ROG
#A couple of good, really good, examples, and I'll go back to the Arlon acquisition, which we've now have for two years, some of the technology that came over from Arlon was, when we looked at the deal in due diligence, we understood there was some interesting technology, but what we've seen is, with Rogers capability on applications, to take the Arlon technology and really apply it, and this is in an extremely low loss type applications, that Rogers didn't participate in any large way.
We found that to really enable us to start moving very rapidly in that market with very much leading market capabilities.
So that's one of the real clear benefits that I've seen.
In DeWAL, for example, we've been able to utilize some equipment from some of our other manufacturing locations to help with capacity and so forth and help us easily expand that business in a very cost-effective way.
So as we go through here and we identify on the technology side, on the operating side, there's been early benefits that we've seen with DeWAL and some of the technology side with Arlon.
Hello, Dan.
Okay.
Dan, just to let you know, this year we [did] do a lot of capital expenditures, although they are carrying forward into next year as a percent completed as we do our financials.
Though it looked low, it's really because we didn't finish them and they're carrying forward to 2017.
2017 is about 4% and if we average the two, it's the 3%, 3.5% that we want to actually spend every single year.
It's just unusual that some of the projects ended at the end of the year that are following through on it.
On the capacity utilization that we talked about in the Belgium, you will see a large improvement, not so much is 2017, as we go forward of consolidating the two.
The real run rate improvement will be starting in 2018 or the end of 2017.
So you are not going to see that improvement, but as you look at any consolidation, obviously, there's a large margin pick-up when we do that.
As we've said historically, this is part of our core strategy, both organic growth and synergistic M&A, and we have a lot of focus now on looking at opportunities, top-of-the-pyramid opportunities, companies that we think have good growth prospects from an innovation perspective, where we can acquire them and apply our science and technology to help expand their technology, and of course, power organic growth.
So, we're active, is the way I would describe it.
Yes, I mean, we haven't really disclosed a lot, obviously, subsequent then in the K at this point in time and the purchase price, but a lot of it has to do with that have similar silicone products that we have today, that eventually, we see some synergies in the operational performance and some of the engineering and R&D performance that we see.
2017, obviously, you're not going to be seeing a lot of integrating just the basics on it.
But the margins really should be similar to the EMS margin that you're seeing today on our financials so you're not going to see any kind of a deterioration because of that.
It's very similar.
Just another comment on DSP.
DSP is very much a North America company and they provide us with capabilities, particularly on silicon sponge, which is we didn't have strong capabilities there.
But we see this as a growth opportunity for us, particularly using that technology and those products, not only in the US, but around the world where we have a very strong footprint in Asia and in Europe.
So it's, still to come, we've only owned it now for maybe a month-and-a-half or so, so we're still working through a lot of it, but part of the acquisition thought process was they're experts in these kind of technologies and we can really leverage that through our network.
Thanks
Yes.
<UNK>, it's <UNK> <UNK>.
So it was broad.
I mean we've had, we play very, very broadly in these defense electronics systems and I think if you go back over the years, people generally think of A&D as pretty slow growth.
We generally have seen pretty nice growth, frankly, in that business, because we're playing in the more advanced systems.
Pretty much anything electronic, including the drones, applications like Space Fence, for example, which is something that's being deployed today, anything that's in the high-frequency area, so again, I think this is more, this is a pretty broad-based business.
There is not, it's not one application or two that tends to drive this business.
And I think, overall, we've generally seen some nice growth year-over-year.
So we are actively integrating DeWAL and Diversified Silicones and we continue to seek other opportunities.
This is, again, part of our core strategy, top-of-the-pyramid businesses, high-profit, higher-technology, differentiated and so we continue to see that and when the opportunities come, we will take advantage of them.
Thanks, Scott.
Thank you, everyone, for joining the call today.
We are very pleased with our performance in 2016 and we are looking forward to another great year in 2017.
Thanks for your support.
Have a great day.
