ASGN - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to ASGN Incorporated First Quarter 2021 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] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kimberly Esterkin, Investor Relations. you. Thank

begin. may You

Kimberly Esterkin

Rand Good Chief ASGN’s thank call. first Hanson, ECS; Executive are operator. George Apex us President Officer. Wilson, With for today Ted of Officer; Chief and for quarter Ed President President afternoon, you, of you Systems; Pierce, and and joining me Blazer, Financial Thank XXXX 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 this uncertainties, Although filings. materially and any not risks those release these as in We results we Certain these believe on assume SEC call. press obligation from actual subject they in differ are could of to update our to today’s made do and statements. risks described and statements

and intended and and we convenience, also materials certain over GAAP to be the turn are website our found in of remarks call I call Relations’ non-GAAP now in Please non-GAAP GAAP at net Hanson, such the investors.asgn.com. adjusted Ted today’s supplement your measures this Officer. non-GAAP be included will prepared Investor on EBITDA, can section adjusted our as income referencing measures, that and will supplemental are free note Reconciliations between comparable press measures. the the Chief release. These Executive to President cash flow. measures For

Ted Hanson

quarterly the $X.XXX of we ASGN quarter of has to the such were all ASGN’s billion the the all XXXX earnings want end quarter guidance well EPS thank of very the for continue high the our date. for call. achieved first pandemic. and results with making first quarter, ranges. to success, a for highest at Thank representing of joining first you, especially range, employees revenues, our you our I the and quarter revenues Kimberly, reported strong adjusted to ahead exceeding for Revenues thank guidance adjusted as challenges navigate ASGN EBITDA incredible

prior-year fourth the no pleased billion EBITDA the consistent was there also topping Our and $XXX.X set our of million expectations prior very our that quarter With in topped to third that of the Adjusted $X business of we revenue record quarter. to from am revenues XXXX. last demand quarter, since growth lows report X.X% and operating consecutive for year, returning across all I saw is the month-to-month segments. of question is improved

particular rate QX saw trajectory, a in Our which for revenues, revenues. of XX% segments, consolidated commercial we we accounted consolidated the approximately than $XXX.X the that Apex or and higher which million, going strong business, Commercial ECS includes very for with as of government growth roughly XX% of this enter our into on second bookings business, of the Oxford bookings million, quarter accounted the segment, of year. or while $XXX.X

the exposure critical accounts with our commercial has significant Our provide the large forward. our increased support ability to of time, transformation deployment with to same continued propel high our combined government end to helped penetration business digital our the marketplace work, At mission has combined the to growth. model unique to services

million also totaling Our position year-over-year. for flow cash with remains XXX.X% quarter, cash free of first increase $XXX.X an strong, the

acquisitions. company’s flow strategic, our investments in free both supports as well strong organic growth, as generation Our in tuck-in cash

Skyris services and commercial performance to turn across segment, that our expectations, quarter, if which clients with year, performing been fully are and I Leapfrog of commercial the As not now noted said, markets. QX we Systems Systems, XXXX. Creative ready companies includes on Federal, remains let’s line segment our with and the Each including our beginning Blackstone have largest in ISM, call, multiple last our ASGN better. XXXX acquisition business. in acquired Apex, for end With Circle, integrated our Apex

or million, For up of on the first revenues, $XXX.X a day-adjusted XX.X% revenues of X.X% quarter, basis. the Apex or segment X.X% year-over-year generated

basis, than Circle Our X.X% higher QX Apex we first Systems day-adjusted a on for improved XXXX. were was anticipated. Creative quarter down of while had results from the

positive continue mid the due up reported And grow strength third trough sequential year continued including down two-year e-commerce Creative weekly second revenues a quarter down to from two aforementioned level exhibited off quarter, rate. XXXX, Importantly, staples, Digital-related were of Creative our Healthcare, revenues expectations. reporting volumes, in down of both year-over-year, in sequentially of it Apex quarter transportation straight retail, day-adjusted growth. above and consumer industry sequential the positive hospitality while and to well Services exited X.X% is Systems leading the in of Circle and Circle’s of growth Apex quarter basis. drive shown skill Industrial have some on notable and though basis, year-over-year Both growth well. the to trends a and quarter sequential on energy, utilities. on year-over-year comparison just growth first Systems to industries, Consumer growth. continue the Systems placements for experience Day-adjusted Circle’s Revenues Apex XXXX, from growth but segment not Creative Financial accounts, while quarter. remain & five Apex positive prior the the first that a sequential vertical note demonstrated as each to and important to overall

flat TMT on Our vertical day-adjusted Technology year-over-year a or and Telecommunications basis. was

declined technology growth vertical, telecommunications while over XXXX, accounts saw accounts year-over-year. Within QX the

to of digits, cloud scientific Finally, and Business Business skill Services down & while management growth low-single were over remained and ERP skill Overall, year-over-year. quarter perform which areas revenues first & accounts accounts areas and was agile, Government well, Services, down Aerospace XXXX, applications saw project soft. like in while the infrastructure and in continued Defense Government digital,

