Jan 29, 2008
Executives
Fred Warner - IR Manager Keith Busse - Chairman and CEO Mark Millett - EVP of SDI, President and COO for Flat Rolled Steels and Ferrous Resources Richard Teets, Jr. - EVP, President and COO for Steel Shapes and Building Products Danny Rifkin - EVP, President and COO, OmniSource Corporation Theresa Wagler - VP and CFO
Analysts
Aldo Mazzaferro - Goldman Sachs Brian Yu - Citi Chris Olin - Cleveland Research Brad Levy - Jefferies & Co. Michelle Applebaum - Applebaum Research Timna Tanners - UBS Mark Parr - KeyBanc Andrew O’ Connor - Millennium Partner John Tumazos - Prudential Financial Charles Bradford - Bradford Research
Operator
Good day everyone and welcome to today's Steel Dynamics fourth-quarter earnings conference call. Today's conference is being recorded.
Joining us today are Keith Busse, Chairman and CEO, Richard Teets, President and COO Steel Shapes and Building products, Mark Millett President and COO, Flat Rolled Steels and mining and minerals, Danny Rifkin Executive Vice President and Metals Recycling, Gary Heasley, Executive Vice President Strategic Planning and Business Development, and Theresa Wagler, Vice President and CFO. For opening remarks and introductions, I would now like to turn the call over to Mr.
Fred Warner, Investor Relations Manager. Please go ahead sir.
Fred Warner – Investor Relations Manager
Thank you and welcome to today's Steel Dynamics conference call being webcast, January 29, 2008 from Fort Wayne, Indiana. This call will be available for replay from our website and will also be available for downloading as a podcast.
Today's management discussion includes forward-looking statements. We caution that actual future results and events may differ materially from statements or projections that are made today.
You may obtain additional information concerning a variety of factors and risks that could cause actual results to differ materially from today's forward-looking statements, by referring to our most recent annual report on form 10-K that's filed with the Securities and Exchange Commission and in other reports we file from time to time with the commission. Specifically, please refer to those sections in our Form 10-K and Form 10-Q reports entitled forward-looking statements and risk factors.
These reports we file from time to time with the commission are publicly available in the SEC website and on our website steeldynamics.com. After today's management discussion, we will open the call for questions from participants, who have informed us they may wish to ask questions.
We will begin with remarks by SGI’s Chairman and Chief Executive Officer, Keith Busse.
Keith Busse - Chairman and Chief Executive officer
Thanks Fred. Good morning ladies and gentlemen.
As our tagline, our headline of our press release states, our fourth quarter was a little stronger than we had anticipated, when we talked about mid-quarter guidance that we put out and we had good annual results as well. I think that's significant in the phase of considerable weakness that persisted in the Flat Rolled arena throughout the year, which as most of you know is on the uptick or upswing at this point of time.
But Flat Rolled was the weak spot with regard to steel earnings at least in our camp last year. Our net income was essentially unchanged, $395 million in '07 versus $397 million in '06.
Earnings per share reached a record of $4.02 versus $3.77, although it was principally a result of the share repurchases, although I think most companies in the sector were probably engaged in share repurchases and we're no different than any other company, but it did possibly impact the earnings per share calculation. During the quarter, the net income was $98 million or $1 per share versus $105 million or $1.03 per share in the fourth quarter of '06 and $101 million or $1.06 per share in the third quarter of '07.
OmniSource was dilutive to our earnings by $0.07 as advertised during the quarter, and of the $0.07, a penny of that was due to purchase accounting adjustments. Therefore, if you remove Omni from the calculation, we ended up with income for the quarter at the high end of the range of $1.07.
I think we'd originally forecast $1.02 to $1.07. Our mid-quarter guidance was about the same, although we guided to the low-end and had better results.
So, without Omni in the mix, we would have had about $1.07 for the quarter, which is a fairly good result. We're going to talk about the fact that our results are to some degree indicative of our growth strategies and diversification, and that's true.
During the year, later in that paragraph, we talk about the fact that our Flat Rolled shipments actually declined by 2% while our structural steel volume increased 15% and engineered bars increased 9%. These were our original Indiana operations netting 4% year-over-year increase in steel shipments from the Indiana mills.
We did not have Roanoke as part of our family throughout the entire year 2006, but they had a great year as well and our total steel shipments including acquired operations grew to 5.6 million tons in 2007, a 17% increase over '06. I'd point out to you that our scrap costs increased 3% quarter-over-quarter.
I think that number is very similar to that was reported by Nucor during their conference call. Although on a year-to-date basis, our scrap costs were up 9% per annum.
Those were up a little higher perhaps due to pig iron moving rather aggressively throughout 2007. The outlook is very good for the future.
We see our earnings in the $1.10 to $1.20 range in the first quarter, which is a little bit of an anomaly growth in steel earnings at a time when we're perceived to be in a recession or there is some market weakness and there is market weakness out there. I think Brian Yu's comments from Citi that I read this morning really summed it all up talking about manufacturing weakness, but good results potentially available to just not just Steel Dynamics, they should be available to all steel makers due to a structural supply shortage creating a gap that's not being filled by imports, and I think Nucor talked a lot about that on their conference call as well.
So, we had a situation, where our domestic pricing was far below world market prices that is high as some areas greater than $150 a ton, but somewhere between $100 and $200 a ton, when you factor in the extensive cost of trading products from other environments to the United States. It is one of the only times I can remember in history where domestic pricing was well below international pricing.
It is usually domestic pricing that is above international pricing, but when you think about the impact of the weaker dollar and the fact that there are no import surges of any significance to deal with. In fact there are just almost no imports to deal with.
We probably do have a structural shortage of supply. As I said before, the industry is increasing its capabilities but yet they would only be able to ship 105 million tons of steel less exports, which have increased from 4 million, 5 million tons to perhaps as much as 8 million, 9 million, 10 million tons.
So what is available for the domestic market may well be actually below 100 million tons and even though the market may not be at 130 million ton consumption level, it may be significantly less than that given the weakness in economy. That gap has still not been adequately met by imports, which have historically, at least recently been higher priced than domestic products.
I think most of you know that. We have all experienced a very positive increase in revenues and will be in the first quarter as a result of price increases that are holding in the market.
And they are varied. And I know there are some people wondering whether or not that impact shouldn't have a greater impact then perhaps the 15% impact we're forecasting.
