Catalyst Health Solutions Inc. Q3 2008 Earnings Call Transcript

|
 |  About: Catalyst Health Solutions, Inc (CHSI)
by: SA Transcripts

Catalyst Health Solutions, Inc. (HLEX) Q3 2008 Earnings Call November 5, 2008 10:00 AM ET

Executives

David Blair - Chief Executive Officer and Director

Hai Tran - Chief Financial Officer

Analysts

Brooks O’Neil - Dougherty & Co.

Tony Perkins - First Analysis

Eugene Goldinberg - BB&T Capital Markets

Adam Poshot - Barclays Capital

David Toung - Argus Research

Michael Minchak - JP Morgan

Mark Arnold - Piper Jaffray

Michael Petusky - Noble Research

Operator

Good day everyone. Welcome to the Catalyst Health Solutions Incorporated third quarter investor conference call. Today’s call is being recorded.

This conference call contains forward-looking information. Forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described in the company’s filings with the Securities and Exchange Commission.

With that said I would now like to introduce the Chief Executive Officer of Catalyst Health Solutions Inc., Mr. David Blair. Please go ahead, sir.

David Blair

Good morning and thank you for joining our third quarter conference call. Also with me is Hai Tran, our new Chief Financial Officer. There are a couple of items I’d like to run through briefly with you before turning over the call to Hai to review of our financial results.

On the sales front as noted in the press release we sold new business representing approximately $300 million. The majority of these wins consist of small-to-mid sized plants across the country ranging from a few thousand to 30000 lots. The 300 million in new business certainly demonstrates the continued appeal of our differentiated service model while pursuing significant market opportunities with midyear effective date as well. In fact the volume of business that we’re pursing for July 1 is as strong as we’ve seen.

Our sales message continues to be centered around local market solutions, financial transparency, as well as innovative approaches to controlling pharmacy costs. Client retention is our top priority at this point in the year we have over 97% of our existing business contracted for 2009.

Next I’d like to briefly comment on the acquisition of IPS. As we’ve discussed previously the acquisition of a mail service pharmacy is the natural evaluation to our business model and is the continuation of our commitment to be the leader in pricing transparency and innovative programs to drive patients to the most care-effective, cost-effective drugs.

Over the past several months we’ve recruited personnel, we’ve trained our client service and sales teams, made modest investments in the mail facility, developed marketing materials and pricing proposals, as well as established communication and transition timelines for our client base.

A handful of clients have been engage and will be transitioning into our mail business during the first quarter. In addition to the new business that we’re implementing on January 1 will be utilizing our mail facility. These new clients that we’re bringing on have been intrigued with our acquisition based pricing, as well as an increased level of transparency.

While Hai will discuss our financial guidance in more detail, I’d like to spend a few minutes describing the conservative assumptions behind the 20% projected growth. As it relates to capturing margins on mail order business, our guidance reflect that our mail penetration rate remained constant at 2008 levels. Additionally our guidance reflects that overall prescription growth for our existing clients remains flat which is consistent with the recent forecast by IMS.

Our guidance does not incorporate any contribution from midyear client additions; and let me state that again because it’s clearly important. The financial guidance that we’re providing today does not incorporate any contribution from mid year client additions; yet as I mentioned earlier, the sales pipeline is sound and more optimistic that will bring on new business throughout the year, just as we have in prior years.

Lastly, our forecast incorporates the fact that we’ve allocated several million dollars of additional funds to pursue business development opportunities, expand our service offerings and enhance our data analytic and reporting tools and we’re confident that these initiatives will support our growth in 2009 and beyond.

At this point I’ll turn the call over to Hai for a review of our financials.

Hai Tran

Thank you, David. We are pleased with the performance in Q3, as revenue grew by 31% on a year-over-year basis from $498.4 million to $653 million and is in line with our expectation of $2.5 billion in revenue for the year.

Our script count for Q3 was $13 million, compared to $10.7 million in the third quarter of last year. We expect total scripts for the year to be approximately $52 million. If we look at per script metrics, revenue per unadjusted script was $50.09 compared to $46.49 last year and $49.38 last quarter. The principal contributor to the revenue per script growth is inflation on the brand drugs.

