Question-and-Answer Session
Operator
The first question comes from Robert Mccarthy, Banc of America.
Robert Mccarthy – Banc of America
Good morning everyone.
Vernon J. Nagel
Hi, Rob.
Robert Mccarthy – Banc of America
Congratulations on a good quarter it looks like you had double digit operating margins even including the special charge. Could we talk about the special charge and the benefits first? There’s, 14 million I think you're, seeing you expect the run rate to be kind of hit. For fiscal one q08 any kind of sense of the timing trajectory near-term of those kind of benefits and how does that relate to this already stated goal of about 70 basis points and kind of base cost take out over the next couple of years.
Vernon J. Nagel
Sure first of all Rob it was a great quarter not just a good quarter. We believe that the opportunity for the simplification of our organization really does [inaudible] as I said earlier allow us to be more nimble and quick. We believe that we will achieve the full run rate of $14 million savings and we get our fiscal year ’09. So you’ll, seea ramping in Ricky do you have some?
Richard K. Reece
Yeah Rob as you looked at it obviously here in the first quarter we got virtually no benefit from these actions. We’re, looking at probably a seven to $8 million of benefit for the remaining three quarters of this year and as Vern said that'll, ramp up from say around $2 million in the second quarter. And, up closer to three or 3 ½ million by the fourth quarter and then we’ll, be at that 3 ½ million or so run rate per quarter as we get into ’09 to achieve that 14 million.
Robert Mccarthy – Banc of America
And then, you'd, of course you’d and then of course you would anniversary that benefit then you would start to anniversary that benefit.
Richard K. Reece
Beginning the second quarter.
Robert Mccarthy – Banc of America
Yeah understood.
Vernon J. Nagel
We would expect that it would contribute to the 70 basis points or more of improvement and as you know Rob, we have been on a trajectory of doing much better than that goal.
Robert Mccarthy – Banc of America
Absolutely. So this is going to just basically, infuse your goal this is not a step function in addition to that goal.
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