Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Luke Folta – Longbow Research.
Luke Folta – Longbow Research
My first question is regarding your metal framing business and your expectation that you’re going to be cash flow neutral there for the year. I guess firstly, does this take in to account working capital inventory reductions as well or is it just from operations?
B. Andrew Rose
The goal is to have it be cash flow neutral from operations excluding working capital.
Luke Folta – Longbow Research
Can you give us some color on what your assumptions there are for shipments and/or metal margin that come up with this conclusion?
John P. McConnell
You’re talking about going forward?
Luke Folta – Longbow Research
Yes.
John P. McConnell
Well as I think George said during his call, the volumes have been relatively stable and that could remain the case. I think we are prepared for it to worsen some though we have seen some modest signs as some jobs we had won both in futures metal framing and in [WIVS] our construction side that we had won being released as they finally arrived at finding financing. So obviously, that could affect it in a positive way if liquidity continues to loosen.
Luke Folta – Longbow Research
Regarding margins, the metal spreads?
John P. McConnell
Margins have also been relatively stable. Again, we have a declining steel price and there have been two increases now announced by one of our competitors in this space in the market space which we felt will help margins in the future.
Luke Folta – Longbow Research
Just regarding the near term outlook on automotive, we’re hearing some evidence of restocking and also there’s been some – the shutdowns are going to be an issue in the quarter too. Can you give us what we should expect near term regarding the automotive market in general and how that’s going to impact your results?
John P. McConnell
Well obviously, we all probably know about the same amount of information about what they’re going to do. Prices started up in June, or the beginning of July. There are several plants that are going to shut down again for the last two weeks of July and we have yet to really see General Motors start to bring its capacity back up. So while it was anticipated to be up already, they announced a continued extension so that could happen again.
- To read the full transcript on Seeking Alpha, click here »
