Question-and-Answer Session
Operator
[Operator Instructions]. Our first question comes from Chris Gutek, Morgan Stanley. Your line is open.
Christopher Gutek – Morgan Stanley
Thanks. Good morning, guys.
Mike Van Handel – Executive Vice President, and Chief Financial Officer
Hi, Chris.
Jeffrey A Joerres – Chairman, Chief Executive Officer, and President
Hi, Chris.
Christopher Gutek – Morgan Stanley
Just want to ask the question on France to what extent do you guys expect additional Labor Market Reform and do you have an opinion on what specifically might change and therefore, what’s the impact would be on demand for temporary staff beyond the changes that have already been implemented?
Jeffrey A Joerres – Chairman, Chief Executive Officer, and President
There really hasn’t been a lot of discussion beyond the changes that have been implemented. At the beginning of Sarkozy administration there were some discussion about what’s call the single contract and a few other things, but most of those have not really been brought forward, what we would see is just really it will stimulus in the marketplace, so I am not sure if we would have good visibility because there has been fairly quietness on the horizon regarding really direct labor law changes that would have an impact on our industry other than what we’ve talked about which is the overtime and remember you can’t in the new overtime reprieve if you will in France, you still can only work up to 40 hours. So, it’s not you can’t work another 20-30 hours a week on that. So, we are looking at right now is we are going to continue to monitor the effects of that overtime charge change and continue to work with the administration, but there is really nothing right on the horizon right now that we will be able to point too.
Christopher Gutek – Morgan Stanley
I’ve got the follow-up on? mostly on a domestic business, if somewhat surprisingly has the franchise acquisition fees [inaudible 34:44] up somewhat surprisingly the business experiencing a little bit more weakness given that, this also in the financial market over the last several months. How concerned are you that, so that the business might drop up over the next couple of months with a bit more lag and maybe haven’t seen that lag effect say ten years and in that context is there any intention to sellback some of the investment from the capital spending not just domestically but potentially globally given the less clear macro outlook?
Jeffrey A Joerres – Chairman, Chief Executive Officer, and President
You know, clearly each? clearly it’s less clear, I am sorry about that. But, I think the financial market wanted we have seen and our customer said. We deal with hundreds of thousands of clients. We are talking about less than 1% is affected by that. So how does that ripple into the economy in general, I’ll let a lot smarter people try to figure that out, but our client base really isn’t talking about that. And in fact many of our financial institutions that we do business with our business is up in those because there are many financial institution particularly in the central parts of the United States that don’t have some of those credit in some prime issues that we talked about. So, you know it is a very difficult environment to take a look at. So, what we try to do is to continue to take a look at it from a pragmatic perspective, what are we hearing and what can we see. As far as we can see, what does it mean for middle and end of 2008? We just can’t go there because it’s not something we have good data on or good information.
Christopher Gutek – Morgan Stanley
Thanks, Jeff.
Jeffrey A Joerres – Chairman, Chief Executive Officer, and President
Yes.
Operator
Our next question comes from Mike Fox, JP Morgan. Your line is open.
Michael Fox - JP Morgan
Thanks. Good morning, guys and congratulation on a strong quarter.
Jeffrey A Joerres – Chairman, Chief Executive Officer, and President
Thanks.
Michael Fox - JP Morgan
Please, give me the paramount as a percent of total gross margin for the total company.
Mike Van Handel - Executive Vice President and Chief Financial Officer
Yes. We are running just over 9%, Mike.
Michael Fox - JP Morgan
Okay. And how is that compared to the prior year?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Yes. Prior year we’d be just over 7%. So clearly, it is growing faster than the overall GP. And we have seen for the quarter our firm business grow 37%, so you can see our investments within that area are paying off. We continue to add our permanent recruiters across the world. And we’re really seeing strength on that line of business in all of the geographies we are operating in, including the U.S. market.
