ASGN - Earnings call transcript Q1 2020

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Incorporated First Quarter 2020 Earnings call. [Operator Instructions]

I will now like to turn the conference over to Kimberly Esterkin, Investor Relations. ahead. go Please

Kimberly Esterkin

Rand Good Chief today operator. With thank for ECS Executive you are George Apex Thank President Officer. Wilson, ASGN's afternoon First us of Officer, Chief and for Hanson, Ed Call. President Quarter joining of Ted Systems, Pierce, you, and President and Blazer, Financial XXXX me Conference

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

such, uncertainties and our statements are reasonable, are uncertainties Although filings. materially and risks those release these as in results we Certain these believe SEC press from actual subject they in differ are could of to our today’s and statements. risks described and

update do made call. on assume this obligation We not to statements any

found Income investors.asgn.com. Investor website will For measures of our Reconciliations supplement Cash also in EBITDA, Please be section today's Adjusted measures, Free your this our Flow. can and press as GAAP the release. the referencing between remarks comparable non-GAAP convenience, Relations' These are the call non-GAAP at and prepared that Adjusted included such measures and in to note intended GAAP Net on supplemental non-GAAP we are certain be materials measures.

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

Ted Hanson

our XXXX Thank QX call. with you, quarter has revenues safe ranges staying you Adjusted everyone the guidance ASGN's listening is for solid XXXX joining and We both first Kim. Thank for earnings today that quarter. ASGN within falling hope and very EBITDA healthy.

generated the Apex Segment, March year, our growing Apex impact the with X.X%, crisis, and X.X%, $XXX.X in our million, First continued tough $XXX.X performance led X.X%. Segment, million was over quarter and year-over-year. the which This COVID-XX by comps. up X.X% Adjusted Systems EBITDA XXXX of prior year-over-year where million, of up increased revenues industry-leading of in revenues on double-digit XX.X% $XXX.X improved were revenues $XXX.X growth million, from by above-market of year-over-year ECS growth despite

our across our to two see for Through the we business growth months. expectations above at February, continued or

crisis while took accounts and business our we the As retractions, March growth. businesses market and in strong entered our off saw hold, the public see some slight cases, federal government serving health to continued commercial onset of leveled

and Board and albeit leadership continuity I wellbeing met, plans ensure February of execute late well deploy measures early of Directors our ASGN's to the our the and with to virtually, During employees. our as safety senior as to of each necessary March, business

and of address teams service Our safety requirements clients. the protocols understand our moved to and quickly individual

to over site on technology essential month XXX% strong into of our portion the remote safety early our in transitioned billable just protocols. with and to compliance Leveraging a platforms, small work, remote. shifted internal workforce staff still required with of Then, our March over April, we XX% of consultants working

Fortune employees efficiently and for to IT site. as large only which period, XXX the but not and on undertaken become off and and and to fulfill Defense enable our percent us, been expanded increased We've now well networking a have in work contracts, fortunately as eight seen to our as more so, strategic benefits computing, government to key XX existing our of mobility IT-centric rely The the us continue to high-end in solutions Federal but We've of to safely challenging, we've agencies. innovative customers Civilian result also evolve the ideas much over strengthen cloud their capabilities and, bring business. doing have time account same past the weeks over includes initiatives portfolio, we've ASGN's

industry the more during Lastly, segments but positioned has volatility for many strength prime assignments in least, that of now for but Each significant mission-critical than to us the these are developments Government. industry stability strategic exposure also gained recovery. the future marketplace, downturn, on current not we often economic for Federal contractor only insulated commercial certainly the and we've the not government an federal from is

QX, of free million flexible we XX.X% acquisition in due share we quarter cash since solid had mainly end January, generated Blackstone structure Our to XXXX, credit cost year-over-year. to $XX.X revolving our modest generation facility, In of our up business. also free repurchases our cash which and under we have borrowings At in with of flow, flow provide Federal million stability the $XXX ceased. the along first further

capital as recent been I acquisitions, strong always essentially a balanced and acquisitions. strategy our to A to leverage. moderate cash Consulting not with Intersys note, free our we however, and Blackstone of pleased take did on of any part cash amount flow, for paid result need that supported and allocation of Federal, debt make has ASGN's am ability most to additional our

Even capital senior fourth our XXXX. in is we quarter with Continuing $XXX XXXX, strategy. our million due on our ASGN's of facility the recall, acquisition amending in current notes conditions, financial and part improved due active remain as structure, position, a senior and pipeline credit may you unsecured market growth long-term in acquisitions of issuing strong XXXX our

employees, in us result been efforts our of increased the revolving indebtedness, rate as we to lengthened half under capacity years direct have by a debt with on clients facility of interests these our $XX we borrowing we These timelier, of our our credit As million X.X funds actions, our to could fixed provided interest they our stockholders. increased our and best and $XXX tenor not the by million. flexibility

payments of until due Importantly, we they borrowings principal no reach these on maturity. have any

commercial Apex, Creative the our services With which now segment, clients that Circle, across our Apex end let's includes first and performance multiple markets. Systems background, as a largest in talk quarter. about

segment year-over-year first up of on the $XXX.X the a comp. difficult of generated quarter For very double-digit million, X.X% revenues Apex XXXX,

of growth the the prior-year XX.X% in XX.X% Systems XXXX, recall, at may you quarter As the with Apex grew Apex year-over-year leading the way over first period. segment

