Harte Hanks Inc (HHS) 2012 Q4 法說會逐字稿

Good day, and welcome to the fourth quarter 2012 earnings conference call hosted by Mr. Larry Franklin. (Operator Instructions).

At this time, I would like to turn the conference over to Mr. Larry Franklin, Chairman and CEO. Please go ahead, sir.

Thank you very much. On the call with me this morning is Doug Shepard, our Executive Vice President and Chief Financial Officer, Robert Munden, Senior Vice President and General Counsel, and Jessica Huff our Controller. Before I begin with my remarks, Robert will make a few comments.

Thanks, Larry. Our call may include Forward-looking statements. Examples may include statements about our strategies, adjustments to our cost structure, financial outlook and capital resources, competitive factors, business and industry expectations , litigation developments and regulatory changes, the economies of the United States, and other markets we serve and other statements that are not historical facts.

Actual results may differ materially from those projected or implied in these statements because of various risks and uncertainties including those described in our most recent form 10-K and other filings with the SEC and in the cautionary statement in today's earnings release. Our call will also include non-GAAP financial measures. Please refer to today's earnings release for the required reconciliation and other related disclosures. Our earnings release is available on the investor relation's section of our website at harte-hanks.com. I will now turn the call back over to Larry.

Thank you, Robert. Before talking about our individual businesses, a couple of comments about overall Company results. In my remarks, I will be talking about financial performance from continuing operations meaning income without the results of the Florida shoppers, without the loss on the sale of the Florida operations that we closed on December 31, 2012 and without the Shopper Goodwill Impairment that was taken in the second quarter of 2012.

While definitely not where we want to be, we are pleased with the results for the quarter. Revenues decreased 4.8%. Operating income was down 10.1% and income from operation was down 6.3%.

And EPS from continuing operations was $0.23 compared to $0.24 in the fourth quarter of 2011. Doug will provide much more detail about EPS in his comments after I add some detail about the performances of our two businesses.

First, Direct Marketing. Direct Marketing was restructured in August 2012 around customer engagement and strategy, customer solutions, and customer delivery. I could not be more pleased with the aggressive yet thoughtful way Jeannine Falcone, Tony Paul, Brian Dames, and Andrew Harrison have approached transforming this business.

And by the way that our people have embraced the changes which are now woven throughout the 2013 operating plan. These changes we believe more closely allowed our conversations and solutions with the way our customers are thinking about their businesses. Before adding more detail about each of our vertical markets , I want to emphasize that the overarching goal of what we have been doing and continue to do is to drive profitable revenue growth from new logos and growth from existing accounts , and we mention four ways in the press release that this is being done, and I want to just reemphasize those again.

The first is the deployment of a new integrated marketing sales product design and delivery process which more tightly aligned with our and our customers' businesses. Also a new approach to the pharmaceutical market with our new agency, True Health and Wellness, launched in October. Implementation of a new digital print capabilities and continued development of the Trillium software solutions for the insurance and financial markets. Looking at each of the verticals, first financials, up 7%, performed well in Q4.

For our financial clients, change in regulations has reduced revenue from below balance deposit accounts and therefore banks are focusing on attracting and growing more affluent customers to increase profitability. Financial services companies have placed more emphasis on multi channel customer marketing to improve their customer experience across all channels, to reduce marketing costs and improve and improve ROI. This is particularly true for midsized banks which is where we continue to focus. Pharma in Q4 was down 29%.

Pharma is a particularly difficult vertical for us at this time with the loss of a significant client from an agency consolidation that took place midlast year and that we discussed in the third quarter. We will obviously face this headwind for the better part of three quarters in 2013. However, we recognized about 18 months ago that the Pharma market was in the midst of a seat change and pharmaceutical companies are now reevaluating brand and life-cycle management. They are reevaluating their sales team design and incentive, physician and payer relationships and social media campaigns.

