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Lionbridge Technologies, Inc. (NASDAQ:LIOX)

Q3 2011 Earnings Call

November 03, 2011, 09:00 a.m. ET

Executives

Sara Buda - VP, IR and Corporate Development

Rory Cowan - Chairman and CEO

Don Muir - CFO

Analysts

[Ahmed Singh] - Jefferies

Ben Rose - Battle Road Research

George Sutton - Craig Hallum

Kevin Liu - B. Riley

Rich Davis - Canaccord Adams

Vince Colicchio - Noble Financial

Rich Baldry - Wunderlich Securities

Operator

Welcome and thank you for standing by. At this time all participants are in a listen-only mode. After today’s presentation we will conduct a question-and-answer session. (Operator Instructions) Today’s call is being recorded. If you have any objections you may disconnect at this time.

I’d now like to turn the meeting over to Sara Buda. Ma’am, you may begin.

Sara Buda

Great. Thank you. Welcome everybody to the Lionbridge investor call to discuss financial results for the quarter of 2011. During this call we may make certain statements that may be considered forward-looking statements under the Federal Securities Laws and which involves risks and uncertainties. Our actual future results may differ significantly from the matters discussed in any forward-looking statements. We have disclosed in greater detail in our Form 10-K filed with the Securities and Exchange Commission on March 15, 2011, the factors that may cause such differences.

And now I’ll turn the call over to Lionbridge Chairman and CEO, Rory Cowan.

Rory Cowan

Great. Thank you, Sara and welcome everyone. Today as is traditional we will walk through a third quarter results and focus on three topics. A first gross revenue growth across all of our market to service offerings, what’s going on there? Our strong earnings and momentum as you saw for the conversion from this quarters announcement and also a first half of 2002 which really indicates continued revenue and profit growth as the of multi-year restructuring plan comes to an end and earning begin to accelerate. I’ll focus on around the first topic about revenue growth and Don will focus on points two and three, to talk about earnings and outlook for 2012.

So, first let’s start with the financial highlights for the quarter, we saw we delivered revenue about 107.8 million this quarter reflecting a reasonably solid growth of $8.4 million or about 8% year-on-year. This is slightly below our expected range to the shift in the product strategy within our largest technology plans some things are coming forth, some things are going back. Excluding revenue for this plan, we grew about 12% year-on-year. So, we are beginning to see that the diversification effort of our revenue base into new vertical markets and offerings is really beginning to take hold.

We’re successfully delivering on that goal and now that our investments in sales and marketing are paying off, we expect this to continue. Overall, technology is still a strong market for us and more diverse revenue across verticals and offerings to build on as well.

Total gross margin was about 31.5% reflecting on-going improvement from last quarter, and growth from last year in constant currency. As a reminder, from a profit standpoint, we prefer a stronger U.S. dollar. In fact, but it is an evidence on the statement our analysis shows that a 60% conversion of incremental revenue to operating profit year-on-year in constant currency, we operate about 27 currencies around the world. So, we have an internal analysis that shows at constant currency conversion rate.

To our cost management actions are starting to have a positive impact on profitability as we began to generate top line growth. Q3 GAAP earnings were about $0.04 reflecting a profit increase of $6.2 million or $0.10 a share year-on-year despite the currency headwind. This reflects the benefits of increased revenue volume, improving margins, lower restructuring expense and better other expense FX management below the line year-on-year. So, on a sequential basis we kept earnings relatively flat despite of course the seasonally lower revenue that happens in Europe during Q3.

We are here to manage our cost for investing appropriately in the business and as a result as we grow revenue we expect continued margin improvement and earnings growth. Finally, we generated about 4.5 million in cash flow from operations during the quarter and we ended the quarter with almost 21 million in cash. So, the balance sheet remain strong despite our on-going investments in our software business.

So, q3 was a solid quarter, we grew about 8% year-on-year, 12% excluding the volatility of the timing of things one large technology plan. Our cost management is showing benefits, we are expanding margins and profitability.

So, let’s talk about the revenue opportunities across end markets and various offerings. As you know during the past few quarters we have been investing in a number of growth initiatives to put them in place to accelerate our revenue. We are seeing the results of that revenue growth across various segments. So, we will take them segment-by-segment.

Our GLC language business is generating solid growth. In Q1 GLC grew 6% year-on-year despite its concentration with our largest technology plans. So, let me provide some context.

