective year in 2009. Had we not taken our production down, we'd have been sitting on a whole bunch of excess inventory, and the recovery for AWP would be more protracted, and the opportunity to have meaningfully good margins in 2009 would almost have evaporated on us. So, doing what we're doing now, recognizing that there is a substantial year-over-year margin degradation because of the production declines, we think is absolutely the right thing. So, Tom, do you want to comment on the steel for the company?

Right. Alex, as we talked in the last couple conference calls, we really in some respects have a bifurcated company as you might expect with short-cycle businesses, such as AWP and Construction, short-cycle order rates being much more impacted on steel pricing, because typically we've not had longer-range steel projections out there in order to maintain flexibility. Sometimes that works out well. Obviously, in the last 12 months, that has not worked out well. Contrarily, our Cranes and Mining businesses in particular tend to have much longer lead times, much higher value equipment, and frankly, at the time of the bid process, either hedge and/or lock in commitments for steel at the time to ensure and protect against pricing and cost changes. So, at the end of the day, as you are seeing today, we've got much more volatility and much more PPV [ph] impact in the Construction business and AWP business than we do elsewhere. And they will also be some of the first ones to show the improvement coming back out of this as steel, we believe, will begin to start dropping off.

Okay. Thank you. Alex Blanton - Ingalls & Snyder: Okay. Thank you very much.

We'll take our next question from Charlie Rentschler with Wall Street Access.

Just a clarification. What do you mean by the crane repair program? I don't think you explained that. It's mentioned in the press release and you've mentioned it this morning.

Yes, it's an initiative we're undertaking as a result of a quality issue on some of our cranes. We're going back and addressing them with our customer base.

It's a one-time thing, do you think?

Yes. We're taking that cost right now. It's the best estimate that we have. And we think it will take us some time, but it is… we don't expect at this point any additional charges.

Okay. But my real question is, there is undoubtedly lots of machinery companies around the world that are in trouble or heading for trouble. And what is your appetite and capability to do M&A at this point? Are you just going to put that on hold like you're putting your share repurchase program on hold?

I don't think you go out and do aggressive M&A when you don't have access to capital markets and when the clarity of access to capital markets isn't there. I do think you continue to work. You continue to look at prospects, and you examine the opportunities. And then you come back when capital markets are a little more open, and you examine what is the best use of my cash. You've got three obvious choices. One would be share repurchase. Another one would be acquisitions. And another one will be investing in your own business and CapEx. And so… in no particular order. And you're going to look at the valuations that present themselves on those three areas and make a determination.

Thank you.

We'll take our next question from Robert McCarthy with Robert W. Baird.

Good morning, everybody.

Good morning, Robert.

Ron, before I ask my question, I kind of got the impression during your… the discussion of the AWP business with Alex that you wanted to say something about competitors' pricing behavior in the AWP market and how it was affecting your business.

Well, I think what I said was our competitors' pricing implementation isn't 100% clear to us. We announced a 7.7% price increase. They announced a 7.5% price increase. Our customers are giving us some mixed signals on the steadfastness in the application of that pricing. And we obviously aren't going to lose in the marketplace on pricing, although we will be diligent in trying to maximize what we get in the marketplace, but we got a big market share, and we plan to protect it.

Of course. Thank you, Ron. I wanted to… in terms of just trying to help with trying to assess where the business might be going short term, for those of us on the outside, I've got two or three little number-oriented things I'd like to ask about. One, can you characterize at all what kind of annualized savings level you might be targeting with the extensive steps that you've announced in the release for the quarter? I mean are we talking like $100 million class is or is it more aggressive that that?

Phil?

Rob, I think we're not necessarily going to indicate just one piece of the plan for next year. Savings are significant in relation to the one-time costs that you'll see. However, you have to consider the absorption effect, the volume effect. So, it's not a number that in itself is that meaningful.

Yes, we're talking significant multiples, let's say, of the cost savings.

And again, to reinforce Phil's comment, we are… the actions we're taking we believe have a reasonably short-term payback. They are the right things to be doing structurally, and we are, in some respects, taking reductions in force immediately. And obviously, it takes a little bit more time to be thoughtful, precise, accurate and under control as it relates to more structural changes. So --

Yeah, when we talk structural changes, the kind of things we're talking about is consolidation of facilities, elimination of excess distribution points, moving product lines, some of which we will do and some of which we will look at and look at the paybacks and decide not to do. But it is important to put all things on the table and to look at the company and say, how can we use this current time to prepare ourselves for a better time.

Okay. And then to follow that up, in terms of short-term cash flow and requirements, can you… I believe the… you've effectively fixed your cost on the Fantuzzi deal. I wondered if you could tell us what it is in dollars. And then secondly, could you give us any help on what kind of either cash flow from operations or cash from working capital alone that you expect or hope to generate in the fourth quarter?

Robert, on the first question with Fantuzzi, this is a euro-denominated price. We have euros in the company.

Okay.

So, it will be at whatever the rate is at the time that we do that.

215 million euro.

Okay, right.

Right. And in terms of the… I'll give you kind of a target on the inventory side. That's probably the one that's most specific that we're looking at. We're looking for a couple of hundred million dollars out of inventory at least in the fourth quarter.

