Q1 2020 Earnings Call
Greetings welcome true Mastec do.
First quarter 2020 earnings call.
All participants are in a listen only mode.
Question answer session will follow the formal presentation and once you require operators business. During the conference. Please press star there on your telephone keypad. Please note. This conference is being recorded it didn't now my pleasure to introduce your host jump for Ford Lacey manager of legal Affairs Mastech Digital Inc. Thank you much worse you may begin.
[music].
Thank you operator, and welcome to Mastech digital first quarter 2020 conference call.
If you have not yet received a copy of our earnings announcement, they could be obtained from our website at www Dot Mastech digital dot com.
With me on the call today, but that does not take digital Chief Executive Officer, Jack crowded, our Chief Financial Officer.
I would like to remind everyone that statements made during this call that are not historical facts are forward looking statements.
These forward looking statements include our financial growth and liquidity projection.
Well the statements about our plans strategies intentions and beliefs.
Concerning our business cash flows cost and the markets in which we operate.
Without limiting the foregoing the words believe anticipate plans expects and similar expressions are intended to identify certain forward looking statements <unk>.
These statements are based on information currently available to us and we assume no obligation to update these statements circumstances change.
There are risks and uncertainties that could cause actual events to differ materially from these forward looking statements.
Putting does look it did the company's 2019 in your were port on form 10-K filed with the Securities Exchange Commission and available on its website at Www Dot FCC dotcom.
Additionally, management has elected to provide certain non-GAAP financial measures to supplement our financial results presented on a GAAP basis.
Typically we will provide non-GAAP net income and non-GAAP diluted earnings per share data, which we believe will provide greater transparency with respect to key metrics used by management in operating our business.
Reconciliations of these non-GAAP.
Financial measures to their comparable GAAP measures are included in our earnings announcement, which can be obtained from our website at www Dot Mastech digital dot com.
As a reminder, we will not be providing guidance starts during this call normal provide guidance in any subsequent one on one meetings or calls.
I will now turn the call over to Jack for a few of our first quarter 2020 results.
Thanks, Jen and good morning, everyone.
Let me begin by acknowledging our current environment.
Obviously, the coping 19 pandemic is having a profound impact on the global economy and on People's lives companies are being faced with unprecedented challenges and Mastech digital is no exception.
Well, our fine where our business and financial results will be adversely impacted by the economic it other conditions arising from coping 19, the extent of decision Pat will largely depend on the duration of shoulder in place and other government mandates as well was the pace of the expected.
Economic recovery.
We are fortunate to entered this difficult period, and a strong liquidity and cash position and their combined with our business model lead us to bleep that we won't experience some of the severe liquidity challenges, but many other companies you're facing.
This pandemic plays out.
With that backdrop.
Now turning to our first quarter 2020 financial results.
Revenue for Q1, 2020 totaled $50.4 million and represented a 12% increase compared to $45.2 million in the first quarter 2019.
Our data and analytic services segment contributed $7.4 million chip revenue during Q1, 2020, which exceeded last year's Q1 revenue resolved by 28%.
Activity levels in this segment held up well given the state of the global economy, and we did secure Signets again multiyear multimillion dollar order with a blue chip customer in the financial services industry in March.
Well our pipeline of opportunities is strong we are seeing some clients pushing project out into the second half the year.
Year over year revenue growth from our Ickes staffing services segment was 9% in the first quarter 2020. However, we are seeing lower demand.
For our staffing services, particularly with clients and hard hit industries, such as travel energy and manufacturing.
Gross profit for the first quarter 2020.
<unk> $12.7 billion compared to $10.8 million and the same period last year.
Our gross margins for Q1, 2020, or 25.2% of revenues compared to 24% into first quarter of 2019.
This is our second consecutive quarter, a breaking the 25% gross margin barrier.
Our data and analytic services segment had gross margins of 47.1% in Q1 2020, an increase of 160 basis points from a year earlier.
And our I keep staffing services.
Men at first quarter 2020, gross margins of 21.5% an increase up 70 basis points from the 2019 first quarter.
