Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Cox – Piper Jaffray.
Michael Cox – Piper Jaffray
My first question as it relates to scrap metal and the other category that you breakout, I was wondering if you could provide a little bit more detail around the profit contribution from that category considering the expectations that will fall off in the fourth quarter to give us a sense for where that was trending in a higher commodity price environment?
Joe Holsten
I will start out with a stab at that and then Mark may have some follow-up comments. If we're kind of looking at our Q2 of 2008 levels of gross margins to the Q3 levels we would have seen deterioration between those two quarters and there's a bit of a lag affect particularly in the self service side of the business.
Keep in mind that, for example the cars or the car bodies that we were selling in September with depressed commodity prices would have been the car that we bought in late July and early August when commodity prices were peaking. In an ordinary market where commodity prices are making modest moves month to month we are able to adjust our buying pretty quickly to keep our gross margin dollars the same.
The markets that we saw in September and into October are anything but normal with prices moving significantly week to week, and accordingly ineffective with our purchasing we’ve been chasing the scrap metals market down.
It’s our belief that during the fourth quarter we’re hopeful that that gross margin dollar relationship should bottom as the scrap prices reach bottom we continue to pull our purchase prices down and we would be hopeful moving into 2009 that we’ll be able to restore a normal gross margin dollar relationship to that line of business.
Michael Cox – Piper Jaffray
Would it be possible to maybe rank order then the profit contributions from the three different segments you break out just so we can get a better sense for how much was coming from this other category relative to the other segments?
Joe Holsten
I’ll say one thing we don’t go out and just buy large quantities of scrap, hold it and then sell it. We’re buying automobiles that have parts on them. So if you’re trying to get a feel for the margin for that line it’s about the same as the margins for everything else.
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