Q1 2022 TrueBlue Inc Earnings Call
Pleased to report our strong performance trends from 2021 continued into the first quarter with all three segments capitalizing on a widespread demand for our services led by people Scout, which delivered a fourth consecutive quarter of revenue growth.
Overall revenue was $552 million, an increase of 20% compared to Q1 2021.
Marking the fourth consecutive quarter of double digit growth.
People ready revenue trends benefited from historically high bill rates and worker supply improvements, while contributions from new and existing client demand drove people Scott results.
We are also pleased with the revenue growth and our people management business, Despite global supply chain challenges.
These factors along with our continued focus on improving operational efficiencies produced net income of $11 million, an increase of $4 million compared to Q1 2021.
Let's take a closer look at the performance of each of our three segments starting with people ready.
People already is our largest segment representing 58% of total trailing 12 month revenue and 61% of total segment profit.
Already as a leading provider of on demand labor and skilled trades in the North American industrial staffing market.
We service our clients via a national footprint of physical branch locations as well as our job stack mobile app.
People ready revenue was up 17% compared to Q1 of 2021.
Bill rates are at historic highs and outpacing pay rates.
While worker supply continued to improve and performance within retail and hospitality with solid.
People management is our second largest segment, representing 29% of total trailing 12 month revenue and 9% of total segment profit.
People management provides onsite industrial staffing and commercial driver services in the North American industrial staffing market.
The essence of a typical people management engagement is supplying an outsourced workforce that involves a multiyear multimillion dollar onsite or driver relationships.
We are very pleased with people management growth this quarter with revenue up 8% compared to Q1 2021.
<unk> sales in our onsite business produced year over year growth, Despite global supply chain challenges and demand for our commercial trucking services remains robust.
Turning to our third segment people Scout represents 13% of total trailing 12 month revenue and 30% of total segment profit.
Scout as a global leader in filling permanent positions through our recruitment process outsourcing services as well as offering managed service provider solutions.
People, Scott delivered a fourth consecutive quarter growth with revenue up 76% compared to Q1 2021.
Results this quarter benefited from a combination of the re staffing surge of existing clients that started to ramp in Q2 2021.
Higher employee attrition rates at our existing clients and new client wins.
Before turning to our strategies I want to provide a bit of context for recent business trends.
During the back half of March we typically see a seasonal increase in people ready revenue.
This year the ramp was less due to seasonal and project work in the retail industry that will not carry into Q2.
As well as some clients taking a more measured approach to on demand temp labor as a result of broader economic uncertainty.
On the plus side sequential growth for people ready and April has been in line with historical norms.
Revenue trends for people management and people Scout continued to perform as expected.
Now I'd like to shift gears and update you on our key strategies by segment, starting with people read it.
And people ready our most important strategy is to further digitalize, our business model to gain market share and improve the efficiency of our service delivery cost structure.
The U S temporary day labor market is highly fragmented and there are very few large players in the industrial staffing segment, where people ready competes with the bulk of the market made up of smaller companies.
These smaller regional companies are typically not able to spend the type of investment required to deploy something like our job stack mobile app.
So this along with our nationwide footprint is what makes us a leading provider within industrial staffing.
At the center of our digital strategy is job stack.
The application has created a unique user experience for our associates and clients, allowing both groups to connect at anytime.
Since deploying the application nearly five years ago associated option has grown to over 90%.
Turning to clients total users of the application of our 29900, a 13% increase versus Q1 2021.
We continue to focus on converting clients to heavy users.
As a reminder, the heavy client user has 50 or more touches on jobs that per month.
Whether it's entering an order, creating a worker for premium time.
Overall heavy client users account for 57% of people ready to use on demand revenue compared to 44% in Q1 2021.
We've also seen continued growth in our digital fill rates, which.
We have increased to nearly 60% with 792000 ships filled.
Via the App during the quarter.
Now the latest jobs that provide a differentiated experience, but also as a key enabler for our service center strategy.
Which aims to better serve existing clients and reach new ones more effectively.
The enhanced go to market approach increases operating hours by 25 hours per week compared to a typical branch.
And includes repurpose job roles.
This includes the addition of territory based account managers responsible for expanding and building relationships with new and existing clients.
