Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Shawn Hannon - Needham & Company.
Shawn Hannon - Needham & Company
Just a quick question around your gross margin that actually seem to be a pretty decent accomplishment around the lower revenues you had in the quarter, can you perhaps provide a little bit more color around what drove that upside in the margin line?
Douglas Bryant
The upside was primarily through the sell through of previously written down inventory. So, by the quarters we had taken reserves on some inventory that proved to be conservative so to the extent that we sold that through this quarter that benefited the margin by approximately 9/10 of the point.
Shawn Hannon - Needham & Company
So, beyond that 9/10 of the point, there was still some relative strength. Is there a way to perhaps elaborate on that a little bit as well?
Douglas Bryant
Through ups in that is 15.4 if you take out the benefit of the sell through there. That actually was down from the prior quarter. It was down because of the lower volume compared to the prior quarter and so the rest of that would be based by the customer mix.
Shawn Hannon - Needham & Company
Can you talk a little bit about the cost reduction plans that you folks are working through, is there a way to do maybe expense on where it is that stands today and how it is that we should be thinking about that?
Greg Shortell
Shawn, I think that we have aligned the company kind of on a pay-as-we-grow basis and that the issue of cost reduction and efficiencies are coupled together not as a one-time exercise but as all the time exercise and I really feel that the expense levels that the company has should be consistent with the revenue levels that we are achieving in the marketplace and not have one get too far ahead of the other. Having said that, any adjustments that we make are always based on not disrupting our customers or any critical positions or skills that we have in the company. But not looking forward right now taking no sort of guidelines, we are looking at the integration of the company now that we have automated, as I said earlier, a lot of the backend systems have been automated, we think that going forward we can build on that in a cost reduced way.
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