易速傳真 (EFX) 2002 Q1 法說會逐字稿

Ladies and gentlemen thank you for standing by and welcome to the Equifax 1st Quarter Earnings Release conference call. At this time all participants are in a listen only mode. Later we'll conduct a question and answer session and instructions will be given at that time. If you should require assistance during this call press zero and then star. As a reminder this conference is being recorded. I would now like to turn the conference over to our host, Chairman and Chief Executive Officer Mr. Tom Chapman. Please go ahead sir.

Thanks Paul and good morning ladies and gentlemen. We're glad to welcome you to today's conference call. We're here as usual with Phil Mazzilli our CFO,

our Controller and

, our head of Investor Relations. As usual, you know we'll make some statements during this call that are forward looking.

Our 10K other FTC documents outline the risk associated with these statements so, as I always do I encourage you to review them if you have any questions. Now let's get onto the purpose of our being together this morning.

We completed another solid quarter of profitability and earnings growth, despite a economy that's challenging all of us. We made consensus earnings estimates of 30 cents. That's a 20 percent increase, over last year. Operating earnings per share grew seven percent. Last year's restructuring, allowed us to grow profits by driving overall expense in our company down seven percent.

At the same time, we increased operating margins to 30 percent, compared to 28 percent last year. We are seeing improvement in Europe, and Latin America continues to perform well, despite the tough climate in which their dealing particularly, in Argentina. Phil will cover all the details as he usually does in just a moment. Revenues were down 12 percent in Q1, two percent when you exclude the currency impact.

The current revenues were impacted by the weak economy, and particularly in some of our major marketing sectors. I want to, let me highlight some of the key accomplishments in Q1, for each of our three major businesses starting with Information Services. A key new business for each of our three major business starting with Information Services. A key new business initiative, in this sector is our industry exchanges. We renewed 25 million dollars of telco exchange revenues during the quarter. That's under two separate agreements.

One the consumer exchange, which is our national consumer telco and utility exchange. Many of you remember this as where we manage customer payment history for the telecommunications, wireless, cable and satellite and utility industries. This is a 20 million dollar contract we executed in Q1, over five years.

Our commercial exchange which is sort of a flip side of what we just talked about where we do similar things for the 72 telcos throughout the US where they provide similar data on companies. We were awarded this contract which is five million over five years and this, this goes out to big periodically from a data management standpoint and this is the third consecutive time that we've been awarded that contract.

Nation Security or Homeland Security is an important factor for everybody. And that's why our company is attempting to contribute to that important area. We bid into, one our first homeland security contract, with one of the top four airports in the world. And what we were doing is, there's two sides of homeland security. One is the passengers and the verification of that.

The other is the employees that are verifying the passengers and checking. So there's two very important parts of this market. Where we're concentrating is in and around the employee screening, and we're doing this in partnership with IBM. One of the things that's happening, is, in, in employee sets where security lists occur, as you well know there is very, very, very high turnover.

So in order to enable to identify and verify those individuals, they're carrying out the security measures, and this becomes a very important part, of what we're doing. Another matter in our pool of business, as we introduce lease set. It's a brand new tenant screening analyzer tool. You know this is a huge market. We sized it about 150 million dollars, we signed six deals, in the first week that this product was launched.

We completed four new installations during the quarter at large banks and financial services companies, for our, record setting decision tool, Decision Power. You'll remember this is where we used various sorts of data in analytics and scores and

to help our customers cross sell, and market that. So before we had four major deals. We now have 350 client locations, utilizing our decision power tools.

But here's where we signed five brokerage firms to Decision Power during the quarter, we now have 15 out of the top 20, util- utilizing Decision Power. We won a two, a brand new two year three point five million dollar contract to provide Echostar communications with our data feeds, application processing, and other analytical science tools.

