Forrester Research Inc (FORR) 2008 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Q2, 2008 Forrester Research earnings conference call. (OPERATOR INSTRUCTIONS) I would now like to turn the call over to Karyl Levinson, Vice President of communications. Please proceed ma'am.

Good morning. Thank you for joining our second quarter 2008 call. With me today are George Colony, Forrester's Chairman of the Board and CEO, Charles Rutstein Forrester's COO, and Mike Doyle, Forrester's Chief Financial Officer. Mike will open the call and provide detail on our financial results for the quarter. George will follow Mike, and provide a strategic update on the business and our role-based strategy. After George completes his review, we'll open the call to Q&A.

A replay of this call will be available until August 13, 2008 and can be accessed by dialing 888-286-8010. Please reference the passcode 28361250. This call is also available via webcast, and will be archived in the investor section at Forrester.com.

Before we begin, I'd 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 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. I'll now hand the call over to Mike Doyle.

Thanks, Karyl and good morning. I'll now begin my review of the financial performance for Forrester's second quarter, and year-to-date results. The balance sheet of June 30, our second quarter metrics, and the outlook for the third quarter and full year 2008. Please note that the income statement numbers I'm reporting are pro forma, and exclude the following items. Amortization of intangibles, non-cash stock-based compensation expense, professional fees related to the stock option investigation, and restatement of the company's historical financial statements. Net realized gains from securities and non-marketable investments. Also, we continue to book an effective tax rate at 39% for pro forma purposes. The anticipated effective tax rate for 2008 is approximately 40%.

As we reviewed in our last call, we began the year with good momentum, finishing the first quarter in line with our plan. Today, I'm happy to report that we have continued to maintain the positive momentum and achieved strong results for the second quarter of 2008. We also announced today the acquisition of Jupiter Research, which will continue to strengthen our syndicated business. With today's release, we're reporting second quarter 2008 revenues of $63.5 million and pro forma operating margin of 20%. Revenue increased 15% versus prior year, with 2% attributable to foreign exchange. Operating margin performance was at the upper end of our guidance, and two points above prior year. Pro forma earnings per share came in at $0.37 per share, just above the upper end of our guidance and up 19% versus year-ago. For the six months ended June 30, 2008, we're reporting revenues of $118.5 million, up 16% from the same period a year-ago. Pro forma operating margin increased 1% to 17% for the six month period ended June 30, from 16% during 2007. Pro forma earnings per share were $0.63, an increase of $0.12 from 2007.

Now, let me turn to a more detailed review of our second quarter results. Forrester's second quarter revenue increased 15% to $63.5 million, from $55.2 million in the second quarter last year. Second quarter research services revenue increased 18% to $37.9 million, from $32.1 million last year. Research service revenue comprised 60% of total revenue for the quarter, versus 58% in the second quarter of 2007. We are pleased with the healthy increase in our research services revenue, which is in line with our objective of driving a higher percentage of total revenue from research services, what we call Q, during 2008.

Second quarter advisory services and other revenue increased 11% to $25.6 million from $23.1 million in the second quarter of 2007, and represented 40% of total revenue for the quarter. The increase in advisory services and other revenue was driven by strong performance at all the five events held during the second quarter. International revenues were 29% for the second quarter, compared to 30% in the second quarter last year, as business continues to grow faster domestically, than in Europe and Asia-Pacific.

I would now like to take you through the activity behind our revenue, and review progress for each of our products, starting with research. In the second quarter, 477 new research documents were added to role view. 56,885 clients have now chosen a role. The top three roles are application development and program management professionals, with 6,533 clients. Enterprise architecture with 6,225 clients, and business process and applications with 5,803 clients.

During the second quarter, we refined our roles to become more relevant and focus on the individuals, we strive to make successful every day. The market research professional was split into two separate roles. Consumer market research professional, and the V to V market research professional. The eBusiness channel and product management professional was divided into the consumer product strategy professionals, and eBusiness and channel strategy professionals. We hosted 106 teleconferences in the second quarter with a total attendance of 4,482 participants. All 19 roles were represented.

Forrester Leadership Boards our peer offering for Senior Executives continues to perform well. Five boards focused on IT roles now have a total of 816 members. Technology Industry boards including the analysts relations and technology marketing councils with total membership of 354. Finally, the marketing and strategy boards, which include the CMO group, the database marketing council, and the interactive marketing council, now have a total membership of 230. At the end of the second quarter, the Forrester Leadership Boards had 1,380 members, an increase of 93 from March 31, 2008. The FLB business achieved year-over-year revenue growth of 49% in the second quarter of 2008.

