Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Seth Potter - Merriman Curhan Ford.
Seth Potter - Merriman Curhan Ford
The cost reductions, are there any changes in timing of reaching field EBITDA positive? And also, Tom in regards to the contract services, is this more of a CapEx savings or where should we look for it there?
Kurt Van Wagenen
In terms of EBITDA positive guidance, we are not changing our guidance with respect to our EBITDA positive goals. We still expect to be EBITDA positive on a consolidated basis across our markets by mid 2008. The force reduction was part of that profit and was also a result of the fact that we are completing the build-out phase of the 13 markets I discussed in the prepared remarks.
With respect to contract services, I think you can expect that a large portion of the cost related to contract services is capital related. But there certainly is a portion as well that’s expense, but that’s minor relative to the capital portion.
Thomas Scott
Yes. Seth, I would note that in the $10 to $12 million number that we put out there with respect to annual cost savings the overwhelming majority of that is P&L related.
Seth Potter - Merriman Curhan Ford
That just leads to reasonable expectations of a continued trend towards adjusted EBITDA loss from here, is that fair to assume?
Thomas Scott
It is fair to assume. We took this, I would characterize the action we took here as really trying to shorten the distance from giving our markets field level positive in the middle of the year as Kurt noted and really shortening the distance as could take the business to get the overall business to adjusted EBITDA positive over the next 18 months.
Seth Potter - Merriman Curhan Ford
In terms of backlog trend, from the fourth quarter up or down in the first quarter in terms of the directional?
Kurt Van Wagenen
We report backlog on a semi-annual basis so we are not going to share specific results with respect to the backlog. What I will note is that our backlog continues to be healthy, and we believe is sufficient to allow us to meet our goals for the year.
Operator
Your next question comes from Mark DeRussy - Raymond James.
Mark DeRussy - Raymond James
About EBITDA positive, we are talking about field level EBITDA positive in the middle of ’08. Tom should I interpret your 18 months to mean that we are looking to get the entire operation EBITDA positive by the summer of ?09?
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