LKQ Corporation (LKQ) Q1 2014 Earnings Report, Transcript and Summary

Greetings, and welcome to the LKQ Corporation First Quarter 2014 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Joe Boutros, Director of Investor Relations. You may begin.

Thanks, Devin. Good morning, everyone, and thank you for joining us today. This morning, we released our first quarter 2014 financial results. In the room with me today are Rob Wagman, President and Chief Executive Officer; and John Quinn, Executive Vice President and Chief Financial Officer. Rob and John have some prepared remarks, and then we will open the call up for questions. In addition to the telephone access for today's call, we are providing an audiocast via the LKQ website. A replay of the audiocast and conference call will be available shortly after the conclusion of the call. Before we begin with our discussion, I would like to remind everyone that the statements made in this call that are not historical in nature are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements regarding our expectations, beliefs, hopes, intentions or strategies. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made, except as required by law. Also note that guidance for 2014 is based on current conditions, including acquisitions completed through March 31, 2014, and excludes the impact of restructuring and acquisition-related expenses; gains or losses related to acquisitions or divestitures, including changes in the fair value of contingent consideration liabilities; loss on debt extinguishment; and capital spending related to future business acquisitions. Please refer to our Form 10-K and other subsequent documents filed with the SEC and the press release we issued this morning for more information on potential risks. Hopefully, everyone has had a chance to look at our 8-K, which we filed with the SEC earlier today. And as normal, we are planning to file our 10-Q in the next few days. And with that, I am happy to turn the call over to Mr. Rob Wagman.

Thank you, Joe. Good morning, and thank you for joining us on the call today. In Q1, revenue reached a new quarterly high of $1.63 billion, an increase of 35.9% as compared to Q1 2013. Net income for the first quarter of 2014 was $104.7 million, an increase of 23.7% as compared to $84.6 million for the same period of 2013. Diluted earnings per share of $0.34 for the first quarter ended March 31, 2014, increased 21.4% from $0.28 for the first quarter of 2013. Please note that adjusted diluted earnings per share for the first quarter of 2014 would have been $0.35 compared to $0.29 for the first quarter of 2013 after adjusting for a net loss resulting from restructuring and acquisition-related expenses, loss on debt extinguishment and the change in the fair value of contingent consideration liabilities. Organic revenue growth for parts and services was 10.3% for the quarter. I am particularly pleased with our North American organic revenue growth for parts and services of 6.4% despite the extreme weather we faced throughout January, a month when miles driven was down almost 5% in some of our key North American markets. Now more detail on our North American operations. During the first quarter, we purchased over 72,000 vehicles for dismantling by our wholesale operations, which is an 8% increase over Q1 2013. As we progress into Q2, the volumes and pricing at auctions remain steady despite the recent 2.2% spike in the Manheim Index we witnessed during Q1. With inventory already on hand and a continuation of our current run rate for acquiring cars, we should have sufficient inventory for our recycled parts operations. In our self-service retail businesses, during the first quarter, we acquired approximately 120,000 lower-cost self-service and crush-only cars as compared to over 128,000 in…

Thanks, Rob. Good morning, and thank you for joining us today. As Rob noted in our press release tables, we've broken out Keystone automotive operations as a segment for reporting purposes, which we are calling Specialty. While we believe the business has many of the characteristics of our existing North American business, including sharing customers, facilities and economic characteristics, for the time being, we're calling it a separate segment as we believe there is interest in the standalone Specialty results. So for now, we have 3 reportable segments: North America, Europe and Specialty. And I'd also point out that in Q1 2014, we saw LKQ reach a number of significant milestones. It was our first quarter with revenue reaching an annualized run rate over $6 billion, with our Q1 revenue annualizing at a hair over $6.5 billion. It's the first time we exceeded $200 million in EBITDA in a quarter and the first quarter where we exceeded $100 million of net income. Giving you the specifics on the quarter and beginning with revenue. Our Q1 2014 revenue of $1,626,000,000 was an increase of $430 million as compared to Q1 last year or an increase of 36%. For Q1, our total organic revenue growth was 6%, and we delivered an additional 29% from acquisitions, with foreign exchange adding a further 1 point. Rob mentioned that the Q1 2014 organic growth for parts and services was 10.3%. And within that, we saw our North American operations grow organically 6.4% while the European segment grew 25.3%. We completed 5 acquisitions in Q1 2014, with Specialty being the largest. Our Q1 2014 acquisitions contributed $197 million in revenue in Q1 2014, of which Keystone Specialty accounted for $177 million. The total revenue acquired in Q1 on an annual basis was $790 million. Total change…