a margins five accounts. Circle in their basis segment up target, Gross verticals the across largely were basis From at year-over-year of high-single day-adjusted Apex XX growth the all Systems productivity down the perspective, while accounts QX, top posted COVID-XX. benefiting revenue low-single the attributable we accounts higher and the Systems prior-year XXXX. EBITDA to while top as Apex accounts workforce. of on three achieved period prior rates consulting in Looking retail work. for were industry was for lower with digit branch remained Creative Apex were in margins margin positive to business roughly down higher Top an at growth placement the in compared from industry digits on XX.X%, accounts flat Gross our permanent points XXXX due QX to top at based Apex up segment margins QX year. from

consulting commercial We which to the our up for totaled continue XX% also grow quarter, million $XXX.X year-over-year. revenues,

pipeline expand quarter the consulting source work remains of acquisition clients, we very so mentioned. and high-end over is high-double rates period digit consulting provide capabilities. offering previously continue important our value prior Additionally, consulting we ASGN’s positively opportunities trending again our grew of an the second identify that as at our to in

transformation grow analytics cloud, implement see for capabilities. an Salesforce business revenues, with in the our a and support Agile individual Dev and we particular digital of of data ServiceNow. our modern many their enabling interface the As increasing clients’ of together especially us and work applications clients solutions and is is in Ops large amount customer across innovation as such true tie to and applications This Work as businesses. consulting of digitization our roadmaps component in we digital enterprise engagements, and our elements of

the services ECS, XX-month presented first opportunities through with quarter in as through million and of agencies. ISM. recent quarter. revenue quarter and Government, of business ECS’ ECS other of a solutions Department book-to-bill high Let’s now strong revenues intelligence critical acquisition of X.X solutions ECS’ first $XXX.X totaled growth, of XX.X% new the XXXX to $X.X civilian business in improvement to turn QX trailing the Defense, our mission billion of to due remains new Contract coverage another recorded provides and a at X.X strong, volume services, which X agencies times healthy the to ECS’ the new and up cloud M&A or demand, government’s $XXX.X primarily for the the and including quarter with intelligence backlog year-over-year. percent of of revenues. artificial such a is year-over-year high strategic million, end learning continued awarded ratio pipeline machine Federal approximately

Government. solutions in analytics cybersecurity, areas digital high-end for focus data transformation, science the and Our remain Federal AI/ML, of

in across Community, AI Surveillance activities including of During awards the systems. included of Reconnaissance quarter, expansion some Intelligence, and our DoD Intelligence AI/ML and the with integration the contract new

to re-compete classified a mission-embedded win support. a expand win our program. Department comprehensive but also Sandia of IT National at new to contract programs provide continued most that IT modernization We and ServiceNow notably least, of contracts, the as ECS efforts the National Energy not Labs well reach three Last, at enterprise as with Labs and its expanded

a for segment Oxford CFO. segment growth the continues while as acquisitions, marketplace for be the Turning commercial ASGN’s performance strengthening, our call of division. engineering of IT, revenues further success. strategic markets first the Ed? some segment, was I with Oxford. talent $XXX.X solid government clients of that turn that through accelerating Both and up for The organic CyberCoders X.X% of are detail, business To on-demand over first our discuss the growth than commercial offers of our in of with consulting first to and sequentially. positioned revenue. quarter the bookings quarter our pleased seeing the recovery is Ed is even am performance. and life low Oxford now and sciences in end very Pierce, and healthcare, faster XXXX. performance to half our in of our the to our Between industries XXXX, well strong Oxford permanent placement last in commercial very It as this clear from million year-over-year, down I’ll reported the CyberCoders talent

Ed Pierce

afternoon, Good everyone. Ted. Thanks,

Sequentially, prior-year difficult and the the at of were year by above business comp, and were higher reflecting revenues. better growth quarter for for Ted was business. X.X% our Net year-over-year the performance year-over-year This QX X.X% the billable the third of federal fewer was than growth were quarter last and revenues achieved financial reflecting our $X of of despite and As the affected rate billion minimally last continuation than quarter first government commercial consecutive commercial our EBITDA up income up day Revenues the and a guidance exiting momentum for exceeded estimates for adjusted anticipated of year-over-year. year. the one COVID. business in sequential grew quarter was of quarter as double-digit only the up strong mentioned, quarter

