Q4 2021 Volt Information Sciences Inc Earnings Call
[music].
Greetings and welcome to the Volt Information Sciences, Inc, fourth quarter and fiscal year 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
Please note. This conference is being recorded I will now turn the conference over to your host Joe <unk> Investor Relations you may begin.
Thank you Carl and good afternoon, everyone.
Thank you for joining us today for volt information Sciences fourth quarter and fiscal 2021 earnings conference call on the call today are Linda Pruneau, President and Chief Executive Officer, and lineage, Okay controller, Chief Accounting Officer and Treasurer.
After the market closed this afternoon the company issued a press release announcing its results for the fourth quarter and fiscal year 2021.
It is available on the company's website at bolt dot com as well as the aggressive C website part of the form 8-K.
Before beginning today's prepared remarks, I would like to remind you that some of the statements made will be forward looking and are made under the private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected or implied due to a variety of factors included but not limited to potential impacts of the COVID-19 pandemic in our business on our business operations.
We refer you to volt information Sciences' recent filings with the SEC for more detailed discussion of the risks 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 a reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon with that I would like to turn the call over to volts, President and CEO Linda pronounce Linda.
Thank you Joe and welcome everyone to today's call. We hope you had a happy and healthy holiday season, and we wish everyone a very happy new year.
Before getting started I would like to mention that due to an unforeseen medical procedure. Today. Her is unable to join US we look forward to having him back next week.
In his absence I will be joined by lending to choke at our controller and Chief accounting Officer and Treasurer.
Today I will begin with commentary on our full year 2021 results. Lenny will then provide a more detailed overview of our financial performance.
I will then conclude with performance highlights and provide a high level overview on areas of focus for fiscal year 2022.
One year ago during our yearend fiscal 2020 earnings call. We stated that the path to positive revenue growth and significantly improved EBITDA in 2021 would occur through a combination of expansion opportunities within our existing clients as well as winning new logos.
Improving gross margins through focused efforts on higher margin business.
Countability and execution on direct hire draw.
Driving efficiencies in all processes improved pricing and cost discipline.
We are pleased with our performance across each of these key areas.
Overall 2021 was a year of several financial milestones and significant progress on our path to profitability, which I will take a moment to highlight.
For the first time in nine years, we achieved a year over year revenue growth and positive EBITDA each quarter as well as for the full year.
Each of our operating segments, North American staffing North American MSP and international achieved year over year growth for the full year.
International achieved year over year growth for the last three quarters.
North American staffing and North American MSP achieved year over year growth in all four quarters.
For the third consecutive year, we improved gross margin, whilst simultaneously, reducing SG&A for the full year.
We also achieved full year positive net income for the first time in four years.
Excluding the gain on our divestiture in 2017, it has been seven years.
And finally, we delivered a strong fourth quarter, a fitting in to a strong year and the foundation for our confidence going forward despite ongoing COVID-19 disruption.
We entered the year with great optimism and executed accordingly.
We adjusted well internally to the frequently changing macro landscape.
Maintaining our growth trajectory, while overcoming the various obstacles that continue to challenge today's workforce.
As anticipated the global economic recovery progressed throughout 2021, albeit at a more moderate pace than projected.
COVID-19 impacts continue to loom large and the delta variant spread rapidly.
To date, specifically in the U S.
There remains nearly 7 million people without employment, despite approximately 11 million job openings.
Clearly regardless of vaccine and booster availability. Some workers are electing to remain unemployed <unk> resigned from current position.
And the subsequent supply chain shortages continued to create disruption for businesses across multiple industries.
Overtime, we believe the workforce challenges and supply chain shortages will ease.
Until then we will continue to operate with the necessary agility to address the ebbs and flows of client demand and the broader market.
Thanks in large part to the resilience and determination every volt colleagues across the globe. We delivered strong operating performance due to the successful and continued execution of our strategic priorities.
Let me now turn the call over to Lenny to give a detailed overview of our results Lenny. Thank you Linda Rep.
Revenues for the fourth quarter of 2021 was $227 8 million compared to $211 1 million in the prior year comparable quarter.
