TTEC Holdings Inc (TTEC) 2003 Q1 法說會逐字稿

Good afternoon, and welcome to the TeleTech First Quarter 2003 Earnings conference call. I would like to remind all parties that you will be able to listen-only until the question and answer session. This call is being recorded at the request of TeleTech.

I would now like to turn the call over to Miss Karen Breen. Thank you. Ma’am, you may begin.

Thank you. Good afternoon. My name is Karen Breen, Vice President of Investor Relations and Treasury, and I will be the Moderator for today’s call.

For your information, this call is being recorded. Participants today include Ken Tuchman, our Chairman and Chief Executive Officer, and Margot Tekavec, our Chief Financial Officer and Executive Vice President of International Operations.

Before we begin I would like to make you aware that during this call there may be a discussion of certain forward-looking information. Please understand that actual results could differ materially. You are encouraged to review our 2002 Form 10-K and other SEC filings regarding factors that could cause actual results to differ from those forward-looking statements.

Thank you, and I would now like to turn the call over to Ken Tuchman.

Thank you, Karen. And welcome to everyone joining us today.

I’d like to start by briefly reviewing our first quarter results, and then outlining our plan for improved financial performance during 2003 and 2004. Our first quarter results were in line with our expectations with revenue at 246m, and EPS of four cents. This was lower than the fourth quarter due to the seasonally higher fourth quarter results.

Despite the challenging macro environment we remained sharply focused on areas within our control, and during the first quarter returned Percepta to profitability and stabilized our losses in Europe. We continue to deliver solid operational results for Nextel, and are confident its financial performance will improve in the last half of the year, achieving its targeted operating margin by year end.

Having made progress in the above areas we’re not satisfied with our financial performance, and are launching extensive profit improvement plan. The plan will focus on revenue optimization, the increased employee productivity, and continued aggressive cost reductions across the organization which I will address later in the call.

But first I’d like to provide a review of our business units. Our North American results were sequentially lower due to the seasonally higher volumes we normally see in the fourth quarter. In addition, a portion of the Postal Service volumes ramped down during the quarter, and the remainder of the work will be mostly completed by the end of the second quarter.

We continue to maintain strong relationships with our existing clients, and during the quarter we renewed our relationship with Time Warner Cable for an additional three years. We’re encouraged by the positive trends in the North America sales pipeline as more opportunities are entering the later stages of deal negotiations. Given this development we are confident that we will sign new business in the second quarter that will utilize some of our available capacity.

Percepta demonstrated improvement in the quarter and generated a modest profit as a result of cost reductions implemented in the venture. Just recently and in conjunction with Ford we named Tom Loberto, a seasoned TeleTech Executive, as Chief Executive Officer for Percepta. We expect the venture will continue to operate profitably during 2003 and will remain committed to building a long-term profitable partnership.

In Europe we continue to see steady progress. We recently renewed a three-year agreement with the yellow page subsidiary of Telefonica de Espana, signed a short-term program for the Spanish Tax Authority, and have developed a strong pipeline of opportunities with new and existing clients.

Although Spain has demonstrated substantial improvement our U.K. operations continue to be impacted by excess capacity, primarily in Belfast. We are now incorporating our Belfast operations into our blended offshore solutions to U.S. clients giving us a high quality work force and state-of-the-art infrastructure.

In addition, we recently announced the appointment of Rod Edwards as President and General Manager of our European operations. Ron joins TeleTech from EDS where most recently he was Vice President of Strategic Sales within the Europe, Middle East, and Africa region. Prior to EDS Ron was an Executive with Computer Sciences Corporation. We welcome him to TeleTech and look forward to his contribution.

The Asia-Pacific region continues to demonstrate steady performance. Though we’ve seen softness in certain areas of their business their clients include both Singapore Airlines and Quantus Airlines, and we know that the volumes in those programs will be lower in the next several quarters given the unique travel and health issues in that part of the world.

We are pleased with the steady progress of our Philippines operation. Several new and existing clients have elected to use this location as high quality, lower cost English-speaking solution. And we expect the Center will be operating at its targeted capacity utilization by year end.

Latin America remained largely unchanged during the quarter. We’ve made good progress in the sales pipeline in that region, and recently closed an agreement with TD Deja in Brazil. Looking ahead, we believe the region’s overall performance will improve as a result of new business opportunities and ongoing cost reduction initiatives.

