Question-and-Answer Session
Operator
Ladies and gentlemen we’d like to begin by remind you that the information in this conference call includes certain forward-looking statements that are based upon assumptions that in the future may prove not to have been accurate or subject to significant risks or uncertainties including statements as to the future performance of the company. Although the company believes that the expectations reflected in these forward-looking statements are reasonable it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct.
Factors that could cause results to differ include but are not limited to the loss of primary customers, successful implementation of the internal plans, product demands, the impact of competing products, increase in the price of raw materials and active ingredients, successful acquisitions and integration of additional product lines and businesses, the condition of capital markets on interest rates and currency fluctuations and general economic conditions, environment liability, the ability to obtain registration and re-registration of products, increased environment compliance cost of products and general political and economic risks and uncertainties.
(Operator Instructions) Your first question comes from Rosemarie Morbelli – Ingalls & Schneider.
Rosemarie Morbelli – Ingalls & Schneider
You made quite a lot of cuts in SG&A and also towards manufacturing efficiencies, are those permanent cuts or did you eliminate some expenses because of the lower level of demand and they will have to come back and therefore as a percentage of sales GS&A may go back up in the future when markets pick up?
John V. Sobchak
Rosemarie when you compare let’s say the fourth quarter of this year to the fourth quarter of last year keep in mind that a good portion of the SG&A is variable, as we mentioned. And also, there was approximately $1.1 million of amortization expense in the second half of fiscal 2008 that wasn’t there in the second half of fiscal 2009. Of the reductions or operating efficiency improvements that took place in the second half of 209, most of those were centered around optimizing the supply chain and we would not expect for those to come back on a percentage of sales basis to the same level that were there in fiscal ’08.
Also, in the second half of fiscal 2008 keep in mind that we were operating the electronic chemical business under a transitional services agreement with Air Products. We had estimated that that transitional services agreement cost us on average a $175,000 per month more than it’s costing us now to operate it on our own.
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