Q3 2023 Advantage Solutions Inc Earnings Call
Speaker 1: Good morning and welcome to Adventist Solutions 3rd quarter 2020-200 calls. Today's call is being recorded and we have allocated one hour of focus pair remarks and Q&A. At the time, I'd like to turn the conference over to Sean Shao-Ktie, Investor Relations and Strategy for Adventist. Thank you, you may begin.
Good morning, and welcome to Atlantic Felicia third quarter waiting 23 earnings call.
Today's call is being recorded and we have allocated one hour focus her remarks, thank you Wendy.
At this time I'd like to turn the conference well My choice, Sean Sean Zhang Investor Relations and strategy for other vintage. Thank you you may begin.
Speaker 2: Thank you, operator, and thank you everyone for joining us on advantage solutions third quarter 2023 earnings conference call.
Thank you operator, and thank you everyone for joining us on advantaged solutions third quarter 2023 earnings conference call.
Speaker 2: On the call with me today are Dave Peacock, Chief Executive Officer, and Chris Groe, Chief Financial Officer.
On the call with me today are Dave Peacock, Chief Executive Officer, and Kris <unk> Chief Financial Officer.
Speaker 2: After their prepared remarks, we will open the call for a question and answer session.
After their prepared remarks, we will open the call for a question and answer session.
Speaker 2: During this call, management may make forward-looking statements within the meeting of the federal securities laws. These statements are based on management's current expectations and involve assumptions, risks, and uncertainties that are difficult to predict.
During this call management may make forward looking statements within the meaning of the federal Securities laws.
These statements are based on management's current expectations and involve assumptions risks and uncertainties that are difficult to predict.
Speaker 2: Actual outcomes and results could differ materially due to a number of factors, including those described more fully in the company's annual report on Form 10K files with the SEC.
Actual outcomes and results could differ materially due to a number of factors, including those described more fully in the company's annual report on Form 10-K filed with the SEC.
Speaker 2: All forward-looking statements are expressly qualified in their entirety by such factors.
All forward looking statements are expressly qualified in their entirety by such factors.
Speaker 2: The company does not undertake any duty to update or revise any forward-looking statements except as required by law.
The company does not undertake any duty to update or revise any forward looking statement, except as required by law.
Speaker 2: Please note, management's remarks today will highlight certain non-GAAS financial measures.
Please note management's remarks today, we'll highlight certain non-GAAP financial measures.
Speaker 2: Our earnings release, which was issued earlier today, presents reconciliation of the non-gaft financial measures to the most comparable GAAP measures .
Our earnings release, which was issued earlier today presents reconciliations of these non-GAAP financial measures to the most comparable GAAP measure.
Speaker 2: His call being webcast and recording of this call will also be available on the company's website. And now I'd like to turn the call over to advantages to EO Dave Peacock. Thanks, Sean.
This call is being webcast and a recording of this call will also be available on the company's website.
And now I'd like to turn the call over to advantage is CEO, Dave Peacock.
Thanks, Sean and good morning, everyone and thank you for joining us.
I want to once again extend my gratitude and appreciation for everyone else the vantage team for their hard work this quarter.
Speaker 3: Together, we delivered $1.1 billion in revenues, an increase of 4.3% year over year, and adjusted EBITDA of $113 million, well above consensus at $1.5 million.
Together, we delivered $1 $1 billion in.
An increase of four 3% year over year, and adjusted EBITDA of $113 million well above consensus estimates.
Speaker 3: Furthermore, we generated $177 million, but just an unleavored free cash flow very recorder, which reflects our ongoing success, optimizing our working capital.
Furthermore, we generated $107 million adjusted Unlevered free cash flow during the quarter, which reflects our ongoing success optimizing our working capital.
Speaker 3: Our executive leadership team continues to make significant progress on the strategy we're building together to maximize the company's full potential and positions of business for long-term profitable growth.
Our executive leadership team continues to make significant progress on the strategy. We're building together to maximize the company's full potential acquisitions that business for long term profitable growth.
Speaker 3: to ensure our successful execution. We continue to invest both time and money behind technology modernization and robust talent management initiatives which include up-skilling key roles and building a more diverse leadership team reflective of our broader workforce of creating a more inclusive organization for all.
To ensure our successful execution, we continue doing basketball time and money behind technology modernization and robust talent management initiatives, which include Upskilling key roles and building a more diverse leadership team.
Our broader workforce, while creating a more inclusive organization for all teammates.
Speaker 3: These efforts are aligned to strategic priorities we've spoken about previously, namely, to strengthen our culture, simplify our operations, enhance our processes, and improve our financial discipline as a unified company to deliver more value to our
These efforts are aligned strategic priorities, we've spoken about previously.
English strengthen our culture simplify our operations enhance our processes and improve our financial discipline as a unified company because they learn more about each of our stakeholders.
Speaker 3: We are proud to share updates with you today on our progress and how we are building our plans.
We are proud to share updates with you today on our progress and how we are building a plant.
Speaker 3: Advantage stands for the Interception of CPG Brands and Retailers, Physical and Digital Repail, National and Pivot Brands.
Advantage stands at the intersection of the CPG brands and retailers physical and digital retail national and private brands, our extensive reach and breadth of services that span the entire purchase path of generating demand and converting shoppers into buyers in every way they shop, our operational scale is unmatched.
Speaker 3: our extensive region breadth and services and the entire purchase path by generating demand and converting shoppers and the buyers in every way they shop.
Speaker 3: Our operational scale is unmatched with more than 4,000 CPG brand clients across 17 trade channels and most of the largest US grocery as well as several big box retailers choosing advantage as their exclusive in-store experiential provider.
More than 4000, CPG brand clients across 17 trade channels and most of the largest U S grocery as well as several big box retailers choosing advantage as their exclusive in store experiential provider.
Speaker 3: We also have contracts with retailers representing over 100,000 locations to provide empathetic, merchandising services and private label support.
We also have contracts with retailers representing over 100000 locations to provide episodic merchandising services and private label support.
Speaker 3: Our business is highly relational and our teammates are committed to serving with hard and executing relentlessly. Building trust and working during every day is critical to our success and reflected in our reputation as one of New Zealand's world's most trustworthy companies in 2023. We're ranked number 18 in our category among a list of 1000 companies around the world based on customer trust, investor trust and employee trust.
Our business is highly relational and our teammates are committed to serving with hard executing relentlessly building trust and working to earn it every day is critical to our success and reflecting on our reputation as one of Newsweek's worlds most trustworthy companies in 2023.
We're ranked number 18 in our category of my almost a thousand companies around the world based on customer Trust Investor Trust and employee Trust.
Speaker 3: The recognition is a testament to how we center our success on both relationship and results.
