Good day and welcome to the Information Services Group Third Quarter 2015 Results Conference Call. Today’s conference is being recorded and a replay will be available on ISG’s website within 24 hours. At this time, I would like to turn the conference over to Barry Holt. Please go ahead, sir..

Thank you, Operator. Hello good morning. My name is Barry Holt. I’m a Senior Communications Executive at ISG. I’d like to welcome everyone to ISG’s 2015 third quarter results conference call. I’m joined today by Michael Connors, Chairman and Chief Executive Officer, and David Berger, Executive Vice President and Chief Financial Officer.

Before we begin, I’d like to read a forward-looking statement. It is important to note that this communication may contain forward-looking statements which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects.

These statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated.

For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8-K that was furnished yesterday to the SEC and the Risk Factors section in ISG’s Form 10-K covering full year results.

You should also read ISG’s annual report on Form 10-K for the fiscal year ending December 31, 2014 and any other relevant documents, including any amendments or supplements to these documents filed with the SEC when they become available.

You’ll be able to obtain free copies of any of ISG’s SEC filings on either ISG’s website at isg-1.com or the SEC’s website at sec.gov. ISG undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances.

During this call, we will discuss certain non-GAAP financial measures which ISG believes improves the comparability of the company’s financial results between periods, and provides for greater transparency of key measures used to evaluate the company’s performance.

The non-GAAP measures which we will touch on today include adjusted EBITDA, adjusted net earnings, and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided as additional information and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

For the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8-K, which was submitted yesterday. And now, I’d like to turn the call over to Michael Connors, who will be followed by David Berger.

Mike?.

Thank you, Barry, and good morning everyone. Today David and I will review our third quarter and September year-to-date results, brief you on some operating highlights, will discuss the demand environment and reaffirm our full year guidance.

Before we review our results, I want to welcome to our call Vincent Colicchio from Barrington Research, and Matthew Brooks from Macquarie research both of whom recently initiated coverage of ISG. ISG now have eight analysts following our firm.

ISG continue to create momentum in the third quarter, completing a strong first nine months of the year with revenues up 7% and adjusted EBITDA up 7% in constant currency will all regions contributing to our growth. In addition, our recurring revenue streams were up 6% for the first nine months.

ISG has now delivered constant currency revenue growth in 16 of the past 19 quarters, despite persistently weak global economies. This consistency I think is a testament for the strength of the ISG brand in the market and recollection of the investments we are making in digital services and our recurring revenue streams as I will discuss.

Indeed demand for these new and expanded services as fueled by 13% increased in our client base so far this year. Through the third quarter we served 416 clients.

Looking at the third quarter, our solid performance was led by double-digit constant currency revenue growth in both Asia-Pacific and in certain key European markets, such as the UK and Nordics. Our overall revenue growth was held back somewhat by weakness in France and some client timing delays in the Americas.

Adjusted EBITDA was $6.4 million for the quarter, up 7% versus the prior year excluding the impact of currency and up 23% sequentially from Q2. Our reported numbers, as expected, were negatively impacted by currency translation, a deterrent of 8% in the third quarter. David will provide more detail about that in a few moments.

Turning to our regions, third quarter revenues in the Americas were down 1% as a result of client timing issues. We won several new engagements late in the quarter and have started work on them in the fourth quarter. With that said we are very bullish on the demand environment in the U.S.

for the next 12 months due to our first half growth in the Americas of 9% and our growing pipeline of new business. Key client engagements in the Americas during the third quarter included WEX, which is a global corporate payments company, CAN financial, Scotiabank, American Express and the states of West Virginia and Arizona.

We saw good growth during the quarter in our banking, financial services and insurance verticals. And we continue to have success selling our expanded product offerings, including service integration and management. For the quarter, revenues in Europe were up 5% as business picked up across most of the region.

As I indicated, we achieved double-digit growth in North Europe particularly in the UK and the Nordics partially offset by a decline in France with the business environment remains challenging. During the quarter, we saw solid growth in our technology and public sector verticals in particular.

