ASGN (ASGN) 25 Jul 192019 Q2 Earnings call transcript

Ladies and gentlemen, we do appreciate your patience and welcome to the ASGN Second Quarter 2019 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Kimberly Esterkin. ahead. go Please

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

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

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

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

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

quarter. to second Kimberly, and the we that report delivered pleased today. us performance solid very for you, Thank and am thank you joining all I financial operational for

industry-leading market flow. and cash Over in the strong past three producing revenue ahead ASGN months, profitability rates, well generated addition to growth of free

learning, model, our strategic services modernization services. industry. making and the science higher-value engineering acquisition our effective IT our machine ECS, delivery expanded services advanced IT computing, cyber enables us differentiated we of competitor Our us agile, go-to-market cloud AI, strategy provide our in clients and security, to a Since vastly more via

solution our commercial staff-augmentation and IT consulting pace than grow services traditional even work. an to faster government continue Our at

for brief George Rand call. and a respectively, strong second of discuss delivered for like overview performance the Oxford. our segments, the of each ASGN's double-digit growth to today's segments: guidance. from quarter, by in ECS year-over-year strong revenue of later up I and provide Apex including saw will during with XX.X% was the revenues ASGN top-line second our and at Apex totaling midpoint would year-over-year. now driven million, which our This ECS detail and each $XXX.X primarily results more quarter, increases performance of ECS, and Apex,

guidance the which will shortly, within fell adjustments, our one-time quarter results certain Ed ranges. discuss for Excluding of all our

our segment, growth XX.X% our up X.X%. strong million, $XXX.X generated of commercial its and in of high-rate consultative outperformed by in up $XXX.X with growth contract backlog ECS work. account in revenues our revenues Apex, of continued expectations, largest and year-over-year sequential million, year-over-year. was portfolio above-industry growth top a XX.X% performance This driven of

million was the $XX.X from the of quarter, quarter. an in DHA preceding the growth contribution compared with XX.X% Excluding year-over-year, acceleration revenue ECS

services federal solutions ECS provide bid to for high-end to continues and contracts to unique, the government. IT successfully

contract in services Today government clients about awards, translates our we forward, going Initial strong bookings able consulting and of into in times. second book-to-bill which speak solutions X.X positively businesses. ECS and wins million quarter. show offer are third our quarter, a the trending $XXX new the will into to IT and now During secured very indications we commercial

will Higher these of our internal slight permanent largely for in prior-year the addressing keep a Segment and totaling the Segment CyberCoders a challenges the Oxford Oxford reported our in second the resides work, you in we result our challenges, the than which decrease million, X.X% revenues efforts. The on decline to revenues expected majority we productivity $XXX.X decline turnover over The revenues quarter, placement period. business. drove our of impacted of was at which are updated to the and decline continue head execution led on, CyberCoders in

Our basis points consolidated which This permanent for gross of to year-over-year. lower down primarily compression was percentage much industry, related of the XX of margin about the mix ahead of compressed point. a placement the quarter, revenues, seven-tenths although

permanent are you revenues know, As placement to XXX%. margins gross close

was Our portion adjusted in adjusted margin the $X.X our million quarter, a totaled of $XXX million, EBITDA for expenses, also This with $XXX.X the for corresponding EBITDA XX.X%. margin within totaled CEO resulted adjusting XX.X%. cash guidance. of corresponding second After transition the a which of million,

the Adjusted range net of our approximated expenses. per QX, share, CEO $X.XX income for the the diluted which quarter or excluding transition effect guidance million, for of $XX.X midpoint was the one-time

down For the QX, paying $XX second during times million ratio our was XX cash EBITDA After months our million. totaled in at adjusted debt flow leverage trailing $XX.X quarter-end. quarter, X.XX free

the or repurchases X.XX end any forward, approximately barring X.X of be XXXX, quarter our of Going we third share estimate at acquisitions. ratio times and roughly will leverage the at the times end

We our includes Directors balanced million includes investments organic Board debt our we of growth quarter, strategic repayment, have acquisitions. of a consistently part leverage of approved stock below, With to value the in our to $XXX repurchase evaluate ways a X.X to capital or allocation our once that times that not in but stated strategy reduced ratio return shareholders. at said, second as that additional plan end we would the and only also

our in Now leverage that back we ratio, shares. buy have have our reached, place the plan to we and right target exceeded,

acquisitions. plan. not of do strategic us long-term ASGN component acquirer remains making repurchases and is These choice, an M&A from growth core our a preclude of

prospective of to ongoing our evaluating place We support have an currently in operations. business pipeline that are acquisition targets we active