Higher margins from new assignments in both segments were largely responsible for this improvement.
That's your M&A expenses were $10.2 million into first quarter of 20.8 compared to $9 billion into first quarter 2019.
It's 1.2 million dollar increasing as to your <unk> expenses represented investments of $900000 or data and analytic services segment.
Principally in the areas of global sales and delivery.
And $300000 dinner I T staffing services segment, largely due to higher staff related expenses.
As we entered 2020, we had paying to continue investing in both the board business segments.
However, given the current environment, we will delay much of the planned expenditures until we start to see a meaningful recovery and economic conditions.
GAAP net income for the first quarter or 2020 was $1.9 billion or 16 cents per diluted share compared to $1 million or nine cents per diluted share in the first quarter of 2019.
Non-GAAP net income for Q1, 2020 was $2.7 billion or 23 cents per diluted share compared to $1.6 million or 15 cents per diluted share and a corresponding quarter of 2019.
First quarter executing a expense items not included in non-GAAP financial measures net of tax benefits for the amortization of acquired intangible assets and stock based compensation and are detailed in our first quarter earnings release, what's your job Warner website.
Addressing our financial position at March 31, 2020, we had $19.6 million sub outstanding debt net of cash balances on hand, and borrowing availability of over $15 billion under our existing revolving credit.
During the quarter, we've reduced debt by $3.4 million lowering our debt to equity ratio of 2.45 compared to 1.1 a year ago.
I'll now turn the call leverage at the deck for his comments.
Good morning, everyone. Thank you Jack for the detailed financial review of our operating results for the fourth quarter of 2020.
Let me begin by saying that I think they still is navigating today's challenges from a position of relative strength following record performances in so many critical areas in 2019.
Yeah that organizations working incredibly hard to service our customers during these difficult times.
We were quick to mobilize our workforce to order more work from home moderate to mitigate the health risks to our employees and to continue to provide uninterrupted service to up.
Our ability to do so was made possible by a solid technology platforms across our global environment, which we have been investing in quite heavily over the last several years.
I don't agree why the world has been going through this unprecedented crisis.
Have delivered one of our best quarterly results on many bad I mean does in the first quarter off for any 20, including revenue growth in both business segments.
Having said that we didn't see somewhat worse impact of Corbett 19 during the month of March and continued to see both our business is being impacted.
<unk> in the second quarter.
However, the visibility being substantially limited on the one hand and with the continued existence of new opportunities on the other.
I'm unable to quantified for you the exact impact on Q2 financial results.
What what I can tell you is that we are very confident that hey.
<unk> fundamentals of the company remain strong beat.
The high demand for services little bit on as the global economy recovers and see.
Well position to withstand these economic headwinds until it does.
Meanwhile, during this crisis, we are predominantly adjusting our cost structure in ways that that allow us to maintain our top top notch talent that we have artfully secured over the years.
[laughter] proven track records and both of our businesses.
Mindful of awarding any sharp them decision that make into an ability for a speedy and prosperous recovery.
Lastly, I'm happy to tell you what all in confidence levels are high across our entire organization. Despite today's daunting environment.
Without getting too granular many of the austerity measures that we have undertaken have been receiving a body organization with understanding and appreciation.
Major crises doing to bring people together as can be seen across the board today.
At Mastech digital I see us well that is all you're not dedicated associates to successfully get through this crisis and eagerness to get back to building up on not accomplishments and successes of Frente Nike.
I've been now open the session for your question.
[noise]. Thank you at this time will be conducting a question and answer session. If he would like to ask your question. Please press star one on your telephone keypad confirmation tonal indicate your line is into question Q you May press star too if you like to remove your question from the Q for participants.
I think speaker equipment, it may be necessary to pick up your hands. It before person. This dark east one moment, please while we pull for questions.
Our first question is from Josh <unk> from Sidoti and company. Please proceed with your question.
Thank you good morning to vacant Jack I Hope you and your families are doing well.
