Earnings call transcript Q1 2023

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Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss BBSI's financial results for the first quarter ended March 31, 2023.

Joining us today are BBSI's President and CEO, Mr. Gary Kramer; and the company's CFO, Mr. Anthony Harris.

Following their remarks, we will open the call for your questions.

please the of Securities meaning Act XXXX. further, harbor company's Litigation go of within statement of we take the note safe Reform Before the Private cautions statements. The regarding provides important statement forward-looking today's conference The company's remarks call include forward-looking will statements. during presented other fact to of These number not uncertainties. and subject does information along reflect that statements a risks with historical are Actual statements. results these by forward-looking may differ implied materially from those and the Exchange the actual company's those for that with recent company's to quarterly the by to and filed uncertainties and or statements. refer expressed about Please the results information release Securities Commission more and from the reports annual earnings implied forward-looking to risks differ cause could

XXXX, to I link Eastern will at that p.m. as www.bbsi.com. available replay starting Time the remind tonight. call available A X, today's website also in this well the at everyone via would as be available on webcast X:XX for like release be press will provided June replay through company's

like I'd Executive Kramer. sir. over ahead, to President Mr. go Please the Now of call BBSI, Officer and Gary Chief turn the to

Gary Kramer

or results. morning focused successfully strong year good long-term and start executed I'm our the everyone with you for and Good laser joining had the to you. Thank and pleased short term very a We thank were call. our We afternoon, on and objectives.

produced Our financial results QX profitability. record year we are our and with in line projections full

Moving financial our to results.

prior no these would in of year few regional During the This direct bank and troubled I the the we for a billings clients nonevent at quarter to banks quarter. over our gross to X% BBSI. essence was exposure state our like increased that facilities. have very

funnel continue exceeded QX. our strategies I growth am sales to again our stack, of that as the WSE the say our pleased our various to and client expectations on execute once quarter controllable the expectations top we exceeded and to in increase our Regarding we in

larger been and the and average we clients of stack technology the the size that This running that to and we size with trend are licenses. clients able than off. national favorably is support upgraded the that previously progress discussed larger PEO average that sell are of we've Next our to clients adding are continues

I our the continues client remain pre-pandemic than levels. stronger do with the quarter year-over-year clients. Regarding like that the our work teams The to we results in all value was and year quarter new retention that controllable is what added of from our refer prior to we better to net as employees worksite I'd these runoff, X,XXX efforts to clients attribute provide. that our growth and to or the than approximately

could Our operations. mix believed same of forecasted our sales we that factors. amount California I was we of last colossal weather, a softer is which were and mentioned quarter couple a than a receiving clients customer impact

finished California clients reduced these construction to Northern Our reduced landscaping and in clients which and industries and than more forecasted. at positive their offset we weakness sales positive in California than We Northern staff same worked. unable Northern industries overtime affected their other geography, less conditions specific to work moderated by and California, the customer employees, net reduced were the the had but we worksite were accordingly. these in every in severely. a They hours In our quarter

partially growing clients and plan This employees the was for offset To on our by slower retained summarize, than anticipated. X% was business. worksite as we grew more our which sold quarter by we

our staffing Moving to operations.

some and Anthony decrease we varies our seeing Our to for anticipated. give and by was will XX% staffing This supply, lower regional over including than of in year demand, markets. what declined prior geography. many factors combination limited a the but is color quarter we're business not weather

the updates. operational field to Moving

of entering progress asset-light model. very our are pleased We markets our with new with

achieving largely and well new doing are managers and of referral their adding goals clients partners. servicing and development new market Our

first graduated Our XX all classes in and their the in markets X respective have selling quarter. were first

next to We our QX. of and selling have in training plan start the hired X in their Class with QX they start

than far are expected return internal better exceeding results Our and hurdle rate. we our thus are

continue Regarding our our service execute product on health Benefits, update, offering. the we new to BBSI of and sales insurance

for As enrollment a select of refresher clients soft season. a a existing we launch to in rolled out limited number markets X/X/XX the

to was to our and and focus our intent Our new California shift craft then prospects. to perfect

benefits March existing in we as every as soft was new launch Our BBSI to market in started successful well and selling clients. prospects

clients, based and additional total our Since clients ancillary California. medical approximately of plans. are last to brings successfully sold to XX various This XXX year-to-date have on products in earnings XX which our we call, our

our sold products in. More we importantly, in that have every operate geography successfully proven we

