So here we are almost at year end — with a better than expected outcome. Even more encouraging were our conversations with various supply chain participants at this year's AAPEX show. Early indications are that 2010 could outperform 2009. We will save our thoughts on how next year might play out for January, but we are nonetheless encouraged.

This year's show was as we anticipated, and in some ways better. While total attendance appeared somewhat below 2008 levels, the overall quality of the show seemed higher. Some will say that the importance of the show has slowly diminished over the years, reflecting lower levels of negotiations and procurement discussions. That said, perhaps a more important facet of the show is the opportunity for all levels of the supply chain to reinforce the importance of each critical role. In an increasingly digitized and intertwined world, we believe this form of direct communication is very important. Besides, the aftermarket has and always will be a relationship-driven business. Be it the trust a consumer places in the technician, a shop's reliance on a jobber for advice and delivery or a WD's longstanding tradition of sourcing quality, branded parts from a reputable supplier.

Most exhibitors and buyers we encountered seemed generally optimistic about business prospects, certainly more so than at the 2008 show. Also interesting was that this positive commentary was fairly balanced by channel, with many suppliers sounding as upbeat as many of the buying groups, WDs and dual marketers in attendance. SEMA, on the other hand, was an entirely different matter. The fanfare and packed house that is typically the special equipment market show was much diminished relative to years past. By segment, the tire manufacturers and electronics providers appeared particularly hard hit, with many of the largest companies in both spaces absent from the show. Given the far more discretionary nature of the specialty equipment market, the downturn in attendance at SEMA was not all that unexpected.

The show attendance provides a segue to recent trends in the equity markets. The investment community generally places greater emphasis on anticipated future economic profits, discounting these back to the present, than on historical performance. Looking at the stock price performance of three large aftermarket names, Advance Auto, AutoZone and O'Reilly, it seems investors are now in search of companies with better growth prospects and closer alignment to a rebound in consumer spending.

Admittedly, the worst economic recession since the 1930s has taken its toll, but the industry has held its own versus other sectors. We think it goes back to the aftermarket's relatively defensive nature, with cyclical downturns in the economy bringing lower new vehicle sales and an uptick in maintenance and repair wok to be performed. With some in the House looking to pass additional legislation aimed at jump-starting job creation, perhaps a self-sustaining economic recovery is still a ways off. Current gas prices and improving miles driven trends also remain supportive of aftermarket demand fundamentals. In terms of gasoline prices, energy analysts believe it likely that OPEC member countries will add to capacity through 2010, which, coupled with continued lackluster demand for crude, could send prices lower in coming months.