Gross profit for the third quarter increased by $10.5 million to $37.7 million from $27.2 million in the prior year. Our gross profit margin percentage was 5.8% in Q3, a 30 basis point improvement over the third quarter of 2007 and a 20 basis point sequential improvement over the second quarter of quarter 2008. The improved gross margins were primarily due to consolidating HospiScript for the fourth quarter, our ability to leverage direct operating expenses and various margin improvement initiatives.

Gross profit per unadjusted script for Q2 was $2.89 compared to $2.54 last year and a sequential improvement of $2.74 for the second quarter of 2007. Year-over-year generic utilization increased from 61% to 65% for the third quarter, unadjusted mail order claims was approximately $514,000 for the third quarter, a 31% increase over the $392,000 unadjusted mail order claims from the third quarter of last year.

SG&A in the third quarter increased by $5.3 million to $18.2 million, from $12.9 million in the third quarter of last year. $3.4 million of this change is attributable to consolidating the acquisitions and the balance is from investments associated with initiatives to support the company’s continued growth, such as additional employees, facility and vendor costs to implement and serve new clients.

Operating income grew to $19.5 million or 3.0% of revenue from $14.3 million or 2.9% of revenue last year. On a per unadjusted script basis, operating income per script increased by $0.16 over the prior year and $0.02 on a sequential basis.

From a cash flow perspective, capital expenditures for the quarter were $3.3 million. During the quarter, non-cash charges totaled $3.6 million including $1.4 million in non-cash compensation expense and $2.2 million in depreciation, amortization as well as other non-cash adjustments.

We ended the quarter with $52.6 million of cash on the balance sheet and $31.5 million in operating cash flow. The cash balance was impacted by the IPS acquisition and the swing back in working capital due to timing issues that we discussed last quarter. We also drew on our revolver during the quarter in order to provide us with cash cushion for the acquisition of IPS. The debt balance was $10 million at the end of the third quarter and subsequent to the end of the last quarter, we have already paid that off in the fourth quarter.

As we look to guidance for the balance of 2008, we believe that we are tracking towards a previously stated guidance of $2.5 billion of revenue and earnings of $1.17 per diluted share, reflecting an increase over 2007 of 34% and 29% respectively.

As we look to 2009, we expect revenue to be approximately $3 billion and net income to range from $59.5 million and $64 million, which should yield earnings per share between $1.35 and $1.45. This guidance for 2009 reflects organic growth that is augmented by the consolidation of the acquisitions which are projected to be integrated in 2009.

The key items management will be focused on include our strategic initiatives to capture margins on mail order prescriptions and expand our HospiScript business, sales executions, as well as integration of our acquisitions and general economic conditions.

David, with that I’ll turn the call back over to you.

David Blair

Thanks Hai. Before opening the call to your questions, I’d like to comment on the overall fundamentals of our business. Over the past nine months, the company has realized $71 million in cash from operations and $62 million in EBITDA. The company has no debt. Our days outstanding for AR is 30 days, meaning our earnings are deposited into the bank within a month.

The company has multiyear client contracts and realizes the industry leading client retention rates providing us with significant revenue visibility. We have expanding sales opportunities as we pursue larger health plans and different types of business, as well as open offices in new parts of the country.

Lastly, with over five million members, we have reached a scale to successfully offer our client additional product and services such as mail and specialty. In short, we’re confident about our prospects in 2009 and beyond. Our approach to management pharmacy benefits continues to gain momentum and our services will only become more valuable in an uncertain economic environment, as health plans look for innovative ways to effectively reduce their pharmacy costs.

So with that we will open up the call for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Brooks O’Neil - Dougherty & Co.

Brooks O’Neil - Dougherty & Co.

I have a number of questions. I guess first, I’m curious if you have seen any changes in the business or your outlook over the last month or two in relation to the slowing economy?

Hai Tran

Well Brooks, on that we have noticed a slowdown in prescription utilization and I think that is consistent with what has been reported by IMS across the country, but the prescription utilization is just simply slowing down.

David Blair

Yes clearly, I think as we’ve indicated on the earnings release as well as our prepared remarks, we factored that in as we looked towards guidance for 2009.

Brooks O’Neil - Dougherty & Company

Secondly, can you comment at all on how integration efforts are going particularly with both HospiScript and IPS? I know you had a few comments in your prepared remarks, but are those acquisitions on target from an integration perspective and do you continue to expect around $0.08 or $0.09 of accretion from the HospiScript deal next year?

