TechTarget, Inc.
Q1 2009 Earnings Call Transcript

Published: 18 Aug 2009

[Operator:]

Good day, ladies and gentlemen, and welcome to the TechTarget first and second quarter 2009 conference call and webcast. My name is [Louisa] and I’ll be your coordinator for today. (Operator Instructions) I would now like to turn the call over to Rick Olin, Vice President and General Counsel. Please proceed sir.

[Rick Olin:]

Thank you, operator. Before turning the call over to Greg, I want to briefly summarize the new earnings release process that we are using today and plan on using going forward. As you saw, we issued our press release at 4

[Greg Strakosch:]

Thank you, Rick. Welcome to the call. With the filings of our Q1 and Q2, 2009 10-Qs today we are now current with all required SEC filings. To reiterate the restatement involved a change only in the timing of our recognizing revenue. In regards to the restatement, our total revenue did not change for any specific customer contract and the aggregate revenue shifted between the annual periods reviewed was approximately 1%. We are glad to have this issue behind us and look forward to focusing on running and growing the business. We are pleased that during this downturn we’ve been able to maintain healthy profitability and cash flow, which demonstrates the strength of our business model. In addition, we’ve been able to take advantage of the slowdown to improve our offering. We’ve also used our financial strength to be an aggressive investor by launching new websites, expanding sales and marketing and growing internationally. We believe that we are gaining market share and that our competitive position has never been stronger. While it is too early to say that a recovery is underway, we are cautiously optimistic as the market seems to have stabilized. We are encouraged that we experienced sequential growth in Q2 ’09 versus Q1 ’09. For Q3 ’09 we are expecting revenues between $21.7 and $22.7 million and adjusted EBITDA between $4 and $4.8 million. I would like to now open up the call for questions.

[Operator:]

(Operator Instructions) Your first question comes from Ross Sandler - RBC Capital Markets.

[Ross Sandler:]

Just a couple questions. First I think in the prepared remarks you talked about large advertisers’ still growing about 40% year-over-year. That’s consistent with what we’ve seen recently. Can you talk a little bit about what’s going on with the smaller advertiser segment? And then on the 3Q guidance, if I’m doing my math correct I think the EBITDA margin at the mid-point’s about 19.8%. That’s pretty much flat with what you’ve done in 2Q and in a typical 3Q historically you guys would have seen margins drop off. So is that just kind of the environment getting a little bit better, cost structure realigned or is there something else that’s going on here to get you to flat margins from 2Q to 3Q?

[Don Hawk:]

Okay, this is Don. I’ll take the first of those questions. So with regard to what’s going on with the small advertisers, it’s really what we’ve commented on previously. In an economic downturn like the one that we’re in here, those advertisers are kind of disproportionately impacted by that. They tend to have more of their budgets already heading into this downturn tied up in online marketing programs. So as they look to cut the overall marketing budgets, there’s less traditional marketing spend to cut there. What we’re seeing with the large advertisers is although their overall marketing budgets are absolutely declining at this point, there’s enough traditional marketing vehicles that they’re still making use of that they’re able to cut those first and the online budgets are not impacted as significantly. So on the smaller advertisers’ side of the ledger, those guys have more online marketing to begin with, overall marketing cuts are having a larger impact there. As we previously commented on that front, we don’t see that as being sustainable. A lot of the advertising spend from the smaller advertisers tends to be focused on lead generation programs. They’re investing less in lead generation in this type of environment because the sales cycles are that much longer for them, but those types of changes to the marketing expenditures tend to show up two or three quarters down the line. So they can afford, if you will, to cut those lead generation budgets in the short term but over the next two or three quarters they’re going to see less and less leads coming into the pipeline. So for that reason we don’t see that as being a long term trend and clearly we see ourselves as being well positioned for when that advertising spend returns. I’ll let Eric comment on the margins question you were asking there.

[Eric Sockol:]

Hi Ross. This is Eric. Regarding the margin, you know there’s a couple of factors there. In the cost of sales we used to have a print business, and that print business had a much lower historical margin. Our percentage of revenue related to online is significantly higher than it’s been in the past and that margin on online is in the 70’s. And the other part, when you were speaking about EBITDA margin is how we’ve been managing our operating costs. As you know we made some cost reductions last December and we’ve also been very closely managing costs. So when we combine those two factors that allows us to run the business you know at a very healthy profitability margin of about 20%.

[Operator:]

Your next question comes from James Friedland - Cowan and Company.