I'd take minute some to BBSI of a Benefits. successes and like discuss

industries. to our have We to into able been take been to a to able clients, also new which is We've client great sell distribution existing channels and product thing. new this

benefits distribution aligns approximately new partners and We increase to throughout onboarded new with velocity channels, in the we is the new partners This that BBSI in brokers. added and quantity referral quarter. quarter Benefits the products of expect the our well the Regarding benefit referral year. XX% XX we

compensation diversification. has and product will balance distribution better channel for to Our better brokers and casualty property because skewed this heavily of workers' allow and product been our new

in new offering. healthcare adding new consulting, early us to of successes for have services. the financial with clients collar of our to the and industries penetrate company in extremely is with lack client previously Regarding were industries had benefits challenging a The of work more These industries, excited we markets. these white all

remainder view our quarters exceeded our to great this growth We've consecutive controllable April. shift our of and expectations the in trend continued QX to into like for momentum, of year. had the I'd Next

Benefits BBSI all be road in to servicing and now regarding and selling are continue ahead. We we markets the optimistic

the remarks. Now prepared for over call Anthony to to I'm turn going his

Anthony Harris

strong more the from quarter PEO client in growth to Thanks our Gary employees QX finished controllable year with adds hello, quarter. achieving we as QX report the in financial and added I'm with than everyone. income and net results we strong prior pleased as highest a worksite

Our continued we in positive share With to billion in $X.XX $X.XX year overall prior leverage, QX the achieved cents QX X% per quarter. 'XX. increased gross diluted XXXX of earnings earnings compared $X.XX versus billings billion to in $X.XX

Looking over prior at PEO QX our X.X% revenues quarter $X.X more over closely the year while $XX million. to staffing billion, increased to prior billings results, gross XX% the decreased

expectations. As Gary quarter, for clients which by our partially once Overall, client noted, QX gross existing was our was increase billings new slower from This our net in line base. than in expected the offset hiring the by included in growth quarter. PEO X% customer stronger in grew WSE's again with

decline Northern in for accounted of X/X in California With our slowdown approximately total respect the to client hiring. hiring,

of hours poor in hiring to in California to weather have but be last April year. We seen increase worked continue than the since pace we expect going forward client slower the subsided

Client continue wage will to of rates remainder quarter, the have remained billing which and growth XXXX. for resilient, increased in drive even the

However, WSE Average as billing decreased per average XX%. X% previously year-over-year, less and mentioned, WSE decreased was our in time fewer the over by impacted quarter. per and hours hours overtime worked

As for a billing result X% the our than total WSE for less average quarter. increased

grew quarter, California bonuses declined by normalized Southern the total California growth by grew Mountain X%. Northwest the gross onetime when States X%. PEO prior The first for X% year prior versus billings by Coast XX%, Pacific increased East And large at Northern in in grew region XX%, Looking year.

our compare demand staffing we staffing strong to the closely revenues, Looking that toughest anticipated would decline first the QX in for at prior due quarter. in more year be staffing

and low. rates Reviewing in client remain more to moved labor by orders region challenge customers the unemployment labor orders sell to primary our be their as Northwest States larger Pacific in-house. continues In Mountain the several availability decreased of of have the

Our primarily by economic California regions and were due decreases softening in impacted to conditions. weather demand

challenges we an clients. in services Overall, revenues additional XX our PEO decline We the in year-over-year economy. expect to quarter due roll continue continue we placed PEO employees the to the out to to staffing recruiting and of ongoing

slower be than should the QX the So decrease. decline rate a at

to Moving results. gross our margin

Our of favorable $X.X expense trend pricing claim line And in quarter from favorable savings with remained while compensation margin the the liabilities of plan. reduction prior first year actuarially trends. cost continues has workers' quarter Workers' gross included determined million. continues our expense to estimated to frequency with favorably a in benefit from compensation lower continued

our future covered by downside development. now our risk reminder, claim for primarily a fully with program adverse no to is BBSI As insured compensation exposure workers'

