Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Frank Magdlen with The Robins Group.
Frank Magdlen - The Robins Group
On the Hamilton Beach side what is happening to your costs right now particularly in light of maybe declining deflationary trends for raw material and what are the new products? Can you give us new product examples?
Al Rankin
Let me address the issue of product cost first, because it is a very important issue. We have challenged all of our suppliers to get their costs back to the levels that we saw toward the end of 2007 and we have seen increasingly positive responses from suppliers as their own supply chains are having lower costs. To the extent that the lower costs have not fully come through at this point we have been working with our customers to change product offerings, to increase prices and generally to put ourselves back in a margin position that’s much closer to our traditional margin position than it was after the big spike in costs occurred.
I think the answer to your question is it’s a very aggressive program to get costs back down to levels that they previously were at.
As far as new products are concerned, I think if you want some more detailed list that Christy can provide those in a separate call, but we have a very broad new product introduction program. It covers our commercial products where we have an increasingly broad set of products. It covers our US consumer product lines and includes really new products in essentially every product category. On average, and I would have to check a little bit, but my recollection is that we renew about 1/3 of our products every year, so it is a very broad program.
To the extent your question was focused on break through products I think in the main these would be more classified as updating and enhancing the performance of products we have, ensuring that the quality is as high as it can possibly be. We give a lot of attention to quality. We have a very significant quality oversight organization in China that works closely with our suppliers and is actively involved in bringing forward a strong new set of products.
Frank Magdlen - The Robins Group
Okay Al. On the cost side could you quantity a little bit, ’08 costs were what percentage higher than ’07 and you’re halfway or ¾ of the way back to the ’07 levels?
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