Q1 2024 BGSF IncEarnings Call

Operator: Good morning, and welcome to the BGSF Inc. Fiscal 2024 First Quarter Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touch-tone phone. Please note that this event is being recorded. I would now like to turn the conference over to Sandy Martin, one of our three-part advisors. Please go ahead.

Good morning, and welcome to the BG S. S Inc. Fiscal 2024 first quarter financial results Conference call. All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask.

Operator: <unk> to ask a question you May Press Star then one on your Touchtone phone.

Operator: Please note. This event is being recorded I would now like to turn the conference over to Sandy Martin three part advisors. Please go ahead.

Sandy Martin: Thank you, Chad. Good morning, and welcome to the BGSF first quarter 2024 earnings conference call. With me on the call today are Beth Garvey, Chair, President, and Chief Executive Officer, and John Barnett, Chief Financial Officer. After our prepared remarks, there will be a Q&A session. As noted, today's call is being webcast live, and a replay will be available later today and archived on the company's investor relations page at investor.bgsf.com.

Sandy Martin: Thank you Chad good morning, and welcome to the <unk> first quarter 2024 earnings Conference call with me on the call today are Beth Garvey Chair, President and Chief Executive Officer, and John Barnett Chief Financial Officer. After our prepared remarks, there will be a Q&A session as noted.

Sandy Martin: <unk> call is being webcast live a replay will be available later today and archived on the company's Investor Relations page at Investor Dot <unk> Dot com.

Sandy Martin: Today's discussion will include forward-looking statements, which are based on certain assumptions made by the company under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. However, actual results may differ materially from those indicated by the forward-looking statements because of various risks and uncertainties, including those listed in the company's filings with the Securities and Exchange Commission. Management statements are made as of today, and the company assumes no obligation to update these statements publicly, even if new information becomes available in the future.

Sandy Martin: His discussion will include forward looking statements, which are based on certain assumptions made by the company under the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095 actual results may differ materially from those indicated by the forward looking statements.

Sandy Martin: Various risks and uncertainties, including those listed in the company's filings with the Securities and Exchange Commission management's statements are made as of today and the company assumes no obligation to update these statements publicly even if new information becomes available in the future during the call management will also reference certain.

Sandy Martin: During the call, management will also reference certain non-GAAP financial measures, which can be useful in evaluating the company's operations related to its financial condition and results. These non-GAAP measures are intended to supplement GAAP financial information and should not be considered a substitute. GAAP and non-GAAP measures are reconciled in today's earnings press release. I'll now turn the call over to Beth Garvey.

Beth A. Garvey: non-GAAP financial measures, which can be useful in evaluating the company's operations related to the financial condition and results. These non-GAAP measures are intended to supplement GAAP financial information and should not be considered a substitute GAAP and non-GAAP measures are reconciled in today's earnings press release.

Sandy Martin: I'll now turn the call over to Beth Garvey.

Beth A. Garvey: Thank you, Sandy, and thank you all for joining us and reviewing our performance so far this year. Before we discuss our first quarter earnings, I want to address last night's release announcing our decision to review strategic alternatives for BGSF. Over the past five years, we have worked hard to execute our long-term strategy for growing the company organically and through M&A, enhancing our margins, paying down debt, and returning capital to shareholders. I wholeheartedly believe what we have built will create value for shareholders over time.

Beth A. Garvey: Thank you Sandy and thank you all for joining necessarily viewing our performance so far this year.

Beth A. Garvey: Before we discuss our first quarter earnings I want to address last nights release announcing our decision to review strategic alternatives for P. J S F.

Beth A. Garvey: Over the past five years, we have worked hard to execute our long term strategy for growing the company organically and through M&A, enhancing our margins paying down debt and returning capital to shareholders I wholeheartedly believe what we have built will create value for shareholders overtime.

Beth A. Garvey: However, our evaluation has not reflected that progress to date, and the board and I know that this is the right time to evaluate our options. We also think suspending the cash dividend is appropriate as part of this decision.

Beth A. Garvey: However, our valuation is not reflected that in progress today and the board and I know that this is the right time to evaluate our options. We also think suspending our cash dividend is appropriate as part of this decision. The strategic process includes a full range of value creation opportunities to accelerate growth or improved the structural.

Beth A. Garvey: This strategic process includes a full range of value creation opportunities to accelerate growth or improve the structural return profile of the company. John and I are fully engaged with our advisors and the board to explore ways to unlock value for the shareholders of BGSF. We have not set a timeline for the conclusion of the review, and I do not have an update today. So I will not be taking calls or will not be taking questions related to the company's strategic review process.

Beth A. Garvey: Return profile of the company.

Beth A. Garvey: John and I are fully engaged with our advisors and the board to explore ways to unlock value for the shareholders of the G. S. F. We have not set a timeline for the conclusion of the review and I did not have an update today. So I will not be taking calls are will not be taking questions related to the company's strategic review process.

Beth A. Garvey: Turning to our results, the first quarter of 2024 met our near-term expectations. Although there continues to be caution around hiring, we are encouraged by recent trends in our project and consulting work related to IT and finance and accounting. Despite choppiness in the past few quarters, we saw significant momentum for both areas, resulting in a 7% increase sequentially over last quarter. Our recent project wins have bolstered our confidence in our strategic repositioning and important tech investments, bringing us closer to our clients' needs in 2024.

Beth A. Garvey: Turning to our results the first quarter of 2024 met our near term expectations. Although there continues to be caution around hiring we are encouraged by recent trends and our project and consulting work related to it and finance and accounting.

Beth A. Garvey: Despite choppiness in the past few quarters, we saw significant momentum for both areas, resulting in a 7% increase sequentially over last quarter.

Beth A. Garvey: A recent project wins have bolstered our confidence in our strategic repositioning and important tech investments, bringing us closer to our clients' needs in 2024.

Beth A. Garvey: Our actions during the challenging macro backdrop over the last few years have helped us transition into a structural, high-margin business. We acknowledge that there is more work to be done and are increasing our focus on accelerating revenue growth and scale. We're proud to offer high-value professional and property management services and solutions in highly specialized niches in growing addressable markets. Our business is built on a state-of-the-art technology platform with proven process expertise. Looking at our professional segment, I'd like to start by highlighting just a few recent wins we're excited about.

Beth A. Garvey: Our actions during the challenging macro backdrop over the last few years have helped us transition into a structural high margin profile of business.

Beth A. Garvey: We acknowledge that there's more work to be done and are increasing our focus on accelerating revenue growth and scale.

Beth A. Garvey: We're proud to offer high value professional and property management services and solutions and highly specialized niches and growing addressable markets are.

Beth A. Garvey: Our business is built on state of the art technology platform with proven process excellence.

Beth A. Garvey: Looking at our professional segment I'd like to start by highlighting just a few recent wins we're excited about.

Beth A. Garvey: In the first quarter, we commenced one of the nation's largest SAP cloud projects with a Fortune 500 company that ranks in the Fortune 100's fastest growing companies list. We would not have been in a position to bid on this project a few years ago, but today we are because of our strategic implementations, process changes, and platform upgrades we've made. We're also actively engaged in projects to support two large divestitures for a Fortune 500 client and are engaged in supporting other merger and acquisition projects this year.

Beth A. Garvey: In the first quarter, we commenced one of the nation's largest S. P cloud projects with a fortune 500 company that ranks and fortune 100 fastest growing companies list, we would not have been in a position to bid on this project a few years ago, but today, we are because of our strategic implementation process changes and platform.

Beth A. Garvey: Grades we've made.

