Ladies and gentlemen. Welcome to the Titan International Inc First Quarter 2016 Earnings Conference Call. During this session, all lines will be muted until the question-and-answer portion of the call. [Operator Instructions] Any statements made in the course of the conference call that states the company’s or management's intentions, hopes, beliefs, expectations or predictions for the future are considered forward-looking statements. Please note that the Safe Harbor statements contained in the company's latest Form 10-K and Form 10-Q filed with the Securities and Exchange Commission extend to this conference call and any forward-looking statements involve risks and uncertainties as detailed therein. At this time, I would like to introduce Titan Chairman and CEO, Maurice Taylor.

Good morning, everyone. I appreciate the fact that you are on this call. You probably got the release. And like has been going on for all over the years, there is a good things and there things that aren’t so good. But the first quarter I think the thing that everybody -- that were taking away from it was and Paul will get to it later. But it came out really, really weak. And I think that’s from the standpoint of where the inventories were. And I think everybody is flushing both January and February. The situation on our side is that you make adjustments March came too and March kind of like started the uptake and the situation now is where we are going to be -- I just came in from down south basically Northern Florida, Georgia and Alabama. And in the next three weeks I'll start with the situation of the harvest down there and any of the grading crops that were planted. But overall I think we’re modeled around down to the bottom. And whether it was March, beginning of March was a low point or it's going to do a little bouncy up and bouncy down. I was with a lot of big dealers down there in the south, the equipment dealers. And the farmers are spending money on things that they actually need. They are certainly going to I think this is going to be a year where they decide are they moving on to a bigger, newer piece of equipment or they looking at the used equipment. Used equipment has started to move. If it is good the equipment that has been beat up like over the years, that's still probably have a lot of dealers who going have to take ride off…

Hey, great. Thanks, Maury. Good morning, everybody. First quarter was a difficult start to the year. You saw in our release, we continue to see challenges in many of our markets. This unfortunately did lead to a 20% drop in first quarter sales compared to last year. And if you go even a step further, if you compare our Q1, 2016 back to 2014, you will see our sales are down near about 40% or $250 million. That's a heavy loss to absorb in revenue operationally. Yet we've been able to really manage our business successfully. When you look at that $250 million decline in revenue and we've only seen a little over $8 million decrease in our operating income. Also with our sales down over 40% in the last two year period, our cash is sitting right around the same level it was just at the start of a couple years ago. So in overall the revenues is not where we wanted to be but the management of the business and the decremental margins both from gross margin and operating income perspective have been quite impressive when you look at it that way. Look it's tough out there and there is definitely no easy path in this difficult market to change things around easily. I point out these comparisons for two years ago not to just search for a silver lining but to show how the Titan team has done a good job battling these marketing conditions. And again it takes a team of people working hard and together to see a slip of only $8 million in operating profit on a $250 million decline in revenue. To do this we've implemented successful programs like business improvement framework and the one Titan initiative we talked about that on previous…

Thanks, Paul. Good morning, everyone. Well Q1 was a challenging quarter for us as stated by both Maury and Paul. The story continues to be the erosion of sales relatively to our end markets. So let's jump into the sales story. So sales for the quarter were $322 million, this was down $80 million, or 20% from prior year. A quarter-over-quarter decrease was driven across all segments with North America Ag and currency impact comprising $58 million, or73% of the variance. As has been the trend the majority portion of the North America Ag decline is attributable to high horsepower product. Our reference currency, this drove reduction sales of $26 million on the quarter versus prior year. Half of this impact was driven by the Brazilian Real with smaller impact scattered across our other international businesses. If you adjust for the currency impact, sales declined 13.4% versus the reported 20%. So let's talk a little bit about Ag. As stated earlier, Ag was a key driver in our sales decline. Ag in total was down $30 million, or 15.5% when you exclude currency impact. At a gross level, North America Ag represents this entire decline. Nearly three quarters of the North America Ag decline is driven by the OEs as they continue to scale back production commeasure with the lower demand. And as a result, they are putting more pressure on suppliers like us to lower price. On the aftermarket side, they are only buying a need and that's a lowest price. So product availability is critical to realizing these sales and we are very focused on that. From a product perspective while we are experiencing just slight erosion in small Ag, the driving force continuous to be high horsepower equipment. While there is still long ways to go in…

[Operator Instructions] The first question is from Larry DeMaria at William Blair.