ASGN adding strong services the position we expanding and the footprint today, as growth Federal was that IT for capabilities to on are space. and headed consulting am a as down the to are our tomorrow continue well right and and I in it above-industry high-value quarter focused measures, solutions all We Overall, by government we path confident as achieve very future.

detail Blazer further quarter Rand? Rand in call second performance. I'll over about turn now Apex's the to speak to

Great, the for quarter. reported thank of business Apex Ted. Segment, Creative which The units, Circle solid Systems you, results Apex consists and again

$XXX.X million, As up with year-over-year, pricing Ted reflecting revenues in-line a reported, over QX steady margins XXXX environment. XX.X% totaled

Let me of a quarterly color on results. bit now our provide

the of quarter, four Systems eight the segment's Defense, Services, including: factors, including: Apex For driven way a of in was industry Consumer by accounts. verticals led Apex service double-digit we the and Financial growth & number the Technology again Aerospace & performance with revenue Industrial industry

growth. posted continues growth. achieved Healthcare Services Retail posted or double-digit top-line revenue single-digit three overall top Systems’ Telecommunications including verticals year-over-year Sciences, outpace accounts remaining Business our more industry branch-centric slowly. The slight negative Life growth. high Apex accounts revenue that to grew growth and very

quarter lower as Creative our relationships saw Although leveraged Circle's our this growth accounts we revenue than these growth with across accounts account segment. our top we expectations, the remained in past

you continues and accounts. expectations of we XXX Growth times highlight growth to segments percentage engagements Apex, business. Transportation of and rate. growth overall are low-teens outpace as than sense other services, consulting a in in the of consulting it Fortune rate our our our to is growth approaching and Apex revenue Led consulting work our also to seeing Oxford give X.X rate across opportunities Company our one our client by a our I more with a with is the of want

eligibility support, software using For for fuel this the client, and operations traveler scheduling we method development for large-scale management, systems. projects are agile supporting responsible

excited we we remain finding value our type can domain for are accounts of IT methodology, We about responsibility for opportunities on our continuing consulting stepping work, by look offerings, taking both that and We expertise work. into our capitalizing to client enhance our to clients by areas. and our solution in providing these service this and forward and these

performance I Apex summary, with In and margins. revenue am pleased Segment’s the in

strong QX are XXXX our particularly XXXX, our performance QX results in Given impressive.

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

we in and Rand. of ECS coupled via matter second provide to mission our you, the prime to solutions large customers' strategy as performance durable advanced our achieved contracts. technical deep-subject continue execute needs expertise Thank most pressing and with quarter address strong XXXX,

technology significantly in peer ECS' growth space. averages continues industry to be companies operating the of for federal ahead

grew of ECS year. XX.X% adjusting acquired noted, on DHA, by basis XX.X% Ted reported the for a this contribution revenues from in quarter As first $XX.X million after and the

our EBITDA of ahead the as is DHA's is of DHA of and progressing exceeding margin. expectations, integration its post-acquisition and the is expansion schedule performance

sell top-line We have recent cloud mix preferred revenue and cross seen DHA's capabilities EBITDA we with expansion. synergies and and our opportunities cyber margin with and fixed to time see found price have for additional contract materials, XXX% opportunities awards, of

on the we the quarter, resulted contract contracts. a $XXX of growth X.X in of which in of second received million quarter, front. and In to new period strong XX% were contract This ratio under very performance existing for attributable revenue of approximately another total business book-to-bill awards development a the awards,

dashboard deliver training cyber Corps. aviation design systems award awards next continuous agencies, recent Federal to training information CDM generation the a and U.S. management the ground deploy growth and Some system. and civilian our to include to competitive and monitoring ECS Marine X.X next award This an award management or the for positions aviation contributing generation information in Corps security leader the both for Marine as diagnostics

solutions AI for Federal, operational state secure, ECS-designed, expanded as and an well and unclassified, list deployed commercial and demand to use our expanding of and continued the network strong delivery also to have delivering of and services solutions We technical of key demand and innovative for as seen defense, services enclaves customers, built, cloud an customers. but

advanced includes and with cyber ECS sharing through endpoints platforms. list our zero-day approaches which clients, multiple threat our X and of AI-based cyber risk across under expand threat cyber assessment commercial along partnerships to defense detection, continuous threat platform, million automated capabilities ECS hygiene, technology continue protection as