However, BBSI can still development periods. claim participate future in in the favorable

continued for quarter in BBSI earnings Benefits efforts. result SG&A higher the management our prior increases line associated savings is The quarters. expenses. cost operating included launch is to first the and earnings QX than leverage with driven by by plan largely Turning of with for offset

XXXX, term line remainder to the of in expect with favorable at growth and to long Looking SG&A XXXX anticipate slower targets. continue earnings leverage in continue our we

assets. Moving invested to our

$XXX,XXX from up the investment earn $X.X in prior portfolios million first quarter, Our year. the

continues Our and to and in book AA. of the up with is average X.X% years investment prior portfolio X.X be conservatively X.X% managed average an quarter, yield quality from duration of our

to sharing XX, payments. balance Turning at quarterly primarily XX. due to the to million sheet. $XXX compared investments March of cash decrease and had timing employee the at The of We is million December unrestricted year-end $XXX profit tax

with BBSI is interest a do we rates. not incur As increased expense any reminder, debt higher associated completely free and

quarter. reaffirmed $XX share. dividends an quarter paid $X repurchased million for million of in share The in price per the million also the under Board's dividend of company its program the at following Continuing BBSI $XX.XX first repurchase quarter and shares average $X.X the in

our outlook. to Turning

for remain with consistent XXXX expectations Our outlook. prior our

gross We expect and increase X% to to continue billings between X%.

X%. X% to average increase between expect and We WSE

the and between we We remain percentage effective of be expect to billings our X.X% and XX%. margin expect X.XX% rate between gross and annual to tax XX% at gross

back I questions. operator call will for now turn the the to

Operator

[Operator Instructions].

comes Our of MKM. ROTH Jeff Martin from first question

Jeffrey Martin

the or PEO decision you a that throughout the to then making other factors delayed the give of market? March? to And of side you may tied any be within economic kind the California sector on month Did unique Could California uncertainty see market? any ripples sense banking of little

Gary Kramer

went nonevent the in that very us. direct we then we for slowdown regarding was have exposure the of clients a of our April. a don't situation and much all looked any exposure. and indirect at any we would itself have bank And We much I had of and because say it, banking didn't and through accounts pretty strong

that Our we've as transacting. counts some we XXXX, in business our think something went time, momentum quite our Aprils April since whatever had slowdown of continued April like best unit and best any Didn't back actually we it as regarding our see far was in in April one I new added. probably

had We do starting industry, California to Cal, specifically see mentioned an wet it's see our Northern can't slowdown, we're and in that it our construction business. did they there, the prepared and that on we And into April. out in come mentioned effect that the If we but and weather remarks, right? back

run. a Remember, of when we couple have payroll we're behind weeks our

real not see payrolls in But April, It's Northern yet. data specifically perfect see time. we in can't some in we those So Cal bounce back did industries.

Jeffrey Martin

Okay. strength And to you coming competitors with your Are renewing quarter? pricing comment out one strong think new then pricing I there? could on of respect pricing the they you said unexpectedly of saw and clients? seeing

Gary Kramer

craft health our I learning specifically, would in still say the that one. insurance, for we're

just I'll and So charge comp our to we talk clients. the admin, the ultimately, specifically workers'

So bottom do feeling. comp. the able to at we've is we're being other has a That that offset the been our hold to bouncing to bit market workers' little on been costs been the admin able the hold we've that. pretty And able to and well rate then on inflationary even rate increase kind thing of

some up, the going push months. have we've the over if are we that had costs strategy So with over we doing try and these success to to a XX last that clients, of our costs

Jeffrey Martin

batting take terms your new Great. at as Do expect Or in more of What's you to offering. BBSI And it rate? question are selling respect of looking then you the come in that that pretty you have high of a with to of from my expectation kind clients? terms is probably existing to Benefits final clients? average

Gary Kramer

Yes.

it's to to us. know I like them plan is them going a fits, value next They if good underwriting sell-through, to think be clients, clients us, we the If that is right? help for months our administration, it's the This product us. say, with be better existing going X I'll over design. can help they So going the competitive. our with

clients the to X able ads the for through existing So are now sell-through we going in clients. get But the we to to new be this we seeing our we're is where next sell most what months. think

typically PEO that managers, we're on my we've to the like I mentioned in So that before, clients would companies we're remarks that, adding different ability right? that because had benefits. a We're with law hedge are seeing collar firms, go adding. they that funds, never white bring money had

industries them good on we're to new rate these white-collar and bringing product. having on Now our on, new able bring with we're success

