Q1 2023 Barrett Business Services Inc. Earnings Call
Speaker 1: <expletive> .
Speaker 1: That.
Speaker 1: And.
Speaker 2: Good afternoon everyone and thank you for participating in today's conference call to discuss BBSI financial results for the first quarter in March 31, 2023.
Speaker 2: joining us today of the BSI's president and CEO Mr Gary Pramer and the company's CSO Mr Anthony Harris.
Speaker 2: Before we go further please take note of a company's safe harbor statement within the meaning of the private security's mitigation reform act of 1995. The statement provides important portions regarding border-lican statements. The company's remarks during today's conference call with huge border-lican statements. These statements, along with other information presented that does not reflect historical fact also lead to a number of risks and uncertainties.
Speaker 2: available on the company's website at www.bsi.com. Now we'd like to turn the call over to the President and Chief Executive Officer of BBS Science, Mr. Gary Kramer. Please go ahead, sir.
Speaker 3: Regarding our client and WSE stack, our controllable growth exceeded our expectations in the quarter as we continue to execute on our various strategies to increase the top of the sales funnel. I am pleased to say that we once again exceeded our expectations in Q1. The next trend that we previously discussed is that we've been able to sell and support larger clients with our upgraded technology stack and national PEO licenses. This continues to progress favorably and the average size of the clients that we are adding are larger than the average size of the clients that are running off.
Speaker 3: Regarding client runoff, our retention in the quarter was better than the prior year quarter and continues to remain stronger than pre-pandemic levels. I like to attribute that to the work we do with our clients and to the value that our teams provide.
Speaker 3: We had positive scene customer sales in every other geography, which more than offset the weakness in Northern California, and we finished the quarter at a net positive, but by less than we forecasted. To summarize, we grew our worksite employees by 3%, which was on plan for the quarter, as we sold and retained more business. This was partially offset by our clients growing slower than anticipated. Moving to our staffing operations, our staffing business declined 23% over the prior year quarter, and was lower than we anticipated.
Speaker 3: This decreases the combination of many factors, including but not limited to supply, demand, weather, and varies by geography. Anthony will give some regional color for what we're seeing in our markets. Moving to the field operational updates, we are very pleased with our progress of entering new markets with our asset light model. Our market development managers are doing well and largely achieving their goals of adding and servicing new clients and new referrals.
Speaker 3: and service of BBSI benefits, our new health insurance offering. As a refresher, we rolled out a soft launch to a limited number of existing clients in select markets for the 1-1-23 enrollment season.
Speaker 3: Our intent was to perfect our craft and then shift our focus to California and to new prospects.
Speaker 3: Our soft launch was successful, and in March, we started selling BVSI benefits in every market to new prospects as well as existing clients.
Speaker 3: Since our last earnings call, we have successfully sold medical and an ancillary products to 31 additional clients.
Speaker 3: This brings our year-to-date total to approximately 101 clients on our various plans. More importantly, we have proven that our product can be sold successfully in every geography we operate in. I would like to take a minute and discuss some successes of BBSI benefits. We have been able to sell into our existing clients, which is a great thing. We have also been able to take this product to new distribution channels and to new client industries. We have also been able to take this product to new client industries.
Speaker 3: Regarding new distribution channels, our BBSI benefits products aligns well with benefits brokers. We onboarded 74 new benefit referral partners in the quarter. This is approximately 15% of the new referral partners that we added in the quarter and we expect the velocity and quantity to increase throughout the year.
Speaker 3: Our distribution channel has been heavily skewed to property and casualty brokers because of our workers' compensation product, and this new product will allow for better balance and better diversification. Regarding our new client industries, we have had early successes in adding clients in the industries of consulting, healthcare, and financial services. These white collar industries were previously more challenging for us to penetrate with a lack of a benefits offering.
Speaker 3: The company is extremely excited to work with all of these new markets. Next, I'd like to shift to our view for the remainder of the year.
