Question-and-Answer Session
Operator
Our first question comes from the line Chris Donaghey – SunTrust Robinson Humphrey.
Chris Donaghey – SunTrust Robinson Humphrey
I was wondering if you could tell us what the inventory value is at the end of the first quarter, and where that was relative to the fourth quarter number, and maybe what percentage we should think of inventory as, related to the counter-IED system.
Dana Marshall
We’ve been watching this carefully. As we discussed during the call, our primary interest has been to make sure that we are able to really jump on the opportunity that we’ve been provided with the Marine Corps and with the JIDO folks. So we have been pushing that forward pretty aggressively.
Ken and I conducted an analysis over the last couple of days just to take a look at this numbers and look at both what we’ve built in inventory, as well as the amount of overhead and G&A that gets absorbed by that inventory when it is converted to revenue. And so, Ken, do you want to step in and just walk through those numbers for Chris?
Kenneth Wallace
During the first quarter inventories increased approximately $860,000. $680,000 of that was associated with building inventories for the counter-IED system. Had we received an order prior to the completion of the quarter, we would have booked approximately $1.4 million in revenue, and there would been $680,000 of relief associated with inventory attributable to the counter-IED work.
Chris Donaghey – SunTrust Robinson Humphrey
Okay, great. Thanks. And then, Dana, obviously with some concern to the sensitivity of the subject, clearly the past few months the security situation in Iraq has shifted somewhat. We haven’t seen too much activity in the areas where the Marine Corps has been operating.
But where the Army is operating, there’s been significant increases in roadside bomb attacks. So can you just comment about relative interest in the two services for the counter-IED system?
Dana Marshall
Yes, and it’s a very good point. The Marine Corps has done a really fine job I think in their local diplomatic efforts within this particular Anbar province. As a result, they’ve had a fairly quiet time for the last six or seven months.
The Marine Corps had their first run-in with a successful IED attack just in the last month. They had had six months of relative calm. As you pointed out, the Army has had a much harder time in their provinces.
- To read the full transcript on Seeking Alpha, click here »