Our cyber volume our velocity are illustrate solutions and of addressing recent the how rising cyber threats. successes

As solution and internal to workforce. our architects we continuous and technology our through continue always, heavily partnerships, capabilities certification training in of invest

opportunities to capabilities tracking technical our acquisition deepen strengthen We are relationships. also customer several our and

end award sign of a equates ratio opportunities another had grow. XX-month our proposals the X.X At submitted record we at and have quarter, quarters billion $X.X new forward, and At revenue. billion, high. current the to the total continue the number backlog, remained a time, times, retreating. nearing Proposal two second trailing awaiting to in no size has which levels of past backlog the ECS and $X coverage of contract business shows all-time activity healthy Looking of of the

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

generally of Revenues, our momentarily. for two discuss for and the mid-point Thanks, George. I will which charges, the adjusting adjusted one-time after quarter EBITDA earnings were guidance at

year this foreign days for Revenues million contribution, year acquired of Revenues of excluding changes rates quarter a and contribution effects year-over-year the was and as quarter the significant. the exchange $XX.X up billable in in number included second quarter were which up on first from the were of XX.X% the same X.X%. revenues currency that of were last not DHA,

a placement a for was year-over-year. the the DHA, result which was down and of was basis of X.X% approximately And our The than revenues, which mix quarter, permanent in as down guidance which for from of quarter the was margin X.X% of: compression one, Gross lower XX.X%, at low gross points end whole. two, last the of year. a second inclusion quarter the ECS the carries lower XX margin

margin while was gross gross for of was last our second consolidated the margin DHA, Excluding the as assignment year. the year-over-year, up quarter same ECS

certain two, SG&A for charges million. million were included the of in expenses which and one-time trademarks CEO expenses of million, included stock-based compensation of: million comprised and which two $X.X one, write-off $X.X quarter $XXX.X totaling million, $X.X were $X.X transition foreign the totaling

at of Excluding our low were these guidance. expenses was million, the SG&A which $XXX.X charges, end

Net totaling the charges one-time million. after-tax $XX.X of $X.X was million, included effects the Income quarter the two for which

our million, of these which approximates $XX.X the charges, Excluding mid-point one-time guidance. income net was

Adjusted expenses, mid-point net excluding of guidance. after CEO million income our was was $XX.X and $XX.X one-time of at tax transition effects million the and the the

or million Adjusted $XXX.X EBITDA revenues. was XX.X% of

portion cash CEO million, $XXX.X revenues. the $X.X of of expenses XX.X% transition adjusted million, of EBITDA the Excluding was or

DSOs. the million Free quarterly flows activities X.X the from operating million, of quarter or revenues. sequential flow cash $XX.X Cash of for days free cash $XX.X and reduction reflected were X.X% in flow was

times. our paid down approximately paid we we the our debt ECS, ratio million quarter, down X.XX times the have of acquisition from leverage $XX million and During and, X.XX of since to reduced $XXX debt

would day a implies on growth million, to the I to which like on XX.X% our a to last which of days year. $XXX than X.X% QX make estimate Estimated billable We third are basis. of Now comments few one-half revenues year-over-year is XX, reported $X,XXX now of quarter guidance. more

permanent sequential during placement a We revenues. mix slight foreign exchange and assume changes decline also not that be will be will in currency that there the the rates in of significant quarter

be We of revenues and lower and margin holiday revenues assumes be range time flat XX% of the effect ECS additional materials will estimate as to gross margin margin cost-plus will will range from assignment contracts at XX.X%. result revenues that one gross gross in sequentially from from a mix This on on of a the the higher and contracts the QX. sequentially

from We XX% range to and will estimate net million $XX.X to of will that revenues. $XXX our EBITDA million $XX.X or XX.X% from million, range million income to adjusted $XXX

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

Thanks, Ed.

we are to valuable results clients continue to on into second to to the to and our As look services shareholders. of we XXXX, deliver the path half and right our XXXX strong

continuing to share. serve to across delivery of our breadth government clients and while services, market take commercial services scale, Our and differentiated markets has the positioned us model well