Speaker 3: We've had consecutive quarters of great momentum. Our controllable growth exceeded our expectations in Q1 and this trend continued into April . We are selling and servicing BBSI benefits in all markets now and we continue to be optimistic regarding the road ahead. We can maintain and recap the flight of bribery,
Speaker 3: Now I'm going to turn the call over to Anthony for his prepared remarks.
Speaker 3: all over the Anthony for his prepare remarks. Thanks Gary and hello everyone.
Speaker 3: I'm pleased to report we've finished Q1 with strong financial results, achieving our highest Q1 income as a PEO, and with strong, controllable growth as we added more work site employees from net client ads in the quarter than in the prior year quarter.
Speaker 3: Our overall gross billings increased 5% in Q1 2023 to 1.79 billion versus 1.71 billion in Q122. With continued positive earnings leverage, we achieved diluted earnings per share of 12 cents compared to 4 cents in the prior year quarter. Looking more closely at our Q1 results, PEO gross billings.
Speaker 3: increased 5.3% over the prior quarter to 1.8 billion, while staffing revenues decreased 23% over the prior year to 22 million. As Gary noted, our increase in PEO gross buildings in Q1 once again included stronger than expected growth from that new clients in the quarter.
Speaker 3: This was partially offset by slower client hiring in our existing customer base. Overall, WSC is through by 3% for the quarter, which was in line with our expectations. With respect to client hiring, the decline in Northern California accounted for approximately two-thirds of our total slowdown in hiring. We have seen hours worked increase in April since the poor weather is inside of the Northern California. See that It can be approved on ten months torn under the
Speaker 3: but we continue to expect the pace of client hiring going forward to be slower than last year.
Speaker 3: Client wage rates have remained resilient and even increased in the quarter, which will continue to drive building growth for the remainder of 2023.
Speaker 3: However, as previously mentioned, our average billing per WSC was impacted by fewer hours worked and less overtime in the quarter. Average hours per WSC decreased 5% year-over-year, and overtime decreased 11%. As a result, our total average billing per WSC increased less than 1% for the quarter. The average billing per WSC increased 5% year-over-year, and overtime increased 11%.
Speaker 3: Looking at PEO growth buildings grow in total by region versus the prior year first quarter. East Coast grew 14%, Southern California grew 10%, Mountain States grew 8%.
Speaker 3: The Pacific Northwest increased by 1% when normalized for large one-time bonuses in the prior year, and Northern California declined by 2%.
Speaker 3: Looking more closely at the decline in staffing revenues.
Speaker 3: We anticipated that Q1 would be our toughest compare for staffing due to strong staffing demand in the prior year first quarter.
Speaker 3: Reviewing by region, our primary challenge in the Mountain States continues to be the availability of labor to fill client orders as unemployment rates remain low. In the Pacific Northwest, several larger customers have decreased orders and moved more of their labor in-house.
Speaker 3: Our California regions were impacted primarily by weather and decreases in demand due to softening economic conditions.
Speaker 3: Overall, we expect staffing revenues to continue to decline year over year due to the ongoing challenges in the economy, but the decline should be at a slower rate than the Q1 decrease. Moving to our gross margin results, our gross margin rate continues to trend favorably with continued cost savings from lower workers' compensation expense in the quarter.
Speaker 3: while our pricing has remained in line with plan. Workers' compensation expense continues to benefit from favorable claim frequency trends, and the first quarter included a favorable actuarially determined reduction of prior year estimated liabilities of $1.1 million. As a reminder, our workers' compensation exposure is now primarily covered by the prior year
Speaker 3: with our percent and included increases associated with the launch of BBSI benefits largely offset by savings driven by cost management efforts.
Speaker 3: The result is continued earning leverage and higher earnings for Q1 than prior first quarters.
Speaker 3: Looking at the remainder of 2023, we continue to anticipate slower SGNA growth in 2022.
Speaker 3: and continue to expect favorable earnings leverage in line with our long-term targets. Moving to our invested assets, our investment portfolios earned $2.3 million in the first quarter, up 700,000 from the prior year.