Good morning, guys. Few questions. First as far as improved gross margin, can you just delineate maybe how important the material cost were versus the productivity improvements and costs cutting you have done? Just curious how important the material costs being lower year-over-year were?

Well, material cost always helps okay. But generally it helps when you are going up. When material cost is going down it hurts you because really what you are pushing off into the market is higher price. So and the margin side once it stops going down it should actually then turnaround, if just stays flat you will probably get little pickup again in margin. Then what happens is as it starts to go up it reverses and you get to pick it up every month as it keeps going up. So in reality it is what you can call that productive improvement and that's pretty much what you got there.

Okay. So the lower material cost but it was a net positive obviously in the quarter. You were able to really capture that as opposed to losing on pricing.

Well, yes. There is no question because you are getting the material cost today is the differential before what you got stuck in working inventory and everything else. So the drop in the material, it is not as great in this last quarter as it was three quarters ago, okay. So but have we hit the bottom of it, it's hard to say because what happens is you have the bouncing around right now of oil prices. I am referring to tires right now. And I am also referring to the price of steel in our wheel business. So it's a moving -- in the wheel business you really get a pickup and efficiencies if the price starts to going up. So that -- I would always rather see the price of material go up.

Hey, Larry. This is John. Just maybe another comment in that regard. We did not give all the price back and I made mentioned about the long term agreement with the OEs and so we do have to pass back, the other portion of our business is aftermarket. And I think we've done a much more effective job in terms of managing price there. We got a number of initiatives that are focused on price management. So I think that's been the way we've not been passing back all the reductions in material costs that we are able to realize.

Okay. Thanks. And then maybe switching gears a little bit here. And obviously market share has been under a bit of pressure last couple of years. I mean now some competitors such as GKN are now offering wheel tire combination. I think that has historically been one of your main playgrounds. Is that something that you're looking at as a competitive threat? Or how are you thinking about that?

Yes, Larry, I just actually met with one of the companies that would be doing; potentially doing the mounting for GKN and I think what GKN is doing is just blowing a bunch of smoke in the air, trying to create a nice press release to get attention. I have not seen any validity to that. We have done some channel checks. Like I said I met in person with the mounter that would’ve definitely been contacted, has been contacted by GKN, there is no -- I don't want get into too much detail but I am just -- let's just say it, it seems like a lot of smoke in mirror right now.

To add a little thing. This is not the first time, Larry. There is nothing new except that they must have hired somebody who thought this is a great thing to publish. It's been out there for a long time. GKN has teamed prior with our competitor in France, Firestore, they have done a bag of anybody's tire any place in the world. But when we hit down to it in the range, there is no one, and no more that can produce 50,000 different SKUs in the wheel business. And there is no one else in the world that has the range of the various SKUs in tires. So it's --do you have them picking at you and certain high runners, they all figure out, and each going to drop the chip, they can get their foot in the door. Yes, you always going to have that. We had that since we've been in this business. But we also know from the OE side, our customers that when they decide to go with just the whole mounted program. It's not just the four sizes that have some volume. It's the other 200 that you don't have that volume. And so it's real simple. If you are going to take around and lose the 4 to1 then you might as well take the others, someone has got to do it. So everything else so just rock it up. I mean that's how it runs.

Okay. So you are still in a good spot there. Last question therefore --

Larry, the guy I was talking to, it's exactly the same thing that we talked about. I mean he does an extensive amount of mounting and what he does that he does it across the board with the full product portfolio. GKN is getting in this and doing very limited selective products with a limited line of manufactures. It really goes nowhere. And it doesn't have the potential to go anywhere.

Got it. Last question and I will jump off, guys. The current offer for ITM, if no other bidders emerge, is this the real offer that you will consider and probably negotiate and close? What would you do with the cash? And then I will jump off, thanks.

