Question-and-Answer Session
Operator
(Operator Instructions) Your first call comes from [Sulka] for Jeffrey Zekauskas – J. P. Morgan.
[Sulka] for Jeffrey Zekauskas – J. P. Morgan
In terms of raw material costs, should raw materials costs have been a benefit this quarter already or like an inventory evaluation expense that was embedded in cost of goods sold this quarter?
Frank Sullivan
It's a combination [Sulka] of inventory revaluations as well as just a slow down in sales in a number of our businesses where we were still bleeding off inventory associated with raw material costs September/October. We didn't see raw material costs coming down very dramatically until the end of October and November.
We are now in a circumstance where we are seeing the benefits of those in March and they will finally show up when we report our fourth quarter results.
[Sulka] for Jeffrey Zekauskas – J. P. Morgan
How much was the inventory reevaluation expense in the quarter?
Frank Sullivan
I don't have that number in front of me but it was a combination of that as well as just lower overhead absorption with the lower sales revenue and year to date through nine months, raw material costs were still up as we were suffering through peak raw material costs into the early fall of last year and really it wasn't until January or February that we were able to work all of that cost through our P&L through product sales.
[Sulka] for Jeffrey Zekauskas – J. P. Morgan
And for the next 12 months, what magnitude of material cost decreases would you expect and which materials are moving lower more significantly?
Frank Sullivan
We're seeing resins down pretty dramatically. We're seeing solvents down pretty dramatically. Obviously freight costs have dropped versus where they were at their peak last summer. Packaging is a mixed bag. We're seeing plastics related packaging in pretty good shape. There are some issues with steel cans.
But in general, we're seeing raw material costs declines which we are now benefiting from across almost all our chemical raw materials as well as a lot of our packaging other than steel cans.
[Sulka] for Jeffrey Zekauskas – J. P. Morgan
And do you think these decreases for the next 12 months would be more like single digit, double digit, what of magnitude?
Frank Sullivan
We're at double digit now and until the economy really starts turning and the supply demand situation changes, we should benefit from that throughout the year.
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