And the reduction of non client facing positions, resulting in a net cost reduction.
We expect the new structure will deliver a greater sales focus and provide elevated customer service.
Last year, we successfully launched and later expanded the territorial coverage of two service center pilots.
In addition earlier this year, we opened a service center dedicated to skilled trades and added a fully virtual model to test.
Results for all pilot locations continue to improve as we advanced the operating model and apply learnings for example, we're learning the virtual model tends to have materially lower employee attrition, thus, creating more continuity potentially leading to better financial metrics relative to the other models as.
As we move forward, we will be closely assessing the progress of both physical and virtual models develop the most ideal structure for the business.
Turning to people management, our strategy is focused on execution in growing our client base. We continue to invest in our sales teams to enhance business development activities and we remain focused on expanding our geographic footprint by targeting more local and underserved markets.
Coming off a record level of new wins last year people management has secured annualized new business when the $21 million this year.
More than 40% versus the three year comparable average prior to 2021.
The continued strength in new wins.
As well as improving trends in existing client sales are helping to offset recent global supply chain challenges. Additionally, we are investing in customer and associate care programs in an effort to better serve our clients' needs.
And improved retention.
Turning to people Scout our strategy Leverages, our strong brand reputation to capture opportunities in an industry poised for growth.
The company has reduced or eliminated their in house recruiting teams during the pandemic.
And now we're seeing companies returned to hybrid and fully outsourced models.
Our ability to hire large volumes of workers has allowed us to meet the demand of our existing client base.
They are re staffing it to pre pandemic levels, specifically within travel and leisure.
Our capitalized further we made investments in our sales teams to expand wallet share at existing clients and obtaining new clients. Our efforts continued to deliver strong results with annualized new wins of $12 million this year up 27% versus prior year.
Our ongoing commitment to our digital strategies.
Combined with our focus on improving operational efficiencies are driving operating margin expansion and creating a competitive advantage for us in the market.
I'll now pass the call over to Derek who will share greater detail around our financial results.
Thank you Patrick.
Total revenue for Q1, 2022 with $552 million representing growth of 20%.
This growth was driven by strong overall demand as all three segments reported revenue growth for the quarter.
People are ready continued to command higher bill rates and capitalize on improvements in worker supply.
People management returned to growth this quarter, despite global supply chain challenges, while people scale continued to see heightened demand from both new and existing clients.
We posted net income of $11 million or <unk> 30 per share an increase of $4 million.
And adjusted EBITDA was $23 million, an increase of $9 million.
Our net income and adjusted EBITDA margins grew 40, and 120 basis points, respectively, driven by revenue growth and gross margin expansion.
Gross margin for Q1, 2022, or 25, 4% was up 130 basis points.
Our staffing segments contributed 110 basis points of margin expansion, driven by 40 basis points from favorable bill pay spreads.
30 basis points from increasing people ready sales mix, which carries a higher margin than people management and.
And 40 basis points split between workers compensation and customer mix.
People scale also contributed from higher sales mix, providing 20 basis points of benefit.
SG&A expense increased 24%, which was higher than our revenue growth of 20% due to two factors.
First we are in the process of redesigning our front office technology for people already this year, which houses our applicant and customer tracking systems.
As planned we spent $3 million this quarter as we prepare to fully implement this system next year.
These costs are excluded from adjusted EBITDA and adjusted net income.
SG&A growth on an adjusted basis resulted in the increase of 21% essentially in line with revenue growth.
Second we are still lapping temporary cost cuts made in 2020.
Since Q1 is our seasonally lowest volume quarter is also our low point in SG&A dollars, making the lapping of these cost cuts more pronounced on a percentage basis.
We expect year over year adjusted SG&A in the second quarter of 2022 to grow at about half the rate. It grew in Q1 2022.
The bottom line is we are running the company more efficiently today than pre pandemic due to our operational improvements and digital strategies.
SG&A as a percentage of revenue in Q1 2022 improved by 130 basis points in comparison with Q1 2019.
Our effective income tax rate was 16% in Q1 versus a tax benefit of 2% in the first quarter last year.
Turning to our segments people ready revenue increased 17%.
While segment profit increased 37% and segment profit margin was up 70 basis points.