Thanks, John. To summarize, we are quite pleased with our first quarter 2014 results and proud of how our team of over 26,000 employees performed in the midst of some unusual weather-related operating challenges during the quarter in both North America and Europe and nonoperational headlines that could have impacted our morale, performance and long-term strategy. But collectively, we never took our eye off the ball and got it done. And with that, Devin, we'd like to open the line for Q&A.

[Operator Instructions] Our first question comes from the line of Nate Brochmann with William Blair. Nathan Brochmann - William Blair & Company L.L.C., Research Division: I wanted to talk a little bit -- congratulations on the opportunity to start working with State Farm a little bit. I know you work with them on some of the mechanical and recycle-type aftermarket things but not so much, obviously, on the collision. And I know that this is a small data point and we shouldn't get overly excited about it. But I was wondering if you could talk a little bit about how those discussions went to start doing these chrome bumpers, when they might have started or whether they just one day kind of picked up the phone and said, "We're going to start doing it," or whether you guys were involved in that in terms of trying to think about what the pipeline might be for future products.

We were not involved in that decision, Nate. Of course, we regularly pitch our products and services to State Farm. They came this -- upon this on themselves, and they did it in conjunction with the rollout of PartsTrader. And as PartsTrader has gone across the country, obviously, we've seen more and more sales. Our reps that are on PartsTrader reviewing those estimates know about those 2 part types and are pushing them hard. So while we can't comment -- I don't know for sure how much of that percentage increase was related to State Farm because not all times that we know there's a repair or tell us who they're repairing a car for. But clearly, the 29% and 33% increases, some of that was related to State Farm's new policy. With an 18%-plus market share, they're a mover, obviously. So we're monitoring this, and we still, as I said in my prepared remarks, in constant communication with State Farm. And hopefully, they continue to expand the product offerings. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, great. That's optimistic. And then second, congratulations also on getting a couple of more insurance companies into the ECP pilot programs. It kind of sounds like even though -- while some of those insurance companies are kind of still tiptoeing around, being really aggressive with those programs, given your increase in overall revenue, they're clearly starting to use those. Is there any take in terms of whether or not they have to officially sign on for those programs to still take hold or whether you really expect gradually they'll take hold even if they don't fully move past the pilot program?

Yes. I would expect that they'll continue to move, Nate. The fact that they haven't signed anything, I wouldn't read anything into that. We certainly haven't. The fact that of the 15 that are in pilots, plus the rental car company we announced today as well, none of them have stopped writing it, so they continue to write it. And I think some of them are averse to actually signing a contract. But we do have 2 under contract, and the rental car company is under a contract as well. But I suspect it will continue to move along as we continue to grow our product offering. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, great. And then just 2 housekeeping things, John, if I could. One, what tax rate should we be thinking about going forward now with some of these adjustments?

Yes, I think we had a 34% rate in Q1. Absent some discrete items, I would say probably in that range, 34%, maybe 34.5% for the rest of the year. Nathan Brochmann - William Blair & Company L.L.C., Research Division: Okay, great. And then also, too, you talked about maybe some lower organic total growth expectations towards the end of the year as Sator gets in there or maybe the U.K. paint business. Could you just give us maybe a rough estimate of what the organic growth of those individual businesses are as we think about the overall mix?

Yes. And we're thinking it's probably going to be sort of more North American mid single digits on those 2 components.

Our next question comes from the line of Craig Kennison with Robert W. Baird. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: A lot on the call here. I'm going to have to reread the transcript. But did want to ask about your pending acquisitions in The Netherlands. It would seem to be a very big positive if you're able to close those deals. I'm curious how other jobbers in that market have reacted to the announcement, and I'll start with that.

