Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Hamed Khorsand - BWS Financial.
Hamed Khorsand - BWS Financial
My question is regarding your Wal-Mart agreement with these 51 closures, if I heard you right, you were saying that you’re going to have more control over the hours of operation?
Gary W. Douglass
Yes. It’s part of the amendment that we executed. We had asked for certain reductions in minimum hours of operation and we were granted that by Wal-Mart in the amendment.
Hamed Khorsand - BWS Financial
Is that going to save you a certain amount of money over the course of the year?
Gary W. Douglass
Here’s the aspect of it. We will either, and more likely reinvest those hours into periods of time where we think it will drive productive sales. There could be some cases in which we will just pocket that and actually record it as a savings to labor.
But I think our primary driver there was to try to get our hours more reallocated to periods of time when as they say the ducks are flying so that we can provide a better customer experience and hopefully, really drive top-line because of the, obviously, the margin associated with those sales.
Hamed Khorsand - BWS Financial
On your negotiation process with Sears, is there a timeline that you could provide us and when we could expect some sort of announcement?
Gary W. Douglass
I really can’t. I mean, we can’t comment any further about the nature of the discussions other than to say that the agreement does expire in December 31, 2008. And I think both parties are certainly working diligently toward getting something done substantially prior there too. But I certainly can’t make any predictions as to timing.
Operator
And your next question comes from Nicole Jacoby- Liberation Investment.
Nicole Jacoby- Liberation Investment
Can you talk a little bit about the drivers of free cash flow generation going forward; specifically CapEx and what we should be thinking about in terms of EBITDA margins are, looking at about where they will be, things like that?
Gary W. Douglass
Well, free cash flow going forward obviously we’re still in 2008 going to be in a fairly heavy spending mode. We’ll probably spend, I believe our estimate is somewhere in the $37 million range for capital in 2008. Now, as we talked about, that should get us through our complete PictureMe! Portrait Studio digital conversion by the end of fiscal 2008.
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