Only to held steady the Circle crisis driven digital-related mostly the revenues. attributable growth levels quarter. for Creative and posted Event placements slight the Ad, March Early slowed reduction skill growth very through in permanent placement quarter. in

Systems' month Revenues final Business Apex of trends March, Systems, despite some while Financial Industrial percent quarter. Services, Revenue year-over-year. demonstrated in for grew for Services, weakness holding the revenue the X.X% Apex in notable Energy, Consumer mind steady And year-over-year. and that Aerospace/Defense all and Retail, in exposure specifically and to has were Hospitality Sciences March hospitality industries. Apex airline, limited a Keep gas Life up in and Airlines. in Transportation, the oil

down Project modernization, security, and such scientific, JAVA year. Maintenance Telecommunications, Healthcare, areas were the year-over-year. prior in and Software QA Software March the records electronic Support, were March Mobile and to compared business Management, Revenues best, skill Development Revenues information Technology Cloud, down in accounts as Engineering, health Digital, performed in in while intelligence

green We Financial some being in shoots are created Services. seeing

measures. As Apex forward. pushes funding the is need large stimulus clients for business new industry heightened to it creating through Services Financial this commercial should implement to stability both going exposure to Systems' provide growth a and banks, our opportunities IT

growth Apex branch-centric high single-digit rates QX, Segment declined achieved for digits. accounts accounts low single top while

our Segment Apex QX, gross margin totaled expectations. for with XX.X% consistent

Importantly, steady March. Segment remained margins throughout

and the work Segments Margins for quarter, totaled the the Consulting both Apex overall Oxford first work and rates for $XXX.X up for our Segments. outperformed margin million Apex Oxford for consulting XX.X% year-over-year.

provide high-end our our important an will consulting that we of expect be value the source We continue clients to going forward. offering

in organically, opportunities broadened through As capabilities the our quarter we revenues consulting our we Intersys XXXX. new by continue fourth grow presented we Consulting, also to of acquired which

been and of increased we've together. integration as to consumer Systems of an Apex Most large work production able effort, led CRM. consumer a supported a the Intersys, bid integrated capabilities. with amount transformation fully and modern and Apex Intersys to Systems a With services company with their on Intersys client's data their recently, large cloud their in also and joint more modernize efforts product computing system set journey the this to IT provider

a seeing offshore market Development is Center, traction serve difficult to their to of remote companies transition Interestingly, Mexican re-shore near-shore with under We clients. their looking as Intersys’ we’ve which and to well are conditions, Apex growing finding number current great clients are work. staff capabilities, positioned of it to outsourcing Oxford’s U.S. many witnessed also

come offshore newfound provides be alternative traditional near-shore with Mexican Center to risks. Our Development outsourcing not great feasible a may or when

demand now to mission-critical of industry-leading growth the Department revenues for ECS, government, the and intelligence XXXX quarter other first agencies the which Federal and solutions provides achieve Let’s of Defense, reported revenue civilian continued ECS to increased turn for volume an including agencies. up driven primarily a million, year-over-year, strategic $XXX.X services, customers and by and cloud government high federal for intelligence services XX.X% from continued of solutions M&A. of and presented artificial learning by opportunities machine new

a revenue did March. slowdown ECS not see in in

of in in revenues saw In month with final consistent quarter, the performance. fact, ECS' the as the March is slight a pickup Segment

more be our fortunate downturn, a and In have revenue first We material of nice a government business. backlog result quarter or of as net COVID-XX. XXXX to ECS to the economic changes ECS thus an in tends safety to work no to the are in provides seen stable,

awards. the U.S. include also business machine X.X Defense, the new expansion the public Department the We contract expansion and of also in federal stimulate safety to the requests more significant and government within spend technical significant a QX provided robust Key $XXX.X of see network economy. book-to-bill professional of for the to high-end customer contracts the achieved strong often during first ECS' slowdown contract learning Service. for of within times under of X won services to during quarter. in in no new services Department solutions pipeline with new Segment The proposal a money received million a remained global Defense a Postal recessionary

to contract X.X coverage QX, quarter trailing This the awards increased in at backlog ECS’ billion healthy times or strength ratio revenue. $X.X first a XX-month of of end

in prime January, has fully Department the welcomed Security. both continued and Homeland to ECS Blackstone's it pathways to we've into customers of with seeing the be are Blackstone Federal the relates companies. benefits the acquisitive combined new In adding ECS, M&A, been of As now government integrated to Blackstone market. and contract ECS we

ECS our global work even of performs crisis, times Federal more becomes the Government vital. In for

for was efforts IT as data of Mercy, lead, a U.S. end of aiding the and the on rapid, ECS ship Towards serving Navy relief on now the provide flexible as are tasked equipped officer well COVID-XX as U.S. surgical team with West division acute the and services. communication, automated medical mobile the processing Members ECS the Ship mission to Coast. and Navy’s the March,

to critical We such meeting trying in government support our during time our for are nation. a challenges proud

commercial quarter. XXXX, clients. on-demand IT, last offers our $XXX.X and first quarter life reported Oxford. Oxford Segment's consolidated for talent while first over engineering to X.X% the Oxford Turning healthcare, the work the million comprises consulting permanent only for our however, revenues sciences year-over-year, down of segment, were of the revenues. of placement ASGN revenues up prior Keep in X.X% mind, slightly placement permanent

we quarter began impact the in second beyond the enter well last will the know we mid-March. ASGN COVID-XX of XXXX, experience of that As first effects to

second the additional materials, for we uncertainty, offer on can Instead, our CFO, typical in quarter. be this Ed Given will guidance find our providing relations not website. details which scenarios these investor provide our scenarios. will supplemental revenue we our you will quarterly Pierce, several on

visibility, near-term including typical challenges work, Government our relates and our only scale, related position to without a also but business immediate well not offerings high-end base, Federal Even to of significant address portion us COVID-XX, client to drive the longer-term and service stable that diverse to large value.

