Hackett Group Inc (HCKT) 2005 Q4 法說會逐字稿

Good evening, and welcome to the Answerthink fourth quarter conference call.

[OPERATOR INSTRUCTIONS]

Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO, and Mr. Grant Fitzwilliam, Chief Financial Officer.

Mr. Fitzwilliam, you may begin.

Thank you and good evening, everyone and thank you for joining us today to discuss Answerthink's fourth quarter results.

Speaking on the call today and here to answer your questions are Ted Fernandez, Chairman and CEO of Answerthink, and myself, Grant Fitzwilliam, CFO. A press announcement was released over the wires at 4:47 pm est today. For a copy of the release, please visit our website at www.Answerthink.com.

We'll also place any additional financial and statistical data discussed on this call that is not contained in the release on the Investor Relations page of our website.

Before we begin, I would like to remind you that in the following comments and in the question-and-answer session we will be making statements about expected future results which may be forward-looking statements for the purposes of the federal securities laws.

These statements relate to our current expectations, estimates, and projections, and are not a guarantee of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict, and which may not be accurate. Actual results may vary.

These forward-looking statements should be considered only in conjunction with the detail information excluding the risk factors contained in our SEC filings.

At point, I would like to turn it over to Ted.

Thank you, Grant, and welcome everyone, as we customarily do, I will open the call by providing some commentary relative to the overview of the quarter, I will turn it back over to Grant to comment on operating results, cash flow and also a comment on outlook, Grant will turn it back over to me, I will make some comments relative to marketplace and strategic overview, and then we'll open it up for Q&A.

Having said that, let me start with the overview. We were pleased to announce 25% year-over-year quarterly revenue growth, excluding our recent REL acquisition, and pro forma EPS results in line with our previously-provided guidance.

We experienced year-over-year growth across all of our service lines, but the strongest growth was reported by our business intelligence group which was up 43% and our Hackett group which grew 28% on a quarter year-over-year basis.

As we closed out the year, it is clear to us that the integration of our transformation group into Hackett last March strengthened our business model. It allowed us to significantly improve the intellectual capital and know-how we brought to our membership advisory ofference, and it also repositioned our business transformation group to successfully compete with the top strategic consulting firms in the world.

At that time we introduced a series of fixed-price, fixed-scope business transformation programs which properly position our skills and intellectual capital under the Hackett brand, but did so at significantly higher rates.

In the fourth quarter alone, our Hackett sales channels sold over 60 of these transformation programs. These programs consist of strategic transformation plans, transformation management office, best practice blueprints, best practice workshops, which strategically position us to support client planning, design, or full scale implementation efforts.

Our membership advisory program, sales were up 28% year-over-year, driven by 52% growth in our C-level or executive advisory program, which is now our primary advisory program product platform.

Our corresponding membership advisory client and membership count continue to grow strongly as we were at approximately 400 members and 200 clients across our 12 programs as we exited the year. I will provide additional commentary on our plans for 2006 to further enhance our sales incentives, executive focus and infrastructure investments in order to further accelerate the growth of these programs.

Our best practice solutions groups continue to see improving performance as a result of our strong Hyperion implementation demand, and also as a result of our ability to leverage our Hackett intellectual capital through the use of our best practice implementation approach on most of our technology implementation engagements.

As I have mentioned throughout the year, we continue to see strong demand for performance management, analytical applications, and we have one of the best implementation groups in the country, and that was reflected in our business intelligence results.

Relative to our lines with Accenture, we continue to see proposal activity and we continue to close new deals primarily within our business applications offerings. We've recently had a meaningful public sector systems integration win and we also have seen our national association of state agencies contract result in several new state benchmark wins. As you may recall, any down stream that results from these benchmarks will accrue to the alliance.

We believe that the move to combine our empirical data and research, coupled with strategic execution expertise provides us with an opportunity to continue to aggressively grow our Hackett revenues and to also strongly position our best practice implementation approach.

At the heart of that strategy is our strong belief that our advisory membership based programs allow us to develop a close continuous relationship with our clients, that positions us to independently and objectively assist them with their needs as they emerge.

Our strategy is simple. Clients who value our research programs or membership advisory programs will turn to our other offerings as those needs arise.

We believe we have made great progress to that end throughout the year and during our most recent quarter we have seen our offerings enriched and grow, and we see the leverage of our Hackett brand and our best practice intellectual capital expand each and every quarter.