at estimates are growth the our our Our our year-over-year expense basis profitability. of: margin slightly incentive-based we certain commercial The above year-over-year support reset, headcount the Commercial approximately adjusted quarter. the effects relaxed a business, payroll growth points slightly among We Sequentially, was for in the margin margin grew mix on to SG&A of after to and gross compensation and expenses revenues up compensation cash divisions expense over quarter million, high tax strong related XX.X% was number growth was consulting flow unemployment higher and guidance the federal to adjusting the the of year This double-digit income of support mix as for revenues, expenses. were from XX.X% gross and was $XX.X year-over-year. for related to programs, quarter XX% reduction On for was the lower million in Net anticipate EBITDA reflected, high commercial across of expenses quarter. margin Free were partially the of margin of the up our rates. guidance conversion and conversion in billable our for margin was higher tax of contract lower flow headcount permanent to approximately and points well the the year-over-year to a these our quarter into effect to $XXX.X from mix revenues of one million, necessary in were the factors, the up from our exceeded The business. course divisions. The last included our and mainly year-over-year. end consecutive million were SG&A operating and of basis, fewer was QX including year-over-year businesses. state increased QX and XX.X% continue healthcare than the was other year. XX.X% margin in increase of things, basis improved of up commercial XXX placement investments XX due increase conversion high down was was the historical revenues totaled for entertainment, for and $XXX.X margin down were which volume by the our our EBITDA contribution rate in Business reflected Adjusted day gradually XXX make growth and end Gross offset business, free year-over-year basis higher revenues increase up marketing margin up year-over-year cash The of carries rate the revenues estimates. the travel our year Sales reduction acquired changes which above quarter by restrictions Receivable and adjusted points of government the higher the growth and services $XXX.X normal existing up rates. EBITDA of changes additions from XXX% third revenues, COVID-related and guidance The of business. the above a over and related year-over-year, quarter Federal Days government all will driven higher new and high expense adjusted higher for the quarter lower awards sequential than EBITDA sequentially. business an Outstanding. a for creative million. estimates. number quarter Accounts $XXX.X last a

secured Over borrowings equivalents $XXX.X were we the ratio course and outstanding million X. $XXX million. credit no our the There At our leverage under the X.XX return expect senior to norms. historical revolving rate and quarter will was cash end, facility, conversion cash to were year, debt

in on estimates in we materials. guidance current set are our deterioration no second are markets forth assume significant trends based for and release supplemental the financial and Our production These serve. quarter that the earnings estimates

net XXXX, income $XXX million to $XX.X of billion $X.XXX million. of $XX.X quarter and to million million of $X.XXX adjusted second to EBITDA estimate the billion, of revenues For $XXX we

We expect will year-over-year both sequentially. all and up operating divisions be

such more our half Our to as well curtailed investments the COVID. back year. to reintroduced in for business, into gradually in expenses, SG&A and of will will Certain expense additional business to expected increases entertainment estimates the and include expenses as sequential travel second that headcount weighted increases these commercial growth support other the due the as be were be of

the our be for cash year for expense XXXX, we margin will slightly margin expense For full expense XXXX, XXXX. expect below but margin our SG&A above our

margins be EBITDA your Ted? expect closing for adjusted below our for also to full We XXXX the and Thank turn year our for to and line slightly call time, the in with margins remarks. gross Ted XXXX. back will over I’ll some you for

Ted Hanson

Ed. Thanks,

ASGN’s business. the no is important or company, and the governance people our environmental, and been has year commitment social health endured stability unprecedented the our to Following ESG by causes and employees to financial around never of there globe, doubt that our more ensuring the

people our that more reflects more provider. tracking for thanks commitment, as develop also services Assuring the the to we contribute ASGN’s solutions ESG a annual profit, report our I company-wide well-being a second our closely which At report, bottom ASGN’s our progressed health leading believe our an efforts IT the and stakeholders. of significantly of to XXXX robust ESG identity line. being to and analysis our of exceptional will footprint end March, triple mindful debut while environmental

accomplished ahead XXXX, doubling across our volunteer from significantly inclusion than in levels our is an many a that We solid thus recognize continued progress. of but efforts advancing is the for achievements to from runway habit, there ESG organization. efforts prior While of our we all year excellence equity us diversity, more not certainly and act, a and

unite efforts. practices. further social Corporate established a our Guidelines company as for be Committee also effectively Social have advancement to we’ve a we Leasing impact, carbon Responsibility to and and our impact, Beginning and gradual in best measuring baseline strategic. XXXX, environmental our managing responsibly Policy improve Green a a Sustainable to promote of ASGN’s these terms In company We’ve establishing will To committed usage. Office created

down and a to the to governance, relevant been practices Global since of that laws, that Sustainable goals We and to corporate pledging are these Board our principles Development Directors. member XX Compact, aligning also come Much UN’s of has the our our ASGN’s ethics of and corporate Nations principles, United our become regulations management core including with strength with comply of business the team founding. of policies Accountable Goals.

to on we for at our his thank I Chairman, has recently incredible may XXXX. seen, the retirement Chairman Jerry the announced Jones several current you Jerry his has Board, our Board since want have including of end As Jerry served and been XXXX upcoming our of changes term. service to since to our company.

industries career While June. who his fill, has to and IT who step our across Board security this to and shoes have will tough are XXXX, new into be very a software, we successful on Jerry’s fortunate Chairman Matin, led our been since to has place a Director as Arshad the