stability provides our Our further to flexible cost business. structure

a As if ASGN little, carries no, reminder, bench.

when a As sales decline, of proportionately. assignment our result, fall revenues our costs

are compensation Adjusted variable, to tied Our profit these incentive-based of also expenses comprised with or gross cash SG&A one-third of expenses EBITDA. directly

lower when working our free decline, to flow we see a capital higher conversion With to EBITDA of our adjusted cash that requirements. revenues due said,

the turn revenue to quarter to more call Ed? first further scenarios about I now Ed performance detail. will discuss these in our financial and over speak Pierce

Ed Pierce

acquisition we expenses, net Ted. net And Thanks, And income quarter. revenues, the the the for in highlighted, Ted adjusted not high-end financial income were solid our excluding onetime reported for integration as guidance costs write-off deferred full which and estimates. loan were after estimates, has the above guidance all year of our and XXXX results of and

of Ted the experiencing COVID-XX. Financial Performance Operating in line last of in with expectations. despite our the of cash and the quarter some to also flows Trends Guidance financial for March with were couple April related our were mentioned, our Estimates As effects weeks softening line results in

at cash digit to quarter be related a mainly to at to Blackstone free and year-over-year single reflecting and Revenues compensation preceding growth were the Operating included pertaining flow $X.X seasonally year. lower X.X% for from percent the tend double payment Federal, the Segment. in of growth ECS, contribution the first incentive up million which quarter digit annual Apex

our related ECS revenues margin were margin operating to slightly of high high of the the placement for lower our units. mainly down our range, gross approximately XX basis segment, growth XX.X% quarter but was Permanent at year-over-year. end year-over-year guidance a and down Gross which points the carries other than

federal than favorably slightly in our gross SG&A which because integration and consolidated Although with our a compares million, margin our its and its expenses slightly mainly gross is margin margin. range contractors, lower our has $X.X EBITDA below were of similarly-situated guidance. acquisition other divisions, only guidance expenses ECS margin were above included of not government

Excluding expected SG&A below branch as healthcare came guidance, than a expenses, lower expenses and our result costs. of those in compensation expense mainly

Estimates. rate of include guidance as tax we do of percent slightly on excess in XX.X effective was tax stock-based lower than our which a benefits Our Guidance result not compensation,

were was million Net flow million. EBITDA favorable coming all margin the range $XX.X expense in at Cash from gross $XX.X were activities free guidance end within and operating Net and from ranges Adjusted Adjusted cash and our income, and Income variances. of operating high flows our benefited

million, now were upgrade quarter X.XX office project. costs X.X, secured full related under which our Capital million expenditures all ratio the senior revolver major and for systems and end, under million included to At debt the the had was $XXX.X to to quarter a and availability. the back $XX.X have leverage our front borrowings we $XXX.X we revolving facility. repaid available quarter, end of credit Subsequent

various on Because earnings financial as plan In our are revenue forward more the of the guidance, financial COVID-XX scenarios uncertainty second effects of of We at caused of guidance place illustrate to we once providing providing pandemic, our significant certain XXXX. resume levels. the this pandemic mentioned, become possible business in predictable. for by our the outcomes guidance that Ted quarter not included supplemental materials traditional we

predict While of be. with past trough when it or rate level over the trends will to "trough" not what a scenarios recovery any these is revenues, production will considered few the weeks, of occur, possible, degree precision,

the benefits services be as variable Having of structure, other do the the actions will which well as of illustrate we of account and up benefits government business, said year-over-year, our our that, commercial highly we high are scenarios breadth federal these for our expect that scenarios more portfolio our all be single Cash and would We Free would ECS year-over-year than fifty that taking revenues percent EBITDA Segment assumed to digits. manage placement Adjusted our grow generation. Flow our permanent down and the cost

by our illustrated as margins. As scenarios, in we and decline, would see some EBITDA these Gross revenues compression Adjusted

A are would placement margins Gross of period Margin creative Expense relative improve depreciation would revenues, be flatten excludes attributable the compression stock-based decline highest to which assumed in margin revenue Our EBITDA to and mainly and and Adjusted streams. or compensation same which SG&A last higher our Adjusted year. the permanent in marketing

of expect We deferral of employer-portion requirements Flow as Free CARES would also the to due benefit allowed the rate Act. a by Adjusted working Cash EBITDA enacted capital FICA into of high the the the and lower recently tax of conversion

Flow Our facility. expect meet and and Cash be credit our to $XXX.X to we Free million is requirements, capital sufficient to expected full our under availability have revolving operating

On our digits three comments are April few a revenues preliminary on first just weeks a recent low-single down basis, of closing, In year-over-year. for consolidated the production data.

which XX% which revenues, Our largest federal unit, over government low digits. accounts was of Apex revenues, approximately accounts year-over-year, services was XX% Systems, and flat ECS, operating up for for double business, our

creative Our other Oxford CyberCoders, declines occurring units, permanent marketing the the with financial revenues double-digits, in the recent included production placement our were the and considered Creative earnings of These for supplemental in approximately materials. in Circle, XX% were account aggregate scenarios down trends highest in of which development and revenues.

