text: at 2.9 to 1, consistent with the June 30, 2011 level. 
  
  Applied monitors several economic indices that have been key 
  
  indicators for industrial economic activity in the United States. 
  
  These include the Industrial Production and Manufacturing 
  
  Capacity Utilization (MCU) indices published by the Federal 
  
  Reserve Board and the Purchasing Managers Index (PMI) 
  
  published by the Institute for Supply Management (ISM). 
  
  Historically, our performance correlates well with the MCU 
  
  which measures productivity and calculates a ratio of actual 
  
  manufacturing output versus potential full capacity output. 
  
  When manufacturing plants are running at a high rate of 
  
  capacity, they tend to wear out machinery and require 
  
  replacement parts. Our sales tend to lag the MCU by up 
  
  to six months. 