Question-and-Answer Session
Operator
(Operator Instructions) Our first question is coming from Robert Dunn with Sidoti and Company. Please state your question.
Robert Dunn - Sidoti and Company
Hey, thanks for that. I thought Rick your comments were very helpful. Just kind of a housekeeping thing; the $5.1 million in project from the prior period was that in schedule distribution?
Ray Schmitz
Yes, it was.
Robert Dunn – Sidoti and Company
Okay and the $5 million in business that you walked away from the fourth quarter of last year because it wasn’t profitable enough, do you remember what bucket that came out of?
Ray Schmitz
That should have been scheduled in distribution also I believe.
Robert Dunn – Sidoti and Company
Okay. Relative to the guidance I know there is a slight sequential decrease in the per day rate; is there any vertical -- specifically you are seeing any material, that it’s beginning to weaken relative to what it was doing in the first half?
Richard McClelland
I don’t know that there is any leakage on any vertical that we are aware of. Although there has been some -- the economy has had some impact on some of our larger customers on the same store basis, but we have been able to replace that revenue with new locations, but I don’t think its and any particular vertical. We are not impact a whole lot by the housing industry; we are not in the automotive business, not a great deal, so we are in verticals. There has been some in retail, but that would be the one area where we would have the largest impact I would assume.
Robert Dunn – Sidoti and Company
Okay and sort of on the margin side, the target rate is 26.5 to 27. I remember a few back on the second quarter conference call. You went a bit further and actually said that you are looking for year-over-year gross margin improvement in the back half. I mean you take out that bad debt expenses, the workers comp will grow; that was actually true in this quarter. You mentioned that the bad debt was going to be anomaly. I was kind of just wondering if that was an intentional back away from that statement and if so are you expecting some sort of ramp in SG&A or depreciation?
Ray Schmitz
No, no I don’t think that our comment should have guided anyone in that direction. We are expecting to be in the range that we said 26.5 to 27 in the second quarter.
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