Brian Campbell - Vice President, IR Mark Allin - President and CEO John Kritzmacher - CFO and EVP Technology and Operations.

Daniel Moore - CJS Securities Drew Crum - Stifel Ian Whittaker - Liberum.

Good morning. And welcome to Wiley’s Second Quarter Earnings Call. As a reminder, the conference is being recorded. At this time, I’d like to introduce Wiley’s Vice President of Investor Relations, Brian Campbell. Please go ahead..

Thank you. Good morning and welcome to Wiley’s second quarter fiscal 2016 earnings call. Before we start, I’d like to remind you that the call is being recorded and may include forward-looking statements.

You shouldn’t rely on such statements as actual results may differ materially and are subject to factors that are discussed in detail in the Company’s 10-K and 10-Q filings with the SEC. The Company does not undertake any obligations to update or revise forward-looking statements to reflect subsequent events or circumstances.

For those of you who prefer to listen to the call over the phone, but still want to view the slides, we recommend that you click on the Gears icon located on the lower portion of the left-hand side window and select Live Phone.

This will eliminate any delays in viewing a slide transition, as well as remove any potential background noise if you prefer to ask a question. After the call, copy of the presentation and the playback of the webcast will be available on our Investor Relations page. Now, I’ll turn the call over to Mark Allin, Wiley’s President and CEO..

Thank you, Brian, and thank you all for joining us. I will speak to business performance and John Kritzmacher, CFO and Executive Vice President of Technology and Operations will follow with an update on operations, cost initiatives, balance sheet and cash flow, as well as our full year outlook.

Note that I will be excluding the impacts of foreign exchange when commenting on all variances, to give a consistent measure of performance. As expected, foreign exchange was a headwind again for us this quarter. Since half of our revenue is generated outside the United States, we are adversely impacted by a stronger U.S.

dollar, particularly with respect to the euro and the British pound. In the quarter, the unfavorable impact of revenue and EPS was approximately $19 million and $0.03 respectively as compared to the year ago period. Year to date, the impact was $41 million and $0.08 respectively. Now onto results.

Revenue and adjusted EPS for the quarter declined 5% and 10% respectively due to a larger than expected decline in books along with the impact of an unusually large journal backfile sale in the prior year period.

Excluding that sale which generated $10 million of revenue and $0.10 of EPS last year, revenue would be down 3% while adjusted EPS would be up 2%. Also note, we expect to sign a comparably-sized backfile agreement with another national consortium in the third quarter.

The background of backfile license provides access to a historical collection of Wiley journals. So, back to the second quarter results.

Steady performance from the combination of Journal Subscriptions and Author-Funded Access as well as double-digit growth in solutions did not offset a sharper than expected decline in books, particularly in education, and I’ll talk more about that shortly. For the first six months, revenue and adjusted EPS were down 2% and 1% respectively.

It is important to note that if you exclude the prior year backfile sale, adjusted EPS would be up 6%. In terms of our journal business, calendar year 2015 subscription renewals were up modestly with nearly all business closed. The renewal performance included the $5 million adverse impact of the Swets Agency bankruptcy.

It is too early to talk about our expectations for calendar year 2016 journal renewals, although the Swets bankruptcy will be behind us. And finally, the consolidation of our book businesses is well underway.

The combination of these businesses will result in a more streamlined organization structure, further portfolio rationalization and efficiency gains from common operating processes, enabling us to focus on higher value content.

In addition, our cost benchmarking and efficiency initiatives in shared services functions such as finance, technology and operations are also making good progress. As a reminder, we are anticipating fiscal year 2018 run rate savings of $25 million from our shared service initiative with approximately half of that to be realized in fiscal 2017.

These initiatives will enable us to operate the business more effectively and flexibly for the long-term. Onto our research segment, where we continue to see steady performance from the combination of journal subscriptions and also funded access.

As mentioned earlier, the Swets bankruptcy had an adverse impact on calendar year 2015 journal subscription performance. However, calendar year 2016 results will not be affected. Also as noted, it is too early to provide a meaningful update on 2016 renewals, but we do anticipate a similar market environment till recent years.

In terms of our society business this quarter, Wiley renewed seven society journals during the quarter worth approximately $10 million in combined annual revenue, while one which was not renewed worth $300,000 annually. No new society journals were signed. Note that we anticipate society journal win/loss to be roughly even for calendar year 2016.

