Boland Jones – Chairman and Chief Executive Officer
Theodore Schrafft – President
Michael Havener – Chief Financial Officer
Sean O’Brien – Senior Vice President, Strategic Planning and Investor Relations
Tavis McCourt - Morgan Keegan
Rod Ratliff - Stanford Group
Sri Anantha - Oppenheimer
Premiere Global Services, Inc. (PGI) Q4 2007 Earnings Call February 21, 2008 5:00 PM ET
Good day everyone and welcome to the Premiere Global Services Incorporated Fourth Quarter 2007 Conference Call. Today’s call is being recorded. This call is also being simultaneously broadcast over the Internet. You can go to our website at www.premiereglobal.com and go to our press section.
Alternatively, you may listen to the rebroadcast from your telephone beginning at 8 p.m. Eastern Time today through midnight Friday, February 29. The replay numbers are 888-203-1112 within United States and Canada or at 719-457-0820 outside of North America. The confirmation code to access the replay is 4419425.
All lines will be muted throughout the presentation until the question-and-answer session period begins.
At this time, I would like to turn the conference over to the Senior Vice President of Strategic Planning and Investor Relations for Premiere Global Services, Mr. Sean O’Brien.
Thank you and good afternoon everyone. If you have not received a copy of our fourth quarter earnings release, please visit our website at PGiConnect.com, where it is available in our Investor Relations section.
Joining me on the call this afternoon are Boland Jones, our Chairman and CEO; Ted Schrafft, President of Premiere Global Services; and Mike Havener, our CFO. Following some brief comments by management, we will open the call to your questions.
Before I turn it over to Boland, I would like to remind everyone that statements made in this conference call, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties.
Such forward-looking statements are based on management’s beliefs, as well as assumptions made by and information currently available to management, pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Our actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those we identified in our Annual Report on Form 10-K for the year ended December 31, 2006; our Form 10-Qs for the quarters ended March 31, 2007, and June 30, 2007, and our other filings with the SEC.
In addition, during this call we will present non-GAAP financial measures of our business. Please consult both our press release and Form 8-K filing of this afternoon for reconciliations of these non-GAAP financial measures to the most comparable GAAP measures. These materials are also available at our website at PGiConnect.com.
At this point, I will turn the call over to Boland.
Boland T. Jones
Thanks, Sean and good afternoon everyone. This is Boland Jones, Chairman and CEO of Premiere Global Services. Welcome to our Fourth Quarter and Fiscal 2007 Earnings Call.
For more than 16 years, Premiere Global has always been an innovator of new communication technologies. We’ve built a worldwide open standards platform, called the PGi Communications Operating System or PGiCOS for short, that today delivers multiple customer solutions in an on-demand software service model.
Our strategy has been to build a broad suite of these solutions and to embed them into our customers’ communication-centric business processes. This is in contrast to many of our competitors that are single-product focused by conferencing or email-only providers.
We believe we are leader in a large, yet, vastly underserved market as companies around the world are more focused than ever on improving their businesses and are realizing how the application of communication technology gives them a competitive edge.
Today we believe our PGiCOS solutions help companies fix or improve broken or inefficient business processes, automate paper-based and manual processes, and in many cases create new and better ways of doing business.
We believe we are unique in offering an end-to-end suite of business process improvement solutions and our customers are clearly seeing the value in this strategy. That’s why more than 50,000 companies, including 95% of the Fortune 500, use the PGi Communication Operating System today. It is the value we create for these customers along with our world-class service and support that led to a record year across the board for our company.
We grew revenue greater than $63 million, an increase of nearly 13% to $560 million for the year. Our volumes on the Premiere Communication Operating System were up across the board substantially. We accelerated our operating leverage with an increase of more than a point-and-a-half in our operating margin. And as included in the release, our operating cash flow and pro forma EPS both grew in excess of 33% for the year.
As far as we know, no other competitor has put together multiple communication technologies on a single on-demand platform. We believe we are significantly ahead of our competitors here and that our strategy and focus on this segment of the market provides us a unique and very substantial growth opportunity.
We recently commissioned a study that projects our market opportunity this year is approximately $10 billion and will grow to nearly $17 billion in the next 4 years, and thorough continuous innovation and growing customer acceptance, we believe our true market opportunity will be even greater.
Over the past few years, we have shifted our sales focus away from simply selling product and competing on price, to selling enhanced value and return on investment, or ROI. This shift, this solution based selling has been very positive for our company.
