Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matt Sheerin - Thomas Weisel.
Matthew Sheerin – Thomas Weisel Partners
My first question is regarding the computing operations which was better than expected both top and bottom line. So, the first question in terms of why you saw stronger than expected demand, how much of that was just due to the fact that the push out that you saw in the March quarter got done in the second quarter, that’s number one and number two on the operating margin side I know there was some leverage on the expense side and some cost cutting, but how much of that also benefited from the fact that you exceeded your rebate thresholds and other agreements with suppliers that enabled you to get a better gross margin?
Michael Long
Our performance for this quarter exceeded the expectations as you had indicated and we did achieve sequential growth from all of our product segments. While we did close on a number of deals that we’re pushed out for the first quarter, excluding these deals we still actually experience normal seasonal trends for the second quarter. So the sales trends in general were healthy for us.
Getting towards the second question regarding the operating margin, our performance this quarter I think demonstrates a little bit of a leverage we’ve created in our model. Our earnings grew at almost four times the pace to sales and actually more than 90% of the incremental gross profit dollars fell directly to the bottom line. I think this highlights part of the strategy for us was to achieve our scale and some of the productivity gains that that scale we said would unable us.
The last quarter we spoke about how those rebate levels adjusted to the changing conditions and this is really a normal process Matt. These get negotiated quarterly and they’re negotiated based upon your forecasted sales. So, we didn’t get any rebate if you will to make up first quarter, if that’s what’s your insinuation is. This model is a consistent model where these rebates are negotiated and you still have to hit your sales plateaus to get that, so there really wasn’t anything that we got as a benefit from Q1, if that answers your question.
Matthew Sheerin – Thomas Weisel Partners
Regarding the components business, in your guidance you’re basically saying that you’re expecting seasonal trends in the business overall, but you have seen weaker than normal trends in Europe for at least two or three quarters now, U.S. has been so would you characterize all three regions as seeing seasonal trends or is Europe still going to be a little bit weaker than normal given what’s going on there?
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