Filed by RCG Companies Incorporated (Commission File No. 1-8662)
Pursuant to Rule 425 Under Securities Act of
1933 and Deemed Filed Pursuant to Rule 14a-12
of the Securities and Exchange Act of 1934
On December 7, 2004, RCG Companies Incorporated and Farequest Holdings, Inc.
Jointly Held the Following Conference Call:
TRANSCRIPT OF THE CONFERENCE CALL
Operator: Welcome everyone. My name is Katie, and I'd like to welcome
you to today's conference call. At this time, all participants
are in a listen-only mode. Later, we will conduct a question
and answer session, and instructions on how to participate
will follow at that time. If you should need operator
assistance at any time, please press star, then zero.
I would now like to introduce your speaker for today, Bob Prag
[sp]. Please go ahead, Bob.
Bob Prag: Thank you, Katie, and good afternoon everyone. I am Bob
Prag, President of the Delmar Consulting Group. I would like
to welcome everyone to the RCG Companies 1800CheapSeats.com
conference call. Today's call is being broadcast both via
telephone as well as live on the Internet. A telephonic replay
will be available for the next 60 days. The replay number is
in the press release issued yesterday by RCG.
Last week, RCG announced its plans to acquire
1800Cheapseats.com, one of the fastest-growing online travel
companies in the United States. Today's call will provide
investors an opportunity to better understand the combination
of the two companies as well as the business plan on a go
forward basis. Before we begin the call today, I've been asked
to read the following disclosure on forward-looking
statements.
The statements in this presentation that are not historical
facts are forward-looking statements within the meaning of
section 21E of the Securities and Exchange of 1933, made in
reliance on the safe harbor protections provided under that
Act. These statements may be accompanied by words that convey
the uncertainty of future events or outcomes. These statements
are based on assumptions that we believe are reasonable.
However, many important factors could cause our actual results
in the future to differ materially from the forward-looking
statements made herein, and in any other documents or oral
presentations made by or on behalf of the company, including
the risk that the company would be unable to grow or strength
its network, due to lack of capital, or will be unable to
consummate the acquisition of FareQuest Holdings [sp], or that
the benefits anticipated from the acquisition will not be
realized.
Additionally the forward-looking statements concerning the
performance of the travel and leisure industry are based upon
current market conditions and risks, which may change as a
result of certain economic events or a shift in consumer
travel. For further information on these risks and
uncertainties, see the company's Securities and Exchange
Commission filings, including its 2004 annual report on form
10K. We assume no obligation to publicly update or revise any
forward-looking statements made herein, or any other
forward-looking statements made by the company, whether as a
result of new information, future events, or otherwise. This
material is not a substitute for the proxy statement
prospectus that RCG will file with the SEC. Investors are
urged to read that document when it is available, because it
will contain important information, including detailed risk
factors.
The proxy statement prospectus, with other important documents
to be filed by RCG, will be available free of charge at the
SEC's website, www.SEC.gov, or directly from RCG.
RCG's directors and certain other executive officers may be
considered participants in the solicitation of proxies in
connection with the acquisition. Information concerning RCG's
directors and executive officers can be found in the documents
filed by RCG with the SEC. Certain directors and executive
officers of RCG may have direct or indirect interest in the
acquisition. Additional information about the participants
will be contained in the proxy statement prospectus.
Presenting today for RCG will be Michael Pruitt, the company's
CEO, and presenting for 1800CheapSeats.com will be Will
Goldstein, its chairman. Will will also assume the position of
RCG at the closing of the acquisition.
At this time, I'm happy to introduce Michael Pruitt, CEO of
RCG. Go ahead, Mike.
Michael Pruitt: Thanks, Bob. I appreciate the opportunity, I
appreciate on the phone participating. As you are aware, RCG,
a little over a year ago, acquired Vacation Express and
SunTrips from My Travel of Canada, making us one of the
leading tour operators in the United States. Both these
businesses were largely done in an offline world, through the
traditional travel agents through the 1-800 number, and
through some on the Internet. We saw a great opportunity at
the end of the rainbow [inaudible] to take them to the
Internet and we focused on doing that on Suntrips.com, is the
brand to go national.
We also recognized by making the acquisition of these two
businesses that this year we would incur losses until we
reached the new contracts on the airline and were better able
to execute that new plan of taking them on to the Internet.
