Question-and-Answer Session
Operator
Your first question comes from Michael Harrison - First Analysis.
Michael Harrison – First Analysis
In terms of the credit agreement and this hang up on the precious metal cash deposit. This is similar situation to what your lenders were reporting back in late 2006 and I believed in the early 2007?
James Kirsch
Its similar situation, but different circumstances.
Michael Harrison – First Analysis
And are you still negotiating on whether you are going to need to provide cash deposits or is that something that’s finalized and what you’re working on now is kind of going back to the drawing board on other components of the agreement.
Jim Kirsch
It’s a discussion on a case by case basis.
Sallie Bailey
Hi, Mike this is Sallie we are still, as Jim had mentioned going on a lesser by lesser basis, but we are also taking action to decrease the reliance the company has on precious metal and I think Jim mention that in his comment.
James Kirsch
Let me give an example Mike, in 2006 at this time frame we had about $14 million troy ounces of metals in our system, which by the way as all collateralized by the metal because we never take title of it or less stores own it. We when in efficiency reduction campaign and are still on that have reduced that to that $8 million to $9 million troy ounces I mentioned little earlier.
We are still heading down that path and we’re operationally and with customers working to take more metal out of our system and we think given our track records it is a good opportunity for us to reduce the total metal in our system pretty substantially.
Michael Harrison - First Analysis
Alright and then in terms of the covenants they we’re going to see under the new agreement, will there be a complete waver for certain amount of time or are you just working to get more on headroom in terms of the covenants and may be how long should we expect until you have to be back under that 3.5 times net debt to EBITDA?
Sallie Bailey
Yes. Mike we are negotiating relief for the term of the agreement which then extends into 2011, so it’s a reset of the levels versus the waver.
Michael Harrison - First Analysis
Alright, any guidance in terms of the how much we might see interest expense increase next year?
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