Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from Michael Gaugler- Brean Murray, Carret & Company.
Michael Gaugler- Brean Murray, Carret & Company
Andy let’s start with the dialysis business for a moment. When I think back to some of the previous calls and discussions the question that comes to mind is has market pricing become irrational here?
Andrew Krakauer
I have to give you my opinion. My opinion is that one of our main competitors continues to lose money and has lost money every quarter for the last few years, so I think there is some truth to that. Nevertheless, that is the market pricing.
Michael Gaugler- Brean Murray, Carret & Company
This is probably a question you’ll have to dance around a little bit, but I think it is worth asking. With that being the case, does it make sense to consolidate the suppliers or exit the business?
Andrew Krakauer
Well, I think the point is we will stay in the business where rational and profitable and make adjustments to our manufacturing facilities as required. There is no reason to make any rash moves. We decided now almost a year and a half ago or more that we just won’t sell at a loss, but while we have a profitable business particularly, as I said, we can ship within a few hundred miles of our Minnesota facility as one example, or if we can continue to find some profitable international business we will continue to serve it.
Michael Gaugler- Brean Murray, Carret & Company
Next I wanted to jump over to the healthcare disposable segment for a moment. Obviously margins eased a bit last quarter. With your current price increases that are underway do you see these margins going back to where they have been historically which has been the mid double-digits?
Andrew Krakauer
Well, I do see all things staying as I hope and we will get back to the margins as we have had in the past year – the prior year ago. Obviously a lot of wildcards in there including the effect of new products and again what happens to the raw material costs. The answer is yes. We should certainly see improvement from the last six months.
Michael Gaugler- Brean Murray, Carret & Company
You spent some time kind of pressing comments about the economy and the potential effects going forward. We are pretty far into the existing quarter here. As you look across the various operating divisions would you say business conditions on a consolidated basis have strengthened, remained relatively flat or declined?
- To read the full transcript on Seeking Alpha, click here »
