• we saw significant improvement in selling, general and administrative expense as a percentage of revenue from 39% for last year's first quarter to 33% for this year's first quarter.

Our first quarter has historically been our lowest quarter from a revenue standpoint. We experienced a 23% decline in our consolidated revenues for this year's first quarter compared with the same period a year ago. To put this into context, it is important to note that we did not begin to see significant impact of the global recession on our performance until the second quarter of fiscal 2009. We will continue to focus heavily on rebuilding our revenue base, controlling our costs, and executing on our key strategic initiatives that we set out to accomplish in fiscal 2010.

Critical Accounting Policies and Estimates The preparation of financial statements requires management to make estimates and assumptions that affect amounts reported therein. The most significant of these areas involving difficult or complex judgments made by management with respect to the preparation of our consolidated financial statements in fiscal 2010 include:
§ Revenue recognition,

§ Impairment of other intangible assets,

§ Income taxes,

§ Stock-based compensation,

§ HIpoints loyalty program, and

§ Contingencies and other accruals.

In each situation, management is required to make estimates about the effects of matters or future events that are inherently uncertain.
During the three months ended September 30, 2009, there were no changes to the items that we disclosed as our critical accounting policies and estimates in management's discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed by us with the SEC on August 31, 2009. Results of Operations
Three Months Ended September 30, 2009 Versus Three Months Ended September 30, 2008
The following table sets forth the results of our operations, expressed both as a dollar amount and as a percentage of revenue from services, for the three months ended September 30, 2009 and 2008, respectively:

                                              2009          %          2008          %
     Revenue from services                  $ 38,935       100.0 %   $ 50,280       100.0 %

     Operating expenses:
     Cost of services                         24,431        62.7       31,151        62.0
     Selling, general and administrative      12,962        33.3       19,608        39.0
     Depreciation and amortization             1,754         4.5        2,083         4.1
     Restructuring and other charges             148         0.4          628         1.2

     Operating loss                             (360 )      (0.9 )     (3,190 )      (6.3 )
     Interest and other income                    15         0.0          190         0.4
     Interest expense                           (537 )      (1.4 )       (455 )      (0.9 )

     Loss from operations before taxes          (882 )      (2.3 )     (3,455 )      (6.9 )

     Provision (benefit) for income taxes       (249 )      (0.6 )     (1,194 )      (2.4 )

     Net loss                               $   (633 )      (1.6 )   $ (2,261 )      (4.5 )

Revenue from services. Revenue from services decreased by $11,345, or 22.6%, to $38,935 for the three months ended September 30, 2009 compared with the same prior year period and included a negative foreign exchange rate impact of $1,425. The timing of the global recession was such that we did not begin to see its significant impact on our operations until the three months ended December 31, 2008. Revenue from services for the three months ended September 30, 2009 across North America, Europe and Asia generally continued to show the effects of a challenging economic environment, which in turn has resulted in decreases in the research budgets of many of our clients.

North American revenue decreased by $8,729 to $27,359 for the three months ended September 30, 2009 compared with the same prior year period, a decrease of 24.2%. By country, North American revenue for the three months ended September 30, 2009 was comprised of:
• Revenue from U.S. operations of $22,832 down 25.1% compared with $30,469 for the same prior year period.

• Revenue from Canadian operations of $4,527, down 19.4% compared with $5,620 for the same prior year period, which included a $212 negative foreign exchange rate impact on Canadian revenue compared with the same prior year period. On a local currency basis, Canadian revenue for the three months ended September 30, 2009 decreased by 15.5% compared with the same prior year period.

European revenue decreased by $2,458 to $10,672 for the three months ended September 30, 2009 compared with the same prior year period, a decrease of 18.7%. By country, European revenue for the three months ended September 30, 2009 was comprised of:
• Revenue from U.K. operations of $6,715, down 28.6% compared with $9,402 for the same prior year period, which included a $994 negative foreign exchange rate impact compared with the same prior year period. On a local currency basis, U.K. revenue for the three months ended September 30, 2009 decreased by 17.4% compared with the same prior year period.

• Revenue from French operations of $2,590, up 30.3% compared with $1,987 for the same prior year period. On a local currency basis, French revenue for the three months ended September 30, 2009 increased by 35.2% compared with the same prior year period. The increase in French revenue was principally driven by growth within the Healthcare and Qualitative research groups, partially offset by a $137 negative foreign exchange rate impact compared with the same prior year period.

• Revenue from German operations of $1,367, down 21.5% compared with $1,741 for the same prior year period, which included a $78 negative foreign exchange rate impact compared with the same prior year period. On a local currency basis, German revenue for the three months ended September 30, 2009 decreased by 19.2% compared with the same prior year period.

