Linda Hasenfratz - Chief Executive Officer Roger Fulton - General Counsel Dale Schneider Chief Financial Officer

Mark Neville - Scotiabank Peter Sklar - BMO Capital Markets David Tyerman - Canaccord Genuity Ben Holton - RBC Capital Markets

Good afternoon, everyone and welcome to our second quarter conference call. Joining me this afternoon are members of my executive team Jim Jarrell, Mark Stoddart, Roger Fulton, and Dale Schneider as well as members of our corporate and group finance team.

Before I begin, our General Counsel, Roger Fulton, will make a brief statement regarding forward-looking statements provided on this call.

Thank you, Linda. Certain information regarding Linamar discussed in this teleconference, including management’s assessment of the company’s future plans and operations may constitute forward-looking statements.

This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results may differ materially from those anticipated in the forward-looking statements due to factors, such as customer demand and timing of buying decisions, product mix, competitive products and pricing pressure.

In addition, uncertainties and difficulties in domestic and foreign financial markets and economies could adversely affect demand from customers. These factors, as well as general economic and political conditions, may in turn have a material adverse effect on the company’s financial results.

The company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. Linda?

Thanks, Roger. I’ll start off with sales, earnings, and content as usual.

Sales for the quarter were $1.105 billion, up 19% from Q2 a year ago results for another new record for Linamar. Earnings saw another fantastic level of growth in the quarter with net earnings up 48% over a year ago to $89.7 million or a $1.38 per share.

Net earnings as a percent of sales in Q2 were 8.1%, extending once again our trends of margin enhancement. We appear to be in the midst of a period of higher margin performance than what we would historically consider normal.

In fact it’s reasonable to expect our normal net margin range to now be in the 5% to 7% of sales range rather than the 4% to 6% referenced in the past. Quarterly seasonal highs and lows might move from 4% to as much as 8%.

Program mix is the key driver in this situation with higher CapEx programs that have higher margins to maintain return on investment targets, influencing our results for at least the next couple of years. Of course, mix can shift, if new program wins for instance start to move towards more module assembly business with its lower margins, which is more likely than not to happen in the latter part of the decade.

Of course, we’re running right at the top end of these ranges at the moment. Thanks to low levels of launch cost and a strong performance of Skyjack in conjunction with the favorable mix described.

It is reasonable to assume we will stay at the high end of our new normal range, say 6.5% to 7% for both 2014 and 2015 fiscal years, noting that 2015 will have somewhat higher launch cost, thanks to new business plans launching in that time period. Earnings growth continues to drive a solid performance in return on capital employed and return on equity, reaching 21.5% and 24.1% respectively, a fantastic result in line with goals of 20%.

It’s great to see this consistent improvement in performance in this important area for our shareholders. We continue to see a positive level of cash flow not withstanding continued sales growth.

Strong earnings performance and a continued focus on non-cash working capital management to absorb the impact of the spike in sales allowed us to further reduce net debt level now $353 million, which reflects excellent levels of leverage and an extremely strong balance sheet. Plans for building levels of cash and debt availability include continued investment in future growth through both Greenfield and acquisitive opportunities.

CapEx in the quarter scaled up a little from the last few very like quarters. We spent $78.5 million on new capital investment or 7.1% of sales.

We expect to see this continue to build over the next several quarters, given the heavy level of new business wins we are seeing. 2014 and 2015 CapEx is expected to be in our normal 8% to 10% of sales range.

In North America, content per vehicle for the quarter was a $127.39, up 7.7% compared to last year. Our Q2, automotive sales in North America were up 12.5% over a year ago, reaching $582 million compared to $517 million last year, in a market that was up 4.6% in production volume, reflecting great continued market share growth for us.

This growth level almost three times the level of market growth is of course a key factor in Linamar’s continued growth and success. One of the key elements of the Linamar story is that our potential for growth is less dependent on broad market growth and vehicle volumes and much more dependent on increasing market share, which in our business is a real time opportunity.

Our target market of Powertrain and Driveline on the vehicle side is still largely captive but increasingly outsourced with every new engine and transmission launch. That is where a large portion of our growth will continue to come from for an extended period of time as these systems gradually make their way to the supply base.

In Europe content per vehicle for the quarter was $19.13, up 43.9% from last year. We have a solid book of new business launching in the region which is helping to drive content growth.

Vehicle production levels were 5.2 million units in the quarter up 1.6% from last year; sales increased 46.3% to reach 100 million. It is great to see growth in the vehicle market in Europe amplifying our growing market share in our top-line.

