Minerals Technologies Inc. (MTX) Q3 2013 Earnings Call Transcript

Rick B. Honey - Vice President of Investor Relations & Corporate Communucations Robert S. Wetherbee - Chief Executive Officer and President Douglas T. Dietrich - Chief Financial Officer and Senior Vice President of Finance & Treasury D. J. Monagle - Senior Vice President and Managing Director of Paper PCC Han Schut - Former Vice President and Managing Director of Minteq International Inc Jonathan J. Hastings - Vice President of Corporate Development Joseph C. Muscari - Executive Chairman

Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division Daniel Moore - CJS Securities, Inc. Rosemarie J. Morbelli - Gabelli & Company, Inc. Andrew Dunn - KeyBanc Capital Markets Inc., Research Division Alan Mitrani

Welcome, ladies and gentlemen, to the Minerals Technologies Inc. Third Quarter 2013 Earnings Conference Call. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to turn the conference over to your host, Rick Honey, Vice President of Investor Relations. Please go ahead. Rick B. Honey: Good morning. Welcome to our third quarter 2013 earnings conference call. Today, Chief Executive Officer Bob Wetherbee will provide some insights into our third quarter performance. And we'll then turn the call over to our Chief Financial Officer, Doug Dietrich, who will give you a detailed report of our financial results for the quarter. Following Doug, D.J. Monagle, Senior Vice President and Managing Director of our Paper PCC business, will provide an update on our growth initiatives for that business in Asia. Before we begin, I need to remind you that on Page 8 of our 2012 10-K, we list the various factors and conditions that may affect future results. Statements related to future performance by members of our management are subject to these cautionary remarks and conditions. Now I will turn the call over to Bob Wetherbee. Bob? Robert S. Wetherbee: Thanks, Rick. Good morning, and thanks for joining us today. Minerals Technologies posted record financial results for the third quarter, with operating income of $32.8 million, up 15% over the prior year. Operating income as a percentage of sales reached 12.9% as we continued to improve over last quarter and exceeded the 2015 goal we established 3 years ago. Earnings per share for the quarter were $0.63 compared with $0.54 in the same period a year ago, a 17% increase. And underlying sales increased 4% as we continue to grow the top line. Our Specialty Minerals segment posted record quarterly operating income of $26 million, a 12% increase over the $23.3 million in the third quarter of 2012. Continued execution of our geographic expansion and new product innovation strategies drove this growth. Our Paper PCC business benefited from the restart of the satellite plant in Alizay, France, and the continued ramp-up of new satellites in India and Thailand. We also increased sales in our Processed Minerals and North American specialty PCC product lines. During the quarter, we announced 2 new contracts for the construction of satellite PCC plants. The first was in China. We signed a joint venture agreement with Nanning Jindaxing Paper for the construction of a 45,000 metric ton satellite plant. The second was in Europe, where we reached agreement for a 14,000 metric ton satellite plant with an established paper company that wish to remain anonymous for competitive reasons. We expect both plants to be operational in the fourth quarter of 2014. Fulfill, our high-filler technology for the paper industry, continued to gain momentum. Earlier this week, we announced a commercial agreement with a paper mill in India, who asked to remain anonymous for competitive reasons, that is deploying our Fulfill E-325 technology. This technology allows papermakers to reduce the cost of paper by increasing the use of MTI's PCC to replace higher-cost fiber. We now have agreements with 14 paper mills around the world that are deploying the technology. Also, during the quarter, our Board of Directors authorized a new 2-year $150 million share repurchase program. Looking at our earnings per share, you'll see that we've been at or above $0.50 per share in 9 consecutive quarters, and above $0.60 for the second consecutive quarter. We've achieved these sustained levels, despite operating in the challenging paper, steel, construction and automotive industries. This continues to confirm that our geographic expansion and new product innovation strategies, coupled with our strong operating performance and focus on operational excellence, are continuing to create value. Our return on capital improved to 10.1% versus 9.1% a year ago and above our cost of capital. Geographic expansion in Asia is a key lever in our effort to grow organically. Our sales in that region grew 11%, primarily driven by the continuing ramp-ups of satellite PCC plants in India and Thailand, both of which were constructed in the last year. As I mentioned earlier, we also saw advancement of our Fulfill high filler technology with the deployment at a paper mill in India. We continue on track to deliver our 2013 Fulfill operating income target. We delivered sales growth in Performance Minerals, which consists of our Processed Minerals operations and the Specialty PCC product line. Ground calcium carbonate, or GCC sales, increased 12% over the prior year. We captured modest share gains from product substitution in adjacent markets and saw a regional growth in the construction market. Talc product line sales grew 8% as we expanded our positions with global customers in polymer, sealant and adhesives applications. North American Specialty PCC product sales grew 9% as we continue to capture the benefits from the expansion at our Adams, Massachusetts facility that we mentioned in last quarter's call. In the Refractories segment, sales on our Metallurgical Wire product line increased 10%. And refractory product sales in Europe and the Middle East region increased 12%. In addition to our strategies to grow through geographic expansion and new product innovation, we continue our efforts to improve performance through operational excellence and expense control. New product innovation is an equally important core element of our strategy. As you can see in this chart, our new product development pipeline is healthy and growing, significant for a technology-based company. Today, we have 121 active projects in our pipeline, up from 95 at the end of 2012. 39 of these have been launched. And 34 are in active development or trial. In Refractories, we're introducing longer-life product offerings that address the global customer need for furnace uptime, productivity and lower overall operating costs. Coupled with our product and operational expertise and laser measurement systems, we continue to drive for solutions that optimize material application within a furnace to maximize furnace life. We're expanding our product portfolio for electric arc furnace customers to gain share, building off our core Refractories business, serving basic oxygen furnaces. In our Performance Minerals business, we're focused on improving particle size distributions and surface properties that can grow our business in sealants, polymers, packaging and food pharma applications. In addition to the Fulfill high-filler technology portfolio that we continue to develop and deploy in our Paper PCC business, we're pursuing new offerings that provide alternate uses for the industry's waste streams and processed residues. We've asked D.J. Monagle to expand on the Paper PCC new product pipeline and the growth potential on this business later in today's presentation. Our team is excited about the new product pipeline and growth potential, and passionate about capturing. Before I turn it over to Doug Dietrich, who will provide the financial details of the third quarter, I want to give you a quick recap of the quarter and where we are as a company. Once again, we broke company records of profitability by executing on our key strategies. Our sales are growing. And our income from operations for the Specialty Minerals segment reached all-time high levels. We continue to seek new opportunities for growth around the world, primarily in Asia. Our portfolio of growth initiatives across all our product lines has us well-positioned to more than offset the recently announced reductions in North American paper capacity that we've seen coming for some time. We continue to maintain a sharp focus on improving efficiency and productivity. The company is on a high-performance track, led by a solid management team, committed to safety, technology development and deployment, continuous improvement and expense control. As a strong operating company with market-leading positions in many of our businesses, we're building upon that strength by continuing to grow our existing product lines and seek acquisition opportunities to leverage our minerals and operational expertise to improve bottom line performance. We are staying the course that has led to improved financial performance. And we will continue to focus on developing and capturing opportunities for profitable growth. Now I'll turn it over to Doug Dietrich for a detailed review of our financial results. Doug? Douglas T. Dietrich: Thanks, Bob. Good morning, everyone. Let's go through our consolidated and business segment results for the quarter. I'll highlight the key market and operational elements of our financial results in each major product line and comment on comparisons to both the third quarter of last year, and sequentially, to the second quarter of this year. As Bob mentioned, we achieved record operating income of $32.8 million this quarter. And earnings per share were $0.63, which is a 17% increase from the $0.54 recorded last year. Our strong performance this quarter was led by the Specialty Minerals segment, which also achieved record quarterly profits of $26 million, a 12% improvement over the prior year, and was 15.5% of sales. Paper PCC operating income increased over 15% compared to last year. And the Performance Minerals business continues on its strong track with operating income growth of 6%. The Refractories segment operating income also improved, up 17% from the third quarter of last year. Our consolidated sales this quarter increased 3% or about $6 million over last year. Our underlying sales grew approximately 4%, as foreign exchange had a 1% unfavorable effect. We saw underlying sales growth in both the Specialty Minerals and Refractories segments and, in total, the growth was in line with the expectations that we communicated to you on our last call. Gross profit was approximately $60 million, 8% above the prior year. Gross margins expanded to 23.6% from 22.4% last year, driven by price increases, sales of higher-margin products like Fulfill and a 4% improvement in manufacturing productivity. Total fixed overhead costs dropped to 14.3% of sales as compared to 14.9% last year, a 4% improvement. As we've discussed on previous calls, we continue to control our overhead expenses tightly, which has helped drive a greater portion of these new sales to the bottom line. The combination of these 2 improvements leverage total company operating income growth to 15%. Our return on capital for the quarter increased to 10.1% on an annualized basis compared to 9.1% in the third quarter of last year. We generated close to $34 million in cash from operations, of which $10 million was used for capital expenditures. We repurchased approximately $24 million of shares in the quarter, which completed the $75 million share repurchase program authorized in 2011. In addition, in September, the company's Board of Directors authorized a new 2-year $150 million repurchase program, which will essentially return the majority of our free cash flow back to shareholders over the next 2 years. Sequentially, consolidated sales decreased 1%. Specialty Minerals sales decreased 1% due to the seasonal decline in the Processed Minerals product line. And Refractories was 2%. But despite the slightly lower sales level, operating income increased 1%, which was higher than anticipated on our last call, as Paper PCC came in stronger than expected. As we've done over the last several quarters, this slide highlights the product line contribution to the operating margin improvement over last year. You can see the growth was driven largely by Paper PCC. However, the Performance Minerals business continues to operate at historically high levels. And the Refractories segment also achieved year-over-year improvement. The Paper PCC margin growth was due to price increases, productivity improvements, contribution from both new satellites and Fulfill and the restart of our Alizay, France facility. The improvement in Performance Minerals was due to strong sales growth from our ground calcium carbonate and talc businesses, volume growth in our North American Specialty PCC product line and price increases. In Refractories, margins improved due to low -- due to volume growth in our Metallurgical Wire business and contributions from refractory sales in Bahrain. Going forward, we expect the company to continue to operate at a high-performance level. And we're well-positioned to expand margins further as we continue to execute our strategies. Let's go over the financial results within the Specialty Minerals segment. As I mentioned earlier, this segment had a record quarter, with $26 million in operating income and underlying sales growth of 4%. As you can see from the chart, this segment continues on a very strong track this year. Within this segment, Paper PCC's underlying sales grew 2%, driven by a 9% increase in Europe and an 11% increase in Asia. This growth was partially offset by slightly lower volumes in North America and Latin America. In Performance Minerals, underlying sales grew 7%, driven by volume growth in our U.S. Specialty PCC and ground calcium carbonate product lines and higher pricing. This growth was partially offset by weaker Specialty PCC demand in Europe. Segment gross margins expanded to 24.1% from 22.8% last year. Operating income grew 12%, driven by a 15% increase in Paper PCC and a 6% increase in Performance Minerals. Operating margins in the segment expanded to 15.5%, an improvement of over 8%. This margin growth was primarily due to the contribution from our new satellite facilities in Asia, increased profits from Fulfill, higher pricing, manufacturing productivity improvements and volume growth in our ground calcium carbonate, talc and U.S. Specialty PCC product lines. Sequentially, segment sales were 1% below the second quarter, driven by the seasonal market decline in Performance Minerals that we typically see late in the third quarter and indicated to you on the last call. Sales in Processed Minerals were 4% lower than the second quarter. Operating income for this segment increased 3%, which was better than our expectations, due to higher profitability in Paper PCC, primarily in Europe and Asia. Also, in the quarter, there were announcements by International Paper, Boise and Georgia-Pacific to close paper machines, removing approximately 970,000 tons of uncoated wood-free paper production capacity. As a result, paper machine