Today, our sales professionals are having entirely different conversations with their customers than just a couple of years ago. They start by listening to their customers and prospects about their business objectives.
Then they suggest ways for these customers to achieve their goals by enhancing or automating in existing business process or perhaps even creating a new more efficient process through the application of our PGI Communication Operating System.
In many cases, this begins at our conferencing solutions, but once the relationship is established, we immediately broaden it to include additional applications.
As I look ahead, the next step for our company will be to take the multi-solution capabilities of the PGiCOS to the next level, to focus our development and marketing efforts on more specific business applications. Ted Schrafft, our President and Chief Operating Officer will speak out about this and other operating strategies in just a moment.
We continue to believe in the value we are creating not only for our customers but for our shareholders as well, and to that point we remain committed to reinvesting a portion of our cash flow and liquidity and continuing open market share repurchase program, while our stock remains at what we believe to be attractive levels.
In conclusion, let me say, I am super proud of what our company has accomplished, and I remain very excited about the many opportunities that lie ahead, as we execute on our mission of changing the way companies both view and manage their business processes.
Before I turn the call over to Ted, let me thank him and our management team and over 2,500 associates around the world for their continuing hard work and dedication.
Theodore P. Schrafft
Thank you Boland and good afternoon everyone. Let me begin by echoing Boland’s excitement and enthusiasm for our unique market position and the momentum in our business as we enter the new year.
I stated last quarter, and I’d like to state again, our company is more aligned, more focused, and more disciplined than ever, all in support of the customer and shareholder value we are creating through the growing acceptance of the PGI Communications Operating System.
Just like 2007, we enter 2008 with a very clear plan and roadmap for success. Our corporate objectives and operating plan, first and foremost, support the continued acceleration of our revenue growth by helping customers achieve their business goals through the application of our communication technologies.
You heard Boland lay out our strategy and opportunities for 2008 and beyond. My job is to deliver on that strategy through operational and execution excellence.
With that in mind, our first objective is to grow our revenue and value by increasing our focus on selling our existing customers additional PGiCOS solutions. This is important, as it increases our customer loyalty, because we are assisting them with solutions that improve their business, in additional and now in multiple ways.
As a result, PGI moves up the value curve with these customers and is viewed as an integral partner, as opposed to a product-oriented vendor. The focus on selling additional solutions to our existing customers began in 2007, when we sold second and third solutions, and in some cases fourth and fifth solutions, to more than 1,000 customers.
In addition, we also sold 250 brand new customers multiple PGiCOS solutions at the time of initial contract. Collectively, this effort resulted in several million dollars of incremental annualized revenue for our company. And just as importantly, it began to position PGI as a mission critical solutions-based partner to these customers.
Our second objective is to further enhance our value to our customers by packaging our PGiCOS solutions into more specific horizontal and vertical applications aimed at speaking to and improving very specific customer business processes, as Boland mentioned in his remarks.
Let me give you an example of what we mean by this. Currently, we do an excellent job of offering our customers a broad set of solutions, such as Notifications & Reminders or eMarketing Solutions, that customers integrate into their business to improve or automate a certain process.
Today, for example, an airline might use our standard Notifications & Reminders solution to notify its passengers of a flight delay or cancellation. Going forward, for example, we might take that same standard solution but package it and market it specifically for this particular airline process. This will allow all airlines to easily see and recognize the benefits, the relevance and the value of this application to their business.
Another example might be a Notifications & Reminders application targeted at pharmaceutical companies to assist patients with reminders to take their prescriptions, or financial applications, specifically packaged to help banks automatically alert credit card customers of fraudulent activity on their cards.
Taking our existing solutions and packaging them specifically for these targeted vertical or horizontal applications will communicate more clearly how we add value and improve specific business processes. We believe the potential application of our communication technologies is immense and that our focus on applications will greatly enhance our addressable market opportunity.
Our third objective is to increase our customer value through enhanced pricing options, such as subscription-based pricing or license pricing in addition to our current usage-based pricing.
These pricing models, which are common with on-demand service providers, are available today for all of our solutions that are sold on the web. In 2008, we will offer these pricing options through our direct sales force as well.
Our final objective is to continue to enhance our web presence by bringing greater functionality and customer value to our web portal PGiConnect.com.
We are embracing the power of web 2.0 to deliver video content on our site that will help make our solutions and applications even more tangible through customer testimonials and customer stories that explain the many ways our solutions and applications are being used to improve or automate real world business processes.