[James Friedland:]

The first part is a follow up to the last question on the strong growth in the top 12 advertisers. If you keep carrying that trend forward or just call it strong growth, doesn’t it still need to be 40%? And you look at the smaller companies which have been declining, but it sounds like Q over Q it stabilized. When we hit a point in you know holding all things equal in 2010 where we should see the overall company grow, and then as a follow up on that just looking, you know since you guys have been through this before, ’01, ’02, what are the best leading indicators of you know a signal that will say B2B tech spending is going to pick up again? Is it an improving IPO market or is there anything you can point to from your experience?

[Greg Strakosch:]

Yes, so in terms of 2010 I mean obviously a lot has to do with the macro economy and what’s going on. But if things you know kind of stay in this current trajectory, yes I think we’re comfortable believing that growth will return at that point. I think in terms of the leading indicators for us is going to be two things. One is when the small guy starts spending again. I think that will be a good sign. And then the second place you know where we’ve seen weakness it’s also been by market. So the markets that have been strong have been things that are compliance related, just not very economically sensitive. Or to that things like you know email archiving and backup and disaster recovery and compliance. And places that have very compelling ROI that make sense in any economy. So that’s things like server virtualization, data center consolidation, power conservation, those types of technologies. But there’s also markets that have been very slow which we consider discretionary markets which are things like enterprise applications or the network, where what you have is good enough today and you put off that spend. So I think when we start seeing those markets that have been soft, we see spending start to return there, I think that’d be another positive indicator for us. I think those two things will be what we’ll be looking at.

[James Friedland:]

And secondly, you know you guys have really done a good job on controlling costs and bringing them down in a tough environment, but you’re also growing your international websites and you’re launching new websites here in the states. When growth returns, particularly on the cogs line or on the pipe development line, will some of that spend come back? Basically what I’m asking are have you squeezed those costs out permanently and you’re going to get a lot of leverage? Or when growth returns you’ll get leverage but at the same time you’ll also look to reinvest a little bit more?

[Greg Strakosch:]

Yes, a lot of the costs that we took out were really related around print and a smaller event schedule. So all the investments we’re making now are around online. They carry the very high margins. So I think it’s safe to assume we’ll continue to have very high incremental margins on new revenue.

[Operator:]

Your next question comes from Mark May - Needham & Company.

[Mark May:]

It looks like if I’m looking at the relationship in Q2 between EBITDA and the change in cash because you didn’t provide a cash flow statement, it looks like there must have been something kind of non-operational that had a meaningful benefit in positive cash in the second quarter. I wonder if you could help bridge the gap there because your cash balance went up quite a bit from Q1 to Q2. And then kind of going back a little bit to just the past in terms of revenue change, you know a lot of companies in the media category saw the drop off in Q3 and Q4. You guys really saw it in Q1. I’m just wondering if you could reflect a little bit on what was the cause of that meaningful pull back in spend starting in the first quarter. And then I guess what were the areas of strength that you saw in Q2 as business picked up? Or is what we’re seeing from Q1 to Q2 a little more seasonality than anything else?

[Eric Sockol:]

First of all, Mark, this is Eric. As far as our net cash and just so we’re clear on this, we’re defining net cash we’re including cash, short term investments and long term investments. So you looked at all three of those together when you made your comment?

[Mark May:]

Yes. I think I’m showing that your net cash balance went up by like $5 million from Q1 to Q2.

[Eric Sockol:]

Right. Right.

[Mark May:]

And that’s about twice the sequential growth that you typically see, and it seems even greater than what your EBITDA went up.

[Eric Sockol:]

Yes. Our net cash and if you take out bank debt, too, went up about $7.6 million for the first six months. So you can see the business is generating healthy cash. During the quarter, during Q2 we were able to collect about $24 million in receivables. We had a very good collection quarter as well as we did generate EBITDA of about $3.8 million. And we were able to get a refund from the federal and state government close to $1 million. So that may have been one of the swing factors. But basically the balance sheet’s been functioning very well as far as all the working capital, and the business is continuing to generate a profit. And that explains it.

[Mark May:]

Could you provide a little more color or detail around you know what exactly were driving the drop off and why you guys didn’t see the real impact like other folks did starting in Q3 and what was going on in Q1? Is it primarily a function of the number of campaigns or did you see a drop off in sales leads? Just trying to get a sense of more detail on.