I'm really nice results for Q1, despite the onset of the pandemic I do have a bunch questions for you I guess the first one I just looking at the tax rate in Q1, it was 17% it's much lower than the.
26, 27% rate you reported over the prior couple of quarters can you tell us why and is this is the new tax rate, we should expect going forward.
Hi, Josh. Thank you pick up question I'm going to ask Jack to answer that.
Hi, Josh.
Yeah, the tax rate was Donnie Q1 of.
2020 on there was actually down to a by 17% and or normal catch rate is.
Generally around the 26% level. So for Q1, we did get some benefit gone because we had <unk>, we had a lot of stocks exercises, which generated and accounting lingo excess tax benefits.
And if that occurs when the gains from the exercises of stock options. It seed that's fair value of the options are determined by that you know that D. At the grant which is the 123 ARX bench. So the difference between the two actually creates higher deductions.
For a company when they do their tax returns. So those additional tax deductions are book adds reductions in our tax provision.
Oh, you know so you would you should still expect.
26 going forward.
You know there's.
There's always an opportunity for you know this situation to refurbish and it's just part of.
The arguments that impact or our provision.
Okay. That's helpful. Thank you shifting but yet the interest expense it obviously dropped pretty significantly compared to the prior year and I know you've been paying down debt at a good clip.
Is there I'm were there any changes to your effective interest rate what was it and has that dropped with the feds moves in Q1.
Jack.
Yeah, Yeah, just give me a second here.
So our effective interest rate on our term loan today is a little over 4%.
And our.
The effective interest rate on our revolver.
It's a little over 3%.
So if you would blend those.
Percentages.
I I think our average interest rate today is around 3.5%.
In 2019 first quarter of 2019.
Our effective interest rate was.
5.5%. So yeah. It has been dropping and it's been dropping due to a combination of the fed cuts and then all show the impact of a diminishing term loan balance which carries the higher interest rate.
So that's definitely helping our overall interest.
You know probably the bigger factor.
And you know our debt repayments, which have been really good over the last 12 months.
Okay, Great I'm, just I'm the liquidity position I know you mentioned that you had.
More than 15 million available to you I'm on the existing revolver. Our just wondering if you had access to any other potential vehicles and also.
Are you.
Potentially partaking in any of the government programs.
Yeah Jack.
Okay. That's one.
Yeah, Yeah, they did $15 million out of a ball ability.
You know, we we bleep that is.
More than enough to get us through you know just situation and returned to normal times.
We do have a 10 million dollar.
According feature.
And our PNC.
Credit facility that we can draw a line, but we don't expect that we're going to need to draw on that but it is nice to have in case you know the unexpected occurs.
So so that's one thing that's as far as the you're talking about the cats are de stand a stimulus Oh, yes, right, yes, somebody that's something that.
Yeah, you know we did di di one provision that we did take advantage of was.
A provision that allows you to defer the employer poor person portion of that I see a task.
And again this is only a deferral its knocking out directly impact our personnel not going to lower our S.G. and <unk> expenses, but indirectly it's gonna have a pretty nice effect on.
Interest expense, because we are going to have a nice cash savings through the deferral and the payments on the deferral, which we expect to accumulate to about $5 million.
By the ended the year it they don't have to be paid back they don't have to be paid back into a b and 2021 and the other half at the end of 2022, so it's a nice benefit.
That's the only provision that we took advantage of.
Okay, Great that's helpful or excuse me. So shifting gears you you mentioned that you are putting some planned investments on old adjusting the cost structure can you.
Remind me how much you would tended to spend on these events investments before coping 19.
Versus cities plan and also was mostly all personnel and over the back you had a comment on you had.
Vested in the technology. So is this a a blend of personnel and technology and then I guess are you concerned that if you do a put somebody to invest things unfold investments unfold are you concerned that this will impact your speed a recovery when the economic conditions improve.
Oh good questions, Josh So I don't think Ivan I have the exact numbers as to how much we were planning to invest in out of that how much. We have done already what I can say, it's a pretty significant amount that was yet to be invested.
