Dun & Bradstreet Holdings, Inc.
Q1 2015 Earnings Call Transcript

Published: 5 May 2015

[Operator:]

Good morning, and welcome to Dun & Bradstreet's 2015 First Quarter Teleconference. This conference is being recorded at the request of Dun & Bradstreet. If you have any objections, you may disconnect at this time. All participants will be in a listen-only mode until the question-and-answer session of the call. I would now like to turn over the call to Ms. Kathy Guinnessey, Treasurer and Investor Relations Officer. Ms. Guinnessey, you may begin.

[Kathleen Guinnessey:]

Thank you. Good morning, everyone, and thanks for joining us today. With me on the call this morning are Bob Carrigan, our President and Chief Executive Officer; Rich Veldran, our Chief Financial Officer; and Josh Peirez, our Chief Operating Officer. Following my brief remarks, Bob will talk about our first quarter results and the acquisition we announced last week. Rich will then take you through the financial performance in the quarter and our outlook for the rest of the year. After that, we'll open the call for your questions. As you can see from our press release schedules, we've made a few changes to our reporting. We've modified our segments and enhanced our revenue categories to more closely tie to our strategy and how we've been talking about the business for the past 15 months or so. Let me take you through the changes. First, we're now reporting our segments as Americas, which is the U.S., Canada, and Latin America, and Non-Americas, which is the rest of the world. This is not a big change from prior reporting. We've just moved Latin America from the prior Europe and Other segment into the Americas and combined Europe and Asia-Pacific into one segment. The new Americas segment is approximately 75% of 2014 revenue and Non-Americas was the remaining 25%. Second, below the segment level, we continue to report on revenue by the primary use cases of our data and analytics

[Robert P. Carrigan:]

Thank you, Kathy, and good morning. I'm glad you're able to join us this morning as we have lots going on in the business that we're going to talk about. I'm also pleased to announce that we're going to hold an Investor Day event on June 15 in New York City, where we can share more details about where we are headed as we execute on our strategy. So save the date and more details will be coming shortly. Now in my comments, I'm first going to talk about our results for the quarter, and then spend most of my remarks discussing the acquisition we announced last week. Rich will go into more details of the quarter as well as the financial impact of the acquisition in his remarks. Last night we reported that operating income was down 11% and EPS was down 14%, both as expected. If you remember, when we laid out our expectations for 2015, we said that results in the first half of the year would also be lower than the second half due to the timing of investments and also due to timing of revenue growth, which is more back-end weighted. Our revenue grew 1% in the quarter, which was about 1% lower than we expected. We've talked in the past about how the timing of large contracts can skew our quarterly results. This year we had a multi-million dollar government contract signed during the first quarter for a six-month term compared with a 12-month term last year. Most of this revenue is recognized at the beginning of the contract term, so the shift hurt our first quarter revenue by about a point. We expect to sign the other half of that contract in the third quarter. Other than this timing issue, I'm pleased with where we are against our plans and am feeling really good about how things are progressing. Everything I'm seeing makes me feel confident that we are on track to deliver our guidance for the year. And I'm happy to say we're continuing to make good progress on our key strategic initiatives. During the first quarter, we introduced a new modernized expression of our brand, including a new logo, which you can see on our website, and our new brand purpose, which is

[Richard H. Veldran:]

