John McConnell - Chairman and Chief Executive Officer Mark Russell - President and Chief Operating Officer Andy Rose - Vice President and Chief Financial Officer Cathy Lyttle - Vice President of Corporate Communications and Investor Relations

Luke Folta - Jefferies Chris Olin - Cleveland Research Michelle Applebaum - Michelle Applebaum Research Glenn Primack - PEAK6 John Tumazos - John Tumazos Very Independent Research Richard Garchitorena - Credit Suisse Charles Bradford - Bradford Research Tim Hayes - Davenport & Company Sal Tharani - Goldman Sachs Mark Parr - KeyBanc Capital Markets

Ladies and gentlemen, good afternoon and welcome to the Worthington Industries second quarter 2013 earnings call. All participants will be able to listen only until the question-and-answer session of the call. This conference is being recorded at the request of Worthington Industries. If anyone objects, you may disconnect at this time. I'd like to introduce now Ms. Cathy Lyttle, Vice President of Corporate Communications and Investor Relations. Ms. Lyttle, you may begin.

Thanks, John. Good afternoon and Happy New year everyone. Welcome to our second quarter earnings conference call. Certain statements made on this call are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risk and uncertainties and could cause actual results to differ from those suggested. Please refer to our second quarter earnings release issued this morning for more detail on those factors that could cause actual results to differ materially. For anyone interested in listening to this call again, a replay will be made available on our company website, worthingtonindustries.com. On the call with you today are John McConnell, Chairman and Chief Executive Officer; Mark Russell, President and Chief Operating Officer; and Andy Rose, Vice President and Chief Financial Officer. John will start us off.

Thank you, Cathy. Good afternoon everyone and thank you for joining us. Reading our release this morning, you saw that we had a good second quarter given that we operated in an atmosphere of uncertainty that Washington fueled throughout the quarter, and knowing that our steel company's top line performance was better than it appeared, I would say we had a very good quarter. Both Andy and Mark are going to provide more detail on how a well executed strategic decision affected steel’s top line year-over-year comparisons. So let's get into some detail and I will turn the call over to Andy rose.

Thank you, John, and happy new year to all of you. The company’s performance in the second quarter of fiscal 2013 was again solid, led by strong growth in cylinders, improved margins in our steel company and improved earnings from our joint ventures. The Engineered Cabs business was less profitable this quarter as customers pushed out orders to reduce dealer inventories and deal with slowing sales growth. Quarterly earnings per share were up $0.29 from the prior year. If you exclude the negative impact of inventory holding losses in the current and prior year quarter of $0.03 a share and $0.09 per share respectively, and the impact of the cylinder recall of $0.01 per share and $0.10 per share, respectively, quarterly earnings per share would have been up $0.13 per share or 36%. Volume growth was positive in the first quarter. Cylinder volumes were very strong, up 28% for the quarter, driven by acquisitions and organic growth in our retail and alternative fuels businesses. Steel processing volumes were down 8% overall but direct volumes were actually up 2% after excluding the decline in volumes from the MISA Metals acquisition, most of which was wound down during the past year as we anticipated. Total volumes were also impacted by the MISA business but also declined due to lower volumes at our Spartan toll processing joint venture, which is being impacted by our partner moving some volume in-house. Mark Russell will provide more color on the encouraging signs of organic growth and market share gains in cylinders and our direct steel processing business. The newly acquired Engineered Cabs business experienced softness as sales slowed at its largest customers and economic concerns led to inventory destocking at distributors. The business also had $700,000 in one-time charges in the quarter related to severance and accelerated vesting of stock related to the acquisition. Management of the business has taken steps to reduce cost to match this lower demand level, but is being cautious not to be overly aggressive yet as activity with some smaller customers has picked up and the longer-term outlook for heavy equipment, particularly in the construction space, Engineered Cabs’ largest end-market, while lower, is still positive. We continue to feel good about the long-term prospects of this business and are optimistic that this slowdown does not represent a systemic downturn in the heavy equipment market. Equity income from our joint ventures during the quarter was up 15% over the last year to $25 million, driven by strong contributions from TWB, Serviacero and WAVE as compared to last year. All of our major joint ventures operated at a profit during the quarter and we received dividends of $18 million. Free cash flow for the quarter was $72 million, which benefited from working capital reductions and increased earnings. The company invested $8 million in capital projects and distributed $9 million in dividends to shareholders. There were no repurchases of stock during the quarter but we did invest $70 million on September 17 to acquire Westerman shortly after the quarter began. The business which manufactures tanks and separators for oil and natural gas drilling market is performing well, contributing in excess of $3.5 million in operating income during the quarter after adjusting for the impact of purchase accounting. Debt decreased by $24 million during the quarter. Our balance sheet remains strong. At quarter end we had total funded debt of $452 million and over $500 million available under our revolving credit facility. Considering that we purchased Westerman during the quarter for $70 million, this was another strong quarter of free cash flow. The company paid its March and June 2013 dividend payments on December 28, 2012. The company will next consider declaring regular dividends at its June 2013 board meeting for payment in September 2013. Calendar 2012 was a year of good progress for Worthington Industries. The integration of the Engineered Cabs business and several cylinder acquisitions in alternative fuels and energy combined with operating improvements from our transformation have materially improved our financial results. Our 12-month trailing EBITDA at the end of November was almost $300 million. Our stock price began the year at $16.38 and finished the year at $25.99, an all time high, resulting in a return of almost 60% for our shareholders before dividends. While we are gratified with market’s recognition of our progress, we are even more excited about the growth we are positioned for in 2013. Where will that growth come from, three areas that we control and one that we do not. Continued base business improvement via transformation, acquisitions of new products and entry into new markets and accelerating investments in product development and innovation, and, hopefully, a little more robust economic growth. I'll now pass the call to Mark Russell who will discuss operations.