What coming to the larger point.
<unk>.
They can be austerity measures.
You mean guided by for bromine principles.
We should minimize the essential expenditure, which has to be done anyway, but minimize it to the extent that's possible.
Then eliminate door default discretionary spend.
And all investments for future growth.
Well, but most importantly, perfect all ought to any deeply.
We don't want apart.
You know ourselves deep or so deep that'd be it in goes out ability to scale quickly.
Because we think that when things start recovering back on a economy starts recovering.
The demand will come back a fairly quickly and we should be ready and it due to a scale at that point in time.
So we have not bad deliberately not been taking any action that compromise.
So does that on single question, Josh Yes, definitely thank you and I, just one more and I'll hop back into queue.
I guess, if we if we look at.
I'm, sorry, I want.
Sorry about that the work from home get so crazy [laughter]. So if we look at B pack region as as a model for recovery and maybe the three month or so lag that we're seeing in the U.S. I know, you're not giving guidance, but any sort of direct.
No commentary you know if you if we can think about the revenue cadence and what it could look like within both data and analytics and I teach staffing over the balance of the year, if assuming that we get back to a new normal and say June or July I. Just curious about any comments you had on that thank you.
Oh, Okay, let me try to answer it slightly differently as to what has been the impact.
So far in what the business.
On the data analytic side. The demand is still there be pipeline is still looking robust and that includes Asia Pac to Europe and North America.
The one thing that's happening is that decisions are getting before delayed into the later part of the.
So so they are scaling up that'd be about hoping or planning for to happen quite rapidly or beginning the you know maybe in the very first half of the itself. If you go to go into good Billy.
On the other side be I'd be staffing business demand has definitely come down.
And does some of the clients Swabbing daus heavy hit industries, so they've actually come up in early and so I know a customer's watering the industries as Jack mentioned like you know transportation.
Energy manufacturing.
So so that's that's how it's a it's happened so far but again like I said, a little while ago that we expect that when things he's off.
When a you know things thoughts settling down and gone I mean, it's a start recovering.
We feel that are being staffing demand will come back very quickly and then we are hoping that the data analytics that decisions when it started getting Ford up a little.
Close up rather than for that out into the.
But let me try that yeah definitely and thank you again I'll hop back in the Q.
Thank you and our next question is from Howard Rosencrans from <unk>. Please proceed with your question.
Hi, guys Huh.
I Hope you wouldn't your families are all safe and healthy in.
As our all your employees and and theirs.
I wanted to ask you about just follow up on on the last question just so I'm not sure I fully understood. Your answer and you haven't had that $20 million plus order or so it would you provide a little more.
Color on on on on the prior answered in the context about of the two separate businesses the I key business.
Are you I believe you're saying that.
There's a.
But oh, you're seeing push outs, and Oh earlier terminations and I'm not sure exactly on the clarity of the of the data analytics piece and it really did get a little more color on that.
That large large order that you dive in Oh <unk> I believe it was December thank you.
Okay, Hi, Howard the nice to hear the awards. So thank you for the question.
So as you know Howard we have two businesses business segments, the data analytics and the IP staffing services business.
The data <unk> analytics business is the one that secured a $23 million of business in December and these was ER see multi million dollar multi year contracts.
Happy to say those contracts are going strong NVR delivering upon them on puff them up in fact in this quarter in the month of about should we added a fourth one which is also a similar size and quality multiyear multimillion dollar and that's also going to keep a baby and started executing up on that.
So the point I was trying to make on data analytics is gone that any of those have been affected I'm, saying that the business you, but hoping to scale the business.
Beyond where it is right now to a higher levels.
That's part of scaling is getting delayed because the pipeline is still dad, except that the customers decisions I've getting pushed out into a little further the future.
So what we were hoping to achieve into first quarter first off of the are probably going to happen in the second half and more people that are hoping to it in the second half a penny trend, even probably happen and you know early 2021.
So that's that's one of the data and analytics segment is concerned.
The idea staffing business we have.
