Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Kevin McVeigh – Credit Suisse
Kevin McVeigh – Credit Suisse
I wanted to talk a little bit about the margins and the strength of the margins, to try to understand what drove that little bit in the quarter particularly given—I’d imagine conversion fees were pretty low but if you could give us some color around that.
Thomas Christopoul
I’d like to say at a high level that it come directly from the focus that the team had on addressing that really important element of our profitability and our margin—I’ll let Nate speak specifically to this in a second but I think the takeaway here is that this is a result of some very close attention and management to the cost side of our business and making sure that we manage our leverage in an appropriate fashion.
Anthony Cherbak
With regard to the conversion fees they remained relatively consistent with the past at about 0.5% of revenue so that was not really what I would call any significant impact and I think as Thomas pointed out this is really the results of what we’ve been talking about since the first quarter of the fiscal year of really focusing on the bill and the pay rates to get our margins back to what we believed are the appropriate levels. That said, clearly in certain respects we were helped by the 14th week during the quarter and the improved leverage that that revenue offered.
Thomas Christopoul
Our work on gross margin is far from done. This is going to be a focal point going forward into fiscal 2009 and beyond and is at the forefront of the minds of all of our managing directors across all of our company wide offices.
Kevin McVeigh – Credit Suisse
I wonder if you could—because there’s been so much talk about the current macro environment, it seems like you said a lot of success in passing through bill rates, what clients appetite was the bill rate increase and just under the current macro environment overall as it has been impacting the business.
Anthony Cherbak
I would tell you and again it really just echoing what Thomas has said, we believe we offer tremendous value to our clients and when you go back to the experience and qualification levels that Thomas mentioned at the beginning of the call, I think when our clients compare us to many of the alternatives they see the value and its just a matter of us having the discipline to approach the clients appropriately and again a lot of this was working to claw back the costs associated to the extra week of vacation that we granted at the very beginning of the fiscal year.
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