Question-and-Answer Session
Operator
(Operator instructions) We will hear first from Timothy Arcuri with Citi.
Junaid Ahmed – Citi
Hi. Thanks for taking my question. This is Junaid Ahmed [ph] calling in for Tim. Could you please talk about cash requirements and I think that you might be needing to raise money late next year, and if so, how you would go about accomplishing that?
Andy Moring
We really haven't discussed that at this point in time. I think we were quite clear that we are positioning ourselves so that we have six to eight quarters of cash available for working levels and what we need for the foreseeable future. So we haven't even gotten to a point where we've had those discussions about what would have to happen late next year.
Junaid Ahmed – Citi
Okay. So you think six to eight quarters you're okay?
Andy Moring
We've said that we had six to eight quarters of cash reserves on hand. And as we go through the year, it becomes apparent that this is going to extend out even longer, we will take the necessary steps from a cost reduction perspective to continue to have that six to eight quarters of reserves at that point in time as well.
Junaid Ahmed – Citi
But if business deteriorates to that level where you cannot compensate with just cost reductions, and you have to raise money, how – I guess I was thinking along those lines?
Dave Dutton
Again, we really have not discussed that because we believe that we still have room to take further cuts if necessary if the business conditions warrant that.
Junaid Ahmed – Citi
Okay, thank you very much.
Operator
We will take our next question from Patrick Ho with Stifel, Nicolaus.
Patrick Ho – Stifel, Nicolaus
Thank you for taking my question. A couple of questions on my front, first off, related to the last question about you know your cash balance and the cash burn, would it be fair for me to characterize as your cost savings yet realized, and as we progress through the year, the burn should actually reduce even if you don't significantly grow revenues in this type of environment?
Andy Moring
That's exactly right Patrick.
Patrick Ho – Stifel, Nicolaus
Okay great. And in terms of you know the gross margins this quarter, obviously you had the inventory reserve. Can you just give a little clarification of what type of I guess pro forma gross margins you would have at these kinds of depressed revenue levels? I guess excluding that inventory reserve, what would your gross margins be with the low fixed cost absorption that you're experiencing right now?
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