Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from William Loomis - Stifel Nicolaus & Company, Inc.
William Loomis - Stifel Nicolaus & Company, Inc.
On just the cost reductions on the two commercial units, can you go into a little more detail and specifically from the angle that - what exactly is in the plan? So you said the two military sales you mentioned earlier are not in the Era sales, but what is? What level cost structure do you have for both those units to withstand further declines in the business as we work through this year?
Stanton Sloane
Well, let me start with Era. If you recall in November we said that we would set high end of guidance if the two key military orders moved one quarter, low end if they moved out of the year. In essence what we've done now is just assume they move out of the year.
In November we started actions in Era under the assumption that those orders did in fact move out of the year and that we needed to structure the business to be viable and profitable assuming no military orders. We have done that; we're working on that. That has, like I said, commenced in November. It is essentially reduction of personnel and that's both factory personnel as well as indirect or overhead personnel. We have also taken out a fair amount of non-personnel-related SG&A costs from the business, marketing and other things related not to people, and continue to restructure that business. We're very pleased with the progress we've made in terms of getting to a much better plan and when I say business progress looks good, I really do mean that.
I think that the ATC side is performing at or better than our expectation in terms of new business, so that's encouraging. I don't see further declines, but we have to get the business sized appropriately without these military orders and that's what we're doing.
On GCD, actually I'll let Tim answer that question since that's his business.
Timothy Atkin
So on the global drug side, in terms of looking forward, there's really two principal areas to the business - the clinical trials piece and then also strategic regulatory consulting. The clinical trials is really the larger, more stable piece of it. The higher volatility is on the regulatory strategic consulting side. And to use the language that Melissa did, our guidance reflects caution. We basically going forward have very little in there beyond what is firm orders already in terms of that business.
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