Key client engagements in Europe included Allianz, the UK Ministry of Defence, RWE which is a German Energy company, the RGO, TNT, BASF, Shell, Postbank Systems which is an IT service provider, and Nationwide Building Society.

In Asia-Pacific, our revenues were up 28% for the quarter, the third quarter in a row with double-digit growth driven by our manufacturing, technology, transportation and energy verticals. Key clients in the region included Qantas, Jetstar Airways, McDonald’s, AIA, EnergyAustralia, BMW, and Tata Steel.

We continue to provide ongoing support and advice for IT and business process transformations for many of these clients. Looking beyond 2015, our leadership team recently met at our annual weekend strategy offsite, to review our growth initiatives for the next three years.

We reaffirm that our strategy is working and gaining traction and we are excited about our future growth opportunities.

We will continue to expand our focus from a transactional approach driven by outsouring to a broader strategic role with our clients, around the emerging technologies, analytics digital transformation and the integration of services across the entire enterprise. I have discussed with you ISG’s continued investment and offerings digital.

We have launched a new cloud solutions practice, introduced the ground breaking ISG Cloud Comparison Index, and acquired Saugatuck technology, a leading subscription-based analyst and research firm focused on digital business and cloud technology. This important groundwork is only the beginning.

We are working on a multiyear journey to build our position as a leader in digital business solutions. An important part of our strategy is to make connections with key industry players. Just last week, Saugatuck held its fifth annual cloud business summit in New York City.

This event attracted more than a 120 senior business and financial executives, marketing strategists and technology leaders to discuss our enterprises are leveraging digital technology for greater operational impact and faster growth.

On the service provider side, at the end of September more than 170 executives gathered in Dallas for Annual Sourcing Industry Conference. The theme was future smart, achieving success in the digital world. Our agenda focused on how providers need to adapt their business models to compete and grow at the age of digital business.

In engineering services later this month we will be holding our second ISG Imagine Your Future, engineering services workshop, this went for the manufacturing industry in Detroit. After a successful conference in Houston for the oil and gas industry a few months ago.

These conferences are part of our creating awareness and generating new business leads for our emerging engineering services business. To meet what we expect to be an increasing demand we have added eight additional resources to our engineering services team.

We continue to build momentum for our value proposition, primarily across three major offerings, global engineering insurance centers, IT and engineering and software product engineering. We are still in the very early stages of these new service offerings in both the U.S. and Europe, but they are encouraging.

I’d like to conclude my remarks with an update on the demand environment and our full year revenue and adjusted EBITDA guidance for 2015. We are confident in our full year 2015 guidance and remain enthusiastic about our ability to continue executing on our long-term strategy.

We are reaffirming our full year guidance of constant currency growth in revenues of between 6% and 8% and as discussed last quarter we continue to expect revenue growth toward the top end of that range. In addition, we expect EBITDA growth of between 10% and 15% excluding the impact of currency which implied significant operating leverage.

Our guidance is based on a number of factors including the revenue momentum we’ve experienced in the first nine months with revenues up 7% including 27% growth in Asia-Pacific year-to-date. The continued growth in our recurring revenue streams of managed services research and the U.S. public sector.

And the increased demand for advisory services to help businesses manage their multi-sourcing environments and harnessing emerging technologies to address their digital futures. Naturally in providing our guidance for the full year we remain cognizant of the broader macroeconomic conditions that may impact our results.

We will be providing guidance for 2016 when we report our full year results in March. I’ll say now that we anticipate big growth on the top and bottom lines next year. So with that, let me turn the call over to David Berger, who will summarize our financial results..

Thanks, Mike and good morning everyone. Third quarter revenues were $51.4 million, an increase of 4% from the prior year on a constant currency basis. Revenues were $27.8 million in the Americas, down 1% from the same period in 2014, $18.1 million in Europe, up 5%, and $5.15million in Asia-Pacific, up 28% with growth rates in constant currency.