Let me turn it over to Grant to provide details on our operating results, cash flow, and also comment on outlook.

Thank you, Ted.

I plan to review our financial results and operating statistics for the fourth quarter and then conclude with a discussion of our financial outlook for the first quarter. All references to revenue in my discussion will pertain to gross revenue, which includes revenue, including reimbursable expenses.

For the fourth quarter, our revenue was $44.7 million, including $2.5 million attributable to the REL acquisition, which occurred on November 29, 2005. Excluding REL, revenue was $42.2 million, which is up 25% from the fourth quarter of last year, and $1.2 million above guidance.

Our pro forma net income including REL was $1.9 million, or $0.04 per diluted share, which was within guidance. Excluding the impact of the REL acquisition, pro forma net income would have been $0.05 per diluted share.

REL had a small loss, and in addition we incurred integration costs that reduced pro forma net income by approximately $240,000, which was enough to decrease pro forma net income from $0.05 to $0.04.

Pro forma earnings exclude non-cash compensation and intangible amortization of assets, and include a normalized 40% tax rate. Our pro forma operating profit margin was 7%, a slight decline from 8% in the third quarter of this year, and an increase from 1% in the fourth quarter of last year. Our cash flows from operations were very strong, totaling $10.1 million.

On a GAAP basis for the fourth quarter we had a net loss of $270,000, which included non-cash compensation expense of $1.2 million, amortization of intangible assets of $562,000, and $1.8 million of restructuring charges. Restructuring charges which we previously announced on our November 30th REL acquisition conference call relate primarily to the consolidation of facilities.

The remainder of the previously announced total restructuring charge of $4.5 to $6.5 million will be charged to expense over the first half of 2006. Our non-REL GAAP tax rate for all of 2005 was 10%, which was offset in the quarter by a $230,000 tax benefit related to REL.

As of the end of 2004, at the end of 2005, the Company has approximately $76 million of U.S. federal loss carry forwards. As expected, the Hackett group revenue was up sequentially, benefiting from a strong momentum transformation advisory had entering the quarter and the continued growth of membership advisory revenues.

Both the business applications and business intelligence group were up slightly, despite the impact of fewer billable days in the fourth quarter. Business intelligence again benefited from continued strong growth in our Hyperion practice.

Breaking down revenue for the fourth quarter, benchmarking and membership advisory programs were $7 million, which represents a year-over-year quarterly increase of 20%, and a year-to-date year-over-year increase of 26%, driven by our membership advisory program growth. $2.3 million of the $7 million is membership advisory revenue.

Revenue from Hackett's transformation advisory group was $11.1 million, which represents a year-over-year quarterly increase of 35%, and a year-to-date year-over-year increase of 29%. Business intelligence reported $10.4 million of revenue, which represents a year-over-year quarterly increase of 43%.

Our business applications group reported $13.7 million of revenue, a year-over-year quarterly increase of 11%. From a sales perspective, benchmarking and membership advisory contract sales in the fourth quarter totaled $10.2 million, compared to $10 million in last year's fourth quarter.

The Hackett sales channel also generated another $9.5 million in fourth quarter transformation advisory program sales. Our membership advisory sales were up 28%, driven by our executive advisory sales, which were up 52%.

Revenue from the Accenture lines represented 8% of non-REL Answerthink revenue in the quarter, down from 10% the last quarter. Most of this revenue represents technology implementation services that are included in our business applications group.

Excluding REL, revenue from our top 5 and top 10 customers was 20% and 30% respectively, compared to 20% and 33% respectively in the previous quarter. Revenue from our largest customer was 7%, compared to 6% in the previous quarter.

Consultant head count excluding REL at quarter end was 620 compared to 601 at the end of the last quarter. Included in the consultant headcount were 63 subcontractors, which compares to 54 last quarter.

Consultant utilization was 69% in the fourth, up from 61% last year, driven by strong demand in the quarter and the increased usage of subcontractors. Our per hour realized billing rate was $191 this quarter, which is comparable to the $194 last quarter. This change is due to the revenue mix. We continue to see stable to improving pricing in the marketplace going into 2006.

Our gross margins excluding REL as a percentage of revenue were 39% in the fourth quarter, up from 36% in the previous year's fourth quarter. This was driven by higher rates and better utilization compared to the previous year.

On a pro forma SG&A basis, as a percentage of revenue, excluding REL, we were at 32% in the fourth quarter, which is down from 35% last year, and is also our lowest level of 2005.

