Question-and-Answer Session
Operator
Thank you. (Operator instructions) Your first question comes from the line of Jim Lucas of Janney Montgomery Scott. Please proceed.
Jim Lucas – Janney Montgomery Scott
Thanks. Good morning guys.
Mike Hoffman
Good morning, Jim.
Steve Wolfe
Good morning, Jim.
Jim Lucas – Janney Montgomery Scott
First question on, Steve, FX, what was the contribution in the quarter?
Steve Wolfe
For the quarter it was about $7 million and instead of being up – hand on a second – instead of being up 15%, the international side would have been up about 9%. So you’ve got 9% organic growth. The rest was FX, which is $7.5 million.
Jim Lucas – Janney Montgomery Scott
Okay.
Steve Wolfe
For the year-to-date, it was – we were up 12%. Half of that FX, or little over $27 million.
Jim Lucas – Janney Montgomery Scott
Okay, that’s helpful. And gross margins, if you could dive a little bit deeper into the 180 basis points erosion in the quarter, you called out a couple of things. If you look at the commodity and freight, and so the inflation side versus the lower production volumes, what was just the ballpark, the contribution of the margin degradation between those two factors?
Steve Wolfe
Yes. By far, the biggest factor are commodities and freight with what’s going on with things like steel and the things we’ve been talking about often on for the last year. And with diesel prices due to what’s happened to oil. The production side of it, the hours side, it certainly was a factor, but it pales in comparison to the commodity piece. And it’s something we’re continuing to deal with and figure out for the rest of the year where we are going to end up, but the bulk of it was the commodity side.
Jim Lucas – Janney Montgomery Scott
Was it two-thirds a third or was it greater than that?
Steve Wolfe
No, that’s probably – even greater percent was commodities than that.
Jim Lucas – Janney Montgomery Scott
Okay. All right. The main thing trying to get a handle on is what the gross margin picture looks like going into next year and that’s why I wanted to get a better feel for what is going on from a production standpoint. When you go back and you talk about some of the things that you are doing to combat the inflation side of the equation, besides the new products comprising – I know it’s too early for you to talk about 2009, but just directionally I’m trying to understand where gross margins are heading.
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