Question-and-Answer Session
Operator
(Operator Instructions)
Your first question comes from the line of Suresh Balaraman with ThinkEquity. Please proceed.
Suresh Balaraman, - ThinkEquity Partners
Thanks guys. When we look at your third quarter historically, it has been up an average of roughly 15%, when you look at all of the data since you went public. And when you look at the quarter, the March quarter, there doesn't seem to have been any [equivalents] because your core products are pretty much in line with seasonality, they are still down probably slightly. So, is there any reason to expect that the June quarter would not have a typical historical seasonal descent?
Bill Noglows
Suresh, this is Bill Noglows. Q2 for us is typically our seasonal low quarter and we tend to be down roughly about 4% to 6% historically. Yes, the third quarter, as you know, we don't guide on earnings, but as Bill said in his script, we see our sales in the first couple weeks of April being at the same level as we saw through this quarter which we think was a relatively strong quarter given that we only saw a sequential drop in our core CMP slurry business by about 2%. So, we remain, I said in my prepared comments we continue to think that unit starts and wafer starts will remain relatively strong for the remainder of the fiscal year in the high single-digit kind of growth rate -- and we think it's potentially going to be a pretty -- relatively strong year for the Company.
Suresh Balaraman, - ThinkEquity Partners
When we look at the inventory levels, your balance sheet, the inventories are up pretty significantly compared to December -- in March despite the fact that revenues are pretty flattish.
Bill Johnson
That's right. And most of that was attributed to our pad business. We were ramping volume pretty rapidly and filling the pipeline and preparing to serve these high volume customers. So, we added several million dollars of inventory and really pad-related. And it's not just finished goods, it's kind of raw materials work in progress and finished goods. But most of that was pads-related.
Suresh Balaraman, - ThinkEquity Partners
And the last question is, $3 million increase in the cost of goods sold just because of the manufacturing yield seems kind of high because your total revenues from pads only about the same level. Do you have like a bunch of products at 0%. It should have been pretty big, an issue and when you go to the next quarter you said it will take several quarters to optimize. I don't know how we should read it. Are we going to get to June quarter where your pad would not have such a major impact on a [non-recurring basis]? How should we rate that statement?
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