Good day and welcome to the Second Quarter 2008 Insight Enterprises Incorporated Earnings Conference Call. My name is Candice and I will be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session after managements remarks (Operator Instructions). I would now like to turn the presentation over to your host for today’s conference Ms. Glynis Bryan, Chief Financial Officer. You may proceed. Glynis Bryan – Chief Financial Officer: Welcome everyone and thank you for joining the Insight Enterprises conference call. Today, we will be discussing the Company's operating results for the quarter ended June 30, 2008. I'm Glynis Bryan, Chief Financial Officer of Insight Enterprises. And joining me is Rich Fennessy, President and Chief Executive Officer; and Mark McGrath, President North America and Asia Pacific. If you do not have a copy of the earnings release that was posted this afternoon and filed with the Securities and Exchange Commission on Form 8-K, you will find it on our website at insight.com under Investor Relations section. Todays call and answer is being webcast live and can be accessed by the investor relation section of our website at Insight.com. An archive copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for limited time. This conference call and the associated webcast contained time sensitive material that is accurate only as of today August 11, 2008. This call is the property of Insight Enterprises. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of Insight Enterprises is strictly prohibited. Also, please note that during todays conference call management will refer to certain non-GAAP financial measures when discussing the second quarter financial results. Specifically, these non-GAAP…

Thanks Rich. Starting with our North America segment. Net sales grew by 33 million or 4% to 956.9 million. This included the benefit of the Calence acquisition which we closed at the start of the quarter. Calence contributed to our hardware as well as our services performance in the quarter. Hardware grew 2% in the quarter as sales from Calence offset to decline our legacy hardware business. Our services sales were up over 100% in the quarter reflecting double digit growth in our legacy, services business and the addition of Calence to our portfolio. Please recall that the professional consulting and managed services business of the Calence for key drivers of the acquisition. Software sales were relatively flat this quarter when compared to the record level net sales reported by the software team in the second quarter of last year. Gross profit grew by 1.8 million or 1% to 135.9 million. The growth in services and software gross profit generated by the legacy business and the acquisition of Calence more than offset the decline in hardware gross profit. Gross margin was 14.2% versus 14.5% reported last year. This decrease is primarily due to decreases in product margin which includes private funding and was primarily driven by market as pricing pressure. These decrease since were offset partially by the improvement in gross margins resulting from increased sales of services which are typically at higher margin. Selling and administrated expenses increased 5.2 million or 5% to 106.3 million compared to 101.1 million reported in the prior year quarter. The 2007 second quarter results include 4.1 million in expenses associate with the companies stock option review. The total increase year over year is entirely due to the acquisition of Calence. In fact selling and administrative expenses in the legacy Insight business were down…

Thanks Glynis. As Rich referenced earlier the American team was very focused throughout the quarter again back to moment where we lost in the first quarter and I believe we are making progress. Our initiatives around software helped us deliver solid financial results for that portion of our business in the second quarter the integration we put in place relative to the Calence acquisitions help us successfully integrate that business in the Insight as a strategic networking team and we continue to make a progress on our IT systems upgrade project. In addition, the expense action we took in the first half of the year help produce our cost base and will provide us flexibility to continue to execute against our strategic objectives. We continue to strengthen our business for growth, we also concluded in the quarter that we needed to restructure many aspects of the US business not only to become more efficient from an expense perspective, but also they continue to evolve our approach to gain profitable market share as part of our global buyer strategy. Here are the main highlights of the organizational changes. First, we merge our SMB and enterprise sales organization into a single client facing team. As you know, we had historically operate separate sales organization for enterprise in SMB. The SMB came in had been predominantly telesales with some fuel coverage and our enterprise had been fueled with weekend size sale support. While both of these organization had strong kill in the client relationship having two organization created redundancy, client coverage inefficiencies and in some cases on our overall ability to drive accountability across the team to penetrate that new clients. We believe by combining these teams we can better leverage one of our strongest assets which is our outstanding fuel selling skills with our excellent telesales skills to create better market coverage, improve sales productivity and create greater accountability across the team. We also announced the position of our three speciality teams that are strictly focused on software, networking and services within our coverage model. As specialty these teams will have deep expertise in the work of our client facing to help identify and close incremental business around our solution areas. The final organizational changes relate to our client support organization. We are consolidating our marketing and product management teams to drive greater synergies and alignment with our partners. And we are consolidating all of our pre-shell support resources in the one organization that will support our sales teams. We believe that by adding one mere with one set one processes, tools and metrics we can greatly allege the leverage support to our sales teams and clients that accelerate sales productivity improvements. All of these changes are excited in part of the national evolution of our organization, in support of our trusted advisor value preposition of our clients design to fuel our continued success. I will now turn the call over to the operator to open the line for your question.

