Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Budd Bugatch – Raymond James & Associates.
Budd Bugatch – Raymond James & Associates
The tax rate Barry you talked about 37.2% normalized and the $1.4 million NOL. What should we use going forward? Should we use the 37.5%?
Barry L. McCabe
Looking forward I would expect our rate to be somewhere between 37% to 38%.
Budd Bugatch – Raymond James & Associates
Andrew, if you could, could you give us a little more granularity on what you’re seeing in success maybe internationally and specialty, talk a little bit about how you see that unfolding?
Andrew B. Cogan
Well, I think we’ve worked very hard to diversify our revenue stream. If I go back to the start of the decade, something like 80% of our sales and over 85% of our profits were really just purely out of the North America office portion of the business. I think as we sit here today, about a third of our sales now come from our international and specialty businesses and those businesses are almost contributing close to half of our operating profitability. So, it’s been a very important strategy. It’s not a result of any one acquisition or anything like that. It’s a result of something that we’ve been working hard at for five, six, seven years and it’s starting to pay off in both the gross margin mix and in the share of operating profit.
When you look at growth for the quarter, we had very strong growth in the specialty businesses, that led the growth which followed by nice international growth. I’m very pleased to see international growing as a percent of our revenues. It’s still not where it needs to be, we’re working hard to expand it. We think there’s great opportunities for Knoll in more international markets and we’re aggressively investing in those markets. So, I’m very pleased given the whole macroeconomic environment that the way we’ve been diversifying this company over the past again, five, six, seven years seems to be playing out as we had hoped if we were to hit an environment like we’re presently in.
Budd Bugatch – Raymond James & Associates
And the percentage of international business today is approaching what?
Andrew B. Cogan
I think it was 7% at the start of the decade and we’re pushing north of 12% now.
Budd Bugatch – Raymond James & Associates
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