Forrester Research Inc (FORR) 2006 Q1 法說會逐字稿

Greetings, ladies and gentlemen, and thank you for holding. Welcome to the Forrester Research First Quarter 2006 Financial Results Conference Call.

[OPERATOR INSTRUCTIONS.]

It is now my pleasure to introduce your host, Ms. Kim Maxwell, Director of Investor Relations for Forrester Research.

Thank you, Ms. Maxwell, you may begin.

Good morning and thank you for joining our First Quarter 2006 Conference Call. With me today are George Colony, Chairman and Chief Executive Officer, and Warren Hadley, Chief Financial Officer. A replay of this call will be available until Wednesday, May 11th and can be accessed by dialing 877-660-6853. Please reference the confirmation ID 199265, and the confirmation account, 242. This call is also available via webcast and will be archived in the Investor section of Forrester.com.

Before we begin, I would like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expect, believes, anticipates, intends, plans, estimates," or similar expressions are intended to identify these forward-looking statements. These statements are based on the Company's current plans and expectations, and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.

Some of the important factors that could cause actual future activities and results to differ are discussed in our reports and filings with the Securities and Exchange Commission. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Now, I'd like to turn the call over to Warren.

Thanks, Kim. Good morning. I will review Forrester's first quarter results, the balance sheet at March 31st, our first quarter metrics, and the outlook for our business in the second quarter in 2006 and then turn the floor over to George for a business update.

Please note that the income statement numbers I'm reporting are pro forma and exclude the following items: amortization of intangibles of $652,000 in Q1, non-cash stock-based compensation expense of $1.7 million, and realized gains on marketable investments of $199,000. Also, we booked an effective tax rate of 37% for pro forma purposes. The anticipated actual effective tax rate for 2006 is approximately 51%.

Forrester's pro forma first quarter results exceeded guidance we provided on our fourth quarter conference call. Forrester's first quarter revenue increased 22% to $41.2 million from $33.8 million in the first quarter last year. Net income increased 29% to $3.3 million, and EPS were up 25% to $0.15 on diluted weighted average shares outstanding of 28.8 million, compared with net income of $2.6 million and EPS of $0.12 on 21.8 million shares outstanding in Q1 last year.

First quarter Research Services revenue increased 16% to $27.2 million from $23.4 million last year. Research Services revenue comprised 66% of total revenue, in line with our expectations for the quarter. First quarter

Advisory Services and other revenue increased 34% to $14 million, from $10.4 million in Q1 of 2005, and comprised 34% of total revenue for the quarter. For 2006, we expect Advisory and other revenue to comprise approximately 35% to 40% of total revenues.

International revenues were 30% for the first quarter, compared to 31% in Q1 last year. We expect International revenues to comprise 28% to 32% of total revenues in 2006.

Operating expenses for the first quarter were $36.9 million, up 21% from $30.6 million in Q1 last year. Operating income was $4.3 million, or 10% of revenue, compared with $3.2 million, or 9% of revenue last year, in line with our guidance for the quarter.

Our balance sheet remains strong. Our cash and marketable securities at March 31st were $156.4 million, up $24.2 million from year-end. We generated $21 million in cash flows from operations for the first quarter. In 2006, we expect to generate at least $28 to $33 million in cash flows from operations.

During the first quarter we used $2.9 million of cash to purchase shares on the open market pursuant to our stock buyback program. We have spent $26.4 million of the $50 million authorized with regard to the stock buyback program, and will continue to be active with the buyback in 2006 when it is accretive to our EPS.

Accounts receivable at March 31st was $33.3 million compared to $28.7 million as of March 31st, 2005. Our future AR balance, which are amounts to be invoiced in the future for clients with two-year deals or scheduled payment terms, increased 19% to $27.7 million at 3-31-06, from $23.2 million at 3-31-05.

Our DSOs at March 31st was 77 days, down slightly from 80 days when compared with 3-31-05. And AR over 90 days was 11% at March 31st, up slightly from 9% last year.

Net property and equipment decreased to $5.2 million at March 31st from $5.8 million at the end of 2005. Our capital spending for the quarter was approximately $328,000, and our capital spending plan for 2006 is $3.5 million.

Deferred revenue at March 31st was $87.5 million, up 20% over March 31st, 2005. If you include future accounts receivable, the year-over-year growth rate for deferred remains at 20%.