[Don Hawk:]

This is Don speaking. So I actually think we did start to see that show up in Q3 and it was very much in evidence in Q4. So for example in our ’08 restated results you see that we’ve got revenue dropping off from Q3 to Q4, both overall and online. So that would be extremely unusual for us. We’re always showing sequential growth, at least in all the years that I can remember we’ve shown sequential growth in Q3 to Q4. So we didn’t see that last year. So that was really where things really hit. And what we were seeing at that point in time was a lot of uncertainty in the market as obviously as you just pointed out in every segment within the media landscape. There’s a lot of uncertainty about how bad things were going to get, so we had a lot of situations in Q4 where we had verbal commitments heading into the quarter, across every market segment in which we operate, and those verbals didn’t turn into actual orders. People just sat on their cash. That trend really continued into Q1. In Q1 we were in a situation where we were going out and talking to people we would normally don’t be doing business with, and people’s marketing budgets were very much on hold. So I’d say the big change that we’ve seen from Q1 to Q2, I wouldn’t say its any particular market segment. Its that there’s a little less uncertainty in the market about exactly where the bottom might be and people are now much more open to having discussions about how marketing dollars could be spent either this year and in particular I think heading into 2010. So I wouldn’t say there’s any particular market segment that popped back for us in Q2 that wasn’t there in Q1. It was pretty much across the board. I would say that heading into the latter half of the year, some of the stronger market segments that Greg alluded to, the ones that have good spending rationales and the ones where they’re more recession resistant if you will, things like compliance, those are areas where we’re seeing a little bit more strength heading into the second half of the year in terms of the actual dollars being spent. Across all segments I’d say there’s much more of a willingness to have discussions about crafting programs and kind of potential levels of spending. So does that help?

[Mark May:]

I think so. Yes. I mean you guys earlier were asked what are some of the signs, early signs that things are getting better. I would think one thing that you guys could see is on the supply side where you’re starting to see more user activity pick up and viewing of webcasts and reading of white papers and opening up of emails and things like that. I mean, is that an early indicator? If so, would have been the trends on that side of the house.

[Eric Sockol:]

Well fortunately the trends on that side have been extremely good. A lot of that has to do with the issues we were alluding to in our prepared comments there where we spent a lot of time overhauling the ways in which we generate leads for our advertisers, how we message to our audience, how we generate new members. So we’ve actually done a lot of work during this downturn to really reinvent a lot of core business processes here, and the results from that have been outstanding. So excuse that metric a little bit in terms of it being a leading indicator, because we’re actually doing a lot to drive success with regard to some of the metrics that you’re talking about there, based on some of the things that we’ve overhauled or reinvented if you will during this downturn period.

[Operator:]

Your next question comes from Doug Anmuth - Barclays Capital.

[Doug Anmuth:]

A few questions, guys. First one, if you could comment on the drivers of gross margin expansion just beyond the mix shift in the business which we obviously get toward the online segment, but it looks like online was up about 300 basis points year-over-year, so if you could comment on that. And then I have a few follow ups as well.

[Eric Sockol:]

Doug, this is Eric. If you look at the cost of revenues online there are some costs that are directly related to the delivery of the product, but most of those costs are labor related that are re-classed up there, meaning relating to the creation of content and editorial, etc. And in December we were right-sizing that with the business and we’ve been very [audio impairment] managing those costs. So most of those cost savings as created a higher margin online is labor related as well as some better job, done some contracts related to delivery of the online product, too.

[Doug Anmuth:]

So is it reasonable to think that sort of this newer level of gross margins can continue going forward as revenues come back as well?

[Eric Sockol:]

Yes. I mean, we’ve been pretty steady in the mid to high 70s or mid 70s, depending on the volume in revenue. Because there’s a tipping point there, too. Most of the costs were labor so most of the costs are kind of fixed in nature. So if we were to generate more online revenue on that cost structure you will see a higher margin. But as far as them being in the 70s that’s pretty consistent.

[Doug Anmuth:]

And then in your 3Q guidance, can you give us a breakdown in terms of what’s implied between online and event? And specifically do you think online can grow in the third quarter?

[Eric Sockol:]

Well, I think we’re targeting events in that guidance at about $4.5 million, so the rest would be online, which was basically flat with Q2.

[Doug Anmuth:]

Flat on a Q2?

[Eric Sockol:]

On a sequential basis. Yes. And historically Q3 online tends to be a little bit lower than Q2 online.

[Doug Anmuth:]

Okay. And then.