Michigan is a testament to how we center our success on both relationships and results.
Speaker 3: The strong and enduring relationships we have with our brand clients and retail customers, combined with a new business we're winning, create a competitive position that yields critical insights and strategic perspective on today's shop.
The strong enduring relationships, we have with our brand clients and retail customers combined with the new business, we're winning.
Create a competitive position that you'll just critical insights and strategic perspective on todays shoppers.
Speaker 3: We regularly leverage our collective intelligence to both inform and help achieve our client's goals and an extension of their own teams, including how best to play and where to pivot to optimize performance.
We regularly leverage our collective intelligence to both inform and help achieve our clients' goals and an extension of their own teams, including how best to play where the pivot to optimize performance.
Speaker 3: For example, we conduct a quarterly survey among dozens of brand manufacturers and retailers called the Advantage Outlook to gain robust data on marketplace trends, emerging dynamics, and the macro operating outlook over the next six to 12 months.
For example, we conduct a quarterly survey among dozens of brand manufacturers and retailers called advantage outlook to gain robust data on marketplace trends emerging dynamics and the macro operating outlook over the next six to 12 months.
Speaker 3: These surveys are packed with valuable and unvarnished insights that not only inform, but also provide timely actions for CPG and retailers to consider.
These surveys are packed with valuable unvarnished insights not only for them, but also provide timely actions for CPG and retailers to consider.
Speaker 3: The latest advantage outlook that will be released later this month reveals several trends that continue to drive the man for advantageous service.
The latest advantage outlook that will be released later this month.
Several trends that continue to drive demand for advantage of services.
Speaker 3: A few highlights from the report include the deal of persistent unit volume challenges. Retailers are working to attract value-seeking shoppers by leaning heavier into key events and holidays, private-able brands and shopper loyalty programs to drive sales.
A few highlights from the report include still persistent unit volume challenges retailers are working through attractive value seeking shoppers are leaning heavier key events and holidays.
They build brands and shopper loyalty programs to drive sales.
Speaker 3: Over 40% of retailers say they plan to make room for more privatelyable brands by reducing space for SKUs of national brand products.
Over 40% of retailers say they plan to make room for more private label brands by reducing space for S. Skus of National brand products.
Speaker 3: Finally, labor availability remains the cute challenge with holidays even with some 30% of retailers saying they plan to decrease the number of in-store display that the result of simply not having enough in-store labor to build and maintain.
Finally labor availability remains an acute challenge this holiday season, with some 30% of retailers, saying they plan to decrease the number of in store displays as a result of simply not having them up in store labor to build and maintain them.
Speaker 3: That doesn't mean they don't expect a pause in the powe. See that?
It doesn't mean, they don't expect a positive holiday season, however, more than half as manufacturers and retailers in our survey data anticipate growth between one 5%. This holiday season, driven by improved product availability and resilient consumer demand.
Speaker 3: or than half of the manufacturing retailers in our survey, say they anticipate growth between one and five percent this holiday season, driven by improved product availability and resilient consumer demand.
Speaker 3: We will share the full slate of industry meeting insights when we release the advantage outlook later this month.
We will share the full slate of industry, leading insights when we released the advantage outlook later this month.
Speaker 3: Bar and Fides and Expert teams have supported our progress across our business this quarter. The macroeconomic environment remains next. GDP growth and consumer spending have remained resilient. Whereas inflationary cost pressures and labor availability challenges have persisted across the industry.
Well, our insights and expertise to support our progress across our business. This quarter. The macroeconomic environment remains mixed GDP growth and consumer spending remains resilient.
As inflationary cost pressures in labor availability challenges persisted across the industry East.
Speaker 3: These challenges are consistent with our expectations and we anticipate that they will take time to evade.
These challenges are consistent with our expectations and we anticipate that they will take time to abate.
Speaker 3: We are experiencing labor cost inflation in the mid-single digits, as expected, with the rate slowly moderating on a sequential quarter-based.
We are experiencing labor cost inflation in the mid single digits as expected with the rates slowly moderate on a sequential quarter basis.
Speaker 3: Given our success in revenue management, we were able to offset the majority of our labor inflation with realized pricing in the third quarter.
Our success in revenue management, we were able to offset the majority of our labor inflation, but realized pricing in the third quarter.
Speaker 3: We remain focused on continuing to pursue full value for our services in an effort to offset this cost inflation and wages in other parts of our business.
We remain focused on continuing to pursue full value for our services in an effort to offset this cost inflation in wages and in other parts of our business.
Speaker 3: We expect to see continued improvement in revenue management going forward, as well as we upskill our talent and grow our capabilities in this area. We also are focused on driving efficiency in our business, recognizing the need to deliver services in a way that is more precise and generates a greater yield on time and cost expenditure.
We expect to see continued improvement revenue management going forward as well as we upskill, our talent and grow our capabilities in this area.
Also our focus on driving efficiency in our business recognizing the need to deliver services in a way that is more precise and generates a greater yield on time and cost extended.
Speaker 2: Additionally, we continue to focus on driving increased profitability and enhancing the conversion of our profits into cash. On a year-to-date basis, ADDvantage generated approximately $294 million of adjusted unlevered free cash flow. We're representing a significant increase versus the prior year, driven largely by working capital benefits.
Additionally, we continue to focus on driving increased profitability and enhancing the conversion of our profits into cash.
Year to date basis advantage generated approximately $294 million of adjusted Unlevered free cash flow, representing a significant increase versus the prior year driven largely by working capital benefits.
Speaker 3: As Chris will discuss, we are focused on balance sheet management. We will comment on long-term targets at a later date, but we are happy with our progress in achieving 4.2 times net leverage relative to 4.5 times at the beginning of the year. And we will continue to work towards bringing the ratio even lower over time.
As Chris will discuss we are focused on balance sheet management, we will comment on long term targets at a later date, but we are happy with our progress in achieving 4.2 times net leverage relative to four five times at the beginning of the year and we will continue to work towards bringing the ratio even lower over time.
Speaker 2: We are also making progress on our portfolio evaluation work, and we'll provide further updates in the first half of 2024.
We're also making progress on our portfolio valuation work and we'll provide further updates in the first half 2024.
Speaker 3: Our long-term success is tied to the people we employ and the talent we develop. This is why we are increasingly focused on recruitment and improving retention across our business. We hired more than 1,200 net new employees in the quarter, which has supported continued improvements in our in-store merchandising and demonstration business.
Our long term success is tied to the people we employ in the talent me develop.
This is why we are increasingly focused on recruitment and improving retention across our business. We hired more than 200 net new employees in the quarter, which is supported continued improvements in our in store merchandising and demonstration businesses.
