Question-and-Answer Session
Operator
(Operator Instructions) And our first question comes from the line of Victor Miller - Bear Stearns.
Victor Miller - Bear Stearns
I’m really pleasantly surprised on the auto trends you have seen, you’ve talked about the local dealers. Can you talk a little bit about what GM is doing in your markets, and whether you’re seeing a shift there, and whether indeed you think you’re really starting to see a significant migration of dollars out of the newspapers, because that’s traditionally where the local dealers have spent most of their time and money?
Secondly, just in the first quarter in terms of you talked about some of the cost initiatives that you’ve got $1.8 million of savings that you’ve outlined. First quarter expenses are obviously up in the 2.5% to 5% range or so, predicted. That’s not typical expense growth for the company. So, you could maybe outline that.
And then one for Matt, as you going into looking at that tick in April has the market changed substantially enough where you think you may have difficulty in ultimately taking that out or do have enough cash on the balance sheet to make a substantial dent in taking that out altogether?
Matt Devine
Let me address the tick first. The company has available under its revolving credit facility $60 million plus that is available for us to draw, and we will use approximately $47 million of that to make our payment, or a HYDO payment on April 1.
And so we don’t see any problem making that payment and being in conformity with our leverage covenant for the rest of this year. Right now that piece of paper actually looks like a nice piece of paper in today’s credit market. So, I don’t see that being any kind of a problem for the company, Victor.
Victor Miller - Bear Stearns
Simply to convert that to the interest paying, you will not try to refinance that at this point?
Matt Devine
That’s correct.
Perry A. Sook
Victor, as it relates to automotive spending, approximately two-thirds of our revenue in the fourth quarter was from individual dealers, and we take that obviously as a positive sign. We work very hard to make that happen.
We are also attempting to migrate, as part of our growth for the digital revenue this year, dealers to our automotive classifieds program. And actually we are successful in underscoring a big revenue commitment in West Texas this week from a particular multi-market dealer group to user automotive classified program to literally put their entire inventory of cars online and the ability to change it at their will. So, we view that as a positive marketing tool going forward.
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