Question-and-Answer Session
Operator
(Operator Instructions) Your first question is coming from Bob Labick with CJS Securities. Please go ahead.
Bob Labick - CJS Securities
Good morning.
Eric Edelstein
Good morning.
Bob Labick - CJS Securities
Hi, first question I want to ask us with regards to the Doors division. You mentioned some restructuring charges. Could you quantify that?
Eric Edelstein
Hi, Bob. Yeah, the restructuring charges were about $2.5 million. They break down three ways. One piece of it is estimated costs associated with closing and cleaning up the facility we were in.
One part of it is a fairly significant cost associated with moving the production line from Tempe to the new facility in Troy. And then finally, severance for key personnel that are on in the intervening months as the business transitions.
Bob Labick - CJS Securities
Okay, great. And then, excluding the restructuring, I am trying to back into the math a little bit. It looks like operating margins were probably down slightly or flat versus the prior quarter, even with a little bit of a pickup and sales seasonally, so what has the trend in gross margin been?
Eric Edelstein
When you said prior quarter, you mean?
Bob Labick - CJS Securities
I mean, that the June quarter, when you did lower sales. You picked up in sales little bit, so I would expect gross margin to maybe pick up, but I just want to get a sense of?
Harvey Blau
I do not think there is an actual trend there. I think any difference that you would see from Q3 to Q4 would be more rounding.
Bob Labick - CJS Securities
Okay, so gross margins have been stable. It was more the transition cost that caused the decline in operating profit in the quarter?
Eric Edelstein
I believe that is correct.
Bob Labick - CJS Securities
Okay, great. And where does that division stand in terms of its cost-cutting goals overall?
Eric Edelstein
Well, it is an ongoing process. You probably recall, that we spoke of a number of initiatives mid-year that we were planning and doing. Those have all been completed except for one, which is something that is ongoing.
We need to take a look at as the year unfolds as to what happens with market conditions, as Harvey has referenced, and if -- our sense is we do not believe it is going to strengthen dramatically in the coming months, and so we have to see how we do in that market and the possibility exists that we might need to take other steps in the course of the year to reduce the overall cost.
- To read the full transcript on Seeking Alpha, click here »