[Eric Sockol:]

That didn’t play out in last year’s restated numbers but last year was somewhat of an anomaly if you go back over the revenue stream and you look at that. And I think some of that last year it may have had to do with the impact of the acquisition that we had [inaudible].

[Doug Anmuth:]

We’re hoping 3Q is just an anomaly for a lot of companies last year. Going back to the cash levels, $76 million, can you talk a little bit more about uses going forward and what sort of the minimum level that you’re comfortable with operating with going forward?

[Eric Sockol:]

Well, you know I don’t think there’s a specific amount we have in mind, a minimum amount. In terms of uses you know I think we’re looking to do acquisitions that make sense. It’s a very challenging acquisition environment right now because there’s a big disconnect with public and private valuations. So that’s just a fact of today’s market. But you know we want to have a healthy cash balance so we can continue to invest aggressively and be opportunistic when it comes to acquisitions.

[Operator:]

Your next question comes from Colin Sebastian - Lazard Capital Markets.

[Colin Sebastian:]

I guess first of all I’m curious how broadly at this point you’ve rolled out the behavioral targeting programs across your websites. And then secondly you called out in the prepared remarks the TechnologyGuide sites, and I think those are more consumer focused so I’m curious if you see BTC as a bigger opportunity now.

[Don Hawk:]

So on the behavioral targeting programs that we alluded to in the prepared comments, that has been rolled out across all sites in the network. Saying that its been rolled out does not say that there’s not more upside if you will with regards to our use of it. We’ve had very good results thus far. We continue to take a look at how we’re implementing that and what additional changes we can make and that’s keeping us very busy if you will. And it will be throughout the rest of the year. But again, great results so far and we see very good upside with regard to our use of that. With regard to the TechnologyGuide sites, we have been very pleased with progress we’ve made with that acquisition. We’re seeing good growth there and its in the backdrop of a market that is not doing particularly well right now with all the traditional players in that space are really struggling and advertising spend in that segment is way down. So the share that we’re taking there really is market share. We’re taking dollars from more traditional venues, companies will be advertising in. I wouldn’t mistake that as a change in emphasis for the overall business. You may recall that we entered into that acquisition thinking that TechnologyGuide was kind of a good bridge vehicle for us, if you will. It was a good way for us to take down some sales demand we had against the laptop segment in particular. A lot of the devices that we have reviews on on those sites are purchased by enterprises or at least by small to mid-sized businesses, so it’s really a good kind of crossover market for us. Yes, we continue to look and see what the potential revenue stream looks like in that area. We may move more strongly into some consumer spaces with regard to our coverage within TechnologyGuide but in terms of the overall business we still think we have a lot of upside with regard to enterprise IT specifically.

[Colin Sebastian:]

And then just one follow up, on your comments regarding the increase in activity, I just want to clarify which segments are you seeing that in and whose becoming more active and in which forms, display or lead gen? And related to that are you seeing a corresponding increase in activity in your pipeline as well? Or is that just the existing partners?

[Don Hawk:]

You’re talking about sales activity, right?

[Colin Sebastian:]

Right.

[Don Hawk:]

So it is on the large advertisers side, its really both. I mean your large advertisers tend to spend more on sponsorship type vehicles that are more branding oriented, where they buy those in combination with lead gen programs. As you move down the food chain if you will in terms of spenders, the small to mid-sized advertisers tend to spend more money specifically on lead generation programs. And you know we’re seeing increased activity obviously from the largest advertisers and its taking the form of the vehicles that they traditionally use with us. On the small to mid-sized front, as those advertisers do come back to us it tends to come in as lead generation business. I don’t know if I quite caught the second part of your question there. I think it had to do with pipeline versus existing advertisers. Are you talking about?

[Colin Sebastian:]

Right. Are you seeing your pipeline start to build as well from new potential vendors in addition to the existing roster?

[Don Hawk:]

Yes. I mean we’re definitely seeing growth on both sides as we head into the second half of the year. I think we’ve alluded to this in previous conversations and calls that we’ve done in that in this downturn what we’re really seeing is not so much a customer retention issue, particularly with regard to the broadest base of our advertisers, this top 100. Our renewal rates there continue to be very good. It has more to do with the amount of time in between campaigns and the amount of spending within individual campaigns. So I think as things head into an upturn, whenever that’s going to occur, what we’re going to be seeing is the advertisers that have done business with us in the past increasing their level of spend, and diminishing the amount of time in between individual campaigns they run with us. And then we’re also going to see on the new customer side increased ability to bring new advertisers into the fold. So again we don’t want to over play what we’re seeing. We’re cautiously optimistic. I think we’re seeing good signs on both sides of that equation, but its certainly very early to be making any kind of final conclusions about that.