David Blair

Yes, I think that the integration of HospiScript is doing well. We continue to believe that that we’ll be able to fully integrate them in the first half of 2009 typically as we talked about previously. It takes about a good year for us to integrating an acquisition of that size. So I think that we are on track or fact ahead of schedule relative to that rule of thumb.

Brooks O’Neil - Dougherty & Company

Third question, I’m curious; obviously Hai, you and I talked a little bit about the fact that with relatively modest overall growth in prescription drug trend, cost trends, employers have less incentive to move their business at this time. On the other hand, I was listening to the Medco call just a little while ago and they seem to say that some clients are frustrated with inefficient pharmacy utilization and hence looking for ways to encourage employees and members to be more intelligent in their purchasing trends. How do those factors weigh out for you guys and how do you feel about the $300 million of net new business you’ve signed so far this year?

Hai Tran

Well, as we look at our sales opportunity, there’s a couple of different things going on; one, we’re responding to more RPs now than we have historically and not only are we responding to more RPs, we’re being much more selective than we have in years past and you’re well aware of why we’re responding to more RPs instead of better brand recognition; our name is out there in more parts of the country, etc.

There is certainly employer groups and health plans that are less likely to change PBMs this year because they have bigger problems to focus on with the way the economy is, but on the other hand, to your point, there are plans that are looking to save money in innovative ways. Over the past three or four years health clients have been very reluctant to implement restricted networks or tighter formulas, because of the backlash they would potentially hear from their employees.

So for us this is an opportunity to circle back to our existing clients as well as potentially sell new clients on kind of innovative ways to save money and to get folks to the lowest cost drugs and so as we look at over the next six or seven months, we’re thrilled with the RFP pipeline. We’ve had an active dialogue with benefit consultants in the last couple of months about the July 1 implementations and so we’re optimistic that our approach is going to continue to work and we’re going continue to sell new business.

Brooks O’Neil - Dougherty & Company

Last question; historically, I always believed you had very limited expose your to government programs, particularly obviously Medicare and I’m just curious if you have any thoughts regarding any potential impact on Catalyst from the sweeping democratic wins last night?

Hai Tran

That’s right, Brooks. We don’t have much Medicare business, there’s not any exposure there. Generally, our business will be affected more by the overall economy and to the extent that prescription drugs are made available to greater number of Americans, whether providing healthcare benefits to the uninsured and those types of things and that’s only going to help our business going forward.

Operator

Your next question comes from Tony Perkins - First Analysis.

Tony Perkins - First Analysis

I see that the revenue in Q3 grew 31% and you brought on AvMed I believe on July 1. In Q1 and Q2 revenue grew 45% plus. So I’m curious; the revenue growth slowdown is that due to some contracts ending or is that due to script volumes declining within the current book of business?

David Blair

No. I think that’s just due to timing Tony. As you look at the comparison, which is the basis for which you compare, we brought out some July 1 business last year as well and so you’re up against a tougher comp in terms of last year’s numbers.

Tony Perkins - First Analysis

Okay and then on script volumes for ‘09, can you give us any guidance on what we should expect in ‘09? I know it’s a challenge because of the current environment; but any help there would be appreciated.

David Blair

I think we anticipate script volume to largely follow the revenue growth expectations here. We of course factoring in some variables related to brand drug inflation, which would be offset by the utilization as well, but by and large it should somewhat track the growth in revenue.

Operator

Your next question comes from Newton Juhng - BB&T Capital Markets.

Eugene Goldinberg – BB&T Capital Markets

This is Eugene Goldinberg standing in for Newton. We have seen you gross margin improved quite nicely over the past two quarters. Can you talk about some of the initiatives that Hai mentioned that are in place right now on this front and is the 5.8% that we saw in the quarter a good baseline to use and can we expect to see some further expansion from here on out?

David Blair

I think for now, the balance this year, clearly 5.8% is probably a good number. I probably wouldn’t pick it up much for the fourth quarter and I think in terms of the contributors to the margin expansion and the initiatives there, I think part of that was due to once again full quarter HospiScript; we talked about previously as being a higher base business than your base business, so that contributed partially to that, but really the other factors were the basic blocking and tackling which has changed from last quart to this quarter, which is our ability to more effectively managed our math, for example our ability to better leverage the labor in our call center operations, that’s another examples. So it’s basic blocking and tackling that’s delivering the margin expansion here.

