Question-and-Answer Session
Operator
Thank you. (Operator Instructions) There are no questions at this time.
Jennifer Condame
Sure your system is working here because I’m sure that James would have a question. Now to you James.
Operator
We have a first question from Mr. Rick Hoss with Roth Capital Partners. Please state your question.
Rick Hoss – Roth Capital
Good morning. There is an issue about the questions I did try to be a star one or couple times. But obviously got through on the - I think at this time. Question on SG&A, looking forward, are there further reductions available, based on expected decline in top line, are there other things you can do at this point?
James R. Lines
There are other things that the company can do to control its expenses or lower its expenses and that will depend upon how we view the short-term and long-term outlooks.
Rick Hoss – Roth Capital Partners
Okay. Secondly, regarding the delay of projects it seems like the rationale behind a few of them, at least the Saudi projects I’ve read about is really the – is the oil company wanting to delay just to get the better pricing and I know you talked about that previously on what the expectations of waiting the 12 to 16 months, see a 10% to 15% off. To me that implies that the demand is still there. And that while you’ve seen a rapidly deteriorating order volume or order interest in say the last three months, that - thinking about long-term demand trends, the demand is still there and this is really just a pause as everybody sort of waited out and figures out, what’s going on here, and how do we prepare for it. Any thoughts on that Jim?
James R. Lines
I believe your assessed it right Rick. Our understanding is what is more encouraging from customers is they do expect as the supply chain softens, and as you might be aware the metals markets has come down significantly, copper, nickel, carbon steel. Those are off from their size of 6 to 9 months ago, almost 2 and 3 fold. So, that’s eased toward us way into the end-user project cost which is hasn’t yet fully and they expect as the supply chain softens that they can realize cost savings of that order of magnitude. While the underlying reason for the investments really hasn’t changed, the long-term demand growth projections have not changed and they are prepared to wait to let their costs come down and be more sensible and in alignment with the market price for oil, that also has come down appreciably.
- To read the full transcript on Seeking Alpha, click here »
