Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line Jim Boyle with CL King.
Jim Boyle – CL King
Good evening. Gary quick housekeeping question just to refresh my memory, on the debt covenant, is it the net debt ratio or the higher ratio that is used?
Gary Ritondaro
It is the higher ratio but remember that we certainly have the opportunity to use any of that cash to pay down debt. That is why think it is important to show what it would be on a net debt basis.
Jim Boyle – CL King
Okay, makes sense. Scott, if LodgeNet’s trend worsen beyond even the most recent early October levels, how many or how much OpEx, CapEx, and levers do you have left to pull beyond this presentation slides?
Scott Petersen
Well Jim I was indicating for next year, we are seeing certainly OpEx which this year will be running in about in the $112 million to $115 million range. We think there is an 8% to 12% range right now that we are looking at and will be implementing given this current environment pending any turn around during this period of time. So that it would be significant, I mean, we are talking a significant reduction in OpEx almost comparable to what we had probably saw this sort for less, maybe slightly less.
From a CapEx perspective, I would say that we believe we can operate at the level that’s in the range even of $6 million per quarter that would – that is not optimal by any means but to get through these uncertain times. The traditional capital, the internal capital pieces here are being highly scrutinized or reduced. And then, the balance going to our customers most important issues especially when it comes to like opening of the major brands, full service hotels, etc. So at level of $6 million a quarter like $25 million would be something that we believe we could live with for some extended period of time if it needs to be.
Jim Boyle – CL King
Okay. And do you think will ?09 revenue be negative versus ?08?
Scott Petersen
If that is the great – if that quarters take a long, the question is that where is that all going to go? I don’t think we want to probably go out that far right now. I’m in a crystal ball if you know where the accounting is going to go in the second half of next year. I guess that is the great question where it goes. On the near term of course, we would certainly believe in our plan in the movie revenue will continue to be down quite substantially, I mean that’s the reality we – or that is the assumption that we are putting into our planning. Hopefully as the second half of the year comes along, it turns into flatter period-over-period result on the movie levels. And of course in our growth initiatives in the meantime are continuing to build and then actually supports and increase in revenue. So, it really depends on the length and the depth of the recession but – and I don’t think we want to stick our necks out at this point on trying to make that determination.
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