Eugene Goldinberg – BB&T Capital Markets

Okay, I just have a few more follow-ups. There’s been some continued improvement in the revenue per script metric and at the same time we have seen the generic utilization trend rises well. Can you kind of reconcile this phenomenon; they seem to be counterintuitive.

David Blair

I think it’s just that the only thing, when you shake it out and do the analysis, I think part of it is that there is brand drug inflation that is occurring and generic utilization is also obviously offsetting that, it’s just not offsetting into enough.

Eugene Goldinberg – BB&T Capital Markets

And the last question I have is and this is a piggyback off of Brookes’ question; with the economy softening and generic utilization continuing to increase, how much of that do you attribute just to the increased availability of general versus people just looking to save dollars?

Hai Tran

I think most of its coming from and doing a better job educating members about generic alternatives and creating the benefit plan structure in a way and intensifies them to take the generic drug. So we’ve seen this generic trend over the past several years perhaps before there was kind of more recent downturn in the economy.

Operator

Your next question comes from Larry Marsh - Barclays Capital.

Adam Poshot - Barclays Capital

Good morning this is [Adam Poshot] calling in for Larry. David I think briefly mentioned what you’re thinking customers looking for; any plan design changes next year?

David Blair

Well, a couple things. The employer groups, it really is an opportunity to come in with a more restricted benefit plan design, because in this environment, everyone’s willing to make sacrifices to make things work.

As you think about our health plan, our potential clients out there, we do see an increasing demand for, well I call that kind of a queasy outsourced model where they want to retain control of the formulary and certain clinical criteria, but they’re looking for someone to come in with rebate management expertise, a network of pharmacies on the P&G committee, call center support. So that’s one dynamic always continuously gain momentum as well.

Adam Poshot - Barclays Capital

I guess back to the generic utilization, kind of strong increase for the quarter, would you just contribute that to any kind of one time items or just overall success of your generic program?

David Blair

I think it’s just a success of the generic program. I mean, earlier this year we rolled out our generic advantage plan, which was a big initiative, a big member education plus to get members to take generics where available. So I think that’s just the results of some of those initiatives.

Adam Poshot - Barclays Capital

One more quick question from me. David just kind of looking back a few months after IPS and HospiScript, is there anything can I guess surprised you from those acquisition that maybe you didn’t appreciate a few months ago?

David Blair

Well, with both organizations, the management teams that we’ve inherited are better than we thought going in. We knew we were inheriting quality teams, but the folks at both companies have really become an integrated part of the senior management team here and we’ve really gelled and everyone’s working together well.

Operator

Your next question comes from David Toung - Argus Research.

David Toung - Argus Research

Hai I think in conversations you’ve talked about customer retention at HospiScript; is there anything you can talk about how that’s going and I’ve got a follow-up.

Hai Tran

Yes, I think David, on previous calls I think specific questions related to therapy, probably no secret, that was one of HospiScript’s largest customers and we were struggling to try to retain them. I think at this point, we believe that we will not be able to retain them, but once again, that’s already been factored into our guidance for 2009.

David Blair

Any time, we don’t generally talk about clients specifically; any time you have a client that’s acquisition by a larger organization, you’re always at risk for keeping that business. I sure it certainly wasn’t an issue of pricing or service. We think we did a good job there and we’re optimistic that eventually we’ll have an opportunity to go after the whole block of business perhaps when they go off to bed.

David Toung - Argus Research

In your 2009 guidance, you mentioned four factors that could essentially take the EPS above the guidance range. Give a little quantity of what factor; I assume these four factors would take the income above the 25% growth.

Hai Tran

That’s right. I mean we’ve tried to take a conservative approach to 2009 guidance based on business that we have booked today and then a conservative look at the trends that we’re seeing with prescription utilization as well as the integration of our acquisitions. So to the extent that we can do better, either add new clients, like AvMed was mentioned earlier as a midyear client addition this year. Since then, we can bring on a client like that, so we can an acquisition done, perhaps move generic utilization or capture margin on mails better than forecasted, we could certainly exceed the guidance that we’ve provided.

David Toung - Argus Research

Right. The July 1 customer, the ones that you’re talking to for July 1, 2009, would they be expected to be increasing your mail facility capacity? I mean, is the effort going on that you can handle that capacity?

Hai Tran

That’s right. What we’ve done is we’ve made some modest investments into the facility and we’ve hired additional personnel, so that we can increase the capacity of that facility to handle new business.