operating rates in the U.S. should increase over 90%, which is a healthy position for the paper industry. We expect the majority of the displaced uncoated freesheet volume to be absorbed into other paper mills, where we currently have satellites. At this point, it's unclear as to the exact timing and direction of the moves, but indications are that this will take place over the next 4 to 6 months. We do expect some net volume of impact on our satellites over this period. And we're currently working through to what extent as we see how this volume shift takes place. Looking forward to the fourth quarter, we expect lower profits in Paper PCC, as we absorb the impact of higher line costs in North America that contractually cannot be passed through to customers until the first quarter of next year. In Performance Minerals, we expect the typical seasonal volume decreases, as the fourth quarter is the low point of demand in the year for our end markets. Fourth quarter sales in Performance Minerals are typically 7% to 10% lower than the third quarter. Overall, we expect fourth quarter operating income for this segment to be between 10% and 12% lower than the third quarter levels, which is a normal seasonal drop. However, compared to last year, we expect to continue on our strong track, with sales growth of approximately 4% and operating income growth of 10%. Looking further into next year, despite some of the recent structural changes in North America and European paper markets, we expect to maintain our momentum of sales growth and margin improvement in the segment through the commissioning of 3 new PCC satellites in China, the expansion of 4 satellites in the U.S. and the continued deployment of our new technologies. In a few minutes, D.J. Monagle will take you through in more detail the broader growth opportunities in Paper PCC and our recent progress in capturing them. As I mentioned on the last chart, segment operating margins increased 8% this quarter to 15.5% from 14.3% last year. And this chart outlines the components of that improvement. We absorbed higher lime costs in Europe, as well as significantly higher electricity costs in Performance Minerals this quarter. These costs were offset by contractual Paper PCC price increases and product price increases in our Performance Minerals business. We had sales growth in our GCC and talc business of 12% and 8%, respectively, which generated close to a full percent of margin improvement. We continue to achieve productivity and other cost control improvements in this segment, which contributed 0.003% to the margin growth. And finally, we're seeing solid performance from our new PCC satellites in Asia, along with increased contribution from Fulfill. Now let's go through the results within the Refractories segment. Sales in the third quarter were 2% higher than last year. Underlying sales grew 4%, as foreign exchange had an unfavorable impact of approximately $1.3 million. Sales in Metallurgical Wire increased 10% due to volume increases in both North America and Europe. Underlying sales of refractory products and systems grew 2%, driven primarily by growth in our Europe, Middle East refractory business, where sales increased 12%, due largely to incremental volumes in Bahrain, share gain with customers in Italy and increased volumes in France and Austria. These higher sales were partially offset by lower sales in North America and Asia refractory products. Operating income for this segment increased $1.2 million or 17% in the quarter to $8.4 million. This increase was driven by the sales growth in Metallurgical Wire and manufacturing productivity gains in both product lines. Operating margin was 9.7% for the quarter, which represents a 14% improvement over the 8.5% in the third quarter of last year. Sequentially, Refractories segment sales and operating income were slightly lower in the second quarter, which was in line with the expectations and what we communicated on the second quarter call. Looking forward to the fourth quarter, we expect our operating income for the full segment, again, to remain similar to third quarter levels, as we do not see any significant near-term improvement in the North America and Europe steel markets. In addition, steel producers continue to curtail capital spending, which impacts the number of refractory equipment units we sell. Compared to the fourth quarter of last year, however, we expect segment sales to grow by 4% and operating income to increase 10%. Here's a summary of the changes in the Refractories segment operating margin. The third quarter ratio of 9.7% compares to 8.5% last year, a 14% improvement. As I mentioned, improved Metallurgical Wire volumes in both North America and Europe contributed about 7/10 of a percentage point to margin improvement. Productivity improvements and expense control add another 3/10 and increased sales and profits in the refractory products added another 2/10. Now let me move onto our working capital and cash flow trends. Total days of working capital increased slightly to 57 days, but remained at the low levels that we have maintained over the past several years. Our cash flow from operations was $34 million in the third quarter. And capital spending for the quarter was $10 million. We used the majority of our free cash flow to repurchase approximately $24 million of our shares. In addition, we're gaining some clarity with our customers on the timing of new paper mill installations in China. And we expect that our capital expenditures associated with the building of these PCC satellites will move into the first part of next year. Our current outlook is that total capital spending for the year will be in the range of $45 million to $55 million. In summary, our third quarter earnings of $0.63 per share reflect our strong performance this quarter. The sales growth that we've been projecting over the past several quarters is showing through. This performance is a direct result of the execution of our strategy of geographic expansion and new product innovation. We've leveraged these higher sales to record profits through our lean processes and culture of operational excellence. Looking to the fourth quarter, we expect a normal 10% to 12% decline in the Specialty Minerals segment operating income, as Performance Minerals enters its seasonally slow sales period and Paper PCC absorbs higher lime costs in North America. In Refractories, we expect segment operating income to remain similar to third quarter levels, as we still do not see any significant near-term improvement in the North America and Europe steel markets. In total, we expect fourth quarter company sales to be lower than the third quarter due to the normal seasonality of the business. As a result, we expect operating income to be 7% lower than the third quarter or about $0.05 per share. Compared to last year, however, we see continued strong performance, with 4% sales growth and 10% earnings-per-share growth. Now I'll turn it over to D.J. Monagle to review our growth opportunities and progress in Paper PCC. D.J.? D. J. Monagle: Thank you, Doug. Good morning, everyone. I'd like to provide you with some insight into the growth opportunities that we're pursuing in Asia, especially China and India, through geographic expansion and the development of new technologies. Three years ago, we presented our vision of the long-term growth we saw in China and India based on 2 factors: tons of uncoated wood-free produced compared with the tons of PCC used in paper production in these 2 countries. We then estimated how the potential PCC tons would grow based upon the historical annual rate of growth in uncoated wood-free paper production and our ability to differentiate and make a positive impact with our new technologies in this emerging region. This provided us the basis for our strategies and objectives designed at converting this region to our core technology and delivering significant growth. Today, I'd like to review that potential PCC growth rate and bring you up-to-date on the advancements we've made through the execution of our strategy of geographic expansion. This slide is a graphic depiction of potential PCC growth in China and India, compared to the established regions of Europe and the Americas. Today, 12.4 million tons of uncoated freesheet are produced in North and South America, while 11 million tons are produced in Europe. As a point of reference, these markets have declined between 1% and 3% per year over the past 10 years. In comparison, India is producing about 3.5 million tons of uncoated wood-free, and is growing by more than 7% per year. China produces 16.5 million tons of uncoated wood-free, more than both North and South America combined, and is growing more than 6% a year. Now let's look at PCC penetration, which we define as the tons of PCC used in paper production as a percent of paper tons of our primary market. In the Americas, PCC penetration is 20%; and in Europe, 17%. By contrast, in China, the tons of PCC produced and sold into paper is about 7% or 1.2 million tons and 9% or a little over 300,000 tons in India. I'd like to note here that in 2010, PCC penetration in India was 4%, and has grown to 9%, primarily by Minerals Technologies' development efforts in that country, through the construction of 5 of the 7 PCC plants there in the past 4 years. Because we have established PCC as the filler of choice for production of world-class quality uncoated freesheet, and because these 2 countries are installing state-of-the-art paper machines, there is significant room to grow and to increase PCC penetration in China and India to 20%. So what does that mean? We have several fundamental elements supporting our growth. First, we have penetration into the existing market. If you increase PCC penetration rate to 20% in these 2 countries, PCC consumption increases by 2.6 million tons. Next, we have these growing markets. If you apply the historical growth rate of 6% over a 5-year period, the near- to medium-term market potential grows by another 1 million tons. Finally, and something we consider as additional opportunity to what we've reflected here, we are introducing technologies that allow for penetration beyond 20% in our portfolio of Fulfill technologies. And to give you a frame of reference, our highest level of PCC used in uncoated papers is actually above 25%. As a point of comparison, in 2012, MTI sold 3.3 million tons of PCC per paper. So the Asia potential represents nearly a doubling of our current volumes sold to the industry. Our objective is to pursue every possible ton of PCC and to establish a market share commensurate with what we've been able to capture in the Americas and what we've recently demonstrated we can do in India. Now much of this you've heard before in various discussions we've had in the past, but we thought we'd refresh you on the progress we've made by executing our strategy through the addition of the infrastructure and talent into the region in the form of technical and business development. In the last year, we signed contracts with 3 more Chinese paper makers for the construction of satellite PCC plant. This brings our total to 6 in that country. It should be noted, as we've stated in previous calls, that we have been prevented from marketing PCC in China because of a 10-year exclusivity agreement we had with Asia Pulp & Paper, also known as APP, until 2010. We are now convincing the rest of the Chinese papermakers of the PCC value equation. As you can see, from the left-hand side of this chart, in 2009, India produced 30,000 tons of PCC used in paper. And Minerals Technologies had 0 market share. In China, in 2009, of the 1 million tons of PCC produced for paper, our market share was 35%, which was from the 3 satellite PCC plants we've had with APP for the past several years. Right now, in India, we have approximately 70% market share through our existing 5 satellites and our market projections are that we can maintain that share as we grow our sales in the 350,000-ton market in 2014. In 2009, in China, much of the non-MTI PCC was from small or local producers with older technology than what we have today. Next year, we estimate that the continued growth of state-of-the-art papermaking, we will be able to increase our share to nearly 50% of a larger 1.4 million-ton market, as the high-quality papermakers adopt PCC and our new technologies. This penetration anticipates successful startup of our satellites under construction, as well as delivering a new satellite in our business development pipeline. To summarize, there is significant and substantial room to grow in these developing regions. And Minerals Technologies will be the leader in this conversion to PCC. This chart gives you a glimpse of why we believe we can continue to hold the position of world leader Paper PCC. The 3 Chinese flags on the right represent the papermakers, with whom we have signed contracts to build satellite PCC plants in the last 12 months: Sun Paper, Jindaxing Paper and Jianghe Paper. The additional dozen flags denote paper companies in China and other countries in Asia, where we're now working with papermakers in various stages to develop the use of our PCC in their papermaking facilities. In addition to working with the dozen papermakers we saw on the previous slide, we've also identified another dozen papermakers that could benefit by adopting our PCC technology. And technology is now and will remain the key to our success. For example, the main reason we're able to obtain 5 out the 7 satellite PCC plants in India was that we offered higher filler technologies, such as our Fulfill E-325, that we made available to papermakers as part of the new satellite offer. Earlier, Bob pointed out progress we've made as a company in revitalizing new product development. This chart shows the progress we've made in Paper PCC. But as you can see here, our development pipeline consists of many technologies aimed at several different objectives, not just the higher filler loading, which saves papermaker enormous cost in expensive fiber and remains our core focus. Some of the areas of technology that we're investigating, that you may not have been aware of, include products and processes for waste management, recycling, energy, the environment sustainability, penetration in the packaging and some offerings for mechanical uncoated paper as well. Let's look at our progress with the Fulfill technology. We recently came to commercial terms at our 14th E-325 customer. We continue to be actively engaged with 21 other paper mills around the world, signing up and conducting trials to validate the technology, which leads to customizing Fulfill to optimize results at specific paper mills across differing pulps. We continue to track well in operating income for the Fulfill technology in 2013. In closing, I'd like to say that we're confident in our ability to grow Paper PCC business. The Asian region offers tremendous growth opportunity. And our new products will allow us to continue to penetrate new markets. Our major focus will remain the execution of our growth strategies of geographic expansion and new product innovation. Now let's open it up to questions.

