Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Peter Lisnic - Robert W. Baird.
John Haushalter - Robert W. Baird & Co.
It’s actually John Haushalter on for Pete. Just a question for you guys with the margin on the ERP system, but is it safe to say that the gross margin improved in September, once shipments can resume the normal rate?
John Batten
That’s correct.
John Haushalter – Robert W. Baird & Co.
And were those on a year-on-year basis, when you guys closed the books for September was there degradation there or was it really pretty comparable year-on-year?
John Batten
Fairly comparable.
John Haushalter - Robert W. Baird & Co.
And then turning over to the oil and gas transmission business, if I remember right, that’s a longer kind of production time business where it doesn’t initially go in to your backlog I think? I mean you said orders were up, but I mean how much business did you book there that is going to happen and kind of the fourth quarter of fiscal ’09 or fiscal 2010?
John Batten
Well we are seeing order intake, some of the orders for the oil and gas transmissions are falling into this fiscal year, but some are falling out into fiscal ’10.
Chris Eperjesy
John, this is Chris Eperjesy. The number that we reported in the press release would only relate to the six month backlog. So, it would not relate to stuff that Mike referred to that was beyond that.
John Haushalter - Robert W. Baird & Co.
Okay, and its safe to say that probably the majority of the orders you took for oil and gas transmission fall outside that six-month backlog number?
Chris Eperjesy
We are prepared to ship before the six month period for certain opportunistic orders, but normal lead times would have them fall outside going forward, outside of the six-month backlog number.
John Haushalter - Robert W. Baird & Co.
Okay and I’m just following up on that a little bit. My last question just was the kind of the fall on oil prices the last kind of 40 days or so, have you seen a difference in kind of quoting activity or just interest from customers in kind of upgrading their fleets to higher horsepower transmission?
Chris Eperjesy
John, do you want to take that?
John Batten
No, no, we haven’t. We actually in the last, I would say three to four weeks have seen an up tick in the order activity, basically request for quote, lead times and things like that there’s actually been an increase.
- To read the full transcript on Seeking Alpha, click here »
