Q2 2021 Volt Information Sciences Inc Earnings Call
Greetings and welcome to the volt information Sciences' incorporated second quarter 'twenty 'twenty 1 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation and fan.
Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Joe <unk> with Investor Relations. Thank you Joe you may begin.
Okay.
Thank you Paul and good afternoon, everyone.
Thank you for joining us today for volt information Sciences' second quarter fiscal year 2021 earnings conference call.
And on the call today are Linda <unk>, President and Chief Executive Officer, and Herb Mueller Senior Vice President and Chief Financial Officer.
After the market and closed this afternoon. The company issued a press release announcing its results for the second quarter fiscal year 2021.
The release is available on the company's website at <unk> dot com as well and grass seed website filed a form 8-K.
We have also prepared a supplemental presentation, which is available on the Investor Relations section of the company's website.
Okay.
Before beginning today's prepared remarks, I would like to remind you and some of the statements made will be forward looking and are made and the private Securities Litigation Reform Act and 1995.
Actual results may differ materially from those projected or implied for a variety of factors, including but not limited to true potential impacts from the COVID-19 pandemic on our business operations, we work for.
For you to volt information Sciences' recent filings with the SEC for more detailed discussion of the rates that could impact the company's future operating results and financial condition.
Also on today's call management will reference certain non-GAAP financial measures, which we believe provide useful information for investors.
Reconciliation of those measures to GAAP measures is included in the earnings press release issued today.
With that I would like to turn the call over to volt, President and CEO and the prep Linda.
Thank you, Joe and welcome everyone to today's call.
We are pleased to report continued momentum in fiscal Q2. Despite the first 7 weeks of operations in the prior year quarter being pre COVID-19 and the weather related impact in February and this year, especially across Texas and Tennessee.
Thanks to a combination of new wins and.
And expansion within existing customers.
We recorded our strongest quarterly revenue growth and a decade.
Gross margin improved primarily due to the continued performance of our retail branch network and accelerated results within our direct hire thing.
We also successfully maintained our cost discipline within SG&A.
In all we reported positive GAAP net income for the first time in 14 quarters.
Our performance and the second quarter provides further evidence that the strategy and investment we have made over the prior 18 to 24 months are working.
We made significant progress on our path to profitability.
Over the past 15 months.
Pandemic has and continues to present, a number of challenges across our business.
Yeah, our teams have persevered and that.
And ways to overcome adversity and emerge as a stronger organization overall.
Let me now turn the call over to her to provide additional detail on the financials and her.
Thank you Linda Rep.
Revenue for the second quarter of 2021 on a GAAP basis was $221.1 million compared to $207.3 million and the prior year comparable quarter.
$14.8 million or 7.1% increase after adjusting for favorable currency translation overall company revenue increased $12.4 million or 5.9% due to continued improvement and our north American staffing and international segments.
During Q2.2021, our domestic and international direct hire lines of business continued to show improvement.
For the quarter, we were up 37% from the prior year and up 27% sequentially from Q1 and 2021.
Looking at Q2, 2020, 1 adjusted revenue for each segment.
Our North American staffing segment reported adjusted revenue of $184.3 million and increase of 6.3% from the prior year and.
Adjusted revenue for our international staffing segment was $27.9 million up for $3 million from the prior year and our North American MSP segment reported adjusted revenue of $9.8 million a slight increase from the prior year.
Our North American staffing segment posted positive year over year revenue growth for the second consecutive quarter. The 6.3% increase was primarily attributable to new business wins, and a combination of retail and mid market clients combined with the expansion of business within existing clients.
Direct hire revenue increased 37, 4% year over year and exceeded second quarter 2019 by 7.5 per cent.
Our international staffing segment increased $3.6 million or 14, 7%, primarily due to increased managed service business head count improvement and France and increased direct higher revenue, partially offset by results within our UK staffing business.
Revenue and our North American MSP segment was slightly higher versus the prior year increased demand and our payroll service business was partially offset by declines and managed service revenue.
Gross margin for Q2, 2021 was $16.4 per cent compared to 15, 6% and the prior year comparable quarter, primarily due to improved margins and our north American staffing and international segments.
Our North American staffing segment increased 100 basis points due to a mix of higher margin business lower employee related cost and a 70 basis point benefit from government wage subsidies. Our international segment increased 210 basis points due to a shift away from the lower margin business and an increase and direct hire business.
North American MSP decreased 380 basis points, primarily due to business mix.