While the cash, the cash will come in and then -- well the first thing is the end of this year I think it is, right of course at the end, we are going to pay -- we'll pay off our $60 million in convert all right. That still leaves us an awful lot of cash. And we will probably -- I am just one vote, in a group whether you buyback your bonds, a big chunk of your bonds or depending on how you have all these various things in bond covenants, my own personal belief is that we have excess cash, you just payout in dividend. So there is no big acquisition that we are looking at as of today. I mean we believe we got ourselves pretty well situated. We believe our internal cash and what we are doing with that, we think it will be very positive over the next couple of years. I hope that answers your question.

The next question is from Brent Rystrom at Feltl.

Hi. Good morning. Maury, when I went out with that sales call with you last year and we met with that farmer, he put the tires on, the LSW tires, he had been extremely happy with the tires. And really thought the performances has helped him a lot both tractors and combined. But in his case he told me that he kept the tractor tires and returned the combined not because of performance just where his capital is right now. When we cycle out of this tough farmer environment -- how do you think the uptick in the aftermarket will be for LSW? Will we see that uptick accelerate considerably quickly?

I think you are going to see the uptick -- we have I think it was in the press release. We probably -- we have a great number of LSW tires and wheels. In fact, at this point today we -- I am headed off after this call back up to one of our tire factories because we are going to have to start ramping up production and some of the big and the reason being is the fruits of our labor for the last three years just like you talked about with that farmer. The situation is and it is not a sales tool or anything but we make every piece of equipment run better. I am not going to say the OE otherwise idea because they are on the phone and they are going to get mad. But to show you the difference. A farmer, a fellow in Louisiana and he runs scrapers where they pull pans and he wanted to put our LSW tires on this big four-wheel-drive scrapper. While the OE, well we haven't approved it there. Well if so asinine because it is not only will make their scrapper perform better, you can turnaround and put a regular size tire which is a same D, same old D and there people thought well we don't understand this. If this and that and so it takes them three years to get it through unless somebody from the top banks them. But what happen is we put less -- the tractor won't bounce so you put less strain into the tractor so but they said, no, you can't, we won't let you warrant that. Well, it has been at the OE now, once we found out about situation the guys turnaround, he is buying our other LSW…

Couple of other quick questions. Can you guys give us a sense of kind of the detail of the process and timing for the ITM activity? And then are there any debt covenants tied to the asset that ITM holds?

I don't believe so. What happens is most of the debt is issued to us. What happens on that is, they met this week over there, the team from the banker and the management team over there, and then I expect that within probably 30 days, they will have their book and the data room set up, and they've already -- they have a list that has -- I never even thought of the lot of the people on that list. A few of them I think will cross but I would expect them by September 1st to be able to have it narrowed down to two or three real, real serious people. And I think that coming October they should be able to move on it. And I think that it will be done this year.

All right. That was going to be my question. And then a final question for your guys. Can you give us a sense of just what are the primary activities and timing for ramping up European sales?

The European sales?

Yes.

Europe, there is a -- our business in Europe is governed on two things. Number one, the biggest chunk outside of ITM is wheels. We are turning around, and Russia equipment is -- some containers I believe have left, the rest of them should leave by between now and June 1. So we will turn around over there. I would say that Europe, when they get back in -- when they go off for the whole month of August, and they finally get back in September, I would expect that their sales will probably pretty much stay where we have forecast them, but I think they will start to produce a little bit better profit because there is going to be a little bit more as Paul talked about, is One Titan. So even when you go to Europe, even though – they have been there for a long time, it's what happens in England, it stays in England; what happens in France stays in France, what happens in Italy stays in Italy, and then the Turkish facility.