The shift of the pharmaceutical industry from one based on the blockbuster drugs to one based on smaller niche Madisons is affecting not just company's R&D strategies, but also how the companies are marketing their drugs. Pharmaceutical companies are looking at marketing strategies earlier in their pipeline with drugs in the midstage development rather than waiting until the late stages as they did 10 years ago. This gives companies extra years to shape and condition the market.

As it impacts our business, it means they will look for agencies and marketing services sooner and expect more of them as it relates to helping shape the brand. Our launch of our new agency True Health and Wellness was built specifically for those reasons. It's early, but we are encouraged by what we are seeing at True.

With healthcare form, millions of consumers will be offered new government subsidized health insurance from private insurers beginning in October, and the private health plan companies are gearing up their marketing and operations capabilities rapidly. New healthcare legislation like this has historically provided revenue growth opportunities for outsourced marketing services providers. We expect current Harte-Hanks customers to grow their engagements with us across agencies, database, and contact center.

We also expect additional project revenue from already contracted customers who need last-minute marketing services. We believe the opportunity to capture new customers will come after open enrollment meaning the Spring of 2014. In the press release, we mentioned the agency inside Harte-Hanks was named a strong performer in a new report from Forrester Research titled the Forrester Wave, Customer Engagement Agencies. That recognition was received in the fourth quarter, and we are proud of it,our people and the organization were receiving such a distinguished mentioning .

High-tech , 10% down reflecting the same challenges mentioned in Q3 as the international economy and as our high-tech clients operate on a global basis and volume reductions from a context center client. Technology clients are continuing to buy solutions surrounding the use, implementation, and enablement of marketing automation systems. That translates to a range of solutions for Harte-Hanks. Mason Zimbler our B2B Agency starting with strategic agency of record engagement, moving through executional solutions like demand generation campaigns and programs that leverage our agency and contact center solutions and then on to the operational infrastructure solutions, wherein we provide managed services , resources to drive global standardization and optimization of these new marketing technologies that our clients are deploying.

Social media opportunities are increasing linked to sales enablement, helping our customers keep -- helping our customer's sellers keep in contact with their prospects. Unfortunately in the high-tech sector, almost all of our clients are generally unwilling to go beyond quarter to quarter commitments. Retail, our largest vertical was up 1% in the quarter. We have talked now for a year about JC Penney's negative affect on our performance, yet the Retail, again our largest vertical has performed very well on the strength of increased business from some of our largest clients.

The implementation of our digital print capabilities will change the conversations we have with our direct mail customers and prospects certainly in Retail, but also in other verticals. We are deploying a new approach , a new go-to-market approach integrating front-end strategy with self-support and structure, and then execution on a new digital print technology. Early returns again are exciting. Select Markets down 8% .

Consumer Markets, multichannel marketing continues to be the focus with changes in media mix to reflect changes in consumer behaviors. The shift of spending and traditional and digital channels, we expect obviously to continue into 2013. That means the traditional Direct Marketing segments continues to be modest growth, mobile-posted larger growth actually than expected in 2012. E-mail continues with steady growth and allows for cost- effective targeting.

Our focus on multichannel consumer engagement continues to position us well to capitalize on these trends. We had a number of new digital deals in the fourth quarter. They were mostly in cross sales to existing clients. International. International accounts for about 15% of our revenue which had been organized around business units. In the new structure the alignment is to customer engagement and strategy which brings our B2B agencies and sales of marketing into the customer engagement strategy initiatives here in the U.S.

Customer Solutions and Customer Delivery. Customer Delivery International is primarily in the contact center BPO area. We believe this new alignment will improve financial performance and also provide better service and increase opportunities for growth. Within Customer Solutions, our recently formed product development R&D group is working on some exciting initiatives that should payoff in the future with even more competitive offerings and stronger market leadership.

