Question-and-Answer Session
Operator
Thanks, sir. Ladies, and gentlemen, we will now begin our question-and-answer session. (Operator instructions) Our first question comes from Scot Ciccarelli with RBC Capital Markets. Please go ahead.
Scot Ciccarelli - RBC Capital Markets
Hey guys, Scot Ciccarelli. A couple of questions for you. Kevin, you made the brief comment regarding first quarter expectations regarding sales declines and earnings declines. Does that encompass both segments of the business or is it more to the deterioration of the satellite?
Kevin Duffy
No, that takes into account the overall total business, Scott. Okay that’s fine.
Scot Ciccarelli - RBC Capital Markets
Okay, that’s fine. And it is accurate to say, it sounds like you guys talked about a lot of products, is it accurate to say that your product launch platform is a lot more aggressive this year than it was this time last year?
James E. Minarik
It’s definitely stepped up, Scott, and it’s pretty much firing on all cylinders.
Kevin Duffy
Yeah, the security and remote start products that Jim mentioned, we haven’t turned that line for probably the last four or five years. So it’s the most substantial change we’ve made in that period of time.
Scot Ciccarelli - RBC Capital Markets
What was the impact of Trilogix in the quarter?
Kevin Duffy
Trilogix in terms of I’ll first of all say we were sourcing from them previously and reselling their products. So I will say it’s difficult to pull them out as a separate entity, because of that effect, if that makes sense. You were buying their product and reselling it because we didn’t have a comparable SKU. So when adding it in, it’s actually replacing existing SKUs that we had. That product category is an important category and products that we sold branded by them were in the $3 to $5 million dollar range.
Scot Ciccarelli - RBC Capital Markets
Lastly, there’s a lot of uncertainties in the business, but are there any broad balance sheet targets, just we can kind of gauge progress against some sort of benchmark?
Kevin Duffy
Going into this year, I’ll say one of the key metrics we’re going to follow is cash-to-cash days. You know, every day we improve and our GSO is worth over a million dollars in debt retirement. Every day we improve in DIO or DTO is about $600,000 dollars in debt retirement, so it’s a critical metric. I mean from Q406, we’re at roughly 260 cash days and Q407 we were down to just under 150 days. So going forward, that is clearly the target we’re driving towards. We’re going to manage GSO more tightly. We’re investing in inventory management software to help drive down DIO and as I mentioned, we’ve partnered with our suppliers to improve our AP terms throughout the year. So all three of those components are something we’re clearly focused on improving this year.
- To read the full transcript on Seeking Alpha, click here »
