Question-and-Answer Session
Operator
Yes sir. And thank you. The question-and-answer session will be conducted electronically. [Operator Instructions]. And we will take our first question from Chris Allen from Banc of America Securities. Please go ahead.
Christopher J. Allen - Banc of America
Hey guys. How are you doing?
Thomas M. Joyce - Chairman and Chief Executive Officer
: Hey Chris, how are you?
Christopher J. Allen - Banc of America
Good. Can you just start off in the Global Markets business ex-Direct Edge. We still saw a decline in the pre-tax margins from 22%, 21% even though this had record trading volume there. Just wondering if you could kind of walk us through what's causing the decline even as volumes are picking up and I think revenues ex-Direct Edge were growing?
Steve Bisgay - Chief Financial Officer
Yes, I am happy to. I would say that from the margin perspective the vast majority of our expense ratios in margins are consistent quarter-to-quarter. I think that there is a bit of a dip with regard to our trading revenues as it relates to a bit of the anomalies market impact in July which had this dampening impact, but in general as we look and take a step back in the sense our expense ratios and how we're managing our business, things are generally very tightly in line including Direct Edge which we saw in the previous quarter and a quarter a year ago.
Thomas M. Joyce - Chairman and Chief Executive Officer
: And only to put that in perspective, we handle as you heard nearly 1.4 million trades a day, the vast majority of which comes from our private clients, our regional broker-dealer network. It is a dealing where you want to handle that kind of volume, billions and billions of shares a day is to do with electronic automated point model and clearly involve those fund models, there are a variety of models one of which is the step up kind of model.
Now I don't think you have to go far certainly I am sure you all remember the papers in August, the train wrecks that occurred and set our business in August including reportedly some of our larger competitors losing close to $400 million in one day. I think we did actually a remarkable job of managing risk through the quarter. So while the margins are down out here I think Global Markets performed exceptionally well during the quarter.
Christopher J. Allen - Banc of America
Okay so it's fair to say that I mean the decline was on revenue capture trying to illustrate that point so to speaks that... the challenge in the step up models will show up there, right?
Thomas M. Joyce - Chairman and Chief Executive Officer
: Yes Chris, the kind of revenue capture is much more relevant with when you look at the mix of business and increase in ALP portion of our business but you are right, clearly the long-term looks against the critical component handling August what was our order flow the long-term book had a little bit of a hiccup in August which we recovered nicely from. But it's really more the blend of business. When you throw in top of that and including I should say, the blend of business is the fact that over the kind of Bulletin Board area which we talked about, the region has been relatively well for about a year now, certainly it enjoyed a very solid quarter. So it is very much the fact to our blend of business in terms of the profile of revenue capture as opposed to any one specific catalyst.
Christopher J. Allen - Banc of America
Sure. I mean, we know about the blend right now. Just the thinking about August relative to September, did you see an improvement in the capture rate ex-ALP business?
Thomas M. Joyce - Chairman and Chief Executive Officer
: We don't really ex-out ALP business; we did not see an increase in the Bulletin Board. We certainly saw I think their performance in some of our models, but the Bulletin Board and Pink Sheet flow remain tepid
Christopher J. Allen - Banc of America
Okay. And then just on the comp expense, I mean, just looking at it, from thinking about it from net revenues came down about $20 million, $27 million sequentially ex-the gain, the comp expense only came down about 6 to 7, I thought that there would be more leverage in the comp expense could you give us some color there?
Steve Bisgay - Chief Financial Officer
Sure, looking at the comp expense, when you break out the gain and we pull out Direct Edge, the ratio is about 43%. Its really very much in line frankly with what we saw for Q2 '07 which is 42% and in fact all for Q3 2006 was up 42%, so there is a general consistency I think from the period to prior period.
Christopher J. Allen - Banc of America
Okay, I'll get back in the queue, thanks, guys.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Thanks Chris.
Operator
And we'll take our next question from Ken Worthington from JP Morgan. Please go ahead.
