Question-and-Answer Session
Unidentified Participant
If you go back to your cash cycle slide, what are the target (inaudible)?
William Kullback
Okay. So I think a reasonable days sales outstanding is probably in the 60-day range.
Unidentified Participant
60?
William Kullback
60. And I come to that based on our international business. If we were just a US company, I’d probably put that number in the 47-day range, but we have a fairly significant international business. And the reality of doing business internationally is that that’s going to drive up DSOs. You know, that’s not –
Unidentified Participant
(inaudible).
William Kullback
International probably in the 85 to 90-day range I think is reasonable. And that’s not a small company thing. That’s something because we don’t have leverage with our customers. I think if you look at the big med-tech guys and you look at their international business as well, you’re going to see their DSOs meaningfully lower as well.
Unidentified Participant
Inventory?
William Kullback
Inventory, you know, I’d like to get inventory down as low as possible. I think a reasonable expectation for the near to mid-term is probably 135 days.
Unidentified Participant
135?
William Kullback
And then from a days payables outstanding, we are at 43 days. I think I would put that as my target. The reality there is that as a company that that does bind our hands a little bit with respect to vendors, not so much professional service vendors, lawyers and the accountants, et cetera, but with the software [ph] vendors, the raw material vendors. We are small and we are not a large consumer of their products.
Unidentified Participant
(inaudible).
William Kullback
I think 43 days is good. I was very pleased with – yes, I was very pleased with where that ended up at the end of the quarter.
Unidentified Participant
(inaudible).
William Kullback
Well, so – do the math. I’m sort of winging this a little bit for you here, yes. Yes, sir.
Unidentified Participant
First question, you have a contract with a one-time –
William Kullback
Right.
Unidentified Participant
Could you tell us – give us a sense of whether it is (inaudible)?
William Kullback
Well, I think we wanted [ph] – and this pre-dates my tenure with the company, but I think we wanted face [ph] number one on the quality and brand reputation of our equipment. Okay? So we provided equipment and services. But I think it was our equipment that first caught the eye of this large pharmaceutical company that awarded us that piece of business. Now, one thing you should know is that clinical research projects of that size, and that project was about a $16 million project over the course of nine quarters or so. That was like winning a lottery. There aren’t a lot of – for a company of our size anyway, there aren’t a lot of projects out there like that.
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