Thanks, Andy. The quarter was solid and in several ways looks stronger as you get into the detail. Let’s start with steel volumes. When comparing the previous year numbers, in addition to lower average steel prices, remember also that last year's numbers included temporary unprofitable volume we inherited in the MISA asset swap. That transaction was the key to forming the ClarkDietrich JV and was the right thing to do. But it temporarily spiked our volume with both direct and toll business that we knew we would not keep at the incumbent pricing and we did in fact price clear most of that volume over the next few quarters. The other factors reduced volume in our Spartan JV which is related to capacity utilization at our partner’s new facility and we believe that’s not permanent. Adjusted for MISA and Spartan, both our direct and toll volumes are up compared to last year. Compare that to the overall flat-rolled market, which the MSCI says was down by 4% in the comparable period. Looking more closely at cylinders, you can see that the story is not just about acquisitions. The total business without acquisitions was up 3% over last year, led by alternative fuels, which was up 10%. Alternative fuels continues to be our fastest growing market and we are looking to accelerate that trend, more on that in a second. Engineered Cabs as expected weakened through the quarter as some of our largest customers cut back productions schedules. Caterpillar in particular is looking to help their dealers adjust inventories in the face of slower demand, more in the agriculture and mining markets than in construction. The Cab team has a plan to adjust their variable cost according to their volume which we think is an improvement on the plan they implemented in 2008 and '09, when they were able to remain profitable even at significantly lower volumes. They have already made some of these adjustments and will implement further if reduced demand persists. On the joint venture front, WAVE turned in another quarter of outstanding results continuing to find strength in the commercial remodel market. An unprecedented percentage of WAVE's volume now comes from commercial renovation and remodel of projects. Both WAVE and ClarkDietrich are particularly well positioned for the eventual recovery of the commercial construction market. We saw signs of some U.S. residential construction market recovery during the quarter but continued mixed signals in the construction market. Serviacero Worthington volumes in Mexico were strong and the start up of our new pickling facility in Monterrey continues with volume hitting 10,000 tons this month after starting from just zero last August. All of our major joint ventures operated at profit in the quarter with ClarkDietrich, Serviacero Worthington and TWB along with WAVE continuing to be the major contributors. Our transformation continues to show positive results and the work is expanding. Cylinders is now in their second year of transformation and is in the process of forming their own internal travelling diagnostic and implementation team. Engineered Cabs is still in early phases but going into third quarter of this transformation they are showing some strong initial results and the team has now moved into a second cab facility. Steel, now in the fifth year since kicking off the process, shows evidence of making the transformation approach cultural and permanent. Steel has objectives and plans for further transformational margin improvement and growth that we believe are credible. Our centers of excellence overall is increasing the resources we have dedicated to driving the process and discipline of innovation across our businesses beginning with our highest margin and highest growth markets. On the high margin, high growth front, we are particularly excited as you know about our continued organic and strategic growth in the clean natural gas and alternative fuels market. Shale and tight sand natural gas is not only the cleanest hydrocarbon energy on the planet, but here in North America it is also the most economic. This trend appears unlikely to be derailed by anything other than political forces in the years and decades to come and we've invested and will continue to focus accordingly. As Andy indicated, our acquisition of Westerman focused on the production and separator tanks at the wellhead into this market, was immediately earnings accretive. And at the combustion end of the market, we can see the continuation of our significant organic growth in automotive and transportation fuel cylinders, up 10% over last year. John, back to you.

Well, Mark, thank you both and thank you Andy. Before I move on to take your questions, I'll take a moment to say our forward view has really not changed much from last quarter. We do believe that the economy is on somewhat more solid ground than the suspended uncertainty that I referred to last quarter. The election is behind us resulting in Washington remaining as it was for the prior two years and some action has been taken towards resolving our debt crisis. As a result, we believe that moderate growth will continue to occur in many segments of the economy and we remain very confident in our ability to continue to generate year-over-year growth both organically and through additional acquisitions here at Worthington. As this point, we're happy to take your questions.

(Operator Instructions) And we will first go to the line of Luke Folta with Jefferies. Please go ahead. Luke Folta - Jefferies: First question. I wanted to talk about your, just the near term outlook. In the press release you noted that there is probably going to be some typical seasonality coming up in the February quarter. And there's been a lot of changes to the business portfolio over the last couple of years and we've had some strange years as well. So, I guess, I just wanted to better understand what exactly you meant by that. And to the extent that you can talk divisionally about what you are seeing kind of in the near-term, that'd be really helpful.

Well, it's usually our second worst quarter, second being -- or first being the worst. Am I getting this right?

Yeah, second.