XXX as Fortune over enable solutions as growing major We sustainable model IT with and maintain can Federal withstand us and and have commercial customer to well These business our relationships the managed business cycles. relationships, government Defense economic margins that consulting of and a government companies and long, XXX services and trusted agencies. business

like for support and your today I'd for your time ASGN. you thank to of

stockholders would to In thank lead in I our for Directors placing and trust like our Board of employees, their our ASGN. closing, me also to

forward progress calls. our to on quarterly share We look future to continuing

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

first [Operator of with Certainly. our Capital ahead. will Jeff And go from Instructions] Please the Markets. line BMO Silber question come

much. so Thanks

you guidance. basis just this it projecting you guidance, Can at in to XX that adjusted us had points quick like color to Just If looks If it couple is? slightly basis look math to a about year-over-year give questions be XX margin correct are of EBITDA some my down. down why I on was sequentially. the flat points

quarter? you to third our Yes, talk the question. guidance want the thanks for for about Ed,

a that's this highest really of and the year, expense quarters. between we Yes. our Jeff that was And we year year-over-year in margin year. remember last QX basis and may last XX year EBITDA had or And you the differential points big variance QX quarter this about of all last for the adjusted our driver of margin. favorable

ECS to its it business is mix XX reasons we their expecting margins as about only – in I high part points mix And that's the much of gave as ECS the relates commentary as margin its expense And a mean And maybe And to mentioned – call. bigger gross again, as it thing the going margin result and relates for as down will up be basis related, that sequentially, other growth. be our a the SG&A on of is slightly. our to I've the decline we’re a sequentially slight sequentially.

our the to third. part they perm In mix, expect consistent revenues, second expectable that addition to quarter we lower sequentially work certainly assignment margin that, place which, Jeff from that growth got although be we maybe a of you’ve the to margin. affects Otherwise that gross

perm cyber little there the on just you you about prepared And to remarks turnover expected helpful. coders. plan side, a your talk Can you happening higher than in that? about how That’s address Thanks. what's great. Okay, mentioned and in

active an it's market. Well,

have think experienced than So I that the have more in they turnover past. they

addition, predominantly pretty space In vertical. so now in is their of done the That's driven. business because candidate most right a it's technology difficult

revenues you if we've California couple can be of that as internally some to help grow Texas, help will and a actually –we're there's markets more we're in and excited we our we're the be reacting reallocated that firm few team of out making therefore to Florida as about. good opening see both things tenure business. or continue will, to modifications promote will up that a other going to you us couple in So And well that which and those think

Okay, great. queue. in much. I’ll the so get Thanks back

Thank you.

with go go will Gary We ahead. America. Bisbee to line Please of of Bank

changes new Hey team you're first role, else now guys, or a anything you Ted, good afternoon. focus any belt make, under it's the guess quarter question, or in the whether your calling worth to out? to areas I looking that's a that got

talked at don't it. anything second steady end I this out. quarter think pretty worth of I we've the around we think I and mean, been about calling Gary, the

of right that on We're third stay that. you hasn't The and we'll any terms if smoothly. in interruption place? performed focused divisions units Here gone There terms and our transition IP that of is in business have distractions has or of good the certainly the that strategy very been marketplace headway making any in will, in services we the how really have serve kind.

commercial We're both going marketplace of increasing any and after penetration don’t I stay hard and in the So – our market. we’re to IT going the services you’ll right turns. government keep to see think

– then shortages beneficial realized to of Okay, on demand pockets and markets, labor of are the thanks. and to point? that finding the they're ability I skill business. the impacting business business. businesses, the you markets impacted people how all guess, labor any just less candidates for and your But at about tighter given Thanks. And I of or tight is more there can the supply that, and all of this increasingly talk close the close

within I years. been will the you has if spectrum, many IP for many, think, talent tough, Well,

