Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Mark Marcon – Robert W. Baird
Mark Marcon – Robert W. Baird
I was wondering if you could give some clarification with regards to the expectation for a loss in Q1, is that inclusive or exclusive of any charges or are you just talking about that as an operating loss.
Michael Van Handel
That really is just looking at it as an operating loss as we look at trends as we see them. Today of course those trends can change but we don’t see any dramatic change coming over the next couple of months so as you know the first quarter is quite a seasonally low quarter for us so there’s only so much we can do with our expense base.
I clearly expect expenses to be down sequentially from the fourth quarter into the first quarter and I also expect expenses to be down given some of the reorganizational moves we have made on a year on year basis but just given the low seasonal quarter I think that will result in a loss in the quarter.
As I said I do expect to return to profitability in the second quarter as typically the second quarter of course seasonally things pick up and our gross profit contribution will go up sequentially in the second quarter and we will not have to add really too many more expenses to support that higher gross profit.
Jeffrey Joerres
As I think you can appreciate one of the challenges in looking at this is where revenue may be off a little bit more depends a lot on how it creates and OUP ripple effect because where we have countries that have already deleveraged quite a bit we’ve taken out cost. If those countries tend to lose a bit more revenue there’s not as much you do to do that. What we do is as those stabilize a bit more and some of the others do it, then we are in a different category but we wanted to make sure that all of you understood that in an environment like this when you look at some of the deleveraging that’s already happened we are very comfortable that we’re keeping our network.
We’ve made some changes to it but we want to keep our network in place and not worry too much about the seasonally low quarter to try to manage that to profitability when we’d rather be looking at two, three and fourth quarter.
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