So, the third quarter, I'm sorry, that's why I got a little screwed up in my head there. Yeah, third is usually the second worst quarter following the one we just finished. As we look at what we have going on and you are right, there are a lot of new moving parts here. You're coming out of December which is always our worst month and then followed by usually the pretty strong rebound in January and February. So that's the pattern we expect to have followed. We expected to follow the patterns we have in the past several years, and maybe we should have said that more clearly but that's what we meant. Luke Folta - Jefferies: Okay. And just on the steel price, you guys, I mean when I look back, the historical trend has always been, your average July selling price in steel is about one quarter lag basically on what we see in the spot price. And the spot price has fallen pretty meaningfully a quarter back which would indicate that this quarter you might have saw a big step-down, and we are not seeing that. We saw maybe $5 I think sequentially. But your selling prices are holding really well and I just wanted to get better sense of how you basically dodge that bullet?

Luke, the most important -- this is Mark -- the most important thing that we've done on that front is keep our inventories tighter, so that that reduces the – or that reduces the time that we have between when we buy and sell it, increase the velocity of the metal flow. The second thing that we do is we do a lot more hedging than we used to do. Most of our business is contract and most of that is on fixed price and we do those things back to back and that mitigates that. We still have the base inventory issue that you can't hedge that away as we are FIFO Company. But we've mitigated those factors somewhat so that would be partly the reason that you see that. It was partly. Luke Folta - Jefferies: I mean that makes sense to me why the margin should be stable but I mean what -- I mean this doesn’t really as much how the average selling price itself stayed stable quarter-over-quarter?

Well, if you're talking about the lag then that's what I was trying to address. Luke Folta - Jefferies: Okay.

If you are talking about keeping the selling price more stable...

There is -- oftentimes, Luke, there is some noise in there in terms of mix and in particular in the year-over-year comparison, both Mark and I referenced the MISA Metals business which has been wound down, which also sort of tends to be lower price, lower margin business, also is having an impact there. It's tough to isolate exactly what it is to answer your question but that's going to be part of it also. Luke Folta - Jefferies: Okay. And then just lastly. I think we've touched on this in the past a bit but I just wanted to get your updated thoughts. When you look at the steel processing margins out longer term and there’s a couple of things that will come into play. You will see some operating leverage when volumes recover and there is still quite ways to go there. But then at the same time, some of the business that are already coming back may not be your highest margin business, like your auto business that’s currently strong. So when you think about the two years outlook for margins in that business how do you expect those factors to kind of come into play?

I think as you pointed out, one of the biggest things is we have a lot of capacity utilization left in front of us. I think we can offset what business comes in that maybe at lower margins though not guaranteed, but as we continue, as Mark referred to in his comments, the transformational mindset that really has set into steel very effectively and they continue to find new ways to increase and improve our operating performances. So a lot of that would be on the comp but I think our view would be that we can continue to improve margins as we go forward. We probably disagree internally a little bit on whether we've gotten the biggest bite of the apple already or not. But I think we can continue to move them forward to some degree. Mark or Andy, do you want..?

Well, Luke, I would just say that the proportion of our business that is straight slit, the kind of bread and butter of most service centers, is at the lowest percentage of our sales it has ever been. The amount of tons that goes to the steel company that are just slit, is actually gotten to be pretty low percentage. We don’t do a lot of that business on a standalone basis if we are splitting. It's almost always in conjunction with another value added process. We are going to slit it, we are going to pickle it, we are going to galve it, we are going to cold roll it, if we are going to slit it. So we have a lot more value add than we used to in the portfolio. So the amount of that kind of commoditized business that would be coming back to us would be reduced compared to in the past. Luke Folta - Jefferies: Okay.

Luke, just maybe as a follow-up to your prior question, somebody around the table brought up. One of the factors that changed in this quarter is also our mix of direct versus toll was up in the quarter. So, that would have an impact on the selling price. Luke Folta - Jefferies: Okay. Just last one and I will turn over. The Engineered Cabs business, you talked about some efforts there to downsize, I don't know if you'd downsize, but maybe cut cost a bit as demand is correcting or the inventory is correcting in the channel. Should we look at the margin that we saw in this quarter as kind of the near-term expectation or is there something kind of -- I know there is like a one-time item in there, $700,000 something like that. Adjusting for that, is that kind of where you expect that business to be over the next quarter or two?

Well, we don't give guidance so we can't answer that question. I will tell you, we don't believe that the margin in this quarter was the long-term margin. You also should take note in my comments we had a one-time adjustment from severance of about $700,000. So the margin wasn't quite as low as it appeared this quarter.

Our next question is from Chris Olin with Cleveland Research. Please go ahead. Chris Olin - Cleveland Research: First, I want to focus on this Engineered Cabs segment. And I guess just to get a little more clarity, can you give us an idea about the sales breakdown or I guess how I should say, how much leverage would be related to mining as opposed to the other markets?

It's the smallest of the three segments they serve, so their end markets are basically construction being the largest which I think is roughly 50%, maybe slightly higher. Second is ag which is probably another 30%, maybe 35%. And mining is the smallest, I think it's like 15% or 17%. My percentages maybe off slightly, but that's order of magnitude.

