Question-and-Answer Session
Operator
(Operator Instructions) We will take our first question from Franco Turrinelli - William Blair & Company.
Franco Turrinelli - William Blair & Company
First, obviously a terrific performance on the enterprise clients. You’ve kind of hinted that the pipeline looked pretty good at the end of the prior quarter. Can you give us some of customers’ interest and willingness to pull the trigger on this?
Eric Belcher
The hint thing that we gave is regarding the expectations we had for this quarter. You can see with our nine wins in this quarter, as we said on the call, we’re particularly pleased with the quality and size of these wins, and as we look toward the future, we see no reason why our enterprise solution won’t continue to accelerate in the market as we gain scale, as we gain in reputation and clout, and frankly we’ve got far more dialogues going with major corporations today than we’ve ever had before, so we’re very optimistic, Franco, as it pertains to our enterprise offering.
Franco Turrinelli - William Blair & Company
Congratulations to the leadership and among the senior management team by leading the way on what I’m sure are very painful cuts for everyone involved at the company. I’m assuming we should interpret this $1.2 million as being something of a one-time thing, in that when things get better rather than if they get better, those savings would essentially go away because obviously people would no longer be on furlough and presumably bonuses and other stuff would back. Is that a fair way of reading it?
Eric Belcher
Yes, that’s a fair way of reading it. The furlough and the temporary salary reductions enable us to keep our team intact, which we know based on the enterprise volume that we have right now we’ll need moving forward. So, yes, you’re thinking about it the right way. These are temporary, and our talented team of employees will be with us in 2010 as we continue to grow.
Franco Turrinelli - William Blair & Company
Joe, the effective tax rate seemed a little lower in this quarter. I’m wondering if there is anything there that we should be aware of, and also what’s the tax treatment on the $850,000 gain from the sale?
Joe Busky
The tax treatment on the gain from the sale of the Echo stock is normal operating income. There is no unusual taxation there. The drop in the effective rate in the quarter was due to the fact that we did book an R&D tax credit in the quarter of roughly $350,000, and the good news is that that tax credit will continue in the future assuming that we have the same level spend and same type of spend in our IT area regarding the technology enhancement, so that R&D tax credit is an annuity going forward which will permanently reduce our effective tax rate.
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