POWL
#Well [Rhett], this is <UNK>.
24 months ago, generation was a lot stronger.
We are seeing some activity increase in the last couple of quarters on the quoting side.
Competition is definitely ---+ price pressure is definitely increasing.
As <UNK> mentioned and we have mentioned on previous calls, on the distribution side, we saw an uptick two, three quarters ago.
And those projects tend to be smaller in that they are not as big as generation.
But we are seeing regionally in the States some markets that are stronger than others on generation.
We are doing some work in the UK and we have also had some success in the Middle East.
<UNK>, good question.
I'm going to try to give you an example of what we are trying to get at there without too many details because there's some things there that we are still getting our hands around.
But as an example, 10, 12 years ago on the documentation side ---+ every one of our projects requires documentation.
And the engineering companies which are 99% of the time involved in the change from the end-user to us used to take care of that requirement.
Over the last 10, 12 years, that's been pushed down to the supplier.
So we are looking at best practices and how to address that, making sure that what we are doing and positioning and offering to our clients in terms of what we can offer is uniform and best leveraged throughout the Company.
So we are trying to in our operational reviews make sure we are positioning that right and executing it right.
So as an example, that's what we are doing.
We are looking at our products and our integrated solutions with teams and trying to attack it with the same sort of passion.
Well, to clarify, there were a couple of markets geographically that we have taken steps into.
We talked in previous calls about the utility market and also East Canada.
That's an initiative that is going well, and we continue to be actively learning and seeing what we can do to accelerate the rate of success there.
We did take some steps in the Middle East.
In terms of core oil and gas markets, that's still a strong area, but it's also extremely competitive.
<UNK> made a comment here a minute ago about onshore Canada being tough.
While the market is still spending in Middle East, but everybody is playing there.
So it is a tough market.
And we did take some steps in the Far East but I would say that's also a market that has decreased activity.
Some of the elections are really delaying things there and the funding just looks to be not as strong as it was, say, a year ago.
Yes, I assume you are speaking of the electrical equipment industry.
Of those that are focused on the hot specifying project related business, I would suspect that they are feeling the same as we are with significant pressures.
Those that are more on the commercial construction at least here in Houston should be doing well.
Thanks, <UNK>.
From a revenue perspective, there was some shift of revenues that they have come in a little bit.
You are not talking a huge amount.
But I would say some of the revenues that we had previously anticipated would occur in the April/ early May period did get pulled in, and we were able to support the customers' requests in those areas.
So ---+ but I would view that as less than 10% of our total revenues.
When you are looking at the bottom-line impact, clearly, it was primarily influenced by the cost improvements and efficiency benefits that we received from the Canadian business.
Canada was profitable in the second quarter.
It actually exceeded our average and was able to pull up the gross profit as opposed to be a business that had to be supported.
I think the trends have been consistent, and it is downward.
It is, depending on the particular project, who shows up from a competition standpoint, which market it's in.
I don't want to sit here and say that everything is falling off a cliff.
But I would say the majority of the projects that we go into ultimately end up with price pressures either from the engineering firm or from competitive levels from the beginning.
There's a lot of rebidding going on where firms are attempting to try to find the bottom as well as justify going forward what they are spending.
And when you rebid projects, typically that pushes the price levels down.
(inaudible) additional comments.
No, I agree.
The degree of rebidding on projects before they release full funding has definitely increased, and that creates lots of opportunities for new entrants to the market and just amplified some of the pressures we see.
Again, I think <UNK>'s right: not across the board but, on average, we are seeing an uptick.
We are focusing on both.
If you're looking at the most recent quarter spend, it would be more in improved manufacturability, improved features and improved design costs of products that we have historically manufactured.
But we have invested in and we do have resources that are 100% dedicated to looking and developing new products, particularly in some of the areas we talked about in the past from a control and monitoring standpoint.
We appreciate your questions today.
Thank you for joining us, and we look forward to speaking with you again next quarter.
