Question-and-Answer Session
Thank you. [Operator Instructions]. And our first question is from Rick Wise with Bear Stearns. Please go ahead.
Frederick A. Wise - Bear Stearns
Good morning, John. Hi there. Can you give us a little color on the gross margin of resin and the outlook for the rest of the year?
John R. Considine - Senior Executive Vice President and Chief Financial Officer
Sure, Rick. Again, our initial guidance back in November was that our gross profit for the first quarter would be down by about 1 percentage point. So to remind you in '07, our gross margin was 52.8%. We actually came in at 51.4%. So another 40 basis points lower. As I said in the remarks, that 40 basis points which amount to just under $7 million relates to some one time items that we reflected in the cost of sales in this quarter and they were some very minor recall type costs that had to be charged against cost of sales as well as some asset write-offs that we had to take. Again tiny number, $7 million and that moved it down 40 basis points which again has us back to about a one basis... one percentage point difference. We continue to have good productivity and mix giving us about 60 basis points and then as we had said in our guidance back in November we experienced about a negative 70 basis point impact from foreign exchange and then had a number of other items primarily resin and steel which might have been 20 basis points or so to start up cost about 20 basis points. And then a bunch of other type items that run through the quarter, so you arrive at the 51.4.
When you look at the whole year importantly the... again our mix of productivity continues. Last year we had a 51.7% gross margin, we are looking for about a 80 basis point improvement in mix and productivity. As we discussed at some length in the last call start up cost will cost us about 30 basis points and then raw materials particularly the resins and the steel is about 60 basis points and then there is a little other in there but not much. That would give us a 51.5, about equal to last year 20 basis points or up and that 20 basis points is just the additional increases we have had in resin from our initial guidance. So we should be just about exactly where we said we would be back in November.
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