Okay.

To give you a sizing there.

And logically, the pressure on the business, one would expect that receivables would be a source of cash as well.

Well, we've got Cranes and Mining, which, again, their volume continues to grow.

Okay.

In both of those businesses, we do get significant advance payments.

Right.

And again, it's going to be dependent a little bit on the volume of activity that we have there.

Yeah, and timing, et cetera.

Right. Certainly, in our other businesses, they are shorter cycle, and I would expect that we'd be in the same range of about 45 days overall for the turn of that cash.

Okay. That's very helpful. Thank you, Phil.

Okay.

Our next question comes from Andrew Obin with Merrill Lynch.

Most of my questions have been answered. But just in terms of Fantuzzi, philosophically speaking, is there a set of circumstances that under which you would consider walking away from that deal? And can you do it from a legal perspective?

I don't think, Andrew, it would be appropriate to even speculate about that at this point in time. We have a contract. It's a good business. We think the business will be nicely additive to the company. So, I don't want to speculate.

What's the… is there a breakup fee on the transaction?

I have no comment on that really.

Okay. Thank you very much.

We'll take our next question from Seth Weber with Banc of America.

Hi, good morning.

Good morning.

Just going back to the Mining business, is it possible to help us understand what percentage of the backlog might come from what we might think of as second-tier operators?

We really don't know, Seth. I mean it is probably a very small number, but… it's very small. We are in with all the big mining companies. In fact, I think our relationships are significantly improving with the big mining companies as we go forward. We introduced a heck of a good new truck, the 6300, at the MINExpo show. It got a lot of attention. We know that Caterpillar is introducing a new electric drive truck also. There is not enough capacity for mining trucks at this very point in time, but the smaller mining operations, just a small piece of our total operation.

Okay. And maybe a different way, would you ask for a larger deposit from some of these more marginal operators typically?

I don't think so.

Okay. Have you seen any… have you had any… it sounds like no cancellations, but have any requests been… have you had any requests to push orders out or to extend delivery times in the Mining business? Eric A. Nielsen - President of Terex Materials Processing & Mining: I'll take that one, Seth. This is Eric. The short answer is no. There has been a handful of independent operators that are having trouble getting credit financing, as Tom noted in his opening remarks. But it's very much those independent operators at the fringe or at the margin of our business activity. So, we've seen absolutely no pattern other than those handful of incidents.

And I've been in this business now for, unfortunately or fortunately, 16, 17 years, and we have always had those kind of credit issues with certain customers in the mining area. Eric A. Nielsen - President of Terex Materials Processing & Mining: Yeah, I wouldn't say to anything out of the norm, to Ron's point.

Okay. And then just a separate question on this shadow backlog that you have in the Crane business. Do you take deposits for those? Have you taken deposits for those orders or the shadow orders?

No, Seth, we have not.

Okay. Thanks very much.

I want to be specific. That's on just the rough terrain and truck cranes that are in that type of backlog.

The 463 or 460, for something like that?

Yes.

Right. So… okay. Thank you.

Our next question comes from Tom Shandell with Fridson Advisors.

Hi, good morning. I apologize if this is out there in the public domain, but have you disclosed the kind of EBITDA that Fantuzzi generates?

No, we have not. What we have said is the business is approximately $600 million of revenue. We have said that the business has two strong operations, one in Germany and one in China. The Italian operation is having financial difficulties and is likely to be a troubled business when we acquire it. We have a good game plan to address those issues. It will take us a little bit of time, because the Italian piece has essentially run out of cash, and that is why the business is available. And we believe that we can make a nice profit on the business in the 12 to 24-month kind of timeframe. And a nice profit to us means double digits. So, it will take us a little while, but that's what we'll be working on.

Okay. Can you say right now it's EBITDA-positive as a consolidated business?

For '09, it would not be EBITDA positive.

Eric A. Nielsen - President of Terex Materials Processing & Mining: '09 or '08?

Or '08. Excuse me.

For '08. And the reason it is not positive is virtually all from the Italian operation which has come to a grinding halt.

Okay. And if it continues to present problems down the road, is it possible to shut that bleeding?

We have a very aggressive integration plan already formulated for the Fantuzzi business. We have a team identified of Terex team members that will go in and help bridge some of the both cash and process challenges that the business has. Certainly, we believe in '09 we can bring the Italian businesses at least back to a neutral position, if not better. Eric A. Nielsen - President of Terex Materials Processing & Mining: Part of the issue there is also the cash availability with the Italian subsidiary. And as a result, they're in a bit of a spiral at the moment of not having cash to be paying suppliers. And as a result, that's having a significant impact on their business that we believe post-closing will mitigate reasonably quickly.

We will fix this. I mean this is a classic… and we have said this before. This is a classic Terex acquisition in that it has got a couple of really strong legs. And by its really strong… they're already making that kind of profit in the German and Chinese operation. It has got a weak leg that has caused it to be in financial distress. And that financial distress, we have a fix for and we will make that fix happen.

Okay. So separate question. I think you addressed this with the gentleman from Baird in terms of working capital. But is it fair to say that fourth quarter, the cash generated from your working capital will be of the same magnitude if not better than '07?