Michael Fox - JP Morgan
Okay. And to the next question. When you look at the U.S. business you mention strength in firm and Jeff mentioned strength in some of the financial institutions you work with? Can you talk about where else you are seeing strength despite the overall softness?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Well, I guess maybe just one clarification. We are not seeing strength on the financial side that we are working with. I think, Jeff’s point was it’s still a small piece of our overall customer base. I think when you look at the U.S. staffing business generally we’re seeing some softness really straight across all of our staffing business from the office and clerical to the light industrial and industrial business. So, it seems to be fairly broad, which is really just a continuation, I think, of what we have seen for sometime, but despite that fact, you know the overall labor market is still healthy and there is still some growth and certainly given our investments and our focus on the permanent recruitment side that has been, we’ve been able to drive, drive some growth on that side of the business.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes, and I would just want to add that, I am not sure if you could use the word strength with the U.S. right now. There are pockets like permanent recruitment which we think it is because of offices, a new entry to that part of delivering that service but if you look across the board, some regions are stronger than others, some of them have clients that their business is actually growing but we would really put the U.S. under category of stable, stable at a lower level and we are starting to seeing it stable in the last five to seven weeks. But we wouldn’t put in the strength category.
Michael Fox - JP Morgan
Okay and then, do you notice any change sentiment following the most recent charge report when we had a large revision, a positive revision?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
The only sentiment I see when I talk to some self side analyst our client will look at those numbers and we don’t? we look at them but our field really doesn’t do much with those, so what when the numbers first came out in August, we said that’s not what we are seeing so when they were revised in September, we said okay that makes more sense to us, so I think that’s how we took the news here.
Michael Fox - JP Morgan
Okay, great. Thanks a lot.
Operator
We have a question from Andrew Fones, UBS. Your line is open.
Andrew Fones - UBS
Yes. Hi, thanks. Can you quantify how much of the revenue acceleration that arrived was from geographic footprint change in delivering that bit just to pick and kind of lay offs generally?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes, it is a good question. Clearly, there are some areas within the U.S primarily where few industries have gone through some multiple times and whether it would be in the automotive industry or in the financial services industry, those tend to be a large client of ours. So we get some of that but without getting into too much detail, the real difference in this quarter versus many other quarters is a new product offering, a new service offering, really allows much easier and robust access by the individuals. So the individual is more motivated to be using some of our services which is when the revenue starts. So whereas before if they didn’t see a value in it, the company was willing to pay and wanted to help out that individual but they could go do things on their own. What we’re seeing is as much more participating in the programs because they see value in our offerings. And we track that very closely which would be called take-up rate and that rate has been a substantial part of the increase in the revenue.
Andrew Fones – UBS
Okay, thanks. Let me pack it up one of that on Jefferson Wells, the acceleration there that you are trying to guiding to or at least kind of less of a decline, I should say, can you quantify how much of that is due to pick or pin in business or just underlying strength versus the annualizing of a couple of large contracts that you lost last year? Thanks.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Sure.
Mike Van Handel - Executive Vice President and Chief Financial Officer
We didn’t lose the contracts so if you may want to change?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes. In terms of, it wasn’t a loss of contracts, really was a completion of the contracts if you will I believe was some project business that was designated amount of time and the time went out. So, certainly that was a? two larger contracts were really getting to the tail of those, they had some impact on the third quarter of 2006 and kind of around down, if you will, in the fourth quarter of 2006. As we look to the, to the fourth quarter, we've seen a little bit of pick up in our average daily revenue for Jefferson Wells toward the end of the third quarter and into the fourth quarter. Typically, our seasonal peak comes around this time of year so, which is why we're looking for the sequential decline as well as near the holiday time, there’s more vacation time. So you're seeing the sequential decline there. But overall I would say, the business is healthy when you look at, at the, at this non-SOX business. We had a little bit of sequential pick up from the second quarter to the third quarter. We had a little bit of sequential pick up on the SOX business from the second quarter to the third quarter. So it’s pretty much, I would say, slightly better than stable. It’s showing some signs of improvement. Certainly, we're working hard within that market. We see some great opportunity. We continue to invest in offices overseas. So, we certainly look for an improving profit picture as we move into next year as well. Next question please.
Operator
We have a question from Michel Morin, Merrill Lynch. Your line is open.
Michel Morin - Merrill Lynch
Good morning, guys. I just want to drill a bit further down into the acquisition and the impact in the U.S. I think you said that added about 3% point to the growth rate. What was the timing, because I think you said it was not a full quarter impact?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Yes. That’s correct. It was in the August time period that is when we picked that up, so a little bit less than half of a quarter.
