Question-and-Answer Session
Operator
(Operator Instructions). The first question comes from Katherine Lu - Oppenheimer & Co.
Katherine Lu - Oppenheimer & Co.
First of all, I did not catch this part; could you repeat what’s your current number of sales people?
Preston Romm
We have 134 which includes 117 of direct sales people; 134 total which includes inside and sales management.
Katherine Lu - Oppenheimer & Co.
You also mentioned about some personnel cuts, about 18%, is that correct?
Preston Romm
Right.
Katherine Lu - Oppenheimer & Co.
So, that’s more on the administration part?
Preston Romm
Yes. It’s non-sales, it’s the corporate people.
Katherine Lu - Oppenheimer & Co.
It seems from your press release you have been disappointed with the SoluCLENZ launch. I’m just wondering because it is a very challenging marketing environment and a lot of companies are using cost-cutting as a tool to achieve bottom-line growth; at which time would you feel you would say that is the point that you can stop maybe promoting this product and if there is any area you can see this year that will save your operating cost besides the non-sales personnel cut?
Steven R. Carlson
I think broadly certainly given this economy, we would continually look at what is prudent for us to reduce in SG&A expenses on an ongoing basis. As it relates to SoluCLENZ, as I indicated on the call, we are extremely bullish on the clinical efficacy that the studies continue to demonstrate to us. As I indicated, we have just put all the appropriate tools into the field late in the past year and early in the first quarter. We recognize, and I think you do also, that the dermatology prescription marketplace requires more patience and diligence than the direct selling business model we are in, in physician dispense, and I think appreciably there is a very important meeting starting today and going through the weekend with the American Academy of Dermatology in which additional information and clinical data will be released, and last but not least, as we indicated, we will continue to evaluate our options on how to optimize the value of both this product and the technology.
Katherine Lu - Oppenheimer & Co.
I was impressed by Nu-Derm Condition and Enhance related performance in 4Q, but what I noticed is some smaller product lines like ELASTIderm or CLENZIderm actually had more dramatic sequential decline. So, I am just wondering if you can elaborate the market dynamics for those two lines. Have you seen any material change in competitive landscape that’s impacted and will impact your sales this year?
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