And of new I don't is think so that necessarily. dynamic the

we've has information in had little see most growth of can our rate a through that of our bill come that. You increase, bit supplemental now although

helpful. of we're that we Most things, the think work volume it talent work, projects. and to on needed the order a We'd which to we of as like I in those of of find through balance that which is exhibits able to have just new has come both do fact these

that? add Rand, anything to would you else

the made. if are fill number increased we said increased you draw kind the the ratios, We've placements of as indicators we've We've our all We've think of increased that upon. of I candidates Ted, pipeline No to we The the flow a labor of to no measure that, seen tight us market. what in hear use much we so metrics candidate and then to and disruption as the client you up. will. we've despite

think said, Ted I steady having you go as here. So is we

just if And last could. I then one, one

in at on that? where are the progress update just you’ve making the the strategy Oxford recent you. with Thank go-to-market we any been in and Just whatnot with changes and quarters

didn't its Oxford their quarter, our things working the expectation. sales Yes, past about in been to institutionalize quarters. spots we've continues and think which that revenue this bright meet Two over, I methodologies talked many times quite we've although

If you terms up information, hours of in supplemental in volume digits the of billable looked worked. they work mid-single were at their

their a made – their had They slight year-over-year. growth decrease in which rate, bill of their kind X%-ish

If methodical services, look and think – that at in more so definitely these in we with I definitely that cross a out. way, the past. We're strategies customer selling reaching and to do you things. according to to just one used with than We're laid we able we the stick customers do

forward. move stick things we so positive. margins about the They to which and And beyond our improved actually with excited EBITDA We're those expectations, this continue a quarter. was

So, signs there’s productivity. some of there terms good in

you. Thank

you. Thank

will the with of Caso Fargo. line go Edward to Wells Please go We ahead.

thank. Great,

if your keep about X. your price? that Is be of intent of stock little dilution the how fast and intent a much there in you to a the option down? Thanks. or rule take Is advantage intent sort there Is bit there future? talked on a to repurchasing could an depressed stock, below you talk leveraged down wondering to Just a could getting X.X about hard

Ed. thanks So

words, lower. rule interested been, acquisitions to our debt to don't those it's would until or are in certainly commitment people post and that a got down other have our and that it's investors a we to know the fast pay although, that We X.X hard we we've made I if

shares can So certainly think this ability our we're to to now look that facility. repurchase under at that exercise we I range,

competes our best of said times the Every capital here and that capital. best highest many its we us. are dollar for believe acquisitions We've use

shares. we So feel pathway. repurchase the of the extent our a under something advantage be that at our definitely could to the reinvesting is of place we're at preferred we're ready not like now there, capital to X.X lip to take something where we cup, go that's Should

story good we those there the we've it's that consistent past. that and have that I handled options our remains how with So, think in

is? related; my the – the in commercial I government your acquisitions guess sort side On gross a had side’s and into your other on then new M&A level compression focus margin any models question’s expect we curious quarters? your talked the what space. the margin so areas on as that continue is, you about of out and interest Thanks. government we effect depressive on that to of EBITDA work I'm is

Ed Well, to question. lot that a there's

let So in it pieces. me take

like into commercial portfolio the also us augmentation, certainly to for have higher that want we us would are great staff not work. our serve, only a feel account We that we for in use potential prospecting side commercial segments acquisitions. like to On value we step but

would can So important the capabilities, to make that to the in you enhance our us, value just the if proposition capability extent industry great and and CIO. the will to we segments are be it our find there right raise then acquisitions to

both a to that. and I billion to be laid support XX% with part of we on that that the acquisition and ultimately plan want I an EBITDA we'd to from important organically today government and beyond. solution said five-year our between ASGN we that our don't that there believe into progress hurt our mean, that will as on would five-year margins. we that I billion path ECS towards we both margins key it move team we that think acquisitions $X for is to out manage our We've stay a end make thought growing increase and as on we get that they ECS strategy is XX.X% can acquisitions our $X where could and plan side the still and we've to

our then that of part Ed? third And what's

you. No, it. Thank you got

Okay, thank you.

Marcon R. to Next of with go ahead. W. line Please go in Baird. queue we Mark will

obviously average really at there's terms I was number Good look continue on Apex, But do everybody. we a when and a Oxford, customers. decline afternoon customer for well. data take the Apex to of you wondering of the in both

that part key to is about deliberate wondering, of how just or on a strategy regards with that? accounts focusing should we I'm think So

want to that? Rand, you take

Yes.