Research books and references revenue declined 11% due to weak library demand. Year-to-date books and references revenue is down 5%. As already noted, we have begun to integrate our various books businesses to achieve operating synergies and to focus on areas of growth.

Finally, adjusted contribution to profit fell 11% due to the high margin backfile sale in the prior year. For the quarter, Professional Development revenue declined 3% with book revenue continuing to be challenged by weak retail trends coupled with the impact of planned portfolio changes in the past two years.

We saw positive performance in the quarter around the Windows 10 software release and its impact on our technology publishing. Online Test Preparation continues to be an exciting and rapidly growing area for us with strong double-digit growth from our CFA and GMAT programs.

We recently signed an important partnership with the ACT, one of the nation’s leaders in college and career readiness to enhance our collective Test Prep product offerings. Wiley will become the exclusive publisher for ACT’s, The Real ACT Prep Guide beginning in January 2016.

Wiley also acquired, both CFA content and AnalystSuccess.com from the American College of Financial Services. The terms were not disclosed. The acquisition further positions us as a market leader with CFA Test Preparation. We feel good about the progress we’re making with this digital business.

The Assessment business rose 4% with solid post-hire assessment growth, offsetting an expected decline in pre-hire assessment revenues following portfolio actions to optimize longer term profitable growth. Corporate Learning was up 7% in the quarter. Note that last year’s reporting lag adversely impacts the reported growth rate.

On a comparable six-month basis, Corporate Learning revenue is up 25% year-to-date and we are seeing strong customer momentum in that business in Europe and in the U.S.

Adjusted contribution to profit for Professional Development increased 95% or $9 million with restructuring savings and cost synergies from the Talent Solutions businesses driving performance. Education had a challenging quarter with sharp declines in books and Custom Material and modest growth in WileyPLUS.

The performance is attributed to lower enrollments, increased penetration by rental, channel inventory consumption and fewer adoptions. Student behavior continues to shift with test book rentals, used textbooks and digital sales taking share away from traditional print textbooks.

For the quarter, print textbooks were down 22% while Custom Material declined 25%. We expect to realize improvements in our operating performance and efficiency as we consolidate our books businesses and rationalize our portfolio.

Our Online Program Management business formally Deltak, continued its strong momentum this quarter, finishing with 216 degree programs under contract compared to 210 programs at the end of last quarter.

Wiley also signed a new partnership and new programs with Nottingham Trent University, one of the UK’s largest leading universities with over 28,000 students as well as with an existing partner Loyola University of New Orleans. I am very pleased with the momentum we’re seeing in that business.

Wiley’s long standing reputation inside of academic institutions means a great deal to potential partners whether our position in research inside of the academic library, course material inside of the classroom, or administering graduate degree programs on behalf of the institutions. All of this resonates with potential partners.

In summary, we see continued strong opportunity for growth. Adjusted contribution to profit declined 19% in the quarter, reflecting the books revenue decline and investments in new online program management partnerships and programs. I’ll now pass the call over to John to further discuss our operational performance and fiscal year outlook..

Thank you, Mark. Moving on to operations, adjusted shared services cost for the quarter increased 4% over prior year, primarily driven by an 11% increase in technology investments. For the quarter, incremental investment in ERP and related business applications totaled $4 million.

Our ERP implementation achieved its first key milestone with the deployment of SAP Record to Report functionality for our North America operations on November 1st. Distribution operations expense declined 3%, reflecting our continued shift toward digital products and services, and additional efficiency gains from outsourcing.

Content management cost improved by 12%, driven by further consolidation and outsourcing of our content management activities. Finally, the increase in other administration expenses was primarily due to higher professional services fees including investment in our operational improvement initiatives.

As Mark briefly noted, Wiley has embarked on important efforts to improve our operating efficiency and effectiveness. Over the coming months, we will be consolidating the books businesses from our three operating segments, simplifying the organization structure and integrating our business processes.

We’ve also entered into an agreement to outsource our U.S. based print textbook distribution operations to Cengage Learning with the continued aim of improving efficiency in our distribution activities through a more variable cost model for print products.

We will transition the fulfillment operations of our New Jersey distribution center to the Cengage and close our facility over the remainder of this fiscal year. Meanwhile, we are also making good progress with our shared services cost benchmarking programs.

Our competitive reviews for technology and finance are complete, and we are now moving towards the implementation of streamlined service delivery models for these core functions. We expect these initiatives will substantially improve the effectiveness of our technology and finance functions while achieving parity with competitive cost benchmarks.