Finally, Newgen continues to demonstrate strong performance. Revenues grew eight percent sequentially from the fourth quarter, and they signed several agreements during the first quarter including the first International Service Reminder Project which recently launched in Canada. They also introduced Sales Channel, a new solution that manages the acquisition and qualification of sales lease and dealer appointment scheduling. We’re exciting about Newgen’s long-term prospects, and believe they will increasingly play an important role in diversifying the company’s revenue mix.

Let me now turn to several areas we are focused on to drive long-term change in our business. The first is India. Today we announced a joint venture with Bharti Enterprises to provide in-country and offshore customer management solutions to Indian and multi-national companies. We continue to lead the industry in near shore and offshore, English, and Spanish language solutions having first entered near shore operations in Canada in 1997.

We took a disciplined approach to entering India including evaluating build, buy, or partner scenarios. After extensive analysis we determined that partnering was the best solution for TeleTech given Bharti’s global brand equity, financial stability, in-country business expertise, and existing state-of-the-art customer management infrastructure and operations.

Bharti is the largest non-government owned provider of telecommunications services, and was the first private sector operator to provide fixed line services. Importantly Bharti’s extensive communication network including last mile service for business customers will allow the joint venture to leverage a reliable, redundant telecommunications infrastructure.

Combined with TeleTech’s international expertise in providing customer management solutions the joint venture will be a powerful offering. An Indian based solution completes our global offering of English based services from lower cost markets including Argentina, Canada, Mexico, New Zealand, Northern Ireland, and the Philippines.

We have been co-marketing our Indian solution with Bharti over the past several months, and we’re very excited about our relationship. We are confident this approach provides the right blended solution for our clients.

The second area I wanted to touch on is the management changes that we announced today. We are pleased to announce Margot’s appointment to Executive Vice President of Global Operations where she will redirect her efforts to the company’s worldwide operation. Over a year ago Margot expressed interest in taking on a greater operational role in the company. At that time she assumed additional responsibilities for our international locations including Europe, Asia-Pacific, and Latin America. She will now oversee these regions, as well as North American operations and our Global Information Technology Group.

Since joining the company two-and-a-half years ago Margot has provided strong leadership to several key areas of the company including finance, administration, procurement, and real estate. Her accomplishments include improving and automating the company’s financial controls and reporting systems, along with strengthening the capital appropriations process. Additionally, through aggressive capital management Margot’s Team has been instrumental in returning the company to generating positive free cash flow.

We’re delighted to welcome Dennis Lacey to the TeleTech Team as he assumes Margot’s former role as Chief Financial Officer. Dennis joins us from CKE Restaurants with revenues of approximately $1.5b, operations in 15 countries, and 33,000 employees. As CKE’s Chief Financial Officer Dennis was responsible for developing and implementing a strategic plan to improve CKE’s profitability. Prior to CKE Dennis served as CFO of Imperial Bank Corporation, CEO of Capital Associates, and spent 13 years with Coopers & Lybrand where he became an Audit Partner. Dennis brings extensive financial and operational experience to TeleTech, and we’re confident he will be a strong complement to the Management Team.

These management changes are part of our ongoing effort to streamline the organization and migrate to a global operating company. My direct reports now include five executives with worldwide responsibility for each of the following areas. Operations and technology, sales and marketing, finance, human resources, and legal. This is a natural evolution in the company’s development and will drive improved performance through increased standardization, financial controls, and operational excellence in every part of our business.

The final area I wanted to discuss is our Management Team’s firm commitment to improve profitability. We’re not pleased with our sequentially lower financial performance, and while there are several drivers behind this trend we’re committed to addressing these issues and launching an extensive profitability improvement plan.

With Europe, and Percepta, and Nextel improving financially there are two other components to our strategy that should enable us to return to operating margins in the four to six percent range by year end. The first is closing new business to utilize some of our available capacity. This should drive one to two percent improvement in operating margin by year end. As stated earlier, I am confident in our ability to close new business during the second quarter.

The second focus is gross margin. We have launched several initiatives that should allow us to improve gross margin by one to two percent by the end of 2003 and an additional one to two percent in 2004. This is expected to achieve the revenue optimization initiatives, increase employee productivity targets, along with cost reduction efforts across the business.

To conclude, we continue to make steady improvements in these areas of the business within our control. The Nextel project is transitioning according to our revised plan, the financial performance in Europe has stabilized, Percepta has returned to profitability. We’re seeing deals in the pipeline into the financial negotiating stages, and we believe we are in a solid position to win new business in the first half of 2003. The balance sheet remains strong with $118m in cash and a conservative debt-to-capitalization ratio.

