Good evening and welcome to Pitney Bowes 2008 Second Quarter Earnings Conference Call. Your lines have been placed in a listen-only mode during the conference call until the question-and-answer segment. Today's call is also being recorded. If you have any objections, please disconnect your lines at this time. I would now like to introduce your speakers for today's conference call; Mr. Murray Martin, President and Chief Executive Officer; Mr. Michael Monahan, Executive Vice President and Chief Financial Officer; and Mr. Charles McBride, Vice President, Investor Relations. Mr. McBride, will now begin the call with a Safe Harbor overview.

Thank you, and good afternoon. Let me remind you that you can find today's earnings press release and the attached schedules on our website, at www.pb.com/investorrelations. The forward-looking statements contained in this presentation involve risks and uncertainties and are subject to change based on various important factors including changes in international or national political or economic conditions, timely development and acceptance of new products, timing of potential acquisitions, mergers or restructurings, gaining product approval, successful entry into new markets, changes in interest rates and changes in postal regulations as more fully outlined in the company's Form 10-K annual report filed with the Securities and Exchange Commission. Additionally, if there are any non-GAAP measures discussed during this call, such as adjusted earnings per share, earnings before interest and taxes or EBIT, free cash flow and organic revenue, there will be a reconciliation of those measures to GAAP measures located on our website. Now, our President and Chief Executive Officer, Murray Martin, will start with an overview of the quarter. Murray?

Good afternoon. Thank you for joining us for today's quarterly results announcement. I will share a few thoughts on our results and Mike will follow with the financial overview of the quarter. I will conclude with our focus for second half of the year and then we will open the line for questions. We are pleased that we remain on target to deliver full year financial results consistent with our original guidance despite the difficult comparisons for the first half of the year and the challenging economic environment. During the quarter, revenue rose 3% and adjusted earnings per share were $0.69. The benefits on focusing on expense management were reflected in another quarter of strong free cash flow at $205 million, which was 32% better than the $155 million we generated last year. As we did in the first quarter, we are pleased to again increase our free cash flow guidance range for the full year, this time by $50 million to $675 million to $750 million, which is now $75 million above our original guidance. The quarter's results were characterized by continued momentum in Mail Services, improving trends in International Mailing, and in Management Services businesses, and performance in line with expectations in the core U.S. mailing operations. Growth in mail services continues to be driven by both presort and international mail services. Our strategy to expand and strengthen the Mail Services network continues to benefit our customers, in terms of enhanced discounts and postal processing. In addition, the strategy benefits our business in terms of operating leverage and efficiency. We will continue to diversify the mix of mail processed in the U.S. and seek opportunities to expand our presence in international markets. International Mailing continued to improve in line with our expectations, as we remained focused on growth,…

Thanks Murray. Revenue was $1.6 billion for the quarter, which was a 3% increase from the prior year. On an organic basis, revenue declined about 4%. Foreign currency contributed about 3% and acquisitions about 4% to revenue growth. For the quarter, revenue owed [ph] in the U.S. declined by 6% while revenue outside the U.S. grew by 29%. International operations now represent about 33% of total revenue. Earnings before interest and taxes or EBIT for the quarter excluding charges relating to restructuring was $279 million. EBIT margin was 17.6% which was lower than the prior year on a comparable basis. The anticipated decline in our EBIT margin was primarily due to unfavorable comparisons to last year, when we had very strong sales of high margin Shape Base retrofit kits in U.S. Similarly, the SG&A expense ratio was up this quarter when compared with the prior year, but was about the same as last quarter. This was largely due to reduced organic revenue growth, a shift in the mix of our businesses and higher credit loss expense in the U.S. versus last year. When we add back depreciation and amortization, adjusted EBITDA for the quarter was $376 million. Net interest expense decreased by about $8 million compared with the prior year. The impact of higher average loan balances was more than offset by a lower average interest rate, which declined about 80 basis points from 5.3% last year to 4.5% this year. The effective tax rate for the quarter was 34.1% which was about the same as last year. While we expect the tax rate for the full year to be approximately 34.5%, as previously noted the tax rate could vary between 34% and 35% during the course of the year. Adjusted earnings per share for the quarter was $0.69 which…

