Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Nathan Schneiderman - Roth Capital Partners
Nathan Schneiderman – Roth Capital Partners
You ended head counts for the year, I believe you said 71 employees. What are you looking at for 2009 hiring and where do you think that ends up?
Todd E. Wille
I think we’re adding four or five individuals, all in the Composer sales and technical area. So we’ll end up with about 77 or 78 would be my guess.
Nathan Schneiderman – Roth Capital Partners
And then, other than that do you see any significant changes to the cost structure in 2009 versus 2008?
Todd E. Wille
No, we don’t, except for potentially in the execution of the Composer migration projects. We believe that there are going to be some head count adds and we may be supplementing with additional contractors assistants with the QA testing of the Composer projects, depending on how often they come, the timing of the, how much they are lumped together. So there could be some additional contractor costs as well. But not significantly different, no.
Nathan Schneiderman – Roth Capital Partners
On the Lotus Notes, I didn’t quite catch it, you said something about a 40% sequential increase. I was hoping you could clarify what specifically increased 40%.
Todd E. Wille
The number of prospects in the pipeline. So the number of opportunities we are pursuing increased by 40% since the end of the third quarter. We’re obviously very delighted with that. That business is continuing to find opportunities and start working them through the sales cycle.
Nathan Schneiderman – Roth Capital Partners
If I recall right you may have given us the number of prospects you had in Q3. Do you have those numbers?
Todd E. Wille
I don’t remember what I said. I don’t have that pipeline report with me today. I don’t recall. I think it was 70 maybe.
Nathan Schneiderman – Roth Capital Partners
So you’re getting close to 100 prospects?
Todd E. Wille
Yes, that’s an accurate statement.
Nathan Schneiderman – Roth Capital Partners
You did a great job on the EBITDA front this year, coming in with margins that were just over 20%. What are your thoughts for EBITDA margins for fiscal 2009?
Todd E. Wille
We certainly believe those margins are going to continue, something similar to what we did in 2008 we will continue to do in 2009. There’s really no real deterioration of that. It’s just from a guidance perspective we want to now transition people to now thinking about non-GAAP net income, which is very similar to EBITDA, it’s just back to non-cash amortizations and stock options and so forth. So now we have our interest expense reduced because of the conversion of the debt, we felt like that would be an appropriate metric for us to be talking about for fiscal 2009.
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