Volt Information Sciences' (VISI) CEO Michael Dean on Q4 2015 Results - Earnings Call Transcript

| About: Volt Information (VISI)

Volt Information Sciences, Inc. (NYSEMKT:VISI)

Q4 2015 Results Earnings Conference Call

January 13, 2015, 05:00 PM ET


Lasse Glassen - IR

Michael Dean - President and CEO

Paul Tomkins - SVP and CFO


Joe Gomes - William Smith

Ross Taylor - Somerset Capital

David Neuhauser - Livermore Partners

Matt Sherwood - Cooper Creek Partners


Greetings and welcome to the Volt Information Sciences’ Fourth Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now turn the conference over to Mr. Lasse Glassen, Investor Relations. Thank you, Mr. Glassen, you may begin.

Lasse Glassen

Good afternoon and thank you for joining us today for Volt Information Sciences’ fiscal 2015 fourth quarter and full year earnings conference call. On the call today is Michael Dean, President and Chief Executive Officer; and Paul Tomkins, Senior Vice President and Chief Financial Officer.

Before beginning today’s call, let me remind you that some of the statements made today will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to Volt Information Sciences’ recent filings with the SEC for a more detailed discussion on the risks that could impact the company’s future operating results and financial condition.

Also on today’s call, our speakers will reference certain non-GAAP financial measures, which we believe will provide useful information for investors. A reconciliation of those measures to GAAP is included in the earnings release issued this afternoon, January 13th, 2016.

With that, it’s now my pleasure to turn the call over to Volt’s President and CEO, Michael Dean. Michael?

Michael Dean

Good afternoon and thank you for joining us today for Volt Information Sciences' fiscal 2015 fourth quarter and full year conference call. I'll begin today's call with an overview of our results on this past quarter along with efforts and progress we're making towards our plan to improve Volt’s financial and operational performance.

Paul Tomkins, our CFO, will then discuss additional details about our financial results, balance sheet, and capital allocation priorities. A question-and-answer session will follow after our prepared remarks.

First, let me state that I'm very optimistic in the opportunity we have to return Volt to a vibrant, profitable, and growing company, nothing that I've seen since joining makes me feel otherwise.

Along with my team and the Board, I believe there's significant upside in this business and in the valuation of Volt. That being said, this is a turnaround which will take some time to enact, but I feel that we're making progress executing against the plan to do just that.

We ended fiscal 2015 with a very productive fourth quarter. Overall, I'm pleased with the efforts we made to stabilize Volt's financial performance. Fourth quarter revenue held steady compared to the prior quarter as we were successful in maintaining our book-of-business with our roster of customers.

Furthermore, we generated quarterly GAAP income from continuing operations for the first time in a year. Perhaps most importantly, we also took concrete steps to advance our plan, aimed at shoring up our balance sheet creating a foundation for returning Volt to a growth trajectory. I'll discuss our efforts here in more detail in a moment.

Looking at our fourth quarter results in more detail, net revenue of $364 million was down just 0.2% compared to the prior quarter. Within our staffing services segment, revenue increased by nearly $1 million compared to the prior quarter as overall demand for our technical, engineering, and light industrial skillset has started to stabilize.

However, this increase was more than offset by $1.6 million sequential quarter decrease in our other segment revenue, primarily related to the sale of our Uruguayan Telephone Directory Publishing and Printing business at the end of the third quarter of 2015.

At the bottom-line, we reported a net loss in the fourth quarter of $0.2 million or $0.01 a share compared with the net loss of $4.1 million or $0.20 a share in the previous quarter. Net income from continuing operations for the fourth quarter of 2015 was $0.1 million compared to a net loss from continuing operations of $4.1 million in the immediately preceding quarter.

Net income from continuing operations in the fourth quarter of 2015 included special items that reduced income by $0.9 million, which Paul will describe in more detail in a moment.

Excluding the impact of these special items, income from continuing operations for the fourth quarter of 2015 would have been $1 million or $0.05 a share on a non-GAAP basis.

On our last call, I provided our assessment of the key issues that has impacted Volt's financial and operational results over the past several years. I also discussed our detailed and time-sensitive plan to get our business back on track and return Volt to profitable growth.

As you may recall, our plan is comprised of three main pillars that include one, improving our balance sheet and simplifying our corporate structure; two, reducing costs and enhancing margins; and three, generating topline growth.

I'd like to share with you the tangible progress we made in each one of these areas since our last quarterly conference call. With respect to improving our balance sheet and simplifying our corporate structure, we continue to make excellent progress on a number of fronts.

During the quarter, we successfully completed the conversion of collateral on our casualty insurance program from cash to a letter of credit. This change resulted in the release of cash totaling approximately $22 million, the majority of which was used to pay down amounts drawn under our financing program.

In fact, we reduced total indebtedness by more than $25 million during the fourth quarter and by nearly $30 million since the end of last year. In addition, as part of our goal to simplify our corporate structure and improve operational focus on our staffing business, we continue to make progress in divesting non-core assets.

During the fourth quarter, we completed the sale of substantially all of the assets of Volt Telecommunications Group. And subsequent to the end of the quarter, we completed the sale of our Uruguayan Staffing Business.

You may also recall that at the end of the third quarter of 2015, we completed the sale of our Uruguayan Publishing and Printing business; and in the first quarter of 2015, we sold our Computer Systems business.

While the consideration Volt received in the sale of each of these assets was modest, these businesses have been a significant drag on our profitability, working capital, and cash flow.

Within the Volt portfolio, the lone remaining business that we have identified as non-core is Maintech, our information technology, infrastructure services business which is included in our other reporting segment.

Maintech is an independent service organization, or ISO, serving the global corporate IT marketplace with a solid roster of multi-national blue chip enterprise customers.

Unlike our other recent divestitures, Maintech has a strong track record of profitability. However, we've come to the conclusion that Maintech is not a strategic complement to our staffing operations.

And similar to our previous asset sales, the divestiture of Maintech will enable us to better focus management attention and resources on opportunities within our Core Staffing Business where we believe we're better positioned to add value.

During the past several months, we've engaged financial advisors to evaluate options regarding the sale of Maintech. This process has generated significant interest from a wide range of potential buyers.

Although we're not going to comment on expected proceeds from the sale, we do expect to complete the transaction by the end of the second quarter of fiscal 2016 or early in the third quarter.