As you heard from the recent Analyst Day, they shifted spend from a mature product businesses for their newer cloud consumer and mobile initiatives. This is having a short-term headwind on us given our foothold and some of their more mature product groups. But it should give us a longer term positive impact as we won a number of multi-year programs within these new cloud, consumer and mobile businesses. So, we expect those to ramp during ’12. And overtime, it should mean more consistent, less lumpy revenue as these are more business process outsourcing relationships rather than episodic IT services engagements, because they deliver new releases and updates to the market far more frequently.

Despite this plan shifts in Q3, all of our other major accounts are wakening as planned. Our GLC revenue is growing nicely as sales team deliver on the initiatives we started a year ago, to drive more diverse revenue across a variety of verticals. So, we are beginning to see increased revenue from our Life Sciences group, our Automotive group and our manufacturing teams.

Our new business momentum continues, in fact, as we mentioned in the press release, Q3 won a number of new programs including engagements with the contract research organization in our Life Sciences group, medical device in Life Sciences as well as a large U.S. retailer. So, the diversification strategy is really working as it complements our core tech group of accounts.

In GDG, for a development and test business is also growing. Now this is driven by growing relationship with a large search plan as well as a large technology organization, both of whom offer opportunities for further expansion. As you saw in our small interpretations business, it's starting to manifest from new revenue across (inaudible) by year ago I changed the leadership in that group and they are really focusing on a lot of very interesting opportunities there. So, I think that business has some potential in ’12. So, I’m pleased with our broad based growth across end markets and segments.

So, in addition to our traditional services businesses we are also bringing some new solutions to market. First, our SaaS technology offerings, where we have been investing heavily over the past 18 months. As many of you know we have been refining our GeoFluent real-time translation technology which is based on our partnership and joint venture agreement with IBM. GeoFluent had two notable successes this quarter, first we signed a partnership with LivePerson, a leader in the online chat market. And with this we have been working with them informally for quite a while, but now that there is formalized partnership we can jointly bring the new solution, this solution to new and existing clients who want to engage and support customers online across a variety of languages.

Other software’s are compelling solution for contact center and marketers, who now have an English speaking agent and chat online in real-time with someone inside Germany for example. The contact center economics are very compelling, so we are enthusiastic about 2012. We also secured engagements and employed GeoFluent for large technology plan. This engagement will start out with real-time translation of blogs and forums. There are further expansion opportunities to help us plan to flex support calls, improve customer sat, and also improve global collaboration.

So, continuing to our technology sales and marketing programs, and client momentum is starting to build. I think there is one thing we are learning as sales cycle with some of these as longer than we had anticipated. Given that our customers have a reengineering process on their side of the handshake to really get them to drive value from this technology. However, there is very strong interest and a very solid pipeline for this offering.

Second, we are bringing a new service offering to market. Some of you may have heard about our new GMO or Global Marketing Operations solution led by our new Senior VP of Marketing, this offering combines our skills and translation, content development, web development and local market expertise. Essentially with GMO, or Global Marketing Operations, GMO, we are effectively help large organizations manage their marketing operations, additional campaigns across geographies, variety of web content platform, as well as local content needs.

We delivered this solution for a few clients and have proven that we can reduce cost and short cycle time to market by as much as 30%. By formalizing this offering with dedicated teams and unique global technology platform, we are winning a number of new engagements. and each of these plans generates between 500,000 and 2 million a year within each multi-year agreement.

This is another example of really our ability to leverage our skills and geographic breadth to accelerate revenue and profits. Now we have our restructuring behind us as I said last year, we began to invest in growth opportunities and so we are beginning to see new activities in technologies and new activities in services.

So, in summary Q3 was a solid quarter in both technology and services, there is a lot of new in the pipeline as I said. We are growing revenue, we are offsetting any short-term product shifts within a large plant with diverse growth vertical markets. New offerings are gaining momentum, we are expanding margins and earnings as we grow the top line and manage cost. And of course, we continue to generate cash and maintain a stable balance sheet.

And now I’ll turn it over to Don and he will talk about the earnings momentum and our initial outlook for 2012. Don.

Don Muir

Thanks Rory, and hello everyone. Today I’ll provide a financial overview of our third quarter, talk about some of our positive revenue and earnings trends and then provide an outlook for Q4 and our initial thoughts around 2012.