This leverages our credit data, and our direct marketing data as we've been saying we would do, giving significant lift to our customers, we signed 65 deals in Q1 continuing to leverage the credit data and the lifestyle, data in our portfolios. These expand

into a new market space, that's broadband and satellite communications as we continue, to move share by, utilizing our product set in emerging markets, to deliver a large database management application for a major telco.

This is an on-line, realtime application used for the customer, for their 17 million accounts, for qualifying and for customer service. This deal's worth two million dollars annually to us. As we go into, first three customer solutions using

. We're talking about

, if you remember, that's our unique new software application for linking individual consumer records across multiple databases, therefore providing the common identifier, for those consumers even though their names may be listed separately in multiple databases.

We match those, find that one household, assign an identifier a unique identifier, and that identifier applies differently to every customer set. So it could be a unique ID, for varying customers so they can locate and market to those. We processed half a billion records, this quarter. If, and as we move in Q1 excuse me. And as we look at Q2 we expect the processing and delivery of those records through

to triple.

Growth in consumer direct is just something we're very pleased about. March was the highest month in history for both revenues and unit sales. Seven point million in revenues for the quarter, that's a 90 percent increase over last year. It's profitable, margin's at 20 percent. And the unit sales for, for Q1 included 380,000 profiles. That's each agree to understand credit report online, fully authenticated. 260,000 school products and 23,000 credit watch subscriptions.

And we're continuing to increase our channels of distribution. We now got 1300 link partners, and we're beginning to work with (tape gap) and credit watch subscriptions. And we're continuing to increase our channels of distribution. We now got 1300 link partners, and we're beginning to work with the major financial institutions and clients that we have, adding value to them, for their customers in a remarketing mode.

In the quarter we'll introduce at least two new consumer products that will continue to enable consumers to better analyze their credit health and improve it. Demand continues to grow, in this particular

order considering, the economy. We're well positioned for continued profitable growth. Our shareholders value our results as recognized by nine consecutive quarters of share price growth. We rank number one in the S&P 500 in that category.

That's a quick summary and now as usual let me turn it over to Phil for the drill down a bit. And give you a little bit closer perspective on the business. Phil?

Thank you Tom and good morning. As Tom said, gene- Equifax generated solid results with continuing earnings and margin growth. Let me take you through the details. First in North America. Record Q1 operating margins of 40 percent. This is 200 basis points greater than first quarter last year, driven by lower expenses and the record consumer direct growth that Tom talked to.

Consumer reporting revenue was flat, but we were coming off a very strong first quarter growth last year. Transaction volume growth increased two percent. And again that's off of a very strong comparison last year. We, saw lower activity among top bank and card issues as they have not been marketing as aggressively. Pricing declined two percent. Mortgage revenues were slightly above prior year. Canada had record revenue and profit in the quarter.

Moving to our, second business our CRM business, we have only declined seven percent verses prior year. However credit marketing, the largest of the marketing businesses reported flat revenue with last year. The positive news there is we are starting to see increasing activity among the major card issuers.

marketing revenues are down due to continued weakness in advertising activity. Consumer direct, as Tom said record revenues of seven point eight million, and a two point six million profit improvement over last year.

In Europe, our first quarter margins were six point five percent, which is a record for first quarter, verses one point eight percent, and we're improving margins as we said we would. The UK performance drove that improvement, but we saw improvement in their consumer reporting revenue, and the benefit of cost reductions taken in 2001. Revenue was 33 million.

In Latin America, revenues of

and the benefit of cost reductions taken in 2001. Revenue was 33 million. In Latin America, revenues of 20 million. Margins over 20 percent, despite economic turmoil in Argentina. Cost actions taken in 2001 were instrumental in maintaining solid margins. Argentina revenue was obviously impacted by the currency, and the economic impact to the tune of five million dollars.

Brazil and Chili reported solid performance in the quarter. Turning to cash flow summary, we continued very strong free cash flow, 32 million in the quarter, which was double last year. Capital expenditures were five point four million in the quarter, verses 14.9 last year. We repurchased 876,000 shares, for 23 million investment. Our remaining authorization is 272 million. Our ending gap was 754 million.

