Marvin Sims - IR
Rich Daly – CEO
Dan Sheldon – CFO
Ian Zaffino – Oppenheimer
Stefan Mykytiuk - Pike Place Capital
Tien-Tsin Huang - JP Morgan
Broadridge Financial Solutions Inc. (BR) F1Q08 Earnings Call November 7, 2007 8:30 AM ET
I would like to welcome everyone to the Broadridge Financial Solutions first quarter fiscal year 2008 earnings conference call. (Operator Instructions) I will now turn the conference over to Marvin Sims, Vice President of Investor Relations. Please go ahead, sir.
Good morning, everyone and welcome to Broadridge quarterly earnings call and webcast for the first quarter of fiscal 2008. I am Marvin Sims, Vice President of Investor Relations. This morning I am here with Rich Daly, Chief Executive Officer for Broadridge and Dan Sheldon, Chief Financial Officer for Broadridge.
I am sure everyone has had the opportunity to review the news release we issued earlier this morning. The news release and the slide presentation that will accompany today’s earnings call and webcast can be found on the Investor Relations home page of our website at Broadridge.com. We’ve also posted to our website the key revenue metrics that we mentioned during our fourth quarter earnings call and an 8-K was filed this morning.
Before we begin, I would like to remind everyone that during today’s conference call, we will discuss some forward-looking statements that involved risks. These risks are discussed here on slide 1 and in our periodic files with the SEC.
During the review of our financial results to provide a point-to-point comparison between fiscal '08 and fiscal '07, all pre-tax and net earnings numbers discussed throughout the presentation are non-GAAP and exclude one-time transition expenses and interest on new debt. The actual GAAP reported numbers and comparisons are also listed.
During the review of our segment results, again for a point-to-point comparison for revenue and operating profits, we will discuss adjusted numbers that reflect a change in the methodology that occurred in the third quarter of fiscal 2007 for the interest segment allocation between clearing and outsourcing and the other two segments. Again, a reconciliation to the GAAP numbers is available in the presentation appendix as well as in the press release.
Now let's turn to the next slide and review today's agenda, Rich Daly will start today's meeting with his opening remarks and provide you with a summary of the financial results for the quarter and discuss a few key topics. Dan Sheldon will then review the financial results in further detail, and review cash flow performance. Rich will then return and review the fiscal 2008 guidance and provide a summary before heading into the Q&A part of the call. After Q&A, Rich will provide his closing comments.
Now please turn to the next slide for Rich’s opening comments. With that, I'll now turn the call over to Rich Daly.
Thanks, Marvin. Good morning, everyone. This morning as part of my openings remarks, I'll discuss the following key topics: First, the results of our first quarter; next, the market conditions during the quarter; and then an update on key topics and initiatives. After Dan's update, I'll discuss how our first quarter and the market conditions prompted us to raise our guidance to a range of $1.30 to $1.40 versus our original guidance of a $1.17 to $1.25.
We believe it’s important for you to hear my update on what drove our first quarter financial results and the market conditions they occurred in; as well as Dan’s update to have a better context for understanding our increased guidance.
Let me start by saying that I am very pleased with our results and earnings and I am encouraged by the market activity that drove us above our planned performance. It’s a strong start to fiscal year 2008, although the first quarter is generally only planned about 14% of our full year earnings. We were even able to grow over the two client losses we previously disclosed. We continue to drive positive margin expansion, greatly impacted by trading volume revenue falling to the bottom line and benefits from one-time items.
The primary components of our over-plan performance for the quarter were internal growth with significant growth in trading volume of 37%; also contributing were one-time items and even event-driven activity was slightly above our plan. However, I want to point out that some of this over-plan performance was partially related to the delayed timing and ramping up our investment spend and the public company infrastructure spend. I will talk more investments later during my update on key topics and initiatives.
Relative to our expectation and coming off the summer months, I am also very pleased with our overall sales. The first quarter is historically the smallest contributor to our overall plan. Our sales for the quarter of $30 million are just over 25% of our full year plan; or recurring sales for the quarter making up 30% and event-driven sales making up the balance. The net of this is that our recurring sales are in line with plan, and event-driven sales are over-plan.
Now, we will always need to keep our financial performance in context with market conditions, and that market turns are difficult to predict. At the time we put together our plan, we were concerned about projecting growth off of a record year of 30% growth in event-driven revenue. At the time we presented our fiscal 2008 guidance on August 22, our concerns were compounded by the summer credit crisis and its potential impact on the market and event-driven activity.