Thanks Mike. The quarter's performance despite tough comparisons and challenging economic conditions, underscores our confidence in our ability to deliver enhanced value to customers and to shareholders. As a result, we are reaffirming our 2008 revenue guidance of 6% to 9%. We are also reaffirming the range for our 2008 adjusted earnings per share from continuing operations of $2.80 to $2.90. And as mentioned earlier, we are increasing the range of our 2008 expected free cash flow to $675 million to $750 million. We have continued to diversify our revenues by expanding into new adjacent market spaces that provide greater growth opportunities. In 2005, only 40% of our revenue came from areas outside of our traditional core mailing businesses. Today, revenue in these adjacent spaces has grown to about 50% of our total revenue and we expect that trend to continue. Unlike any of our competitors, we provide a complete and diverse set of solutions for our customers' mail and document management needs. But, even as we expand, we remain focused on enhancing the customer experience and executing our strategies, while maximizing operational efficiency, free cash flow and expense management. Now, it's time for us to open the line for questions. Question And Answer

Thank you. [Operator Instructions]. Our first question in today is from the line Jay Vleeschhouwer with Merrill Lynch. Please go ahead.

Thanks, good afternoon. Murray could you be a little bit more specific with respect to your vertical markets and how they performed, or what your expectations are in those for the remainder of the year, particularly financial services, public sector, healthcare and the like. And then I have a couple of follow ups. Thanks.

Sure Jay. As we look at the various sectors, we did see financial services continuing to be down. That's said it, what we saw beginning aback at the end of last year and it has continued that way and that has caused delay on some transactions and we aren't seeing business going away there. What we are seeing is delays on the acquisitions of some areas. We did see improvements in areas within PBMS, in our government and our legal space. So, we saw those on the upside and the others were fairly well neutral to us. So, we really had the one that is continuing to be negative, which is a continuation of the trend and then the two other areas which were positive and pretty well neutral across the board.

Okay. You noted a 4% drop in organic revenues for the quarter. Does your guidance for the year, Murray, encompass organic growth for the entire year or not? And when you think about your components of growth, the legs of the stool so to say, do you think the number of businesses that you are counting on for growth is more or fewer or the same as what you might have thought three or six months ago, for the year?

That number is all inclusive and we are continuing to see good growth in the businesses we'd expected, and pretty well in line in all of the other expectations as to where we've planned back in the third quarter of last year.

Okay and then just couple of last ones; could you be a little bit more specific about the cost savings or margin improvement that we might see out of U.S. PBMS; now that you retaining margin expansion there at least has to be one of the critical things you are working on. Could you just be a little more specific?

Yes hi Jay, its Mike Monahan, just a touch on that. We did see a good improvement in the quarter and it's early days in terms of the actions, but we saw the EBIT margin there improved from 8% to 10% in the second quarter, based on some productivity actions that we've taken and obviously now that the decision has been to retain the business before it going to continue to implement both cost-oriented programs. But, obviously looking at the growth opportunities in the business as well.

And then lastly, one should we next see an important bump from either domestic or international rate or regulatory changes with along the lines with what we saw last year?

We aren't seeing anything that is out of the ordinary bump. We all have the normal rate changes and those are becoming more regular in most countries around the world. Where they use to be sporadic, they are heading... most countries are heading towards annual changes now. But, we aren't expecting any major change which as you know, has been both a positive temporary but it affects other streams over the long term. So, we aren't expecting anything that is going to change the model significantly going forward.

Thanks, very much.

Our next question is from Caroline Sabbagha with Lehman Brothers. Please go ahead.

Hi this is actually Linda Sigwin [ph] on for Carol. First question around your financing business; have you guys seen any change in the default rate to be seen any rising there, and also just wondering if you had increased your bad debt reserves? And then lastly, I was wondering if you have changed your lending policy, is that all around there?

Sure, I will be happy to take that one. In terms of delinquencies in the portfolio, actually year-to-year we've seen very little change in delinquency, virtually flat in our core leasing business in the U.S. and pretty much so on a global basis, which is a very good performance in light of the fact that the real credit problems in the marketplace began in the third quarter of last year, so we see that as good. I did mention, we did have a little bit higher credit loss in the quarter versus prior year. But, it was relatively consistent with the first quarter. So, we haven't seen any reason to change our reserve policies. We are within ranges that we would expect. In terms of credit policies, what we have done, we really have two core pieces of our financing business; the traditional leasing business and than we have a payments business. And what we did do and actually began this early in the year is take a look at the line of credit that we provide a lot of our customers in the product we call purchased power, and we have on a customer-by-customer basis looked at tightening that those lines of credits where we felt there was a sector or particular customer that may be a risk. And I think that's helped us avoid any significant issues on the credit-loss perspective.

