Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Mark Kelleher - Canaccord Adams.
Mark Kelleher - Canaccord Adams
Could you guys tell us what your estimated quarterly cash interest expense is now?
James W. Pluntze
It’s probably about a million higher. We have at the end of the year about $108 million or $109 million of senior debt so $108 at 1%, we’re talking about $1 million a year or $1.1 million a year.
Mark Kelleher - Canaccord Adams
On a quarterly basis you were around $2.5 million or something like that so maybe $3 million?
James W. Pluntze
Yes, approximately that.
Mark Kelleher - Canaccord Adams
Could you walk us through what went through in the quarter, the reasoning behind the renegotiation of the debt covenants and maybe what has led to the delay of the 10K filing?
James W. Pluntze
The delay in the filing was primarily due to the fact that we were in the process of renegotiating our credit agreement with our lenders. That was dictated by a couple of things. One is we were in violation of some of our covenants at the end of the year so we were required to seek a waiver. We also looking ahead into fiscal year ’09 realized that it was time to be looking at relaxing covenants as opposed to tightening covenants so we were working with the lenders on that aspect also.
Both of those took a little bit of time given the volatility in the credit markets and until we reached that agreement, we really weren’t in a position to file our 10K. Now that’s we’ve reached that agreement we’ll be filing that shortly.
Mark Kelleher - Canaccord Adams
How about your churn? I know the churn was within normal levels for the July quarter. Do you anticipate that creeping up as we get into a more difficult economic environment?
Arthur P. Becker
Certainly we would contemplate that in our forecasting. Fortunately we’ve not seen that yet in the early portions of fiscal year ’09 but that certainly wouldn’t be something you could rule out as you look toward the year and given what’s going on in the business climate.
Operator
Our next question comes from Srinivas Anantha - Oppenheimer & Co.
Srinivas Anantha - Oppenheimer & Co.
A couple of questions on the guidance. Jim, could you walk through on the guidance for 1Q09? How much of that is coming based on your bookings during the past 12 months and how much of an incremental booking are you guys expecting in 1Q to provide that revenue? Also with respect to you were slightly surprised at given the lower contribution from professional services that margins would actually be better, but it looks like that’s not the case based on your EBITDA guidance.
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