Question-and-Answer Session
Operator
(Operator Instructions) Mark Miller.
Mark Miller - Brean Murray, Carret & Co.
Congratulations on a wonderful job done. It’s very impressive to me. I just wanted to talk a little more about Komag, and you say there’s still more room for margin improvement as we go through to the end of the year. What are you estimate that Komag being accretive this quarter added to your margins? Was it around 75, 100 basis points?
Tim Leyden
About 80 basis points.
Mark Miller - Brean Murray, Carret & Co.
Okay. Second question; was there any change -- did you do more heads internally this quarter or was that flat roughly quarter to quarter in terms of percentage of total heads you did internally versus externally?
John F. Coyne
I think roughly on a percentage basis, roughly flat from the prior quarter.
Mark Miller - Brean Murray, Carret & Co.
Okay. Could you just break down the inventory for me? I know it’s up somewhat. It’s not unusual but could you break it down? And maybe you did that and I missed it in terms of finished goods and raw materials and work in progress.
Tim Leyden
Actually, our inventory turns improved from 13 to 15 in the quarter and finished goods were up from 151 up to 157 million, but as we indicated, that’s actually down from the same period last year.
Mark Miller - Brean Murray, Carret & Co.
All right. Again, wonderful job. Thank you.
Operator
Richard Kugele.
Richard Kugele - Needham & Company
Thanks a lot and I guess first, since it will affect your gross margin and my model, is Komag actually able to help you on some of these newer areal densities you are announcing, at least in the desktop side? Or are you buying those parts on the outside and using Komag for more the mainstream?
John F. Coyne
Rich, we’re both in the June or May and October 2.5-inch programs and in the 3.5-inch 320-gig per platter that we just announced, we have capability on both our internal heads and media, as well as capability from our external suppliers. So we use a blend of both.
Richard Kugele - Needham & Company
Okay, and then from a capacity standpoint, how long -- I guess a lot of the $100 million you’ve spent to date has really been just on bringing the media business up to a greater percentage perpendicular, but how long do you think it will be before you actually have to add capacity on that side?
- To read the full transcript on Seeking Alpha, click here »
