Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Daniel Rizzo – Sidoti & Company, LLC.
Daniel Rizzo – Sidoti & Company, LLC
I understand that you said a lot of the, some of the margin gains were because of just better product mix. Are you still cutting internal costs as well?
James E. Hurlbutt
Yes, we have. We implemented some cost saving efforts that are made with New Jersey plant last year. Then we continued to pursue, we’ve implemented a sigma project that take costs out of the system on a company wide basis as well as we’ve implemented purchasing , an initiative of which is, yes, we anticipate savings down the road. We have yet to see significant savings. It’s at a relatively early stage but we still put cost savings high in the priority list for improving the overall profitability of the company.
Daniel Rizzo – Sidoti & Company, LLC
So there is a long ways to go with the savings you think you can achieve then.
James E. Hurlbutt
We still see a lot of opportunity, yes.
Daniel Rizzo – Sidoti & Company, LLC
Has there been a pullback in the cost of the raw materials for biodiesels? I know oil’s pulled, I’m just talking the past few weeks with the pullback in price of oil and gas.
James E. Hurlbutt
Well, we’ve certainly seen selling price of crude oil coming down but I think we’ve yet to see any significant decline yet in soybean oil. I would expect it would come down some but it’s not moving in perfect tandem with crude oil because so much is used in the food industry. But we’re still using a significant amount of tallow in our biodiesel blend which is significantly lower cost than soybean oil.
Unfortunately, we can’t run tallow all winter because of the temperatures being too low and it doesn’t hold up as well in cold weather as soybean oil but for the summer months and well into the fall, we will be using a fairly high percentage of lower priced tallow to be able to put a biodiesel out on the market where we can make some improved profitability which had declined over the last year.
Daniel Rizzo – Sidoti & Company, LLC
And when would you start using tallow again? I guess March or something like that?
James E. Hurlbutt
Yes, in springtime.
Daniel Rizzo – Sidoti & Company, LLC
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