ASGN - Earnings call transcript Q3 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings. And welcome to the ASGN Incorporated Third Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

to Investor conference Relations. like host, to now Esterkin, Kimberly would turn over the your I thank you.

begin. maybe You

Kimberly Esterkin

Thank you, Wilson, Officer. call. Operator. us Good of Chief Chief afternoon. And thank Financial Blazer, Rand ECS; ASGN’s Ted President President quarter and Executive are Pierce, Officer; today Systems; you third XXXX of me conference George With Apex Hanson, and President for for joining Ed

to remind statements. Before everyone our would we get forward-looking started, commentary like I contains that

they reasonable, results are to Although, statements update from assume we in are believe release in as this risks actual on statements and made today’s risks our those these and not and any described our could subject obligation uncertainties uncertainties of these call. certain materially are SEC to and press do statements. filings. such, Certain differ We

our found be website convenience, materials your of in investors.asgn.com. the prepared remarks supplemental our Relations’ section at and can For Investor

such non-GAAP the flow. and press EBITDA, measures are note measures. free measures will cash intended measures, These we that on the between Reconciliations today’s net GAAP and included non-GAAP adjusted supplement to financial release. call Please are also in this income referencing as comparable non-GAAP be GAAP certain adjusted

Executive the to call will I turn now Hanson. President Officer, and Ted? over Chief Ted

Ted Hanson

Thank It’s the you, next of third been Kimberly. phases ASGN plan. ASGN And we call. thank into accelerate you five-year an conference for quarter for joining as exciting time our strategic

to reach and track we which of in $XXX adjusted revenue, at that XX% Day $X XXXX our on May outlined million in anticipate initially each remain am to XX.X%. Analyst $XXX I of margins in million these billion includes XXXX, we targets. revenue, pleased to of reaching report As EBITDA we to topline acquired by

accomplished government industry ability expanded of and to commercial vast and and to consultative capabilities, expertise, deep combination derives ASGN’s clients. talent attain and pool who effective a solutions professionals deliver our a Our solutions from of productive targets these

differentiates ASGN model providers. deployment unique IT service from Our other

We QX highlights pleased today’s with quarterly performance, details including a CFO, our the exceeding numbers will call, our ranges. for with and during guidance cash Pierce, results revenues flow. further I free are key so our all on or focus later our provide few very quarter Ed on either in-line will

our the in totaled Consolidated $X quarter and the revenues over our billion guidance for increase high represents mainly for reaching of in and billion, XX.X% first our milestone third at ECS $X and year-over-year quarter. an by just Apex very segments was for by a company This end strength quarterly for revenues driven range growth of time. the significant the

Rand segment more of portfolio. call. largest $XXX.X end clients will Apex account our X.X% performance segment year-over-year. was in commercial success in on strong color our revenue across generated top Apex, markets, on Apex’s Growth multiple the by up million, services driven provide later which Blazer today’s

IT intelligence more revenue provides to speak which shortly. of Wilson George including $XXX.X certain Federal the of Government Department million, XX.X% solutions will ECS agencies, generated agencies year-over-year. on ECS, up and civilian the Defense,

life healthcare, sciences for engineering days and billable third of consistent both million the prior-year offers which $XXX.X and the for talent adjusted IT, roughly currency when reported on-demand commercial with consulting period clients, Oxford, fluctuations. for revenues quarter,

XXXX. adjusted our anticipate decline by saw leverage quarter-end. shares, in XX million flow the X.XX buying ratio leverage also our approximately X.XX paying We long-term our for pay enabling to end after at months back EBITDA and Even down of common continued generate and trailing of free debt ratio debt strong to we cash our in down to million long-term We $XX times $XX average a a times the us stock. of quarter, repurchase

shares neither last As precludes repurchase our nor debt strategic of of acquisitions. our quarter, the making repayment the noted ASGN I from

announced we is Intersys Systems IT week, past in part we Consulting, now and a Consulting and million provider, of this the just their cash. services for welcome Intersys fact, leading acquisition $XX to ASGN. Apex solutions of In team

The growth to our to customers generating Their value in modernization. by is shareholders. increased strategic digital in Intersys in and Consulting plan Intersys growth important both and expands revenues full our acquisition year our deliver $XX step systems deepens Consulting in revenue of capabilities anticipates double-digit for addition XXXX, approximately innovation followed million and an XXXX. our

Apex customer to portion of synergies to realize by capture bases within an opportunities. existing Systems capabilities revenue current their our pipeline Oxford We leveraging expect robust higher-end consulting our increased and of