Okay, thanks. And then one quick follow up. On the calendar, meter migration coming on at the end of this year, Neopost talked about some of it possibly being pushed into '09. Just wondering if you thought this was possible, some of the mailers could do this. And what your guidance range assumes around this? Thanks.

We have done a very good job in migration. Unlike some other companies, we are pretty well through the majority of our migration and whether there is a minor shift over year end, we haven't heard that that will occur but it would not really have an effect on our results as we are... we'll be pretty well complete regardless.

Okay, thank you.

Our next question is from Matt Troy with Citigroup. Please go ahead.

Just wanted to revisit a question I asked I think at the end of the year and again at 1Q. During this turbulent period, you were kind enough to revise slightly downward, your long-term outlook for what the organic growth rate of U.S. domestic meter business could be. I think it's been historically 0% to 3%. Can you narrow that somewhat down to 0% to 2%? Just wondering now that you're kind of in the middle innings of the house-cleaning exercise and talking to customers and getting a sense as to when the dust settles on migration. Are you still comfortable with that 0% to 2% organic growth rate for the core mail... mail business in the U.S.? And if you could break out, what are the 0% to 2% if it still holds. Is it pricing power and what is the placement growth?

This is Murray. The... we are still staying at the 0% to 2%. We think that coming out of this year and looking forward at our lease-based trends which we've previously stated start to return in Q3, Q4 and then into '09. We see that as being there. As to units in place, we don't see a dramatic increase in the units in place; so that will be a mix shift in how those units are put in place and what we see in future technology and capability that is coming down into the future years that will effect those revenue streams. There'll also be some price in there, but it's not going to be a significant component.

Okay. Second question in times like this, you obviously get pushed back from customers wanting to defer orders. I was wondering, to the extent you guys operate in a very tightly concentrated competitive environment and you've got Neopost which is historically positioned itself as someone of a value alternative to Pitney. Are you seeing any share loss? what's your sense on an incremental placement basis, in this last few months and going forward. Is Neopost any more of a relevant competitor? Do they still occupy the same niche? Are they potentially gaining some traction as a lower-cost alternative?

Well first of all, we are very competitive in our pricing on a global basis. So we don't see that as a particular issue. In fact, if you take the U.S., we have seen share gain over the last year as people are looking at our value proposition and as we are being very sure that our customers are seeing the value of the Pitney Bowes offering when they start looking at all of the connections of everything that Pitney Bowes offer. So when you look at not just the equipment, but the linkage into our Mail Services and the value that that generates for our customers. We're actually... we've actually seen market shares swing positively and we would expect that trend not to reverse itself.

Got it. Last question. In terms of the software segment, revenue obviously have nicely withheld by currency and acquisitions, margins came in slightly less than what I would have thought, though you had communicated some challenges there. I was just wondering, you talked about the investment in sales and marketing. If you could just help us with maybe the one, two or three key metrics by which you're measuring progress in the software segment, specifically. What are your return criteria, over what timeframe? What kind of margin can that business grow off run rate when things normalize?

I'll let Mike answer the portion of it on the percentages. But let me just touch on a couple of the items. First of all, and back to your other point, we aren't seeing dramatic delays as far as procurement in the mailing... traditional mailing business. It tends to be on the bigger ticket which would be production mail and in software. And as you look at the margins, when you have a delay and procurement there, that tends to affect the margins. At the same time, we see significant opportunity outside of the U.S. for a continued expansion and we've been investing in sales, marketing and in R&D to transition some of the products here into global products, because we see that as significant long-term return in taking those products and globalizing them. So we are investing in Europe and in Asia, particularly with the location intelligence products to expand our long-term capability in both the sales force and the marketing.

Yes, and to just add a little bit of color to Murray's comments about margins; if you look year-over-year, one of that issues was the timing of the MapInfo acquisition, where we acquired it mid month and got most of the revenue for the month, which generally comes in the back half but did not get all the costs in the first half of the month. So, that's one of the comparison year-over-year but the other impacts... the sales and marketing which Murray mentioned and the R&D were an incremental expense. We also had some integration costs as we combined the MapInfo and Group 1 businesses together into an integrated software business and look to leverage that common technology platforms and common technology development centers. So, there is a clearly an investment, the last piece is certainly the fact that there is a lot of leverage in this as you grow the revenue and we would expect as we see some of these deals come in over time that as the revenue base grows, we are going to get pretty strong leverage out of that incremental revenue.

