Question-and-Answer Session
Operator
Ladies and gentlemen, if you wish to ask a question, please press "* 1" on your touchtone telephone. If your question has been answered or you wish to withdraw your question, please press "* 2". Questions will be taken in the order they are received.
Your first question comes from the line of Budd Bugatch from Raymond James. Please proceed.
Budd Bugatch - Raymond James
Good morning, Andrew. Good morning, Barry.
Andrew Cogan - Chief Executive Officer
Hey, good morning, Budd.
Barry McCabe - Senior Vice President and Chief Financial Officer
Good morning, Budd.
Budd Bugatch - Raymond James
Just a couple of questions, if I could. Barry, can you kind of walk us through last year to this year maybe in SG&A and gross margin, give us some of the elements maybe? I know you gave them to us in kind of a verbal form, but is there any way to put some numbers to some of the differences? Because I was a little surprised by the expenses and pleasantly surprised by the gross margin.
Barry McCabe - Senior Vice President and Chief Financial Officer
We'll start with the gross margin. I am not going to give you specific dollar amounts, but I will say one of the things that we had identified last year with our tremendous growth was the pressures and efficiencies and really as we ramp up our facilities to produce the higher level of production.
And we had told everybody we thought we would improve greatly over that this year at a much slower kind of growth rate, coupled with not only the factory performance improvements in terms of on time and efficiencies, we're beginning to see the benefit of the price realization from the price increases that have been put into place over the last few years. We're seeing moderating inflation.
I think we've mentioned any number of times where average inflation on material was 8% to 9% a year. This year, it's more in the 3% to 4%. Really the only category where you're seeing continued inflationary pressure is really in the transportation area and that's due to the price of oil. So, we expected the gross profit and improvement.
And one of the things now to the SG&A that we said all along, even though our targeted percentage is 20% to 21%, we had said throughout the year when the opportunity presented itself, we were going to invest in growth initiatives whether it be in product development, collateral material as we look at penetrating more of the international markets. So, I really believe even though there is a slight up tick, if you will, in SG&A, it's in line with our full guidance.
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