Question-and-Answer Session
Operator
Thank you. The question and answer session will be conducted electronically. (Operator Instructions).
Your first question comes from Jim Ricchiuti – Needham & Company.
Jim Ricchiuti – Needham & Company
Hi. Good morning. The question I had is just with respect to operating expense. You had a very strong quarter operating margin-wise in the current quarter. Now, given the decline that we’re expecting in sequential revenue in Q3, clearly there will be a sequential decline in operating margins. But would you expect your operating margin to be up versus last year?
William R. Retterath
Jim, this is Bill. Thanks for the question. It’s going to depend on how our sales come. There’s a chance it could be up over last year, but it’s going to ultimately depend on the sales level that we get and the gross margin. I apologize I can’t answer that specifically. There’s variables that impact that. We have a chance to exceed last year’s. Last year’s was at 5.9%.
Jim Ricchiuti – Needham & Company
Right. And you’re assuming, it sounds like you think, Bill, your gross margins can continue to show some improvement even at these lower sales levels.
William R. Retterath
Yeah, not as much as what it would have been nice to have seen, but we think so. Yes.
Jim Ricchiuti – Needham & Company
Okay. Now, just with respect to the order pipeline, would you still be taking orders at this point, booking orders for the Major League Baseball season and I wonder how you’d characterize the activity that you’re seeing right now in that market. You alluded to two orders that you got some verbal commitments on, but I wonder if you’d talk a little bit about what else you see out there.
William R. Retterath
Just as far as the timing, yeah, we’ll be booking, expect to book orders for the next, really through Q3 that would be delivered, could be delivered for baseball. There’s a number of orders out there, opportunities out there that are just, we have a really pretty decent pipeline not only on baseball but for other sports too that are in the pipeline. These are very real life projects. There’s opportunities out there and we’re still pretty confident in the live events business.
Jim Ricchiuti – Needham & Company
Jim, on the MLB projects there is a pipeline out there. At this point it sounds like you’re not seeing an impact from the economy, some of that potentially being pushed out. If it gets pushed out it gets pushed out of season, is that correct?
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