Our third quarter adjusted EBITDA of $6.4 million compared with $6.5 million in the third quarter of 2014. And sequentially up 23% in the $5.2 million we reported in Q2. As discussed last quarter, we report revenues and EBITDA on a constant currency basis to reflect our operating performance.

We don’t take on transactional risk, and the matching of revenues and expenses in non-U.S. dollar currencies creates a natural hedge for us. Nonetheless, we are impacted by translation gains and losses for reporting purposes. And like many multinationals we saw a significant foreign currency impact on revenues and EBITDA during the quarter.

Currency translations negatively impacted reported revenues by $3.9 million or 8% and our EBITDA by figure approaching $1 million. Utilization for the quarter was at 71% versus 69% in the prior year.

Headcount of 995 was up 46 positions from June, with most of the increase is to support the new sales growth in managed services as we prepared to bring new clients on stream in 2016. Billable headcount was 741.

Our operating income for the third quarter was $3.2 million, which compares with operating income of $3.8 million in the third quarter of 2014. Net income for the third quarter was $1.8 million compared with $2.4 million in the prior year.

Reported fully diluted earnings per share were $0.05 per share compared with $0.06 per share for the same period in 2014. Adjusted net income for the third quarter was $3.5 million or $0.09 per share on a diluted basis compared with adjusted net income of $3.8 million or $0.10 per share on a diluted basis in the prior year second quarter.

Foreign exchange impacted earnings per share by $0.01 per share for the quarter, and $0.03 year-to-date. We continue to maintain a strong liquidity position to support the implementation of our business plan. The cash provided by operations for the first nine months was $1.5 million versus a decline of $2.1 million in the prior year.

We invested $1.1 million in capital spending during the first nine months of the year. During the third quarter, we repaid $611,000 of debt, we repurchased $1.4 million of stock and $500,000 in acquisition-related payments for Saugatuck Technologies.

Total outstanding debt at September 30, was $51.3 million versus $54.2 million in the prior year, which is reduction of 5%. Our gross debt to adjusted EBITDA leverage ratio was 2.3 times and our net debt leverage ratio was 1.7 times at September 30, 2015. Our average borrowing rate for the quarter was only 2.4%.

Our accounts receivable balance as of September 30 was $44 million and our DSOs were 69 days. Mike will now share concluding remarks before we go to Q&A..

Thank you, David. I’m pleased with our year-to-date results and very optimistic about our future. In summary, we delivered a strong nine month year-to-date results with revenues up 7%, and EBITDA up 7%.

We have now achieved constant currency revenue growth in 16 of the last 19 quarters, reflecting the increasing predictability and recurring revenue of our model. September year-to-date revenues were up 5% in the Americas and Europe, and 27% in Asia-Pacific. Recurring revenue streams were up 6% for the nine months.

We continue to invest in digital services and our recurring revenue streams. With demand for the new and expanded services fueling 13% increase in our client base. We generated good cash flow during the quarter. And we continue to return capital to our shareholders in the forms of a special dividend earlier this year and from stock buybacks.

We reaffirmed our guidance for revenues and adjusted EBITDA with revenue spending toward the top end of the range. Thanks very much for calling in this morning, and now let me turn the session over to the operator for questions..

[Operator Instructions] We’ll go first to Peter Heckmann at Avondale..

Good morning, gentleman..

Good morning, Pete..

If I hear correctly that you ended this quarter with 741 in billable?.

Yes..

Okay, so that – why don’t you added about 46 net billable in the last two quarters. That seems very constructive for demand, for the next couple of quarters.

Can you talk about what kind of folks you are hiring, at what disciplines and whether you expect that to impact utilization over the next quarter as you folks get ramped up?.

Yes. Thanks, Pete. Yes, so the quarter we added about 46 people, the bulk of those are for – are recurring revenue managed services business. We had a very strong quarter in sales. So we are ramping up, I think I’ve talked before that we ramp up about a quarter ahead of the contract starting.