As you can see from the numbers Q3 was a solid quarter, we grew 8% year-on-year reflecting positive revenue growth across segments. I’m delighted to see the strong year-on-year revenue performance we saw in Q2 continue again in the third quarter. We also continue to expand operating margins and GAAP profits year-on-year, thanks to incremental revenue and the benefits of our cost management actions. And finally, we generated strong cash flow of $4.5 million during the quarter.

At a more detailed level, Q3 revenue was 107.6 million up 8.4 million from last year reflecting strong growth across our businesses and end markets. (inaudible) in our top 10 continued to grow nicely from last year including a large internet search company and a later UK based industrial manufacturer. And accounts outside of our top 10 grew more than 10% year-on-year. Clearly, the new business initiatives we talked about are starting to show benefits.

Looking at margins, we saw strong sequential quarter gross margin improvement of more than 100 basis points from Q2 despite the low revenue volume. This sequential margin growth was driven by all businesses. Gross margins in our GLC language business were 33.3%, gross margins in our GDT development and testing business were 30% and gross margins and interpretations was 16.4%. So, all business segments delivered solid sequential quarter of improvement. Year-on-year despite currency headwinds gross margins were up solidly in all businesses expect in GDT, which was down about 200 basis points due to currency and work mix. Overall, I’m pleased with that gross margin trend.

Non-cost of revenue related operating expenses ex restructuring was up about 1.3 million versus last year, but essentially flat in constant currency. We had about 600k of restructuring expense this quarter versus about 4 million a year ago, as we said we are at the end of our multi-year restructuring program. And the cost benefits of our actions are having a positive effect on margins.

Sales and marketing expense continues to run at roughly 7.5 to 8% of revenue, as we continue to invest in growing the business across new offerings and end markets. Third quarter G&A grew 1.4 million from last year's Q3, this is largely related to unfavorable currency, the impact of our new program with Hewlett-Packard and incremental compensation expenses related to pro forma and shares.

Going forward we expect G&A to stay relatively flat at the current run rate for Q4, and most of 2012 in constant currency despite our on-going investments in the business. With solid revenue growth and large improvement, we continue to strengthen our operating earnings. Our internal analysis shows a 60% conversion of incremental revenue to operating profit year-on-year in constant currency, while that 60% may not happen every quarter, we should see meaningful operating leverage as revenue continues to grow and margin strengthen.

As you look below the operating profit line, you will see that other expense was a benefit of approximately 250k in Q3 due to favorable FX management and other items. As we said in past calls we have models going forward, we expect their other expense line item to be plus and minus about 500k every quarter. Our tax provision for the quarter was a modest benefit as well. Going forward for the next couple of quarters we expect a quarterly tax provision in a range of about 500k to a $1 million.

Moving to GAAP earnings, we delivered 2.4 million or $0.04 per share in Q3, growth of about 6.2 million or $0.10 per share year-on-year and roughly flat sequentially from Q2. And as you can see from our release non-GAAP were 5.3 million or $0.09 per share.

Now let’s talk about our balance sheet. We generated 4.5 million in cash flow from operations in the quarter, and we maintained cash balance of over $20 million despite our new business investments and restructuring expenses. So, the cash flow generation of our core services business remains very strong and we are using that operating cash flow for the right reasons, funding top line growth in new programs, reducing cost and investing in new businesses. These investments position us well for long-term, growth and competitive advantages.

Global DSOs were 48 days in the quarter, a decrease of about 4 days from last quarter. So, our balance sheet remains solid and we continue to invest in the right areas.

In summary, our Q3 results underscore solid top line growth and our ability to increase earnings and generate cash. Looking forward for Q4, we are estimating revenue to be between 108 to $111 million reflecting year-on-year growth of 8 to 11%, despite the product shifts within our largest account that Rory mentioned.

For 2012, we reiterating our annual top line growth estimate of 5 to 10%, and we expect gross margin improvement of about 100 basis points from the expected average of 2011 depending on currency. As I said we expect G&A to be relatively flat in dollar terms, from our current quarterly run rate. With this framework we expect meaningful operating income growth and GAAP earnings leverage year-on-year. So, I’m feeling very positive about the early indications for a strong 2012.

In summary I’m very pleased with the third quarter, revenue was growing, new business is ramping, we are growing our margins and our balance sheet remains solid. Now Rory back to you.

Rory Cowan

Thanks Don. I don’t think I have much to share, (inaudible) and we are feeling pretty positive about the current state of events. So, let’s open the call up to questions.

