Question-and-Answer Session
Operator
(Operator instructions) Your first question comes from Bob Cornell – Barclays Capital.
Bob Cornell - Barclays Capital
First of all congratulations to the Burndy deal, the ghost of [Burn Dimmner] is looking down from the sky and it’s a good deal too.
Dave Nord
You are one of the few people who might know that name.
Bob Cornell - Barclays Capital
That’s right, but more relevant non-arrays, okay, what’s the beginning core activity, what sort of insights do you have in anyway looking out as much as possible there?
Tim Powers
Really not much, to add to our comments I would say a lot of quote and re-quote of the same projects, which still is an indication that the speed at which new starts of any kind are moving forward is slowed by economic conditions and financing conditions. So, the activity level is quite high, but whether it’s turning into orders is the challenge for us right now, but I don’t really have any great insight into the future conditions, it’s more what we see today as it impacts jobs that might be placed one and two quarters out..
Bob Cornell - Barclays Capital
How much were the margin of the current quarter compressed by unabsorbed factory of variances left over from first quarter type of thing and even the second quarter and I guess more relevantly when do you see the destocking end and margins reflect the current price cost conditions?
Dave Nord
Bob I think it’s difficult to quantify and attribute a specific margin decline to the absorption but, clearly when you have the level of volume decline to that we are seeing at, in businesses that have pretty nice, gross margins that there is a drag and then I would put it at, at least a couple of points just coming out of the absorption and whether that’s the inventory or the underlying demand. I think, we expect to see continued inventory, at least from our own perspective, continued inventory destocking so there is going to be a continuation of that although?
Bob Cornell - Barclays Capital
Until when Dave?
Dave Nord
Certainly, through the rest of the year, although it will start to diminish as the second half moves forward and so, I think the relative impact will diminish and therefore, we’ll start to see some overall improvement, but we still have, inventory to get out of our own systems.
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