[Operator Instructions] And our first question in queue is from Jeff Zekauskas of JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: This is Silke Kueck for Jeff. The announced shutdown in West America of uncoated freesheet will probably off be -- remember, this is Portland, Alabama mill for IP and the Georgia-Pacific and the Boise plant. And the -- like as far as I can tell, like the shutdowns will happen in the fourth quarter. And like a rollover to new plants will probably not happen until like the second half of next year. So is it the case like the first half next year will be under, on the PCC side, will it be under significant pressure because of all those North American capacity coming off? Robert S. Wetherbee: Silke, so what we see is that the majority of the tons -- so the capacity is coming out. And it's probably about 160,000 tons of total capacity. But what we see is the production off of that capacity being shifted to other mills. We see it being shifted to other mills within the IP in the case of Portland and other IP mills in North America. So it's unclear exactly how that shift is going to take place, exactly where the paper tons are going to go. We see that shift taking place over the next 4 to 6 months. But we see the majority of those tons being absorbed into other mills where we have satellites. We think there might be some net negative impact as we go through that shift, but that's unclear to us at the moment. And we'll be seeing how that plays out over the next 2 quarters. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. Then also I have a couple of question to clarify some of like the recent announcements for Fulfill and the new satellite expansion. The 45,000-ton agreement in China was Nanning. Is that a new plant? Or is that an expansion plant? D. J. Monagle: Yes. Silke, that's a new plant and a new customer for us. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay, that's what I thought. And the 14,000 tons in Europe, is that an expansion? Or is it an expansion, an existing site? Or is it a completely new plant? D. J. Monagle: Silke, that is a new plant and a new customer for us. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: A new plant and a new customer for you, okay. And how come this customer hasn't become a Fulfill customer then immediately? D. J. Monagle: Which one are you referring to? Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: The European one. D. J. Monagle: Well, we don't have the plant in place yet. So we will work with them quickly to assess the fit of Fulfill in their grades, but we need to get our plan and our operation in place. And so let's just go through the sequence like you've seen in India. We'll get a new business. We'll offer them a portfolio of technologies and work with them to optimize conversion to our products. And then the introduction of those new technologies to optimize the efficiency of that transition. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. And I guess that answers then my last question. So the new Fulfill customer that you signed is probably one of the customers that -- it's probably one of like the new satellite plants in India that you've announced like the past 2 years? Robert S. Wetherbee: I will put it out of probably into definitely. It is one of our -- the new plants we've announced over the previous years. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. And if I can ask a last question, I'll get back into queue. Were the ground calcium carbonate results this year, were they supported by the launch of this new -- of the VICRON products? Or were these sales not significant enough yet to make a difference? Robert S. Wetherbee: They are, Silke. So we've seen both. It's 2 things, the new products that we're putting out, so the VICRON products, as well as you mentioned some products that displays other -- our niche markets that display some higher value minerals. But at the same time, we've seen some market growth in both the East and West Coast due to the construction industry. And on the West Coast in particular, some of the construction and our sales into the roofing industry has been strong lately. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: And so like, I guess, it means that maybe like half of the gross is due to the underlying market growing and maybe half of the growth is due to the new product introductions? D. J. Monagle: Yes. Probably to a little bit more at this point since some of those products are new, a little bit more toward the market growth. But yes, the new products are contributing.