So we expect to see the fruits of our sales efforts flow through in 2016. So the bulk of those folks are managed services which means that they are assigned to a specific contract or a specific client, these are multi-year contracts as you know. So we believe that will service well as we build our recurring revenue streams.

We should close this year, at around 27% of our revenue on recurring and as you know we raised our target to get to 35% over the next few years. So we are marching in that direction and those people are primarily going to hired around those contracts that we sold here late in third quarter..

Okay, that’s great. And one follow-up question on the M&A front. That mean over the last two years what we’ve seen – you’ve been doing is relatively small or even on an absolute basis, small acquisition.

Do you see anything out there that they might essentially on a mid-size basis, except that you’re seeing, some increase in demand the timing seem right due a relatively larger transaction given some of your deleveraging?.

Yes. No, good question. So we’ve got kind of two tracks going here. One is there are some small bolt-ons that we are aggressively looking at as we speak.

And we’re always looking at something that may provide kind of a step change if you will, that if the value is right and it met our criteria and what we’re looking for we would clearly step-up for bit of a larger transaction.

So there are two tracks that are not mutually exclusive, but I would say in the very near-term we have our eye on a few small bolt-ons to helping our capability in our recurring revenue streams..

Got it. I’ll get back in the queue. Thanks..

Yes, thanks Pete..

We will go next to Brian Kinstlinger at Maxim Group..

Great, thanks so much.

Just curious if the projects that were delayed in the Americas if that’s all started up, and I take it as in advisory part of business?.

Yes, it’s in the – yes, thanks Brian, yes, it’s in the advisory start of the business, and they’re starting up during the fourth quarter. So there are start dates of October, November 1 and December 1 for those – so we’ll see that flow through kind of late this quarter, and into 2016..

Great.

Can you give us – you talked about the engineering outsourcing business, I’m wondering, can you believe in 2016 is that, when it becomes a meaningful contributor of revenue, I realized you have a couple of customers, from my guess it is, pretty small right now, when did that start to change in your opinion?.

Yes, look I think I don’t know the answer for that Brian, I will say that we’ve added late in this quarter, I think I indicated we brought a few more people in, so we have a few new clients such as Pitney Bowes and Symbion, which is a maker of wind turbines.

And so, it’s too hard to really read and the reason for it is, I will say it’s kind of tracking like our managed services which is we’re having to educate the buy sides of the client side. The service provider side, quite frankly gets it and then we will right in the middle of it.

And so I can’t – I don’t have a good indicator to tell you, it’s managed services once we got caught hold, it’s taken off, but it’s – it’s still emerging and then the education process is part of what we are doing.

So I don’t have a good date, I didn’t say that, we have now put eight people specifically focused on engineering services only, that’s eight more than we had about seven or eight months ago, so it’s moving along, but too hard to give you an indicator yet, because it’s too soon in the process..

Okay, your research has shown that contract volumes are surging, but the deal sizes are smaller, I’m wondering how any impact they has on your advisory services business?.

We think it’s in health, as we think in health wide, so before we use to go out RFP for a small, I would say a shortlist, might be three, four, five, what’s happening with the smaller durations, is that there was pieces that are getting broken off in the specials areas, so where you might pick a traditional supplier like an IBM, or an HP or Cognizant.

Now we’ve added in a cloud component or some type of a fast component, see you’ve got players like Rackspace and AWS and so on.

So there are – the pieces are getting broken up which is making it more complex which also is driving the success of what we call SIAM, Service Integration and Management, because with the multi-source environment, lots of more suppliers having them all be integrated talked to one another if you will inside the company is becoming even more important on the integration.

So that is what is driven the SIAM growth that we have seen in that part of the business. So we like the multiple suppliers and the shorter-term just mean that they will be coming back around, in a 3 year timeframe, maybe or 3.5 year timeframe versus a 5 or 6 year timeframe..

Okay.

