Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Will Green for Trey Grooms – Stephens Inc.
Will Green for Trey Grooms – Stephens Inc.
I wanted to try to get a sense for where head count stood right now and what kind of unit sales level that would support, and as volumes start to recover, how long will it take before you really need to begin rehiring.
Mike Glenn
Head count is now below 5,000 to answer the first part of your question.
Will Green for Trey Grooms – Stephens Inc.
So as you look out to recovery, what kind of sales level would that support if you saw 5% increase in demand next year or 10%, what kind of level would you really need to start hiring again.
Mike Glenn
I think we could easily handle a 5% or 10% increase in sales without having to have much head count. We believe that this continuous improvement initiative has really helped us increase our productivity and allow for expansion without having to hire a lot of new heads at this time.
Will Green for Trey Grooms – Stephens Inc.
I don’t know if you can walk me through where plant utilization stands on an overall basis. I know it’s going to vary from segment to segment, but can you walk me through about where that is and where it compares to a year ago?
Michael Cole
I can try that one at a real global level. I think if you look at the beginning of the downturn our sales were $2.6 billion or so. We added acquisitions that probably brought our capacity up to $3 billion and if you look at our current run rate for sales, we’re in the neighborhood of $1.7 billion. So we feel like we have the capacity with the plants we have today to get back to the $3 billion in sales and we’re currently running at a run rate of almost $1.7 billion.
Will Green for Trey Grooms – Stephens Inc.
What’s the area focus for uses of cash at this point? Do you have an M&A pipeline at all? Where are your thoughts there?
Mike Glenn
We’re looking at our policy. We’ll be active in sharing purchases. We do have plans for increasing our expansion. We had curtailed capital expenditures pretty severely during the down turn but we’re looking at increasing that and putting several million into expansionary CapEx for next year, and we certainly have many M&A objectives as part of our 2012 strategy so we’re looking at all those things.
- To read the full transcript on Seeking Alpha, click here »