Two months ago, I was introduced to Will Goldstein, who is
with me today, who is the chairman, as Bob mentioned, of
1800CheapSeats, about the synergies between our two companies
and putting them together, and we are very happy, as we did
last week, to announce that the-- we have agreed to acquire
1800CheapSeats, and Will will step in as the new chairman of
the combined companies.
I'm going to let Will tell you about 1800CheapSeats, since
we're all excited about the opportunity, as the shareholders
of RCG and the management of RCG, to bring and his team in,
and then we'll get back in a moment, in terms of the synergies
going forward, that we see both in growing SunTrips and our
offline brands with Will's online brand.
Will Goldstein: Thank you, Mike. Thank you all for taking the time to join us
today. I realize it's somewhat unusual to hold a call to
discuss a pending transaction, but since FareQuest Holdings,
the parent company of 1800CheapSeats is private and not
well-known, we wanted to make sure we had the opportunity to
share with you that our vision and our strategy for the
RCG/1800CheapSeats transaction--
The cornerstone of the deal is obviously travel -- the travel
market is well-documented as a several hundred billion dollar
market. The online portion of this market is growing rapidly
and there are published estimates that online bookings will
exceed $70 billion this year. FareQuest Holdings, in June,
2003, bought the operating assets of the original Cheap Seats.
The original Cheap Seats started in 1987 and has had many
airline contracts that they have kept in place for over 17
years. We launched 1800CheapSeats.com in August of 2003. The
original Cheap Seats did not have a very good presence online,
they were operating as Cheap Seats travel, so in essence we
started from scratch in 2003, in August, with our new site.
That site now today went from zero to having over 30,000
people visiting a day. We do approximately $3.5 million a
month in sales, and we have about 700 to 1,500 people signing
up a day. We went with the strategy of being
1800CheapSeats.com because we wanted to be known as a full
service online, offline travel agency. Most of our
competitors, or the largest competitors, they bury their phone
number -- they don't want you to call. We want you to contact
us in any way shape possible that you feel comfortable.
Since then, we have been known as the name of the company, the
URL, and also the phone number being one and the same.
Our call center that we have in Las Vegas has about 100 seats,
and our agents are closing about 15% to 20%, compare to our
close rate of 1% to 2% online. There's a couple of good
reasons for that, although they're well-trained, I'm very
proud of them, we have about 1,200 to 1,500 calls a day, and
we're getting so many people coming to our website.
Well, the reason why we wanted to do this deal, we saw that
RCG, through its tour lines, has been a traditional operator
in excess of 20 years, and speaking frankly, they needed an
Internet initiative to maximize their strength in the market.
We at 1800CheapSeats.com feel we can deliver this web
initiative. We also feel that 1800CheapSeats brand will grow
next year in air travel, but having access to RCG's hotel
inventory will accelerate our growth by selling hotels to
travelers not looking for a tour. If you participate on the
future calls and for those who know me from other ventures, I
often refer to the three-legged stool. What I mean by this is
a well-supported business model. In this case, I see the
combined entities as having a strong air, hotel, and tour
components. These three legs are critical to the growth
sustainability in the travel business today, in my opinion,
and again, I'm not reinventing the wheel. But what we're
looking at is that we have so many visitors to our site that
we want to be able to parade them by other merchandise. We
realize that the air ticket part is actually the beginning;
that's where the pavement and the rubber meets the pavement,
so to speak, and we want to be able to sell them other
products and services.
When we saw the deal and the opportunity with RCG and their
tremendous tour operations and the ability to convert their
tour sales to an online perspective and also their hotel
inventory, we feel like we have three strong legs to stand on.
As you heard me, I always preach about parading people by the
merchandise. We have an aggressive marketing campaign right
now, we have 30 Scions that are driving around in America's
major cities, and when they drive by, hopefully you've noticed
them. If not, hopefully you will notice the edgy, eye-catching
logo. We plan to do more of this to get people's attention.
We need to figure out a way to stand out and [inaudible]
people notice, as I do not put up a bunch of billboards and TV
ads like our big boys, because we're just not going to spend
the money.