Our cash balances including restricted cash and marketable investments were $32.3 million at the end of the fourth quarter, a decrease of $8.8 million from the third quarter. This decrease resulted primarily from the $21.5 million initial payment to REL, and was partially offset by cash flows from operations of $10.1 million, and REL cash balances of $4.1million, $3.7 million of which is restricted for the purpose of paying off REL's employee benefit trust obligation.

During the quarter we did not repurchase any shares of our common stock. At the end of the fourth quarter, $7.9 million was available for future purchases of common stock.

As expected, DSOs decreased from 86 days last quarter to 73 days this quarter, which contributed approximately $6 million toward the previously mentioned $10.1 million in cash flows from operations in the quarter. 73 days is in line with historic levels.

I would now like to discuss our guidance for the first quarter. For all of Answerthink, we expect first quarter revenue to be in the range of $48 to $51 million. Diluted pro forma earnings per share in the first quarter should be in the range of $0.04 to $0.06.

This pro forma estimate includes the normal tax rate of--normalized tax rate of 40%. Revenue for business applications and business intelligence should be flat to up slightly. Hackett will be up and REL will contribute approximately $6.5 million.

Revenue and earnings that REL contribute will add more seasonality to our future results as their business tends to be more back end weighted due to performance and gain sharing fees that are usually measured and earned in the second half of the year. Additionally, REL integration efficiencies are expected to be fully realized beginning in the third quarter of 2006.

Consistent with previous year's first quarter guidance, there is a substantial impact of FICA and unemployment taxes kicking back in, and the sequential build up in the vacation accrual. This had at least a $0.02 pro forma impact when you compare it to the fourth quarter.

In summary, we reported revenue growth across all service lines despite the impact of fewer billable days in the fourth quarter. We expect continued progress towards our target operating margins of 12% to 15% as our Hackett revenues continue to grow and once REL is integrated into the Hackett portfolio services in the first half of 2006, and we gain the SG&A efficiencies from the fourth quarter and first quarter restructuring charges.

At this point, I would like to turn it back to Ted to cover or market outlook and strategic priorities.

Thank you, Grant.

As we look forward, we continue to expect strong demand for the unique combination of offerings and value propositions that we define using our benchmarking intellectual capital.

If a client is interested in establishing base-line performance, they can turn to our benchmarks. If they desire continuous access to our data, research and advisors in pursuit of an enterprise performance improvement initiative, they can use our membership advisory programs. Finally, if they seek on-site strategic planning or best practice implementation assistance, we can support that as well.

In every case, we can offer companies unique data driven guidance that has proven it's ability to help reduce costs, improve working capital, enhance strategic alignment, which result in improved efficiency and effectiveness.

Overall we were very encouraged by the activity that we are continuing to experience across all of our offerings. Geographically, we continue to see the strong GDP growth and improved business spending reflected in our U.S. demand.

In Europe we see more volatile macroeconomic circumstances, and therefore we are more tempered about our expectations relative to that marketplace. With that as a backdrop, let me now comment on our strategic priorities and our progress in each area during the past quarter.

Of the last several quarters, we have been transitioning to an intellectual capital based business model, grounded in our benchmarking data, and our best practices implementation insight. At the heart of this pursuit has been our investment to build our Hackett group brand around a series of membership advisory offerings that fully expose our clients to our most valuable assets, our proprietary benchmark data, and the insight and know-how of our associates.

The strategies and metrics that come from our world leading benchmark offerings coupled with the unique best practice implementation expertise have become a hallmark of these programs.

As we head into 2006, our key strategies are as follows: To build our membership advisory programs to 1,000 members and 500 clients as quickly as possible. Given our brief history with these offerings, it will be two years in March, we are extremely proud and excited about our progress.

The client and membership count represent several opportunities to us. It means that our programs have rich intellectual capital and insights that our clients strongly value and rely on to make critical decisions. The client and membership targets also represent program scale that can drive very strong profitability to our business model. So we are eager to achieve the 500/1,000 target as quickly as possible.

This overall level of membership participation also defined a large and growing client base that clearly see us as strategic and trusted advisors. We believe that those users will also be frequent users of our complimentary benchmarking, business transformation, and best practice solution offerings. So we believe over time we will be able to ascribe and hopefully predict an increasing percentage of our total annual revenues to our advisory program membership base.

In order to further accelerate our growth of our membership advisory services, our 2006 sales plan will pay three times the commission rate for an advisory program sale when compared to a transformation program sale. We will pay two time the commission rate for a benchmark sale when compared to a transformation program sale.