$16 7 million or seven 9% increase after adjusting for currency translations revenue increased $16 2 million or seven 7%.
During Q4 2021, our direct hire business continued to outpace past performance for the quarter. We were up 95, 1% from the prior year and up 31, 4% compared to Q4 19, which included an additional week.
Our North American staffing segment reported adjusted revenue of $190 9 million, an increase of $12 3 million or six 9%.
The 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.
Tayo revenue increased 94, 9% year over year and exceeded fourth quarter 2019 by 39, 5%.
International staffing segment adjusted revenue was $26 8 million.
An increase of $3 3 million or 13, 9% due to the expansion of business with existing clients in France, and Belgium, as well as increased direct tire business in the U K and Singapore.
Direct hire revenue increased 95, 4% year over year and exceeded fourth quarter 2019 by 22%.
Our North American MSP segment reported adjusted revenue of $10 million up 7% compared to the prior year.
But I really attributable to increased demand in our payroll service business.
Moving down the P&L gross margin for Q4, 2021 was 16, 8% compared to 16, 2% in the prior year comparable quarter, primarily due to improved margins in our north American staffing and international segments.
Our North American staffing segment increased 30 basis points due to the increase in direct higher revenue growth and higher margin business and a.
Benefit from government subsidies.
Our international segment increased 320 basis points, primarily due to an increase in direct hire business and an increase in higher margin business in the U K and Belgium.
North American MSP decreased 290 basis points, primarily due to business mix.
SG&A expense for Q4, 2021 was $34 7 million or 15, 2% of revenue compared to $30 7 million or 14, 6% of revenue in the prior year comparable quarter.
The increase of $4 million was primarily due to higher incentives on the increased sales volume increase in labor cost higher professional fees and negative medical claims experience, partially offset by lower facility cost due to consolidating our real estate footprint.
Impairment costs decreased $14 5 million in fiscal 2021 due to charges related to the partial impairment of our Orange, California headquarters and the closure of select branch offices throughout 2020.
Restructuring costs increased <unk> 7 million in the fourth quarter of fiscal 2021.
Primarily related to ongoing cost of facilities impaired in the second half of fiscal 2020.
Prior year quarter included charges, primarily related to strategic cost reductions.
Operating income for the quarter was $2 3 million compared to a loss of $11 5 million in the prior year comparable quarter exclude.
Excluding restructuring and impairment charges operating income was flat year over year as a result of the actions previously mentioned.
Operating income for our North American staffing segment was $9 1 million, an increase of <unk> 1 million compared to a year ago.
National staffing operating income was $1 4 million, a $1 1 million increase from the prior year and North American MSP operating income was <unk> 7 million a decrease of <unk> 2 million.
This was our 15th consecutive quarter recording positive operating income for each operating segment.
Q4, 2021, GAAP net income was $1 3 million or six cents per diluted share a $13 8 million improvement compared to prior year adjusted.
Adjusted EPS, which excludes restructuring and impairment charges was <unk> 11 per diluted share for the fourth quarter of 2021.
Adjusted EBITDA for Q4, 2021 was $6 2 million or two 7% of revenue.
<unk> 3 million increase compared to Q4 2020.
Looking at fiscal 2021.
Revenue for fiscal 2021 was $885 4 million compared to $822 1 million in the prior year.
$63 3 million or seven 7% increase after adjusting for currency translation and the MSP delivery model shift revenue increased $58 7 million or seven 1% during.
During fiscal 2021, our direct hire business continued its strong momentum.
Increasing 53, 9% from the prior year and up 15, 6% compared to fiscal 2019, which included an additional week.
Our North American staffing segment reported adjusted revenue of $738 8 million, an increase of $51 7 million or seven 5% compared to the prior year. The increase was primarily attributable to new business wins, and a combination of retail and mid market clients combined with the expansion of <unk>.
<unk> within existing clients.
Direct hire revenue increased 64, 4% year over year and exceeded fiscal 2019 by 16, 9%, which included an extra week.
