Question-and-Answer Session
Operator
(Operator instructions). Your first question comes from the line of Kevin Macaka, you have the floor, sir.
Kevin Maczka – BB&T Capital Markets
Good morning everyone.
Unidentified Company Representative
Good morning.
Unidentified Company Representative
Good morning.
Kevin Maczka – BB&T Capital Markets
Ed, I guess my first question is on margins. I thought it was a remarkable performance that you could increase gross margins year-over-year in this macroenvironment when your revenues are down 24%. And it sounds like you're looking for them more like 55 in the second quarter. But yet you just talked about all the headcount reductions and other cost savings that did hit until late in Q1 or even into Q2.
So I guess maybe just give a little more color on how you achieved that margin and why it may not hold up as well going forward?
Edward Campbell
Well, first of all in terms of how we achieved the margin its two issues. Its mix and its cost reductions in both the manufacturing segment, as well as, on the operating margin level of the SG&A.
Mix obviously is a very strong determinant. We've not had the decline in parts and some of the consumables that we have had in systems. And, in fact, we have positive comparisons year-over-year in terms of some of the parts and consumables, not all areas but some.
And the good margins we've received there in quarter one reflect that relationship. With regard to quarter two I point out that currency has moved quite a bit. I know a couple analysts that follow Nordson have commented this morning that the results for the second quarter feel a little weaker than might have been expected given the Dow Jones interview that we participated in last week. And that was actually published this week but the interview occurred last week.
And I might point out that two things have occurred there. First, the early part of last week which was when we were compiling the forecast that we shared in that interview the Euro, for example, was at over $1.30 per one Euro and in the last several days it has gone from over $1.30 to below $1.26.
And it the guidance that we have published with our press release yesterday and discussed this morning we moved the center point of the forecast to be based on $1.26 per Euro and the same conditions are true with regard to the yen. It's moved in the last week or so from 90 yen to the dollar to now it's in the 93 plus and our forecast was based – is now based on 93 versus the previous 90 and then that runs to both gross margins, as well as, to pressure on the whole income statement.
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