Trillium continues to be recognized as a strong leader in the Gardner's Magic Quadrant space for data quality tools, and we continue to invest in our solutions which broaden its reach into its customers in the financial and insurance markets. Again we are optimistic about the payoff from these changes. We are seeing some initial results, and in the second half of 2013, we should see additional revenue again from new customers and existing customers and that is when we will see the impact on our overall operating results.

We have some great people doing great work. Shoppers. Shopper revenue for the quarter was $47 millionfrom continuing operations. This is the last time I will say that in these comments for the quarter and that was revenue up 8%, 8/10 of a percent.

Sure is good to just be able to say up. OI for the quarter was $1.1 million or $2.6 million excluding the $1.3 million charge for the closure of the Northern California production facility.

Great performance and good to see for our people. Some color on revenue. Real estate was down midsingle digit. That was our best performance in several years. The Fraud Services category declined low double-digit which was an improved pace over the previous two quarters school still is a problem there. Consumer spending grew low double digits during quarter 4 after declining the previous quarter.

Automotive grew for the fourth consecutive quarter. Communications declined midsingle digits and for product types, ROP our in-book advertising was down,distribution was up, and

Web products were up, revenue from web products were up. Sales both in-book and distribution products from each of our three primary sales group, inside sales, outside sales and majors improved year-over-year in Q4 compared to Q3. Power sites, the centerpiece of our web strategy again had double-digit revenue growth following the restructuring of our Web unit in Q2 of 2012. Full attention has been focused on growing power products and ways to improve their effectiveness and to make them even more effective for our print advertisers is moving forward. Our new leader in Web is doing a terrific job.

Turning to cost, experiences were flat in Q4 compared to the prior year as mentioned previously. That includes a $1.25 million or $1.3 million charge for the anticipated close of the Northern California production facility and the move of those activities to our three Southern California production plants. Posted rates are up 2.2%.

Newsprint rates increased .6%. Labor expense is down due to the restructurings that have taken place over the last few quarters. Repeating what we said in the press release, while we are excited about Shoppers fourth quarter revenue and operating income growth, we continue to face challenges with the California economy which along with increased postage expense will continue to affect our financial performance.

We expect Shoppers revenue and operating income in 2013 compared to 2012 to be down slightly which is a significant improvement in trend compared to the experience during the past few years. Our people continue to look for ways to make our products and services more effective for our advertisers and to deliver those services more efficiently. I am very proud of the people in both of these businesses who are managing a great deal of change and doing it extremely well. Our Company has a very bright future. Doug?

Thank you, Larry. Good morning. Let me start off with what are hopefully some clarifying statements about the earnings table included in our release this morning. With the sale of our Florida shoppers operations as of December 31st, the results of operations for Florida and the loss on the transaction have been included in discontinued operations on the P&L.

For the analysts who follow us and want to compare their results to your models which included the Florida operations for the fourth quarter, you should start with $14,343,000 reported as income from continuing operations on the P&L and adjust for the following three items, deduct the $931,000 fourth quarter net operating loss for the Florida shoppers operations reported within discontinued operations. Second deduct approximately $2, 200,000 of nonrecurring tax benefits That is recognized in continuing operations within the line item income tax expense that is also related to the sale of Florida operations, and finally add back the $750,000 after tax charge for our production facility closure. This all would net to roughly $11,980,000 or approximately $0.19 per share.

Earnings per share for 2012 by quarter after removing the Florida operations and the second quarter impairment charges were first quarter $0.12 second quarter $0.12, third quarter $0.15, and fourth quarter $0.21

For clarity purposes to get to the fourth quarter$0.21 per share, all I did was add back the $931,000 Florida shoppers fourth quarter after tax operating loss from the previously discussed $11, 982,000 or $0.19 per share.

Moving on to the Company-wide overview of the fourth quarter. Consolidated revenues for continuing operations decreased 4.8% Direct marketing decreased 6.3% and Shoppers increased 0.8% for the quarter. This was the first quarterly revenue increase for Shoppers since the fourth quarter of 2006.

