Question-and-Answer Session
Operator
(Operator Instructions) And your first question comes from Gary Liebowitz from Wachovia Securities. Please proceed.
Gary Liebowitz – Wachovia Securities
You mentioned in the10Q that there were a number of technical problems on development programs and also in a BED product line and it looks like you booked a provision for that. Could you tell us, I’m trying to get a sense of just how pervasive these are and how much $0.06 reduction to second quarter earnings are a result of this? And do you anticipate further provisions having to be taken in the second quarter?
O. Joe Caldarelli
Yeah, there were higher than average in part because we had so many development programs going on and so you know I wouldn’t consider them to be extraordinary except for the fact that the base of development is much higher right now hence the probability, as is always the case in development programs, the probability is higher. So yes there is some possibility as we continue to have a fairly high percentage of development programs on our backlog that there may be needs in the future to take some additional provisions. There are none right now that were aware of but on a probability basis it could very well come up. You know what we’ve done so far is not extraordinary in the sense other than we have a lot more that were dealing with right now.
Gary Liebowitz – Wachovia Securities
So, since December, you have not booked additional provisions, so the material knock down will have to be called out in 10Q like you did this time?
Joel A. Littman
Not yet, in the second quarter, no. We really don’t expect anything that would be material to be honest, Gary.
Gary Liebowitz – Wachovia Securities
Okay. Also if you could clarify, the delays in defense programs, or defense orders that you sighted. Are they all for sole source programs?
Robert A. Fickett
Yeah, the ones that were called out are for sole source programs, we are also seeing even on the competitor’s side, it is strung out a little bit longer, but the majority of the ones called out were sole source.
Gary Liebowitz – Wachovia Securities
One more before I get in the queue again, the R&D for Win-T, I guess you start shifting in the back half of the year, does that start to trail down starting in the second quarters? I think you said $600,000 in Q1.
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