Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Shawn Milne with Janney Montgomery Scott.
Shawn Milne - Janney Montgomery Scott LLC
If you could spend a little bit more time talking about the commercial business. The transaction volume slowed down from what you had reported in the prior quarters. Then, of course, you had lower retail pricing. What changed from what we saw in the prior quarter to this quarter? You talked about having some delays in new programs, but what changed on the market place and if you could talk about the quarterly flow. There was some indication that transaction volume was likely higher than what you reported, at least in the month of June.
Secondly, Jim, if you look at the volume, your GMV guidance for the fourth quarter, it’s not dissimilar to what you just reported in the third quarter. How much more spending going up, that’s driving the uptick in depreciation in the fourth quarter. It just seems like the dislocation from EBITDA down to earnings is too steep. I’m just trying to get my arms around that. Thank you.
James M. Rallo
I think the reality is that current retail clients have reduced volumes and sell through in retail and that’s driven primarily by consumer psychology and the fact that consumer spending has continued to be weak and at some level the recurring replenishment of goods in reverse supply chain will realize that impact. And so, we’ve done a terrific job retaining and growing the categories within our existing accounts, but they are not immune to that secular decline in retail, which has created some softness in GMV on an apples-to-apples basis in the June quarter. I would say June in particular. The month of June did reflect that.
I’d also add that the price points that retailers are taking to the market have come off since September of last year.
I think it’s good to note that our large relationships are with retailers that have fared quite well in the downturn and that over time we think we’ll expand our own market share, which is good for our overall business and growth.
With respect to our business development activities, we’ve had a lot of success sitting down with retailers to sign new programs. We have a view that over the long-term, we’re going to grow our market share and pipeline and the number of recently signed new business includes national grocery chains, national big box retailer, and national high end department store chain, national broad line retailer, and online retailer of consumer electronics, manufacture of networking equipment and accessories. We bought two business development people online in March. They’ve had roughly three months to get out there and tell the story and it’s being well received.
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