Andrew Kramer - Director of Investor Relations
Stuart Clark - President and Chief Executive Officer
Andrew Hajducky - Chief Financial Officer.
Randy Haugen - Piper Jaffray
Ashley Hemphill - William Blair
Jonathan Haywell – Casanove
Interactive Data (IDC) Q1 2008 Earnings Call April 24, 2008 11:00 AM ET
I would like to welcome everyone to the Interactive Data first quarter 2008 financial results conference call. (Operator Instructions) Mr. Kramer, you may begin your conference.
Thank you very much, operator. Good morning, everybody and thank you for participating in Interactive Data Corporation’s first quarter 2008 financial results conference call. Joining me are Stuart Clark, the company’s President and Chief Executive Officer; and Andrew Hajducky, our Chief Financial Officer.
As is our practice and as we referenced in our news release this morning, we are presenting a set of slides as an optional visual accompaniment to our remarks. You can download and print these slides from our website to follow along, or you can view and advance the slides through the webcast viewer if you are listening to the call over the Internet.
Turning to slide 1, I will briefly review the agenda. After I recite the Safe Harbor statement, Stuart will review our financial performance and share his thoughts on highlights across the organization. Andy Hajducky will then review our results and 2008 outlook in detail. We will then open the call to questions and answers.
With that said, slide 2 covers our Safe Harbor statement. This conference call will contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and Federal Securities Laws including statements regarding the company’s future financial performance, future operating results and plans and expectations and other statements that are not historical facts.
These forward-looking statements are based on management’s current plans, expectations and assumptions. They are subject to known and unknown risks, uncertainties and other factors that may cause the company’s actual results to be materially different from those contemplated by the forward-looking statements. The company undertakes no obligation to update these forward-looking statements to reflect subsequent events.
For further information on risk factors that may affect these forward-looking statements and the company’s business, please refer to the press release issued by the company today as well as to its most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the SEC, which are available on the company’s website at www.InteractiveData.com. An audio replay of this call will also be made available on Interactive Data’s website.
Furthermore, during this conference call management will make reference to certain non-GAAP financial measures such as organic revenue growth, adjusted revenue, adjusted cost and expense amounts and operating profit and operating profit margins from core businesses. The reconciliation of these measures to GAAP measures are set forth following the financial tables in our earnings release or in the slides relating to this conference call, both of which are posted on the company’s website under the heading of investor relations.
Please note that all of the numbers in our prepared remarks are for the first quarter of 2008. All comparisons are with the comparable period in 2007 unless otherwise noted and all comparisons are done on a GAAP basis unless otherwise noted.
With that said, I’ll now turn the call over to Stuart.
Thank you, Andy. Good morning, everybody, and thank you for joining us. As Andy mentioned, there are slides available on our website that support our commentary. We will indicate which slide we are referencing as we move along. Let’s turn to slide 4 to start my commentary.
I believe that our results for the first quarter of 2008 represent a strong start to the year. Generally our performance was in line with our expectations, plus we also benefited from some one-time items that we will summarize later on in this call.
We generated revenue growth of 11.8% or 8.7% on an organic basis, which excludes the effects of foreign exchange and acquisitions. This is consistent with our organic growth rate for 2007 and reflects our strong finish to last year in terms of new sales as well as continued progress on that front during the first quarter.
As we expected, we saw strength in our pricing and reference data and real-time services businesses, our two largest units, while we continue to pursue plans to reignite sustainable growth across the rest of our business.
In terms of geography, our growth in North America was solid even as we grew our international business at a faster rate. In particular, we continued to sustain strong growth in Europe, driven by a higher demand for fixed income evaluations and real-time data feed services, as well as continued expansion of the company’s managed solutions business. Additionally, we continue to reallocate resources that will position us for long-term growth in the Asia Pacific region.
In terms of our operating performance our revenue growth, combined with prudent management of our business and the positive impact of certain one-time items, contributed to a 26.1% increase in income from operations. Net income also grew 26.1% to $32.3 million or $0.33 per diluted share. These results contributed to another good quarter of net cash provided by operating activities.
From a strategic perspective, we also made progress with our one company initiative that began last September when we unified our two largest businesses under a single management structure. In that regard, we completed the work necessary to unify the previously separate pricing and reference data and real-time services sales teams, while also expanding the scope of our major accounts group. We believe that these actions will better position us to more effectively and efficiently address the needs of our worldwide customer base.