Adjusted revenue for our international staffing segment was $107 million up $5 million or four 9% from the prior year, primarily due to increased staffing business in France and Singapore.
In addition revenue in the United Kingdom increased slightly as a result of higher payroll service and direct hire revenue.
Direct hire revenue increased 39% year over year and exceeded fiscal 2019 by 13, 5%.
Our North American MSP segment reported adjusted revenue of $39 3 million up $1 3 million or three 5% from prior year, primarily attributable to increased demand in our payroll service business.
Gross margin for fiscal 2021 was 16, 2% compared to 15, 6% in fiscal 2020.
Primarily due to improved margins within our North American staffing and international segments.
Our North American staffing segment increased 70 basis points due to a mix of higher margin business and a benefit from government subsidies are international segment increased 190 basis points, primarily due to an increase in direct hire business and improve margins in the U K and Belgium.
North American MSP decreased 280 points, primarily due to business mix.
SG&A expense for fiscal 2021 was $135 4 million or 15, 3% of revenue compared to $137 7 million or 16, 7% of revenue in the prior year.
The decrease was primarily due to $4 7 million and lower facility related costs due to consolidating our real estate footprint at $1 2 million and lowest software and travel expenses.
This decrease was partially offset by a $2 1 million increase in labor and related costs as a result of higher incentives on the improved sales volume and.
And higher medical claims in addition, professional fees were $1 7 million higher in fiscal 2021.
Restructuring cost in fiscal 2021 were $2 8 million, primarily related to $1 $8 million in ongoing cost the facilities impaired in the second half of fiscal 2020, as well as severance costs of $1 million.
The prior year included charges, primarily related to our strategic cost initiatives.
Impairment charges in fiscal 2021 were primarily related to capitalized software costs as a result of a change in the expected useful life of assets impairment charges in fiscal 2020, primarily related to consolidating and exiting certain leased office locations throughout North America.
Operating income for fiscal 2021 was $4 8 million compared to a loss of $29 4 million in the prior year.
The year over year improvement as a result of the actions previously mentioned operating income from North American staffing segment was $33 million, an increase of $18 7 million compared to the prior year.
International staffing operating income was $4 1 million, a $2 7 million increase from the prior year and North American MSP operating income was $2 1 million a decrease of $1 million.
For fiscal 2021, net income improved by $35 million compared to prior year to $1 4 million or <unk> <unk> per diluted share.
Adjusted EPS, which excludes restructuring and impairment charges was <unk> 21 per diluted share.
Justice EBITDA for fiscal 2021 was $17 8 million or 2% of revenue a $17 9 million improvement compared to fiscal 2020.
Moving onto a few key items from cash flow and the balance sheet.
We ended the fiscal year with $71 4 million in cash and equivalents and an additional $8 7 million in restricted cash and short term investments a combined increase of $20 8 million compared to the prior year.
Our long term debt remained at $60 million. The same since January 2020, and total available liquidity increased 37, 2% from $32 1 million in July to $44 million on October .
We generated $23 9 million in cash flow from operations with capital expenditures of $3 1 million.
On January three 2022.
We paid $13 1 million or 50% of our 2020 employer social security taxes, which was deferred under the cares Act.
Pages from cash on the balance sheet.
To make our second and final payment in January 2023.
Trend for Q1.
Looking towards the first quarter.
Although the labor market remains tight and we continue to be impacted by restrictions and areas. We operate early trends are promising we expect revenue to improve 3% to 4% over last year.
Gross margin should be consistent with last year with a gross margin percentage increasing throughout the year as a result of lower payroll taxes S.
SG&A should be in the high $35 million range. We believe the increased revenue should result in improved EBITDA over the prior year quarter.
I will now turn the call back over to Linda Linda.
Thank you Lenny.
For sharing commentary on the performance highlights I would like to address the ongoing COVID-19 impact on our business, what we anticipate in the coming months as well as how we are aggressively addressing the labor shortage headwind specifically in the U S.
Since our third quarter earnings call when discussions largely focused on Covid and Delta Varian impact, we find ourselves facing a new fast spreading variant known as Ami crime.
