Question-and-Answer Session
Operator
(Operator instructions) Our first quarter or comment comes from the line of Ross Haberman [ph]. Mr. Haberman your line is open.
Ross Haberman
Good morning, Bob. How are you?
Robert Thornton
Good. How are you?
Ross Haberman
Could you tell me on the revenue side, how much softness you are – you would attribute to lack of optional or discretionary procedure. I know you were concerned about that issue. Is this coming forward is soft as you thought it might and were there any one-time expenses in the quarterly results?
Robert Thornton
They were no one-time expenses in the quarterly results. Actually there is a $300,000 interest expense charge for the collar around the shares given in the Carmichael’s acquisition. So, interest expense includes $300,000 of what would essentially be derivates costs because we put a collar around that and if he sells before a certain date he is entitled to some reimbursement for that.
Ross Haberman
Okay.
Robert Thornton
One of the hospitals had about $150,000 of unanticipated repairs on one of the digital imaging machines. That doesn’t happen every quarter but I would tell that a one-time thing because it happens periodically. Things (inaudible). So, I wouldn’t say that there is anything terribly one-time in the operating results in the hospital. As far as the demand for the services in the hospitals, it is a little – it is softer than we expected and it is in the discretionary stuff and I don’t have statistics to show exactly how much the discretionary is down but it would be reasonably substantial. Some of that will be because there is doctor turnover here and there in the hospitals and that usually occurs in the summer and the fall, rather than in the busier seasons of the winter and spring, but we have seen a decline in demand.
Ross Haberman
And do you think you will continue to see it and have you broken, again have you broken that out as a percentage of total revenue, annual or quarterly revenue?
Robert Thornton
Not broken that out as a percentage of revenue. We don’t have a statistic precisely like that and it is also subject to some clear definitions. I don’t really have anything like that. As far as whether we expect it to continue, we have seen blips in volume over the last month, subsequent to September 30th. But in none of the incidents sustained here, blip up for a week or two and take the hospital because of flu and (inaudible) what you see in the fall. So, what we are seeing is not abnormal. It is just at a lower level than I think we expect it. I think the real measure of what demand can look like will come in the winter. We will certainly get the normal Medicare pickup because the winter months are harder on the elderly and they will come to the hospital and they have to come to the hospital. The question is when the self – when the commercially insured patients become more comfortable in coming and doing more discretionary things, not just deferring treatment. Most of the treatment we are not doing, I suspect is being deferred. It’s going to show up one of these days. Our challenge at that point would be to treat them in an efficient way because they’re likely to be more sick or sicker, when they show up after having deferred treatment for a while.
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