Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Hamed Khorsand - BWS Financials.
Zaheed - BWS Financials
This is actually [Zaheed] calling for Hamed. A couple of questions, what is the contract activity you are seeing out of Europe?
John Gibson
Now say that again, I’ll listen clearly. Your question wasn’t clear.
Zaheed - BWS Financials
What kind of contract activity are you seeing out of Europe?
John Gibson
The contract activity out of Europe, in Aerospace it’s been healthy. We are involved in several proposals and we are very optimistic about the future. To kind of track the activity out of Europe, it affects us and our Fine Chemical business is also fairly stable. What’s typical among these customers is that they have balanced inventory, they cut inventories in certain cases, but we are still optimistic.
Zaheed - BWS Financials
With regards to gross margin, can you give an update on the efficiencies in the Fine Chemicals segment?
John Gibson
Well, my update would be that in the first half of the year; I think we explain previously, although Dana gave probably the better run rate of precisely what we said. Joe Carleone is here, he’s very familiar with the operation, but anyway we were attempting to scale up production and a certain degree of conversion to continuous process and we had problems with it, we think those problems are behind us.
What I mean by that is, that you have efficiencies and how long it takes to produce the batch and if it’s extended, then obviously that costs you the time and as I say, I think that’s behind us. Do you have anything you want to add to that Joe?
Joe Carleone
No, I think absolutely right. We did have a start up process and it took us a little longer to get there to meet our goals and that cause reductions in margins that we reported at the main meeting. We’ve seen those improved significantly and now are approaching our margin targets for that particular product.
Zaheed - BWS Financials
One last question, how certain are you that you’ll recognize revenue from the big quarter in September that’s expected?
John Gibson
I’m not sure what big order you’re referring to.
Zaheed - BWS Financials
It was a question direct from Hamed, so I’m assuming he had spoken to you about it.
John Gibson
Let me ask Dana to respond.
- To read the full transcript on Seeking Alpha, click here »