While there is still much to be learned about the exact health implications and the effectiveness of the vaccine on this variant there is no denying the disruption. It has quickly costs on air travel public events School and University openings and in some places has fueled the return of mask mandates.
Over the last several weeks, we have seen an impacted attendance of our field employees at various client locations and an increase in workplace health and safety concerns, placing additional pressure on an already tight labor market.
The good news is we are well poised to address such challenges given our experiences over the last 24 months and our increased use of technology to source and recruit quality talent more efficiently.
We continue to enhance both the candidate and the client experience through our automated surveys client specific communications the scheduling tool and of course the chatbot.
The combination of these advancements saved nearly 21 hours per month per recruiter, allowing them to redirect that time too high payoff activities for our clients.
Since last quarter, we invested in an AI powered job board jobs that both dot com.
<unk> replaced our former job board functionality.
This new job board actively engages candidates in real time, providing a more personalized user experience.
The look and feel of the site have also been significantly enhanced and better reflects the volt brand.
Although this site has been active for only a short period of time, we have seen thousands of new job seekers to our career site with.
With nearly 30% of those converting to applied.
Lastly, we are expecting to rollout a daily pay option for our field employees are desirable benefit for the skill sets, we generally place.
This program will allow for early wage access by field in place.
<unk>, leading to greater retention and a more engaged workforce.
As we have seen throughout 2021 demand for talent remains high and availability is scarce.
All of these advancements and benefits will play an integral role as we face the known and unknown talent headwinds in the coming quarters.
We are also anticipating a ruling from the U S. Supreme Court on Osha emergency temporary standard or Etfs, which requires employers with more than 100 employees to mandate vaccines or require weekly testing of unvaccinated employees.
A couple of key points I would like to make.
Despite the uncertainty around the ultimate enforceability or effective date of the actual Etfs.
Many of our larger clients have been posed variations of the requirements, including vaccine mandate daily or weekly testing or combination of both.
Overall, the field employee population at these clients represent a substantial portion of our total head count in North American staffing.
Our teams have expertly handled each situation and close partnership with our clients managing inquiries of the employee population setting guidelines for hiring and reviewing religious and medical exemption.
The success of these efforts is a tribute to the trust and confidence our clients have in our dedicated program teams.
This is when the strength of client relationships are tested and once again our teams prevailed.
Knowing that compliance with the federal mandate on a much broader scale would be a daunting task to handle manually we have secured an automated solution to allow us to address vaccination status during onboarding, which has already been implemented.
The lessons learned from the early adopters have shaped the sustainable comprehensive companywide strategy that we will be prepared to implement as needed pending a decision from the Supreme Court.
Now, let me turn to some performance highlights across our operating segments.
In North American staffing revenue growth from retail or our commercial and technical branch network delivered 21% growth year over year.
The third consecutive year of improvement.
Representing 20% of revenue for the full year. This business line continues to maintain gross margins 500 to 600 basis points higher than our overall margin.
For our international segment on New model implemented during 2020, which focused on key business segments of.
Life Sciences engineering and professional paid off.
All countries reported positive year over year trends in the fourth quarter and made significant improvement for the year.
Direct hire was a substantive contributor to our margin improvement with North American staffing up 94, 9% in the fourth quarter and 64, 4% for the full year.
And international up 95, 4% in the fourth quarter and 39% for the full year.
The investments made in the professional search teams in the U S gained momentum throughout the year, making their most significant contribution in the fourth quarter as expected.
All three operating segments reported strong operating income North American staffing $33 million, North American MSP, $2 1 million and international $4 1 million.
We believe this year was an inflection point in the turnaround and yet at the same time, we know there is still work to be done.
Our focus now shifts to 2022 and beyond as we progress towards our 3% EBITDA margin target.
Looking forward, we are focused on several key areas.
Continuing our evolution to a more balanced portfolio as a result of the successful execution of both retail and direct hire business lines through the bifurcation of retail and enterprise business, allowing for a more tailored candidate and client experience.