Ken Worthington - JP Morgan
Hi, good morning.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Good morning, Ken.
Ken Worthington - JP Morgan
TJ, I think, you spend much of the time on the Global Markets business, talking about what worked. Can you spend a little bit of time on may be what is not working. If we look at the first three months of... I am sorry, first three quarters of this year versus the first three quarters of last year, revenue is growing but its not growing very much. So I guess, the ultimate question is how do you get more of what's working to grow faster and how do you shrink the areas that really not working?
Thomas M. Joyce - Chairman and Chief Executive Officer
: Unfortunately nothing is not working which we are happy with, there are different growth rates to stay competitive in the different business. As I mentioned, the electronic component of Global Markets business is a segment of business we are focusing on, growing very albeit in a low base, but at a very high relative speed you know pushing 40% compounded over the last several years. The electronic business is, and will continue to be a focus. For voice business, while I don't have the exact numbers and would give more detail on November 5th but it is clearly growing more slowly, but it is growing. Now remember, you guys all work in this industry. It is not a linear business by an stretch. Volumes go up volumes go down. The VIX index changes, so there's a lot of dynamics around what happens within our industry. I happen to think that given what we saw in terms of the operating environment that the Global Markets businesses which again performed admirably. So I don't think any think is broken. We certainly want to enhance the stuff that is growing more rapidly like the electronic business. Clearly, the growth creation really in growth of the ALP business and KnightLink business over the last 14 months is a sure sign that we are focusing on growing our client business, and are enjoying successes. So we are not closing anything. We are focusing on growing and obliviously focused even more so on what's growing the fastest.
Ken Worthington - JP Morgan
Okay, thank you. And then for Steven, you talked about sort of the $60 million income before profit sharing in Deephaven. You didn't tell us where we stood right now. Where do we stand at the end of the September quarter? How far below that bogie are we?
Steve Bisgay - Chief Financial Officer
: We are slightly below that at the given point.
: Ken Worthington: Okay. So we should expect if Deephaven has a reasonable quarter to get to that 75% fairly quickly. Is that right?
Steve Bisgay - Chief Financial Officer
: Yes, you're right
Ken Worthington - JP Morgan
Okay, thank you. And then, also in terms of the accounting treatment for Direct Edge, how should... if Direct Edge was... the ownership was far below the 50% level in this quarter, how would that have impacted revenues and expenses? So, you mentioned that the operating margin goes up but how does it impact in each of those lines?
Steve Bisgay - Chief Financial Officer
It would have been... if you are talking about what the impact would have been for Q3, the current quarter; it would have had a clearly significant impact. The revenues for Direct Edge were approximately $38 million, offsetting cost against that would be about the same as well before... so we are talking about offsetting revenues and incentives roughly in the same.
Ken Worthington - JP Morgan
Okay. Great, thank you. And then the last question, for the... the sales in Deephaven this quarter, I think its $200 million that you indicated the difference between September 30th and October 1st, any context there that you can help us out with?
Steve Bisgay - Chief Financial Officer
We are always happy to welcome new money to Deephaven.
Ken Worthington - JP Morgan
: Thank you very much.
Steve Bisgay - Chief Financial Officer
Thank you.
Operator
And we will take our next question from Rich Repetto from Sandler O`Neill. Please go ahead.
Richard Repetto - Sandler O`Neill
Hi Tom. Hello?
Thomas M. Joyce - Chairman and Chief Executive Officer
Good morning, Rich.
Richard Repetto - Sandler O`Neill
Hey Tom. Hey, first question is, on the corporate segment, I am hearing an echo on my side, but on the corporate segment if you ex out or exclude the effect of sale of Direct Edge and the investment in Deephaven, it looks like it was a $7.8 million loss excluding those two items out. And, that's up from $1 million and $2 million from the 5.4 in 2Q and 5.8 a year ago. So I am just trying to see was there was a reason why the corporate overhead expense was higher in this quarter than prior quarters?
