Mr. Hayes: I follow a couple of companies that provide products and services to the building/construction market. Astec Industries specializes in road paving and construction products, which includes rock crushing and screening for the aggregate, and mining equipment designed for everything that produces cement. Apogee building products produces coated windows and glass for nonresidential and commercial construction. Beacon Roofing Supply sells roofing products to both the residential and nonresidential markets. Watsco sells both new HVAC equipment as well as replacement parts and accessories. My coverage universe encompasses specialty distribution and diversified manufacturing. I follow Beacon, Watsco, Pool Corp. and Fastenal in the specialty distribution side, and Astec and Apogee, which we loosely put under our diversified manufacturing segment, that are most closely tied to the building markets.
TWST: The sector has gone through some very difficult times. Are things improving?
Mr. Hayes: I think it's getting better in that it's not getting worse. You still see new housing projects going up. We're here in Minneapolis, and there are still housing projects going up. Even in Florida, which is a difficult market, they are still building houses. In California they're still building houses there. Basically, I think there is always going to be a market for people who want a new house versus an existing house. On the other hand, there is a large subsegment of people who would like to get into that new house but for one reason or another can't make the move right now. I think this is going to be a challenging period, but I don't see a double-dip. But I also don't see a resumption to the 2005, 2006, 2007 growth rates.
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