Question-and-Answer Session
Operator
(Operator instructions) And for our first question we go to Lisa Gill with JP Morgan.
Lisa Gill – JP Morgan
Thanks very much. And good morning, Jim and Bill. I just had a couple of questions. I guess is it relates to, number one, the guidance, and then the secondly, some thoughts around the quarter. As we look forward, and we start thinking about where are the things came on in the SG&A line and we back out the one-time item. Can you maybe talk about any other additional costs that are going to continue as we go forward into the next fiscal year? And Jim, as we think about the gross margins especially being strong this quarter, can you talk about how much of that came from rebates or from other programs and things that are sustainable? And then just lastly, maybe if you could just give us some thoughts around your acquisition pipeline and what you see in the competitive marketplace right now? Thanks.
Bill Lacey
I'll take the margin question, Lisa. If you look at our year-to-date – again, we pointed out that volume accounted for about $16.8 million of our increase in margin, but we're down slightly in margin percent. Our profitability was, I believe, $19.1 million versus $19.3 million last year. It was driven by a reduction in rebates, but essentially offset on increase in margins. I think if you look at it'd be about $6.5 million reduction in rebates offset a $5.2 million increase in transactional margins. If I look at that on a quarterly basis, for the fourth quarter, we had about $3.7 million of direct margin increase from volume and about a $3.8 million increase from profitability. That profitability was driven by $2.2 million increase in rebates, a $1.3 million increase in transactional margins, and a couple hundred thousand dollars for everything else. What that got us was about a 20% margin in the fourth quarter, compared to 17.7% margin, the year prior. Jim, I'll turn it over to you for acquisition discussions.
Lisa Gill – JP Morgan
And also I mean how do you see things going forward from a rebate perspective. Are you seeing any changes though as far as the relationships you have with the pharmaceutical manufacturers?
Jim Robison
No, I think right now, our relationships with our vendors are very stable. We mentioned in the prior calls we had a problem with one of our largest vendors before, what seems to have evaded –
- To read the full transcript on Seeking Alpha, click here »