Steve Bisgay - Chief Financial Officer
No Rich, I don't think there is any specific reason, looking with me at historical operating expenses in the corporate segment they will be varied to an extend, but not dramatically They are roughly $1 million or $2 million up and down for any specific quarters. Number of factors playing into that obviously, with regard to things such as marketing costs and other overhead type costs. But there is nothing specific or unique that I can point out that it would be.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Yes, kind of just timings Rich, when we do a marketing campaign and we get it built in one quarter versus kind of a slow marketing quarter we don't get a sale up there is nothing... there is no switch or no thematic change in how it has been handled.
Richard Repetto - Sandler O`Neill
Okay. And just to follow up on an earlier question, on the margins in the Global Markets segment, if you exclude Direct Edge the 22, the 21 but I guess what I'm... we talked about the mix and where you are getting flow and may be I am just looking at this wrong, but isn't that all being captured by the realization rate of the revenue capture and then the margin is after that reflects expenses and pre-tax income after that?
Thomas M. Joyce - Chairman and Chief Executive Officer
: I mean it depends, the pre-tax margins are pre-tax margin whether, whatever we're selling in the revenue line try to contribute revenues and whatever our expenses are and we had a pre-tax margin. So if you want to look at the realization rate as if on and above revenues, its fine. It's just that we don't focus on it because we focus on what every incremental trade, whether its profit going on and if profit goes up growth of 20%, 30%, 40% margins. So the realization rate is a data point but it's not one that drives our decision process. Our decision process is driven as to whether in each incremental trade is a profitable one and one that generates margins in excess of 20%.
Richard Repetto - Sandler O`Neill
Okay. And then Tom; wouldn't these ALP trade like... I hear you saying about being low realization rate but they add revenue. Wouldn't the margin be in it's electronic be very high, again realization rate low but the margin and what you actually make once you get the revenue in, be very high?
Thomas M. Joyce - Chairman and Chief Executive Officer
Actually you're right. It's high but I may not use the word very, but a lot of the ALP trades are actually up, they do have very attractive margin, rest of all... we see no, there is no losses, we see any expenses attached to it for example, because it is all positive selection. We take what works for us which of course then drives down expenses of our client. There is always often a period of adjustment as you bring on a new ALP client, profile flow is usually different than the profile of prior client flows, or sometime there is an adjustment while we tweak models to get the kind of returns we like. But you are right, in general, we believe that growing of the ALP product will help us really solidify and expand our pre-tax margin, you are right.
Richard Repetto - Sandler O`Neill
So I guess then we could see potential with an expansion in the margin but I am not sure how much of this bringing on expense was in this quarter. But all other things being equal, it would appear that the margin would go up because your mix of ALP is going up, get higher dollar volumes, showing some operating leverage, that's why I was pretty curious to see it go from 22 to 21.
Thomas M. Joyce - Chairman and Chief Executive Officer
Yes, at this point, the electronic business is about a third of the Global Markets business. A very large component of the Global Markets business is the robust voice business we have and still has somewhat lower margins in the electronic business, so it's a function of the blended business and as the ALP business grows, we will... we do expect the margin growth. But at this point, the impact of the electronic business be a larger... a larger portion of our Global Markets business and of course we are working towards that.
Richard Repetto - Sandler O`Neill
Okay. And very last thing Tom, on the buyback, you did make some comments in the prepared remarks about balance and strategic acquisitions and balance sheet management, but anymore specifics? You really... you significantly increased the number of shares, is it going to be dictated by... like you do have over $480 million when you include the cash Deephaven as well as the line of credit you have now. So any... I could... also on how aggressive you would be and what might determine your aggressiveness?
