Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Jim Bartlett from Bartlett Investors
Jim Bartlett - Bartlett Investors
A terrific performance. Could you expand a little bit more on V-Flash, have you gotten a sense of the material usage rate yet or is that too early and does it include Asia and Europe rollout and also what kind of mix are you getting with your the [curing] stations?
Abe Reichental
Good morning Jim and thanks. As I said in my opening remarks we are pleased with the first full quarter performances we had with V-Flash and we mentioned that V-Flash sales have contributed $0.9 million of revenue to the mix here. It was primarily generated in the United States and Europe. The roll out in Asia is more of a fourth quarter event and what we are finding in term of [curing] stations is that we have an initial system and we always sell the [curing] station and then receive orders on to require rates. In terms of material usage, we have had a nice performance from the initial installs in terms of repeat cartilage orders. So far we are very pleased.
Jim Bartlett - Bartlett Investors
Just following on the cost allocations to V-Flash, what portion is really a sort of a fixed cost and what portion is variable cost. I'm trying to get an idea as to how you ramp up, you approach profitability?
Damon Gregoire
On that one, Jim we outsource the production of the V-Flash unit and as we move along we've been working with that outsourced contractor to continue to reduce the cost.
So it's basically on a build-by-build that we keep reducing that cost, we don't really have at this point for internal purposes here much of our fixed cost there, but we do keep moving ahead with sourcing and productions to keep bringing that cost down.
Abe Reichental
This is literally a function, Jim of ramping up and scaling up cost that we believe will fade away at the end of the first four full quarters. We believe that we have responsibly and so far very accurately estimated the range, and we're pleased that we were able to absorb and more than make up for it within our own internal savings and productivity improvements, because as you recall our gross profit margin for the second quarter was 44% and that was with at 2.1 percentage points absorption, in our negative absorption of V-Flash. In this quarter, we also have 44% plus with 4.1 percentage points negative drop. So, we believe that we are not only estimating this negative drag from the initial launch cost but finding ways to more then make up after it.
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