Moving to guidance. We expect four to six revenue, four to six percent revenue growth for 2002, as we expect revenue to be strong in the second half of the year as the economy continues to improve. Our EPS growth is 20 to 22 percent, on the reported basis, including the impact of the accounting change, and 10 percent on an operating basis.

Our outlook for the second quarter is 33 to 35 cents. I'll now turn it over to our moderator for Q and As.

Ladies and gentlemen if you wish to ask a question press the one on your touch tone phone. When you hear a tone indicating you've been placed in cue, and you may remove yourself from cue at any time by pressing the pound key. If you're using a speaker phone please pick up your handset before pressing the numbers. Any of you who wish to ask a question press one at this time. And one moment please for the first question.

First question please from

Brad

with Stevens Incorporated.

Good morning guys.

Good morning how are you.

: A couple of quick questions. You, you talked a little bit about the

product. Could you give a little bit more detail in terms of, on the three wins, where those competitive situations, what's really the basis that you're winning those deals on. If they're competitive. And can you talk a little bit about pricing?

Well first of all we, we go to our major customers periodically and we initiate the new technologies, the new platforms, and, so the net

is in or out, to the degree that it was competitive, I, I really don't know. In my, this is such a unique new application that as you know we go through beta, we, we then dump a bunch of records to see how it's fitted and all, all I'm saying is in these three cases they've been very pleased, with the results and the list they're getting.

So, the price is based really on a, on a fee per transaction, and going forward we'll, we'll probably price this on a fee for the (tape gap) based really on a, on a fee per transaction, and going forward we'll, we'll probably price this on a fee for the installation up front and then look on a

basis which is our global model, for businesses on names produced much like we did with

.

Tom would you say the demand though, initially looks better or worse than you guys, kind of expected?

Well I believe, I believe it's better than we expected and I think that demand is increasing as there seems to be more activity interest coming. There's, we've seen a lot of RFPs and I'm not saying that it won't be competitive, but some of the real big guys are, are really after a new way to, to take what, you know all the response rates and marketing offers, and find a way to pinpoint, so what this does is not only reduce their expense, of, of doing the multiple names that's the same person but also allows them to, to target, much better in marketing the stuff.

On the consumer side you mentioned to have a more, you know Equifax only type product like a credit watch, or will they be more partnership type products like something like a Score Power for example.

Probably both. Both, you know our partnership with Score Power with,

has been a darn good one. And we, we've done some, you know industry leading things together. But we'll also, continue like credit watch to create markets, and new products that have dimensions. Probably a little bit of both.

And we'll you know one of the things that I, that I've mentioned, I think's gonna be important is a sort of co-module. With, with large customers if they want to tweak, some offerings, to customize and identify their customers and their brand a little bit better. So I think in addition to that with link partners we'll get some good traction on the new block.

We have a question from David Pivot of Morgan Stanley.

Thanks, could you address some of the underlying, demand drivers from the core consumer credit reporting business? Particularly some of the, end markets like auto, mortgage, credit card, how you see those, evolving throughout the year. Thank you.

And good morning David. Thank you this is Tom.

Tom.

First of all I think if you look at the major segments, Phil, Phil's gonna hit on it then I'll come back to him, and hitch hike on it.

Hi David. As I say on my comments where we've seen the weakness in this quarter was in bank and credit card. Our, auto, which is not as you know not a larger segment was relatively flat. We're still seeing good growth in, in, in telco. You know the mortgage volumes have, have held in there. If you look at retail they're, they've been, you relatively modest. Which, those are the key verticals.

And then this is Tom. I think if you've seen the articles in the last couple days, in the paper about the two largest financial institutions who are saying, we have not marketed, we've not been in the market for a year.

