TrueBlue, Inc. Q3 FY2022 Earnings Call

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the TrueBlue Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Derrek Gafford, Chief Financial Officer, you may begin your conference.

Good afternoon, everyone, and thank you for joining today's call. I'm joined by our Chief Executive Officer, Steve Cooper. Before we begin, I want to remind everyone that today's call and slide presentation contain forward-looking statements, all of which are subject to risks and uncertainties, and we assume no obligation to update or revise any forward-looking statements. These risks and uncertainties, some of which are described in today's press release and in our SEC filings, could cause actual results to differ materially from those in our forward-looking statements. We use non-GAAP measures when presenting our financial results. We encourage you to review the non-GAAP reconciliations in today's earnings release or at trueblue.com under the Investor Relations section for a complete understanding of these terms and their purpose. Any comparisons made today are based on a comparison to the same period in the prior year, unless otherwise stated. Lastly, we will be providing a copy of our prepared remarks on our website at the conclusion of today's call and a full transcript and audio replay will also be available soon after the call. Okay, let's now turn the call over to Steve.

Thank you, Derrek, and welcome everyone to today’s call. Overall, revenue was $576 million or roughly flat compared to Q3 2021. At PeopleReady demand softened, yet we filled a higher proportion of jobs as worker supply continued to improve. PeopleScout results were solid as hiring volumes at our clients were strong, while PeopleManagement trends held steady. Operating income and margin were higher due to historically wide spreads between bill and pay rates as the labor market remained tight. PeopleReady revenue for the quarter was down 4%. While demand slowed, worker supply improved leading to an increase in our job order fill rates. PeopleReady is our largest segment representing 57% of total trailing 12-month revenue and 57% of total segment profit. PeopleReady is a leading provider of on-demand labor and skilled trades in the North American industrial staffing market. We service our clients via a national footprint of physical branch locations supported by our JobStack mobile app. PeopleScout revenue was up 10% compared to a year ago. Demand for RPO services remained strong at existing and new clients due to the high number of job openings. Our highest margin segment, PeopleScout, represents 14% of total trailing 12-month revenue and 33% of our total segment profit. PeopleScout is a global leader in filling permanent positions through our recruitment process outsourcing services. Turning to our third segment, PeopleManagement, revenue growth remained steady, up 4%. Commercial driver services contributed the bulk of the year-over-year expansion. PeopleManagement represents 29% of total trailing 12-month revenue and 10% of total segment profit. PeopleManagement provides onsite industrial staffing and commercial driver services in North America. The essence of a typical PeopleManagement engagement is supplying an outsourced workforce that involves multiyear, multimillion dollar onsite or driver relationships. I will now shift the discussion to our strategies before ending with additional views on the current environment. At PeopleReady, a key strategy is to use digitalization to supplement our nationwide branch footprint, gain market share, and improve efficiency. The United States temporary day labor market is highly fragmented with the bulk of the market made up of smaller companies in the industrial staffing segment where PeopleReady competes. These smaller, more regional companies are typically not able to invest in digital applications, like our JobStack app. JobStack provides a unique user experience for our associates and clients, allowing both groups to connect at any time. The application is used by over 90% of our associates and has over 30,000 client users. The majority of our competitors also lack our expansive branch footprint, which spans across most major markets in the United States. This combination is what makes us a leading provider within the on-demand industrial staffing market. We are able to service customers that need a nationwide one-stop shop in addition to taking care of local clients. JobStack makes it easier for both national accounts and local accounts to access the labor they need when they need it, without all the friction involved in a branch-based business alone. Turning to PeopleScout. Our strategy leverages our strong brand reputation to capture opportunities in a growing industry. Companies today are confronted by people shortages. Our ability to hire large volumes of