Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Steven Rees – J.P. Morgan.
Steven Rees – J.P. Morgan
Can you talk about your debt covenants with a little bit more color specifically debt down 15% trend in October into '09. How much room would you have under that scenario what additional real estate would you have beyond the headquarters you could monetize or additional cost cuts you've already announced to prevent breaking your covenants.
Robert Vincent
I think we would project that the sale of the headquarters would probably provide approximately 20 basis points in the calculation, which obviously would give us some cushion on the down side. If that transaction doesn't close and comps are down at the level that we suggested in the guidance, certainly it will be tight.
However, having said that, I think one of the things that benefits us in Q4 that some people probably haven't recognized from a cash flow perspective, we really get the benefit of gift card sales. And if we hit the target that we sold last year which we think is pretty reasonable given the fact that we have more stores in our system and the additions of Mitchell's we think that helps us get cleared.
Steven Rees – J.P. Morgan
On the CapEx in 2009 assuming that those stores don't get built and the remodels don't happen, what could be the best-case scenario for CapEx in '09?
Robert Vincent
I think at this point it's premature to conclude or speculate what the CapEx might be. Clearly if we had no new unit growth we would have obviously some remodel stuff which we may or may not do, and we would have maintenance capital. I think overall it would be pretty modest.
Steven Rees – J.P. Morgan
What's the run rate of maintenance capital you would expect on an annual basis?
Robert Vincent
In my remarks I indicated that we spent $800,000 in maintenance capital in Q3, so I don't know if that's the right proxy but it gives you some sense.
Steven Rees – J.P. Morgan
Maybe in that $3 million to $4 million range on an annual basis?
Robert Vincent
I'll give you more color when we have really gone through and prepared an outlook for '09.
Operator
Your next question comes from Jason West – Deutsche Bank.
Jason West – Deutsche Bank
Can you talk a little bit more about the trend in October? Was the mix the same as you saw in the third quarter and the traffic was the difference or was there some other complexion in the comps that changed in terms of pricing or mix and has November seen any kind of rebound or are you still in that same kind of range?
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