Here we are now, a quarter later, and our first quarter trading volume was up 37% and even event-driven results are slightly over plan. At Broadridge, we will always be concerned about forecasting the upside or downside of market activity during any short-term period. We are confident we can control our businesses. We recognize we are not in control of the markets we serve.
Let’s move to key topics and initiatives, starting with client retention. The best way I know to retain our existing revenue and grow new revenue is to provide the ultimate client-centric experience. We need to avoid being commoditized, so as our clients’ markets evolve, we must expand and reinvent our offering to create better and stronger value propositions.
Everyone of our P&L owners, and therefore the entire organization, now have clear requirements that they understand their clients’ strategy and how we fit into that strategy today, and more so in the future.
Now I will talk about investments and a small acquisition. In the quarter we completed a small acquisition for less than $6 million plus an earn-out by acquiring Finaplex. This acquisition provides us with some additional wealth management capabilities. We have also included in our fiscal ‘08 plan about $10 million an incremental investment to search out and begin development of new products that will drive revenue growth in future years.
We expect this expense to be part of our ongoing run rate. We have a stringent approval criteria before any funds are dispersed. This has caused us to be behind our planned fiscal ‘08 spending levels, but we believe this will ultimately ensure that we invest these funds in the best opportunities with clear goals and clear accountability.
Now for quick update on the regulatory front. First, notice and access. We have successfully rolled out notice and access. Issuers have saved real money and the functionality we built works as planned; however, long-term issuer participation rates will be difficult to project. This is due to the unknown status of the ten-day vote for directors and other corporate governance proposals that if incorporated into the proxy rules, will make notice and access less attractive to issuers. All of these results to-date have been presented to the SEC.
Next, XBRL . We continue to work with the SEC on developing the taxonomies for the notice and proxy statement. We are proud to step up to this leadership opportunity created by this new SEC initiative.
Next, a brief update on suppression incentive fees. Brokers and their trade association have been questioned on the appropriateness of charging suppression fees in certain situations. We participated with SIFMA and the brokerage community in analyzing these fees and helping the New York Stock Exchange and the SEC develop the reimbursement fee schedule. We remain confident in both the value proposition and its direct tie-in to the requirements of the rule.
Other regulatory activities remain high. However, this is consistent with our experience over the last two decades.
With that said, I will now turn the call over to Dan and when he's finished, I will be back to review our fiscal '08 guidance and provide my closing comments before we head into the Q &A.
Thanks Rich. I am on slide 4. Our financial results for the quarter, our revenues grew 3% and without distribution fees, grew 7%. Of the 3%, think of that as half the growth coming from the segments and the rest coming from our one-time contract termination fee, as well as the benefit from FX.
The contributions, by the way, from sales and losses to revenues were in line with our expectations. With respect to internal growth, it was better than our expectations by $16 million and was driven primarily by increased trade volumes in our securities processing and clearing and outsourcing segments, and interim statements and event-driven mutual fund proxy activity in our investor communications segment. I would also point out that event-driven sales are part of our internal growth as they don’t necessarily repeat each year.
Losses were in line with our expectations, including the two large client losses which impacted revenues by approximately $16 million.
Turning over to EPS before transition one-time expenses and interest on new debt, it is up 48% and primarily driven by pre-tax earnings, so let me focus for a minute then on pre-tax earnings. They grew almost 50% this quarter. Our over-plan internal growth of $16 million I just mentioned had an EBIT contribution of over 60%, which more than made up for our two large client losses with respect to EBIT.
We also benefited from the termination fees I mentioned and FX. I would also point out that our expense levels are below, as Rich mentioned, our planned rate due to a slower than anticipated ramp up of corporate structure and incremental investments in the business. We also benefited from our royalty expense dropping off to the tune of $11 million.
A couple of other points I would make on this page: our estimated tax rate is 39% versus our guidance of 40%. We have analyzed our FIN 48 requirements and implementation had little impact on our effective tax rate. Our debt now is $533 million, as we paid down an additional $85 million, and since the spin, have paid down $155 million.
As Rich mentioned, our sales for the quarter were strong, were above last year and again approximate 25% of our full year target.