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

Ted Hanson

Thanks, Ed.

ASGN economic are do than providing history. downturn if affected model we the to our our decline today rate we formal in at in other the Company's and better at confident in our has an not of position bottom, this now is Although but manage a time any business as be April guidance the know revenue not hit may we've We units of business. in of across lessened time,

gradual, to pre-COVID-XX and be nor based businesses will the cannot the economy policies it based state each is one, doors Recovery of of will return expect health reopening expect how to our of can their client the rate on we on be federal to back We immediately. levels from economy. open fast vary local, client resolved. real be will accounts the will that and Ultimately, crisis on day for

and several With resolutions. the in over Most the percent. saw the YXK, Recession the whole. ’XX not has for since through downturns: industry industry recession and to services, though early three a extent continuing ASGN several decades Recession been Great we than experienced example, a reduction more the for of overall Great Apex and and the of nearly government as economic our pull demand staffing ’XX, shutdowns in their founding, Systems, the of of XXXX back recently, XXXXs, XX XXXX

countercyclical. mentioned piece as on And to placement and be focus has contracting the declines. for work increasingly revenue earlier, solutions. as largest we our smaller IT Government become saw work services of ECS their higher-margin market tends revenues consulting grew I much mix a Permanent as perm

not the business Recession. the Today's at our company the of Great provided including our by mission-critical ASGN is assignment the than of XX% ECS, were on time. not revenues today, government of More part

higher-margin In even for longer-term over We one-third and associated the revenues, government on with have our Apex with XX% clients. services business performed and commercial and be for the by federal two-thirds focus performed our Solutions solutions. the of since alone, projects past Oxford our of consulting by IT grew evolved to projects statement-of-work this representing higher-end, to ECS and and Consulting IT more year consolidated IT

commercial and will coming services months, our foremost government we solutions IT of the industries. as continue the the provider to and evolve business weeks to In and consulting

to tuck-in make services business acquisitions organically. add contracts And and clients position capabilities our by long-standing to business our our and We time when that is client will grow unique additional our IT expand the right, relationships leveraging our maintain key pipeline. market

clients We profitability our labor to drive company. and on serve And leveraging and execute generating and strong cash to deployment, our interest capital and contingent liquidity will free margin safely against force we current the contracts, maintain of using in focus our our continue our company for smart our will stockholders. our our flow stability best

sense witnessed at last ASGN. few I've of enormous the an weeks, Over community

contingent the We work are have skilled available of to remote today. most largest, for fortunate one workforces

successfully positive capable of each to great Their addition, is Oxford led our experienced in me segments, cycles. and market negative crisis. business In and during managed deeply experience have Apex, provides ability units our ECS, clients business and who and individuals by ASGN's confidence served navigate with this

thankful smoothly am of together our all of Board forward We we of to continued for our ASGN. to On to mile our who have your support run a and critical that them. today's of IT priority. business employees I ensure emerging our clients' the top for remains gone company needs entire from extra even and you thank stronger look challenges behalf than entered Directors, continues

call up now your We will open the questions. to

Operator

will Edward Please session. with We now Caso Instructions] comes question-and-answer The Fargo. [Operator go Wells from first begin the question ahead.

Edward Caso

the what a about or talk Thank you term clients your little you. far evening. any price as as payment bit Thank you good you great Hi, price, Can concessions? detail here. for are for asking

Ted Hanson

that price the already I'm contracted space, work is a standpoint. Randy going me, is on let, Ed, space, our thanks commercial to to in for for the from excuse answer in being I'm work going call. our one. government the Obviously, let

seeing there. the as in marketplace talk why accounts? not what about commercial don't Randy, in really relevant So large you're But you

Rand Blazer

may a get at understand to and amount of say but I kind big recognize supporting say, wouldn't And some concessions. this have price where think not and concessions staying asked point. They come passed market, with I they broader account. our would it, the and but it's the are and generally bit Sure. somewhat employees had on in the we those you in for Ed, contract of us we've overly when price top other of material be accounts, our I also by who have unemployment, it much that born accounts accounts, little to had see us

Edward Caso

off clients help more or How far us my not Right. middle with and versus other differentiate impacts are question turning around so they the concession your maybe the forth? is business, of Fortune request turning with some as off business, accounts. branch behaving XXX And as

Ted Hanson

Great. Rand?

Rand Blazer

are our look, positively Ed accounts in smaller territory. top not. Well, you negative numbers, are see are They very our think, slight I by and still growing can our accounts

varies I So by think it industry.

chains. of and have to hospital example, doing to virus initiatives. chains, they tried is What Hospital chains and healthcare big hospital accounts. For new small has seen hunker IT the opposed down we've just most have fight [indiscernible] smaller as the

read going certain expand today seen not. definitely paper larger technology that Smaller or on. work, accounts, can pulled the have you looking are technology we have have still accounts you So or back ones trend Microsoft, in Amazon, their have initiatives. pursue hiring are where the the to

belief it than I that's by bit. guys who is. our At a economy It little is industry So the bigger is, keep the least the March, think beginning belief tried flowing. more smaller definitely of to hitting what varies guys my since believe have, I the

Ted Hanson

we're Ed, at the different with was smaller thing and role, organizations. I all we you but while of things, part accounts, these everything working if their operates very important provide we the serve to And In resources, difference mean would same add important I we're a the the don't for of home Rand agree I how said, play and in doing of needs such how accounts. shop. those technology CIO they large mean, continue. those there's an has fabric that I will, only

