Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Kevin Casey with Casey Capital.
Kevin Casey - Casey Capital
Can you expand on the vendor and the issue with them? I assume the current vendors you’re using are probably the best quality and also the best price; so when you have to go to somebody else, are you losing quality or does it take time to ramp that up, and does it cause any interruptions? And also pricing, too, I assume when you’re going to somebody new they probably know somebody else?
Fred P. Lampropoulos
Kevin, let me go to an issue of resins, and I’ll talk about polycarbonate as an example. It is, I think, the largest plastic that we use for our syringes and inflation devices, manifolds, stopcocks, and so on and so forth. There are several companies. Again, I’m not going to go out and give names right now; I would do that privately, but I don’t want to talk about it. But let’s say the backup vendor has the same reputation, the same quality, the same service generally. What happens is you end up using a lot of these things for a long period of time, but what we’ve been doing for well over a year is qualifying other vendors.
Now, other vendors are so excited about getting our business that in order to get that business one of the things that’s understood upfront and negotiated is they have to be able to match the price and be able to do it on smaller volumes if they’re going to get their foot in the door. I mean, just like in my business, I can’t go out and say, ?I have this new catheter, and, oh, by the way, would you like to pay $5 more for it,? when they have an acceptable catheter. And I would say that very same thing happens here, whether it be batteries, whether it be boxing, whether it be in corrugate, or whether it be resins. We have enough buying power across the board as a company because of the size to be able to negotiate and make sure that the parties both get a fair price.
So, I don’t see those as being issues of desperation or we have to accept the prices. I see them more of issues of negotiation, and I can tell you that our vendors are very, very hungry, because of, let’s say, the drop-off in the automotive industry or other areas, they’re very, very hungry for companies that are continuing to grow and have good prospects. So it’s not really that risk.
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