As I mentioned last quarter, the rate of which sales convert to revenue in any fiscal year is about 50% with the carryover of the remaining 50% going into the next fiscal year. Let me be a little bit more specific with respect to event and recurring. Event-driven sales usually fall to revenue within the fiscal year that they are sold; and with respect to the recurring sales which primarily happen in our security processing and in our clearing and outsourcing, they fall to the current year to about 20% with the carryover remaining at 80% until the next fiscal year. Hopefully that will help you with some of the modeling that you are all trying to do.
Let’s turn to pages 5 and 6 for a discussion of the segments. On slide 5 we will start off with investor communications. Revenues were down 3%, or if you take out the distribution fees, flat; and slightly above our plan. The loss of the previously disclosed large client decreased revenues by 3%. Our event-driven revenue were flat, but the distribution fees related to these revenues were down year over year due to the mix between pre-sorted bulk and first class.
Our recurring internal growth drove revenues up by 3% and higher than our expectations for both interims and for some of the mutual fund, but lower for our equities. With respect to our margins, they were up 210 basis points. The distribution fee mix change added 180 basis points, which I will come back to in a second; and the product mix, as we would expect, added about 30 basis points.
Now back to the distribution fee contribution of 180 basis points. We had, this period, more bulk presorted jobs in this quarter versus a year ago in Q1, we had more first-class jobs. And if you remember what we’ve talked about before, we make profits on the bulk presorted activity which we share with the issuers and others. There is no profit on first class. So this is how you can have a decrease in total revenues for distribution fees, yet have an improved margin as far as contributions to EBIT.
With respect to notice and access, Rich already brought up where we are at. I’ll tell you it had minimal impact to our results. Our distribution fees dropped by approximately $2 million and generated fees of less than $1 million. As predicted, there was no significant negative impact to our earnings. By the way though, Q1 is by no means indicative of the year as proxies in this period in Q1 represent only 10% of our full year proxy revenues.
With respect to securities processing, revenues are up 10% which are above our plan and the increased revenues were primarily driven by internal growth related to trade volume and for equities, was driven by just a few clients. As you can see by our sub-bullets, trade volumes in both equities and fixed income are up significantly. The way to think about internal growth in this segment is that for every 1% change in trade volumes this will translate into a range of $300,000 to $700,000 in incremental annual revenue; and depending upon the product and the client mix, that's where you get into the range of the $300,000 to $700,000. This quarter, we are in the higher end of that range.
Now with respect to the 2.5 million trades per day, over the last three quarters -- which was our last third quarter and fourth quarter, and including this first quarter -- trades as adjusted for sales and losses to give us the true picture of internal growth has been relatively flat at that rate of 2.5 million trades per day. Last year you'll remember we showed over 25% growth in trades over the prior year for the fiscal year, primarily all coming from the internal growth.
The impact to Q1 this year was a large increase in trade and therefore the revenues. In Q2, there will be an increase as well. However, if trades don't increase beyond the 2.5 million before new sales and losses then the second half of our year will remain virtually flat.
With respect to revenue from new sales, the contribution was 3% and we gained an additional 3% of growth from non-trade activity around professional services fees. These fees, by the way, fluctuate period to period as they are specific to client projects. As previously disclosed, the loss of TD Waterhouse cost us 6 percentage points.
Now, when we look at margins they are up 620 basis points. When you think about internal growth from trade volumes, it always usually virtually falls to the bottom line. By the way, our data center savings this quarter added 120 basis points, which will continue through out the fiscal year.
Finally, although no impact to our margins in Q1, I would like to make you aware that we capitalized both integration and implementation expenses related to new business and then amortize these costs over the contract life. Our FY08 plan contemplates about $5 million in incremental expense being added back to our cost structure in quarters 2 through 4 as some of our R&D personnel come off a large project where this costs were capitalized. Currently we don’t see anything in this fiscal year as a replacement project for those personnel. This is normal in our business and we don’t hire and fire experienced R&D personnel just due to timing of projects.
With that said, let’s turn to slide 6. With respect to clearing and outsourcing, revenues were up 13% and in line with our expectations. Sales are the major growth driver and contributed 14% which was split 60% between clearing and 40% for outsourcing. Although we lost TD as an outsourcing client, we gained two additional clients this quarter. Losses were primarily related to the TD Waterhouse, and internal growth contributed 9% and was pretty much driven by net interest and clearing fees.
With respect to margin improvements of the greater than $1 million, they are absolutely in line with our expectations as we continue to leverage our infrastructure and drive towards breakeven this year.
Onto other, which is not really a segment but is our other category. Revenues all relate to one-time contract cancellation fees.
