Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Nat Overton – Morgan Keegan.
Nat Overton – Morgan Keegan
With the fourth quarter run rate of G&A expense be a reasonable quarterly run rate to anticipate going forward?
Thomas O'Brien
Yes, we think that would be a reasonable run rate.
Nat Overton – Morgan Keegan
Given your capital spending plans and all the various cash flows of your company's business model, would you expect to maintain, increase or decrease your cash balance in 2009?
Thomas O'Brien
Our goal is obviously to increase it, but 2009 if it's anywhere near as volatile as 2008, obviously that can be positively or negatively impacted. I think if we see a run up in diesel prices or fuel prices running into the summer, we could expend a fair amount of cash funding our working capital needs, although a lot of that is behind us as you heard us say with the posted letters of credit and things like that.
In the current environment, coming out or starting to come out of the first quarter, I see more opportunities to increase cash. I think lower volumes still haven't taken effect fully on our inventory levels for example. And so again, our goal, I'm not providing guidance here, but our goal is to increase it.
I think there's a balance of factors that exist today that suggest that we can be successful in that. However, obviously we're subject to changes in the market and the economy just like everybody else.
Nat Overton – Morgan Keegan
One crystal ball question for you, and I recognize that it is, but long term, over three, four, five years down the road, where do you think fuel margins could reasonable be expected to stabilize?
Thomas O'Brien
Yeah, that is a crystal ball question. I think that the fuel margins that we've seen in 2008 and all of our competitors have seen are a product in part of declines in fuel prices. I think there is some more recognition in the industry today that fuel margins are flat, are not necessarily healthy when prices are increasing and it costs to more to deliver those fuel gallons.
But whether or not that hinting will hold for the long term is the crystal ball question, is the million dollar question. I think we have had some cement in our industry that could have an impact on fuel margins depending on how they shake out, although I haven't seen any material impact yet.
- To read the full transcript on Seeking Alpha, click here »