people enables us to meet the demand for existing clients and has positioned us to capture new clients for long and short-term engagements. As we move forward, we will continue to expand our product offerings to meet the growing needs of our clients in helping them source, onboard, and effectively manage their employees. For PeopleManagement, our strategy is centered around operational execution and geographic expansion. Improving our customer and associate experience is mission number one. We have made targeted investments in these areas to enhance the service levels, in an effort to improve retention. Turning to geographic expansion, within the onsite offering, our business development activities are targeting local and underserved markets, specifically in the western part of the United States. Meanwhile, we are focused on increasing market share in the eastern part of the country with the commercial trucking business. With this being my first full quarter back as CEO, I wanted to provide you all with my assessment of the business and our main priorities. First, I continue to be impressed with our leaders and our people. I have had the opportunity to re-engage with all facets of the company. The feedback I have received about the business has been consistent, demand is softening and labor is tight. The uncertainty surrounding the economy is causing some buyers to pause spending, which is impacting our business in different ways as Derrek will discuss later. However, with over 10 million job openings throughout the United States, many lower paid, blue-collar jobs where we specialize, this implies the labor market will remain tight for some time. Our multitude of services and ability to connect people with work has the team focused and excited about our growth prospects. People are our number one priority. We know our clients and the industries they serve. The long-term relationships our teams have developed are what makes us great. In times of uncertainty, committing to our employees is ever so important. The tight labor market gives people options. As such, we have doubled down our focus on retaining and developing our teams. This will require us to be diligent about maintaining the appropriate level of staffing needs with the right positions and in the right locations supplemented with training and resources to ensure success. The result is a client-first mentality defined by excellent customer service and superior delivery. Our goal is to be ready to bounce back quickly when economic uncertainty eases, and it’s our people who will make this possible. This leads me to our next priority, technology. To further enable our people, serve existing clients, and reach new markets, we recognize the importance technology plays. At PeopleScout, we have a differentiated tool in Affinix to service our RPO clients. Over the past year within PeopleReady, we have been on a journey to update the underlying technology platform. The goal of the transformation is to reduce process friction, which has a cascading effect. Freeing up time enhances employee productivity and allows for more interaction with customers. It also increases the scalability of our business, lowering the cost to deliver our services. When paired with JobStack, we create differentiation and gain a competitive advantage in the markets we service. Each of our businesses are poised to grow market share, especially within our niche and high-margin product offerings. At PeopleReady and PeopleManagement, the opportunity is to accelerate market expansion mainly in the eastern half of the United States within skilled trades and commercial trucking services. These investments pay back quickly and have a proven track record producing high double-digit returns. We also have a lot of green space to grow PeopleReady’s renewable energy presence. Recently, the Biden Administration passed the Inflation Reduction Act, which provides developers access to tax credits to fund new solar projects. Our long-term client relationships combined with the ability to scale quickly positions us strongly to capture market share. Finally, at PeopleScout, the sky is the limit for our highest margin business. We see big potential to not only enter fast-growing verticals, such as life sciences and technology, but also find ways to grow our geographic footprint by expanding relationships with our existing client base. We find ourselves in a unique position with this current downturn. Unlike the past recessions, this time we are focused on investing for the future. Don't get me wrong, we will remain disciplined on costs, and with the right strategies and investments, we will be well positioned to capitalize on the rebound and maximize profit across the cycle to achieve our long-term goals. I’ll now pass the call over to Derrek, who will share greater details around our financial results.