<unk> 1100, luff up our associates billing for clients on different parts of Oh, North America, primarily U.S.
And that's the piece, but I was saying that we have seen the demand for that or the staffing has a reduced somewhat.
And some of the folks that for billing in that 1100 plus.
Uh huh.
What was only we'd be saw some early terminations or from the customer side and if we are talking about a few percentage points out of the 1100.
Well from customers, who have been badly affected you don't like airlines a cruise.
Industry.
And so on and so forth.
So that's the distinction I was trying to make between the two businesses does that answer a question huh.
Hey, It struck me very helpful. One that's when I appreciate the color. So in terms of the data analytics that business remains steady and you can basically deliver all backlog for the next few years and you would also and you also picked up another contract in March so.
And so that you could also deliver over the next <unk> am I understanding that correctly.
Oh, yes, that's bench and that is limited visibility and things are changing by the week Oh by the hour in a a write off but as of today Oh, we are comfortable at these multiyear deals that we have signed will continue and we'll be able to execute upon them over the next.
Because the the customers have the ability to stop.
I would either be cancelled with let's failing to with many penalty or <unk> <unk> would you expect that sort of activity to follow on that walk and they only differ.
[laughter] without any meaningful cancellation Pete.
Well I want to cancel the palm talked about it in a way that both sides have the auction off a giving notice to each other but are you know stopping the contract or putting it on hold if need be.
But the conversations that we're having with the customers we're not seeing any indication of that are happening at this point.
[laughter].
Okay.
Very good. Thank you. Thank you both in Michigan No one at an all continued.
Safety in Palestine, so much.
Thank you our [noise].
And our next question is from Lisa Tom is from Zacks Research. Please proceed with your question.
Good morning.
Oh, Hi, Lisa.
My first question I have is could you just decode this cryptic.
Adjusting cost structure to allow us to retain top notch talent does that mean, you just you gave people raising like what if any.
Well, Lisa there was actually a bunch of things that we have done a weve tried to not impact the top notch talent as I said, a that's being one of the principles <unk> and we've been coming up with that austerity plan, we want to protect all of a N.B. players. So I'm on the things that.
We have done.
Put a hiring freeze so we've delayed joining dates so people who were already and idle hiding in process.
Actually delayed a compensation increases, which I typically done around this time springtime effective first of April.
Oh, we put all of 'em.
Marketing initiatives on hold off minimize did including participation in a lot of conferences some of our internal events.
Well, it's got a reduced dramatically.
We've also eliminated a bunch of a bottom see players.
Which anyways and will feature which we'd do it on spring time after we complete I know appraisals.
We're looking at a better utilization off up big time off.
And we've been negotiating or re negotiating with our suppliers and partners and the spin it off a collaboration.
But because of the current situation. There did you just a need especially when people are working from home.
And of course, we also benefited.
Sort of unintended consequences of the global working from home, we've seen some on the infrastructure and operational costs because people are not going to work in office locations.
So there was a whole long list of things that people looked at and then we continue to look out to see that we do this to bring keep on its DNA under control.
And not so as not to impact the are the key players that we have.
I'm not moved.
That's an unfair question Lisa.
Yes, that's much more clear. Thank you Oh, so does that mean that it should expect gets you need to be down sequentially.
Our June.
And the rest of there.
Well definitely the as you know it should be down in Q2.
Again or to what extent that says, it's it's working progress and its depending on how things pick up into future quarters or if there's no starts picking up the etsy and able to pick up as well.
But if I'm.
Unfortunately, the economies remain where they arent that they don't pick up in a how do you then we will keep our it's you're gonna though.
Okay do you got the exact number how many billable consultants you had for the quarter.
I don't have the exact number as of March 31st what it was upwards off 1100.
Okay, and I wasn't exactly.
You heard me a little lapping 11.
Okay.
The liberal on I T staffing side, and then of course, we have billable people other data analytic side.
I would be those are 275 or so so you can add the two that's roughly 13 other people.
Our billing.
The last one.
So based on what's happened so far so that's what the end of April.
