Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Alexander Brand – Stephens, Inc.
Alexander Brand – Stephens, Inc.
I guess I’d like to understand Rick what changed when? When did Office Depot come to you and sort of exactly how are you scaling that back? I guess my concern here is that you in some of your projects and perhaps the Office Depot is a bad example, but in some projects you actually do have some expenses that you build up for the customer and what kind of fixed cost risks that we might have beyond sort of this new guidance? I know there’s a lot there but any color would be helpful.
Richard K. McClelland
Their situation I guess to start with is like a lot of shippers that we deal with and that we don’t deal with, they’re finding the market very tough, volumes are down so we’re rescaling the network. I think our folks have done a terrific job of doing that. In other words, we basically protected their cost structure even though we brought the overall network down so there was no pain for them there and I think we probably found some additional cost savings for them. That’s their problem and we’re responding to their problem.
As it relates to any cost hangover, we do have provisions built in to our agreement with them that obligates them to certain fixed costs if for any reason we were to stop servicing the work. So, I’m not sure if I’ve answered all your questions but that’s my attempt.
Alexander Brand – Stephens, Inc.
As your quarter progressed it sounds like later in the quarter and particularly since the quarter ended that business has more materially weakened. Is that accurate?
Richard K. McClelland
Yes, I think at the very tail end of October, more pronounced in November and then it just seems to – yes, that’s really it. The end of October and certainly in to November and we certainly haven’t seen any uptick.
Alexander Brand – Stephens, Inc.
So, it must have been very difficult to come up with any kind of guidance because you don’t know how much worse it can be. Can you help us understand how you thought about that? Did you sort of look at it and say, ?We’ve got to plan for it to get worse on the top line and we’re going to have to respond on the cost side as a result??
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