Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Sam Mendoza with Advent Core Capital. Go ahead.
Sam Mendoza – Advent Core Capital
My question had to do with better understanding the rebates and how that works. Can you give us a sense for what percentage of your volume has rebate associated with it and can you help us understand kind of the breakage assumptions that you guys use and what your historical breakage has been?
Lawrence P. Reinhold
We don’t disclose the detail of rebates and the specific assumptions that go into it but let me talk about a couple of things. First, there are two different types of rebates. First, most rebates are offered and funded by the manufacturers. Second, some rebates are offered and funded by the retailer or the etailer. Manufacture rebates do not impact our financial statements, they are simply a transaction between the consumer and the manufacturer although if we process the rebate we are sort of the manufacturer’s agent and act under their instructions. Retailer rebates are simply one of the tools that the company can use in the pricing of its products and the estimated costs of a rebate program are reflected as a reduction in our sales revenue similar to how estimated sales returns are reflected as a reduction of sales revenue.
Sam Mendoza – Advent Core Capital
Okay. I guess on those can you help us with what the historical breakage has been or what your assumptions are for those?
Lawrence P. Reinhold
That’s a level of disclosure that we really don’t get into. We haven’t historically and we won’t be doing that today.
Sam Mendoza – Advent Core Capital
Okay. I guess my other question you mentioned or someone mentioned in their comments that the recent reports contained inaccuracies and innuendos and I was hoping you might highlight for us what some of the bigger ones were.
Richard Leeds
I have pretty much have said whatever I feel we can say so I’d greatly appreciate it if there could be no more questions about the lawsuit on this.
Sam Mendoza – Advent Core Capital
The question wasn’t related to the lawsuit it was related to the inaccuracies in the earnings report and whatever else?
Richard Leeds
As I said in my comments, those will come out over time and we feel confident that we’ll have our reputation restored.
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