Operator

Barrington is Colicchio The Research. of Vincent from next question

Vincent Colicchio

If versus how doing California, we prior trends hiring set is aside the quarter? client

Gary Kramer

quarter. year a clients prior prior Cal, employees. Northern as as actually we give slower would as our example into than were It's that balance. the then Cal, about slower is we negative you negative, got pulled far use And than It's quarter. worksite back But X,XXX Southern I as

Southern X,XXX. by about Cal, positive we were

we're continued add Southern Cal predominantly Cal. and industries and weather-related. to Northern worksite So clients share, our for was to But every in, except added almost it across were those board, Cal that every industry the due employees, region Northern

Vincent Colicchio

quarter? side, platform out is your -- lead And is your digital in marketing meet the traditional that like generation that it The sounds did building nicely. expectations

Gary Kramer

say what in product fits that target we're can calling Because is to quarterly it meets last where well. we available X, and which What towards done new and benefits using we're talked that partners. brokers there. other to trying taken them based because And reporting a that to good target now now were is success calls. out And learned our find year. we're non-traditionals. nothing to TAM had -- would right? employee going a where that That's strategy question year, that we we our for we some I on did -- We We very my total expectations. P&C a this brokers, But predominantly we as had have about was they sell trying it last market loaded referral ever and we've

we now have the on a for referral targeted partners So approach side. health and more life

success those the pretty So think that. good but had we're feeling throughout started I We bringing far, all good at in about We've that to get so going QX. year. better

Vincent Colicchio

prepared are last I your your had most classes any through in setbacks third since you performing stated first been your incremental within you that said. there And of asset-light expectations, think remarks Has quarter?

Gary Kramer

I'm No. XXX-plus about pipeline. year, group, at potential of of well. doing new WSEs they in We're for and big the of million now XX out added clients reports revenue a pipeline looking we've got $XXX-plus the that

real Class well going selling we're there, the intent these getting now next QX. And comfortable to launching real already why that's that with success. and X doing through they're hired folks start in good with training of So we've the the

Vincent Colicchio

slowing other changes economy? any And in lastly, or any sales cycles indications of a

Gary Kramer

controllable No. us or weather only when a I little home I'm And more sell. peculiar thing We've about that more We've to above our the is machine, the I the but talked a thing I and bit feel our sell product mean our really to weather, I like for quarter. was, executing the it people got in plan. optimistic about the would growth. say, sales been just we was got

Operator

Moore of next is The question Chris from CJ Securities.

Christopher Moore

Is couple will about just the Obviously, little positive of over I workers' bit some get last increasingly a de-risked start years. assume the that at one-time the talk to point comp workers' time, significantly fair been it adjustments in to smaller. you've model. So want comp to

Gary Kramer

on that this going to our our enter we started setting way good to future back into get 'XX, transactions them up the these scheduled say, we we're that prospective we when is I the ourselves so that would structured think prospective so have favorability underwriting, Chris, in we So forward so these, would about we program. share in in continue right? we that

return So an return as an as of And organization. is goal to premium organization back provisions much have there. premium we our try in get that as

future and have crystal in and the things our continue it we'll fully program. benefits. forward, clear going if the as to is, ball these we're hope work all as I If come continues through So going going you underwriting to return is potentially have out forward, about think insured premiums

Christopher Moore

That's filled it. gap there's kind of to it is care looking at filling gap, health be a Got And that I like helpful. but incremental earnings seem doesn't necessarily. was

standpoint. the when benefits XX% thinking and a of feel that fair modestly I Just then Is look that expectations we is a from would on be at impactful, revenue way benefit an really it? from kind was XX% to side,

Gary Kramer

because I'm California big far. good end going into had hedge started know, -- selling the you just have we April. of March success we literally to as here we and in California a presence, We've so at

we get think selling clients selling is call brought the XX your your really the which and and said you predominant for season on we're and so idea selling season, I is health craft to I here on far, so reps on get still those, a learn X And weeks, selling for ready X/X season. X/X just it, capitalize care. can that the

all it's to to or material good do dependent really we upon not whether enough you have estimate give data And of in California. on I because is say this don't be well yet. I a going just how that

think cover year. this 'XX. we and profit for going business on about cover going as the bring revenue expenses the is So our we things as in far this, we're as freight to We're bringing probably the to