In our data business, we continue to add and renew an impressive list of clients. We added or renewed 22 1-B+ companies in the second quarter. Including Toro, [Cisco], Proctor & Gamble, Google, and Rabbobank. Demand for consulting services continue to be strong in the second quarter with growth coming in the areas of traditional strength. IT projects focused on IT strategy reviews, vendor selection and assessment, RFP reviews and contract negotiation support, and security assessments. Our marketing and strategy projects focused on customer market strategy, interactive marketing, and customer experience. And our tech industry project centered on total economic impact studies, or TEI and market assessments.

Our events business had another strong quarter, with substantial growth in both sponsorship and attendee sales. As mentioned previously, we hosted five events. Three IT events, and two marketing strategy in the second quarter. Specifically the Europe Security Forum, the US IT Forum, the Europe IT Forum, the Marketing Forum, and the Financial Services Forum for Marketing and Strategy Professionals. In the third quarter of 2008, we'll be hosting two IT events. Security Forum, and the Business and Technology Leadership Forum.

Let me turn to second quarter operating expenses and operating income. Operating expenses for the second quarter were $51.1 million, up 13% from $45.3 million in the second quarter of last year. The operating expense increase was primarily driven by higher net headcount in both sales and research. Operating income was $12.4 million, or 20% of revenue, compared with $9.9 million or 18% of revenue last year. The improved margin performance, year-over-year reflects leveraging of our expense-base, as revenues are growing faster than expenses, and improvements in our events performance. Net income increased 18% to $8.6 million, an earnings per share were up 19% to $0.37 a share on diluted weighted average shares outstanding of $23.6 million, compared with net income of $7.3 million and earnings per share of $0.31 on $23.8 million weighted average shares outstanding in the second quarter of last year.

Looking at our results for the first six months, total revenue for the six month period ending June 30, 2008 increased 16% to $118.4 million from $102.5 million last year. For year-to-date 2008, research services revenue increased by $10.5 million, or 16% to $73.8 million. Research services revenue was 62% of the total year-to-date revenue, consistent with 2007. Operating income for the six-month period was $20.5 million, or 17% of revenue, compared with operating income of $15.9 million or 16% of revenue in 2007. This is in line with our long-term goal of targeting operating margin in the range of 17% to 19% while growing revenues at the rate of 15% to 20%. Net income on a year-to-date basis increased 22% to $14.8 million from $12.1 million last year, and earnings per share for 2008 increased 24% to $0.63 on diluted weighted average shares outstanding of $23.6 million, compared with $0.51 and $23.8 million weighted average shares outstanding last year.

Now I'd like to review the balance sheet. Our balance sheet remains strong. Our cash and marketable securities at June 30, were $278.7 million, up $29.7 million from our year-end 2007 balances. The portion of our marketable securities relating to auction rate securities, has been reclassified as a long-term asset on the balance sheet. This is a result of the current liquidity issues in the auction rate marketplace. We fully expect these securities to redeem at par value.

During the second quarter, we redeemed $11 million of these securities at par value, which leaves $49.9 million remaining in our portfolio. We generated $37.5 million in cash from operations during the first half of 2008 which is up $11.4 million from prior year, due primarily to net income improvement, and strong cash collections. We've also received $12.8 million in cash from options exercise in the first six months of the year. During the first half of 2008, we repurchased 722,000 shares at a total cost of $20 million, and will continue to be active with the buy back at selected price points.

Accounts receivable at June 30, was $44.9 million compared to $37.8 million as of June 30, 2007. Our day sales outstanding at June 30, was 79 days, up from 78 days last June 30, 2007. Accounts receivable over 90 days was 13% at June 30, 2008, consistent with both prior year, and in line with our targeted range. Both DSO and accounts receivable over 90 days improved versus the first quarter this year. DSO for the second quarter of 79 days was down from 84 days in the first quarter, and accounts receivable over 90 for the second quarter of 13% was down from 21% from the first quarter of this year.

