Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Keith Siegner with Credit Suisse.
Keith Siegner - Credit Suisse
It sounds like the remodel is on track for completion by the end of next month and it sounds like some of the marketing might be shifting a little bit more towards the direct mail program. Can you give us a sense of the unit performance maybe on the comp line, as to units where the first and second round of the direct mail was sent out and how that compared to the rest of the restaurant base?
Kimberly Grant
I can answer that question. In the restaurants that were receiving the direct mail, they averaged about two to three points better than the rest of the system with the direct mail support. Without the direct mail support, they were about three-tenths better than the system in sales.
Marguerite N. Duffy
One thing to keep in mind -- that is, a larger percentage of the system is remodeled, so that would be a larger --
Keith Siegner - Credit Suisse
Right. A question for Margie regarding the free cash flow expectations for fiscal ’08 now, can you give us an updated number for where you are seeing free cash flow?
Sandy Beall
How do you define free cash flow?
Keith Siegner - Credit Suisse
Cash flow from operations less CapEx.
Marguerite N. Duffy
We said it would be slightly positive.
Keith Siegner - Credit Suisse
Okay, and then last question; you’re not in violation of any covenants right now but you say you may be by the end of the year. How close are you on which covenant? Can you give us a couple of details there?
Marguerite N. Duffy
It’s our leverage ratio and our coverage ratio and it depends on sales, the closeness depends on sales.
Keith Siegner - Credit Suisse
How close are you?
Marguerite N. Duffy
Again, it all really depends on sales, so based on even these projections that we’ve share with you for the year, we could be in violation over that timeframe.
Keith Siegner - Credit Suisse
Have you already spoken to any lenders?
Marguerite N. Duffy
Yes, we are.
Sandy Beall
Yes, definitely.
Keith Siegner - Credit Suisse
Okay. I’ll get back in the queue. Thank you.
Operator
Your next question comes from Joe Buckley with Bear Stearns.
Joseph Buckley - Bear Stearns
A couple of questions; first, Margie, I just want to make sure I heard on the tax rate, the tax rate for the full year, did you say 7% to 9%?
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