This is important: we are continuing to add management talent to our organization and we also advanced initiatives aimed at interconnecting our other businesses more closely with the core of our company.
Moving on to slide 5, I would like to spend a moment discussing our view into the marketplace. There are clear signs of stress among many large banks and other significant sized firms in the financial services industry as a result of the difficult credit market conditions. These conditions are in turn creating some uncertainty with regard to their spending plans for market data.
However, we were pleased with our new sales level during the first quarter and renewal rates across our institutional businesses remained at approximately 95%. I would like to commend our sales and account management professionals on remaining focused on the needs to that our customers during the first quarter while we made substantial progress with the activities required to unify our pricing and reference data and real-time services sales teams.
Given the uncertainty in our marketplace, I believe that our revenue growth this quarter confirms the relevance and appeal of our offerings. The difficult credit market conditions some of our clients are facing do not diminish the other challenges they have to deal with, particularly as they pertain to their valuation, compliance, risk management, trading and wealth management activities. We are well positioned to help our customers in these areas and continue to make investment that will help further enhance our standards.
With that said, we will continue to closely monitor market data spending for this year and we will carefully manage our business accordingly. It’s still quite early in the year but we have reaffirmed our outlook for 2008.
Let’s turn to slide 6 so that we can discuss key highlights at the business unit level. As is our custom, we will begin this review with our institutional services segment and start with our Interactive Data pricing and reference data business.
This business reported revenue of a $113.8 million, up 13.8% or 12.9% before the effects of foreign exchange. Excluding the impact of foreign exchange and the $2.2 million in net contributions from our Xcitek acquisition, the organic revenue growth for this business was 10.7%, primarily due to new evaluations in the reference data business with existing customers in both North America and Europe.
As I mentioned earlier, today’s market climate has increased customer sensitivities regarding their valuation practices and regulatory compliance activities. New regulatory mandates such as the market and financial instruments directive in Europe and Basel II and accounting rules such as FAS 157, are catalysts behind our ability to drive new sales at our pricing and reference data business. Many customers are seeking independent sources to help them determine valuation for their thinly traded fixed income securities held in their portfolios. We believe this will lead to their augmenting their internal evaluation activities with third-party content.
In this context, we view our expertise, broad coverage, reliable delivery, responsive support and independence as strengths that place us in an excellent position to continue to be successful in winning new business.
We have continued to broaden our coverage across an array of asset classes. Earlier this month and our pricing and reference data business expanded coverage of its interest rates swaps valuation service by adding independent valuations of fixed for floating interest rate swaps in Australian dollar and Japanese yen to its existing coverage of swaps in British pounds, euros, Swiss francs and US dollars. We believe that our coverage of interest rate swaps now covers nearly 95% of the total notional amount of interest rate swaps outstanding.
We have continued to see increased adoption of our new basket calculation service that’s designed to deliver intraday indicative valuations of equity and fixed-income exchange traded funds. Yesterday we announced Invesco PowerShares as a new customer of this service as well as our fair value information service.
We believe that the ability to determine intraday indicative valuations covering municipal, treasury, emerging market, sovereign and corporate securities have potential to add greater value to our existing end of day services.
I would now like to move on to slide 7 to review our real-time services business. This business reported first quarter 2008 revenue of $38 million, which is up 17.1% or 11.3% excluding the impact of foreign exchange.
We saw good performances within both our real-time data feed services and managed solution businesses, both of which grew organically at over 11%. Within our real-time data feeds business, we are continuing to win business within the global institutional marketplace. In terms of new sales, we are seeing further adoption of our PlusFeed consolidated low latency data feed service by a broad range of institutional customers and we also closed our first European sale for DirectPlus, our ultra low latency direct exchange data service. In addition, we announced last week that we filled an important leadership position for this business with the appointment of Jay Kilberg as managing director.
In regard to our managed solution business, which is the other part of real-time services, we are generating strong growth in North America while we continue to expand the business in Europe. We see opportunities to further accelerate our progress within our managed solutions offerings in North America, and are working on plans to further strengthen our talent base and build out our infrastructure in this region to accommodate these opportunities. We plan to work closely with institutional customers and prospects to assist them as they strive to grow their wealth management businesses while at the same time lowering their operating and capital costs.
Moving on to slide 8, the third business in our institutional services segment is Interactive Data Fixed Income Analytics, which reported first quarter 2008 revenues of $8.1 million. This was basically unchanged from the prior year’s quarter. Revenue for this business has been flat now for a number of quarters but we were pleased by new sales levels during the first quarter.