And actually, they have a whole – they have a cats and [dogs] category because they make cabs for almost anything you can think about. The vehicles you see on an airport ramp that moves the baggage around, they make cabs for those things. So of the big segments Andy called out, mining is number three. Chris Olin - Cleveland Research: Okay. That’s helpful. And then when we talk about cat, I guess they've been throwing around some number about $3 billion of excess inventories. I'm just curious on exactly what this means for that segment. And can you talk about it in terms of how many quarters it will take for you searching a ramp-up in volumes?

We do not have the ability to forecast that for you. Chris Olin - Cleveland Research: Does it seem like a one quarter or a four-quarter event? I mean, do you have any idea?

I think the most important thing from our standpoint is that we, as Mark referred to, we have a mitigation plan that has been run before. We think we've improved upon it. And if this does not improve over the next several quarters we will implement that plan deeper than we have at the moment. Right now, we're watching cost very closely. We've curtailed shift work and watched overtime, doing all the simpler things. But we know we can implement a plan that's been played once before that kept them profitable at much lower volumes than these, and that's what we will do as time goes forward if it does not correct or we see correction on the horizon.

And if you want to look at history, Chris, the 2008-09 scenario is what we have based our plans on. So, not that we expect that to happen, we've only implemented, as John said, the first parts of that. That if it persists, that's what we'll do. Chris Olin - Cleveland Research: Okay. Thanks. And then just shifting gears quickly on automotive in general. I guess, we've been watching this in some of our channel work and it seems to have slowed down a bit coming into December and now we've got this potentially negative production outlook for the first quarter. I'm just wondering how you guys are looking at automotive over the near-term. I mean, are we looking at a substantial slowdown based on what your backlogs are shaping up like?

I'll let these guys comment, because everything I heard this morning was that December was record sales month and automotive is feeling very bright and perky. I don’t if that other....

Maybe you should call us after we are done with the conference call and you tell us what you know.

I would probably say, Chris, I tend to look at it on more of a longer-term outlook, and I think the outlook for calendar '13 is up, half a million cars maybe even higher over calendar '12. Now, are we experiencing a little bit of a short-term slowdown? I guess possibly, but I don't think -- it's a little bit tough for us to tell in our business right now because December we get the seasonal slowdown and then the question is how strong do we come out of it in January. And so, it's a question we can't really answer right today. We could probably answer in three or four weeks better.

There was the earlier question about the seasonality. This is seasonality we normally see and we don't make projections based on what we see in December because those shutdowns are highly variable. They sometimes tweak them in the day before they take them.

But from a dealer standpoint I think this December was the highest since '07.

Yeah, good sales.

Yeah. So if you know some we don’t know we would be grateful to hear it. Don't charge us too much for it.

And we will go to Michelle Applebaum with Steel Market Intelligence. Please go ahead. Michelle Applebaum - Michelle Applebaum Research: So, a couple of questions. Number one, my first question is on the $700,000. I missed it. Did you say it was pre-tax or after-tax?

Pre-tax. Michelle Applebaum - Michelle Applebaum Research: It is pre-tax. Okay. So, if you want to look at what cabs did in the quarter, we want to just add that back don't we?

Yes. Michelle Applebaum - Michelle Applebaum Research: Okay. All right. So, that's not quite as bad. Did we indicate at all if we think that that business has bottomed, you have seen those three months?

We just went through that and again as far as communicating with you about what goes forward is we are confident we can keep this business profitable regardless of what happens in the quarters ahead. And the mitigation plans that we have in place that we can use and go further. Michelle Applebaum - Michelle Applebaum Research: Okay. I was trying to ask it different way. That's encouraging. It's interesting your comment about product mix of cabs. So 50% currently is construction, that's the current number?

That may not be last 12 months, Michelle, that maybe data a year or so. But it's probably not dramatically different. Michelle Applebaum - Michelle Applebaum Research: Okay, it's a post-recession number, is what I'm trying to say.

Correct. Michelle Applebaum - Michelle Applebaum Research: So, at a normal market, maybe '07, what was the mix -- the percentage of construction must have been much greater?

I do not have the data to answer that question.

I don't either. Michelle Applebaum - Michelle Applebaum Research: Okay. And you don't recall if you could just say it was larger or not?

Michelle, that make sense but I don't have the numbers for that, I am going to look here. Michelle Applebaum - Michelle Applebaum Research: Logic would dictate but...

We would think, yes. Michelle Applebaum - Michelle Applebaum Research: You would think, but you never -- there is always surprises. The other question I want to ask about the steel market. Do you have any sense of number one, near-term direction and number two, is there anything out there that you think might change the volatility that we've seen in the past two years, either less or more?

At the moment I would say we don't see anything that would change the current dynamics of the market. I gave up long ago saying that the consolidation would bring more stability, so. Michelle Applebaum - Michelle Applebaum Research: That was '04?

Yeah. Anyway. Michelle Applebaum - Michelle Applebaum Research: It's not really consolidated, it's just imaginary consolidation. And near term?

Near term on… Michelle Applebaum - Michelle Applebaum Research: On pricing?

Mark, do you have anything you want to add there?

No. I'm sure we see the same things you do Michelle, that it doesn't look -- the spot market doesn't look very strong at the moment. But now the uncertainty has passed we'll see what kind of bookings come in next week, right. Michelle Applebaum - Michelle Applebaum Research: Okay. And then last question, how does the M&A environment look right now?