Our next question in queue is from Daniel Moore of CJS Securities. Daniel Moore - CJS Securities, Inc.: You've done, obviously, a tremendous job over the last year or so in terms of margin improvements and efficiency gains. Doug, you mentioned lime specifically. Maybe talk a little bit about input costs and what you're seeing around energy and electricity costs and any potential impact that may have in your ability to continue to expand margins here in the near term? Douglas T. Dietrich: So 2 things. Energy does affect us directly, primarily in Performance Minerals at our processing facilities. But energy impacts us indirectly through magnesium oxide and lime, particularly lime. In Paper PCC, those energy -- that lime cost increase comes to us. We absorb it in certain quarters. And in North America, we'll absorb that share in the fourth quarter. But we are contractually able to pass that through pricing in a delayed fashion. And North America will pass it through next year. We've offset some of the energy increases. As you remember, we converted our kilns in our Adams facility from Number 6 oil to natural gas. And we've made some substantial savings this year on the conversion of those 2 kilns. And as I outlined on my slides, that's been slightly offset by some higher electricity costs. So we've seen pretty big increases in unit electricity cost, both in the East Coast and the West Coast in our Processed Minerals business. Daniel Moore - CJS Securities, Inc.: So just to clarify, going -- but you've obviously been able to offset those. And expectation will be you continue to be able to do so barring any further material jump? Douglas T. Dietrich: Yes, yes. Sorry about that. I've probably left the answer to your question. To answer your question, so we work on price increases. Now we've pushed some price increases, as I mentioned, in Performance Minerals to offset that. We work in a the Refractories business, obviously, with magnesium oxide prices to push our value proposition. And the savings we passed, we gave to steelmakers as we maintained those furnaces. We've pushed those prices. We worked to push those prices during price increases. So largely, we've been able to offset those increases in Performance Minerals. And contractually, we do that in Paper. Daniel Moore - CJS Securities, Inc.: Got it, very good. And you talked a little bit about Refractories. You gave a lot of detail. And I appreciate it. Metallurgical wire demand continues to grow. Maybe just remind us of those drivers. And historically, Q4 is a seasonally important quarter for equipment sales and Refractories. What are your expectations as we go in the tail-end of the year here? Douglas T. Dietrich: Sure. The first thing, I'm taking Metallurgical Wire, and then I can give it to Han to give some more color. Largely driven by geographic growth. So we've seen some new sales. We've been selling into India over the past several years and also in the Middle East and Turkey. Han, you want to give a little color to that?

