Question-and-Answer Session
Operator
(Operator Instructions) Our first question is from the line of Jim [Harken] with Premiere Capital Management.
Jim Harken - Premiere Capital Management
I’d like to get a little more color on the agreement with Arcadian. When would you envision this contributing materially to revenues?
Richard B. Gold
It depends -- let me just start by saying we are working with them on several potential projects right now. There are proposals outstanding from Arcadian to customers that involve our product, so I think that depending on those, on the timing of those, we could certainly see some this fiscal year but this is really something we would expect to contribute in a meaningful way in fiscal 2010.
Jim Harken - Premiere Capital Management
Can you give me a sense of the size of the orders that you are looking at with them?
Richard B. Gold
I think it’s premature to talk about that but the kinds of projects that we are talking about here are pretty substantial and could be, you know, certainly in the six or seven figure range, depending on the scope of the individual project. And some of those will play out over time.
Jim Harken - Premiere Capital Management
And how about the gross margins you would have on sales to them? Would they differ materially from what you get through your direct sales?
Richard B. Gold
I think from a standpoint of is there margin stacking because of the extra tier there, there’s a little bit of that but what this really allows us to do is to get the extra scale, so fundamentally the economics that we would be seeing for orders of comparable size if you aggregate them together, we would expect to be comparable to other customers that were buying in those kinds of aggregated volume.
Jim Harken - Premiere Capital Management
Okay.
Richard B. Gold
Now, one thing I should mention is that these parts, they are based on a common platform that we already have but because of the specifics of their network, they are -- they do become customer products.
Jim Harken - Premiere Capital Management
Okay. Can you talk a little bit about these new opportunities for the Aercept business, and in particular what type of end markets or applications you are thinking about for them?
Richard B. Gold
We have not announced -- there’s -- there are a few key initiatives that we are working on with some partners that we have -- that the partners have not announced them yet and we have not announced them. The one common theme that I can tell you is that these are really targeted at end consumers.
- To read the full transcript on Seeking Alpha, click here »
