Question-and-Answer Session
Operator
Thank you, Sir. Ladies and gentlemen, at this time we’ll begin the question and answer session. (Operator Instructions). Our first question comes from the line of John Franzreb with Sidoti and Company. Please go ahead.
John Franzreb – Sidoti and Co.
... where we are on the Power/Vac integration and that process, what physically remains to be done, and what’s the time line for that?
Thomas W. Powell
We missed the first part of your question somehow, John. What was it?
John Franzreb – Sidoti and Co.
Sure. Power/Vac, where are we in the integration process, what physically still needs to be done, and what’s the time line for that?
Patrick L. McDonald
John, this is Pat. Good to talk to you again. We are, as Tom pointed out, in the last stages of this. We are in full assembly down in our Kurland facility of the Power/Vac product line. We are moving ahead with our integration move of the fabricated parts now and that will continue in December and into the first quarter of 2008. So that’s the last parts of the transition that are going to be required to be finished up with the fabrication side of things.
John Franzreb – Sidoti and Co.
Okay. And based on what you know now, are you guys still sticking to your operating margin targets that should exceed the previous peak in cycle based on what you’re seeing on the current order books for the cycle.
Patrick L. McDonald
After we get through the transition side, as we’ve talked about with everybody, we are still approaching and believe that we have the capability to approach the peak of our margins that we have seen in the past. But we still do have to get through this finalization of the transition period and then get our people up to speed in the second half of ’08 to be able to get in those margin level targets.
John Franzreb – Sidoti and Co.
Okay. Thank you. I’ll get back in the cue.
Operator
Thank you. Our next question comes from the line of Ned Borland with Next Generation Equity Research. Please go ahead.
Ned Borland – Next Generation Equity Research
Good morning, guys. Just kind of a follow up question on the last one as it pertains to margins. If I look at the guidance on revenue and EPS, I mean, I’m looking at a gross margin range of about 19% to 19.5% or so. Are we still looking at gross margins, say in the first half, being more like 17%, 16%, and as you get through the transition what are we looking at in the second half of fiscal ’08?
- To read the full transcript on Seeking Alpha, click here »