I’d to behind our further capabilities acquisition. will Intersys Consulting’s like While strategy briefly this address discuss shortly, Rand

ASGN our rates and strategic solutions pipeline be margin to relationships existing focus. provider this consultative be continues in to growth continue and our acquisitions to account solutions IT When and accretive fulfill as Target our need, possess attractive in-demand and must capabilities. consultative looks differentiated and business our preeminent capabilities that making acquisitions, Increasing evolve leveraging services and to a markets. acquire and companies profiles,

Intersys of focus Consulting box the the attributes. relationships, deep to well markets we end ASGN’s across developing customer combined with a mission own high-end expertise, of each checks provide with serve. each Their services fits these industry longstanding on on technology

the commercial Through our of our segments sectors. solutions industry and and key and most the expanding government acquisition across prior Intersys ECS scaling DHA, recent consultative and we into Consulting, of acquisitions capabilities, are

account merging of and solutions industry relationships. strengthening technology We unparalleled with vision our are expertise

and our IT to and industry today, solution assets our strategy to the execute and Ultimately, our acquire complement will future. in solutions, expand long-term capabilities, to our strong services commercial ASGN further and expertise growth which government to tomorrow and into plan, position presence achieve business

I speak third Rand performance. Rand? segment’s call further Blazer quarter to will Apex the to the over about now turn

Rand Blazer

Creative quarter. segment, Circle, The consists of Apex solid for Apex again and Great. Systems you, which Thank Ted. the reported results

$XXX.X up quarter difficult As grew prior the the Ted XX%, of noted, quarter on third XXXX, of third a quarter comparable. highest revenues totaled X.X% year million, year. In year-over-year we last growth

a XXXX, placement the compared permanent sequential quarter on down basis. slightly lower to on Our past work third this margins stable remained quarter were but

segment’s well growth revenue the third by we driven Healthcare, & factors, in Apex Apex including, the revenue five Financial number quarter, Business performance of first, double-digit verticals was including, accounts. overall of industry Services, double-digit Consumer and as service, a systems, eight Aerospace Defense, & the industry growth in Industrial During Services, as

single-digit for Circle’s for third vertical in-line overall with saw or posted year-over-year. achieved accounts again while Top the outpacing a Sciences retail mid decline accounts quarter. Technology revenue Life revenue improved revenue while quarter, saw growth growth growth, Our the revenues with internal expectations sequentially, branch-centric Telecommunications and Creative revenue flat our year-over-year. rate revenue topline growth, double-digit

segments estimates year-over-year for the both outpace Led our the revenue work consulting consulting in and quarter also by growth internal to Lastly, $XXX.X across our continued systems, XXXX, was total XX.X% quarter. for Apex third up million Oxford Apex revenue for we solutions consulting as grow added Apex for continue our and business. provide business mid-teens combined now value about Oxford a of clients. to segments’ our and We as remain percentage that accounts opportunity to the our excited create

we strategic welcoming Apex certainly quarter success, ASGN’s out the an ways achieving Ted key to organic acquisitions. discussed, just Intersys our end, to continue also strong eye keep Subsequent growth systems. that, Consulting While is did enhance to as through to we growth for to

providers. and for in digital data innovation IT capabilities with modern digital segment complement enhances strategy enterprise Apex Agile, service to from commercial full capabilities enterprise of our The solutions in our sector. The and solutions and services the ASGN base a in consulting DevOps. development to Consulting mission and provide differentiate learning, in workforce our technology innovation will high-end full analytics, and growing provides IT cloud, these services other Intersys data stack transformation, mobilization, to and machine client continue assist current ability to

closing the team With of Apex than Intersys acquisition the in week one process less ago, the is systems. within integrating fully Consulting already

begin serve pipeline our experience across opportunities systems, to are Consulting’s We accounts. leveraging growing and of Oxford to Intersys business Creative Circle Apex excited

past I margin summary, segment’s with am and this Apex In quarter. revenue the pleased performance

XXXX, our results our strong QX of noteworthy. quarter performance XXXX Given the more third all are in

solid continue determine the in through of quarter. in and slowdown a we initial September, to results August It’s fourth see As the Client hard QX if and spend this as the October. were, week trend will IT in did

innovation actions strong growth the our to However, continuing with important we and to be staffing additional better enterprise will expanded serve record. our and are clients digital taking IT solutions

over I to George? to ECS George the call Wilson Segment. speak will about our turn now

