Question-and-Answer Session
Operator
Thank you. (Operator's Instructions) Our first question comes from John Kreger of William Blair.
John Kreger - William Blair
Thanks very much. Hey, Bill. So when we do a rough calculation of your trailing 12 month EBITDA for covenant purposes it looks like when the December quarter ends you'll be around $15 million. Does that seem about right versus your guidance, and does that put you in any sort of a dangerous position relative to the covenants?
William F. Lacey
December in our forecast will be our tightest covenant quarter and we will be slightly over — we will have about a 0.1 turn over our requirement in our term note which will be about — that will give us about a $1.2 million cushion in there if our projections hold out.
John Kreger - William Blair
A $1.2 million cushion in EBITDA?
William F. Lacey
Well, in the whole calculation — in the excess over the debt service and interest, tax interest over — the rest of the calculation is EBITDA less CapEx and taxes paid. And I believe that your number 15 is probably a little optimistic for EBITDA for the trailing 12, but we'll gt some benefit from taxes on a trailing 12 basis.
John Kreger - William Blair
Okay. But the key here is if you can get through the December quarter without a problem, that cushion should grow from that point?
William F. Lacey
I believe that is the case, John.
John Kreger - William Blair
All right, great. Second kind of related question, when we were doing the math it seems like your full year EBITDA guidance, about a third of that comes in the first half and maybe two-thirds in the second half. What's really driving the pickup that you expect? I know you mentioned that you think the market environment will improve, but is there anything else to point out to kind of build conviction that you can get that sort of ramp in the second half.
William F. Lacey
The thing that gives us comfort is the futures markets and through this whole downturn we've seen the futures markets, if you will, back up on us. And we would look out 60 or 90 days and we would see that milk prices were, for example, $13 or $14, and as we closed in on that date they would back up on us and end up in the $12 range. I'm just throwing numbers out there.
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