SG&A expense for Q2, 2021 was $33 million compared to $36.2 million and the prior year comparable quarter, a decrease of $3.2 million was primarily due to strategic cost reductions, including labor and related costs due to lower headcount and lower facility costs due to consolidate and kind of real estate.
State footprint, partially offset by higher incentives on the increased sales volume.
Restructuring costs and the second quarter of fiscal 2021 was primarily due to.
$5 million related to ongoing costs of facilities and paired and second half of fiscal 2020. The prior year quarter included charges, primarily related to the strategic cost reduction initiatives.
In addition, and the second quarter 2021 included an impairment of <unk> 3 million related to previously capitalized software costs.
Operating income for the quarter was $2.7 million compared to a loss of $4.4 million and the prior year comparable quarter.
Year over year improvement as a result for the actions previously mentioned.
Operating income for North American staffing segment was $9.5 million compared to $2.6 million a year ago.
International staffing operating income was $1.1 million, a <unk> 9 million increase from the prior year and North American MSP operating income declined $2 million.
For Q2.2021.
We reported GAAP net income of $1.9 million or <unk> <unk> per diluted share. Our first positive GAAP net income quarter since the fourth quarter of fiscal 2017.
Reported a net loss of $5.4 million or 25 per share and Q2, 2020.
The improvement was primarily due to higher gross margin and a 9% reduction and operating expenses related to our strategic cost initiatives.
Adjusted EBITDA for Q2, 2021 improved by $7.4 million to a positive $6 million as compared to a negative $1.4 million and the prior year comparable quarter.
Moving onto a few key items from cash flow and the balance sheet.
We ended the second quarter was $47.2 million and cash and equivalents and an additional $12.8 million and restricted cash and short term investments a combined increase of <unk> $7 million compared to the prior year and.
And $8.1 million increase sequentially, our long term debt remained at $60 million. The same since last year and total available liquidity increased 12% from $24.2 million and January to $27.2 million in April.
We provided $8.3 million and cash flow from operations as a result of positive net income and increase in accounts receivable collections and lower payroll tax payments from the second quarter of fiscal 2021 with capital expenditures of <unk> 8 million.
Alright trends for Q3 looking towards the third quarter, although the labor market remains tight we expect revenue to improve 12% to 15% over last year, we expect gross margin to be and the low to mid 16% range SG&A should be and the 33 and a half to $34.5 million range.
We believe the combination of increased revenue and favorable cost comparisons should result in improved operating income and EBITDA over the prior year quarter.
Overall, Linda and I continue to be encouraged with the performance and the second quarter of 2021 with consistent year over year revenue growth and positive operating income.
I'll now turn the call back over to Linda Linda.
Thank you for.
The performance of our North American staffing segment continues to lead the way.
Our strategic initiatives and they are selling progress and becoming increasingly impactful.
We maintained our momentum coming out of the first quarter with new logo wins recovery and from existing customers and expansion within others.
Across the organization, we have fallen into a nice rhythm of work Michael.
Some colleagues are working full time, either in them in and all of it or onsite and the client location.
A portion of our branches are working on a hybrid model 3 days and 2 days remote and the remainder continues to work remotely on a full time basis.
Revenue from retail or our branch network grew over 3 times the rate of our enterprise clients during the quarter. The first time. This has occurred since we implemented the model in 2019.
We made headcount investments and several branches throughout the country and it's held 3 retail bootcamp already this calendar year.
Retail continues to represent approximately 20% of revenue on a higher overall base this quarter.
Our direct hire discipline continues to mature and produce strong results.
Surpassing pre COVID-19 level as well and same quarter result in 2019 and 2018.
We are seeing direct hire revenue from every region across the country with every breach having generated fees during fiscal Q2.
And this discipline and as a critical component of our gross margin improvement strategy, we have a multi pronged approach and intend to continue to invest in this area to capitalize on current market condition and fuel ongoing growth.
During Q2, specifically, we hired a tenured industry veteran and our national director of professional certs.
He brings over 30 years and that professional search experience, including several decades as the head of direct hire for and global professional staffing organization.
His charter is to expand our executive search capability across and disciplines of accounting and finance.
H R I T and engineering.
The fees and these discipline for the scope of rules, we will pursue our typically for 2.5 times higher than speed on general staffing disappearing.
As was the case and fiscal Q1, we continued to realize order volume and demand from new and existing client that exceed pre pandemic levels.
Identifying sufficient volume of candidates available and willing to work throughout fiscal Q2 proved increasingly challenging, particularly in the lower wage growth.