Thanks good afternoon guys. Just on the implication of your guidance the $1.50 to a $1.60 which you provided last quarter and implied you would do about $0.51 to $0.56 this quarter excluding charges and I think if you backup the charges this quarter you did about 63, so you had some pretty meaningful upside this quarter, you also commented that your software business performed better than expected and I know that was key concern coming into the quarter and the expense which you’ve outlined today should be some additional benefit going forward as well. So I am just – given all that I am wondering why the range for the year didn’t go up? What are the main factors in your mind that are keeping you from raising $1.50 to a $1.60 in light of the upside and all the factors I mentioned. Thanks.

Sure Brian. First and foremost the expense actually that we took in 2Q as well as 1Q in the benefit of those expense, that’s actually we took any consideration, we created the dollar to be 60 range on the last call. So we knew it and take as we call on the last earnings call some actions in the second quarter which we took and we think there is a right action to get our expense structure to where it need to be. But as it relates to looking at our 2Q results was clearly better than we were anticipating as we are very pleased by that. Really we did two things, one is we are – we are optimistic on our software business which we called out and we see that’s playing out in the second half of the year. While at the same time we are actually quite conservative about the hardware market, and now the uncertainties we are seeing the marketplace today relative to the CapEx and people looking at their desktop no book service span and whether they can defer those projects into filing here. So we are actually looking to slower hardware growth in the second half of the year then we originally would expect in that kind of offsetting some of the upside that we solve in the software business in the second quarter. So the combination those fact and as well as these are the general uncertainty of the market and as I think we go on the second half of the year obviously, we are looking to go – trying to go drive the hedge performance, but as we look at it we think overall we are very slow demand environment.

Is it fair I guess look at the rest of the year similar to how last year played out where just from an EPS perspective of the last year you were surprised by the negative seasonality in the third quarter and the ended up coming in at $0.21. It sounds like for the rest of the this year you are assuming kind of flattish EPS growth or I have that incorrectly and may be some other quarters you’re see growth in some of the quarters you can see declined year-over year?

Yeah. We did exactly year-over-year where EPS perspective in 3Q and 4Q we had come in right around a $1.55 for the full year. So, which is right on the middle of our range. So as we look at it that’s a fair as assumptions how you will drive at least year-to-year flat and obviously – our goal is to drive year-to-year improvement.

Right. And then if I can just switch gears to the Hardware business in North America, if I back out what may assumption is for Calence, it sounds like that business did about 75 million in the quarter and I think that recall maybe three quarters of that being hardware from previous call. So if I back that out, it looks like your hardware business in North America might have been down somewhere around 8 maybe 10% year-on-year which is a little bit great over decline that you saw in the first quarter, and I am just wondering hw much of that accelerated decline do you think was market weakness versus more exacerbation from your system issues versus maybe a decision to walk away from on profitable business given the pricing actions we talked about from competitors.

A combination of lot of factors but I mean, else, given the way we have integrated student together, we don’t call our Calence versus non-Calence business today, but as we did call we did see in the Harbor business a year-to-year decrease across all customers’ debt in our Harbor segment. As you recall, we have 60% enterprise mix for the most of North America, 32% or so SMB and 8% or so public sectors and in the enterprise space we are clearly seen our clients scrutinized you CapEx running very much and we are seeing show up in terms on our year-to-year growth. As it relates to our SAB migration we do actually do good on the SMB side of the equation that we made progress in the quarter and we feel good about the 7% year-to-year, quarter-to-quarter I should say growth in the first quarter, second quarter, we’re actually relative to first quarter same quarter actually would back to low ask ground. So on the SAB side, we see like trending, and we see 3Q hopefully improving by net 4Q the same as we finished our migration by the end of this year. But in the enterprise space as well as public sector is really to stay in local we are seeing some concern than Hardware which again we try to make in consideration as relates to we steady in our guide without 50 to $1.60.

Okay. Maybe just a couple of more. It sounds like on Calence you’re not going to be able to provide anymore breaks out there and I am just going to ask if there is anyway to help us think about the gross profit in EBIT contribution excluding any non cash amortization charges that you are taking or may be at least if you cant do that, let us know qualitatively if there is any reason to believe that that business is an operating at the levels with operating at when you close down the deal?