Our plan is to simplify our corporate structure and monetize the asset also includes Volt owned real estate including approximate 200,000 square foot Class A office facility in Orange, California.

Extensive marketing activities by Cushman & Wakefield generated significant buyer interest in the property, including eight bona fide first round bids with Volt selecting the top potential buyers to move forward in the process.

Currently, we have a general agreement on terms for sale and long-term leaseback of the property with two finalists. Both of whom were currently working to secure full financing of the property.

While we expect to complete a transaction with one of the potential buyers eminently, it has taken longer than expected due to our requirement that the buyer have fully committed financing.

Upon completion of the transaction, the property will continue to house approximately 400 Volt employees. In addition to the Orange, California property, we have entered into a sale agreement for approximate 19,000 square foot office facility located in San Diego and we anticipate it closing shortly.

The progress on executing all of these activities is setting the table for us for a secure foundation and management focus all on staffing. I'm also pleased with our recent efforts related to the second term [ph] of our plan, which is reducing cost and enhancing margins to provide the resources to invest and grow.

After an in-depth review of our business unit operating cost, corporate overhead and overall business processes, during the fourth quarter, we completed a rigorous bottoms-up plan for fiscal 2016.

Part of this process, we've established annual budgets for which every department within the company will be held accountable. I believe it is imperative to create a culture of accountability within Volt that will be the key to the company executing against our budgets and achieving the desired improvements to our cost structure.

I believe our plan for fiscal 2016 strikes the right balance between aggressiveness and achievability and should help Volt make meaningful progress towards long-term profitability and growth.

That being said, I want to make it clear that relative to fiscal 2015, we face margin in cost headwinds to operating income totaling approximately 20 million as we look ahead to fiscal 2016.

Specifically, this is comprised of approximately $10 million related to the direct margin impact on lower Staffing Segment revenue volumes on our current book-of-business. It also includes approximately $10 million of higher expenses related to investments in the business to upgrade our IT infrastructure, rent expense associated with the sale leaseback of Orange facility along with other investments required to strengthen of the operation and management teams.

To fill the gap, we are executing a detailed plan. Subsequent to the end of the fourth quarter, we announced the implementation of cost reduction actions as part of our overall initiative to improve efficiencies, competitiveness, and profitability. This includes reduction of workforce of approximately 200 across our business unit and corporate staff.

As part of this action, we expect to incur approximately $3 million in restructuring charges in fiscal 2016 related to severance, lease termination, and other cost and we expect to realize estimated annual savings of approximately $10 million.

Part of our suboptimal cost structure is the result of inefficient and outdated business processes. To address this, we're making investments in IT and ongoing technology improvements and expect to realize approximately $5 million to $7 million in annual cost savings and other efficiencies.

And importantly, the divestiture of unprofitable businesses that I described earlier in my remark is expected to eliminate approximately $3 million in operating losses in 2016.

In addition to reducing operating expenses, we're also keenly focused on managing our business mix towards technical verticals and job categories that have higher direct margins and renegotiating unfavorable contracts.

While the third pillar of our strategy generating topline growth is longer term in nature, I’m pleased with our progress and identifying areas for improvement and developing the processes necessary to achieve better results in the future.

We have completed an assessment of our sales organization and have begun the process of moving people into the right positions within the organization as well as notable and structured effort to fortify our strong team with outside talent.

Notwithstanding, our strong roster of Fortune 500 customers, we found that poor execution of client relationship management has hindered our ability to grow with our clients' staffing need.

To this end, we're instituting early actions to rectify the situation as well as working aggressively to build a world-class client relationship management capability. I’ve made this the business' top priority.

And finally, we're also restructuring the compensation structure within our sales organization and across the rest of the company that incentivizes profitable growth. To achieve this objective, we're establishing a pay-for-performance culture and aligning incentive structure with corporate-wide strategy and matrix.

Going forward, more employees will now have more of their compensation at risk, tied specifically to our revenue and operating income budget objectives.

In summary, during the fourth quarter, we made solid progress advancing our plan sure for financial and operational performance and returning Volt to profitable growth. We remain acutely focused on strengthening our foundation, improving efficiencies, and reinvesting in topline growth in our business.

Based on our early progress, I’m more confident than ever that our actions will lead to a significant improvement in our financial performance in the quarters and years ahead.

Now, I’d like to turn the call over to Paul to discuss our financial results in more detail. Paul?

Paul Tomkins

Thank you, Michael. Good afternoon. I will provide additional details on the fourth quarter financial results as well as discuss our balance sheet and liquidity position. Our revenue in the fourth quarter of $364 million was relatively stable compared to the third quarter, down just $0.7 million or 0.2% on a sequential quarter basis.

However, revenues declined $65.7 million or 15.3% a on year-over-year basis, primarily attributable to the Staffing Services segment where revenue decreased by $60.7 million or 15.1% from the same period last year.

The Staffing Services segment revenue decline was driven by lower demand from our customers in both our technical and non-technical administrative and light industrial or A&I skillsets as well as a change in the overall mix from technical to A&I.

Declines were most prevalent with customers in the manufacturing, oil and gas, and utilities industries as they continue to experience a slowdown in demand.

Clearly, the year-over-year decline in revenue was unacceptable to all of us here at Volt. Early in fiscal 2015, our Staffing Services segment experienced a significant drop in revenue with several of our large customers. As a result of the recurring nature of this contractual revenue, topline year-over-year comparisons in the subsequent quarters in fiscal 2015 were impacted.

While the year-over-year performance comparisons will continue to be difficult through the first quarter of fiscal 2016, we are making good progress in stabilizing our revenue base with a goal of resuming to growth trajectory.

To this end, during the fourth quarter, we signed new contracts with a number of new, large enterprise customers with significant revenue potential. Although, it will take time for these new customers to ramp and meaningfully contribute, we are confident that we are beginning to stabilize the revenue curve. This, coupled with our ongoing efforts to strength our customer relationships and enhance our sales team, should produce tangible results overtime.

Now turning back to our fourth quarter financial results. Net income from continuing operations in the fourth quarter was $0.1 million, up $4.2 million compared to a loss of $4.1 million in the third quarter and down $4.4 million compared to net income $4.5 million in the fourth quarter of last year.

Net income in the fourth quarter included special item charges of $900,000 consisting primarily of restructuring charges and impairments, partially offset by small gains on our sale of non-core operations.