Beth A. Garvey: We're also actively engaged in projects to support two large divestitures for a fortune 500 client and are engaged in supporting other merger and acquisition projects. This year. These.

Beth A. Garvey: These projects excite us and give us confidence that our strategic high-end consulting solutions are uniquely positioned for what clients are looking for in 2024 and beyond. We're at the leading edge of the best technologies available to top companies worldwide.

Beth A. Garvey: These projects excite us and give us confidence that our strategic high end consulting solutions are uniquely positioned on what clients are looking for in 2024 and beyond.

Beth A. Garvey: We're at the leading edge of the best technologies available to top companies worldwide.

Beth A. Garvey: Turning to a discussion about property management as we look at the first quarter sales, we were up against strong sales from the prior year, which were up almost 10% competition coupled with increased operating expenses for property owners has resulted in a reevaluation of our sales process to overcome these factors for our valued clients.

Beth A. Garvey: Turning to a discussion about property management, as we look at the first quarter sales, we were up against strong sales from the prior year, which were up almost 10%. Competition coupled with increased operating expenses for property owners has resulted in a reevaluation of our sales process to overcome these factors for our valued clients. In the first quarter, we included a restructuring of our sales organization and, more importantly, a change in how we compensate them.

Beth A. Garvey: In the first quarter, we included restructuring of our sales organization and more importantly, a change in how we compensate them.

Beth A. Garvey: Our property management sales leaders are now directly compensated for sales and are no longer tied to a specific market, empowering them to drive sales and see the success of their own personal production. This was based on a proprietary CRM technology we implemented last year. Now we have full visibility into each market and the number of units, which is a game changer for the sales leadership and property management. We expect our work to begin showing up in the results in the second half of 2024. With that, I'll turn the call over to John.

Beth A. Garvey: Our property management sales leaders now are directly compensated for sales and they're no longer tied to a specific market empowering them to drive sales and see the success of their own personal production.

John: This was based on our proprietary CRM technology, we implemented last year.

John: Now we have full visibility into each market and the number of units, which is a game changer for the sales leadership in property management.

Beth A. Garvey: We expect our work to show to begin showing up in our results in the second half of 2024 with that I'll turn the call over to John.

John Richard Barnett: Thank you, Beth, and good morning, everyone. Beth gave some great insight into a few key metrics, but let me provide a deeper dive into our numbers. First quarter revenues were $68.6 million compared to $75.3 million in the prior year quarter. Property management revenue declined 13.6%. And as Beth mentioned, we were up against an increase of 10% in the year-ago period. Property management is experiencing increased competition. In addition, property management companies, our clients, are facing cost pressures, adding complexity to our sales efforts.

John: Thank you Beth and good morning, everyone. Beth gave some great insight into a few key metrics, but let me provide a deeper dive into our numbers.

John Richard Barnett: First quarter revenues were $68 6 million compared to $75 3 million in the prior year quarter.

John Richard Barnett: Property management revenue declined 13, 6% and as Beth mentioned, we were up against an increase of 10% in the year ago period.

John Richard Barnett: Property management is experiencing increased competition. In addition property management companies our clients are facing cost pressures, adding complexity store sales efforts.

John Richard Barnett: The professional segment was down 5.7% from the prior year quarter and up slightly on a sequential basis as we continue to see the business stabilize. Gross profit and margins in the first quarter were $23.4 million and 34.1% compared to $26.8 million and 35.6% in the prior year quarter. As discussed, we saw competitive pressure in the property management segment, which has impacted our GP margin. However, slightly lower margins for the professional segment are expected to recover in the second quarter.

John Richard Barnett: The professional segment was down five 7% from the prior year quarter and up slightly on a sequential basis as we continue to see the business stabilize.

John Richard Barnett: Gross profit and margins in the first quarter were $23 4 million and 34, 1% compared to $26 8 million and 35, 6% in the prior year quarter.

John Richard Barnett: As discussed we saw competitive pressure and the property management segment, which has impacted our GP margins.

John Richard Barnett: Slightly lower margins for the professional segment are expected to recover in the second quarter.

John Richard Barnett: SG&A expenses for the first quarter were $20 million and 36% of revenue an improvement from $23 2 million and 38% of revenue in the prior year quarter.

John Richard Barnett: SG&A expenses for the first quarter were $20 million and 30.6% of revenue, an improvement from $23.2 million and 30.8% of revenue in the prior year quarter. Reported operating income was $415,000 versus an operating loss of $20.7 million in the prior year quarter. Recall that we recorded a one-time, non-cash brand name impairment charge of $22.5 million related to our rebranding initiative. Fourth quarter adjusted EBITDA was $2.7 million, or 3.9% of revenue, compared to $4.3 million, or 5.6% in the prior year quarter.

John Richard Barnett: Our reported operating income was 415000 versus an operating loss of $20 7 million in the prior year quarter.

John Richard Barnett: Recall that we recorded a onetime noncash brand name impairment charge of $22 5 million related to our rebranding initiatives.

John Richard Barnett: Fourth quarter, adjusted EBITDA was $2 7 million or three 9% of revenue compared to $4 3 million or five 6% in the prior year quarter.

John Richard Barnett: We reported adjusted earnings of $0.07 per diluted share compared to $0.16 per share in the prior year quarter. As Beth mentioned, we have suspended our dividend as we work with Houlihan Loki on our strategic review. While our strategic review may change our near-term outlook, we currently have no plans for acquisitions in 2024. Funded debt trailing 12 months pro forma adjusted EBITDA was 2.53 times on March 31st. With that, I would like to turn the call back. Thank you, John.

John Richard Barnett: We reported adjusted earnings of <unk> <unk> per diluted share compared to <unk> 16 per share in the prior year quarter.

John Richard Barnett: As Beth mentioned, we have suspended our dividend as we work with Houlihan Lokey on our strategic review.

John Richard Barnett: While our strategic review May change, our near term outlook. We currently have no plans for acquisitions in 2024.

John Richard Barnett: Funded debt to trailing 12 months pro forma adjusted EBITDA was 253 times at March 31.

John Richard Barnett: With that I would like to call turn the call back to Beth.

John: Thank you John.

Beth A. Garvey: Over the last several years, our strategic directives have focused us on transforming our business from a lower-margin staffing agency to a premier, high-value consulting, managed solutions, workforce solutions, and property management organization. Today, our tech stack includes business and technical expertise with over 100 technologies covering the software development lifecycle. BGSS's collective knowledge is highly valuable to our clients because we bring an unbiased approach that ranges from selection to implementation to expansion, and that often includes every part of a tech cycle.

John Richard Barnett: Over the last several years, our strategic directives have focused on transforming our business from our lower margin staffing agency to a premier high valued consulting managed solutions workforce solutions and property management organization.

Beth A. Garvey: Today, our tech stack includes business and technical expertise with over 100 technologies covering the software development lifecycle.

Beth A. Garvey: The GSS collective knowledge is highly valuable to our clients because we brand unbiased approach that ranges from selection to implementation to expansion and that often includes every part of the tech cycle.

Beth A. Garvey: For professional consulting, we see a steady ramp-up of new client relationships, strategic IT consulting, executive search, and senior-level projects related to tax, mergers, and acquisitions, to name a few. As discussed, we've secured an important partnership with Workday. This means that we now are a partner company, and our people are Workday certified resources with credentials that validate their skills and knowledge in all Workday products and services. Although our legacy Workday assignments continue to benefit our professional segment, this new credentialed Workday relationship will benefit us beginning in late Q2 and into Q3. Our relationship with Workday is stronger than ever, and we are happy to accelerate Workday's progress, which translates to accelerate our growth.