Speaker 3: Our book yield is 2.3% up from 1.8% in the prior year quarter. Our portfolio continues to be managed conservatively with an average duration of 3.8 years and average quality of investment AA.
Speaker 3: Turning to the balance sheet, we had $133 million of unrestricted cash investments at March 31st, compared to $160 million at December 31st.
Speaker 3: The decrease is primarily due to the timing of year-end employee proper sharing and quarterly tax payments.
Speaker 3: As a reminder, BBSI is completely debt-free and we do not incur any increased expense associated with higher interest rates. Continuing into the board, $75 million share repurchase program and the first quarter BBSI repurchased $8 million of shares, an average price of $88.67 per share.
Speaker 3: The company also paid $2.1 million in dividends in the quarter and reaffirmed its dividend for the following quarter.
Speaker 3: Turning to our outlook, our expectations for 2023 remain consistent with our prior outlook. We continue to expect growth billings to increase between 5 and 8%. We expect average WSEs to increase between 2 and 4%.
Speaker 3: We expect gross margin as a percentage of gross billings to be between 3.0 and 3.15 percent, and we expect our effective annual tax rate to remain between 27 and 28 percent.
Speaker 2: I will now turn the call back to the operator for questions. Thank you very much. Ladies and gentlemen, we will now be conducting the question and answer session. If you would like to ask a question, please press star and then 1 on your telephone keypad.
Speaker 2: You will hear a confirmation tone that your line is in the queue. You may press star and 2 if you wish to remove your question from the queue.
Speaker 2: For those using speaker equipment it may be necessary to pick up your handset before pressing the star key.
Speaker 2: Our first question comes from Jeff Martin of Roth in
Speaker 2: question comes from Jeff Martin of Roth in Britain. Thanks. Hi Gary, hi Anthony. Hope you're doing well.
Speaker 4: Yeah, hello.
Speaker 5: Could you give a little sense of the California market? Did you see any delayed decision making tied to economic uncertainty or banking sector kind of ripples throughout the month of March? And any other factors within California on the PEO side that...
Speaker 3: of our clients and looked at the bank accounts and we didn't have much indirect exposure. And then regarding any slowdown because of it, we had a very strong April . Our momentum continued into April . Actually, probably one of our best April's we've had in quite some time. We went back and I think it was our best April since 2000.
Speaker 3: and 16 something like that as far as our unit counts for what we added. So didn't see any slowdown in April regarding new business transacting. You know we mentioned the weather in California and specifically Northern Cal and it had it had an effect on our construction industry right if it's if it's wet out there they can do the business.
Speaker 3: and we did that slow down and we mentioned that in our prepared remarks but we're starting to see that come back into April . Remember we're a couple weeks behind when we have our payroll run so you know we can't see perfect data yet it's not real time but we did see payrolls bounce back some in April specifically in northern Cal in those industries.
Speaker 5: Okay, and then could you comment with respect to pricing on new and renewing clients? Are you seeing pricing strength there? I think one of your competitors said they saw unexpectedly strong pricing coming out of the quarter. Who is testing on new sales?
Speaker 3: You know, I would say, you know, for the health insurance specifically, we're still learning our craft in that one. So I'll just talk specifically to the workers comp and ultimately the admin we charge our clients. So we've been able to hold rate on the workers comp.
Speaker 3: That market's been kind of bouncing at the bottom and we've been being able to hold rate pretty well on that. And then the other thing we've been able to do is increase our admin a little bit to offset the inflationary costs that we're feeling. So we have a strategy that, you know, if our costs are going up, we try to push some of those costs over to the clients.
Speaker 3: and we've had success with doing that over the last 18 months.
Speaker 5: Great. And then my final question is with respect to the BBSI benefits offering, what's your expectation in terms of kind of take rate? What do you expect?
Speaker 5: more of that to come from new clients or are you looking at that as you probably have a pretty high batting average in terms of selling it to existing clients? I think the sell through, I'll say over the next...