Thank you, Bob, and good morning, everyone. I'm going to take you through three things today. First, I'll discuss our results for the quarter; second, I'll talk about the new acquisition and what it adds to our financial results; and third, I'll update you on our guidance for the rest of the year. Total company revenue for the quarter was $376.8 million, up 1%. The Americas segment represented about 75% of our revenue at $281.5 million in the quarter and was roughly flat to last year. The timing shift of the large government deal, that Bob discussed, hurt the Americas by about one point in the quarter and shows up in both risk, product categories. This timing shift is responsible for half of the 3% decline in risk overall; and the rest was primarily due to DNBi. DNBi was down 1% during the quarter, a 2.5 point improvement over the 4% rate of decline that we saw in 2014. Pricing continue to be in the low-single digits, but overall sales and retention picked up a bit. We also had one large customer convert from another RMS product to DNBi in order to take advantage of the advanced functionality that DNBi offers, adding almost a point to DNBi's growth in the quarter. We're encouraged with the improvement in DNBi and expect its performance to be better than last year, although still down for the year. Other enterprise Risk Management was down 1%. As we've noted in the past, the revenue in Other Enterprise Risk includes usage-based products and some project spending and can be lumpy from quarter to quarter. Compliance and supply showed good growth in the quarter, but that was offset by timing, including the government contract that I discussed a moment ago. Sales and marketing revenue increased 5% in the quarter. Traditional prospecting represented about a quarter of S&MS revenues and was down 5% due to declines in Hoover's. Advanced marketing solutions, the remaining three-quarters of S&MS, was up a strong 9%. A little more than half of this growth was from NetProspex, which we acquired in early January. The rest of the increase was due to continued strong growth in our DaaS/CRM Alliances. We also saw nice growth in our other marketing products that are aimed at helping our customers identify the best new prospects to help their businesses grow. However, that growth was offset by declines in other third-party Alliances. If you recall, in addition to our newer CRM Alliances, we have relationships with other third-party providers, and one of our Alliance partners lost a customer, which in turn lowered our revenue from that partner by about $2 million in the quarter. We knew about this going into the year and it's factored into our 2015 guidance, but it did cause a drag in Advanced Marketing Solutions in the quarter. Deferred revenue in the Americas was down about 1% in the quarter before the effect of foreign exchange. This does not reflect committed sales through Alliances that would have added about two points to the total balance. Overall, we're pleased with how we're progressing against our plans for the year in the Americas segment. We expect to recover the lost revenue from the government timing shift later in the year, and we're getting growth from the key strategic products that we expect to drive growth as we progress on our strategy, including compliance, supply, and our DaaS solutions, including our CRM Alliances, and our new Professional Contact solutions that came with the NetProspex acquisition. These strategic products, in total, contributed over three points of growth to the Americas in the quarter. In the Non-Americas segment, we had revenue of $95.3 million, which represented 25% of our revenue in the quarter. Non-Americas revenue increased 3%, which was consistent with our expectations and also with our recent performance. Turning to profitability, operating income was down 11% in the quarter, which was in line with our expectations. As expected, foreign exchange hurt operating income by about two points in the quarter. EPS was down 14%, again in line with expectations. EPS declined more than operating income because our tax rate was very low last year. We had a large tax benefit a year ago due to the release of reserves related to closed audit periods. Now let me talk about the financial aspects of the Credibility acquisition and how we expect it to impact our results in 2015. As Bob said, Credibility has doubled their revenue since 2010, reaching $135 million last year. Their 2014 sales growth was in the mid to high-single digits, and we're excited to bring their expertise to Dun & Bradstreet to help accelerate our strategy. They've also been profitable, with an EBITDA margin approaching 20%. In 2015, we expect the addition of Credibility to add about four points to our revenue guidance, assuming that the transaction closes in mid-May. The four-point contribution represents 7.5 months of revenue and is net of the $20 million annualized royalty revenue that we would have received when Credibility was independent. We expect the acquisition to add three points of growth (25

[Operator:]

Thank you. At this time we will begin the question-and-answer session. First question comes from Peter Appert with Piper Jaffray.

[Peter P. Appert:]

Thanks. Good morning.

[Robert P. Carrigan:]

Hey, Peter.

[Richard H. Veldran:]

Hey, Peter

[Peter P. Appert:]

So, Bob, this is more big picture rather than specifically about the quarter, but you've talked about, I think, getting back to mid-single digit revenue growth over the next couple of years and it's difficult for us outsiders to see the progress in the context of the lumpiness quarter to quarter. So I'm wondering how you're feeling about that target and timeframe to get there?

