Question-and-Answer Session
Operator
(Operators instruction). Our first question our first question comes from the line of Adam Greene, J.P. Morgan. Please go ahead.
Adam Greene
Hi guys, I had a couple of questions, I just wanted a little more commentary on for the growth increase in second half of the year, specifically, 3Q, 4Q you talk about double digit growth due to increases in anilities, that’s just based on this conference due to historical trends or just what other kind of market dynamic are you seeing that gives you the confidence that you could return to the double digit growth?
Stephen Garcia
I think what we look at in marketplace and what the survey data be more in depth analysis on the impact of the economy, the strength that we had in first quarter over a year ago despiteness in our expectations. We believe the guidance that we put out there is appropriately cautious, conservative and prudent as we work at expense management, and if one looks out normal trends in this business in 2007, 2006 we historically have and seasonality of the holidays is stronger back half of the year then we do the front half.
Adam Greene
And then for the leverage on the SG&A as a percentage or Rev, due you expect that it was kind of linearly decrease or sort of a step down dramatically in the second half of the year?
Steven Carlson
We believe that it will be more of a linear type of decrease taking place throughout the year.
Adam Greene
And then on gross margins you said that it’s suppose to slightly improve in '08, is that slightly improve from 81% to 1Q of improve from the 82% for the historical range?
Steven Carlson
From the Q1 prospective because of the sales incentives that were offered of surroundings on the Décolletage launch.
Adam Greene
And then finally Nu-Derm a you commented was down, I mean, what can you -- due to reaccelerate, do you think that you got too many products in the bag, and you’ve talked about adding three to fives reps per quarter, at what point do you think `08 to put another way, what number do you think you need to get to feel confident you have the right size sales force?
Stephen Garcia
Let me answer the back half of that question first. As we’ve always indicated we look at adding new sales people and investing in our sales organization is in important component of driving growth. We’ve always done that based on new account demand, and one of the very positive signs that we still saw in Q1 as we have historically is we continue at a very strong new account growth and adding over 200 in the quarter. Respectively we work to continue to add sales people as that account demand requires. Today as we look at the guidance that we have put out there, we will adjust our sales growth accordingly with the demand in supporting that revenue projections. As we looked at NU-Derm what we indicated in the discussion part of this is we saw those larger more stable accounts in the back part of the quarter become more cautions in their purchases. Given the lot of our larger accounts, their historical business volume is more associated with NU-Derm and that’s where we saw that adjustment. As we look at modeling and forecasting the business going forward, we think we reflected appropriately that more cautions conservative and a returns in NU-Derm growth.
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