ASGN Inc (ASGN) 2005 Q1 法說會逐字稿

At this time, I would like to welcome everyone to the On Assignment first-quarter 2005 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS).

Thank you. I will turn the call over to Mike Holtzman, Senior VP and CFO. Sir, you may begin.

Before we begin, I would like to remind everyone, as we do each quarter, that our presentation contains predictions, estimates and other forward-looking statements representing our current judgment of what the future holds. These include words such as forecast, estimate, project, expect, believe and similar expressions. We believe these remarks to be reasonable, but they are subject to the risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. We describe some of these risks and uncertainties in today's press release and in our filings with the Securities and Exchange Commission. We do not expect the obligation to update the statements made in this conference call.

Peter Dameris, our CEO and President, will now provide an overview of our first-quarter results.

Thank you, Mike. Good afternoon, everyone. I would like to welcome everyone to the On Assignment 2005 first-quarter earnings conference call. With me today are Mike Holtzman; Emmett McGrath, President of Lab Support US; and Shawn Mohr, President of Healthcare Staffing.

During our call today, I will once again give an overview of the markets we serve and an operational highlight and numbers, followed by a more detailed discussion of the performance of our operating segments by the presidents of each of those segments. I will then turn the call over to Mike for a more detailed review and discussion of our first-quarter financial performance and our financial guidance for the second quarter of 2005 and the remainder of the year. We will then open the call up for questions.

Consolidated revenues for the quarter grew year over year by 3.4 million or 7.3%. Revenues in the first quarter were 49.8 million, compared to 51.3 million in the fourth quarter of 2004. Consolidated gross margins were 26%, which represents a 100 basis point improvement from the fourth quarter of 2004 and a 60 basis point improvement over the first quarter of 2004. The gross margins were higher in the first quarter of 2005 compared to the same period one year ago, due to lower SUI and workers' compensation expenses and higher bill/pay spreads. Lab Support and MF&A, our highest gross margin businesses, continued to grow along with higher conversion and direct-hire placement fees and increases in their bill rates.

Exiting the quarter, our business strengthened. Over the last four weeks, our weekly revenues have, on average, exceeded $4.2 million. In addition, our numbers of hours billed, billable headcount and client count all exceeded the levels we posted at the end of the first quarter.

I am pleased with the revenues we posted for the first quarter, as they were at the high end of our range of previous guidance, and were achieved in what is historically our most challenging quarter. I'm also relatively pleased with our progress towards profitability. The $0.11 loss we reported -- which includes 107,000 in severance payments and 200,000 in costs related to completion of our Sarbanes-Oxley compliance work -- is a sequential improvement over the fourth quarter 2004 loss, which traditionally is our third strongest quarter, and $0.06 lower than the midpoint of our guidance for the first quarter of 2005.

To fully appreciate the performance of our company during the first quarter, investors should, one, evaluate each operating group's performance separately; and, two, consider our reduction in EBITDA loss over the last 90 days.

Our Lab Support segment generated 21.8 million in revenues, essentially flat from the fourth quarter of 2004, and had a 32.1% gross margin, which is within 90 basis points of our all-time high. The Lab Support segment billed 1,149 clients, down slightly from the 1,239 for the fourth quarter of 2004, and added 220 new or reactivated clients. The average bill rate for this group increased $0.78 first quarter of 2005 over first quarter 2004.

Our European operations, which are reported as part of the Lab Support segment, generated 3.2 million in revenues, up 21% from the first quarter of 2004 and up 2.1% sequentially over the fourth quarter of 2004. That group's gross margins were 35%. New order and direct-hire placement activity in Europe is at its highest level in years. The Lab Support segment revenue performance in the first quarter is meaningful, considering that traditionally, the first quarter is seasonally the most challenging quarter and often is down on a sequential quarterly basis. Our Lab Support segment grew revenues 11.3% over the first quarter of 2004.