Question-and-Answer Session

Operator

(Operator Instructions) The first question comes from Jason Kupferberg [Jefferies]. Your line is open.

[Ahmed Singh] - Jefferies

This is [Ahmed Singh] for Jason Kupferberg. I actually had a more macro question about, in the current macro environment, are you witnessing any decision making delays from the client side and is that in some way affecting your visibility for maybe the current going quarter and the next quarter.

Rory Cowan

Yes, I will repeat the question, the question is, are we seeing any decision making a delays. I think you see it really as a company-by-company situation right now, end market by end market product portfolio by product portfolio. As I said one of our largest customer is rebalancing all their spend, that means there are some fits in starts as that spend moves from one division to another. Another one of our large customers is really actually accelerating their spend. In addition, it depends on the company culture, some companies have more of an outsourcing orientation. So their business is either strengthened they outsource more or often as with one of our large handset customers and in Finland their business gets to a little bit challenging, but they tend to outsource more. So, it's really customer by customer by customer. Lastly, I know that we do get questions about this, because we see, we have visibility to next year's product cycle with most of our customers. So, right now we are not seeing anybody pulling in, and during the last downturn which many of you has asked about, we did see people spread the time between releases or cutout some of the ancillary spend around our marketing program. We are not seeing that now, that doesn’t mean we won’t but we are certainly not seeing that now.

[Ahmed Singh] - Jefferies

And just quickly on the (inaudible) are you also witnessing any pricing pressures?

Rory Cowan

Look, price is always a discussion in this environment, are we seeing any pricing pressures that are greater than normal in a slow growth economy. Not really.

Operator

Next we have Ben Rose from Battle Road Research. Your line is open.

Ben Rose - Battle Road Research

Rory, could you talk a little bit about the progress that the company maybe making in sectors outside of the technology sector?

Rory Cowan

That’s a good question about this new vertical markets that we are focusing on. We are seeing a couple of things, we have visibility we operates in 20 some countries. It's high to draw a high level of conclusion, but let me talk about geographics first and then verticals. Geographics, I think we are seeing what I’d call the former Russ Bell to the United States, it seems to be doing very, very well and we are recommitting to that geography across our industrial and manufacturing segments. Germany of course, is well. Their export engine as we all know is continuing and so we are increasing our commitment to our German sales force as well. So, those are the two geographic areas and of course, we are just replacing normal attrition issues bring from the (inaudible) sales force that’s a normal process.

End-market verticals as I mentioned, were focusing on our Life Sciences group and that has a number of sub segments everything from clinical trials all the way through the medical devices, because that means you need to have to have a intimate knowledge of all the regulatory bodies in each country. So, we created a separate business unit in that group that is just focusing on a Life Sciences. We are also beginning to see our manufacturing groups began to grow nicely and our retailing, we also had particular luck with retailers as well. So, the GLT business as you see that $300 million segment. We are beginning to create some sub segments within that Ben.

Ben Rose - Battle Road Research

And then just a follow-up question, the recent announcement with LivePerson. Can you discuss maybe some of the near and intermediate term opportunities in terms of working with their accounts either, do you expect the focus to be on large global organizations, mid-sized companies. And is there anyway realize it might be early to discuss or quantifying what kind of revenue opportunity that could be, but maybe just some color there. Thank you.

Rory Cowan

Again we have been working with LivePerson informally for quite a while as we both had to see if there was any there, before you can start to structure things formally, you want to just get an indication that there is some opportunity. We do that conclusion and LivePerson is that there are number of chat platforms of course, LivePerson is the first that we are working us on formalized manner. It seems as if this will be the first drawdown will be in the enterprise helpdesk, internal enterprise applications, because that’s where the economics really improve very, very quickly to the particular company. I think the independent services companies really have less incentive to reduce the number of people in their call centers. And we have been very proactive with the presales activities here as well. So, we are getting a couple of pilots that were in the process of getting started. So, it feels positive.

Operator

Next we have George Sutton from Craig Hallum, your line is open.

George Sutton - Craig Hallum

So, I wanted to make sure I understood and I did hop on in little late, but the large customer challenges that you talked about timing challenges that you talked about. Did that impact Q3 and is that specifically a concern in Q4?

