Question-and-Answer Session
Operator
The company would like to provide everyone the opportunity to ask a question, so if you could please limit yourselves to two questions at a time it would be greatly appreciated. You may recue as often as you would like, time permitting. (Operator Instructions).
Your first question comes from the line of Douglas Chudy with Keybanc.
Douglas Chudy – Keybanc Capital Markets
Good morning. A couple of quick questions. It appeared during the quarter that volume declines accelerated following a couple of quarters of improvement. I wondered if product rationalization had any impact on that and, if so, to what extent?
Michele Volpi
Good morning, Douglas. Well, first of all, if you remember, when we discussed about the third quarter we were very, very cautious in calling it the beginning of a trend reversal. What has happened in the fourth quarter has been clearly the US construction market going farther down, clearly reflected by the sales of our tech business, our window business. That has also been overall generally (inaudible) activity that has affected also our (inaudible) business. In spite of very positive successes in terms of developing and closing new business.
Clearly specifically North America, the biggest driver – as outlined before in our comments – the biggest driver of this decline has been the (inaudible) business, which has been posting revenue year over year of less than 55% net to the negative.
Douglas Chudy – Keybanc Capital Markets
Okay. So, I mean, is product rationalization a small component of that or pretty much it’s all on the demand front?
Michele Volpi
It’s a small component of that.
Douglas Chudy – Keybanc Capital Markets
Okay.
Michele Volpi
That clearly doesn’t mean that we are not continuing to requisition, but the vast majority was demand driven and strongly linked to the Roanoke results.
Douglas Chudy – Keybanc Capital Markets
Thanks. And secondly, at the investor day back in October you provided the long-term EPS goal of 10% to 15% annual growth. I understand that’s the long-term goal. Certainly the guidance for 2008 on an EPS basis is quite a bit below that. Do you feel that you’re being relatively cautious at this time due to the current environment and, secondly, do you still feel that that long-term target remains realistic?
Michele Volpi
For sure we believe in the long-term target. But also if you remember back when we discussed in October at the investor conference we said that it was going to be a gradual ramp up. Not only because changing amidst this model takes time, but also because of our view of the economy, which we have been very clear and consistent all along the last five quarters. Clearly when we have to give forecast, which for us as usual is a commitment to our shareholders, we need to make sure that we are cautious and that we incorporate in our guidance the status of the economy.
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