I’m curious how much revenue Saugatuck added in the third quarter, which it all research and also, did they add any billable resources or there are no billable resources from them?.

This is just a small number of people with the firm, it is – it’s rounding for the quarter, we said that it will add about $2 million of recent recurring revenues in 2016..

Okay.

Last question, okay, sorry, what you’re going to say?.

That was it..

Okay. Last question I have, I’m curious as you look to 2016 without giving any guidance.

Is currency already a headwind in 2015 [indiscernible] today meaning the place where we are today, are those already less favorable than where they were on the average of 2015?.

Yes. I think currency will continue, based on where they are today will have an impact, not at the same magnitude at this year. But it will have a slight drag on revenues for next year..

Okay. Thank you..

Thanks, Brian..

And our next question comes from Vincent Colicchio at Barrington Research..

Yes. Nice quarter, guys..

Thank you, Vin..

So it sounds like you’re doing well in the managed services side. I’m curious, has cross selling, is it with the existing clients, I know you’ve added a lot of new clients this quarter through the cloud side.

I’m curious, on the managed services side, if you’re seeing a lot of cross selling success, if that’s driving there?.

Yes.

As most all of the new we had a very strong sales quarter in third quarter for managed services and almost, not – almost, all of them are existing relationships that we’ve had at ISG, refine at the education process of taking it from in-house to our business is easier if they know us, they used us, they trust us although we have a few expectations for that.

But it is building and getting a larger share of our clients’ wallet by adding this service into their business..

And then related to that Mike, I know that you had a lot of clients as you said with it – digital services side.

Is that also helping you increase wallet share?.

Yes. That’s good – very, very good question.

I mean we launched this comparison, Cloud Comparison Index and one of the things this index has done is its raised awareness out in the 400 to 500 and we’ve had a number of blue chip firms in the healthcare, media and agrochemical businesses that are moving to the cloud and now using our CC – what we call CCI report, or Cloud Comparison Index report to help validate their value proposition.

So this whole movement around digitization, around the use of cloud, around the automation and our research offerings that is what is driving this increase in new clients for us that have not worked with ISG in the past.

So we think that will serve us well downstream because we know that once we lock in on a client, our client stayed with us for a long period of time. So I’m expecting that to service well in 2016 and 2017 as these new clients begin to mature..

On the digital services side, are you seeing, what are you seeing in the competitive front, is it some of the same player as you saw on the traditional side and with the new client on the digital side, curious what your wins rate looks like versus traditional business?.

Yes. So we see basically the same players. I think we’ve said that’s about 75% of our business is whole sourced to us that’s still remains the case today as it have for a number of years, actually that have not moved much. Again we think the trusted relationship, they allow us the great return on investment they have with us.

So that kind of 75% remain still short, the 25% that is RFP if you will, it’s really the same player. So as the big for, it can be Gartner on the benchmarking in the U.S. where they have a number one position we’re number two, Europe, Asia, we’re number one, they’re number two.

But I would say the competition in this space is very similar to what we seeing, we don’t really see any new entrance that are competing against us..

That’s it. I’ll get back in the queue. Thank you..

Yes, thanks, Vin..

We’ll go next to Marco Rodriguez at Stonegate Capital Market..

Hi. Good morning, guys. Thank you for taking my questions..

Good morning, Marco..

Hi, I was wondering if you maybe you could provide a little more color in regard to the – there is a push on the revenues in the Americas, it’s kind of what happened there, and then also in terms of France, if you can provide a little bit more color there in terms of, what are the challenges there in that market, is it just macroeconomic or is there some competitive fluctuations there?.

Yes, let me start with France it’s all macro, we have a very strong market share position in that market. Our guys would say and I think it’s probably true, we own that market, we have a very good position.

It’s all macro, clients are not spending the money that they were – the environment in France in terms of the economy and growth is not great, and because of that the spending levels are less than they were a year ago.