I would say it looks reasonably well. There has been I think a fair amount of selling activity in the last six months. Part of it I'm sure is driven by tax planning strategies. Particularly, you've seen a lot of private equity firms liquidate assets, but I still think the market is relatively attractive. We're certainly seeing a number of opportunities and are pretty focused in terms of where we're looking. So, I don't see much difference from how it's been in the last year or two.

And Michelle, while you've been talking I've been trying to find the historic breakout of construction versus other for the cabs business historically and I do not have it, sorry.

And next we go to Glenn Primack with PEAK6. Please go ahead. Glenn Primack - PEAK6: At the Analyst Day you mentioned the cryogenic market as an opportunity, have you launched any products yet in that area?

We have not. We certainly continue to research all fronts on entering into that market and aggressively pursuing all the alternatives. Glenn Primack - PEAK6: Okay. Thanks.

I would just add to that. I know you're signing off here, but I would just add to that that we obviously highly emphasize this market. We have a lot of things going on there and that certainly our intention is to get into that market as soon as we can practically do that.

Important to point out, that while we think it’s very important for our entry into this market as the last piece of the alternative fuels from a transportation standpoint that we do not have, it’s not the largest segment of this market by any means. But it is an important component for us and we want to make sure we're playing in that game.

And we think it's going to be limited to Class A trucks and larger mining trucks, specialized vehicles that need the range and the running time endurance that the cryo tank will give them. Other than that we think the best solution for transportation is the CNG cylinder and we are already the leader there.

And the next question is from John Tumazos with John Tumazos Very Independent Research. Please go ahead. John Tumazos - John Tumazos Very Independent Research: If I can ask several. First, with steel prices and volumes less than expected and CapEx running a little less than $68 million fiscal 2013 guidance made at the onset, how much might the $482 million in debt pro forma Westerman at quarter's end fall by fiscal year-end? First.

That's a good question. John Tumazos - John Tumazos Very Independent Research: So It looks like you are using less working capital than you would have in a higher priced steel market.

Yeah, that's fair, and I would echo sort of Mark's comments earlier whereby we are managing our inventories, particularly in our steel company, as efficiently as we ever have. Running in the low 60s in terms of number of days, maybe even less when you exclude some of the forward buy activity. The debt level is going to be driven by the other uses of capital, CapEx being certainly one of them, acquisitions being a second. Certainly, we typically have dividends in the first six to nine months, although we pulled forward two quarters of payments for dividends. So that won't be a use in the next six months. And share repurchases would be another potential use there. So, any of those are potentially in play. I would say we do carefully manage our leverage level. Our trailing EBITDA right now is just under $300 million, so our net debt is sub-$500 million right now. So we are relatively conservatively capitalized we think. So we've got flexibility. We've got $500 million in available short-term capital if we need it to take advantage of opportunity. So, it will really be driven by the opportunities that we see. We are generating a fair amount of free cash flow. You’ve heard me mention in my comments that the $70 million that we paid for Westerman in the middle of September, we've effectively paid that off. Our leverage level is back down to where it was pre-transaction. So the nice thing is, is our business improves and as our working capital management improves, we generate more free cash flow which is a good thing.

We are not going to have time to do the math but if you're asking if we did nothing what would happen to debt, it would go down, as Andy just indicated. It would go down fairly rapidly. But to answer where the debt level is going to be going out in the future is very difficult based on everything you just told. John Tumazos - John Tumazos Very Independent Research: Second question. Given the things you are doing good, when can we look for the old $0.68 dividend level to be exceeded?

Yeah, I don't know that we're going to give you an answer to that. We do want to continue to look at the dividend as a place to spend our capital and reward our shareholders. In one sense I'm pleased that part of what they did was have a dividend level in Washington taxation wise, while it's up, it’s not as much as if they went over the cliff. I think that's helpful to supporting the continued payments of dividend and increasing them. And as you know from our long history we have a desire to increase the dividend fairly much every year. That's not a commitment, that's just generally the way we think of it. But we don't intend to leap back to where we started regardless of our performance. John Tumazos - John Tumazos Very Independent Research: Can I ask you a third question? I was kind of hoping for something like an Alcoholics Anonymous or a rehab program. In the context of Worthington's had the core steel processing business, the Cylinders has been a great second segment, the suspended ceilings has been a wonderful joint venture. But over the years there was metal framing, there used to be the Buckeye Steel making rail castings, custom products, machine shops, plastics, all these other businesses. And do you think that sticking to your core product lines is good and venturing afar is bad? And paying premiums over tangible net worth for something that looks glamorous one week is a mistake. There is no way that 80% of that business is construction and ag and you just broke even.

I am not going to... John Tumazos - John Tumazos Very Independent Research: Somebody is in denial, John.

Well, it's certainly not me. I've been here a long time. I have seen what's happened. I am a learning person. I think our acquisitions are very focused, John. They are related to things that we are doing, they are spaces that we want them to be in. And this all comes back mainly to Cabs which has gotten a lot of attention here. It's a business that we have a great deal of confidence in. There was a sudden cliff fall out of its largest customer. And we will get through that nicely and there's a ton of opportunity in this business that we haven’t focused on as a result of this quarter's results and you've seen that through the transformation effort. So while it's performed very well in the past we know we can get it to perform better. Hopefully, John if you want to go through the litany of past errors, we know that we learned from them and we feel very confident in what we are doing as we look forward. John Tumazos - John Tumazos Very Independent Research: John, the five large gold companies have all fired either their CEO or the COO?