Forrester's first quarter metrics agreement value, the total value of all contracts for Research and Advisory Services in place without regard to the amount of revenue that is already been recognized, or is yet to be recognized, was $147.7 million at March 31st, a 15% increase from last year.

At March 31st, Forrester's retention rate for client companies was 78%, and our dollar retention rate was 88%. Both rates are calculated on a 12-month rolling basis, and both within our target ranges. Our enrichment rate was 107% for the 12-month period ended March 31st.

At the end of the year our total for client companies was 2,095, up 88 from 12-31-05. And for 2006, we expect to gain approximately 200 net new clients.

For headcount at March 31st, Forrester had a total staff of 732, up 17% from 624 a year ago. Current headcount includes a research staff of 286, up from 65 of last year, and a sales staff of 250, up 48 from 3-31-05.

The last topic I would like to cover today is our business outlook for Q2 and full-year 2006. Due to a stronger than planned first quarter, we are modestly increasing our full-year guidance for interest income revenue in EPS. Our pro forma guidance for Q2 and full-year 2006 excludes the following: amortization of intangible assets, which we expect to be approximately $500,000 for Q2 and $2.1 million for the full-year 2006; gains and impairments on sales on marketable securities and non-marketable investments; and non-cash stock-based compensation expense of approximately $2 to $2.5 million for Q2 and $8 to $10 million for the full-year, as required by FAS 123R.

For Q2, we are aiming to achieve total revenues of approximately $45.5 to $47.5 million, an operating margin of 13% to 14%, interest income of approximately $900,000, a pro forma income tax rate of 37%, and pro forma diluted EPS of approximately $0.19 to $0.21.

Our full-year 2006 guidance is now as follows: total revenues of approximately $178 to $183 million, a pro forma operating margin of approximately 14% to 15%, interest income of approximately $3.6 million, a pro forma income tax rate of 37%, and pro forma diluted EPS of $0.83 to $0.89. We have provided guidance on a GAAP basis for Q2 and full-year 2006 in our press release and 8-K filed earlier this morning.

Thank you, and I'll now turn the floor over to George.

Thanks, Warren, and good morning everyone. I'm going to summarize the first quarter, and I will then give a quick update on our plans for Q2.

As Warren reported, our Q1 revenue grow 22% and pro forma EPS grew 25%. The Company got off to a fast start at Q1, setting us up for a solid 2006.

Client company growth continued to strong. We ended the quarter with 2,095 client companies, a net increase of 88 clients from year-end 2005. We are well on our way to achieving our goal of 150 to 200 net new clients for the year. New [multi-plus] client companies signing on in Q1 included Diageo US, Huntington BankShares, LG Electronics, PUMA, Raytheon, The Stanley Works, Target, and Warnaco. Our 1B+ penetration moved from 16% to 17% in Q1. As most of you know, our primary market is the universe of 1B+ companies, of which there are 4,700 worldwide.

Turning now to a review of each of our products, starting with Research. As I mentioned on the past several calls, the key mission for Forrester is to grow its syndicated products, of course, lead by WholeView 2. I'm pleased to report that in Q1 sales of WholeView 2 continued to improve, and we are on track for 12% revenue growth in 2006.

WholeView 2 is growing for three reasons. Number one, research relevancy. Client Choice Research and Waves are resonating with clients. Client Choice enables clients to vote for specific research topics, and the number of documents in Client Choice increased 50% in Q1. Waves are a proprietary methodology for evaluating vendors; 24 Waves were published in the quarter, an increase of 150% over Q1 2005.

The second reason for the growth of WholeView 2 is the sales force. The sales team has reduced discounting and is responding to new compensation incentives for growing our base of syndicated products led by WholeView 2.

Then finally, the third reason for the growth of WholeView 2 is pricing power. One year ago we raised prices. This increase is flowing through revenue in 2006.

The Boards business continued to expand in the first quarter. The CIO Group, this is our board of technology leaders, now has 203 members. Technology Counsels, our Boards for technology titles below the CIO, now have a total of 158 members. The Analyst Relations and Marketing Counsels added members for a total 135.

Our three newest programs for marketing executives, the CMO Group, the Database Marketing Council, and the eMail Marketing Council, ended the quarter with 58 board members. At the end of the Q1, the total Forrester Leadership Board membership reached 554. This is an increase of 31 seats from year end. In Q1, new board memberships and an increase in average seat prices contributed to growth. Over the full-year 2006, we anticipate that our Boards business will grow approximately 40%.