I of think well. the differentiation here that's part as mean, I So

Edward Caso

All you. right, thank

Operator

from Seth Markets. RBC Weber question go Capital next Please ahead. with The comes

Seth Weber

Hey, hope well. everybody. good is afternoon I everybody

cash seeing year? here from pretty strong could be a accounts free otherwise which this should for perspective set potentially your last derail, there that Following up like flow potentially up on that that from anything Is smaller question. collections you're a

Rand Blazer

point. an Seth, could that, be significant issue, although worried to we're that we're not definitely this seeing anything

that's could in I we execute the that in benefit, a DSOs be our to side, strategy account have and it's well. to and always both continue on nonissue. world that Again, as you part government perform the of maybe accounts future. expect a continue of on they in the have. the an business large think think commercial that that smaller would the some operate of And issue side things the I They

Seth Weber

a Okay. follow-up George. for just Thanks. And then maybe

of the in how the remarks backlog your unfunded Just there on you that feel portion during business, prepared slowdown that of ECS of confidence activity that comments for the the Is backlog? can were your do us? business government think kind sometimes about unfunded some economies? I feel here in for here? And what's handicap your Can going sort level in of of confidence just you increase

George Wilson

Yes, and in backlog that But We on backlog, COVID. just going feel our way to unfunded we Ed. as with well. regardless track confident sure, our very with and confident feel COVID Ed. our in being it, unfunded the We about of forward, very way the is moving feel unfunded-yes, capture able the government strongly that's very what's we

Seth Weber

very you thank Hi, Okay. guys. much

George Wilson

Yes.

you. thank Okay,

Operator

The go comes Sommer next question Please SunTrust. from ahead. Tobey with

Tobey Sommer

Ted, as lessened. some your remarks, rate to a steep sort closing in decline week is week as today has of you. decline last of Thank in April revenue say not as earlier that the month? within Is this that April the of of you mentioned

Ted Hanson

in some cases, out, decline true, two largest it's it of Yes. And beginning flattened say mean, kind obviously. here saw and would I rate our we April. weeks in Tobey. of first of week-to-week, that, seems those to have that's but I lessened

dependent have control these we'll the of health and be to continue around that will the on other watch factors our and crisis to economy. something And outside

Tobey Sommer

All right.

some you've crisis And but in and quarters? uncertainty a on interestingly afford company, those? the to Okay. strategic valued and your are some had active Is can to the strategic going cash continue kind of execute acquisitions consulting And of an its you the small, sheet more space. flow over executed amid from perspective, appetite this pipeline couple opportunities next on to balance describe

Ted Hanson

Yes.

opportunities. is said, think we mean, good in see like opportunities. afford we I certain good I maybe pipeline affected, I could Maybe and businesses not think, not think, this the to some And And marketplace, commercial there, -- but space, ways, -- they from in you most a less some valuation it the that's ways. certainly robust. in I government question. that evaluate are much a things certainly continue of much these changes so could the standpoint, could obviously, in so

settles where the step to But, really our that feel, an about out. choice really balance I to that good sheet our acquired of yes, have we're and So situation have feel and in we we'll this know targets make have ability acquirer in and acquisitions. all feel see is, past the certainly how here. good We a we we

like So we think as our situations surely, think all to things that been stuff and opportunities this, arise. positioned so. may well be benefit, we'll I have in -- And in earnest become arrive opportunities that not otherwise

stay this. diligent we'll through So working

Tobey Sommer

What's the a sales-generating perhaps able market? and posture, to for firm's the to out slingshot growing sustaining its than last bit it's internal Thanks. posture little question on faster headcount me. firm's the this be What's of

Ted Hanson

first to -- and I continue look, the foremost, think ourselves. Well, Yes. -- always, to in invest we first need

close accounts. to we'll So our stay

if they a your geography like from us a we've a industry both to words, be standpoint, -- to account be don't approach, certainly I standpoint, and to need there well top with as go-to-market these, slingshot That's think in forward, it there much positions they this. clients, these standpoint, through been out Our times. of few even as coming an to use tough stick times this

close going those to clients for the they stay because big opportunities sure. to for are in our so, ways, us And other on we're all side this, of

Operator

Thind go ahead. Jefferies. with comes question Please next Surinder The from

Surinder Thind

taking for you my questions. Thank

Just trends. on one follow-up the April

seeing, clients. is that like there taking that on mention of hold? Obviously, that But the simply projects can continued little -- bit trends? guys with did are was not Or off? those that new staff. about you in In you on-boarding of projects talk a You declines clients terms the larger some interest mix is what's of projects not causing clients that or new putting

Ted Hanson

take do you that from perspective? Yes. want account Randy, to an

Rand Blazer

Yes.

natural project they in a the bottom start to come own say business. where some end. the that little I projects reticent a and to natural a some new economy are And their have see there clients been presume, in until think would I I is,

So the of two it's things. an it's a combination outright things, not but shutdown

as bit seen expect coming said I is that start. through some seen the natural clients. we've to are haven't that. would being and that little end, a But and We What I delayed from projects

Surinder Thind

there That the new appetite projects terms fair. that any in on the you are any color can Or dynamics? of point? this number, at Can Or sounds provide that color perhaps starting you provide?