[Robert P. Carrigan:]

Yeah. Thanks, Peter. Look, I'm feeling pretty good about the strategy overall. Obviously, a lot of our revenue this year is back-end weighted. But when I look at all elements of the strategy, we're making great progress. And I'm particularly excited about addressing what was the single biggest drag on our revenue and our desire to get to that mid-single digit growth, and that was our performance in the small business channel, which has been a challenge for us. And with the Credibility acquisition, we feel that we're bringing in the capabilities to help us get to that objective. Now we've addressed Alliances, our large strategic strategy and then, of course, our small business now with this acquisition. So I'm really excited about where we're going and the progress we're making.

[Peter P. Appert:]

Do you think, therefore, with the addition of DBCC, we could anticipate something close to mid-single digit revenue growth in 2016?

[Robert P. Carrigan:]

Yes. We are absolutely on track for that and all of this is intended to help us get there.

[Operator:]

Next question comes from Shlomo Rosenbaum with Stifel.

[Shlomo H. Rosenbaum:]

Hi, good morning.

[Robert P. Carrigan:]

Hi, Shlomo.

[Shlomo H. Rosenbaum:]

Thank you very much for taking my questions. And I'm familiar with the management team of Credibility and they're a very good management team and a very good product set. It seems to me that just the business on its own would weed this acquisition to be kind of a solid hit. And if you retain the management team for an extended period of time, this would be a home run. Do you have any thoughts as to ability to retain them? And then also a follow-up, I want to talk about if there's any ability for the acquisition to help with the DNBi sales as well.

[Robert P. Carrigan:]

Right. Well, thanks for the question. I'm really excited about bringing this new team in. As you said, they are a fantastic team with a proven track record in the SMB stakes. We have an earn-out that's built into the agreement, a $30 million earn-out, with sales and profitability targets that would really help us create lots of tremendous value for us and for the Credibility team that will be running the business. So the earn-out is one of the reasons why I think they're going to be very excited to help us execute on the strategy. Secondly, we are combining the entirety of our small business assets at Dun & Bradstreet into this Emerging Businesses division, which Jeff Stibel and his team will oversee. And so that's a pretty exciting proposition for them. So they get to continue to run the business that they've done very well, but now have access to lots of other products to be able to offer a broader suite of solution to customers. And the other thing is, as we've gotten to know these guys, we have lots of similarities in our culture. Obviously, they know and love our brand; and we love the innovation mindset of that team. And we're really excited about having them as part of our business; and I'm very optimistic about a long-term relationship with these guys.

[Operator:]

Next question comes from Andrew Steinerman with JPMorgan.

[Andrew Charles Steinerman:]

Hi. It's Andrew. I wanted to ask about a comment that was made last conference call about first-half profitability on an operating income basis being down about 10% because of strategic investments. And so before the Credibility acquisition, Rich, is this still the case?

[Richard H. Veldran:]

Yes, it is still the case. Obviously, we lost a little bit of revenue on the government deal, right. That's moved to the second half. So I'd call it more in the 10% to 12% range. But, yeah, it's still around there.

[Andrew Charles Steinerman:]

Right. And could you give us the level of strategic investment in 2015? We know that builds on top of the $80 million that was spent in 2014.

[Richard H. Veldran:]

Yeah. And I'll frame it for you. It gets somewhat difficult to continue to track year-over-year, but let me give you it in kind of the high-level numbers. Overall, we've got an additional about, well I'll call it, a net $40 million increase year-over-year that's comprised of two pieces. There's about $60 million of new investment, right? And then of the $80 million from last year, only about $60 million stayed in the base. So about $20 million of it was non-recurring. So net-net, it's up about $40 million from investments; and it's pretty much in the same type of buckets that we talked about last year, all of the things that are driving the strategy.