Sure, Craig. The -- we have a tie-in with every one of our customers over there with our computer system. We've been in contact with every one of those other jobbers. Some of them have offered to sell us their business. These 5 acquisitions give us 52 facilities. We think the right number is circa 75. So we're going fill in the balance either through acquisition or greenfield. So we've gotten some inquiries about selling the businesses, but we haven't had one defection as of yet. Some of that certainly is at risk. They could probably find somebody else, but the tie-in with the computer system, they use our operating system, actually, to order a lot of parts and to actually manage their business. So it's going to be pretty difficult for them to get away from us, and as of now, we've had no defections whatsoever. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: And to follow up, you mentioned the operating system. It's my understanding that Sator has an order platform, if you will, that is widely used. Could you explain what that is and whether it's something that could scale more broadly beyond that particular geography?

Yes, absolutely. Basically, what we have -- the system that the jobbers use actually ties right into our system live. It's called My Grossier [ph], my best attempt at Dutch, where basically, we -- they can see our inventory. We can see what they're doing as well in terms of ordering, so it's pretty intricate. We have looked at that as an ECP potential model to move to other parts of Europe. But at this point, we're still, obviously, just looking at that. And then now with the acquisitions now going into a 2-step model, we'll have to relook at that as well. But it is an interesting system where we get really full visibility of what our customers are doing.

Yes, and it actually goes down to the garage level. So the garage uses our software. They use that to look up inventory, not only at our customers but they can actually see right through to our inventory. And then they can order those parts. So they order -- the garages are ordering from our customers using our software, and they're sort of an intermediary in there. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: If you look at ECP in the U.K., is there a different operating platform that you don't control that is used?

Yes. The garages use typically their own software for the garage management system, if you will.

We don't have the access to -- we don't have the ability to see what they're doing, though we do in Holland. So it's very intriguing, and we're looking at ways to replicate that in the U.K. at some point. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: And then one more on that deal. What does the rest of Europe look like from a 2-step or 3-step model perspective?

Pretty much every country has some level of 2-step and 3-step, but the vast majority of Western Europe is predominantly going to be 2-step. There are some 3-steppers still out there, but the bigger companies are going to be 2-step. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: And then, John, one housekeeping question. On the 4 deals, the incremental deals that were announced in the transcript, what was the trailing annual revenue? And can you give that to us by geography, if possible, North America versus Europe?

The total annualized revenue is $790 million, and pretty much all of it's in North America. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: That includes Keystone?

Yes. Craig R. Kennison - Robert W. Baird & Co. Incorporated, Research Division: Do you know what it is x Keystone?

Keystone was around $700 million, so it was about $90 million of other deals.

Our next question comes from the line of James Albertine with Stifel. James J. Albertine - Stifel, Nicolaus & Company, Incorporated, Research Division: Obviously, everyone's going to have their State Farm questions, and we certainly do as well. But I wanted to focus, if I could, on just making sure I understood what you said on gross margin. Your core, if I understood it, North American gross margin was up 70 basis points year-on-year. Is that correct? And sort of can you get to a little bit of what's driving that, whether it's sort of the flow-through of deals as they leverage or something going on with the sweet spot of kind of the SAAR roll-off?

We just -- we saw a little bit better margins in the businesses here. I did mention that other revenue was down. Some of that was the aluminum furnaces and precious metals businesses being down. Those tend to be relatively lower-margin businesses. So as that other revenue came down, it was probably a slight benefit to the margins, which is why we said don't count all of that 70 basis points. It's just sort of the math on product mix. We did see a little bit improvement in the margin in the late model [ph] of the salvage business and a little bit improvement on the aftermarket parts costs. It was pretty widespread, frankly, other than we did get those benefits just from having lower other revenue, which probably hurt us on the operating leverage on the facility and warehouse and other below-the-line costs. James J. Albertine - Stifel, Nicolaus & Company, Incorporated, Research Division: And can you remind me -- last quarter, I think it was positive year-over-year as well but maybe a lower on rate-of-change basis. So we're seeing acceleration in the improvement, in other words?