Beth A. Garvey: For professional consulting we see a steady ramp up of new client relationships strategic consulting executive search and senior level project related to tax and mergers and acquisitions to name a few.

Beth A. Garvey: As discussed we've secured an important partnership with workday. This means that we now are a partner company and our people are works. Thanks certified resources with credentials that validate their skills and knowledge and all workday products and services, although our legacy workday assignments continued to benefit our professional search.

Beth A. Garvey: Matt This new credentials workday relationship will benefit us beginning in late Q2 and into Q3.

Beth A. Garvey: Our relationship with workday is stronger than ever and we are happy to accelerate workdays progress, which translates to acceleration of our growth.

Beth A. Garvey: Managed Solutions has been another growth area in our successful after our successful acquisition of Momentum Solutions a few years ago. This offering is a high-value proposition for clients looking for us to give them advisory services. After further assessing our growth strategy, we strategically hired a leader from the consulting world to help us grow this practice. I'm proud to announce that Hitesh Talati, a 20-plus-year veteran of Deloitte, has joined BGSF to focus on key customers and bring consolidated packages with various service offerings while helping us explore new revenue streams, including artificial intelligence, product development, cloud initiatives, and delivery expertise.

Beth A. Garvey: Managed solutions has been another growth area and our successful after our successful acquisition of momentum solutions, a few years ago.

Beth A. Garvey: This offering is a high value proposition for clients looking for us to give them advisory services.

Beth A. Garvey: After further assessing our growth strategy, we strategically hired a leader from the consulting world to help us grow this practice.

Beth A. Garvey: I am proud to announce that attached to like a 20 plus year veteran of Deloitte has joined <unk> to focus on key customers and bring consolidated packages with various service offerings, while helping us explore new revenue streams, including artificial intelligence product development cloud initiatives and delivery.

Beth A. Garvey: Excellent.

Beth A. Garvey: The test has a depth of experience and a strategic division that will help us and be a valuable asset as we navigate our next growth phase and continue to deliver value to our customers, employees, and shareholders. In property management, we continue offering proprietary training to attract and upscale talent, a unique differentiator in the marketplace. Our operational teams have added an important sales training facilitator role, and we have completed four different training modules in the first quarter alone.

Beth A. Garvey: <unk> has a depth of experience and a strategic division strategic vision that will help us.

Beth A. Garvey: Be a valuable asset as we navigate our next growth phase and continue to deliver value to our customers.

Beth A. Garvey: Employees and shareholders.

Beth A. Garvey: In property management, we continue offering proprietary training to attract an upscale talent a unique differentiator in the marketplace. Our operational teams have added an important sales training facilitator role and we have completed four different training modules in the first quarter alone.

Beth A. Garvey: We know this industry is evolving and growing and we're excited to continue to be on the leading edge of innovation and expanding industry of apartment luxury communities and commercial conversions to residential multifamily is a dynamic industry that grows especially of single family housing becomes less affordable and high interest rates remained.

Beth A. Garvey: We know this industry is evolving and growing, and we are excited to continue to be on the leading edge of innovation and the expanding industry of apartments, luxury communities, and commercial conversions to residential. Multifamily is a dynamic industry that is growing, especially as single-family housing becomes less affordable and high interest rates.

Beth A. Garvey: I am pleased with the GSS gross prospects, even with the strategic review underway. We will continue to focus on sales profitability and cash flow growth I want to thank our associates, our partners, our shareholders and our board for their support and dedication to our business strategy.

Beth A. Garvey: I am pleased with BGSS's growth prospects. Even with the strategic review underway, we will continue to focus on sales, profitability, and cash flow growth. I want to thank our associates, our partners, our shareholders, and our board for their support and dedication to our business strategy. We would now like to open the call for operational and financial questions concerning the business. We do not plan to discuss the strategic review or the suspension of dividends on this call. However, when we have something to report, we will include it in future calls or releases. Operator?

Beth A. Garvey: We would now like to open the call for operational and financial questions concerning the business, we do not plan to discuss the strategic review or the suspension of the dividends on this call. However, we have something to port when we have something to report we will include it in future calls or releases operator.

Beth A. Garvey: Yeah.

Speaker Change: Thank you very much we will now begin our question and answer session to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two.

Operator: Thank you very much. We will now begin our question and answer session. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. And at this time, we will pause momentarily to assemble our roster. And the first question today will be from Jeff Martin with Roth Capital. Please go ahead.

Operator: And at this time, we will pause momentarily to assemble our roster.

Operator: And the first question today will be from Jeff Martin with Roth Capital. Please go ahead.

Jeffrey Michael Martin: Good morning, Hi, Beth John.

Jeffrey Michael Martin: Hi Beth and John, I wanted to start with property management.

Jeffrey Michael Martin: I wanted to start in the morning wanted to start with property management.

Jeffrey Michael Martin: You mentioned that the challenging comp from a year ago.

Jeffrey Michael Martin: How does <unk>.

Jeffrey Michael Martin: Expectations it'll ramp starting in the second half.

Jeffrey Michael Martin: Curious.

Beth A. Garvey: You mentioned the challenging comp from a year ago. How does any expectation that you'll ramp up starting in the second half? Against the comps for the back half of last year, does that serve as a tailwind or a headwind, and to what degree do you expect it to ramp up in the back half?

Jeffrey Michael Martin: Against the comps for the back half of last year is that serve as a tailwind or a headwind in and to what degree do you expect it to ramp in the back half. Thanks.

Speaker Change: Yes, Jeff I would say historically right, we don't provide guidance on expectations moving forward I think we are moving into a.

John Richard Barnett: Yeah, Jeff, I would say, you know, historically, right, we don't provide guidance on expectations moving forward. You know, I think we are moving into a period that we haven't experienced before. And it's really coming from two different areas. One, you know, we've had competition, but I think what we've experienced more recently was meaningful competition in the marketplace, impacting, you know, our efforts. And then the other thing that's happening is that our clients, the property managers, are feeling cost pressures from several different avenues.

John Richard Barnett: Period that we haven't experienced before and it's really coming from two different areas one.

John Richard Barnett: We've had competition but.

John Richard Barnett: I think what we've experience more recently it was meaningful competition in the marketplace.

John Richard Barnett: Impacting.

John Richard Barnett: Our efforts and then the other thing Thats happening is.

John Richard Barnett: The our clients the property managers.

John Richard Barnett: <unk> cost pressures from.

John Richard Barnett: Several.

John Richard Barnett: Different.

John Richard Barnett: Avenues.

John Richard Barnett: And, you know, that's causing them to really tighten down the belt, too, and in some cases, moving decisions on the use of our service to a higher level. So, you know, it's a more competitive market that we're seeing, and we're entering a different phase for the Property Management Business Operator.

John Richard Barnett: And that's causing them to really tightened down the belt to and in some cases moving decisions on the <unk>.

John Richard Barnett: Use of our service to a level up.

John Richard Barnett: <unk>.

John Richard Barnett: <unk>.

John Richard Barnett: It's a more competitive market that we're seeing and we're entering a different phase.

John Richard Barnett: For the property management business operators.

Speaker Change: Jeff I think wasn't that we'll have our normal seasonality in that in that division and I think that we feel good about that just to John's point.

Beth A. Garvey: Jeff, I think we'll have our normal seasonality in that division, and I think that we feel good about it. But to John's point, you know, when you don't have any competition and all of a sudden you have more competition, it's a different sell for us. It's also a different structure for the property owners, you know, at one point, the decision to be made at the property level.

Beth A. Garvey: When you don't have any competition in all of a sudden you have more competition. It's a different it's a different sale for us. It's also a different structure for the profit for the.