[Andrew Charles Steinerman:]

Perfect. Thank you.

[Operator:]

Next question comes from Jeff Meuler with Baird.

[Jeff P. Meuler:]

Yes. Thank you. I wanted to ask a follow-up on Peter's question. I believe that you said mid single-digit organic growth in 2016 on the last call. So I just want to verify that that was based on the assets that you had at the time? It was not contemplated on buying faster-growing assets like Credibility Corp. or others; and that that would be additive to kind of that prior target, is that correct?

[Robert P. Carrigan:]

Yes. I can confirm that.

[Jeff P. Meuler:]

Okay. And then can you maybe talk about the drivers of Optimizer growth and how big of a market that can be? And I know layering on the NetProspex data can kind of help you create new similar products, but how much of this is new customers? How much of this is better hits on your databases? Just if you could help us understand the growth drivers of Optimizer and how big that product could be for you?

[Joshua L. Peirez:]

Yeah. Hey, Jeff. It's Josh. I'll start and then Rich can give you some of the specifics on the numbers. But Optimizer's growth drivers are primarily around new customers and growth with existing customers, both. So when we get growth with an existing customer you may look at it as a price list, but really what's happening is we're able to deliver them more data both in terms of numbers of records that they're requesting, as well as the number of data elements that we're providing to them. So when you think about the core Optimizer product, it provides the ability to match somebody's data against the Dun & Bradstreet database to provide them with the cleansing service against the data they have that might be wrong relative to information we have in our database, as well as for us to append additional data fields that they may not have while at the time they've provided their file to us. So when we're able to provide additional fields of value, more records back to them and higher match rates, that naturally improves the ability to get revenue from an individual customer and it is an area where we do have the ability to sell to many more customers. It's not as high a penetration rate as, for example, a DNBi might be. And then as you mentioned the Optimizer for Contacts products, something we really have just launched this quarter more broadly within our sales force, where we have the opportunity to now to take that same proposition for the people who run businesses and allow that type of a cleansing, matching, and appending service. And we're very bullish on the potential there because the people at (35

[Jeff P. Meuler:]

Thanks, Josh. And then one more for me. Can you just help reconcile the comment about the accelerating declines in the small business channel with the improved rate of contraction in DNBi? Is this all Hoover's, or was DNBi better for medium-sized businesses, softer for small businesses, or are there other products...

[Richard H. Veldran:]

Yes. So overall, yes, DNBi did get a little bit better, as you know. Some of it was really just a shift, right? We did have a customer do a conversion. But we do feel better about the underlying retention and sales rate. So that's good. Where we see the biggest strength with DNBi is in larger customers that use it. Because remember, it crosses the spectrum. There's a big chunk of small customers that use it, but there are also mid-sized and larger customers that actually use it. That tends to be stronger. The weakness in DNBi has really been in the small business arena; and that's where we're actually hoping that we'll start to get a churn over time.

[Jeff P. Meuler:]

Okay.

[Joshua L. Peirez:]

And I think just to jump onto that, Jeff, and also link to Shlomo's question. We do expect Jeff and his team as they join to be responsible for the sales of the DNBi product to the SMB segment; and we are expecting them to be able to help turn that performance.

[Jeff P. Meuler:]

Got it. Thank you, guys.

[Operator:]

Next question comes from Manav Patnaik with Barclays.

[Robert P. Carrigan:]

Hey, Manav.

[Manav Shiv Patnaik:]

Yeah. Good morning, guys. I just had a question around the M&A strategy? So I think earlier on you guys have talked about doing small tech capability type deals, and now you guys have done two fairly large deals at least for D&B. So just wondering going forward what we should be expecting. And then just specific to Credibility Corp., just wondering if you could give us a history of how long you were looking at buying back the assets and whether the lawsuit had any influence to it?