Speaker 3: In our sampling business, event counts are up 20% year-over-year, representing approximately 78% of 2019 levels. We expect to see incremental...
And our sampling business event counts are up 20% year over year, representing approximately 78% of 2019 level.
We expect to see incremental improvements in the coming quarters.
Speaker 2: We continue to reduce turnover across our enterprise quarter over quarter with significant improvement in our part-time retention rates. In fact, we saw our lowest level of quarterly turnover since COVID and continue to work to retain our valued teammates and improve their experience at our company.
We continue to reduce turnover across our enterprise quarter over quarter with significant improvements in our hard time retention rates.
We saw the lowest level of quarterly turnover since COVID-19 and continue to work to retain our valued teammates and improve their experience of our company.
Speaker 2: We will further refine our talent practices to strengthen retention, which should allow us to provide better and more reliable service, enhance our execution levels, and limit talent acquisition and training costs.
We will further refine our talent practices strengthen retention, which should allow us to provide better and more reliable service enhance our execution levels and limit talent acquisition training class.
Speaker 3: Given our sheer breadth and scale, exemplified by our more than 70,000 teammates, we continue to regularly identify operational enhancements and levers by which we can simplify our service offerings while driving performance.
Given our sheer breadth and scale exemplified by our more than 70000 teammates. We continue to regularly identify operational enhancements and levers I wish we can simplify our service offerings, while driving performance.
Speaker 3: Our team is energized for this challenge and is invigorated by the opportunities that we see for this business.
Our team is energized with this challenge and this is bigger aided by the opportunity that we see for this business.
Speaker 3: We are designing our transformation roadmap based on a comprehensive strategic review and a range of inputs, including analyzing the macro environment, market trends, and the competitive landscape.
We are designing our transformation roadmap based on a comprehensive strategic review and a range of inputs, including analyzing the macro environment market trends and the competitive landscape.
Speaker 3: But even more importantly, we've assessed a wealth of stakeholder feedback, including from brand clients, retail customers, teammates, and investors.
But even more importantly, we've assessed a wealth of stakeholder feedback, including from brand clients retail customers teammates and investors.
Speaker 3: Amid significant changes in shopper behavior and in how brands and retailers are evolving to meet new challenges in the marketplace, ADDvantage Solutions is embarking on a necessary multi-year transformation to integrate, cross-sell, and operate more effectively as one company.
Made significant changes in shopper behavior, and then how brands and retailers are evolving to meet the challenges in the marketplace advantage solutions of embarking on a necessary multiyear transformation to integrate cross sell and operate more effectively as one company.
Speaker 2: The changes we're pursuing are intended to position advantage for long-term profitable growth by doing three things. Simplifying our structure, enhancing our processes and platforms, and strengthening our financial
The changes were pursuing are intended to position advantage for long term profitable growth by doing three things simplifying our structure.
<unk>, our processes and platforms and strengthening our financial discipline.
Speaker 2: In doing so, we will deliver on our shared mission to generate demand for consumer brands and retailers, converting shoppers into buyers in every way they shop. First, we will
In doing so we will deliver on our shared mission to generate demand for consumer brands and retailers converting shoppers into buyers in every way they shop.
First we will simplify our structure.
Speaker 3: Well, we've grown to our position and are proud of our competitive position. We've admittedly overproliferated our footprint historically, becoming a holding company of disparate businesses, which has created inefficiencies and barriers for strategic growth.
We've grown through acquisition and are proud of our competitive position, we have admittedly over proliferated, our footprint historically, becoming a holding company of disparate businesses, which has created inefficiencies barriers for strategic growth.
Speaker 2: As such, we are simplifying our operations by centralizing duplicated backoffice functions and streamlining commercial operations.
As such we are simplifying our operations by central logging duplicative back office functions and streamlining commercial operations.
Speaker 2: In addition to our ongoing evaluation of our service offerings, our plans include better organizing our portfolio of businesses to align our capabilities with economic buyers.
In addition to our ongoing evaluation of our service offerings. Our plans include better organizing our portfolio of businesses to align our capabilities with economic buyers.
Speaker 3: These changes will drive greater collaboration and cross-selling throughout the company, clarify the value-enhancing connections in our comprehensive suite of service offerings, and demonstrate the collective value of our capabilities.
These changes will drive greater collaboration and cross selling throughout the company clarifies the value enhancing connections and our comprehensive suite of service offerings and demonstrate the collective value of our capabilities.
Speaker 3: Put simply, our evolved approach to the business will enable us to better address our clients' challenges from multiple angles, allowing them to benefit more from the collective power of our team and our services.
Put simply our evolved approach to the business will enable us to better address our clients' challenges multiple labels, allowing them to benefit more from the collective power of our team our surfaces.
Speaker 3: While our business is comprised of two segments today, sales and marketing, the new anticipated reporting structure and disclosures are designed to center on three distinct service segments, branded services, retail services, and experiential services.
While our business is comprised of two segments today sales and marketing the new anticipated reporting structure and disclosures are designed to center on three distinct or soda segments branded services retail services and experiential services.
Speaker 3: Within branded services, the economic buyer is the consumer package goods manufacturer or an agent representing the manufacturer.
Within branded services, the economic buyer is the consumer package goods manufacturer or an agent representing the manufacturer.
Speaker 3: Branded services includes our headquarter sales services where our teams execute as a strategic extension of CPG teams by selling their brands into retailers and executing their merchandising plans in thousands of retailers across the country.
Branded services includes our headquarter sales services, where our teams execute is a strategic extension of CPG teams by selling their brands entered retailers and executing their merchandising plans and thousands of retailers across the country.
Speaker 2: In addition, our brand-driven marketing solutions and our e-commerce marketing teams will report into this segment, among other capabilities.
In addition, our brand driven marketing solutions and our ecommerce marketing teams will report into this segment among other capabilities.
Speaker 2: Retail services bring together capabilities and offerings where the economic fire is the retail.
Retail services, bringing together capabilities and offerings, where the economic buyer is the retailer.
Speaker 3: This includes, but is not limited to, our single-source merchandising division called SAS and Damon, which develops, builds, and manages private brand strategies on behalf of retailer customers.
This includes but is not limited to our single source merchandising division called S. A S.
Damian, which develops builds and manages private brand strategies on behalf of retailer customers.
Speaker 3: Lastly, our market-leading demonstration and sampling businesses will form the core of our experiential services segment, which serves both retail customers and PPG brand manufacturers in-store and at home.
Lastly, our market, leading demonstration and sampling businesses will form the core of our experiential services segment, which serves both retail customers and CPG brand manufacturers in store and at home.
Speaker 2: Our simplified and interconnected structure across branded retail and experiential services will enable more seamless execution, increased precision, and unlocked value for our stakeholders.