And now, a look at our Data business, which includes Consumer Tech and Graphics and the Ultimate Consumer Panel. Both products posted growth in Q1 and beat their sales plans.

Hispanic Technographics, which launched this quarter, now has 20 clients, an increase from the 7 charter members that were on board at year-end.

Consulting Services continued to show healthy demand during the quarter. We expect the Consulting business to grow approximately 20% in 2006, and Q1 performance was in line with this plan.

As part of our continuous measurement of client satisfaction, we recently surveyed Consulting clients. They gave Forrester's Consulting Services a very high grade, a 71 on the net promoter scale of 100. And this score carried two messages. Number one, clients are highly satisfied with the product and, number two, a large percentage of clients would recommend the product to a colleague. They both demonstrate underlying strength in our Consulting offerings.

I would now like to focus on our plans for the second quarter and beyond. The Company's overarching target is to maintain a 65-35 balance between our syndicated and non-syndicated bookings and revenue. Employees' goals, and this is particularly in sales, will continue to drive this company-wide effort.

We will host three events during the quarter. IT Forum took place in Las Vegas earlier this month, where year-over-year attendance increased 40%. Attendees engaged in more than 100 sessions, and 1,300 101s performed by Forrester analysts. Outside speakers included Mark Hurd, the President and CEO of HP; Bruce Goodman, CIO of Humana; and Bill Vass, CIO of Sun Microsystems.

In May we will host the IT Forum Europe in Lisbon, Portugal, and the Finance Forum in New York City. Forrester will hold a total of eight events in 2006. We anticipate that this business will grow approximately 30% this year. Given the success of IT Forum, we are off to a great start toward our target.

A note about our executive team. I'm glad to report that executive team transitions in the first quarter have gone very smoothly in EMEA and also in the Americas. Charles Rutstein, the new President of Forrester Americas, and Dennis van Lingen, the new President of Forrester EMEA, are settling comfortably into running their respective operating groups. Both have had long tenures at Forrester, with successful track records across a range of responsibilities.

So to conclude, Forrester has gotten off to a fast start in the first quarter, and we are very pleased to be raising full-year guidance at this time. Our revised guidance puts us squarely back in the range we've been targeting for the long term; that is, 16% to 20% revenue growth.

Warren, Kim and I will plan to be on the road visiting investors this quarter. We hope to see many of you in our travels. Thank you for listening to the call and we will now take questions.

[OPERATOR INSTRUCTIONS.] Laura Lederman from William Blair.

Good quarter. Just a few quick questions. One, can you talk a little bit more about the flow-through of the price increase and how that's helping versus less discounting? And can you give us a sense of how much of this quarter's contract value growth came from either improved pricing or less discounting, however you can break it out? Thanks.

Yes, Laura, as you say, it's really a combination of both price increase and a focus on reducing our discounts that we sell to our clients. New business is really a strong indicator of why the AV is up 15% year-over-year. But, the price increase and discount, I would say, is not far behind. I'd say new business probably accounts for about half to two-thirds of the total increase in AV, and the price increase is maybe another 10% to 15% of that.

Great. Can you talk a little bit about the boards? And you gave the sense that it's going to grow 40% for the full year. Is that bookings or revenue, and can you give us a sense of what percentage of a revenue or bookings it would be for the full year?

That's on a revenue basis, and it will be about 10% to 12% of revenue for the full year.

Great. And can you talk about long-term plan for the boards, how many you would think? I'm trying to get a sense of how big that business can be and what type of additional boards you would add.

Currently at 10 boards. And our current plan over the next two years is to drive it close to 20.

Actually, this year, we are launching a minimal number of boards. I'm looking at Kim. Kim's shaking her head.

Actually, the plan for this year is there may be some in development, but we may not launch them this year. This year, the plan is to grow what we have.

This year.

This year. And then as George mentioned, in the future launch additional boards.

Yes, again, over the next two years, I would say between 15 and 20 boards would be up and running.

And Laura, let me just clarify. It was 8% to 10% of revenue this year. It will be about 10% to 12% of bookings this year. Apologies for that.

Okay. And also, can you talk a little bit of let's say five years out, how big you expect this to be? I'm just trying to size how much of the growth going forward is going to come from the Boards business.

How big the Boards will be as a percentage of our business? I would say 20% to 25%.