I will note in relation to my previous comments, our sales increased at a rate nearly 30 times the market rate, thanks to that market share growth. We continue to believe the recovery in Europe will be very slow and gradual over the next several years.

Growth in Europe continues to be a priority for us given the size of the market. Business in-hand in Europe is expected to more than double our 2013 footprint in the region over the next four years which should continue to drive meaningful content growth for us.

In Asia Pacific, content per vehicle for the quarter was $6.76, up 21.8% from last year, reflective of continued launches in both our Wuxi and Tianjin plants. Vehicle production levels were 10.9 million units in the quarter, up 5.2% from last year which resulted in Q2 automotive sales in Asia Pacific up 28.3% to a total of 74 million.

In Asia, our sales are growing at more than five times the market growth levels and book business will see sales grow more than 2.5 times to 2013 levels in the next five years. As I’ve described shortly, we have seen great business wins in Asia this year which will continue to substantially drive content per vehicle in the regions.

Other sales were up 22.1% in the quarter at 350 million compared to 286 million last year, due to continued growth of Skyjack as well as increases in our off highway and energy sector sales. Turning to market outlook.

For our global light vehicle business, we are look at about 3.9% growth globally in the market this year. For 2014 industry experts are predicting a year of moderate growth in light vehicle volumes in North America, Europe and Asia to 17 million, 19.9 million and 44.8 million vehicles respectively, up 5%, 2.2% and 4.3%.

Next year is expected to generate continued moderate growth in Europe and Asia and North America up only slightly, so 2.5%, 4.4% and 1.1% respectively for Europe, Asia and North America. Industry experts are predicting strong growth and on-highway medium heavy truck volume this year in North America up 15.6% over last year with more modest moderate growth in Europe and Asia up 0.7% and 0.9%, respectively.

Next year is expected to generate growth globally in North America, Europe and Asia at 14.4%, 13% and 8.4% respectively. Off highway medium-duty and heavy-duty volumes are predicted to grow moderately this year in both North America and Europe up 2.6% and 4% respectively, with a little better growth in Asia which is expected the 5.2%.

Next year is expected to grow more moderately on a global basis, 2.2%, 2% and 4.1% in North in North America, Europe and Asia respectively. Turning to the access market, outlook in the industry continues to be positive.

The first half of 2014 has been highlighted by a strong market in the area work platform industry as rental companies continue to invest in equipments. Most rental companies share a positive outlook for 2014 and are predicting steady growth into 2015.

The North American market is expected to grow further and the European market has been gaining more strength as 2014 goes on and trending positively into 2015. Skyjack strategy continues to be global expansion and product line expansion to drive market share growth in all products.

Our target is to double our 2013 sales levels by 2020. Industry experts’ global market predictions for 2014 and 2015 for this industry are 4% or 5% to 10% growth each year.

Turning to new business, we had another solid quarter of wins as we continue to take advantage of several new transmission and engine platform changes in the coming years. Before reviewing the highlights on where we are at on launching business, first look for ramping volumes on launching transmission platforms to reach 20% to 30% of mature levels.

These programs will peak at nearly 1.4 billion in sales. Sales last year were about $250 million and growth next year should be around 40% to 50%.

We look for ramping volumes on launching engine platforms should be 35% to 45% of mature volumes, they will peak at nearly $900 million in sales. Sales last year were $200 million and growth next year should be another 30% to 40%.

I should note that since our last call of that $45 million in business launching in the engine area shifted to productions. Look forward ramping volumes on launching drive line platform should reach 25% to 35% of mature volumes.

These programs will peak at more than $815 million in sales. Sales last year were about a $150 million and growth next year should be actually quite substantial from this year’s level with another 80% to 90% growth.

And finally look for increases in volumes on our energy and industrial business launches to reach 50% to 60% as mature levels, as we work towards peak sales of close to $30 million. Sales last year were about $15 million and next year, we should see another 35% to 45% growth to basically reach that level of mature sales.

So, to summarize our launches, we have a grand total of a 182 programs launching, representing nearly $3.2 billion in annual sales. Depending on industry volumes programs currently in launch were add a total of another $350 million to $450 million in sales 2014 and another $450 million to $550 million in 2015.

Skyjack should see continued growth at somewhat better than market growth levels in 2014, as market share penetration continues. Temper that growth with loss in business that naturally ends each year, no need to expect a low end of our normal range of 5% to 10% this year and mid to low end of the range for next year and of course normal productivity gets back as you work out an estimate of sales for both years.