Beth A. Garvey: Property owners you know at one point you know the decision can be made at the property level and we're now seeing those decisions being moved up to a regional level and so that's a different type of approach and so our team has done an incredible job in understanding and navigating what the changes have been in the market and how the industry is evolving and I.

Beth A. Garvey: And we're now seeing those decisions being moved up to the regional level, and so that's a different type of approach. And so, you know, our team has done an incredible job of understanding and navigating what the changes have been in the market and how the industry is evolving. And I think that we have a lot of good things that are coming for us in that area. It's just, it's a shift for right now, but a shift that we have under control.

Beth A. Garvey: I think that we have a lot of good things that are coming forward for us in that area. It's just it's a shift for right now, but it shifts that we have under control.

Beth A. Garvey: Right right.

Jeffrey Michael Martin: Right, right. On the professional side, you know, could you compare the contrast between professionals today versus five years ago? I know you've made a lot of efforts to transition into more of a consulting type of role with clients, you know, maybe. Just give us a, you know, a snapshot of today versus five years ago, and then also, you know, give an update on what's happening in the area of finance and accounting, where you historically have had a significant degree of business.

Jeffrey Michael Martin: The professional side could you compare contrast professional today versus five years ago, I know you've made a lot of efforts to transition to more of a consulting type of.

Jeffrey Michael Martin: Of role with clients maybe.

Jeffrey Michael Martin: Just give us.

Jeffrey Michael Martin: A snapshot of today versus five years ago, and then also give an update on what's happening in the area of finance and accounting, which historically you've had a significant degree of business there.

Beth A. Garvey: Great question. The IT and professional world is completely different today than it was five years ago. It was disjointed five years ago. We did not have the cross-sell efforts, and we really kind of did a little bit of this and a little bit of that. And we really doubled down and said, "What do we want to be, and where do we want to focus? If you're going to be something, you can't be all things to everyone.

Speaker Change: Great question.

Beth A. Garvey: And the.

Beth A. Garvey: The I T and professional world is completely different today than what it was five years ago. It was a disjointed five years ago, we did not have the <unk>.

Beth A. Garvey: Cross sell efforts and we really kind of did a little bit of this in a little bit of that and we really doubled down and said what do we want to be and where do we want to focus if you're if you're going to be something you can't be all things to everyone. So what do we want to be and leadership got together and we decided we looked at our business we look forward with.

Beth A. Garvey: So what do we want to be? And leadership got together, and we decided we looked at our business. We looked where we were strong. We looked where the margin profiles were.

Beth A. Garvey: Strong we look toward the margin profiles we're at.

Beth A. Garvey: We got together, and we decided how we wanted to move those technologies forward, how we wanted to build out the teams around that. And strategically, that moved us in a bunch of the right directions for the business to be focused and more intentional on how they sold. It put us in a position to really open up the doors to the cross-sell efforts so that now the brands that operated in silos no longer operate in silos; they operate as teams. And those teams are super, incredibly powerful.

Beth A. Garvey: Got together and we decided how we wanted to move those technologies forward, how we wanted to build out the teams around that and strategically that moved us in a bunch of it in the right direction for the business to be focused and more intentional on how they sold it put us in a position to really open up the doors in the cross sell efforts to wear now.

Beth A. Garvey: Now the brands that were hit that operated in silos no longer operate in silos they operate as teams.

Beth A. Garvey: And those teams are super incredibly powerful and I think that the way the acquisitions that we've done over the last three years three years have been super complementary to what we already had and that was not a strategy for M&A in Pryor.

Beth A. Garvey: And I think that the acquisitions that we've done over the last three years have been super complementary to what we already had. And that was not a strategy for our M&A in previous years. When we bought something, we kind of saw how it was going to fit.

Beth A. Garvey: Yours was you you bought something we kind of saw how it was going to fit and the last three acquisitions. We've done had been specifically around something that we saw the need in the market that fit a puzzle piece within our organization that allowed us to go to our customers until our customers that you do not have to do.

Beth A. Garvey: And the last three acquisitions we've done have been specifically around something that we saw a need for in the market that fit a puzzle piece within our organization that allowed us to go to our customers and tell our customers that they do not have to do business with anybody else because we have them covered in all of these areas. And that transition has been a game changer for that group. And it took us a while to get there, honestly.

Beth A. Garvey: With anybody else because we have you covered in all of these arenas and that transition.

Beth A. Garvey: It has been a game changer for that group, but it took us a while to get there honestly you know you know when you do acquisitions. It takes a while to get the implementation when you change comp plans. It gets people you know it takes a while for people to understand that teams, we're getting to know each other that you know it took us a while to get there, but I feel so incredibly good about that division.

Beth A. Garvey: When you do acquisitions, it takes a while to get the implementation right. When you change comp plans, it takes a while for people to understand that. Teams were getting to know each other, and it took us a while to get there, but I feel so incredibly good about that division and the things that they have done in their area in the last three to four months. I just could not be more proud of what they've done to transition that group.

Beth A. Garvey: The things that they have coming out of their area in the last four to.

Beth A. Garvey: Really last three to four months.

Beth A. Garvey: If I just could not be more proud of what they've done to transition that group.

Beth A. Garvey: And then one more if I could on the near shore offering.

Jeffrey Michael Martin: And then one more, if I could, on the neutral oscillating update, you know, you bought a Royal about a little over a year ago now. Just curious how much progress there you think in the current economic climate that clients would be looking to do more near and offshore.

Beth A. Garvey: Update you about our royal about little over a year ago now just curious how <unk>.

Jeffrey Michael Martin: <unk> is there you would think in the current economic climate that clients will be looking to do more near and offshore.

Jeffrey Michael Martin: They are a solid acquisition they have done some really great things that continue to grow and the teams have started to cross sell into that business that we would never been able to get before from our customers because they were giving it to somebody else that had who had offshore.

Beth A. Garvey: They're a solid acquisition. They have done some really great things. They continue to grow. The teams have started to cross-sell into that business that we would never have been able to get before from our customers because they were giving it to somebody else who had offshore capabilities. And so we're starting to see some of that traction moving in the right direction, and the addition of Hitesh is really going to be a big part of seeing that group grow.

Beth A. Garvey: Capabilities and so we're starting to see some of that traction moving in the right direction and the addition of potash is really going to be.

Beth A. Garvey: A big part I've seen that group growth.

Speaker Change: Thanks ill circle back in the queue.

Jeffrey Michael Martin: Thanks. I'll circle back in the queue.

Jeffrey Michael Martin: Thank you and the next question will be from Howard Halpern from tablets brothers. Please go ahead.

Howard Allen Halpern: Thank you. And the next question will be from Howard Halpern from Taglich Brothers. Please go ahead.

Howard Allen Halpern: Good morning, guys. I guess we could talk a little bit more about... workday strategy there and the pipeline that's developing for the second half of the year due to that recognition.

Howard Allen Halpern: Good morning, guys.

Howard Allen Halpern: Okay.

Howard Allen Halpern: A little bit more about.

Howard Allen Halpern: The work there yet.

Howard Allen Halpern: The strategy there and the pipeline that's developing for the second half of the year.

Howard Allen Halpern: Due to that.

Howard Allen Halpern: Recognition.

Beth A. Garvey: Sure. This is a new program for Workday. Workday, it's never in the implementation type of business, so they said, we want to go in, and we want to have some consultants that we own, as in Workday. And they came to us because of the relationship that we had with them and said, look, we don't really know how to build this out, and we would like for you guys to come help us think through it.