Okay. And shifting to some more questions about Data, what percentage of bookings or revenues would you expect that to be for the year? And looking at a few years out, where would you expect that to be as well?

For 2006, we expect data to be about 6% of our total revenues. That's grown at a clip of about 35% to 40% on the syndicated side. And looking long-term, we could see that in the 10% to 15% range over the next 3 to 5 years.

[Matt O'Connell] of Robert W. Baird.

Hi. We noticed that SG&A was up a little bit, about 13% sequentially. Were there any specific investments, or is that mostly seasonality?

Well G&A, as a percentage of total revenues, was at 12%, which is the same as it was Q1 of 2005. The number that you're looking at in the press release that you've got to factor in there is a -- the numbers on the top include the option expense, so you may have to close out. That may be a part of it.

Okay. So, would you expect sequential increases throughout the remainder of the year?

For G&A, we'd expect that to be in the 10% to 12% as a percent of our revenue throughout the remainder of the year -- well, with options. Without excluding the option expense.

Okay. Revenue, the mix was in line with your expectations, and gross margin was down just a little bit. Any particular reason for that?

Yes. Just as we’re kind of moving into a better growth rate of 15% to 20% on a year-over-year basis, our overall operating margin tends to start out a little bit slower at the beginning of the year and increase throughout the year. So, you can see we’re at 10% for Q1. And obviously, to get to a 14% to 15% margin for guidance, we’re going to have to increase incrementally throughout the year, peaking in Q4. And I think what you’re seeing is just some investing in Q1 to really grow the business. A lot of the hiring comes in in the first quarter for the year. And you’ll see the productivity of that in the Q2, Q3 and Q4 timeframes.

Matt O’Connell: Okay.

And Matt, that’s a long-term seasonal phenomenon we’ve seen.

Matt O’Connell: Could you talk a little bit about the business in Europe and Japan, how some indicators are there and if traction has been any better than you’ve seen in the recent past?

Yes. I would say that we saw much better traction in Q1 than we saw in actually all of 2005. And that’s really about our execution. You know, we’re executing better in those regions now. New leadership, new sales leadership, and it’s really paying off and they both did quite well in Q1.

Matt O’Connell: Okay. Great.

I’m not saying that’s going to be for the full year, but we’re showing some good signs there.

Matt O’Connell: Okay. Great. And for clients that didn’t renew in the quarter, was there any specific reason that was more common this quarter than others, or is it mainly just budgetary issues?

No change in the patterns. Budget always leads that as the reason.

Dom LaCava of Canaccord Adams.

Hi, guys. Great quarter.

Hi, Dom.

Just a few follow-up questions I guess. Some of them have been answered. Can you break out what your expectations are for Research Services growth in the June quarter year-over-year?

Research Services growth?

Yes. I mean, coming off the 16%. I know you mentioned the year, or the annual, the 2006 expectation.

Yes. No, we’d expect that to be in the 13% to 16% range.

Okay. And then I guess can you talk a little bit more about the hiring efforts you were talking about? I know generally in Q1 there’s added investments in hiring, etc. Can you talk a little more about what that involved for this Q1 as far as growing the business?

Yes, we -- Warren will give you the numbers in a second, but we actually got a head start on hiring in Q4 and that continued into Q1. So, we’re back to our old pattern, which we were actually in the ‘90s, where we lay on a lot of people in Q4 - Q1. And then the hiring would tend to taper off into Q3 and Q4. So, what are the numbers?

Yes. Well, we actually hired just under 40 new headcount for Q1. And our plan would be to hire about -- we expect to end the year at about 800, so we’d be hiring about 100, 105 for full-year 2006. So as you can see, clearly 40% of that will be in Q1 and then that will taper off as you go throughout the year. Q2, Q3 and Q4 will probably be about 25%, 20% in each of the quarters, down to 15% to 20% in Q4.

Gotcha. Okay. And then moving over to stock option expense. It’s a little lower than I think expectations in Q1, but you kept the ’06 level the same. How can we think about that as far as going from June to December? Is it going to be higher than Q1, or how can we think about that?

Yes. I think there’s a lot of variables in the calculation that we have little control over, such as volatility of the stock price, etc., [inaudible], options that are exercised, etc. But, it was a little bit lower in Q1. It came in at 1.7. We had estimated about 2 to 2.5 million. It’ll be a little higher in Q2 and for each of the quarters going forward. It should be between 2 and 2.5 million a quarter going forward, but I can’t give you really an exact number. Part of that is just the expectations from options granted this year that will be kicking in for the second half of this year.