Net property and equipment stayed flat at $6.6 million at June 30 of this year. Capital spending for the first six months of 2008 was approximately $1.7 million. Deferred revenue at June 30 was $108.1 million, up 17.5% over June 30, 2007. Our future accounts receivable balances are amounts to be invoiced in the future for clients with multi-year deals, or schedule payment terms. Deferred revenue plus future AR grew 15.3% year-over-year, which is reflective in part to the favorable mix shift towards our syndicated business.

And now I'll review Forrester's second quarter metrics. Agreement value or AV, this represents the total value of all contracts for research and advisory services in place without regard to the amount of revenue that has already been recognized or as yet to be recognized, and was $200.1 million at June 30 a 15% increase from last year. At June 30, Forrester's retention rate for client companies was 75%, and our dollar retention during the same time period was 86%. Our enrichment rate was 105% for the 12-month period ended June 30. Client and dollar retention rates, and enrichment rates, are calculated on a rolling 12-month basis. At the end of the second quarter, our total for client companies was 2,544, up 76 from year-end, and 54 from the end of the first quarter.

For headcount, at the end of the second quarter, Forrester had a total staff of 967 up from 935 at the end of the first quarter. Current headcount includes a research staff of 353, up 7 from March 31, and sales staff of 343, up 16 from March 31. We continue to monitor sales attrition and are pleased to see year-over-year improvement. We'll continue to add resources to the sales organization as the year progresses.

As discussed in our first quarter conference call, we have introduced a new metric. Roles per client. This metric captures the number of unique roles in each of our clients, per the agreements in place at the end of each quarter. We believe this additional metric, coupled with enrichment, provides greater insight into the performance of our role-based strategy. The metric for the first quarter was 3.2 roles per client, as of June 30 there are 3.3 roles per client. We'll continue to provide this metric on a quarterly basis, going forward.

The last topic I'd like to cover today is our business outlook for the third quarter and full year 2008. In summary, we're very pleased with our first half performance. In particular, the success of driving our research revenue. In addition, I'm excited about the acquisition of the Jupiter business. It will add value to Forrester by strengthening our role-based strategy, adding greater depth and breadth to our syndicated products, and bringing us a talented research and sales organization. For the remainder of 2008 we are anticipating the impact of Jupiter to be slightly dilutive. As we look forward to 2009, we expect the acquisition to be accretive to earnings per share.

Our pro forma guidance for the third quarter and full year reflects our early plans for integrating the Jupiter research business, and incorporates Jupiter business results effective August 1, 2008. Our guidance excludes the following. Amortization of intangible assets which we expect to be approximately $500,000 to $1 million for the third quarter, and $1 million to $2 million for the full year 2008. And non-cash stock-based compensation expense of $1.2 million to $1.5 million for the third quarter, and $5 million to $6 million for 2008. Costs associated with the stock option investigation and restatement of our historical financial statements, and gains and impairments on sales of marketable securities, and unmarketable investments.

For the third quarter, we're aiming to achieve total revenues of approximately $59 million to $62 million, an operating margin in the range of 15% to 17%. Other income of approximately $1.6 million, a pro forma income tax rate of 39%, and pro forma diluted earnings per share of approximately $0.27 to $0.31. Our pro forma full year guidance is as follows. Total revenues of approximately $246 million to $252 million, a pro forma operating margin of approximately 17% to 18%, interest income of approximately $7 million, a pro forma income tax rate of 39%, and pro forma diluted earnings per share of $1.28 to $1.34. We have provided guidance on a GAAP basis for the third quarter and full year 2008 in our press release, and 8-K filed this morning. Thank you and I'll now turn the floor over to George.

Thanks, Mike. I'd like to welcome everyone to Forrester 2008 [future] call. My remarks will be addressing four topics. Number one, Forrester's three business imperatives. Number two, new products. number three, the economy and projected tech spending for the remainder of 2008. And then finally, the acquisition and integration plan for JupiterResearch.

As Mike has noted, the company's momentum remains strong. Despite macro economic uncertainty, renewals in the business remain on track for the year. as I've referenced on past quarterly calls, Forrester has three business imperatives. number one, to complete the build out of a role-based strategy, two, to grow our sales platform, and three to increase the quotient of our business that is syndicated. I'm happy to report that we had much progress on our role-based transition. The company's operational report card, which tracks our role progress has moved from C+, to B-, to B, to B+, over the last four successive quarters. While we have more work to do, we feel the company is successfully navigating its voyage to be 100% focused on roles.

