Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Larry Solow - CJS Securities
Larry Solow - CJS Securities
Could you maybe discuss what changes you’ve seen since your last call and if I’m not mistaken I think you thought medical imaging would be close to flat if we excluded Copley and the inventory draw-down from I would assume would be [inaudible] therapy, I thought maybe you thought it would be down mid-single-digits. It seems like it was much worse then that and then I know you kind of put an outlook out there for last quarter do you have any quantitative outlook going forward or is the environment just too difficult to put one out?
James Green
Let me start by looking at what we talked about last time and so many things we expected to see in the first quarter we did expect to see a substantial inventory adjustment with the subsystems that go to the radiation treatment OEM and that accounted for a little over $4.5 million.
We also saw with a couple of our high end CT customers some adjustments associated with as we thought the DRA driving, softening the overall demand but really resulting in again a more of an inventory adjustment in that first quarter because we also expected to see and do see some improvements going forward in those areas.
But when you put those two numbers together you’re talking about north of $10 million in the quarter. That has a dramatic amount of that drops to the bottom line when you’re dealing with the kind of equipment that we make with these kind of push-outs. So if we can’t recognize revenue on it and we’ve already covered the cost of the material, and it’s a push-out, it has a pretty dramatic effect on it.
The other thing, as I said before is we’re making more investments on the ultrasound side because we see that a real nice new opportunity in a market that has not been effected by DRAs and does seem to still be a pretty strong business opportunity for us.
And then last of all and starting I think it was the first week of October with the credit crisis its kind of hard to predict exactly what that’s going to be. We know and we hear from our customers that there are some end customers that are delaying decisions. So that’s the piece that its hard for us to really comment on as to what kind of additional effect that might have on us going forward.
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