Question-and-Answer Session
Operator
Ladies and gentlemen, at this time, if you would like to ask a question, please press "*" "1" on your telephone. If you are using a speakerphone, we ask that you make sure your mute function is turned off to allow your signal to reach our equipment. Once again it is "*" "1" please. And we will go first to Sandy Harrison with Signal Hill
Sandy Harrison - Signal Hill
Thanks. Good afternoon guys. How are you?
Michael Salameh
Hey.
Sandy Harrison - Signal Hill
Just a quick kind of tightening in on some of the outlook you guys gave. So the margins, you had a real nice bump in the September quarter as far as -- it looks like not having the mass charges that slip into Q4, I got that. And then, the top or gross margin was a little bit better as well. So with it sort of slipping back on the December quarter, or given some of that back, could you help us understand a little bit, sort of, of the mix issues? Is this some of the more legacy products with the higher margins becoming less of a percentage? Have you guys made sort of a lot of the early moves in the PCI Express? Just if you could give a little bit more to that commentary?
Mike Salameh - President
Yes, Sandy. One of the things I want to do is 62% that we did this quarter was off of 59% last quarter. I think that what you're seeing here is some of the variability that happens because of the range in gross margins between our legacy products and our PCI Express products. Things are improving in general, but you shouldn't read that as a trend. I think we're looking at margins going forward in the very low 60s because as we work the cost improvement against the improving or the increasing mix of our PCI Express products, staying in the 60s will be plenty of work rather than to try and drive them much higher than they are.
Relative to the spending, I think what happened was, we have moved some of the costs of these big tapeouts spread over several weeks, and more of it made it into the fourth quarter than into the third. I think if you look at what our expenses were in the third and fourth quarters in the models that we had at this time last quarter, the total for the second half is going to be about the same. So we're basically moving some expense into the fourth quarter from the third quarter, although we do expect that the first quarter numbers will be down again.
- To read the full transcript on Seeking Alpha, click here »