We don't deal in gold. John Tumazos - John Tumazos Very Independent Research: And four of the five largest diversified mines have changed their CEOs and the four largest collectively have $142 billion net debt. So, those guys are retrenching seriously?

I understand and again we pointed out that that's one of the smallest parts of what they do. But either way, John, I appreciate your comments and we will take them into consideration. John Tumazos - John Tumazos Very Independent Research: I am a shareholder.

I understand. I don't think this is a place to have an argument though.

Our next question is from Richard Garchitorena with Credit Suisse. Please go ahead. Richard Garchitorena - Credit Suisse: First question, just back to the auto markets. I was wondering if you could just remind us what is that contracts you actually have in place for your auto customers? Does that renew at the calendar year or is that throughout the year and how does pricing work through?

Now those contracts tend to be annual. They often are on a calendar year basis but we have expirations throughout the year. Richard Garchitorena - Credit Suisse: Okay. And can you give us any color in terms of this year how sort of pricing settled in?

Well, our trend for the last several years is we have not given up any price, and anytime there has been change it's been an increase of margins for us. That’s kind of where we have been. Richard Garchitorena - Credit Suisse: Okay. Great. And then just wanted to touch on some of the comments you made on the construction market. I think one comment was that it remains mixed up. Can you give us a little more color about just the differences in the residential versus non-res and any color around WAVE, I guess, continues to be strong?

WAVE has very limited residential exposure so they do do some, but their business is vast majority commercial. And so that's why we said that the recovery in the commercial markets bode really well for both ClarkDietrich and for WAVE, once that gets going again. And indirectly it will be a good thing for the cab customers as well since the construction market for them has been down for several years now. But there are definitely signs of strengthening residential but there is mixed signals on the commercial. You can see the ABI Index is up, but then there's other indications out there that are going the other way. So it's still a mixed bag. Richard Garchitorena - Credit Suisse: Okay. And then my last question is just on, the SG&A this quarter as a percentage of sales was a little higher. Is there anything in there that's a one-time item and where should we expect the run rate going forward?

Well, I'll repeat again, we don’t give guidance so we can't talk about where the run rate for SG&A is going to be but there's no significant onetime items in the quarter. There is definitely some noise because of acquisitions which add SG&A as we add revenues. Sometimes that's higher margins, sometimes that's lower margin. So, that's the only thing I can say off the top of my head. I don’t have anything specific for you.

Our next question is from Charles Bradford with Bradford Research. Please go ahead. Charles Bradford - Bradford Research: I'd like to talk a little bit about a couple of your joint ventures, such as Spartan. Now, that Severstal has their own galvanizing line running, is there anything to keep them from doing all the easy and more profitable things and leaving for Spartan the lower margin businesses?

Charles, they own the 100% of the one up at Dearborn and only 48% of the one we have a joint venture in. So, they are going to prefer that whenever they can, I'm sure, and that's what we would do as well. The situation we have to adjust to is the fact that right now there's not enough volume to fill both of them up, so that's why the Spartan volume is off more. But it's a situation that can be addressed. That's why we're saying that it's temporary. They have rights to fill 80% of that volume and typically did, and now they're not going to do that so we're going to fill it up from our point of view. So, that's our intention. Charles Bradford - Bradford Research: Spartan has a history and an experience record that they don't have yet. So it seems like it would make sense for them to do the easy stuff?

Well, that's been the case so far as they started on the easy stuff. And so far we've benefited by the fact they are on a learning curve although that's a two-edged sword, because we need to be able to commit that capacity to other people so that we can fill up Spartan without depending on Severstal for 80% of the volume. Charles Bradford - Bradford Research: And is ThyssenKrupp still in the welded blank business? Because there had been some stories in Germany that they wanted out of some of their non-steel product business activities?

Charles, their share of the welded blank business is for sale. I think they publicly announced that and they are going through a process on that right now, and that obviously affects us because we're their partner here in North America. Charles Bradford - Bradford Research: Do you have right of first refusal?

No.

Our next question is from Tim Hayes with Davenport & Company. Please go ahead. Tim Hayes - Davenport & Company: First thanks for the extra numbers by the segments. It gives us a full read I think rather than having to wait for the Q, so I appreciate that. And from that, two questions on the steel processing segment. First, in terms of the sequential decline in volumes, any feel for how much of that was the OEMs working off the safety stocks that they built worrying about strikes that may have occurred on September 1, and when they didn't they were able to work those off?

Yeah. In steel -- you are talking about steel, right, Tim? Tim Hayes - Davenport & Company: Yeah, steel processing, right.

There's really two things underlying the decline in steel processing volumes. One is MISA Metals which is probably 38,000 tons where we had in our numbers last year that we don't have this year, which is business we just wound down. It was unprofitable business when we bought the business. We liquidated assets and that business went away. And the second is the decline in volumes at Spartan which should be in the toll processing line. If you back both of those out, we are actually up year-over-year 2%. Tim Hayes - Davenport & Company: Year-over-year, but MISA didn't affect sequentially though obviously, right?