Okay. And actually, I will ask one more question. Since you've been in CFO role now for several months, Pitney Bowes the upside and downside is it's got a very high hurdle rate in terms of your incremental return on capital and that for me register off a pretty high rate that's tough to match at least on near-term investments. Has your thinking changed either with returned thresholds or payback period or time window for investments, when you're drawing capital at, internal projects or some of the bolt-on acquisitions you guys do it from time in time, have those metrics changed?

Yes, I would say we're getting a little more refined in sort looking at the metrics on a business-by-business basis. And, if you look at a business like Mail Services, where when we invested early in development of the network, the return was not that great on the assets. As we'd expanded that network and we put volume into it, the incremental dollar capital into that business actually is at or great... actually greater than the corporate average and is rapidly moving up the curve towards the mailing business. So, there is a critical math element that we have to be able to invest through in these businesses and I think software has that same type of curve potential to it. So, we are getting very specific in how we look at each business, where they are in their development cycle and then the capital we commit to them, because we do believe that the opportunity is there to drive the overall average return on those assets up. Obviously, if we can put a dollar investment to generate return in the core mailing business, we are going to do that because the return is always quite good.

Got it. Thank you very much.

Our next question is from Shannon Cross with Cross Research. Please go ahead.

Hi, good afternoon, just a couple of questions. The first one is with regard to restructuring; can you just maybe provide some more clarity on exactly where you are focusing your restructuring, where you see the benefits? And then I am just curious depending on the level of revenue growth in what you are getting from some of your businesses, what kind of opportunities there might be to leverage the model even more?

Sure, we set out initially to reduce positions by about 1500, was the original target and to generate about a $150 million of annualized savings in 2009. We took a look at this initially we went across the businesses and we looked at both the management ranks as well as sort of the operational side of the various businesses, and the first wave of activity was really to make sure, we had an efficient management rank. So, we've had a reduction of greater than 10% in our overall management ranks. We've been, as I said looked at operating opportunities, consolidations, integrations of acquisitions, and those and identified other positions. As I mentioned in my remarks, we now have a clearly identified and have in implementation plans that will get us to the $150 million of benefits and then actually in terms of the total number of positions identified, it well exceeds the 1500 at this point. So, this is an ongoing review, that we are underway with and obviously part of the philosophy we had adopted is that, ongoing in the business we need to just constantly be looking at our cost structure and making sure it's appropriate for the level of business opportunity that we have and we will do that in each of our businesses.

Okay great. And then, yes I was just trying to figure out sort of how much more you think you could put sleaze if need depending on what the economy does. But then, my second question is with regard to cash flow, obviously very strong. You possibly think about... you think of any marked clarity and sort of how you weigh sharing purchase versus acquisition, obviously the dividend in terms of increases there; I think you talked about your philosophy there before. But just given the strengthen in cash flow, some if it I'm sure you can recur next year obviously some more losses where we are but with the potential of this model, sort of how should we think about what you are focusing on in the next say 6-12 months, in terms of the list you preserve it, and what you are also seeing out there in terms of the acquisition potential, are people little more flexible in terms of the pricing that they are willing to time to take or is it so far a marketed to be in acquire in? Thank you.

Sure, I think we're very pleased with the free cash flow generation that we have to-date, and the outlook for the rest of year. So, I think that gives us a greater flexibility in the second half of the year, particularly with respect to share repurchase and so, we'll look at that opportunity. We have a 134 million of authorization remaining and we'll balance that with other potential demands like acquisition. What we have done, on minor amount of acquisitions this year relative to other years mainly around our Mail Services businesses, we continue to look that we are only going to do things when they really fit timing and price points. In terms of valuation on acquisitions, it's very much a deal-by-deal question in the segment in which the business is in terms of how much the evaluations have come in. But, that I don't think our approach has changed at all in terms of it meeting the strategic criteria and the return expectations that we would have.

Thank you.

[Operator Instructions]. And with an additional three questions in queue, we will go to the line of Ananda Baruah with Banc of America. Please go ahead.

Hey guys, thanks for the question. Murray, just wanted to go back to the U.S. mails...U.S. mailing business. I know you've commented that things are relatively inline with your expectations, year-over-year did decelerate 14%, I am assuming that's why you just got the tough compares second quarter on a seasonal basis, everything... business was about flat, that's in line with the last few years. You did mention that there were some pockets I don't know maybe that's the right word but there were some you did see a little bit of delay I guess in financial services. Just wanted to make sure that there is really nothing that sort of above and beyond what your expectations really were as we enter the year?

