Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Dan Leonard – First Analysis
Dan Leonard – First Analysis
I’d like to get some idea of how business exited the quarter, the rate of decline in business? To help there could you tell me how business was in January versus the rest of the quarter?
Eric Krasnoff
The January fall off year on year was higher then it was earlier in the quarter. Particularly I think we’re seeing companies who are on calendar years adjusting their CapEx spend for instance or re-jiggering their inventories. That’s the month we would have expected it to hit worse. It isn’t necessarily a trend issue so much as the timing related to larger customers.
Dan Leonard – First Analysis
Performance in January was better then the other two months of the quarter?
Eric Krasnoff
No, it was worse. I’m saying that we believe that’s particularly due to the fact that companies are generally on a calendar year basis and plan their budgets accordingly.
Dan Leonard – First Analysis
Do you think if business doesn’t improve do you think you would be able to generate free cash flow at current revenue levels?
Lisa McDermott
Assuming a somewhat steady state, contemplating the performance in the quarter, yes we will believe that we will generate free cash flow for the year.
Operator
Your next question comes from Jeff Zekauskas – JP Morgan
Jeff Zekauskas – JP Morgan
Do you regard your electronics business as having an unrepresentatively weak quarter or do you think that this is sort of the run rate for the next few months or it’s just very difficult to tell? This is not against the strongest comparison in the world.
Eric Krasnoff
If we look at spending overall for the whole industry and look at the 2001-2002 downturn which is the last big one, spending was about 53%. Right now for 2008-2009 that total spending is down about 56%. We’re pretty much at the APEX if we can use any history as a guide. We have seen an increase in the price our customers are getting for their chips which is positive. We just don’t have the visibility. Our sales are based upon the production levels of our customers.
They clearly worked down inventory so to the extent that production levels do not decline further and that companies like Intel was one of the major ones do go ahead and take this opportunity to build new plants. Hopefully we’re at the end.
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