Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Shannon Cross – Cross Research.
Shannon Cross – Cross Research
Can you talk a little bit about linearity in the quarter? Obviously you are hearing push back in terms of decision making but curious on a geographic basis how customers were responding and how sales progressed versus a typical first quarter.
Murray D. Martin
We have, particularly in Production Mail and in our Software business, continued to see deferrals in decision making and we see this as long-term. The opportunity is still there and we still are looking forward to getting those transactions at a later date. But they continue to hold back.
In the Mailing Business, as I mentioned, we have had customers not looking to make long-term commitments the way they have in the past, or capital expenditures, so we have extended our lease program to included the ability to extend the lease itself.
And this is very positive for us on the long-term but in the short-term has a negative impact on the revenue side as the revenue comes in over term rather than a new equipment sale.
In answer to your question around the world, the U.K. has been similar to the U.S. The rest of Europe has been slightly better, as you can see in our results, that on a constant currency basis we are performing 2% in Europe. Asia Pacific has seen, on the large transactions, similar results to the U.S. So that is sort of a general overview. The Mailing side in Asia continues at about its historical pace.
Shannon Cross – Cross Research
As you went through the quarter did things get worse or sort of stabilize? Any indication now that we are a little bit into this month?
Murray D. Martin
We certainly saw early through the first part of the quarter a significant change from the fourth quarter and it's now running more in line towards where it was. But it's still not to the level that we would want it to be.
Shannon Cross – Cross Research
So it's not getting worse but it's not rebounding either, which is kind of what we've heard from a number of companies.
Murray D. Martin
Yes. There was a real heavy holdback early but it hasn't really bounced back.
Shannon Cross – Cross Research
And from the standpoint of working capital, Mike maybe you can discuss—and sources of cash since you're holding to your cash estimates. Just how you're thinking about where the cash is going to come from and if there's been any change since when you talked to us after fourth quarter.
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