I did that my merely taking the middle of our range and compared it to our dollar reported number, which is a 15% increase. But you have to remember scrap costs have escalated rather dramatically for all EF producers and late December and in January, and we will let Danny talk about the environment in scrap universe on a go-forward basis, but scrap cost will remain high in relation to where they were throughout most of the year, which will heat up much of the margin increase gain by the price increases, yet there will be a margin gain.
I think the other factor that is maybe impacting these numbers to a greater degree than some people had contemplated is the fact that much of our pricing is tied to allow [ph] our pricing somewhere between 30% and 40% of our pricing is tied to CRU. And CRU is moving, but it certainly hasn't moved as aggressively as the hot-rolled numbers have moved, and the impact of where CRU has moved is really only going to be felt by most of us in the month of March, the last month of the reporting quarter.
So, it is a little slower as you are traveling up the hill and you get the benefit for a month or two longer as you travel down the hill. So, for some people that may have been expecting a buck on a quarter or something like that, I don't know that that's not out of the realm of possibility, but it is not likely as we see it.
So, we see our earnings between $1.10 and $1.20 on a go-forward basis. We did buy back about 2.1 million shares during the quarter.
And from a steel segments perspective, I will offer a few comments before I turn it over to Dick and Mark and Danny that you will note that... and I think we are offering a lot of information in here now that we are doing segment reporting, it is going to help many of you model the future.
I think it certainly gives you a clear picture from a steel scrap substitutes and fabrication perspective. But our shipments in the steel operations segments were about 1.5 million tons, which annualizes to 6 million tons.
I suspect next year, we will probably ship at a rate given the... if the economy doesn't just totally collapse, we should, if the [inaudible] environment continues to be positive, we should ship about 6.5 million tons of steel.
We follow the growth plans that we have set into motion if you will. I would also point out that the… in that paragraph we talk about our operating income being $131 per ton ship excluding profit sharing costs of approximately 8%.
So, you can do the math on that to see what the net is. But I would tell you that our primary operations where we melt steel and process it through hot rolling and finishing probably would have been closer to $150 a ton.
We have the tax results in here and that does… it does drag down the operating profit per ton, because as we stated, it's just a margin gained on a number converted by purchasing steel in the open market. I would tell you that Omni was dilutive.
During the quarter, we do expect Omni to be slightly accretive, it's not going to be massively accretive, but slightly accretive in the year '08. Normally their fourth quarter is one of their weaker quarters historically.
I might also point out that volume in that segment of our business if you look at 5 million tons of ferrous shipments and that will be 5 million tons of Omni ferrous plus our own ferrous, margins in the scrap business… so why are margins so low in the scrap… I don't know that on primary operations they are all that low. But when you mix in and I think in Omni’s case nearly 2 million tons of brokerage activity it does hamper margins and without brokerage activity, I think those margins would be greater.
So, all in all I think their company is going to have a very good year. Some of the data we've provided to you during the quarter does not include iron dynamics, which by recollection produced and shipped, I don't know, 50,000 to 60,000 tons of total during the quarter that's not in there.
The wording is very careful… total, total ferrous scrap shipments during the quarter were 831,000 tons and during the quarter the company… companies scrap operations supplied 239,000 tons. Now the company includes our own ferrous scrap operations as well as Omni's resulting in about 22% of the tonnage that are purchased by our mills in this operating segment.
Our steel fabricating operations, I would only point out that we have finished renovating the three Roanoke divisions, which were older facilities and operated on a very marginal basis, whereas the two steel dynamics operations were very, very profitable enterprises. When you blend all that together, you could see we made a $141 per ton ship.
I think that's a good number, but I think it's certainly a number that we expect is going to grow as we bring the Roanoke Corporations online in our own image, that number should grow throughout time. So, that's my comment about the segments.
In the last page we talked a lot about our project statuses. We expect to see some volume expansion in Flat Rolled and are currently experiencing that, especially now that we have a better quarter book and in hand.
And we'll let Mark market address where we are relative to our order book. In coated steels, we note that we will see some benefit from Galvalume and painted products throughout the year, and we are currently in the process of commissioning our second paint line in Jeffersonville.
I think most of you know about our expansion at Columbia City, and Dick will talk a little bit more about that, and we expect to grow our business in engineered bars. In ‘08, yet I would point out that our expansion plans will principally impact '09 as equipment delivery will be very late in the year.
As I said, we have now repositioned new millennium from a competitive posture and expect to see some results there. Omni will contribute to our earnings during the year as we see it this point in time.
And we are moving forward on Mesabi Nugget, and there are only positive events going on there, but we will not put that division on until… the Nugget issue won’t come online until sometime in mid '09. And I will let Mark talk a little bit more about that.
So, I would conclude my comments with those comments, and turn it over to Mr. Millet.
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
Thank you Keith. Good morning everyone.
As Keith alluded to, despite weak underlying demand by end users, Service Center inventories still remain very low, necessitating a sort of steady purchasing of their immediate needs. And so we are not speculating on or building inventory at this time.
And the recent market strength has certainly surprised by driving… we certainly have some domestic production issues and the integrated mills, again strong export activity and obviously minimal influence. And currently, we are fully booked through February and we have got rapid order entry for March and depending on the product, the lead times are either mid-to-late March on our order book.
So, we are in great shape. '06, '07 shipments for the year were 2% off principally due to the very soft market through August.
During this period, we had some short backlogs that required some additional downtime that presented efficient mill scheduling. In the Q4, that backlog did come back, although I would suggest our performance remained a little disappointing.
We had some design issues relative to the caster modifications, which presented the full exploitation of the new cast feeds. These issues substantially resulted… the cast demonstrated operating [inaudible] in excess of the 2.8 million ton annualized rate that we previously advertised.
And given the solid market, we would hope to ship 2.8 million tons in '08. We have had further capital expenditure approved for electric furnace modification to expand the shells there.
And that should fully exploit the caster modifications to get through a probably 3 million ton rate in 2009. Galvalume modification started up well.
We shipped about 47,000 tons last year, being well received by our customer base, excellent quality, width up to 61 inches. We remain the only mill with a double-wired capability for [inaudible] as we speak.
It's been delayed dramatically unfortunately through late deliveries of equipment and also there is some critical component that was actually missed… now designs that we have to retrofit over the several months. But it is commissioning that today and we hope to be shipping painted products next month.
