Question-and-Answer Session
Operator
(Operator instructions) Our first question comes from the line of Andrew Wiener with Burnham. Please proceed with your question.
Andrew Wiener – Burnham
Hi. Good morning, gentlemen.
Tom Vacchiano
Hey, Andrew.
Dave Rawden
Hi, Andrew.
Andrew Wiener – Burnham
Hi. I just wanted to try to get a sense of – if I’m doing my math correctly, you achieved the net debt pro forma would be – I mean, sorry, the gross debt would be $272.3 million and if I think about the cash balance, I’m coming to a number of about $50 million on a pro forma basis. Is that correct?
Dave Rawden
At the end of the quarter, we have $50 million of cash on hand. That’s correct.
Andrew Wiener – Burnham
Well, no, but I’m saying then if I assume that $7 million was built into debt you received from insurance proceeds was built to offset the $7 million you intended to put on the balance sheet when you gave the pro forma use of proceeds a few months back, I assume that means that there should still be about $50 million of cash pro forma after the repayment of debt or the restructuring of the debt.
Dave Rawden
The $7.5 million is included in the $50 million at the end of the third quarter.
Andrew Wiener – Burnham
Correct.
Dave Rawden
I’m not sure –
Andrew Wiener – Burnham
I go back to the presentation when you did the restructuring and the debt. You said one of the uses of the sources of proceeds was the $20 million expected for the life insurance policies, so I assume that ultimately goes out the door even though the $7 million is actually on the balance sheet right now as of the end of the quarter. That then though gets offset by the fact that on that same sources and uses of funds, there was an intention of adding back $7.5 million of cash to the balance sheet out of the $175 million of total sources of funds, so I’m just trying to get a sense of what the net debt ultimately would look like on a pro forma basis.
Dave Rawden
I think if you go back to the pro forma that we provided back on August 20th, the one thing that has changed is we estimated that we’d get $20 million of life insurance proceeds and we’re on track of that. We’re actually going to get $20.7 million. We’re going to get another $700,000. We only get to keep $7.5 million of that. All the excess goes to pay down first lien debts, so of the $20.7 million, we get to keep $7.5 million and the rest goes to pay down first lien debts.
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