With our recent management changes we have the strongest Executive Team in the company’s history. They are motivated, and a talented group of executives with a proven track record of operational excellence, fiscal responsibility, and the ability to drive long-term change in the business. Looking ahead, I am confident we will execute on our profit improvement plan, and the company will further it’s legacy of demonstrating leadership in a dynamic and competitive industry in a difficult and uncertain economic environment.

With that, I’ll turn the call over to Margot.

Thank you, Ken.

Let me begin by reviewing revenue. First quarter revenue was 246m, down three percent from 254m in the year ago quarter, and down five percent on a sequential quarter basis. The sequential decrease in revenue was primarily attributable to normal seasonal volume declines in the first quarter. The year-over-year decreases related to campaign work we did in the first quarter of 2002 to transition certain Excite At Home cable subscribers to other carrier networks.

International revenue was 87m or 35 percent of first quarter revenue, relatively unchanged from both the fourth quarter and the year ago quarter. 15 percent of the 35 percent came from services provided to U.S. based customers from international facilities.

In terms of client concentration Verizon and Nextel were our largest clients and represented 17 percent and 15 percent, respectively, of first quarter revenue. Beyond Verizon and Nextel no client represented more than 10 percent of revenue in the quarter.

Now, let’s get to earnings. First quarter earnings were four cents per diluted share and in line with our expectations of four to six cents. As expected, the results were impacted by the transition of the Nextel project to lower cost labor markets, as well as sequentially lower revenue.

SG&A as a percentage of revenue was 19.4 percent in the first quarter down from 20.7 percent on a sequential basis, and up from 19 percent in the year ago quarter. Over the last five quarters we have maintained SG&A as a percentage of revenue in line with our goal of approximately 20 percent.

Operating margin for the quarter was 2.4 percent, down from 3.6 percent in the fourth quarter which excludes restructuring charges, and down from six percent in the year ago quarter. The transition of the Nextel project was the primary driver of the lower first quarter operating margin. As Ken mentioned, we are sharply focused on improving our operating results throughout our global operations, and are placing increased emphasis on improving gross margin during 2003 and 2004, on which I will speak to you momentarily.

Before doing so, let me discuss the balance sheet. Our financial position continues to be very strong, and I want to provide some detail on our cash position, DSOs, and capital expenditures. Cash and short-term investments were 118m at the end of the quarter, down sequentially from 145m in the fourth quarter. The decrease is primarily related to DSOs with as expected returns to a more normalized level of 56 days in the first quarter, up from 49 days at year end. Going forward and given our mix of international revenue we believe DSOs will remain in the mid to high 50-day range.

During the quarter we had 8.4m in capital expenditures and continued to impose strict guidelines regarding the commitment of new capital. Also in the first quarter we purchased our corporate headquarters building for 38m electing to early terminate the synthetic lease on that facility.

Given the anticipated accounting changes related to synthetic leases we elected to purchase the building now. Under the new accounting rules effective mid-year the asset would have come onto the balance sheet. This would eliminate the tax and accounting benefits traditionally associated with synthetic leases. We used the proceeds from the revolving credit facility agreement to purchase the building and expect over the next year to secure long-term financing for the building.

Finally, our capital structure remains very conservative with a debt-to-capitalization ratio of 28 percent including the outstanding revolving credit proceeds used to purchase the headquarters building.

In summary, we’re pleased with the continued strength of our balance sheet and cash position. Our primary focus in 2003 and 2004 is to improve operating results by further increasing our focus on gross margins.

Now let me provide some detail on our profit improvement plan and where we see opportunities for both short-term and long-term. Our near-term focus is on revenue optimization, employee productivity, and company wide cost reduction. Similar to our approach with SG&A we established a formal target to drive organizational focus around improving gross margin. We expect to see improvements over the next several quarters driven by standardizing our operating systems, leveraging our global technology buying power, and purchasing additional, and pursuing, excuse me, additional savings at the facility level.

Our goal is to exit the year with a one to two percent improvement in gross margin associated with this initiative from the first quarter rate of 27 percent. Given our success in lowering SG&A over the last 18 months we are confident in our ability to drive meaningful improvement in our gross margin.

Let me end by addressing our outlook. Going forward and in response to an economy that is increasingly difficult to predict we will be providing more directional guidance rather than specific revenue and EPS ranges. We continue to be encouraged by the progress of opportunities in our sales pipeline, and believe we are closer to signing new business.