The second quarter is our biggest events quarter of the year, and roles were much in evidence at these forums, with role-based tracks, role focused presentations, and Forrester leadership board sessions running throughout the five events. The forums all performed according to our plans. Forrester's researching and consulting continues to become more relevant to their focus on roles, and roles increased relevancy, and higher relevancy will increase new business win rates, and renewal rates. With roles as our focus, we are not lacking for market potential. The 4 million executives in 19 roles, represent a revenue potential of $9 billion. To date we have penetrated less than 5% of our target market.

Forrester's second business imperative is to expand our sales platform. Our goal is to get 15% to 20% yearly expansion of the sales force. As Mike has already noted, sales attrition did attenuate in the second quarter while hiring accelerated. These factors increased sales force headcount 20% in the second quarter, as compared with Q2, 2007. This puts us on target to achieve our sales force expansion plans for the full year, an important factor in enabling the company to tap it's large potential market space.

Our final business imperative is to increase the quotient of Forrester's business which is syndicated. We call this factor, Q. Our Q products are role view, boards, and data. Non-Q products are events, and consulting. Q products are the most profitable and renewable in our product portfolio. In the second quarter of 2007, 58% of our revenue was syndicated, that has now moved to 60% in Q2, 2008. Our goal is to move Q by 1 to 2 points per year, with long-term goal of being Q of 70%.

As I talked about on the first quarter call, the commission plan for salespeople has changed for 2008, with higher incentives available for the sale of Q products. As in the first quarter, the plan successfully incentivized the sales force to make its Q plan. While there certainly has been a period of adjustment for the sales team, particularly among the company's seasoned veterans, the new commission plan has been an important factor in moving sales toward syndicated business. While investors do not have visibility of the company's booking, higher Q is translating in the short term into faster, deferred revenue growth, and in the long term, into a higher mix of syndicated business in reported revenue. In future calls, we'll continue to update you on our progress of three business imperatives.

Turning to new launches, at year end 2007, Forrester covered 17 roles. Eight in IT, five in marketing and strategy, and four in the technology industry space. As Mike has mentioned, in Q2, we have launched two new roles in the marketing strategy space. Consumer market research professionals, and consumer product strategy professionals. This brings the company up to 19 roles, eight in IT, seven in marketing and strategy, and four in the technology industry. I would like to point out, that we added these roles to sharpen and tune our role coverage. We do not need to launch new roles on a regular basis to drive our growth.

The fastest growing segment of our business has been Forrester leadership boards for the last three years, and this trend continues as evidenced by FLB's growth of 49% in the second quarter. At the end of 2007 Forrester had 10 boards. In the second quarter, we launched two new FLBs. The Market Research Council, and Sourcing and Vendor Management Council. Both boards are launching with more than 50 charter members. The company's ultimate goal is to have at least one Forrester leadership board for all 19 roles.

I'd like to say a few words about prospects for the technology economy. Forrester is now projecting that the second half of 2008, will have slower economic growth than the first. This will have impact on the technology market. We expect technology spending in the US to increase 4% for all of 2008, versus an increase of 6% in 2007 and 2006. We expect weaker growth in computers, peripherals, and communications equipment, with software services and outsourcing continuing to perform well throughout the year.

As Mike has noted, today we acquired Jupiter Research. I would like to start by saying that all of the Forrester team is very happy to welcome Jupiter employees and clients to the Forrester family. Jupiter is a very well respected brand, that since it's launch in the late 1980s, has been a leader in analyzing the impact of the internet on media and business. The combined companies now create a unique and differentiated offering for executives in marketing and strategy roles. Forrester's leadership in this market now becomes an even stronger platform for future growth.

We're buying Jupiter for six reasons. Number one, financial. We expect the deal to increase shareholder value and cash flow over the long-term. Two, more content for the M&S roles. Three, new clients. Jupiter comes to us with 350 clients. Four, cross sell. Jupiter's penetration of Marketing and Strategy roles in accounts, now gives Forrester the opportunity to cross sell to IT roles, and Technology Industry roles in the companies.

