Question-and-Answer Session
Operator
(Operator instructions) The first question comes from the line of Mark Smith - Feltl & Company.
Mark Smith - Feltl & Company
In Mexico has there been any chance of you doing all of the work there yourselves or are you using a paid distributor?
Mark Roberson
No we are distributing direct ourselves in Mexico.
Mark Smith - Feltl & Company
Any plans to change that?
Mark Roberson
No, we don’t have any plans to change that. We are talking directly to the large operators in Mexico. There are four large operators that control about 2/3 of the market and then there are a lot of other quality operators in addition to those four as well. Our plans are to distribute in contract directly with those operators.
Mark Smith - Feltl & Company
Turning to Heads Up Challenge can you talk about demand for Heads Up Challenge under the new leasing model?
Mark Roberson
Being that it is a new model, it is a little bit of an experiment and we are proceeding cautiously. We had pretty good demand in Q2 with our operators we were putting in place and selling to. We have 144 units out under this new model through the end of September. Obviously the economy is challenging. Bars and restaurants are difficult places for anybody to do business placing product so we are proceeding cautiously and watching it month by month. During the quarter we had pretty good placement with our operators.
Mark Smith - Feltl & Company
Outside of that leasing model, talking about product sales is that still the model in international markets? If you can talk about any change in demand in the international markets for Heads Up Challenge especially with the declining dollar.
Mark Roberson
Internationally we continue to sell the product direct. We are seeing again the effects of the economy on international distributors as well. Their business in all regions has suffered. With the decline of the dollar we haven’t necessarily seen a corresponding immediate uptick in demand for our product. We are still seeing orders but they are sporadic. Again, it has a lot more to do with the economic situation than all those countries and consumer spending and bars and restaurants and amusement games than with just the impact of currency at this point.
There are some statistics published that in the U.K. for example there are 50 pubs closing per day in the U.K. It is definitely a challenging environment from being a restaurateur, a pub operator or a vendor that is placing product into those markets.
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