Now last year in total, the Techs produced 910,000 tons given that the combined Techs SDI end of the year 2 million tons of galvanizing capacity. That's roughly 25% of the non-automotive galvanized market, which gives us a strong market presence there.
It's become very apparent that their product mix is very complementary to the established SDI product portfolio further increasing on our market diversification. Furthermore the focus on end user accounts complements the SDI's focus on service centers and processes, and their ability to serve the market has been amply demonstrated just recently.
They were rated number one rank in the Jacobson quality and customer satisfaction survey this past year. The integration is proceeding well.
Techs’ employees are being patient as we introduced new employee benefit and incentive programs, and in fact they're responding very well. We are operating at record rates and the Q4 operating income was actually a record for the Techs organization.
It's a great combination, two groups of dedicated hard working creative people. It's going to be a wonderful, wonderful synergy.
Their order books are strong with lead times essentially into April as we speak. Just a couple of comments on Iron Dynamics.
We produced 250.. 2000 tons of iron last year.
That's up 7% to 10% over the prior year. But more importantly, the mix of HBI to liquid iron changed dramatically.
We produced and shipped 120,000 metric tons of liquid iron. That's up 46% over prior years, principally due to better availability of the submerged arc furnace.
We have three times carved into that, 66% on that piece of equipment. So, there is still plenty of room to move and improve.
Cost structure actually remained very consistent through '07, even though we had inflated prices for iron ore and coal, but natural gas consumption went down dramatically. We utilized substantial amount of mill scale, recycled mill scale, which cut our iron unit costs.
Currently we are a little challenged on the all cast system, rotary hearth furnace and have CapEx approved to retrofit that system, which will happen probably in Q3 of this year. And that should be able to take the facility up to probably 30,000 tons of DRI or 23,000 tons of product shipments for the month.
I think it's doing very well.
Keith Busse - Chairman and Chief Executive officer
It is indeed, Mark. Thank you for your comments.
Iron dynamics since their November outage has produced in excess of 20,000 tons, two months in a row 23,000, 24,000 tons, which is as good an operating rate as it has ever achieved. And if it continues at that level, it ought to be profitable.
The only other comment I would add is that we just opened our order books. So, when I talk about March, we opened it Friday and it's only Tuesday morning.
So, we're halfway through the month I guess, essentially in terms of bookings and feeling very positive about our future in the out months if you will. Dick, let's turn it over to you.
Richard Teets, Jr. - Executive Vice President, President and Chief Operating Officer for Steel Shapes and Building Products
Thank you Keith, good morning. As the press release stated, we had a very good year, 2007, for the long products steel sheath group, a couple of comments about each one.
The structural mill at Columbia City continues to improve. 2007 as we stated was a 15% improvement in shipments over 2006.
And we look to improve significantly over that even in 2008 as we bring on our second rolling mill. From a backlog perspective, I would tell you that first quarter of '08 appears favorably to the first quarter of '07.
There have a been lot of questions I get asked about the market and so forth, and I'd just tell you that, as we see right now, it continues to be strong as it was in 2007. So, we're very pleased with that And as stated, the second mill is scheduled to begin commissioning, cold commissioning in May of this spring and continue into June with hot commissioning and then start bringing some of the smaller steel shapes to the market off of that mill.
That complements our other divisions. At Pittsboro again, we saw 9% improvement in shipments when comparing '06 to '07.
The expansion there is going well. All the equipment has been on order and mill stands are scheduled to arrive in July.
As Keith said, many of the major components for the casting will show up in October and November, and therefore the expansion capacity improvement won't be realized until '09, but things are going well there. I'm also happy to report that from a quality perspective, Pittsboro continues to make great headway.
We did earn the Caterpillar Bronze Certification. Congratulations to everyone.
And we also received London certification for crankshaft production, which have opened up new opportunities for us from the sales perspective. In Roanoke, we continue to have good bookings and excellent shipment in production levels.
Our customers in that bar division and up from that bar division continue to actually have lower-than-average inventories, and so even with the price… recent pricing increases that we've seen and announced, we continue to see bookings steady. Production levels for 2008 have started off at record levels at both in the melt shop and in the mill, and we look out to carry that division through 2008 with a record performance.
And capital projects, we have one there of modernizations in the scrap handling arena, and also from a work life quality perspective with improved baghouse evacuation and that looks to help us with our expansion in tonnage down there. And from our Steel West Virginia group, we had our highest income in the history of that company, and that was really in spite of our core market there at the truck- trailer business being in a typical downturn.
What that shows is the ingenuity and the resourcefulness of the employees of putting back onto that mill sections, that they have need for substantial periods of time and came back very successfully with it. We do have about $25 million worth of capital of appropriations at Steel of West Virginia, which includes a new melt shop transformer and some new straighteners, and those will all improve our reliability and reduce our operating costs, so there are some good things going on in Huntington.
And finally, the New Millennium Building Systems group. As I stated, construction is finally, basically behind us in three acquired organizations and all five of them will see a higher performance in contributions in 2008 versus 2007.
Keith?
Keith Busse - Chairman and Chief Executive officer
Thanks, Dick. And I'll turn it over to Dany Rifkin, who leads our new operating segment ferrous and non-ferrous resources.
Danny Rifkin – Executive Vice President, President and Chief Operating Officer, OmniSource Corporation
Thanks Keith. Good morning everyone.
Scrap markets in both the ferrous and non-ferrous areas continue to be characterized by higher levels of volatility and look to continue that way for the foreseeable future. In the ferrous world, pricing is high by historical standards.
We expect generally for that to remain over the next few months. Exports are continuing to move at record levels, based on strong overseas demand and the weak dollar.
Domestically from a supply side, we see volumes down as compared to historical level last year primarily based on diminished industrial production especially in the Midwest and seasonal reductions in flow from obsolete scrap. On top of that, some processors have relatively low inventories and when faced with solid demand, that will lead us to the higher price environment that we are experiencing today.
Over the last few months, our shipments to our own mills have increased somewhat, but OmniSource has been able to maintain consistent supply relationships with our other long-term consumers. In terms of '08, we look to continue the integration of the SDI yards into the OmniSource organization and OmniSource into SDI and expect to ship somewhere on the order of 5.5 million tons of ferrous scrap and about 900 million tons of non-ferrous scrap.
Keith Busse - Chairman and Chief Executive officer
Thanks Danny. Theresa?
Theresa Wagler - Vice President and Chief Financial Officer
Thank you Keith. I will briefly review some of the aspects of the quarter beginning with the balance sheet.
