FCN
#Welcome.
I think it was ---+ that business is a relatively small one and so they have a certain lumpiness in the revenue cycle having to do with the staging of initial evaluations versus follow-on work that they often were awarded after the initial evaluation.
And you had less business in that two-stage pipeline that produced in the fourth quarter.
But I think that they've got a lot of things underway and the pipeline is filling out nicely and it gives us confidence that they should be able to deliver more smoothly in 2016.
Thank you.
Good morning, <UNK>.
You mean if we start licensing it to partners, would there be positive cash flow implications.
Absolutely.
Well, sure.
The question is how does that net against the investment we need to be making in this business is an interesting question.
But, of course, if to the prior question we're forced by the channel partner strategy to take on another investor, obviously they would pay, we presume, a reasonable amount for to have a chance to participate in that.
And that would be ---+ I don't think that's an operating cash flow.
I will let <UNK> and <UNK> talk about that.
I don't think they'd classify those as operating cash, but it's an inflow of cash.
Am I hearing your question right, <UNK>.
So I think the answer is the burden wouldn't be lessened, but the point is the revenue base over which it would be amortized would be higher.
I mean, that is clearly what's going on in this industry.
And to stay leading-edge you have to spend a lot of money.
And if you look at it, it used to be there were a lot of software providers and some of you know some of these players in depth, even if some of them are private.
My sense from the outside, a lot of places people have this software but they basically said I can't compete and they're not willing to invest the R&D necessary to compete and we are.
But what I believe is ---+ in order to do that and to stay leading-edge, you need to not just be licensing it to ourselves.
So the goal of this would be to continue to invest in the R&D and probably do, as we said, some significant add-ons this year, but on an ongoing basis to continue to invest.
But the goal here is to amortize that over a lot more ---+ a bigger ecosystem and you get a big revenue stream from licensing and that's pretty margin.
That's a high margin business.
So that's the goal.
Does that answer your question, <UNK>.
I think that's right.
The challenge (technical difficulty) to other people outside is the thought we were thinking about, yes.
<UNK> or <UNK>.
I think we've disclosed in the K it's a range of about $35 million to $45 million.
We don't disclose specifically what's Tech related, but some of that number will shift towards Tech as part of the R&D expense that they experience this year turns into capital.
But it's included in that range that we talked about.
I don't think we've ever disclosed that, but ---+
But I would say, look, this is a pretty ---+ outside of technology, this is a pretty simple business.
It's furniture and fixtures and it's laptops for the practitioners.
But it's not 90% Tech either.
I guess the global point is this Company generates a lot of cash and has fairly simple CapEx needs for our practice with approaching $2 billion of revenue.
So we are not constrained in our ability to make capital investments should we need to.
And even with the run rate we are on in terms of plans for technology coming out of 2015, it's a very manageable amount of capital expenditures.
If we needed to increase that, it's well within our resources.
The obvious answer is we can do more than we have in the past.
Now we don't have all the same segments and obviously it's not just segments but geography.
If you have extra heads in Australia, it is not quite so easy to have them staffed on cases in New York, right.
It's all those sorts of issues.
And what you need to be a leader in Strat Comm is different than what you need to be a strong junior person in our Econ business.
But obviously you pick on two areas where the question sort of leaps out at you, which is junior staff in FLC and junior staff in Corp Fin, with many of whom places where we recruit from the same background and it's an issue we're looking at.
I think there's always big project risk and that's one reason why we have a range on our e-guidance, right.
I would say I think we are doing a better job of understanding the distribution of those risks than we have in the past.
There's risk on the upside that you get a lot of jobs and there's also risk on a downside that some major assignment settles, which is great for the client, but that means you have an abrupt end to your revenue stream.
And I think we've historically thought those were kind of symmetrical and when you really look at it, actually the ending thing happens faster than the ramp-up stuff and so forth.
And so we've gotten ---+one of the things we've done over the last months is try to get a little bit more analytical about where we've missed in the past on our budgets and correct for some of those.
So I would say, on average, I believe we are ---+ we have more disciplined budgets right now and are doing a better job of trying to calibrate those risks than we have in the past five years, including during the first couple years when I was here.
So does that mean we are perfect.
No.
And will I probably ---+ if I'm here for the next five years, will I come up in front of you and say, Wow, we got blindsided by that.
Almost certainly, because it's just there is a randomness to this, but it's not quite as random as we've been whipsawed by and we're trying to tighten that.
Does that answer.
I'll take that unless, <UNK>, you were waving.
Did you ---+ that was on the last question.
Okay.
The separate locations, we have a video screen up, so we're trying to figure out who's taking the questions, so I didn't know whether <UNK> was taking that.
As I say internally, I love my house.
And I'm not going to sell my house.
My kids grew up there.
On the other hand, if somebody comes along and offers me stupid money for my house, I will listen.
So that's always the case.
As a CEO of any major Company, that's the responsibilities you have to the shareholders.
But the other reason why people sell businesses is because they don't have confidence in those businesses.
And I think that's the more often reason why people sell businesses.
And I was worried about that when I first came in and that was the first gig, right, and some of you said, jesus, we can't do anything with Strat Comm, with the whipping boy of the day.
And you should be dumping that.
And every business I've looked at, we have real opportunities to build those businesses.
And where we have those, I don't spend a lot of time trying to think about selling those businesses and that's where we are on all of our businesses today.
We have real upside.
There's been a lot of value that we could have created over time and that we can create going forward and that's what the Management team and I are focusing on and we're getting tighter and tighter and more effective at that focus in going forward.
But that is my focus going forward here.
Now if you want to come along and have somebody offer us the Google valuations for any ---+ my house, by the way, I'm happy to listen to it.
But other than that, I'm not looking to dump any of these businesses and I'm looking to create the value out of them.
And let me use that to close on a key point.
I believe if we do ---+ we don't have to be perfect.
If we do the right things with most of our businesses most times on these bets, we don't have to have perfection, and we continue to improve these businesses in a significant way, we're disciplined, we're a little bit more rigorous on our planning processes so we know when we're kidding ourselves, and we stay disciplined with cash except when the right acquisition comes along, which will be periodically, but we are disciplined, we will turn this Company into sustained double-digit EPS growth.
And that is a pretty good performance.
And I think we're not far from that.
In fact, we have a shot this year of being the first time in two years ---+ first time since 2007 and 2009 to be two years in a row.
And we are looking by the end of this year to put ourselves on a platform for sustained double-digit growth.
I think we can do that without dumping businesses and that's where we're thinking right now.
, <UNK>.
Is that clear.
Thank you.
I think we are over with questions.
I just want to say thank you all for joining the call.
And we're looking forward to this year and we look forward to engaging with you during the course of this year.
Thank you very much.
