Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from the line of Ivey Zelman of Zelman & Associates.
Dennis McGill – Zelman & Associates
Hi, guys. It’s actually Dennis McGowan for Ivy. How are you?
Robert Schottenstein
Dennis, how are you?
Dennis McGill – Zelman & Associates
I’m good thanks. I just have one quick numbers question and kind of two big picture questions. So, on the landfills in the quarter, what was the total cost associates with that?
Phil Creek
There was very little land sold. The revenue was only a couple of million, so I have to get back to you on that Dennis, but it was just not very significant in the quarter.
Dennis McGill – Zelman & Associates
But the $4 million impairment that you said was land related would be related to those sales or is that on land that you still own?
Phil Creek
I think both are in that number. Let us get back to you on that Dennis.
Dennis McGill – Zelman & Associates
Okay. No problem. The first big picture just has to do with when I think about your cost structure you mentioned in the quarter you’ve obviously taken some costs out but if you look at where you guys were at the peak on the SG&A and then down around 30%, but revenue is down 55-60%, how can we think about that moving into ’09 because it seems like its very likely that revenues are down again, so it’s this cycle is making it very difficult to keep up with the revenue declines and you know the cost structure certainly doesn’t seem to be aligned? So what kind of leverage are you guys going to be able to pull next year and how should we think about that overhead burden as the top line continues to fall?
Robert Schottenstein
It’s a good question. Let me take a crack at it. First of all, we might have been a little late in being as aggressive as we were. We were continuing to cut costs and reduce expenses but we very sharply intensified our focus during the last four months of last year and have now, as I said before, effectively on a line-for-line basis reduced our run rate by over 20%.
Obviously if our top line revenues backing out extraordinary items were to stay the same in 2009, as they did in LA and were not anticipating that, but if they would then our SG&A as a percent to revenues would fall significantly. We’re just going to continue to manage it. As we sit here today and since the beginning of the year, we have taken steps to further reduce our SG&A and we’ll continue to do what we can to get it in line. I think sometimes the percent gain can be a little bit misleading when you take into account things like average selling price and just a sure size of a company. But we’re doing all we can in that area. We think we’re on the right track. Frankly we feel the same way about (inaudible) bricks and reductions that we’re starting to be much more focus on now. We’ve experienced breaking more the reductions than everyone of our divisions for each in the last two years and we’ve monitored on a monthly basis. We’ve intensified that effort as well and expect to see further improvement there.
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