We're beginning to see, uh delinquencies I think the term that was used sort of, level off. They're beginning to redeploy, assets and budgets back to marketing, which certainly they have not been doing. If, you know the more marketing that occurs, the more prescreening we do, one of the important parts of our business is on the back end or sometimes in the middle process, it feeds our online credit reporting business as well.

So they're cuddled. So we're, we're beginning to see, it, more activity, in and around that space. I don't, not send us back to gangbusters yet but we're getting, beginning to see those big players come back and then David as you know as well as anybody, once, once they start going back to market, you know one doesn't want to be left out of the other. So we're, you know we're, cautiously optimistic about what that's gonna do.

In your assumptions about a second half economic recovery, are you making specific assumptions about some of these, key vertical end markets in terms of, unit demand in the second half?

Yeah I mean we're certainly not trying to predict the economy how, I wish we all could do that. But what we are, what we are seeing is in the banks, we're seeing in their earnings, calls and their earnings statements and our customer force we're, we're hearing them talk, a bit more aggressively, you know, than they have, particular banks, autos and hard gas so we're really, you know it's, we're not, we're not expecting gangbusters necessarily but we are expecting to get back to more normal trends, really across all sectors.

Principally in, financial cards or, and continue a lead in telco. So, and I have to, another thing that may, may help us, be more attentive to that as I mentioned is this, this new application, of combining our credit marketing business with our direct marketing business and particularly the data feeds that come from both, to help pinpoint the marketing that's going to occur. So, that, that, that's really the basis of our, of our view. I mean we can't, we're

but that's our, that's our best view of what's evolving. We're all, I think all of us are into that day to day.

And David let me add a comment if you remember last year we started with seeing a decline in direct marketing in June and July, and in credit marketing in the second quarter also. So, we will have more favorable comparisons in the second half of the year, and, and we see from, you know as Tom described with these mark, major issuers starting to come back in the market we're, we're, we're optimistic.

We have a question from

Prince,

and Blachley.

Thanks, good morning everyone. Couple questions for you, can you give us an update on the marketing services group, Tom just how, how

and, and expectations for this year.

I think, yeah, that the combination of our credit marketing business, our, our BNS business, or direct marketing business, is where pass our decision paddle, platform. It's where we place authentication with is our online authentication ID tunnel and it's where we're, we're utilizing our database management type of products like

. So, I think first of all we've combined the, the old folk business with our credit marketing business very, very well. We've cross polarized that with, with talent that comes from, Phil's half of the ledger.

You know I really do believe that we're creating a unique science in what we're doing with, with

delivery, the day to day thing we mentioned about the big, the bit utility that we can't name but, hey, I think, as we are as we are looking at the market place and looking at the marketers begin to, at least seem to be a bit more, aggressive I, you know that's your, we think we've packaged the tools, under Paul's famous leadership, who has been a pro at this business for, forever, to keep driving a combined total solution, and add

science as directed toward that, that particular segment.

And, and you're pleased with, with some of the cross pollination is there I mean you really feel like everything's sort of, got coming together? Or is it still sort of each, each individual product being sold as a stand alone basis?

Oh yeah. Believe me we are compressing that, as we said we were gonna do, and I think what we've done is we've come by and, you know the sales forces already, the product development is one and I think that, I mentioned that Echostar, in my remarks. I think that's a prime example of selling a platform that not only has credit there, but it also has that non-regulated lifestyle, data. We've added our application processing to that

, as well as our set up marketing. So I think, I, I really believe that we're beginning to get the traction of a combined unified solution driven

.

And I think we're well positioned Dennis as this thing continues to take forward.

We have a question from Greg Peckin with Jeffries.

Good morning I've got a couple of questions. First I, I might have missed it but are there any, specifics available on growth in actual reporting volumes this quarter?

Mm, Greg, before you buy it.

Greg this is Phil, could you repeat that again? I, I didn't hear the first part of your question. peckin: Yeah, is it possible for you to let us know what the growth rate and actual reporting volumes was this quarter?

