Question-and-Answer Session
Operator
(Operator Instructions). The first question comes from the line of David Turkaly - SIG.
David Turkaly – SIG
When you talked about the synergies on the medical side, I think you said 12 of the 18 to 20 have been recognized this year, and I was just trying to get a handle on, when we’re looking at SG&A and R&D, maybe some increased investment in R&D, where do we think those margins could go on the operating side, let’s say over the next couple of years.
Jeff Black
Yes, I think David you hit it on the head. While we are investing in certain parts of our business, clearly we are trying to manage our overall cost structure. I would say that, I think we’ve been pretty open, that we believe with the additional synergies that we will obtain in 2010, plus continuing to drive a more efficient backend of our business, our goal for the company is to try to move our operating margins for our medical business up into the mid 20s over the longer term. I think you are looking at three to four years.
If we weren’t in the investment mode in both R&D, RAQA and into the sales force, we could probably accelerate that, but again I think it’s a target that we think we actually will be able to achieve, even making the investments to grow our business.
David Turkaly – SIG
Can you remind us, did you quantify what the synergies in 2010 for just a medical business alone could be? Have you done that?
Jeff Black
David, as we’ve said from the offset, we expected to achieve $70 million to $75 million over the three year period. With the 18 to 20 we expect to get this year, we should be a little over $60 million. So there’s another 10 to 12 or so that should come in next year.
Kevin Gordon
But clearly David, I think we have a larger target internally than what we provided to our investors and we’ll see how that goes going forward.
David Turkaly – SIG
Then lastly on the FDA inspection. I know that the letter I think covered a number of facilities, do you guys have any kind of a more clarity from them in terms of how many inspections may need to occur before we kind of get a green light from them to move forward?
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