Excluding the impact of these special items, net income from continuing operations for the fourth quarter would have been $1 million on a non-GAAP basis.

Adjusted EBITDA as highlighted in our earnings press release was $5.3 million in the fourth quarter of fiscal 2015. On a sequential quarter basis, adjusted EBITDA increased $1.9 million compared to the prior quarter, but declined $6.1 million compared to the same quarter last year.

Moving onto our Core Staffing Services segment results, operating income in the fourth quarter of 2015 was $5.6 million, which represents growth of 62% or $2.1 million on a sequential quarter basis. Compared to the fourth quarter of the prior year, Staffing Services operating income was down $7.7 million or 58%.

Staffing Services segment operating income for the fourth quarter of 2015 included $1.2 million special items related to an impairment charge of $700,000 and restructuring cost of $500,000. Excluding the impacts of these special items, Staffing Services segment operating income would have been $6.8 million.

Staffing Services segment direct margin percentage during the fourth quarter was 15.8%, a slight increase of 33 basis points when compared to direct margin of 15.4% in the prior quarter.

On a year-over-year basis, Staffing Services direct margin decline 62 basis points as compared to direct margin percentage of 16.4% in the fourth quarter last year, primarily due to our quarterly workers' compensation adjustments based on cumulative actual claims experience as well as larger declines in the higher margin technical categories.

The Staffing Services segments selling, administrative and other operating costs in the fourth quarter increased $500,000 or 1% compared to the prior quarter. On a year-over-year basis, selling, administrative and operating costs decreased $5.4 million or 10.2%. The year-over-year decline was primarily due to lower recruiting and delivery cost as well as lower information technology support cost.

Staffing Services segment’s selling, administrative and other operating costs were 13.8% of Staffing revenue in the fourth quarter this year versus 13.7% in the third quarter and 13.1% for the same period a year ago.

As Michael noted in his remarks, during the first quarter of fiscal 2016, we implemented a cost reduction plan as part of our overall initiative to become more efficient, competitive, and profitable.

We estimate that we will incur restructuring charges of approximately $3 million throughout fiscal 2016, primarily resulting from the reduction in workforce, facility consolidations, and lease termination cost.

We estimate that we will incur severance related charges of $1.2 million in the first quarter of fiscal 2016 and the remaining $1.8 million throughout the remainder of the year. Annual cost savings from this action are estimated at approximately $10 million.

As we have been indicating, we're also making significant investment estimated at $10 million to $12 million in expensed and capitalized cost to update the business processes, back-office financial suite, and IT tools that are critical to our success and offer more functionality at a lower cost to the company.

Our goal is to reduce complexity, identify and address manual redundant processes, and simplify the organization, all with a focus on aligning our support infrastructure with the requirements of the business. This project is progressing very well and is on-track and as Michael indicated, annual cost savings from this project that estimated at $5 million to $7 million.

Turning now to our balance sheet and liquidity position, our total debt balance at the end of the fourth quarter was $107.3 million, an improvement from $132.5 million at the end of the prior quarter, and $136.6 million in the fourth quarter of last year.

As Michael mentioned, we completed the conversation of the collateral associated with our Casualty Insurance program from cash to a letter-of-credit. As a result, we received cash in the quarter totaling $22 million and we utilize the majority of this cash to reduce the outstanding balance on our $150 million financing program with PNC Bank.

Subsequently, at the end of the fourth quarter, we had $49 million of available liquidity for working capital requirements, which we define as cash and banks and borrowings availability. This is up from approximately $27 million at the end of the third quarter and $17 million at the end of the second quarter.

Since the end of the fourth quarter, our liquidity has further improved to $53 million as of January 8th. This has more than tripled from our available liquidity at the end of the second quarter.

Subsequent to the end of the fourth quarter, we successfully amended and extended our $150 million financing program with PNC through January 31st, 2017 which shifted debt under this facility on our balance sheet to long-term.

We continue to make progress on several initiatives undertaking to further enhance our liquidity position and shareholder value. As discussed earlier, we have exited several non-core businesses over the last year that were incurring losses and were drag on cash flow.

To further enhance our liquidity, we're in the process of selling our information technology infrastructure services business, Maintech, the final step in our divestitures process.

Further, proceeds from expected tax refunds later in fiscal 2016 and the monetization of our real estate in Orange and San Diego, California will also improve our liquidity position.

As we solidify our liquidity position, I'd like to discuss capital allocation. Our top priority is to ensure that there was adequate liquidity for working capital purposes to effectively manage our business.

Last quarter, we noted that we believe the liquidity balance of $40 million to $50 million would be adequate to support our business requirements. It is important to note, however, that our borrowing capacity which is a key piece of our liquidity is tied to our receivables balance and not static given the cyclical nature and seasonality of our business. Thus, managing our working capital includes forecast of future high and low points in quarters ahead.

Our next priority is to invest in the growth of the business. This includes tools and advanced technologies to support our Staffing business including an upgrade of our back office financial suite which will provide more functionality at a lower cost to the company.

An important piece of our capital allocation strategy includes returning excess capital to shareholders. As we continue to execute our plan and once we divest both Maintech and our Orange facility, we will have the opportunity to repurchase shares. We also have been and will continue to derisk the business by deleveraging our balance sheet.

In closing, I’d like to summarize some key points. While our company is challenged on a number of fronts and it will take time to return to profitable growth, Volt has a strong brand, a solid roster of Fortune 500 customers, and is operating in a growing industry.

We continue to make excellent progress on our plan that builds on the foundational strengths of the business, sharpens our focus on our core strengths, improves operating efficiencies, and puts Volt in a position to grow.

I look forward to updating you on our progress in the coming quarters. That concludes our prepared remarks. Thank you for your attention and at this time, I’d like to open up the call to questions. Operator?

Question-and-Answer Session


Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]

Our first question is from Joe Gomes of William Smith. Please go ahead.

Joe Gomes

Good afternoon, guys. Thanks for taking the call.

Michael Dean

Hi, Joe.

Paul Tomkins

Hi, Joe.

Joe Gomes

I’m listening to the call today. There does seem to be some positives, but we still see -- well into two years of this restructuring process and we’re still now implementing new additional cost reduction cost plans, you’re talking about Staffing business just beginning to stabilize revenues there, talking about we’re still looking -- taking some time to return to profitable growth in -- I guess kind of wondering how much longer here.