Michel Morin - Merrill Lynch
Okay. And was there an impact on margins?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Not material. The business is running margins that were not that different from our overall business. So, it did not have any materially impact on margins, so.
Michel Morin - Merrill Lynch
Okay. And what was, I might have missed it though. What was the explanation for the margin decline in the U.S., is it continued investment in the firm capability or what’s driving the 50 basis point reduction there or is that certainly the relocation costs that were included there?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Well. Yes, that’s a good question, Michel. There was some modest amount of relocation costs in there. I think what you are seeing within the U.S. market is in previous quarters we had substantial gains on the gross margin line. This quarter we still have gains on the gross margin line but not quite enough to offset the natural de-leveraging that you feel when the top-line is contracting. So, the decline in operating margin you are seeing really is the fact that our overall cost base isn’t coming down quite at the same rate as the top-line which is fairly natural given some of the fixed cost components of our expense base here, so that’s what you are seeing. You would have seen some de-leveraging in the first half of the year as well, it’s just that our gross margin with a number of factors. In addition to the permanent recruitment we also had some favorable year-on-year gains and workers compensate on employment taxes. Those gains allow there this quarter much more modest than they were in the first half of the year. We still have the gains on the gross margin line from permanent recruitment business.
Michel Morin - Merrill Lynch
Okay, that’s really, really helpful and then just finally on firm in the U.S, you said it was very strong. Can we actually put some numbers around that and how much that grew and was it stable throughout the quarter and I guess the question would be was there any noticeable impact specifically following the credit crunch?
Mike Van Handel - Executive Vice President and Chief Financial Officer
Overall, our growth in the quarter was 33%. Our firm business moves around a little bit week to week so it’s a little bit more difficult to look at weekly or monthly trends and come with a meaningful conclusion. But rest assured it was fairly stable throughout the entire quarter we didn’t see any dramatic swings and no dramatic swings relative to the credit crunch at all.
Michel Morin - Merrill Lynch
Great. Thanks very much.
Operator
We have a question from Andrew Steinerman, Bear Stearns. Your line is open.
Andrew Steinerman - Bear Stearns
Hi. It’s Andy Steinerman, Bear Stearns. When you look at the margin expansion and that happened in the third quarter, it looks like it was more driven by gross margins year-over-year. In the fourth quarter of this year, I think we have a tougher gross margin compared to the year ago but you are still seeing a margin expansion story. Could you sort of explain what is happening underneath that on the SG&A line to enable continued margin expansion story?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Sure, sure. We continue to drive efficiency across the organization Andrew as you know and we are still picking up some benefits from our project Titan which was an efficiency program initiative that we began last year looking at all of our non-personnel cost. So, we still have some of those benefits coming through, but again as you know one of our key strategies is to continue to drive the efficiency and that’s what we are doing and continue to do throughout the organization. And I certainly see opportunity for that as we look in the next year. I think, the third quarter was? well, we have less gains from an SG&A standpoint is really? you really have to look at the components of our businesses on how they reacted I suppose to a generalization that we weren’t getting SG&A leverage. Certainly in some countries we’re doing quite well from the efficiency and leverage standpoint. Again, as I commented earlier, the U.S. given the top-line contraction, picking up SG&A gain is a bit difficult.
Andrew Steinerman - Bear Stearns
And so some of the SG&A would be driven by your firm build out, the recruiter build out, right?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Well, that’s true. As you look, as you think about SG&A, that’s a good point thank you. As you think what SG&A as we add firm recruiters, that is adding to our GP but of course, it’s adding to an SG&A cost as well. And if you think about SG&A as a percentage of revenue, when we do that our SG&A as a percentage of revenue in fact goes up but our SG&A as percentage of GP will go down because those recruiters are paying for themselves fairly quickly, so the normal relationship on SG&A to revenue becomes a bit distorted when we are investing on permanent recruitment side.
Andrew Steinerman - Bear Stearns
Right. But it still very much right now in operating margin have therefore you look at the contribution from firm as well as the investment in firm?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes. So when you look at overall operating margins from firm the investment is positive I think again just to clarify it’s helping the gross margin but it’s adding a little bit more to the SG&A cost of percentage of revenue but net on the operating profit margin there is a gain from that.