I think if you strip out the other revenue, it's probably fairly consistent, right? I haven't got my notes in front of me, but I think you're right. I think we've said around 50 bps is our number currently. James J. Albertine - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And then if you guys could just help us understand. I think you've said in the past sort of ballpark assumption is 30 to 50 basis points of operating margin kind of expansion on an annual basis, I mean, inclusive of the M&A, which obviously is a little dilutive at the outset. As some of the M&A flows through here from Sator and Keystone, sounds like it may even be ahead of schedule to some degree in terms of the integration strategy. Is that sort of range changing? Or should we expect something more in the higher end of that range as a result?

I've always said this thing's going to be lumpy. And you've got to kind of adjust for the fact that you look like you're getting operating leverage when scrap costs are going up and it looks like you're losing it when they're going down. But I don't think we've changed our view with respect to that in terms of it's our belief that we can grow the business organically the way we do and then supplement that with some acquisitions. We ought to be able to see leverage coming through like we did this quarter in depreciation. And as I said, if you adjust for the other revenue, you do see that leverage in the North American operations, and we did see a little bit in the gross margin. But I don't know that's so much operating leverage as just cost structure in terms of price range for the cars.

Our next question comes from the line of John Lawrence with Stephens.

Rob, would you talk a little bit about -- you mentioned Keystone a little bit, some of the end markets, what you're seeing as far as the muscle cars, et cetera. Talk a little bit -- take one more step on those end markets. And maybe what are you seeing today in the activities surrounding sort of integration that you have left to do in '14 for that business?

Sure. John, the integration has actually gone much quicker than we expected. As we mentioned -- as I mentioned, we closed 11 cross-stocks. We also moved about 14 locations into existing locations. To give you a quick example, Keystone was delivering into the Dallas market from Kansas City, and they were driving through Oklahoma City. And they would drive to Dallas, drop off all the parts, and then trucks would then leave Dallas to go service the Oklahoma City. That shuttle truck is now stopping in Oklahoma City, dropping off the products for Oklahoma City and local LKQ/Keystone drivers delivering those products. So we're seeing a tremendous amount of freight going from Dallas all the way back to Oklahoma City, where that truck is already going by. So that's some of the found synergies that we really didn't anticipate, quite frankly, is 14 of those locations. We're on plan for synergies on both the financial and the operational side. We -- as I mentioned on the last call, at some point, we want to bring some products to Europe to try and test this. We've actually -- I actually personally met with the CEO of our Keystone operation, with one vendor in Chicago, and we're going to launch, hopefully, something in late Q2 to start bringing some products into Europe as a trial. Meeting the vendors, we're seeing some cross-selling opportunities, as we discussed. One of the things that we found was, in the RV side of the business, there's a lot of these dealerships have paint and repair businesses, and we're already starting to market our paint products into those RV businesses. The LKQ reps already have access to the Keystone inventory, so they can now sell that product. It just started about a week ago, so it's really too early to say what the impact of that's going to be. And then, of course, Keystone has access to the muscle car products, our cooling products and as well as our reman engines, so that is now starting to cross-sell. So we're pretty bullish on, hopefully, what the cross-selling opportunities are. And most importantly to me, the cultures are in lock step. They're a growth-oriented company. We are too. And we're very pleased with that acquisition. And just finally, one last thing on Keystone. We approved a new distribution center in Texas. That's a big market for the Keystone. As I said, we're servicing Kansas City now, and we're going to have our own distribution center there. So really excited about what we got going in the works there.

Our next question comes from the line of John Lovallo with Bank of America Merrill Lynch.

First question is on the inventory at the salvage auctions. Are you seeing pretty good inventory supply there? And I mean, do you think that, over the next quarter or 2, that higher kind of supply -- in fact, you are seeing that, could offset higher Manheim prices and maybe be a benefit in pricing?

Yes. We track weekly, John, the number of vehicles at the auctions. And we've only seen a modest spike so far. So I assume the Coparts and the ADESAs and the insurance auto auctions are sitting on a backlog because we haven't seen it hit the auctions yet. And it generally does take 2 months before it gets through the systems. But we certainly expect that if that volume increases as much as the number of total losses that likely took place in Q1, we do expect it to have a positive impact on Manheim, thereby lowering, hopefully, our cost. But haven't seen that yet. Our auction costs actually were, year-over-year, just down slightly. But I would also mention that scrap is down, so that could be just a scrap relation. But we do expect Manheim to eventually start to lighten up a little bit here, hopefully soon.

