Question-and-Answer Session
Operator
(Operator Instructions) The first question comes from the line of Jimmy [Sheber] – [Rice Felcher].
Jimmy [Sheber] – [Rice Felcher]
Could you go over the tax rate? I want to make sure I understand that. Let me repeat, you provided an 80% provision of income before taxes here. I understand there is some catch up from the lower rate last quarter. Does that imply you are looking for some rather hefty profits in Q3 and Q4 or how should I look at that?
Gregory Kleffner
As you noted, the effective tax rate for the second quarter was 72.6%. You are right, that resulted from our changing from the discrete period method we used in the first quarter. At that point we had not been able to make a reliable estimate of the annual effective rate for the year. We now believe a reliable estimate can be made and so we have calculated the provision using what we estimate the rate for the entire year will be which is the 35.4%. So that was the catch up second quarter versus first quarter.
Jimmy [Sheber] – [Rice Felcher]
A minute ago you mentioned $20 million in a tax refund. Did I understand correctly in you said that is not included in the $45 million shown on balance sheet at the end of the quarter?
Gregory Kleffner
That is not included so it is in addition to. Yes.
Operator
The next question comes from the line of David Mann - Johnson Rice & Company.
David Mann - Johnson Rice & Company
In terms of the cost savings estimate you had given earlier in the year it sounds like you just said you had $30 million lower SG&A year-to-date. Can you reconcile that with the previous estimate of $40-50 million in savings for the year? Does that now mean we should expect at least the $50 million or perhaps something higher than that?
Gregory Kleffner
At this point we are on track to meet and possibly exceed the previous estimate of $40-50 million for SG&A savings.
David Mann - Johnson Rice & Company
In terms of what you have said earlier about the supply chain can you give us a sense on how much benefit you might expect in terms of those savings from the back half and just remind us if there is sort of a $20 million SG&A over the course of the implementation?
- To read the full transcript on Seeking Alpha, click here »
