Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Analyst for Timothy Arcuri - Citigroup Smith Barney.
Analyst for Timothy Arcuri - Citigroup Smith Barney
Can you give us any sense for the gross margin on a combined basis in Q1?
Mark J. Gallenberger
At this point we can’t give you any color like that. What we plan to do is give you additional information below the revenue guidance that we have provided today, which would be gross margin and EPS assumptions, at the October mid-quarter update call that Dave alluded to.
David G. Tacelli
One thing that I’d like to add is that in that October call we also plan to talk about the new structure, give some color on product road map, and also talk about the road map as it’s been rolled out to customers. So not only will there be some financial pieces of that update but there will also be color on the markets, the customers, and how the merger plans have been executed to that point.
Timothy Arcuri - Citigroup Smith Barney
Maybe as a follow up, I guess I’m just trying to get my arms around it a little bit just for the model, but can you give me any sense for what the gross margins are for just the service business at Credence?
David G. Tacelli
Any discussion of the Credence business we have to stay away from at this point. You know that.
Mark J. Gallenberger
We’re two separate companies still so we really can’t be commenting on Credence’s business at this point in time.
Timothy Arcuri - Citigroup Smith Barney
Fair enough. Maybe a bigger picture question then. If I look at the Credence side of the business, they reported their results for this quarter obviously and it looks like there’s very little product left there and it’s mostly service at this point. Is the big deterioration in share there a driver of the need to realize additional cost synergies beyond the initial $25 million target and does any of this incremental savings, I know you guys haven’t put any fine comb on it, but is it coming as a result of plans to maybe shutter certain product lines once the merger’s complete?
David G. Tacelli
Yes. The first thing, let me talk about the cost synergies. All of the planning process was done when we looked at the markets and when we looked at the products that we wanted to go after, none of the cost synergies has to do with any kind of deterioration as you mentioned. So it was all part of the planning cycle as we went into this integration process. As far as any other comments on pieces of business on the Credence side, we can’t comment at this point as we’ve said before.
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