Question-and-Answer Session
Operator
(Operator Instructions) The first question today comes from Bob Evans of Craig-Hallum Capital. Please go ahead with your question.
Bob Evans - Craig-Hallum Capital
First can you explain a little bit more on that $8 million of cost reduction, where will that come out of and how much has already been done?
Vincent Riera
Well, it’s all been done so it starts in Q1 and it’s going to be -- I think it’s about half -- it’s about half cash and half non-cash and about half in cost of revenue and half in operating expenses.
Bob Evans - Craig-Hallum Capital
In terms of impact, you’re saying $8 million though on the P&L?
Vincent Riera
On the P&L, plus we are guiding our cash flow product investment to between $5 million and $6 million, which is also down significantly from ’08.
Bob Evans - Craig-Hallum Capital
Right, and how about CapEx for ’09?
Vincent Riera
It’s going to be under $1 million.
Bob Evans - Craig-Hallum Capital
Okay.
Vincent Riera
Let me just be clear -- you’re talking about the non-product investment, right, Bob?
Bob Evans - Craig-Hallum Capital
Yeah, non-product investment, right. Okay, so if it’s five to six, that’s six to seven all in in terms of expenditures. So that means -- I think in the press release -- so you should be nicely free cash flow positive, given the reduction in spending, shouldn’t you?
Vincent Riera
Well, you know, it comes down to orders and as you know, we are very dependent on the back-half of the year. That’s when the K12 buying season happens, so we don’t have a lot of clarity on that. That’s why we are guiding to flat free cash flow, it may be a little positive.
Bob Evans - Craig-Hallum Capital
Okay. If we look at fiscal ’09 in total, can you give us some greater sense as to how we should look at revenue and at one time I think the thinking was that your revenue could be [of the company] [inaudible] to maybe even slightly up. What are you thinking now?
Vincent Riera
Well, the challenge we have is understanding the decline in some of the other parts of our business and we’ve got perpetual revenue. Some of those products are tied to supplementary programs, our PSP, so we are more concerned about the funding levels on supplemental programs than we are on our core platform, so we don’t see -- revenue growth next year is probably going to be a bit challenging. Maybe a little bit of revenue growth but we are on that edge to where it can go either way.
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