Question-and-Answer Session
Operator
(Operator Instructions). And our first question comes from Kevin Kessel - Bear Stearns.
Analyst for Kevin Kessel - Bear Stearns
This is (Yeung?) for Kevin. A couple questions; first though some bookkeeping questions. What is the depreciation and amortization for this quarter?
Matthew W. Long
The depreciation was $5.1 million and amortization was $800,000.
Analyst for Kevin Kessel - Bear Stearns
So, what’s the stock expense for this quarter?
Matthew W. Long
It was $53,000.
Analyst for Kevin Kessel - Bear Stearns
My next question is regarding your largest customer HP, what’s the percentage of sales for them this quarter?
Vinod M. Khilnani
I am looking at the full year numbers first, so let me give you full year because the quarters may fluctuate. The full year number for HP was 17.1% for 2007, and the same number for last year was closer to I believe 22%.
Analyst for Kevin Kessel - Bear Stearns
So, going forward for 2008, what’s the percentage range do you expect from HP?
Vinod M. Khilnani
We have stated that due to end-of-life products, we will continue to see that percent come down, and as we have stated before, the focused area in EMS, which are medical, industrial and defense and aerospace, will continue to go down as a percent of total EMS business.
So for example, full year 2007, those three focused areas were close to 26% of the EMS business, while they were close to 20% last year. So we continue to broaden and grow that piece which is our focused area because we have chosen those areas to target.
Analyst for Kevin Kessel - Bear Stearns
So maybe we can switch gears a little bit. Regarding your EMS business we noticed that for this quarter your operating margin is basically flat on a sequential basis, it’s about 3.6%, which we noticed that it is still below your 5% target. So, going forward, can you give us a little bit of color on your margin improvement for your EMS business?
Vinod M. Khilnani
On a full year basis, the EMS margins have improved nicely from I believe approximately 2.5% or so. Actually on a full year basis, EMS has gone from 1.6%, which was fairly low, to 2.5%. If you look at it on a quarterly basis, they have gone from 2.6% last year in the fourth quarter to 3.6% in the fourth quarter of this year.
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