activity and the expected continued progress in our eCOST business unit, we expect improved
performance as we look ahead to the rest of the year. The bottom line results were also generally
inline with what we had provided to our banking partners earlier this year.
We continue to maintain a proactive communication channel with all of our banking partners to
ensure that they are continually updated on our business developments and we are currently in
compliance with and expect to maintain compliance with all of our existing financial covenant
Now Id like to turn the call back over to Mark for closing remarks.
Mark C. Layton, Chairman, Senior Partner and Chief Executive Officer
Thank you, Tom. So to recap, despite the tough economy, our results for the second quarter were
within our expectations. Weve made the necessary adjustments to our business in order to emerge
from these challenging times a stronger company, we believe.
This concludes the body of our prepared comments for today. And, operator, well now be available
for some questions.
Operator: [Operator Instructions] And you have a question from George Walsh.
<Q>: Good morning, gentlemen.
<A Thomas Madden>: Hi, George, how are you?
<Q>: Good. Mark, I wonder if you could go into the as the best you can see the ramp-up
with the new clients in the Services side, the kind of EBITDA youre looking for the balance of the
year. Is it really a matter of getting to break even these next couple of quarters, in the second
half in Services? Or its just a matter of still having some negative EBITDA there for a couple of
<A Mark Layton>: Tom, you want to handle that, please?
<A Thomas Madden>: Sure. George, Im not going to give any specific guidance on the
individual quarters here. Again, I think our general guidance for the year so far has been on the
free cash flow break even to positive performance. I think we all have alluded to the fact that we
expect improvements as we look at the Services business unit, and that would include both the
Services and Supplies Distributors business unit combined as we look out into Q3 and then further
strengthening in Q4 not only because of continued new clients being added on, but also we get the
seasonal up tick from some of our Business-to-Consumer holiday activity as well.
<Q>: Okay. Any special trends youre seeing in Services as far as a lot of brick-and-mortar
and malls are going by the wayside. Is there more activity there thats going to increase the
<A Michael Willoughby>: So, George, I think that I mentioned in the past couple of
conference calls that we had seen a real increase in the number of brand manufacturers finally
going direct to consumer with their own eCommerce initiatives. Its amazing the number of
particularly prestige and luxury brands that have yet to put up even their first eCommerce site
prior to this year. And were now seeing I think with the pressures on the brick-and-mortar
channel, with pressures on maybe traditional catalog sales that this is an area of the economy that
still shows signs of growth, and these folks are jumping at the chance to go online.