Thank you, Steve. Total revenue for Q3 2022 was $576 million, or roughly flat to Q3 last year. PeopleReady revenue was down, while revenue grew at PeopleScout and PeopleManagement. Lower workers’ compensation expense and a positive spread between bill and pay-rate inflation led to bottom line growth and margin expansion. Net income grew 11% and adjusted EBITDA grew 18%, while net income and adjusted EBITDA margins grew 40 basis points and 90 basis points, respectively. Adjusted EBITDA margin expanded more than net income margin due to PeopleReady technology upgrade costs this year, which were excluded from our adjusted results. Gross margin for Q3 2022 of 27.1% was up 170 basis points. Key contributors included 110 basis points from lower workers’ compensation expense and 100 basis points from bill/pay spreads, which were partially offset by a higher proportion of revenue contribution from our lower-margin PeopleManagement business. The workers’ compensation results are from a combination of favorable development of prior year reserves and fewer workplace injuries. Q3 2022 SG&A increased 5%, which is less than the 10% increase in Q2 this year due to cost management actions given the current level of demand for our services. Our effective income tax rate was 17%, which was in line with our expectations. Before discussing the performance metrics of each of our segments, I’d like to provide some big picture commentary on how the current environment is impacting our business. Inflation and higher interest rates are clearly causing consumers and businesses to rethink their level of consumption and investment resulting in demand uncertainty for many businesses. Demand uncertainty is translating into future workforce uncertainty for many of our customers, which is impacting our three lines of business, albeit in slightly different ways. The demand impact is most noticeable in our PeopleReady business. In a slowing or accelerating economy, we typically see the revenue impact first in this business due to the short duration of job assignments combined with the fact that many customers rely on PeopleReady as a variable supplement to their core workforce. On the flip side, the short duration of job assignments allows PeopleReady to continuously reprice its business in a favorable way given the talent shortages that exist. In fact, the favorable spread between bill and pay-rate inflation this quarter was the largest I have seen in my 20-year history with the company. At PeopleManagement, many of our customers use our services as an integrated part of their core workforce. Demand changes here are less volatile in comparison with PeopleReady, as customers often vary the use of PeopleManagement services in tandem with adjustments to their core workforce. As a result, recent demand trends have been more steady than at PeopleReady. However, we have seen uncertainty when it comes to new customers. While the pipeline for new customers remains healthy, some are hesitating to make labor supplier changes due to uncertainty about their future workforce needs. Similar to PeopleManagement, potential new PeopleScout customers are hesitant to make commitments on multi-year deals, but demand for new short-term projects has been very strong this year and remains healthy. With record levels of open jobs in the economy, employees have many choices resulting in higher levels of employee turnover for our clients creating additional demand from our customers. Now, let’s turn to the specific results of our segments. PeopleReady revenue decreased 4%, while segment profit increased 16%, and segment profit margin was up 150 basis points. Improving job order fill rates helped offset the decline in demand, improving by 5 points from Q2 to Q3 this year. Segment profit and the related margin growth came from lower workers’ compensation expense and favorable bill/pay spreads. Bill rates grew 9.7%, while pay rates grew 7.5%. PeopleScout revenue and segment profit increased 10% and segment profit margin was relatively flat. Growth was driven by higher volume within our core RPO business as well as short-term RPO projects. PeopleManagement revenue increased 4%, with segment profit up 89%, and segment profit margin was up 120 basis points. Commercial driver services contributed the majority of the year-over-year revenue performance. Segment profit and margin were up due to an increase in mix from commercial driving and lower recruiting and candidate marketing costs, which were at a high point last year due to worker supply challenges. Now let’s turn to the balance sheet and cash flows. We finished the quarter with $44 million in cash and no outstanding debt. The business is producing strong cash flows with year-to-date cash flow from operations totaling $80 million. Now I’d like to take a moment to provide additional color on a couple of forward-looking revenue items. For Q4 this year, we expect a revenue decline of 12% to 8% compared to Q4 last year. In Q4 last year, PeopleReady benefited from a demand surge across the business as our customers found themselves in desperate need of labor during the peak of the post-COVID recovery. This surge is not expected to reoccur this year, which will create a 9% headwind for total company revenue in Q4 this year. In October, our weekly sequential revenue trends are holding steady in comparison with typical, historical patterns. I’d also like to point out a couple things for 2023. In Q1 next year, revenue growth will be suppressed for the same reason as Q4 this year, which will create a 6% drag for Q1 2023. Finally, the 2023 fiscal year will have 53 weeks, which is a typical occurrence every five to six years since we operate on a 52-week year versus a calendar year. This extra week will provide incremental revenue for the year of $22 million to $27 million, but will not contribute additional profit due to it being an annual low point for weekly revenue. For additional details on our outlook for the fourth quarter, please see our earnings presentation filed today. This concludes our prepared remarks.