The additional increase in accounts receivable and inventory really as related to the acquisition of OmniSource, our receivables are still extraordinarily strong at over 95% or less than 60 days outstanding. Our capital expenditures for the year were $395 million, a $139 million for the quarter.
Approximately 45% of our annual capital expenditures were related to the addition of a second rolling mill and a structural mill. About 10% to 15% was related to our expansion to Galvalume and new paint line at Jeffersonville.
Approximately 10% to 15% was related to the renovation of the fabrication plant which is now complete and a little less then 10% was related to the Minnesota project, purchasing the mining property and some initial construction at Mesabi Nugget plant. In 2008, we currently expect capital expenditures to be between $350 million and $400 million.
Most of the projects that we indicated in the press release comprise these capital expenditures as well as some new capital expenditures from OmniSource and are related to scrap yards. Depreciation and amortization for the quarter was $42 million, for the year was $138 million.
For 2008 we estimate it to be somewhere between $175 million and $180 million. Liquidity at 12.31 was approximately $500 million to $510 million.
We had $239 million outstanding on our revolver and we still have… I only remember it as $360 million available on an accordion feature on our revolver if we were to wish to have that committed. From a tax perspective, our deferred tax assets are currently booked at 38.5%.
Our effective rate for the year was 37.4%. For 2008 due to some state income tax changes, we would suggest that you model at 38% effective tax rate.
Other long-term assets you will notice increased about $90 million. That's due to some equity investments that we acquired along with the OmniSource acquisition.
Goodwill and intangibles, you will notice increased as well. We're still in the middle of finalizing our accounting adjustments for OmniSource.
We will have those finalized by the middle to end of March where we will report final numbers. As Keith mentioned, we repurchased 2.1 million shares in the quarter.
Year-to-date we actually repurchased 12.6 million shares for approximately $534 million. At the end of the year, we still have 3 million shares available under our share repurchase program.
We had 95.2 million shares outstanding. We also have 4.4 million shares that are related to our convertible notes.
So on a fully diluted basis we would have been about 99.6 million shares at the end of the year. Moving to the income statement, gross interest expense for the quarter was $31.6 million.
Year-to-date, it was $69.1 million. For 2008 we would estimate currently quarterly interest expense to be between $30 million and $35 million a quarter on a gross basis.
Some of you had some questions relating to the other income that occurred during the fourth quarter. It was primarily composed of $1.5 million of interest income, $1.4 million from the equity investments that we acquired through the OmniSource acquisition, and $1.2 million worth of trade case recovery.
To conclude, for the Flat Rolled shipment. Hot-rolled shipments were 312,000 tons; pickled and oiled, 28,000 tons; cold-rolled, 29,000 tons; hot-rolled/galvanized, 92,000 tons; cold-rolled/galvanized, 79,000 tons; painted, 55,000 tons.
And our third quarter of Galvalume production actually resulted in 19,000 tons of shipment, which would have a total Flat-Roll division shipments of 614,000 tons. Keith?
Keith Busse - Chairman and Chief Executive officer
Thanks Lisa. When I was reading some of the early press releases about our earnings, for the quarter and for the year, it was noted that we did not mention or provide any further guidance for the year.
And we see that from the year perspective being unchanged from the guidance we previously have given. Having said that, if you look at $5 to $5.50 and pick the middle of that as your range and divide it by $4.02, which is what we earned this year, that would imply that we are capable of growing in a rather weak business environment, 30% year-over-year, which is pretty substantial growth.
And I think I read it in one release and I think it was [inaudible] where he talked about leverage being at 57% and manageable. I would tell you with those kind of earnings, it's very manageable and that calculation is the correct calculation as I said.
So, that really concludes my comments and my team's comments. So, we would be please to answer any questions that any of you might have.
Operator. we're ready.
Question and Answer
Operator
[Operator Instructions] We will take our first question from Aldo Mazzaferro with Goldman Sachs.
Aldo Mazzaferro – Goldman Sachs
Hi guys. How are you?
Keith Busse - Chairman and Chief Executive officer
I am fine, Aldo.
Aldo Mazzaferro - Goldman Sachs
Good. So, I was wondering if I can get a little further detail on the expected ramp up of your two big projects at the structural and at the Pittsboro mills.
I see the total for the full year, I am wondering if you could compare what you might see in the first quarter or two compared to the fourth quarter and then maybe help us ramp up to the total for the year?
Keith Busse - Chairman and Chief Executive officer
Well, the ramp-up is clearly from 500,000 to 550,000 is with existing assets, and it's spread fairly evenly throughout the year. So it's just a month-over-month or quarter-over-quarter consistent increase up to a higher level.
As we said, the big change, 225,000, 250,000 tons somewhere in that arena, we will not really begin until the first quarter of '09 and its impact will be felt in '09.
Aldo Mazzaferro – Goldman Sachs
Right. That's Pittsboro you're talking, right?
Keith Busse - Chairman and Chief Executive officer
Right. Relative to structural, it's really anybody's guess as to how fast the commissioning process moves along, but I think the team is expecting that it could produce 350,000, 400,000 tons.
Is that right Rick?
Richard Teets, Jr. - Executive Vice President, President and Chief Operating Officer for Steel Shapes and Building Products
That's what we originally had forecast Keith when we showed the start-up in January, the weather being delayed to half a year, it looks like it's going to be about 200,000 tons in the first year. That's what will effectively be shippable.
Production will be higher, but shippable tons in 2008…
Keith Busse - Chairman and Chief Executive officer
And then you just have to add that Aldo to where we… we are on the number-one mill at about 1.2 million tons, which would imply 1.4 million and maybe potentially, we could get to 1.5 million.
Aldo Mazzaferro – Goldman Sachs
I got you. Okay, that's all I have right now, Keith, I'll be back in queue.
Thanks.
Keith Busse - Chairman and Chief Executive officer
Thank you.
Operator
We'll take our next question from Brian Yu with Citi.
Brian Yu - Citi
Okay great, thank you. Keith, I remembered last year when we had a kind of similar scrap push on fuel prices.
There's a lot of customer push back, wherein your prices subsequently declined. And that's because a lot of mills sold quite a bit.
Is that part of the reason you're keeping a shorter strength on the order book this time around? You just opened up March, so it would suggest that there is about a month lead time?