Thanks for the question. In the traditional mail business, we have not seen that much of affect. There has been a little bit affect in the supplies business, as people stretch out the reselling and the repurchasing of their supplies and taking lower quantities rather than buying more box. So, to me that's a timing shift and that will catch itself up. Since that business is generally a lease business, it doesn't delay the same as some of the larger ticket item. So, we see that business with the comparisons changing in Q3 and Q4, beginning to move forward. We did have just to reiterate in Q2 a significant Shape Base-rating element as well as pull forward of revenues, as people that were in their lease flow brought their equipment forward for change earlier. So, those were the two elements that created the change that we saw back in the Q3 of last year. So this is in line with those expectations that we had since Q3 of last year, and we are now expecting to see it move at a different pace going forward.

Got it, I appreciate that. And then I guess historically, you've grown organically between 3% and 5% the overall business. Is that still sort of... that ballpark still you got envision as we kind of move through the second half of '08 into '09?

It's Mike. Yes I think in terms of 3% to 5% is our mid-term outlook for organic growth in the total business, that's an accurate view. Obviously, this year we have the unusual comparison to the second quarter. So, just remind you to keep that in your thinking. But we do view that as the outlook for the business over the midterm.

And just wanted to get your thoughts on the upcoming sort of I guess, the lease renewal cycle that you guys envision benefiting from I guess towards the end of the year here. Where do you guys see yourself, I guess if you think about peak to trough of the cycle, where do you guys see yourself as being right now, and how long you expect right now that continuing then once you're kind of kick in I guess in whatever degree of renewal you expect to see, how long do you think that portion of the cycle can last?

It really, if you look at the lease cycle, our average lease terms are four-plus years. So, you got to think of it in terms of that length of a cycle. We are in the trough of the cycle right know certainly, and as we mentioned we expect to see begin to come back in the second half of year. And certainly that would continue on into 2009 and probably into 2010. But do you think that any cycle is having ups and downs in its four years than you are probably on a up cycle for a couple of years and in the back half if it for a couple of years.

And Mike, is there a leverage benefit you guys could begin to realize, if not immediately, I mean you should into '09 and through '09 and forward, and your margins have been pretty stable in the U.S. mailing business. So, maybe the answer over the last so many years maybe the answer is not really. But it just seems to that you were going to be... simplistically if you are going to begin to benefit from an up swinging intermediary cycle, there might be some leverage benefit as you move forward?

Yes we had I think targeted 40% EBIT margin in our core U.S. mailing businesses kind of a guideline to shoot for and I think that's kind of looking through the cycle and is the target that we have set for the business. So, I think that's a good way to look at it.

Well, that actually I was to. I mean your margins are about 40%. So that will sort of just imply maintenance of current margins. I guess, is that right?

Yes, I think there is pluses and minuses all along the way. But in terms of the way to look at over the cycle that's why I had look at it.

Okay, Okay, and just a couple more if I could; the legal settlement in Europe that was benefit to the operating margins this quarter. Can you give us sort of... can you quantify that's for us or give us any guidance on to what extent that might occur with regards to help during the quarter?

There is always minor ups and downs and we'd... there were some expenses in the quarter and there is also a legal settlement we can't disclose exactly what it was due to the contract on the settlement but, it was not something that we... as we look at it, compared to other negatives and positives, as just sort of one of things that flows through.

Good. So 17% margins this quarter versus 14.5% margins last year. Is it reasonable to expect some degree of year-over-year operating margin improvement in international mailing?

Yes. As we have outlined last year, we had significant expenses in the transition into outsourcing. We're also in the middle of moving manufacturing out in Europe. So, as those flow through, we'll continue to see a margin improvement on that whole trend.

Thanks. And then, just last one from me. Just going to your U.S math, you see margin improvement already in the business. I imagine to have more kind of baked into your second half of the year. Is this incremental to the $150 million or I guess it would be... is it incremental to your expectations for this year and then going to next year from the original restructuring or well I guess that's the question?

Not really, we had if you go back to when we had originally looked at the restructuring, we've looked at PBMS at that time. We did differ in some of those while we're examining the alternatives and have progressed in putting those things through now. So, we're starting to see that benefit and we will continue to be looking at all of the details in the business, how it's aligned and what the productivity opportunities are there and we will look to take advantage of those before the end of the year.

Got it, okay. Thanks a lot.

