Question-and-Answer Session
Operator
(Operator’s instructions) We will take a moment to compile a list of questions. Our first question the line of Mayank Gandhi, please proceed.
Mayank Gandhi - Cowen and Company
Hi, guys this is on behalf of Sara. Can you just quantify the four things you mentioned for gross margin implement? Would you be able to quantify?
Joseph P. Pellegrino Jr.
Yeah. I can give you sort of directional answers I think. I would say the AlboGraft piece is probably worth 0.7% or so, and the manufacturing efficiencies maybe around 1% or so and then the inventory pieces and the higher ASPs probably a bit more than that.
Mayank Gandhi - Cowen and Company
Okay, very helpful. And just going forward, so how sustainable do you think disclosed margin implement is? And just in the context of your intermediate to long term goal of increasing the gross margin to mid 70s, do you feel is that achievable in the near time?
Joseph P. Pellegrino Jr.
Yeah. I guess I would say first, you think of those manufacturing efficiency improvements that we talked about is not recurring. That said, the ASP piece and the manufacturing efficiencies piece I think you’re still going to see improvements over time. And you might get 100 basis points, sort of, in the next couple quarters or something like that. I wouldn’t say a lot more than that. But maybe in that range over the next couple quarters might be reasonable.
Mayank Gandhi - Cowen and Company
Okay. And then just the share repurchase strategy. You’ve increased, doubled the repurchase plan yet you’ve only bought a limited number of shares. So how do you reconcile that? Do you have a target in mind or how are you approaching this whole share repurchase activity?
Joseph P. Pellegrino Jr.
That’s a good question. I don’t think we’re necessarily – and clearly we’re not committed to buying $2 million worth as an absolute target. I think this plan is in place to absorb excess supply. And we don’t necessarily need to get to a predetermined figure. If the market dictates that we buy 5,000 shares a week or 10,000 shares a week then we’ll evaluate as we go along do what’s reasonable at reasonable prices. We’re still convinced that the stock is a bargain for shareholders and a good idea for the company, a good investment for the company. And so given our bullish outlook I think it make sense to continue with the buy back. And in addition, maybe there’s a piece of you that says well maybe it’s a good thing that there hasn’t been a lot more shares bought back by the company because the market maybe doesn’t have an interest in selling at these reduced prices. And that’s probably a positive signal to us as well.
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