Thomas M. Joyce - Chairman and Chief Executive Officer
Aggressiveness in acquisitions or aggressiveness in the buyback, I think we had a reasonably aggressive quarter, buying $17 million was a high for us certainly and it really does depend upon the outlook for acquisitions. If we can do I would tell you for sure, my bias and bias of Board is to pursue accretive acquisition. So we position the company for long-term growth. It's wonderful to enjoy accretion through optimizing the balance sheet and returning the excess cash to our shareholders. I don't think you might continue to see, but if we have an opportunity to look at attractive acquisitions that will probably take best of them. And that's just a matter of timing frankly, a big part of my job, my specific role is talking to people a lot about opportunities, but I try to do that. So sometimes they come to get us, sometimes they don't, so lot of that will be timing and until we come to a point where we find an interesting acquisition candidate or an emerging candidate, we will be in the market buying stock back.
Richard Repetto - Sandler O`Neill
Okay, thanks very much. Appreciate it.
Operator
We'll take our next question from Mike Vinciquerra from BMO Capital Market. Please go ahead.
Michael T. Vinciquerra - Bank of Montreal
Thank you, good morning. One clarification first with Steve; I think, you said... you were asked about Direct Edge and I think you said the revenues were $38 million according to the stats in your press release, I come up with like 28.5, the 192 minus 164, is that the right number?
Steve Bisgay - Chief Financial Officer
It is actually, because the $38 million of the gross numbers, there is also elimination offsetting activity in between Knight and also Direct Edge themselves.
Michael T. Vinciquerra - Bank of Montreal
I see, okay. Thank you. And then how does that 38 compare to Q2, can you just give us a comparison?
Steve Bisgay - Chief Financial Officer
It's up significantly, actually its 38 compared to Q2 approximately $22 million in Q2.
Michael T. Vinciquerra - Bank of Montreal
22, okay, thank you. And then I guess, just in terms of reporting, Tom, you mentioned this and certainly we've seen that the... when we look at your core equity revenues, such as what we can kind of get out with your... the revenue capture you provide. That is the percentage of your total trading revenues is dropping pretty significantly, is there at some point... obviously that's going to change a little bit with Direct Edge not being in the mix now, but at some point we start providing more detail on some of the other pieces, the Hotspot which I think is growing nicely, your international business, any additional color might be helpful then I think people are little confused at how to look at your results?
Thomas M. Joyce - Chairman and Chief Executive Officer
: Mike, I think your points well-made and just to be completely honest, we are actually working on the different type of presentation from the analyst day where we will give you more detail on how does this operate. We fully appreciate the fact that there is little opaqueness when we refer to the word Global Markets, we don't give you lot more detail beyond that, we've done it for a variety of reasons, many of which was competitive reason. Mike, as we move towards the analyst day, we do hope to have a new... we hope somewhat... a lot clearer presentation so; there will be more granularity around some of these things.
Michael T. Vinciquerra - Bank of Montreal
That will be much appreciated, thank you. And then I just wanted... I know you've talked about this little bit publicly, Tom, the Manning rule impact on your Bulletin Board business. Can you just kind of walk through that again and give us what you think the impact will be in that and if that's going to drive lower overall trading volumes in your OTC and Pink Sheet business?
Thomas M. Joyce - Chairman and Chief Executive Officer
Typically, Manning will be put in for Bulletin Board and Pink Sheet Limit orders. And typically in the past, as investors continue that kind of regulatory input and the natural order flow sort of stands on its own intensive increase actually in volume. So, we are hoping that the past is prologue. So we expect, we think a thematic secular event might be that with Manning rule in, we might see a more return on investors to the Bulletin Board and Pink Sheet business. Having said that, by regulating it more, the converse of that is a change in our trading behaviors that will likely result in a loss of revenue, of somewhere between $10 million and $15 million, because we are going to have to reconfigure and reposition the way we trade this stuff. And that is a singular number that looks towards the future, as if the status quo exists, i.e. there is no increase in volume, there is no change in investor behavior. There is no change in trader behavior and hopefully, we will adjust to the operating environment and perform better. So starting in mid November, and we think the top end of the negative impact on the Manning rule in over-the-counter Bulletin Boards is again around $10 million to $15 million annually.
