David Mandy – Analyst
Thanks. Hi guys good morning. First off you know back at the contribution margins side, just given the level of profitability and the earnings growth that you’re seeing right now. I know on the upside and the downside that we’ve had these stabilizers or shock absorbers through bonuses and profit sharing. And i just wanna press a little bit more on that contribution margin side. It sounds like you took a little bit of that in the fourth quarter here but as we look to next year is there a possibility that those things kick in and even at a flat gross margin, it’s a little bit more difficult to get to that 30% level Dan.
Daniel L. Florness – Chief Financial Officer
Well you know, with growth where we’ve talked about it and that it teams neighborhood. We’re in a position to invest in energy at our stores and in the neighborhood of those operating margins, the incremental margins stayed. Because when I look at our incentive comp, it really stepped up when i look at this when i look at it in the fourth quarter of this year. It really stepped up when we got into second quarter. And in the first quarter it was really healthy and in number 2 it really stepped up. And i think that layer of added expense is really in our numbers when i look at the details of the opening 15. And i think it positions us well.
And the offset of that, some of the pieces you normally don’t count on, we just touched on it. And then well based on our earlier is you have some SGNA that’s going the other way in the short term. We have some nice benefit coming into the first quarter through this energy. I know you’re down Florida and you don’t appreciate this anymore. You’re no longer in the mid-west it’s gold up here. And energy prices for heating a lot of our locations and the northern half of the country and throughout Canada is a meaningful piece too. So it gives us entail when coming into the first part of the year.
Willard D. Oberton – Chairman
Dave I’ll jump in this as well. But the biggest component of our SGNA so far is our labor and what the plan that Leland J. Hein – President & CEO and this team have laid out for adding the past majority of our new selling energy. We’re not selling energy but store energy that our sales people can get out on by hiring college students. We can add 15, not saying we are gonna add, but the math says we can add 15% percent more hours in our stores and that would translate to just under 7% labor not including bonuses. So the base labor to fuel that or just work that 15% more hours. And then there’s a scenario that we’re looking at, and that gives us a tremendous amount of leverage when you look at the labor bi carve a big expense. We can add the hours of with only just under half the expenses as a percentage. That’s we’re a lot of it comes from. And it allows us to be very bullish out there. They’re our customers and so are customers are very high in level.