Traditional unemployment benefit combined with the additional 300 dollar weekly peanuts and the ongoing stimulus payments are generating supplemental income that is similar to or in other states greater than the hourly rate being offered for the job openings.
We expect the decision by 'twenty 5 states to opt out and be additional 300 dollar supplemental unemployment payments beginning mid June through the end of July may cause some return to the labor force and alleviate a portion of the pressure.
We have taken immediate steps to address the candidate shortage and ensure we can meet our hiring needs and our clients.
We continue to leverage our technology platform partners, and expand usage and availability upfront and branch and large program network.
We are also exploring additional tools and that will accelerate sourcing and screening our potential candidates.
We have increased head count and our central recruiting team and have even leverage our arc turn team and India to source for specific clients off hours, increasing our operational hours to 24.7 in these instances.
In March and this year, we introduced the creation of better you Academy.
Our new online Upscaling program for our valued contingent employees across North America.
This is yet another way that we are aggressively addressing candidate attraction and retention challenges impacting our clients.
Through a partnership with education leader 10 Foster.
What are you Academy provides free skill development courses, which are flexible credit it and mobile friendly.
The goal of better you Academy is to support our contingent employees and furthering their education and achieving their personal and professional goals.
While at the same time, cultivating a better skilled pool of talent for our clients nationwide.
And our clients need skilled workers and the current talent shortage and skills gap makes it harder than ever to find them.
We anticipate improved loyalty commitment and retention to improve and we expect to attract determined workers, who want to learn and do more.
And just a short 12 weeks, we have over 1000 enrollment and and already celebrated over 60 graduates.
The value of education with always championed by volt founders and that legacy continue as we increase our investment and employee development and and providing our employees the opportunity to bolster their desired skill sets and help secure jobs with better pain.
Our international segment is showing early promise on the road to recovery.
Helped in part by the easing of Covid restrictions, specifically in the U K and France, both reported a sequential double digit revenue increase and contingent staffing and direct hire.
However, we do continue to experience challenges due to lockdown measures in both Belgium, and Singapore during the second quarter.
As of May 8 restrictions and Belgium has eased slightly however, many domestic restriction and restrictions remain in place for the foreseeable future.
Singapore as restrictions the other hand have gotten more strict beginning with additional locked out and like conditions on may 16th.
Historically, Singapore has been a substantive contributor to our overall direct higher result, and as expected. The continued COVID-19 related lockdowns have impacted results.
We remain cautiously optimistic about the recent performance.
The international teams are working hard to capitalize on opportunities and the economic landscape slowly recovers.
We understand there's work to be done and our recovery will happen and fits and starts as restrictions ease and all countries that we operate in are fully operational.
During last quarter's earnings call I shared that for MSP segment, we were seeing a slight recovery from the initial pandemic impact.
This slower than anticipated rebound to continue into fiscal Q2.
Our ability to accelerate growth and this segment has been hampered by delayed decision, making and multiple Archie.
That M&A and consolidation activity within multiple clients.
And of course, the lack of available candidates and willing to work.
Our sales team remains focused on adding perspective, new targets to their pipeline, which paid off last quarter with the notification of 2 small wins slated to go live at the end of our fiscal Q4.
The program management team tasked with identifying expansion opportunity and our existing portfolio currently have multiple projects within our top 10 accounts to include location expansion and that's O W solutions.
Based on our frequent business solution planning conversations we are having with our MSP clients.
We are hearing that they anticipate increased talent demand and late 'twenty 'twenty, 1 and into 2020, 2 specifically and the health care and manufacturing sectors.
Lastly, we were recognized by Forbes magazine as 1 of America's best temporary staffing firms for the second consecutive year.
In addition, we were also named as a professional recruiting firm for 'twenty 'twenty 1.
The rest are comprised of the best staffing and recruiting agencies based on the results of the independent surveys involving over 31000, recruiters and 7200 job candidates and hiring managers, who has worked with the firms.
More than 26000 nominations were considered in the final analysis and volt was selected as 1 of the best.
These recognitions are the result, and the hard work across all of our team to support our candidates as well as providing a high level of service to our clients during and especially difficult year.
I am honored to work beside this global team of colleagues.
In summary, I concur with her.
Our performance throughout the first half of 'twenty 'twenty, 1 leaves us well poised to continue the projected growth trajectory for fiscal year 'twenty 'twenty 1.
Before I turn the call over for questions.
I would like to express our heartfelt appreciation and well wishes to our arc <unk> arc turn colleagues and India as the country continues to battle surgery, and COVID-19 cases.