Clearly, given the level of launches and market conditions we’re expecting to see again solid sales growth at Linamar this year and next. We target double digit top and bottom line growth each year at Linamar and we feel very confident in our ability to deliver such results based on launching business and expected margin performance.

I have noted we had another great quarter in new business wins and continue to quote a strong book of business opportunities. I’ll highlight a few of the more strategic wins.

First we’ve continued to significant business in our expanding gear business. Wins in Mexico, China and India this quarter add to those that we won in Canada last quarter to take our total wins to nearly $80 million to annual sales.

The gear market is quite significantly globally and Linamar is a dominant player with few competitors. Second, we had a couple of wins in the marine market last quarter for cylinder heads and blocks worth more than $16 million in aggregate annual sales.

The marine market is an interesting win, where many engine opportunities are evolving. We saw continued penetration in the large 5C market with wins for 10 modules and connecting-rods in Europe worth more than $30 million together in annual sales.

And finally as noted earlier, we had a great quarter for new wins in Asia. At this point China has seen more than a $100 million of annualized new business wins mostly for our new plants in Tianjin this year.

Included in that is a major iron cylinder block program win for the commercial vehicle market. India is also achieving good success with now more than $40 million of annual sales booked for the facility which we have leased and initiated this year.

These business wins continue to do a great job of filling in levels of book business for us in the outer years. At this point, we’re looking at more than $5.2 billion in booked business for 2018, based on current industry volume forecast layered with our new business wins and adjusted any business that’s leaving.

It’s very exciting to see this level of secured growth for us in the midterm. With that, I’m going to turn it over to Dale, to lead us through a more in depth financial review.

Dale?

Thank you Linda and good afternoon everyone. As Linda noted Q2 was another solid quarter for sales and earnings growth, with sales reaching over $1.1 billion which resulted in record quarterly net earnings.

For the quarter, sales were 1.105 billion which represents an increase of 18.9% or 175.7 million over the second quarter of 2013, which sets a new record for quarterly sales. Our operating earnings were 124.3 million for the quarter up 34.2 million or 38% over Q2 2013.

Net earnings increased 47.8% from the second quarter 2013 to reach 89.7 million. The net earnings per share for the quarter increased $0.44 or 46.8% from the second quarter of 2013 to reach $1.38 in the quarter.

Included in net earnings for the quarter was a foreign exchange loss of 3.1 million which was entirely caused by the revaluation of our operating balances. If you adjust this FX loss than the EPS for the quarter would have been $0.04 higher.

From a business segment perspective the loss from the revaluation of our operating balances of 3.1 million in the quarter was a result of a $1.1 million loss in the Powertrain/Driveline segment and a $2 million loss from the industrial segment. Further looking at the segment sales in our Powertrain/Driveline business increased from the second quarter of 2013 by 8.5% to reach $884.7 million in the quarter.

The growth is a result of sales increases in all three operating regions due to the significant number of programs in launched the increased volumes on mature automotive programs and the increased volumes on our commercial vehicle products with additional increases in Europe as a result of new sales from our new Germany assembled cam shot business. On the operating earning side Powertrain/Driveline earned 86.3 million for the quarter up 33.6% from the second quarter of 2013 the increase in operating earnings is the result of the increased volumes and favorable sales mix towards highly capital intensive programs and the productivity and efficiency improvements achieved in the quarter which were partially offset by increased management and marketing costs to support the growth.

If we remove any foreign exchange gains or losses then operating earnings for the Powertrain/Driveline would have been $87.4 million for the quarter compared to $64.3 million in the second quarter of 2013, which represents a 35.9% improvement. Turning to the industrial segment, sales are up $37.5 million in the second quarter 2014 or 20.5% in the same quarter of 2013.

This increase is mainly the result of the increased demand in Europe and North America in the access equipment market and the favorable impact to the U.S. dollar.

Industrial segment’s operating earnings were $38 million in the quarter; this represents $13 million improvement or 52% increased over Q2 2013. Improvement can be primarily attributed to the increasing demand in the quarter, the productivity and efficiency improvements demand in the quarter, the favorable impact of the stronger U.S.

dollar partially offset by increased management and marketing costs to support the growth. Removing any foreign exchange gains or losses, the operating earnings in industrial segment would have been $40 million for the quarter compared to $25 million in the second quarter of 2013 instructed as 60% improvement.