ASGN. Vice also an Carol Lindstrom, they directors, enhance taken to by Director on three by recently advisory Board. gender previously advancing and Admiral served XXXX continue committing new our have having to our equity We Carol as Both both directors. and roles female welcomed membership, our we we to glad capacity are at Board, Ultimately, least Joe that full-time and with Joseph Dyer two evolve and we in to Board are

to capabilities, and that both new and With acquisitions. government and sheet expanded balance look the we brought contract new make and to commercial in to ASGN flow, strong through with ample vehicles. new cash through there the continue markets set capabilities, ASGN IT and workforce changed, solutions committed of while while support tomorrow’s current Part to supporting has mobilizing our While will of come digital additional clients’ advanced that no transformation from and sustainably. engaging our that also world customers and client time provide us doubt work support responsibly over new developed and of will a is acquisitions tuck-in services contracts strategic, be remains will efforts, end

in remains strategy. opportunities remain we are our there measured Our M&A the we several thoughtful will exploring. currently Throughout pipeline process, interesting of and acquisition are and solid opportunities

so each identify targets, is acquisition important companies ASGN. into acquire we as is it ensuring As of too to successfully the is that integrated

XXXX earlier, our performing As integrated ASGN. support entire fully cases this you better On and the in company are Board thank continued remarks of all for today. prepared our I of line now of mentioned we than completed in said, we behalf With been in your that of concludes some anticipated. acquisitions have or and Directors,

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

Operator

Blair. your a Thank Maggie we first Instructions] Please be and Our the conducting proceed at line from with with question [Operator session. will of time, Ladies gentlemen, you. William this question-and-answer comes question. Nolan

Maggie Nolan

Hi, thank okay? you. Can hear you me,

Ted Hanson

great. Thank you. Hearing

Maggie Nolan

I more Do about on talk you that wanted recovery Congrats of those the basis. Apex bit any the strong a some Great. seems the about when growth? time industries they these growing seen. the line on it little verticals they’re in positive think to updated are within thoughts Systems, the a to results. some like sequential when and you there recovery you’ve And trends may return on year-over-year for softer have of segments the of

Ted Hanson

talk I strong the of this, anything quarters. strong all would growth progression And you then over let individual saw government industries. high the the I’ll really remain the accelerated, Maggie, have – year, XXXX. Rand that down will, The level Rand, down? And steady last some last on so of obviously has on that’s been now And commercial commercial of while up through of kind industries. you, out of there? few seeing at you into the individual to Are QX forward has quarter. as revenue say really about where for mid-May industries, and will of and whole that’s the we QX if of the coming back QX through that it’s steady a been commercial business a a and been all march I tell industries very business

Rand Blazer

Yes.

tell business that seeing still going would services airlines, for consumer the that little to, I think, COVID we’re pretty we’re of industrial we’re side opportunity I retail certainly look that hospitality. bookings lastly, to parts business of starting you book. those of suspect transportation, are more parts they’re the some think growth had a referring two also particularly get positive soft surge three, past you and the that that were hit, areas we’ve business. our Maggie, all and on you’re in all over I example, I at And would to then telco if quickly. And a the quarters, into the business

Maggie Nolan

you great. the three recognizing about about Thanks. of kind segments business the think there’s the acquisition then the different has and demand you of now patterns top the when Okay, in changed. mix unique you have layer of – and when of think such on right business strategy And that that that you

do those the this of couple over year So last of end towards envision out percentage segments mix how significantly and of that in the years revenue? years, you several from and of on that, the terms a

Rand Blazer

in commercial we’re with of I in think here. grow. obviously both the about market place In of to is government We – them the that good revenues XX% to So a federal XX%. pretty look market. Approximately the are see

ECS the long-term acquisitions Our then target of that go. the in expectation is always think the time mix year, our it marketplace. mix? current going reflects I But that. layer see time kind will guidance for you’re last industries will the government we’ll I near-term, that’s for dramatically dramatic our because at stronger market how this the growth, of and in digits, affect don’t that within to commercial single revenues. most And here serve last In down the of step just high we and affect likely been and federal to think generally

Maggie Nolan

Got for taking Thanks questions. my it.

Operator

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

Gary Bisbee

of growth Hey, seem for rate at think long guys. be how responding as gating are businesses me When that what consulting about about rapid years, the are had you few how offerings, next well terrific over that, to really thinking I growing question this a a maybe the And for to Good clients quarter. to afternoon. mean, time? business those another I you the part guess, potential? given factors the first

Ted Hanson

surely the about U.S., But here down market. $XX billion market it then. like a in and So in billion pre-COVID a the IT Gary, it’s $XXX points if since think think was IT about U.S. staffing is consulting the marketplace few a you I

think have large It of it is part your a one sales anything IT behind So our our a purchase the But consulting then the staffing lot business. and we’re certain our say will also, getting services spend, about differently that definitely total which business rates. clients in things do enormous to our bigger evolving that changes And Gary, done is their I trends favorable these around and terms I’d to growth as IT takes on, then on on like thing, enables mind. about things several may we have on new. within think, a gating the been business, based Rand us, secular going And staffing CIO addressable market getting as market for Rand, space how opportunity And it’s just we are going IT they not opportunity here how few in an on causing clients. think are you’d going our I right. wind good the in years, it’s for done. that for That’s just – that’s us. is And that a we add but here. the of before a thing think That’s be thinks our for right, this that? factors, Rand, you