Andrew Steinerman - Bear Stearns
Thanks a lot, Jeff. Thank you so much.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Thanks.
Operator
Our next question comes from Gary Bisbee, Lehman Brothers. Your line is open.
Gary Bisbee - Lehman Brothers
Hi. Good morning, guys. I got couple of question. First of all, did you get the cash from the retroactive benefits from the French Tax change, yet?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes, good question. We did get much of that cash as we? once the rules went into effect which was in the middle of April, than our subsequent filings for those changes, we were able to effectively take the enhanced subsidy if you will, just automatically reduce it from our payments due into government. But we still have to do is get the cash from 2006 and we file the appropriate paperwork with the multiple agencies that were required to do that with. And that will be coming, we might see some of that coming into the forth quarter, but I think more likely next year by the time it gets processed by the government.
Gary Bisbee - Lehman Brothers
And around how much approximately? how much you are expecting with that?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
I don’t have an exact number for you, here on that maybe we get little bit more clarity as we get through the forth quarter. But, surprise to say it will be several million dollars.
Mike Van Handel - Executive Vice President and Chief Financial Officer
Couple tens of millions.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes.
Gary Bisbee - Lehman Brothers
Okay. And you know in U.S. you did a great job over the last year’s growth slow that continuing to get the margin improvement. If we would to think about some of your businesses in Europe seeing somewhat slower growth trend, just trying to gauge your confidence and ability to continue to get margin gains in the phase of the scenario in which you had positive, but somewhat slower revenue growth. Do you still feel pretty good, looking-forward over the next few quarters by your ability to get margin?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
There is a couple of question in there. One, is our... we haven’t seen slower growth in Europe growth from second quarter to third quarter increase. And we see it let’s called it about flat maybe just marginally down on revenue. So, when you are in the mid upper teens we won’t be seeing any kind of de-leveraging. Now, having said that when you look at the component and what we’ve done in efficiencies and system there is no reason for us to believe that we will not be able to manage that down and those of you have been with us for a long time whether it been in 2000 or 2001. We’ve got an organization. We’ve got something in the organization called the cost containment program that kicks in a various different levels based on performance. And we feel confident we’ll be able to manage through that. What happen is there does come a point when that top-line either persistently has been slow or slows in a dramatic way that, then you do get the de-leveraging you started to see that up bit in the U.S., but when we look at the fourth quarter and you can tell by the guidance, we are not seeing that effect us and we would see it is too early to really give a good prediction on first quarter.
Gary Bisbee - Lehman Brothers
Okay. And then just lastly, you know you obviously step up the buyback dramatically in this quarter with the SOX, still down quite a bit of it buyback. How do you think about that on a going forward basis I mean likely to remain at pretty rapid rate or is there something in particular you’re ready to do it, contractually this quarter? Thanks a lot.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
I think on the share repurchase the way we think about and I thought about it historically, it’s has been, as we have free cash flow, we will use that free cash flow that repurchase shares. If we don’t have any other immediate uses for, because we don’t like access cash under balance sheet. We like to get that back to the shareholders in an effective way so, as we’ve been going through this year, we’ve been accumulating cash certainly I had a sufficient amount of cash on our balance sheet. And as we saw the shares retract a bit. We certainly did get more aggressive on the buyback program. I think, as we look forward we will continue to look at share repurchases as a way again to efficiently to get back access cash to shareholders, so there will be somewhat of function of free cash flow and in our outlook free cash flow and other needs for cash in the business. So that’s how we think about it going forward.
Gary Bisbee - Lehman Brothers
Great. Thanks a lot.
Operator
We have a question from T.C. Robillard, Banc of America Securities. Your line is open.
Thomas Robillard - Banc of America Securities
Well, great. Thank you. Just a follow-up on the share buyback slightly. Can you, first with the actual diluted shares outstanding were at the end of the quarter?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
I don’t know if I have? I don’t have the end of the quarter number, I have got the average for the third quarter number which is 84.1, but I don’t have the number as of the end of the quarter right here. And the expectation for the fourth quarter is for diluted weighted average shares of 82.4 million.