Rand Blazer

yes. Well,

We haven't do that. given want Ted, you to. Go ahead,

Ted Hanson

I was these willing Obviously, we this kind don't as we've calls. Surinder, type they things. by environment. a Yes. some things And to to of start client in it's going information, that industry. seen industry client things, think Rand competitive I out They by defer clients, continue said, give some say, But be that's information. client, of on

Surinder Thind

enough. the provide, was on XX% revenues in stress, to not some helpful. you or I was can And Was for range simply employed? did That's very revenues? of guess, helpful. help in provide minus Why trends, the let's the in April using then guys Fair range scenarios of say, what it you that X% the that terms What minus color consideration? minus XX% me

Ted Hanson

Ed, want take to do you that?

Ed Pierce

scenarios you it lot, given information you to stressed take declines do we've could revenues we you happened Surinder, we've in mainly to want a or to occur. a in if points, And event I enough information able what you. five would think show sense can out what these but quite take where to it you I points could you're another X.X to it. kind get in wanted, of We have these enough the that mean directionally of where given

Surinder Thind

And you. then growth And amount? was does for an into of overall terms the acquisitions then terms what Thank the organic in the QX? contribution in dollar from what translate that revenues, of rate

Ted Hanson

Ed?

Ed Pierce

been was that other Well, two and contributed, main release, the said there's that really into or acquired Apex. and our We we contributed January, as Intersys, Blackstone it acquisitions. in And it's million. integrated $X.X press in

was maybe know, But them Does mean, $XX trying Rand? so longer. given million. the QX? I to million, the be, that going any to not I'm thumb for information that give rule contribution what specific remember, would $XX on I And in don't of probably sound reasonable, we're

Rand Blazer

Are Well, for you quarter? about revenue for the a quarter? talking

Ed Pierce

Yes.

Rand Blazer

little applied was for us, Ed rate have we their technology we've a of the around business. as our they them number But is a less pipeline on think and great run I than opportunities said, really that base prior. provide

they've and farmed million. So been out. running pretty much disassembled slightly they $XX But at below were

probably $X million, million $X.X the last year. the fiscal to end closer of prior to So

Surinder Thind

last And didn't some that, close Understood. from DHA year, should the beginning I year. benefit correct? of still from that be the at there believe Because

contribution some well. be as should that there from So

Rand Blazer

XXXX a yes, Yes, but you in two months had not I mean, QX. was that in lot.

wasn't it So not number. been revenue significant January would have of XXXX a

Surinder Thind

final Understood. And then question. just perhaps quick a

in or bit some focused the federal M&A. for the space. the having deals of pipeline talk on more a about did side You of willingness terms side the you Obviously, of government

values I As on side, you mentioned commercial that, But more obviously, there valuations at point. appetite much. would be changed this little haven't depressed the given assume there probably

Ted Hanson

situational. it's think I Well,

offerings, is. they serve, on depends low it how industries it business their digital depends what think I the I on they spectrum, big the in how are high or think

could don't situation. a know it's I over brush paint broad it. a would that you say So I

Rand Blazer

Ted, can I add that? something to

Ted Hanson

Sure. Yes.

Rand Blazer

I that would is little a bottom? shouldn't, seen where don't it any revenue where have also whether they Ted, or agree, their we've a bottom particular the comfortable bottom When where situational feel think declining they're where company more And stream. in we a and meaning, you

that situational I analysis, think right? that's part of

Surinder Thind

All right. That's helpful.

Thanks that. think for. I

Rand Blazer

Okay.

Operator

ahead. Please America Securities. from question of The next comes Bank with Gary Bisbee go

Gary Bisbee

Hey afternoon. guys, good

as would engagement? that if lot seen I happened commented, be six, And think come that like delayed Or there not portfolio more to that weeks? sense eight you through through. Apex to could a that gone hit you them renewed, get and the due such that haven't a you it others, much of last some projects it some of of projects gone that have of is you at natural mostly is, about are some I'm us a of Can and business bunch of may give sort trying cadence yet in have follow-on end starting, step down the is how the the you of duration the risk impact in earlier, end some see to of So you that? come continues through to a what was the is already that, get the really it's

Ted Hanson

Rand?

Rand Blazer

Yes.

respond me that So slightly a let in different tilt. to

But do airlines, those in percentage ends away has on Ted our up support. natural if small think base, them of of to infrastructure base. of brisk we had those When out the look have the natural gas, start through, certain of going base. have taking of our of end, doesn't into that's because terms percentage more you work were and work you that's client earlier, If definitely ongoing get revenue think rest to a When is projects just in natural that pointed end. OK? came seen a we from ends, the you a mostly supporting that projects hospitality, oil or have clients they Depends. at our again? movement there to I our quick what have I those a projects are it business And

We found when client our XXXX in much the went in little infrastructure of Apex so down numbers because zero two we negative down, of in those years, and small went our was business very supporting base. XXXX this very in

of So we side of as work say, on that us business, Apex. have cushion well a commercial the within gives lot a the infrastructure

but is industry So I work of we're much that what's much the it the by infrastructure think at, project not to at it. how segment you so what looking have mentality, look

probably like In but that thinking may it vary you're new terms by industry. the of of, consulting will projects vary,

Consumer thing. to in client you, in of as of sort parts a We Industrial, other that or base slowdown, aerospace, financial reported have seen institutions defense or & Ted not

OK? So some seen that already, help we And about the gas, that? you oil that hit does definitely, insight have give

Gary Bisbee

Okay. helpful. that is work, that. ongoing greedy to some of much if That's but book The support that maybe sense trying us of the maybe obvious follow-on getting could is, give ask infrastructure I'm business -- you how

Rand Blazer

go here? want on do to me you Ted,

Ted Hanson

don't -- We disclose don't Yes. We that, Gary.

