CSG Systems International Inc (CSGS) 2007 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen, and thank you for standing by.

Welcome to the CSG Systems' third quarter earnings conference call.

During today's presentation all parties will be in a listen-only mode.

Following the presentation the conference will be open for questions.

(OPERATOR INSTRUCTIONS) This conference is being recorded Tuesday, October 23, 2007.

I would now like to turn the conference over to Roger Metz, Vice President of Investor Relations.

Please go ahead, sir.

Thank you, Eric, and thanks to everyone on the call.

Today's discussion will contain a number of forward-looking statements, in particular financial projections, our ability to meet our clients' needs through our products and services, and performance, and our ability to successfully integrate and manage acquired businesses or assets in order to achieve their expected strategic, operating, and financial goals.

While these statements reflect our best current judgment they are subject to risks and uncertainties that could cause actual results to vary.

In addition to factors noted during our presentation these risk factors are discussed in more detail in our most recently filed 10-Q and 10-K.

Currently the Company does not intend to update this information during the quarter.

If you did not receive a copy of our press release you can obtain a copy from our website.

Today we have with us Ed Nafus, Chief Executive Officer, Randy Weise, Chief Financial Officer, and Peter Kalan, Executive Vice President.

Ed will begin.

Thank you, Roger, and thanks to all of you for joining us today.

We are happy to share with you another quarter of solid financial results and to discuss some of the exciting things that have transpired at CSG over the last few months.

For the third quarter of 2007, CSG's revenues were approximately $108 million.

Excluding the Prairie acquisition, which was not included in our previous financial guidance, revenues were approximately $105 million, within the range of the guidance we provided.

Our income from continuing operations for the third quarter was $0.39 per diluted share.

Our higher than expected share repurchases during the quarter provided a $0.02 per share benefit.

Excluding the impact of this benefit earnings per diluted share were at the mid-point of our previously communicated guidance.

In the third quarter, we made excellent progress on our stock buyback program as we repurchased approximately 5.6 million shares of our stock for $130 million.

As of September 30th, we had completed approximately $295 million of our planned $350 million buyback program, leaving approximately $55 million remaining on our announced 10B5-1 repurchase plan.

Randy will discuss the financials in more detail in a few minutes, but first I would like to share some insight into our business, particularly the changes in our marketplace and what CSG is doing to ensure our customers have the tools they need to keep pace with these challenges.

As you know, our clients are operating in an increasingly complex business environment, and there are greater competitive pressures from new entrants in the video and triple play markets.

Changes for our customers represent opportunities for CSG to assist them as a valued business partner.

As our clients' businesses evolve they need increasingly robust systems to market their services, manage the delivery of these more complex offerings, improve customer service, reduce churn and lower operating costs.

Our customers rely on us for these important business needs.

CSG's value proposition is to provide solutions that help our clients ensure that each interaction they have with their customers is an opportunity to create value or deepen the business relationship.

Every day CSG plays a critical role in helping our customers accomplish these goals, and we continue to evolve the ways we serve our clients to meet their changing needs.

In the third quarter, CSG continued to broaden its footprint within its customer base by increasing penetration of our industry-leading solutions.

These include our proven solutions like our advanced convergent platform, or ACP, our work force management product suite, work force Express, our self-care module, Care Express, and various print and mail and related marketing services.

We also continued to enhance our range of solutions with research and development efforts and some of our newer solutions such as order work flow, self-care kiosks, and product catalog are being we will received by our clients.

Additionally, the market is adding new, more personalized ways of delivering content to consumers, and we are looking at ways to bring solutions to the market that will facilitate these more robust content delivery models.

We closed two acquisitions during the quarter.

ComTec and Prairie Interactive Messaging.

Both of these acquisitions are very much in line with our stated strategy of finding innovative functionality that leverages our core competencies and extends our functional reach at our existing clients in the cable and DBS markets.

We now have additional customer relationships and financial services, telecommunications, transportation, utilities, and home security verticals, just to name a few.

Over time, we'll be providing elements of CSG, Prairie, and ComTec solutions in combined offerings that are tailored for each specific market consistent with our goal of making certain elements of our solution suite available on a modular basis, capable of overlaying other billing systems and crossing into new industry verticals.

We talked about the first acquisition, ComTec, on last quarter's earnings call.

Since closing the acquisition, we have been very pleased with the progress of the integration.

While similar in many respects to CSG's established statement processing operations, ComTec's operations add additional flexibility and feature functionality that will enable us to provide even more options to existing and future clients who need to communicate with their customers through the monthly invoice.