Our goal is to have perspective customers hear directly from our existing customers about the many ways in which the PGiCOS is delivering value to their business.
So, to quickly recap, selling additional second or third PGiCOS solutions to our customers, our application focus, our pricing strategies, and our continuing web initiative represents some of the highest priorities in the year ahead that we believe will greatly enhance our value and accelerate our growth.
Now, before I open up the call to your questions, let me discuss our results for the fourth quarter and 2007 in greater detail.
As reported this afternoon, we grew revenue in the fourth quarter by more than 15% to $146.2 million, up from $127.1 million in the comparable prior year quarter. As Boland mentioned, revenues for the year totaled $559.7 million representing growth of nearly 13% from 2006 totals.
We expect to continue to grow at a double-digit rate and as detailed in our release we have guided to revenue growth in excess of 10% in 2008.
Our gross margin in the fourth quarter increased sequentially by 60 basis points from Q3, 2007 levels, totaling 59.5% of revenues in the quarter in keeping with our guidance and our projections this time last year.
We continue to project incremental margin expansion as reflected in our financial outlook for gross margin improvement for the full year 2008.
For the fourth quarter, GAAP diluted earnings per share were $0.16. As defined and detailed in our release, pro forma diluted EPS totaled $0.23, a 35% increase in same quarter a year ago.
Looking ahead, we anticipate continuing operating leverage in our model. And we currently project diluted EPS to increase greater than 20% in 2008.
Net cash provided by operating activities totaled nearly $32 million during the fourth quarter. For the year, we grew operating cash flow by greater than 33% to $97.6 million, ahead of our previous guidance of approximately 20% growth in this important metric.
We continue to invest our cash flow and liquidity in our share repurchase program acquiring nearly 10.5 million shares of our common stock last year or approximately 15% of our total shares outstanding.
Capital expenditures totaled $46.3 million in 2007 or just over 8% of revenues. As included in our release, we expect capital expenditures to decline as a percent of consolidated revenues in 2008.
In conclusion, let me say that I am very pleased with our performance in the fourth quarter and 2007. I continue to believe that we have the right vision and strategy, the right people and the right plan for continued success, and I am looking ahead to 2008 with great energy and excitement.
I join Boland and the rest of the management team in thanking each of our associates for their excellent accomplishments last year and for the continuing hard work on behalf of our customers and our shareholders.
And at this point in time, we’ll open the call up to your questions.
For our first question we go to Tavis McCourt - Morgan Keegan.
Tavis McCourt – Morgan Keegan
Thanks and congratulations on a great quarter. Couple of questions, the broadcast fax again looked like it stabilized a little bit more than I would have thought. What’s your thought process there on what you think that will do going forward? Is it just the long-term contracts are starting to pay dividends or has it just gotten to a point where it’s low enough where there is just a base set of users out there?
And then I wanted to talk a little bit about the leverage next year, which looks pretty substantial. Do you expect to grow sales and marketing and get most of your leverage on the R&D and G&A side or will you limit sales and marketing growth as well?
I will answer both your questions. On broadcast fax, as we had expected and you know we have been pouring a lot of that energy and work into stabilizing that and the rate of decline is slowing down. Again, as we expected, and I think some of the benefits of the work we’ve put into that customer base is paying off.
And you are right, it is a result of getting those customers under contracts and working more closely with those customers to sell them new solutions in relation to the PGiCOS. So, I think from my standpoint, the good news is this issue is falling behind us.
We love those customers. We’ll continue aggressively to go out and sell those customers the rest of the solution sets under the PGiCOS, but all in all we expect broadcast fax to be about 10% or even less of our consolidated revenues in 2008.
The second, on the leverage question, Tavis, we expect in 2008 to continue to get leverage on the gross margin line. We had an uptick this year. We have brought in a number of initiatives to improve it and we expect to get continued improvement on that line in 2008.
We also expect to get leverage in the G&A line. We expect to see that number as a percentage of revenue we will get leverage there. On the sales and marketing side we are going to invest. We stand tall and proud being a very aggressive sales and marketing company, so we are going to be adding sales people.
We are also making investments in new talent in the organization as we look to move from solutions to applications, as we look to move some of our pricing strategies forward. The web continues to be a big development area. So I would say that sales and marketing is going to continue to be an investment area for us.
Tavis McCourt – Morgan Keegan
Got you and then a broader question on the web strategy and two main benefits were initially talked about there, one being on the cost side and one being able to more aggressively going after the small business market using the website. Can you talk about how the web strategy’s helped out in both of those activities so far?