[Colin Sebastian:]

That leads me to one last question then. In terms of pricing then is that still stable or has that been improving or how would you characterize the pricing environment?

[Don Hawk:]

Yes, the pricing environment I would say is relatively stable. For sure there is an increased demand from customers to see what kind of deals they can drive. This is definitely a buyers market, not just in the segment that we’re in but really in every segment in business right now. Right? So in our market the customers are certainly coming to us wondering what we can do for them on a pricing standpoint. A couple of things to say on that front, number one, we’ve always that dynamic in play. We’ve always been the premium place priced supplier in the market, and it has to do with the level of targeting that we provide. So that level of targeting that we provide, particularly on our lead generation programs really gives us a good buffer if you will against any kind of downward pricing dynamics that might exist. And the increased targeting capabilities and the increased activity based capabilities that we talked about, I think also give us good protections on the pricing front. We have some unique capabilities in the markets that we serve that customers really have a hard time getting from other suppliers. And we’re really adding value with those capabilities, so we’re able to reflect that in terms of our ability to maintain price.

[Operator:]

Your next question comes from Sameet Sinha - JMP Securities.

[Sameet Sinha:]

So on June 23rd you put out a press release saying that you expect about 20% sequential growth in the second quarter. I think you ended up at close to, well maybe in the 17, 18% range. Did something happen in the last seven days that you kind of came slightly below that forecast? Is visibility do you think that’s still an issue? I have a couple of follow ups after that.

[Eric Sockol:]

Sure. Sameet, this is Eric. What had happened is we ended up closing Q1. You’ll see that we filed our Q1 10-Q and our Q2 10-Q together. So we had kept the Q1 quarter open so long that in every quarter you typically have reserve for revenue, and that was held open so long that in essence that reserve evaporated. So as you’ll see the revenue that was recorded in Q2 was a little bit higher than we had anticipated and really that was the reserve coming to fruition if you will in Q1 and that amount, about $200,000 or so, came out of Q2. And that’s the difference between the 18% growth and the 20% growth.

[Greg Strakosch:]

So it was where we expected it to be for the six months, but just switched between Q1 and Q2 a little bit.

[Eric Sockol:]

And its an unusual situation to be closing out Q1 in August basically.

[Sameet Sinha:]

And the second thing can you [audio impairment] your cost structure? I remember you used to give out a stat about what percent of the operating cost structure is level with the others. Is that still, does that still hold or has that changed?

[Eric Sockol:]

Yes, our cost structure and we don’t give out the exact amount. But generally speaking our operating costs are around 75% labor related. There is a direct cost related to the events business in that as we floor events there are specific costs related to the individual events. But our largest cost is definitely labor and then some of the other larger costs are also fixed in nature such as rent, hosting and some of the other relationships we have. So that is what causes the leverage in the business and as we generate more revenue there’s a high incremental EBITDA.

[Sameet Sinha:]

Now in terms of, this forms another question, you had mentioned that cost of goods especially for online the significant amount of labor there which is fixed in nature, how long do you think you’ll be able to keep that labor pool of content producers fixed? And after what level of revenues before you need to add there?

[Greg Strakosch:]

Well, typically when we add new websites we add new people. But its important to realize that there’s a lot of different sources of content that we get. So we have the people that are full time on our payroll, we have relationships with over 300 outside industry experts that contribute content, we generous enormous amount of peer to peer content or user generated content. That obviously doesn’t cost us money. The outside experts we don’t typically have to pay them. Then we’re also the leading place for vendor content. So we’re number one in white papers, number one in webcasts, number one in podcasts. And that vendor content again we don’t have to pay for it. So one of the reasons we have such good operating leverage is because we have so many different sources of content that we can get at little or no cost.

[Sameet Sinha:]

Now in terms of the competitive environment, if you look at the last let’s say 12 months, how has that changed? I mean you were one of the premium suppliers in the industries that you’ve been impacted. How about the others out there? Were they impacted much worse than you were? If so, can you give us some more details on that?