I, I'm sorry, I said that it was two percent. For the US, consumer reporting volume.

Okay thanks. And, as far as, free cash flow generation goes, I think you've said in your last call that, somewhere in the 220 to 230 million dollar range is, is what you're, looking for, for this year. Has there been any change to that outlook?

No sir.

Okay great. And, and, as far as, share repurchases, would you be able to share with us at what level those buybacks, stopped being accrued based on some current interest rates?

We've looked at that and I, I took it up to 40 and it's still accretive. So it's accretive north of 40.

We have a question from Linus

with AG Edwards.

Could.

Come on in.

Could you, if, if you, already talked about this I apologize but I, I was curious if you could give an update to sort of on the progress of the small business exchange, any developments there, new clients, and just sort of what's going on with that operation?

Yeah I'll be willing to do that. We've we're pushing seven million records through our file. That's, that's, continuing to increase, the, you know we've got the major players in, in the consortium, what we're waiting, we got about 25 major institutions that are beginning to contribute data. We've got to get all their data in, and so I think that, we, we've got to goal on year end that we've established in the about nine to 10 million range to have all those records.

And then what we'll begin to do is, deliver

as well as the unique reports. So, it's still moving very well, there is strong interest, continues to be in the exchange network and opportunity if not only in financial institutions, but as well in non-financial institutions that have huge sources of data that want to be able to put it in an environment where they can extract, certain information.

So I think, I think we're beginning to see that, kick in. I wish we had had the data, all the data parts we need quicker. But the platform is there. The platform is functioning. So, I, you know I think we're making good progress there.

Great, thanks a lot.

Yes sir.

Question from Bill Wormington with

, Robins and Humphrey.

Good morning everyone.

Hey Bill how are you?

Doing okay thank you.

Good.

The, first of all congratulations on the, the new wins on the, employee screening and the tenant screening side.

Thanks.

I just wanted to, to ask and see, those are, those are new efforts for you guys, and I wanted to see, what should we think of in terms of revenue expectations for those, for those new business lines?

Well that is quite a question. They are, they are part of our emerging market initiatives Bill and, where, where certainly from a Homeland Security, on the early stages of this. I think everybody knows that there's not been a definitive, approach to, to how that comes out from the FAA or otherwise. I think it's interesting that, you know we've had a product line called

for some time, that works in, in preemployment on a simplistic call prospective basis for high turnover, areas.

So, yeah

's part of our core information business but it, it, the extension of that is what we're using in security application. We believe that, you know in, verifying employees in high turnover, situations is going to be a strong market, and we, we may concentrate on that in addition to try to provide security and identification where we can, in the other parts of the security business. So I think, we're using the same data. We're using the same platform and I think we've always been pretty good at reconfiguring it.

It's hard to predict the, the level that, we're talking to other airports which we think is an interesting market, if we go. So, you know the

thing is, that is a, a repositioning of, of what we've been doing. I mean we've got, we're coming up with a new product line in and around this lead safe and, and homeland security and, our safe hire type of products and services which we think, can grow. So,

define it but I bet you'll see us making tracks in early on

.

My second question is on acquisition opportunities, whether that still remains a priority for redeploying your free cash flow, and whether you, whether you're seeing a lot of opportunities out there for doing that.

Well there's always a lot of opportunities to find the right fit at the right price, to provide long term value as, as you know, the magic of what we're doing. We've always been, reasonably acquisitive and disciplined in that sense. We'll continue to look for companies that, that number one, provide customer industry sets that we do not have an expertise. Number two, also a, a technologies, that allow us to jump shift what we're doing. And then perhaps serve new markets. Those have been

, and, and accretive, accretive quicker. So, we're, we're continuing to look at the market place and assess how things, and not only to create, not only, you know technical product and market value but intellectual. It's human talent to our franchise and that's very important to us as well. So those are the, we'll continue to look, and deploy that, cash flow in that direction, to support our strategy.