Asian revenue decreased by $158 to $904 for the three months ended September 30, 2009, a decrease of 14.9% compared with the same prior year period. The impact of the foreign exchange rate on Asian revenue for the three months ended September 30, 2009 was inconsequential compared with the same prior year period.
Cost of services. Cost of services was $24,431 or 62.7% of total revenue for the three months ended September 30, 2009, compared with $31,151 or 62.0% of total revenue for the same prior year period. Cost of services for the three months ended September 30, 2009 was impacted by the declines in revenue discussed above, as well as the differing types of custom research projects performed when compared with the same prior year period.
Selling, general and administrative. Selling, general and administrative expense for the three months ended September 30, 2009 was $12,962 or 33.3% of total revenue, compared with $19,608 or 39.0% of total revenue for the same prior year period. Selling, general and administrative expense was principally impacted by the following:
• a $3,509 decrease in payroll-related expense, driven by headcount reductions taken throughout fiscal 2009,

• a $634 decrease in stock-based compensation expense, driven by the forfeiture of stock options and restricted stock upon the departure of several senior executives throughout fiscal 2009,

• a $469 decrease in travel expense, driven by our continued focus on controlling these costs, and

• a $304 decrease in office rent, driven by space reductions taken during fiscal 2009.

The remainder of the decrease in selling, general and administrative expense was the result of decreases across a number of other operating expense categories because of our continued focus on ensuring appropriate alignment of our cost structure relative to the needs of our business.

Depreciation and amortization. Depreciation and amortization was $1,754 or 4.5% of total revenue for the three months ended September 30, 2009, compared with $2,083 or 4.1% of total revenue for the same prior year period. The decrease in depreciation and amortization expense for the three months ended September 30, 2009 when compared with the same prior year period is the result of fixed and intangible assets that became fully depreciated or amortized during fiscal 2009 combined with decreased capital spending as part of our overall focus on controlling costs.
Restructuring and other charges. Restructuring and other charges were $148 or 0.4% of total revenue for the three months ended September 30, 2009, compared with $628 or 1.2% for the same prior year period. Other charges for the three months ended September 30, 2009 consisted of $148 additional legal fees associated with the amendment of our credit agreement during fiscal 2009, along with costs incurred to close our telephone-based data collection center in Brentford, United Kingdom during the three months ended September 30, 2009. Other charges for the three months ended September 30, 2008 consisted of $628 in fees paid to Alix Partners LLP to assist with performance improvement initiatives. There were no restructuring activities during the three months ended September 30, 2009 or the same prior year period.
Interest and other income. Interest and other income was $15 or less than 1% of total revenue for the three months ended September 30, 2009, compared with $190 or 0.4% of total revenue for the same prior year period. The decrease in interest and other income was principally the result of having a lower average cash balance for the three months ended September 30, 2009 when compared with the same prior year period.
Interest expense. Interest expense was $537 or 1.4% of total revenue for the three months ended September 30, 2009, compared with $455 or less than 1% of total revenue for the same prior year period. The increase in interest expense compared with the same prior year period is principally the result of an increase in the effective interest rate on our outstanding debt from 5.95% at September 30, 2008 to 10.08% at September 30, 2009, offset by the impact of the decline in outstanding debt as we continue to make required principal payments.
Income taxes. We recorded an income tax benefit of $(249) for the three months ended September 30, 2009, compared with an income tax benefit of $(1,194) for the same prior year period. The tax benefit for the three months ended September 30, 2009 was principally impacted by the tax benefits related to operating losses in certain of our foreign jurisdictions. Based upon management's assessment of the realizability of the Company's U.S. deferred tax assets, a full valuation allowance continues to be recorded at September 30, 2009.
Significant Factors Affecting Our Performance Key Operating Metrics
We closely track certain key operating metrics, specifically bookings and ending sales backlog. These key operating metrics enable us to measure the current and forecasted performance of our business relative to historical trends.
Key operating metrics for the three months ended September 30, 2009 and the four preceding fiscal quarters were as follows (U.S. Dollar amounts in millions):

                                       Q1          Q2          Q3          Q4          Q1
                                     FY2009      FY2009      FY2009      FY2009      FY2010
      Cash & marketable securities   $  25.2     $  26.1     $  16.9     $  17.8     $  14.4
      Bookings                       $  43.5     $  48.6     $  37.9     $  36.3     $  32.7
      Secured revenue                $  60.1     $  58.0     $  56.0     $  48.8     $  42.5

Additional information regarding each of the key operating metrics noted above is as follows:
Bookings are defined as the contract value of revenue-generating projects that are anticipated to take place during the next four fiscal quarters for which a firm client commitment was received during the current period, less any adjustments to prior period bookings due to contract value adjustments or project cancellations during the current period.