Yes. Thank you, Doug. So if you look to Metallurgical Wire and into third quarter and our strategy in general, we saw in the third quarter geographical growth, like Doug mentioned, in Turkey and in the Middle East, but also specifically in Russia, and also in our home market in the United States. And so that is our first pillar of growth. Then the second pillar of growth for us is new products. So we launched, last year, lower activity wire. And that has opened up new accounts for us. And that project is really going well at the moment. And finally, if you look to the North American market, historically, we have been focused on slab gases and medium slab gases. And we have made some breakthroughs and that we're also selling in conventional slab gases. So we have kind of expanded our market in North America. And specifically, in the third quarter, we have some gains in the conventional slab gases. Douglas T. Dietrich: And Dan, I'll answer the second part of your question, the equipment sales. Yes. Typically, the fourth quarter is higher than other quarters as customers have outages. And they generally commission those units that we sell in the fourth quarter. Fortunately, similar to last year, we're seeing a bit of a slowdown in capital spending has continued. We've been mentioning that all year. And we haven't seen the general increase in equipment sales that we're going to see in the fourth quarter. And that's why I've indicated that in terms of Refractories from the third to fourth, we're going to see similar operating income. Daniel Moore - CJS Securities, Inc.: Got it. And so -- but that's embedded in the guidance like before? Douglas T. Dietrich: Yes, yes. Daniel Moore - CJS Securities, Inc.: Last question, if you look back a couple of years ago, your 2015 goals. Revenue, perhaps, trending a little lower, but obviously on the margin side, you've been able to already exceed those. If you were to update both of those goals, what might they look like? Or will you consider doing so going forward? Robert S. Wetherbee: Yes. This is Bob, Dan. We were certainly excited to be at 12.9% in the third quarter. And year-to-date, we're close to 12.2%, Doug, in terms of what we've been able to achieve. As we look forward, we can see sufficient and plenty of room to grow going forward. I think as we get into 2014, we'll have a chance to redo our -- revisit our goals over the longer term. But when you look at the fundamentals, when you look at the Fulfill growth, the geographic expansion, I'm talking about Metallurgical Wire, we do see the opportunity for additional improvement in that area. Doug, any additional flavor you want to add to that? Douglas T. Dietrich: I'll agree with Bob. I think there's definitely room for margin growth, both gross margin growth and operating income growth, Dan. I think the gross margins, as we continue with our productivity improvements, that's an underlying piece of our operational strategy. We look at higher margin products like Fulfill. D.J. showed you a technology pipeline that has new products in it, which are also higher-margin. But then we're going also leverage our cost base to grow margins, to grow the operating margin. So I think, look, we're sitting at 13%. I think we can push that to 14%. When we set some targets, we'll expand that. Can we push to 15%? Perhaps over time. But there's certainly the levers in there to be able to expand it further.