We are also making progress on the product development front as we transition BondEdge to a next generation platform. We expect to have this new version of BondEdge available for release to customers over the summer period.
In addition to a product transition, we are also in the midst of a leadership transition. Laurie Adami, President of this business, informed us earlier this quarter that she plans to leave the company for health-related reasons. Laurie has remained dedicated to her role at Fixed Income Analytics while having to deal with health issues for some time now and I fully understand and respect her decision to focus on her health and well-being. We’ve already engaged an executive recruiting firm to assist us with the search for her successor and Laurie will continue in her role until her successor is in place.
Once Laurie’s replacement has been hired, we plan to bring the Fixed Income Analytics business into the Institutional Businesses Group which is currently composed of our pricing and reference data and real-time services businesses. I would like to publicly thank Laurie for her contributions to this business over the past 24 years and in particular during the nine years she has been its leader.
Let’s turn to slide 9 for a review of our eSignal business, which comprises our Active Trader Services segment. eSignal is a leader in providing real-time streaming market data platform and decision support tools to over 63,000 Active Trader’s individual investors and investment community professionals. This business reported first quarter 2008 revenues of $21.8 million, a slight decline of 0.8% or down 1.2% before the effects of foreign exchange.
Although we modestly expanded the direct subscriber base over the first quarter 2007 levels, our progress on this front was more than offset by lower advertising and seminar revenue. eSignal’s reputation as a leader in the Active Trader marketplace was further reinforced this quarter with a number of industry accolades. This business continues to invest in product development and we expect these investments to bear fruit later this year.
At the same time, we are seeing what appears to be attractive growth opportunities emerge for eSignal outside of its core Active Trader market with regional and online brokerage firms. Many of these forms are supporting their own Active Trader platforms and related infrastructures at a time when rising date volumes are causing costs to increase while trading revenues are under pressure.
We believe that eSignal's scaleable technical infrastructure, track record in developing private label solutions and comprehensive suite of Active Trader Services serve as a meaningful foundation for pursuing these emerging opportunities.
I would like to close my commentary on slide 10 with a couple of quick observations before I turn the call over to Andy for a review of the financials. For us, 2008 represents a milestone year as we mark Interactive Data’s 40th anniversary. We’ve grown considerably since this business was started as a computer time-sharing company four decades ago and today we are viewed by our customers worldwide as a trusted provider of specialist financial data, analytics and related solutions across the enterprise.
With that as our foundation, we moved forward, focused on our institutional and active trader businesses. I believe that our first quarter results represent a strong start to the year as we made steady progress in expanding our business globally, fortifying our market position and creating value for all our stakeholders.
As we look ahead, we recognized that there is still significant work to be done. In order for us to achieve our objectives for 2008, we have plans for investment in our content and products that will position us to better address customer needs and grow organically. We also have the requisite financial strength to continue pursuing acquisitions and partnership ideas where the economics of these ideas make good fiscal sense and strategically hold the prospect of enhancing our business.
With that said, I’d now like to transition the call to Andy for the financial overview.
Thank you, Stuart. Let’s begin on slide 12. As a reminder, all the numbers in my commentary are for the first quarter of 2008. All comparisons are with the first quarter of 2007 unless otherwise noted. And all comparisons are done on a GAAP basis, again, unless otherwise noted.
To reiterate what Stuart said earlier, our Q1 results reflect a strong start to 2008 and are positive reinforcement of the value we deliver to customers worldwide. Total quarterly revenue increased 11.8% to $181.7 million. Before the effects of foreign exchange, our revenue grew 10.1%. The Xcitek market data assets, which we acquired back in May 2007, contributed net of $2.2 million in quarterly revenue.
As Stuart mentioned, excluding the impact of foreign exchange, the acquisitions and the related intercompany eliminations, our organic revenue growth was 8.7%. This represents the fifth consecutive quarter where we produced organic revenue growth of 8% or better.
Our growth this quarter is due to the strong performances at our pricing and reference data and real-time services business.
Onto slide 13. This gives you our revenue mix by geography. As you can see, we are expanding our business in each major region. Our fastest growth came from Europe due to strong demand for fixed income evaluations and real-time data feed services as well as continued expansion of the company’s managed solutions business in this region.
Moving on to slide 14, I will review of our operating performance. Cost of services increased by $5.7 million or 10.5% to $60.2 million. This increase primarily reflects the following factors: the effect of foreign exchange; costs associated with the acquired Xcitek business; and increased personnel-related expenses primarily attributable to increased headcount.