No actually I mean, overall you too see in our earnings obviously the networking category which is now we’ve asked Mike Fong who was the CEO Calence now actually run that combined business they’re doing that today, so we’ve integrated together and you can see overall some – and you will be seeing every quarter just how that networking categories is doing. As it relate to the second quarter as we closed on the April 1st overall I would tell you they a very strong performance on our first quarter of ownership, one there is historical high in terms of growth and we are pleased three months ended where in terms of how that business is planned inside of Insight.

And should we still think of that as kind of a mix single EBITDA margin business or is there any reason why that change?

There is no reason why that change.

And then finally just on the issue which was obviously a big upside surprise at least for me and probably for you, anything you need you want to that you want drilling to in terms of maybe some large deals that wont recur, was there any core on ahead of the Olympics or anything that had decide China was up something like 70%. I am just wondering if there is anything unusual in that quarter or do you think we had phase just so there is anything that you heard China was up something like 70%, I am just wondering for is there anything on usual in that quarter or do you think we’re at page right now where that business is going to continue to grow substantially year-over-year? Thanks.

Yeah, I think since we saw spectrum acquisition having every number in front of me we have had – we have been pleased every quarter with kind of performance we have seen at Asia Pacific and they definitely had a very strong quarter and I said nearly doubled when will have we have been pleased every quarter with kind of performance we’ve seen on Asia Pacific and they definitely had a very strong second quarter and I said nearly double what they did second quarter last year both on EFO as well as net sales . And the nice thing about the results – there was no – there was not 1, 2 key transaction which general health across all the countries that we are in. So that business, we moved into leader back to run that business and she continues -- she has been now back for several months now, she did a very good job in the quarter as we look at our business going to in 3Q and the second half of this year, we are expecting to continue to see good things from that business. Now kind of the strategy that we had, as we all know the US economy is the tough one. The strategy of diversifying both in Europe as Asia Pacific is playing out just the way we would hope it would, but the kind of growth as they did enjoy in Europe and as well as kind of growth our specific business enjoyed really offsetting some of the exposure that we’ve seen in overall US market, and obviously as we look at the investment they we’re making, we are looking to continue to fuel that. So if you look for example an head count growth in EMEA you see roughly substantial head count growth in our sales organization in EMEA and surely part of our strategy how we will to continue feel that as we kind of weathers on the storms of the uncertain demand environment we have in the US marketplace.

Okay thanks a lot Rich.

Our next question will come from the line of Matthew Sheerin of Thomas Weisel Partners, please proceed.

Yes thank you. Just a follow up on couple Brian’s questions. Just regarding your commentary on hardware demand it definitely found a bit more cautious on the second half and you did in the first quarter, but suddenly you’re not allowing a lot of your competitors and distributions suppliers have said the same thing. I guess, if you could just drill down a little bit more, did you see push out fleet in the quarter, are there anything kind of broadly speaking that customers are telling you that they’re putting things on hold now?

No I would say at the end of the quarter it take phenomenal, I would say throughout second quarter we saw an increase -- but I think its little bit more surprising to what we saw in the first quarter is the level of slowdown in the enterprise segment from what we were expecting, because first quarter we definitely saw a March, while also net really slow down and I that was I do – it was different more we experienced in January, February the right enterprise, I would tell you enterprise throughout the second quarter was just the slow quarter, and we see that is kind of one thing we are concerned about going into the second half of the year just CapEx spending in stead of just being referred in first half or second half where that’s been pushed off already 2009.

Okay that's helpful. And then you talked about pricing pressure in North America in the hardware business have you found that due to the fact you did loose some customers because of the migration of your IT systems and MICP and the if had ago and deal will be with more aggressive on pricing to bring customers back?

We are definitely aggress in the market place and but I would say its not -- we are not unique and I think we’re seeing the across the board which was I mean, -- we are down 80 points as we call our 1Q year-to-year and now we’re down 30 basis points. So we are actually pleased a little bit that we saw last price deterioration quarter to quarter. Part of that is driven by the fact we did have counts and makes now with the higher margin offset some of the decreased in a year-to-year basis, but I don’t think the pricing aggressiveness in the marketplace even you need to ask when that customers I think its just a more of factor f slow demand and every clinical when the business at it does exist out there.

Okay and then just switching geography the UK where it sounds like hardware sales is bouncing back a bit and it sounds like the demand picture is better. How much of that do you think is attributed to the market they are versus a just improvements in the overall business in your infrastructure?