No. Sorry, you are asking sequential? Tim Hayes - Davenport & Company: Yes.

I mean, sequential is hard just because it's a different quarter, it’s different -- I mean we are a seasonal business. Tim Hayes - Davenport & Company: Sure. But any feel for what the -- you are running down any safety stocks that the OEMs may have built worrying that there was going to be a strike coming?

I don't have any information on that Tim. Have you heard anything like that? Tim Hayes - Davenport & Company: Well, I've heard, but it's always tough to quantify.

I would say the same thing. I heard the rumor, I'd say, I couldn't derive that from our numbers. Tim Hayes - Davenport & Company: Okay. And then second question, on the steel and steel processing looking against sequentially, there seemed to be an increase in unit manufacturing cost that seem to be more than it could be explained from fixed cost absorption. Was there anything on the cost side in the November quarter versus the August quarter to cause the unit variable cost to move higher?

I am not sure which number you are looking at Tim. Tim Hayes - Davenport & Company: Just kind of back into what we would call a unit manufacturing cost and then try to estimate that between fixed and variable etcetera, etcetera. It just seems like the cost on a per unit basis moved much higher sequentially than what we were expecting. Again, this would be backing out material cost and SG&A etcetera. Just wanted to get a little more color if you had that handy on what happened to those cost?

If you looking at Steel Tim, you got to remember that you got to adjust for direct and toll of course, and the mix between direct and toll has swung. It used to be about 50:50, now we're 55 direct, 45 toll. You got that factor going on. And then you got the overall mix between the total value adds. Our highest value adds where we are going to pickle, slit, cold roll and kneel etcetera, etcetera, that's a whole lot higher value add. And if that segment increases then the average goes up significantly, but that would be a great thing because that's our highest margin stuff. Tim Hayes - Davenport & Company: I guess was there any real significant move towards higher value in the November quarter versus August quarter or was it just sort of the typical gradual climb higher?

It's a gradual climb higher, and again, we don't know exactly what number you're looking at. That's what I would say you're looking, you're seeing, is the fact that the automotive volume is pretty strong. That's our strongest segment and the largest application we have there is cold roll and that's also our higher margin product in steel. Tim Hayes - Davenport & Company: Maybe it is a mix issue that I’m trying to -- that is impacting the numbers?

I'd look at that first again without knowing what number you're looking at. That's why I'd look first.

And we will go to Sal Tharani with Goldman Sachs. Please go ahead. Sal Tharani - Goldman Sachs: You have been in the forefront in terms of managing the volatility in steel prices using hedging and forward contract. I was wondering have you seen any improvement in liquidity in that area and more counterparties willing to do these contracts.

You know, Sal, a dramatic improvement. I'd say the growth is exponential. I wouldn't say we're at critical mass yet, certainly not where the base metals are. But I think everybody who's trading this stuff regularly we are counterparties with, and as you say we were certainly among the first if not the first, and now we have a lot of counterparties and we can give multiple quotes and the spreads are tighter. So it's getting much more useful, much more useful.

And we will go to Mark Parr with KeyBanc. Please go ahead. Mark Parr - KeyBanc Capital Markets: I had a couple of questions, just kind of in different areas. First of all, when Angus was announced, I remember discussion related to potential for incremental outsourcing by major customers and some programs that may become available. I was wondering there has certainly been a change in the end demand outlook. Just wondering if the customers you're referring to seem to be more interested or less interested in outsourcing a greater proportion of their cab business?

Mark, I'd call it a mixed bag. We have some opportunities we're working on where we would give more of the value-add, we give the cab and the substructure. And then on the other hand, Caterpillar just announced a new plant where they are saying they are going to do the cabs themselves in that plant. So, it's a mixed bag. I think we still have possibilities to do more of that, but I can't say we're winning that battle and nor would I say we're losing at this point. I think it's a mixed bag.

Yeah, and if you look, Mark, over the long-term trend in that industry, is more outsourcing. So as far as the… Mark Parr - KeyBanc Capital Markets: Yeah. And that certainly would make sense. I was just wondering, how the customers were reacting given the recent shift in kind of the global demand environment? That's all.

I think that's an opportunity for us. As we get our arms around the business, as we run our transformation process, as we implement steel hedging opportunities for our customers, we potentially can become a more value-added partner to them and hopefully produce cabs as competitively and maybe even for less than they can.

Well, and as John said, we still like the value proposition of that business where they can certainly be more the lower cost producer, particularly of cabs that are being produced in lower than their biggest volumes. We are going to be much more fast and efficient than they are with money and your labor. And we're going to be able to spread those costs over more products than they will be able to. Mark Parr - KeyBanc Capital Markets: Okay. I'm glad to hear that's still an opportunity. I had another question related to the Pressure Cylinders business. And on your release, you had referenced strength in alternative energy and I was wondering could you give some more color on the magnitude or the strength that you are seeing? And also in the last 90 days, is your outlook unchanged, is it a bit more aggressive, less aggressive? How are you feeling today for that piece of the business compared to where you were 90 days ago?