There are a lot of these strategies that are ongoing. The web strategy is paying off; it’s paying off in huge dividends in a couple of areas. Some in sales, some in second solution sales so it’s paying off mostly what we wanted to pay off with initially.
Yes we are getting a lot of smaller than global customers I’ll say, grabbing on to several of the solutions in the communication operating system but this is a vehicle that we are going to use to make tangible a very intangible issue, which is the communication operating system, the technologies on it and how to apply those technologies into each of everybody’s business process need.
So we really expect, as Ted said in his speech and pointed out, we expect to have hundreds and hundreds and hopefully a thousand or better customer testimonial videos on the site, about late this summer starting very soon maybe in the next 30 days putting those things on the site with very large customers and small customers talking about how they apply our technologies into their processes.
We expect to introduce several new applications on the site here very shortly and then ongoing forever. We expect to help lead our pricing changes using the website and the web presence for each and every one of our customers long-term and so it’s those things plus the leverage we are going to get yes from trying to not replace a direct salesperson by any means or indirect resellers or OEMs by any means but to try to bring in the other sales that we’re not able to reach geographically or just even in market physical presence, where we don’t have salespeople sitting in certain cities in this country or in other countries where we don’t have salespeople sitting where we actually have indigenous services.
Tavis McCourt – Morgan Keegan
Great and then a final financial strategy question. Looks like you did a little over $50 million in free cash flow this year and looks like probably over $60 million in ‘08, should we think about a continued strategy of buying back some stock and making acquisitions here and there or should we think about more aggressive pay down of debt or talk about the cash strategy at this point?
I am going to answer that question by maybe rephrasing it a little bit if I may please. We are super happy with our leverage levels right now on the balance sheet. If we didn’t do anything to pay down any debt and we used our cash flow and our dry powder to acquire our own stock, which we continue to believe is undervalued, and we look opportunistically into the marketplace, we would be super happy doing that the entire 2008 year.
So we are good to go with our leverage where it is. Obviously, we expect a good growth here in 2008. It will make our leverage look even smaller at the current debt levels. So we are going to use it opportunistically both in our own stock as well as if there is opportunities out there for technology or customer base as usual.
For our next question we go to Rod Ratliff - Stanford Group.
Rod Ratliff - Stanford Group
Congrats, nice quarter. I will go ahead and get the obligatory conferencing question out of the way. How is pricing these days, generally speaking?
Pricing is pretty solid. There is nothing to report on pricing. As we have said in the last call, or I think even two calls, it’s steady now, continued cost consolidation as we’ve seen announcements in the industry this week.
I think you will see more consolidation by us and other players. It just strengthens the entire market and helps us. That consolidation combined with invention of different ways to price these products and subscription-based pricing, which we hope to lead the entire market with, I think pricing is good.
Rod Ratliff - Stanford Group
Boland, you know I have been following the industry for a while in one manner or another, I just got to figure that it’s not naturally as fragmented as it got in the early part of this decade.
Yes, there is no doubt.
Rod Ratliff - Stanford Group
Do you ever foresee a set of circumstances where PGI would abolish usage based pricing altogether? Do you always want to leave some flexibility for your customers?
I am never going to say never, but if I wrote a press release that was written in The New York Times or Wall Street Journal two years from now that said where we’d like to be as a company, it would be thought of and known as not only a creative company on invention of technologies and the way we place them in the marketplace, but it would talk about things like how aggressive and how creative our pricing metrics are and how we’ve taken, what’s viewed as sometimes traditional things that are measured in a certain way and we’ve turned them upside down and done our customer great service as well as our company a great service.
So if it is all subscription-based two years from now; if it’s term based; we are experimenting right now with bandwidth pricing. Bandwidth into the communication operating system. So it could be any of those things, moving away from where we are now towards those things at an aggressive rate.
Rod Ratliff - Stanford Group
In terms of selling expense, probably looking to tick up some in the first quarter for sure, even as a percentage of revenue because of the sales confab, is that a reasonable assumption and then would you expect it to settle back down to levels more maybe in line with third quarter in terms of percentage of revenue?
Yes, even second quarter, Rod, as you know, and for those who don’t know, we do a good amount of sales launch at the beginning of the year, and we’ve developed it as an incredible tool to not only bring in our sales associates, but to also bring in associates beyond sales, sometimes in customer service, sometimes in different parts of client services.