For belt. 'XX, won't a profitable. until much just is we of know little it that going we is could to -- it's and profit. we going to going more just that be depending a going be, get profit question -- upon question how is It's -- experience how to do, under The our add it's

Christopher Moore

I it. the there And significant BBSI impact know for some that earnings any are maturity? guess could to and the question portfolio these is if That's the losses held Got investments had helpful. on losses investments. just where scenario last has maybe unrealized is, I investment one on me. restricted

Anthony Harris

the is to that answer right. And really no,

need There's not account. a liquidate held these So primarily we trust scenario would investments. are those our to in where

X.X noted, our is we years. duration as So average

those long to and maturity. out value. par amortize So not fully time We're let duration, long to not content run it's

no any of realize to So losses. transaction those required forced that kind risk we of

Gary Kramer

depositors There's and are in right? Yes. of you a there get to is These bank on payment claims no a to modify. very hard where it's can run not the day, workers' -- comp workers' comp a when support curve

a the So we bank. on run let age. don't about them have worry to can We

Operator

Jeff The MKM. next question of is Martin ROTH from

Jeffrey Martin

Wanted movement come that rates often rates, revenue the payroll and the the don't to of for fall pseudo states the prior is the for seeing Anthony pseudo booking to into by payroll, you respect understanding business things any renewing determined to with year, business line. taxes, there? year. are out My Are cost those ask you

if curious of specifically on just So what within tax also pseudo you're seeing, anything else terms payroll in anything, that's around? and trends, rates, moving the then line

Anthony Harris

It's we've seen our of cost of as in well. year our going a And overall time. sales now great multiyear Seeing we've over again decreasing, that right, market And a that this question. trend seen down.

continue workers' see to we comp costs So our down. go

pseudo rates or various down overall our Our come in states. have across flat

rate. tax favorable seeing again, once So

piece one in passthrough go negotiated rates tax for that did country, the was there to real time. in an that it reduction that our our in including the pseudo with incremental was up, a but The California, obviously credit we've clients states handful news was was of

So no impact to favorable margins from that. trends. But cost overall,

Jeffrey Martin

And a -- last bought then $XX million was back well, stock amount the the of since authorization approved Board. your by you in considerable

continue your particularly the $XX million got stock pursue You to share where is? left. propensity with repurchases, it trading What's to

Anthony Harris

at. Well, that's and there's stock a lot look trading of there, definitely again, it we the something value where is,

more we've our fundamentals So been and never company. about have better. been Gary optimistic the our as never controllable And growth noted, really

program. from opportunity share to perspective, repurchase continue So it's our a the great

Jeffrey Martin

BBSI look And offering does still benefits there? looking continue potential to M&A need to are then, at acquisitions the Kramer, or negate the out on you side, the

Gary Kramer

were What don't But shifted are still we're still now to that profile. a Good the built We own we PEO for question. look that offering specific need had if insurance more -- for tech in in we're are down. looking would of and looking We're for active say seeing for still part respect geographies? our some. PEOs it getting an you that looking at We health little looking a makes as has can is platform. we come market. I we out. not. market that And sense, the We're a now our to tell can rational actively support still IT we're valuations. We're -- market of looking. the that I products

to we to what be valuations We're irrational the and it these find where -- was it's these were, think or it we we we dry we apprehensive to a why at lines come deploy kind were seeing buyer it. But market that's was year to if ago, reasonable a were some something X that down got up ready of when right. do before looking that's powder

Jeffrey Martin

standpoint, some Okay. BBSI years years in And X more X then I collar, respect wanted standpoint, client side and mix footprint, from gray ask, collar and the of where out of geography more more here, for white markets time player do we since you PEO nationwide a a from we a if geographic have to a the with versus look to see competing lot in being blue-collar white market?