Speaker 3: new clients or are you looking at that as you probably have a pretty high batting average in terms of selling it to existing clients? Yeah I think the sell through you know I'll say over the next nine months
Speaker 3: is going to be better for our existing clients. So our clients know us, they value us, they like us. This is a good product that if it's going to help them with administration, it's going to help them with plan design, if the underwriting fits, we can be competitive. So we think the existing clients for what we're seeing through our sell-through now.
Speaker 3: is going to be where we get the most ads in the next nine months. But we are able to sell this to new clients. I mentioned in my remarks that we're adding clients that we've never had the ability to bring on before. We're seeing hedge funds, money managers, law firms, companies like that.
Speaker 3: white collar that typically would go with a different PEO because they had benefits. Now we're able to bring them on and we're having a good success rate on bringing on these new white collar industries with our new product.
Speaker 5: Great. Sounds encouraging. Appreciate your time. Thank you for your time.
Speaker 2: Thank you. Thank you. Our next question is from Vincent Galicia of Barrington Research.
Speaker 6: Yes, Gary. How is, if we set aside California, how is a client hiring trends doing versus the prior quarter?
Speaker 6: Yes, Gary. How is, if we set aside California, how is a client hiring trends doing versus the prior quarter?
Speaker 3: It's slower than prior quarter, it's lower than prior year quarter, but you know the example I would give you is Northern Cal we were negative, negative about 1800 as far as our clients actually pulled back worksite employees.
Speaker 3: And then as we got in the Southern Cal, use that as a balanced Southern Cal. We were positive by about 1300. So Southern Cal continued to add Northern Cal shed and it was predominantly due to those industries that were weather related. But across the board.
Speaker 3: you know, every region and almost every industry we're in our clients added worksite employees except for Northern Cal.
Speaker 3: region and almost every industry we're in, our clients added worksite employees except for Northern Cal.
Speaker 6: It sounds like your traditional lead generation platform is, you know, building out nicely. The digital marketing side, did that meet your expectations in the quarter?
Speaker 3: That's a loaded question because nothing ever meets my expectations. But, you know, I would say, you know, we talked about this last year where we had our total available market strategy where we were going out and trying to find new referral partners. And that was predominantly based towards...
Speaker 3: P&C brokers and other non-traditionals. We had very good success on that last year. We did some reporting to that in our quarterly calls. What we've done is taken what we learned there and now we're using that to target you know we're calling it a TAM2 which is now we're trying to target
Speaker 3: employee benefits brokers, right? Because we have a product that fits for them and they can sell it as well. So now we have a targeted approach for more referral partners on the Life and Health side. So feeling good about that. We started that in Q1. We've had pretty good success so far.
Speaker 3: But I think we're going to get better at bringing those on throughout the year.
Speaker 6: And you had stated in your prepared remarks that most of your first-through-third asset like classes are performing within your expectations, I think you said. Has there been any incremental setbacks since last quarter?
Speaker 3: Now, we're doing well.
Speaker 3: I'm looking at reports now for the year we've added 20 clients out of that new group.
Speaker 3: about 200 plus WSEs and they've got a big pipeline of 140 plus million of potential revenue in the pipeline. So doing real well there, getting real good success. That's why we're comfortable with launching the next class of five that we've already hired these folks, and they're going through the training now.
Speaker 3: with the intent to start selling in Q3.
Speaker 6: And lastly, any changes in sales cycles or any other indications of a slow economy?
Speaker 3: No. I mean, you know, I feel a little bit like a homer when I talk about the weather, but the weather was, I would say, the only thing that was peculiar for us in the quarter. And you know, the thing I'm just real optimistic about is we got more product to sell. We've got more people to sell it. We got more product to sell.
Speaker 3: and our sales machine, our controllable growth, we've been executing above our plan.
Speaker 3: our sales machine, our controllable growth, we've been executing above our plan. OK.
Speaker 2: Thank you. Thank you very much. The next question is from Chris Moore of CJ Securities. Please go ahead.
Speaker 4: The line is open. We'd like to ask you a question.
Speaker 2: Please just check your line is not muted.
Speaker 2: We cannot hear you at the moment. I will be left behind.