George Wilson

you, the financial ECS’ from of outstanding. execution, was quarter development business third standpoint Thank performance, new business Rand. operations and

execute provide strategy most pressing to advanced coupled matter expertise, to continued our subject with our address solutions, technical We needs. customers’ to

our Several quality solutions technologies, so and can contract key Awards positively on net our of of included services. strategy reflect awards These durable the past execution. contract contract and contract and awards the contracts, provided additional both and awards. of expand use re-competes our expansions, new our vehicles large customers

the in space. federal continues peer of growth the ahead financial for to Our average companies industry significantly be technology

similar Third year reported the XX.X% growth EBITDA. in quarter adjusted over by a with grew revenues prior on basis along

in third in prior purchases quarter renewals license fourth renewals and from advanced some We revenues be Defense one-time technology solutions, Included to that Intelligence primarily anticipate impressive the our critical this purchases, acquisition, license our were the from in growth technology and and contributions market. will are lower several quarter.

time of received which times of X a front. we for million strong total the quarter, QX, performance a of the very awards, book-to-bill to on in third development period In X.X another resulted ratio business $XXX.X contract in

X trailing XXXX months Our to book-to-bill times for ended September the XX, twelve X.X ratio was time.

develop to which this review during unclassified network. the U.S. extraordinary deployment, ECS few well examples, contributed as two I’d to expanded award partners beginning of won systems the several a on significantly worldwide, and used continue quarter, an tools contracts and awards book-to-bill. like that a secure, and expanded with third key deploy development, the software maintenance as by U.S. to network and to

and awarded support important innovative Agency defense a of to and DoD’s Defense Health additional tasks deliver Defense customer solutions services the to were also AI an network. network contract to computer We

AI applications to improve received award and of migration including Marine U.S. also for cloud modernization We the and deliver management the value application of end maximum the resource an processes to human Corps, customer. for

Lastly, and multi-year management, U.S. efforts we to a including were the Office service optimization. migration delivery application the modernization CIO, operations, IT lead of contract Mint’s for awarded cloud

and contracts awarded awards. competitively were all All single were of these

investments system technology continue and our Our partnerships, partnerships to secure heavily continue include operations AI and cyber in to center capabilities make invest certification our technology as facilities expand in advanced we to our lab. integration and our of workforce, and training

coverage an we of $X.X sequentially. is advanced the of total believe strong, in was healthy trailing which has the of activity and currently had contract million $XXX billion is backlog very equated ECS proposal over revenue. At and the positioned third recent X.X which high solutions ratio XX-month ECS contract demand. backlog, within a well to increase our services times This in remained market, quarter, Our end

call turn to the results for Ed quarter. to financial Pierce now consolidated will Ed? ASGN’s I over discuss the

Ed Pierce

Thanks, George.

results for the above first at quarter. SG&A and financial the impressive and has were were and Earnings end reported Ted the Revenues by revenue end range As $X of billion range. high highlighted, of we high adjusted time expenses. lower-than-expected both driven our exceeded guidance for guidance our growth the high EBITDA

basis, billable one-time days We same Revenue segment the on expectations growth XX.X% XX.X% and constant of our revenues in above from Revenues lower quarter license for a result from some were a higher these and ECS quarter. the type of and fourth purchases anticipate was as revenues technology basis. purchases. on a from reported renewals currency

but to permanent half which compression margins, related mix from margin and higher the and our remainder revenues result range, points of gross margin lower of approximately Our mainly year-over-year. down high-volume, About lower-margin mix lower placement within from the were in basis of ECS revenues a XX a guidance contract to the of customers. was

Although, base. are expense low other lower its ECS’ adjusted than the generates peer EBITDA double-digit of higher it Its of margins as our margins its result margins industry group. at are SG&A a segments, gross end

SG&A mainly and guidance variances related below $X.X favorable compensation expenses expenses. million in our were to range, healthcare

the for last of benefited made and certain tax percentage lower quarter higher to the from discrete Reform guidance inclusive including Tax estimates than than rate slightly -- which points tax year, of a QX was effective of under Act. provisional reductions had items, Our X number

were EBITDA range adjusted to expense and above variances. mainly our income guidance the favorable net all adjusted income, Net related

activities operating free and from $XX.X were flows million or X.X% Cash of cash flow was million revenues. $XX.X

of common the as our During million quarter, mentioned, down of XXX,XXX and shares long-term to used $XX our Ted million we debt stock. $XX repurchase paid

$XXX.X quarter, net estimating adjusted $XX.X for million million, $X,XXX estimates million, the revenues of $XXX we its results These Intersys date financial fourth include million million of $XXX.X are $XX.X for million. to income estimates to and acquisition. of our Consulting the from to EBITDA of Regarding