However, a majority of the United States Postal Service projects will be ramped down by the end of the second quarter. Furthermore, certain client programs are experiencing lower call volumes as a result of recent global events.

Therefore, we expect second quarter revenue to decrease slightly on a sequential basis. Further, we believe second quarter earnings per diluted share will decrease sequentially commensurate with the lower revenue forecast and our continued investment in our global sales and marketing efforts.

We believe SG&A, depreciation, and amortization as a percentage of revenue will continue to be in a range similar to the last several quarters. Overall, we expect to see improvement in the last half of 2003 from a combination of ramping new business and pursuing our profit improvement initiatives with a goal of exiting the year with an operating margin between four and six percent.

To close, we are pleased with having met our expectations in a very difficult business climate. However, we’re not satisfied with our operating margin performance and the entire Management Team is committed to improving our results.

I am excited to assume a broader role in the company and utilize my financial and operational background to further strengthen the company’s global operations and technology efforts. And we look forward to working with Dennis, a seasoned executive with a solid track record of operational and financial leadership. We are well-positioned to transition the CFO role to Dennis, and are confident he will be a strong complement to the TeleTech Team.

With that, Ken and I would like to open up the call to your questions.

Thank you. (Caller Instructions.)

Our first question comes from Jeff Nevins. And please state your company, sir.

Good afternoon. First Analysis. As it relates to the U.S. PS contract if it’s expected to be wound-down by the end of the second quarter just directionally I would think that Q3 revenue may be weaker than Q2 revenue, or is that a – is that off?

No, we would expect that Q3 revenue would be slightly better than the second quarter because we do expect to sign business in the second quarter. And the U.S. PS business will for the most part ramp down by the end of the second quarter.

Okay. And both your comments about cost reductions and efforts to improve margins going forward is there any actual workstations or centers that you’re going to be taking out or are you still maintaining the existing capacity.

Yes, at this point it’s still premature to say what we would do. There were two centers that were dedicated to the United States Postal Service program. One of those centers was owned by the postal service. The other facility is a TeleTech facility. And at this point in time we have not decided whether we will utilize that facility for other TeleTech business, whether it be for a dedicated client, or for multiple clients.

Okay. And the last question I had, there was a disclosure in the 10-K related to some payments you guys still received from some of the old Verizon [Sealec] [ph] business, and as some of those decline going into 2004 what’s kind of the, you know, the outlook as far as the margin improvement to make-up for some of the – those payments going away?

Yeah, the payments that were disclosed in there, there’s also costs associated with those minimum commitments, and so I think that’s important first to point out. Also, it’s three quarters away as far as those minimum commitments impacting us. We do believe that with the renewal of business with Verizon, as well as improvements in the Nextel program, and other new business that we will close that we will be able to mitigate the impact associated with those former Sealec commitments.

Okay. Care to comment at all what roughly are ballpark figures of the cost of those commitments?

No, we really can’t do that. It’s, right now we’re in the middle of contract negotiations on a couple of the pieces of Verizon business. And obviously, for competitive reasons that’s not something that we’re going to disclose.

Thank you.

You’re welcome.

Thank you. Our next question comes from Brandon Dobell. And please state your company.

Brandon Dobell from Credit Suisse First Boston. A couple of housekeeping items. I think first the impact of foreign currency in the quarter, and can give us an idea of how much of the cash goes on the balance sheet is overseas right now?

Sure, the foreign currency impact was negligible in the first quarter. We have some currencies moving opposite directions, and netting them all together it was negligible overall.

Okay.

As far as cash held domestically versus internationally I don’t have that number right here in front of me, but I would imagine it’s about 70 percent would be domestic.

Okay. And then in terms a little bit broader, I guess, from the capital allocation from two perspectives. One, where is the capex going these days, and can you kind of break it down into broader categories in the quarter, and kind of what you expect for the year? And second, in terms of India what kind of capital requirements do you have near term or longer term? Is there any commitments you guys have to be on the hook for for putting money or assets into the business?

Sure. As far as capital expenditures in the quarter we were – we spent about 8m which was comparable to where we were in the fourth quarter of last year. And, you know, roughly we’re still investing over 50 percent of that in North America, and the remaining into our international locations. The primary investment at this point is maintenance of our current facilities. There is some expansion in Canada to support the Nextel program.

As far as India goes, this year there will be a commitment certainly associated with going into India. It’s still a little early to say exactly how much that will be. It depends on whether we pursue one or two centers. And that will have to do with what business we sell. We certainly won’t get out ahead of ourselves and build capacity before we have the contracts in place.