David Toung - Argus Research

And presumably if these customers come in, that will be beneficial to your gross margin?

Hai Tran

Yes.

Operator

Your next question comes from Michael Baker - Raymond James

Michael Baker - Raymond James

I was wondering if you could give as a sense for in terms of the 7-1 opportunities, which segments seem to be most active state, employer, etc?

David Blair

There’s specific ones that we’re going after. Now there’s two large state governments that we have on our radar screen as well as a couple large health plans, what we would considered to be significant opportunities for our organization and then in addition to that, Michael of course there’s numerous smaller to mid sized employer group clients that we’re pursuing.

Michael Baker - Raymond James

And I just had a question if you could update us on the state of Maryland. I know when you guys won that contract; one piece of it that was a potential expansion opportunity was the fact that they had a program where small businesses could kind of roll into the buying of the drugs so to speak. How has that panned out and where do we stand there?

David Blair

That’s right, Michael. As part of that contract, there’s an opportunity for other state employers to act as that Maryland contract and that’s been rolled out. I would say the enrollment is probably below, where we had hoped that it would be. Nonetheless, the relationship that we have the state of Maryland and their pharmacy plan overall is doing extremely well. We would expect that to continue to grow, as you know it’s a four-year contract. So we’re just a year and half or so into it, so we expect to continue to grow.

Michael Baker - Raymond James

Why do you think it’s kind of tracking below? Is it a function of the state not promoting it as much because of a tighter budget constraint or anything along those lines?

David Blair

It’s probably mostly communication sales and marketing. We’re getting the message out, it’s just takes time.

Operator

Your next question comes from Michael Minchak - JP Morgan.

Michael Minchak - JP Morgan

Just a couple of questions; first, to get to the full year 2008 guidance of $1.17 that implies a pretty relax sequential acceleration in the fourth quarter. What do you expect to be the main driver of that acceleration?

David Blair

I think they are primarily two things. One thing is if you look back at our history, there’s some seasonality of our business, Michael. I mean, fourth quarter is seasonally one of our larger quarters from prescription volume perspective. I think secondly it’s the midyear start we had this year. It takes probably a good quarter for them to kind of fully ramp up, so you’ll see the impact of that in the fourth quarter.

Michael Minchak - JPMorgan

Okay and then with respect to the ‘09 guidance, you set froth a pretty wide range; I’m just wondering, you talked about the swing factors, but maybe to delve a little further into it the script growth expectations, you provided some color around that. Does the low range guidance range assume any more slowdown in perception drug utilization for next year related to the economy or possibly layoffs of your existing clients?

David Blair

Yes. It includes some decline as good comp growth, but not significant, so every time we really goes south much worst than we have anticipated; we think need to just make sure we keep our basis in line to be able to still demonstrate leverage in the model.

Michael Minchak - JPMorgan

Great and then just finally, as you talk to your customers about your new mail offering, are you seeing any pushback from them with respect to moving from their current provider or do you need to get approval from those clients to in order to make that transition?

David Blair

Sure. Michael if you recall our strategy with mail is to offer differentiated service offering. Primarily to as it relates to acquisition based pricing right, because today as you look in the marketplace, the price that folks are paying for generic drugs are all over the place. So we’ve developed this model so that individuals can get the convenience of mail at the same price as would they had gone to a Wal-Mart or Costco or something along those lines. So that model, that transparent model that acquisition based pricing is being well received by both our existing clients and perspective clients.

Operator

Your next question comes from Brooks O’Neill – Doughert & Co.

Brooks O’Neil - Dougherty & Company

Historically, retention has been a key part of your program and it sounds like you continue to retain a large number of clients, but I continue to hear some talk about potential account loss in Las Vegas; has that happened and can you give us any color there?

David Blair

Sure, Brooks. We’re anticipating the loss of a casino client in Vegas effective 01/01 and that loss is reflected in our guidance and is also reflected in the less than 100% client retention that we’re going to have this year. We’re always surprised when we lose a client that’s not a result of either the client being acquired or a client perhaps, moving to a fully insured relationship. In this case, it’s not a matter of pricing, it certainly not of a matter service, but sometimes there’s relationships that are well understood by us and that just happens from time to time.

Brooks O’Neil - Dougherty & Company

Okay. So generally, things continue to go very well in Nevada I assume, outside this one situation?