Rory Cowan

Yes, I think that it's a one particularly customer that’s having some timing and some rebalancing issues as they said. Our other customers we have broad based strength in because their businesses are in the different cycle as I mentioned. We have 3 or 4 significantly large customers here, each has a different product portfolio and a different set of end markets. So, I think that in Q3 and Q4, the revenue softness is rebalancing of their spend from reps of their older products to some of their newer offerings.

George Sutton - Craig Hallum

Okay. Now you mentioned the end of the restructuring program, again in the end of the restructuring program. I’m just curious how do you manage the business differently once that restructuring process is done.

Rory Cowan

That’s because for the past 3 years or so, if I was taken 3 or 400 people out of Europe and it's a very different activity when you are focused on reducing headcount, reducing space, reducing sizes, closing offices that is building on top of existing infrastructure. So, a lot of during ’12 I think a lot of the cash that has been going out the door for restructuring will probably be focusing on increased automation and increased customer acquisition activities. That doesn’t mean by the way that there won’t be, is it 2, it is $400,000 or $500,000 a quarter as you rebalance things. But the big 5 and $6 million quarters that we have been had here I think are thing of the past.

George Sutton - Craig Hallum

The 5 to 10% growth you have next year. I’m just curious in your own mind is that success in your opinion or is there, how would you define superb success in your business.

Rory Cowan

Yes, I think 5, 10% I guess it's, given that the economy is where is at right now, given the uncertainty with our customers, I think 5 to 10% feels pretty strong especially if you recall Don mentioned of earnings conversion. I think we have our cost in lined here, so that it just takes 5 to 6% to have a meaningful EBITDA transition or a meaningful GAAP earnings transition. Now that restructuring is behind us, I mean what I like to see more would it be interesting to get a couple of smaller of tuck-in acquisitions started again. Absolutely, but I think at this time right now there is no reason for me to try to be a hero and forecast anything more than that.

Operator

Next we have Kevin Liu from B. Riley, your line is open.

Kevin Liu - B. Riley

So, that sound like most of the softness in revenues relative to your original guidance was attributable to the large customer, but this one can you give a sense for whether or explain any impact on that as well?

Rory Cowan

Quarter-on-quarter, not really. Forex was pretty stable.

Don Muir

It really didn’t have impact coming.

Rory Cowan

So, it's just it's a timing things on as we mentioned to some divisions that some projects that we thought will be released, it really haven’t been released yet. And I guess there were some surprises and when we file OC, some of the customer that people have given up for that actually did grow. So, media coverage is quite different from actual spending with us.

Kevin Liu - B. Riley

And as you look to Q4, d have in the past you talked about your largest established customers being your most profitable. So, as they start to rebalance here, you guys launching new programs in the event of. I think what’s the outlook for the gross margin line going in the Q4.

Rory Cowan

(inaudible).

Don Muir

We expect to see a sequential uptick in gross margins, Kevin. As we mentioned looking forward into 2012 we expect to sustain gross margin by about 100 basis points top of what you see in 2011. So, I think we feel that because of our cross management, and the conversion rates that we are seeing that gross margin improvement is something that we expect.

Rory Cowan

We did have a very large expansion one particular account that has to start in Q2 and Q3. So, I think that will be stabilize as well.

Kevin Liu - B. Riley

To start this current year you guys had announced a number of new customer wins, this one they say how quickly they wanted to ramp up with you.

Rory Cowan

No, we are beginning to see, I think the earlier question about how we are managing the business differently. We are focused on growth again, and so we are beginning with our coverage or adding sales people we are bringing new customers on. And new customers tend to have a customer by customers I mentioned. You got some project phased activities like the 0.5 million or 1 million starts for particular release. And you have multi-year contract activities. The later of course, take a longer time because once you have notified of the win have negotiated particular statement of work, the particular contract, the you have to convert from existing supply or so. Those do take a little bit longer to ramp. You win a project or what I call one off program, that might start in 6 weeks. You win a multi-year program that’s probably a full quarter before you see any particular revenue coming.

Kevin Liu - B. Riley

So, regarding that the new marketing initiatives or marketing organization, could you talk a little bit about where you are in terms of having the right infrastructure and people and place. What incremental investment we might see as we head in a fiscal ’12.

Rory Cowan

We probably see sales and marketing at a similar expense of where we are. I don’t think we might take it up a little bit, but not much more. Second, this global web media operations is really something we have been doing for number of customers and it really integrates both our GDT skills and testing and building websites. Our content skills for local language offering as well as our translation of skills and so it really is an orientation of that it works very nicely for us and we just had a customer counsel last week where we had the bracing and marketing people for a lot of major companies there and I think the initial feedback from this offering is balancing, we are positive than we had anticipated.