Consolidated operating income from continuing operations decreased 10.1% for the quarter, direct marketing declined 8.2% while Shoppers increased $1.6 million excluding the facility closure charge.

Consolidated operating income margin was 10.8% below last year's fourth quarter of 11.4%. For the quarter, our free cash flow was $13.3 million versus $16.2 million in 2011.

For the year, our free cash flow was $45.5 million versus $47.4 million. We spent $5.5 million on capital expenditures this past quarter compared to $4.6 million in the fourth quarter of 2011.

Turning to the businesses. In the quarter Direct Marketing revenue decreased 6.3% and operating income decreased 8.2%. Operating income margins were fairly consistent at 15.5% compared to a margin of 15.8% in the 2011 fourth quarter.

Direct Marketing results continue to reflect the impact of JCPenney changing its marketing strategy from direct mail to broadcast with a reduction in mail services contributing about 20% of the total decline. Our pharmaceutical healthcare vertical declined 29% and was impacted by volume reductions from a longstanding client and a loss of a client discussed in our third quarter results. Our financial vertical increased 7% compared to the prior year quarter and our Retail vertical increased 1%.

High-tech experience a 10% revenue decline and our Select vertical declined 8%. In the quarter, our Retail vertical market represented 33% of Direct Marketing revenue,High-tech was 23%,Select markets were 23% and Healthcare Pharma was 8%. Financial is 13%.

Our top 25 Direct Marketing customers represented 47% of Direct Marketing revenue for the quarter. Shoppers fourth quarter revenue from continuing operations increased 0.8% and operating income increased $1.6 million if you add back the shutdown of costs incurred in the quarter.

As previously mentioned, this was the first quarterly revenue increase since the fourth quarter of 2006. Revenues increased for our distribution products and decreased for our print products. Postage rates increased about 2.2% for the quarter and newsprint rates increased 0.6% during the quarter.

Our third quarter effective tax rate was 29.3%, but this includes a nonrecurring tax benefit in continuing operations related to the release of a Florida valuation allowance. For 2013, we expect our effective tax rate to be approximately 40%.

Our total debt balance has been reduced by $69.2 million to $110.3 million compared to $179.5 million at the end of 2011. Our net debt at the end of the quarter was $61 million versus $93 million in 12/31/2011, a reduction of $32 million. We currently have $70 million available under our revolver, excluding outstanding letters of credit, in addition to a cash balance of approximately $50 million at the end of the quarter.

We continue to have a strong balance sheet with low debt leverage ratio and plenty of liquidity. In the fourth quarter, we repurchased approximately $2.4 million of stock under the $10 million stock repurchase authorization put in place last August. Our ability to purchase shares was hindered during the quarter due to the timing of our earnings announcement in negotiation with the Florida shoppers transaction. We have about $5.6 million remaining in unused authorization.

We will update you on our first quarter repurchase activities during the next earnings call at the end of April. Finally, in the fourth quarter, we paid our regularly scheduled dividend and accelerated our first quarter 2013 dividend and paid it before year-end. With that, operator, we will turn the call over for questions.

Thank you. (Operator Instructions). We will go first to Michael Kupinski with Noble Financial.

Thank you, and thanks for taking the question. The retail vertical showed remarkable improvement in the quarter despite JC Penney, and I was wondering especially as you cycle into the first quarter which also showed growth year-over-year last year. Do you anticipate that this vertical will show improvement in the first quarter 2013? What are your thoughts on how is it looking? And maybe just in terms of JC Penney strategy, are you seeing some of the business coming back a little bit?

Mike, I don't believe -- we don't believe that there will be much change. The retailers, it has been pretty well publicized. They had I guess I would call it a mediocre holiday season. We don't expect to see any significant improvement and/or significant decline. It probably be flattish for the next quarter or two would be our anticipation.

