Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Budd Bugatch - Raymond James.
Budd Bugatch - Raymond James
Your guidance for the first quarter assumes revenues down 12% to 17.5% which I know while sequentially the top end of that meets what was done in the fourth quarter, it sort of implies that maybe you have seen a continued worsening even in the fourth quarter and maybe in the first part of the first quarter?
Jeffrey R. Scheffer
Budd, I think your math is right there on the down 12% to roughly 17%. I would say this to you: this downturn began -- or at least we saw it begin -- in late ’05. It showed signs of abating early last year. Our first quarter, and I haven’t looked hard at Q2, but I think our second quarter last year, the first couple of months there, April and May, were actually quite good. It was still down over the prior year, but it was giving us a little hope that maybe things were starting to bottom a bit and that turned out to be a false bottom, I suppose. We don’t see anything a whole lot different right now than what we experienced in Q4.
Budd Bugatch - Raymond James
Your language was pretty instructive, I thought, in the release when you said modestly worsening, framing your guidance. I wanted you to characterize that if you would or put some numbers around that if you could. I think at the top end it is probably fairly flat and at the bottom end it is worse.
Jeffrey R. Scheffer
I think at the top end it’s down about 5%; at the bottom end it’s down 10%.
Budd Bugatch - Raymond James
That’s for the full year?
Jeffrey R. Scheffer
Right.
Budd Bugatch - Raymond James
I congratulate you on a least appropriately trying to frame that.
Jeffrey R. Scheffer
The 5% down would be somewhere around current demand levels.
Budd Bugatch - Raymond James
Your crystal ball is probably better than mine --
Jeffrey R. Scheffer
No, Doug likes to say that the only thing true about a forecast is that it’s always wrong; you just never know which way and to what extent. What we’ve given you here is our best shot today and if things change either way, we’ll certainly let you know.
Budd Bugatch - Raymond James
Receivables, it looks like in days sales you really curtailed that and I’m kind of worried about the health of retailers out there. I think there was a notable retailer -- I’m not going to mention the name -- that has put some squeeze on the manufacturers very recently. What can you tell us? Is that calculation right that you have actually curtailed days sales outstanding based upon the most recent run rate?
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