Keith Busse - Chairman and Chief Executive officer
I think the market in the end is going to determine [inaudible] could go. Some of it would obviously occasionally be tied to resource cost, and I think as Danny said, he expects that market to remain strong, and I think if I heard him right, it's because the collective volumes out there in the manufacturing sector are a little weaker.
There is just not that great stockpile of obsolete scrap that there was a couple of years ago available to the processors as well. So, I think when you look at his forecast for ferrous, which is 5.5 million tons, 500,000 tons of that are sold.
He is telling you from a collection perspective, it's got to be a little short of the previous years…. from his experience and that's due to the weakness in the economy and the manufacturing sector which is probably with the import factor going to keep prices fairly volatile.
I do believe that as we talk to Dan and his team, they felt there could be some softening as there was last year in the spring, when the flows are better, but it's anybody's guess as to where we are going to be here at the end of this month and the end of February. Some people are betting we will go in sideways, some people are betting up a little, some people are betting down a little, and I don't think any of us know yet.
So, commenting on it would be speculation.
Brian Yu - Citi
Okay. And then, I might have missed this, but did you discuss the Roanoke expansion of the melt in the upgradeable rolling capacity, when that might be available?
Richard Teets, Jr. - Executive Vice President, President and Chief Operating Officer for Steel Shapes and Building Products
No, we have only bought spare parts and a couple of extra stands so far. And so we really don't have a capital expenditure going on down there as far as the rolling of those… the major capital expenditures that we have down there are supportive scrap yard areas, and new transformers… I mean we have a lot of smaller projects, but we have no major expansion projects going on there in the rolling mill.
Keith Busse - Chairman and Chief Executive officer
I think some of the upgrades might help throughput, consistency things like that, but no terrific volume expansions. A lot of these as expenditures as Dick said are related to Caster upgrades.
And if you have ever been to Roanoke, you will know they almost didn’t have a scrap yard, and so we are busy excavating hillsides and putting in the scrap yards so we can do the appropriate power rotation on their inventories as we march forward.
Brian Yu - Citi
Okay. Thanks.
Operator
We will take our next question from Chris Olin with Cleveland Research.
Chris Olin – Cleveland Research
Hi.
Keith Busse - Chairman and Chief Executive officer
Hi Chris.
Chris Olin – Cleveland Research
Just a question on the non-residential construction, I guess call it commercial construction market, which for me is the biggest question mark out there. It seems like you have some pretty bullish comments as it relates to being demand and new millennium demand.
I'm just wondering is that related to a better supply dynamic or are you seeing any slowdown in commercial construction order activity that could represent a risk to you guys, maybe further down in 2008?
Keith Busse - Chairman and Chief Executive officer
Well, I think there is always the risk that as you continue with this malice in housing that you could see the light side of commercial non-residential construction, perhaps the impact at some point of time. I think we have yet to experience that, but I think in terms of infrastructure and heavy construction, the order entry is really pretty good in that sector.
And so we see a good year ahead of ourselves in structural. A lot of it again is tied to our order books.
We haven’t really opened them beyond March, and if we did I am sure we'd have some order entry activity for April. Clearly at this point in time, that's just not the way we run our ship, and in the case of new millennium, they have a strong order… a stronger backlog as they have had in many, many years, although the first quarter in terms of the approval process is generally fairly weak and picks up throughout the quarter, and deliveries pick up into the second quarter or third quarter which tend to be the peak periods and fourth quarter.
But as you gauge it against no money and backlogs of yesterday, we are not in bad shape at all.
Chris Olin – Cleveland Research
Okay. That's all I need.
Thanks a lot.
Operator
We will hear next from Brad Levy with Jefferies & Co.
Brad Levy – Jefferies & Co.
Hey guys, couple of questions. First off, you mentioned that the March order book is about half flow on the sheath side.
Are you getting the full price increase for the portion that you have full for March? And then sort of further out again kind of maybe a sheath question.
As soon as you get Mesabi Nugget up and running or maybe before that, you guys have been out in the press saying something about potentially putting up a West Coast mill would be a sheath mill or would be a plate mill. Have you guys thought out that far and can you guys expand your thoughts kind of in terms of the West Coast concept?
Keith Busse - Chairman and Chief Executive officer
Well, we would love to have a primary presence out there, but I have said many, many times, it's really tied to our ability to deliver low-cost, high-grade resources into that project. And that would be primarily dependent on the success we have with Mesabi Nugget.
That could be a big driver for launching a primary project of some significance, although it certainly wouldn't be a 3 million ton mill. We will probably look at 1 million to 2 million ton facility if that project whenever given the green light.
What was the first part of your question Brad?
Unidentified Company Representative
Whether we achieved full price increases and I will say, yes, we have.
Keith Busse - Chairman and Chief Executive officer
Mindful of the fact that we are behind the curve on CRU as we stated earlier, but in terms of spot pricing, we are… we have bauxite achieving full price increases and mindful of the fact, the order books have been open two days.
Brad Levy – Jefferies & Co.
Got it. And then one question for Dick.
I mean the talk of any kind of further developments of your rail product seems you have gotten very silent and maybe that is the function of a very strong structural beam market. But there was supposed to be this transition to the new longer rail by the end of this decade.
Is that kind of on hold right now, or can you talk a little bit about kind of the plans in rail in the longer term.
Richard Teets, Jr. - Executive Vice President, President and Chief Operating Officer for Steel Shapes and Building Products
Sure. The fact that the structural market in 2007 wasn't robust as we experienced did put us in a mode of making rail only when it was advantageous for the mill, and as we went out, we made no commitments to customers so forth for the further development of that product.
We do see the phasing in of the rail products in 2008 as we ramp up production on the second mill and start stripping off some of the products that are currently being rolled on the existing mill. And so we do have a game plan, we are executing to it.
We have continued to roll 240-foot rails occasionally, and we have been welding it on our welding line and shipping it. So, all the tools were in order, it is just a matter of us being focused on it as appropriate for mill loading and maximum profitability.
Brad Levy – Jefferies & Co.
And then a last kind of follow up on my original question. Is the West Coast mill contemplated to be a sheath mill or plate mill or have you guys kind of thought about what kind of mill that ultimately would be?
Keith Busse - Chairman and Chief Executive officer
We were contemplating a sheath mill with finishing activities associated with it.
Brad Levy – Jefferies & Co.
Thanks very much guys.
Operator
We will hear next Michelle Applebaum with Applebaum Research.