Each as QX assignment same a is Our are last revenues. revenues on basis, and X.X the of on estimates effect billable million billable quarter billable are fewer in $XX.X year. based of the day days million. is approximately days than QX the XX.X, there $XX.X sequential On estimated is fourth which approximately

increase assignment of X% We day. are sequential also billable in approximately estimating a revenues per

Our ECS’ estimates considered days billable revenues and two and time of additional from effect holidays fewer the sequentially contracts. materials on

also QX. than lower mentioned, assuming from technology revenues we are previously As purchases third-party

will back to Ted? I some over turn now the remarks. for Ted call closing

Ted Hanson

relationships relationships business XXX companies, agencies. with Thanks, us government and civilian and XXX services of scale as that Fortune well as sophisticated our cycles. performance financial maintain Through we customer over sustainable model ASGN’s us major the withstand a long, defense, Ed. of to very with trusted and These margins well project XXXX I economic The breadth intelligence position delivery, can enable to am pleased insights for our unique industry and size, continues have developed success. to-date.

thank for forward progress today, times company and your you time quarterly on our ASGN. your future These I’d our continuing exciting to like we look for again are calls. of for to share support to

now to will open We Operator? up the your questions. call

Operator

you. from your with proceed the question. of Instructions] first Securities. Caso comes question with Fargo Thank Wells Ed Please line [Operator Our

Ed Caso

migration Good get more any is trying the solutions just there evening. a if from Hi. cultural if company? you issues towards sense The company -- here consultive a to staffing Congratulations. start

Ted Hanson

Ed. Thanks,

based The also feel our way are will I part activity, client and pushing as a but the of for we past move. been serving is so a driven work. you is marketplace on to about and are a think really client evolution, us to calls business, customer. Remember, it’s our if it’s have people we capabilities, this in if just provide like our people our to not provide the not our in, talked and certain resources, solutions you who this our natural will, natural inviting just

the not So solutions only of activity standpoint, cultural team. providing of value I that, the add top on I about resources, providing performing upper relationship but in to think think, more they a our all having to it’s opportunity feel also great of for the so, and by from

Ed Caso

update Circle My you other Creative question just on us give could there? if is an

Ted Hanson

Rand, Circle? about want talk do Creative to you

Rand Blazer

Yeah.

quarter doing Circle a fine. Their third higher I their on the think, quarter is rate growth than growth year-over-year Creative in in the rate second was basis.

and marketing just We about creative yearns but have as digital for the go you talked not -- marketing, lot marketing. marketing, a the will digital

marketplace. set competing are people they a So of in that with broader now

very have relationships. They good very are They processes. good internal count

Competition So that a in to but they the comes are facing players the transition from IT facing broader set marketplace. of competition. normal

And healthier accounts, So they well, doing of typically think larger good getting I the are be they up picked think doing. and things of they they toward Apex we between some team we the end go. Creative healthier our and are the there’s around which synergy should is and quarter performing the as

Ed Caso

you. Great. Thank

Operator

from of your are with the proceed comes Sommer Our next question line you SunTrust. question. Please Tobey

Tobey Sommer

a and elaborate remarks of helpful? said, on give slowed in that Thanks. color kind bit, -- quarter IT kind spending October. you within wondering Rand, if of was could Any us would you could that the be I little your early Thanks. on

Rand Blazer

want Okay. Ted, do me to ahead. go you

or So, Tobey, acquisitions that We think, for with. a that amount we a by I all, bit are the IT measure yeah, and slowdown of of think, assignments of we services flow. the that in have presented first I that seen openings again, business we little provide,

year-over-year, I brand our flat and think our single-digit accounts. technology, three negative mid-market I or industries had our accounts, two to So our we negative of centric said -- single-digit telecommunications of performance to industries QX in growth

if we seen with have the of is, which occur. up are I three those slowdown four, where the not you most think, will, So other keeping

little where they turn to gone their call I they as own this before, projects pauses their reset spend the in have have through We Tobey, you by the what right in turn client where strategies. left, to

not us. it’s So new to

eight our say, it see have I in think, all double-digit the was spend. felt that a mean, fair look, we, see to Ed in did seven But industries of we a slowdown growth. we or little I reflected, of and and had I all normally, bit We Ted

are So that’s -- we that’s the what seeing.

Tobey Sommer

as you in rates describe change? and would typical significant this a oscillation growth So a not

Rand Blazer

as said, that I call it words occurs. Well, before I think, an use on flow. I and -- oscillation it it the I earnings think, is these We ebb calls.