Bookings for the three months ended September 30, 2009 were $32.7 million, compared with $43.5 million for the same prior year period. Bookings for the current quarter continued to show the effects of a challenging economic environment, which in turn has resulted in decreases in the research budgets of many of our clients.
Monitoring bookings enhances our ability to forecast long-term revenue and to measure the effectiveness of our marketing and sales initiatives. However, we also are mindful that bookings often vary significantly from quarter to quarter. Information concerning our new bookings is not comparable to, nor should it be substituted for, an analysis of our revenue over time. There are no third-party standards or requirements governing the calculation of bookings. New bookings involve estimates and judgments regarding new contracts and renewals, as well as extensions and additions to existing contracts. Subsequent cancellations, extensions and other matters may affect the amount of bookings previously reported.
Secured Revenue (formerly referred to as ending sales backlog) is defined as prior period secured revenue plus current period bookings, less revenue recognized on outstanding projects as of the end of the period.
Secured revenue helps us manage our future staffing levels more accurately and is also an indicator of the effectiveness of our marketing and sales initiatives. Generally, projects included in secured revenue at the end of a fiscal period convert to revenue from services during the following twelve months, based on our experience from prior years.
Secured revenue for the three months ended September 30, 2009 was $42.5 million, compared with $60.1 million for the same prior year period. Secured revenue for the current quarter continued to show the effects of a challenging economic environment, which in turn has resulted in decreases in the research budgets of many of our clients. Financial Condition, Liquidity and Capital Resources Liquidity and Capital Resources
At September 30, 2009, we had cash, cash equivalents, and marketable securities of $14,393, compared with $17,762 at June 30, 2009. Available sources of cash to support known or reasonably likely cash requirements over the next 12 months include cash, cash equivalents and marketable securities on hand at September 30, additional cash that may be generated from our operations and funds to the extent available through our credit facilities discussed below. Until we achieve leverage ratios specified in our credit agreement, we must have minimum cash balances ranging between 1.2 and 1.5 times the amount of borrowings we make under the revolving line that is part of our amended credit facilities. While we believe that our available sources of cash will support known or reasonably likely cash requirements over the next 12 months, including quarterly principal payments of $1,731 and interest payments due under our credit agreement, our ability to generate cash from our operations is dependent upon on our ability to profitably generate revenue, which requires that we continually develop new business, both for growth and to replace completed projects. Although work for no one client constitutes more than 10% of our revenue, we have had to find significant amounts of replacement and additional revenue as client relationships and work for continuing clients change and will likely have to continue to do so in the future. Our ability to profitably generate revenue depends not only on execution of our business plans, but also on general market factors outside of our control. As many of our clients treat all or a portion of their market research expenditures as discretionary, our ability to profitably generate revenue is adversely impacted whenever there are adverse macroeconomic conditions in the markets we serve.
Our capital requirements depend on numerous factors, including but not limited to, market acceptance of our products and services, the resources we allocate to the continuing development of new products and services, our technology infrastructure and online panel, and the marketing and selling of our products and services. We would be able to control or defer certain capital and other expenditures in order to help preserve cash if necessary. Our capital expenditures during the three months ended September 30, 2009 were $62, and are not expected to exceed $4,500 for fiscal 2010.

The following table sets forth net cash used in operating activities, net cash provided by (used in) investing activities and net cash used in financing activities, for the three months ended September 30:

                                                              2009         2008
     Net cash used in operating activities                 $ (1,534 )   $ (4,587 )
     Net cash provided by (used in) investing activities        451       (2,101 )
     Net cash used in financing activities                   (1,731 )     (1,731 )