Our next question in queue is from Rosemarie Morbelli of Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Could you give us, D.J., a little more details on those new applications for some of your Fulfill product lines? Well you say it will go, for example, in waste management, well, how is it going to play a role there? And if you could give us a feel for what your products will do in the other categories. D. J. Monagle: Okay. So thanks for asking the question, Rosemarie. Here's some thoughts for you. So there are several themes in our product development. And the Fulfill product line is really addressing that higher filler loading. So we introduced that portfolio to you before. And that brand, that portfolio will continue to focus on those areas. But let's address some of the waste management strains and those sort of things. We were talking about this expansion into Asia, in general. And I think I, by design, tried to show you the concentration in China. If we look at that Chinese papermaker, they're under stress trying to reduce their energy cost, trying to reduce some of the waste streams that come out of their paper mill and trying to reduce fiber. So Fulfill is addressing the need to reduce their fiber cost by putting in more PCC. But also, we've got a couple of other technologies that are coming out that in addition to just the standard PCC that cleans out the air by sucking CO2 out of their exhaust stats, we can also manipulate and change some of their waste products into functional filler products. I hesitate to go much further than that, but it has to do with us having a much better understanding of China now that we've deployed a lot of technical and business development resources there. And looking at that region is very fertile further business development. So that -- so I'm hoping I'm asking -- or I'm answering your question, but that's the way that we're looking at that. Rosemarie J. Morbelli - Gabelli & Company, Inc.: And in the other categories, D.J.? D. J. Monagle: Well, we've identified that energy reduction will be one of the things that we're working on. And so we've got some products and processes that can help the papermaker reduce their energy. Just as a point of reference, increased filler, in general, helps reduce energy because it's easier to dry than the fiber is on paper. But we're talking about introducing new processes that can really change the energy footprint of a papermaker in a different way. That would be one of them. And then we also are trying to get into the packaging market in a more aggressive way. So that would -- those are 2 of the other things that I was trying to highlight in that area. Rosemarie J. Morbelli - Gabelli & Company, Inc.: That is helpful. And on the packaging side, does that mean that you would use PCC in corrugated cardboard, for example, which you are not doing now? Or what would you be doing? D. J. Monagle: So you asked a very specific and technical question. Let me try and give you a general answer. We're looking at all packaging. The packaging that, right now, makes the easiest and the most sense for us is the white packaging, the higher-end folded boxboard. But -- and we've had a good growth even over the last year in Europe in penetrating some of that market with PCC in those applications. But -- so our immediate thrust is probably in the whiter packaging, but we do have some development programs. And some of the boxes that were in that pipeline are looking for avenues to penetrate into packaging broader. You mentioned corrugated, that would be one. But I hesitate to go much further into that because they're under development. And then the exact pigment portfolio or the pigment platform may or may not be PCC. We're looking at several developments. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Okay. And just on Fulfill, if you look at the existing agreements, some of them are probably now anniversarying 1 year or more -- well, let's say 1 year. Do you see that the paper mill is expanding its -- a specific paper mill is expanding its use of Fulfill in different machines or a paper company expanding into several of their mills? Could you give us a feel as to what is happening on those existing contracts, older contracts? D. J. Monagle: Gladly. So for those papermakers that have been running the technology, and we've been able to really expand the use of Fulfill across their grade structure. We are now in the process of deploying some equipment to go into other machines. Now as we go into another machine, that does take us to requalify on that machine and do more design work. But yes, we are seeing, really, over the next couple of months even just deploying that technology further within existing customers across different machines and grades.

[Operator Instructions] Our next question in queue is from Andrew Dunn of KeyBanc Capital Markets. Andrew Dunn - KeyBanc Capital Markets Inc., Research Division: So just to maybe follow up on Rosemarie's question a little bit. Could I get you to -- give us some idea of how many of these plants now you would say are in the stage where they're using meaningful quantities of Fulfill, so maybe not just like trial runs, but really starting to consume higher amounts of volume of that product? And then maybe also, could you give us some idea of where your tech -- your royalty payment for that product's at? Robert S. Wetherbee: This is Bob. We have 14 signed agreements and very active across the globe to do that. I think when you look at the trial side, so we had 21 that are actively being pursued to get that lined up. D.J. might have -- maybe in the best position to answer the details of that particular question. D. J. Monagle: Yes. I would say that over half of them were well-deployed. But when I say well-deployed, they're regularly using it, but we still have quite a bit of opportunity to just get across all their grades. And so we see a fair amount of growth just within the 14 contracts that we've signed. And that is a major effort over the next several months to expand our revenues and income associated with those 14 that are signed. What I also showed is that I know the chart isn't up right now. But we have put 1 across the line this quarter. That one will quickly start delivering some good revenues. And then the 2 that are in the cusp should also quickly come up to speed. These qualifications have taken longer, but we've done a pretty good job at getting qualified across a lot of the grades, prior to finalizing with the commercial contracts. We expect to get more contracts soon. And we would expect that we get a relatively quick effect on those. Does that help? Andrew Dunn - KeyBanc Capital Markets Inc., Research Division: Yes. And I guess maybe going a little bit further with that. For some of the other applications that you were talking about, just outside of providing a filler product, but all other solutions, would you get technology payments or royalties from implementing those at your customers as well, maybe similar to what you're seeing for what you described for Fulfill? D. J. Monagle: Yes. And so without revealing exactly how we would do that, I think the right way of looking at it is that they would improve our margins. So yes. So the exact commercialization fees would be different. But yes, they will contribute to the margin growth that Bob and Doug were talking about earlier. Andrew Dunn - KeyBanc Capital Markets Inc., Research Division: Okay, great. And then just maybe one more point of clarification, if I could. You mentioned that at Asia, I think, you're 11% there. You said it was overwhelmingly from your new satellite facilities. Can you give us some idea of, overall across the segment, what your growth was like in existing facilities, versus facilities that had come online in the last year? Douglas T. Dietrich: Let me see if I can answer that. So segment sales increased about 4%. And there was a couple of factors, as I mentioned, the decline in Performance Minerals. But then, yes, that 11% growth in Asia Paper and 9% growth in Europe. So those 2 Paper PCC growth were 2 things: new satellites that came online. We had one come online at JK Paper in late -- in the second. That's still ramping up. On a year-over-year basis, we had another one that came on late last year in India, and then also one in Thailand. So the growth that you're seeing, that 11%, is really driven around new satellites, and then also the ramp-up of ones that have been on for a little less than a year. In Europe, that growth is, as I mentioned, the Alizay mill which came back online. So it's an existing satellite down for a couple of years, and it came back online recently under a new ownership, Double A paper. And the growth, we've had a full quarter of that facility's volume contributing to that growth. We've also had some outages in North American Paper that -- temporary maintenance outages in the third quarter, which we took away from some of that. And I mentioned that also in my comments. Does that help? Andrew Dunn - KeyBanc Capital Markets Inc., Research Division: It does. And then just last question, I'll hop back in queue. Previously, I think you've talked a little bit about even some acquisition opportunities to expand maybe more along the lines of your Specialty business, clearly focused more on this call, I think, on kind of new opportunities within the business. Does that mean maybe you're focusing a little less now on opportunities for external expansion? Or is it still -- what does the pipeline look like there itself? Robert S. Wetherbee: No. This is Bob. We're very active across all of our products, specifically in the Performance Minerals space -- the Specialty PCC business in terms of what we're seeing in the U.S. following our global customers around the world. We haven't backed off that at all. In fact, we're aggressively pursuing opportunities in Asia and expect to move in that area early next year. But whether it's talc, Specialty PCC, the customer base is giving us a strong pull to take our products globally. So we feel that's still very much the center of what we're doing.