I ebb think there’s little a of bit in and spending. flow

think in you about are their and If technology, with priorities. dealing they have other base investment manufacturing China

But out of for ways speak that and conjecturing continuation imagine of provide to content just to want streaming more this. industry. that’s am on I going there. for different looking content I in don’t there’s ways telecommunications, I a

So I look so the point four often, there’s last good over our every in years. you or history do at years and things to think three

do to the You some businesses us. presented of just oscillation in pattern

what in we ebb I that’s goes we and remarks, I I the we see said this So -- are is quarter. it said, my think will normal think just in how flow and a

Tobey Sommer

Okay.

tell growth some services strong Within with of like that Ted segment, a kind some driven little by detail the maybe these us have contributor part what been? was product we the or what bit would obviously, revenues. more things the deal the by you how size a very Can rate, might in to maybe revenues pass-through and related break in yourself, out growth ECS of pass-through versus

Ted Hanson

George, do you to take that? want

George Wilson

Yes. for Sure. Thanks the question.

between make services purchase we want end our And to solution. are between two we important specialized deliver have hardware, things, non-recurring. needed licensed purchases one-time in be Now what recurring to differentiating are differentiator sure I would that

But lumpiness some semi-annual, long hardware solutions, and things As purchases curve that. of typically these refresh in the like stuff those licensed revenues. those end and are the course are in a we are our technology licenses or provide delivering over annual year, as quarterly will such

annual basis, will So basis and smoothed will bit those But lumpiness. little on out. a provide will quarterly on a it be it recur of

those to very relative the rest of revenue. simple as As far small one-time are purchases,

So as been on our there’s well annual been been direct a growth solutions, as growth. labor as has basis has delivery, both a which an as our in service strong far

Tobey Sommer

maybe kind That’s example queue. of in acquisition, and this you. look seen you acquisition may kind past? the I The step-up that back in have Thank an opposed your that, platform Ted, to -- as will helpful. the we the question good consummated an what ASGN the is a of recent future, of And then, get in like for acquisitions

Ted Hanson

will I I in think the maybe to two it in Well, end that IT are answer be in I ways, relates want services. Tobey. mean, markets we as we to

thinking that get on not So probably is acquisitions IT on our about platform not roadmap. outside roadmap or our us making of

heard It’s difficult if what for wouldn’t go me those are wanted customer you Day ECS the otherwise back to acquisitions providing that us talk you or may would our us things. say that or to April about Apex XXXX, and to in we capabilities as set not be we are give you future we know opportunistic through a of But in value expanded in expand how the because the acquire to we bring businesses our us or key that into enhance Analyst of either customer.

stick the there. where you that line think we we think, we and this knitting like, is that are markets that are will to So -- where placed I and see now a our with between in in being I

Tobey Sommer

much. very you Thank

Operator

your of question America. with line next Bank Bisbee Gary question. with Our Please proceed the from comes of

Jay Hanna

on Jay today. Hanna Gary Hey. This for is

have thoughts just maybe job down forward? months, expectations I going bit my data to come guess with business, recent recently now is have your and with seen a the just market in your the some on perm just really to get first So openings we wanted your is question suggesting current regard

Ted Hanson

because mix were become Well, but growing up, quarter a the -- are of from our basically that, expected units flat percent third a to it’s we faster, to quarter. perm other business, actually part. of and the to total look just revenues It’s the going second smaller grow smaller as our the

$XX maybe this our million revenue it’s think quarter. I billion on $X

that something think over I So business, are part not of our going important but we to it’s an emphasize.

candidate in the difficult driven piece that but that’s a of is opportunities, see the really to today, very market -- of The what difficult. with I think, it the you in business side find marketplace. Not candidate clients

the comment we So major that’s not I of bit a number market. macro think our whether see can’t perm openings too or in little that I much the what headwind color business. But a on is inside basis. that’s of of on down

Jay Hanna

the growth nice, just I behind driven then here, what’s macro shifting be is generally anything performance? or company despite continues difficult that’s And obviously, this changed Okay. mean, to comps. there Apex, to specific and

Ted Hanson

you Look, capabilities us providing think, consultative client I don’t Obviously, great on a just inside our in think, addition to value solution resources. Apex. are seeing our see I they optics strong in product of on in using

So what it we in the I portfolio both look in there inside and and a their continued Apex think you continued testament are performance that of terms continue. is really share clients terms path account strong to that that’s that of you that of are should seeing in to that on new for of of most their wallet and and expansion of

Jay Hanna

Then lastly, the really to quickly, Intersys Okay. margin willing comment profile? you on are