Net cash used in operating activities. Net cash used in operating activities was $(1,534) for the three months ended September 30, 2009, compared with $(4,587) for the same prior year period. The change from the same prior year period was principally the result of a decrease in our net loss for the three months ended September 30, 2009 compared with the same prior year period, along with timing differences in cash payments and receipts when compared with the same prior year period.
Net cash provided by (used in) investing activities. Net cash provided by investing activities was $451 for the three months ended September 30, 2009, compared with $(2,101) used in investing activities for the same prior year period. The change from the same prior year period was principally the result of an increase in the net proceeds from the maturities and sales of marketable securities from $(1,392) for the three months ended September 30, 2008 to $513 for the three months ended September 30, 2009.
Net cash used in financing activities. Net cash used in financing activities was $(1,731) for the three months ended September 30, 2009, consistent with $(1,731) for the same prior year period. Cash used during both periods was for required principal payments on our outstanding debt. Credit Facilities
On September 21, 2007, we entered into a Credit Agreement (the "2007 Credit Agreement") with JPMorgan Chase Bank, N.A. ("JPMorgan"), as Administrative Agent, and the Lenders party thereto, pursuant to which the Lenders made available certain credit facilities. As of December 31, 2008, we were in violation of the leverage and interest coverage covenants under the terms of the 2007 Credit Agreement. We obtained a 30-day waiver of the covenant violations from the Lenders on February 5, 2009, and in connection with the waiver, the 2007 Credit Agreement was amended. We obtained an additional 60-day extension of the waiver on March 6, 2009, and in connection with the waiver, the 2007 Credit Agreement was further amended in immaterial respects. On May 6, 2009 and effective as of that date, we entered into a further amendment to the 2007 Credit Agreement, pursuant to which the prior covenant defaults were permanently waived and we were again in compliance with the terms of the 2007 Credit Agreement, as amended (the "Amended Credit Agreement").
The principal terms of the Amended Credit Agreement are described in Note 8, "Borrowings," to our unaudited consolidated financial statements.
At September 30, 2009, we were in compliance with all of the covenants under the Amended Credit Agreement. For the three months ended September 30, 2009, our financial covenants were:

      Covenant                                         Required         Actual
      Minimum Consolidated Interest Coverage Ratio     1.75:1.00       3:79:1.00
      Maximum Consolidated Leverage Ratio              6.40:1.00       2:55:1.00
      Minimum Consolidated Revenue                   $    33,200     $    38,935

At September 30, 2009, we had $20,775 outstanding under the Amended Credit Agreement compared with $27,700 for the same prior year period. At September 30, 2009 and 2008, we did not have any amounts outstanding under our revolving line of credit.

Interest Rate Swap
Effective September 21, 2007, we entered into an interest rate swap agreement with JPMorgan, which effectively fixed the floating LIBOR interest portion of the rates on the amounts outstanding under Term Loans A and B (reflecting the consolidation of Term Loans B and C into Term Loan B) at 5.08% through September 21, 2012. The three-month LIBOR rate received on the swap matches the base rate paid on the term loan since both use three-month LIBOR. The swap had an initial notional value of $34,625 which declines as payments are made on Term Loans A and B so that the amount outstanding under those term loans and the notional amount of the swap are always equal. The interest rate swap had a notional amount of $20,775 at September 30, 2009, which was the same as the outstanding amount of the term loans. The applicable spread referenced in the table above is added to the 5.08% rate fixed by the interest rate swap. The terms of the interest rate swap were unaffected by the amendments to the Amended Credit Agreement.
At September 30, 2009, we recorded a liability of $1,279 in the "Other liabilities" line item of our unaudited consolidated balance sheet to reflect the fair value of the interest rate swap. Changes in the fair value of the interest rate swap are recorded through other comprehensive income. Off-Balance Sheet Arrangements and Contractual Obligations At September 30, 2009, we did not have any transaction, agreement or other contractual arrangement constituting an "off-balance sheet arrangement" as defined in Item 303(a)(4) of Regulation S-K.
There have been no material changes outside the ordinary course of business during the three months ended September 30, 2009 to our contractual obligations as disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009, filed by us with the SEC on August 31, 2009. Recent Accounting Pronouncements
See Note 3, "Recent Accounting Pronouncements", to our unaudited consolidated financial statements contained in this Form 10-Q for a discussion of the impact of recently issued accounting pronouncements on our unaudited consolidated financial statements at September 30, 2009 and for the three months then ended, as well as the expected impact on our consolidated financial statements for future periods.
Item 3 - Quantitative and Qualitative Disclosures about Market Risk We have two kinds of market risk exposures, interest rate exposure and foreign currency exposure. We have no market risk sensitive instruments entered into for trading purposes.
As we continue to increase our debt and expand globally, the risk of interest rate and foreign currency exchange rate fluctuation may increase. On an ongoing basis, we will continue to assess the need to utilize interest rate swaps and financial instruments to mitigate such risk.
In light of recent economic conditions, we reviewed the cash equivalents and marketable securities held by us. We do not believe that our holdings have a material liquidity risk under current market conditions. Interest Rate Exposure
At September 30, 2009, we had outstanding debt under our Amended Credit Agreement of $20,775. The debt matures September 21, 2012 and bears interest at the floating adjusted LIBOR plus an applicable margin. On September 21, 2007, we entered into an interest rate swap agreement, which fixed the floating adjusted LIBOR portion of the interest rate at 5.08% through September 21, 2012. The additional applicable margin is fixed at 5%.
Using a sensitivity analysis based on a hypothetical 1% increase in prevailing interest rates over a 12-month period, each 1% increase from prevailing interest rates at September 30, 2009 would have increased the fair value of the interest

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