Actuant Class Earnings Call Insights: Brazil, Energy in Europe
Charles Brady – BMO Capital Markets: With respect to the commentary on Brazil, it felt like there’s a lot of activity going on down there with respect to Energy. Can you give us or remind us kind of what is Brazil in terms of total sales, and I guess specifically on Energy today, and kind of where do you see that going over the next three to five years?
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Bob Arzbaecher – Chairman, President and CEO: I’ll let Andy noodle on, on getting you the numbers and I’ll just talk more generally, and then we can bring the two comments together. Brazil today is primarily a Hydratight business and Enerpac business and a little bit of (capital) business that we did for Scania and one other truck customer. We were handling this out of a couple of smaller facilities. With the Turotest acquisitions, I think we are looking that this is going to be a broader initiative. Energy is our biggest business down there. We do a lot of rental tools, we sell them both to Petrobras on a Tier 1 basis, but also to quite a bit of sub-suppliers that fall under those guys.
Andy Lampereur – EVP and CFO: In terms of sales, Charlie, with Turotest, we do about $30 million, $35 million of revenue down in Brazil.
Charles Brady – BMO Capital Markets: Just as a follow-up on the Energy side of the business, can you give us some granularity between the growth rates of Cortland and Hydratight in the quarter?
Andy Lampereur – EVP and CFO: They were actually quite similar in the quarter. I think within a couple 100 basis points, within (200-300) basis points from one another.
Energy in Europe
James Bank – Citigroup: James Bank filling in for Deane. I was just wondering if I could get a better sense of both, the European and the China landscape. It looks like it’s really impacting your OEM heavy truck space. I think you mentioned in your prepared remarks that Electrical was good, if I am using the right word, but I was wondering if you could give us a bit more color in terms of north and south regions, and maybe how broad-based the weakness is or if it’s just really in that vehicle space for you?
Bob Arzbaecher – Chairman, President and CEO: Well, I’ll start and Andy will help me on some of the details there. You’re up in total, it was up. A lot of people lose that fact, but we actually had core growth. it moderated a bit from the prior quarter, but we also had some pockets of pretty good strength. Energy represented a big chunk, 25% or 30% of the European market, and obviously the trends we saw in Energy were strong everywhere. We don’t do a lot in the southern countries. Ours is Germany, Holland, the U.K., a little bit in France, but by and large we are in the northern climates there. So, we saw great results, Mastervolt had a great quarter admittedly, a week comparable last year, but it was great to see the recovery in the channel inventory issues that we’ve seen in the past that have dissipated. I think we told you that a couple of quarters ago that we thought we were at the end there. So, the last thing I would say about Europe is, IS has been a big positive success for us. A lot of the orders, we’ve talked you guys about the Venice MOSE Project, a number of others are in the revenue stream and are offsetting some of the weakness you’ve got in the general, industrial tool portion of Enerpac. As for China, the weakest spot, we’re weak in both Enerpac and in truck, but truck being the weakest. Now, in China, we’re mostly with CNHTC. So, it’s a single customer, we’re in launch mode with FAW, I think that will start offsetting that because obviously we didn’t have sales in the prior period. So, I think we’re expecting this to be an improving picture as you go out in the quarters on truck. Anything you want to add, Andy?
Andy Lampereur – EVP and CFO: No.
James Bank – Citigroup: And just for – the second is, just the M&A pipeline, we’re hearing that’s robust from a lot of the other companies share in this sector, and as you mentioned your capital structure is as good, as it’s ever been, but we’re really only seeing some bolt-ons here and some tuck-ins there. I’m just wondering, is there anything going on with the service or strategies maybe bidding up some stuff. So, you guys walk away from it or may be some of the sellers are rethinking exit strategies. I was just wondering if there is anything more to the timing or that’s just coincidence.
Andy Lampereur – EVP and CFO: I think nothing to call out, nothing unusual out there. I mean, there are certainly some deals that get pricy and you just walk away from them, but nothing out of the ordinary here. People should not read into the fact that we’ve only closed down two small deals. There is plenty of activity out there and I just remind people that in 2010, we did $40 million of acquisitions and in 2011 we did $300 million, and this year we’re at 35 or 40. Next year or we could end up – certainly there is possibility here something happens this quarter, if not this quarter, next year, but it’s not for lack of activity, it will happen.
James Bank – Citigroup: Size of some of some of things?
Bob Arzbaecher – Chairman, President and CEO: Size of some of the things in the funnel, I mean our target would be kind of $50 million to $100 million that would where we would like to be. We have things that are smaller than that. I think the largest thing in the funnel is now 250 or 300, but it would be in that perspective that the items are in there, and I would say primarily focused on Energy and Industrial. Those are the two areas that most of the activity is going on.