Fill rates grew at double digits for the fourth consecutive quarter and outpaced pay rates, which boosted segment profit margin.
Average weekly associates put to work were up 12% year over year.
We saw widespread growth from a geographic perspective with growth in 18 of our top 20 states.
From an industry perspective results were particularly strong in retail due in part to projected seasonal work and hospitality continues to deliver the strongest results.
People management returned to growth this quarter as revenue increased 8%. However.
However, we did see a slight pullback in segment profit.
Which decreased 4% to 30 basis points of segment profit margin contraction.
Our onsite businesses provided three points of revenue growth.
Strong demand in our commercial driving business contributed the other five points of growth.
The decline in segment profit margin was due to a benefit in the prior year's credit loss reserve.
People Scout revenue increased 76% with segment profit up $7 million and over 400 basis points of segment profit margin expansion.
This marks the highest quarterly revenue in the history of people scale.
These results reflect increasing volumes from same customer demand, most notably with travel and leisure clients as well as new business.
Operating leverage from higher sales volumes contributed to the improvement in year over year segment profit margin expansion.
Now, let's turn to the balance sheet and cash flows.
Our balance sheet is in great shape.
We finished the quarter with $37 million in cash and $4 million in outstanding debt.
The business is producing strong cash flows with year to date cash flow from operations totaling $26 million and we returned $36 million of capital through share repurchases during the quarter, leaving $114 million of authorization.
For details on our outlook for the second quarter and full year 2022.
Please see our earnings presentation filed today.
This concludes our prepared remarks, please open the call now for questions.
Okay.
I would like to remind everyone. If you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your first question comes from the line of Mark <unk> with Baird. Your line is open.
Hey, good afternoon, Patrick and Derrick Congrats on the strong results here in the us.
In the first quarter I am wondering can you talk a little bit more about what youre seeing.
In terms of the centralization of officers.
You know that you initially started up in Chicago and Dallas.
The progress that you're making in terms of the rollout.
After the markets that you discussed last quarter.
Hey, Mark this is Patrick thanks for the question.
As a reminder, the future state model for the service centers evolves.
Significantly more hours of coverage going from 60 hours to 80% to 85%.
Less reliance on brick and mortar branch locations.
Mythical more local feet on the street, and essentially doubling our sales force and account managers and reducing non client facing roles.
Yeah.
We're making good progress we're excited about how the service center pilots are coming along as we mentioned earlier in the prepared remarks, we expanded the Chicago and Dallas pilots to Houston and Rural Illinois.
We've also expanded to include skilled trades and then we've rolled out a virtual service center as well for Baltimore, and Washington D C.
In terms of what's going well there.
The client feedback has been very strong both for local and our national accounts.
A number of client site visits that our teams are making his way up the number of safety visits were making his way up to make sure that we're.
Placing workers in safe environments, and we're seeing that in our safety metrics are improving across the board in the pilot locations versus the branch compare job stack usage is up in the service centers versus the compare group in.
One of the interesting findings.
That we've had is in the virtual service center.
Turnover is orders of magnitude lower than in the branch model or in the centralized service model, which has some pretty significant downstream implications.
That are favorable.
In terms of what's not went well we are operating on our current technology, which was built for branch delivery.
Not a centralized or virtual models, we're having to do a lot of work around until we get the end state.
Quality and system put in.
The other thing that's been a little surprised that we thought the turnover would be quite a bit lower in the centralized locations versus the branches and that's not been the case, we've only seen that and the virtual model.
So far.
In terms of kind of where we're headed there is a couple of open items that were still working out.
One of them is what the dominant model will be will it be a physical set of service centers.
Virtual San of centers or some combination of the two and still we're still working that one out and then the other open item as Derrek mentioned in his prepared remarks.
We're upgrading our technology, particularly our front office system.
And the timing of that is in the first quarter of next year and so we're trying to sort of time out what's the best way to rollout the centers with with the new technology or roll them out prior to the to the new technology and so those are some of the open items, but the headlines are really encouraged and we've had a lot of learnings and.
Since we are expanding the pilots.
We're pleased with the results.
Yes, I mean, obviously you are pleased with the results can you can you give us a sense for like.