Returning to the overall Linamar results, the gross margin came in at 16.5% for the second quarter, up from the second quarter of 2013 levels of 14.5%. Gross margin in the second quarter of 2014 increased due to the higher sales volumes on both mature and launching programs, higher margins due to the favorable sales mix towards highly capitalized programs and the productivity and efficiency improvements.

Product amortization expense for the second quarter was up $7.2 million from the second quarter of 2013, product amortization as a percent of sales decreased to 5.4% in the quarter from 5.6% in the second quarter of 2013. The decrease in amortization as percent of sales is mainly attributed to the higher utilization of our fixed assets as a result of increased volumes.

Selling, general and administration cost increased to $54.8 million from the second quarter of 2013 levels of $44.3 million. On a percent of sales basis, second quarter 2014 has increased to 5% in comparison to the second quarter of 2013 at 4.8%.

The increase on a dollar basis is mainly the result of management and marketing costs supporting growth and then as a result of the additional cost from our new and expanded facilities. Financing costs have decreased by $2.4 million versus the second quarter of 2013.

This decrease is mainly due to the lower debt level, lower borrowing rates as a result of both the credit facility being renewed in Q2 last year and the improved covenants since Q2 2013 in addition to the higher interest earned on long term AR finance in the industrial segment. Additionally, the consolidated effect of interest rate was 4.9% compared to 4.5% in Q2 2013 after removing the impact of ineffective interest rate swap that ended in Q4 2013.

The effective interest rate has increased as a result of private placing notes having a heavier rating on the debt levels as the company continues to delever its balance sheet. It is expected going forward that the effective interest rate will be at level consistent with the second quarter of 2014.

The effective tax rate for the second quarter of 2014 was 24.5% compared to 26.2% second quarter 2013. Effective tax rate for the quarter is lower mainly due to the reduced levels of unrecognized benefit of losses experienced in Europe and a more favorable mix of foreign tax rate in Q2, 2014 than in Q2, 2013, which is partially offset by higher levels of unrecognized benefit of losses experienced in Asia.

We are expecting the tax rate for 2014 to be in the range of 24% to 26%. Linamar’s cash position was a $119.1 million on June 30, 2014 in comparison to $97.2 million on June 30, 2013.

The second quarter 2014 provided a $136.8 million in cash from operating activities and created $45.5 million in free cash flow. Non-cash working capital improved from the second quarter 2013 levels at 10.9% to 9% of annualized sales in the second quarter 2014.

Debt to capitalization improved to 24.6% in Q2, 2014 from 36.8% in Q2, 2013. We are pleased to see that debt to cap has continued its improvement trend and remains well within our target of 35%.

Net debt to EBITDA also improved significantly to 0.6 times in the first quarter of 2014 from 1.3 times in the first quarter of 2013. The deleveraging of our balance sheet has resulted in the amount of available credit on our syndicated revolving credit facility to increase to $581.2 million at the end of the quarter.

To recap, Linamar has enjoyed a terrific quarter that saw strong sales and earnings growth and free cash flow results, which gave rise to a record quarter for both sales and earnings. Q2 sales were up 18.9% to reach more than $1.1 billion in the quarter, the strong sales from both program launches and mature programs led to solid earnings performance in both operating segments which resulted in net earnings improving 47.8% and EPS improving 46.8% in this quarter.

The second quarter continues the pattern of earnings growth outpacing the sales growth that has been demonstrated over the last couple of years. The margin expansion in the quarter has resulted in further improvements from return on equity which reached 24.1% in the quarter to remain with other targets.

That concludes my commentary and I now like to open it up for questions.

Hi, good evening. You moved up your margin targets again this quarter, with the new normal being 5% to 7%.

I think you also mentioned 8% being a possibility. That was for a given quarter, not year, correct?

That’s correct, yes. So, seasonally Q2 is normally our strongest quarter or so.

And certainly Q3 and Q4 are both are weaker quarters, Q4 being typically is the weakest. So, just to give you a sense for the highs and lows of where the margins might go on a quarter to quarter basis.

Okay, sure. I mean, you’re at the high-end of what you would consider normal now.

You talked about mix being favorable for the next few years. I mean, you did mention higher launch costs next year.

But I mean, seeing that revenues will likely continue to grow by double digits, I mean, could we still, could we see margins go higher still? I mean what prevents that from happening, at least in the near-term?

I mean, I think it’s unlikely to see continued margin growth, I mean as I have described we have a lot of things that are all on the positive ends. I mean, if you look at the margins they come from a blended situation from high to low launch levels.

