Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Scott Hamann – Keybanc Capital Markets.
Scott Hamann – Keybanc Capital Markets
Just in terms of the gross margin, it looks like to get to that 300 for the year you’re going to need to do a little over 400 basis points for the balance. Can you talk about what some of those buckets are and kind of the relative magnitude of the buckets for the rest of the year?
Claude J. Jordan
Primarily as we’ve mentioned before, I think the biggest bucket we’re going to have is in terms of sourcing and we’ve been working with our vendors in terms of getting reductions across the board and we’ve been fortunate in terms of commodity prices working with us. That’s certainly the number one thing, other than that there are a whole host of things that we’ve been working on, a lot of them are engineering initiatives that we’ve been going over the last 12 to 24 months as well.
The one thing to remember is Q1 is a fairly low volume month for us in terms of production so we’re certainly at a disadvantage in Q1 there. I think we’re going to start seeing some significant improvements here come Q2 and Q3 especially as we start sourcing more of the raw materials for the product and we’re able to ship more.
Scott Hamann – Keybanc Capital Markets
Then just to follow up on that, you have a shutdown that occurred during this month, was there a comparable shutdown last year and is there anything else planned for the balance of this year? And, was there anything last year?
Claude J. Jordan
Last year we did not have a shutdown. We do shutdown our manufacturing typically after March, we start back up in the May/June timeframe. We did not have across the board shutdowns like we did this year but that was part of our planned reduction that we announced earlier this year, we said we would shut down for a week in April and a week in July. Are there further, I would say that would depend on how the year evolves. Right now we’re not stating that we’re going to have any shutdowns in Q3 or Q4 but obviously depending on how the year and how the economy goes that’s certainly something we may consider later on.
Scott Hamann – Keybanc Capital Markets
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