Two, is drive marketing dollars that you will go over through
Mike, when he talks about it, that they use from their hotels
and their hotel credits that they have, to continue to build
the online campaigns that we have going. What we saw as an
opportunity to continue to grow 1800CheapSeats.com as well as
create a new vacation destination site with Suntrips.com. With
the years of experience that Suntrips has and the experience
that we have on driving online, we feel that one plus one
equals a whole heck of a lot more than two.
Michael Pruitt: All right, as Will just mentioned, on Suntrips, we've stated
this from the beginning, that Suntrips, our intent, was to
take it national through our website, travel site, for
specializing in vacation travel. As we have launched it over
the last six months, we have found it very difficult to one,
from a technology standpoint, but two, even more importantly,
it's incredibly difficult for us [inaudible] airline contracts
give us the ability to have a national platform. When Will and
I got together, it was obvious the synergies with their
longstanding history and contracts with the airlines, and the
major carriers of the airline, that we were unable to achieve
on our own, and their booking engine that they have
[inaudible] internally, transact the Internet, it allows
Suntrips to go from where we are today, which is a 27-year
history and brand of serving the vacation market, online, you
know, virtually overnight, on a national basis, and to us,
those synergies were just incredible for us, and that's why we
reacted quickly and we struck the deal that we struck.
And so, we couldn't be more excited about it from a Suntrips
standpoint, as we grow this national brand, from a vacation
standpoint, and as you can tell, from Will, his obvious
excitement from 1800CheapSeats, to be able to grow their brand
as they continue to do online.
As Will mentioned, you know, Suntrips and Vacation Express, on
an annual basis, spend a little over $5 million promoting our
two companies. We've largely done that on an offline basis of
traditional media, newspaper, you know, television, radio, to
promote our brands in local markets. One of the exciting
things that we look forward, in joining together, is to
reallocate those funds that we currently get from the hotels
to a more online brand and take advantage of what obviously
Cheap Seats has been able to accomplish, which is a great deal
in a very short period of time on the Internet, and to be able
to grow the Suntrips brand nationally, as well as help, you
know, Cheap Seats grow their brand, the 1800CheapSeats brand,
by taking those same hotels and taking the co-op dollars that
we receive from them, that 1800CheapSeats can use to grow out
their marketing dollars as well.
Will Goldstein: One of the things that we have is we have a tremendous
inventory of air contracts, and with that, we could give a
national footprint to Suntrips [inaudible] flying out of their
half a dozen gateway cities, we'll actually be able to put a
dynamic package together, where you'd be able to go online,
book your air, book your hotel, and put it together as a
package. What I mean by that, instead of saying that you have
to leave on a Thursday and come back on a Sunday, well, if you
have to be back on a Saturday, you weren't able to do that
before without our scheduled air contracts that we have. So
we're going to put this together as a dynamic packaging unit,
so when you get it through 1800CheapSeats.com, you'll be able
to always get your -- your airline flights. I mean that's --
that's one thing. That's our bread and butter. We understand
that business and I think we've cracked the code on being able
to sell that and show scalability.
But what we want to do is be able to put together a tour
package because the adults is where we make money, number one
and number two, and number three, we want to be able to sell
the land individually. What I feel is a -- a -- a selling
point for SunTrips as opposed to some of our other competitors
is that they've been around forever. And their infrastructure,
when you go to one of those resorts, it's second to none.
Instead of getting a voucher to get a taxi ride somewhere,
you're actually going to meet one of those employees that'll
have a sign there saying, "SunTrips, welcome," and will take
you further to the hotel and talk about the excursions.
Our cornerstone and our growth, and what's different than
anybody else out there, is that we want to be a full service.
Back in 99, most of the companies that were operating 800
numbers for travel industry -- they embraced the Internet. And
-- and as I preach all the time, the Internet is about sharing
information. I -- I don't know if it was technically about
selling dog food, but we feel like it was sharing information,
giving the consumers the power. And that's what it has done.
You can shop your airline tickets. We feel like today, people
are shopping by price and not by the brands anymore. And so
what we want to do is say, "Look, if you come to us,
obviously, we want you to book it online." But we also
[inaudible] full service element and that's why it was such a
perfect for us in RCG. For us, we want to take their inventory
of hotels on our website. Right now, about 95 percent
[inaudible] air only. We feel like the [inaudible] for our
future growth.
Michael Pruitt: Yeah, and as -- as Will mentioned, with SunTrips --
Bob Prag: Hey, Will -- Will -- hey, Will, back -- back up, you cut out
there. You said about how much percent is air only and how
much percent is hotel?