I'm trying to remember what '07 was in the quarter.

'07 was very strong.

Yes, I think it's… the difference I think in '07, we've got Cranes and Mining probably a higher percentage of mix in the fourth quarter. That may cause a little bit of dampening on the reduction. But I think we're in a couple hundred from inventory. And I think AP and AR are probably relatively neutral. And then you've got the income effect. So, we're talking in the, let's say, 200 to 250 to 300 kind of range from operations activity.

Okay. Thank you. Yeah, thanks.

Okay.

We'll take our next question from Steve Barger with KeyBanc Capital Markets.

Can you talk about some of the aftermarket parts and service volumes in your segments, where that applies, to give us some sense for utilization rates of the installed base, kind of as a comparison to what you are seeing in OE order trends?

Yeah, our aftermarket business really runs the gamut, and we don't manage our aftermarket business across the company as one business. I do think in general, our aftermarket business is pretty good. What do you say, Phil?

It's about 14% of parts sales in the third quarter overall.

Okay. 14% of our total business.

Total revenue.

I think we are… we haven't seen a slow… in fact, our installed base in every one of our businesses with only a couple of exceptions is probably substantially greater. As we go through the next 6 to 12 months, it's a number we will watch carefully, because it will tell us about the utilization of our equipment. And if utilization drops, then obviously it will not be a good thing. But right now, I think it's pretty good.

And one other minor point is that as you would expect, the aftermarket parts usage is much higher "in the dirt", specifically in Mining, Material Processing and Construction than it would be in the Cranes or AWP businesses as a percent of revenue.

Sure. But to date, you haven't seen any fundamental change in the rate of ordering from… for that 14% of your business?

In general, that's true. There has been some minor blips, but frankly nothing significant on the radar screen.

Okay. Obviously, a lot of investors are focusing more on balance sheets right now. And sorry if you covered this already. But have you seen any increase in bad debt incidents in receivables? And do you have to think about any potential risk to goodwill write-downs based on the way you're thinking about 2009 right now?

The first question in terms of bad debt, it's pretty flat relative to our performance. Certainly, we always have occasional issues that we have to take charges for. And the second question, I'm sorry, was --?

Goodwill.

Goodwill. Yes, we cautioned on Roadbuilding & Utilities… really Roadbuilding portion in the second quarter and the third quarter. We do our annual assessment in the fourth quarter of each year when we have the planning for the following year. So, in Roadbuilding, we had some cautionary language, given the performance. In the third quarter, we added Construction to that list as the level of losses increased in the third quarter from a watch standpoint. Again, we're going to monitor that and look at our future projections to determine if we do indeed have indications of a goodwill impairment. But those are the two segments.

Okay. And one last question. A lot of talk about credit concerns. You said smaller customers are having some financing struggles. Is it your sense that credit markets for the smaller customers have unlocked a little bit, given the prospects for the funding injections that the central banks have talked about? Or are things as tight as they were a month ago?

I would say it's not yet eased, and it's similar to what it was a month ago for the small players. I think the point that I made in my earlier comments was, when we get involved, we are usually able to help these smaller players find sources. Now, certainly a bad credit isn't going to get approved today just like it wouldn't get approved a year ago, if the credit itself is not there. So, as Ron indicated, our equipment is a real asset, and we usually can find sources if we are engaged in it.

All right, thanks.

Our next question comes from Mark Coneudek [ph], a Private Investor.

[inaudible]

I'm sorry, Mark. We're not hearing you very clearly. Could you please pick up your handset?

[inaudible]

All right. Hearing no response. We will move next to a follow-up question by Andy Casey with Wachovia.

Good morning. Just a quick question. Most of them obviously have been answered by this point. Could you remind me what your convention is for dealing with foreign currency when you are giving guidance? Is that the end of the prior quarter?

Yeah, we typically do our projections in the last month of a quarter for the future period. So, it would tend to be using that type of rate in terms of the projections that we have. And certainly when we have, Andy, contracts of a large nature, we will hedge individual contracts. We have a hedging program that rolls out over the next four quarters. And basically, the fourth quarter out, we might hedge 15% of the flow activity up to the next quarter out about 75% of the flow activity. So, that gives you an idea in terms of… it's not a dramatic impact. It does tend to roll through on the flow business.

And historically, on every quarter we have reported, we tend to disclose what's been the currency effect on the revenue line.

Right.

We always try to report ex-currency and ex-acquisitions to give people real year-over-year comparisons.

Okay. Thank you very much.

Thank you. I think our questions have been exhausted at this stage. And what I'd like to say is I apologize to Mark because we couldn't hear you. But if you want to call Investor Relations, I'm sure they will follow up with you. And I look forward to answering any and all questions from investors as they come up. We will be available at least through Laura over the next week. The management team is actually traveling to China. So, it may be difficult for us to get back to you instantly. But obviously, several other members of the management team will be available to take any and all of your questions. And thank you for your support. Laurie, I think this ends the call.

Thank you very much, ladies and gentlemen, for joining today's call conference call. This concludes your conference. You may now disconnect. .