Question-and-Answer Session
Operator
Thank you. (Operator instructions) Our first question is from Arnie Ursaner. You may ask your question and please state your company name.
Arnie Ursaner – CJS Securities
Hi, this is Arnie Ursaner, CJS Securities. Good morning.
Don Morel
Good morning, Arnie.
Arnie Ursaner – CJS Securities
Couple of questions if I can, can you quantify the losses you incurred in Q2 at Grand Rapids, please?
Bill Federici
Yes, Grand Rapids was actually breakeven for the quarter, in second quarter of ’08. And if you remember in the second quarter of ’07, we lost approximately 600,000 at Grand Rapids.
Arnie Ursaner – CJS Securities
That’s one of the key factors in the margins improvement in Tech Group?
Bill Federici
Yes, it is.
Arnie Ursaner – CJS Securities
Okay. You mentioned in your prepared remarks that you plan to reconfigure the facility that you have for Exubera for other devices, are these likely to be for the Tech Group or are they likely to be for the pharmaceutical side?
Don Morel
A combination of both. There will no doubt be some molding work done for third parties in the custom molding business but as CZ and some of the products come on line, we expect that molding capacity to go towards those items.
Arnie Ursaner – CJS Securities
Because in Tech Group you had some excess capacity, more than 50% or so operating rates, so I would have been surprised if you were expanding capacity for that.
Don Morel
No, it is more converting that facility into a clean room molding operation.
Arnie Ursaner – CJS Securities
Okay. In your pharmaceutical segment you mentioned 2.6 million increase in tooling development and lab services revenue, typically those are much lower margin revenue, can you comment on the impact you think you had in the quarter?
Bill Federici
Actually the impact was slightly positive versus the last year second quarter, Arnie. And if you remember last year, throughout the year in fact, we had some under absorption of the overheads coming out of that engineering group. So, we have done a better job of filling up the pipeline plus with our restructuring activities we took out some of the costs in that group.
Arnie Ursaner – CJS Securities
You mentioned in your prepared remarks that you saw a $0.06 hit to the year from higher raw materials embedded in the guidance, can you comment what the impact was in Q2, in other words is it $0.06 for the balance of the year or is it –
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