Our simplified and interconnected structure across branded retail experiential services well.
More seamless execution increased precision and unlock value for our stakeholders.
Speaker 3: To further accelerate our growth journey, we will enhance our processes and platforms.
To further accelerate our growth journey, we will enhance our processes and platforms.
Speaker 3: We're proud of our reach, agility, and reputation for service. However, we have taken disparate approaches to running our individual divisions, which has also been compounded by underinvestment and over-complexity in technology and systems. We have an opportunity to work
We're proud of our reach agility and reputation for service. However, we have taken disparate approaches to running our individual divisions, which has also been compounded by underinvestment and over complexity in technology and systems, we have an opportunity to work smarter and faster.
Speaker 3: We intend to support our three business segments by centralizing all of our shared service functions.
We intend to support our three business segments by centralizing all of our shared service functions, we will enhance our processes by building more cohesive ways of working and leading through best practices across finance HR communications legal and I T.
Speaker 3: who will enhance our processes by building more cohesive ways of working and leading through best practices across finance, HR, communications, legal, and IP.
Speaker 3: These changes will not only allow us to drive efficiencies and operational excellence, our centralized shared services model will also enable our branded, retail, and experiential services segments to focus more directly on driving business growth by solving problems that our clients and customers face.
These changes will not only allow us to drive efficiencies and operational excellence. Our centralized shared services model will also enable our branded retail and experiential services segments to focus more directly on driving business growth by solving problems that our clients and customers face.
Speaker 3: To me, technology is an extremely critical enabler to any strategy, and we have an opportunity to move from siloed, duplicative data platforms to a more integrated, cloud-based infrastructure with consistent reporting, analytics, and enhanced artificial intelligence capability.
To me technologies and extremely critical enabler to any strategy and we have an opportunity to move from Siloed duplicative data platforms through a more integrated cloud based infrastructure with consistent reporting analytics and enhanced artificial intelligence capabilities.
Speaker 3: We're planning to include investment in tech modernization to upgrade our capabilities and fees.
Our plans include investing in tech modernization to upgrade our capabilities and speed.
Speaker 3: These enhancements will create a stronger and more stable data environment, allowing us to manage complex data sets and drive actionable insights even faster.
These enhancements will create a stronger and more stable beta environment, allowing us to manage complex datasets and drive actionable insights even faster.
Speaker 3: We have a strong technology foundation to build upon, but we need to upgrade some legacy systems to enable the heightened expectations that we have for our customers.
We have a strong technology foundation to build upon but we need to upgrade some legacy systems to enable the heightened expectations that we have for our company.
None of this structure a process enhancement can work without great people we.
Speaker 3: None of this structure or process enhancement can work without great people.
Speaker 3: We are fortunate to have a great team, however, we can better enable this team to realize their personal and professional dreams through improved talent management and better training.
We are fortunate to have a great team. However, we can better enable this team to realize their personal and professional dreams through improved talent management better training.
Speaker 3: We will invest in top tier systems to help us both provide more opportunities for our teammates and deploy them more efficiently. We will also upskill key roles and add capabilities where needed within the organization.
We will invest in top tier system to help us provide more opportunities for our teammates and deploy them more efficiently. We will also upskill key roles and add capabilities where needed within the organization.
Speaker 3: While systems and processes are important, people stay with a company and commit themselves based on the experience they have with that company. The experience many of our employees have at advantage is mixed and can improve.
Our systems and processes are important people stay with the company and commit themselves based on the experience. They have with that company experienced many of our employees have that advantage is mixed and can improve.
Speaker 2: This starts with a culture rooted in values that are modeled throughout every level of the organization in an inclusive workplace where every teammate feels they are valued and belong.
This starts with our culture rooted in values that are modeled throughout every level of the organization and an inclusive workplace, where every teammate deals they're valued and belong.
Speaker 3: These principles will underpin our DE&I efforts and serve as the energy behind our overall talent strategy.
These principles underpin our D N I efforts and serve as the energy behind our overall talent strategy.
Speaker 3: In addition to simplifying our structure and enhancing our processes and platforms, we will strengthen our financial distance.
In addition to simplifying our structure and enhancing our processes and platforms, we will strengthen our financial discipline.
Speaker 3: Our business has historically maintained an over-weighted focus on top-line growth at times at the expense of profitability and cash flow. Business changes.
Our business has historically maintained an overweighted focus on topline growth.
Times at the expense of profitability and cash flow this is changing.
Speaker 2: we will look to achieve profitable growth and capture appropriate value for our services while maintaining a healthy balance.
We will look to achieve profitable growth and capture appropriate value for our services, while maintaining a healthy balance sheet.
Speaker 3: Furthermore, we are behind on updating our infrastructure, resulting in several very manual processes.
Furthermore, we were behind on updating our infrastructure, resulting in several very manual processes.
Speaker 3: We're investing significantly in making the right changes to gender efficiencies, speed and accuracy in reporting.
<unk> significantly and making the right changes between gender efficiencies speed and accuracy in reporting.
Speaker 3: The changes we're implementing will improve how we forecast can birth revenue into cash and bring enhanced revenue to our capital spend.
The changes were implementing will improve how we forecast convert revenue into cash and bring enhanced rigor to our capital spending.
Speaker 3: While it will take time to fully adopt new systems and enhance processes, I am confident in the team's ability to achieve that goal over the coming months and years.
While it will take time to fully adopt new systems and enhanced processes I'm confident in the team's ability to achieve that goal over the coming months and years.
Speaker 2: We also plan to introduce new financial and operational performance metrics designed to track progress against our strategic priorities while driving transparency and accountability for delivering results.
We also plan to introduce new financial and operational performance metrics designed to track progress against our strategic priorities, while driving transparency and accountability for delivering results.
Speaker 3: We expect to begin reporting on these metrics and segmented results under the new structure on a quarterly basis beginning with our Q1 2024 results and plan to establish long-term targets to orient investors around their future goals.
We expect to begin reporting on these metrics and segmented results under the new structure on a quarterly basis, beginning with our Q1 2024 results and plan to establish long term targets to orient investors around their future goals.
Speaker 3: Our objective is to position advantages in employer choice and a partner choice with the right plans, the right people and the right capabilities to drive sustained, profitable growth and position us as an investment choice.
Our objective is to position advantage as an employer of choice and a partner of choice with the right plans the right people and the right capabilities to drive sustained profitable growth and position us as an investment choice.
Speaker 3: Our teammates will deliver through shared values and a sense of purpose to connect people with the products and experience and enrich their lives.
Our teammates will deliver through shared values and a sense of purpose to connect people with the products and experiences that enrich their lives.
