Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Andrew Jeffrey - SunTrust.
Andrew Jeffrey - SunTrust
Obviously the first quarter is a pretty challenging environment. It sounds like you haven’t seen much of anything change in the U.S. and it looks like Europe is a little bit weaker. And then you’ve got sort of the full year improving from the first quarter run rate. Can you give us a sense of the confidence in latter-year ramp up? Are there any specific assumptions you are making to make you feel a little more confident as we move out past the first quarter of the fiscal year?
Douglas G. Bergeron
We are confident, as I said, as we continue to see some growth in the emerging markets, and actually good growth in multi-lane and petroleum. The great unknown is will there be any recovery in North American financial, i.e. processors and ISOs, and in Europe, and in some of our more important emerging markets, like Russia and Venezuela, and Mexico, which are actually hurting quite measurably right now.
Our assumptions are it will be a challenging first half but we built into the revenue range an expectation of some improvement in some of our segments in the second half of the year. Clearly, if that does not happen and we stay where we are today, macroeconomically, or deteriorate, we will be at the low end of our range. If we get some improvement, we’ll be mid- to upper-end of our range.
But the range is wide because of the unprecedented lack of visibility we have in the overall future of the worldwide economy today.
Andrew Jeffrey - SunTrust
Is there anything we should be thinking about as affecting the gross margin here, as we move throw fiscal 2009. It looks like mix has gotten about as adverse as it’s likely to. I know on the last call you talked about some initiatives to reduce the cost of goods. Where were you in that process and how do you consider this 35% range as progressing?
Douglas G. Bergeron
We are on target with all of the research & development programs. They’re largely complete and now those component price reductions are working their way through the supply chain and we have already seen a little bit and we will see more throughout the year, unchanged from the expectations that we discussed last quarter, in the $30.0 million to $40.0 million range.
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