Question-and-Answer Session
Operator
(Operator’s Instruction) Your first question comes from Steve Crowley - Craig-Hallum.
Steven Crowley – Craig-Hallum Capital Group LLC
Question for you, obviously it seems like your Animal Safety business is firing on some more cylinders versus last year, and you bolted at a few more. I am wondering, what kind of opportunity there is for you to improve the gross margins and make be more importantly the operating margins of that business? I am wondering what that picture of improvement might look like? Is it one of steady improvement? Are there some step functions in front of you? How can we look at that?
Jim Herbert
I think that we will see it is going to tend to look more like steps I think, rather than steady, as I mentioned in my comments, right now the products that the are marketing are made in two different plants. One in the United Kingdome and one in the United States on our total manufacturing basis, we do have the capability at our Randolph, Wisconsin plant to manufacture those. The only thing holding us there are about 234 registrations around the world with EPA-like registrations that we have to get in place, which will move the products and allow us to move the products to a different manufacturing site. Obviously one of the first ones we want to close down is the one in the United Kingdom or not close it down but we want to get our products out there, but then we have others. So, if we look at the fact that we are to have in place most of the infrastructure in Randolph in a way of other than I mentioned $300,000 to $400,000 probably of additional equipment, but we have got the people, we have got the facility to do that.
So that would make kind of step-wise, as we begin to be able to manufacture more products our self. I think you asked the right question that, what improvements or will it make to the operating line. This from a marketing standpoint is pretty much a bolt-on of what we are doing in Sales and Marketing. We are already had a group that was part of the Animal Safety that was addressing. What we call the integrator business or the large producers of swine and poultry. We have added a few to that, added a few product management spots but basically, it is that same sales organization, that has already proven what good relationships with a lot of customers, they are going to be carrying these products forward. So that is on of those that is not unlike some of the others that we have done it and as we wear along over the next year, I think we will see that particular product line it was improvement of both of the gross margin line as well as the operating line. I think there are some other opportunities that Lon might want to address.
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