Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Albert Rice - Soleil - Pomeroy Research.
Albert Rice - Soleil - Pomeroy Research
A couple quick questions if I could ask; first of all, you mentioned the $2 million worker’s comp adjustment in the fourth quarter, is it right to think about that as being reflective of expenses incurred in the fourth quarter only or should that have been probably spread over the course of the previous quarters of 2008? Can you give us any incremental flavor you have for that?
R. Dirk Allison
It is a little difficult to be able to answer that entirely. As we look at our actuarial report, there is an opportunity going forward that the $2 million run rate workman’s comp in the fourth quarter could be lower, we’ll have a better view for that at the end of the first quarter.
Albert Rice - Soleil - Pomeroy Research
You mentioned obviously the purchase of Avalon Hospice in the fourth quarter. It looks you spent, if we’re looking at the full year spending for acquisitions minus the third quarter, you are about $4.5 million; was that all for that Avalon purchase or was there anything else going on in there in spending for acquisitions whether it was a payout for VistaCare or something else, an earn-out, or anything.
R. Dirk Allison
It wasn’t an earn-out, it was related to some tax issues for the VistaCare acquisition. The acquisition price for Avalon was approximately $500,000.
Albert Rice - Soleil - Pomeroy Research
Right. It seemed like a very high number for just that one acquisition.
R. Dirk Allison
Right, the remainder of that has to do with VistaCare transaction.
Albert Rice - Soleil - Pomeroy Research
Again on the cash flow numbers, you had a good cash flow quarter, but I’m looking at the CapEx for ’08 relative to ’07 for example; is the ’08 number, looking ahead this year, is that the right number to use. You stepped down a bit in CapEx this year versus last year?
R. Dirk Allison
The CapEx number, we expect to spend about 1% to 1.5% of revenue, which for us will be right around $7 million to $8 million or so an annual basis. The big issue related to our operating cash flow for the fourth quarter was the reduction in day sales by 3 days; that contributed a lot to that cash flow.
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