Our next question is from Rosemarie Morbelli of Gabelli & Company. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Following up on this last question. If your main focus is on those areas, does that mean that you are kind of giving up the idea of adding a third leg? Or it is just that you have yet to find what you want? Robert S. Wetherbee: No, we haven't. Rosemarie, we haven't given up on any aspect of it. And I think, in my comments, I talked about finding opportunities that leverage our minerals expertise, our operating expertise, our global presence and continuing to expand in that particular area. Actually, joining us today in the call is Jon Hastings, who handles our Corporate Development function. And Jon, can you share some insights into where you see us going? Jonathan J. Hastings: Yes. Rosemarie, thanks for your question, and Bob, thanks. We do have a very robust portfolio of targets and opportunities that complements what we're doing, some geographic growth and also focusing on other technologies and new products. During the past year, we refreshed our portfolio screening. And the portfolio now cuts across all our businesses and all geographies. There are lots of different opportunities that we continue to focus on. And of course, I can't go into a whole lot of details about that, but we do have a very rich portfolio across the business. Joe, do you want to say anything? Joseph C. Muscari: No. Just as a quick reminder, that is the area with Bob on now as CEO that I'm able to spend more time with Jon in the acquisition area. And that's something that I have been spending a lot of time in, as has Jon and his entire team. So the energy and the opportunity level is still extremely high in the space. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Glad to see you have not fully retired, Joe. Joseph C. Muscari: No, I'm working on it. Rosemarie J. Morbelli - Gabelli & Company, Inc.: If I could go -- I was looking at your previous 2015 revenue targets. You were expecting an additional $150 million on the Paper side, $150 million to $250 million on the new products and then market help of about $100 million. Where do you stand today? Douglas T. Dietrich: Rosemarie, so obviously, we're not tracking with those targets that we set. However you look at the 3 components that you gave us, the $150 million geographic growth, we're on target with. We've mentioned a number of new satellites, some geographic expansion with wire products as well. So that $150 million were on track. In the $250 million new products, I'm not tracking quite the $250 million. Though, as you know, we're making some progress with Fulfill. We continue to deploy new technologies in both the Performance Minerals business. And D.J. has a number of them that are prepared to be commercialized, but we're still working with customers on that. And if you remember, filler-fiber was part of that in terms of the deployment. We thought we'd see out of Fulfill F, which we call it now through to 2015. And we have not commercialized fully the filler-fiber. As far as market growth, we have seen some of the $100 million in terms of the North America market, but what we didn't expect back in 2010 is we didn't see the European drop, which has taken some of that revenue back. So we're not tracking on the market growth, but we are on the geographic expansion fees, and to some extent, on the technology. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Okay. And If I may ask one last question. Is it reasonable to assume that you will buy back about 1.3 million shares a year in each of the next 2 years? And how much of that could be offset by dilution? And what would be the net, net change to your average fully diluted shares? Douglas T. Dietrich: Well, I guess, I can't comment on the exact number of shares because that will depend on, I guess, the price that we purchased them at. Rosemarie J. Morbelli - Gabelli & Company, Inc.: Yes, I know, I know. I made -- I did the math. It's $58 or something like that. Douglas T. Dietrich: Yes. It'll probably equate to around a 5% per year share count reduction. And the dilution is only through exercising of options and other things that are out there. So it should be very small -- a small impact to dilution over that, at least that $150 million buyback.