Additionally, we have defined our commission accelerators around the achievement of membership advisory sales targets. All of these are significant changes from our 2005 commission and sales incentive plan.

Organizationally, we have dedicated more senior and also an increasing number of advisors supporting our programs, and the majority of our IT investments in 2006 will be focused on our advisory membership programs. We believe all of these actions will accelerate our path to 1,000 members from 500 clients across 12 programs.

Our second initiative is to further drive the importance of our advisory program strategy, therefore we are introducing a new delivery strategy we refer to as Advisory Inside. Most strategic consultants or advisors are unable to support their clients once an engagement or project is completed.

As we head into 2006, we have architected our benchmarking and implementation offerings to include the appropriate off-sight advisory program support that will allow our clients to have continuous access to our data, research, and advisors beyond the traditional on-site engagements.

This will also allow our clients to know that we fully understand that they need this type of strategic support beyond implementation related initiatives, and that we have developed a delivery strategy that recognizes how to efficiently support their initiatives.

Our third initiative is to continue to expand our best practice repository and implementation tools. We continue to see our clients and our alliance partners decision to team with us directly attributed to the proprietary best practice implementation content and tools.

The objective of our best practice implementation tools is to help clients define their performance improvement opportunity and to help them make smarter business process and software configuration decisions that allow them to realize targeted results.

We are now looking for ways to increase this access to this unique intellectual capital, as well as to expand the content to cover broader global sourcing information and to look for ways to develop it across targeted industry verticals.

Our fourth initiative is to create incremental revenue and intellectual capital channels through strategic relationships, that help us leverage and expand our Hackett intellectual capital base as well as grow our revenues. Accenture and Lawson are great examples of this, and we continue to believe that there are other organizations that we believe can help us grow revenue and our intellectual capital consistent with our strategy.

Our 5th initiative was to expand our dual shore capabilities. In November of '04, we opened our new facility in Hyderabad, India. As we have mentioned throughout the year, we have continued to expand the leverage of this facility to support not only our business applications, group implementations, but to also support our Hackett group delivery, and internal software development efforts. We are continuing to expand the leverage of this important talent pool.

Lastly, we continue to believe that our unique Hackett access and our intellectual capital coupled with our strong balance sheet and infrastructure can be utilized to support a growing and larger services organization.

Our focus and goals remain unchanged. Acquisitions must be accretive, have growth--have strong growth prospects, but most importantly, they must have strong synergy with our intellectual capital and strategic advisory offering focus. Although the REL acquisition will temper our short-term expectations, we will continue to keep an eye on organizations that can help us accelerate our strategy.

In summary, we believe that our intellectual capital and strategic advisory services focus provides us with a unique set of value creation opportunities. Accordingly, we continue to be excited about our strategic positioning, the progress we continue to make, and with the opportunities that it provides all of our associates as we look forward.

Let me close by recognizing our associates. They are passionate about our business model, and the value they deliver to our clients, and continue to make noticeable contributions across our strategic initiatives. I want to thank them and recognize them for their outstanding effort and their spirit.

Let me now open it up to Q & A.

Thank you, at this time, we would like to begin the question and answer session.

[OPERATOR INSTRUCTIONS]

Our first question comes from George Sutton with Craig-Hallum.

Hi, guys, nice job on the quarter.

I wanted to start if I could with a couple of things you mentioned on the call that were somewhat new informationally, and just make sure I fully understand them. Number one, you talked about the REL acquisition, and how there's more back-end weight to their results as the year goes on. If you could just explain that a little bit more.

And then secondly with respect to the commission accelerators that you talked about, can you give us a sense of how that might impact margins, and what sorts of things should we be looking for to measure that success?

First of all, on REL, the nature of their working capital, focus and business, clearly tends to drive a number of very significant engagements where clients establish cash flow targets. Normally that would be close or closer to the year end, or whenever they report their overall financial results.

So we expect to see, as we saw this year, a revenue that would increase throughout the year, also I'm going to call it peppered, or even significantly impacted by performance fees or gain-sharing fees that are only realized when any gain contingency is eliminated.

So a combination of both the way they do business, and also the measurement base that drive some of their most significant implementation engagements, we expect to drive the--their impact on our overall results as the year progresses.

And, Ted, these are contractual, these gain-sharing and performance fees are somewhat contractual, and thus we can look to a form of a pipeline, I would assume?