[Robert P. Carrigan:]

Yeah. This is Bob. So with regard to our overall M&A strategy, we've been consistent in saying that we are looking at acquisitions that will accelerate our strategy and help us generate sustained organic growth; and we think the Credibility acquisition will do just that. And so that is the lens through which we look at this. And when I announced the strategy about 15 months ago, I said that we would need an integrated sales and service approach to address the needs of all of our customers. And when I look at the SMB market, that's exactly what Credibility brings. So they have the expertise; and combining our assets together with what they bring gives us a great opportunity to serve this segment. So I think it really rounds out the strategy, and we're very consistent with everything we've said about M&A. And then the second question I believe was around, you asked about the lawsuit. Obviously, this will put the legal disputes between our companies behind us. But again that wasn't the reason why we did this. The driving factor was to improve our performance in the SMB channel as part of our overall growth strategy. And, again, we think the deal will accelerate our efforts.

[Manav Shiv Patnaik:]

Okay. Fair enough. And just real quickly for Rich, what percentage of your revenues is government? Like, what exposure do you have there? Like, is this something we should expect regularly? Just give us some exposure there.

[Richard H. Veldran:]

Yeah. We definitely don't disclose the business with the government, but I will say it's sizable enough that in any given quarter you can see some lumpiness. And as you've followed us for a while, you've seen many quarters that bounce around. We typically sign the contract, but we're not always in control over the timing of when they happen.

[Manav Shiv Patnaik:]

Okay. Thank you, guys.

[Operator:]

Next question comes from Andre Benjamin with Goldman Sachs.

[Robert P. Carrigan:]

Hey, Andre.

[Andre Benjamin:]

Hi, good morning. I first wanted to ask about the beta testing of the DNBi Cloud Solution. I wanted to hear a little bit how it's going and reconfirm that the plan to roll that out internationally at the end of the year is still on track.

[Joshua L. Peirez:]

Hey, Andre. It's Josh. We're testing the prototype solution with customers and we remain on track for a stage launch outside of the U.S. later this year. We've not provided the timetable on the U.S. roll out. I know you didn't ask about that. But in the meantime we are continuing to enhance the existing solution through incremental features that we've previously discussed, like mobile alerts, online application, automated approval functionality for sales folks within their CRM system; and we feel good that the underlying performance of DNBi is showing some slight improvement over 2014. Obviously, we have our sights set much higher; and we think the addition of the Emerging Businesses team focused on an integrated sales and service model can help. And we also believe the rollout of the global DNBi Solution will help.

[Andre Benjamin:]

Thanks. And I know – I don't believe you've announced anything, but I guess any updated color on how you're thinking about the prospects for additional alliances in the Risk Management space? I know the KPMG one announced last quarter was the first.

[Joshua L. Peirez:]

Yeah. Thanks, Andre. We have not announced any and obviously we will be happy to tell you about them when we have them to announce. But we do expect to be able to give you a more detailed description of our Alliance strategy and where we're going at Investor Day, and the pipeline is very strong for these partnerships.

[Andre Benjamin:]

Thank you.

[Operator:]

Next question comes from Bill Warmington with Wells Fargo.

[Robert P. Carrigan:]

Morning, Bill.

[William Arthur Warmington:]

Morning, everyone. So a question for you on how much contribution there was in the quarter from NetProspex; just trying to get to the organic constant currency growth.

[Richard H. Veldran:]

Yeah. So it was about a point of our overall growth was from the NetProspex acquisition, so around about $4 million.

[William Arthur Warmington:]

Okay, excellent. And then you talked about issuing some new long-term debt. Just wanted to get a sense, what's the leverage going to be on the close of the deal, assuming it happens as expected, and then the target leverage you have and the timeframe to reach it afterwards?

