Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Darren Horowitz – Raymond James.
Darren Horowitz – Raymond James
? OpEx particularly as we try and get more comfortable with the relationship with OpEx sequentially with any sort of lack of utilization or throughput?
Curt Anastasio
Hey Darren the first part of your question was not – we couldn’t hear it. Could you please repeat it?
Darren Horowitz – Raymond James
Talking on the asphalt side of the business just more color into OpEx as we get more comfortable with basically looking at how realized OpEx hits sequentially versus any sort of lag in the business.
Curt Anastasio
Okay. I’m sorry and the question is? We became more comfortable?
Darren Horowitz – Raymond James
Well what we’re looking at is, I mean relative to what you’ve put up historically on a quarterly basis I think what a lot of us are modeling is obviously larger than expected operating expenses and I think what we’re trying to figure out as we gauge the sequential progression of the business through this year, obviously there’s a bit of a lag.
And if product sales and utilization is decreasing how can we forecast the movements in OpEx? Is there anything that was experienced in this quarter that was abnormal or I guess if you could just give us a little bit more color around how we can forecast that.
Curt Anastasio
Yes. Not for asphalt OpEx. The lag really relates not to OpEx but our cost of goods. And so in a very sharply declining price environment in Q4, then the prices declined more rapidly than we were able to sell the inventory and the inventory declined at a slower rate.
That’s setting up to benefit us of course as we go into the asphalt season this year because we’re working off that higher price inventory. That cost of goods is getting lower and lower as we speak and as the market turns up and you get into the asphalt season we’ll be selling against that lower cost of goods.
So I don’t see anything unusual in asphalt OpEx but that was – the cost of goods was really the driver there in connection with the lag that was I talking about.
Darren Horowitz – Raymond James
Yes. No that makes a lot of sense on the COGS side. I guess OpEx at least on a sequential basis was higher and we're just trying to figure out some rationale behind it.
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