Ted Hanson

information quarter. our revenue estimates XXXX. on give we in margins included sense for give a what didn’t the What the was, Intersys. We you expected for did We

that rest our than EBITDA just business profile I margin both based their assume the there. probably gross and can their business, You their is profile on will think margin but stop of higher

Jay Hanna

you. Okay. Thank

Operator

Thind comes next with Our from Jefferies. Please with of Surinder the line question question. your proceed

Surinder Thind

Hi.

not top strength. a the to about contribution couple each? the relative branch-centric As you far revenues the enough follow the talk producing Apex and between you really good Can And then discussed have of some diversions kind for accounts where now as accounts a of up quarters retail maybe on growth? growth of

Ted Hanson

you do that? Rand, take want to

Rand Blazer

Sure.

accounts that’s of total before the and XX% represent remaining our commented accounts about branch-centric have are top mid-XX% revenues We accounts. of our the

So it’s pretty weighted sure. towards for accounts the top

Surinder Thind

the is the account at profile growth what this And point? of Understood. branch

Rand Blazer

third quarter. for they QX, in reported we think, were the flat I year-over-year Well,

Surinder Thind

on Last or any segment. coming Oxford then I about bit If is color at you a Oxford of step bit little a back, that the say quarter, it most CyberCoders talked maybe showing a was the more point? think, is guys itself. can this take I you from how was to growth, business about to maybe all should weakness it think we And little or color fair Understood. the provide

Ted Hanson

The for growth little slightly was adjusted quarter. I They similar is a are other the business third, Eden. currency the profile think, and better for The bit through CyberCoders above effects. performing

progress So we out, they are some discussed making the have initiatives on for that laid some making headway marketplace with there. you they before but are difficult and them,

Surinder Thind

those mean are Understood. that And your guys that’s some sort as project, initiatives, kind of through California year-long will and of all the meaning of of, kind countries we it, you be small kind some make of those like equal, way that I is segue months something pushing else project, normal, stuff that a call six in space?

Ted Hanson

Yeah.

a proposition. giving I those productivity, staff of and diversifying the up geographically term both long-term as well are our Surinder. initiatives to longer as is adding mean I think business

progress So quarters making. not or are the next out, those pleased are if quarter, but you are with will next we we month,

Surinder Thind

the guys question, Understood. positive. cost Can And one or maybe different with little to able you more we that that that in I about a go it revenues maybe little compensation lower final something talk a maybe how delta or variable there had bit quarter bit more should variance be basis, color you that see talked? then think was SG&A associated there, was was forward you a this your think might on we is the about more mix there sustainable than guys

Ted Hanson

that in a was that release. there picked out benefit said one-time is up thing $X.X One we we our million from

Ed Pierce

to was related healthcare as variance we to favorable mainly other compensation The expenses. and indicated

amount you fair year. The we or have same the of a QX the thing variability and in almost last of thing thing other saw same

it’s to line are estimates sequentially know. about million includes of for I and as Intersys, And in uptick QX, we in $X.X million. that much gave related to with SG&A think expecting the expect had… SG&A what an we that you we in And when you $X.X consider pretty also would We

Surinder Thind

Got it. Thank you.

Ed Pierce

QX million. fee Intersys the think $X.X I about is

Surinder Thind

million. $X.X

Thank Okay. you.

Ed Pierce

Yeah.

Operator

Our next with the Chien go comes Please from Capital Markets. with of question. line ahead Henry question BMO your

Henry Chien

Hey. maybe noticed I or missed looks if Good I have guys. have anymore. your disclosure like afternoon, rates doesn’t it

away guess, reason comment began I don’t I [inaudible]. Just curious for if thinking on and could to, know, a just you

Ed Pierce

It’s taken not No. away.

go you If supplemental. to the

Henry Chien

Yeah.

Ed Pierce

that are calling This rate, just we And barometric, it customer. disclosed because -- are into really we and of not all it We think we it better worked, revenue -- between it. reporting hour calling it per go what lot and cost difference which not is it’s past the factors we we are average of at have the of reported how not a what in bill a the is today. they is a includes way looking

Henry Chien

Yeah.

And we back for call, said the everybody on we go did and disclose…

Ed Pierce

Yeah.

Ted Hanson

a road … prior there map quarters on that was there. that so

Ed Pierce

Yeah.

that back ‘XX we of supplemental, will QX by quarter. went the back you see to flip to you If

Henry Chien

Thanks Okay. for it. Got that.

to I is question with And of impact -- kind of business? a the going you. sort like coming elections Thank the with what on up, have on Great. just guess ECS, Okay. guess, I election

Ted Hanson

George?