[Greg Strakosch:]

Yes. In terms of our competition, you know our competition tends to be companies that their legacy business is print advertising. And so those, you know we have zero print advertising now and those the main competitors that we deal with still have a large portion of their revenue is print advertising, which we don’t have. So those companies have suffered very much in this downturn. So we’ve seen you know multiple rounds of layoffs, across the board pay cuts, so its definitely been a very challenging environment for our competition and all print publishers in general. And you can see what’s happening to the newspapers and the magazine publishers. You know the print publishers in our market aren’t immune to those market forces.

[Operator:]

Your next question comes from Sandeep Aggarwal - Collins Stewart LLC.

[Sandeep Aggarwal:]

My first question has to do with the pricing. What are the trends in effective CP and RPL quarter over quarter and where do you see the height improvement over these two formats?

[Don Hawk:]

I want to make sure I caught the question there. So what trends are we seeing in was it?

[Sandeep Aggarwal:]

In the CPM as well as revenue per lead.

[Don Hawk:]

Got it. Again we’ve seen pretty much a stable environment for our pricing, and we do pricing on a market by market basis so there’s not some kind of overall operational metric that I can roll that up to for you. But we have a pretty good feel for it as we put together proposals for customers and we’ve seen pretty good stability on that front.

[Sandeep Aggarwal:]

And what percentage of your revenue comes from lead versus banner, you know brand oriented leads or any other format? And how does that compare on a year-over-year basis?

[Don Hawk:]

Yes, we don’t break that out specifically and one of the reasons we don’t break them out is that we have a lot of programs that cross over those borders. If I had to characterize it for you, high level we do more lead generation business than we do branding business. And we haven’t seen the mix between those two broad categories change much on a year-over-year basis.

[Sandeep Aggarwal:]

And Greg in terms of you know we are hearing from one or two other companies that they are seeing some shift in terms of advertisers moving from lead generation to display advertising. And since you have a high lead generation exposure, are you seeing some of those kinds of trends?

[Greg Strakosch:]

We’re not. Most of our customers do both, and so we haven’t really seen the mix change much. Most of our programs though are combination programs and they’re integrated, where the customer has a specific brand initiative tied with a lead generation goal and that’s what we’re really good at is doing integrated programs that meet all of our customer’s market objectives.

[Sandeep Aggarwal:]

One question on guidance. What percentage or what type of revenue are you assuming in your Q3 guidance from the sites which have been launched in 2009?

[Greg Strakosch:]

We don’t break that out specifically, but generally the sites we launch we already have a good head start on those because they’re typically spin outs of existing sites where there’s already content and there’s some revenue. So those contribute fairly quickly. But there is a gradual growth of those over you know several quarters.

[Sandeep Aggarwal:]

And just if I may ask this last question, I don’t know if you are willing to sign up on anything on a long term basis in terms of you know what percentage of your revenue can come internationally in 2009 or maybe two years from now?

[Greg Strakosch:]

Yes, I mean its hard to say that. International is a huge opportunity. You know over half the IT market is outside of the U.S., so it’s a very big opportunity. Right now it’s a very small revenue stream for us but its growing very quickly. You know I think over the next few years it can become a very meaningful and material part of our overall revenue stream.

[Operator:]

Your next question comes from Mark May - Needham & Company.

[Mark May:]

Believe it or not, there’s actually a follow up. Seasonality is the question. Could you help us remember the typical seasonality that you see in the fourth quarter, both around your events business, the events that you have planned and typically what online ad campaign activity looks like in Q4 versus the other quarters of the year?

[Don Hawk:]

Yes. On the online side we would see a sequential increase from Q3, on the online advertising side in a normal environment. And on the events side I don’t know if there’s a real normal there. I mean in late Q3 and early Q4 tend to be good times for us for events. And I don’t have our event numbers right here in front of me as I speak to you, but I believe in previous years, you’ve got to throw out 2008 because it was really the second half of 2008 on the events side where we started to see a precipitous decline with regard to event revenue. But if you go back to years beyond that I think you might see a slight increase from Q3 to Q4 on the events side but relatively close.

[Mark May:]

But you picked up a company in the last 12 months that does an event I think in Q3, right? I don’t know how meaningful that is.

[Don Hawk:]

Yes, it wouldn’t be that meaningful with regard to the overall event revenue stream.

[Operator:]

At this time we have no further questions. I would like to turn the call back over to Mr. Greg Strakosch for any closing remarks. Sir?

[Greg Strakosch:]

Yes, well I’d just like to thank everyone for joining today’s call. We look forward to speaking to you at the next call a quarter from now. Good night.

[Operator:]

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a good day.