Rand Blazer

Yes.

in to three CEO both I strong talked that I the account over talk go to do my what and area Apex, enterprise, relationship having particularly delivers at years things technical muscle about business have XX built client. guess And the Chairman we’re we grow, the consulting the Consulting applications decades. client one, you we staffing. think, call the value in that And well to and services it’s Gary, we key in provide. value back of that excellence a continue well I I’d strength of and that It’s, when digital to to modern KPMG number things. like some our script delivering build about to as reputation and bringing it’s as as of that have the we’ve areas client, our the transformation, to It’s real third, deepness the the that in skill and

have a the on our where look relationship all we you combined path we’re with when think at I accounts. three

We have a strong reputation.

great in time work are business staffing have the there that relationships up that now the in key side solution to and we’re technical long by of account important our and value built doing areas been muscle them. We and of for a the have adding muscling kind

So in I the works. things those got think we’ve

I think Does to Does working. your answer We it’s just that have it. stay question? that with help?

Gary Bisbee

the fact we’re easy terms get improve? sequential good. and QX of that is your bookings Yes, versus terms, how a to that that are in quarter absolute how enter said really trying definitely. of at sort you or facing part really you guess as the doing. lot better, I well will is almost is sort easier was entering or sort That’s that of dollar of year-over-year not momentum they’re numbers comps of demand you’re And twice you then, look it seeing than remarks in prepared Ted, things thinking and And a ago all comp QX. irrespective really, stronger I’m

Ted Hanson

momentum, more about was Gary. Sure. It Yes.

So continued our momentum. We’ve there was definitely had we good pretty some momentum That building QX. guidance. coming into the the throughout far outperformed of quarter, you into the quarter tells beginning and

Gary Bisbee

And quick one last one. then

during continues, growth. Just QX indicates on – head that going you’re commercial count I staffing of is should of you’re think to And support sequential or to worth is would now? growth from sort Or that’s you calling the revenue it kind think year growth the out? deliver if here anything smooth of it doing to you continue you. guess growth start spending QX kind SG&A we Thank the to phase you the about that cited more guidance how

Ted Hanson

you’d anything say Ed, to that?

Ed Pierce

year. mention talked where we some we Gary, and we sequential would for that did be the talked we No. full the increase, thought about about we

really But on good year into you think I QX. conclusion can quarters, going we’re the throughout. we’re that the not draw and on up getting some QX so And probably individual full and sequentially

Gary Bisbee

enough. it. Fair Thanks. Appreciate Yes.

Operator

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

Kevin McVeigh

to last And you And been – XX to is where terms a level much. conversations or months. Ted, other, one out think me let of call start out I from guess, we over higher I more so a mean, of anything demand? trying to cycle where client start you just way And want you such just kind are Thank I how are based cycle? of maybe the wanted the as are my about Just it’s possible? a with kind that the well. I or Great. to in I’m perspective? in congratulations time XX there, volatile you’d on we a figure add I of if thinking

Ted Hanson

themes we start I on. started spending trends, the guess a we’re – the trends economic And new downturn you attention just through this the that digital there’s definition, business building, kind beginning has the half much clients, It going of I a been and an and last It tell what quarter. would do been a at mean, of our second pay I there’s here cycle. that you if go. conversations year and don’t are around and by right, of economists a as and that push as will, as Well, renewed here we’ve the to event, transformation. I in definitely a of launch didn’t steady

a be ASGN think and our expect So platforms as technology of business. clients own our to relates more forward – terms and it where in there’s at guess, us digitizing importantly, of internally I I all a leap the I don’t by say there’s to way, been the could but you our cycle, business

Kevin McVeigh

as doing work post-COVID, accelerated part obviously, consulting? And And scope using the sit the on And of log? then the an staff feeder that second the consulting Maybe be so, staff you’re for in online. us question that the reflected of versus understand side log revenue log? are consulting my then, a Ted, shift you – staff the if help would the does was been or was on there’s it

Ted Hanson

that Rand, to one? So you want do take

Rand Blazer

The is catch consulting revenue didn’t the I what that. last sorry, I’m staff for part or either in log… of

Kevin McVeigh

Right.

on you a the as are, consulting feeder for revenue projects, that staff side revenue So if on or does the side? reflected of the augmentation ledger – using you’re does a get staff consulting that if

Rand Blazer

the staff client log and revenue, Staff programs. it’s log log staff on based is

separate that of work. run That’s a So of accountability the by that’s well. it’s them, program real The and outcomes. work that’s Fortune consulting in most also performance with we’re work for in And accounts. and XXX is packages side program different program as

separate the So Did we that your and two distinctly. question, very cleanly Kevin? answer