With respective to these shared services initiatives including distribution operations, we expect to achieve $25 million in run rate savings by fiscal 2018 with half of that amount to be realized in fiscal 2017. Much of this will be enabled by our ERP deployment, which is progressing as planned.

The aforementioned activities including the consolidation of our books businesses, the outsourcing of the U.S. distribution operations and the implementation of other shared services efficiency initiatives will give rise to restructuring charges of approximately $20 million.

Roughly two thirds of the charges will be recorded in Q3 and the remainder including a real estate charge related to the closure of our New Jersey distribution center, will follow in subsequent periods.

Our balance sheet continues to provide us with the flexibility and capacity to make strategic acquisitions and return cash to shareholders in the form of dividends and share repurchases. Net debt to EBITDA on a trailing 12-month basis was 1.5 at the end of October as compared to 1.4 in the year ago period and 0.7 at fiscal year-end.

With respect to cash flow performance, free cash flow was the use of $193 million through the second quarter as compared to a use of $141 million in the prior year period. Cash from operations was down by $32 million due to working capital timing and lower net income.

As a reminder, cash flow is seasonally negative in the first half of Wiley’s fiscal year, principally due to the timing of annual journal subscription cash collections. Capital expenditures were higher due to investment in new product development as well as investment in our ERP integrated systems.

And finally, we deployed $32 million in the quarter to repurchase 638,000 shares at an average per share cost of $50.15. Given our performance through mid-year and current market conditions, we are reaffirming our fiscal 2016 outlook of flat adjusted EPS. We are lowering our revenue outlook from low single digit growth to flat.

These expected trends exclude the impact of foreign exchange and the previously announced timing shift for journal revenue. As a reminder, we are implementing time-based journal subscription agreement and the new data base option for customers in our mature markets.

These changes will greatly simplify the contracting and administration of our subscriber agreements but the move to time-based subscriptions will shift $35 million of revenue and $0.35 EPS into fiscal 2017. Most of the revenue and earnings impact will occur in our third fiscal quarter.

As a reminder, our cash flow performance will not be impacted by this change. As Mark mentioned, the strong dollar versus the euro and British pound remains a headwind for us with first half revenue and adjusted EPS impacts of $41 million and $0.08 respectively.

That said, I would also note that current exchange rates are more comparable to the second half of last year, as the dollar strengthened during that period. As a reminder, our EPS outlook includes an incremental expense impact of more than $0.15 for our ERP and related systems investments. And now, I’ll pass the call back to Mark..

Thank you, John. So to summarize, steady first half performance in journal subscriptions and author-funded access and double-digit growth in solutions could not offset a larger than expected decline in books, particularly in education.

It’s important to note that the comparison to prior year was impacted by $10 million high margin journal backfile sale in that period. Excluding that sale, EPS would have been up 6% for the six months. Also as mentioned, Wiley expects to sign a comparably-sized backfile agreement with another national consumption in the third quarter.

Calendar year 2015 journal subscription renewals remain steady overall, up slightly including the $5 million adverse impact of the Swets bankruptcy while also funded access continued to show strong double digit growth. It is too early to comment on renewal negotiations for calendar year 2016.

Our cost benchmarking and efficiency initiatives are well underway. We are integrating our books businesses in order to focus on areas of growth and improve efficiencies. Wiley recently partnered with Cengage Learning which will now take over our print textbook fulfillment and distribution operations as we move towards a more variable cost model.

We plan to exit our New Jersey distribution center by the spring of 2016. Given the first half results and what we see for the remainder of the year, we are reaffirming our outlook of flat adjusted EPS but lowering our revenue guidance to flat due to challenges in our books businesses, particularly in education.

Overall, while there is important work to be done, we remain fully confident in our foundational strength and our overall strategy to achieve consistent performance in our journals business, invest for growth in our digital solutions businesses, consolidate our book businesses for efficiency, and to better focus on opportunities while improving our operating effectiveness.

We expect continued strong cash flow generation which along with our very strong balance sheet will allow us to make targeted but meaningful acquisitions that accelerate growth across our portfolio. And with that as background, we welcome your comments and questions..

[Operator Instructions] And we will go first to Daniel Moore of CJS Securities..

Good morning. Talk a little bit about print books as you consolidate or work to consolidate the operations around print book businesses in the various segments.

Are you contemplating any incremental divestments or portfolio changes in light of the accelerating declines in those areas?.