Michelle Applebaum – Applebaum Research
Hi, good morning. A couple of quick ones.
First, when you originally guided in the December to $5 to $5.50 for 2008, I really don't think that you would have anticipated, maybe you would have Keith, but on a say completely… I don't think you would have anticipated to see March prices at $670 a ton for hot rolls? And so, I am trying to reconcile the $5 to $5.50 with the $1.10 to $1.20 and the dramatically higher prices for hot rolls that we are seeing going into March.
Do you understand…
Keith Busse - Chairman and Chief Executive officer
I understand your question Michelle. Let me do my best to answer it.
We did anticipate March pricing over 600, with that anticipated being at the level that it is currently at. And therefore you would expect some improvement in earnings as a result of that, but we also did expect scrap to shoot up $100 a ton in one month and really expected more like, somewhere between $30 and $40, $50 and the market just delivered a different message.
So, one was a little higher than contemplated, but the resources being delivered during the timeframe are higher than we had contemplated would be delivered to the mills. And therefore it had its impact as well.
Michelle Applebaum – Applebaum Research
Okay, and then the other side...
Keith Busse - Chairman and Chief Executive officer
And then the other fact we mentioned earlier, CRU is behind the curve as prices are going. And therefore what we are realizing in March, they will be behind what we actually realized in April.
Michelle Applebaum – Applebaum Research
Well, offsetting that, what I had heard in the marketplace was that your February books hadn't even been opened, when Mittal first announced that $50. So, I would imagine that you probably might have gotten, which obviously was a smart move on your part.
So, on the spot side, the 70% sheath tonnage that you sold, you probably got, I would imagine you got some of them in February, right?
Keith Busse - Chairman and Chief Executive officer
Our number is for a model for February, whereas we had pretty much forecast them and our scrap costs were too, because we had sizeable stocks on hand, but certainly the world began to change in March.
Michelle Applebaum – Applebaum Research
Okay. So clearly you are saying no upside in the first quarter to the guidance?
Keith Busse - Chairman and Chief Executive officer
I don't say that. I mean, if you deliver somewhere in the range, that is pretty good upside quarter-over-quarter in what could be one of the weaker quarters of the year.
Michelle Applebaum – Applebaum Research
Okay. Then my next question is with regard to the West Coast Mill, I see press release after press release and conference calls, where you talk about your margins for Techs galvanized products being lower, because you are purchasing material, and I am just kind of wondering, you had talked years ago about that West Coast Mill potentially being out there if Mesabi Nugget were probably four years ago.
I'm guessing that wouldn’t the priority now be solving some of the procurement margins issue for the Techs?
Keith Busse - Chairman and Chief Executive officer
Well, I think that is a good observation, we are working on that. That doesn't dampen our enthusiasm for having a West Coast project, which got delayed because Nugget was delayed for a couple of years, but clearly Nugget could be the primary driver for an effort on the West Coast of modest size.
And obviously we are going to be dealing with primary metals, with the cost structure that should put us in a favorable position. Having said that, we probably need to quit quick talking so much about it, because it is years away…
Michelle Applebaum – Applebaum Research
The West Coast?
Keith Busse - Chairman and Chief Executive officer
Yes, and if they will happen and it is a future growth project for us, but it is not tomorrow. We are looking at how in our extended universe, we might provide more Hot Metal to our sister divisions over the course of time.
That is something we have looked at continually.
Michelle Applebaum – Applebaum Research
Okay. Well, listen.
You know, I beat you up a lot, and it is out of, you know, love. And to say that your timing in getting into the loan product market was either brilliant or lucky, a fabulous move, and we are seeing it pay off in a very large way here.
So, nice quarter. Nice job.
Keith Busse - Chairman and Chief Executive officer
Thank you.
Operator
We'll hear next from Timna Tanners, UBS.
Timna Tanners - UBS
Hi, thanks and good morning. I wanted to ask some quick questions really.
Theresa mentioned that there would be a finalization I think on some of the intangible or the goodwill calculation in the middle of March and there will be preps and updates. Is that a signal that there will be a mid quarter update maybe?
Theresa Wagler - Vice President and Chief Financial Officer
Oh no, I didn't mean to do that.
Timna Tanners - UBS
Okay.
Theresa Wagler - Vice President and Chief Financial Officer
I just meant that we've made some estimations, a month to a month and a half. [inaudible] the evaluations are final.
It wasn't to mean that we are going to have a mid quarter guidance call.
Timna Tanners - UBS
Got you, and thanks for giving those volumes, that was really helpful. On the CIU contracts, would you mind just explaining how that works a little bit better, how quickly are those repriced, and you said that 30% to 40%.
Can you give a little more detail on how this works?
Keith Busse - Chairman and Chief Executive officer
The CIU deals, we basically have as a range and it changes with seasonality of our customer base and also the market a little, but as the range of 64,000 to 85,000 tons of CIU based contract. Roughly 20,000, 25,000 tons of that is hot metal related, whereby the CIU price that comes out typically round about a twelfth of the month, would dictate the following months twice.
For total products and galvanized products, there is a two-month lag. So, January pricing for instance, the increase in January CIU, which was $75, gets realized for those products in March.
Timna Tanners - UBS
Got you, that's helpful. Okay.
Keith Busse - Chairman and Chief Executive officer
44,000 and 60,000 ton range of those products.
Timna Tanners - UBS
Got you and then finally, I wanted to ask if you could comment on your potential for export given that the market overseas has continued to be quite strong and big exports. I don't know if your geographical positioning is as supportive, but if you could comment on exports please?
Keith Busse - Chairman and Chief Executive officer
Well, essentially Timna the export numbers that we have been seeing, [inaudible] - have just not been attracted to us. Again, to your point geographically, and again this is cheap flat products, which is going to get us there and get the margin that we want.
I think Dick may be slightly different.
Richard Teets, Jr. - Executive Vice President, President and Chief Operating Officer for Steel Shapes and Building Products
Mostly from the [inaudible] perspective we do have the ongoing business relationship with a number of European customers than we've been shipping to Europe on an ongoing basis throughout the 2007 calendar year and expect that to continue in 2008.
Keith Busse - Chairman and Chief Executive officer
And I mentioned, as you know Nucor and other competitors’ mills may well be better positioned to export business. When you look at the fact that Hickman is on the water, Decatur is on the water, Brooklyn is on the water.
They are in a lot better position to effectively compete in that market.