Speaker 2: We're fortunate to be an organization that supports a sticky fragmented customer base anchored in a long-term secular growth and Mr. Miyawakan Mysteries, with a CPU gain Dieser Rookie.
We're fortunate to be an organization that supports a sticky fragmented customer base anchored in a long term secular growth industries in CPG and retail.
Speaker 3: And I'm confident that the news we're making in the coming year will set us up in the next phase of growth.
And I'm confident that the moves we're making in the coming year will set us up for the next phase of growth.
Speaker 2: by simplifying our structure, enhancing our processes and platforms, and strengthening our financial discipline. We are poised to deliver new value for our teammates, clients, customers, and investors.
Finding a structure enhancing our processes and platforms and strengthening our financial discipline, we are poised to deliver new value for our teammates clients customers and investors.
Speaker 3: With that, I'll turn it over to Chris for more on our financial performance and out.
With that I'll turn it over to Chris for more on our financial performance and outlook.
Speaker 4: Thank you, Dave. While our current business has significant room for improvement as it relates to simplification and process optimization, we believe that our long-term profitability will be driven by our ability to create value for both retailers and brands through our portfolio of differentiated services, which remains unwaveringly strong. I'm excited about our transformation work underway to drive that value.
Thank you Dave while our current business has significant room for improvement as it relates to simplification and process optimization, we believe that our long term profitability will be driven by our ability to create value for both retailers and brands through our portfolio of differentiated services, which remains unwaveringly strong.
I'm excited about our transformation work underway to drive that value.
Speaker 4: On a consolidated basis, third quarter revenues grew 4.3% year over year to a total of $1.1 billion. Excluding unfaerable foreign exchange rates and acquisitions and investors, revenue increased by 5.8%.
On a consolidated basis third quarter revenues grew four 3% year over year to a total of $1 $1 billion.
<unk> unfavorable foreign exchange rates and acquisitions and divestitures revenue increased by five 8%.
Speaker 4: Third quarter, Adjusted Evida was down 4.3% year over year to $113.1 million.
Third quarter, adjusted EBITDA was down four 3% year over year to $113 $1 million.
Speaker 4: Sales segment revenue decreased 2.7% year over year to $629 million. Down only 0.7%, including changes in foreign exchange rates, in acquisitions and investors.
<unk> segment revenue decreased two 7% year over year to $629 million down only 0.7% excluding changes in foreign exchange rates and acquisitions and divestitures.
Speaker 4: Fails, segment, adjust to the bidah to climb 12.1% year over year to $67 million.
Sales segment, adjusted EBITDA declined 12, 1% year over year to $67 million.
The revenue decline was driven by our completed divestiture and intentional client exit in late 2022, partially offset by success in our pricing initiatives and growth of our European joint venture.
Speaker 4: The decline in Adjusted Abida in the sales segment is largely a result of inflationary pressures in line with expectations, including wage in the Senate compensation and increased technology spend.
The decline in adjusted EBITDA in the sales segment is largely a result of inflationary pressures in line with expectations, including wage and incentive compensation and increased technology spend.
Speaker 4: Marketing segment revenues of $48 million were up 15.5% year over year, and up 16.3% excluding foreign exchange in acquisitions and investors. This growth was primarily driven by the continued return of our in-store sampling and demonstration services to higher event counts and pricing realization across the business.
Marketing segment revenues of $468 million were up 15, 5% year over year, and up 16, 3%, excluding foreign exchange and acquisitions and divestitures.
This growth was primarily driven by the continued return of our in store sampling and demonstration services to higher event counts and pricing utilization across the business.
Speaker 4: Marketing segment adjusted to the DAW of $46 million was up 9.8% year over year. Driven largely by the aforementioned return of sampling and demonstration events and pricing realization. Partially upset by inflationary pressures and increased technology spent.
Marketing segment, adjusted EBITDA of $46 million was up nine 8% year over year, driven largely by the aforementioned return of sampling and demonstration events and pricing realization, partially offset by inflationary pressures and increased technology spend.
Speaker 4: In the air-good, our total adjustity of the dam margin came at 10.3%.
In the aggregate our total adjusted EBITDA margin came in at 10, 3%.
Speaker 4: Moving to our balance sheet, we continue to prioritize opportunities to be levered, our balance sheet and reduce our levered ratio. For the third quarter, our net debt to Adjusted to the Bedav ratio finished at approximately 4.2 times, relative to the 4.5 times at the beginning of 2023.
Moving to our balance sheet, we continue to prioritize opportunities to delever, our balance sheet and reduce our leverage ratio for.
For the third quarter, our net debt to adjusted EBITDA ratio finished at approximately 4.2 times relative to the four five times at the beginning of 2023.
Speaker 4: We also continue to emphasize working capital management. For the third quarter, we converted approximately 94% of Adjusted with DAH to adjusted unlearned free cash flow.
We also continue to emphasize working capital management for the third quarter, we converted approximately 94% of adjusted EBITDA to adjusted Unlevered free cash flow.
Speaker 4: And why with the prior quarter, our debt profile remains healthy and we have no meaningful maturities in the next four years.
In line with the prior quarter, our debt profile remains healthy with no meaningful maturities in the next four years.
Speaker 4: During the quarter, we voluntarily purchased approximately $57 million of floating rate debt and an attractive discount. And we'll continue to monitor opportunities to deploy capital that the leverages the balance sheet while generating a favorable rate of return.
During the quarter, we voluntarily repurchased approximately $57 million of floating rate debt at an attractive discount and well.
You need to monitor opportunities to deploy capital that the leverages the balance sheet, while generating a favorable rate of return.
Speaker 4: At the end of the third quarter, our total funded debt outstanding was below $2 billion.
At the end of the third quarter, our total funded debt outstanding was below $2 billion.
Speaker 4: As of September 30th, approximately 80% of our debt is hedged or at a fixed interest rate.
As of September 30th approximately 80% of our debt is hedged or at a fixed interest rate.
Speaker 4: A summary of our debt and equity capitalization can be found in the supplementary slides for the third quarter results posted on the Investor section of our website.
But some of our debt and equity capitalization can be found in the supplementary slides for the third quarter results posted on the investors section of our website.
Speaker 4: Additionally, we're happy to comment on an activity subsequent to quarter end that marks progress in our efforts to simplify our business.
Additionally, we are happy to comment on an activity subsequent to quarter end the marked progress in our efforts to simplify our business.
Speaker 4: We completed a small bit usher of a niche retail analytics platform Atlas Technology Group to Crisp and Key4. The transaction was accreted for us on a trading value basis and we're excited to work with Crisp, a leader in collaborative commerce for CPGs and retailers going forward.