Hi Dan, it’s Mark. So, our first target is to consolidate activities and operations, so we’re being as effective and efficient as we can be in print.

Also as a reminder, we are consolidating our books businesses, so that includes print and digital, so ensuring that we have to rise focus on digital opportunities at the same time as rationalizing the cost base and activities associated with print.

That doesn’t contemplate portfolio adjustments at this time but it’s setting the portfolio in the context of what’s happening in the marketplace in our own performance is an important part of that work, as we work through it. So, nothing immediate but it’s certainly part of our consideration..

And then maybe just elaborate a little bit more, I know you’ve talked about in the past but the agreement with Cengage, how much of the cost savings that you anticipate by 2018 is sort of wrapped up in that agreement and maybe just elaborate on the benefits there a little bit more?.

So, Dan, it’s John. Roughly speaking, the savings that we anticipate at run rate in ‘15 include about a 10% contribution from the shift to the arrangement with Cengage Learning.

Principally as you would expect from what we’ve done with other distribution operations in moving towards this partnership with Cengage, we move to a variable cost model that scales much better with the volume of print that we are experiencing.

So, we now move to a completely variable cost model, take out a significant amount of fixed cost in the operation that we are running on our own..

Very helpful and one more.

Perhaps the expected benefit of the backfile sale in Q3, what is that on an EPS basis and is that new or is that embedded in your original fiscal year ‘16 EPS guide?.

So, we are -- so just to make it clear, we are anticipating another agreement and we are anticipating that that will be signed in the quarter and likely delivered in the third quarter as well. It’s comparable in size and earnings impact to the sales that occurred in the second quarter of last year.

And I am sorry, your last question was, was that contemplated in our expectations for the year. And the answer to that is yes..

Okay.

And just more generally in terms of backfile sales, is it something an opportunity that -- I know they are lumpy and unpredictable but is it an opportunity you expect to continue to pursue going forward?.

I would say opportunities of this size are a little rare. We had one last year, another anticipated this year, and they tend to be significantly smaller and yet more in numbers. There has been a fairly reasonable pattern of these over time and there are still opportunities in front of us.

So I would say it’s an opportunity set that continues for us into the future, not substantially different next year versus this year..

Okay. And last one and I will jump back. But pre-hire assessment, maybe talk a little bit more about the changes you have made there.

If you expect additional declines, for how long and what the sort of base run rate revenue looks like post those changes and when we should anticipate more improved growth on a go forward basis?.

Yes. So, it’s Mark, Dan. So the rationalization of that business was essentially around the distribution model. The business that we acquired Profiles International had a multichannel distribution model including direct B2B sales and sales through resellers.

We consolidated around a reseller model, as we already operated for our post-hire assessment business that used to be in scale. [Ph] And that reseller model is both more productive economically but it is also easier for us to scale.

So, as we work through that and essentially shifting business from one channel to another, we would expect that business over the course of time, as we work through that in the near-term, to reach a level of growth comparable to our post-hire assessment business which is of low double digits..

Okay. Any color you might be willing to share in terms of what the initial -- what profiles original pro forma run rate revenue was and what the new base to grow from, would be helpful..

So, the original revenue associated with that business was in the high 20 millions. And in reshaping that portfolio, we've probably taken that run rate down by about 20% and then we'll build back up from there. But in so doing, we have while lowering the revenue level of the business actually improved its profitability and its contribution to Wiley..

Understood. Thank you, again..

Thanks Dan..

[Operator Instructions]. And we will go next to Drew Crum of Stifel..

Okay, thanks. Good morning, everyone. I’d just like to get an update on the progress you are making to accretion, profitability from some of the larger acquisitions you've made over the course of last couple of years. And I guess I'm speaking directly to Deltak, Profiles which you just addressed and CrossKnowledge..

So, speak to -- we just spoke to Profiles. So, I won’t go through that again. You’ve got a clear picture of what we’re trying to do there. With regard to Deltak, as we have said in the past, we’re continuing to invest for growth in that business. We still believe that we’re at a stage where establishing market position is important.

And we said earlier in the year and would reiterate that for this year, the balance between growth and managing the level of investment there has us anticipating dilution on the order of about $0.10.

We were at around $0.13 or $0.12 dilutive something like that for last year and we expect to be on the order of $0.10 dilutive this year while growing at a pretty strong cliff. And you see from the results again this quarter we’ve got strong double digit growth in that business and the strong funnel of programs yet to be implemented.

