Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Nick Andrews with Lazard.
Nick Andrews - Lazard
Good afternoon, I should say. Could you just give us a – actually first of all can I get the backlog number again for the rest of the year?
Jacques D. Kerrest
Backlog is $20.7 million.
Nick Andrews – Lazard
Twenty point seven million, and how much is that going to be recognized in the fourth quarter?
Jacques D. Kerrest
Thirty-nine percent of it [inaudible] million.
Nick Andrews – Lazard
Okay and can you guys just – Grant, can you give us a look into what your initial expectations are for fiscal ’09 on the revenue growth side?
Grant Evans
Yes, I’m – we’re working through that, Nick. We’ll come out with guidance. We’re not through that process. As you know we just brought – Jacques Kerrest's just joined us. We’re still in motion of that. We ask your patience with us on that. We anticipate that towards the end of our calendar year – or excuse me, our physical year for the company, which is September 30, we will be coming out to the street with a clear direction on strategy and guidance on where we’ll be targeting.
Nick Andrews – Lazard
Okay, great, and you talked about headcount reduction. Have you reduced headcount further, you know now that we’ve started fourth quarter?
Grant Evans
Yes. We – when I first joined the company our headcount was 301 people. We’re down to approximately 280, somewhere around there.
Nick Andrews – Lazard
Okay.
Grant Evans
I don’t look at it as specific reduction. I look at it more as realignment and getting optimization done so we can get better leverage out of our organization and better efficiency. So there's further to come and that will become clearer to the investors in the coming days, but overall it’s approximately a – let’s see, about a 20%, 25% reduction overall.
Nick Andrews – Lazard
Great, and could you just remind us – you know the gross margins on the maintenance and support side seems to have, you know, come down significantly from last year. Can you just remind us what’s bringing that down and if we expect to rebound that?
Jacques D. Kerrest
Generally the gross margins have been dropped because of essentially the way we’re reporting. Prior to, I think second quarter of last year, we were not recording the full expense set into the cost of goods sold. We were providing sustaining engineering and other cost, essentially costs of good sold labor that was not being reported, essentially probably just staying in operating expenses, so that’s really the driver there.
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