Question-and-Answer Session
Operator
Yes, sir. (Operator instructions) And our first question will come from Derik DeBruin.
Derik DeBruin – UBS
Hi, good afternoon.
Martin Madaus
Good afternoon.
Charlie Wagner
Hi, Derik.
Derik DeBruin – UBS
Hi. So, just looking at the – Charlie, looking at the gross margin for the quarter, I mean, you cited a bunch of reasons why it was down. I guess how do we look at the gross margin number for the fourth quarter, same type of mix issues (inaudible) impacting there? And I guess what do you see when you look to next year just given all the current fluctuations and just do you still expect to see gross margin expansion in 2010?
Charlie Wagner
So Derik, you’re focused on sequential Q2 versus Q3?
Derik DeBruin – UBS
Actually sequential Q3 and just kind of what you think about in Q4 if you’re going to expect to see the same type of mix issues in Q4.
Charlie Wagner
Yes. Gross margin, obviously, it’s the mosaic of driver. So, you really have to focus on the few things to understand what happened there. Certainly mix had an impact in the quarter. And also as I mentioned, we took inventory levels down and also had some inventory write-offs associated with product rationalization. So those are some of the dynamics of the current quarter. Some of that does continue into the fourth quarter as well. I think the best way to think about it is that I’ve said I think a few times it’s very hard to look at gross margin in an individual quarter and draw too many conclusions because of the way the cost flow through the P&L – So if you at the year-to-date, the improvement of $140 basis points, good chuck of that is from currency, some of it is from operating improvements, and we would look at our ability to improve margins on a constant currency basis. That should continue into 2010 as well.
Derik DeBruin – UBS
Okay. I guess let’s say, just looking at the historicals, I mean, typically Q4 tends to be sequentially down from Q3. And I just was wondering if that’s the same trend that’s going to repeat this year? That’s where I was going to go with that.
Charlie Wagner
Got it.
Derik DeBruin – UBS
Okay. And I guess how – what are you expecting for the top line impact on FX in Q4, and what are your first takes on looking at 2010 for the FX impact?
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