And then with regard to CrossKnowledge, CrossKnowledge is also growing well, as Mark pointed out in his comments around the corporate learning business, we’re seeing that business grow top line at a rate of 25% through the half. We’ve invested in that business in order to, again establish strong market position there.

And in terms of its contribution to earnings, it’s slightly negative but it’s holding its own with respect to the level of investments that we made last year, so growing the business without further diluting the bottom line.

Both of those businesses, both CrossKnowledge and Deltak, as we’ve said, are relatively early in their cycles of maturity and we're continuing to invest for scale on those businesses as we establish market position, notably on the CrossKnowledge side, establishing market position in the U.S.

which was one of the key elements of our strategy for that acquisition..

And with that in mind guys, as part of your Investor Day presentation back in September, you talked about margins of 17% or better by fiscal 2018, acquisitions are going to be important part of the growth strategy to get to you the 25% of the revenue coming from the solutions business.

So, I guess the question is your appetite for acquisition that may have a dilutive financial profile, at least at the outset or the onset of the acquisition.

Could you talk about your appetite for M&A and your willingness to take on dilutive acquisitions as part of that strategy?.

Let me offer some comments, Drew, and then Mark can add on. I would say that willingness to take on dilution in the near-term would be dependent of course upon the opportunity and how it contributes to our strategy. If we were to make acquisitions in new areas beyond our current capabilities, those might in fact be dilutive in their early stages.

It really depends on what the opportunity might be as compared to opportunities that exist for us to take on additional scale in some of the areas that we currently participate in such as online program management, where of course we would probably be looking more for opportunities that are -- that include cost synergies and opportunities to drive scale in the places that we currently operate in.

So, I would say it's a mix. We're not shying away from opportunities that might be dilutive. Of course the profile that we suggested for fiscal ‘18 would not accommodate significant acquisitions that were materially dilutive.

Right? But in the construct of what we currently operate and the opportunities that we have to drive the current operations to scale, we feel good about the profile for operating margin that we set in fiscal ‘18..

Yes, I think well said. The only thing I would add to that is in terms of the market opportunity and how we feel about bringing together the acquisitions we have to-date, which really span the market from education through assessment and employment, so that remains a high growth market.

There's a lot of activity including a lot of acquisition activity; valuations are certainly challenged.

And so, we are careful about what we consider to be the right kind of strategic acquisition, both in terms of size and fit with the existing business but as John said, we've established an operating base in that business that does allow us, both in OPM and Corporate Learning, potentially to add other acquisitions and to get some benefits from scale, whist we’re also improving effectiveness in performance across the rest of the business as well, in order to work our way towards the goal that you described..

Two last questions from me, both separate for Mark, on education, can you address your comment on lower adoptions and having impact on performance in the quarter, does that suggest that the business lost some share during the period? And then separately, your free cash flow use through the first six months is down about 50 million.

Do you expect to maintain [ph] that up in the second half of fiscal ‘16?.

So, on education, couple of points to make. So, one is about the market which is challenging and is somewhat disrupted.

So, some of the things that are impacting that business overall are clearly impacting Wiley, so lower enrollments, retailers are burning through existing inventory as demand slackens rather than reordering, there is the impact of rental. So, there's market specific questions.

There are some Wiley specific factors here which mean through the quarter we did somewhat underperform against the market, against our expectations. Yes, we do have fewer adoptions for several reasons, one is that the demand in qualitative and softer subjects is not as strong as we expected.

And we have quarters that span both qualitative and quantitative, and we'll address that in the way that we select quarters for Wiley trust going forward. It's also important to note that are front list, so new courses which is really the feature that drives that business each year, that list of new courses is smaller this year than it was last year.

So, I would say, appreciate the disruption in the marketplace in which we're operating. There're couple of short-term and immediate Wiley related issues which we understand and which we’re addressing..

Okay..

And then, Drew, it’s John.

To your questions with respect to the cash flow performance, you’ll recall that we indicated that for our fiscal ‘16, we anticipated our operating cash flow to be roughly comparable on a year-over-year basis as compared to ‘15 but then we were anticipating substantially more investment, principally driven by investment in our ERP and related applications and also investment related to our remodeling of the headquarters facility.

The timing of some of that investment are still to be determined. We did in fact start the project at our -- to reconstruct the headquarters at Hoboken a little bit later, so some of that capital will come along a little bit later than originally anticipated.