Okay. So, there’s no other reason -- there’s no other I guess rationale beyond that, it’s just volatility and I guess conservatism.

Yes. Yes.

Yes.

Okay. Do you an update on numbers as far as the old RDCC kind of look at the business? I know the 9% in 2004 for community was out there. Do you have some kind of update as far as that?

Yes. I mean, I guess for the full year for revenue what I could tell you is that we’d expect Research to be about 50% of our revenue, and that’s growing at about a 12% clip. Data, we’d expect that to be about 6% of our revenue, growing at a 35% to 40% clip. That’s the syndicated data. Consulting, that should be in the 30% to 35% of our revenue range, and that’s growing at about 20% to 25% right now. Our Leadership Boards, that will be in the 8% to 10% of our total revenues, and that’s growing at about 40% right now for the year. And then Events, that should be just under 5% of our total revenue. And that’s growing, as George mentioned, at about 35% to 40% as well.

Okay. So, those numbers were -- expected ’06 numbers?

Those would be full-year ’06 revenues. And they’ll vary on a quarter-to-quarter basis, obviously, depending on how strong Advisory is or how many events that we perform in a given quarter.

Sure. Okay. And I guess that’s it. I can follow up later with some of my other questions. Thanks, guys.

Andrew Thut of BlackRock.

The first question was about enrichment rate coming in at 107. You guys have sort of been talking 110 to 115. Can you comment on where we are on that front?

Yes. I guess what I’d say is it’s a 12-month rolling number and it was certainly much higher than that in Q1, and we’re still working on getting it up to that -- I’m sorry, Q1 of this year, but it’s still being weighed down a little bit by Q2 through Q4 of last year. And we are working on getting that number up to the double digit 110 to 115 range throughout the second half of this year -- or Q2 and the second half of this year. So, the trend is in the right direction.

In the direction, yes.

Okay. The next thing is, could you guys comment on cash and uses of? George, we’ve talked about this before. But, it sounds like the cash [war] just keeps piling up there. And what potential uses are and where you are in terms of acquisition pipeline, etc.

I mean -- well, at the risk of repeating myself, we’ve done four acquisitions in our history and three were very successful. And our largest one, Giga, was very, very successful. We’ve shown we can do that.

I would say the cash is going to go primarily to M&A. We had a board meeting yesterday and that was -- spent a lot of time on this topic. And that is really where we’re going to center the use of that cash. So, as you might imagine, we spend a lot of time in that area looking at targets. As I’ve said before, we’re just really picky as to what we will -- who we will acquire. We pass on, of course, most of the deals and for reasons -- the reasons we’d be passing would be they don’t have the profit motive -- not the right people, not the right product fit, not the right culture.

Expensive.

Too expensive, yes. So, for all of those issues. So, I would -- if you look long-term at the cash, we’re going to use this primarily for M&A.

Could you give me a sense of the size of the potential pipeline, or the order of magnitude of what these acquisitions that you’re looking at -- order of magnitude of revenue?

I’m not getting too specific for you but, I mean, they would range from fairly small deals in the area of 5 to an area of 50. But you know, that’s today. It could change tomorrow.

Robert Skloff of Sidoti & Company.

I just wanted to kind of build on a few that have already been asked. Just on the last one, the uses of cash, what would encourage you guys or get you guys to buy back more stock? I mean, do you feel comfortable with -- I mean, I think you said 26 out of 50. Is that right, Warren?

Yes.

And I mean, is that something that is over the next year that you’re thinking about, or is that the next couple of years? And then kind of related to that use of cash question, how are the valuations looking in the acquisition front?

Sure. On the buy back front, we will continue to be active in Q2 and likely throughout the rest of the year. We do revisit it on a quarterly basis at the board meeting. We have, I think, $24 million to go on the buy back of the 50 million authorized, the second 50 million. And we’ll continue this quarter. And I would expect that we probably won’t get through all of it this year, but we would continue into 2007. We’re going to spend the rest of it in ’07.

As far as valuations go, I would say we certainly have seen an increase in the last 12 months. For private companies, I’m in the 0.75 to 1.0 range and they have been ranging higher in the last 12 months. And the fact is, we’re not going to let the money burn a hole in our pockets. We’re just going to look for the best deal with what’s right financially for the company.

