Question-and-Answer Session
Operator
Thank you. (Operator Instructions) First question from the line of Matt McCall with BB&T Capital Markets.
Matt McCall - BB&T Capital Markets
Thank you.
Stan Askren
Good morning, Matt.
Matt McCall - BB&T Capital Markets
Kurt, first on the guidance you said to look at 1.6 to 2.1 percentage points on top of a 26.7%. I'm just making sure I've got the adjustments right, that we are talking apples-to-apples here that's on 26.7% number from last year. What gross margin are you using when you talk about 4 to 4.5 points lower?
Kurt Tjaden
Matt, prior year 2007 Q4 was 36.4%.
Matt McCall - BB&T Capital Markets
That's what I had, just wanted to make sure I didn't forget any type of charge on that line. Maybe you've talked about in the past or you've announced a couple of units, you closed Richmond, we've also talked about some logistics cost savings efforts. Can you remind us of two parts, of the timing or the magnitude of the savings expected for each or remind us of the timing that you expect to occur. Did you recognize any of the cost savings from those efforts in Q3?
Stan Askren
I think overall when we did these figures there was savings of $15 million, lets say overall, but I don't have the numbers exactly here in front of me. I'll remind you, those were very, very large sort of changes for us, probably the biggest most complex projects we have ever undertaken, closing the facility, expand another facility, closing two distribution centers and opening up another distribution center. We were challenged with the complexity of that and as a result of this our savings have been delayed. We do anticipate fully realizing those savings in '09 as they come on line. So the impact for 2008 would probably be a couple of million dollars positive savings, and we expect to see the rest of that either cost savings or in a negative demand climate its more cost avoidance as well.
Matt McCall - BB&T Capital Markets
Did that $2 million occurred just in Q3 or is that going to be Q3 and Q4?
Stan Askren
It probably would be both, Matt.
Matt McCall - BB&T Capital Markets
Okay. Then from a pricing and inflation standpoint, it sounds like things are expected to get a little better in Q1, the pricing and cost that you gave was helpful. As we look forward to Q1, holding kind of everything constant, assuming you get the level of pricing that you expect, what's the ballpark figure or what that should look like from a pricing and cost perspective?
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