What the rate of improvement in our rate of growth has been.
In Dallas or Chicago.
Relative to the rate of improvement that you've seen in the in the markets, where you haven't implemented the pilots.
I appreciate the question Mark we're not going to get into the <unk>.
The details of the various metrics that we're tracking we're going to keep those to ourselves for competitive reasons.
Okay, but I mean.
It would be it would stand to reason that they are clearly doing better now.
Okay.
Well I'd say this in some cases, yes in some cases now I'll just leave it that we've had we've had.
Some cases were very encouraging and others not as much.
Alright.
And then with regards to.
So people Scott continue to do really well there.
You mentioned leisure and hospitality the specific clients that you have there that.
That are seeing a surge.
The reason to believe that that.
Search doesn't continue.
In the near term because it certainly listening to some of your clients.
And leisure and hospitality, they're basically saying that there they're seeing some some pretty big increases so I would imagine staffing remains a big challenge for them.
Okay.
Well. It does there is a lot of catch up that had to go on in the back half of 2021 and that continues.
We're really encouraged with people Scott right now you saw the growth rate of.
76% in Q1, we think Q2 is going to be a very strong quarter as well. The other dynamic that comes into play as we're seeing a lot of health care companies interested in and recruitment process outsourcing when you look at our.
Our wins that we've had in recent quarters, it's been disproportionately tilted towards healthcare.
Yes.
A little bit in transportation retail hospitality health care has really been a hot area and we're excited about that because that's typically first time buyers you don't see a lot of health care providers that it had.
RPM engagements. So we're seeing a lot of first time buyers a disproportionate number compared to historical averages pipeline is very strong. So we're feeling very good about people scout and not just the hospitality piece of it but the entire entire portfolio of clients.
Great and then the last question and then I'll jump back in the queue can you talk a little bit about your commentary about the second half of March.
How widespread is that is it primarily just basically due to the retail clients that you mentioned with the special projects kind of coming off or is there something thats a little bit more widespread.
Yes, I'll, let Derek take that one to start market I'll add some specific color, but theyre going to go ahead and take that one.
Sure Hi, Mark Thanks for the question.
Yeah, So what what we're seeing the big picture normally our second quarter.
Sequentially compared to the first quarter, taking the five year average we would expect it to go up about 8%.
Or what the trends right now suggests is about 4% and Thats really about this part that we talked about with people already.
So about four points of drop if you would want to call it that half of it is from retail.
Our retail sector has been performing very strong and just like we called out in the fourth quarter. We had some seasonal and project work, that's not going to carry but overall retail industry is still there.
Pretty well.
And then the second part is this.
We take a look at those last two weeks of March compared to the first two weeks of March and a sequential build that we would expect it was pretty widespread across industries. Just a couple of points last year and one three points less than another five points and one one point in another averaging out to about two points of this was four points.
We've talked about.
As we went into April the good news is is that April did build like.
We expected compared to the last two weeks of March So everything is consistent there we havent recover.
The buildup that we would've had in our weekly run rate had March.
Back half of March came in as expected, but things are running consistent there.
Interestingly enough, we haven't seen that in.
Any softness at all or any pullback or any any pause in our business on the people management side and people scout side both of those.
Doing quite well and.
What we're really talking about here with the sequential build that would translate into <unk>.
Revenue growth for the second quarter, if that continued at this pace of about 10% to 12%.
Okay.
Great. Thank you year over year over year growth.
Yes.
Okay.
Your next question comes from the line of Jeff Silber with BMO capital markets. Your line is open.
Thank you. This is Ryan on for Jeff while it doesn't appear your business is seeing an upcoming recession. The market is a little bit more pessimistic what signs do you look for in your business to gauge a potential cyclical downturn.
Yeah.
Well.
I'll go ahead start off here Patrick you can you can take some as well.
In staffing businesses.
I think most would probably say some of the factors they look at it or their own business.
We've taken a look at a lot of different.
Aspects of the economy, and we could go down a list of a lot of the common ones that you take a look at.
I think this time around we've all of course caught our eyes on inflation and what the feds dealing with interest rates. So.
We're not sure really where this goes.
Now, we've got a pretty experienced management team across the company that knows how to respond.