SG&A expenses increased by $2.2 million or 3.8% to $59.2 million. The same factors that drove an increase in cost of services also were the primary items behind the increase in SG&A.
Depreciation and amortization expense increased 9.8% to $13.4 million due to the timing of capital spending in prior quarters and the amortization associated with the acquisition of Xcitek. Income from operations grew 26.1% to $48.9 million. In addition to the leverage resulting from the strong organic revenue growth and prudent spending, this performance also reflects the positive cumulative impact of several one-time or non-recurring items on our total costs and expenses such as the exchange gain on the revaluation of foreign bank balances and a number of accruals.
Income before income taxes of $51.3 million increased 26.1% also. This reflects the growth in income from operations plus higher interest income resulting from higher average invested cash balances. Our effective tax rate was 37%, which is unchanged from the year-ago quarter. We reported a 26.1% increase in net income to $32.3 million or $0.33 per diluted share.
Turning to slide 15, I will now briefly review our balance sheet and cash flow highlights, starting with our cash position. Interactive Data ended the first quarter of 2008 with no outstanding debt and our cash, cash equivalents and marketable securities totaled $247.2 million, which is a $31.7 million decrease over our balance at the end of 2007.
Now the decrease in our cash, cash equivalents and marketable securities is due to $74.5 million that was returned to shareholders in the quarter. This more than offsets the $42.4 million in net cash provided by operating activities.
Now of the $74.5 million returned to our shareholders, $47.2 million was used to pay our special dividend of $0.50 per share; $14.1 million was used to pay our regular quarterly dividend of $0.15 per share; and $13.2 million was used to repurchase our common stock during the quarter.
Moving to slide 16, in the first quarter of 2008 we generated $42.4 million in net cash provided by operating activities. This represents an 11.3% increase over last year due to the increase in net income which was partially offset by negative changes in working capital.
As you can see from the table on this slide, we generated a 10% increase in net cash provided by operating activities. The $0.44 per diluted share in the first quarter compared with $0.40 per diluted share in the first quarter of 2007.
Slide 17 provides further insight to the strength of our balance sheet. Our accounts receivable at quarter end was $118.7 million, which translates into DSOs of 59 days. This is down one day compared with our year end DSO levels and unchanged from the same time last year.
Our current ratio is 2.5 at end of the first quarter, which is within the historical range and up from 1.9 at year end and 2.3 for the first quarter of 2007.
In terms of capital spending, our capital expenditures during the quarter totaled $6.9 million.
Slide 18 provides an update on our stock buyback programs. During the first quarter, we repurchased 456,000 shares of our common stock at an average price of $28.98 for a total expenditure of $13.2 million. Now entering the second quarter of 2008, we had more than 2.3 million shares available for repurchase under our current program.
Moving on to slide 19, I’ll review our outlook for 2008. Given our strong start for the year, we are reaffirming our 2008 outlook. As a reminder, we detailed our financial targets for the year just two months ago and they were as follows:
We are planning for 2008 revenue growth over 2007 in the 7% to 9% range;
We expect our 2008 income from operations will grow in the range of 9% to 11% over 2007.
We anticipate that our 2008 effective tax rate will be in the range of 36% to 38%.
As a reminder this is notable increase in our effective tax rate over 2007 as our effective tax rate last year benefited from a number of discrete or one-time items that are not expected to recur in 2008. The higher effective tax rate we are expecting will constrain our anticipated 2008 net income growth which we are targeting to be in the 3% to 6% range.
We anticipate that the 2008 capital expenditures will be in the range of $45 million to $47 million. Now that concludes my review. I’ll turn the call back to Stuart, so that we can begin the Q&A session.
Thank you, Andy. That concludes the management commentary. At this stage we would be very happy to take questions, so operator could you please open the call.
Your first question comes from the line of Randy Haugen - Piper Jaffray.
Randy Haugen - Piper Jaffray
You mentioned the impact of several one-time items. Could you quantify the overall impact there and also going into where it actually hit?
What we’ve got as far as one-time items is approximately $1.3 million to $1.5 million and it relates to bringing back some of the accruals that were established at year end that had to be trued up as of the first quarter.
Randy Haugen - Piper Jaffray
So did those mostly fall into SG&A?
Randy Haugen - Piper Jaffray
So that’s the reason for the significant drop there and it is probably going to go up to a more normalized level as we move into next quarter.
