Question-and-Answer Session
Operator
Yes, thank you. We’ll now begin the question-and-answer session. (Operator Instructions). And our first question comes from the line of Peter Lisnic with Robert W. Baird. Please go ahead.
John Haushalter - Robert W. Baird & Company
Good afternoon, it's actually John Haushalter on for Pete. Just had a couple questions for you guys, first of just where ERP system being deployed kind of worldwide, is there potential protest similar disruptions what happened in the US, I guess in the first quarter if you are kind of looking towards third or fourth quarter of this year?
Michael Batten
John the ERP system next implementation will occur at the beginning of our new fiscal year 2010.
I'll let John pick up on that.
John Batten
We don’t anticipate nearly the type of interruption that we had in our domestic operations. We learned a lot with that implementation and are taking extra time with people that have been involved in the first implementation as we roll it out at our other manufacturing locations and then distribution operation. So, the most complicated and comprehensive implementation was the first one and the next one should be much smoother.
John Haushalter - Robert W. Baird & Company
Okay, so there is a true learning curve there where you guys are much more comfortable kind of approaching the implementations in fiscal 2010?
John Batten
Absolutely, the internal team will remain the same. So, they've had quite a learning curve in the last six months.
John Haushalter - Robert W. Baird & Company
Okay, and I guess one more on the cost side before shifting to demand. But just on that materials cost front impacting us on the quarter. Are you still seeing kind of costs pressure there and just kind of given the inventory turns, I know its going to take a while the kind of flow through if you are getting kind of lower purchase prices right now but just what's your outlook for kind of the big commodity cost or just kind of cost picture there?
John Batten
We had a lot of the material cost increases that slowed in to the second quarter are attributed to -- a lot the surcharges and cost increases that we would actually receive physically in the first quarter. Some slipped in to the second quarter as we were getting all of those things through the system. We had as far as surcharges and commodity cost they came down steadily in the second quarter. We had a bit of blip in December which we’ll be circling around to tackle. But we see hopefully that’s certainly surcharges on steel and other metals has started to come down quickly.
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