Operator, please open the call now for questions.

Thank you so much. Appreciate all the detail you gave in your prepared remarks. Is it possible to get a little bit more color by end market vertical? I'm just wondering if there are specific end markets doing better or worse than others?

Hey, Jeff. Thanks for that question. It's Derrek here, and I'll take that question. From a pressure perspective, when it comes to results, the two areas where we're seeing the most of that are in retail and hospitality. Most of that is because we're coming up on tougher prior year comps, but also part of that is because we've seen some softening in both of those markets, particularly retail. To give you some perspective on this, in retail, we were up 16% in Q2. We were down 7% percent in Q3. And our Hospitality business is still growing. It was up mid-single digits, but that's been a really big grower for us for several quarters up over 50%. On the other side of the equation, construction and manufacturing actually held steady. The growth rates or minor decline depending on which one of those industries you pick stayed pretty steady with where it was in Q2.

Okay. That's really helpful. I appreciate that. You also talked a little bit about what's going on in October. I'm just wondering if we can step back into last quarter and talk about intra-quarter trends, if possible, about the different kinds of business?

Sure. So for talking intra-quarter trends, PeopleScout stayed steady at about 10% all throughout the quarter. PeopleManagement steady as well. June, July was up 4%, 2% as they exited the quarter, and PeopleReady is where we saw the most step down going from minus 2% in July to minus 6% at the end of the quarter. Going into October, though, our staffing businesses are holding pretty steady with the typical sequential trends that we would expect. So we haven't seen any softening in the run rate. From a year-over-year perspective, the declines are getting larger. We're running probably about 8% down in the first three weeks of October, but that's not from any softening in our weekly trends if we compare to typical historical patterns. It's more about the prior year comparisons that I pointed out in my prepared comments.

Okay. That's helpful. If I can just sneak in one more. Based on that, I'm just curious what's implied in your revenue guidance for the quarter and I do appreciate you guys giving us revenue guidance once again.

Yeah. You bet. So the midpoint of our guidance for Q4 is minus 10%, and the trends that we're seeing in October are right in line with our expectations of where we should be in October compared to the guidance that we gave.

Good afternoon. I would like to follow up on Jeff's questions regarding the midpoint, which indicates a decline of 10%. How do you anticipate that will be divided among PeopleReady, PeopleManagement, and PeopleScout? Is the one-time impact entirely focused on PeopleReady as you mentioned?

Yes. PeopleReady will be above that 10%. It will be in the low-teens. PeopleManagement flattish and PeopleScout still growing. What was the second part of your question, Mark?

Just ensuring that all of the drag from the one particularly large client that you don't expect to replicate, but that's all in PeopleReady?

The vast majority of it is there, Mark. We also had a nice sequential step up in our PeopleScout run rate from Q3 to Q4 as we brought on a pretty sizable customer. So the headwind increases there as well in that segment. But from a total company perspective, the overwhelming majority sits in the PeopleReady business.

Okay. And so PeopleReady exclusive of that drag would be more like down 3-ish?

Yeah. That's right. Excluding that would be down 3-ish to 4-ish.

Is that because your expectation is, hey, we're going the economy is softening? Obviously, there's lots of uncertainty and so the expectation is that those trends should continue and particularly in retail and to a greater also perhaps in hospitality and some of the more cyclically sensitive end markets?

Well, we don't have a lot of softening built up. I mean, we exited the quarter PeopleReady at 6%. There was a little bit of prior year headwind in there from some of the comps, but we exited that 6%. So we're seeing, going into Q4, it'll be around 3% or 4%. So it's a pretty steady case as far as from what we've seen in October, and it's building off of that. We didn't throw a lot in for additional softening. We just try to give it to you based off what we're seeing.

Okay. And then with regards to PeopleScout, sequentially, there was a fairly significant difference between Q2 versus Q3. Were there any end markets that ended up having a change of pace or how should we think about this type of sequential trend?

I'm glad you asked that question. PeopleScout saw a sequential decline of $12 million, and there are two main factors at play. First, a few clients reduced their spending in Q3 compared to Q2, but it's important to note that Q2 was a record high for their business. Therefore, this decline is more a return from a peak rather than an indication of any fundamental weakness in their operations. In fact, the businesses of the clients that reduced spending are still performing well. However, there is one client, which can be described as a luxury retailer, that accounts for the other half of this decline. This particular client is struggling with high inventory levels and is experiencing demand challenges due to consumer shifts towards more affordable brands amid current inflation pressures.

Okay. And then as we think about just the margin impacts you called out, you obviously had a benefit from workers' comp, which you've had in multiple years, how are you thinking about that impact in terms of the fourth quarter? And are there any considerations that we should put in place for next year as we think about that?

Certainly. There are three key points to consider here, and I'll provide an overview that will also link to our fourth quarter discussion. Reflecting on our performance this year, I want to emphasize gross margin. We have experienced a favorable development in our workers' compensation reserves, which has led to a reduction in workers' compensation this year, approximately 50 basis points lower than the same period last year. However, this situation is not expected to be sustainable, as the prior year's reserves will eventually revert. From a pricing standpoint, we've performed well, with a 100 basis points positive contribution to gross margin this quarter, primarily from PeopleReady due to favorable pay spreads. If we were to maintain our current position, we might see around 50 basis points for next year, just based on calculations—not guidance. Of course, if we were to enter a significant recession with job losses, that could reverse the situation, though that’s not our current expectation. Additionally, with PeopleReady experiencing declining revenue, our PeopleManagement business is taking up a larger share of the sales mix, and this lower margin segment is negatively affecting gross margin by about 30 to 40 basis points. I anticipate that this trend could persist, so it’s reasonable to factor that into your estimates. The revenue trend for PeopleManagement is currently better than that of PeopleReady.

