Janet Kloppenburg (JJK Research): In order to get to your annual guidance, your next quarters are going to be up. What expenses will not burdening those quarters?
Michael L. Henry: The severance and retention will be contained to the first quarter once we complete the transition fully. We have targeted as the date week three of April. At that time, all the remaining severance and retention obligations will be there. There may be a small amount of expense at the beginning of the second quarter, relocating some people or something to that effect, but it would be less than $0.5 million is our current estimate of what that might be. That would be the one category that would not carry through.
Janet Kloppenburg (JJK Research): What about the inventory reserve on the footwear?
Michael L. Henry: That should take care of the footwear transition within the first quarter. I would not expect at this point that we would see repetitive additional significant footwear reserves as we go to forward.
Janet Kloppenburg (JJK Research): How much will the depreciation be up on the year versus last?
Michael L. Henry: It would be 75 to 80 for the year. It was 80 this year. It was $80,323,000 but it will be up by $2.5 million in the first quarter versus last year’s first quarter. That is because you have the carryover impact of all the refreshes that we did last year. You also have the impact of a greater number of store closures than we had relative to the prior year.
Janet Kloppenburg (JJK Research): Why the quarterly loss for the first quarter is at 6 to 8 cents, and it seems that some of that has to do with the footwear reserve and the higher severance?
Michael L. Henry: $3 million of it is tied directly to the footwear transition and the other $1 million to the DC transition. The other things are issues that are just attendant to what we have done in terms of the refresh program and other investments in different pieces of our business that have a particular impact to the first quarter because it is such a small volume quarter. I would not expect that these types of expenses would continue to have these kinds of variances as we go forward and then we should have much better leverage points as we go further and further into the year.
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