Question-and-Answer Session
[Operator Instructions]. Our first question today will come from Tom Gallucci. Please state your company name and then you may ask your question.
Thomas Gallucci - Merrill Lynch
Merrill Lynch. Good evening everybody. Two quick questions here, first in the IT business, you talked about reducing cost trying to be more efficient. Can you give us some ideas how flexible that business really is and the types of things you can do? And then the second one is just a quick one. You said you built inventory a little earlier this year. Given the credit environment, you seem to be spending a bit less on buybacks and things but you built inventory early, so any reasoning there would be helpful. Thank you?
John H. Hammergren - Chairman, President and Chief Executive Officer
Thanks, Tom for the question. I'll take the IT question and ask Jeff to comment a little bit about inventory. Clearly, the first thing we could do really companywide is to crank back on some of our discretionary spend, things like travel and other kinds of activities that will hopefully have nominal effect on sales, but that have a big effect on expense are places we'll go to first.
In the Technology Business in particular, we're not likely to touch any of our development activities or any of the things that have a long term paybacks. But in some areas where customers may not be ramping up to their deployments on products, our implementations because they're trying to reduce their own costs or in areas where they maybe shifting their purchases of one product to another, and we could reorient our organization in a different direction. And in some places we may have some more cost reductions.
So I think we will be able to effectively offset some of the change in demand here, clearly we're not likely to get the kind of margin expansion we had hoped for in the IT business this year. But we still expect to get positive leverage in both of our businesses. And I think one of the real positive things that Jeff mentioned, definitely when he was talking about Distribution Solutions in fact on a full year basis, we still expect to get margin lift. And if you look at our sales rate in that business, it is very strong. So if we get margin lift on a business that's going that well in sales, we're going to get greater earning throughput the last half of this year, particularly the fourth quarter. So, we're still excited about that business in particular and how it's positioned.
- To read the full transcript on Seeking Alpha, click here »