George Wilson

budget Yeah. the we government -- continue terms and shutdown, consider. the process in go of a is things of to acquisition Thanks. are two There to versus back going those are having One resolution really continuous a Sure. type budget, to thing.

thing supporting whether House. solutions to effect White mission. or other one part look those of in that on less not than have the going may end the will other provide remain to companies ECS critical Both part at is other The is things

of be and and Homeland civilian in other the in shifts there the the space such Marshall’s. in some of that. federal even though EPA, like of even like the funding Department from some Justice, organizations, said customers one is Security, with These part Department Our are might that other or fellows areas

pretty, for it’s a The sets or funding even, the mission-critical whether customers Democrat streams pretty Republican. are

a to whoever ECS the takes big see or House. White I change don’t to impact big So expect really a

Henry Chien

Got it.

Great. much you guys. Thank so Okay.

Operator

Our next line Markets. of question the Capital with comes read RBC Please from question. the Seth Weber

Seth Weber

through afternoon. Apex fourth to assumptions guide? the about of October, Any down? quarter, the you here back kind you the to expected your are expected comments that of for of early your stabilize? what your just quarter -- kind the to your saw Thanks. into business, Good to you fourth cadence what’s tell comment us kind in Do wanted continue trajectory I so to you the quarter? embedded what’s September, and can slow Hi. go Do August, there that

Ted Hanson

that revenue billable did on same think is The pretty guidance the expect we I guide, levels implies the that we continue days. much to to look it’s that at rate move and less if you it forward. third roughly in

we are see expecting can So where We opportunities we to grow. grow.

I did it there a whether in letting was here and a of staying it that and trend kind summer low we certain industry. in and of you see was know by Rand just it or the how the see was are saw quarter, quarter we job what we a that And weeks just the thank good few a we -- look

Seth Weber

fourth prior -- closer company. Thanks. could pretty gross then total your Okay. quarter is just And It margin suggest to guidance for totally get year-over-year you strong.

on next So XXXX -- think you margin up flat do could an aggregate gross be you think do to basis?

Ed Pierce

when businessman happened as -- margin comment just more this going what Well, report relates have so it could to yet. by we and say of we And on XXXX are on will mainly to frankly, to what gross not QX. we

Seth Weber

you. guys. Okay. I Thank appreciate

Operator

your Our next Credit question Kevin question. Please proceed of McVeigh comes with Suisse. from the line with

Kevin McVeigh

and bit just the of a core so you as asset? opportunity incremental context I itself. does that of -- to what’s you the digital just guess Intersys if business relative little wonder fit that where give you much. Thank leverage Hey, I Great. could

Ted Hanson

let of the opportunity under developed Well, work on Rand and come comment integrate units the and and have engaged really look, I Oxford incremental Apex pipeline the mean, already will business that our to we within in I then is segment.

ability bringing new to not understand, is our is and there needs uptick this you a will. So anything qualified existing work. going we more if add on you customers something These be that? believe would are we pipeline so win Rand, will immediate if you help that to pretty to their customers to are us that have in

Rand Blazer

just deliver the revenues our on strong of way having have base. Oxford. themselves first Yeah. pipeline that pretty up Ted Apex own real said, I that that’s I But projected just client they the of the inside way, agree ability muscle for obviously, with guess, to and what the said, more and their they Ted,

larger solution they the only brings accounts. Shore we a give us in have but the scale gold in services provide Development Mexico, which to I And providing of our Center services we those some want also think and that, areas, kind nice push to addition of Near Intersys to In to a not really capability believe of is well a it nugget.

real with opportunity So these did we revenue here is the acquisition. this. That why are

Kevin McVeigh

current in And $XX your footprint? terms the or with that customers of revenue, Rand Ed any existing overlap or new customer million in is there is all

Rand Blazer

overlap, I a that accounts of will Yeah. overlap. There point very Ted, sector, but I not different are we the I couple smaller There that go more much most there to One ahead. at few would guess, are one customer by a But they end accounts the say. very international skill mean, business. services, you. had is accounts, are the have. in technology I scale

Kevin McVeigh

you. Thank

Operator

comes with question of Marcon Our proceed Please line Baird. Mark with question. the from your final

Mark Marcon

of could in have in if everybody. both the that little about continuing that are then what a and bit couple we economic of currently just a afternoon wondering of more how bit Good take terms normal this work a to think growth constrains XX% was rate longer that that term seeing? and years, assuming roughly you hitting $XXX in growth about and little and I are be quarter growing we Intersys that million could big terms statement plus, of you talk

Ted Hanson

numbers Well, look future but... we it give mean, on can’t you I Mark, can

Mark Marcon

No.

strategically? are how about Just thinking you

Ted Hanson

Yeah.