The top 10 customers in Lab Support represent approximately 7.6% of total Lab Support segment. Q1 2005 revenues and our average number of staffing consultants for the first quarter was 102, up from 101 in the fourth quarter of 2004.

The Medical Financial and Allied group generated 8.3 million in revenues for the quarter, up 2.5% sequentially over the fourth quarter of 2004. MF&A achieved a 26.4% gross margin, billed 990 clients, up from 892 at the end of the fourth quarter of 2004, and added 293 new or reactivated clients. And the average number of contract professionals on billing increased by 170 over the same period one year ago. Our top 10 customers in MF&A represent 14.8% of total MF&A Q1 2005 revenues, and our average number of staffing consultants for the first quarter was 84, down 7 from 91 in the fourth quarter.

The MF&A division grew revenues approximately 36.7% over the first quarter of 2004. The first-quarter gross margins for MF&A were lower, primarily due to an increase in reserves for a workers' comp claim originally incurred in Q3 of 2004. Without this increase in claim reserves, the gross margins would have been 30%. Exiting the quarter, MF&A continues to increase its weekly revenues week over week.

The Nurse Travel group generated 19.7 million in revenues, down 7.1% sequentially from the fourth quarter of 2004 and down 5.2% from the first quarter of 2004. Gross margins of 19.1% were up from 18.8% in the fourth quarter of 2004. The number of nurses on billing averaged 492 for the first quarter, compared to 496 for the fourth quarter of 2004. And the total number of clients billed was 125, up from 113 in the fourth quarter of 2004 and up from 81 for the first quarter of 2004. We added 35 new clients in the first quarter.

During the quarter, approximately 85% our nurses had been working on specific assignments for longer than nine weeks. Our top 10 clients represented 67.8% of total revenues for Nurse Travel in the first quarter of 2005. This is down slightly from previous quarters.

During the week of May 1, 2005, we billed 123 customers and had 570 nurses on assignment. Each of these data points are two-year highs for this division. In addition, the Nurse Travel group averaged a bill rate of $68 per hour, and its nurses worked an average of 45 hours per week, both highs for the industry.

With regard to new nurse order activity, new orders are at the highest level for the year. As many of you who follow the Company know, our Nurse Travel division always experiences a large fall-off at the end of each calendar year and then builds its headcount back up through the first quarter. This year, the buildup of our nurse headcount occurred earlier in the quarter compared to the average of the prior two years.

The decline in Nurse Travel revenues year over year is primarily related to, one, in the first quarter of 2004 we had $270,000 of revenues generated from strike support; two, certain of our clients experienced a more severe flu season in the first quarter of '04 versus the first quarter of '05; and, three, we had one less billable day.

As you know, our Nurse Travel business is differentiated from other Nurse Travel companies by providing highly skilled and more experienced nurses on a rapid response basis. Our clients are primarily hospitals needing immediate help in their ICU, ER, OR and Critical Care units. Our nurses' skills are, therefore, harder to find and less commoditized than other nurse travel companies, and hospitals will always have to rely more heavily on third parties to fill these types of positions.

As for the health of the markets we serve, I would describe each of the end markets we serve as stable, productive and improving. Specifically, the nurse travel market improved during and exiting the quarter. All of our divisions experienced increases in bill rates and bill/pay spreads. The improvement in demand in our healthcare segment can also be seen in the fact that we worked with the largest number of clients in this quarter compared to any other quarter over the last two years. This is third consecutive quarter that the Company has met its operating objectives and remained consistent with its operating plans that management set forth last year.

Going forward, our focus will remain on supporting our core offerings and growing our new lines of business. We are very focused on returning to appropriate levels of profitability as soon as possible. Towards the end of our call today, Mike will walk you through the forward guidance that we announced in our earnings release.

I would now like to turn the call over to Shawn and then Emmett for a more detailed review of operations.