Okay, that's helpful. And then there's been more talk about multi-bidding platform in terms of the salvage auction industry and in the whole car auction industry. What are your guys thoughts on that? I mean, do you think that, that would have any impact on potential pricing competition and so forth?

Well, the Internet bidding has been around really -- [indiscernible] Copart's initial, I think, came out in '04, if I'm not mistaken, maybe even earlier than that. So it's been around for quite a bit of time. So those multi-bid functions have been there for quite a while. We've been dealing with them. So I don't see any additional impact because they've been open for quite a few years. So really not expecting to see anything there negative.

Okay, great. And last question, John. I think last quarter you guys had mentioned that you expect kind of EPS to ramp sequentially throughout the year. First quarter was probably a little bit better than expected. I mean, is it still reasonable to think that we'll see some kind of ramp-up? Or is the normal seasonality something we should think about?

I think the things that are sort of different is Keystone Automotive is -- their strongest quarter, we believe, is going to be Q2. What we did see is the European businesses, and it's our understanding that Keystone also are pretty light in Q4.

Our next question comes from the line of Gary Prestopino with Barrington Research.

Just talk a little bit more about State Farm so I get my understanding here correctly. Are you the only entity that has been approved to sell these aftermarket bumpers?

No. They authorized the use of certified aftermarket chrome front and rear bumpers, and anyone who carries a certified bumper has the ability to sell that product.

Okay. So -- and is this really the first time in a long time that State Farm has -- is starting to use, what would they be called, collision repair parts?

On the collision part, yes. They have written radius condensers, but that's considered mechanical. This was really the first collision part they've entered the marketplace with.

So do you think it's to be expected that they'll come out with some more going forward, then?

We're certainly hoping, but nothing more than that at this point, unfortunately.

Our next question comes from the line of Bret Jordan with BB&T Capital Markets. Bret David Jordan - BB&T Capital Markets, Research Division: As you look at the end of the first quarter, coming into the second quarter, do you have a feeling for sort of what the collision channel backlog looks like? I mean, there are certainly increased crash rates, but there are some issues, maybe some of those repairs weren't made, given supply disruption. And as we look at Q2, do you have a feeling maybe year-over-year how we entered the quarter with sort of channel demand?

Honestly, Bret, just anecdotally, we hear -- because a lot of the cars were drivable, so you might drive by a shop and not see many cars there. But just because the car is drivable, it is scheduled to come in. I can say that we don't give, honestly, guidance for the quarter. But I will say that, for the first 3 weeks of April, it appears that the shops are working through some backlog. But it's really, really tough to say how much backlog is actually out there. Bret David Jordan - BB&T Capital Markets, Research Division: Okay. And then on Keystone Specialty, do you have a feeling, I guess -- I'm sure you have a feeling for what the inventory levels are on that? And then just given the fact that, that's closer to traditional auto parts, which, in many cases, has got better working capital leverage, is there the potential to generate cash as you could extend payables or leverage some of that inventory you're carrying at Keystone Specialty?

Yes. I'll just give you some indication. The -- we acquired about $152 million through that deal. They were one of the causes of the increase in the inventory in the quarter. So quarter end, they were at about $166 million. The type of programs you're talking about, you're right, this has more potential for that sort of a financing structure. We don't have any plans in place at the moment, but given we're -- that refinancing of our credit facility, it can be more interesting, I suspect, in terms of it's really a leverage play. So I won't say never, but we don't have anything in the hopper at the moment.

Our next question comes from the line of Scott Stember with Sidoti & Company. Scott L. Stember - Sidoti & Company, LLC: Could you remind us how big the chrome bumpers are within the portfolio of products that you guys have?

Yes. It's -- obviously, they're just basically on pick-up trucks. So it's a pretty limited line, mainly Ford, Chevy and Dodge. But the 4 manufacturers don't carry much. But as you know, the F-150 is the #1-selling vehicle in the United States. So it's not a huge product line. It is pretty limited in that respect. Scott L. Stember - Sidoti & Company, LLC: Okay. And to that point, just trying to figure out how much business you could potentially get out of this versus your competitors. Are these parts, do they have any extra certifications that possibly some of your competitors would not have?