We completed a small divestiture of a niche retail analytics platform Atlas technology group to crisp in Q4.
The transaction was accretive for us on a trading value basis, and we're excited to work with crisp a leader in collaborative commerce for Cpg's and retailers going forward.
Speaker 4: Chris was a leading cloud-based data sharing platform that will offer advantages clients with enhanced supply chain and product availability information, enabling them to make faster decisions, optimize inventory and marketing, and drive sales and will...
Christmas is a leading cloud based data sharing platform that will offer advantages clients with enhanced supply chain and product availability information, enabling them to make faster decisions optimized inventory and marketing and drive sales and loyalty.
Speaker 4: Turning to our outlook for the full year 2023, we remain pleased by our deliberate steps to improve our financial discipline, combined with steady improvement in the economic backdrop.
Turning to our outlook for the full year 2023, we remain pleased by our deliberate steps to improve our financial discipline combined with steady improvement in the economic backdrop is.
Speaker 4: as such were more confident in delivering a just diva da around the upper end of the guidance range of 400 million to $420 million. Our guidance contemplates the continued realization of pricing, growth, and in-source sampling and demonstration events, as well as the completed deletures and accelerated investments behind technology and talent.
Such we're more confident in delivering adjusted EBITDA around the upper end of the guidance range of $400 million to $420 million.
Our guidance contemplates the continued realization of pricing growth in in store sampling a demonstration events as well as the completed divestitures and accelerated investments behind technology and talent.
Speaker 4: We remain diligent with regards to revenue management, our cost structure, and our cash generation, as we continue to strengthen our financial discipline to help fuel growth. Thank you for your time. I'll now...
Remain diligent with regards to revenue management, our cost structure and our cash generation as we continue to strengthen our financial discipline to help fuel growth. Thank.
Thank you for your time, although I'll turn it back over to Dave.
Speaker 3: Thanks, Chris. I am confident in the leaders of our company, both new and legacy. We continue to work towards enhancing our people first culture, optimizing our operations and serving brands in weekends.
Thanks, Chris.
I'm confident in the leaders of our company, both new and legacy we continue to work towards enhancing our people first culture, optimizing our operations and serving brands and retailers.
Speaker 3: The people of advantage have done tremendous work going to company to where it is today.
The people of advantage have done tremendous work around the company to where it is today.
Speaker 2: We have more than 70,000 teammates who wake up every day with a focus on serving the brand we represent and retailers where they work, while enriching lives in our communities along the way.
We have more than 70000 teammates who wake up every day with a focus on serving the brands, we represent a retailers where they work while enriching lives in our communities along the way.
Speaker 2: It's our job to enable their efforts and help them realize their personal and professional goals, a key step to becoming the employer of choice being ever to be.
It's our job to enable their efforts and help them realize their personal and professional goals a key step to becoming the employer of choice me never to be.
Speaker 2: But we are always proud to celebrate our strengths and successes. We remain unsatisfied. That healthy pension is creating the energy and momentum. We need to challenge the status quo and create a better future for advantage solutions.
Well, we are always proud to celebrate our strengths and successes we remain unsatisfied that healthy tension is creating the energy and momentum we need to challenge the status quo and create a better future for advantage solutions.
Speaker 2: We look forward to providing you with more details as our ongoing transformation journey progresses at the advantage. We will now take your questions. Operator.
We look forward to providing you with more details as our ongoing transformation journey Progressive advantage, we will now take your questions operator.
Speaker 1: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press tire one owner telephone keypad. A confirmation tone will indicate your line is in the question key. You will press tire two if you would like to remove your question from the key. For participants, you're gonna skip the sticker equipment. It may be necessary to pick up your headset, be for pressing they start.
Thank you we will now conduct a question and answer session.
Like to ask a question. Please press star one on your telephone keypad it.
A confirmation tone will indicate your line is in the question queue.
Press Star two if you would like to remove your question from the queue.
For participants.
It may be necessary to pick up your headset is perfect and de stocking.
Speaker 1: And our first question comes from Fraser O.E. with Deutsche Bank. So, go ahead.
And our first question comes from Faiza <unk> with Deutsche Bank.
Got it.
Yes, hi, good morning. Thank you so looked at it it looks like Theres a lot of changes that you're contemplating at the company.
Speaker 5: So, look, it looks like there's a lot of changes that you're contemplating at the company. There's two questions related to that. One is, are you able to size the potential divestitures that you are considering and give us a bit more color around the type of businesses?
There's two questions related to that.
One is are you able to size the potential divestitures that you are considering and it'll give us a bit more color around the type of businesses.
Speaker 5: that you think, don't belong with the company in the future.
Do you think you know don't don't don't belong with the company in the future. Our and then secondly, you know you've mentioned Underinvestment in technology historically.
Speaker 5: And then secondly, you know, you've mentioned under investment in technology historically.
Speaker 5: How are you thinking about the magnitude and the pacing of that technology investment over time?
How are you thinking about sort of the magnitude and the pacing of that technology investment over time.
Speaker 6: Thanks, Vyze. I appreciate the question. On the vestitures, we're not really ready to disclose a lot of detail. We hopefully will know more by the fourth quarter. We're obviously going through a review of some of the operations. And then obviously for processing sensitivities as well as personnel sensitivities, we want to be kind of smart about how and when we provide more guidance.
Thanks, guys I appreciate the question on divestitures, we're not really ready to disclose a lot of detail. We hope we will know more by the fourth quarter, We're obviously going through a review of.
Some of the operations.
And then obviously for processing sensitivities as well as personnel sensitivities and we want to be.
Smart about how and when we provide more guidance on that as it relates to our it investment.
Speaker 6: as it relates to IT investment, I think we'll see increased spend.
<unk> will see increased.
Increased spend.
Speaker 6: over the next call it two years. And even starting this year a little bit, I'm gonna text you a little bit.
Over the next call it two years.
And even starting this year, a little bit I mean, it's actually showing up a little bit in our numbers and.
Speaker 6: And it is a combination of opx and capx. I will say that the capx spend that we're looking at.
And it is a combination of Opex and Capex.
I won't say that the capex spend that we're looking at.
Speaker 6: It is not out of a range bound that we've spent before, so it's not...
It is not out of a range bound it we've spent before so it is not.
Speaker 6: significant increase, but we are going to see kind of a greater portion of our
A significant increase but we are going to see kind of a greater portion of our capex, especially next year being devoted to it.
Speaker 6: Especially next year being devoted to uh, invest their uh, take- and take-
Investors are our technology spend.
Speaker 6: And then on the op-x side, it will be a reasonable increase in order.
And then on the Opex side.
B.
You know a reasonable increase.
In order to accelerate frankly, some of the system transformation, we're looking to do.