So, yes.

April, I that you and that think in is I way the industries saw in are we're think I in several our March, the it things for again, out. together. can right in what way to mean mean, kind I trend there comments, lays think we of different it Rand piece the both about

Gary Bisbee

me. what enough. The guess, concept even was I that Fair high revenue there Yes. is there, we've at provided acquisition question adjusting slowdown the of from And on ECS growth then occasionally low-margin quite this revenue, technology QX. ECS. for guess really And more a robust. of was I year-over-year just in get pass-through, trying growth scenarios you is for one the Last that quarter seen single-digit the QX, out? any of you scale to I'm call significant and

that you. is reason but other visibility, the Maybe some so there's just it's Thank any reasons? And conservatism color? or

Ted Hanson

the Ed, him help unpack can there? you rate growth

Ed Pierce

degree. I mean, year. large we XXXX. made QX, but the million, In renewed the you of mention that some at think, that or of recall, not end Yes. of purchase license early that of otherwise that, in had in we I It was have license to transaction QX, happened would in $XX.X

George labor that we important, $XX high-growth transactions, comment terms about year-over-year of But you those that, on been think of or business. very type that high can is think, that I million and look had rate direct drives in that what's in I a margins numbers so. the in have if our up may

Rand Blazer

out, and we what liked forward in last was licenses moved we last I'd of that QX year, this as would What fiscal year. million sure. Yes, saw procured comment. $XX have Ed pointed from

and overcoming seeing licenses in a QX So And as opposed things is a and these pass-through. in spectacular. pretty simple that solution the of the solutions we to end-customer growth thing the other acquire is delivering are that part strong we're that still

solutions. occur our continue So they will to continue to advance as we

part that, typically delivery solution, the thanks But the others it's a of then price for margin some And them a and like in stuff if are government it's lower of the question. solutions. fixed higher are but margins,

Gary Bisbee

Thank you.

Operator

next Please Chien comes The with question Henry BMO. from go ahead.

Henry Chien

wanted the evening. recession on Or I Are good positioning was comment seeing I assignment and the more about ask of bit just you comment like if that. kind works could on referring just the positioning to about about ASGN to guys, to what wondering branch made you business? the Hi in, a based on relative little And being more Apex. the say want the of last how resiliency. like understand to that here? just you're you

Ted Hanson

Yes.

think and to Henry? referring you in That's on XXXX, assignment – right, the about I XXXX time if think you're period

Henry Chien

Yes.

Ted Hanson

added back big recession got the XXXX, Oxford while and you crisis. some engineering And XXXX collection to around mid-market especially accounts, and if during smaller really and and with with serving industry, a pull credit period, partly on that I caused units, enterprise by the CapEx rest focused and of just of that, offerings. was that and think ERP-type that nature, staffing that, will things which the of of business and nature just Oxford, XXXX XXXX and different scientific time off. It healthcare, other IT was And implementations turned partly by those that also obviously was mostly the in that

are we who centric, the I today centric. difference think one, digital with is, we're IT fully IT

than business federal government large more of predominantly accounts than or account through accounts. we're a XX% is, XX%, is our two more business, Number slightly large

just for we're part but just for a so year, and of relationships months and with, have these and been we've a and that not decades. And are years accounts

And important through XXXX where of really technology certainly want XXXX And keep how that that's part more recessions so found client. is their we we're and and economic they get to have be running what different you're through important because done. to you an much the things and

to has Your more business it. much that stability

there's that today who during So we we were period. time are versus a difference who real in

Rand Blazer

than actually, yes maybe. more Yes,

Okay?

Henry Chien

that that's the Yes, Thanks. graphical.

Ted Hanson

Thank you.

Operator

Please with Mulrooney Blair. question The William Tim ahead. go next is from

Tim Mulrooney

afternoon. good Yes,

toward term, working? and at back spur additional as step scramble you shift do a bolster digital will taking and companies ultimately Just to more capabilities think remote COVID-XX the long looking their demand

Ted Hanson

business, continue their this all coming even not more industry pace. faster going crisis out and this And to in so. a think or important economic I develop are to clients and obviously become to that less systems think, at doesn't but even this of digital I of of downturn, have we're Tim, it's our to size transformation Yes, It's in all this. specific of is just because or important as parts account,

been of certain or technology risks to around with that ways come to we all we have electronic fact carefully ready That we are where because systems that with that types up remote different have of in be to work need constituents. to as offshore opened work need And engage an be continue handle certain done there having our can way needs it. to in considered the

a out of think this. I learning that's coming

none even this certainly, think transformation, the I So and digital it different enhanced. it's ways, of of a need this in remains, lot for changes

Tim Mulrooney

regard adjustments change new can it. Got with you And also your consultants during or temps to make processes had had and you've any about recently? I'm that of on have how to the assignment difficulties on-boarding making types curious just to talk are or quarantine.

Ted Hanson

our with I think Yes. like to did teams really either consultants having that our of have XXX% our internal remote we of really, great. go tested I'm I staff. some with or But to our weeks, work obviously Look, proud in teams. two to nearly mean, go amount

issues that for I-Xs be have in to been to our to of happen. really and they've to of a We've was up engaged government, allowing able that it and flexible then Our that all proved clients have remote all systems been very and this, as about and help other And need a big up, stand been well. relates dealt that The it. in been very, went fashion. resources in projects administrative

in to not so. that's happen. to think it's the engagement everybody turned it of a problem, taking I And that thankfully really be So out make

Tim Mulrooney

Thank helpful. That's you.