Will Goldstein: Over 95 percent of what our sales are today is air. That is
what we're known for. And it's going to take some creative
marketing, which we think we have grassroots marketing
campaigns, which I'd mentioned earlier that to cut through the
clutter of all the advertising that the big guys are doing, we
had to be very innovative in our marketing techniques. And
we've done that, what we call gorilla marketing, and I -- I
suspect people on the call will understand what that is. We
have these little Scions going around and we're handing out
information. We're going to be able to spread the word about
us being a premier online/offline tour destination site. What
I mean by that is that I don't think we'll come in immediately
in January, February -- whenever it closes -- and say that 100
percent of what's being done by SunTrips/Vacation Express,
we'll convert that to be online. That's not the case. When
people save up for a whole year to take their vacation, they
want to make sure that they can look at it, they can peruse
the pictures, they can see the stream and video of where
they're going, they can actually go through from the time they
arrive to the plane to the time they get off the plane, by the
time they go to the hotel, by the time they look at the -- who
knows -- the midnight buffet. But they want to be able to see
that. And then they're going to want to be able to talk to
somebody to make sure that is the [inaudible] folks have
questions.
So we think, over a period of time, we'll migrate 30 to 50
percent of all our visitors to be able to do this online, but
we want them to know we'll be there on the offline
perspective. We don't think anybody's out there doing it, and
we suspect nobody wants to do it because they're in the volume
game. We're in the customer service game and we know the money
will come. We know that we'll be able to do add-ons.
Like I mentioned earlier in my long-winded opening statement,
which I apologize, is that we pride ourselves in being able to
do customer service. That's not necessarily a cost center to
me -- that could be a profit center. Right now when somebody
calls us and has a problem -- didn't get their itinerary or
didn't know their -- their airport locator code -- they call
us, we can add on a hotel component and also an auto -- the
car rental component. We feel like it's an opportunity for us
to add on. We feel like it's an opportunity for us in customer
service to help -- to help close the sale for the vacation, so
to speak. We feel like people are going to go to the website,
they're going to do the research, more people are more
informed now because of the Internet than ever before, but
sometimes they need that little extra nudge to make that
buying decision. And we feel like having that cost center and
our experts, and I think our cost center is second to none. We
believe in high touch and high tech, and I think that's what
we preach.
And hopefully, if anybody's been on here and used our
[inaudible] that our customer service will stand behind it.
We're going to go ahead and make that sale. And that's why we
thought the combination was tremendous. We're not the new guys
on the block, although we've only been Farequest Holdings
since June 2003. The reality of it is, this is the original
CheapSeats, we called it the original superstore, which was an
offline travel agency, and that started back in 87. It's been
around 17 years. And there's no -- make no mistake -- you
don't stay in this business for 17 or 20 years if you're not
providing customer service.
Michael Pruitt: And -- and one other point we want to add is what's the
current business model of Vacation Express and SunTrips, and
one of the other exciting things is CheapSeats will be a
distribution channel for the existing business via the
Internet. And so that's exciting with their over seven hundred
thousand opt-in members today, as Will mentioned earlier,
growing by two to three thousand everyday. It's an exciting
opportunity for them to be able to market our charter flights
and our packages [inaudible] existing business that we have
today of Vacation Express and SunTrips.
Will Goldstein: And that's a very good point because we really want to have
two brands when we say multiple brands. We'll try to work on
consolidating the back office and share all our technology and
all our secret thoughts that we have. We're going to have two
brands. We're going to have SunTrips [inaudible] also own
1-800-SunTrips, as well as 1-800-CheapSeats. And what'll
happen is when you go to SunTrips and you're looking for air,
because maybe they're just looking at air and build their own
package, they'll have our booking engine on there and use
[inaudible] flight. As well, as for our vacation tabs, we're
going to go ahead and have all [inaudible] vacation and
packages. We feel like we want to parade our customers by the
merchants [inaudible].
And as I said in the opening [inaudible] when I ran through
it, is we're getting 25 to 30 [inaudible] day. We're having
between [inaudible] twelve hundred signing up to get our
newsletter. And we're getting more than two thousand totally
signing up for some of our strategic contests that we have
running, and actually, we -- we announced one of the contest
winners today for one of the cruises we had.
