Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jonathan Lichter with Sidoti and Company.
Jonathan Lichter – Sidoti
Could you quantify the benefit from closing the Massachusetts facility?
Francis D. Gerace
As we stated I believe in the announcement, we expect to take a charge in our fourth quarter of about $2.6 million, part of it is to... Many of the associates in Framingham have been with the company for many, many, many years and we want to make sure, especially in these difficult times, that they are treated as equitably and fairly as possible so I think about half of it is in severance related type benefits and then the remainder is for some asset write offs and some equipment write offs that we have at the facility.
Relative to the savings going forward, I will go so far as to say that we expect to get a pay back or a return on that $2.6 million in closing within the first year of it being completely closed.
Jonathan Lichter – Sidoti
It will be completely closed by the end of March?
Francis D. Gerace
I think we’ve said it will be closing over the next several months and of course when you’re going through these types of transitions you’re working very closely with customers to make sure that their business is transferred in a very organized manner and that we’re continuing to achieve the type of quality standards that are expected so I think March might be a little aggressive but we do expect that it should be closed by the end of our first quarter our next fiscal year.
Jonathan Lichter – Sidoti
Where was that $192,000 in expenses, is that in SG&A or cost of goods?
Dawn H. Bertsche
Yes, that is in SG&A.
Jonathan Lichter – Sidoti
Does this mean that you're polling back on looking at acquisitions or is it just an acquisition that didn’t work out?
Francis D. Gerace
It doesn’t mean that we’re pulling back on looking at acquisitions. What it means is that we are going to be much more... our standards relative to hurdles and returns and accretion are going to be heightened and this particular case if I recall, I think on the last conference call we said there were three or four acquisitions that we were looking at.
Let me just bring you up to date on all of them. In this particular one where we took $192,000 charge, as we were going through due diligence, we began to see things relative to the quality of their earnings that weren’t consistent with what we would like to see in order to make that investment feasible, so we’ve disengaged and terminated that particular acquisition.
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