Question-and-Answer Session
Operator
(Operator instructions). And your first question will come from the line of Eric Prouty with Canaccord Adams.
Eric Prouty – Canaccord Adams
Great. Thanks a lot. And Jack, Barry and Tony, congratulations, good quarter on a tough environment. I guess on the geothermal and Climate Control business in particular, obviously with the real rapid growth in geothermal, we have a mix shift going on, could you maybe get into a little bit of detail about how that revenue mix shift over time might impact both the gross margin and operating margin, both geothermal as a whole grows, and then as residential within the geothermal mix grows at even faster clip than the commercial?
Jack Golsen
Well, these are all products that have good healthy gross margins. And as we grow the business, I think in general no matter how we grow the business, we're going to see some operating leverage and leverage on the bottom line and overhead absorption is what I'm really talking about. And so, as we grow, we expect this to just enhance the overall profitability of the business.
Eric Prouty – Canaccord Adams
Right. So, no significant differential in gross margin between the geothermal products and say the coil product, any other retract products?
Jack Golsen
No they are all in the same range. What you have in our business, I'm going to leave you with the impression that all the products we sell have exactly the same gross profits. I might over explain here but I want to be explicit. In everyone of our products, there's a range of profitability depending on the distribution channel we sell through, the size of the job, the competitive nature of the market at the time. So, there is a range. But generally speaking, we don't see a significant difference in the gross profit levels but what we just see is continued growth of the business and the benefits we get from that growth.
Eric Prouty – Canaccord Adams
Perfect, now understood. And then in terms of booking and backlog and again you gave plenty of caution on the call but I am sure you've gone through and really scrubbed the backlog well, what is your confidence level on that backlog being shipped out in the usual period, or do you believe that there is more risk in the backlog now than there has been in prior periods?
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