Question-and-Answer Session
Operator
And the question-and-answer session will be conducted electronically. (Operator instructions) And our first question will come from Rich Wesolowski.
Rich Wesolowski – Sidoti & Co.
Thanks, good morning.
Steve Romano
Good morning, Rich.
Rich Wesolowski – Sidoti & Co.
The portion of the revenue that was coming from transportation costs was the lowest since Honeywell really began to ramp up in early '06. Was that due solely to Molycorp, or was there a change in the transportation piece of some of your base work, or other event work aside from Molycorp?
Steve Romano
I will start, and Jeff may want to add. It basically reflects, primarily reflects Molycorp ramping down as expected. I would also note that, as we've discussed in the past, we maintain a combined railcar fleet of both owned railcars – we own 234 railcars – and the leased railcars, with the lease number fluctuating. We recently turned back 100 railcars and our fleet is right now, I believe, Jeff, 541 railcars total?
Jeff Feeler
That's correct.
Steve Romano
So, that's something that we did expect to ramp down as that project ramped down. I'm not sure we are in a position to break it down in a more granular basis for smaller projects, but primarily Molycorp.
Rich Wesolowski – Sidoti & Co.
So should we expect the transportation expense to decline on an absolute basis for the remainder of the year?
Jeff Feeler
You know, Rich, it's really going to be dependent on what event projects we win going forward. Assuming we don't get our fair share of bundled transportation and disposal projects, we would expect that to decline at this stage.
Rich Wesolowski – Sidoti & Co.
Okay. As I look past at the last couple of September quarter reports, your treatment and disposal margin, as we calculate it, assuming transportation is all pass-through, contracted a great deal versus the June quarter. Are we likely to see that again in '08?
Jeff Feeler
It's really hard to say, Rich. It's really going to be dependent on service mix and volumes that come through in the second half of the year. We are still expecting to have favorable margins, probably in the low 50 range. Whether that's north of our long-term average is really going to be dependent on the service mix that does come in.
Rich Wesolowski – Sidoti & Co.
Okay. Lastly, on Honeywell here, can you talk about the schedule of excavation, if you have any visibility to that? By my estimate, you have a little less than $90 million on the original contract to recognize. If that is the case – and I'm not asking you to confirm that specific number – but would that come in these high teens quarterly rates until it goes to zero, or are we more likely see it leveling off at a lower rate as it moves towards November '09?
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