The recent announcement by the government that all adults can receive the vaccine free of charge and an increase and doses available for daily distribution will hopefully offer relief to everyone.
On behalf of the management team and the board.
I would like to thank you for your dedication to book during this difficult time, and hope you and your families all remain safe and and good health.
Now I would like to open up the call for questions operator.
Thank you we will now be conducting a question and answer session.
We'd like to ask a question. Please press star 1 on your telephone keypad and confirmation tone will indicate that your line is and the question queue. You May press star 2 if he would like turbo for your question from the queue for participants using speaker equipment and it may be necessary to pick up your handset before pressing the star keys.
1 moment, please while we poll for questions.
Thank you. Our first question comes from Josh Vogel with Sidoti and company. Please proceed with your question.
Thank you good afternoon, and let and Herb will give both doing for now.
Yes.
Right.
So my first question you know obviously the big theme.
Fans around the lack of workers are the supply constraints, especially on the blue collar side and seeing some good insights and I'm still curious for 1 when I think.
Think about and North American and business can you talk about how much of the client base you would classify as facing challenges with finding available talent and maybe just a little bit more detail, which specific end markets are the toughest for you to find the workers. Thank you.
Yeah. So I'll take that 1 her you know I have not heard and the herd.
About a commodity yet that isn't experiencing challenges are and identifying talent and.
It is pervasive across the board and irregardless of skill set and and irregardless of location across the country and this is a dynamic that we have not seen it's a different dynamic than what occurred when coat when the pandemic.
And initially started and it is 1 that and you know certainly and closing a number of challenges are.
Particularly as I mentioned in the low wage rolls and we generally are are having a more significant challenge and those roles and the reason really is because what individuals are getting between D. A supplemental unemployment as well.
As you know stimulus and <unk>.
Generally exceed.
The the wages that they were making and in some of the and some of those roles and a lot of those rules and.
So you know and many area and we've been working very closely with our clients and to address. This we have had clients that Tom has increased pay rate to the extent that they that their April.
There is a glass ceiling and 2 where they start budding up against their their own internal employee pay and that starts to present, a challenge and we've had clients that have looked at a specific bonuses.
Other types of benefits that that they can that they can provide a flexibility and shifts so and we certainly have been very fortunate that we've got 8.
<unk> portfolio of clients and that are understand the challenge and are addressing it to the extent that they can and we are optimistic that we'll start to see some relief here as we start to see some of these states opt out which started this week. So you know we're in.
<unk> that that will hopefully provide some relief as we you know.
As we continue to move through the remainder of the calendar year.
That was really helpful. Thank you and and southern commentary.
Leads into my next question, but thinking about.
You know wages and I was just wondering when I think about wage and general Bill pay spread trends can you just give some commentary there and.
And I want to get a better understanding of the dynamic today and aware.
Wages are seemingly going to go up potentially to entice workers to come back so that would that compress the bill pay spread early on for you, but ultimately benefit you longer term on the pricing side, how does how does that work.
Yeah, typically when we increased wages Ah is done and obviously either through and you know a state increase right and and in a wage base and and we pass along the commensurate bill rate.
As we have been working over the past 15 months, we have been extremely proactively working with clients to increase wages are and we have pass along the commensurate bill rate. So that is that is generally and how it works.
Are there situations, where you know we we we work with our client and and you know.
And it might not be 100% of debt commensurate bill rate, yeah that is really a and exception not the rule.
Okay, great and shifting gears, a little bit always great job on the SG&A line.
And Herb you gave some guidance for on Q3, I guess looking out you know maybe late this year certainly as we get into next year, you know how should I be thinking about.
You know investment and we think about whether it's technology and capabilities, our new service offerings, our head count.
How should we think about.
A the level of SG&A spend longer term for you now.
Anywhere from like 3 to 15 months.
Right, so and and as you saw and my guidance from them.
Upping the number a little bit from what we've had in the last couple of quarters and you know as.
As you know we look to invest for the business you know both with.
The direct hire that we talked about and.
And as well as you know when our sales functions and that'd be very important and then technology is and as well.
Expecting to start easing back into that we.
Really cut back on that over the last you know.
12 months or so and we.
Perhaps from opportunity to ease that up a little bit so thats why youll see the guidance that we're.
And you know, we're giving there is a little bit higher but what really.
Beyond that we expect to be able to maintain those levels you know longer term.
And we're really committed to continuing to find.
Additional opportunities for savings.