What we've been doing already, like Maurice said, we got some really good equipment coming over here from the States to Russia that will increase not just their capacity and their efficiencies, but their quality as well, and so we are looking over there to bifurcate the brand, and we’ve got the leading aftermarket brand in Russia, so . So you don't want to screw that up. So, you are really going to need to bifurcate it and go more upstream with anything that we produce under the Goodyear label, and so that equipment is -- some of that’s already on the water, the rest is shortly coming after that. Our strategy thus far has been in Europe we’ve started seeding the market. We do have a sales group already set up over there, works out of our wheel plant there in Birmingham, and we've done some seeding into the market with US products to let them know that we are here and arrive and doing that with sizes that match the European market. We've recently gone over to our Russian plant and said, all right give us the products that -- from the OTR some of the light industrial and then kind of the smaller -- like with industrial and Ag overlap where we can start getting some of that product in there just -- to get our distribution channels warmed up and then get things rolling or prepared to roll when we get Russia up and running, and then looking at some other opportunities to get some products manufactured that would be able to hit the good markets over there on the smaller horsepower tractors that will run into smaller bias-sized tires that's a very attractive market over there. So we are moving some molds around, also moving -- shipping some molds down to Brazil to take advantage of the weak real. So, the only issue we are running into right now is just the timing of ramping it up, but I think the plans there are being laid out and we will keep moving forward on it. So, to answer your question specifically with dates and dollars and timeframes, I am not exactly at that stage yet but there are a lot of pieces that are moving forward.

Quick question then Paul, third quarter revenue, with that kind of when we should expect first revenue or will there be some maybe in June?

Yes. I would agree with later in the back half for the year.

All right. And finally, John best wishes. It has been a pleasure working with you as CFO.

Thank you very much.

The next question is from Joe Gomes of William Smith and Co.

Good morning, guys. I just wondered if you might be able to just give us a little more color, a little more detail and maybe some data points if possible on your aftermarket efforts. You know, last year you had mentioned that it was really an area of focus for you guys in trying to capture more of the aftermarket. And I’m just wondering when you talked a little bit about it, if you just could provide a little more deeper dive into what kind of efforts and results we are seeing in the aftermarket?

Well, the aftermarket and the climate that you have today is a situation where you are dealing with everything that is out there for tires that are made for years, years, and years okay, which we make in almost every place in the world, we can make those sets. So what happens on that is price is probably -- you can get on the higher end, but it's still related to price. And it's how far they drop the price and how far you are going to go down with it, because consistently tire dealers work on much lower margins than an equipment dealer will, okay. We have very few dealers that we sell the LSW package through by our choice. And the reason being is that we believe that the situation is that because it’s tire and wheel, it's going to command a greater markup because it makes everything perform better as you heard the fellow from before, so we are working with the equipment dealers, and the situation there is that that is growing much faster in the aftermarket today than we really anticipated because what happens is the fellow that is in south right now, and he has had let just say 520 46’s on his combine, and they are getting the combines ready , because in probably 30 to 45 days, they are going to be out there in a field. But what happens is we walk up now with a great big 1250, but he bought this combine a couple of years ago, and his problem is that if its wet [ph], he can't jump in there as quick as he can, time is money. So we are going to -- we've set up a program with equipment dealers, and here they are. They are…

Okay, thanks for that. On the fourth-quarter call, Maury, you mentioned that you thought revenues would grow in 2016. Four months into 2016, do you still think that is achievable?

I would say to you that the first two months, we are way off our target, okay. If we can continue what we started from March on, my answer is yes, and also I would throw the caveat out there that the starting of the TTRC up in oil sense, the thermal reactor, we were -- we have contracts, we have the business there, and we are off probably 30 to 45 days because of permitting. And right now, we are going to lose probably a week or so with the fire. You can see the flames are right in Fort McMurray. We are north of -- up in the Oil Sands that’s about 30-35 miles north, but that's what's going on. But do we have shot at it? Yes, and I think the shot is in the aftermarket.

Okay. Great. And two other quick ones. For John, in the fourth quarter, you were talking about SG&A, it was around the $36 million level, and you said that that was not sustainable. And in this quarter, we are again right around that $35 million, $36 million level, just trying to get a little more color on to that as -- are your plans that -- there are expectations that SG&A will increase off of these levels here? And then for CapEx, are we still looking at the $30 million to $35 million range? Thanks.