I mean I think from investor prospect, there has been frustration here that seems -- the turnaround here just seems to be taking significantly longer and being more drawn out than it had been anticipated. Can you provide some additional insight into timing and some -- given some comfort level that we’re going to see this soon?

Michael Dean

Yeah, Joe, this is Michael Dean, okay. I’ll start with this. Couple of points on that. First, I can’t speak to the turnaround as you describe it for the last couple of years. There is new Board, myself and notable number of new management here that is in the last five or six months. And frankly, we were brought in to turn the company around. So, I can speak for the last six months.

I think that’s -- there is a number of things that we have to do and we described lot of them, but its suffice to say this is a business that has seen revenue declines and in the past, there has been some cost reduction prior to the new management, as Board getting here to try and sort of mitigate some of those revenues declines, but I don’t think any efforts were that successful in the past on sort of ultimately getting to the root cause of turning the company around or at least if they did, it wasn’t effective.

And I think over the last five to six months with the new Board and new management, we’ve been solely focused on a very large number of things that we think are addressing root causes, to help ultimately not just shed cost because at the end of the day, if you keep shedding cost, but you don't fix your underlying revenue potential and growth prospective, than you can’t cut costs forever.

And so we are rationalizing cost imparts to continue to help our margins while we invest ultimately in the turnaround which we are doing great number of things towards, but it’s also create processes and to create focus and everything else so that we can have an aligned team working on a finite specific number of things to address the longer term issue of turning revenue around and having a growth business.

And we outlined -- I don’t know, 20 things on the call but there's a great number more than that and those things have been instituted in the last three months. The new Board, new management team has gone their footing we’ve assessed the scenario of what we need to do, we have built a detail plan on to do it and we are now executing against that.

So, in that scenario, there are some things that will take -- that will hit the P&L sooner than later and some of those cost reduction actions are short-term, but even while we're doing that we're doing a great number of things to address our competiveness and our ability to add value to clients and client relationship management, so that we can start growing again, but that takes longer term and that's not of an exit.

Growing the topline to year-over-year growth is in the next quarter or two. We have to basically bend that curve overtime.

Joe Gomes

Okay. And -- I mean how far of true I guess are we true working through some of these unacceptable contracts, it’s another item that the firm has been talking about for a while here. How many -- where do we stand there?

Michael Dean

So, there has been -- again -- it's -- before six months ago I can't speak of it, because there is -- I don't know exactly what was intentional and what was not, but I'll tell you since I've gotten here, there is a number on contracts that aren’t -- don't have the acceptable profitability that we like.

But our first order of magnitude is -- our first order of business is to instead of exiting those businesses, we often have an opportunity -- and the better the relationship we have with the clients, the better opportunities to renegotiate those as oppose to exit them.

I can say last quarter, there were some contracts we exited four specifically because we could renegotiate them, but there was a much larger number that we're in process of renegotiating. It’s a very competitive business, so I don't want to overplay the issue and I'll tell you that even where we can renegotiate those, this is a business of pennies and we don't go from unprofitable to wildly profitable even in those scenarios.

So, it is one piece of -- one tool of the many tools we used for this, but I don't want to overplay the issue that that's really our key strategy to save the margins here.

Joe Gomes

Okay. And lastly I wonder if you maybe give us a little -- where you guys are seeing from an industry standpoint, it would seem that a number of our typical drivers are positive, maybe and dive a little bit more deeply into some of the verticals and what are you doing in some of the verticals well that's helping them perform better and some of the challenged ones what do you see the you might be able to do there in order to get some of those verticals performing better?

Michael Dean

Okay. There's a lot question, let me try to get them in order. While we're doing well, I can argue what we're doing well fairly across -- mostly across the Board is on the delivery side and that's a cross-even verticals. I think that we -- our infrastructure that setup to find good talent and appropriately place that talent in our clients and finding actually one of our strengths.

I think on the sale side and certainly by verticals, there's some variance here that I think that overtime we have lost the sales focus. We've retained our delivery focus and our ability to find recruit and place candidates were pretty strong in.

Our ability to generate an ever-growing pipeline is getting better, but I think for example, in the IT area, our ratio of salespeople to other types of people in our organization was too low and as a result, in the IT area, we've been hurt disproportionately because -- directly as a result because we have not retained strong, bright talent as much as we would like and that we have it, but not enough of it.

And so one of the efforts to do that not only in IT, but IT is a good example, is where we're starting to bring back and retain the talents. We do have them bring additional new talent that's world-class from the sales side, specifically in some of these areas to bolster them, again because part of what we're seeing is sort of a lack of focus over the last several years on strengthening our pipeline.

And bringing in -- and sales function here is important because not only do you bring a business, but that client relationship capability is important because not only do you get business, but one of the ways to succeed here is not only get in the door, but then to provide great value and use that relationship to grow that business with our clients' needs over time and in both of those areas, not just in IT, but in others, I think we've lost some focus, and I think that's part of the issue that we're addressing.

Paul Tomkins

Yeah. And Joe, this is Paul. I also Volt has always been strong in engineering and also in A&I which is administrative and industrial -- light industrial. And those are key areas for us. We've always had strength in all three of those areas and so we're looking to maintain those and also grow them as we rebuild some of the IT that Michael was talking about.

Joe Gomes

Okay. Thanks guys. I'll get back in line.

Michael Dean

All right. Thanks Joe.


Thank you. The next question is from Scott [Indiscernible] of First Oil Share [ph]. Please go ahead.

Unidentified Analyst

Hi guys.

Michael Dean

Hi, Scott.

Unidentified Analyst

You've talked about restructuring and expense control and that is we're moving through the later stages of that obviously growth is the next step. And so if you could talk a little about winds you've had in the last three to six months and maybe any information on the type of industries those might be in?

Michael Dean

Sure. I'll take this. So, first let me start by saying actually we've had some encouraging results on client wins lately. I'm not sure if therein lies the trend yet, but we are pleased with some of the results that we've found particularly in quarter -- the fourth quarter, we had a number of large enterprise client win.

And I think it's encouraging. I think it's continues to add to a pipeline that I've said before, but our pipeline is actually stable and reasonably sized. And these most recent wins are encouraging to make sure that we continue to add to that good pipeline.