Fueling growth through purposeful investments in our higher margin business segments, including our branch network direct hire and North American MSP.
Continued expansion of existing technology tools to meet client demand as well as launching new technology partnerships to drive productivity and efficiency.
Volt has a competitive advantage in our India based operations and while today. This is used largely as internal back office support. We believe we can leverage this offshore model to supplement candidate recruiting and sourcing efforts in the U S.
Pacifically for higher end skill sets.
And we're preparing to quickly mobilize operational plan to successfully partner support and educate our clients in navigating any future vaccine mandate.
As Lenny mentioned early trends are encouraging as we are seeing continued momentum across all three operating segments.
This services volt offers are in high demand and our enhanced technology tools allow us to be a valuable partner in solving workforce challenges for clients across multiple industries.
Our teams are tackling 2022 with the same resilience determination and dedication that we have demonstrated since the onset of the pandemic.
We believe we will again deliver full year top line revenue growth margin expansion positive net income and continued year over year EBITDA improvement for 2022.
Remaining steadfast in our commitment to our goal of an adjusted EBITDA margin of 3%.
I will now open the call for questions operator.
At this time, we will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.
For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for questions.
Our first question is from Josh Vogel with Sidoti <unk> Company. Please proceed with your question.
You pilot and lending happy New year, I Hope you guys are well.
Same to you Josh happy New year happy New year. Thank you and please pass along my regards to Herb will be gets better quickly.
And we certainly well thank you for that.
Okay great.
I have a couple a bunch of questions here actually.
First one.
I was just curious are there any markets where.
Where specialty skill sets, where you find yourself, having a stronger candidate pool relative to peers and thus you are finding it maybe a little bit easier to navigate.
The macro supply challenges everyone's seeing.
I wish I could say, yes to that Josh Unfortunately.
I think we are.
We are seeing the same type of tight labor market across all skill sets.
And I believe all of all of us in the industry are in a similar similar situation.
Regardless of skill set we are finding that.
It's a very tight labor market type tough to find individuals.
Wages are increasing across across all skill set.
Individuals are leaving jobs for a variety of reasons. So it is.
Across the board across skill sets and it is really about.
Broadening our net wider and and.
Further in order to capture as much of those of those available candidates across all skill sets that we can.
Yes, that's understood and you actually lead into my next question.
The wage environment and the the wage inflation, we're seeing.
Curt curious.
General commentary there how it affects your business or our ability to attract candidates and how successful are easy. This in passing this along to clients.
I am sure they are becoming more and more aware of its needed that pay.
Pay rates are going up.
Yeah, it's been an interesting dynamic.
It used to be incredibly challenging to get clients to raise wages.
Over the past.
In 12 to 18 months, we've certainly seen a.
A shift in that the clients recognize the challenges that are out there they recognize the need to increase wages up for the most part they recognize the need to.
Add retention bonuses or sign on bonuses or <unk>.
Flexibility in schedules, so that there is a a much more broad.
Acceptance of what is needed to be done in order to get the quality talent that clients need now so we've definitely seen an increase in the wage inflation.
Approximately mid single digits from a year ago that varies again across skill sets and across markets.
Yeah.
It typically is accretive to us as the wage increase is accompanied by the commensurate bill rate increase so for the most part that is that is accretive to two to volt.
I appreciate all of those insights.
Looking closer at the results in the quarter I was wondering if you could bridge.
The strong gross margin performance you know basically what specifically drove the 30 basis point bump above the higher end of your guidance or is that just because.
Direct hire came in stronger or is there anything else there.
We absolutely over performed.
And outperformed an indirect higher.
The teams across the board not.
Not only in North American staffing, but also in international it was an incredibly strong quarter from a direct hire perspective.
And that certainly helped too.
Drive the margins up for the quarter.
Got it and.
Lenny I don't mean to put you on spot here and I would normally ask this to her but.
A really strong cash generation in the quarter I was I'm curious if a little bit of that was timing between receivables and payables and other accrued expenses.
So we did receive.
About $12 million in payments early.