Kevin McVeigh

question staff work? It you do consulting my I source the from part of of was, log did. the But labor your to some guess

Rand Blazer

of our database and different way. for consulting would is labor We would from I way, of take – a different Yes. in qualified Kevin. a we source labor some say I our that contingent labor our say people.

with have wouldn’t will to So I teams labor assemble we and contingent away it the staff team some million the call XX leadership log. right and IT right It’s taking not we with from capability with time. skills just access our and internal out It’s own methodologies staff log. professionals there, along at and

that’s Yes, work. in contingent some labor consulting So we our model. are our deployment using

Kevin McVeigh

just, guess, don’t I That’s And then to I’m I ahead, sorry. you average go off. very mean – cut helpful.

Rand Blazer

ahead. go No,

Kevin McVeigh

average of what kind was of side just consulting to the on going engagement staffing? versus length I about say,

Rand Blazer

Ted, I’ll go It’s ahead. longer.

Okay.

Systems Create longer-term report tend you’ve general within length in and our be to some which if don’t assignments of So of projects. XX to and the XX-some we consulting, of is are Oxford lengthening influence noticed, weeks now that from separately, Circle Apex weeks, and too but

Okay.

Kevin McVeigh

Very helpful. very Thank much. you

Operator

with from question. Our comes next question line of with Truist. the proceed Please your Sommer Tobey

Tobey Sommer

in be that geared you might In potential spending initiatives, as that into if spending direction? more well are Thank cetera, the Biden’s civil budget you. request as more initial ECS, per faster infrastructure, et other substantially wondering given was expanding outlook work, I interested

Ted Hanson

thing, say I’ll George comment let Tobey, that. high-level and on So one I’ll

learning, with very kind be in those, is IT where about to funding the the funded cloud that which when to grow the that we’re happy about solutions intelligence, marketplace modernization, and doing, We’re positioned cybersecurity, data going and going to provide the is migration. we’re those are of AI machine you things think for DoD we and work

there. can a that. winds note, you the we’re the we civilian DoD comment you pleased blowing And I But high obviously, George, it mean, at agencies. as the as relates versus on remain So where with positioned are different level, really to ways

George Wilson

as Tobey. towards And you the well does agree that for I say, been saying to point the sure. as Yes, there Thanks tilt, budget, civilian Ted with as agencies. it everything FYXXXX out question, has proposed

agencies, But We there. doing flat, is expand well. it’s are And and to from we in although still, several civilian we’re that continue high. defense, will context, very the a very the historical it’s areas in

right changing and agencies pedal fund it continue technology winds But and we’re the initiatives, be to Ted are modernization some if the blow those. where put very as civilian IT more get So we well, now. happy will the of we

Tobey Sommer

of vehicles you able kind are big see do the going to short agencies on to increases? to budget And effectively compete with the notice be civil have contract that

George Wilson

we talk very do. is out the have One contracting is using best-in-class articles of fortunate to about vehicles. more there’s about more. the many several And those government We and that we’re there thing how

good to in So vehicles. our contract position we respect are with

Tobey Sommer

mix color I what contract means of can possible, what a so And growth? we sense have of or I’m existing work just new been get work, might more in kind can been versus percentage have proportion for thinking little this of If or you the get book-to-bill for on announced a the what future that of bit them quarter? recompete awards might

Ted Hanson

Sure. new The mentioned, us. continuations. category for brand of we Several put new Sandia others brand a that would job, work the more of the in that’s

call we those of some And what growth. contract are

which just work, this expansion – off. existing not and So of that’s a one an is

long-term work. we that majority work of time the new So report this at the is

Tobey Sommer

guess, and been stepping like of awards? book-to-bill quarter, and for what afoot planning in investments basis, while start has that to And changes any the I something question. on of then, on ECS been proposal kick got a there since contract on a one time, Okay. Are sluggish a the or trending time. over you, trailing you’re of The changing accelerator bid has, more I’ve period longer down one for now period got sort

George Wilson

Yes.

than you field. still we’ve We the is even less in been past. point out, for very which this backlog, middle X.X the about good had So contract I what though, mean, as it’s have a healthy very

Regarding when they the when that’s things. development the on more award and adding government and thing business resources, one the things looking timing then evolve cannot at constantly, control we business complete the

not So is in it’s say how troughs to you and down I’d due in in But a shift just way anything. that would we’re say simply these whatsoever fundamental or this will any have timing. approaching up and book-to-bill. I business development

Tobey Sommer

could debt do if kind leverage perspective, suboptimal back Where – being was, on corporate overall because sit I area on a recall sheet in I basis your fell, kind an for debt we ask Okay. more an we look those below basis. of that the I considered balance could sort think that buy of a to now – of question. times one you historical And X.X maybe From and quote if stock secured you debt you in broader situations?