It's worth noting that pipeline is not immediate revenue, because we stated before, they can be anywhere from a short period of time to all the way up to 18 months before. Particularly larger clients take longer time to ramp up that revenue. It’s a long cycle process from once you start the sales process to ramping up full scale on revenue.

So, client wins in the fourth quarter don't necessarily mean much revenue in the fourth quarter, but it ramps up over time. But that's part of the process of what we do and their client wins. In the third quarter, they start ramping up in the fourth quarter, et cetera.

The other thing to note here on our client wins, while we're starting to see good client wins that are encouraging and building our pipeline beyond where it's at where it has been.

The issue still stands that we have -- there's always attrition in this business. It’s a temporary business by nature and so there's always attrition in the business. So, you always have to have a pipeline to backfill the natural attrition.

What we found here is that we've had natural attrition and also unnatural attrition and what has happened is we -- our pipeline has been pretty strong if it were just unnatural attrition -- I mean natural attrition, but we've had to -- the reasons for the declining several quarters of revenue is because we've had share losses in addition to natural attrition.

And -- so while our pipeline is strong and we're encouraged, what we're really focused on is not only it continuing to build that pipeline with restructuring our salesforce and the incentives there and investing in growth.

The other thing that we're working very hard on is limiting the share losses that we've seen in the past. And we're doing quite a few things to counter what in the past has been. Frankly, I'll tell you I think somewhat another lack of focus on client relationship managements tied to comment earlier that we were good at delivering value, but we were not very attuned to our clients' needs.

We didn’t have the robust capability I think that we can have and that we're working to build in client relationship management, so that we have an opportunity to grow share as oppose to dwindle our share with our large clients.

So, not only do we have working on those client wins that you asked about Scott, and we're finding at least some encouraging results there. We have to hit the other -- the flip side of that is start to limit our share losses that we're putting a number of things in place to work on that.

Paul Tomkins

One of the things -- Scott, this is Paul, just to add to what Michael said. One of things that we think is really important is to add a much more robust sales compensation plan, which we think is also going to help considerably throughout the sales force and driving a lot more activity on incentives because today or in the past, how it's been, it hasn’t been that strong incentive.

Unidentified Analyst

Okay. And on the wins, can you give us a feel for how many of those were maybe relationships you've had -- were they additional wins of business with customers you had a continuing relationship, whether the customers coming back or they knew customers? And then, are you up against several other companies and sort of bidding for it?

Michael Dean

So, this is Michael. The good news is -- good news on both of those questions. One is that we are up against almost in every case. If not every case, so especially the large clients we're talking about that I was talking about, those wins, they were competitive bid processes. So, we are actively winning bids against our competitors. And that's an important thing to note and we have been. So, it's not that we sort of have a dry pipeline and in fact we are in competitive processes on a daily basis often with very large clients and we're winning. Not every time, but we are winning more than we have in the past.

And so the large enterprise clients that I was referencing minute ago were actually new large clients. We also are -- since I've been here in the last five months or whatever it is, we have in a number of instances been able to grow our share again. That’s counter balanced by others that we have not grown our share, the loss sharing as evidenced by the revenue decline. But we are starting to see that we are being more into with our clients and understanding what they need and that is resulting in client share increases which is encouraging as well.

Yeah. And part of that also is evidenced by the -- if you look at the sequential revenue over the last three quarters, it’s a lot more flat. I mean the year-over-year declines are there, because as I Michael indicated in this prepared remarks, in the first quarter of 2015 there were drop-offs that were comparing against. And so the year-over-year is continuing to show declines. But if you look over the last several quarters, it's beginning to stabilize.

Unidentified Analyst

Okay. And I guess -- last thing, is any change to the way the customers either industry or your current customers, how they are behaving, and I guess, maybe brining more in-house and not using your services or the services that are competitors or is there any changes there anything to note or is it business as usual?

Michael Dean

I don't know if its business is usual. I think the industry is changing. What we are finding the industry is in the growth phase and it continues to be. And there is lots of people who myself included fill to that phase for this industry is not near an end. I think that given the economic climate that there continues to be a trend where large businesses and small are sort of finding ways to use contingent talent in ways at larger scope ways to use their talents.

So, I think there continues to be lots of opportunity. I think it is a very competitive environment and it's going to continue to be competitive. We have 300 viable staffing companies in the U.S. alone I think and we find that. So, what's important for us is to not try to be everything to everybody and we’re good as Paul said in the couple of areas that we're -- our strategy is to continue to focus on what we’re good at or real house, and that allows us to be competitive in that, and we're very competitive environment.

Unidentified Analyst

All right. Thanks guys.

Michael Dean

Thanks Scott.

Paul Tomkins



Thank you. The next question is from Ross Taylor of Somerset Capital. Please go ahead.

Ross Taylor

First congratulations on a really nice solid quarter. I'd like to get into couple of things. You're taking steps to try to get margins improved. What do you think we should expect margins to be over the next couple of quarters? And then what do you think they should be able to over the next 12 to 18 months?

Michael Dean

Okay. Hi Ross. Thanks. So, we're still doing a great number of things and to predict the actual margins by quarter -- we’re not at that guidance level yet. But let me tell you what I can tell you. So, we're doing a great deal of work now on -- we're doing a great deal of work on the cost structure and the processes and in addition to sort of building for growth on the revenue side.

But on the cost side, we announced a number of things and we're not done here. We're two months into the year and we're just getting started. So, there is some margin improvement. We also talked about head wins, so some of the work we're doing is to just fill the gap -- those head wins we're finding, but we're not stopping there. So, to know sort of where we're going to end up it's hard to tell you.

What I can say is that our -- and we said this before, industry margins are 2% to 4%, and some even better in this growth environment. And it is our goal to be nothing short of industry standard margins and anything less, also in the long run, is not acceptable to us.

So, that's our goal. I think the cost step that we're doing gets us part of the way there. I'll be honest, the reason lot of our competitors have industry margins that are relatively high for this sort of thin margin industry, is because they are growing and when you grow, incremental revenue drops pretty high margin to the bottom-line. So, I think to get to industry margins, you will see industry margins as approaching them when we start turning the revenue to a growth phase where we can start.

We are pretty lean for how much revenue we’ve lost in the last couple of years and we're working on further efficiencies. But I think the real win in the margins comes when we start getting revenue growth and it starts dropping to the bottom-line.