Yes, in Q1, Doug, weren't we were having the benefits of some new business that was sold the previous year that was still -- we weren't cycling against. The question on JC Penney, they have and as we mentioned in previous quarters they have been adding back some business. They are still not close to where they were and won't be. We don't have -- we should not have the declines that we have reported this year for sure.

And in the press release you indicated that you are looking for growth in revenues and operating income, and obviously you provided the earnings pro-forma basis. Can you provide the comparable on the revenue basis that you are basing your expectations on? I assume that is a pro-forma number or what are you working off of there?

The only pro-forma number for revenue will be in the Shopper category and the comment about increase -- slightly increased revenue was directed at the Direct Marketing business range.

Great. Thanks for the clarification. And then is there anyway to frame the revenue opportunity that you may have regarding the prospects from the healthcare open enrollment that you indicated in 2014? What your thoughts are on that.

At this time with everything that is going on with government in industry it is still very unpredictable. We definitely see an opportunity as Larry mentioned in his comments. A lot of these insurance and healthcare companies are going to have to aggressively go after consumers and customers and with our consumer brands and retail background we have a lot of marketing experience and expertise that we can bring to the insurance industry that hasn't had to deal with this in the past, but even the healthcare companies will tell you right now they are having problems projecting what they are going to be dealing with and what the size of the opportunity is for them over the next really 12 to 24 months.

And my last question in terms of the improvement in the California Shoppers business, can you just give us a little color on what the key drivers there? Is it all real estate at this point? Are we starting to see a broadening of the advertising categories or can you give us an idea of that -- the improvement there?

The improvement in the fourth quarter was more driven by the vertical consumer spending and that is what it is where - -the furniture and - -

Home goods.

Home goods, yes. And it was driven by distribution products. Our major accounts sales has had just a terrific quarter and have had -- actually have been building throughout the year. And we are getting some benefits from that performance. It was reasonably well broad based in some of the other FFE areas, but still some softness obviously and down in a number of those categories. We are cautiously optimistic. We are just very pleased with the performance in the fourth quarter.

Great, thanks, guys.

Thank you. We will go next to Carter Malloy with Stevens.

Hi, guys this is actually Ben on for Carter. First, can you talk us through what the main drivers will be behind a return to growth in the Direct Marketing business over the next four to six quarters or so?

That is what we are outlining a few of those in the release there. The thing that is really going to drive the growth is gonna be the more integrated approach to the way we go to market and that is what we have been talking about since this restructuring took place. So that we have got our capabilities, our people, our solutions lined with the way that our customers have to deal with their marketing challenges. So it will be a number of different things. Also the new R&D group will be looking at a number of our processes and how we go to market with some of our solutions.

We will be taking -- those have been done generally in the various sectors of the business. So whether it was in mail database, direct and agency, and now it is an integrated approach to how we develop products and solutions that cut across all of those boundaries. A lot of it is focus , but it is simplifying the organizational structure more aggressively going after the opportunities that we see, and also really improving our whole sales and marketing strategy and approach. So a number of different things, and we will be outlining those just like we called out a few of the initiatives in this report.

Thanks. And then from more of a strategic standpoint, how do you think of the rest of the Shoppers properties?

They had good performance in the fourth quarter. The product works, and our people are now veterans and looking for ways to deliver more efficiently and effectively those services to our advertisers. So we've got a plan in place for 2013.

Great, thanks, guys.

Thank you. We will go to Edward Atorino from Benchmark.

Thanks. Are you going to give restated numbers for the Shoppers for 2011 without or should we just deduct the same number backwards? We have the old stuff in the first three quarters, and out of the fourth quarter -- what is the base of the first three quarters?

Yes, Ed, we will take care of it. It will be published in our 10-K. It is a relatively straight forward thing to do.

But estimated just take the same number out I guess?

Yes, it will be pretty close.

Secondly, Larry, on the Direct Marketing another company I follow had some difficulties similar to yours in businesses like this. It seems like it is more than just cyclical. In listening to your commentary it seems a lot of customers are used to doing it one way or finding new ways to do it and either are postponing using your services to find other places and you are having to adapt to their new strategies I suppose.

