Question-and-Answer Session
Operator
(Operator Instructions) We will go first to Robin Shoemaker with Bear Stearns.
Robin Shoemaker - Bear Stearns
Good afternoon, Gus.
Gus Halas
Good afternoon, Robin.
Robin Shoemaker - Bear Stearns
Thank you. Wanted to talk a little bit about the acquisitions, the accretion on a pro forma basis that you mentioned is quite impressive. Can you tell us how much debt you will have in '08 that's related to the acquisition and a rough level of interest expense associated with that debt?
Gus Halas
I think the debt will be somewhere around $55 million to $65 million and the interest, we will get you in just one second. $2.6 million for the year.
Robin Shoemaker - Bear Stearns
$2.6 million of interest expense is what you're anticipating?
Gus Halas
Correct.
Robin Shoemaker - Bear Stearns
Okay, and so you will draw down on your cash reserves as well as the $55 million, $65 million of debt?
Gus Halas
Yes.
Robin Shoemaker - Bear Stearns
Okay.
Gus Halas
Yes, that's how we will finding it.
Robin Shoemaker - Bear Stearns
Okay. Also, related to the acquisition is the good will, I'm sorry, will this be good will associated with this, or will there be a step up in the assets EEC or HP&T?
Gus Halas
It will be both, good will and a step up, Robin.
Robin Shoemaker - Bear Stearns
Okay. And also the G&A expense that EEC has appears to be quite a bit lower than as a percent of revenues than T-3. I guess part of that is explained by the fact that it was a private company, but do you have any guidance on SG&A expense as a percent of revenues for the combined company?
Gus Halas
I don't have any guidance on that.
Robin Shoemaker - Bear Stearns
Okay.
Gus Halas
It will be, let me just give you enough to say that we are planning to be a little bit lower than where we are now, because a lot of the Sarbanes-Oxley costs are going to go away, since we were going to be fully compliant by the end of the year.
And last year, as I have mentioned on numerous occasions, is costing us over $1 million just to get to this point. So some of that cost will go away and only the public company costs will be staying put.
Robin Shoemaker - Bear Stearns
- To read the full transcript on Seeking Alpha, click here »
