Question-and-Answer Session
Operator
(Operator Instructions). Mike Sison from KeyBanc.
Mike Sison - KeyBanc
Jim when you think about several longer-term outlook, in 2008 your sales for precious metals is about $2 billion. You earned close to a $1 per share, you've got more cost savings in the pipeline, you did a nice job particularly in the first quarter getting back to breakeven in plastics. To sort of get back to that dollar range which you, that sales number is probably lower. Any feel for what that is, would it be more like $1.8 billion, $1.9?
Jim Kirsch
Yes, let me leave you with a couple of thoughts, Mike. Couple of key thoughts, markets seem to have stabilized and although we don't expect a large recovery. We're seeing some slight improvements in April as I mentioned. We're working the European issue, and the reason Porcelain Enamel was profitable on a segment basis or an EBIT basis was because we've taken out the Holland facility.
So, our Limoges facility is 100% in the glass business. So, as you think about $14 million of cost savings being generated when that facility comes out, you'll see because of the operating leverage, a substantial upturn with any volume that comes along over the next couple of years in that particular business.
So I think the answer to your question is, and I am not an economic prognosticator. Our breakeven's continue to come down, that's evidenced by the operating leverage, example I gave with what '06, '07 and '08 would have look like with our current cost structure, and we continue to drive to bring that cost structure to lower levels. Gross profit on an adjusted basis, as I said fourth quarter to first was slightly better 60 basis points. Again, more evidence that the fixed cost reductions are sticking.
So I am not going to prognosticate when volumes will return and we'll be able to achieve $1.8 billion or $2 billion in sales again. But I will tell you that the operating level is substantial and we are seeing a pretty significant increase in the contribution margin in the businesses. And as we realized and we've shown we can deliver on the cost reductions in Europe, which is where we are putting a lot of focus right now. I would expect to see that breakeven come down and our ability to return to reasonably good earnings rates a very doable goal.
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