That's very helpful. And then with regards to next year, how are you thinking about managing your own headcount, own expenses and capital allocation given the uncertainty in the environment?

I'm glad you asked this question. When we're experiencing growth, we're making investments, and when we're not growing, we adjust accordingly. This year, our trends show that SG&A increased by 10% in Q2, 5% in Q3, and we expect SG&A in Q4 to decrease by 5%. We'll keep making adjustments, although these may not be as significant as in previous recessions. We've been industry leaders in cost reduction, making $40 million in cuts in the PeopleReady business in 2020, most of which are still in effect. Our revenue per employee at PeopleReady is currently running 20% to 25% higher than pre-COVID levels. While this indicates good productivity, it also raises concerns about whether this trend might negatively impact our gross profit dollars compared to the expenses we're saving on staffing. As we plan for next year, we will make some adjustments, but likely not as drastic as in the past. If a deeper recession occurs, we will reassess. Going into a recession, we feel it's our responsibility to take actions to help mitigate potential drops in profitability. Overall, our goal is to maximize profit across the entire economic cycle, and in a relatively mild recession, we may not implement much cost cutting in the PeopleReady area. We might even invest in filling some open positions, especially for our branch managers.

Okay. And what about capital allocation in terms of like buybacks didn't look like you bought back anything during the quarter?

From a capital allocation standpoint, we aim to maintain a robust balance sheet while also returning excess capital to our shareholders at favorable prices. We will monitor both aspects closely as we progress. Regarding acquisitions, we are currently not interested in pursuing any on the staffing side, as our focus is on maximizing the value of our existing assets through digitalization. However, on the RPO side, we are open to acquisitions to enhance our portfolio of professional white-collar work, which we already have a significant amount of. We are optimistic about the positive trends in technology and life sciences, and we believe that strategic additions in these areas could enhance our reputation for new deals, so we would consider opportunities there if the price is right.

Great. Thank you.

Your next question comes from the line of Kartik Mehta with North Coast Research. Your line is now open.

Good evening. This is Jack Boyle in place of Kartik Mehta. Just have a quick question in going with the demand there. Are you guys seeing any difference amongst your larger or smaller clients in their demand behaviors? If you could give us a little bit of color on that?

I’ll take that question and if you want to add any comments, feel free. Regarding larger customers versus smaller customers, we are observing that for our larger clients, especially in our PeopleManagement and PeopleScout businesses, their usage of our services has been relatively stable. However, there is noticeable hesitation in making decisions on new deals. Many of our larger customers in the pipeline are reluctant to switch providers due to the current uncertainty. They are uncertain about their demand and, consequently, their workforce needs. It’s important to note that these two businesses primarily cater to customers' core workforce needs, which can fluctuate somewhat. On the PeopleReady side, we are seeing similar levels of softening in demand from both small and large customers. Many customers in this segment treat us as a variable supplement, making this service one of the first to be reduced when economic conditions slow down and one of the first to be re-engaged when demand picks up.

Thank you. And just as a follow-up, are you seeing any difference amongst changes in bill spreads among some of the different job positions that you were mentioning just a few moments ago?

Well, our bill and pay rates that we quote, it's all out of the PeopleReady business. And we've been getting equal benefit on both sides of the house with large customers and small customers, but more benefit with small customers. In those particular circumstances, we're often dealing with the business owner, an operations manager versus dealing with a purchasing department. With virtually all customers, we've been getting the pay rates push-through, that part hasn't been a problem getting it through our bill rates. And we're getting some extra spread with both small and large customers, but a little more with our smaller customers.

Great. I appreciate the color. Thank you.

Hey, good afternoon.

Hey, Mark.

First, I want to express my gratitude for all the detailed information you have provided, and you have addressed a lot in the slides and the earlier Q&A. I would like to know if you can discuss any potential misperceptions or misunderstandings that you think might exist regarding investors or your clients’ views on what usually happens during a recession compared to what is actually occurring. It would be helpful to hear your insights on whether you believe there are any specific areas where people may be mistaken.