Speaker 7: Yes, we can hear you now, sir. Okay, sorry about that.
Speaker 7: So, I just want to talk a little about the workers' comp model. Obviously, you've been significantly de-risked over the last couple of years. Is it fair to assume that at some point in time, the one-times workers' comp, you know, positive adjustments will, you know, start to get increasingly smaller? Chris, the way that we think about...
Speaker 3: that we we're setting ourselves up so that we continue to get favorability in the future on our prospective program. So we we have return premium provisions in there and our goal as an organization is try to get as much of that return premium back.
Speaker 3: as an organization. So if you think about going forward, going forward, we're gonna have, you know, potentially future benefits. You know, if all things work out and are underwriting continues, and the crystal balls as clear as I hope it is, we'll continue to have these return premiums come in through the fully insured program.
Speaker 7: Got it. It's helpful. And I was kind of looking at incremental health care earnings as filling that gap, but it doesn't look like there's a gap to be filled necessarily. Just from expectations on the benefits side, I was kind of thinking that 24 would be modestly impactful and then 25 is when...
Speaker 3: we have a big California presence. And we literally just started selling in California at the end of March into April . We've had good success so far. I think I said we brought on 11 clients so far, just the news, call it.
Speaker 3: six weeks and we're still selling for the 7-1 selling season and the idea here is to get your reps and get ready and learn your craft so that you can so that you can really capitalize on the 1-1 selling season which is a predominant selling season for healthcare. I say all of this because you know whether it's material or not is going to be dependent on how well we do in California and I just don't have enough data.
Speaker 3: to really give you a good estimate on that yet. So as we think about this, we'll bring it on business this year. We're probably going to cover our freight as far as the revenue and things we bring in the profit is going to cover the expenses for 23, for 24, depending upon how we do. It could, it's going to be profitable. It's just a question of, it's going to add profit. The question is just how much profit?
Speaker 7: if these are held to maturity.
Speaker 3: our trust account, there's not a scenario where we would need to liquidate those investments. So as we noted, our average duration is 3.8 years, so it's not long duration, not long maturity. We're fully content to let those run out and amortize down to par value.
Speaker 3: no risk of any kind of forced transaction that we require to realize those losses. Yeah, there's no it's not a bank where you can get a run on depositors when you know in a day, right? These are these are there to support workers comp claims and and the payment curve of workers comp is very hard to to modify so we don't have to worry about a run.
Speaker 5: I wanted to ask Anthony with respect to payroll, payroll taxes, pseudo rates, things that fall into the cost of revenue line. Are you seeing any much movement there? My understanding is pseudo rates are determined by the states and those often don't come out.
Speaker 5: prior to you booking the business for the year or renewing the business for the year. So, curious what you're seeing if anything in terms of trends specifically on Cedar Raids and then also anything else within the payroll tax line that's moving around.
Speaker 3: Yeah, I know it's a great question and we've seen a multi-year trend now of our cost of sales decreasing right over time. We've seen that in our overall market going down. Seeing that again this year as well. So we continue to see our workers come, cost go down, our shooter rates would come in flat or down overall across our various states. So once again, seeing favorable tax rate.
Speaker 3: The one piece that did go up that was obviously in the news was if there was food of credit reduction for a handful of states in the country, including California, but that was an incremental tax that we've negotiated with our clients to pass through in our rates real time. So no impact to margins from that.
Speaker 5: propensity to continue to pursue share repurchases particularly with the stock trading where it is.
Speaker 3: Well, again, the stock trading where it is, there's a lot of value there, and that's something we definitely look at. So, you know, as Gary noted, our fundamentals and our control book growth have really never been better. We've never been more optimistic about the company, so from our perspective, it's a great opportunity to continue the share with purchase program.
Speaker 5: Okay, great. And then, Kramer, on the M&A side, are you still looking at potential acquisitions or does the BBSI benefits offering negate the need to continue to look out there?
Speaker 3: Yeah, good question. I would say we are still in and active of the market.