We spend a good amount of money in this in the beginning of the year, somewhere in the upwards of $2.5 to $3 million. We get everybody in the company on message. We get everybody culturally motivated. We get everybody very fired up, and we send them out to accomplish those objectives that we set up for that current year.
And so that drives the first quarter up a little bit in those expenses, down a little bit in opportunity, but it recovers well in the second quarter, beginning in the second quarter.
Rod Ratliff - Stanford Group
All right, great. In terms of CapEx, you had mentioned in your prepared remarks, either you or Ted did, that it’s going to come back down in ‘08 compared to ‘07. You used to guide I think to about 6.5% of revenue as rule of thumb. And obviously spend a bit more this year, but do you think you probably going to get back to that 6.5% of revenue rule of thumb?
I think it’s probably going to be more in the 7% to 8% range. And again that’s just obviously our continued investment in building out our platform and our solutions.
Rod Ratliff - Stanford Group
Okay, one last one. Last quarter, Boland, you gave some stats in terms of the number of web leads and generally speaking how much multi recurring revenue from the new customers. If you gave that again this quarter, I didn’t hear it, so did you give anything out in that regard?
We didn’t give anything out, but Ted’s got some stats for you real quick here.
Over the web in the quarter, I don’t have all the recurring revenue, but we generated over 3,000 leads. We actually had 4,000 new customers added, but 3,000 total customers, but 3,000 leads were generated that actually went to our direct sales force. And out of those 3,000 leads, 1,000 of them were closed actually by that team. So I can get you or we can follow up with you and get you the exact recurring revenue. But we continue to see good traction.
Rod Ratliff - Stanford Group
Great, I’d appreciate that.
We go next to Sri Anantha - Oppenheimer.
Sri Anantha - Oppenheimer
Couple of questions, could you talk about the drivers of revenue growth in this quarter, to what extent the strengthening of the international currencies has helped you and also what was the contribution from acquisitions?
The second one is I know you are aggressively rolling out this web-based strategy. During the quarter, could you talk about how many of the new customers have taken multiple solutions as opposed to just taking a single solution?
And then the last one, I know you talked about targeting the small and medium-sized businesses, there are a number of other players too in this particular segment who are actually targeting like single-based solutions, especially for small and medium-sized businesses at much lower price points.
So how are you competing there in the marketplace where multiple solution might not be that important for a small business customer? Thank you.
I will try to take some of those and invite my management team to butt in when they feel it necessary. First of all, I want to talk about the last one first. He asked about, how do we stack up against single-solution providers and whether or not they or us are the aggressive pursuer and so forth and so on.
We’ve got the scale and the size over all these single-source providers in 99% of the cases, whether you are talking about desktop fax, whether you are talking about email, whether you are talking about notifications, we’re in some cases a lot larger. In most cases a lot larger than those companies, and we are getting better at learning how to use our scale to our advantage in a lot of those areas.
But we will certainly be aggressive in meeting each one of their challenges with the customer. But there is no match when it gets to the point where you are a salesman and you have got the next three tools the customer needs and your competitor only has the first tool.
Each of us on this phone call, it’s easier for us to go to the store that has multiple items that we need. They think the same way and they tell us every day the large global customers that we deal with, worldwide globals, countrywide globals, small-to-medium businesses, they all positively respond to the fact that we are the competitor with the multiple solutions.
They can totally identify if they are buying conferencing. They may start with conferencing but they say “come back. As soon as we get going with this we want to talk to you about your email marketing technologies. We want to talk to you about your document management technologies.” And it’s an absolute killer advantage that we have over the competitors. So that is working beyond a shadow of a doubt.
I will let Ted talk about the revenue drivers for the fourth quarter mainly and the acquisitions. But the acquisition for the fourth quarter that we did, NetConnect, over in Sweden and so forth that was a $2 to $2.5 million revenue contributor with almost a zero contribution on a contribution margin basis. It was the first time we got into that.
Year-over-year in the fourth quarter, we picked up around $5 million between NetConnect, as Boland mentioned, and the Budget acquisition we did earlier in the year.
Couple of following comments, hopefully we will get all your questions answered here. I also said in my opening remarks too on the multiple customer piece that we actually added during the course of last year, we had 1,000 customers that basically added a second or a third solution, and we are just getting going with this thing.
So as I said, this is going to be a really significant part of our selling and marketing strategy going forward because as we get that second and third solution as I said, we really move from a single solution provider to more of a partner assisting them with multiple business problems, and it just moves us right up the value curve.
