Question-and-Answer Session
Operator
Thank you. (Operator Instructions)
We’ll go first to Curt Woodworth – J.P. Morgan.
Curt Woodworth – J.P. Morgan
Hi good day today. Eric, Anthony, can you give us the number in terms of the actual dollars lost this quarter from the x-ing of lower-margin contracts
Anthony K. Slater
The amount, Curt from those accounts in the first quarter of last year was approximately $9 million.
Curt Woodworth – J.P. Morgan
Okay, and is that process pretty much finished by now? I mean I think that’s been going on for at least the last three quarters; so, you know when you would expect to kind of resolve that issue?
Anthony K. Slater
These were accounts, Curt that we exited in the latter part of fiscal ’07, and so we’re just seeing the impact of that rolling through as we continue through the quarters this year. So these are not new exited accounts.
Curt Woodworth – J.P. Morgan
Right. So in terms of the kind of normalizing for the base business, in terms of the outsourcing and the demand growth, can you give us a sense for, you know, excluding that, you think the market is sort of growing you know mid-single digits or; you know sort of get a sense of what the underlying market is doing for you.
J. Eric Pike
Yeah I think that the market is poised, Curt, as we said for some pretty good growth on the infrastructure side in 2008, based on what we’re hearing from many of our utility customers. Right now as we go into the close of the year, the market’s relatively flat; I mean we’re satisfying our customers’ needs and demands; we’re not seeing on existing customers a lot of up-tick right now as we go into their fourth quarter.
Curt Woodworth – J.P. Morgan
Okay. So in terms of the holiday issue and then obviously the budget issues around the utilities—maybe they aren’t going to spend as much—can you give a little bit more guidance; I assume sequentially you would expect sales to be down on the core business on the second quarter?
J. Eric Pike
We just really wanted, Curt to give you guys a little bit of color into Q2, and we’re not really prepared to give further quarterly guidance.
Curt Woodworth – J.P. Morgan
Okay. And then if you look at the gross margins for the company this quarter, relative to last quarter, you know similar amount of power line revenue, little bit lower storm revenue but the gross margins were up about 100 basis points roughly? Is that a mixed issue, or how should we think about that?
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