David Blair

That’s right. Brookes, that’s reflected in the 97 plus client retention. Across the country, we’re doing an outstanding job; the PBMI survey that came out, most recently again we were the number one ranked PBM as early to client services. So everything is working very well, but we’ve always been in that kind of 97, 98, 99 client retention rate because you have these one-offs occasionally and we’ll be that way in 2009 as well.

Operator

Your next question comes from Mark Arnold - Piper Jaffray.

Mark Arnold - Piper Jaffray

Just a couple of quick questions. Hai, could just go back over the SG&A spike and you talked a little bit about what was the result or what caused that, but how do we look at that number going forward here over the next few quarters?

Hai Tran

I think that consistent with what we said in the last quarter, there’s two things. One that the’re truly is a higher basis only, because we’ve consolidated HospiScript and we’re consolidating IPS and shows there’s a higher basis because of that and I think we talked about in terms of the SG&A growth, of the $5.3 million year-over-year growth, $3.4 million of that was attributed to those acquisitions.

On top of that, on a go forward basis as we alluded to in the last call, we continue to invest in our mail operations as well as our other opportunity to grow the business long term and so right now, we’re still trending towards that $3 million to $5 million investment we talked about for this year.

Mark Arnold - Piper Jaffray

Okay, that’s helpful and then related to the factors that you did talk about that could cause to you exceed guidance for this year; you mention generic utilization I think in your prepared remarks, but what assumptions are you making related to generic drug utilization in your guidance?

David Blair

As it relates to overall utilization I did say that in my prepared remarks, we’re predicting that just flat utilization prescription volume, both brand and generics year-over-year with existing clients and that’s conservative. I mean you might have saw the IMS report; it came out 1% to 2% projected growth. So we think we’re being conservative of that. As it relates to our generic utilization, we do that on a client-by-client basis based on their benefit plan design. So if you look at it on a blended average, you’ll see it continuing to creep up a few percentage points over the year, but again, that’s going to vary based on the client.

Mark Arnold - Piper Jaffray

Okay. So you’re not projecting that to increase more at a more rapid rate than kind of what we’ve seen here over say, the last year.

David Blair

That’s absolutely right. To your point, if we’re successful rolling out perhaps more restricted benefit plan design, we might see better than forecasted increase in generic utilization.

Mark Arnold - Piper Jaffray

Okay and then just one last question, you’re not including any midyear new business coming online. Can you just remind me whether your historical guidance for 2007 and 2008 included midyear contributions?

David Blair

Our financial guidance that we provided in the third quarter typically just reflects business that we have contracted to date, you know, kind of signed up, regardless of where it starts. So if we signed business last November or April 1 or June month started that would have been included and I don’t recall what business we had signed up last November that might have started in the fist and second quarter. Certainly we don’t have it signed up today it’s not in our guidance, but we would expect to add new business throughout the year just like we have previously.

Operator

Your next question comes from Michael Petusky – Noble Research.

Michael Petusky – Noble Research

Did you say there was $52 million in cash on the balance sheet, is that what you said?

David Blair

That’s correct.

Michael Petusky – Noble Research

I just want to go back real quick to the SG&A question. Of the $3.4 million that you associated I guess that was incremental based on the consolidating, related to the recent acquisitions. How much of that is kind of that ongoing higher SG&A basis that you were talking about and how much might be more one-time in nature?

David Blair

I think the $3.4 million is more that’s on the ongoing basis and then we’ll have additional spend to top that has to continued look to create capacity in our mail facility.

Operator

(Operator Instructions) And we have a follow-up from Larry Marsh – Barclay Capital.

Larry Marsh – Barclays Capital

I was just wondering, you guys talked last quarter about kind of seeing by region, the slowdown in scripts is fairly consistent. I guess you since that time have you seen any regions that you’ve seen a significant difference in volume trends?

David Blair

No. Once again, I think as we discussed our call, you know, the fact that it is widespread is probably indicative of the general economic impact.

Operator

And there are no further questions at this time. (Operator Instructions) It appears there are no further questions. I’ll turn the conference back over to Mr. Blair for any closing remarks.

David Blair

We would just like to thank you for joining us this morning and we look forward to speaking with you during our next quarterly conference call.

Operator

That does conclude today’s conference call. Thank you for your participation and Have a great day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!