Five, people. The Jupiter team matches up closely with the Forrester team. Jupiter significantly extends the sales and research coverage of the M&S client group. M&S Research gains 43 people, an increase of 58%. Sales moves up by 27 people, a 41% increase. Our final reason for buying Jupiter is data. Jupiter's pay loads and multi-year online server portfolio, enhances Forrester's data offerings forming a unique and powerful player in the business. A few details on the acquisition. Jupiter was owned by MCG, a publicly traded investment firm. The deal was for all cash, and we're planning to fully integrate Jupiter's operations with Forrester's marketing and strategy client group by the first quarter of 2009.

Integration of Forrester has already begun. Clint (inaudible) the Head of Research of the Marketing and Strategy client group has relocated to the former Jupiter headquarters, and will be working there for the next six months. Dennis [Van Lugen], Managing Director of the M&S client group, has overall responsibility for the Jupiter acquisition. Present plans are to retain substantially all Jupiter people. The company's former parent handled much of Jupiter's the general and administrative work from their headquarters. So there is little G&A redundancy at Jupiter. The Jupiter website research will continue as is through 2008, after which the offerings will be integrated with the Forrester's site and product line. The uniting of the two leading research brands used by marketing strategy executives, creates a rich offering that will help those executives successfully navigate a world, increasingly changed by technology.

In addition to Jupiter we remain very focused on evaluating other acquisition candidates. The economic slowdown and associated credit constraints are both working in our favor vis-a-vis pricing and potential details. Having readily deployable cash in this market, gives us a major bargaining advantage. With this said, I'll reiterate my long stated views on acquisitions. Any deal we do has to get over a very high bar. It has to work financially, culturally and strategically, bringing Forrester good clients, good people, and good fit. In other words, we'll continue to work hard to find only the best deals for Forrester.

To conclude, all the Forrester team is pleased with the performance in the second quarter and in the first half of 2008. Our reference to drive Q, grow the sales force, and complete the role based transition remain on track. We are very happy to be bringing new value to the fold with Jupiter, and expect similar additions to the product line in the future. Mike and I will be traveling this quarter to visit with investors, and hope to see many of you on these trips. Thanks for listening to the call. I'd like to welcome Charles Rutstein, Forrester's COO to join Mike, and me for questions. We will now take questions.

(OPERATOR INSTRUCTIONS). Your first question comes from the line of Laura Lederman, with William Blair. Please proceed with your question.

Thank you so much for taking my call, and congratulations on the acquisition, and a good quarter. Just a few follow-up questions on the acquisition. You mentioned that it's slightly dilutive for this year, can you give us a sense, is that's a penny for the year? Just give us a sense.

And also revenue, how much would you expect to have in Q4, and that sort of thing? I noticed that they did $4 million last year, can you take that $4 million divide it by four, and assume there's $3.5 million revenue per quarter, or was there deferred write-off, so you wouldn't be getting that much revenue addition from Jupiter? Thanks.

Laura, it's Mike, relative to the dilution, there's integration expenses and a variety of things. We anticipate somewhere between $0.01 to $0.02 this year per share. Relative to revenue, we're looking at for, from August 1, forward, approximately $5 million, obviously we'll be finalizing a number of things as we work our way in, and finalize deferred revenue, adjustments, and that sort of thing. But we're estimating approximately $5 million.

And I wasn't quite sure if I misunderstood the last comment before the Q&A, that we would look for similar acquisitions soon? Or similar--, I wasn't quite sure what that statement was.

This is George, just saying that we remain very active on the M&A front. I mean we have spent a lot of time in this area right now, as you might imagine.

Yes, if you look at M&A, would you expect it to be more in the marketing side? IT side? International versus US? Can you give us a rough feel? Or all of the above?

I'd say all of the above. Having now brought jupiter together with M&S, I doubt we'd do another M&S deal this year, it's just a lot of (inaudible) to absorb that over the next 18 months.

That being said, what's on the market, is on the market.

One final question on Jupiter. Can you give a sense how much revenue grew last year? It was 14 up from what, and give us a sense of the margins that they were running?

Laura, their historical revenue growth, was low double digits, in terms of a percentage basis. We think over time we are going to increase that. We provide resources to the folks at Jupiter. They're a very talented group. I think the combination will bode well for combined entities.

And relative to margin, I think their margin numbers were below ours, but, I'm not going to give you too much color there, other than that they were below ours, probably by 5 to 6 points. But again, as we combine the companies, I'm very comfortable that as we go into 2009, we're going to have them to the right place, and we're going to get it through continuing to grow the business. We have leverage on the top line I think more so, than as George mentioned on the expense side.

