Question-and-Answer Session
Operator
Thank you. (Operator instructions) Our first question today is from Mike Schneider. You may ask your question and please state your company name.
Mike Schneider – Robert W. Baird
Good morning all, it is Mike Schneider from Robert W. Baird.
Greg Hyland
Good morning Mike.
Evan Hart
Hi, Mike.
Mike Schneider – Robert W. Baird
I guess starting off with the obvious question about the debt covenants. Do you anticipate just getting a waiver for the third quarter or is the case where you want to amend the entire covenants structure in the agreement?
Greg Hyland
Yes. We are in discussions with our lead banks at this time and you know, it is our expectation that we will seek relief in the format of amendment. So that will be a process that we are going through and plan to have achieved, you know, by the end of June of this year.
Mike Schneider – Robert W. Baird
Okay, and can you give us the sense of just the timing of this. Why would you wait until the fiscal third quarter to commence the process to do something that occurred during the second quarter that was materially worse than you expected because, Greg as you said we talked about these market conditions last quarter on the call. I am just curious what if anything changed or if this has been going on even since last quarter.
Greg Hyland
Yes Mike. I think that we look at four primary variables that we think have changed the last three months relative to the outlook that we had – the prior outlook. First of all, I think that we've seen non-residential construction market has worsened and the potential recovery has moved out. So certainly as everyone knows that this is the big driver for Anvil demand. So we think that the market for Anvil has deteriorated from where we thought it was three months ago.
Secondly that three months ago, I think we were more optimistic about the timing of the up-tick in municipal spending primarily driven by the stimulus package and now we think with the confusion that there still remains a lot jammed, we know that there has been significant discussions within the EPA of trying to get better clarity on the Buy American clause, but I think that that money has not started flowing yet. So as we referenced a little earlier, now we think the earliest we will see any benefit from the stimulus package will be in our fourth quarter of our fiscal year, and then we think it runs the risk of getting into the season where construction becomes very difficult.
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