I think its improvements in our business or versus the market strength. And I think the UK market is very close to the US market as demand picture and as we call on our first quarter call we in the first January, February that we have some slowness in that business and we made some leadership changes and some just overall design changes for how we’re going to market and we started in March and we saw some improvements in late March going into April which we called out in the call for fiscal results. I would say those improvements played out through the whole second quarter and we believe that the leadership team understood and his team have really kind of fixed the issues where we did have and we are really pleased that we definitely regain market shares relates to the UK market place my hardware perspective.

Okay thanks. And just lastly, just quick question of Glynis on the interest expense, is that going to be somewhere this quarter than it was last quarter?

Math, this is third quarter versus second quarter.

Yeah.

I mean, we have required the Calence acquisition that was a big driver increase in our overall debt, debt related to interest expense in short of market rates change and et cetera you should anticipate its going to be similar.

Okay. Thank you.

(Operator Instructions). Our next question will come from the line of John Lawrence of Morgan Keegan. Please proceed.

Good afternoon.

Hey John.

Rich, could you go and maybe Mark wants to discuss it a little bit as far as talk a little bit about -- I mean just to get in the system just a little bit. As you look at these clients that you have on both sides of -- they are trying to do the software business and the hardware business. Is there a push back because of the system, because of some of that as they cross over or is that not where the issue is?

No, no, we have (Inaudible) because we are running our software business through the legacy software spectrum IT system and we are running the Insight businesses a legacy Insight system. And from a customer perspective, quite honestly that's working quite nicely. I mean they don’t mind in fact we had merged one system. So the only thing that we believe we are not seeing all the opportunities that we like to see. There is internally the content of cross selling and trying to go leverage with the client, the software client, you gave about hardware trying to go sell hardware to him. We believe we will have now leverage that to the extent that we can. In fact it is behind our restructuring. So the whole concept of restructuring our sales approach, which is a big deal in terms of bringing SMB and enterprise businesses together was really designed to do two things. One is to go drive more cross selling by leveraging the specialty teams that we have positioned around our front end called the general sales organization and two was really to go after this net new opportunity. So in this slow demand environment, clearly when you have effect customers who have been doing certain amount of spend with you may start to slow, you either just weather that storm or you are trying to redirect that sales talent to go win back net new business and we believe by going to the three structure that we just went through, which we now it's about four weeks ago is that we can go get back and start be much more aggressive from a net new win perspective.

And so the end result is there is less people that know more about what's happening of that account across segments. Is that the way to look at it?

No John, I would tell you I think I look at it that regarding enterprise field team, now team with an SMB tele team so you got in terms of client facing exercise in many cases more resource and then would be specialties around networking services and software, you got absolute clarity of which specialty organization to bring in to go drive that cross selling. So we think the combining of this is more productive, less redundancy, more clarity with the client and in fact we think we are going to get more client facing resources for that client.

All right.

One other things is a typical concern anytime you hear so many go into a seller restructuring is there is going to be disruption in the business and one of the things that we are very focused on through this effort in addition to getting more efficient is try to go make sure we don’t disrupt any existing client by relationship. So there is no client that has relations today with an Insight sales person who doesn't today has resulted after the action of still of that same relationship with the same sales rep. So that was very important to us. My other action you seem to low other competitors take, we have break relationships and see a diff in your sales productivity. One of that design points and our restructure of our sales team was to maintain the client relationship with their existing sales rep, which we have been able to do, which we believe will allow us not to see the downturn but at the same time go get that sales meeting that folks and net new clients as well.

Great. Thanks guys.

(Operator Instructions). This concludes the question and answer portion of today's conference. I would turn the call back to management for any closing remarks.

Overall, thank you very much for joining today's call. We are pleased in today's challenging market environment with the results we were able to demonstrate and post here in the second quarter. We are also pleased with some of the action we have taken like the closing of the Calence acquisition April 1st, the closing of the Minx acquisition in the UK and now this restructuring of our sales approach. We think the combined effect is really a better go-to-market approach from a sales perspective as well as stronger capabilities around our solution areas in line with our strategy to be a global war that we have been able to go pull off here in the second quarter. As we go into the third quarter and the fourth quarter, I will say our design is to continue to go drive improvements from an execution perspective and we look forward to sharing those results with you in upcoming calls. So thank you very much.

Thank you for your participation. You may now disconnect. Have a great day.