With respect to net expense of approximately $8 million, this is a combination of our interest expense of $8 million, our one-time transition expenses of $2 million and these are offset by the one-time items that we mention above in revenue, and the difference between allocations to our segments and actual expenses.
With that said, let me go a little bit deeper into this area. Some of our corporate expenses are allocated to this segment. We have mentioned before that our incremental corporate expenses, as well as investments, would approximate on an annual basis the fall-off of our royalty charge of approximately $35 million. We still expected this to be the case.
However, as Rich mentioned, our Q1 other expense run rate is below our planned levels due to slower than expected ramp up in corporate expenses and investments. Our plan anticipates that each of the future quarters will be approximately $6 million to $8 million higher than Q1’s expense rate. All of the incremental spend is comprehended in our FY08 guidance and again, this is inline with our original expectations communicated back in August.
With respect to FX, we continue to see the weakening of the US dollar and again this year contributed favorably to our results. As we mentioned before, on a full year basis foreign revenues represent about 10% of our consolidated revenues.
I would like to move on to slide 7, our cash flow performance as well as the discussion of how we look at cash flows. Many of you have asked us to talk about how we think about cash flows and how we define free cash flow and our cash performance for the quarter during the calls.
The way we manage and analyze our cash flows is as follows: as you’d expect, we add back to net income depreciation and amortization, including other and stock-based compensation expense. We also aggregate our changes in working capital and analyze the changes which are usually changes in accounts receivable and accrued liabilities related to those receivables.
The pluses or minuses each quarter, or year, are primarily due to timing of collection and payment of liabilities, versus any real working capital requirements. I still estimate our real working capital needs to approximate whatever we have in revenue growth in any specific year.
We then go on to specifically identify the changes in long-term assets and liabilities, as these changes are driven by implementation, deferred expenses and any deferred revenue related to the contracts. The amortization offset is the other depreciation and amortization I mentioned above.
With respect to the clearing and outsourcing receivables and payables, as well as any deposits with clearing organizations and segregated cash due to regulatory requirements; these are listed within the cash flow provided by operation activities.
We separate out our clearing business from our net cash provided by operation activity and we do this for the following reasons. We want to know the free cash flows available for our use to investor finance in the non-clearing and outsourcing businesses. And as we all know, the clearing and outsourcing business is itself a self-financing operation and any funding needed by the organization to finance margin debits is generated from customer payable credits or third-party lending from our revolver.
We then go on to subtract our capital expenditures and intangibles to arrive at our definition of free cash flow. As we have mentioned before, our depreciation and amortization related to capital and intangibles is basically an offset in any year.
As you can see from the chart, Broadridge generated strong cash flows this quarter. I would also point out that given seasonality in our business, over 70% of our profits are usually generated in the last two quarters of our fiscal year and therefore our fourth and first quarters have the greatest cash flows.
As I mentioned before, our long-term debt at the end of Q1 is now down to $533 million. At this point, I will turn the meeting back over to Rich Daly who will discuss our increase in financial guidance as well as the uses of our free cash flow.
Thanks, Dan. As I mentioned during my opening remarks, the strong start to our current fiscal year has prompted us to raise our guidance. We are increasing our revenue guidance to a range of 1% to 4% and our diluted EPS guidance before one-times for fiscal '08 from a range of $1.17 to $1.25 to a new range of $1.30 to $1.40.
In our new guidance, we are reflecting the benefits from the first quarter. The low end of the guidance assumes a slight fall off in trade volumes and less event-driven revenue for the remainder of the year. The high end assumes slightly better trade volumes and modest event driven revenue increases for the remainder of the year. Our guidance does not contemplate any major downturn in the markets we serve that could result in a significant drop in market activity.
With respect to free cash going forward, we will continue to use our strong cash flows to pay down debt, pay a dividend, acquire products and businesses and at least for fiscal '08, we are not contemplating any share buybacks.
Let's summaries before we go into Q&A. We had a very solid start to the fiscal year, with strong quarterly earnings driven by internal growth and continued event-driven activity. As a result of this strong start, we have increased our financial guidance. Markets are difficult to predict and activity in markets will create both upside as well as downside. Broadridge is in control if its business, but not of the markets.
Our strong cash flows enable us to pay down debt to $533 million. We are executing our growth strategy and will drive our service profit chain culture to provide the ultimate client-centric experience in our industry. This will ensure we are lined strategically with our clients.