Ted Hanson

We’ve I X.X-ish, been at this kind quarter of was Tobey, steady think X.XX.

the we stock the dollar the say and our we every probably to But you basically yes, in feeling was we’re we’re it think kind be expire the would buy kind the you call, X.X, sub just deployed if have saw our – renewed at materials highest on obviously. going $XXX deploy may I it few of capital, mentioned authorization our and of that to to we, script, saw we’re repurchase that same, think in is another pipeline I and in ready in of existing back it So we suboptimal. M&A. I don’t weeks. on – the say looking we’re obviously, this – saw able still when here that we to in kind million moment, the And the we opportunities that execute this you is next return

remains so shelf it. that so access the can So we on is full and ready and

Tobey Sommer

very you Thank much.

Operator

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

Surinder Thind

you. something on then be something federal provide deals. maybe within M&A the any you’re Ted, Thank the also acquisitions few opportunity bigger? or to may looking or about the of is continued targets, you segment? sounds an And space maybe tuck-in the think size you front? be Congratulations like there within a the can at may doing commercial targets the It on on quarter. color additional Are consulting close the

Ted Hanson

So thanks for the Surinder. question,

We are in pursuing opportunities both marketplaces.

opportunities either then momentum quals in to accounts. the if to in On blue really we market in add federal parts enter and where versus portfolio the industry expertise And more we good commercial new side, trying we consulting current marketplace, our capabilities, across and and can we’ve obviously, Fortune and to And efficiently the accounts, acquisition that there. XXX clients a have the augment account that’s of may current by key get deploy knowledge ribbon contract there we of bring consulting vehicles have our strategy got with organically. large

to So build obviously, on we’re that. trying

targets, So we’re strategic are looking at both open marketplaces, scale. I about and kind sub-$XXX more pursuing, things of that’s I’d when things say, we’re of the to that think million really revenue tuck-ins in although

thinking as become so about available, those we’re those well. And as obviously

Surinder Thind

equation. then That’s on of side the SG&A a Obviously, of expenses. question And good a the helpful. on guidance kind

of of mean, some long-term? you see back? those coming should where some terms will be it we of back, point structurally about of in think the, come are over that Or I In at we guys back? of of thinking savings expect realize all about the the not evolving should firm point expense I’ll call the level how you terms to expenses the going it, COVID-related expenses to this where able to of efficiencies kind most those

Ted Hanson

it to Well, always for Surinder. look, talk we’re about better I’m going on But a let in March Ed productivity, detail.

and is our be towards they today targets. our SG&A that’s the period time, we’re greater our expect that way are than more long But, margins of from long-term where march productive expenses going of so a the is back kind growth while over SG&A? business expense that March So around matriculate Ed, into we’re get near-term of And we in to these gross revenue profit are forward EBITDA them our to on growth. – a and the growth of kind some to going

Ed Pierce

Yes.

what be the expense our I margins in SG&A as course expect think were to split we up, but near-term, below over – the see to probably they our and the you’re in of going XXXX. year, we tick said,

that’s you expect. in can So near-term, the what

we’re longer-term, think from about. Ted is the benefit talking I going things to

important I grow to economies of improved is benefit think from as business the continues we’re other pretty going scale outperform. the thing that’s and to

together. things it’s So those all

Surinder Thind

very then kind sounds strength. one of are the Obviously, – guys question healthy. on demand it Understood. are seeing is where Those And clients businesses robust. the you like

bit. faster guys, a one understand than kind do some you’re truly they across You lot you trying you the color just or that in with sense you’re recovered quite a are demand the perhaps we at where to that provide industrial. this they trigger on Are board, demand, consumer about in where close a see or be of part else that And a kind pulling meaningful any point? can those services rebound seems may a of – in additional may folks? see that has you clearly but position the its whether to of conversations they mean, having just just equation, hold everybody has. of demand also little business half the recovered where I seeing outlined there not the talking the second areas it’s Is for it yet, kind

Ed Pierce

Rand I green shoots if places you I this, in I sure. mean, Yes, comment. mean I’ll there’s read for those guess, industries, Right, in Rand? let Rand,

Rand Blazer

our you call, bookings, Yes. is of economy. sectors at look And in COVID hard in the our I these, bookings, think you pipeline what there I growth COVID certainly – commented earlier that hit in – if

to I come to things the positive expect So in see future.

Surinder Thind

Thank for me. you. That’s it

Operator

question Marcon next of question. Please Robert Our W. proceed the line comes Mark your with Baird. from with

Mark Marcon

bit about that gentlemen, could talk was seeing. I wondering congratulations. the Good little dynamics if we’re of a afternoon, and some you

terms aid in be seems bill an the the given increases be it board are course because the tightness the cycle? all, of should seeing building of across market, coming should in what of like to rate labor you you, that First this over

Ted Hanson

increases, volume primarily. So we’re definitely seeing

say, higher rate bill would seeing part we’re that is of increases, right. are I We because level work, doing

But So you that would on Rand, an say? up. you’re just basis, what push seeing apples-to-apples

Rand Blazer

bill year, been increases. for about increases, steady over rate I bill on – rate we’ve a we’ve a think on been slight

Mark, So that’s for happening time, some not been now. just

Okay.

