Question-and-Answer Session
Operator
(Operator Instructions). And our first question comes from Arny Ursaner with CJS Securities. Please go ahead.
Barclay Simpson
Good morning, Arny.
Arny Ursaner – CJS Securities
Hi Barc, how are you?
Barclay Simpson
Okay. Okay.
Arny Ursaner – CJS Securities
First of all I want to thank you on behalf of your investors for the analyst [inaudible]. It was a very productive use of the day. It gave us a chance to meet your team. One of the questions I have is, can you give us a sense on your inventory levels and on your customer's inventory levels? And specifically given the dramatic rise in the price of steel it would seem both you and your customers should almost be hoarding or inventorying steel relative to the cost of capital or debt to hold these inventories?
Barclay Simpson
Well, our customers have been pushing hard to get inventories down. That’s with business the way it is, why that of course you can understand why and we ourselves as far as our inventories go, where are we, Mike?
Mike Herbert
Regarding steel per pound in the U.S. and North America we are — we're flat.
Arny Ursaner – CJS Securities
But in terms of units?
Mike Herbert
Pounds of steel.
Arny Ursaner – CJS Securities
And again, given the rapid rise you expect would you anticipate building these inventories?
Barclay Simpson
Say that again.
Arny Ursaner – CJS Securities
Given the expectation you have of dramatically higher cost of steel, would you be trying to expand your inventories?
Barclay Simpson
Well of course.
Arny Ursaner – CJS Securities
Okay. And can you comment at all on final inventories? Again, I know you try to keep anywhere from two to four months of inventory of essentially all your products to make sure that your customer can get their deliveries. So you see that number expanding? Is that expanding sort of out of your control in the short run?
Mike Herbert
No it is not. We are keeping our inventory level, both at raw materials and at finished good at the same historical level they have been at.
Arny Ursaner – CJS Securities
Final question, Barc, you mentioned you anticipate taking some actions to reduce your costs beyond steel. Could you give us some sense of what these actions may be and how you might attempt to quantify them if at all?
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