You know as we move into next year.
Okay great.
And I was.
Curious when you know what what's the average size.
Youre seeing today or a new engagement.
And with a retailer mid market client versus prior to the pandemic, whether it's and.
And head count or annualized revenue dollars and I'm just curious how that's been trending.
Yeah. So we continue to you know kind of look at our our buckets and 3 different ways generally when we say something is retail right or or in our branch network and it's you know we look at something that's a million dollars and annualized spend or less again on average.
And mid market clients are generally over a million dollars to potentially 8 or 9 million generally we sit on site and then our large clients are.
Over that $9 million, Mark and and and could have won or or met any locations and you know across the country. So we've that that that's really how we look at it. It is how we think about it when we sell it as how do we think about it when we solution design debt that delivery model and you know.
And we really haven't seen much much change from that.
Since since you know throughout the pandemic.
Okay, Great and just 1 more 1 last 1 here you know given.
Given the unfortunate situation in India, and my my thoughts and prayers go out to everyone over there I was just curious has it affected our turn it all on your other operating and maintenance and back office functions for.
Yes, great question.
It could not be more proud of the job that our term team.
Team did you know we had about a month ago and that was Covid was at its peak there and on the second flare up.
<unk> had.
A significant impact on our team we were.
Scrambling to have contingency plans and factor for me if it.
It was to get worse and these people and at great personal sacrifice stepped up and pulled together and and we got to combine 2 teams and some cases people took on.
New roles and again, it's true and just really scramble to make it work. So we really got true this.
Pretty much unaffected and Christian of course, we are doing our billing over there we're doing our collections and all of that we were able to still hit our metrics. So it was just really a testament to the resiliency that that team has and again you know Linda indicated and I'll pass it up we cannot.
You know be more proud because some of these people.
Losses, and their immediate family and.
It's just a devastating impact.
Impact there but day.
Rallied through it and pulled each other up so you know I think you know things are rebounding over there and getting a little bit better. We had actually started a program where we're going to pay you know we were paying for the vaccines for our team as well and now the government has stepped in to.
To do that so.
And again.
And it's just and really impressed with what they've done there.
Yeah really remarkable.
Yes, and are hoping for a speedy recovery for everyone over there.
Well, thanks for taking my questions and and.
Impressive results looking forward to seeing how this for the year plays out.
Thanks, Josh Thanks, Josh.
Thank you. Our next question comes from Mike Hughes with S. T. F capital. Please proceed with your question.
Good afternoon, and thanks for taking my questions first 1 can you just repeat your revenue expectations for the July quarter. Please.
Yes, we expect them to be up about 12% to 15% from a year ago.
Okay. So that would imply about a roughly 4.5% sequential decline and I think there are there 2 fewer days and the current quarter versus the 8 per quarter.
That's correct.
And there are so it's staying fairly close and the top end and on the you know the revenue per day.
But then you also what those days with those holidays. It's beyond just the 1 day impact because you typically especially get into like for fourth of July holiday you know you have.
People not just taking the 1 day off but they take both the Friday and the Monday after for the weekend. So you run into that same thing with Memorial day.
So it's a little bigger than a 2 day impact when you have those holidays.
And and I'll just jump in I'll, just jump and and Mike and you know you mentioned that it does imply a 4% decline and the reality is that.
It's very hard to look at it and in that very literal that very little literal way that I that I think you might be looking at it. So you know if you think about and you know our COVID-19 impact last year versus our cope COVID-19 impact and this year, because we continue to have COVID-19 impact.
And what I mean by that is we have clients that haven't have not recovered we have clients that have recovered and and and are and are doing a little better and then others that you know like I said that that arent for.
Covid related impact this year, and Q2 worst and by $7 million when compared to last year net.
Now keep in mind and 7 weeks of our Q2 last year were pre COVID-19.
But what that the punch line of that is is that the overall growth that occurred this quarter came from the combination of existing customer's recovery.
And customer expansion and new business wins. So these factors actually exceeded the negative COVID-19 impact so our underlying business.
It is actually growing quite significantly.
Okay. So just turning to the labor challenges that are you and and your clients and everyone.
Faces.
Just thinking month by months to fill rates kind of stay the same throughout the quarter or did they actually become more and more challenging.
Yes, so and certainly fill rate became more challenging and fill rates and it is a bit of a and.
And.
Wow, that's a metric that we look at are there are so many different factors that go into the fill rate and particularly when you're doing a business that MSP business and other business with programs, where there are you know.