Our next question is from the line of Jeff Zekauskas of JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: I just wanted to go really quickly over the satellite -- over like the new PCC plants that were coming on in '14. So does the Shandong Sun paper plant, that's 100,000 tons in PCC that was scheduled to the first quarter, and another smaller one of 20,000 tons this first quarter. Are those still on plan to start up as scheduled? D. J. Monagle: The Jianghe, which is the smaller of the 2, will start in the first quarter. Sun Paper has been delayed because of some changes in the customer's operation. But that'll come on later in 2014. Second half is what we're targeting right now. And then Nanning Jindaxing would be in the fourth quarter. When that comes on -- and then we're aggressively pursuing some other opportunities. And we hope to contribute even more. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: There were also a couple of like U.S. satellite expansion that were to come -- they were to come on in the fourth quarter, if I remember that correctly. And are those still coming on? D. J. Monagle: They are still coming on, Silke... Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Those mason switches to Fulfill? D. J. Monagle: They were associated with the Fulfill technology in many cases. I think one of the things that happened with this recent shift in the North America market is we've got a bunch of our customers that are reassessing what their grade structures is. And so these -- we had worked through them with that. So these expansions start coming on. I had something going on in Latin America that's coming on now. North America starts coming on in the fourth -- first quarter. And then I've got them trickling out through the next several quarters. It's mostly to do with just what Doug was speaking to earlier. There has been a shift in the market regarding capacity. These people are now going to be coming up to some 90% operating rates. And they're working through the specific rate. So that's -- we just had to make sure we were deploying the right technology to meet their needs. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: So it sounds like that -- it sounds like some of these opportunities will just be pushed into, like, early '14. D. J. Monagle: That is correct. None of them went away. They are just slid back so that we could be more efficient, more sustainable. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Did you lose any opportunities with the Alabama plant? Because I -- what was the -- was the plant shut down, was that one -- was one of the expansion at the plant that is being shut down? D. J. Monagle: No. No, all the expansions are continuing. As we said, they just got shifted around. But did I lose opportunity with Courtland International Paper is a dear customer of ours. That was one of our facilities. And so, still, it's unfortunate that it shut down, yes.

Our next question is from Alan Mitrani of Sylvan Lake Asset Management.

Can you remind us what leverage ratios you're comfortable with? I know you have none now, but maybe you can just remind us? Douglas T. Dietrich: I was about to say we're very comfortable with...

You're a little too comfortable, in my opinion, but that's fine. Douglas T. Dietrich: Look, I think as a smaller small-cap company, as we are, in cyclical end markets, I think having a conservative balance sheet is prudent. I think we could look at a balance sheet that has 20%, 25% debt-to-capital. I think that's something that with our cash flows we could certainly sustain, and also still be on the conservative side, given the cyclical end markets.

I'm not thinking debt-to-cap. I'm thinking more about debt-to-EBITDA maybe in terms of coverage ratios. Do you think that way when looking at deals? Douglas T. Dietrich: Yes. Okay, on an EBITDA basis, but we'd look to stay in the investment grade. Sure, we could lever up to 2.5x, 3x for a time period. We found something in the M&A front that was transformational, that really fit the company, we could see ourselves levering up for a time period. But I think very quickly pushing that leverage back down to the 2x EBITDA, 25% debt-to-capital kind of levels on a sustainable basis. So, willing to go a little bit higher for something that's the right deal, but we'd work that down very quickly to a sustainable level.

Okay. And about a year and change ago, I think before Bob came on, maybe Joe was talking -- you guys were talking about looking at big deals. Maybe you had something that passed over? You guys are very disciplined, obviously, which we appreciate. Any big deals on the horizon? Or is it more of the incremental geographical expansion type of thing? Joseph C. Muscari: Well, we -- obviously, I can't give you specifics. But as Jon mentioned, we have a very, I call it, active and healthy portfolio. And the range, the size of the deals in there are all over the map. From small, we have some things we've talked about in the past in terms of acquisition opportunities in the talc arena, our Specialty PCC arena in different parts of the world to, let's say, larger possibilities. So we really have a fairly wide range of possible targets that we continue to work.

I mean, the reason I asked, and we've had this conversation, you guys, as you do well. I appreciate the buybacks. I just -- I see where high yield spreads are to treasuries. I see where the debt markets are. And to me, in looking at the market, I appreciate that you're a small-cap company, but you're also a company that focuses on lean and cash flow very carefully. And what that means is with $11.5 of net cash on your books, you might miss an opportunity to really put in permanent capital, 10-, 20-year capital, and take advantage of these rates and really be able to look at your cash flows years out. And I would say, I mean you guys have the capabilities of doing the $20 dividend and still being meaningfully comfortable. Now I'd rather you buy something so we can have that cash flow for a long time or buy back meaningful amounts of stock, and not just the 2% to 4% a year. I just -- I'm trying to weigh what you've done relative to the opportunity as it relates to putting in permanent capital. The companies that have this cash flow certainty the way you guys do in an industry where you're an essential provider seem to be all buying back stock and lengthening out their debt capacity. You guys seem to have been paying off debt over the years, and only now are returning capital more aggressively. So can you just help me bridge that with relative to where your funnel is for acquisitions? Joseph C. Muscari: Yes. We -- first of all, I appreciate the perspectives and the comments. And this is more of a reminder in terms of where the approach we've historically taken -- I say historically, the last 3,4, 5 years. But post the recession, it's conservative, but also balanced. And the balance is between how close we may be to an acquisition, the size of the acquisition and the timing around that to determine if we don't think it's going to happen fast enough that we accelerate the stock buyback. Now we've just doubled our historical rate of buyback. That should be an indication of what the company is willing to do, and is going to continue to be willing to do in the interest of shareholder value. And so it's looking at that and taking that balanced look of the potential to increase and improve long-term value for shareholders through the various paths. We also doubled our dividend within the last year. So we're really -- we are absolutely sensitive to the points that you're making. And we're well-tuned into it. And we're going to continue to work like hell and make smart decisions. And we are very willing for the right acquisition to invest for the long term because, clearly, that has to be something that is in the best interest of what our shareholders want. And we're going to continue to be prudent around doing that. I used the term in the past when I've met with a number of you, we're not going to do something dumb. We haven't done that so far, but we -- our objective is to do something that's going to make sense for the longer-term. And if we can't get there fast enough, we're going to keep looking at ways to deliver value in the form of stock buyback or dividends back to shareholders. Doug, you want to add anything to that? Douglas T. Dietrich: No. I think I want to mention it in the comments, as Joe mentioned a balanced approach. We're going to take our free cash flow for the next couple of years and deliver it back to shareholders. That means we're not going to continue to pile onto the cash balance. But as we see those acquisition opportunities ebb and flow, we're going to maintain, at least in the near-term, the opportunity should it come across. And as Joe mentioned, we'll be able to then and we're willing to lever up to do so. So I think it's just part of, as Joe mentioned, that balance use. And we're showing that we're willing to, obviously, put capital back to shareholders as needed. Robert S. Wetherbee: There are no other questions. So I'd like to close out the call and thank everyone for their interest in Minerals Technologies. Have a great day.

Thank you. Once again, thank you, ladies and gentlemen, for joining today's conference. You may now disconnect. Have a great day.