Question-and-Answer Session
Operator
The question-and-answer session will be conducted electronically. (Operator Instructions). If you are utilizing a speaker phone, please make sure that your mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you signalize and we'll take as many questions as time permits. (Operator Instructions). And we'll pause for just a few moments to assemble our queue. (Operator Instructions). Wait for a few more moments as we assemble our queue. We will take our first question from Holly Guthrie of Boenning & Scattergood
Holly Guthrie - Boenning & Scattergood
I was hoping to get some more, some clarification on the SG&A dollars that were spent in the quarter. The last two quarters you guys saw a significant reduction in the dollar expense and you guys actually produced a flat SG&A number. I know you said advertising was I think it was $800,000 incremental the last year, but what else was in that number and is that what we should be looking for going forward a flattish type SG&A relative to the prior year.
Dave Stern
Sure Holly. This is Dave. We did have reductions in our core operating expenses which were offset by increased advertising that David referred to earlier. And as you know, we don't give a lot of guidance going forward, but we have said previously that we expected the promotional going into Q4 as well.
Holly Guthrie - Boenning & Scattergood
And I am just trying to figure out why there was a change in the third quarter relative to the last two quarters. In the last two quarters you saw significant reduction in and around $4 million in each quarter. As far as the dollar expense goes to the SG&A line and now it's flat in the third quarter. So, I guess what you are saying is that what happened in the third quarter, you are looking at as far as your current expense structure to occur to continue to go going forward we should look for dollar reduction in SG&A?
Dave Stern
Well, without getting into more detail than we've previously given guidance on, we do expect to continue to be promotional as referred to earlier and we do expect to continue to offer top customer service and have [favor] on the stores to support that.
Holly Guthrie - Boenning & Scattergood
And then another expense question, Joe said that you expect by the summer of 2010 to have 25% of your stores in Nevada prototype which is a great model logically doing that, but the cost, if I am looking at it correctly is, is it 25% in the stores at $40k per store is around $10 million. And I am wondering, what part of that is expense? Is all of that expense or some of the capitalized can either go through expense of that in a cost to the P&L?
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