Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Todd Cooper with Stephens, Inc.
Todd Cooper - Stephens, Inc.
First Rich, many congratulations on exceeding your goal of renewable energy revenues accounting for 10% of total sales, but are you seeing weakening demand in this market as well as the others?
Richard J. Thompson
I would say it’s more seasonal as you would expect; the first quarter in this business is slightly down from the fourth quarter. So, we’re not seeing really any unusual demand pattern changes in the renewable energy business.
Todd Cooper - Stephens, Inc.
Okay. Rich, can you discuss your decision to repurchase debt versus conserve cash at this time.
Richard J. Thompson
As we looked at an opportunity, it was an unusual opportunity with a very steep discount as suggested in our comments, and we felt that it was the right step taken for the company at that time. Our cash as you saw ended the year at approximately where we began. So, we’re at $28 million and we ended the year at $28 million. So, we believe we have adequate cash in today’s environment. We do expect to create cash through the balance sheet. You saw us reduce inventory. We have actionable plans to continue to reduce inventory. You also saw our receivables go up in the fourth quarter, and these were delays from some very blue-chip customers who I would suggest were posturing their balance sheet as well. So we expect cash to start to grow; it has throughout the first few weeks of this quarter, and we believe we were in good enough position, that’s what our forecast showed us to be able to take advantage of the opportunity before us.
Todd Cooper - Stephens, Inc.
Okay. On your on-time delivery of 88%, what kind of lead times are you quoting depending on this?
Richard J. Thompson
Basically our lead times, as you are aware, are 8 to 12 weeks generally in this market, on average. Right now, we’re actually quoting shorter lead times than that, and response to the market place requires us to be a little quicker on our feet particularly with our supply chain, but we expect to be able to meet or improve on the industry required lead times throughout this year.
Todd Cooper - Stephens, Inc.
Given the environment, do you expect to see more turn business during the first and second quarter?
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