Question-and-Answer Session
Operator
(Operator's instruction) Your next question comes from the line of Ram Selvaraju – Rodman & Renshaw.
Ram Selvaraju – Rodman & Renshaw
First a couple of detail items on the P&L, Chuck, if you would maybe help me out here. So, it looks as though your cost cutting efforts were not as successful as you might have liked in the third quarter. There is a pretty significant reduction between the third quarter and the fourth quarter that you have subjected. If I heard you correctly, you are expecting general and administrative expenses of about $5.3 million in the fourth quarter. Could you provide some more color on how you expect to achieve that?
Chuck Timpe
Hi, Ram. What we said was we expect total cost expenditures to be $5.3 million in the fourth quarter but that is a decrease from the $6.9 million at least reported in the third quarter. It is not just the general and administrative expenses; all cost, operating cost, G&A, research and development throughout the organization.
Rick Anderson
Let me add something and Chuck you can try them in but I think one of the things that Ram was asking was the reduction in expenses for this last quarter would have them have much as we anticipated. I think, Ram that was your question?
Ram Selvaraju – Rodman & Renshaw
Yes.
Chuck Timpe
Okay. There were some wearing of those numbers and that as we decided to cut further, we obviously incur subsequent increases of expenses as it relates to severance, etc. That was one contribution or one contributing factor. The other contributing factors would be that upon a pretty event given that we have eliminated a lot of employees this year, we wanted to make sure that those debts we retained also received the promise at the end of last year colorizes which we are withholding and at the ranking file and the lower levels, the incremental bonuses if you will that were also promised to them when we had a liquidity event which we achieved with some liquidity versus our auction rate securities. So that was a timing issue relative to which quarter do that fell in. That is, and then you will see that coming through in the fourth quarter as well in terms of that is why you are saying further reduction and then finally, we did incur one additional expense that was not in our budget and that related to a several client study that is very cost effective initiated outside of addiction that we really have not discussed too much that we are very excited about and although that the total cost to that study I think will approximate $400,000 or so, I am looking at Gary but I think it is approximately $400,000 or so over the next year spread out, we did incur a couple of hundred thousand of that amount in the quarter.
- To read the full transcript on Seeking Alpha, click here »
