Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Michael Pace – JPMorgan
Michael Pace – JPMorgan
Some of the other MSOs have given some color on RGUs so far in Q3 or really just the month of July, I’m wondering if you could add some color to that. And then I wanted to focus a little bit on the SG&A line, it was down a little bit in Q1 year over year, call it flat in Q2, what are you doing there specifically on marketing dollars and is that sustainable.
John Pascarelli
On the third quarter results, obviously we’re not going to make forecasts, we’re very early into it. The students are just returning. We are seeing some activity from those levels but its way too early to predict what its going to look like for us. So we’ll wait until deeper into the quarter to give any indications.
As far as SG&A, we’re not cutting back on marketing costs. If I understood your question, is that where you’re going with that?
Michael Pace – JPMorgan
Yes.
John Pascarelli
No we’re not cutting down on marketing costs at all. I mean our marketing expenditures year over year are up actually and we continue to push and will continue to push the marketing of our business. We at this point right now, have accelerated direct mail in a big way trying to drive more sales.
Mark Stephan
And then what’s helping us on the SG&A line, there’s two things. One is telecom costs at our call centers, we’ve brought a lot of traffic on our own network so we’re saving a great deal of money. We continue to drive down say the cost per call to our call centers. So that’s been a huge savings for us.
And secondly our call center group has done a great job in realigning what we do at the call centers and creating a lot of efficiencies so we are now, we’re directing more of our customers, if it’s a service outage, they’re not making a call and contacting a representative, they’re going through the IVR and understanding that we have a network outage that is widespread.
We’re doing all these little things that are creating greater and greater efficiencies in our call centers so we can drive down overall the cost of customer contact. Those are the two areas where we’re seeing a lot of help on SG&A.
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