But back to the question around cash from operations, through the first six months of the year, cash from operations is down by about $32 million. Most of that -- more than half of that is related to timing and working capital we expect that we will claw most of that back over the remainder of the year.

The remaining shortfall through the half relates to lower earnings. And we expect again to claw that back through the remainder of the year.

So I’d say the previous direction that we’d indicated with respect to operating cash flow still holds, some work to be done around working capital performance but I think that that will balance out through the year. And the fundamentals of the Company’s cash flow characteristics are unchanged, going through the balance of the year..

[Operator Instructions] And we’ll go next to Ian Whittaker of Liberum..

Hi there. Thanks so much for taking the questions, just apologies; I’ve got questions on education again. I guess the first one is in terms of reasons why you sort of mentioned about the market being weak, you’ve been very candid about the reasons.

Sort one of the things that’s sort of a significant in terms of being different from what one of your peers has said, it’s been the effect of book rentals.

So, one of your peers has suggested actually rentals are really that big of deal sort of longer term, essentially what will happen is that we’ll just eventually plateau out into the used book market.

Is that your sort of view sort of, of book rentals, so do you really think that book rentals are going to be a longer term drag on the new sales? And then the second one is just want to clarify a point. Again, sort of this is from one of your peers.

But they were suggesting that the return of the inventory issue was down to one specific retail channel but I think sort of you said, sort of suggest it could be more than one and it was across the whole of the industry.

Can I just clarify whether it was just one specific retailer or supplier that had sort of inventory issues and was burning through inventory or are you seeing this across the whole of the industry? Thanks..

Sure, thanks for the question Ian. So, on the question of rental, I would agree that the long-term impact of rental is not as significant as the impact over the last two years and over this particular period. And it kind of connects to the inventory question.

So, the amount of inventory that is sitting in the channel being used for rental, there are periods in which that’s increased significantly than periods where that rental usage goes either down or up and the inventory either comes back to us or we burn through more slowly over time.

But I think it will settle down to be a piece of the business but not one that I see as a major drag over time, going forward. It’s just part of the industry disruption right now. As far as returns go, yes, there is one -- there was one large return which impacted the industry and that clearly has some impact for us in the quarter.

So, we have seen inventory corrections across the channel as well. Certainly that number was skewed by one large return..

Just come back to sort of the issue of book rentals -- I mean thanks very much for that.

If you go back sort of maybe around two years ago, two and a half years ago and sort of again comments from some of your other peers on book rentals, again the comments that were being suggested then was again yes, book rentals have been a drag on the industry but don’t worry about effect is coming to an end.

We’re now two, two and a half years on, we’re still hearing the same, the same suggestion. Is there anything concrete that you could point to, to suggest that indeed the drag effect of book rentals is indeed less..

So, what I would say is to think of rental in terms of the overall shift in student demand. And I think where we as an industry are still waiting for this to settle down is what’s the balance between custom course material, between second hand, between rental and between digital courses. And that’s clearly still evolving.

I think the drags on the industry that came from rental over the last year’s partly related to that business getting off the ground and that being quite significant purchases of inventory to support the new rental model. Once that becomes as it is now more of a business as usual, I don’t see it being such a big drag.

I think in the early stages of that business evolving, there were some quite significant impacts that came from the inventory, both purchasing and returning that was associated with our business evolving initially..

[Operator Instructions] And we will now take a follow-up question from Daniel Moore of CJS Securities..

Thank you, again. You mentioned FX maybe abating a bit.

If rates stayed generally where they are today, could you quantify roughly the full year EPS impact or H2 EPS impact, either one?.

Not precisely, Dan; I didn’t bring that to the call. But as commented in the notes, if it stays -- if prevailing rates stay roughly where they are, we would expect a much more modest impact..

Got it.

And just remind us what’s remaining after the repurchase activity in Q2 on the current authorization, and maybe any commentary on your current appetite?.

The current authorization has on the order 1.3 million, 1.4 million shares outstanding. We consider it to be still an attractive opportunity. We accelerated buying in the second quarter and will continue to buy on the back half of the year..

And it appears there are no further questions from the phone lines. At this time, I will turn the call back over to management for any additional or closing remarks..

So, thank you for joining us on the call today. And we look forward to speaking with you again at our March third quarter earnings call. Thank you..

And this does conclude today’s conference. We thank you for your participation. You may now disconnect..