Finally, we will continue to invest appropriately in our business for future growth that will drive greater shareholder value.
Now I will turn the call back over to Carol to open it up for Q&A.
Your first question comes from Ian Zaffino – Oppenheimer.
Ian Zaffino – Oppenheimer
Very good quarter. My question would be on the clearing and outsourcing business. You narrowed loss very nicely. How much of that is actually attributable to progress in that business in and of itself, or really the synergies that you’re getting from the other parts of your business as you have melded in the CNO business into the rest of the company?
Great question. By the way, it’s coming from the business itself. You’re talking, I believe, about how we look at the fact that we used to have these cross charges and have any of those cross charges changed anything?
We now state the numbers we give you, we wiped all that out, so you are seeing a real period over period, the exact same kind of charge last year as this year coming from the SPS business, so therefore every piece of leverage coming there, that $1 million improvement, is all being generated by the business itself.
Ian Zaffino – Oppenheimer
Margins have improved very nicely this quarter. How are you going to continue to do that going forward? What type of initiatives are you looking at, if you can talk to that, that would be great, thanks.
Are you speaking again to the clearing and outsourcing business?
Ian Zaffino – Oppenheimer
I am talking about corporate-wide, two of the biggest initiatives or whatever, and what would be the biggest areas of margin improvement?
In all of our businesses, it’s a scale play. By having very efficient infrastructures, the more volume we can put through that infrastructure we will almost always be able to create margin improvement. We always manage expenses very, very tightly and we expect to do that going forward. It’s generating more sales activity across our existing products is what generates the best margin improvements for us.
Our next question will come from the line of Stefan Mykytiuk - Pike Place Capital.
Stefan Mykytiuk - Pike Place Capital
I was glad to see there were no articles on E*Trade this morning in the Journal.
So were we.
Stefan Mykytiuk - Pike Place Capital
Can you just elaborate Rich, what’s the status of the of the board study of long-term compensation for management? Any kind of view of when that will get wrapped up, so you guys can be tied side-to-side with the shareholders?
As I previously stated, we were very, very pleased with the diversity and the strength of the board we were able to put together. A new spin-off though, the company has actually spun before the board is legally in place, so one of the first things the board did was identify their own outside comp consultant, which they have done. They have engaged him to understand where Broadridge is relative to its peers. We have an extensive CD&A, as you will see in the notice and proxy statement, but my understanding is that the board work continues. I am not part of the comp committee, as one would expect me not to be, but we believe that they will have more data certainly by the end of the calendar year. That’s pretty much what I can tell you at this point.
Stefan Mykytiuk - Pike Place Capital
Keeping along the line of board-level discussions, you mentioned in your comments stock buybacks not contemplated for the fiscal year. It looks like you are on track to pay down this debt and get to your leverage targets. Beyond that, is that something that you think would be a priority for free cash flow? Buybacks, that is.
The priority for cash flow is to create value, so where we are right now is paying down debt certainly is a priority. We are looking to get to that stated goal of 1:1 debt-to-EBITDA.
We are committed to pay a dividend and we are committed to use our cash flows to improve the business whether that be through the tuck-in or product acquisitions or business acquisitions.
We absolutely will consider, as we go forward, whether or not doing buybacks will create greater value than the other options we have. At this point in time, we don’t anticipate that to come into play in the current fiscal year though.
Stefan Mykytiuk - Pike Place Capital
Just going one step further with that then, acquisitions. Are there larger acquisitions out there that you’ve identified that you think are very attractive and its just not the right price or the seller is not willing to sell yet? Or are there not really acquisition opportunities at this time?
We originally use the term tuck-ins for acquisitions. We use the definition there of the $30 million to $35 million range. Because of our strong cash flows being slightly better than what we anticipated, we haven’t changed our position on the type of transactions to do. Meaning, the tuck-in philosophy is something that, it would be in a space that we would be confident we would be very good at. It would be executing within our sweet spot of transaction processing and would be executing in our sweet spot to a client base that knows and respects us and will likely consider us for additional services.
Because of the strong cash flow though, we are willing to look at a definition of tuck-in being larger than the $30 million to $35 million. Let me make this clear though; we are not going out there specifically looking to do a deal for the sake of doing a deal. It would have to be something that meets what I’ll call a tuck-in criteria, and probably better said, tuck-in means something we would be confident that we would have the skill set and the ability to execute well on.
Your next question comes from Tien-Tsin Huang - JP Morgan.