We also announced and closed the acquisition of Prairie Voice Services during the quarter, which we have renamed Prairie Interactive Messaging to better reflect the scope of Prairie's solutions.

As you may recall, we began a strategic partnership with Prairie about two years ago through which our two companies brought to market an automated appointment verification solution targeted at improving the efficiency of field technicians.

The solution was embraced by CSG clients as it not only saved costs but dramatically improved customer service levels, both of which are critical initiatives for all MSOs in the face of increasing competition.

Throughout the partnership CSG became more familiar with Prairie's additional capabilities and saw immediate applicability within CSG's own customer base for products such as automated collections, lead generation, order capture, and service outage notifications.

We are delighted to now have these additional capabilities in-house at CSG and are excited about bringing more of these solutions to market to help our clients maximize the quality and efficiency of their customer interactions.

As with ComTec, the Prairie integration is progressing nicely, and we are pleased with the performance of the business thus far.

CSG's outlook for the fourth quarter of 2007, as well as 2008 and beyond, remains solid.

Day in and day out we continue to provide battle-proven widely deployed and innovative customer interaction management solutions that enable our clients to navigate the challenging and evolving marketplace in which they operate.

We deliver these solutions on an outsourced basis with service quality that is second to none, which affords our clients the resources to focus on what they do best, run and grow their businesses.

We look forward to continuing to deliver for our clients which in turn, will allow us to deliver for our shareholders.

On a final note, on behalf of everyone at CSG, I would like to welcome the ComTec and Prairie employees who joined us during the third quarter.

We are very excited to have them on board as an integral part of CSG's future.

I'll now turn it over to Randy Weise who will review our financial results and provide updated guidance before we open the call to your questions.

Thank you, Ed, and welcome to all of you on the call today.

I'm pleased to share with you today the financial results for our third quarter 2007 as well as our outlook for the remainder of the year.

Total revenues for the current quarter were $107.6 million which represents an increase of 9% when compared to $98.5 million for the same period in 2006, and an increase of 8% when compared to $99.5 million for the second quarter of 2007.

A significant portion of the increase in revenue in the third quarter when compared to these prior quarters relates primarily to the successful acquisitions of the ComTec and Prairie businesses during the third quarter.

Due to the timing of the transaction, CSG's financial guidance for the current quarter did not include the impact of the Prairie business.

As a result, excluding the Prairie results for the third quarter revenues were approximately $105 million, which is within the range of our previous financial guidance of $105 million to $107 million for the quarter.

Looking at the components of revenues, processing revenues for the third quarter were $97.8 million, up 8% when compared to $90.3 million for both the third quarter 2006 and for the second quarter of 2007.

The revenues of ComTec and Prairie fall within this revenue classification which explains a significant portion of the increase when compared to these prior periods.

Software maintenance and services revenues were $9.8 million for the current quarter which compares to $8.2 million for the same period last year and $9.2 million for the second quarter 2007.

Revenues from Comcast and EchoStar made up approximately 26% and 20% respectively of our total revenues for the third quarter.

These percentages were down slightly from the second quarter as we expected with the decrease due primarily to greater revenue diversification resulting from our recent acquisitions.

We finished the third quarter with 45.1 million subscriber accounts on our processing system relatively unchanged from the number of subscribers at the end of the second quarter.

Our operating margin percentage for the quarter was approximately 20% which was in line with our expectations.

Our effective income tax rate was approximately 36% for the quarter , which was at the low end of the range of 36% to 37%.

Income from continuing operations for the quarter was $15.2 million, or $0.39 per diluted share.

This compares to $0.37 per diluted share for both the same period last year and the second quarter of 2007.

Our earnings of $0.39 per share for the third quarter includes an unexpected benefit of $0.02 per share when compared to our previous guidance expectations as a result of lower outstanding shares for the quarter due to higher than expected stock repurchases during the quarter.

Absent the impact of this $0.02 benefit earnings per share were at the mid-point of our previous financial guidance of $0.36 to $0.38 per share for the quarter.

The financial results for CSG include several non-cash charges related to depreciation and amortization expense and stock-based compensation.

These non-cash charges for the third quarter total $11.3 million or approximately $0.19 per diluted share.

Turning to the balance sheet, as of September 30th, cash and short-term investments totaled approximately $177 million, down approximately $161 million from June 30th.