Howard Allen Halpern: Sure and.

Beth A. Garvey: This is a new program for Workday Workday, it's never in the implementation type of business. So they.

Beth A. Garvey: Said, we want to go in and we want to have some consultants that we own as in workday and they came to us because of our relationship that we had with them and said look we don't really know how to build this out and we would like for you guys to come help us think through it. So we had a group of leaders that went to California, and sat down and said here's.

Beth A. Garvey: So we had a group of leaders that went to California and sat down and said, here's how this would look for you. What it means is we have certified Workday folks that will go into a Workday portal at Workday, and then Workday will have the ability to go into that portal and select those consultants and deploy them out. So that is different than a Workday person, you know, a success manager saying, hey, we've got this customer over here and they're having struggles; let me walk you in the door.

Beth A. Garvey: How this would look for you what it means is we have certified work day folks that will go into a work day portal at Workday and then work they will have the ability to go into that portal and select those consultants and deploy them out so.

Beth A. Garvey: That is different than a workday person.

Beth A. Garvey: Success managers, saying, Hey, we've got this customer over here and Theyre, having stripe struggles let me walk you in the door. So it's a whole new process for workday, which is why it's taken up it takes a while to build it we got to ramp it up they got to get the infrastructure together and they've got to move it through that so I think those are the good things that happened.

Beth A. Garvey: So it's a whole new process for Workday, which is why it's taken us so long; it takes a while to build it. We have to ramp it up, they have to get the infrastructure together, and they have to move it through that. So I think those are the good things that are happening. We do not know quite yet how that's going to work, but we feel very, very positive that we're going to be successful at it because Workday has asked us to lead it.

Beth A. Garvey: We do not know quite yet how that's going to work, but we feel very very positive that we're gonna be successful at it because workday has asked us to lead it and that puts us in a in a very unique position to be able to go through and really help not only our company, but help workday as well and and.

Beth A. Garvey: And that puts us in a very unique position to be able to go through and really help not only our company but help Workday as well. And so we think that's all going to start once it's all built and starts getting the rules of engagement start getting worked out. I think that we will see those results start to show. I think as of yesterday, Eric Peters, our division president, told me we just had our first Workday consultant out of the Workday portal get chosen to go on a job. So we've got the first one going out right now, so that's a great sign for us. Okay.

Beth A. Garvey: So we think that's all going to start once it's all built in starts getting the rules of engagement to start getting worked out I think that we will see those resorts results starting I think as of yesterday, Eric Peters Our Division President told me, we just had our first workday consultant out of the workday portal get chosen to go onto jobs. So we.

Beth A. Garvey: We've got the first one going out right now so that's a great sign for us.

Howard Allen Halpern: Okay, and just overall now, could you talk about... What do you anticipate the pace of being able to pay down debt will be throughout the year?

Beth A. Garvey: Okay.

Howard Allen Halpern: Just overall now could you talk about.

Howard Allen Halpern: What are you anticipating the pace of being able to.

Howard Allen Halpern: Pay down debt will be throughout the year.

Howard Allen Halpern: Yes.

Howard Allen Halpern: Yes.

Howard Allen Halpern: Okay.

John Richard Barnett: I mean, every bit of cash that we generate, everything that we can pull out of the business, we are focused on paying down debt, and I'm, you know, I'm not gonna... provide a forecast. But, no, we are, you know, that is our focus.

Howard Allen Halpern: No.

John Richard Barnett: Every every bit of cash that we generate every everything that we can pull out of the business. We are focused on paying down debt.

John Richard Barnett: And im.

John Richard Barnett: I'm not going to.

John Richard Barnett: Okay.

John Richard Barnett: Provide a forecast on that.

John Richard Barnett: No.

John Richard Barnett: That is that is our focus.

Howard Allen Halpern: Okay. Okay, guys. Thanks.

John Richard Barnett: Okay.

Speaker Change: Okay guys. Thanks, Thank you.

Speaker Change: Thank you.

Bill Deslam: And the next question is from Bill Deslam from Titan Capital. Please go ahead.

Howard Allen Halpern: And the next question is from Bill <unk> from Titan Capital. Please go ahead.

Bill Deslam: Thank you. I'd actually start to ask you to clarify a sentence in the press release. The second paragraph, where you reference that the current macro environment is different from the past. What specifically were you referring to there?

Bill Deslam: Thank you I'd like to actually start to ask you to clarify.

Speaker Change: In the press release.

Bill Deslam: Paragraph, where you referenced that the current macro environment is different from the past.

Bill Deslam: Specifically were you referring to there.

Bill Deslam: The property management Arena, we talked about a minute ago the difference in how they are.

Beth A. Garvey: The property management arena we talked about a minute ago, the difference in how they're operating. What's happened with the... The operating expenses in that environment were, you know, the property owners were having increases in their insurance and increases in their taxes. A lot of people who had ARM loans are coming to fruition now, so their interest rates are going up. So those types of things.

Beth A. Garvey: Operating what what's happening with you know the.

Beth A. Garvey: The operating expenses in that environment, where the property owners are having increases in their insurance and increases in there.

Beth A. Garvey:

Beth A. Garvey: Taxes, and a lot of people who had arm loans are all coming to fruition now so their interest rates are going up so those those types of things.

Bill Deslam: That's helpful, thank you. And then, would you please provide a perspective on your revenue trends for each of the two divisions. Over the last four months, you talked pretty positively about what you're seeing with the professional side, and maybe we can get a little more clarity on the building strength that's taking place there.

Speaker Change: That's helpful. Thank you and then would you please.

Bill Deslam: Provide a perspective on your revenue trends.

Bill Deslam: For each of the two divisions over the last four months I mean, you talked pretty positively about what youre seeing with the professional side and maybe we can get a little more clarity on on the building strength.

Bill Deslam: That's taking place there.

John Richard Barnett: Yeah, Bill, we talked about right, I mean, the property management side, you know, those trends have been down, and really that downward trend year over year, decline started in December and continued through the first quarter. If we look at... the professional side of the business.

Speaker Change: Hey, Bill we talked about right I mean, the the prop.

John Richard Barnett: Property management side.

John Richard Barnett: Those trends have been down and really that downward trend.

John Richard Barnett: Year over year declines.

John Richard Barnett: Decline started in.

John Richard Barnett: In December.

John Richard Barnett: And continued.

John Richard Barnett: Through the first quarter.

John Richard Barnett: If we look at.

John Richard Barnett: The professional side of the business.

John Richard Barnett: You know, I would say really we have been very similar to what we've seen from our competitors, which is relatively flat business adjusted for seasonality, and that really has been since the middle of last year. And that trend has not changed. I think, you know, we are optimistic that a lot of the initiatives that we have been putting in place and working on tirelessly on the professional side really for the last, you know, four months, six months are going to start to show in our numbers, you know, towards the end of the second quarter and into the third.

John Richard Barnett: I would say really we have been we have been very similar to what we've seen from our competitors.

John Richard Barnett: Which is relatively flat business adjusted for seasonality and that really has been since the middle of last year and that trend has not changed.

John Richard Barnett: I think we are we are optimistic that a lot of the initiatives.

John Richard Barnett: We have been.

John Richard Barnett: Putting in place and working on <unk>.

John Richard Barnett: Tires tirelessly on the professional side really.

John Richard Barnett: For the last four months six months.

John Richard Barnett: Is going to.

John Richard Barnett: To start.

John Richard Barnett: To show in our numbers.

John Richard Barnett: Towards the end of the second quarter and into the third quarter.

