Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Arnold Ursaner – CJS Securities.
Arnold Ursaner – CJS Securities
Can you be a little more specific on your tax rate guidance for the rest of the year please?
Joseph G. Pointer
I would say we would probably be in the 34% to 35%. We probably are looking at probably another increase of about 1%, best estimate.
Arnold Ursaner – CJS Securities
Second question I have is I think you were supposed to put in some pretty sizable price increases maybe 8% or so in Q2, did you in fact put those through and was there some kind of lag that may have impacted margin on that?
Robert C. Warren, Jr.
We’re getting some lag, Arnie, and also some realization of getting all of those in place have been slow in coming particularly in Europe. About 45% of our total volume comes from OEMs and there’s lots of discussion and there’s some contracts in place that are precluding us from getting some of those increases.
Arnold Ursaner – CJS Securities
I’m sure there are many of us with questions but one more if I could, you mentioned I think in your prepared remarks Bob you don’t expect improvement in Europe in the second six months and I’m trying to just be sure I understand this, you hopefully may take some substantial actions to lower costs or improve your position within Europe. You’re spending more on marketing which you spoke about this quarter. Is your view that you don’t expect any improvement in the second six months before or after the impact of some of these actions you may take?
Robert C. Warren, Jr.
We believe it’s a combination of both the timing of the increases, Arnie, and we are getting improvement as we make the steps let’s say in Holland the move to Verona but we’re still dealing with the higher material costs that haven’t gotten the price realization yet. So it’s balancing out. We do believe we’re going to get our return for our reorganization next year.
Arnold Ursaner – CJS Securities
But you are expecting losses to continue in the magnitude we’ve seen in the first half?
Robert C. Warren, Jr.
That’s what it appears right now. That’s correct.
Arnold Ursaner – CJS Securities
Even after taking the actions that are likely to occur?
Robert C. Warren, Jr.
And there’s more actions that are taking place in the third and fourth quarter on pricing as well which will help but we’re still expecting the same result.
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