Gary Kramer

the table, Yes. say right, talk inorganic look leave just profile if I somebody require and depending looks, would let's the can how inorganic skew really they upon what off Because would like. your right? we the just organic

in training currently now. X So We that our in are got XX have had that heavily investing are selling. market development We've we managers, been right?

were in that's not selling years markets So that X we XX ago.

state space go use businesses the ever years the want if now, of small North know that people And every years could X could of because lot in And from realistically white you have out to there. there's a think there's states in Alaska say we or X don't I if every where I can we of from now, don't the support. of heavy Dakota, a -- going be to BBSI to but majority population

they're on demonstrated I typically managers, benefits new So these product. also we're just half buying then that the new and say So now any are we're white that right? BBSI the our geography, in product. also can successful markets to core the be of development collar, market product with bringing really want in businesses these And we've

markets. new figure years. it's more selling So time more how the out white markets. And X over of be to We're a the new benefits in to shifts going balance we're collar matter just in selling that

Jeffrey Martin

Okay. one more And I could. then if

In -- -- terms platform? enhanced meaningful white-collar of enhance enhance part is plan an to to demanding the I but thoughts know that know upgraded is a lot is that of continue platform, of platform. you it technology curious of it upgrade, market longer-term understanding was a technology my the more What to there. just and your the

Gary Kramer

That's you're I Yes. team. a blue, white, for IT gray. us. We've committed -- don't are very care we wants good Everybody got a if a every our that to very better better partner We tech, And offshore tech. right? out building development does use good

shop, better a software term, of have right? we a have a monthly lack we And cadence. For become

We quarterly when we cadence, have to ingest. projects and have cadence larger we longer-term that have a a for then have we

the have So on sharing road not and and clear where -- map. pretty I are a going the road there. the know on we we have plan product that do product our We're map, and we're we have what's folks externally, for get year, would we're that to that say, but next --

Operator

is Tieton question next Dezellem The from of Capital. Bill

William Dezellem

and first to the wanting please wage what gains really, of about the -- talk and rates relative seeing about please? wage how Great of And -- and quarter. you would question wage inflation level, ultimately, of And kind you the to pace comes concerned to you're the growth, Fed are is the whole the at economy seeing? spirit that question raising

Gary Kramer

growth consistent Difficulty]. now that some we've Bill, for [Technical wage time, seen really Yes. and hasn't

those it's that continues average ahead And and our So through very you look over even wage last X% year-over-year, you're national than at usually been and resilient. QX. or internal statistics, if quarter, be to rates case statistics actually seeing statistics, the are a this higher the national little

So sales we're resilient. those seeing are the that softness worked. we Really that was about component customer on hours same the in talked wages the

that but X% that will temporary the more wages a be hours those worked to are So really QX. are back, that But comes driver in about and was offset hours lower the that talked resilient growth. of we by continue worked again,

William Dezellem

that Coast? you see were useful weather the And worked, West hampered hours trends the or of did any outside interesting

Gary Kramer

of in in regions. Northern see said reduced of -- a said, terms where focused. are all That lot So in did concentration the what I the we overtime That's statistics California.

or was well definitely softening something of really that a others little there. of leading a that So is in have caution the as industry bit out little a there bit indicator, seen macroeconomic

data will is, I be guess, that that the there So one point relevant.

William Dezellem

And into to staffing, just you to philosophically in business the opening remarks. then relative step it know how to talk of relative bit I you a Would staffing you see just strategy talked and and the back the about over it course time. fitting

Gary Kramer

I have. say now on have and we Yes. staffing more attention ever focus would than we

We dedicated line. in have product leading folks that are the

investing to in been have We side. and staffing the the on support IT onboarding the applicant tracking the app on

the to business. committed we're So

PEOs. our thing so as another continue still right? clients we find #X employees The this and quarter we probably to that to expect hire, We had we do from it's of is I good the can't for they that well. new mean far, have year product grow recruiting that we hear is that to

still this is But openings in is the in economy. still is job openings, that knows fundamentally, everybody history. to now, recession Everybody There's journal. the as advertised twice trying unemployed more still reads most Everybody many people this job hire. right,

our modified returns We on. I look what good a done call are subsided is it's hard reasons, And our profitable taken of folks having staffing, right, really, staffing and down right? geography. making by started down, it But we as people. mentioned our So the our couple ROI businesses strategy. we've at that weren't we at is different think That Anthony of for a all. has trouble And not finding staffing

accounts that profitability our more So recruiters PEO we on for to made profitable. decisions our that the we know recruiting to get going off we're business We deploy certain so can other a that's in clients. have

resources. and diverting making we've So been choices

this of going going top some because and saying, at intentional, through harder staffing every you're starting months, of QX more branch. is now, X against in driving it's been 'XX, staffing And to profitable and compare. look the which for line in see profitability we've branch the every better we intentional is QX that does to is this we're the and last about But

