Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jim Lucas from Janney Montgomery Scott.
Jim Lucas - Janney Montgomery Scott
I have a couple of house keeping questions before I dive into the big picture. The FX benefit in the fourth quarter, could you help us out there Steve?
Stephen Wolfe
From a top line standpoint, I think it was about one million seven. We are used to giving you these in dollars, so a pick up in dollars for the quarter of a million seven, it was high 20’s for the full year, $28 million.
Jim Lucas - Janney Montgomery Scott
On the gross margin you mentioned the tooling write off. When you look at that gross margin contraction of 500 basis points and you look at the major buckets of the tooling write off, commodities, lower production volumes, without giving specifics of hard numbers can you rank order what the biggest impact on the gross margin erosion was?
Stephen Wolfe
By order of impact, the largest by far would be commodities. That was the biggest piece. Followed by the tooling write off that we talked about and then that’s about the same size as the mix issue where we had more residential sales than professional sales where the margins are not as great. So those are the three main things that covers the bulk of that. Commodities would be the biggest, tooling and mix would be about the same.
Jim Lucas - Janney Montgomery Scott
With regards to commodities, you know we are all seeing a number of your major input costs coming down. How quickly is that read through for you? One of the issues that you had in ’08 had to do with the residential business not necessarily being able to pass along price increases. Do you feel you had the product line reset enough to account for where commodity prices are today?
Stephen Wolfe
Yes if you can tell me where they are going. I mean the issue is where our commodity price is going. We told you at our third quarter call that we knew we were going to have heavier back end commodity costs and we did in the third quarter and we did in the fourth quarter. I think it was about $15 million incrementally more over the prior year in each of those quarters.
What happened is that we saw the increase in commodity costs and we lagged that in our costs. We saw it on the back half of the year. We didn’t get much down side in the front part of the year; we got it all in the backside of the year. As those commodities now are hopefully starting to go the other way, I am particularly talking about steel which is one of our main commodities; we will see the benefit of that lag too. We will probably see first in the second quarter still have some commodities pressure and if in fact the prices stay where they are at we will see some benefit of that in the third and the fourth quarters.
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