Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Joel Havard - Hilliard Lyons.
Joel Havard - Hilliard Lyons
Jon or Kent, on gross margin, a 35% reduction in the breakeven point the old target was 20%. What’s a reasonable bogey to hangout there internally this year? Maybe you won’t get there, but this is what you’re working for based on the previous restructuring round.
Jon Wolk
Joel, we’re not guiding. So we’re not going to give out internal gross margin targets for the year, but I would say that in general, we have maintained that we should be able to operate in the 21% to 23% gross margin range in a reasonably healthy market and, by lowering our breakeven point as we have, it’s conceivable that we could operate a bit beyond that target once the market has come back. In the meantime, where we operated during the first quarter, I think is roughly representative of how we’re going to operate if sales continue at these levels.
Joel Havard - Hilliard Lyons
That was my concern here, and I was trying to be hypothetical. I appreciate that you all weren’t giving guidance, but if we say sort of at this level, was there rather, anything non-recurring, restructuring related charges, non-operating cost that were built into the Q1 gross margin. Was that truly an organic or fundamental throughput metric?
Jon Wolk
The 11.7% gross margin that we report, Joel, is pretty clean. We have a separate restructuring charges line?
Joel Havard - Hilliard Lyons
I saw the 2.5 or whatever it was, but there wasn’t other sort of unallocated tucked into gross margin, cost of goods.
Jon Wolk
There are still cost that will come out of the operating run rate, to answer the question.
This was a transition quarter in the sense that we were in the process of closing two of the three plant operations that we did close. So there were some charges in cost of sales that ultimately won’t continue to reoccur, but the 11.7% was a pretty clean quarter.
Joel Havard - Hilliard Lyons
Lastly, then probably for you, Jon, given the, you know, the restructuring behind us, the removal of two and at least temporary closure of the third, what does D&A look like for this year?
Jon Wolk
It’s going to be pretty comparable to what it was last year, Joel. We had accelerated a little bit in a couple of plants that we did close operations in, but it’s not going to be very different from what it was last year.
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