Timna Tanners - UBS
Okay, great, thanks very much.
Operator
We will hear next from Mark Parr with KeyBanc.
Mark Parr - KeyBanc
Hi, thanks a lot.
Keith Busse - Chairman and Chief Executive officer
Hi, Mark.
Mark Parr - KeyBanc
Hi Keith, a great quarter. Had a couple of questions.
First, I was curious about scrap market. When you are talking about lower industrial activity, perhaps with the supply of prompt material or obsolete material is somewhat constrained.
I was wondering if Danny could comment on perhaps how much of an impact this could have on spreads over the course of '08 relative to '07?
Danny Rifkin – Executive Vice President, President and Chief Operating Officer, OmniSource Corporation
Mark, part of it is seasonal in that we usually see in the November, December early January timeframe, industrial output slow, and therefore scrap, industrial scrap volume diminished. I think it is exacerbated this year by some of the issues coming out of the domestic automotive sector.
Mark Parr - KeyBanc
Okay.
Danny Rifkin – Executive Vice President, President and Chief Operating Officer, OmniSource Corporation
And the suppliers to automotive. It is a bit early to forecast how that might affect everything in 2008, but in the near term, the competition for industrially generated scrap is fairly intent.
Mark Parr - KeyBanc
Have you ever seen it this way before, say in the last 4, 5 years?
Danny Rifkin – Executive Vice President, President and Chief Operating Officer, OmniSource Corporation
I think we've… I think we'd see it this way almost every year. I think 2004 was quite similar.
And although I think what's different this time is not so much the issues with the generation of industrial scrap, the fact that domestic demand has remained pretty solid in terms of demand for scrap and export of scrap are at record levels. So, whatever scrap has been historically imported into the US is not coming in and therefore running at 16 million ton a year export rate, that's probably 3 million to 4 million tons above what would be normal on an annualized basis.
That makes a huge impact on a month-to-month basis in domestic branches.
Mark Parr - KeyBanc
Okay. I was wondering, Keith… Dan I appreciate that color, thanks.
And I was wondering, Keith, if you can give us any details about the supply contract that the Techs have, and what sort of cost pressure that might be creating at that… on that part of your business for the first half of the year?
Keith Busse - Chairman and Chief Executive officer
Well, most of the outsourcing at the Techs is with US steel, who has been a very good supplier and we anticipate will continue to be an excellent supplier provider if you will. As pricing in that product environment moves up, in the substrate environment, we would only hope that the end market prices would keep up with in terms of finished product coated.
Mark, any other color?
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
They're obviously booking their mill ahead of most of the market because of the lead time for substrate. And so on the way up, they have the advantage obviously, because they are buying substrate two or three weeks ahead of the curve at lower pricing.
Mark Parr - KeyBanc
And so the stretching of the order book at the Techs out into April is an advantageous thing in the light of the substrate environment.
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
Absolutely.
Mark Parr - KeyBanc
That's fair. All right.
I appreciate that. I had one last question, Keith.
I was wondering, there has been some trade press this morning about a whole bunch of steel mills in China that have been shut down because of electricity shortages. I was just wondering if there is anything that you're hearing or seeing that could create some incremental upsight for pricing or your further reductions in supply for the US market in the next couple of months?
Keith Busse - Chairman and Chief Executive officer
Mark I was unaware of those releases. I am not up to speed on that.
So, I can’t comment.
Mark Parr - KeyBanc
Okay. All right.
By the way, congratulations on the great results.
Keith Busse - Chairman and Chief Executive officer
Thank you.
Operator
We will have next from Andrew O’ Connor with Millennium Partner.
Andrew O’ Connor – Millennium Partner
Thanks operator. Good morning everyone.
Keith Busse - Chairman and Chief Executive officer
Hi Andrew.
Andrew O’ Connor – Millennium Partner
Keith, I heard your response to Michelle's question about '08 guidance. I guess further to this, is it possible to identify the projects or elements that would allow the company to hit the top end of the '08 earnings guidance range, 5 to 5.5 per share, who would you suggest we focus on?
Thanks so much.
Keith Busse - Chairman and Chief Executive officer
Well, obviously the market, it's healthy right now and should the imports continue to be constrained and the pricing environment Flat-Rolled continued to improve or at least settle at the higher levels, that could have a positive impact, if resource costs do indeed back off in the spring. If they don't, it may well not have positive impacts.
So, I mean the two sort of do go hand-in-hand a little, and I know they are probably disconnected more so today than they historically have been. I don't think that there is going to be a lot of change in the structural market.
We do our best to forecast where we think the resource cost curve is going, and we look at that through the binoculars being able to recover that, principally in the shapes arena. So, I don't know… we've already done that.
We want to suggest there is probably a lot of upside, just unless we have a lot more of success would bring in these assets on stream earlier, that would probably be the only upside in the structural arena. It's kind of… kind of tough to know where our fabrication is going to be settle out in the end with these brand new facilities just becoming active in the market and having better cost environments than they have experienced in the past that we've modeled better year in fabrication, we've modeled a… talk about resources, we've modeled the adjusted EBITDA numbers that we saw in the past with Omni.
And right now in the strength of the market don't foresee any change in that environment one way or another. Obviously, if prices remained at these levels throughout the year, there might be an opportunity for some increase in margins there, but I think it's really too early to make that comment.
Andrew O’ Connor – Millennium Partner
Okay. Thanks for that.
I'm looking at page 3 of the press release, projects status, and is there anything else within the control of the company, which again you think might or has the potential to evolve favorably, which would allow you to hit the top end of your '08 guidance, $5.50 a share?
Keith Busse - Chairman and Chief Executive officer
Well, I think we pretty much laid it out for everybody, we thought that would be helpful to have a bird’s eye view of things that we are thinking about, and the timing of these projects. So, I don't know that we have any additional comment or anything we can add to that.
Andrew O’ Connor – Millennium Partner
Okay. And then lastly on CapEx, I may have missed the full-year CapEx 2008?
Theresa Wagler - Vice President and Chief Financial Officer
We estimate to be between $350 million and $400 million.
Keith Busse - Chairman and Chief Executive officer
And the depreciation I think you gave at about $180 million.
Theresa Wagler - Vice President and Chief Financial Officer
Correct.
Keith Busse - Chairman and Chief Executive officer
And was that amortization included?
Theresa Wagler - Vice President and Chief Financial Officer
Correct.