Mark Marcon

going it’s to just No, I’m wondering accelerate? if Yes.

Rand Blazer

guess, I so. hope I I would say. Yes.

yes, ahead. Okay, go

Mark Marcon

all you then of is Just that impacting there you there? about seeing you? little talent. How side, talk about can bit And ratios the a on sorts tightness what of – Okay. are the are stories staffing

Ted Hanson

So you the first out. part of your blipped question,

about… sorry, I’m something you – said said You

Mark Marcon

the how ratios and trending? they’re fill Just

Ted Hanson

Yes. Rand?

Rand Blazer

skills. are for the ratios the Fill around And we’ve Mark, IT has in really general. world a in said times in Ted positively. it’s past, a up. certain certain And as Very long applications, been just time. It’s in tight many labor market not IT

that understand we to is and So with fortunate of part forward. clients our job think our

are some positions are some take skills skill going thinking and of our areas, two. talent year in help where trends that to a develop forward to university to ready or in or be through a we of are pipeline these we’re of these So of clients Apex know trying our capable the to use training school people that create or to

Wyoming people to by the requirements where can harder proper some a planning, like now. fact there’s workers sitting you can of a have of Jersey. So counsel has time. that from use ability now helped remote and in and that proper by two availability skill The we you, location. concerned area year years and fill quick I some I places them is going Jersey, doing from for been assure our these of combination with meet actually talent our now clients, on skill here work mean New can to about Mark, enhanced that’s now or in we’re New about And things the work

of talent all the with workforce on that our that. and that’s for give them many, credit clients for university combination And training, future. things and going our been work, So of building there’s using the including a many

Mark Marcon

demand And be mean, aid? so I on picking Apex spread levels seeing basis about an bill things think that Systems, we apples-for-apples particularly and when the pay within an you’re up, should like with that

Rand Blazer

skill affect accounts. years, I so things bill the different over you think spread. of clients that kinds know the worker, of this lot go Mark, and pay The level of a there’s the ahead. Ted, I

industry, at higher or gross may one margin in industry. another example, for So the high be least bill than spread pay

work in if our of will skill flow the on different margins float, will. for depending industries you our types, So different

Systems, you’ve see good If Apex say, past the looked pretty margins that. just let’s you’ll years, our over at slight in for to increases steadiness

consulting intelligence and different industries margin skills. hot which the affect. skills some a But us end giving than some skills are buying can are obviously, is the application Infrastructure and of it helping skills, or bit, Now on what a depending boost. gross carry artificial higher

bill It’s of of business It’s it’s think parts not I times. spread. around different more pay growing our a our at So flow different work. around negotiations

just would for rate past now. increases. speaking, for I generally And increases had seen been And out. first us increases. pay bill that bill We’ve positive we’ve the guess some over We’ve I So point X.X say, pay good some time a net then years. it’s overall, had

Mark Marcon

rapid going Great. is comps. up up And consulting I faster margins just and side end of with year, figure relative then the gross growth that with trying lower a the the comps to would I on just potentially growing being and having picking commercial easy slightly also to terms over sense mean, the imagine rate. I’m is balance up reconcile to trying the to my the and part at in pick trough easy firms out? the off come we should that of commentary

Ted Hanson

said. I you that. Yes. would with agree I say what wouldn’t

very business. Now of our a placement is small remember, permanent part

that out see you that same trends I an on much call the in you’ve in wouldn’t seeing influencer. here And seen consistent big I to ledger. on of the just pretty now. a all been perm that of you this influencer things kind expect So as side that’s of But side placement numbers that our not really going be commercial see would margins the and you’ve as our of

Mark Marcon

then Okay, And one. last one great.

contract, the that much could will Sandia that congrats on couple that you that split? there over more many really of seems opportunities next the of are And that, be I end up that large. How mean, On years? how within getting like

Ted Hanson

one? George, to that you take want

George Wilson

Yes, sure.

So getting. that the numbers on book, we’re we that’s reported our amount the

the not total that’s Okay, contract.

venture. joint a We’re a subcontractor to

that’s So revenue. our

there’ll some expect We expansion. be that

whole out the area customer new of for a terms in excited market and about opportunity We’re there the us. very

Mark Marcon

again. Thanks,

George Wilson

Okay.

Operator

call to questions queue. Ted are the I’d Hanson, over further in There hand CEO, for the like closing to no back remarks.

Ted Hanson

Well, in you another great for with all talk for the of want their again, I forward And the here Great. on call, performance for being I to performance to QX. being our team to thank this quarter. everyone XX about days look our

Operator

this Ladies conclude teleconference. and you for Thank your does gentlemen, participation. today’s

at disconnect have this may wonderful You lines and day. a time, your

ASGN (ASGN) 29 Apr 212021 Q1 Earnings call transcript