Sure. So for CapEx, I think we are looking from $28 million to $33 million, $34 million range. We continue to review those projects, those discrete projects one at a time. So that's the range that we are looking at right now. In terms of SG&A, I think we've been more successful in funding needed investments by reducing spending in other areas that are not either a priority to our business or adding less value, and so we are going to continue to try to maintain, if not lower, our operating expense -- expenditures while still funding our high priority initiatives.

The next question is from David Tamberrino of Goldman Sachs.

Good morning. I have a couple follow-up questions, some things we've already covered, but I just want to understand the thinking here. Raw materials, we've seen natural rubber which I think is a greater proportion of your tire than synthetic rubbers bounce up sequentially here. Wondering when is that going to begin to hit your P&L in terms of purchasing. And then just given competition within the market that you guys have been talking about, are you going to be able to pass on the price increase, again, in what are weak markets?

Well, the first thing is very few people tell you this, but the true fact is which I said earlier. I love price, it is through material, it is a commodity. So if we have to pay it, my friendly Japanese have to pay it, my friendly Chinese have to pay it, and of course the friends over in India have to pay it. So, it is in a case when you are dealing with natural rubber that only the US boys get it, okay, so they are going to get it too. And so then what will happen is it will get passed out. It is also depends on a lot of the contracts we have which are basically OEs and tires. Aftermarket isn't much bigger for us, it is two thirds of what OE comes to tires, so what would we look for is passing it there, and now to answer your question that comes also from your competition from across a lot of ways. Now and that's an unknown variable, but what I personally believe is that they will try and of course we are going to put it out there, so we have at this stage, it will give us a bounce, and the reason it gives us the bounce, because as mentioned earlier, one of the things that we have that is pretty good is all of our mounted assemblies that can go in and out, it will give us a bigger bounce there. So that problem child as you go, does it keep going or does it stop or does it do a flip and come back down, and I personally believe that the reason you are going to see -- you see it go up is real simple. It is automotive driven. I mean folks, the pneumatic tire business in the world runs about $160 billion, $150 billion, and what your total worldwide every farm tire, every construction tire, and every mining tire, and you put them all together, it's probably now – it’s high was $6 billion. It is probably down to around $4 billion today. So that's -- we are so small into that whole big target, which uses and consumes the rubber, so once automotive moves down, then, hell man, price of natural rubber is going to drop like a rocket, and that's when I don't want see it, okay.

No. I appreciate the thoughts. It sounds as if it really remains on -- your competitors remaining rational if the move continues to go up. As we think about -- go on.

The other thing that you should understand is there is a duty right now on every Chinese tire, basically the main thing coming in, okay, and there are some people that are doing some things to cheapen. Yes. And are they going to get burned, , yes. And then we have the situation of the -- our friends from India, and I believe when their commerce department gets down with theirs and then we go before the international, they are going to get a lot, double digit duties, tariffs, and whatever else that you can throw at them, and then you have -- everybody can think that American public have just gone crazy because, you know Trump’s going -- I told everybody on this call he was going to win it, because I run around this country all the time, and now you’ve got the masses, and you can have the Fortune 500 and executives at the top there, and they are going to be sitting on the outside, and it's going to make a big difference. So I think it's going to be -- we are a basic US manufacturer, and I think the future is going to be good for us. And I also think coal is not going to be run out of business. They got the hell beat out of him, but I think it's going to come back, but that's my belief.

Okay. Thank you, Maury. Back on the competitive landscape, when we just think about some of the recent announced acquisitions that we've seen in the space with Trelleborg and Mitas, Yokohama buying ATG; do you expect that to impact competition globally for both Ag and mining tires? And in that vein, do you think consolidation in the space will be positive for Titan or a potential negative with smaller players doubling their size and getting larger here?