This is a huge opportunity to go ahead and fill up the planes
as SunTrips has, number one, and Vacation Express. But more
importantly, it gives SunTrips and Vacation Express a national
footprint. Our carriers, which are -- are top carriers, we go
from every, every airport destination airport that you have.
So it's not going to be a problem to take somebody from
Detroit to Cancun, as opposed to the half-a-dozen gateway
cities that -- that RCG has now.
Michael Pruitt: All right, Bob, do you want to --
Bob Prag: Yeah, good presentation. If you guys are ready, let's see if
Katie has anyone that wants to ask any questions.
Operator: All right, if anyone has a question, you may press zero-one on
your touch-tone phone. This will place you into a queue. We
will then open up the lines one-by-one so each of you may ask
your question. So again, if anyone has a question, press
zero-one on your touch-tone phone. And that will be just a
moment for questions.
Bob Prag: Mike -- Mike, while we're -- while we're waiting for the queue
to fill up, go through or -- or tell people exactly what
they're going to be looking for with regard to the proxy
shareholder approval and all that kind of interesting info.
Michael Pruitt: OK, over the next -- between now and the end of the year, RCG
is committed to preparing a proxy, which will also [inaudible]
as it pertains to this transaction. And we will get that out
after the SEC goes through the review process and gives us the
final approval. Then as always, the proper amount of days
where -- for mailing that they can vote on this transaction.
The -- I can tell you, Bob, the existing shareholder values
from the nine institutions that have put in money over the
last year to support the acquisition and the -- and the growth
of Vacation Express and SunTrips, it's been overwhelming
positive as well as from the Board and management of RCG to go
forward with this transaction. In that proxy statement, it
will include -- so this may help in answering some questions -
the proforma numbers for 1-800-CheapSeats next year that's --
that they have -- will provide, as well as the proforma
numbers for the existing businesses of RCG, and that proforma
number for the shareholders to review.
We also -- we -- we required a fairness opinion to be done for
this transaction. And that fairness opinion will also be
provided in the documents that will be mailed to the
shareholders. So expect to see something after the -- right
after the 1st.
Will and I are both excited and anxious to get this
transaction closed. We're both committed to the transaction as
evidence by us going here today and -- and making this call.
And in fact, last week, we were in New York together, and we
are, you know, acting as one now, and -- and their technology
people working with ours, to get the SunTrips site, you know,
where we can -- after the 1st of the year -- come out swinging
with a national presence. So we're very excited and we look
forward to giving our shareholders that information.
Bob Prag: Mike, well -- Mike, well, maybe -- maybe you can answer this,
maybe you won't, but the proformas that will go out in the
proxy for calendar 05, are you in a position to say whether
they would show or forecast profits for the combined
companies?
Michael Pruitt: Yeah, as we've said previously, as it pertains to the -- the
current -- or, you know, existing companies of RCG, is that we
forecasted a profit for next year and we stand by that. And we
are not aware of anything from the proformas of -- of
1-800-CheapSeats that affect that, you know, ability to make a
profit for next year.
Bob Prag: Good. Katie -- Katie -- Katie, any questions?
Operator: We do. Our first question will come from David Schlecter [sp]
from Perspective Capital Management. Please go ahead.
David Schlecter: Thanks Katie, and good evening guys. Nice to see you Bob and
Mike, and -- and meet you, Mr. Goldstein. The press release
had talked about the four-and-a-half million per month in
airline bookings, and I wondered how is that treated in
revenue recognition? Will all of that go through the combined
companies' books or do you take a piece of that to report?
Will Goldstein; Well, when we put that press release out, that it's in gross
bookings. That's one of the metrics. When we go out there and
do it as a consolidated statement, what we would do, is we
have two different types of products when you do airlines. You
have bulk, what are net fares are, and you have published. The
published, the only money we make on it is actually our
service fee. We don't have any mark-ups -- we don't control
that inventory. On a bulk, we control the mark-ups -- we
control that inventory. So basically, when we go ahead and
state it in a consolidated statement, when we do revenues, it
would end up being our bulk sales plus our -- our service fees
from our bulk sales and our service fees from the published.