I don’t see that changing in the near-term, I don’t see any catalyst that was just over, I’m going to be back over in January, but I think the French marketplace is going to be soft through 2016 until the macro environment can make a bit of a turn there.

So that’s really the only drag in the European markets, we have all of our other markets are doing well. Italy, UK, Germany, the Nordics et cetera.

So France is soft and I don’t see that changing, for the Americas the separate timing we don’t, as I said this before, we only set up all incentives for our people based on annual target, that’s why we only give annual guidance. We don’t know at times whether clients will start the projects, when they say they will or they start them later.

And then just particular case, we are starting things later in fourth quarter than we had anticipated we thought some starts would be going into the third quarter. So from our standpoint, we like the U.S. business and as we think about 2016 and 2017 they will be a very key part of our success.

Keep in mind we did have 9% growth in the first two quarters in the U.S. so you are relatively flat in Q3, I expect growth in Q4, but that’s just kind of the nature of the business and our business there with the U.S. and some of the other markets..

Can you quantify the dollar value that slip through got push from Q3 into Q4 in the Americas?.

Maybe $2 million, I mean wouldn’t be more than that, but roughly that and that’s probably the difference between growing at 6% or 7% in flat, roughly..

Got you.

And can you maybe provide a little bit of an update on the competitive landscape in your managed services?.

Yes, so our position, we have a very strong position, our number one competitors internal, it’s still a business, it’s 95% done in the Fortune 500 inside their own companies.

So our competition is to educate the client about how we can do it better, more efficiently, more effectively access our talent, our capabilities been doing it inside and that’s really the key to our proposition. We also have software, so we’ve automated many aspects of what we provide to our clients.

There are a number of players, very small, with very small client bases that are out there, a few of the big four try to get into this a little bit, there is a few software companies that have some software out there. But – primarily the competition we have it’s almost all based on internal versus going to the outside with the company like ISG..

Got you. And last quick question I’ll jump back in the queue. In terms of your strategy got slight shift if you will just to kind of characterize it that way. Where you’re kind of moving your focus from a transactional basis to a broader strategic focus, if you will with your clients.

Can you talk a little bit about how you plan on making that shift, just any sort of color there?.

Yes, sure. So in the past we had a focus in our business around what I would call the transaction. So I want to move my infrastructure, I want to do something with all my apps, I wanted to something with finance and accounting whatever.

And so the business was, if I think about barbell, in the center of that barbell, our business was about 75% to 80% around transactions.

Over the last few years, that number is about 50% because the other ends of the barbell now are growing as we’ve expanded our products and services offerings from the benchmarking and the analytics at the front-end, helping them with the cloud or digital strategy, moving into transactions, and helping them transform and transition and then ultimately our made-in services and then consistently keeping them informed with our research offering.

So that’s how we are evolving and so it’s not just centered on transactions as it was three or four years ago, but a much broader array of product and services and accessing if you will, the digitization of these companies and we’re right in the middle of that.

So that’s how this is evolving and that’s why we’d say we’re moved from a – more of a transactional focus to a much more end-to-end solution of provider with all of our trusted relationships we have with our clients..

Got it. Thanks a lot guys. Appreciate it..

Thanks, Marco..

We’ll take our next question from Allen Klee at Sidoti.

Yes, good morning.

Just going on the Asian related business, could you give some color on the strength there and your outlook?.

Yes.

So the business grew very strong double-digits third quarter in a row, our business is on the both commercial and government side, primarily government in Australia, I will say in the quarter believe it or not, there has been yet, there was yet another government change there where the Australian Prime Minister was ousted and yet the new Prime Minister came in.

So Abbott was out, Turnbull was in, and believe it or not, it was their fourth Prime Minister in just two years there. That normally has been disrupting the spending patterns in the Australian government. This is a first time of the last, this is the fourth change in previous three all slowdown this spending.

Now, I think it’s getting a best to be immune from that and we’ve seen good strong growth out of the government sector in Australia and there has not been a hiccup with even the latest Prime Minister change in Australia.