No. I actually think the sanity on some of those companies, they – well here, let's take the firms at Yokohama, okay. The mentality of that acquisition is no different than when they ran in and bought Pebble Beach, okay. You talked about over paying, it is nuts. And then where they do ship all their stuff. They ship basically US and into Europe. And if you think with the election and what's going on, you just watch the TV and it's happening now in Europe. You can't have people who on the elite side think all of this, and everybody on this call turns around, and you don't really -- they are working men and women, they are not going to work at a certain price, and by god they are tired of politicians, so hell's wrath is coming, okay. So for us, I think it's great. But I can't control what someone goes and pays, and then you look at the Trelleborg, I know both players very well. I think Tom Nimitz and his parter, they are going to just sit back there and smile. Poor Peter is going to have to really bust his fanny now because you pay that top dollar, and what happened, you’ve caught the down draft. So, you tell me you are more in the financing. How are you going to get it paid back? A business that did $595 million, that sales, and the sales now are headed south. And so, someone pays and what $1.1 billion, if the numbers are right, it's -- that puts us at -- if you want to talk about capacity and what you can earn. My God, the stock should be sitting there at $35 to $40, and then [indiscernible] probably double that. I mean it is really crazy. So my comments on it, lot of people in the coal business now spend in mining business, they’ve spent fortunes, and now they are heading for the bankruptcy. I don't understand it. But of course -- if you are going to buy money at negative interest, then I guess you can't go bankruptcy, and you have to pay it back. So, I leave them with their own thoughts.

Thanks Maury. I appreciate your thoughts. Good good work on the working capital, Paul, John, and team.

The next question is from Alex Blanton from Clear Harbor Asset Management

Hi. This is a quick one because I know we are running over time. But on the reclamation tire -- tire reclamation, you said in the -- I think in the press release that you can do 24 tires a day at that facility in Fort McMurray. Correct? [Multiple Speakers]

24 tires, each tire weighs on average of around 10,000 pounds.

How many days a year are we talking? Are you going to operate seven days a week?

They operate up there seven days week.

Okay, so that's 8,760 tires a year. How many dollars per tire is the revenue?

Well, if you take what our model, you get -- well first off I'll tell you all the prices, I going to get everybody all excited, you guys are going to put numbers .

You put the number -- you put the 24 tires.

I put 24 tires and I am going go to -- we are going to do 24,000 pounds, you get paid, your pricing is basically anywhere from $0.24 to $0.32, and that's tuned up dollars per tire per pound, okay. That's what you get paid to take this tire. And then you are going to process since you’ve got to cut it into four pieces, which are about 2500, you’ve got to wash the thing and it depends on how good you do that, and then you put in it reactor and what you get out is you get about 600 gallons of an oil, the heavy oil has a flash point just below kerosene, the light is just above.

I can't do all that math. Maury, just tell me how many dollars you're going to get for each tire [Multiple Speakers]

Oh I figure, you’ve got figure you are going to probably average right around CAD$5000 to CAD$5500 per tire, that’s your gross revenue.

Now these facilities you are going to put up in Chile, are they going to be the same size?

Everything is a same. One unit, every unit has three reactors.

Okay, so we could then basically triple whatever number we come up for Canada there. Right?

Yes. I'll help you with some numbers here. You’ve basically got a figure. Every unit will generate approximately if you running 24x7, and I am only using the number that is up there okay. There is no problem getting the tires or belting. And both of those have a high content of natural rubber which then in turns makes it a biofuel. So what happens is you end up with this oil and carbon black and so much steel. So I have given you -- so each unit I would think is probably between -- a low will be CAD$15 million and max right around CAD$20 million up in Canada. You’ve got between CAD$30 million and CAD$40 million year is what that unit up there will do.

CAD$30 million to CAD$40 million a year in Canada? And that is -- what is the CAD$15 million to CAD$20 million then?

I told you one unit has three reactors, all right. So you have two units right now up in Canada. So you are going to get CAD$15 million to CAD$20 million per unit. So there is your CAD$30 million to CAD$40 million in sales.

CAD$30 million up to CAD$40 million. And what do you expect this year, because you're just ramping?

I would expect us to be in that range.

But wait you can't be in that range for the year, because you are just starting.

Yes. But you got’ve six months, so I figure it's going to be between $15 million and $20 million.

Okay, so half of that six months. Okay. And the margin is 50%?

Your EBITDA is that.