And we are seeing that with customers where we sold three or even four, or in some cases five solutions as we are starting to do. We are comfortable competing on a single solution, but we really enjoy competing on multiple solutions because we really feel we have an advantage there that can take it over the top.
On the drivers of revenue, first of all, we had great growth across all three of our segments and our regions. North America, Europe and Asia all had significant and fairly consistent growth. I want to say that while conferencing certainly continues to be a major driver and major opportunity for us, we are getting a lot of conferencing opportunities in accounts where we have other solutions.
So I think we are beginning to see, I just want to say the beginnings of the leverage and the resonance of selling the PGI Communication Operating System and going into these accounts with multiple solutions, even though conferencing may be the one that flips in first.
So as we go forward you are seeing actually the effects of the PGI Communication Operating System in our overall performance. Although if you break it down, you may not see it in every category, but it is beginning to build and contribute to our overall performance.
Sri Anantha - Oppenheimer
Great, thank you. Ted. One last clarification, I know you talked about rolling out this subscription-based pricing. Is that going to be rolled out to all the existing customers or is it just going to be for new customers in 2008?
We said it in previous calls, that’s going to be for new customers. We’ve got a lot to work out there; we’re at the very beginning of that. So, we are going to work on that this year for new customers.
Our customers now use our services largely only through the PGiConnect portal; almost 90% of our customers come there every single day to perform the service opportunities that we provide them in their business structures and their business processes.
So we want to make sure the prices we are putting out there are prices that we are happy with, if they are current customers and they decide to inquire as to those prices, but we are marketing them solely to the new incremental customers today.
I also wanted to say, Sri, and just add a comment to your question and earlier question, you heard Ted talk about revenue drivers for the fourth quarter; that’s going to continue on into next year for the revenue drivers.
I was commenting earlier about the sales cost, I just want to make sure that nobody misunderstood me. We still expect the first quarter to go up in revenue and in earnings despite the fact that we have those extra burden sales costs in the first quarter.
My comrades here are telling me to make sure I made that point as opposed to leaving that point on the table that we are incurring costs without assuring people that we expect increases in all areas as well.
Sri Anantha - Oppenheimer
Thanks all. Congratulations on a good quarter.
And with a follow-up question, we return to Tavis McCourt - Morgan Keegan.
Tavis McCourt - Morgan Keegan
Just a couple of follow-ups on financials. Looking at the balance sheet, it looks like DSOs were down pretty substantially in the quarter, not something we are used to seeing in a Q4, so great job there. But where should we look for those to be at going forward and was there any particular driver of that improved performance this quarter?
And then secondly on the tax rate, bounced around a little bit this year, in and around 33%. Is that what we should look for going forward as well?
I was very pleased with the DSO performance that we put on in the fourth quarter. We ate our own dog food; PGiCOS, we used the Accounts Receivable Management tool. We basically put it out there in the second half of the year and you saw the full effect of it in the fourth quarter and that was primarily in North America, where we rolled it out. You are going to see us do that in Europe and Asia next year.
But as far as I anticipate looking at DSOs in the future, I don’t want to put myself in a situation where I can promise it’s going to go down any further than where it is. It’s actually a very decent rate right now. We are at a point where we feel like we should be maintaining at these levels and making smaller or incremental improvements.
So looking at it year-over-year, it’s going to move around during the quarters. But I wouldn’t look for anything on the working capital side of significance in ‘08.
And then second question that you had on the tax rate, it has been bouncing around. I think for the full year ‘07, we had looked at it as normalized as a 34% rate. There were a number of items obviously this year with us having to adopt FIN 48 and then unfortunately as you adopt that there are things that did not go to the P&L and then on a go-forward basis, it went back through the P&L any adjustments related to that particular accounting guidance. But all in all, 34.5% to 35.5% is a good range for us.
And with that ladies and gentlemen, we have no further questions on our roster at this time. Therefore, Mr. O’Brien, I will turn the conference back over to you for any closing remarks.
Thanks Rufus, and thank you all for your interest in Premiere Global Services. If you have any follow-up questions, please feel free to call me on my direct line, which is 404-262-8462. Thanks and we’ll look forward to updating you on our first quarter performance in April.
And ladies and gentlemen, this does conclude the Premiere Global Services Incorporated Fourth Quarter 2007 Conference Call. We do appreciate your participation and you may disconnect at this time.
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