Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from Jim Boyle - C.L. King and Associates.
Jim Boyle - C.L. King and Associates
Are you budgeting the health segment to recover in fiscal 2010 or would it be later?
Ronald E. Salluzzo
You recall in our last call we'd said that we were going to budget it down for '09, which we have. What we need to do is find the bottom, make sure that we have a solid footing underneath us before we talk about a recovery.
I think realistically we would like to hit the budgeted numbers that we have put in, which is a sizeable decline from '08. But we've scaled the business to allow for better profitability on a percentage basis on the revenues that we have.
So we'll need to look at, once we get to the turn of the year, where we think 2010 will come out.
Jim Boyle - C.L. King and Associates
So it's too early to tell if 2010 could be a recovery?
Ronald E. Salluzzo
I believe so, yes.
Jim Boyle - C.L. King and Associates
Ron, you mentioned the fiscal 2009 revenue could be a bit below, I think was your phrase. Would that be more or less than a 5% drop?
Ronald E. Salluzzo
I'm uncomfortable giving you a number.
The problem we're having, Jim, is that typically we can look at our pipeline and the pipeline has certain value to it and we have some sense of predictability about closings. Our problem right now is that there is so much volatility within client organizations that anything that we've used as a historical basis to predict has become very, very difficult and we see movement in terms of cancellations, in terms of add-ons to work.
So I'm reluctant to put a number out because then you're going to translate that into a specific guidance number and I'm saying right now I don't have enough visibility to answer the question.
Jim Boyle - C.L. King and Associates
Which was more surprising, the traditional revenue or the Internet revenue in fiscal Q1?
Ronald E. Salluzzo
Could you elaborate on that? Why do you ask that question?
Jim Boyle - C.L. King and Associates
Well, you had expectations and then the results came in, so which surprised you the most?
Ronald E. Salluzzo
Well, we've had a consistent, I think, over the last several years, a consistent drift downward of traditional revenue as we have moved to Internet. I think we've seen both giving us difficulty at this point. I don't think we were surprised by either.
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