Question-and-Answer Session
Operator
Thank you. The question-and-answer session will be conducted electronically today. To ask a question please press the * key followed by the digit 1 on your touchtone telephone. If you are using a speakerphone please make sure your mute function is turned off to allow your signal to reach our equipment.
Once again it is *1 for questions. We’ll pause just for a moment to assemble the queue.
The first question comes from the line of Ben Schachter with UBS.
Benjamin Schachter – UBS
Hi guys. Pat good to hear the aggressive tone in your voice. I like to see that. Let’s go through a few things. One you talk about the cash burn for the year. Sort of what were the key drivers there? What will that maybe look like for next year? Two?if you could walk through some of the operating matrix that you’d want on a quarterly basis. How would you think about that in terms of modeling for the year? Maybe talking about average net revenue, agent count, number of transactions and those kinds of things. And then finally, the idea that has come up in the past also is the costs around remaining a public company. Is there an opportunity to maybe take the company private? Any comments on that? Thanks.
David Rector
I think first thing lets go through the cash flow. For 2007 we earned about $8.3 million for the year. Roughly $3.5 million of that is attributable to our new markets both in their operating costs and CapEx that we spent for equipment going into the ten new market offices. We had another $3.4 million dollars of capital expenditures, some of that in the normal server capacity here and we opened up a secondary backup site in Denver. So that was sort of the CapEx.
For the most part, the new markets took up nearly 41% of that burn of the $8.5 million.
Turning to 2008 we expect to end the year with a cash balance in the $71-$72.5 million dollar range and that would be based on the pro forma loss range of $4.2 to $5.7. We’re looking at a CapEx of around $3 million and our depreciation is roughly the same to offset. The one other thing that we have to cover that won’t be out of normal operation. We have the payment on the litigation settlement that we talked about in the third quarter call. That has already been expensed. It is behind us as far as the PNL for 2007, but some time here in the spring of 2008 we will be paying approximately $3.6 million on that litigation settlement. So that sort of gets you down to where we think we’ll be at the end of the year on the cash basis.
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