The substantial decrease in our cash and short-term investments is due to our stock repurchases made during the quarter and the cash paid for ComTec and Prairie acquisitions during the quarter.

Our net bill trade account receivables totaled approximately $110 million, up approximately $7 million from last quarter end, with the increase related primarily to the acquired ComTec and Prairie businesses.

The bill trade accounts receivable reflected days billed outstanding, or DBOs, of approximately 60 days for the third quarter, consistent with our expectations and with the most recent quarters.

As of the end of the third quarter the Company had $230 million in contingent convertible debt outstanding which matures in the year 2024.

Holders of the security can convert at any time after CSG's common stock trades at a price in excess of $34.80 for a set period of time.

The first scheduled put or call option for redemption of these securities is in 2011.

Cash flows from operations for the third quarter were $35.7 million which came in above our expectations of $30 million to $32 million primarily due to normal changes in certain operating assets and liabilities for the quarter.

Our cash flows from operations remain very strong.

During the quarter, we've repurchased 5.6 million shares of the Company's stock under our stock repurchase program at a total price of approximately $129.7 million, or approximately $23.34 per share.

Through September 30th we have repurchased approximately 12 million shares for approximately $295 million, or approximately $24.70 per share, leaving approximately $55 million left on our $350 million buyback commitment.

We're making excellent progress on our buyback program with nearly 85% of the planned repurchases completed within approximately 14 months since our announced commitment in August 2006.

As we have stated in previous quarters, the number of shares repurchased under our stock repurchase plan is highly dependent upon various market factors to include our stock price which can be very difficult to predict.

As a result, the amount and the timing of share repurchases can vary significantly between quarters.

Next, I'd like to provide you with an overview of our financial expectations for the fourth quarter and the remainder of year.

However, before I get into the numbers I would like to note that these guidance numbers include the expected results of the acquired Prairie business on a GAAP basis which was not the case in the previous full-year guidance I provided back in July.

Now for the numbers.

For the fourth quarter we expect revenues will range between $111 million and $113 million and expect full-year revenues to range between $417 million and $419 million.

We expect our operating margin for the fourth quarter to be approximately 20% and expect our full-year operating margin to be approximately 20% to 21%.

We expect our effective income tax rate for the fourth quarter to range between 37% to 38%.

This is up slightly from our third quarter tax rate primarily due to certain state income tax true-ups that will be recorded in the fourth quarter, however, our full-year tax rate is unchanged from our previous expectations of 36% to 37%.

We expect income from continuing operations for the fourth quarter will range between $0.40 and $0.42 per share and full year expectations will range between $1.50 and $1.52 per diluted share.

Absent any unexpected changes in certain operating assets and liabilities, we expect cash flows from operation for the fourth quarter will range between $31 million and $32 million with full-year expectations ranging between $127 million and $128 million.

We expect capital expenditures will range between $16 million and $17 million for the full year.

Non-cash charges related to depreciation and amortization expense and stock-based compensation for the fourth quarter are expected to be approximately $11.8 million, or $0.21 per share, and are expected to be approximately $42.4 million, or $0.67 per diluted share for the full year.

In closing, our business continues to perform very solidly.

We continue to make necessary investments in R&D and other support areas and believe that the acquisitions of ComTec and Prairie have positioned ourselves to further grow our business.

In addition, the significant progress we made during the quarter and our effort to return $350 million of cash back to our shareholders demonstrates our commitment to deliver shareholder value.

We look forward to reporting on continued strong performance in future quarters.

I will now turn it over to the moderator for

Thank you, sir.

Ladies and gentlemen, we will now begin the question-and-answer session.

(OPERATOR INSTRUCTIONS)

Our first question comes from Elizabeth Grausam with Goldman Sachs.

Please go ahead.

Great, thank you.

From your disclosure, it sounds like Prairie contributed $2.5 million during in the quarter.

Could you also help us understand the contribution from ComTec so we can come to organic growth assumption?

Liz, I think If you look back at some of the original guidance we gave on ComTec you can kind of get there.

We don't intend to break it out separately going forward, but to give you kind of a general sense of where it's at, look at the guidance we provided when the transaction closed, which we said was $10 million to $12 million for the full year.

It closed slightly later than we'd anticipated, about one week into July.

If you do the math you should come up with about $4.5 million of revenue for the quarter.

Great, and these are good run rate numbers to think about these businesses, there's no seasonality in them or anything?

No, there's no seasonality in the businesses.

Great, and then you've clearly been very aggressive in your buyback given where the stock has traded over the course of this quarter.

