Question-and-Answer Session
Operator
(Operator instructions). We’ll pause for just a moment to compile the Q&A roster. Your first question comes from John Nobile.
John Nobile – Taglich Brothers
Good afternoon. I’d like know in January –?
Patrick Cavanagh
Hi, John. How are you?
John Nobile – Taglich Brothers
Good. Thank you. In January you mentioned that you went through four-day work weeks in manufacturing. And what level of revenues do you believe it would take to go back to a five-day work week?
Patrick Cavanagh
Well, I’m thinking about $4 million to $4.5 million a month, John.
John Nobile – Taglich Brothers
Okay. So, we may not see something like that maybe till calendar ’04 if industry projections are correct with the build rates increasing. Well, hopefully we’ll see. But anyway, in February you instituted the significant reduction in operating expenses, which obviously are taking place in the March quarter, but assuming that the current rate is where you are going to be going forward, what would you say your annual operating expenses would be on a typical year from what you are right now?
Patrick Cavanagh
Give us just a second, John.
Dennis Bunday
Yes.
John Nobile – Taglich Brothers
Yes. I know you had mentioned you reduced your operating cost by $3.5 million annually.
Patrick Cavanagh
Yes, on an annualized rate and –
John Nobile – Taglich Brothers
Is that from fiscal – if I could say fiscal ’08 or from like a quarter that I could take this as a basis?
Dennis Bunday
Let’s see. John, what I think would probably be best is if I can get back to you on that.
John Nobile – Taglich Brothers
Okay, later on in this call maybe.
Dennis Bunday
Yes, let’s see if we can – depending on how long it lasts.
John Nobile – Taglich Brothers
I just wanted to get an idea because that’s a huge reduction, $3.5 million. But just to see the basis of – you are looking at it on fiscal ’08 or you are looking at it from what you currently were in Q2, just trying to get an understating on that one.
Dennis Bunday
I think probably, John, the best way to look at that is that if you take a look at our fourth quarter run rates for R&D, selling, and admin. I mean that’s – the – obviously the four-day work weeks, some of that comes out of cost of sales for the direct labor, some of the indirect labor, plant support and those types of things come out also, but a lot of it comes out of R&D, selling, and admin.
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