We have a question from Andrew Jeffrey with Robert Stevens.

Good morning.

Good morning David.

Could you talk a little bit about your cost structure, you know, it's nice to hear that we're starting to hear banks, ramp up some of their marketing initiatives again. But you know in a hypothetical environment in which maybe, you don't get the kind of pickup in the second half that you're looking for, do you think you've got your costs enough in line you know, in terms of the improving trends we saw the, beginning in the first quarter, that, you still feel pretty comfortable with your earnings estimates in a in a more difficult relative economy?

Yeah we do. And, and, while, you're absolutely right we hope, you know we're, we feel confident that we're gonna see more activity in the market place, but you know our guys and our numbers we, you know feel strongly that we're gonna be there. We took expense down as you might have heard, total expense down seven percent, in the quarter. That's a, well those as you know us we are constantly doing that. I mean, we, we don't every like to do this but we felt right under, you know 800 plus employees.

Particularly in our international operations which weren't probably as quickly as we'd like and, remember we announced that we concentrated most of that, at, in Latin America and Europe. So, we'll continue, you we're creating margin, as we always have with a target that, about a half of, for the year most of you know that that's been a goal of ours. And we're still only 200 basis points up this, this quarter so, we'll, we'll stay after the expense. We do not consider that ever done. You know we'll continue, continue to manage every penny of the expense and we'll continue to drive that down, 'cause it's just a smart thing to do

.

Hey you got anything you want to add to that?

Well the point in time we, when we, when we, when we, and we're announcing that in January we're taking 700 people out we've actually almost 900 so we've been very aggressive in, in, in, in light of what's been going on.

All right thanks guys.

We have a question from Nat

with JP Morgan.

Good morning. I'm, I'm sorry if I'm gonna repeat anything I, I'm really tickled at this point we got dropped there sorry.

The free cash flow improvement, year by year is that, what's behind that? Obviously cap expel but is that indicative of a trend here or?

This is Phil. As usual we watch our accounts receivable very carefully. In this environment we're very careful on our capital expenditures. And obviously the earning cap that we try for several major projects, that are in the budget on a weekly basis to look at the profits, and so you know we keep driving the DFO down but, but where the cap, capital expenditures are going, they're all in growth. Like

, like new products.

And we're ensuring that, the, the dollars are spent on intelligent growth rather than just projects of maintenance. You got to do both but our accentuation is to introduce new products, and technologies to the market place. So that's, you know we will manage the devil out of cap ex but at the same time invest in the future.

Could you take a moment and talk about the telecom business. You've obviously watched some new initiatives lately. Could, you sort of, summarize where, where in the market you are and where you could go? Like commercial verses retail and, different parts of the market.

Well yeah I think that our, first of all our platforms, in Decision Power and the

and, we, we are a dominant force in that particular industry because we early on, attacked that as a unique and emerging vertical. Our exchanges are, are, you know allow us to take core confidencies, core technology of gathering data, compiling data and adding value, back in the form of

or even a report. And the exchange I think we've got 14 platforms or so of the telcos right now.

I believe that as we talk about the day to day management thing with this huge utility, where they literally are trying to drill down, particularly the telcos, and drill down and understanding their customers, who they are, how they market to them, particularly in the call centers when they're initiating new accounts. I think that, you know I think that we continue to have a major, well position in that market, where attention's gonna be important as you know, in that space.

So a platform like

in addition to our other account opening, technologies I think will, allow us to continue, to add value there. I mean, we not only sell our core credit information but we also market our, our platform. So, yeah I think as you as you look out at the various, opportunities there I, you know I think that, there's involved and sort of growing bandwidth there for us to, to move. You know the, so like to call things like Echostar we mentioned.

So, that's sort of our view of it. I think we've got a good position, we'll continue to grow.

We have a question from Cecil Redmon with Ellen

Management.