A- Is that sort of -- am I on the right track there? Secondly, and in view of what is called the unsettled environment could this stretch out the recovery a little bit? Is there anything you can do or are doing to get ahead of the curve in those news strategies that these companies are doing?

I think your comments were right on target. There remains a lot of uncertainty in the market place. Again back to the way we are looking at addressing the market today with both our people and our systems and our products. That's why we are doing it.

How do we get out ahead of what is next for these companies?The environment is still as you pointed out, it is uncertain for sure. It is better than it was. And we have some opportunities , but we will continue to have these challenges. I think your explanation of it is right on target.

Is there a pricing issue? Are companieslooking at what you used to charge or as many businesses are saying we want less. Is there a pricing or different way you are going to be able to build to maybe get people to spend money? Do you know what I mean?

What we want to do is we want to look for ways to deliver some of our core capabilities more efficiently so that we can have the resources to build on new solutions and get those bundled in and be able to show our customers that they are getting increased return on their investment, but with that said yes, our customers look at price very carefully.

Last question, could you sort of give us an overview of the one quarter trends, first quarter trends and the key verticals? I don't know if you went through that in your comments..

Yes, we did. We talked about that.

I will go back and listen to it. Thanks a lot.

Thank you. We will go next to Dan Salmon with BMO Capital Markets.

Good morning, guys. Spent a lot of time on the Retail vertical. I was curious about the technology and the high-tech vertical and what trends you are seeing there. It continues to be weak, but as you get over the hump here with some of the restructuring maybe your outlook for that vertical for the year.

And then likewise, again in that spirit of getting through some of your restructurings and having your plan in place for this year is any change in your view on the M&A market? You have a lot of dry powder on the balance sheet and it has been a little while since you engaged that. Just wondering if there is anything to highlight in terms of potential use of free cash there?

Well, I will start off with our high-tech vertical as we have talked about in these -- in this earnings call and the last one. A lot of our international business is high-tech dependent, and so is a good portion of our domestic business. A lot of our weakness comes on the B2B B-generation sideof our work. Trillium has continued to be a wonderful product for us, but it has also been impacted somewhat by some of these high-tech companies and the uncertainty that is out there with them putting off decisions as Larry said in his remarks.

We do see a trend where these folks aren't telling us that they are going to reduce their budgets or they are making strategical changes or anything of that nature, but we definitely see them putting decisions off, not willing to make commitments, at least at this point for now. A lot of that again is market uncertainty, economy, things of that nature. We expect that to continue here over the -- especially in the first quarter going into the second quarter specifically with high-tech. As far as the M&A side, I have talked to several of you. I think, Dan, you and I have talked about this before.

We have a strong M&A history. We are open to M&A transactions, but like everyone else you want to find the right assets at the right prices and sellers always have different expectations. So it is a matter of going through the process of finding the right asset becauseonce you buy that thing you are operating it . Acquisition is a lifetime event for the buyer. So we try to be very careful and make sure that we are buying the right assetsfrom a strategical standpoint, from a client-delivery standpoint.

Thank you.

Thank you. We will go next to [Shoba Narasima]

Thanks for taking my call. High-tech market basically this quarter a lot of high-tech companies they did better. Do you -- I know you mentioned that they are kind of going quarter to quarter. In that case, are you seeing better marketing for the next quarter?

No, I mean, like we said, despite their performance we are working with them on a going forward basis, and we don't see them willing to commit to marketing spends right now to increases in their marketing spends which is what you would see in our results, the changed that they are making not necessarily reflective of the current results, but are they going to spend more marketing dollars and things of that nature.

Thanks.

Thank you. We will go next to Sean O'Malley with Wedge Capital.

Hi, good morning. A couple questions. First off, have you received the cash yet from the closing of the Florida Shoppers deal?