I guess, one of the things we did in our 10-K this year, you probably noticed, Mark, is we broke the Cylinder revenue line into three categories, sort of industrial and refrigerant gas which is kind of the legacy GDP driven business. Second was the retail segment, which is the products that go through big box retail for the most part. And then third was the alternative fuels segment. And we have had a fourth now probably which is Westerman, the energy space. If you go down the line on those segments, the industrial gas segment is sort of a GDP growth business and quarter-to-quarter it may be slightly up or down depending on where you are in the year. The retail business is growing at sort of mid-single digits, I think 4.5% or 5% this quarter. And the alternative fuels business is growing at 10% in the last quarter and I think has the prospect to grow at even higher percentages in the future. And then in the energy space, you heard Mark touch on it earlier, I think we feel very bullish on that as well.

Where we are going in the energy space it should have similar growth potential to the alternative fuel side. And alternative fuel side is by far our fastest growing market. We don’t have a lot of things growing at 10%. Mark Parr - KeyBanc Capital Markets: Okay. I was really encouraged to see the accretion out of Westerman in the quarter. I think that's very solid and also your comments about being able to essentially pay for the acquisition in such a short period of time. Are there other opportunities say in the energy markets or are there other pieces of the market that would surround Westerman that might be attractive to you guys?

Yes. The short answer is, a lot of our M&A focus is in the Cylinder space and in particular is in those two fast-growing segments. The retail space where I think organically it's probably just growing at mid-single digits but through product development and innovation we think we can accelerate that growth, and we hired some innovation specialist to help us with that, which is something new for the company but we think has a tremendous opportunity. And then in the alternative fuels and energy space both we think the sort of natural gas, the shale gas, boom is for real and is a multi-decade trend that we are well positioned for with our existing businesses. But there are some very attractive M&A opportunities out there on that front as well. Mark Parr - KeyBanc Capital Markets: Well, I hope you are right about the multi-decade thing.

So do I. Mark Parr - KeyBanc Capital Markets: And one last question, if I could. The transformation efforts that you had begun in the cylinder business, do you have any sense or can you give us some color or try to quantify the magnitude of the impact the transformation activities had in the November quarter?

It's a very difficult exercise to quantify the benefit when it's unfolding. We used to track every single initiative and the amount of operating income benefit that we would get, and the problem is our business is not static. So from quarter-to-quarter we found things were changing, customers come and go etcetera. So, it's a very difficult exercise. The way to think about it though is -- there's a number of components of transformation, the easiest to understand is cost reduction. When you go in and identify cost reduction opportunities, those cost come out very quickly. In cylinders, those are probably smaller although there are some, there is no question. The second and the largest component for cylinders is going to be on the commercial side. These are businesses that we have strong market presence in and we have the ability to use some of the commercial techniques that we've developed to really enhance the margins for that business. So, we'll see how that plays out, but that takes a little bit longer time to implement. And then the third is supply chain where we're utilizing our steel purchasing power, we're utilizing our price risk management capabilities that you heard Mark talking about earlier, and we've started to roll those out into the cylinder business and they are clearly going to have a benefit to that business as well.

Mark, I think we told you last quarter that we have actually started the transformation process in steel because we saw the opportunity were biggest there, and then we went to cylinders with lower expectations. And I think we told you last quarter that I think we were underestimating how big the upside was. Now we've been into it for a year, there is more upside than we thought. As Andy said, it's less in the cost bucket and more on the supply chain and more in commercial than we anticipated. But it's definitely there.

And we have a question from Chris Olin with Cleveland Research. Please go ahead. Chris Olin - Cleveland Research: I apologize if somebody touched on this, I missed the beginning of the call. But I wanted to make sure on the cylinders segments, the hurricane seems to have had an impact on propane demand in some of these retail channels that we follow. Just wondering if you guys saw a large volume benefit from that or anything you can give in terms of what it did to numbers.

The short answer is, it's hard to tell. Our propane business was up modestly over last year and over our plan expectations, and so there is probably some belief that there is some hurricane benefit but it wasn’t dramatic enough to where we could say, yes, there was a huge benefit from Hurricane Sandy. Part of it also depends on how much inventory is in the channel. There is a couple of large customers, one being Wal-Mart that we sell a lot of those cylinders to. Wal-Mart has their own distribution centers. If they have a lot of inventory then they are going to pull as much maybe in the first month or six weeks after something like that. So it may take a quarter or two to really tell how big it is. I think intuitively the cylinders team when they go through budgeting and forecasting they sort of debate should they budget for hurricane and if so, it means that they are going to sell x million more of 16 ounce cylinders. So there should be some benefit, it's difficult to quantify at this point the benefit that happened in this quarter. Chris Olin - Cleveland Research: In terms of the margin, is there a substantial difference between the propane tanks versus some of the other products within this segment?

The margins, if you think about the categories that I was talking about earlier, the industrial gas side which is the more mature and more commodity side of the business, would be the lower margin segments. Retail as well as alternative fuel and energy would be the higher margin as well as higher growth segments of cylinders.

But, Chris, if you are talking about the hurricane related demand, that’s 16 ounces and 20 pounders and that's not the higher margin stuff.

And to the presenters, no additional questions in queue.

Thank you all for joining us. We wish you all the best in 2013.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.