Okay, thanks a lot.

You’re welcome. Thank you, our next question comes from David Doft. Please state your company.

Thank you. CIBC World Markets. I’ve a number of questions. Just to follow-up on India, at this point, Ken, I think you mentioned that you’ve been pitching business for several months with your partner. Do you have anyone who has signed on and is up and running?

There is initial business that goes along with the partnership which is Bharti’s business, which we’ll give more detail on next quarter. In addition to that we’ve had several large clients, perspective clients, as well as existing clients that have visited the facilities, and were very encouraged by their overall impression, and the next stages that they’ve asked us to go to.

So to answer your question, it’s an operation that’s already up and running, and ongoing. And that was one of the many reasons why we made the decision to go ahead with this particular venture. But the real, the revenue impact, and the earnings impact will come out of the new business that we generate, which we’re hopeful that we’ll have significant opportunity between now and the next several quarters.

Okay, and you’ve mentioned that some existing clients are interested. Is there risk to revenues of existing clients saying ‘hey, we want to take advantage of this, let’s go offshore, and pay you a little bit less?’

Well, I think there’s always that risk with the whole offshore situation, but I must tell you that in almost all cases the clients that we’re talking to, whether – as far as on the existing side, are ones that are actually looking at doing program expansions that want a blended solution.

We really believe that it’s not wise for any one client to put all their eggs in one basket, in one offshore location. And clients absolutely agree with that, and therefore, that’s a big part of our value proposition.

Okay. No, that makes sense. It – Margot, on the revenue trend throughout the year, you mentioned that third quarter should be better than second. This new business that is potentially coming in in the second quarter, is that enough to fully offset the U.S. PS and will you have year-over-year revenue growth in the second half of the year?

I don’t think we’re ready to really answer that right now. I think that we’re feeling very good about the opportunities, but the reality is that it is very difficult to say, even after contracts are signed as to the exact ramp of when that business comes on. And so I think it would premature for us to give you a definitive answer as to whether it replaces all that business.

Okay. And in the fourth quarter you took some charges related to potential actions with some capacity. Have you taken any actions following up on those charges at this point?

No, we haven’t taken any further write-offs, if that’s your question, David. We certainly got a little bit of help in the first quarter, although it was negligible related to the write-offs.

Okay. But you – I think the write-off came but the closing of the centers wasn’t necessarily scheduled at the time. You just wrote down the value?

Yeah, there were …

Have you closed down the centers, or?

There wasn’t center closures associated with that, David. It was impairments of the existing facilities.

Okay.

But we went through a calculation to look at the cash flows to see if they supported the facilities going forward. And there were certain locations in the international regions, as well as in the U.S., that we took an asset impairment.

Got it. Thanks for clearing that up.

Sure.

And then has the utilization rate of your capacity changed materially since the fourth quarter?

Some areas yes, and in other areas no. But on balance I’d say no.

Great. That is it. Thank you very much.

Thank you. Our next question comes from Kit Case. Please state your company.

Southwest Securities. A couple of questions. First of all, Nextel, can you comment on maybe how much during the quarter you had in extra costs from the Nextel transition. You know, how much did that impact you?

It probably impacted the margin sequentially about, by about a point or so, Kit.

Okay.

And remember that it’s a transition plan that we outlined at the end of the fourth quarter, and at this point we are on a revised transition plan. And we feel good about the last half of the year.

Okay. And you had during the quarter, though, in the operating margin, you had a reversal of $588,000 I guess from earlier charges. Is that, I guess that’s along the lines of the previous question. But should we expect any more reversals?

No, we think that’s really a true-up. Accounting rules obviously require you to evaluate those historical restructuring charges and reverse them in the quarter if you think they’re over accrued. And that’s what we did in the first quarter, was about a $500,000, $600,000 adjustment in the quarter.

Okay. And what, could you go through the revenue numbers for the different categories?

As far as the segments go, Kit?

Yeah.

Sure. North American outsourcing was 67 percent. International outsourcing 21 percent. And database marketing and consulting 12 percent.

Okay. What about the corporate costs in the revenue line?

Yeah, in 2003 we have decided to eliminate the corporate segment from our reporting. It really makes more sense going forward to allocate those costs to the three primary business units, North America International and database marketing and consulting. The corporate line item used to include a couple of revenue generating units, and it does not anymore. It’s now primarily the cost of our corporate overhead.

Okay.

And so in our first quarter Q we will go into more detail about that, and those costs will be allocated down to the three remaining segments.

