Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Tien-Tsin Huang with JP Morgan. Please proceed.
Tien-Tsin Huang – JP Morgan Securities
I had a few questions, I guess the first one gross margins definitely came in higher than what we expected. I didn’t catch in the outlook, is this level sustainable as we think about the progression throughout the year?
Henry H. Graham, Jr.
Well yeah, I think it is Tien-Tsin. Obviously, there’s some cyclicality to the first quarter, second quarter, third quarter, fourth quarter but obviously because of the scale we gained in ISD and FSD to improve the product mix within TSD and to some extent the mitigation of the access charges that we talked about a great deal. Quite frankly, we do thing this is a sustainable overall for the year gross margin. It might even go a little bit higher.
Dennis L. Randolph, Jr.
I think Tien-Tsin for 2008 we ended the year 2007 just under 50% from a gross margin standpoint. We’d expect improvement in the gross margin line in to the 50 to 51% range next year on an overall basis.
Tien-Tsin Huang – JP Morgan Securities
Okay. So, it sounds like it is mostly mixed. If we think about just overall cost cutting it sounds like you’re ahead of plan; that’s great. Is there more room on the cost side in general as we look out and recast for 08?
Henry H. Graham, Jr.
Well, as we said from the very beginning I mean obviously the original $9.8 million was the low hanging fruit if you will. We also cautioned everyone that we would make more of a surgical effort as we go. I think the cost cutting that you see is a combination of additional costs, opportunities that have presented itself also to realign the organization more consistently with our operating goals as we move forward. You’re not going to see a great deal more additional cost cutting but I’m not going to say that there’s not additional opportunities that may present itself as we continue to evaluate as we move forward.
Tien-Tsin Huang – JP Morgan Securities
More surgical? I get that word a lot these days. A couple of other questions, the first quarter revenue guidance that was down a little more sequentially than what we’ve seen in the past, anything unusual there?
Dennis L. Randolph, Jr.
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