Thomas Robillard - Banc of America Securities
Okay. And then, is my math correct if I assume that? of the new authorization you guys have already brought back 500,000 shares for roughly 35 million?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes. Slightly, above 500,000 for slightly less than 35 million, your math is correct.
Thomas Robillard - Banc of America Securities
Okay, great thanks. And then just lastly on France, obviously been a deceleration in terms of the revenue growth if you are looking at on a constant currency basis, but if you look at the continued margin improvement and this excludes, excluding all the payroll tax benefits that you got just on, kind of, core operation. Are you still able to show year-on-year and even sequential improvements in the operating margin? Can you talk to what else has done, I think it’s clearly it’s not a revenue acceleration that you are just getting, kind of, some leverage on the fixed assets, what else are you guys able to do there that are showing continued margin improvement in that market?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Yes. Your point is a good one. We’ve improved by the French market by 20 basis points in operating margin, when you stripped out all of the subsidy in the third quarter, which is followed by about 40 basis points in the first half of the year. So, if you look at the components of that what you will see is our gross margin on the temporary side of the business is quite stable. We are getting a little bit more gross, higher gross margin overall because of the permanent recruitment business we are doing there, but really when it comes down to is driving the efficiency within the overall operation itself. And our French organization, our masters add efficiency and they are always looking for continuous improvement and I think they have done an impressive job in the market that, well that seems some growth. You are right, its not phenomenal growth, yes we are able to continue to chip away at number of efficiency initiatives to keep driving that. So, I think it’s a good performance, I don’t think there’s anyone thing that I would point to but it’s a continuation of looking at our field operations and our head office operations and finding opportunities to keep getting better.
Thomas Robillard - Banc of America Securities
And is it fair to assume that there are? there is continued efficiencies to be guide out as well as, kind of a gross margin mix that could continue to help improve that irrespective of just pure revenue leverage.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
We, as an organization have that list fairly well compiled not only for France, but for every single location and every single entity of what over the next three to four years, whether it would be shared support centers or anything else that we’re working on, I have already done. So, we believe that we have a lot of opportunity in that area, but we’d like to move at a pace that is appropriate because it’s about the client and the candidate you do something a little bit too rugged or too fast and you don’t pay it temporary that’s the basic brand damage right there. So, we’ve got the list, there is more in France, there is much more in France. They know about it, they’re talking about it. And there is much more all over the world and we are just going at it in a sensible way and in a way that is quite sustainable.
Thomas Robillard - Banc of America Securities
Okay, great, Jeff. Thanks for the extra comment.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Thank you.
Operator
We have a question from Mark Marcon, R. W. Baird. Your line is open.
Mark Marcon - Robert. W. Baird & Company
Good morning and congratulations. Just wondering on, nine years ago, Italy legalized temporary staffing for the first time and now it’s generating more operating profits than our U.S. operations. Last week, we got this announcement about China and you’re the only non-Chinese company as far it’s able to provide temporary staffing services over there. And what I’m wondering is when we think about that from a longer term perspective. How do you think about that job? I know you’ve been meeting with the Chinese Minister of Labor. What are the prospects over there for the longer term perspective, when do you think about the next ten years of Manpower.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Well, to us between China and India, we see these as the real potential to dwarf what great accomplishments have happened in Italy. And the reason we say that is that you know, clearly, sorry it does have this advantage here. And the labor arbitrage, which is being a key driver for moving a lot of businesses there, is actually starting to be minimized a bit. So, it’s not unusual for us to be putting engineers to work at Chinese companies or at multinationals at $30,000 to $50,000 to $60,000 a year. So, we’ve got some 61, I think right now. Maybe, 62 offices in China and about the same in India. We believe that this is a very big opportunity for us. We are moving towards these opportunities with the right speed that is not about press releases and we were reluctant even put this one out because we want to approach the Chinese market in a very sensible way. We’ve worked very hard with the government and we’ve done a lot of training with our Shanghai International partnership office that has been established for almost four years now. So, we really look at these as great opportunities, it comes down to timing. If someone were to say, is this going to be a big impact on us next year or the year after? Yes, it’ll be a marginal impact it will help a little, but the big impact isn’t really until, you know, kind of a four-five year out, which is like a snap of a finger sometimes. So these are big opportunities, big geographies, we’re moving into tier two cities in China in 2008 and a tier two city can be as much as 25 million people. So, there is a lot of opportunity, we’ve got a good management there and we’re excited about the prospects.