All right. What was the final debt number for the quarter? Total debt?

Total debt at the end of the quarter was 119m. And that includes the proceeds that we used to purchase the headquarters building.

And cash flow from ops?

Cash flow from operations was negative 15m for the quarter, and primarily affected by the DSO change.

Okay. But you still expect for the year roughly $50m, $60m in cash flow, free cash flow?

Well, with the buildings …

Excluding the buildings.

Yeah, excluding the buildings we probably can get to that point. It’s still a little premature to project the whole year, but that’s certainly our goal.

Okay. And just a couple more here. How many seats did you end the quarter with?

We ended the quarter with about 23,000 workstations.

Okay. And what’s an update on Verizon Online? Are you all still negotiating that?

Yeah, we are currently in contract negotiations with a portion of the work that we do for Verizon Online.

Okay, all right. Thanks.

You’re welcome.

Thank you. Our next question comes from [Bob Evans] [ph]. Please state your company.

[Craig Helm Capital] [ph]. Good afternoon. Can you comment, what was the year-over-year growth for Newgen? I am sorry, I missed that.

Hold on one second. Sorry about that.

That’s all right. I’ll ask another question in the meantime. The India partnership that you said you are inheriting some business, is that entity profitable right now? Or is that going to be a cost going in?

In the first year there will be some investment, certainly. And that will be both in terms of capital, as well as a slight EBIT hit in the first year. But it will be modest. I would expect it to be less than a cent.

And to answer your previous question the year-over-year growth in Newgen is just under 35 percent.

Okay, thank you. And given the offsetting trends with the improvements that you expect in gross margin this year and next, and then the Verizon commitment being lowered, I mean do you expect next year’s operating margins in net net to be, you know, to increase over ’03?

I think it’s very premature to talk about 2004 at this point. We have, you know, a lot of things ahead of us as far as the profit improvement plan, and working through some of these renewals. And some of the new business opportunities that we’re working on. So I think it’s premature right now to talk about 2004.

Obviously, we would be managing fiscal ’04 to be higher, but I agree with Margot’s comments.

Okay, but you do expect at least some offset from what you’ve outlined before in terms of the gross margin improvements?

Yes, that’s correct.

Okay, all right. Thank you.

Thank you.

Thank you. And our final question comes from Jeff Nevins. Please state your company.

Just a question – Margot, I know you’re having some changing with the segment results, but do you have a rough estimate of what the operating margins were for each segment. Or do we need to wait for the Q?

Yeah, I think we need to wait for the Q, because we have not yet gone through the allocation process of the corporate overheads beyond each of the segments. And so we will definitely outline that in the Q.

But broadly speaking, if you look at international outsourcing, was it breakeven to profitable in the quarter?

No, international outsourcing will be a slight loss for the quarter.

Okay. Maybe, could you just talk a little bit more about the management changes in terms of the structure that you’re going through? You know, how it is now set-up, and compared to how it was before? And what kind of a go-to-market strategy is?

Yeah. You know, the management changes are really designed to streamline the overall organization. And we’re very excited, as we continue to drive towards more centralization and more globalization it’s really critical that we have end-to-end reporting, as well as end-to-end accountability. And so what these management changes are going to do is they’re going to streamline the organization with respect to who the direct reports are to me, and how all the financials roll-up to the individual key executives and contributors.

As far as how the organization was set-up before, and what’s different, you know, I – the key difference is that operations were, in fact, North America operations were reporting in separately, and the international operations were reporting in separately, and now we’re consolidating all those operations under one head.

In addition to that, IT was reporting in separately, and we’re consolidating all of that into one head so that we can get more leverage across our IT, so that we can get more leverage across our global operations, that we’re seeing significant opportunities as now we’re having all these groups inter-working with each other and communicating with each other in sharing best practices, et cetera.

In addition to that, it streamlines my direct force down to size, direct reports, which as we’ve already mentioned would be finance, legal, human resources, sales and marketing, and operations. And really get us onto a Management Team that quite frankly we’ve never had before as far as the capabilities, with the scope of this Management Team, the experience of this Management Team, et cetera. And it allows me to immerse myself more times in the larger mega deals as well, which is something that has been a frustration of mine that I haven’t been able to get out there as much as I’d like to in assisting in trying to get some of these deals closed with the CEOs of the Global 500 and the Global 1,000 that we’re focused on.

Okay, thanks a lot.

Thank you.

Thank you. That concludes today’s conference. Thank you so much for your participation.