Speaker 5: understood that's that's very helpful and then maybe you know you've talked a lot about you know how you've gathered feedback from a lot of different types of stakeholders including your branded and retail partners and curious if you can you know give us some examples or bring to life sort of some of what you heard and what led you to you know make some of these take some of these actions at this point.
Understood. That's very helpful. And then maybe you know you've talked a lot about you know how you've gathered feedback from a lot of different types of stakeholders, including your branded and retail partners and I'm curious if you can give us some examples or bring to life for them.
Some of what you heard and what led you to.
Make some of these some of these actions at that point.
Speaker 6: Yeah, absolutely. And note that we're not flicking a switch and everything's changing at once. This is actually a lot of work that's in progress. So as I would call it, we're bringing our organization along. But...
Yeah, absolutely and note that you know, we're not flicking a switch and everything is changing at once this is actually a lot of work that's in progress so as I would probably bringing our organization along but some of it was in the complexity of our current segments and trying to understand where.
Speaker 6: Some of it was in the complexity of our current segments and trying to understand where different businesses kind of resided almost.
Different businesses.
Kind of resided almost within sales and marketing and trying to really start from the economic buyer. If you will and I mentioned in our prepared comments that.
Speaker 6: trying to really start from the economic buyer, if you will. And I mentioned in our prepared comments that if you think about our business,
If you think about our business we do.
We have a range of services for CPG firms a range of services for retailers and then this leading position in experiential space that really.
Speaker 6: and then this leading position and experiential space that really touches both closely. So we felt that the Fed had organized that way. Also on the shared service side, this is simply a difference in strategy. The business has been more of a holding company of somewhat disparate businesses. And my personal background is coming from businesses where you've got a single HR group, a single finance group, a single IT group, et cetera. I believe you get a fish and cheese from.
Touches both closely so we felt it was better to organize that way also on the shared service side. This is simply.
The difference in strategy of the business had been more of a holding company of somewhat disparate businesses and Mike.
My personal background coming from businesses, where you've got a.
A single HR group, a single Finance group, a single IP group et cetera.
I believe you get efficiencies from that you you're going to have the kind of scale you need the talent in those parts.
Parts of the business.
And you can.
And ensure that you just have efficiency and one way of working versus different HR policies and different companies et cetera. So it makes us a little bit easier to work for if you will and I think enhances the.
Speaker 6: different HR policies.
Speaker 6: So it makes us a little bit easier to work for if you will.
Speaker 3: effectiveness of the work that comes from the shared service group. So that is the why the feedback from different constituencies was effectively...
Effectiveness of the work that comes from a shared service group so.
Yeah that is the why the feedback from different constituencies was was affectively.
Speaker 3: We needed to be easier to understand and as we move towards the first quarter and into the first quarter we'll be able to go in more detail as to what we're doing.
Need it to be easier to understand and as we move towards the fourth quarter and into the first quarter and we'll be able to go in more detail as to what we're doing and I think.
Speaker 6: Even you will find this a little easier to understand and sort of how our business works and frankly why it's
You will find this a little easier to understand and sort of how we how our business works and frankly, why it's such a great business.
Speaker 5: Great. Thank you. Just one quick one. An apology if I mess this in the prepared remarks, but have you ties the vestiture that happened in four q?
Great. Thank you just one one quick one.
And apologies if I missed this in the prepared remarks, but have you sized the divestiture that happened and in for Q.
Speaker 4: We have not given that information Pfizer in terms of sizing it. It's a relatively small business, but we did call it value accretive, right? So we got cash in the door. You know, that will be at a level that's, you know, enough to be better than our multiple and better and allow us to utilize that capital. So.
We have not given that information Pfizer in terms of sizing it.
It's a relatively small business, but we did call it value accretive right. So we got cash in the door you know that will be at a level. That's you know enough to be better than our multiple and better and allow us to utilize that capital. So.
Perfect. Thank you.
Speaker 1: Our next question comes from Jason English with Gold Moon Sect. Please go ahead.
Our next question comes from Jason English with Goldman Sachs.
Go ahead.
Speaker 7: Hey, morning folks. Thanks for slot me in. A lot to chew on today. So let's start with a few questions around the organization. Obviously your business is very much a relationship business. What is the risk if any of disruption for any of the key relationship managers? Are they still going to be connected effectively to their same client?
Hey, good morning folks thanks for slotting them.
A lot to chew on today.
So, let's let's start with a few questions around the organization. Obviously your business is very much relationship business. What is the risk if any disruption for any of the key relationship managers are they still going to be connected effectively to the same the same clients.
Speaker 6: Yes, Jason, this is Dave, they will be. And if anything, some of the feedback from clients has been positive as we've pressure tested the approach.
Yes, Jason this is Dave they will be and if anything some of the feedback from clients has been positive as we have.
Pressure tested the approach we're taking.
Yeah.
Speaker 7: And why is it positive? Like why is it so obvious to clients that you have this change? It seems like a pharmacy P.G. client, maybe the change is and so obvious to me that it feels like business is usual.
And why is it positive like why is it so obvious to clients that you have this change it. It's it seems like if I'm a CPG client maybe the changes and so obvious to me that the it's sort of it feels like business as usual.
Speaker 6: I think it's business as usual to some degree, which speaks to your question around concerns around relationship managers by being business as usual and being a relational business. We're not disrupting those relationships. So I think that answers your first question. But...
I think it's business as usual to some degree which is.
Speaks to your question around you know.
Concerns around relationship managers by being business as usual and being a relational business, we're not disrupting those relationships. So I think that answers your first question, but.
Speaker 8: I think it allows us to structure in a way to have the right...
I think it allows us to structure in a way to have the right.
Speaker 8: talent and kind of weight if you will in leadership devoted to each of our clients.
Talent and kind of waiting if you will and leadership devoted to each of our client or customer segments.
Okay. Okay.
Okay, and you mentioned shared services I think for us.
Many of US have always thought the real value of the business model is the shared labor force the syndication of the shared labor for us the ability to leverage those economies of scale.
Speaker 7: The real value of the business model is the shared labor force, the syndication of the shared labor force, the ability to leverage those economies of scale. That shared labor force has historically served both retailers and CPG brands, whether we're talking resets in half retail or surge marketing, et cetera, in store on CPG's behalf. Where does that fit here in a structure where you've now broken out retail services separate from CPG services?
That sure labor for US has historically served both retailers and CPG brands, whether were talking to reset the math retail or search marketing et cetera in store on Cpg's behalf.
Where does that fit here and in a.
And a structure, where you have now broken out retail services separate from CPG services.
Well I think one.
Speaker 8: Sure, labor force actually can be reinforced.