Operator

Rich Davis from Canaccord, your line is open.

Rich Davis - Canaccord Adams

Two questions, one with the LivePerson thing, would you ever envision also if you are successful with LivePerson, would this eventually pave it into now Oracle, but like right now any other call center operations who might want to use your features and functionality. And the two, I guess adjacent to this question is competitive environment, have we seen any changes there with regard to any of your customers, Google or whatever I mean any other folks that if you can talk about competitive environment here will be helpful. Thanks.

Rory Cowan

Sure, I think your first question is, right now of course, (inaudible) small cap there is lot of focus we have lot of common shareholders. So, people talk a lot about LivePerson. If you think about other chat platforms this is really the first one of their number of other chat platform out there, and my bet is that this will be integrated into other people’s platforms. We are moving toward getting economics proven with one particular customer at the same time. We are moving forward with partnerships on chat platform . So, your intuition is absolutely correct this is first of a series of opportunities. That’s the first question.

Now second question is any customer activities. Again if companies are facing some headwinds they tend to outsource with us a little bit more. Customers are the trees that are growing to the sky. They tend to outsource with us more. It's when customers really hit the wall, is when we have some problems or if they are doing a high level strategic rebalance where they are going to delay product releases in various countries for a while. And I think we probably have some of each with our large customers and I think that’s one of the good things about us right now. As I have fingers in a lot major strategic (inaudible).

Operator

Vince Colicchio of Noble Financial, your line is open.

Vince Colicchio - Noble Financial

Rory, would you like to at this point give us an update in terms of your revenue expectations for GeoFluent in 4Q?

Rory Cowan

Yes, I think as we said our whole technology group this the GeoFluent and the translation workspace are probably running about nowhere about 1.5 million. We thought it will be a little more as we left the year, as I mentioned we are having some those customers that have expressed interest in the pilots and they have a little bit more reengineering activity going on in house. So, I think in 2012 we will probably be about that 5 to 6 million run rate by the end of the year. So, every six months behind, nine month behind probably is what it feels like. Although, as I said I’m more heartened by the economics that were proven with folks and the general interest for it.

Vince Colicchio - Noble Financial

And Don, again with (inaudible) this is a repeat but do you have revenue breakdown by segment.

Don Muir

Yes, GLC 73.6 million, GDT 28.4 million, and (inaudible) 5.5 million.

Operator

Our last question comes from Rich Baldry from Wunderlich Securities.

Rich Baldry - Wunderlich Securities

Just wondering if you can go into marketing operation from sales side for how that sales process will work, higher staffing on the sale side of that, it looks a much different organization than you had you before. And any color around pipelines and target verticals. Thanks.

Rory Cowan

So, I think Rich, and really that’s one of the key question, because first, it is a different DMU or decision making unit, inside of corporation, because it really is a Participant of their global marketing teams. So, that’s one thing. We have touched on that before with some of our web support operations, but never with this group this (inaudible) of skills. So, we are doing two things; first, we are taking some of our lead sales guys in our GLT business and training them and allowing them to sell into these groups. We are also building a separate sales force and keeping with the vertical nature of the removing the business towards building a separate sales force that will only call on these Chief Marketing Officers, NBPs of marketing. That’s first.

Secondly, operations piece of this, it really needs a combined group of skill, as I mentioned their translation skills, their offering skills and their technology skills. So, our off-shoring teams India, Poland, and China are very capable of doing all the back-office engineering activities for building micro sites, maintain and other things. Our authoring capabilities, we have a content business here, (inaudible). That’s been called upon to really scale and really take a global campaign and not just translate it, but truly reoffer and recharacterize it for a local market.

In addition, we then has a translation piece which is all the standard technical that have to support a worldwide campaign. One indication I think that we have taken that you take somewhere about 70 or 80 days to get a worldwide campaign are rolled out. We taken that down to 35 for them. So, I think this is a new class of outsourcing that calls upon all three skills in the company.

Operator

We have no other question in the queue.

Rory Cowan

Great. Well thanks everybody. As always if you have any other questions or thoughts you all have Sara’s number and she will be able (inaudible) meeting. So, look forward to seeing you again and enjoy your Q4.

Operator

Today’s call has ended, please disconnect at this time.

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