Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Jay Harris with Goldsmith & Harris.
Gary Giblen - Goldsmith & Harris
It’s actually Gary Giblen sitting here with Jay. A couple of questions; the inventory looks good. It’s up 6% versus up 25% on revenues, so what led to that good inventory performance? Could you explain a bit?
Frank A. Newman
I don’t know that we -- that there was anything particular, Gary. What we try to maintain is based on the lead times that we have with our principal manufacturers, a sufficient cushion so that interruptions in supply don’t imperil sales performance.
We brought on a second manufacturer during the -- towards the end of the quarter. Their initial shipment was somewhat delayed as they were processing -- it is actually because of some packaging issues that they had that they were unable to deliver it on time and so I think that dipped our inventory a little bit lower than would otherwise have been the case without that minor interruption, which has not been resolved.
Gary Giblen - Goldsmith & Harris
Okay, great. That’s helpful. And the -- should we think in terms of 25% to 30% revenue growth until mid-’08 when you get the increased sales force productive?
Frank A. Newman
We don’t get terribly specific on that, Gary, as you know. I mean, we were during the road show that we had a week before last, I think we were talking about in the range of 20% increases and I think that’s about as specific as we’d want to be at this point on that.
Gary Giblen - Goldsmith & Harris
Okay, so that’s a better number. And what are the largest elements of the marketing expense, other than the cost of salaries of people that -- is it travel, is it entertainment, is it training? What are the bigger items?
Frank A. Newman
It’s all of the above but certainly the salaries and bonuses are far and away the largest percentage there. The next category would be T&E. Obviously these are people who are on the road virtually all the time and so those expenses mount.
The other thing that’s included in our sales and marketing budget is advertising, which would be the next largest item, and then the other expenses related to training and holding sales meetings and printed materials.
Gary Giblen - Goldsmith & Harris
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