Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of [__________]. You may ask your question.
Unknown Analyst
I was wondering if you could if you could please touch on your comfort with the liquidity and the cash burn here. You’re saying that you’ll end the year with an undrawn revolver. If you see, again, cash costs with this annualized savings program and what’s the view there?
Per Brodin
I’ll start with the latter part of that question. While there will be some costs incurred to implement the cost savings initiatives, we don’t see those as being significant relative to the overall program, and relative to liquidity, we typically do not give forward EBITDA guidance, but if you’re to use our last 12 months’ adjusted EBITDA of $273 million, we would generate positive free cash flow. Our uses of cash would include approximately $152 million of cash interest, which anticipates picking the notes as we had announced previously, the CapEx I described of approximately $85 million, and cash taxes of $10 million.
Unknown Analyst
In terms of all the new hires, and my apologies, I didn’t catch everybody’s name, should we expect a material shift in SG&A, or is this going to be offset or included in the numbers?
Per Brodin
I think as Gene mentioned, that was relatively headcount neutral, so on a dollar-per-dollar basis, that should also be the case.
Eugene Kahn
In looking at the work that we did in creating the reorganization for both the North American and European teams, that total census in totality remained virtually the same, and mostly all the people that I discussed with you today, just so you understand the breadth of the changes that we’ve made in order to improve our performance, are most replacements.
Unknown Analyst
And lastly from a really big picture perspective, in terms of the trends with accessories versus jewelries, how do you see that playing out in terms of the fashion cycle? What’s the lead time for new product and where do we see ourselves going there?
Eugene Kahn
We operate basically on quarterly deliveries, so we’re working starting 180 days out, but we’re placing goods on basically 160- to 120-day out cycle dependent on the classification. Accessories themselves work on a slightly longer lead time. For instance, woven fabrics dealing with things like handbags or scarves require a longer lead time than jewelry, but it’s basically similar lead times to what we’ve always been working with. We’ll be placing goods in the next 30 days for the middle to the end of fall season receipts.
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