There is a software tool and that is handling the and all of the aspects of that so the fill rate can get a little funky when I can tell you is that year to date.
Fight the candidate challenges our placements are up 25% it for.
And that's for the year to date number versus versus prior year.
So you know we have managed despite candidate challenges to and drive a higher placement more placement tier placement and through leveraging technology and becoming more efficient more effective and you know overall has you know year to date driven revenue.
And year to date placement and with less head count.
Okay.
Think part of the the.
The bridge to the 3% goal is pricing so it sounds like your your key performance indicators are arc continue to improve so that would.
And that you're still on track to maybe garner better pricing on a go forward basis is that for.
Yeah, I definitely think so.
And we're turning that way he really heavily focused on it and again.
Again, the other key.
Tpi's involved the drug tire and our retail performance, which were both up year over year, Despite a tough labor market.
Okay, and then just 2 more questions not to beat a dead horse here, but.
I I think about roughly 5% of your revenue comes from Texas, They're rolling back to the extra $300 a week on June 26th So 1 would think that our people and Texas receiving that would be looking for work now. So have you seen any change of behavior and the state of Texas or any other states that have rolled it back.
And I actually started to see that yet.
Yeah, a couple of things there 1 overall of those 25 states that have announced to roll back to the robots really just started June 15th so.
Nothing direct you know from that and then that also.
I think slide 15, because you know the latter day for <unk>.
But those 25 states represent 22% of our overall revenue. So it's not gonna have a huge effect, but then the other but it is a positive.
Impact, but then the other part of it is how well did the states and force people having to go out and look for work. So it's 1 thing for $300 is part of it. The other part is alright. There is jobs that are available are you looking or the states holding people accountable, but the <unk>.
Short answer to your answers.
From my standpoint, I don't think I've seen a significant impact yet Linda I don't know if you're starting to see anything from the field people are starting to feel like it's getting better but I haven't seen it measurable.
Yeah, Yeah, Yeah, it's hard to pinpoint right, where exactly it or why exactly is happening and and in certain areas and you know, we we very proactively Mike started too and it.
Reach out to candidates and had previously turned down turned down roles and we we we put together a whole presentation and talking points, so folks could have conversations and encouraging and and and inspiring folks to get out ahead of this and begin to look for work and and go to work before the benefits expired.
And you know over the last couple of weeks anecdotally I hear different things from my field teams that you know look things are things seem to be a little better I'm hearing that you know in Arizona, and we're starting to get and.
More candidates and I'm hearing that we've done a couple of job fairs for various clients and you know a month ago. When a 50 people would register and 2 would show up.
We're now and you're getting the full piece and a full number of applicants that are that are registering actually showing up so again slight changes nothing that I think is going to materially move the needle yet, but I do think it is promising.
Okay and is there any way to think about how much for labor shortages are holding back the revenue potential and the current quarter.
Okay.
Yeah, I think it's a key factor I mean, that's our concern because again our order activity is extremely high.
And we're very happy with that the opportunity is there a system better and how fast we can fill it so to the extent debt.
The labor market improves for us I think we can definitely you know we've got some upside.
But I'm just hesitant to project that you know and in this quarter as we're close to halfway through.
For the quarter and were again and we're starting to see signs of some upside, but I really kind of held.
And where we're at for the balance for the third quarter.
And it makes sense last question I think youre trying to sublease part of your corporate headquarter.
Headquarters any progress on that front.
I would say that there's progress, but nothing to announce at this point and and I'll, probably hold off saying any you know much more until we actually get something done, but we're we're very aggressively doing it.
And you know.
And I feel better about it now and then.
Did 6 weeks ago, but at the same time.
And I felt really good about it 6 months ago on the deal that I thought would happen and that didn't happen. So you know until it's done.
It's you know are not going to happen to the 1 dynamic and the marketplace is a change that does make me feel better about it is the potential of our industrial developers having interest in you know the.
The property and the market value has gone up considerably.
And southern California over the last 6 months and that area.
Okay, great. Thank you very much.
And just talk to you Mike price.
Thank you there are no further questions at this time I would like to turn the floor back over to Linda for now for any closing comments.
Thank you Paul Thank you for your participation in today's call and for your continued interest and vote. As a reminder, we are participating in the 3 part advisors virtual East Coast ideas Conference on Thursday June 17th we look forward to speaking with you again during our third quarter.
For fiscal 'twenty 'twenty, 1 earnings call in September.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful evening.
And we gone on for Jim.
Yeah.
Sure.
Yeah.