The shared labor force actually can be reinforced by what we're doing by having one single HR unit.
Speaker 6: by having one single HR unit and taking one, and collecting the talent acquisition, to leverage ultimately a similar technology across the platform, it's only gonna frankly help.
And taking one approach the Towne acquisition.
To leverage.
A similar technology across the platform.
And going to frankly health on the share labor.
And so yeah. There's this if anything will reinforce.
That's part of our business.
Speaker 7: So that labor force is one year shared services that's effectively gonna be reporting up into two groups, the branded services group and the retail services group, is that right?
So that Labor force is one of your shared services, that's effectively going to be reporting up into two groups. The the branded services group and the retail services group is that right.
Speaker 8: No, I think that you have to look at it as you've got different commercial businesses, but you've got one way of working.
No I think you have to look at it as you've got different commercials businesses, but you've got one way of working for the most part. So if you think of things like performance management, you think of things like Onboarding, you think of things like from higher too.
Speaker 8: like onboarding, you think things like from higher to, you know, in position and how do you reduce that time frame, when you've centralized HR processes and symptoms, it helps all those situations. And in the...
Physician and how do you reduce that timeframe when you have centralized HR processes and systems. It helps all of those situations.
Situations in and out.
I'm Gonna really reinforces this notion of.
You know what kind of speed from higher into physician. That's one that we've seen just industry wide I mean anyone but large workforce can can share that that's that's a key enabler to talent acquisition and retention and that's gonna be better enable when we consolidate our systems and our approach to talent acquisition.
Speaker 8: I mean, I've seen this industry wide, I mean, anyone with large workforce can share that that's a TN able to talent that position and retention. And that's going to...
Speaker 7: Okay, okay. Hopefully I can give a little more clarity on how this is all structured as it takes shape and you start to disclose more because I'm admittedly still a little confused. The associated with this, you are centralizing functions. Centralization of functions usually unlocks a lot of savings, but at the same time, you're saying, geez, our systems are antiquated, our processes are a little out of date. We got to spend some money to go after those. Are those net neutralizers, should we expect us to be a net cost savings program next year?
Okay. Okay, hopefully I can give a little more clarity on how this is all structured as it takes shape and you start to disclose more because I am admittedly still a little confused.
The <unk> associated with this you are centralizing functions centralization of functions, usually unlocks a lot of savings, but at the same time, youre, saying geez, our systems are antiquated and our processes are a little out of date, we got to spend some money to go after those.
Are those net neutralized or should we expect this to be a net cost savings program next year.
Speaker 8: It's a good question. I think to your point, it's kind of both. And so you're going to see an increase in investment next year. I think over time you're going to see the savings in the efficiencies. But we've got some work to do as it relates to both our systems and our talent practices too.
It's a good question I think to your point, it's kind of both and so youre going to see an increase in investment next year I think over time, you're going to see the savings and the efficiencies but.
We've got some work to do as it relates to both our systems and our talent practices to ensure that we've got the greatest retention level as possible with our workforce and we're deploying them as efficiently as possible.
Speaker 7: Okay, and I'm way over my normal question limit, but I'm greedy, I guess. So I'm going to squeeze in one more. I don't want to lose track of what's been the core issue here for the last couple of years, and that's been pricing power and your ability to mitigate escalating labor inflation costs with price. It sounds like you're still not caught up. Like it's not even running out of treadmill and breaking even now. You're still leaking. So is there?
Okay way over my normal question limit but.
I'm greedy I guess, almost I'm going to squeeze in one more.
I don't want to lose track of what's been the core issue here for the last couple of years and that's been pricing power.
And your ability to mitigate escalating labor inflation cost with price it sounds like you're still not caught up like it's not even running on a treadmill and breaking even now youre still leaking.
So.
Speaker 8: Is this a recognition that you're not going to get there and you have to address the delta by attacking cost or is there still reasonably that you can at least get back to a point where pricing is able to keep pace with inflation, recognizing that recovery of what's gone is probably gone. And if there is the opportunity to get back to where you're at least keeping pace, what's got to change to get there and how long is it going to take? Yeah, it's a good question. I think as we reported...
Is there.
Is this a recognition that you're not going to get there and you have to address that.
The delta by attacking cost or is there still reason to believe that you can at least get back to a point where pricing is able to keep pace with inflation recognizing that recovery of whats gone has probably gone.
And if there is the opportunity to get back to where you are at least keeping pace.
What's got to change to get there and how long is it going to take.
Yes, it's a good question I think.
As we reported.
We're narrowing that gap, where we're improving our pricing capabilities each quarter.
Speaker 8: We're bringing in some talent as well, who really understands revenue.
We're bringing in some talent as well, who really understands revenue management.
Speaker 8: or which will I think help us. You're obviously seeing.
At its core which will I think help us you're obviously seeing.
Speaker 8: labor and wage inflation a bit a bit, although, you know, so higher than
Labor and wage inflation abate a bit although still higher than traditional.
Speaker 8: passively, cyclically, that will improve over time. But your point about cost, look, our job is to make sure that we realize the greatest value.
You have to believe cyclically that will improve over time, but your point about costs look our job is to make sure that we realize the greatest value for the services we offer.
Speaker 8: that we manage our mix and that we also are as efficient as possible in what we do. And to your point, I think there's things we can do on the cost side.
We manage our mix and that we also are as efficient as possible and what we do and to your point I think there's things we can do on the cost side.
That can help.
To mitigate some of the inflationary pressure we see.
Yeah.
Okay. Thank you I'll pass it on.
Speaker 1: There are no further questions at the time. I would like to turn the floor back over to date. They call for a call of income and please go ahead.
There are no further questions at this time I would like to turn the floor back over to debate that called for closing comments. Please go ahead.
Speaker 8: Thank you so much. Look, we feel very confident in the trajectory of the business. We feel we have a right to win with essential services, talented teammates, deep relationships, and with the upsides to grow. And we're also very committed on continuing to generate cash in this business. And.
Thank you so much look we feel very confident in the trajectory of the business. We still we have a right to win with our central services talented teammates deep relationships and with upside to grow and we're also very committed on.
To generate cash in this business and be strategic about how we manage our balance sheet and also enhance value for the shareholders. So.
Speaker 8: about how we manage our balance sheet and also enhance value.
Speaker 8: So there's more to come with an exciting time at advanced solutions.
There's more to come but it's an exciting time at advantage solutions and we thank you for your time.
Speaker 1: This concludes today's conference call. You may disconnect your line at the time. Thank you for your participation and have a great day.
This concludes today's conference call you may disconnect. Your lines at this time. Thank you for participation and have a go.
Okay.
Speaker 9: Last pero skin fall off.
Okay.
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Okay.
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