Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Gail Glazerman, UBS.
Gail Glazerman – UBS
Hi, good morning.
Rick Frost
Good morning.
Gail Glazerman – UBS
You are obviously doing a great job given the environment there with the operating improvements. I am just wondering, is the first quarter, given the actions you’ve taken about as good as it can get in terms of taking cost out of the system or will there be carryover that we would expect moving into the rest of the year?
Rick Frost
I think we’ve got a little bit more to flush through in Q2 based upon the actions that we’ve taken recently in Q1 in terms of our operating costs. And then I wouldn’t look for tremendously significant differences in SG&A. We continue to look for what we call the one Zs and two Zs, taking advantage of attrition, continued paring of programs or activities that don’t appear to be working. But that would be my analysis of that, Gail.
Gail Glazerman – UBS
Okay. I mean in terms of the future improvement, would that be focused in any particular segment or across the board?
Rick Frost
Well, we are going to see raw materials continue to flush thorough. We got some impact of that in Q1, but obviously with the volumes down so low, when we replenish inventories at these new prices that we add some carryover from last year. That will be the majority of it. And then the changes, recent changes that we’ve made across the businesses in some of our manning schedules I think we’ll see a full quarter’s implementation of that as well.
Gail Glazerman – UBS
Okay. And Rick, I am just curious, have you done any analysis of the risk I guess to how much material will be used in each housing start moving forward? It seems like builders are talking about kind of shrinking to the market environment. Do you think that will be an material impact on OSB consumption per start moving forward?
Rick Frost
Well, I think it will have some effect, which will offset some of the increased usage of some of the products. I think we are having a big debate here on whether this is a short term phenomenon or whether we really see this square footage of housing go down. So, I don’t have any numbers to share with you because we are in the process of debating the different forecasters’ opinions about having coming up with their conclusion. What I will do is jot that down and in a subsequent call try to give you an opinion on that.
- To read the full transcript on Seeking Alpha, click here »