So, if you have high launches, obviously it’s going to bring margins down from high to little material content level, the mix of your business. And low to high CapEx ratio.

So if you have a lot of business that has really high CapEx that tends to drive higher margins. Skyjack’s performance is certainly a factor as well.

So really I think all of these factors are kind of at the high end of the range which is why you are seeing us performing at really the high end of that range. I would not expect to see continued margin growth I do expect that this year and next we can stay in that 6.5% to 7% range that I think it’s prudent to expect a little higher launch cost for 2015.

Okay. I guess just not to sort of beat it, but the mix I guess doesn’t change in the next year or two.

Again you did mention launch costs, but we’re going to see double-digit growth but so I guess, presumably 2015 could be better than 2014 in terms of margins?

I don’t think that’s a good expectation I think that we will we absolutely are targeting double digit top-line growth and feel very good about that and as well as double digit bottom line growth but to expect that double digit top line growth is going to somehow drive better margins I think is not a good assumption. I think that we are going to be in the same range as this year in the 6.5% to 7% but launch cost are going to be a little bit higher.

So I mean obviously that’s going to put more pressure but not significantly so. We are still I mean we are still going to be at the top end in that range.

Okay. Maybe just one last one.

Cash generation in the quarter, very healthy again. Debt to cap is significantly below the target.

Can you just maybe talk about your comfort level, where you’re at? I mean do you consider yourself underlevered at this point?

And are you looking at ways to maybe better use your leverage?

I will certainly I mean we are quite pleased please with the level of strong cash flow, note as well that we have had a few quarters although this quarter was a little bit higher, but we’ve had a few quarters sort of light CapEx, lighter than we might normally see. And as noted we have a $3.2 billion book of business for the launching so clearly we expect CapEx start to ramp up a little bit again.

So I think that where we’re at, at the moment is a good place, I admit we have a lot of flexibility on the balance sheet I mean we’ve got almost $600 million of availability in terms of our line. But we’ve got business to invest in through these opportunities, and of course are always looking for opportunities to continue to grow the business.

Okay, thank you very much. Great results again.

Thanks.

Thanks. Linda, on the, like, the launches and the $3.2 billion of backlog, I know you’ve talked about this for a long time, this statistic, but could you just explain again what the $3.2 billion is?

Yes, it represents an annualized sales figure, so this is not an aggregate as more than one year of sales, this is taking the average sale for programs that have been one and adding that all up, okay. So that’s where we get the 3.2 billion and then you would layer that in on top of business that we have today and take off business that is ending.

So we normally have sort of 5% to 10% of business ending each year. So you obviously have to take that up to bottom and if you’re going to work out where longer term sales are going

Right. And so, when does something like as soon as program starts even if it’s low level of production, does it come out of the 3.2 number?

No. We take it out of the 3.2 one that reached basically mature levels of volume so if it was supposed to be a 100,000 and it’s approaching 100,000, then we’ll take it out of launch and put it into production.

Okay. And then the other number you threw out, the 5.2 is that the equivalent to the – I am sorry, the 5.2 billion by 2018?

Is that the equivalent to the 3.2 billion currently?

It’s per book, plus the 3.2 launches that’s launching and not all of which peaks out in 2018 by the way, some of that like 2018 is not necessarily the peak sales year for all those programs. Some of that don’t event start between 2017 or 2018.

And then takes of any business that’s leaving and adjust all of that where the market is expecting volumes to be in that time frame.

So, is that 5.8 billion a revenue estimate? I wasn’t sure…

Yes. It’s 5.2.

Sorry, 5.2 it’s the revenue

Yes.

Okay. And then just one last question I had for you.

In terms of the ramp cost you did indicate that you expect the ramp cost to be greater in 2015 versus 2014. There have been certain periods of time where the ramp costs in Linamar’s history where the ramp cost have been substantial and wait on quarterly results like you see the ramp costs like you see any big peaks in the ramp costs or is it relatively modest?

Yes, I mean, I’m saying that launch costs will be a little bit higher next year; if it was going to be substantially higher, I wouldn’t be suggesting that margins can still stay in the 6.5% to 7% range for the year.

Good point. Okay, that’s all I have.

Thank you.

Good evening. Linda, with the guidance that you have given for this year, as you go to the top end of the range implies basically flat margins in the second half.

Is that actually what you expect? These have been much, much bigger increases than that in the first half.

You mean in comparison to last year?