No. It's basically being done through -- NSF is the certifying body for most of those products. I think CAPA does a few, but it's mainly NSF. Scott L. Stember - Sidoti & Company, LLC: Okay. And can you talk about CCC ONE platform? You didn't give an update on it. Is there anything new there?

Still progressing. The growth sequentially was 23% in revenue. Again, that's off a small base, but the volume was up 30%. So still gaining traction. Roughly still around 4,000 shops in the program, Scott. Salvage, though, this is -- right now, we're just solely limited to aftermarket. Salvage is slated to roll out in late summer, and that seems to be on target. And CCC tells us they're averaging about 80 shops a month that are being enabled. So they're getting deeper and deeper into this thing. And actually, CCC is actually running some contests to get more shops involved. So they're stepping up on their side. I'm still really very excited about the product, mainly because it's -- the shop is doing most of the work. But the biggest ancillary benefit is that their returns have dropped dramatically as the shops do the -- keen to do a better job keying in the product than our reps were, what we were being told to key in. So very excited about the program, and hope it continues to grow. Scott L. Stember - Sidoti & Company, LLC: Great. And last question on the collision parts program in Europe. Particularly with many of the underwriters in the U.K. writing business in Europe as well, have you seen any initial traction there?

We have not. This will be Phase 2 of that now with the locations that we acquired at Sator, the 5 locations. We'll now be able to go direct to those shops. So probably later this year, we'll start bringing our insurance team over there to start marketing to the insurance companies. And hopefully, later this year or early next year, we'll start our collision parts program there on the continent.

Our next question comes from the line of Sam Darkatsh with Raymond James. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: Most of my questions have been asked and answered. Just a couple of follow-ups. The Keystone Specialty segment, what's the growth of that business right now? I know you didn't have it, obviously, in the books last year, but what's the year-on-year growth right now that you're seeing?

It's growing -- in Q1, year-over-year -- and again, it's not -- we're not obviously reporting it as organic growth yet, but it was mid to high single digits. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: And is that how we should be looking at that for 2014, you figure?

No. We said it's going to grow more North America, but they had a really good Q1. So we think it's going to be somewhere between the 5% to 7%. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: Okay. And then the April commentary, where you said that it appears that the shops are working through the backlogs, should I look at that statement and the implication being that April was better than March or better than March and February overall?

Well, April definitely slows down compared to March just because of the backlog from January to February. But we think we're going to track on plan for April. Sam Darkatsh - Raymond James & Associates, Inc., Research Division: And last question, and if you've already mentioned this and I missed it, I apologize. You have 156 ECP stores now, having opened 11 this past quarter. I think your goal originally was 165 by year end. And it would seem as though you're ahead of that pace. Are you still looking at 165? Or how should we look at the store count by year end?

Yes, we're going to bring those 9 finish by -- hopefully, by the end of Q2, actually. A few of them may go into early Q3. And at that point, Sam, we'll reevaluate if we can do more. But we'll hit the 165 for no problem at all.

Our final question is from the line of Bill Armstrong with CL King & Associates. William R. Armstrong - CL King & Associates, Inc., Research Division: I just wanted to follow up on a previous question. You don't see a lot of chrome bumpers on the roads anymore. Any idea -- if you look at the carpark is, I think, maybe 270 million vehicles, any idea how many have chrome bumpers? And maybe more importantly, what indication, if any, has State Farm given that they may expand this program to plastic bumpers, all types of bumpers and then, obviously, beyond that to other collision parts?

No indication past the chrome bumpers, and I really don't know what the pick-up truck population in the U.S. is today. But it's certainly a lot smaller than the car population. But yes, you're just going to find these, Bill, to your point, basically just on pick-up trucks. That's all they'll be on. William R. Armstrong - CL King & Associates, Inc., Research Division: Okay. And so far, they haven't given any indication that they may expand this to plastic bumpers or anything else?

None whatsoever at this point. And with that, we'll be back in about 3 months to give you an update on our results for Q2. Thanks for joining the call, everybody.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.