John Richard Barnett: And John, have you seen, as we've gone through January through April, that month to month, there is a little bit of strengthening taking place in the professional arena? Or was it reasonably consistent throughout the quarter?

John Richard Barnett: And John have you seen as we've gone through.

John: January through April.

John Richard Barnett: That month to month, there is a little bit of strengthening taking place in the professional arena or was it reasonably consistent throughout the quarter.

John Richard Barnett: I would say, in general, reasonably consistent. You know, we had some bounces, right, as we moved through, definitely on the professional side as we moved through January, February, and March. We actually had a slightly stronger January than we thought because, typically, we have more year ends there. But as the budget season shifts from one year to the next, you know, we saw less of that in January. We saw a little bit more of that come through in February, and then, you know, we saw more of a little bit of recovery in March.

John: I would say in general reasonably consistent.

John Richard Barnett: We.

John Richard Barnett: We had some balances Ryan as we move through definitely on the on the professional side as we move through January February and March we actually had a slightly stronger January than we thought because typically we have more year ends there.

John Richard Barnett: As the budget season shifts from one year to the next.

John Richard Barnett: We saw less of that in January we saw a little bit more of that come through in February and then we saw more little bit of a recovery in March.

Bill Deslam: So, in essence, the reference that Beth made to the wins that you're starting to see, the revenue benefit from that is still ahead of us. Great. That's helpful. Thank you both.

John Richard Barnett: So in essence, the referenced it method made too.

Bill Deslam: To the wins that Youre starting to see the revenue benefit from that is still ahead of us.

Bill Deslam: Correct.

Bill Deslam: Great. That's helpful. Thank you both.

Speaker Change: Thank you.

Steve Cole: And the next question will be from Steve Cole, a private investor. Please go ahead.

Bill Deslam: And the next question will be from Steve Cole a private investor. Please go ahead.

Steve Cole: All right, guys. Good morning. Good morning. Quick question. I wanted to talk a little bit about property management and the change in the compensation structure you alluded to. Can you speak a little bit?

Steve Cole: Hi, guys good morning.

Steve Cole: Hey, Thanks, good morning.

Steve Cole: A quick question wanted to talk a little bit of a property management on the change in the compensation structure you alluded to.

Steve Cole: Could you speak a little bit.

Beth A. Garvey: What prompted that, and I know, Beth, you've alluded to the, you mentioned the proprietary database that you're now utilizing. How is that working? So, if I remember correctly, that's been going on for a few months now. Can you maybe give us a little bit of background and then what's happened since you rolled that out, and are we seeing higher churn at all as you change the compensation structure? Has that been a good thing, or what happened there? Thank you.

Steve Cole: What.

Steve Cole: What prompted that and I know that you have alluded to the partner you much on the proprietary databases and all utilize like how is that working so a lot of times, if I remember thats been going on for a few months now can you maybe give us a little bit.

Beth A. Garvey: Ground and then what's happened since you've rolled that out and we're seeing higher churn at all as you change the Cabo social structure or has that been a good thing or a whatsapp on this thank you.

Beth A. Garvey: The compensation structure changed on April 1st, so this is, you know, we're going through the first process of seeing what the new comp plans look like, but to give a little insight into how it used to work, we have wanted to do this for a couple years, but we did not have the ability to be able to go in and attach revenue to a person. It was always just attached to the market.

Beth: Compensation structure changed April 1st. So this is you know we're going through the first process of seeing what the new comp plans look like but to give a little insight into how it used weren't we have wanted to do this for.

Beth A. Garvey: A couple of years and we did not have the ability to be able to go in and.

Beth A. Garvey: And attach revenue to a person who was always just attached to the market. So when we would go into a budget. We would say we've got the Dallas market and this is the number we need you to hit there might be five people that work on that Dallas market and they all get compensated the same regardless of what they were doing right. So this does give us the ability to really.

Beth A. Garvey: So when we would go into a budget, we would say, we've got the Dallas market, and this is the number we need you to hit. There may be five people that work in that Dallas market, and they all get compensated the same regardless of what they were doing, right? So this gives us the ability to really have those rock stars that are going through and doing all the production and moving in the right direction, giving them the ability to say, you know what? This is great because now I get to eat what I kill, right?

Beth A. Garvey: <unk> have those rock stars that are going through and doing all of their production and moving in the right direction, giving them the ability to say you know what this is great because now I get to.

Beth A. Garvey: Eat what I kill right. So I get to go out and I get to make more money and the other thing. It also does for US is it allows sale.

Beth A. Garvey: So I get to go out, and I get to make more money. And the other thing it does for us is it allows the sales and delivery teams to get outside their market. And what that means is if there's a market that has no orders, they're all full, they're all good, those delivery people and sales people can pop over and start helping other markets and get credit for it, and win. And we did not have that ability before. And so that all went into effect on April 1st. I'm so super excited to see how that rolls out.

Beth A. Garvey: Sales and delivery teams to get outside their market and what that means is if there were at it there is a market that has got no orders, they're all full they're all good those.

Beth A. Garvey: Delivery people and salespeople can pop over and start helping other markets and get credit for it and win and we did not have that ability before and so that all went into effect April 1st So super excited to see how that rolls out.

John Richard Barnett: Steve, I would also mention that, you know, we needed to transition to a plan that was Our strategy was we wanted it to be always relevant. We, and so our old plan wasn't always relevant, depending on what was going on in the individual market. And the other thing was to create really that owner operator type incentive so that they own their destiny, and they can see, what if I'm in a market for three years and I drive it to this level? I can clearly see what type of commissions and my total comp I would get.

Speaker Change: Steve I would also I would also mentioned that.

John Richard Barnett: We needed to transition to a plan that was.

John Richard Barnett: Our strategy was we wanted to be always irrelevant.

John Richard Barnett: And so our old plan wasn't always relevant depending on what was going on in the individual market and the other thing one.

John Richard Barnett: Really the owner operator type incentive.

John Richard Barnett: So that.

John Richard Barnett: They own their destiny and they can see.

John Richard Barnett: If I'm in a market for three years and I drive it to this level I can clearly see what type of commissions and my total comp that I would.

John Richard Barnett: <unk>.

Steve Cole: That's very helpful. I guess the last question there would just be the macro environment, you know, from the developer's side, from the property manager's side, and your advantage. How do you guys see yourselves positioned there? I know you've obviously got size.

Steve Cole: That's very helpful. I guess the last question there just for you, but the macro environment.

Steve Cole: From the developer from the property manager side.

Steve Cole: Your advantage, how do you guys see yourself positioning there I know you've obviously got size I'm, just curious what you're your value competitive value proposition versus versus who's out. There. How are you positioned now and how is that changing.

Beth A. Garvey: I'm just curious about your value, your competitive value proposition versus who's out there. How are you positioned now? And how is that changing? Aside from Beth, as you mentioned, it's going up the food chain on the decision side, but just in terms of how, in practical terms, is that working?

Beth A. Garvey: Aside from Beth as you mentioned, that's going to power the food chain and the decision side, but just in terms of how tactical terms how is that working.

Beth A. Garvey: Well, you know, the differentiator we have in the property management side is also the training side. You know, that's something that's allowing us to be able to go through and outsell or offer a service that somebody didn't have before. I think the other benefit we have is, you know, these property management companies, the Graystars, the Lincolns, and places like that, are seeing more competition around too, where procurement was never involved in any of the decisions that were made historically about what staffing agencies get used.

Beth A. Garvey: Well, that's the differentiator, we have and the property management side is also the training side you know that that's something that said, it's allowing us to be able to go through and and our sell or offer a service that somebody could you didn't have before.