So that coupled with some terrific work by our leadership team down in the Australia and Asian regions, have really allowed us to build up our base and using these new offerings that we have around digital, around SIAM, around research is all fueling that growth in Asia-Pacific and also the government spending.

In addition, you may recall a year or so ago, we acquired a small research company, that was based in Melbourne called CCI, which provides kind of user experience research, that also has been very successful for us as well. So you put it all together and that’s what really driving our double-digit – strong double-digit growth in that region now..

Thank you..

Yes, thank you..

We will go next to Sarkis Sherbetchyan at B. Riley and Company..

Good morning. Thanks for taking my questions.

So first you mentioned that recurring revenues grew 6% for the nine-month period, can you give us the growth rate and figure for Q3?.

Yes, the figure for Q3 is – it was a 3% growth..

And that’s year-over-year correct?.

Year-over-year..

And what was the absolute dollar value?.

The absolute dollar value was approximately $15 million..

Okay, thanks for that.

In last quarter’s call you mentioned that revenues from I think the European region which shifted into this quarter, can you quantity the impact, I think it was about $1 million?.

Yes, it was about $1 million in movement yes..

Okay.

So if we strip out that million, within that region would the growth rate have been a little bit lower on the constant currency basis?.

Yes, correct. Maybe you got to look at it on a year-to-date perspective. I think, that’s how we look at it..

Okay, and then, moving on to, I guess the Q4 kind of expectations, you did mention that on the constant currency basis, you expect to come in at the high end of the range, do you anticipate similar foreign currency headwinds or the comparisons getting easier?.

I mean, you should – right now, it will depend on the mix of currency to – for the quarter or so, I will look on it and it’s pretty similar to what we’ve experienced today..

All right, that’s all from me. Thank you..

Okay, thank you..

We’ll go next to Juan Pablo Bejarano at Noble Financials..

Hi, good morning, and thank you for taking my questions. So regarding the move to the cloud, do you feel that you need other partnerships to have a stronger position here? I know you have relationships with Apptio, Gravitant and NPI.

Do you feel you’re pretty much offsetting now as far as partnerships?.

No, I think – Juan Pablo, thanks for the question. We’re always looking at whether we can strengthen our position with other partnership. So, we don’t have anything in mind – I mean – and aligned at the moment, but we’re always looking at where we might be able to enhance our capability and a lot of the times we can do that with partnerships.

So I wouldn’t say we’re done there because I think this market is changing and evolving pretty rapidly. So we need to stay out in front of it. And if we see a partnership that may be – some sense to accelerate our capabilities then we will do that..

Okay, got it.

And as far as the $1 million – the revenue has shifted from Europe from the second quarter, did you say – did you get it back this quarter or are you still expecting to get it in the fourth quarter or is that related to France?.

Yes, we got it in the third quarter..

Okay, you got it in the third quarter. Okay, all right. Thank you. That’s it from me..

Okay, thanks Juan Pablo..

And we’ll take a follow-up from Vincent Colicchio, Barrington Research..

Hey, David, just a two housekeeping for you.

I missed what you said in cash flow operations and then capital spending in the quarter, could you give that?.

We just give you….

If you give for nine months that’s fine..

Yes, so Vincent, nine months capital spending is $1.1 million and that was capital spending, cash flow provided by the operations was $1.5 million..

Okay, thanks guys..

Yes, thanks Vince. And the [indiscernible] so you have the cash flow..

Good, thanks..

And that does conclude the question-and-answer session. At this time, I’ll turn the conference back over to management for any closing remarks..

Okay, thanks very much. Let me just close by saying thank you to more than 900 professionals around the world for their continued passion and tremendous dedication to our clients. It’s really their ability to help our clients, achieve operational excellence is the reason for our strong performance over the past nine months.

And I want to thank all of you on the call for your continued support and confidence in our firm. Everyone have a great day..

And that does conclude today’s conference. Again, thank you for your participation..