Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Shawn Harrison.
Joe Whitene - Longbow Research
Hi, good morning this is Joe Whitene on the line for Shawn. Can you hear me, okay.
Gerald Paul
Yes, I can.
Joe Whitene - Longbow Research
I wanted to talk about the restructuring. Specifically, I am trying to understand first off the split in the P&L, how we should be modeling and versus and as far as cost of goods sold versus SG&A. I think you mentioned that SG&A you are focusing on a 19% year-on-year decline. So, my quick math is about $85 million, $86 million.
Gerald Paul
I guess you are right. Yes if you did the math, 19% correct.
Joe Whitene - Longbow Research
So little bit half of it on the SG&A line and the remainder of cost of goods sold.
Gerald Paul
Right.
Joe Whitten – Longbow Research
And then what about the timing, if anything you can add to that, SG&A dollars came down in the fourth quarter, has any of that been incurred three year end and then how should we expect the time it should take to?
Gerald Paul
So if you compare over the savings quarter-by-quarter going forward and compare to the equivalent quarter of prior year this is how to do it, right. Approximately 60% of the savings below curve within the first six months.
Joe Whitene - Longbow Research
Okay. I would assume of that relatively minimal impact in the March quarter?
Gerald Paul
You will see something in the March quarter already. It's not exactly equal but it has already a substantial contribution in the March quarter.
Joe Whitene - Longbow Research
Okay. Any idea I mean what's all the actions are complete which will be in six months like you said substantially 60% to be complete.
Gerald Paul
But 40% stand still, it will all be completed by the end of the year obviously, but it's approximately 60% in the first half and 40% in the second.
Joe Whitene - Longbow Research
Okay, may be just jumping off of that, gross margin. I mean what's a good target to focus on maybe was there any kind of guide along the way would be helpful, maybe what kind of gross margin could you maybe generate, once the 60% is achieved and how much?
Gerald Paul
It totally depends on the sales level, which I am not ready to project at this point, it totally depends. But it’s a very major contribution to stabilize gross margin no question.
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