With the stock now even further below where your average cost of repurchase was during the quarter should we expect you to continue to be aggressive acquirers of your stock and is there any expectation from the management team or the board that you may increase yet again the authorization and continue to use your free cash flow to buy back stock?

Oh, yes, Liz this is Ed.

Certainly at the present pace, we would anticipate that we will complete the original $350 million commitment that we made, which, by the way, we committed to 12 to 15 months, which we probably will be pretty close to.

As to the further discussions, or further buy backs at this point, we will probably wait until, I would say, the first or second quarter to evaluate how 2008 is shaping up and get with the board in terms of planning for that.

Okay, thank you.

Our next question comes from Ashwin Shirvaikar of Citigroup.

Please go ahead.

Hi, nice quarter, guys.

Hey Pete, at this pace of buy back you might be looking for a new job now.

Well, I think the beauty is, Ashwin, that we have a very good business model that's going to also make sure that we have a little bit of money left over to invest back in the business as we've done recently.

We're using the spare cash to buy Rockies tickets, Ashwin.

Congratulations on that as well.

The question is really along the lines of your comment.

Is there any thought to maybe leaving some powder dry here for next year's renegotiations should some kind of uncertainty come up for the contract renegotiations?

How are you thinking of those?

Well, we certainly would not--your term, keep some powder dry is probably a good one.

I think we would evaluate very carefully before we would enter into a very significant continued buyback program.

That doesn't say--never say never, but at this point, I think we would evaluate the situation rather carefully before we would jump into anything large.

Okay.

I guess I was looking for a little bit more detail on where your thoughts are with regards to prioritization, because you still have a good cash balance, and you still throw off a lot of cash, so with regards to other acquisition targets out there that--is the pipeline active there, or what are you looking at in terms of growth, both top line and bottom line?

Ashwin, this is Peter, let me respond to that.

We do have an active pipeline.

There are many aspects of services and functionality that we are looking at to see if it would be natural for us to add to what we're doing.

I think I'd like the put an umbrella over everything and say remember that we deliver solutions that help our clients improve how they market their services as well as the delivery of the customer service to their end customers, and we do this by delivering the systems that manage the many touch points on behalf of our clients, whether that's live agents, field force technicians, the web, statements, digital interactions through the phone or through the web, and so we're always looking to expand those touch points, and we believe there's many ways that we can do that to help our clients improve customer service as well as lower their cost points for delivering customer service.

It's an important part of their business.

So we have many things.

I don't want to go into which categories we're looking at because it might alert companies, or it might alert the competition of what we're looking to, but we do have a robust pipeline.

We continue to look to expand it, and importantly, even though we've been aggressive in our stock buyback, we do still have cash, as you commented that we'll still have available for us, and we'll continue to look to deploy that cash to grow the top line as well as the bottom line financial results of our company.

Okay, and last question, if I may as you've done these acquisitions, and you've rolled out the kiosks, Prairie and ComTec and the kiosks, and some of the other changes that have been happening, your product offering has become more diverse, the Company itself a little bit more complex than before.

What are the new metrics systems you guys are using to sort of stay on top of the increased complexity?

How should we, as investors, measure you other than RPU, which is the old traditional metric?

Well, I'll go first, Ashwin, and then Randy can comment as well.

The old model of RPU really outgrew itself from the nature of what we're providing for our clients and as we look to diversify the markets that we serve, and so I think you have to look at some of the traditional things you look at different companies on, and that's the growth in top-line revenues, what's happening in the operating margins and how that translates down to growth in EPS and how we use our capitol drive all those things.

So that's how I would first respond.

Randy, I don't know if you have anything to add to that.

I think I would agree with you, Peter.

The businesses that we're acquiring have somewhat similar growth profiles as our core business, so looking at the top-line growth, as you mentioned, is probably a good way to model it out.

Okay, got it.

Thank you, guys.

Thank you.

Our next question comes from Scott Sutherland at Wedbush Morgan.

Please go ahead.

Hi, this is Kerry Rice for Scott.

Just a couple of questions, I want to go back to the acquisitions for a second.

I know you didn't break that out and you're not going to probably break it out going forward, so I just want to make sure I understand going back to previous guidance for ComTec of $10 million to $12 million, though it closed a quarter later than you expected.

Is it still kind of, for the balance of '07 here, you think it will fit within that range, and I wanted to make sure that I had this right for last quarter is that you said it would be $0.02 dilutive to '07?

