Question-and-Answer Session
Operator
(Operator Instructions) One moment please for the first question. And your first question will come from Beth Lilly of Woodland Partners. You may ask your question.
Elizabeth M. Lilly – Woodland Partners
Good morning everybody, it’s Beth Lilly calling.
James C. Thyen
Hello Beth.
Elizabeth M. Lilly – Woodland Partners
And I have a couple questions. I wanted to just, can you walk me through the cash and then the short-term debt on the balance sheet and so, what is the net cash number? I missed that?
James C. Thyen
The net cash Beth, net of the revolver is $7.6 million.
Elizabeth M. Lilly – Woodland Partners
Okay, so the revolver is how much then?
James C. Thyen
The revolver is $72.3 million and the cash and short-term investments is $79.9.
Elizabeth M. Lilly – Woodland Partners
Okay. Okay great. And then just so I can understand in terms of the land sale. So, if my math is correct you’re going to get - you generated $50.6 million in total brokerage right for all 27,200 plus okay.
James C. Thyen
That’s correct.
Elizabeth M. Lilly – Woodland Partners
And you have received so far $11 million of that 50.6?
James C. Thyen
That is correct. The $39 million to come in Q3.
Elizabeth M. Lilly – Woodland Partners
Okay so, and what will be the gain on that $39.6 then?
James C. Thyen
The pretax gain in the third quarter will be $23 million, and the net income effect of that is in the neighborhood of $13 million
Elizabeth M. Lilly – Woodland Partners
Okay Great. Okay. Okay terrific. The other thing I wanted you to talk about and we’ve spoken on the several different conference calls and I just want to congratulate you on your – on the expense reduction. It’s significant and just I want to spend a little bit of time on that, and just talk about additional expense reductions. Do you see them over in the next coming quarters? And if so, by how much, and then ultimately as a percentage of sales what’s your goal for SG&A?
James C. Thyen
Beth I’ll have to explain that a little bit better. Starting at a higher level, our strategies in each one of our markets have not changed due to this economic climate, but our priorities have. And clearly our first priority goes to what you and Bob are just been talking about liquidity, age preservation, and how we deploy our capital - the utilization of our capital. The second priority is our cost structure and that is the focus of your question and it really goes to maintaining our financial health and being competitive in the marketplace. We have a goal of 8% operating income for Furniture, and 4% operating income for Electronics. We set that goal before this economic decline started and we intend to keep that goal although we’ve recognized this economic crisis causes us to evaluate whether we should extend the timeline from the date that we are originally said it. So, the SG&A and the cost of goods, all has to be reduced continuously, before going to hit those operating income goals.
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