[Richard H. Veldran:]

Yeah. So it's a couple things. Obviously, each of the rating agencies calculates debt to EBITDA differently, so we factor that into – as we think about it. But if you just strictly go on our debt to our core EBITDA, today we're a little over three. We'll move into the high threes after the deal. We've obviously talked to the rating agencies. They understand the plan. Our target is to get down to below three again. We think that's a good, comfortable place to be. With increasing EBITDA, as well as with the amount of cash that we've generated at the company, we're comfortable that we can do that in relatively short to intermediate term order and then have some flexibility again.

[William Arthur Warmington:]

Like 12 months to 18 months?

[Richard H. Veldran:]

Think about it. We generate almost $300 million a year in cash, right...

[William Arthur Warmington:]

Yeah.

[Richard H. Veldran:]

...and we're expecting to grow EBITDA. So, yeah, you get there in a quick enough order.

[William Arthur Warmington:]

On Credibility, they've had obvious success in terms of selling the Credit-on-Self product. And with D&B though, on the Credit-on-Others product, it seems like one of the biggest challenges in that lower segment of the market is a high price sensitivity. And the guys like Experian and CreditRiskMonitor and Cortera have been underpricing and that's been able to pull some of that volume. How do you address that issue?

[Joshua L. Peirez:]

Hey, Bill. It's Josh. So, first, it's important to note the deal hasn't closed yet, so we're continuing to move forward with everything we've laid out in our current plans and our current guidance. But post-close, Jeff and his team running the Emerging Businesses division will be responsible for the sales of all our products to that customer segment. And I want to note that they've made a lot of investment in their technology, their product development organizations, and they've built their products on cloud-based systems. So our expectation is that they'll be able to deliver the Credit-on-Self solutions through this platform and there could be opportunities for them to also develop new credit-based offerings on the platform to serve the SMB customer segment. We also think their base of Credit-on-Self and Credibility customers is an attractive prospect universe for upgrades to broader credit solutions like a DNBi. So when we look at the opportunity here, it's not about being able to necessarily compete or price within the same prospect universe that (44

[William Arthur Warmington:]

Got it. And then on the positive side with Credibility, they've been growing at double digits or near double digits. On the negative side, there have been some complaints about Credibility's aggressive sales tactics. And so my question is, can you sustain that double-digit growth rate with the operation now back in D&B?

[Robert P. Carrigan:]

Yeah. This is Bob. They've been able to generate lots of new customers. They've basically doubled the business. And so they've got many, many happy customers. And so when we look at how they've approached dealing with small business customers with products that are tuned to their needs, and then their selling approach which is more of an education-first, a nurturing sales approach; when you layer that in also with the other solutions we'll be able to offer in Sales and Marketing and Credit-on-Others, they're going to really have a terrific proposition for small business customers. And so we're really excited about the potential to get on a growth path with their approach, their integrated approach, the way they market to customers, and the way that they help educate and then bring them into buying more and more solutions. So feeling really good about that.

[William Arthur Warmington:]

Well, thank you for the insight.

[Robert P. Carrigan:]

Sure.

[Operator:]

Next question comes from Brett Huff with Stephens.

[James Rutherford:]

Hey. This is James Rutherford in for Brett. I was just curious, on the Hoover's business, what benefit do you expect from the addition of Credibility Corp. and will that business grow this year? And just what will Jeff and his team do to reinvigorate that business? Thanks.

[Joshua L. Peirez:]

Sure. It's Josh. So we haven't given specific expectations for Hoover's for the year. However, what we've done is we've given Jeff's team responsibility for the overall Hoover's product. It's a product where we've had very little investment planned for this year as well as last year. We've put very little investment into the product. And we think that Jeff and his team can really invest much in the way they did when they purchased the business from us almost five years ago in really revamping the product, the go-to-market approach for the SMB customer segment, how they actually market and sell those solutions to customers. We think that it's a wonderful opportunity with a real focus and understanding of customers in this segment to provide them with a tool that will help them to find their best new customers to grow their business; and it's something that Jeff and his team are really excited to own. The product does service some of our enterprise customers as well. So we will, of course, make sure that they are serviced well. But the primary reason for Hoover's decline over the last couple of years has been driven by the SMB customer churn. And we think that, again, the ability to get more new customer acquisition, as Jeff and his team have proven to be very skilled at doing, as well as to improve the churn rates and the ARPU, so the amount per customer, are really three levers that we expect his team to be able to drive on Hoover's. And as Bob said in his prepared remarks, we expect them to have a very quick near-term impact on the overall business. And the two biggest products in that channel are Hoover's and DNBi, so we obviously expect them to be able to impact those in short order.