So I wanted to see if it was dilutive at all to EPS this quarter.

Couple things.

I'll take both those questions.

One is I said it closed a week later than anticipated, it closed on July 9th, it wasn't a quarter late.

Oh, sorry about that.

So the 10 to 12 for the year is probably still pretty good.

It probably will gravitate towards lower end of that to the 10 range, and from a dilution perspective, it was somewhat neutral for the quarter and expected to be somewhat neutral for the year.

So the $0.02 dilution is probably not correct, either, I would just assume it's neutral.

Okay, and then similarly, the guidance you provided for Prairie, that guidance is fine as well?

Correct.

It was $7 million to $8 million for the year.

Right, and then as far as, can you give us any kind of--maybe a little bit more read on where you think gross margin is headed for Q4?

Let me give--

Should we expect something kind of similar to Q3?

I've been saying this for sometime is the gross margin is not necessarily what I consider a good metric for the Company just because there's some fluctuations in the revenue mix and also there's some movement of cost between cost of goods sold and R&D at times, but if you wanted to do for your modeling the last several quarters we've been in the 48% to 51% range, this quarter we were in 47.4%, I think, and the reason it dropped this quarter was primarily because of the ComTec business.

A large percentage of their costs are in cost of goods sold, so that brought it down slightly just because their gross margin is not as good as the core business, b%ut going forward, if you're going to model it out, I would say 47 to 50% range is probably not too bad.

Okay, and then one final question.

Can--you had previously provided customer concentration or what your top customers' revenue contribution to the quarter.

Can you provide that?

Yes, for the quarter, Comcast was 26%, and EchoStar was 20%, and they're down slightly from the second quarter mainly because of additional revenue diversification from the acquisitions.

Okay, thank you very much.

Next question comes from Ben Abramovitz with ICAP Securities.

Please go ahead.

Thanks, guys, good afternoon.

Earlier in the year you talked about some modest customer growth in the back half of the year do you still expect some modest customer growth for the year?

You mean subscriber growth, Ben?

Yes.

I think the last guidance I provided in the second quarter I said I expected it to the trend up slightly towards the end of the yar, I think now it's probably going to be more flat to slightly up from the third quarter numbers.

Okay, and then just to follow down the road on commercial services, earlier in the year you were prepping for some of your clients to begin rolling those out.

Could you give us some update on what the rollout has looked like in terms of how it's progressing from your standpoint?

Yes, this is Ed.

The rollout internally has been very good, in terms of the product is largely completed and ready to go.

We would probably have liked to have been a little further ahead with having the clients taking it up and moving forward with it a little sooner, so that continues to be a bit soft for us, but we are still optimistic with regard to the product readiness, and stay tuned for that.

It has not moved along as quickly as we had hoped, and obviously we're a bit at the mercy of the pace of our clients.

Have they given you a time frame of when they might at least attempt to ramp that up?

At this stage, it really looks like it's going to be an '08, '09 type of a serious ramp up, would be the best guess I could give you at this point.

Okay, and then, final question, I promise I'll let someone else get a chance.

Not a problem.

R&D, as we look at it, we've been in a cycle of increased spending for R&D for about two years now.

As we look out over the next 12 to 18 months, what's going to happen with that R&D spend?

Are we through the cycle, and R&D can tick down a little, or do we still have a lot more that you see because of customer demands on your systems because of some of the competitive issues that they're going through?

Ben, it's the--the answer now is the same as I said last quarter is I expect the R&D, as we exit 2007, to be kind of the run rate going into 2008 from an absolute dollar amount.

As we grow our revenues we should get better leverage on those R&D dollars as a percentage of revenue, however, I've also said that we're very opportunistic.

If we see investment opportunities that have long-term benefit to the Company we will continue to invest in R&D, but as of now I think an exit rate from 2007 is a good indication of what to expect going forward.

Okay, thank you, guys.

Our next question comes from Dan Mendoza with Action Core Capital.

Please go ahead.

Hi, I had a couple questions.

Have you been active in the buy back so far this quarter or have you been locked out of the market?

Very active in terms of the buybacks this quarter.

In the month of October, I meant.

We're in a 10B5-1 plan so the lockout or blackout doesn't necessarily impact us because we're buying under a 10B5-1, so we are in the market.

I understand.

So can you give us a little bit more color on what customer negotiations are--you expect to sort of get concluded by Q1 or Q2 so that you'll be in a better position to go to the board and discuss additional buy backs at that point?

What happens between now and then?