Michael T. Vinciquerra - Bank of Montreal
Annually, okay. And presumably though there is some margin-related that's not pure margin though we should look at, and coming off the bottom line?
Thomas M. Joyce - Chairman and Chief Executive Officer
No, I mean we are not making money, we are going to have to adjust various expense bases and things like that. Certainly we expect to adapt to the new environment and expect that it will be less of a loss, but that is what we look at for the north end of the expectation would be that number. We certainly will try to manage it to a much better number as the year progress.
Michael T. Vinciquerra - Bank of Montreal
Very good. Thank you very much.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Thank you.
Operator
We'll take our next question with Roger Freeman with Lehman Brothers. Please go ahead.
Roger A. Freeman - Lehman Brothers
Hey, good morning. I just wanted to come back I guess that Rich's line of questioning around the ALP margins. So TJ, I mean would you say that there is... is there an order of magnitude difference between those margins on the upside versus your average pre-tax margin for Global Markets?
Thomas M. Joyce - Chairman and Chief Executive Officer
Is it more intact, certainly because it seems like the ECN expenses aren't associated with it. But it is not an order of magnitude at all, it is just 90% of the margin in viable terms.
Roger A. Freeman - Lehman Brothers
Okay. But, as you look at the... you gave us which was helpful, the percentage of your flow that was in the ALP. And that jumped meaningfully. And you also made a comment that I guess as some of the new broker-dealers get up to speed that those that the profitability may be a little bit lower. How much of that increase was coming from new customers, clients you added during the quarter as opposed to ramping up of others that you've already... you've gotten familiar with or so on?
Thomas M. Joyce - Chairman and Chief Executive Officer
It will be 75/25, 70/30 higher number being a ramp up of old clients, and lower number being new clients.
Roger A. Freeman - Lehman Brothers
Okay.
Thomas M. Joyce - Chairman and Chief Executive Officer
: High point actually is reasonably small and we expect to continue that. When you add these clients they are a) bigger and b) they have a more complex infrastructure, technology infrastructure, so there is more work associated with it. This takes longer, but we get the pipeline in a reasonable shape so we expect that we add a handful every month going forward.
Roger A. Freeman - Lehman Brothers
Okay. How meaningful as a percentage of total line you think that's ultimately be, based on the discussions you have with customers, where they want to go with you on that?
Thomas M. Joyce - Chairman and Chief Executive Officer
: I think it could go to 50% level of clients. That is certainly what we aspire for.
Roger A. Freeman - Lehman Brothers
Okay, over a year timeframe or years?
Thomas M. Joyce - Chairman and Chief Executive Officer
: I'd say probably a year and a half or two years.
Roger A. Freeman - Lehman Brothers
Okay. I just wanted to ask you a question on Direct Edge, but now that you've just told these stakes here. Is there... do you anticipate any change of strategy, I mean given the current pricing this business is really never set up to make a profit, I'm not sure that's actually the goal, given the parties involved and for the expense reduction?
Thomas M. Joyce - Chairman and Chief Executive Officer
: I mean more accurately, the business hasn't made a profit, but I would say, it was not set up to not make a profit. I think while like any start up company, you have things you have to deal with, not the least of which is sometimes inverted pricing by competitors. So, it's definitely set up to making profits. As to the strategy, I've articulated in the past, what I think would be an interesting strategy, working with the exchanges etcetera, etcetera. Having said that, I am sort of the equation now because it an independent entity run by Bill O'Brien as a separate entity, so those guys and their Board will set the strategy for Direct Edge at this point forward.
Roger A. Freeman - Lehman Brothers
Okay. And then if my last quarter, I would just be around some of your other business, but I guess specifically ValuBond and Hotspot. I mean how would you characterize sort of where they are right now relative to what you saw when you acquired them?