Beth A. Garvey: I think the other benefit we have is these property management companies. The Gray stars that Lincoln's and places like that Theyre seeing more competition around to where procurement was never involved in any of the decisions that were made.

Beth A. Garvey: Historically about what staffing agencies get used and we're starting to see even those larger companies go in and and start looking at it through the lens of procurement.

Beth A. Garvey: And we're starting to see even larger companies go in and start looking at it through the lens of procurement. And that is potentially good for us because, instead of those decisions being made at a local level now, some of these property management companies are going through and working to try to say, these are the approved vendors that you need to work with. And you can only use these three approved vendors. And we will, likely, well, we will be one of the big three, based on our size and our reputation in the industry. So that's a good move for us, and we're seeing some of those contracts start to develop in recent months. So we're waiting for those to all get signed.

Beth A. Garvey: And that that is potentially good for us because instead of those decisions being made at a local level now some of these property management companies or are going through and working to try to say. These are the approved vendors that you need to work and you can only use these three approved vendors and and we will lie.

Beth A. Garvey: <unk> well, we will be one of the three big based off our size and our reputation in the industry. So that's a that's a good move for us and those were seeing some of those contracts start to develop.

Beth A. Garvey: In the recent months so we're waiting for those don't get signed.

Beth A. Garvey: Yeah, and I think our reputation, too, in the industry, I mean, it's super strong compared to our competitors, right? Last year, we won the Supplier of the Year Award for the Association, which, you know, just speaks volumes to how they view us as a partner and somebody who's helping them in their business. And the Educator Award for them this year. So, you know, that's definitely a strength that we have that others don't.

Beth A. Garvey: Yes, and I think our reputation to the industry.

Beth A. Garvey: Super strong compared to our competitors right last year, we won a supplier of the year Award.

Beth A. Garvey: For the association.

Beth A. Garvey: Which just speaks volumes to how they view us as a partner and somebody who is helping them in their business and then I'm not sure exactly what the name of the award is but we are a finalist.

Beth A. Garvey: On the educator.

Beth A. Garvey: Award for them this year so.

Beth A. Garvey: So that's definitely a strength that we have that others don't.

Speaker Change: Right. Thank you guys very much I'll hop back in the queue.

Speaker Change: Thanks, Andrew.

Steve Cole: Thank you guys very much. I'll pop back into the queue. And the next question will be from Mike Taglich with the Taglich Brothers. Please go ahead. Good morning.

Michael Nicholas Taglich: And the next question will be from Mike Taglich with the Taglich Brothers. Please go ahead. Good morning, folks. Most of my questions have been answered.

Speaker Change: The next question will be from Mike Tag Glitch with tablets brothers. Please go ahead.

Michael Nicholas Taglich: Good morning.

Michael Nicholas Taglich: Folks.

Michael Nicholas Taglich: Most of my questions have been answered.

Michael Nicholas Taglich: One question I guess is for John.

Michael Nicholas Taglich: What would the.

Michael Nicholas Taglich: Tax basis B on the tech side of the Companys business.

Michael Nicholas Taglich:

John Richard Barnett: I don't have that number at my fingertips, but, you know, that's where all of our tax basis is. It's all on the professional side because that's where we've made all of the acquisitions.

Michael Nicholas Taglich: I don't have that number at my fingertips, but that's where all of our tax basis is it's all on the professional side, because that's where we've made all of the acquisitions right. Okay. Okay.

Speaker Change: We could talk offline alright.

John Richard Barnett: Alright.

Speaker Change: I'm excited about.

John Richard Barnett: The process going forward.

Speaker Change: Thanks, Mike.

John Richard Barnett: Thanks.

Jeffrey Michael Martin: And the next question is a follow-up from Jeff Martin from Roth Capital. Please go ahead.

Michael Nicholas Taglich: And the next question is a follow up from Jeff Martin from Roth Capital. Please go ahead.

Jeffrey Michael Martin: Thanks, Beth. I just wanted to get an update on your technology platform initiatives. I think that's a continuous process. Yeah, and an update on what you're seeing in terms of improved productivity, engagement, collaboration, et cetera.

Jeffrey Michael Martin: Thanks, Pat I, just wanted to get an update on your technology platform initiatives.

Jeffrey Michael Martin: That's a continuous process and.

Jeffrey Michael Martin: Yeah, an update there on what youre seeing in terms of improved productivity engagement collaboration etcetera. Thanks.

Jeffrey Michael Martin: Sure.

Beth A. Garvey: We continue to have moved out of the set up phase and more into the phase where we are doing more of the work that makes the system more productive, right? So going and doing in the enhancement.

Jeffrey Michael Martin: We continue to to have moved out of the.

Beth A. Garvey: Set up phase and more into the phase, where we're doing more.

Beth A. Garvey: The work that makes the system more productive right, so going in and doing any enhancements.

Beth A. Garvey: We have a graph that says we now do more things on the advancement sites than we did in actually getting it to work behind the scenes, so that's a positive move, and I think one of the things that has come out of that in the leadership teams, we always have leadership teams every quarter, is being able to really say these are the things that we have going on right now. I know that our marketing team is doing some great things in regards to being able to attract talent and attract customers.

Speaker Change: We have a graph that says we.

Beth A. Garvey: We now do more things in the advancements sites than we did in and actually getting it to work behind the scenes. So that's a positive move and I think one of the things that has come out of that in the leadership team. We are we always had leadership teams every quarter is being able to really say these are the things that we have going on right now and I know that our marketing team is doing some great things in regards.

Beth A. Garvey: To being able to attract talent and attract customers, we have the ability to be able to tell when somebody pops on our site. We can look at them immediately followed the sales teams can immediately follow up.

Beth A. Garvey: We have the ability to be able to tell when somebody pops on our site, we can look at immediately, the sales teams can immediately follow up when they see, you know, John looked at an email we sent out, and then our salesperson can go, hey John, we saw that you looked at the email, and immediately close the gap on some of those conversations. The other things that we're able to do is to go through and do campaigns around activities that we do, all the trade shows and the property management group, all those contacts, you know, when you go to a trade show, you walk away with all the business cards, and what do you do with those things, and, you know, historically, it's hard to follow up, and we loaded all of those up, and the marketing team is now doing drip campaigns out to those people, and those are all things that we couldn't do before, and so that gives us more visibility, again, it gets us quicker touches to our customers.

Beth A. Garvey: When they see John.

Beth A. Garvey: John looked at an email we send out and then our sales person can go hey, John we saw that you.

Beth A. Garvey: It looks to female and immediately closed the gap on some of those conversations the other things that we're able to do is to go through and do campaigns around activities that we do all the trade shows.

Beth A. Garvey: Our property management group all of those contacts you know when you go to a trade show you walk away with all the business cards and what do you do with those things in and we've been historically, it's hard to follow up and we loaded all of those up and the marketing team is now doing drip campaigns out to those people and those are all things that we couldn't do before and so that gives us more visibility again, it gets us quicker touches.

Beth A. Garvey: To our customers we've had some policy changes in regards to how we did time car collection, which has taken some I think at the last number I heard was about five to six hours a week off the plate to the staffing coordinators and that gives them ability to fill it up John.

Beth A. Garvey: We've had some policy changes in regards to how we do time card collection, which has taken some, I think the last number I heard was about five to six hours a week off the plates of the staff and coordinators, and that gives them the ability to fill job orders a lot quicker, and we just continually make enhancements. So we're very intentional about what's closest to the dollar when we make those decisions. There are a lot of wish lists out Yeah, Jeff, we did go through the period, right, of implementation.

