Question-and-Answer Session
Operator: (Operator Instructions). And your first question comes from the line of Kathryn Thompson from Avondale Partners. Your line is now open.
Kathryn Thompson - Avondale Partners LLC
Hi, thank you. Could you give us D&A and CapEx guidance fiscal '09?
Manuel J. Perez de la Mesa
I'm sorry. Kathryn, can you restate the question?
Kathryn Thompson - Avondale Partners LLC
Could you give us CapEx and D&A guidance for fiscal '09?
Manuel J. Perez de la Mesa
Sure. D&A will be modestly less than last year as some amortization expense has been... fully amortized some of the intangibles. So D&A will be modestly less than last year. And CapEx for the year will also be modestly less than last year. I'm talking in both cases about $2 million or so less than last year.
Kathryn Thompson - Avondale Partners LLC
Okay. Also on just delving into your SG&A, just to reconfirm. Is labor still about 50% of your overall costs? Also how much do you...
Manuel J. Perez de la Mesa
When you add all the cost related to labor including benefits and everything else; in fact, labor is closer to 60% as well as travel and whatever.
Kathryn Thompson - Avondale Partners LLC
Okay.
Manuel J. Perez de la Mesa
So cost in essence all together are closer to 60% of our total costs.
Kathryn Thompson - Avondale Partners LLC
Okay, perfect. How much do you expect in labor cost production since fiscal '09? Either on a percentage or on a dollars basis?
Manuel J. Perez de la Mesa
About 8 to 10% versus last year.
Kathryn Thompson - Avondale Partners LLC
So still inline with what you were seeing in the first quarter?
Manuel J. Perez de la Mesa
Yes.
Kathryn Thompson - Avondale Partners LLC
And also just overall for SG&A, I think that you've stated in the past you were hoping to see flat to down on a dollars basis for fiscal '09. So still within your expectations?
Manuel J. Perez de la Mesa
Well, given how we have resized our business for the current environment, our overall SG&A in absolute dollars will be down 8 to 10% versus what it was in '08.
Kathryn Thompson - Avondale Partners LLC
Okay, perfect. Do you also still expect a 4 to 5 million, year-over-year decline in interest expense?
Manuel J. Perez de la Mesa
Yes, Kathryn what I like to do is, yes we expect due to both lower average borrowings...
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