Thomas M. Joyce - Chairman and Chief Executive Officer
: I think they both are little behind frankly, we had different issues with different... with these company and one common theme was the fact that we had management changes at both organization. That was a little disappointing. We certainly weren't expecting that to change management out. Two is we had a little more of a technology drill on Hotspot than we expected. Mostly because, no sooner did we buy it than we ended up with three or four new competitors out of nowhere, so the dynamics of the market changed somewhat. But the good thing is that both situations are in good shape right now and growing nicely. So I think we are behind the tragic period when we had to make changes, now we are more in the building mode, so a little bit behind but certainly making progress.
Roger A. Freeman - Lehman Brothers
Okay thanks a lot.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Thanks Roger.
Operator
And we will take our next question from K.C. Ambrecht with Millennium. Please go ahead.
K.C. Ambrecht - Millennium Partners
Hi good morning thanks for taking the question. TJ, how long have you guys been out of the market following your buyback?
Thomas M. Joyce - Chairman and Chief Executive Officer
: A window that closes roughly five weeks, before we report earnings
K.C. Ambrecht - Millennium Partners
So five weeks you've been out, okay.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Or may be, I am sorry, four weeks. No it's four, five weeks.
K.C. Ambrecht - Millennium Partners
Okay. When does the buyback resume, are you guys are going to be open in the next couple of days?
Thomas M. Joyce - Chairman and Chief Executive Officer
: The window opens tomorrow.
K.C. Ambrecht - Millennium Partners
Okay. And then right now it looks like the stocks trading at 6 to 8 times the core broker-dealer, if you kind of put a reasonable evaluation on Deephaven, and you strip out the cash, the core broker-dealer was trading was 6, 7 times to '08. What's your Board thinking, any talk on taking this company private or doing some sort of Dutch tender there?
Thomas M. Joyce - Chairman and Chief Executive Officer
The Board has a lot of thoughts and if anything was anterior, we would have released it to the public. So we debate a lot of things, but one think that is clear is that we are in the market buying stock back. If we change that into a more aggressive profile in any way, shape or form we will let you guys know.
K.C. Ambrecht - Millennium Partners
Okay. If you think that 6, 7 times earnings after tax, and ADT went for 20 times pre-tax, something is wrong. I mean Citi probably overpaid, but it seems like you guys are probably undervalued?
Thomas M. Joyce - Chairman and Chief Executive Officer
Yes, I wouldn't debate your point about that we are undervalued. I think a lot of people in this room feel the same way. But we want to get the story told as clearly and as crisply to the invested public, I hope the people will react appropriately and start buying the stock.
K.C. Ambrecht - Millennium Partners
Okay. Thanks guys.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Thank you.
Operator
And we'll take on next question with Niamh Alexander with KBW. Please go ahead.
Niamh Alexander - Keefe Bruyette & Woods
Thanks for taking my question. If I could just follow up on the acquisitions, TJ, can you just give us a sense for may be what areas you would like to expand into or shifting Direct Edge off of the balance sheet or if there is a change in equity market environment, has that presented some opportunities?
Thomas M. Joyce - Chairman and Chief Executive Officer
No, I think the way we look at it is what does the Knight brand stand for? What does the Knight brand not stand for and we sort of want to play to those core strengths. From where we sit, Knight brand stands for superior execution. The Knight brand stands for a particularly strong focus on the mid cap, small cap areas. So anything that we can do to enhance the profile in those areas, improve our profile in those area, we would certainly be interested in pursuing. And we had discussion with numbers of people, obviously, we've done several small acquisitions over the years, thematically in those times of areas. So again, we are focused on execution and then we are focused on the mid cap, and small cap space, and as we can look for opportunities there, providing our client access into those realms, we will. So obviously I am not going to give any specifics, or any ideas that we do, or don't have. But I would try to leverage off with the Knight brand standpoint.
Niamh Alexander - Keefe Bruyette & Woods
Okay, that's helpful, thanks so much. And I can just rollback for ALP, probably final question on this. Are any of your competitors starting to offer the same service as you or may be the exchanges of new order types?