No, we have not. That was a note that we issued for that transaction and there are some tax benefits associated with it for us. But there is a note that we received with the transaction will be paid off over time.

And the transaction itself, could you give us any insight as to the genesis of it? Was it something where the buyer had an interest in the asset and they came to you or was it something that you are looking to get done?

A combination of both.

And regarding the commentary on the expectations for Shoppers looking into next year of slightly down operating income. I presume that is on the adjusted continuing basis. Is that about the $3.4 million number from 2012?

Well, the commentary was slightly down in revenue and operating income.

And yes it was on the continuing operations.

So is that the approximately -- I have it $3.4 million for 2012.

$3.4 million of what? EBITDA?

I'm sorry. adjusted adjusted operating income.

I believe you are a little low, but that is-- on the number that you believe you picked up, but the comment that applied to the continuing operations like we said for revenue and OI.

Got it. And switching gears to the Direct side, with the start up of the True Health and Wellness agency just having occurred in the last several months, can you give us any comments or reflect back on what the reaction is to that being a new agency in the market place from the customer community.

Well, as you know a new business in any area is a process that takes time to not just plan, but also to execute. And the reaction meaning are people interested and excited about some of the things we are talking about, absolutely. We are getting some good audiences , but it takes time to get the ultimate signed orders. It will be a process that will take place throughout the year and going forward and at this point we like what we are seeing.

Okay, good. Well congratulations, guys. Looks like we are finally looking to a view around the corner here. So thank you.

(Operator Instructions). We will go next to Michael Kupinsky with Noble Financial.

Thanks. I just had a quick follow-up to the high-tech question. You mentioned that the international is about 15% of Direct Marketing, and I was just wondering if that was commentary for the year or for the quarter? And if you could just remind me because if I recall the contributions from international looked like it was going up, and I was wondering outside the high-tech market which I thought was the majority of all the business internationally , is there any other category that you have related to the international marketplace?

The -- when you said the contribution had been going up --

As a percent of total to the Direct Marketing from the international operations.

It did a couple years ago because we had a small acquisition. That could be part of it. But the other services -- the industries that we serve there are predominantly high-tech, but we also -- we have some consumer select markets, consumer brands -- it is really consumer brands and high-tech.

And outside of high-tech internationally, Larry are the other verticals growing?

Most -- I mean, no. Across the board most are not in that hour. When we talk about our international operations you are right it is roughly 15% of the Direct Marketing revenues. But the trend has been relatively flat to slightly down, and I am talking six to the last 12 months. So it in the mix has not significantly changed. It might have changed a point or two in either direction, but it hasn't gone from 10% to 15% in the last 12 months.

We talk about the high-tech challenges that we have, but we have a blue ribbon list of clients in high-tech. Revenue went up and down a little bit, but we are very important to the execution of the legion activities for a lot of our clients.

We are not -- we said this before and it is very important. We are very proud of the client list, and we are not talking about clients we lost. We are talking about spending decisions with clients who have a long-standing history with us.

And I guess the question would be in terms of domestic versus international in the high-tech vertical, any divergences between the two or are they performing pretty much similarly both domestically and internationally?

I would say they are performing pretty much the same domestically and internationally. There is not a large difference between the two.

Okay, thank you.

Thank you. We will go next to Edward Atorino with Benchmark.

I forgot whether you said this or not. The annual 2012 revenues of the Shoppers that were sold and the operating profit number, did you give that?

Yes, it was -- we have given ranges and told you or told everyone the Florida operations that we sold were in the $30 million to $35 million range in revenues and it was losing several million, a couple million in operating income.

That's right, you gave that a while ago. That's right. I'm sorry. Bye.

(Operator Instructions). It appear there's are no further questions in the queue at this time.

Thank you very much. We appreciate your interest and for our people who are on the call, we really appreciate all that you do for our Company, and we will talk to you soon. Thanks a lot. Have a great day.

That does conclude today's conference. Thank you for your participation.