In the last week of October that would have ordinarily have been received in the first week in November .
Okay.
Great.
Alright I.
You know I also okay. So just looking at international.
Really strong performance, there, especially over the last three quarters.
I was at least based on my model you outperformed everywhere else, but I was a little surprised by the sequential downtick in revenue there.
No that there was a bit of a return to more seasonal patterns, especially vacation.
Tend to take a lot of that during the summer months.
So.
Was that sequential downtick due to that especially in the August timeframe and I guess another way to look at it is obviously still an impressive year over year in advance, but can you give me an idea of how revenue track from month to month during the quarter.
So specifically.
Specifically, asking like Q3 to Q4 or just the revenue in the month of Q and Q4.
I'm curious when we look at the revenue month to month and international.
What's the trajectory look like yes, so obviously.
We normally would get or some slowdown in the months in the summer months, depending on the country.
So the revenue was lower in August .
Due to.
Pent up demand what I'll call. It at best of people wanting to take some time off or vacations.
So that revenue did increase as the quarter progressed.
Okay great.
One more and I'll hop back in the queue.
I was feverishly typing what did you say the SG&A.
Number range was going to be in.
In Q1.
In the high $35 million.
Perfect Alright, thank you very much.
Thanks, Josh.
Our next question is from Mike Hughes with <unk> capital. Please proceed with your question.
Good afternoon, Thanks for taking my questions.
The first one is just on pricing on the last call. You mentioned you were getting a little bit of pushback and perhaps some pressure from some of your larger clients, who are experiencing higher supply chain costs could you just give us an update on that.
Yes, So hi, Mike.
Talk to you, yes, we continue to see those ongoing pricing pressures.
And in many instances.
Most instances, we have done a nice job of.
Identifying ways in which we can run a little more lean Lee are ways that we can run a little more efficiently again, leveraging technology, which has helped too.
Remove some costs so that we can continue to.
Operate at the levels of each of those clients that we want to continue to operate at.
I think we're going to continue to see some of these pricing pressures as we head into into 'twenty two.
I do expect that it will.
Begin to begin to free up a little bit but right now we're certainly.
We're certainly still challenged with some of those pricing pressures and the team has done a really nice job of offsetting those in some creative innovative ways.
Okay.
Last quarter, I guess two months ago now, but so was the pricing pressure in the October quarter worse than that in the July quarter.
Is it worse now or is it.
Bob.
Okay.
I don't think that it's worth I think it's about the same.
I think that is.
It is really on a month to month basis.
It varies obviously, depending upon.
The clients as we're getting new business even.
Conversations around.
Pricing and as we're as we're negotiating new business.
I don't I would not say that it's gotten worse I would not say its gotten better I think it has remained pretty consistent.
And sort of a normal way of how we're having to operate in and negotiating and engage with our clients.
Okay.
And then.
Perhaps on a related topic slide you have gross margin bridge, which is really helpful and it shows that the.
Full workforce solutions contract revenue.
Resulted in about a 50 basis point year over year.
<unk> and gross margin is it pricing or something else.
Okay.
I'm just pulling up the slide.
I do believe that that it does have to do with with pricing.
Just pulling up the slides take a look at it just to make sure I'm, giving you the actual the right response to the slide you're looking at.
Slide eight.
We're trying to pull it up if you have another question you had asked that one back to this one.
Sure sure. So the direct hire business has performed really well the last two quarters, how sustainable is that going into this year.
Yeah, I expect it to be very sustainable so we're continuing to outperform their early indications in Q1 'twenty two continuing to be very strong I mentioned, our professional search group, which.
You may recall, we invested in them.
May June last year.
That team really picked up steam towards the end of last year and while they they had a very strong fourth quarter overall for the year. They werent a huge contributor I expect that to shift this year I do expect them to be a larger contributor to our overall direct higher numbers. So.
I do expect that to that to continue throughout 'twenty two.
Okay.
And then the.
North American MSP business.
I think you talked about last call at the kind of the pipeline of Rfps went a little bit slower.