Thomas M. Joyce - Chairman and Chief Executive Officer
I think as you know, that's a great dynamic space and people are constantly looking at new order type. We definitely have a couple or three competitors out there; they are not actually dissimilar to the competitors that we bang heads with everyday. So unfortunately for us, nobody is leaving the water front untended or leaving us alone on it. We typically have company as we pursue some of these new initiatives. So while I think we have a head start on the ALPs and KnightLink is on my opinion really unbiased, but KnightLink is the best product out there in this realm, there is some other competition out there.
Niamh Alexander - Keefe Bruyette & Woods
Okay, that's helpful, thanks. And if I could just clarify, if you could just dump it down for me, and with respect to Deephaven, Steven, Knight's going to continue to get 100% to the earnings after profit sharing and there won't be any adjustment for a minority interest. That is if Knight will continue to get a 100% of the earnings after profit sharing even though the Deephaven management will own 49% of the equity. Is that how we should think about it?
Steve Bisgay - Chief Financial Officer
You should think about that we will... the revenues will reflect the full revenues of the Deephaven business. The minority interest line item will represent that which the compensation line item would reflect it today, but nothing at all has changed. This is simply just a classification on the income statement in terms of where it gets... what gets disclosed.
Thomas M. Joyce - Chairman and Chief Executive Officer
: To just may be to put in other way, when we put it 50-50 going forward assuming let's assume the exercise, their option and they become 49% equity owners of Deephaven. So the 50-50 pre-tax split when the number is below $60 million, we will still get a 100% of that 50% and then once it earns more than $60 million and when the pre-tax brings us to 75/25 on $1 above $60 million, we will continue to get a 100% of that 25%.
Niamh Alexander - Keefe Bruyette & Woods
Okay that's helpful thanks so much. Those are my questions for now.
Thomas M. Joyce - Chairman and Chief Executive Officer
: I think, hi Darryl, I think we have just one... time for one more question, is there any body left?
Operator
Yes sir. We will take our final question from Peter Monaco with Tudor. Please go ahead.
Peter Monaco - Tudor Investment Corporation
Good morning, thank you all for your time. I certainly appreciate the more aggressive buyback posture in the quarter. Tom, given the confidence you've expressed in the outlook for your business at the outset of the call, why wouldn't you want to buy every share in sight at the $13.00 price particularly since it would seem to me that buyback and acquisition at least of moderate size are not mutually exclusive given the cash generation for any reasonable environment and given that you arguably have more debt capacity?
Thomas M. Joyce - Chairman and Chief Executive Officer
: As I hope I've articulated that we absolutely believe in the stock here and we will continue to buy it. The only constraint would be the ability to use our resources to do an accretive deal. We just... we don't want to use our last bit of fire power and have wonderful deal show up on our doorstep. So we're trying to rebalance and we will certainly continue to buyback stock and use them very aggressively. So we agree, at $13 you want to buy a lot of it or you want back up the truck and load it up. We also want to make sure that this opportunity comes up to buyback, to merge or acquire somebody who can propel us to higher rates of long-term growth, we want to be interested in that too. So we definitely want to have our cake and eat it too, as I've said in the past and we'll try to do it... we'll try to balance it appropriately.
Peter Monaco - Tudor Investment Corporation
Thanks a lot.
Thomas M. Joyce - Chairman and Chief Executive Officer
: Thanks Peter. And that actually brought the call to a close today. I want to thank everybody for joining us on the conference call this morning and I certainly look forward to speaking to all of you again either in person or via the webcast at our Analyst Day Conference on November 5th and November 5th at 10:30 AM Eastern Time, couple of weeks away. We look forward to talking to you all again. Thanks for your interest, take care everybody.
Operator
Once again ladies and gentlemen; that will conclude today's conference. We thank you for your participation. You may now disconnect.
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