How much has that number come down to the cancellation I mean are we talking hundreds or tens of people.
They usually because it sounds kinda scary when you don't quantify.
Yeah. So I I can give you a sense or I think we had a and and the Jack if you have the exact somebody who can I mentioned, but if the <unk> regional 50 to 60 in Q1, we lost that many people billing.
Okay well.
Well you got to be talking about <unk>, a few percentage is on a 11 and or do you know talking about tens twentys a feudal or.
Well some of the 11 of it.
Okay. So.
I guess that means then revenues and staffing will be down sequentially. It does that also apply to data analytics or because of your new contracts could that number be up sequentially.
Oh I don't think we all read the we have that a feel for a at this point in time, whether that number will remain the same or go down for data analytics, but I'm on the I'd be stopping sorry sequentially, yes, it will be a little doubt.
Okay.
Alright, great. This is [noise].
Much clearer as to what's going on thank you so much Oh wait one more question.
But as far as recruiting and thing has anything changed in like the visa situations, where you close.
Oh actually at this point didn't buy them.
Provision has not changed for us I mean of course, the whole recruiting processes change because of people working from home.
But I think it's we don't bring.
So over from overseas.
For billing purpose of.
We hired locally within the U.S.
So I feel smell a it hasn't changed.
Okay, great. Thank you so much that's all my question.
And once again as a reminder, if you have a question you May press star one on your telephone keypad. Our next question is from Josh <unk> from Sidoti and company. Please proceed with your question.
Hey, I'm just following up on that last question can you give any any thoughts or comments around the recent legislation that's going to limit immigration into the U.S. and what impact that could potentially have on your be so the each would be visa holders.
Oh, well, Josh Josh right, though.
What we understand is the immigration has been put on board, which is bringing fresh people from overseas into this country.
But the cut into legislation as of today does not impact the people who are already here.
No things can change something could come out in the next week two weeks, we don't know, but that's where we ought at this point in time.
Okay, and just last one.
Given everything going on we've seen that kind of like a reset in some market valuations and I'm just curious about your your appetite to meet deals and what the pipeline looks like.
Well, if you're talking what make deals and M&A and then yes, sorry, yes.
And right, though and we are obviously this is not the time to do that we are still open minded. We had you know looking at what are the options out there, but Ah I don't think we will be aggressively pursuing it until we got out of the current economic crisis.
Okay, I'm, sorry, if I could just sneak in one last one when when you talked about declines within the hard to industries like transportation energy manufacturing can you could you quantify what percent of revenue comes from those sectors and then maybe what percent would you say comes from you know the essential businesses, where maybe you'd see less of an impact.
Oh actually we've been fortunate the total amount up and stuff that comes from I'm, you know their transportation travel and transportation segment is actually very small it's.
Probably two or 3% or.
Manufacturing is a little bit more energy and then a retail is one which I haven't mentioned one more so we actually I don't have any major concentration in any one or two a industry segments, although financial services and health care.
Probably the more logical [laughter] or if we are fairly well spread out so what's happening is while some of these industries have been hit very badly a couple of them I'm actually even seen an uptick but of course net that venue balance everything out it's more negative it didn't bother too.
So yeah, we don't have any serious industry concentration, which kind of you know.
Our exaggerates the risk.
Hey, Josh.
Our annual report, we do break down.
You know our industry verticals so.
Under our description of business is a you'll find or or top five.
Industry verticals, so that might help you.
Okay, great. Thanks, again for taking all my questions and and the state tape out there guys.
Oh, Thank you Josh and.
I appreciate your question [laughter].
And our next question is from Howard Rosencrans from <unk>. Please proceed with your question.
[laughter].
Hi, again, I just wanted to follow up a little more on.
The visa situation and the ability to get employees see exactly so.
I apologize if this is a.
Good sort of historical question I felt like I had a deeper understanding of that's the.
Your your employees, you're hiring within the United States, but they but they are ready employees that have come I believe predominantly from India and they have achieved their status where your <unk>.