Michael Pruitt: And -- and David -- this is Mike Pruitt -- when you see the
prospectus that'll go out, the gentleman, the -- the firm that
did the fairness opinion who was very knowledge of this space,
actually breaks it down in the fairness opinion by all the
different metrics the transactions have been done in this
space. And -- and as -- as -- as Will mentioned, when we do
the consolidated, that's how we'll report it.
David Schlecter: Say -- OK -- is there some -- is there some round number that
I should use to multiply four-and-a-half million by to -- to
get what would be -- what would be a reportable revenue off of
that monthly revenue?
Will Goldstein: Well, I -- I could take a stab at it. I mean about 30 to 40
percent of what we do is bulk sales, the remainder is
published. So if you take 40 percent of that, and then you add
our -- our service fees on top, and then our GDS fees, then
you would get your gross revenue?
David Schlecter: Got it. One other thing, Will, is I understand you're really
quite a -- an entrepreneur, you've got quite a few other
companies that you're running, and I wondered what percentage
of your time as -- as chair of the operation you'll have to
devote to it?
Will Goldstein: That's a good question. I am the chairman, or I will be the
chairman [inaudible] myself on helping [inaudible] operation
than most people would -- would suspect. I'm not trying to go
around your question. I -- I don't know. I mean I -- I
[inaudible] 18-hour day. I probably have 40 hours worth the
time that would go into this [inaudible] complete.
David Schlecter: Well, it's a -- it's a great piece of news and I'm -- I'm glad
to hear it.
Will Goldstein: Thank you.
Operator: All right, our next question will come from Adam Martin, and
he's a private investor. Please go ahead.
Adam Martin: Hello?
Bob Prag: Yes, go ahead, Adam.
Adam Martin: I've been a recent RCG shareholder, and I was just wondering
is the combined company going to have a new stock symbol, and
what is the -- how is this going to benefit the current RCG
shareholders, and is it going to change the flow?
Bob Prag: Mike, do you want to grab that? Mike, did you hear that? Mike?
Operator: It shows that he is still on line, but I can dial out to him.
Bob Prag: Hey -- hey, Katie, can you -- can you -- the caller that's in,
can you now turn him off?
Operator: Yes.
Bob Prag: Only because there's a lot of feedback. OK, Mike?
Michael Pruitt: Adam, I'll answer your question.
Bob Prag: OK.
Michael Pruitt: In the press release, we announced that we would do a name
change to reflect as we stated back two press releases ago.
RCG would stay focused in the travel and entertainment space.
With this transaction, we have an opportunity to do a name
change to give a clear focus that we don't spend time, you
know, explaining what RCG is because it's not necessarily the
relevant [inaudible] that we operate. So we will do a name
change, and it will be included in the proxy that goes out.
And with the name change, there is a possibility that we would
do a symbol change, and certainly if we do, we would give
ample notice for everyone to -- to know the new symbol.
Obviously, Adam, the answer to the last part of your question,
do we think it'll benefit the shareholders of RCG, as the
currently -- the largest shareholder of RCG, we -- we
certainly are doing this too for one purpose, and that is to
maximize and create shareholder value in the marketplace that
we -- we -- you know, we operate in today. So we're very
excited about the combination.
Operator: All right, our next question will come from Tom Spagnola [sp]
from 1-800-CheapSeats. Please go ahead.
Tom Spagnola: Hey, good afternoon gentlemen. Hey, Will, how are you?
Will Goldstein: Hey there, Tom.
Tom Spagnola: Good. Listen, I -- I just want to say this is an exciting time
for -- for 1-800-CheapSeats and RCG, and I'm looking forward
to -- to working with RCG and growing SunTrips and Vacation
Express. And one question I -- I didn't think of and asked you
about is that is there going to be the realization of growing
SunTrips in the destinations or keeping things as they are?
Michael Pruitt: So -- Tom, I'll answer that one.
Tom Spagnola: OK.
Michael Pruitt: Definitely, our intention is to -- to grow the destinations. I
mean obviously today, SunTrips and Vacation Express are
limited to the destinations we serve by the planes that we
operate. And certainly, as we go forward, the -- you know, one
of the big attractions is to take advantage of the network of
the major carriers which certainly serve a lot more
destinations.
And it gives me a great point to bring up, Tom, my travel who
is a -- you know, one of the largest travel companies in the
world, they are very excited about the opportunity to -- and
-- and continue in the relationship that we have with them to
purchase hotels on our behalf around the world. And they have
a far more extensive network in the Caribbean and -- and other
destinations that we currently don't operate in at -- at both
SunTrips and at Vacation Express. And they welcome the
opportunity to use their buying clout for us in new markets as
we -- we launch them.
