Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Katherine Thompson – Thompson Research Group.
Katherine Thompson - Thompson Research Group
Following up on your inventory commentary, how much of the inventory increase in the quarter is due to pre-buying activity and could you clarify the timing of this flow through of that inventory?
David R. Grace
I wouldn't say it's dramatically different than last year, Katherine. Some of it has to do with the timing of when you make the buys during the month. I would say we turn our inventories currently, especially the residential roofing products, close to seven to eight times so the flow through for that will be through July and partially through August.
The pricing has been pretty consistent though so I'm not so sure there's an advantage or anything else like that by doing these bulk buys, it's just what's happening in the market place right now.
Katherine Thompson -Thompson Research Group
And speaking of the pricing environment, could you give a little bit color on what you're seeing right now with overall roofing pricing.
Robert Buck
Pricing as I've explained it is very solid to up. In the last three or four weeks we have received notices of price increases that will take effective in August and also September. So pricing is confirmed up and it's reflected also in our gross margin. So our objective as we get price increases would be to pass them on to our customer contractor. So that's what it looks like now.
I rarely predict what prices are going to do in the future, but at this point because of asphalt pricing and price of crude and so forth, I would anticipate prices to remain solid with a trend toward up based upon recent activities from our vendors.
Katherine Thompson -Thompson Research Group
Could you clarify the magnitude of the increase?
Robert Buck
They're published. I could send you reports that we get and the price increases are usually 5% to 7%.
Katherine Thompson -Thompson Research Group
Is there any lapping, a little bit tougher comps due to Hurricane Ike last September, how do you manage your business around this and how are you thinking about planning your business over the next six to nine months to give in what we've seen some glimmer of hope in the residential housing market?
Robert Buck
We do manage the business based upon the business we enjoy. I mean we look at our sales daily. We look out as far as we can with the visibility that we have. Storms are a normal part of our business. Ike really affected more the first quarter of fiscal '09 than anything else, and it continued for six to eight months.
- To read the full transcript on Seeking Alpha, click here »
