Which should bring — if something else wasn’t going on, that would bring operating income to $6.4 million, $6,375,000. Taking into account, the 1% increase in your bank spread that’s probably about $1.2 million a year or $300,000 a quarter. So that keeps your interest from $2.8 to $3.1. That brings pre-tax income to $3.275, 20% tax rate brings you to roughly $2.6 million in after tax income on 10.8 million shares. That’s $0.24 a share. You’re talking about $0.3 to $0.10 a share. If I make the adjustment for the new information that Brett gave about $500,000 to $1 million more in severance in the fourth quarter, if I take that out, that gets you to $0.19 a share. So what am I missing? What haven’t you told us that is negative in the fourth quarter that accounts for the difference between $0.03 to $0.10 and $0.19?
Brett Larsen: Well, that’s a lot of moving pieces. I will let you know. I don’t know that I agree with all of your adjustments. Our expectations…
Bob Poole: Hey, come on then, please, Brett. Brett, tell me where I’m wrong.
Brett Larsen: I’m not going to get into an argument here. It’s not worth it, but I will let you know that the pace of recovery of $750,000 is not accurate. And I’m also ensuring that you know the cost structure of the year anticipating of the $10 million, that’s not immediate that that that is ramping over four quarters. So, both of those I think are likely incorrectly calculated and no additional material events are included in that projection of fourth quarter results.
Bob Poole: So, can you explain why if you’ve terminated all of these people, why you’re not and the — and the savings in a year’s $10 million, why is it not $2.5 million a quarter?
Brett Larsen: Because it’s not — we’re not done with severances. We mentioned that we still have $500,000 to $1 million of severance to occur in the fourth quarter. Those have not been fully done even as of today. And we also mentioned that that would take up to six months to fully recover that severance amount. So, to be able to say that that we’re recovering $2.5 million of expenses in the fourth quarter net of what we’re paying in severance, this is not accurate.
Bob Poole: So, actually Brett, if you go back, you’ve paid $3.7 million severance so far and let’s say you pay another $1 million, that’s $4.7 million. That — if you’re going to get that back in six months, that’s about $2.5 million a quarter Brett?
Brett Larsen: Again–
Bob Poole: I’m running working with your numbers, Brett. So, it’s not like I’m making this stuff up you know.
Brett Larsen: Bob we are talking a few hundred thousand dollars, $0.19 and our $0.10.
Bob Poole: That’s about a $1 million.
Brett Larsen: That fourth quarter severance is still in process.
Bob Poole: Right. So, yes, so I’ve taken that out to get to the $0.19.
Brett Larsen: I don’t — I disagree as well with your effective tax rate, I think you need to go back and recalculate that, particularly coming off of a loss in third quarter.
Bob Poole: You told us back in your guide–
Brett Larsen: 25%.
Bob Poole: Is that what the is that with the — Yes. So, you need to update your business outlook because it’s says 20% Brett.
Brett Larsen: Correct.
Bob Poole: So, I’m working with your numbers. I mean you guys kind of get this together and it’s really bad. Okay. Next question. You’re sort of talking about a strong backlog business coming back, yet revenues really if you account for the fact that you lost $5 million of revenues last quarter that should have been $145 for the quarter and now you’re projecting you know sort of $140 at the midpoint. And Bill kind of asked this question, but it’s hard to reconcile your comments about business getting better and having a strong backlog and another 3% to 4% decline in revenues. How do you reconcile those?
Brett Larsen: I think the words I used were muted.
Bob Poole: Well, that’s net negative. That’s not muted benefit. That’s that muted decline?
Brett Larsen: Well, as you said Bob, this is becoming unpleasant and I don’t intend to argue with you semantics of what we said, we’re giving you a true representation of our belief of the revenue going forward. We’re giving you a true representation of the backlog we have and we’re giving you a true representation of the new customer pipeline we have as well with new quotes. So, that’s that.
Operator: Thank you. Your next question comes from the line of George Melas with MKH Management. Please go ahead.
George Melas: Thank you. Maybe just a question about the layoffs in this February and Craig you mentioned $10 million per day. When but when do you expect to get that $10 million in savings? And how much you expect that in the June quarter ending the quarter subtle after that?
Craig Gates: So, the quarter we’re in right now we’re going to get a portion of it. And as we get into July, August, September, we should be see most of it per quarter.
George Melas: Okay. So, does that mean that by September, you’re at the full run rate of $10 million?
Craig Gates: Yes, that’s correct. Yes.
George Melas: Okay, great. That’s helpful. And what — how much are you gaining in the June quarter?
Craig Gates: It is roughly between $1.5 million and $2 million.
George Melas: Okay. And why is that? Is that because more we reestablish the nuance, but you’re going to let go everybody as of March 31st, is that what it is?
Craig Gates: That is correct.
George Melas: Okay. Very good. Then a question that relates to what Bill was asking. Do you actually have some customers migrating from Mexico to Brazil. As they look at if you are reducing your — capability in Mexico, having it – fewer4 people to handle the project. The customers that you still have there that have these expectations. How do you manage that? I mean are we going to have like a bifurcated service almost in Mexico, the legacy customers have a certain kind of expectations and for the new customers it’s a different set of expectations.
