Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Eric Wold – Merriman Curhan Ford & Co.
Eric Wold – Merriman Curhan Ford & Co.
One, you mentioned kind of obviously lowering the operating coast and getting to the point of breakeven, can you give an idea of once you complete all of the cost reductions in Q1 what the annualized run rate of sales you need to get to breakeven?
Kenneth Fish
Eric, breakeven point that we would have during 2009 would be falling down with those cost takeouts to $350 million or less and then on a full annualized basis more to the $330 range.
Eric Wold – Merriman Curhan Ford & Co.
Now, just to make sure we’re apples-to-apples, is that breakeven cash flow or breakeven GAAP profitability?
Kenneth Fish
GAAP profitability.
Eric Wold – Merriman Curhan Ford & Co.
Secondly, with the plan reduction of the availability under the credit line and then the initiatives bringing in greater cash flow what do you project to be your peak debt level in 2009 before it starts coming down?
Kenneth Fish
Levels of debt that we’re carrying presently are around the level that we started the year and we would anticipate to have the debt coming down over the next few weeks and so we’ve really hit the peak already.
Eric Wold – Merriman Curhan Ford & Co.
Lastly, on the commercial side as you’re getting down to reducing the products that you sell that you’re now getting the more profitable ones and reducing or downsizing that division, is there a point where even being in that channel at all doesn’t make sense?
Edward J. Bramson
We’re looking at a strategy for all three of the businesses Eric and I think the first thing to do is see how profitable it looks like commercial would be and then depending on that we’d have to decide what to do.
Operator
Your next question comes from Reed Anderson – D. A. Davidson & Co.
Reed Anderson – D. A. Davidson & Co.
A couple of questions and I joined the call late so you might have covered some of this, getting to the stuff you covered in kind of the last presentation Ed looking at the TreadClimber product and the opportunities to kind of grow that I’m just curious how big a business is that product today? Whether the install based both commercially and the direct business but where are we today in that product as we stand here today I guess?
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