Speaker 3: What we're looking for has shifted some. We were looking for a PEO that had a health insurance offering. Now that we built our own out, we don't need to look for that specific profile. But if it makes sense, we're still looking for PEOs and geographies, we're not. We're still looking at IT products that can support.
Speaker 3: looking or seeing the market come down. We're seeing the market come down to where we think it's...
Speaker 3: but we've got some dry powder that's ready to deploy if we find something that lines up right.
Speaker 5: Okay, and then since we have some time here, I wanted to ask, you know, if we look out five years...
Speaker 5: From a geography standpoint, from a client mix standpoint, blue collar versus gray and white collar, geographic footprint, where do you see BBSI in five years with respect to being more of a nationwide player in a lot more markets and competing more for the white collar side of the PEO market?
Speaker 3: Yeah, I would say let's just talk organic and leave the inorganic off the table, right? Because the inorganic can really skew how your profile looks, right? Just depending upon if we require somebody what they would look like.
Speaker 3: We have been investing heavily in our market development managers, right? So we had 14 that are currently selling. We've got five that are in training now. So that's.
That's 19 markets that we were not selling in.
realistically could have
people in every, I don't want to say every state because I don't know if we're ever going to go to Alaska or North Dakota, but we could be in, you know, the majority of the states where there's a heavy population of small businesses that can use the BBSI support. So, you know, we've really...
demonstrated that our product can be successful in any geography. Just the core BBSI product and then
You know, we're also with these new market development managers, right? So I want to say that half of the businesses we're bringing on now in these new markets are are typically white collar and they're also buying the benefits product.
So we're selling more benefits in the new markets. We're selling more white collar in the new markets. And it's just gonna be a matter of time to figure out how that balance shifts over five years.
Okay, and then one more if I could. In terms of the technology platform, my understanding is a lot of the white collar market is more demanding of an enhanced technology platform.
Is that part of the longer term plan to enhance that platform? I know you just upgraded it and it was a meaningful upgrade. I'd curious to know your thoughts there. Yeah, that's...
You know every I don't care if you're white blue gray everybody wants better tech, right? And we are committed to building out better tech. We've got a very good IT team We use a very good offshore partner that that does our development for us For lack of a better term we we have become a software shop
pretty clear on what's on our product roadmap. We're not sharing that externally, but we do have folks that are...
that know where we're going and have the plan to get there. Thanks again for your time.
Thank you. Ladies and gentlemen, just a reminder, if you wish to ask a question, please press star and then one. The next question is from the design of the Tietan capital. Please come ahead. Great. Thank you. Great quarter and first question is relative to.
Hi, Bill. We've seen consistent wage growth now for some time and that really hasn't tempered. It's actually been very resilient. If you look at the national statistics, you're seeing average wage rates this last quarter about a little over 5% year over year. Our internal statistics usually are ahead or higher than those national statistics. That continues to be the case even through Q1. We're seeing that the wages are resilient. Really the softness that we talked about, the same customer sales component was in those hours worked. That was really offset by the 5% lower hours worked that we talked about in Q1. Again, the hours worked are more temporary and that comes back, but those wages are resilient. We'll continue to be a...
Great, that's helpful, thank you. And then relative to staffing, I know you talked a bit to it in the opening remarks, would you step back and just talk about strategy relative to staffing and how you see it philosophically fitting into the business over the course of time?
Yeah, I would say we have a...
more focus and attention on staffing now than we ever had. We have folks that are dedicated in leading the product line. We have been investing in IT to support the onboarding and the applicant tracking on the app on the staffing side. So we're committed to the business. The new product that we have is we do recruiting for our PEOs.
We had another another good quarter of that this year so far and we continue to expect that to grow as well. I mean, it's probably still the number one thing we hear from clients is that, you know, they can't find employees to hire, right? Everybody's, everybody reads the journal, everybody knows that this is the most advertised recession in history. But fundamentally everybody's still trying to hire. There's still...
more job openings, twice as many job openings as unemployed people now, right, still in this economy. So folks are having trouble finding good people. That has not subsided at all. You know, when I think of staffing, right, our staffing is down and it's down for a couple different reasons, right? In anything you mentioned it by geography, but
Really what we've done is taken a hard look at our staffing as we modified our strategy.