Well to ebbs and flows and this might just be more of an ebb and flow of how the economy trends itself out from here.
<unk>.
The other thing that we're we're taking a look at those we're planning the business as well.
There's still 11 million jobs open.
In the country and we're just not seeing anyone that has any opinion that that's going to go away anytime soon and most of those jobs are are blue collar oriented lower pay rate jobs, that's what we do really well so we.
We think our our business has still got some legs here, but we'll take a look and see where things go economically.
We'll play the cards that we get Delta.
We can make the right.
Adjustments that are needed depending on where the economy goes.
Okay.
Hey, Ryan I'll, just add a little color on that as Patrick clear.
Clearly theres a lot of uncertainties, when we talk with clients around supply chain.
Inflation worker supply and worker pay rates.
Political issues Lockdowns in China, and the list goes on.
Hmm.
But with all those caveats.
The labor market remains very tight.
So the demand is there.
One of the things that I look at is what clients are dealing with their purchasing patterns.
If you look at our year to date wins.
They are up quite a bit so people are still going out and.
Purchase an RP O deals a large onsite deals and projects.
So.
The labor market is very tight.
Having said that though there are there are some projects that have been pushed out you look at our.
Okay.
Our alternative energy business, we had $12 million of business pushed out of Q1 and into the back half.
2022, and it was mainly due to supply chain issues. So.
There's definitely some uncertainty, but overlay that with the tightness of the labor markets.
It feels like that demand is still there very strong.
Got it and as a follow up what drove the revision in the gross margin guidance are you seeing less of a headwind on that workers comp expense.
Okay.
Are you referring to.
Our annual outlook.
Okay.
Yes, it was.
Well a couple of things one our bill pay spreads are still doing really well.
<unk> to show really strong maybe a little bit less headwind on the workers' compensation.
But you take the revenue trends are headed.
For people ready and for people Scout Theres also a mixed benefit that's coming into play here.
Gross margin for both of those businesses is is higher than people management in those two businesses are growing at a faster clip.
Got it thank you.
Yeah.
Your next question comes from the line of Kartik Mehta with Northcoast Research. Your line is open.
Hey, Good evening, Patrick you talked a lot about <unk> and obviously that.
That app is doing really well Im wondering if you look at your absenteeism.
And jobs tax versus the core business.
Kind of difference are you seeing is there a difference or in this current environment is it the same.
Okay.
Well.
First just a comment on absenteeism.
We saw.
A modest spike.
When <unk> really got rolling again.
In.
December January February are a lot of folks are calling in sick or just not showing up at all.
We've since seen absenteeism come back down to more historical levels.
One of the advantages we have in job stack is we do a lot of in App marketing to the workers with incentives with nudges with reminders with confirmations and we've seen some pretty good pretty good results. There I don't have the numbers in front of me in terms of what those exact numbers.
For job stack.
Positions or positions that were filled by job stack versus those that were not other than to say directionally, it's been moving in the right direction across.
Across.
Not only people ready, but also people management.
And just one other comment it's somewhat related if you look at our fill rates.
It's been a little bit of a mixed story in people management.
We're back to more historical norms, we're at around 90% on our.
On our fill rates, which is really encouraging we haven't seen as big a lift in people already partly because of the short term nature of the assignments were still running in the low to mid sixties there for.
Fill rates without jobs that we'd be in a much much worse position, so <unk>, absolutely helping them with a fill rate perspective in all of those nudges and reminders and confirmation to have to be have to be having a pretty favorable impact as well I just don't have the numbers in front of Mcarthur.
Hey, Patrick I, just wanted to your comments and <unk> comments on a little bit of a slowing in the second half and maybe.
I'm getting too granular here, but.
You talked about 11 million jobs, the opening you talked about.
Clients are still meeting workers, yes, second half of March slowed down.
I'm just trying to reconcile the statements you made around that is it simply that business is getting pushed out or do you think your clients are.
Accepted this kind of environment and have stopped looking for people.
Well, we did some digging into specifically where we saw.
The ramp not happened as it typically has or some of the retail.
Roll that didn't quite come on as fast as we had thought and here's a couple of themes that we found.
The first one was definitely some supply chain related.
There were several clients.