Tien-Tsin Huang - JP Morgan
Congrats on the results as well. Question about securities processing. Relative to our model, the securities business drove nearly all of the upside and I am pretty surprised by the margins; specifically, the implied incremental margin as the profit increased by the amount as the revenue increase. It sounds like volume, incremental margins around the trade volume is very high. Anything else that drove that outcome that we should consider? It sounds like contract termination fees are not in the segment.
Let me first comment on the securities processing piece. That business is virtually entirely computer-based, and therefore any additional activity that we process in that business will have very high margins and we’ve experienced this type of contribution from better than planned volumes throughout our history.
I’ll let Dan comment, as he did during his update, on some other pieces that impacted us.
Thanks Rich. Just to be clear on that, you’re absolutely correct Tien, that we did not include any termination or really any kind of one-times in our segment, because we think that distorts the picture. So those will always be in the other. Now coming back to when you are thinking about the Trade Processing, once you get beyond about 5%, 6% growth, in what we call trade processing, you cover your fixed costs or any increase to those fix costs in the business.
So to that point, anything above that pretty much does fall to our bottom line. And in any given year we can always have what we call concessions that might run a little bit higher than the prior year, a little bit less than the prior year. But right now going forward anything that we call the incremental piece above 5% or 6% should pretty much fall to the bottom line.
Tien-Tsin Huang - JP Morgan
I’m just thinking on a go forward basis, as we model out, obviously we know about the client loss so we assume some kind of growth rate on the organic. It feels like we should be assuming, like you said, something closer to 80%, 90% incremental margin. Am I wrong in thinking that way, in terms of aligning incremental revenue growth that just dropped through to the bottom line?
I’ll just give you an example, say that we’re going to grow 10% of the internal growth for the trade volume, so just as an example. That first 5% really is eaten up in what we call any of our what we’ll call incremental costs or fixed cost like merit increases, other kinds of expenses like that. Then the remaining really falls to the bottom line. I still look at it somewhere between a 50% and 75% in an aggregate.
Once I’ve gotten over my what I call fixed cost piece of incremental, then it really all drops to the bottom line; so I still put it in the 50% to 75%, I wouldn’t let it all drop.
For those of you on the call who heard us during the road show, our early presentations, when I described the securities processing business, I’ve historically said the cost of that first transaction that goes through the system is really ugly. The cost of the last transactions going through our systems, it’s difficult to find cost. So it’s a large infrastructure, significant systems and infrastructure cost upfront, but very, very, very scalable.
Tien-Tsin Huang - JP Morgan
That is the beauty of scale. Two other quick questions, maybe Dan if you can comment on stock comp going forward? What should we expect? If you could also comment on this pipeline for clearing and outsourcing. How is that shaping up? Are there any changes in the broader demand environment? Thanks a lot.
How we think about stock comp. What we’ve really said out there is that we have an expense rate of about $25 million. The way that would increase over time is it is highly gauged to our stock price, and I think you understand what I mean there. So, if our stock price went up or down by 10% that is very much a factor in whether that stock comp would move up or down. It’s not a factor, the $25 million is not impacted by we are going to add more people necessarily to it or that we are giving more shares to people.
The derivative that drives that is the value of the stock. Then you have to figure out the value of that you have to put through as far as the expense. Does that help you there?
Tien-Tsin Huang - JP Morgan
Got you. Yes.
Tien, I am sorry. Could you repeat the second part of that question?
Tien-Tsin Huang - JP Morgan
If you can just broadly comment on pipeline for clearing and outsourcing business, and if there has been any change in the demand environment given the economic backdrop?
Sure. I didn’t cover this in my comments, so I am grateful to you to ask the question. I had stated in the past that we were pleased with our pipeline. We absolutely do remain pleased with the pipeline. We have put more assets into identifying new activity for pipeline as we go forward, and I am pleased with those efforts as well. So overall that’s why I used the term very pleased because between the actual results and the pipeline, we are feeling good right now about where we are with sales.
At this time, I am showing that we have no further questions. I will now turn the call back for closing remarks to Mr. Daly.
Thank you. I want to end by saying that we first of all appreciate your participation. But most importantly I want to say that I am feeling good about Broadridge and about our future. I am confident that we are on the right path and we will continue to be leaders in our markets.
Again I want to thank everyone for participating. Dan, Marvin and I look forward to speaking with all of you whether it be throughout the next quarter or after next quarter. Thanks again, and choose to have a great day.
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