We started to call businesses, you know that we weren't making our profitable, you know, ROI returns on so We we made decisions to get off a certain account so that we can deploy our recruiters on other business. That's more profitable We know that we're going to have profitability in the recruiting for our PEO clients, so we've been making choices and diverting resources and
Some of the top line is intentional and we've been going through this intentional for about the last six months and you're You're starting to see it more in Q1 because it's going against the Q1 of 22, which is harder compare But but we look at this saying every branch that does staffing is profitable now and we're driving better profitability in every staffing branch
That's really helpful Gary. Would you please maybe reconcile one thing which is that the overtime is down but yet the number one issue you hear from clients is they can't hire enough people. Those two seem like they could be in.
in general, if they have a choice to not pay overtime, we would prefer to not pay the overtime, right? Because you're typically doing the time and a half depending upon where the wages are.
So, you know, they always try to manage through what's best for their business. And it's better to have more folks on regular time than to be paying excessive wages on overtime. So, just in general, you know, we're seeing overtime down, we're seeing a little bit of pullback on those, but we're also
Right, we gave the stat of, you know, over times down, but our outside of California are our clients still hired, you know, southern California. They still hired 2000 employees. Right? So it's, we're still growing. It's just growing at a at a lower rate than it was compared to 22. Right? Think of 22 you had a ton of pent up demand still coming at you from coded and and it's, you know, it's not as
there is hiring taking place. Does that imply that the level of pain in terms of the ability to hire has maybe improved slightly? And so they are getting more of the employees that they would like just not fully there.
Tough one to answer. It's going to vary by state by geography, right? Like our. Our Utah markets, I think Utah may have the lowest unemployment in the country still.
I'll use our staffing business for example. You know, we have a real tough time filling in those markets just because there's nobody, there's no available workforce.
So, it's hard to paint a brush for the whole country depending upon what the real industry or what the real geography is. Great. Now, that's a very fair point. One additional question then. You have mentioned that April was a very good month for you.
The weather has certainly been better on the west coast. So presumably we should see an acceleration in the second quarter relative to the first quarter in terms of your underlying business strength in terms of how it's viewed or reported externally.
Yeah, I mean, we feel that we're going to get some workers coming back in northern Cal, which is going to be a positive. And then as we look through our unit counts.
clients we added in the worksite employees they had in April and clients we retained you know it's our April's not closed yet but April was a very strong month for us so we feel you know this is where we get back to the controllable and what we feel optimistic about I mean we feel we feel real optimistic about the future and about what we can control and and we think April April is going to be better than March
That's helpful. I told you that would be my last question. I'm going to actually sneak in one more. I believe in your opening remarks you referenced that persistency was better than it was last year. Would you walk through what is leading to that persistency?
improvement and ultimately the implications that that has on your profitability. Yet, you know, our client retention
You know, I gave this stat of our client retention in this quarter was better than we got a bigger client base
and we had less runoff in Q123 than we did in Q122. So we had less clients runoff, less WACs runoff than we did against the prior year, and that's on a bigger base. So we feel real good about that. And that has to do with the service and the value we bring to our clients, right? We're out there every day in the field with our clients, practice and normal.
still there today and we're there and we got new products for them to hopefully help run their business. Microsoft Office Word his&her www.microsoft.com.au
I feel like we've got a real, viable, valuable product for them, and that's why they stay with us. Thank you both and congratulations again on a great quarter.
a real viable, valuable product for them, and that's why they stay with us. Thank you both and congratulations again on a great quarter. Thanks Bill.
Thank you. Ladies and gentlemen, that concludes our conversation on this session, and I would now like to turn the call back over to Mr. Kramer for some pleasure remarks. Sure, I feel like I used all my words on this one, but I just want to thank all the BVSI professionals for a great quarter and thank you everybody for dialing in for your support.
And that concludes our call.