Mark Marcon - Robert. W. Baird & Company
Great. And then, when we think about Italy? you had a 120 basis point improvement in your operating margins over there. How much higher in the margins go in your 7.3%?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
I’m never satisfied, but having said that it will really will depend upon their mix of business. Its two things when you look at that market is, how much permanent recruitment can we get? And how does that improve the mix? And then what is our balance of business between small medium-sized businesses and large-key accounts. And then what is the evolution of the market place? So those are the things we look at. Because there is a basic evolution of the market place that would probably drive down some margin. However, we believe that because there is a large content of small companies within Italy, which is a little different than other European countries, particularly in Northern Italy. And they are really seeing the value of the service. We think, we can probably inch that up a little bit, but to see that dramatically improve is out of the question. But my view is, inch it up a little and you’re still a hero because that’s a good margin for our business.
Mark Marcon - Robert W. Baird & Company
Absolutely. And then, the broader question, we’ve got Merkel in Germany, we’ve got Sarkozy in France. What are your European colleagues telling you about, kind of the longer term point of view about Continental and Europe?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
I would say the sentiment is they believe it’s their time in the batter’s box. There’s a lot of buoyancy there that there is a strength, there is a seriousness of the EU. There are leaders within the EU now that are talking about growth and talking about involvement on an overall scene. And this is creating a sense of confidence and then is being backed up with an economy that is continuing to be strong and one of the real questions will be what they do with their currency and they worked that out, but if you would have talked to our people they really feel is though, it’s their turn if you will to be a real economic force on a worldwide basis.
Mark Marcon - Robert. W. Baird & Company
Well, congratulations and obviously boards well for you.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Thanks. One last question please.
Operator
Our final question comes from Jeff Silber, BMO Capital. Your line is open.
Jeffrey Silber - BMO Capital Market
Great. Thanks a lot to let me sneak in. On the franchise? can you just tell us what were the strategic reasons behind that and that’s something we should expect going forward.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
The strategic reason behind ?
Jeffery Silber - BMO Capital Market
Behind the franchise or purchase in the U.S.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Anytime there is franchise that is? that we either with once to purchase or wants to be purchase, we will buy, it is in a creative acquisition. They carry all of the same brands, wouldn’t be unusual for us in any given year to pick up three, four franchises. This one just happens to be a very large franchise, so it’s kind of, moved in and need a little bit more, but you’ll see some smaller acquisitions happening in the forth quarter. We do these and they are very easy because they follow the same brand, they follows the system, the culture. It’s sometimes have to do with the state planning and some of those issues.
Jeffery Silber - BMO Capital Market
Right, great. And on capital expenditures, Mike or one of you can tell what we should expect in the forth quarter. And I know you are not giving 2008 guidance, but sort of, directionally where should we see CapEx going next year relative to 07?
Mike Van Handel – Executive Vice President, and Chief Financial Officer
Yes. So, we’ll finish this year up in the $90 million range as we look into next year, we’d proceed, continued new office opening, continue refurbishments of branches as we normally would. So, now we would expect what I call some of a normal increase in the 10% range, certainly we haven’t developed all of our plans, we are in the midst of that right now. So, I’ll say that, that is not only official guidance, but I would say, I wouldn’t expect anything too far out of the ordinary at this stage.
Jeffery Silber - BMO Capital Market
In the bulk of the CapEx relating to your new headquarters, was that last year or this year?
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
All, CapEx were on.
Mike Van Handel - Executive Vice President and Chief Financial Officer
Really, related to new headquarters, very limited if any CapEx overall, I mean it’s the new offices are leased premises are over 17 years lease and some of the? so it’s new effectively and even some of the furniture and fixtures that were came in as part of that lease as well, so no significant impact from the new headquarters.
Jeffery Silber - BMO Capital Market
Okay. Great, thanks again.
Jeffrey A. Joerres - Chairman, Chief Executive Officer, and President
Well, thank you all for attending the third quarter conference call. And we look forward fourth quarter and full year one in January. Thank you.
Operator
That concludes today’s conference. Thank you for participating. You may disconnect at this time.
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