Mark you a it's I the say We are Fortune and XXX wouldn't XXXX. will. now on to I out clients Fortune call think the if deliberate focused certainly strategy

in general. quarter bit little in smaller I their spend think past the down seen this a what account to brand-centric we've began is slow

don't anything. So are walking brisk know not we're business that away from just as It's the that I facing. it's as we of other some

So inflows. it added

Mark, Having account largely I in generally retail Fortune account a said Fortune provider. be will think base, base speaking Apex service though, there be the will that, XXX, flow certainly the XXXX in some account and ebb okay. and

you say those a What out? from reason curtailing reading Okay. it or else Is what their a of retail primary little for would is perspective about you we're general just the call that accounts anything potentially would macro spending. bit

is, just of generalize. depends it's on some it maybe look, in. say to the market it think segment the hard I segment, are I'd they

can. same Some the bigger of accounts resources for can't the it compete accounts in is the way smaller

us, expansion you've with bill with rate competitors. just So not some seen but our of

Yes.

to lot technology to to what a more people, said the back part It take seat. through industries. that always Mark hire parcel When through the and these gets I've it goes ripples economy tend expensive the accounts smaller

resources is compete ability ending banks, the pool as technologies are companies that first, Your to they're as retail last. it's the for Small mostly you’re oftentimes embracing their others accounts quickly are. technology telecommunications, government in big where and

where kind quarter. just of So now just it's are – that we but in think maybe I

that what government? What little you great. the expectations with are of bit Okay, anticipate a you giving, regards your to give success It had just of looks guidance is like DHA from can then like would a you're ECS? for coming regards lot revenue percentage looks well. you've performing with to of And there. It granularity

rate growth you can above QX. for reported the – do ECS for you can much what we that expect we'll for Mark, we QX, be pretty

would Okay. Apex Oxford you else characterize And segments? the and how

Well, rates think been, But what it's we pretty give of trajectory. along by I the a same don't growth okay, it's okay. similar sort to division,

a about what there? can little bit Rand, seeing can And creative talk – and then Okay. circle you you're

agree I Well, circle excuse creative Ted, here. you I'll go think – head, me,

Please.

talked in Look, being a past work about And upside that supported generation of marketing and world I about agencies ad are the down. we've place circle revenue companies creative had is niche some creative in really activities. doing think and turned the

different can You firms. you a into the that about get set of when it, about other the more marketing. marketing, digital And read come can work, consulting ad into staffing read agency digital competitors firms, you you have

So world steady on the past bit seen very They changed years. we've some you held have a them growth their for has And if with three two rate over in the dilution that or will. some, margins.

– agencies certainly you focusing more weaning of also the in two, accounts four. good the year last as I We in know, both small are to transition. on a a quarters All to big direct client. think will client off strong end three balanced ad portfolio and and accounts Mark, accounts, in that's Having of going if had a really you said that the quarter, year they

you rate news their, is bit, if want. they're well performing hold not that. to but good year, two that they're peers, companies, and compared marketing first a you look they're creative but of if the the we doing growth still want this off will, quarters the very they've In of we little come other them at to But their – margins

circle Now, cross-selling we're benefit to and doing large creative between around Apex, from and some of accounts. bigger they're Oxford going the

the side, this We at changing think I on now want had point. to pushing don't years dilute to things market. the are adjust but But to some other this going we can they've to two we where margins push, help be

So I improve think their getting for through them. that think and will things I

ended of the quick, QX in guidance for terms real more two XX.X just million count then just And four XX.X Perfect. guidance, up on million. share the we

get down. to debt continued the You've

Is could we that as could correct? it that more stock conservative relates the number to XX.X being a buyback million. So up and end potentially

million if know but XX.X will. but I'd not buying don't conservative, stocks, likely assumes back that the we are I Well, as qualified okay, we most

right, than we're what come in forecasting. you're So number could the lower

as things. ECS guide, the percentage to mix regards that's Great. with driving a just really just clarify really absolutely QX to nothing else. margin the and it's There's the And of firm

talking If the about margin, gross yes. you're

the you SG&A can on And as Right. well? elaborate

I we're the much we have of Well, about in $X.X QX it's in – an sequentially in how prepared increase a of the think will and remarks pretty clear terms million. we what reported in over

you. thank Great,

Sure.

next we'll line Please Tobey of SunTrust. queue with go to And ahead. Sommer in go

Thanks. is margin past for Kind to long-term CyberCoders your to CyberCoders we percentage should goals of of are Ted, next of years? headwind sales? kind manage that margin couple work in the of over rebuilt that? going to you Or as look issue, going be prior the of up a you how turnover be its context to the

will I be good don't growth headwind, I its that I there believe long EBITDA prospects. expect so has margin headwind. period business be a steady time Tobey. fairly proven model has that been it has over And the that consistent, a that of mean a don't that to