So, I think to summarize the efficiencies that we're working on will get us some of the way there and I honestly can't predict exactly how much and which quarters, but that's much closer near-term than several quarters away of real growth in revenue at least.

Ross Taylor

Okay. And then it's obvious this company was much more dysfunctional than anyone really thought it was when you guys came on. Are you confident that with these changes that you've made that particularly changes are going to impact the culture of the company that it's going to be not only not a lot less dysfunctional, but not dysfunctional at all by the time let's say, over the next 12 to 18 months?

Michael Dean

Actually, that's a very good question and the one that I spent a great deal of time on actually in my role -- this turnaround isn’t me, it's me enabling others and building the right team and the right vision of strategy, but it's -- this turnaround happens through the entire team here at Volt. So, it’s a very important question actually. And one that it's sort of soft in terms of when you're talking about P&L numbers, but at the end of day this doesn’t turnaround without what you’ve just talked about.

So, as CEO, it's very important to me to change culture from sort of what it's been in the past and there's good and bad to it, but there is lots of things that we’re looking to change. We're doing a lot of things to create a pay-for-performance culture. We're trying to create very clear vision and objectives. We have a budget that is detailed and set and everybody has held accountable to it. We have processes where there wasn’t enough accountability, there's very much -- everywhere you look, there's accountability and most importantly a culture of -- we can win again.

I’ve come here and it’s sort of me and the team here has created culture of standup and deliver. It's not just pay-for-performance and results, it's that we got a team that now believes they can do it has clear objectives and vision to do it and we're often running. And I have to say the culture even in the last five months is remarkably different in a very positive way. And I'm very pleased with where we stand on the culture change.

Ross Taylor

That's good. Now, your press release mentioned nothing about real estate sales, but yet in the commentary here, you ran down -- pretty important and pretty significant progress in real estate sales. So, could you kind of go back over that and you sold the San Diego properties?

Paul Tomkins

Yeah. So, Ross, this is Paul. I'll take this one. With both of our real estate transactions with Orange, we clearly have an agreement; we're working very, very closely with two parties. We had very, very robust process which drove us to eight bids on the property and some subsequent bids after the initial process as well.

So, we're working with the top bids approach that came in on the top and we're in agreement which we have agreement in terms with these two parties and we're very far down the process and we expect to close it imminently. That's on Orange.

The same thing with San Diego, but it's much more. Orange is much larger, much more complex transaction it’s a sale leaseback and it’s a long-term lease so that obviously makes it more complex. But we're moving very well on both of those transactions.

Ross Taylor

Okay. Now, you've rolled out your debt to -- you extended out over 12 months, is there any penalty in that rollout that when you sell this real estate obviously you're coming to a fairly significantly I would think positive cash flow event. Additionally, you're looking at selling – we have a division to sell, we haven’t talked about the tax refund but I would assume that the tax refund is still somewhere in process. It would seem that you’ve got a number that you’ve talked about meeting capital for technology and other things, but that should still leave you a substantial amount of cash flow or free cash that would go to paying down debt, buying back stock and then some of it sitting on the balance sheet. Correct?

Paul Tomkins

Yeah. So let me address that. Again, we haven’t talked about the numbers, but they -- the Orange facility is significant in that market, and so is the San Diego property. But there isn’t any penalty in terms of P&C agreement in terms of paying down debt.

So we’re -- that's one of our elements within our capital allocation strategy that we laid out that I talked about in my prepared remarks. And so we're making sure we have available capital, working capital to manage the business obviously. That would be number one.

Number two is reinvesting in the business as you indicated. Numbers three and four are both with additional capital and once we sell both Maintech and Orange, we will be in a position and we'll have an opportunity to buy back shares and pay down additional debt.

Ross Taylor

Okay. And from the perspective of insider buying, I would assume that we need to wait to see the sale of Maintech before you guys would get clearance, so can you get clearance -- can insiders get clearance before that get back into the market and buy stock?

Michael Dean

Hi, this is Michael. We don't have to get clearance -- there's conditions that will put change overtime, but over the last -- almost the full last quarter, we were in blackout as you and I’ve talked before. That blackout ends Friday night, which opens a short window. It’s short only because of the SEC rules and this is a strange period because of year end. But the window opens for a short period of time and so part of the reason, there was -- as you know there was a blackout for all Board of Directors and management. That window opens Friday night. I think when that window opens; it's clear to regardless of point about Maintech currently Orange facility or anything else because all that stuff has been announced.

Ross Taylor


Michael Dean

So, you didn’t ask, but I'm happy to tell you that -- look I think that I can't speak for management and the Board because it’s not place to, but I'll tell you that I personally think that this stock is undervalued. I -- in the past, put my money in my mouth and as I bought significant amount of stock and I plan to when the market opens to buy more. I believe when where we're going I think the stock is undervalued and that's my personal belief.

I can't speak for the Board, but I wouldn’t put past other insider buying tap when the window opens to. I can’t tell you. I can tell you that I have encouraged both management and the Board within their means to continue to have insider purchases and we’ll see how that unfolds.

Paul Tomkins

We would certainly suck-in and I think it's important to -- sat today with former CEO of Jordan who basically made a very strong point that management’s Board need to be on the same side of the page as investors are which means you need to own stock, you don't need to be holding options and things for that nature.

You actually have that capital commitment because when you feel the pain and the joy and hopefully we’ve felt a lot of pain but hopefully the next 12 months will give us the other side of equation.

Ross Taylor

Keep up the good work.

Michael Dean

Thank you. I agree with you. And thank you.

Ross Taylor

Great. Thank you. Take care Michael.


Thank you. The next question is from David Neuhauser of Livermore Partners. Please go ahead.

David Neuhauser

Hey, good afternoon guys.

Michael Dean

Hi David.

Paul Tomkins

Hi David.

David Neuhauser

Yeah, I think the previous callers kind of touched on what we continue to talk about and what you and I talk about Michael at calls recently, given that you released the quarter here and you setup some guidelines going forward. How you envision as you flat line revenue growth with some potential new contract wins, how do you envision a ramp up to revenue could look like overtime. I mean, is this something that you could foresee a 5% increase in revenue or greater? Or is this still at the early stages over the next say nine to 12 months?

Michael Dean

That's a difficult to answer because we're at early stages, but -- it’s a little choppy, right. Turnaround is a little choppy in terms of how it enacts and it's really hard to predict. Management and the Board talk about this all the time.

