Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Romeo Reyes - Jeffries & Company.
Romeo Reyes – Jefferies & Company
Just one question with several parts; can you Tom, talk a little bit about cash conservation. Based on your comments there it seems like you’re going to be burning about $38 million in Q4; that just doesn’t sound right to me. Based on your guidance of $125 million of cash, a little bit more than 125, if you could clarify that and then if you could just talk a little bit about the components of the burn. CapEx was only $7.5 million this quarter, is that sort of like the new run rate number?
Then with respect to your construction in progress, as of the end of June you had about $52 million of construction in progress. I guess if you were spending $75,000 per site that would equate to something like 700 sites from construction in progress. Can you talk a little bit about that and maybe how much additional CapEx you need to finish that construction in progress? Thanks.
Tom Scott
Romeo, with respect to your question on cash conservation, as we said in multiple calls throughout the course of the year, we are looking across all levers to free up cash for the business.
Number one, we implemented the reduction in force in the second quarter. We are well on our way to getting the $10 million to $12 million and reductions that we stated on our first quarter call. We’ve also consistently been pushing on capital projects to bring down the capital spend and as you noticed, we saw a roughly $2 million reduction in capital spend in the third quarter relative to the second quarter.
With respect to how we’re going in the year-end, we stated on a call that we believe we will end in excess of $125 million in cash and we’ll continue to push on all those levers that we have already identified on prior calls.
Romeo Reyes – Jefferies
Going back into the burn, you only burned about $14 million of cash in Q3. Based on this guidance, it seems like you’re going to burn two to three times as much cash in Q4; that doesn’t sound right.
Tom Scott
We’re not going to comment any further than we believe that we will have in excess of $125 million in cash at the end of the fourth quarter.
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