Well, it's pretty difficult to speak on behalf of both ourselves and our clients on that, but be assured we're in daily contact, and we're working very closely with the--both of the guys who have contract dates coming up.

I think your timing is reasonable to expect that we would have some conclusion in the first or second quarter, and that we would then be able to sit down and analyze our situation.

I would add also that the--the [pennancy] of how we think about returning capital to shareholders through a stock buy back is not solely dependent upon the status or state of our renegotiations and extensions with our clients as their contracts come up, but also what the opportunities are for us to invest in the business, add feature functionality that does do much for our relationships with our existing clients as well as open up new markets for us, which is part of what our focus and initiative is as a business.

So there's multi-facets that will come into those decisions.

Okay, very good.

Thanks.

Thank you.

Next question comes from Tom Roderick with Thomas Weisel Partners.

Hey, guys this is actually Chris Coe in for Tom Roderick today, thanks for taking the questions.

I just had a couple questions here, the first one being, it looks like your operating margin guidance is about 20% for Q4 '07, which looks like it's a bit of tick-down.

Just wanted to double check to see if that was primarily a function of what you were saying about ComTec being a larger part of the mix, and then the second part would you--do you guys, given what you guys are saying about adding feature functionality and that kind of stuff for your customers, are you more inclined to invest--and if you're limited in disclosing this, I understand, but would you say you're leaning more towards acquisitions versus a buyback going into next year and then also do you expect your operating margins to rebound as you integrate the acquisitions in '08?

I'll take the first question, Chris.

One is that the reason that the operating margin is down-ticked is mainly because of acquisition, so you're correct in your assumption, and I think the second question--

Had to do with whether or not acquisitions and how they may impact the stock buyback.

Chris, I would just tell you that we've always viewed the need to add to the breadth of the type of capabilities we deliver in the marketplace, and we find that what ComTec provides to us, as well as Prairie, is going to help our relationships not only within the traditional markets we serve, in the cable and DBS space, but also it gives us some direct access to other markets with clients that at both these companies have brought to us.

So we'll look to do that, and it's not something that's just unique over the last few quarters, but we've looked at this in the past, but we just see that there's more needs within the space to--and more business needs to solve.

So I think it's an important part of how we look at the business and how we develop deeper relationships with our clients, and I think you should expect us to continue to push that.

It it does not preclude us from doing stock repurchases but we'll need to evaluate the priority and the scope of both of those as we do our business and capital planning for the coming quarters and coming years.

You had one other comment at the end of your questions that said would the integration of these businesses help bring the operation--operating margins back up, and Randy, I don't know if you'd want to take that.

I'll take that.

I think what we've said here in the last quarter as we closed these acquisitions that we assumed they'd be somewhat neutral in 2007 but would hopefully be accretive in early '08 but I wouldn't expect them to move the operating margins significantly.

So just because of the size, they're somewhat small compared to the overall core operations.

So I wouldn't look for them to move the operating margin significantly.

Got it.

Great.

Thank you very much.

That was helpful.

A follow-up, if I may.

So as far as, Ed, I think you commented about the additional verticals that you're trying to get out into.

Are you targeting anything in particular, or is there anything that you have particular in mind, or is it just kind of--you look at every situation as you historically kind of have, as far as acquisitions?

We start in each case with what I would call relevant to our core client base, and we have been fortunate in that some of the products that we have acquired or built seem to have some application in other industries or in the case of the companies that we acquired already have some footprint in other industries, which is really kind of our intention.

We don't have a big bang plan where we're going to wake up one morning and say we've jumped clear over the fence, we will build from strength.

Great.

Hopefully the only thing going over the fence will be Rockies home run balls, right?

We're hoping that this layoff and the four inches of snow that we got on Sunday didn't slow them up too much.

We'll see.

You guys know Tom is a Red Sox fan so we'll see how that goes, but thank you very much for taking my questions.

We assumed there'd have to be some Red Sox fans on this call.

Thank you very much, guys.

(OPERATOR INSTRUCTIONS) At this time I am showing no additional questions in the queue.

I'd like to turn the call back OVER to management for any concluding remarks they may have.

Well, I'd just certainly like to express our collective thanks to all of our employees who are working hard and long every day, every month, to service our customers, and with all due respect to the Red Sox fans on the call, go Rockies.

See you next time.

Ladies and gentlemen, this does conclude the CSG Systems' third quarter earnings conference call.

You may now disconnect, and we thank you for using ACT Teleconferencing.