Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Kyle Evans with Stephens. Please proceed with your questions.
Kyle Evans - Stephens
Hey, good afternoon everybody.
Al Angrisani
Hey, Kyle.
Kyle Evans - Stephens
May be you can give us a little bit more around your comfort with the annual guidance in the ISS business with regard to win rates, and pricing trends, and competition, and customer satisfaction?
Al Angrisani
We reaffirmed our guidance for the year, so we don't say that lightly. I think pricing is stable; the gross margins are healthy and good; expenses are under control, and I don't want to get in to bid activity and volume, but all the indicators at this point in time seem to be pointing to reaffirmation of our guidance for the year.
The underlying issue is, things are little slow out there this quarter. We just saw before the call a piece coming out of one of the market research industry institutes that said across the industry, bidding was pretty flat for the year, for the first quarter. So that's had a little impact on everybody's business. But we're very excited to see the backlog in March start to pickup and the trend lines are moving in the right direction. So we're treating it as business as usual, and expect to be where we said we're going to be at the end of the year.
Kyle Evans - Stephens
And the customer satisfaction levels still where they were for most of last year?
Al Angrisani
Very high, it's not higher, 97%.
Kyle Evans - Stephens
Great; second question, Bob may be some commentary on the gross margin improvement that you see in the business model for the rest of the year?
Bob Bies
Yeah, we're really pleasantly surprised with the first quarter coming in at 78%. The over achieve on Comp Shop is playing in to it; it's virtually 100% gross margin in that business. And also we're seeing some nice trends in the labor lines in the ISS business, probably the early dividends from the UPS worldwide platform, as well as now that supply chain has managed from one office on a worldwide basis, some of the discipline that we had in the US that we established in '06 and '07 is now coming in to the fold in Europe.
And so we're optimistic that we're going to be able to really leverage our scale, and get good supply chain costs, get those down as a percentage of revenues and continue to drive our labor, hold the labor line or reduce the labor costs as a result of the worldwide UPS platform.
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