Question-and-Answer Session
(Operator Instructions). Our first question comes from the line of Craig Bell with SMH Capital.
Craig Bell - SMH Capital
I'm just wondering on your comments on your internal metrics have been improving here in the third quarter. Are you seeing that as just marginal improvement or is there pretty noticeable uptick?
Bill Coskey
What we've seen early in the third quarter is that our utilization is slowly trending up, our billable hours are slowly trending up. Probably utilization what we've seen thus far has improved a couple points, maybe billable hours are higher about maybe 8%, 10% something like that. Of course, it's early in the game, but that's what we're seeing thus far in the quarter.
Craig Bell - SMH Capital
Looking at your automation segment, the gross margin there in the quarter was down. Is that just a function of reduced activity there or reduced revenue or some other factors are playing?
Bill Coskey
Well, there's a couple of factors. We, of course, moved into a new facility and encountered quite a few expenses with our move into the new facility, which we believe is going be efficient over the long run. We've had a little higher variable overhead especially in our Mobile office. We feel like we've recovered from that, Craig. We've received some work even within the last few weeks to put people back to work. So, it's probably a high variable overhead in our design staff and maybe some higher than expected expenses in what we might think of as one-time expenses at our fabrication part of the automation move.
Craig Bell - SMH Capital
On the acquisition you made, is that going to structured in a similar fashion to your past ones where you paid a little bit of cash then a promissory note on it?
Bill Coskey
In this case, yes. It's going to be some part cash and some part deferred payments over couple of years. There is no stock or no earn-out as part of it.
Operator
Our next question comes from the line of Tahira Afzal with KeyBanc.
Tahira Afzal - KeyBanc
This acquisition look pretty interesting, Bill. Could you elaborate maybe on whether it's dilutive or that's accretive or neutral, and maybe talk about perhaps the prospects going into 2010 what you want to do with it, how you plan on integrating it perhaps with your land group?
- To read the full transcript on Seeking Alpha, click here »