Well, Mark, I'll start off and let Derrek fill in the gaps on some of this, but it's definitely different than different recessions. I think we mentioned that in our last quarter, and as we're trying to plan our business and trying to see what our clients are doing. Everyone's just trying to grasp how deep and long this might be. And Derrek just mentioned in his last question that we're playing the card here that we want to bounce back impact. And so as we listen to our clients and the people that we're aligning ourselves with is to be ready for them, and make sure that our business is solid. And so not cutting as deep as we might have in past recessions is really important to us. And that's all based on the question you've asked here is what's going on and how deep it might be and what might be the outcome of this. It's a real mixed signal that growth still seems to be available in some sectors, and obviously in others, it's still a little bit steeper. Derrek talked about retail, and they're making some adjustments and not understanding how the holiday is going to hit. But as far as our alignment with our clients, we just have to stay really close in a time like this. And our commitment to our clients and our people through this coming recession is we will stay nimble, yet we're not going to slash like we have in the past. I think our clients are happy about hearing that. Knowing that we will be here, we will be prepared, and we're going to be ready to bounce with them, it's good for our shareholders, but it's really good for the client situation that we have. So we don't feel disconnected with our clients, and all the information we've shared today is definitely client-driven through lots of conversations and staying close to the data around there. I'll let Derrek answer the question more about the street and the investors and if we're misaligned there, but we feel really connected to where our clients are.

From an investor perspective, I don't see any major concerns or misalignments. As we approach the fourth quarter, we'll observe if there are any changes at the beginning. Everyone, including the markets, is reviewing information week by week, which tends to fluctuate. However, I don't believe there are any fundamental issues affecting our alignment.

Do you think that there's a difference in the mix of business you have now compared to the past, and do you think the flows of information you're receiving now are more beneficial than they might have been during previous downturns?

That's definitely true, Mark, because the size of accounts that we work with is much larger than ever before. PeopleScout has grown, and PeopleManagement continues to grow even in this challenging market, serving larger accounts than the average account at PeopleReady. These two facts drive the type and size of our clients. In general sales at PeopleReady, our national account business has expanded more than our small account business over the last 10 to 12 years. The larger the account, the more sophisticated account manager we have on-site, which allows us to gather more information from those clients and facilitates our alignment and preparedness with them. So yes, very insightful question, Mark.

I appreciate it. Thank you. It makes a lot of sense that you have a better seat at the table today compared to the past, which may improve visibility. Could you elaborate on the pricing dynamic? This was mentioned earlier, but I would like you to expand on it a bit more. Additionally, could you discuss the ongoing opportunities in this area? While we are facing macroeconomic challenges, there still seems to be a pricing balance in play, and I would appreciate your insights on that.

Sure, I'll address the first part of that. Steve can add more if he has any insights. We're currently in a unique situation in the economy. We've experienced a few quarters of negative GDP, and we might encounter more of that next year. However, we have 10 million open jobs, many of which are low-paying and in the blue-collar sectors that PeopleReady serves. This scarcity is driving our pricing. Additionally, there's a growing preference among employees for remote work, but the positions we are filling cannot be done from home, which increases the pressure on an already constrained labor market. Looking ahead, we don't anticipate any changes to this situation. There might be a temporary shift next year if the economy worsens, but in the long term, we don’t see any fundamental changes. The shortage of talent gives us more leverage in pricing discussions. Our disciplined team has a clear plan to ensure we are pricing our services appropriately in relation to the talent available in the market.

Very encouraging. I appreciate it. Thank you very much for all the commentary.

There are no further questions at this time, Mr. Steve Cooper, I turn the call back over to you.

Well, thank you, Emma, and thank you everyone for joining us today. As you can tell, we are excited about the opportunities ahead to drive growth even in a difficult market. But as Derrek was just visiting with you about the continued tight labor markets, we feel well positioned. Now we've got to work through the current situation and when that growth will come. But with the client-first mentality, differentiated technology, we really believe we've got the opportunity to grow our market share through the recession, but definitely coming out of the recession with the strategies that we are creating. We appreciate your interest in TrueBlue. Don't hesitate to reach out if you have any additional questions, and thanks again.

This concludes today's conference call. Thank you for attending. You may now disconnect.