Beth A. Garvey: Job orders, a lot quicker and and we just continually make enhancements. So it's we're very intentional about what's closest to the dollar when we make those decisions and.

Beth A. Garvey: There's a lot of wishlist out there and the first question is always what's closest to the dollar and those are the things that get worked on first.

John Richard Barnett: Yeah, Jeff, we did go through the period, right, of implementation, came out, we turned around and actually made two acquisitions back-to-back, right? So while we definitely worked on... You know, making the system easier to use and more efficient. Last year, we also had a lot of our resources that would have been dedicated to that type of effort working on, you know, bringing in these two companies. So that's done. We have a roadmap of development that we are going to do on the Salesforce platform that we believe will improve efficiencies. In addition, as Beth mentioned, on the sales front, sales enablement and really leveraging the system and leveraging our data to maximize the use of our time is a priority.

Beth A. Garvey: Jeff We did go through that period right of implementation came out we turned around and actually made two acquisitions back to back right. So while we definitely worked on.

John Richard Barnett: Making the system more easy to use and more efficient last year. We also had a lot of our resources that would be dedicated to that type of effort working on.

John Richard Barnett:

John Richard Barnett: Okay.

John Richard Barnett: These two companies.

John Richard Barnett: Yes.

John Richard Barnett: Okay.

John Richard Barnett: Map of.

John Richard Barnett: Development that we are going to do on the Salesforce platform that we believe will improve efficiencies.

John Richard Barnett: In addition to as Beth mentioned on the sales front sale.

John Richard Barnett: Sales enablement, and really leveraging the system and leveraging our data.

John Richard Barnett: To maximize the use of our time is a priority.

Speaker Change: Great answer thank you.

Operator: Again, if you would like to ask a question, please press star and then 1. The next question is from George Melas from MKH Management. Please go ahead.

Speaker Change: Thanks, Jeff.

George Melas: Again, if you would like to ask a question. Please press Star then one.

Operator: The next question is from George Melas from MK H management. Please go ahead.

George Melas: Great, thank you. Hi Beth and John. Good morning. You too.

George Melas: Great. Thank you John.

George Melas: A quick question on Workday. I'm trying to understand that better. Is this sort of a unique setup in the industry, or how do other software shops set up sort of a similar system? And I'm trying to understand, the person that will be on the Workday portal that Workday assigns will be your staff and will be paid by Workday. So the workday would be who pays you. Is that how the contract works? Thank you.

George Melas: John.

George Melas: Hey, George.

George Melas: Okay.

George Melas: Quick question on work day, Im trying to understand better.

George Melas: Is this sort of a unique setup in the industry.

George Melas: Other software shops.

George Melas: Set up sort of a similar system and I'm trying to understand the person that will be on the web portal that workday assigns.

George Melas: <unk>.

George Melas: Your staff.

George Melas: It will be paid by the warranty.

George Melas: Warranty, so workday would be cool.

Beth A. Garvey: Workday, yes, Workday is now our customer in that scenario.

George Melas: Is that how the contract works.

Beth A. Garvey: Workday had yes workday is now our customer in that scenario.

Beth A. Garvey: And would they assign you at the beginning of a project to sort of.., make sure that it starts well, or is it mostly on projects that sort of have problems, and workday feels like they need to have somebody there that people to sort of correct it? And how do you work with the work they do as Consulting and Implementation Staff?

Beth A. Garvey: Yeah.

Beth A. Garvey: Right.

Beth A. Garvey: And with this I knew at the beginning of a project to sort of.

Beth A. Garvey: Make sure that it starts well or is it mostly on projects that sort of problems.

Beth A. Garvey: When they feel like they need to have somebody they aren't that.

Beth A. Garvey: Yeah.

Beth A. Garvey: To sort of correct and how do you work with the work day.

Beth A. Garvey: Consulting and implementation stuff.

Beth A. Garvey: Well, there is staff to begin with. And so we're going to our consultants and saying, hey, you know, you got your credentials; we'd like to get you loaded up into the system. So it's not like they come and we don't have access to them anymore. We can actually still use them.

Beth A. Garvey: Well there are staff to begin with and so we're going to our consultants and saying Hey, you got your credentials, we'd like to get cheap loaded up into the system. So it's not like they come we don't have access to them anymore.

Beth A. Garvey: And to answer your question, whether or not it's an implementation or a fix, it's a combination of both. But I believe that the majority of that part of the business will be an implementation. So when somebody decides to purchase Workday, they will go in and say, now we need the implementers to do it. So that's going to be the majority of it. Our other parts of our Workday practice are the ones that are going in and doing the fixing.

Beth A. Garvey: We can actually still use them and to answer your question, whether or not it's an implementation or a fix it's combination of both but I believe that.

Beth A. Garvey: The majority.

Beth A. Garvey: The majority of that part of the business will be an implementation. So when somebody decides to purchase workday. They will go in and say now we need the implementers to do it. So that's going to be the majority of it are other parts of our workday practice over the ones that are going in and doing the fixing.

George Melas: Okay, all right. It'll be interesting to see how it works out. I have a question about property management. The impact of competition. You are in some 60 or so markets. I imagine competition is not in all these markets. So can you really map the impact of competition? And can you see a real differentiation in your performance between markets where you have competition and where you don't?

George Melas: Okay Alright.

George Melas: Interesting to see how it works out.

George Melas: Just a question on property management.

George Melas: <unk>.

George Melas: The impact of competition you are in 60 or so markets.

George Melas: You mentioned the competition is not in all these markets.

George Melas: So can you really Matthew impact of competition.

George Melas: And can you see a real differentiation.

Beth A. Garvey: I don't believe we have that granular level of information, George, so you're right that not every competitor is in the markets that we're in, but the majority of our markets do have a competitor now, but I don't know that we get that granular on how that works.

George Melas: Rates between markets.

Beth A. Garvey: Petitions.

Beth A. Garvey: No.

Beth A. Garvey: And I don't believe we would have that granular information George so.

Beth A. Garvey: You are right if they're not every competitor is in the markets that we're at but the majority of our markets do have a competitor now and but I don't know that we get that granular on on how that works.

John Richard Barnett: Yeah, I would definitely say we have varying performance across our portfolio, right? Every market is, um, has. They're really a different kind of sub macro environment that it's, that exists in. So, you know, we've seen some markets get a little hit, which we believe is a little harder by competition, and other markets, not so much.

John Richard Barnett: I would say definitely we have varying performance across our portfolio right every every market.

John Richard Barnett: Is.

John Richard Barnett: Yes.

John Richard Barnett: They really are different.

John Richard Barnett: Kind of some macro environment that exists and so we've seen some markets get a little worse.

George Melas: Okay, that makes sense. Okay. Great. Thank you very much. I appreciate it.

John Richard Barnett: We believe is a little harder by competition in the other markets not so much.

Beth A. Garvey: And ladies and gentlemen, this concludes today's question and answer session. I would like to turn the conference back to Beth Garvey for any closing remarks.

George Melas: Okay that makes sense okay.

Beth A. Garvey: Thank you very much appreciate it.

Beth A. Garvey: Thanks George.

Beth A. Garvey: And ladies and gentlemen. This concludes today's question and answer session I would like to turn the conference back to Beth Garvey for any closing remarks.

Beth A. Garvey: Thank you for your time today. We appreciate your continued support, and we look forward to updating you on our second quarter results in August. Have a great day.

Beth A. Garvey: Thank you for your time today. We appreciate your continued support and we look forward to updating you on our second quarter results in August have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Beth A. Garvey: The conference has now concluded.

Beth A. Garvey: Thank you for attending today's presentation you may now disconnect.

Operator: [music].