Yes, you would engage--you would agree to a contract. The contract would have what we would call a contractual rate. The engagements would then set targets on let's say receivables, payables, or inventory, and as those targets are achieved, pretty significant performance fees can then be recognized under a U.S. GAAP basis. So they would be fully contractual, and defined to a very high level of detail in the implementation contract.

So given your strong DSO improvement in the quarter, and I assume REL had something to do with that, are you actually going to owe them a fair amount of money at the end of this?

Believe it or not, I really have to give all of this credit to Grant and our back office group and the project manager that Grant was working with. Having said that, I will tell you that we have--we have taken up REL in their offer to help us look at our total process to see if we can bring our historical DSO levels to much lower targets, and we look forward to pursuing those throughout the year. So, yes, we will-- what we sell or--we believe the the value they bring to the marketplace, and we have engaged them as well.

The 73 days, George, was excluding REL, so prospectively, we, as Ted said, we'll look to reduce that number forward.

Yes, you would expect the averaging down number to come down when we include their receivable number, and then hopefully we will see some impact from some of the initiatives that we identify with them impact the non-REL receivables throughout in entire Answerthink and Hackett organization.

And again could you address the commission acceleration that you discussed?

That has really two--two significant points that I think are worth mentioning. And one, there is no doubt that we're seeing a very significant impact of integrating transformation into the Hackett channel, and we're seeing, also, the level and number of programs that have come from that strategy really manifest themselves really beautifully.

Having said that, we also know that we want to make sure that we overemphasize or properly emphasize our membership advisory programs throughout the organization because of how they define our overall strategy, and we also wanted to properly incent and define the commission or incentives that we are paying for our benchmarking offerings, because they provide very rich and meaningful intellectual capital to our organization.

So we basically said, as compared to 2005, we will pay three times the commission rate for a advisory program sale, and two times the commission rate for a benchmark sale compared to transformation, and that is to make sure the entire organization, but most importantly our sales channel understands how important it is for us to continue to aggressively grow our membership advisory program base.

Additionally, this is also very important, our 2005 sales programs had accdelerators, but those accelerators were defined simply on total volume sales that qualified for commission, and we changed our program now to define those accelerators as being defined, or primarily defined, by the achievement of a minimum amount of membership advisory sales throughout the year.

We think it will have--we think this will have a fundamental and meaningful impact to our strong desire to grow that membership advisory base. Obviously we want to get to 500 and 1,000, but beyond that, as quickly as possible.

So that was a significant change, dedication of more senior people to advisory programs on a full-time basis, and just where our dollars are going, because there's no doubt that our--this is our newest offering, it's less than two years old when you look at when we released all of these programs, one in late '03, but most really in the the middle of '04, and we want to make sure that the total organization understands how important it is to our overall strategy, and we want to properly incent the growth of those programs, and we're really looking forward to seeing the kind of impact that it will have on our '06 growth, and more importantly when you look at how profitable those programs are as they get the scale the impact it can have on our '07 results.

Perfect, thanks, guys.

Our next question comes from Jeff Meyers with Intrepid Capital.

Great, thanks. A couple of questions.

First is just a follow-up of George's question. If you look at the gross margin line what percent--what percent of your cost of goods sold is the sales commission? Is it sort of a small percentage, and is doubling it going to make a difference, or is it a big piece and we could see sort of lower margins based on that?

Jeff, this is Grant.

Commission is actually in the SG&A line item, so it does not impact cost of sales in any way. The cost of sales did go up a little bit and margins were down slightly, but I think that was more a function of the fourth quarter, the fewer billable days, and the higher usage of subcontractor supplements for the fewere billable days.

So that same question just at the SG&A line, what percent of your SG&A line is sales commission, and do you expect that to tick up significantly, given the new accelerators?

Well, first let me say that we believe that we have one of the best paid sales channels in the country, and we're delighted to have that, because we know that we're attracting new and more talented people every day, and it's nice when you actually get calls from talented sales executives, versus having to go out and seek them.

Having said that, as we architected our 2006 plan, we made sure of two things. One, that the--that we were driving the right behavior based on where we wanted the growth to be realized, given the impact on our overall business model, and two we wanted to make sure that our overall sales cost as a percentage of revenue, did not increase, and we believe our new sales plan will accomplish both and continue to strongly reward all of the individuals involved with sales activity, within our organization.