[James Rutherford:]

Okay. Thanks. And then on the Other Enterprise Risk Management sub-segment, I'm just digging in on that quickly, it declined just a little bit. I understand that it's a lumpy business, but I was wondering how much of the contract, the government contract, affected that and what growth kind of would have been excluding that?

[Richard H. Veldran:]

Yeah. The government contract was a bit of it. It was only around a point or so in that. It was more in the other arena. It just tends to be as lumpy as we mentioned, so it's more the timing of the other revenues in that segment. The compliance and supply actually were pretty nice growers in the quarter. They were just offset by the lumpiness.

[James Rutherford:]

Great. Thank you.

[Operator:]

The next question comes from Shlomo Rosenbaum with Stifel.

[Shlomo H. Rosenbaum:]

Hi. Thanks for letting me back in for a few more questions. Can you, Rich, talk a little bit about the Alliances & Partners revenue in the Americas? It was down almost 3%. What's going on behind that? That's typically more of the growth area for you guys.

[Richard H. Veldran:]

Yeah. The biggest thing was really the anomaly of that one deal that we lost through our more legacy part of the business. That was about seven points overall. So actually it would have been into the mid-single-digit growth without it. We actually expect that to be a really strong grower over the year, probably in the double-digit range is what we're looking at.

[Shlomo H. Rosenbaum:]

And then, this is a question for Bob. Just as an operational stand point, can you talk about a little bit of kind of maybe a guidepost or something that you can point to during the quarter or you can kind of point just some of the incremental progress and the turnaround? We have the acquisitions, we have some of the kind of qualitative, but is there something you can point to straight out and say, hey, we made improvement in these areas indicating that the turnaround is happening or progressing?

[Robert P. Carrigan:]

Yeah. So I think the most direct and obvious thing is we had about three points of growth from new products that we've introduced. We reintroduced or we modernized our brand, which was a very big event here with our customers. We continue to bring in top talent and promote some of our stars internally. We're doing a lot in the talent development area, building out our global accounts team. We have about 75% of our global business directors hired; and we're seeing really nice growth among our large strategic customers. So we're making lots of progress again, new products, talent, our brand. There's definitely a new spring in our step over here. And, look, we've been busy with bringing in some capabilities through M&A with NetProspex and Credibility that will really help round out our overall strategy. So lots going on and I am very pleased with where we are. And I'm really looking forward to June 15. This will be the chance during our Investor Day for me and my team to kind of give you much more of an update and to show you a bit more about what we've been up to and allow for a lot more interaction and questions. So I'm excited about June 15. So save the date.

[Shlomo H. Rosenbaum:]

Okay. Thanks. If I could just sneak in a housekeeping, what was the $1.4 million of other income? Was it primarily interest expense or was there anything else in there?

[Richard H. Veldran:]

No. Actually we have a partner that we have about a 10% ownership stake in that sold the business; and that was our share of the business. So it showed up in other income. That was the primary piece.

[Shlomo H. Rosenbaum:]

Okay, great. Thanks.

[Operator:]

And we have no further questions.

[Kathleen Guinnessey:]

All right, great. Well, thank you everyone for joining us this morning. And we really look forward to seeing you on June 15 at our Investor Day.

[Operator:]

Thank you for your participation in today's conference. Please disconnect at this time.