EBITDA. Yes, well, okay, that is before interest and taxes. That is basically a pretax, right? Or is there DA [Multiple Speakers] is the depreciation associated with this?

Yes. You’ve got depreciations. You depreciate that thing. I’ve got to look because we have a situation up there in Canada. We are on Suncor property for the next 10 years, and we pay them for that. And they get a check and I don't have that right in front but they are 10 years agreements. With the agreement we have a situation for track, wheels and tires.

Well, the thing is I need to know what the depreciation is going to be on this thing.

I don't have that off my -- we've got about $30 million totally into that thing and I don't know how the accountants have the building, how they have it depreciating, I don't know Canadian depreciation laws.

Could you get back to me on what that is? Because I wanted to --.

Yes. John can you ask whoever is doing it. I have no idea.

Yes. I can get back with Alex with some of the details.

There is one more from Kirk Ludtke with CRT Capital Group.

Good morning, everyone. Thanks for taking the call. You've got quite a bit of liquidity, and particularly if you can complete the sale of ITM, but there's not a lot of visibility into your end markets and so it is not entirely clear when they will turn. So I am just curious if -- what metrics do you have in mind at which point you decide to do something maybe more fundamental like sell additional assets or reduce capacity? Is there a date in mind or a minimum liquidity level or -- what are the -- how do you --

Well, the matrix that we are trying to do that Paul's busting his fanny with the bunch of his team members and everything. It's real simple. You have to run your factories; the situation that we have is that Des Moines and Freeport can turnaround and make whatever, each one. So right now they reduced their capacity and the situation is that you take that -- you take it by just dropping it basically down, which is human people [ph], and you condense at a certain point and you are better off to run it as a breakeven, and because the fixed costs are going to set there whether you temporarily shut it down or you don’t. And then the Bryan facility, they knew it could be a positive generator in 2016, but because the termination of -- at the end of the fall when they listed how they were going to take Bryan down, they crossed the threshold of what happens with the WARN Act. So that they didn't -- Bryan did not finish the last reduction of employees until the end of February, soyou look into 1st of March is when they are starting to go. Now Bryan, because the orders and what we started, Bryan has a number of SKUs they are behind that. So they start to go into overtime. And you are going to run overtime up there until such time that you can't produce the tires you got until you start bringing people back, but you want to run those 48 hours because that's the most economical way to run a facility. So all of this has been played out -- and your - so to speak as you say, you have -- you don't really have a strong visibility to it. But we…

So you've got another lever to pull with that business.

That lever will end up with environmentists loving it, everything else, it would be like the fellows from, you know who knows, maybe I will get the Swedes or the Norwegians, we just love the Danish, who knows. They’d be running all around. I mean this work is for all these big tire dumps, but when you go to big passenger car, you don't get the biofuel because it's a synthetic rubber that is used. All right, so that's the story there. So, yes, our future is really pretty bright, and we are taking care of -- getting everything set, trust me I am more positive now. I have to go down and watching the peanut farmers and watching the guys planting pickles, and it's great what you see some of these stuff, but the farmers are pretty happy. They can be sitting in their backroom with millions of dollars, and they still tell you, oh it could be better, it could be better, and they want to bargain. That's -- but it's an interesting time. I think for manufacturing, everybody is going to be surprised how things start shaking up. It is about time. You in New York?

No, Stanford

Oh, you are from Stanford, that's where my grandson wants to go to school, scholarship there for-- are you up in Connecticut.

I am in Connecticut. I should mention, yes, Stamford, Connecticut.

Okay. You are up in Connecticut. Well, you are in a high tax area. Did you hear what Illinois was trying to pass?

No

The poor Democrats in Illinois, they felt so bad for California, New York, Connecticut, all the high taxes and all the rich people. They want to graduate income tax up to 11%. They can't keep -- they are nuts. Like everybody wanting free college, free this. It's I guess we are just going to look up and we are going to beam everybody up, so interesting.

Thank you. That's it. Everybody appreciate your time. And again, if you ever get a chance, come out here and visit us. We are pretty proud of what we do. And we’ve got a pretty unique team. So with that from the old man, have a great week.

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