Around lack of materials and delays and things of that sort that didn't ramp to the same degree that they have in the past we had one situation where a client had been doing a lot of construction it was a retail client and.
And that construction got halted because of.
Material shortages and so a lot of the people that we had on building came off billing for that particular client.
And then another and states we saw.
Client shift their mix of <unk>.
Full time and temporary resources to tilt heavier towards full time resources.
Because they thought it would create.
A more attractive value proposition for some of their workers and they have the confidence that they were going to need those workers long term. So they shifted their mix from temp to full time, so it's a little bit of supply chain issue in a little bit of.
Shifting mixing from tempt to full time were the primary reasons that we saw in the retail space.
Perfect and just one last question just on your share repurchase is this more than you had anticipated going into the year or is this kind of in line with what you were expecting.
To get completed by now.
Hi, there. This is Derrick I'll take that one this is about where we expected.
Our share repurchases last year were very.
Basically de Minimis, because we had some things to cover working capital and repayment of the payroll taxes.
We were allowed to defer under the cares act, but if you take a look back to our history over $36 million is.
Really a kind of why in the sweet spot of an average and sometimes more than that so.
The business is doing really well as far as strong cash flows. We don't have that we don't have any other big investments that we've got to make and so this is.
Right about where we expected and this.
This may not be as though the last bit that we purchased by the way. This will be in our 10-Q that we filed today. We also purchased another 39 are another 30.
$13 million on a <unk> one plan as we entered the quarter. So that brings our total closer to 50, so far that we've repurchased this year.
Perfect. Thank you very much I appreciate it.
Okay.
Okay.
Your next question comes from the line of Marc Riddick with Sidoti Your line is open.
Hey, good evening.
Good evening.
So I was wondering if you could talk a little bit about the.
Going back to <unk>.
Worker avail.
Availability and supply and what you saw there was wondering if you can spend a little time talking about maybe sort of what that either either the pace was like or maybe the timing of the geography that type of thing, it's just a little sort of.
More color around maybe what you saw.
And when you do it that kind of thing, but also whether or not there was any anything that you think is likely to persist into.
<unk> and how we should think about it from a big picture standpoint.
Okay.
Yes, Mark are you referring to the last couple of weeks in.
In March that we commented on and people ready.
I believe so yes.
Yes, Derek do you want to maybe start with that one and then I'll add some commentary around worker supply.
Okay.
Yeah, So mark what's the question about worker supply in those weeks or just in general.
Right I was asking about the improvement on worker supply just.
Basically in that and then if there was any kind of read through or.
Or.
Anything about it at that.
B predictive at all.
Well I'll start right here, and Patrick and Leann I wanted to come to work or supply.
We haven't seen that.
Tracking at all actually we've been seeing that expand that we talked about this during the fourth quarter, we felt like.
Our our business had been overly impacted by some of the government stimulus.
Many of our folks don't want to work full time and so they make decisions based on where they are or their bank account in us. So I don't know if I would call. This a read through to the overall supply out there on the broader economic sense, but ours is continued supply continues to look strong. So for example compare.
Two the average number of people that we're applying for us in December if you look at it on a weekly basis and as we entered.
Going into the first quarter that grew by about 1000 people or so a week.
So we haven't seen any reversal of trends on the worker supply side if anything.
A bit better Patrick anything else, you want to add to that.
Yes, just a couple of things.
Definitely wanted to reiterate the supply is continuing to improve our applicant growth was up 20% in Q1.
When we look at the weekly trends applicants are very strong over the last six weeks.
Which translates into more hires we're getting more people through the process our unique workers are up they.
They were up around 9% driven mostly by those new new hires that we've had so we're definitely.
Not feeling like supply is waning. This was more of a demand situation at a handful of clients that was.
Well, maybe more than a handful of clients that there were a couple of big ones that were part of that two week pullback that we saw so I wouldn't read into it.
We're seeing waning supply it was more on the demand side and the supply side.
Okay got.
Gotcha.
And then I was wondering if you could just talk a little bit around the.
The commentary <unk>.
And people management.
Now talking about the <unk>.
The drop in demand which is.
It's understandable to continuing to be strong. This morning, you could talk a little bit about availability, there and and.
And.
May.