What happens is you sort of bend the curve right. You go from negative to less negative to less negative to positive and exactly how that happens it's like a golf [indiscernible]. It’s like a golf swing where a lot of different muscles have to pull together same way and it's really hard to predict the outcome of many different things that we're doing.

And so we're not yet giving guidance on exactly when we're positive. We do -- as Paul mentioned, we do have tough year-over-year comparisons both this quarter and potentially next quarter on a revenue -- on a revenue growth basis because there is large drop in revenue early in last year.

After that our progress remains to be seen on sort of what pieces start kicking in. You sort of have to get critical mass in the number of these things to start hitting -- hitting sort of the growth phase. We're doing a lot of things to change the revenue line now, but because of the long cycles, significant progress from the topline will be this quarter or significant progress probably won't be that noticeable next quarter either.

After that I think it remains to be seen and as these quarters unfold, we can probably give you better insight into that.

David Neuhauser

Yeah. That's understandable. I think everyone knows what the year-over-year comparisons look like. I mean they look like complete hell. I think the key is having some sustainability from quarter-to-quarter and that's what I've been looking at to see when does the drop-off actually start to flatten out. So, that you're flattening out topline, you're $1.5 billion run rate and at the same time, you're creating further efficiencies and removing further cost so that like you said as you get some new contract wins and could actually start to build back revenue, you'll see margin expansion and of course higher levels of cash flow.

Michael Dean

I think that's right. I think some of that -- it's actually well said. Some of that -- quarter-over-quarter slowdown in the decrease is happening, but it still remains the same. For example, there every quarter has a very -- some pretty big differences in number of workdays which we only get paid for on workday.

So, the seasonality that Paul talked about that first quarter is the one quarter that always has a drop-off sequentially. Other than that we've seen -- and we have no reason to believe that there is because of the -- literally I think 8% less days in the quarter -- fourth quarter that -- unless we’re going to be up 8%, you're going to see drop-off, right.

And so -- but other than the -- other than the first quarter seasonality drop-off, we're starting to see the big decrease really happen at the beginning of last year and it doesn’t mean we are fully stabilized and all is good, but we are seeing some stabilization from quarter-to-quarter other than what we might see a little bit in the first quarter just on the seasonality that we always see.

David Neuhauser

Okay. And then in terms of it seems like obviously in process and number of things which should hit here in the next several months, and it sounds like from the previous caller that the Board -- there is a window open next week on buying back shares. I mean, every time we've talked, of course, as you know this since you've been involved with the company. The share price has continued to grind lower.

I think part of it’s just the fact that we haven’t seen actual execution from even the new management team. And I think until you actually prove that and are able to deliver that, that it's -- we are going to continue to be at this large discount to where we should be trading at or where the value of the company even today should be, not just even or the potential would be. So I think that's a key thing you got to focus on is execution from this team.

I mean you guys have set out some guidelines and ambitions. It all sounds very good. We are actually starting to see some real meaningful progress on the operation side. I think the key is now seeing some of those non-core assets actually be sold, getting some of that cash and then being very bold in going out there and returning capital to shareholders and show the market that you are serious about growing the value this company for shareholders, because as you know most of the people on this call have been involved with this company from long time.

They see the value, they see the potential here which could be enormous, but at the same time they are having very difficulty actually seeing what's going to manifest where the value of this company could start to head north. And if we could start to see that relatively soon, I think your creditability will start to improve mightily and the shares will also improve.

Michael Dean

I definitely agree with that and we are working hard against that. I definitely agree.

David Neuhauser

Okay. All right. Thank you.


Thank you. The next question is from [indiscernible] Capital. Please go ahead.

Unidentified Analyst

Hi, guys. Can you help us on the non-core assets sales either completed or in process? Could you help us quantify that a little bit? What did the Volt Telecom net you?

Paul Tomkins

Well, this is Paul. Volt was a -- was a business that was losing money was sold in the first quarter before Michael and I arrived here. But there was actually a note that we took from the buyers, NewNet, which was valued at $10 million. We have that on our balance sheet, and have disclosed it.

The other businesses, we are also -- we are also the non-core businesses that we exited. The publishing, and printing business, VTJ, which is the Volt Telecom and then the staffing company in Uruguay, we actually -- all three of those -- all four of those were exited in 2015.

So, I mean, what do we net. We actually had nominal receipts and proceeds from each of those sales. But we did help the bottom-line, because each of them drained cash and were losing money. And so in the once -- you got Michael.

Michael Dean

No, I was just going to add that -- so the proceeds were nominal and we didn’t disclose them, but it’s nominal. The reasons to gather them were not to create proceeds but to do two things, one, they were all drag on the bottom-line and so that creates -- that's part of our margin improvement and profitability, because they were non-core anyway.

And two, its management focus. We had a lot of little pieces here that were creating sort of distraction to the company. So the purchase price was not as important as shedding non-core assets that we are losing money in and costing management backup focus.

Unidentified Analyst

And how about on Maintech, can you help us figure out how to value that. I know you’re trying to give us some number. But some kind of details that would help us value it.

Paul Tomkins

Well, the only thing that we would say, I mean, we don’t disclose Maintech’s business by itself book, but it is included in the other segment. We have staffed two segments, external reportable segments. We have staffing and we have other and it’s the primary largest business within other.

The other two businesses were Volt Telecom and Publishing and Printing business in Uruguay and both of those have been sold. So, going forward the only business that we have in the other segment is Maintech. And we were right in the middle of that process, and therefore we -- it’s very sensitive, it wouldn’t help process to give you a sizing.

Unidentified Analyst

And how about on the theme with the California real estate, can you give us any kind of range where you think you're going to net out? I know there are some -- there is a mortgage on the one, I think.

Paul Tomkins

Yeah, there is, you're right. There is a $7 million mortgage on Orange. Both are going from market prices, but, again, we're actually further along on both of the real estate sales than we are on Maintech. But we're well along in all of them. But we're right in the middle of the process of negotiation and finalizing a deal. So, again, that's not something that would make sense right now to give you a sizing.

Unidentified Analyst

And then just one last question. I heard the window is open for insider buying at the end of the week. Did you also say that it was true of any company repurchase? Is there anything, I guess, that would preclude you from doing a company share repurchase?