Our next question comes from line from Andy Chang with Linden Advisors. Please go ahead.

Hi. Thanks for taking my question. I just, most of my questions have been asked but I just wanted to follow-up on one that was asked already. As far as I guess returning cash to shareholders, you mentioned you have more flexibility. Should we expect you guys potentially to do more to return cash like did also given that you increased your free cash flow guidance?

As we look at the cash, if you look at first half of the year, we're pretty close to matched. As to our share repurchase and dividend to our cash flow, it's within less than $20 million spread there and that sort of what we look at and we did some acceleration. So as we look through the balance of the year, we'll look at the continuing availability of the cash versus our dividends and any other uses that we have and then tie that into looking at share repurchase.

Okay, thank you.

[Operator Instructions]. Our next question from Vincent Lin with Goldman Sachs. Please go ahead.

Hi my questions were actually answered. Thank you.

And thank you. Our next question is from Chris Whitmore with Deutsche Bank. Please go ahead.

Thanks. Good afternoon. I am surprised to see the rental revenue line improve a bit on a year-on-year basis. I think it is about 3% year-on-year, big change from where it's been trending over the past six quarters or so. Can you talk to that line item? What's happening in that line item to drive the improvement and is it sustainable through the back half of the year?

Yes Chris this is Mike, I would like to tell you that it's all pure good news. There is some FX in there. But we did have good performance in Canada in terms of rental revenue and it was relatively flat outside of that; in the other markets. So we have seen very good retention improvement in the U.S., which has helped that line as well and that's been an ongoing trend. So, we see it as a real positive relative to what you had seen as a declining rate over some period of time. So we're very happy that and obviously we would like to see it be even more positive.

I think it also goes back to one of the other questions about share, which gets into the retention as we keep more and more of our customers has been, Mike mentioned, that has a positive effect. We also have gone through a lot of the resizing of equipment and as that moves through the system, that will also help stabilize that line. And then, certainly Canada has moved through their entire migration ahead of us and so they're now seeing a positive launch there. So that, I think is the real major thing. In addition to that, in Europe and in Canada, we are now seeing the posts recognizing the value of meters and are promoting the expansion of meters and they are doing that via incentives. And so, we're seeing either discounts in the use of meters, metered mail in some countries in Europe or incentives for placing new devices and this is a significant change in the trend that had been there in the postal services over the last number of years.

And if I could just follow up on the rental renewal improvement in the back half of year and into 2009 where are you anticipating there from a cycle standpoint. Can you speak to the underlying driver for upgrade? In other words, in the past, we've had technology-driven upgrades to most recently digital meters. Is there a similar technology driver? Is there a key technology upgrade process that will happen within your installed base or is it just a typical lease renewal cycle? Thanks.

Well, we've had a couple of technology requirement upgrades. But as we look at the business, we see opportunities to continue to enhance the processing of mail and the processing of the evidencing of mail. And we've continued to invest in technology and capabilities which we will be rolling out over the coming years. So even though we have a lease cycle and we are anticipating significant mandated technology changes, as an innovator we'll continue to innovate and provide new technologies to the marketplace.

Last cycle you saw a bit of a mix shift from higher end higher-priced meters to more mid-range meters. It sounds like that's largely behind you. Looking forward over the next 12 to 24 months, what do you expect in terms of ASPs of these renewals?

Well we've continued to return very well during that down shift, and we've just launched an entire new product line in the U.S. So, we've launched as of this month, a whole new set of products and we would expect that in the low and the mid range that we won't see that much down shift. We'll still see a little bit in the upper end of the range, but that is shrinking as a component of the total.

Okay. Thank you very much.

And speakers at this time, we have no further questions in the queue. Please continue.

Thank you and it's certainly been an interesting number of quarters. But through all of it, we are on track to deliver our financial results which are inline with our original guidance, and we are doing that despite the tough comparisons and despite the challenging economic environment. We are certainly pleased with the strong cash flow and we will continue to focus on working capital, expense management for the balance of the year. We'll continue to look for new opportunities to simulate growth and enhance value that we deliver to our customers, and to our shareholders. Thank you, for joining us.

And ladies and gentlemen, today's earnings conference call will be made available for a replay, starting today at 7 PM in the Eastern Time Zone and running for two weeks until August 18th. You can access our service by dialing area code 320-365-3844, entering the access code for today's conference of 935042. That phone number again 320-365-3844 and the access code of 935042. And that does conclude our conference for today. Thank you for your participation. You may now disconnect.