We certainly want SunTrips to be, as Will mentioned so
happily, is a -- you know, a destination site for people
looking for vacations, and -- and obviously, people are
looking to go to a lot more places than we currently operate
to today.
Tom Spagnola: Sounds great, we look forward to working with you guys, thank
you.
Michael Pruitt: Thank you.
Will Goldstein: Thanks, Tom.
Bob Prag: Good question.
Operator: All right, there are no further questions at this time.
Bob Prag: Great, Mike, do you want to give a closing comment?
Michael Pruitt: Well, I --
Will Goldstein: I'd -- I'd like to add a couple of things.
Bob Prag: OK.
Will Goldstein: When we took over in June 2003, the company's doing about
five-hundred thousand [inaudible]. And as we've mentioned,
we're doing 4.5 million about right now per -- per month. So
we're excited about the growth. And -- and when Mike was
talking about the proxy having our proforma and also the
proforma for RCG's other companies, I want to say that,
obviously, the attorneys and the accountants would have to
approve it before we do it, before we put out and publish a
proforma. We feel very comfortable about the growth in this
industry, obviously. And what we're doing right now is the
industy is so big, as I said earlier, and, you know, it's
going to be $70 billion online. So it's a $200 plus billion
industry. We're not taking anybody's business. We're being a
-- an alternative to the guys that are there.
You have certain tiers. You have the top three or four
competitors, and they're out there duking it out. And we're
there, and what we're trying to do is focus on service besides
the price. So when we say that there's going to be growth,
we're going to have tremendous amount of growth. But you're
going to -- we're going to have to spend more money and -- to
go ahead and cross-sell and promote SunTrips and
1-800-CheapSeats.
I'm trying to put a little caveat in there to that proforma
because even though we've had incredible growth, and will
continue to have growth, we are going to have spend money so
-- so folks know. We want to be the number four, five -- fifth
choice because there are reports that the average person goes
to three sites before they make their decision. Well, we want
to be that third, fourth or fifth site, so we are going to
spend time and energy. It's -- it's there for us. And if we
put this combination together, one plus one equals six. And
we're going to have two of the premier websites, destination
websites out there.
Michael Pruitt: And Will makes a great point, and that point is this -- the
market is certain rewarding their efforts and will reward, we
believe, us for creating shareholder value. By taking -- you
know, we're committed to making profits, but taking those
profits and reinvesting them to continue to grow our brands.
And so we believe that's the -- that's the path, not only to
profitability, but the path to creating shareholder value is
to continue to grow our brands and become a dominant force out
there in both the vacations as well as through the air travel
that Will has today with 1-800-CheapSeats.
So, like I said, we are -- we are very confident, and we're
very excited. We're committed to the transaction. We're --
we're anxious to get it done. And together, we're going to go
out and [inaudible].
Will Goldstein: And, you know, I didn't mention it, but Farequest Holdings and
shareholders and myself are very committed to get this -- this
deal done. The reason why I say that is, we're already putting
our resources and efforts in building SunTrips now before the
deal is even closed. We are going to be one company as soon as
the proxy goes out and we go through whatever, kind of like we
had to go through whatever mechanisms. We are completely 100
percent committed. We feel like we have a unique product. We
have, I'm not going to say the -- the complete secret sauce,
but we're not reinventing the wheel for putting this vacation
packaging online. And together, it's just going to be
phenomenal.
Michael Pruitt: And -- and to -- just to further that point, that -- that
Dave's -- you know, the first question asked, Will will be the
largest shareholder in the company, and once the companies are
combined. So obviously, his commitment is to -- to grow the
shares and share prices of RCG, and -- and -- and focus on
doing that. And I'm sure, having been in his presence over the
last, you know, 90 days, and his 18-hour day work ethics, you
know, it will be reflected in -- in -- in his effort to go out
and grow that share -- the share price on behalf of the
shareholders.
Bob Prag: Great, well, guys, thanks -- thanks so much for your time. And
as always, management makes themselves available to the
investment community, you can call them directly or call here
through our office. Will and Mike, thanks again for your time,
and I'm actually going to call you guys back in about two
minutes.