Keith Busse - Chairman and Chief Executive officer
Okay. So that includes depreciation and amortization.
Andrew O’ Connor – Millennium Partner
And the largest chunk of CapEx is to be spent on which?
Theresa Wagler - Vice President and Chief Financial Officer
About 45% of that would go to the structural and rail division [inaudible].
Andrew O’ Connor – Millennium Partner
Got you. Thanks guys.
Keith Busse - Chairman and Chief Executive officer
Thank you.
Operator
[Operator Instructions] And we hear next from John Tumazos.
John Tumazos - Prudential Financial
Congratulations on $131 operating profit margin. This morning US Steel reported just $13 and last week AK Steel lamented contract pricing terms.
It's hard to understand how their cost could be rising quicker when they don't rely on scrap? Is the competitive dynamic that the big auto customers have ratcheted contract prices down or that the integrated side of the competitive equation is cutting prices?
Keith Busse - Chairman and Chief Executive officer
Well, I don't think they are out there cutting prices in the spot market John. I think that I am not privy to specific contract results for each of these companies.
But if you're not seeing it in the cost side, which is a fair logical conclusion that the scrap prices have impacted us to a greater degree perhaps then they have certain other competitors in the integrated arena. You wondered, if that margin compression isn't really occurring through the revenue side, and that would be something I would be thinking about.
But these guys don’t have any picnic either with world market prices for iron ore going up to the degree that they have. Some people are just in better position than others.
Of course US is in a very strong position there. I think they probably had some operating issues scan their press release that held back perhaps the results to some degree, and they're hoping for a better quarter, but I don’t know that I can help you at modeling the difference to our numbers and theirs.
John Tumazos - Prudential Financial
Congratulations on the good results.
Keith Busse - Chairman and Chief Executive officer
Thank you.
Operator
We will hear next from [inaudible].
Unidentified Analyst
Hi, good morning and thanks for taking my call.
Keith Busse - Chairman and Chief Executive officer
Hi Bob.
Unidentified Analyst
Galvalume. Can you give some… is there an alternative for hot-dip galvanizer?
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
Sorry, I didn't catch that Bob.
Unidentified Analyst
Galvalume.
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
Galvalume is a different zinc alloy. It's a zinc aluminum alloy that gives higher corrosion protection, specially guaranteed, it is a trademark in actuality.
And it is principally used in the building products trade for standing seam roofing. And the uniqueness of that actually being able to go up to 61-inch lift, we are able to make, what we call a double lift, [inaudible] and save a lot of costs and improve your efficiency in their line.
Unidentified Analyst
Okay, is that necessarily a substitute for normal [inaudible] it is kind or like the next-generation?
Mark Millett – Executive Vice President of SDI, President and Chief Operating Officer for Flat Rolled Steels and Ferrous Resources
It's product diversification, which is another market. Yes.
Unidentified Company Representative
As Mark pointed out, most of that material is warranted for 20 years and 30 years and their preferred substrate would not be… it would be Galvalume either exposed Galvalume or Galvalume painted.
Unidentified Analyst
Fair enough. Thank you.
And just one quick follow-up. And I appreciate your comments earlier on the scrap markets, and I understand it pricing could come down here with the warmer weather pending, but do you see enough structural reasons out there that we should expect scrap to be up year-over-year in '08 versus '07?
Unidentified Company Representative
Year-over-year, I think the global environment has changed and that's what's driving the rise in domestic scrap parts. I think over the last few years, we continue to see more and more impact of what's happening overseas, and the… it's not just the demand coming from Asia, but policies put in place in Russia and demand in the Mediterranean region have reflected scrap prices.
So, I think there is a fundamental sound rationale for us to expect scrap prices in '08 to remain higher than '07.
Unidentified Analyst
Thank you very much and best of luck.
Unidentified Company Representative
I would agree with that Bob by the way, that comment that they probably will be year-over-year higher.
Operator
And your next from Charles Bradford with Bradford Research.
Charles Bradford - Bradford Research
Hi, good afternoon. Can you talk a bit about the pig iron business, because I understand that CVRD has stopped chipping iron ore from some of the local pig iron guys and the price has soared.
What do you see now for these parts of imported pig and does that have an influence on the higher grade scrap market?
Unidentified Company Representative
I'm not so sure that a major impact on the quality [inaudible] probably ran about 460, 470 right now. We have been out of the market for some time and we've got a pretty good inventory.
Unidentified Company Representative
And Chuck I think we're hoping that the inventory position that we have along with improved results at Iron Dynamics will grow a long way to getting this closer to mid '09 when Mesabi Nugget may well take the place to purchase pig iron for us.
Charles Bradford - Bradford Research
Can you also get a comment about net interest? Can I get a forecast on gross… would your interest income and equity income is relatively constant or would you see that changing?
Theresa Wagler - Vice President and Chief Financial Officer
Are you speaking to capitalized interest?
Charles Bradford - Bradford Research
Exactly.
Theresa Wagler - Vice President and Chief Financial Officer
Yes. That's a little harder to judge.
We're going to continue to have a construction project throughout 2008. So, I would expect during the fourth quarter, we have capitalized interest of just little over $5 million.
I would expect to see that same level throughout '08.
Charles Bradford - Bradford Research
And one last question. Can you talk a little bit about SG&A.
Obviously that has jumped quite a bit with all the acquisitions. How should we model that for '08?
Theresa Wagler - Vice President and Chief Financial Officer
SG&A tends to run pretty soundly at 5% of our net sales number. I will continue to see it at that level.
During the fourth quarter, there were just some additions related to amortization, and as we hit the final evaluations for the OmniSource transaction, where amortization is growing to our SG&A, we'll break that up separately. But I would take 5% or 6% net sales as real good estimate.
Charles Bradford - Bradford Research
Thank you.
Operator
It seems we have no further questions at this time.
Keith Busse - Chairman and Chief Executive officer
Thank you operator. As always, it's been a pleasure to field your questions and let me just close by thanking the 6,000 dedicated people who work for this company.
They're doing a terrific job; I mean just a terrific job. The company has a great culture, results have been great and we look forward to bigger, better things as we march forward.
Thank you everyone for being interested in our company and thank you for the good questions that you always advance to us. Keep us on the edge of our chair or seat.
So, look forward to speaking with you next quarter.
Operator
Thank you. That does conclude today's presentation.
Thank you for your participation and have a great day.