Well, some of these accruals are prepared from time to time; a number of these accruals were based upon estimates as of year end in which there were certain things that had changed subsequent to year end and we brought those accruals back down.
Now also, that affected our first quarter in a very positive way was foreign exchange and that was $3.2 million that ran through the P&L both through cost of sales and SG&A.
Randy Haugen - Piper Jaffray
What type of impact have you actually seen from the financial services slowdown so far? Are you actually seeing pullbacks from clients at this point or is it more just rumblings about what’s happenings in the market?
I would say it is more the latter at the moment, Randy. Nobody could avoid seeing the impacts on some of our big clients over the past few months. We have continued to be strongly engaged with them in terms of the relevance of our offerings as we talked about in the commentary and then activity levels, sales levels, we were very happy with them in the first quarter; activity levels have remained very, very high. We watch it very closely but that is how I’ve assessed it at the moment.
Randy Haugen - Piper Jaffray
If we take into account the cyclical headwinds for the industry that you’re looking at but also the increase in regulatory rumblings which could be a positive for the business, are you guys incrementally more positive or negative now on the 2008 outlook than you were a couple of months ago when you last gave guidance?
It’s a real hard question to answer. It’s almost a day-to-day thing. We all read the papers and your sentiment is affected day to day. I think in all honesty I feel broadly the same as when we gave our guidance if you weigh it all out I don’t think anything has shifted my sentiments significantly in one direction or the other. It is only a couple of months on so that’s how I would answer that.
Randy Haugen - Piper Jaffray
We have seen a number of new regulatory proposals coming out of the last few months. Is there anything out there that would be really beneficial to your business?
The one that is actually starting to get more interesting to us is the market and financial instruments directive in Europe which as you know we spent some time and effort last year investing in product enhancements and changes and the regulation came in to effect in November of last year and it was a little bit of a non-event to begin with because it just didn’t seem to have the initial impact that we had expected.
But we are now seeing, I think the industry itself was somewhat behind the regulators in terms of where it needed to be, but we are now seeing lots of discussions going on based on companies now really working hard to get themselves in compliance with the directive. For our European operations, that’s looking very positive.
I think regulation, we always talk about that as something that affects our business positively and we find that still a great deal of the conversation we are having with clients and the things that they are doing are related to regulation of one kind or another or making sure that they are adhering to the way the SEC would like to see things operating. So it’s a positive factor, I would say.
Your next question comes from the line of Ashley Hemphill - William Blair.
Ashley Hemphill - William Blair
Going back to the conversation in terms of the credit crisis and what’s going on, I just wanted to maybe pose the question a little differently; I understand that clients are having some difficulty and there are rumblings in the market, but are you seeing any specific demand that you’re surprised about in terms of the usage of your products in certain specific areas because of what’s going on?
Are we surprised?
Ashley Hemphill - William Blair
Are you finding any areas that are getting much more increased demand, more so than you would have expected or are being affected positively because of what’s going on other than on the regulatory front?
I can’t point to any one thing, to be honest with you Ashley. One of the things we were pleased about in the first quarter was that we were getting, it wasn’t any one product line or any one area where we were benefiting from good sales progress. We had a pretty good performance across the board.
I would highlight that Europe has been performing very, very strongly for us and although it is not yet reflected in the growth numbers, we are feeling very positive about Asia. We have been putting a lot of emphasis. Europe and Asia have been less affected by the credit crisis than here in North America. In Asia, we have been realigning some of our resources so that we have got more of a presence, more people on the ground in Asia and we are feeling very positive about that. But is there any one thing that surprised us within the quarter? Nothing leaps to mind.
Ashley Hemphill - William Blair
I’m wondering, are you seeing more competitive interests in fixed income pricing? I know that Moody’s indicated that they were focusing on their fixed income pricing product and Clayton had said something about it as well. I’m just wondering if you view that as a competitive threat?
We haven’t seen any what I would call competitive impact in terms of what we’re doing. You certainly see more organizations that are extending their product efforts to bring themselves into areas of pricing information. But we haven’t seen any impact of that on what we’re doing.
There has always been a lot of competition in this field. What we do, we offer a very comprehensive product in terms of the pricing evaluations that we deliver. I think we generated a very strong trust level over the years, put ourselves as a very independent provider of this content, not linked to another product or a spin-off of another product.