And door in some cases, you're working with them to to garner that status.
For the for the yes, the employer Haas the sign on to to give them that status as h. the EUR one.
Is that I'm, just trying to get clarity about Soc in better understand thank you.
Oh, so Howard the it's like this up.
Well, we hire potential you know employees.
From within the U.S. and almost half or so of that is Oh are you as citizens and green card holders, who been here many could be off and you know region and a lot of them or not.
And then we have another pool, which is the a pool of H. one be candidates and they are people who have come on its wouldn't be a they've been working on they've come on other companies. That's one reason they are now I'm looking for better opportunities and we help them find those opportunities and.
Data, we have to do what is called it a transfer and that's when we transfer.
To the new jobs that we are able to fine.
And that's the piece that we work on so when we were talking about a little earlier about immigration being put on hold its four.
At the moment it's.
Fresh people coming in from India, and other countries into this country on H. one we've.
But for us that does not immediately impact us because a we are looking at the auto hiring people from within the poor which is already here in the U.S.
Does that answer a question or am I missing some people no no no I I, but I think that does so it's it's sort of if you needed.
Oh people for the route.
It would impact it would impact your hiring capability it doesn't mean Pat.
Your ability now could particularly since there's a lot lower demand for.
ER for employees, a core part consultants also walk for employees.
Uh huh.
I think that's that's the other study.
Yeah actually that's true you don't things, we demand was far more than supply when we're looking at things in January February timeframe today, because the demand it's come down to supply is more so in some ways. It makes it easier for our.
Recruiters to find the right talent for those positions, which Oh still open and customers are looking for them.
And could you give us any could you give us some color rise to the first few weeks of April.
As to as to what you're seeing if you're comparing it all night on a year or basis versus the last year.
How deep, but oh that are the cuts down or the <unk>. If you look he commented, but you went down I don't know about 50 or 60 people Oh, you're going to the end of Q1.
Uh huh.
I believe that was the timeframe you quoted.
Although in the same billion I would assume that you had a pick up during the quarter. Because you had because you your revenues in both segments increased so I would assume that you.
Actually went from <unk>.
Let's say or a 11 Uh huh.
Yeah, there's probably a 10% caught in March from peak to quarter end.
And just trying to understand is that's another say and what has been the additional caught in the first few weeks.
April thank you.
Okay. So it probably is not over yet so we don't have the final numbers of what the figure out what it looks like what the in some ways. The trend has been continuing what happened in March.
Happened in April as well, but coming back to you all did a comment about you know the headcount or what happened in the first quarter, Oh, we yeah, right, but we didn't lose some people bought back in some ways. It got compensated by a new starts that we got water for better bill rates.
And in some places even better gross margins.
And also the entire did not happen on the very first day of the quarter. It happened to older Peter to for the quarter. So it did not fully impact or you know the revenues for that but are there any you know that production is definitely going to have in a carryover impact into the second quarter that we are.
So I can give you a precise number for April but are you know the it'd be the reductions have been sort of continuing and or the way. It started in March.
Okay, you know what your peak employee count. This year was you Pete you will be a consultant.
It would be you comment the 1100 up right right you guys at the end of the quarter you know what your E. <unk> do you know or what your peak wasn't up approximately one to one of the occurred.
I have to look I, probably records as large as I've said it is above 1100, whether it was 11 25 like 11 afford I live in 40, I wouldn't know immediately what we can get that information.
Okay.
You guys are very gracious and I, Thank you and I.
I think in light of what's transpiring it sounds like you're doing very well so hats off to you in that regard it certainly seems like you.
Like you have a lot of talented people and you're picking up share so [noise] or congrats on the where you're getting through thank you.
Thanks, Howard I appreciate it.
And we have reached the end of your question and answer session. Now, we'll now turn the call not all of which is isn't good for closing remarks.
Thank you operator.
If there no further questions I would like to thank you for joining our call today.
And we look forward to shedding our second quarter 2020 results with you in late July until then we stay safe.
Thank you.
And this concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
[noise].