William Dezellem

reconcile you which that overtime like bit from conflict they of X Would people. be is but clients other. seem with hear each Those the enough could down, one is please they the hire is #X in a can't thing, little maybe issue yet you

Gary Kramer

in time you're because they are. to not where folks the right, we overtime, have typically and upon choice the prefer a to the not think wages I doing general, pay pay half would if overtime, depending

try for to manage paying excessive regular to time on their it's to what's overtime. be business. through have than wages on they And So folks always best more better

just So bit was, down. pent-up gave still still time of as it We're are -- -- clients Southern I'll we're had say down, growing. coming growing right? at rate it's outside little our hired we're the X,XXX it's they of stat a still hired we're clients also seeing on we our over over California, those, but of general, a in not seeing Calgary still right? employees, not So And pullback you you growing. but just It's was but time of of as now still COVID. was as it at compared voluminous a it's ton -- to demand our 'XX, we're Think than still it then, lower from -- 'XX, what

William Dezellem

That's helpful.

in is to improved level place. that imply is terms hiring so slightly. that And the pain that hire, still not of #X problem of taking but maybe hire Does to able given has the there ability

that the they're they there. employees so would like, getting fully not of they not that more are And just

Gary Kramer

like It's tough by to right, answer. vary It's going state, by our markets. one a to Utah geography,

example. business, the have to staffing still. unemployment have may our Utah think use lowest in the country for I I'll

a have real because workforce. those available there's time just We there's no in nobody tough -- markets filling

brush depending it's real the the for a paint what hard what industry geography So to the country, whole or upon is. real

William Dezellem

Great. fair point. That's a additional question very then. One

the certainly You a The better very had was weather on for good mentioned Coast. you. that April West month been has

relative So reported terms quarter it's presumably, terms or underlying viewed the to in how externally? your see of the in we an strength, should in second of quarter business acceleration first

Gary Kramer

is which unit workers Northern through clients feel a they then yet, mean clients, I April added but in to to is April month a worksite our us. closed and retained. going coming back strong positive. was very our going for be employees Yes. some we And we April counts, added It's we in look we we're -- right, the not as that and Cal, get

and So And the this where and about. get going -- to future optimistic April the can optimistic control. be controllable feel really we than is is about we we what think feel better back March. to we feel what I mean we about we

William Dezellem

implications opening your you more, is helpful. actually on persistency through referenced better to was it I'm and has remarks, year. in in believe going your I Would That's the leading persistency last was you improvement that sneak than ultimately, walk that that one which to what profitability?

Gary Kramer

Yes.

was we retention, retention that client we client QX our this we than QX client got the 'XX Our I quarter did bigger better runoff stat in than gave and -- base, had a 'XX. less in

prior year, the base. than runoff clients bigger we less did on against run we a had and that's So off, less WSEs

So we feel about good real that.

do and pandemic. the with clients our there there the making help run clients we to every And to in have out there and much we sure through service has That's needed visiting of their long we're memory day we and right? And the hopefully, out. we're hopefully helping our them when we're them were making that -- what got there how a bring us there and today. that clients, the new We're for we still we're they we field practicing well sure did our our how to products the clients, business. discipline, core out value And with that help

I and us. stay why they feel with for a product them, we've real that's valuable viable, like So got

William Dezellem

quarter. again a Congratulations great on

Operator

this Thank for our gentlemen, and remarks. session. some I like to conversation that you. And call on the Ladies concludes Mr. Kramer now back to over turn would closing

Gary Kramer

in but your feel used call. my words just for want I support, I and thank that this BBSI like Sure. for dialing thank to the for on and great all quarter, you, I one, professionals all everybody, our concludes a

Barrett Business Services (BBSI) 3 May 232023 Q1 Earnings call transcript