Question-and-Answer Session
Operator
(Operator instructions) And our first question will come from John Franzreb.
John Franzreb – Sidoti & Co.
Good morning Sue and Laura.
Laura Hamilton
Hai, John
Sue Knight
Good morning.
John Franzreb – Sidoti & Co.
I'd want to talk a little bit about the cross issues you're having in Test. It started in the summer of 2007, and in your prepared remarks you said, it should be done by the fourth quarter of this fiscal year. Could you give us a little color, why it's taking so long, I thought you did corrective measures, prudent prices that wouldn't be an issue any more? What's the problem here? Why it's taking so long?
Laura Hamilton
Okay. This is Laura. Okay, you asked first going back. Yes, originally we did say, we thought it was behind us. The reason it takes long to get through these projects is essentially that we are doing product development on customer order. And this was – what we said was that we have a larger number of – actual developments in our mix in our custom mix that started per se last summer. And so, we've got a handful of projects that have more development and it's really that (inaudible) in nature of development, and so we have a design and we start executing against that design and then we learnt something about that design that tells us that it's not optimized or it's not fully capable of meeting the acceptance criteria that we've agreed to in the order. Now, normally these cycles happen in your R&D line, and you build that in sometimes to the schedule in a customer order. On these orders we didn't enough time or enough cost and to having multiple iterations to get these designs right. So, last quarter we said, rather than tell you the day that'll be done, we are going to contain the cost – other cost, we are going to do cost cutting our containment measure and we are going to use all of our levers to ensure we still deliver the year. At this point when we look at this portfolio, I think what Sue was saying is, we've made progress on the majority of these projects, we now have confidence that we will gain acceptance for these projects in the second half. And so, we think then this is contains to (inaudible) and the quality of our backlog at this point, there is less development in our backlog going forward.
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