Question-and-Answer Session
Operator
Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys.
Our first question comes from Jeff Stein with Key Bank Capital Markets. Please state your question.
Jeff Stein
First a question for Eric. Wondering first of all, Eric, was the credit card game contemplated in the prior guidance of a loss of $2 million to a loss of $4 million that you issued back on November 8, 2007?
Secondly, did your prior guidance of break-even to $.03 for Q4 contemplate the $.03 after tax charge related to the Catherine’s consolidation?
Eric M. Specter
Alright. Let me take the latter. As we mentioned on November 8, 2007, when we made our update projection for fourth quarter, we did comment that it excluded any of the charges that we had outlined in the November 8, 2007, announcement and that we would at the third quarter call here today update the fourth quarter earnings to reflect what charges would flow through. The answer is on that second question is that it was not included in the projection that was previously made on November 8, 2007.
We now have outlined – the total charge, incidentally, that we had announced on November 8, 2007 – the one time charges being approximately $8.5 million still hold. What we gave guidance today and visibility to is that approximately $5.4 million of those charges would be running now through our fourth quarter. Those numbers could change, but they would be immaterial depending on some of the activity going on on relocations and so on.
As far as the first question goes, we had always in our 2007 plans from the beginning of the year, anticipated that we would be repurchasing the credit card file in the third quarter and, of course, had to make some assumptions (not having the due diligence done on the file) on what the accounting game would need to be so that we had those built into the models and had them built into our projections throughout. Except for the fact now that the transaction has been completed, we have gone ahead and done the accounting for the third quarter earnings release and now we are able to quantify it down to the game that was reported here today.
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