Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Peter Lisnic from Robert W. Baird.
John Haushalter - Robert W. Baird
Good evening, gentlemen. It's actually John Haushalter on for Pete.
Bob Weber
Hi, John. How are you?
John Haushalter - Robert W. Baird
Pretty good. Just on the gross margin line, you kind of quantified or qualitatively kind of described some things that hurt you in the quarter. Could you just put some numbers behind that or just give us a better feeling of how much that actually impacted you?
Bob Weber
Yes. As we stated at other times, John, we really don't want to get into a practice of kind of calling out one-time items every quarter for you, so given that these are operating items, the best way to describe the impact would be without them our gross margin percentage would have been equivalent to the prior quarters of 2007.
John Haushalter - Robert W. Baird
Okay. So to the prior quarters on a year-on-year basis, would it have gone down?
Bob Weber
No. Year on year, we're up, but the gross margin for the fourth quarter would have been approximately equal to the first, second, and third of '07.
John Haushalter - Robert W. Baird
Okay.
Bob Weber
That should give you an order of magnitude type of?
John Haushalter - Robert W. Baird
Yes. That's helpful. Okay. And then the $100 million in CapEx, I think that's more than we had thought you guys would be spending. What approximately is kind of the hurdle rate you guys approach for investments of that magnitude? I know it's spread over two years, but that's more than I've heard you talk about in the past or you spent in the past couple of years.
Tom Gendron
Basically, we look at a hurdle rate of 15% on our investments.
John Haushalter - Robert W. Baird
Okay.
Tom Gendron
I would highlight there though, some of the investments, as Bob said, is with the business we've been winning in all of our markets on more systems, we do have to advance our systems test facilities and we're going to be installing new facilities and those are pricey, so that's a big part of that investment as well.
John Haushalter - Robert W. Baird
Okay, so it's kind of backfilling or giving yourself the infrastructure to handle already won business, so to speak?
- To read the full transcript on Seeking Alpha, click here »