Michael Dean

Well, as we said a couple of times before, I think that given our capital situation, our opportunity to repurchase shares happens once we've sold both Maintech and the Orange facility, which won't be in next week’s window. So, I think it’s not in that particularly short window there.

Unidentified Analyst

Got it. All right. Thank you.

Paul Tomkins

Thank you very much.

Michael Dean



Thank you. We have time for one final question. It comes from Matt Sherwood of Cooper Creek Partners. Please go ahead.

Matt Sherwood

Hi, guys. First of all nice quarter and a tough situation coming through and we're encouraged to hear about that progress on the asset sales and just general back to gaining some staffing company.

Just a quick one, you were just on Maintech, were you able to sort of disclose the run rate, quarterly EBITDA for the other segment?

Paul Tomkins

No, we didn’t -- the -- I think…

Matt Sherwood

I mean, it would in the K, right, so do you have it?

Paul Tomkins

Yeah, the other segment is primarily Maintech, but it’s not completely Maintech, Matt. So, we have -- we still have business from Volt Telecom and we have the Uruguay business in there for this year. So, in the K, you’re going to see all three are still in that other segment.

Matt Sherwood

For the fourth quarter?

Paul Tomkins

For the year.

Michael Dean

For the fourth quarter and full year.

Matt Sherwood


Paul Tomkins

Yeah. Well, the Publishing and Printing business was sold in the third quarter, so, in the fourth quarter, its only Volt Telecom and Maintech in other.

Michael Dean


Matt Sherwood

Right. But you do know what the EBITDA level was or not?

Paul Tomkins

Yeah, that piece we -- I can get back to you on it.

Matt Sherwood

Fair enough. Okay. Then one just quick housekeeping one, just on tech project, you talked about sort of expenses and then savings. Do we look at the expenses as one-off and then the savings that’s ongoing? Can you sort of just unpack that a little bit?

Michael Dean

On the -- you’re talking about the investment in information technology?

Matt Sherwood


Paul Tomkins

Okay. What the two piece -- what the major two pieces are, number one in the front-end, which is the operational part of the project, we're -- we indicated to you that we're spending $10 million on this. It’s a very big project; $10 million to $12 million is what we have released. The large majority of this would be capitalized and the whole project has less than a two-year payback, Matt.

Michael Dean

But we announced that the ongoing improvement -- sort of efficiencies that will create real operating income improvements are to the tune of $5 million to $7 million and that's an annualized number, that's an annual run rate number.

Matt Sherwood

Yeah. And the aspects of the $10 million to $12 million that expenses would just be happen in given quarter when it happens a couple of quarters that will go away.

Paul Tomkins

That’s right. If you think about it there's two big pieces to this Matt. One is on the front end, the operation front and that is an applicant tracking system and CRM which will go live in 2016.

The backend of the process is a new financial suite which will go in place this year as well and both of those -- they are staggered, one in May and one in July. But it is going to save cost as Michael indicated, increase efficiencies, but there's another aspect to this.

On the operational side, that actually is going to help us in the marketplace and help fill orders much more quickly and really begin to have us be more competitive in the marketplace because today it’s much more manual, our systems are antiquated and this will give us a big jump in terms of filling orders.

Matt Sherwood

I mean do you have an estimate of the certain loss revenue that's opportunity overtime not in May or June or whatever?

Paul Tomkins

No, no, I don’t. But if you think about it it’s whether or not you’re first to fill that order, right. So, if an order comes in and can be automatically filled by a competitor that has software that actually can access their contingent workforce with the right skills, in the right location instantaneously, they are going to beat us to the punch. And so one of things that this will do is leapfrog us over some of the competitors, number one, but also significantly much more efficient than what we have today.

So, I can’t give you a -- how much revenue loss we had but, but if get beat down on orders or can only fill a portion because the rest is filled by competitors by the time we get there, it ends up adding up very quickly.

Matt Sherwood

That’s fair. Okay. Just one last one sort of bigger picture. We’re excited to hear about the prospect of capital return to shareholder, returning to repurchase plan. I guess just if you’re getting tax refunds of the upper $2 million, your debt is down and you’re extensively selling your assets whose value like -- why is it contingent on main tax which by the way is cash flow generated assets, so even if you went sale it, it would improve your sort of cash generation. Why is the repurchase contingent upon that since you’re already at well within your 40 million to 50 million of liquidity and you’re going to generate meaningful proceeds from assets of outside of that?

Paul Tomkins

One of the things Matt is -- liquidity is not static, right. So, we have seasonal and cyclical trends. So, literally every week, it will alter by $10 million because we have a weekly payroll for our contingent workers and every Friday, it’s a very large drop-off when we pay payroll and payroll taxes and then it builds up as you go through the early part of the next week. It is not static; it’s a hill and valley. So, you need to manage that very tightly, number one. That’s number one.

Number two, is that the likelihood is that the sale of Orange and the sale of Maintech will take place before we get the tax proceeds. And so the tax refund just because it’s working with the IRS is incredibly slow process and there's no incentive to speed it up by then.

And so we’re working with them very, very closely to try to push that through. We have all the confidence that it’s going to be there and it will, but that piece actually is coming later in the year and Orange and Maintech will take place first.

Matt Sherwood

Right. So, there is no magic to 40 to 50 -- you don’t want to go to back, but anyway we’re excited to hear about capital return and the sooner the better.

Paul Tomkins

Okay. Good.

Matt Sherwood

All right. Thank you.

Paul Tomkins

Thanks a lot, Matt.

Michael Dean

Thanks Matt.


Thank you. I would now like to turn the conference back over to Michael Dean, President and CEO for closing remarks.

Michael Dean

Thank you. Look I just want to close by saying that we are in midst of lot of progress and a lot of activity and its choppy waters and turning a company around, but as I stated in the beginning in my remarks, I am very confident and optimistic about what we -- the potential we have here.

And I think that there's a high level of urgency from the Board, management all the way down to the lower levels of this company to create a vibrant growth company again and we see pass to it.

So, look I appreciate all of the shareholders that are supporting us and understand that it takes a little bit of time and are helping us with good advice and good thoughts and I want to thank everybody for their time today on the call and their good questions and I’d like to state that we’re open all the time for questions. So, Paul’s and my doors are open anytime. So, please if you have any questions, let us know, otherwise I look forward to updating you on our progress as we achieve it.

And with that, I thank you very much for today.


Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. And thank you for your participation.

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