Mark Marcon

you it? are envisioning And how

Ted Hanson

has that today. see business the think, are for to that we I any economy and inside anything Apex Oxford of growing don’t this -- for XX% plus been many stay don’t We see years and now that organically. Look, we in at rates headwinds

to $XXX And do larger, about I million there. run on rate it’s obviously, that, kind think business as the gets a of

of -- would that wind could marketplace. our say numbers don’t large but the is see in I favor. You rate, otherwise fact, affect anything Matter growth in could I

Mark Marcon

they Sounds key what’s one and the is a the that had can is be little near facility can you great. and And how a and through about -- website attraction talk what Intersys the bit shore big then interact they that particular attracted of wanting extent couple really was studies, to would certain specifically, like and to to like. case clients value-add actual I cool but that didn’t what with through the what group go the

Ted Hanson

I will the Well, customer mechanism, that’s the near solution delivery I if and work not, turn say would doesn’t decide or would this, it the and to you solution. with over shore The Rand. facility to

facility shore? solution if that their, near have this anything near deliver obviously in our capabilities there’s because calls the want advantage you to Rand, to it So the they else than cost do they shore through a that. say about for

Rand Blazer

you Yeah. with what Ted. mean, said, I agree

are first in the And they lot point U.S., of business in workforce very Mexico, skills and reflection central that been so, terms Guadalajara, center, the it’s all a which the there, in a It’s business as -- availability universities is I the technical as say, Mark of of of in talent strong of time has. and English-speaking. well talent

So some there’s in versus or some or to other of a lot that areas. the the Philippines, India of of China attributes

in to of supported a they and And attributes that I agree that and leverage, lot companies Golden by decision this there’s to them a of capabilities of think of about using with or I seen we places. more set is capability, work a like and building we like that accept an leverage would different interest capabilities mostly Ted, think see. I these say, we our companies it it’s have Nugget

Ted Hanson

companies were Other business this very big U.S. facet that Intersys here consulting won. was thing is in this -- in that you of I process all would competitive proactive, involved would the think their of add the that that that to Mark was

and of the that And the as to now. are so if so out there, be that have some pleased very hotspot, that capabilities to you shore reasons if that offering that and will, everyone seems think about for you laid think the I we -- all consulting Rand have near firms down the are competitors

Mark Marcon

-- could you It cost the the like growth, just the I How a it wondering within does scale value opportunities supply? available it? I like mention of sounded onshore? if can client relative is that of have wondering like quickly much in and Because you was cetera? you what’s you then And terms lay resources, like sound could the of constraint price advantage, terms the the it et to what over lot also how in resident just a maybe am of to do Apex Intersys. base they have

Ted Hanson

been last in business. that years the two has Mark, facility, That signed-up for

view serving clients although, so, give on if and in U.S.-based U.S. And you of sense could we will. We today. is a between the you out don’t the it that center larger future, numbers much be give that our just it headcounts there, is, scalable than how

a is there significant to for get a although, advantage don’t nice competitive that that out pretty of business. And cost part reasons. very But that, we it’s

to it’s We very excited and proposition. that clients value the are be help bring to really to in to our able we think going

Mark Marcon

the of be where that relative current number To extent your -- in take the at look to the to and this that’s impact of a as one impact holidays other just great, days then thoughts and years? guidance. this what we Does just could regard with billable fall what potential year And prior quarter? terms question,

Ted Hanson

is year-over-year So, days, QX their and way, and an in days more included is material. have there the or in supplemental XX.X. to billable two there Anyway no in are Mark, time terms in of on two basis probably fewer or in the we more change disclosed the that’s included, billable than it’s holiday, that QX by is effect Sequentially, also information. QX it and that EPS going of holidays

Mark Marcon

Yeah.

of… this was terms variance in just So, I thinking the about

Ted Hanson

[Inaudible]

Mark Marcon

fall holiday … on a Wednesday.

Ted Hanson

Yeah. There’s no variance.

Mark Marcon

you. Thank Okay. Great.

Operator

this today’s question-and-answer end call. as of our gentlemen, well and session, the is Ladies as

time. for your now this may and wonderful your participation you thank lines a disconnect We have You at day.

ASGN (ASGN) 24 Oct 192019 Q3 Earnings call transcript