Okay, shifting gears a little bit. Two more questions and obviously I'll pass it on. Are you looking at all at a price increase in the core business? Kind of what are your thoughts on that? And also international growth continues to lag US, is that another area that you hope to work on through acquisition, or if you don't work on it through acquisition, how would you expect to be able to accelerate that?

Hey Laura, it's Charles. Let me start with the pricing one. We tend to look at pricing on a 6 month basis. We did do some price increases in January of this year, around user group, around data, and things kind of around the margin. We did not do a price increase in July of this year. The reason for that is a couple fold. The biggest driver there is, we're looking-- we're doing a major look at pricing and packaging right now. I would say a deeper look than we have done in many, many years. That work was not complete in time for a July change. Therefore we did not do a July change. I would look for a change in the January cycle there, on the pricing and packaging front.

Last comment, maybe on that one, is in the back half of the year, we are taking a closer look at discounting, and trying to get more of the contracts closer to the list price, which of course has the same net affect.

Talking about new contracts, or old contracts?

All contracts. As in any portfolio business, you have a distribution, some that are right at list price, and some that are not there. So of course that tells us where we need to focus. With respect to the international question, we saw point of movement, I think Mike, in the quarter on the revenue line. I'm not sure that's significant. I think you're just seeing variability there. I'm more confident about international growth than I have been in many years. We saw strength in the quarter on the bookings front, in the overseas business, both in Europe as well as elsewhere around the world.

Yes, to echo that on the international front, Laura, and I would agree. I think relative to our internal targets, we were very happy with the way our European business in particular performed. All three of our client groups were better than what we'd hoped for. So I'm with Charles. I think that's just-- I think it's not significant at this stage.

Laura this is George, I think we feel we're on our 70/30 path here.

Final question, which is a very broad one. If you look at technology spending, you mentioned that you expect it to weaken a little bit, have you seen any weakness at all, your quarter was good, but any pockets of weakness, like financial services would be an obvious suspect. Retailers or anything? If you look at the buying segments, where is it strong in your business, and where is it not as strong?

Hey Laura, it's Charles again. I would say we saw certainly, some uncertainty in the quarter. You saw some longer sales cycles, you saw a need for more signatures, as I think you would expect in this environment. I would say it's not necessarily concentrated solely in particular industries. In some of the industries you mentioned, financial services, in travel, we had reps who concentrate on those spaces, who exceeded their plans for the quarter.

I guess the way I would characterize it that, we're running the business in a way to accommodate those changes in the environment, for the reps to have greater coverage in their pipelines. We're looking for them to get paperwork in front of clients earlier, giving more time to execute in the quarter. So that's why we left the guidance unchanged for the back half of the year.

Thank you so much, and congratulations again on Jupiter.

Thanks, Laura.

(OPERATOR INSTRUCTIONS). Your next question comes from Bill Sutherland, with Boening & Scattergood. Please proceed with your question.

This is Michael [Broomburg] sitting in for Bill. Just a quick question on your third quarter guidance. Looks like your GAAP margins, you're looking at 10% to 16%. I'm just wondering if you could drill down on that, and what's behind that, potential downside to your Q2 performance?

This is Mike Doyle. There's a couple things going on there. First as we mentioned, we've got activities with Jupiter. That's going to suppress our activities a bit, and as was the case last year, I mean our third quarter revenues are slightly below our second quarter revenues, which is again, it's a natural cycle for us. So we get less leverage, so again, we're a people company, people costs, so we're a little bit more fixed. And then the last item is really intangibles, which again, gets to the concept of bringing Jupiter on board, we've got increase on the amortization side.

Right, okay, so you don't foresee that as an ongoing contraction of margins going forward?

No, I don't. I think that we said this year, I think we're looking at probably $0.01 to $0.02, but what we did was tightened up our EPS targeted range. We were at $1.20 to $1.36. Our last guidance for full year was $1.28 to $1.34. We're comfortable this year staying basically within our guidance for earnings per share. We think Jupiter's going to be accretive to Forrester in 2009. No, we don't expect this is going to have an adverse impact over our long-term goals.

Great, that's all I got. Thanks.

You bet.

There are no further questions at this time.

Okay. Thank you very much for joining the call. And have a nice day.

Thank you very much, everyone.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.