Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Mark May - Needham & Co.
Mark May - Needham & Co.
I have three really quick questions. First, have you seen any change in your new client pipeline activity given the economic environment? Secondly, revenues were not surprisingly a bit soft but you only mentioned electronics and Linens-N-Things as areas of softness. What other categories or customers also came in below expectations? And third, you mentioned that you did better than 8% to 10% same customer growth in Q3. What is your fourth quarter guidance imply on that same basis?
Michael G. Rubin
I’ll answer the first question and Michael Conn will answer the second and third questions. As far as the client pipeline goes, I’d say that it’s been very strong but I think in a difficult overall economic climate I think that value proposition’s even stronger. I certainly wouldn’t want to be in the business of selling software, looking to get big capital expenditures out of companies right now.
I think that’s something that we definitely hear in the environment is something that companies are looking to do first; the idea of outsourcing on a variable basis. I think that value proposition is as strong as it’s ever been. Certainly it’s been good but I think there’s been even more interest because of the environment. We definitely feel really good about our ability to accomplish our goals for 2008 and again I think the environment will only help from an overall pipeline perspective.
Michel R. Conn
As far as what we saw in terms of revenue trends, it was more strength than weakness and is really a continuation of what we’ve seen from a year-to-date perspective. Electronics had been hurting us. That didn’t change in the quarter. Even as that business has shrunk, the year-over-year declines are large enough that it’s still noteworthy to us. Linens-N-Things certainly was another hit for us that emerged last quarter; something that we mentioned last call was reflected in our guidance but it certainly eroded fairly quickly as a dynamic situation with them. So that was something that was new.
Besides that, normal ups and downs. Lots of areas of strength across a lot of categories. Nothing else that really stands out.
Mark May - Needham & Co.
Can you maybe quantify the hit from electronics and Linens-N-Things to top line growth or net revenue growth?
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