Maybe some consolidation of the customer base can you just talk about the prospects for that business over the next next year.
Yeah, So again I continue to be key.
<unk> optimistic about.
The MSP.
Performance.
<unk> and <unk>.
Certainly are showing some nice traction as we've as we've kicked off 22.
They have several.
Expansion opportunities within existing clients.
Which is which is very good and very solid.
They implemented a new win towards the end of Q4. So that will also we will see that start to begin to generate revenue into 'twenty two.
A lot of a lot of.
The RFP that they're responding to presentation.
There is greater collaboration with our North American staffing team and that will continue will continue to accelerate that.
And broaden that across the organization as well so.
I have.
A very high high level of faith in this team and their ability to drive some some stronger performance in 'twenty two.
Okay, just two more quick ones for you.
I think you gave the metric for the retail mix for the year did you give us for the fourth quarter do you have it for the fourth quarter.
I don't have it broken out for the fourth quarter, but I can get that for you.
Okay, I'll get back into and I think you've given and all the prior quarters.
And then just the last question I think you said you were expecting top line growth.
Current quarter of <unk>.
3% to 4%.
Okay.
What are you baking in as far as.
Degradation growth related to the latest Covid wave.
Mhm.
Yeah, So I mean that.
That is clearly clearly built into there.
We have actually seen.
An acceleration and more of a rash of that happening in the last couple of weeks. So in the in the beginning of Q1 of 'twenty. Two it was less prevalent it has become increasingly more prevalent like I said over the over the last couple of weeks.
So the majority of the quarter will be without impact.
Impact smaller impact on Q1, I believe we'll start to see that more as we had into.
The subsequent quarters it remains to be seen but we're definitely seeing impact of it.
Higher attendance.
And folks having to foreign team.
Can you can you quantify.
I don't know that I can quantify it yet.
Again, it's just sort of something that has has really begun to to take hold.
I am not sure that I'd want to quantify it yet.
Certainly.
<unk> will be a little better more knowledgeable about it by our March call and we'll have a better idea of exactly what kind of impact we're going to see.
Okay I appreciate it thank you.
Let me come back and I'll answer your other question Mike So.
Now that I've got the slide up so.
The reason for that.
That.
Basis point decline really is coming from higher workers' comp.
Also some increase impact from some sick and Covid pay.
Pricing was actually a small also.
Impacted but it was a much smaller percentage of impact.
Okay, and workers' comp I think had been a positive for you over the last few quarters.
How should we think about that going forward not to get too far in the weeds, but.
Was it a little bit of a drag here.
Yeah I think.
There are so many ins and outs with it from a workers comp perspective.
It is somewhat harder to predict because I could say one thing today and it could change next week.
I think that.
We should see something similar to what we saw in 'twenty one.
I don't I don't have any reason to believe otherwise.
Okay. Thank you very much.
Thank you. Thank you.
Yeah.
Our next question is from Josh Vogel with Sidoti <unk> Company. Please proceed with your question.
Thanks.
One more add on here.
Based off of your comments expecting strong trends in direct hire to continue in Q1, but you are guiding for gross margin to be flat year over year. I was just curious if you could talk about the moving parts that get you to flat year over year gross margin is the absence of government subsidies from a year ago, just just trying to reconcile that thank you.
Yeah, I think that.
We're certainly going to see a.
Lower government subsidy impact.
I think where we're still as we talk about some of the pricing pressures I think we're taking some of that into account.
You know.
I think theres, a number of things in there Josh.
Happy to look into that further and we can circle back and give you some more specifics.
But.
I think we are.
We feel confident in the guidance in terms of margin being flat.
Got it well.
Thanks for taking my questions.
Great performance in 'twenty, one looking forward to seeing what you do this year have a great night.
Thanks, Josh Thank you Josh.
We have reached the end of the question and answer session and I will now turn the call over to Linda <unk> for closing remarks.
We appreciate your participation in today's call and for your continued interest in volt. We look forward to speaking with you again, when we report our fiscal first quarter 2022 results in March.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
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Hum.
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Yeah.
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