Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Budd Bugatch - Raymond James
Budd Bugatch - Raymond James
Question, you talked about in casegoods narrowing the number of collections, is that sort of across the board or is it more concentrated in one brand or the other. How should we think about that.
Kurt Darrow
The answer there would be it was pretty much across the board. As your volume contracts the available dollars to flow the appropriate levels of inventory is impacted. We made the decision that we wanted to protect the inventory levels of our best sellers, or our top groups, and so we decided to aggressively move out some inventory in two fashions.
One our groups that we’re not going to go forward with and two, are some of the least productive SKUs in some of the major collections. So it was a combination of both approaches during the quarter.
Budd Bugatch - Raymond James
Could you quantify for us the impact of the discounting on some of those lines in the fourth quarter and is that pretty much done with at this point or do you think some of that will bleed over into Q1.
Kurt Darrow
I don’t want to quantify the amount other then to say it was higher then we’ve experienced in a long time and the difference in the operating margin from how the casegoods business has been flowing I think is evident by the amount of discounting and the selling process of getting through most of it is winding down although we did sell a number of discontinued groups at the April mark at which we delivered in May.
So there’ll be a little flow over into this quarter but it certainly won’t be as significant as the fourth quarter.
Budd Bugatch - Raymond James
And thinking about sort of the element of cash flow for 2010 you gave us CapEx of $12 to $14 million, D&A $22 to $4, you guys obviously did a great job in inventory this quarter, how do we think about working capital and how that plays into cash flow this year.
Mike Riccio
We’re still probably a little heavy on inventory so we’ll still be focused on bringing that inventory level down to levels that we feel comfortable with in the current production environment. And then we’ll have to deal with that in the future.
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