Okay.

to do contract submitted So the could of the business? kind of type Sort back, for little then what about ECS, your to mix you and that build okay. you of in a the duration convey it contract respect outlook intend with Thanks. how And bid? about a does give color, margin

George? that. to George Sure. I'll let talk

Yes, and thanks thanks Ted Tobey.

is here. about We but other space. margin So, company margins second industry I to that the our yes, out margins, segment for tell don't EBITDA one second let's will talk ECS a in you give a only

were our industry average well In as growth the group. standalone times peer two pro rates, terms forma of in as

And has with their mix more and over toward increased year ago. price fixed a the moved backlog X.X%. they we've Time doubled acquisition. contract where and has the last year, our reported margins more our we’ve and EBITDA materials And book-to-bill, Our contract were from DHA

the next the can quarters. our months just bit one-time. the it's also that which and little of the our we're to backlog. submitted was awaiting terms and of in I a that last do award how trailing something X.X. So $X contract billion that couple see margins, I – a get increases, going EBITDA said our And close growth over months And can the over only of XX lot But over see I book-to-bill our up seeing the book-to-bill, quarter-by-quarter, movements positive you go of XX activity and last that

on margins terms a pretty good an in our tier terms we're in growth, of So increase of our space. in in

you. thank Okay,

very the I'll we've the plus them that up days is thing had prime and last awards other recent very the contracts ups we from quarter mission space customer this the the type the environment win, in with all recent talk high that that of congressional like in announce that. because very that duration winning, and focused the we're we'll are long work awards about picked end, And XX benefiting that such are next positive

feel pretty we yes, about So bullish it.

the be my I industry question what because forecast duration, really of to a book-to-bill when I And term. to trying being is the tool in getting after from be of first could limited for the contract was awards elongated which outside the part awards a It contract contract and understand Great. longer we're – and renders yourself. for utility

over figure be So nice a one. could XX apples you with have term were you parse that still to the apples the months positive awards to out contract over last if

– year Yes, typically we're contracts okay. a what to we're five doing is what so, three

So, say – towards in a Materials. through and there's the higher don't a you awards. duration some difference George, the see in meaningful other contract move and We've DHA – Time I'd had

So portrays Tobey, that that that will I if terms to your know expect question, to in future. think the for of you anything in don't how us we I play different out

Ted… Thanks

Yes, we've – what contract of same now wins average got. contract the

if provide you little businesses Ted, you getting revenue could Okay. color. targets and managing the do plan kind your a to with headcount Thanks. growth internally bit across different of how of on growth respect the

Yes. see trail I've said slightly always we're business. the and this you'll Typically, our Well of ourselves. the before rate growth headcounts look, growth of is in what investing

always to expecting for investing They also year. levels higher always We're each organically. getting of productivity always we're in up. striving ourselves keep and grow to So need benching

a So, little to less – productivity. do to it than that think plan bit is let the our in me to business expect people the on in us just order invest expect aspect to rate should a we because growth to grow, you the know business I you of basis be of constant in of our continue increase help but

very much. you Thank

Next to RBC go ahead. Please in Capital Markets. of queue we'll line Weber, Seth go

afternoon. Hey guys, good

for to I willing first if some again this wondering here and quarterly Oxford. you'd you quarter if rate could for be I think do call, the last exit quarter. you on was Apex the gave that – trends for

Seth. Sure,

data prior call the the the two quarter given in this in versus of how past have two know, you on the the for you first been we've weeks So, weeks year.

the period this have I will we weeks of think the single where will, headed. That were two of as information, you to regard. that XX% less the helps. would don't up been is my if you in our especially it's very business estimation but high over digits becomes the meaningful, of the year, if same they have a predictive last and publish tell it first not evolves, of I that business year now ECS nearly with business metric, being

So grain I salt. of with would that a take

takes this to of of long here through mean know second the might about representative – Okay, quarters? you Oxford to take, way the just stays should not how of directionally fair trying being do enough. but you're And little that's guidance, couple through its a or in guess I it transition represented negative how bit segment do think I growth revenue just business that think next the this I'm as quarter, giving down time that I you on think we process through think here when work is

if the different remember So, division, are Oxford things. segment Oxford and you the two will,