Yes, good morning.

Good morning.

Thank you for hitting your earnings and

your guidance.

One question I wanted to have if, I had to get off for just a minute, if anyone hasn't talked a little bit more about Europe would you kind of expand your outlook for the year in Europe and see, and give us a little more flavor of how you see that progressing in the next few quarters please?

Sure.

Hi this is Phil, how are you doing? It's good to visit with you, I guess it was last week or the week before.

Yes thank you Phil.

Time flies. The goal that we set is to get to a target margin of 10 percent run rate by the end of the year in the fourth quarter. We still feel very comfortable with that goal.

Okay. Thank you.

Hi Cece, this is Tom. We're seeing some, some good consumer volume, particularly in the UK. Our consumer reporting business, again back to the previous question we've combined, our marketing businesses under, under Paul's leadership, Paul Spring's leadership worldwide. So some of the platforms and some of our prescreening technologies are, are doing quite well over there.

We took one of our brightest executives from our CRN business here and had him in charge of what's taking place over there in our European theater so, you know that's always a challenging market for us. We want to make sure that, it continues to contribute profitably but we are, you know we've been

expense first of all which is, we got to do. And we're combining, some of the, some of the operating center, very, very rapidly. We're deploying our, our, our telemarketing very effectively. And we've consolidated some platforms.

And the other thing that's gonna be interesting there and forgive the length of the answer, the Data Protection Act, which, which is the legislative thing, particularly in the UK, is requiring examination of the way that data is delivered, is required. What those data points are, how it can be used and it's necessitating, you know a change in platforms, for everybody. So we're working very hard to ensure that we upgrade our platforms and, you know and the purpose of that is to hope that we gain some share, in so doing.

So, that's sort of a, you know a quick look at it. Margin improvement's been good and we'll continue to stay after it.

Thank you.

That's all right.

Question from

Fedecker with Stevens Incorporated.

Hey Phil, a quick follow-up question on your tax rate, if my math is correct it was about 39.9% in the quarter. Last year it was, a little bit better than 41% in all quarters. Is there something going on?

No Brad what that is, is when you take out good will amortization you're changing the equation and it just changes the math.

Well on a go forward basis, something closer to where we are in this quarter.

Absolutely. Absolutely.

Okay, thanks.

And a question from

Brett. Just a second, can you replace me?

Yes I actually Phil, I'm, I'm related to that question. Do you actually have the quarterly net income in the one, adjusted for the good will? I found the release you actually, had the absolute good will but I was hoping for the tax adjustment as well to get to the net income number.

We'll get it to you.

Okay, great. And second question, I'm sorry, did you say what the average price of which you purchased shares were? And also can you update us again on how much is left on the authorization?

Yes sir.

There's 272 millions in

. That's on the authorization.

And we purchased 876 thousand shares for 23 million, that's about, 24 something, a share.

Perfect. Great, thank you.

Thank you.

Question from Kevin

from

.

Great job thank you very much. One question I'm calling from the

, if I could. First of all, from the restructuring charge you took last quarter could you isolate the Q1 cost savings from that? And also the, full time equivalents at the end of Q1 02, comparing that with the, end of Q1 01. And maybe with the year end 01 also.

Okay. Chapman this is Phil. We said on the fourth quarter call, that, we would get five million savings from the restructuring. We've exceeded that slightly. We said we would take 700 people out, we've exceeded that, somewheres at, September 30th we're 5792, and numbers at 1231, we're 5139, and our numbers now are 4920.

Great. And just follow-up and I apologize in advance if I missed this, did you give a, comparison on that direct marketing revenues? Year over year Q1?

No I didn't Kevin they were down 19 percent.

Okay, thank you.

And Mr. Chapman and speakers there are no further questions in cue.

Okay Paul thank you very much ladies and gentlemen thanks so much for, for being with us and, as usual we're available for follow-up calls

so, have a great day.

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