And maybe if there is an opportunity to see more of that either through.
Overall training activity or anything like that.
Well that is the question in a center line was up 28% in the first quarter, So really strong quarter, which is our just for everyone listen Thats our driver business in.
It's probably one of the hottest.
Areas right now other than maybe nurse staffing driver staffing is is in very high demand and that is the million dollar question around how do you go out and get more drivers in.
There are some that have chosen to.
Make investments in driver training and certifications and things of that sort of we've not we've we're looking more for experienced drivers and putting them to work. So.
It's a very hot area clear shortage of drivers and.
An area that were.
We're pretty focused on.
David do you want to add on drivers.
No I think you've covered it well.
Yes.
Okay excellent and then the last thing for me I Wonder if you could talk a little bit about this.
If there are any verticals that we haven't touched on yet and market verticals that you think have the opportunity to sort of.
<unk>.
Perk up demand wise or be more demand drivers in the latter half of the year than maybe the first half of the year.
Okay.
Sure I'll take that one.
I think the ones that we've seen so far are going to continue to weigh pretty strong retail and hospitality have been particularly strong in our people ready business.
Our other groups as well, but particularly people ready.
Take a look at the shortages that there are back to that 11 million jobs a lot of these very low pay rate.
Types of roles and so you get into retail that fits and we all know that retail has been doing strong.
<unk> not only bounced back really strong.
But the number of job openings there is huge.
And so our business really caters to that and you have this with restaurants too, but the contingent staffing model just doesn't suited as well as hospitality. So those are big areas for us both a peep already people management people Scout and as Patrick mentioned, we think we've got some opportunities ahead of us.
From the pipeline and what we're seeing out there when it comes to.
Yes.
In the medical area.
So.
We're excited about that as well.
I would just add mark.
The alternative energy.
The building of the solar firms a lot of those have gotten pushed out from Q4 and Q1.
And when we talk with our clients they tell us they have secured the materials, which was the reason for the delays and so I think youll see a pretty strong back half for us in the alternative energy space.
Just had a backlog of.
Of.
Of installations that have been pushed out.
Okay, Great and then last one for me.
Wanted to go back to one of the things you mentioned if I if I remember this correctly if I got this right was the receptivity from clients, both national and local level and national account level to be.
To the evolving.
Our strategy and also in English.
The service centers and I was wonder if you could talk a little bit about maybe.
Talk a little bit more about is are you getting a sense that that receptivity is.
A greater maybe upside for national accounts or is there something about that that that offering that you think that might appeal more to national accounts versus local accounts or how we should be thinking about that.
Well, it's a big part of our strategy to have more people that are client facing and linear.
You know when you're essentially more than double the number of people that you have locally that are that are out making making calls.
On on client.
If you hire the right people those tend to work out pretty well and so the feedback we've gotten and this is both from local and national clients is that they are very appreciative that we're coming out we're learning their business.
We're making sure that the.
The business environment, there that we're bringing the right people that match the need.
For our workers, they're very appreciative, because we're making more safety visits than we have in the past and just making sure that it's a safe environment and we've got the right PPE for those workers and as I mentioned, we're seeing that in our safety metrics that they where are we.
<unk>.
Run these pilots that the safety metrics have been have been much better.
Then.
Our compare group and so we're just getting a lot of good feedback from folks that hey, I really like that you guys are coming out more often and really trying to learn our business and making sure that you're.
Checking in with the workers that they're having a good experience.
That's a big part of the premise behind the switch to the service centers is to take a bunch of cost out that's behind the scenes <unk> automation and digitalization and efficiencies with centralization free up those dollars and invest them in client facing resources and so.
It really hit Mark on what are the key.
Rationale for doing what we're doing which is to get more people out talking with clients and selling business.
Okay.
Great I appreciate it thank you.
Yeah.
There are no further questions at this time I'll turn the call back to CEO , Patrick Burke for closing remarks.
Well, thanks, everyone for joining today's call and thanks to all of the true Blue Associates for the great work that they're doing and we look forward to speak.
Speaking with you all again on our Q2 earnings call that will take place in late July so.
Stay safe everyone.
This concludes today's conference call. Thank you for joining you may now disconnect.
Okay.
Okay.
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