Okay, great.

But valuations are higher.

Right. Right. And then the last -- two more questions. Just Warren, so I’m clear, options rated expenses roughly a nickel in the quarter? Is that about right?

Of EPS?

Yes.

About $0.04 to $0.05, that’s right.

Okay. And then for the year, roughly 28 to 30? Does that sound about right?

Yes, that’s about right.

Okay. And then pricing. You guys have been successful in increasing pricing. Do you think that over the course of the next year or two there’s more opportunity to increase pricing?

It’s a complex question. It depends on market conditions, it depends on competition. It depends on the unique value proposition that we’re selling. So, I’ll just leave it at this, that we’re spending a lot of time looking at this topic right now, but no plans to raise prices at this point.

Dom LaCava of Canaccord Adams.

Yes, just a couple of follow up housekeeping questions. I’m not sure if you mentioned the number of 1B+ companies you added in the quarter?

Yes. We’re currently at about 800 right now, which is I think 17% of the total 1B+ companies out there.

Right.

And we’re still working -- not working, but analyzing it. But the list changes on an annual basis, so we had to update the list because, essentially, companies reached that milestone our M&A takes place through the year. So, for the exact number of additions, I think it’s in the 40 to 50 range.

Okay. Additions versus end of Q4, or just versus--?

Yes. Versus end of Q4.

Okay. Good. And then, are you still tracking how the [Got META] campaign is flowing into that, or is it tough to break that out at this point?

Getting tougher to break out. What we’re showing is we won four deals in the US, four deals in Europe, but this is pretty rough data.

Okay.

Do you have some -- let me get Kim here about why we’re winning some of those deals.

Yes. On the competitive situation, Dom, as you can imagine it really hasn’t changed much. We see primarily Gartner, and the consolidation in the industry certainly has helped us considered for a second source or a second choice from time to time. So, budget sharing is a great story for us.

And really, some of the feedback from some new clients this quarter was that we’re easy to do business with, and the client service level is high and where it needs to be to win some business. But, also that the research relevancy in terms of writing [tech] research, but having a true application to their business. So, that’s some of the feedback I got this quarter. And same story as the last quarter in terms of the consolidation in the industry continues to help us.

The duopolies definitely help.

Laura Lederman of William Blair.

Hi. I just wanted to follow up on the question of acquisitions. What types of things would you look at? In other words, are there a lot of properties out there? What type of businesses are they? Are they more in the data, are they more in core research, more like the boards business. I’m trying to get a sense of what types of things you would act on. Thanks.

I’ll be very unspecific for you, but there are not many good deals out there, Laura, at this point, at least in the US. So we’re spending a lot of time in Europe and a lot of time in Asia right now looking at potential deals.

And again, we would look across research data, we would look across consulting, we would look across events. And we are looking across all those sides of the business. And again, rather thin right now, rather overpriced. But, we’re -- let’s just say we’re very active at this point, spending a lot of time on this topic. Of course, with flowing this much cash you have to be looking in that direction.

This is a dumb question. Why not a dividend? I realize you’re a small company and maybe -- well, anyway.

We actually talked about this at the board meeting. And our feeling is a one-time dividend doesn’t really buy you very much. And we don’t want to get on the dividend treadmill, the quarterly dividend treadmill.

And third, Laura, is that we’re a growth company, right? And you and I have had this conversation more times in the past, but as we look 10 years down the road here, technology becomes more confusing, more difficult for companies to deal with. And we see a lot of opportunity to grow this business even faster than we’ve grown it over the last year and it’s going to take money to do that. So, we see ourselves as a company which is going to grow fast globally and we’re going to need money to do that. Whether it be acquisition or whether it be by new products.

Let’s talk about that, either acquisition or new products. We know the businesses you’re in today, but what type of ancillary or adjacent businesses might you -- might you be interested in long term?

We’re too challenged with the businesses right now. If you -- look at the portfolio -- I mean, we play across four different distinct businesses. If you include Events, it’s five distinct businesses. So, adding more complexity at this scale doesn’t make sense at this time.

We show no further questions in the queue at this time. I’d like to turn the floor back over to Ms. Maxwell for any further comments.

Yes. Thank you for joining our call and we hope to see many of you this quarter on the road.

Thanks very much.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.