Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Baugh – Stifel Nicolaus.
John Baugh – Stifel Nicolaus
Working capital guidance for '09, did I miss that or could you just review that?
Nicholas Grasberger
Working capital which was up about $60 million in 2008 we expect to be down at $60 million to $80 million in 2009. So we've been running at a working capital intensity or ratio to sales at about 20% and we expect that to move up to 212% or 22%. Working capital will come down. And of course, on an average basis, working capital will come down more.
The figure I mentioned is kind of point to point because as you look at receivables in the fourth quarter, we hope if not expect that sales in Q4 of '09 will be somewhat similar to those in 2008. You wouldn't see a big decline in receivables as we're seeing now as we'll see through most of 2009.
John Baugh – Stifel Nicolaus
So sources between $60 million and $80 million, and I guess that's offset to a degree by the severances, mostly cash. Is there a total cash out number for '09 in terms of all the severance, restructuring, etc.?
Nicholas Grasberger
All of the restructuring together, including the capital spending and the P&L items that are cash will between $40 million and $50 million.
John Baugh – Stifel Nicolaus
So you'll have a cash outflow in '09 of $40 million to $50 million which incorporates all the changes you're making and severance.
Nicholas Grasberger
About $35 million of that would be investments in the plants and the balance would be cash severance.
John Baugh – Stifel Nicolaus
A lot of detail there Mike on European flooring and I tried to follow as best I could and I'll review it in the transcript, but what is the bottom line from an EBIT perspective with the starting point being calendar '08 to kind of how you see it progressing in '09 and '10 with the steps you're taking?
Michael Lockhart
We think that we will lose about $25 million. We lost about $25 million in '08 and we will lose somewhat more than that in 2009, but not significantly. In 2010, in the second half of 2010, we'll begin to see the benefits that we expect in terms of the direct cost savings of the new heterogeneous plant and we should have high single digit profitability in 2011.
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