Got you. Okay, and then on the Hackett side. I think you might have mentioned this during the script of the call, but maybe you could just give the break out of Hackett sales this quarter between membership advisory, executive advisory, if you could break that out, and benchmarking, and then also the--I know you usually give out good bookings breakout by that same breakout.

From a sales perspective, we said 10.2 million of benchmarking and advisory sales in the the quarter. Roughly 50% was advisory and 50% was benchmark. On the revenue side of the total 7 million for membership advisory and benchmark, 2.3 million was membership advisory.

Okay, and then within that, do you guys give out the executive advisory piece, or --

The reference--we said that the executive advisory piece, which we've never gone to that level of granularity, but we said the executive advisory programs grew--did we say 52%, Grant, in your script?

52% in a year-over-year basis, so you're seeing both the client and membership count of executive advisory continuing to grow as we transition and/or reposition some of the process level advisory programs which as you know, Jeff, sell for a significantly lower amount than this C level executive advisory program.

Right, and maybe you could just stalk about the dynamic, the benchmarking and membership advisory were sort of flat sequentially, is that a mix issue that where you guys do that or maybe you just sort of talk about that a little bit?

No, we want it to be higher and we want it to grow stronger. Having said that when we--we believe that some of that has to do with the incentive that we had in place and simply how that focused some of our people, but we think the--as we look into '06, when we look at the scale of those programs and how they continue to grow quarter-over-quarter, and when we look at how we now significantly change the way we compensate and incent our sales channel to position those sales over others, when we--when we look at the fact that we have another year under our belt with these programs, that clearly clients are turning to us on an increasing basis to gain access to our data and insight, and that's why I wanted to make sure that we didn't--we didn't lose sight of the fact that in addition to those $10 million, we had almost another $10 million of transformation advisory program sales that we do not count--that we count and report under business transformation and don't report under membership advisory, just because of the way we--those programs are executed.

But when we look at the overall productivity of our sales channel, we look at the fact that we have the client participation increasing, everything we're doing around those programs improved and we see the alignment of these sales incentives, I--again, to me the question is not--to me the question is only how quickly we get to 1,000 members across 500 clients, and across these 12 programs, and I think you will see that both manifest itself in sales increase year-over-year, and eventually since those programs are amortized either over 12 or 24 months, you'll see that manifest themselves in both revenue and margin growth both throughout '06 and clearly very significantly when we sit there and model it out into '07.

Great, thank you.

Our next question comes from George Sutton with Craig-Hallum.

Hi, guys, just a couple of follow ups. The--if we were to look at Hackett sales coverage today, and that would obviously be combined with the REL folks, versus a year ago, can you just give us a sense of the numbers and the change?

I would say that we're--it will, the sales channel will probably increase by about a third overall. More importantly, when we look at the success of our--of our sales throughout '05, and we see that we still have quite a bit of improvement when we look at the effectiveness of the total sales force, again on a total basis, so we're getting very high productivity, let's just say from a certain level of executives.

When we look at how that--those executives get--with that kind of performance moves all the way through to the median or average of that sales channel, we see very significant upside, George.

Okay, one thesis we certainly haven't had with respect to the overall story is that ERP, whatever, turn around, and it looks like ERP has started to turn around. Can you talk about what you're seeing in that specific area?

Well, first I've got say that our leaders in those groups have really done a terrific job at not only stabilizing the business throughout late '04 and early '05, but the whole team continues to get better at leveraging how we go to market, and that is our intellectual capital our best practice implementation tools, being we don't differentiate ourselves based on scale or on rate. We differentiate ourselves in those areas because we believe we address the software configuration decisions in a smarter way, given the content and tools that we have.

So when I look back at what's happening partially and no doubt Accenture has helped us grow those businesses somewhat, but you're right, when we look at '04, Accenture was down a little bit, and those businesses continued to grow pretty nicely, so we're doing quite a bit of this ourselves on an increasing basis. And I thinks the biggest change is the number of software implementers within our total ERP base that understand how to leverage our best practice implementation tools to sell them to clients, which allows us to get new engagements, and at--I'm going to say in many cases improving rates.

Okay, great, thanks.

[OPERATOR INSTRUCTIONS]

Do we have anything else?

Currently I'm showing there are no additional questions. Mr. Fernandez, I'll now turn the call back over to you.

Thank you so much. As as always, let me thank everyone for participating on our quarterly earnings call, and we look forward to updating everyone again when we report our first quarter results. Thank you again for participating.

Thank you for joining today's conference. You may disconnect.