In will that this you Oxford a So segment CyberCoders. loss a revenue in if business by slight second quarter. at the growth offset the was in

expanded that are margins. it looked of grow the There to grow coming So we pieces the EBITDA up are to that in better there. are growing And business Oxford continue others and and that business its will future. are nicely. our There did do expectations slightly Oxford are

So, we grow. them expect do to

CyberCoders Ed's quarter. the minus I has you guidance lower million may a billion earlier, plus will think that. the if mix a XX of it's However, We to remember our in revenues be are we or – for out in that think comment a slightly the mix that reflects business and of a third and quarter

appreciate very Thank you I much. guys. Okay, it

queue of we in the Next Credit line McVeigh Please ahead. go to Suisse. with Kevin go will

George. Palmer Hey for guys, maybe Kevin, this on is one for

can you about? prepared the that of the remarks cross-selling some on and mentioned DHA, the synergies at folks you revenue you Looking expand talked in

like to Ted, would me that you take now?

Yeah, please, George.

Yes, sure.

Department Department – were DNA Justice. they index the combined the last of We of doing nine very development. FBI the heavy Justice had the presence as in Okay, very, into years, for system so well. been We've

together customers some is with finding that as are relationships the their realm well there we deep lot opportunities what a and are been won of we're their of them. they've targeted So customers. customers and with that and as we that in length our cyber that to these talk these and time capabilities cloud with in – as out working then in we reach and benefiting We're finding particularly

And so, as there well. do to we're able cross selling some being

And thing in red team last that the then program of which remember we also can had. cross-sell that FBI. sets doing for that of all the FBI's blue their and their back relationships their teams just is outstanding in announced we team have some some run run one managers we ways think the is team, to I are that technologists some and of I the skill we terms the last found blue contract, that quarter, of the their red contracts we're again that and use we the that

strengthen to serve again, as of that customer move some were relationships, so their of their to ability we And some able our capabilities and well.

which acquisition when what a experience good an want like positive both been you it's go you So this. sides, is on do

very much. Thank you

[Operator go ahead. Surinder Thind line to Please Jefferies. Instructions] with We'll go of

Hi, you're look the color And what a thank the deals, valuations point Can at time? there this with in bit pipeline. of taking terms questions. then to I'd for my at of deal you you opportunities provide of the of strategic say right in little I'll additional maybe like a start looking when there an Any looking that kind bit existing business. from rolled oriented be something maybe appreciated. one balance little maybe acquisition at be maybe financial a can and more more would thoughts of perspective, into versus that your kind

I things Well that couple a there. look think

for pipeline to good competition work new at out technology there is the I and would there businesses, opportunities not same active is evaluate lot we're of but in of there strong. a here lot space. a It's So time, doing the necessarily the say that's there.

And to we're through. environment so, working evaluating and it's used working and an that

but that portfolio important have you in them. to pretty right add clients continue in think is think and acquisitions the future, very commercial clear with will the those the space with and for both about account we're make clients, us to happy I us we continue what to grow that we've gov If been for our space in and sets solution sticky the

marketplace a to and businesses see we have services long customers that and businesses going find acquiring customer, that so business to And extent for the And is and we the that's our into the over sets serve bear, those positive we that be very those in our provide key solution haul. to those the integrate bring the important. them can to

there's been And looks a in the helpful. That's like of just disclosures, it then of slight some terms change.

kind moved there the One in the disclosure. more hours rates there your by also And worked that thoughts more guys each this subdivisions. then growth the a of or them quantitative total was like segments Any appeared within have divisions. consultant provide different organic the within it looks is It to that used like each staffing of past – – on numbers to of component you've of in point? divisions the or around of at maybe disclosures the a or

the headcount. that consultant of work on. the a just Apex hours and volume made supplemental going true of That's one reflection change the give think for number segments Oxford versus in billable I we information you to of the is worked

material change. a don't better minor give to anything a metric to that's So try other to around think its just you than I that.

you. Thank

queue. continue. [Operator do Instructions] no questions And Please currently have additional speakers in we

on everyone as call. and forward look thank to discuss our want interest to in in us XX I with well, the soon. Thanks. today being days Great, we forward being here with always, We ASGN you and for appreciate look quarter to speaking to third your with you