Ted Hanson

Yes.

Operator

Kevin The Credit next Please go from with question McVeigh Suisse. ahead. comes

Kevin McVeigh

for that like just things of internally the us, kind folks operationally, are allocation to buyback dividend only and that? within thinking you're of about Thanks not what also context but And all capital doing Great. you color. you COVID-XX? prepare for can Hey, remind how

Ted Hanson

Yes. Well, there. things maybe two separate

gone to of kind So work-from-home work-from-home internally. staff status or fully we've

state don't have as to on come allow we're we that. the starting us positive rush get bring to and down to plans to certain develop to do begin work note, that. road to to geographies and begin a Frankly, governments the so into back on health we the our And further crisis in

on-site work our methodical So back we'll to come able very be within to company. about be we how

misstep all And and that. we'll just so time don't it that our so will take be an have issue a in of business our for we

when allocation And program doesn't side, coming or few around not then road capital was the Kevin. got down like We, there others, buyback March the our over how to thesis think on into mean change, we we capital visibility next allocation only our general the beginning about just because was good the stopped I of longer. many what weeks

say, always prudent that, developing we So opportunities acquisitive we be always think was going to to thing we're do. I a first. But that that to think We're in as invest ourselves, going certainly to advance buy If our we're own the front, past business. that on cup back that adept nothing there's the have of we're in at and going the proven lip stock. our

It those nothing. one scale, we all now, be this all have and at things at to And doesn't size or time. do can

capital allocation think has standpoint, from on and I view based liquidity we a our where balance where sheet of are a we strength this changed feel So we good and any stand on today. don't about

Kevin McVeigh

but metrics then for would us guess lot are Ted, reaccelerate given like be little of the confident a the you what come a What stabilize internal you're data, you I in abrupt some how focused of of of feel of terms of most client? looking what that that on, do you for starting you in it Like has terms on? get out can bit? And to things kind to Great. are the starting kind just seems shutdown to of in it, been

Ted Hanson

where a we But doing with work. internal their that's We where good, have understand durable, an business the long they us look period And a standpoint, can Well, lot, we or and the to our such stack at from pipeline, the a going. time close we even them. our think watch end of rev our relationships that, important at to clients look, what to We consulting and that. day, such of world about mean, over see best from visibility whether our give flow our Yes. needs insight. We talk Obviously, stick business We is are. are metrics we we I that project rack think, so the industry we've just are. big accounts. us got them from clients little with these I

So internal metrics. we have

declines, make we few We terms little too of heavier marching tell. the that early lessened it our insights the and declines couple, to of like watch that, forward, over in here to that last a have need first to under sure have have clients We but belt saw we'll like and continues. week-to-week feels time our of watch for the weeks trend great we'll bit things kind It's in the that. business keep to it

Kevin McVeigh

Thank you.

Operator

Baird. comes question Mark next The ahead. from Marcon go with Please

Mark Marcon

you're can and the afternoon the about I was seeing bit in What's shoring? magnitude of wondering, the just little there? and detail. talk shoring near terms all projects of the you for that on scope that you're Good opportunities and thanks a seeing

Ted Hanson

or a because to story, that important them very was mean, off-shored operations it's of project I think you where work. switch I a Well, the couldn't adeptly their fact anecdotally, something remote developing and Mark. executed being be client surprised by got there off-shored to I a can and tell about they're here it

been a step to we've So things. able few into

Here early on. an anecdotal basis just on

certainly the of that. forward. little anything, might to past. here more things of done the here a on-shored, bigger U.S. that I maybe them as been go a we last supports in the gives little offshore bit that a the couple be If of is think fashion in wave the fire And believe the an it experience there to have re-shored, future. sourced I weeks in bit over move come think that in I roll was for

to it's a say watch, that's So I'd opportunities. something developing

Mark Marcon

up material? that and actually becoming hitting do end think you When would

Ted Hanson

Well, and those to and them. able have to have we have I have and up scoped, be them as we is. wouldn't then to far to go those set say things be execute to opportunities, so to Obviously, they when be that to be win able

opportunity in else. developing future, a it's So the anything like

Mark Marcon

talent we to there. to And recruiters Has into to candidates open materially the it amount and source then the place can think racks? are you about a become easier regards what of Or that's out you're how bit with that? your about talk currently experiencing? Specifically, Okay. you productivity if levels, seeing little

Ted Hanson

places, think I it think materially look, a I for as the IT be wouldn't space, to side, forward. situation And IT It's think we'll I unemployment scarce is right on technology I believe. Mark. in different still necessarily the so not say in other don't mean, the I we'll with talent preponderance of that all and dealing go remains sure. that we relates as don't I now

Mark Marcon

follow I'll great. Okay, offline. up

Ted Hanson

you. Thank Great.

Operator

Ted This concludes CEO, Hanson, remarks. back turn would the over closing question-and-answer to the session. for I to any conference like

Ted Hanson

support you, today. next safe, be and more thank QX thank Hopefully, earnings where all your healthy we stable of much ASGN. for time you again we'll a Thank time in Great. and of convene Stay your for for the operator, you place.

Operator

conclude today's does This conference.

You your may And Thank pleasant disconnect your participation. you for lines. have a day.

ASGN (ASGN) 3 May 202020 Q1 Earnings call transcript