I think what a lot of people have not fully appreciated is how the service is just more than the content; it is the all around service, support and flexibility of delivery that goes with that.
Now let’s not in any sense underestimate the competition or to denote any complacency on our part. This is something that we work very hard at and we feel we do a good job at and when we continue to expand their coverage of asset classes in order to be able to give our customers the fullest service that we possibly can. So there are a few more people that seem to be coming into the industry but I don’t see it as dramatically different from the way we have operated in this industry for 40 years.
Ashley Hemphill - William Blair
In terms of the buybacks during the quarter, I’m just wondering, were those primarily 10b5 purchases?
Your next question comes from Jonathan Haywell – Casanove.
Jonathan Haywell – Casanove
First in terms of phasing of your few business, try and help us understand. Essentially if the lights go off at one of your clients, when it feeds through to you in your business, when you see it in your revenues and I guess it may well depend on different contracts that you have in different types of businesses, if you could help us with what the different contractual agreements you have? So when we might see it through, what the lag effect is.
Second question, which is somewhat different, given the more cautious climate you are talking about, is it changing your view at all about how much cash you should keep on your balance sheet, what sort of balance sheet you should run and the balance between retaining it and paying out dividends?
In terms of what happens, I was thinking of a real life sales situation because if a company did go completely bust -- and we hope that never happens in our industry -- obviously that revenue would stop effectively once the business was no longer operating.
But I suspect that the situation you are referring are if there are mergers that happen under a somewhat stressed situation, what happens then is if it’s a merger with another customer, clearly all of our services are used in mission critical operations so unless the business closes down they continue, so do the contracts that we have and then whoever is the party that they have merged with we end up with a conversation with them in terms of how it impacts the total relationship that we have with them.
Very often we have situations where both organizations, the customers and sometimes there is an overlap. I can think of recent situations where actually there isn’t as much overlap as occurred in other merger situations. But we will end up in probably a fairly drawn out negotiation with the two parties or the leading party after the merger has happened and we negotiate some kind of combined license for the two services.
Typically, this takes some considerable time to flow through if there is a loss of revenue and hopefully there isn’t any of any substance; but every situation is different.
As it relates to the balance sheet and the cash requirements and if that would change our perspective, just to remind everybody we don’t have any one customer that accounts for 10% or more of our revenue. So it really would have to be a group or a large combination of customers that would then have a significant impact on our revenue which would then impact our cash requirements.
But given the scenario as outlined, if there was one customer that we found had a lights out situation I don’t think that’s going to have a material effect on the way that we look at our balance sheet nor will it have an effect on our cash requirements.
And we feel very happy at the moment because we don’t have any debt; we have got a strong cash position and we are entering a period where we hope the asset prices for potential acquisition targets will be at a more reasonable level. So we’re very happy to have a strong balance sheet that hopefully can continue to sustain our dividends and our ability to acquire attractive assets.
Jonathan Haywell – Casanove
I was probably sounding a little bit melodramatic with the lights out thing. More a question of if you are entering into or you are winning new business based on long-term data supply agreements to clients then one of the things that they are going to be impressed by is obviously a very strong balance sheet and are you going to be around in several years time, consistently supplying. So just thinking from that point of view, does it make you even keener to retain a net cash position while times are tough or [inaudible] really which is growing opportunities really to use that cash as market gets tougher?
Well I think we have got a strong balance sheet; if we had a weak balance sheet it might have made us have to start thinking about it, but we haven’t. We have got a strong balance sheet so we really haven’t had to think in that way, Jonathan. But we are pleased to have the resources available to pursue ideas that I think there will be more of them I think over the coming months hopefully at more reasonable prices.
I think, Jonathan, that our discussion internally and with our board from a use of capital standpoint is not about the constricting or restricting of cash flows but what to do with the excess cash in regard to looking at the various opportunities.
Given that we generate pretty nice operating margins, we as a management team always believe that the best place for our cash is to reinvest it in our businesses, either through internal development or through acquisitions.
There are no further questions at this time. Would you like to continue with your presentation or any closing remarks?
I think we’ll just move to concluding remarks. Thank you, everybody, who has participated in the call. We appreciate your continued interest in Interactive Data and for taking the time. We hope that you come away with a better understanding of the quarter and our enthusiasm for the business and its prospects. We look forward to speaking with you at the time of our second quarter results which will be in late July.
Thank you very much indeed.
Thank you, ladies and gentlemen, this does conclude today’s Interactive Data first quarter 2008 financial results conference call.
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