Yes, exactly. Just the pure math of it looks like the second half margins would be about the same this year as last year.

Yes. Well, don’t forget that at the end of last year we were already starting to pick up quite a bit on the margin side.

So, we as at the beginning of last year, we were performing at a much lower level than we are right now. And don’t forget Q3 and Q4, I mean normally Q3 is stronger than Q4; Q4 is always our weakest, typically always our weakest quarter.

Right. So, is there any chance here that you could go through the high-end of the range, the 7%?

Well, that’s not our expectation.

Okay, fair enough. I was wondering if you could also update the -- now that you’ve got new sort of net margins, where you see that coming from?

Are there updated Powertrain/Driveline and industrial ranges from where they used to be?

I’m sorry, can you repeat that question?

Are there updated Powertrain/Driveline and industrial margin ranges? Something is pushing the numbers higher, I’m just wondering what it is on the overall net.

Yes. I mean our margin range for Powertrain/Driveline is pretty broad and for rather industrial.

So, we’ve talked about 6% to 9% on the Powertrain side. On the industrial side, we’ve talked about 11% to 13%, I think that could stretch to sort of 11% to 14%, so little bit more upside there.

And at the same time -- so I mean it’s just obviously shifting to higher part and higher area of those ranges. So, we haven’t sort of formally changed the ranges, because it all kind of still works.

Obviously, interest levels also have a bearing there, because we’re talking about after tax, after interest earnings here.

Right. No, absolutely.

Okay. So it sounds like you are just going to run at the high end and maybe the industrial pushes up a little bit from where it was, is the way to think of it?

Right.

Okay. And then just coming back to the use of capital.

Your balance sheet is getting pretty good. You mentioned you’re going to be spending more money unless you deviate materially from the 8% to 10% CapEx range, you’re going to be generating quite a lot of free cash.

So your balance sheet is going to improve even more, even with the good growth that you’ve got booked. I’m wondering whether there -- if that’s -- A, if that’s what you are seeing; and B, if so, what you’re going to do with all the excess cash, because your balance sheet is going to become incredibly unlevered at some point here?

Yes I mean it’s all a balance obviously of the capital we are spending on new programs which as noted there is a lot we’ve got rolling right now and also defines potential acquisitions I mean as you know that’s an area we have always utilized for growth to find new technologies we’ve talked a lot about the need for us to integrate our business into certain types of casting and forging and obviously that would be an acquisition strategy not a Greenfield. So there is funding available obviously as those opportunities might present.

Okay so it sounds like you want to keep your powder dry for acquisitions. Would there be any reason or should we have any expectation that you would actually deviate outside the 8% to 10% range on the CapEx?

No reason to believe that at the moment, no.

Okay. Okay, fair enough.

Okay, that’s helpful. Thank you.

Thanks for taking my call guys. I am just on for Steve.

The $5.2 billion in revenue you mentioned for 2018, I don’t think that’s a new number but just a little bit of clarification on where that comes from, i.e., is it all within the Powertrain/Driveline division or do we also get some contribution from the industrial division?

No we definitely have contributions from the industrial division as well. So that’s a blended number including growth from that business as well.

But not necessarily all of Skyjack’s revenue? Or…

No, it is it’s an overall number.

The 5.2 is consolidated revenue.

Perfect, that’s helpful. Moving to the balance sheet, it looks like the inventory days were fairly light in the quarter.

Is this something specific that happened or kind of a new level of inventory management?

Well, seasonally you do find for example an industrial segment is that our inventory tends to be lower in the second half, because we’re selling out of inventory, we should build inventory in Q1 and Q2 and sorry sell that in Q4 and Q2 and sell that in Q2 and Q3. So that’s kind of naturally occurring.

But we’ve also had a focus on inventory reductions for the last two years and we’re starting to see some more benefits. We continue to be focused on inventory reductions going forward.

Great, thanks. That’s all for me.

Thanks for a great quarter here.

Thank you.

Okay, great, thank you. To conclude this evening, I would like to as always leave you with three key messages.

First is great to see when I’m continuing to deliver on targeted double-digit growth levels both top and bottom-line and reaching new highs in terms of margin performance. Second, we are very pleased with another strong quarter and new business wins particularly outside North America as we continue to see great opportunities developed in Asia in particular.

And finally we are thrilled with another strong quarter in terms of returns for our shareholders, always a key goal as well as continue cash generation for a strong applicable balance sheet poised for continued investment and return generation. Thanks very much and have a great evening.