Thank you, Peter. We had a productive Q1 within On Assignment Healthcare, which consists of our two operating units, Medical Financial and Allied and Nurse Travel. MF&A revenues for Q1 2005 were 8.3 million, a 36.7 (technical difficulty) for Q1 2004. More specifically, assignment revenues grew (technical difficulty) and conversion and direct-hire placement revenues collectively grew 178.1%.

The assignment revenue performance is primarily attributable to a 32.9% increase in the average number of contract professionals placed on assignment and a 3.7% increase in our average bill rate. The end markets that MF&A serves are beginning to show early signs of expansion, and demand for our services in the Allied Medical and Healthcare Financial verticals have seen the different pickup in order activity and placement within the last two months.

Specifically, our Healthcare, Financial and Clinical Lab Staffing verticals have experienced strong growth in March and April. These legacy business lines, coupled with our newly expanded offerings in health information management and local nurse placement, helped us achieve excellent year-over-year growth as we continued to regain traction in this sector. Our average weekly revenues have grown sequentially month over month since January, and the momentum is continuing. We enter May at yearly highs in weekly revenues, contract professionals on assignment and client counts. We feel that a diversified client base, combined with excellent customer service, will allow this MF&A team to grow contract professional headcount within current clients while we continue to attract new clients.

Now, let me turn to our Nurse Travel division, which represented approximately 70.3% of total Healthcare Staffing segment revenues for Q1 2005. I am very pleased with the progress we have made in Nurse Travel over the last two quarters. The strategic plan put in place in August 2004 is beginning to show progress. This growth, coupled with early signs of increased demand for our services, has helped to position Nurse Travel well for continued expansion throughout the year.

The initiative to reallocate resources to increase our field sales and recruiting productivity has paid great dividends. The trailing average weekly revenues for the last four weeks in Nurse Travel were 1.7 million, and nurse headcount was 568, both two-year highs and strong indicators that our field sales and recruiting productivity are increasing.

Another key indicator of our growth and expansion in Nurse Travel is our client count, which, since August of 2004, has increased by 78% and has also grown each of the last 11 weeks. We will continue to make expanding our client count a priority, as we work to ensure a diversified revenue base. I am very encouraged by the early signs of increased demand for our Nurse Travel services, and feel that we can leverage our strength in this area to grow this business line. Both Nurse Travel and MF&A are well-positioned for additional success throughout the year, as we continue to operate more efficiently, increase staffing consultant productivity and get some assistance from what we see as an expanding and strengthening healthcare sector.

With that, I will pass the call over to Emmett McGrath, our President for Lab Support.

Thank you, Shawn, and good afternoon. My comments today focus on Lab Support US, which accounts for 85.3% of Lab Support segment revenue. Lab US revenues grew 1.7 million to 18.6 million in the first quarter, an increase of 9.8% year over year. More specifically, year-over-year assignment revenues grew 8.7%. Direct-hire placement revenues grew 291%, and conversion revenues were essentially flat. We attribute the assignment revenue performance to a 6.7% increase in the average number of contract professionals placed on assignment and a 2.6% increase in the average bill rate.

The improvement in direct-hire placement revenues is the result of a strategic initiative I shared with you and launched in Q3 of 2004, which is designed to enhance our service offerings, offset potential margin compression associated with contract staffing and bolster our competitive position. No additional staff was added as a part of this initiative. As expected, on a sequential basis, revenues decreased 1.3% from Q4 2004 to Q1 2005.

Lab Support US' gross margins improved 300 basis points to 31.7% for Q1 2005, compared to the same quarter one year ago. Lab Support US' gross margin improvements are attributable to four factors -- lower SUI rates, favorable workers' compensation expenses, higher bill/pay spreads and higher conversion and direct-hire placement revenues. Conversion and direct-hire placement revenues represented 2.1% of Lab Support US' gross margins for Q1 2005, a 65 basis point incremental improvement in gross margins over the same period one year ago. On a sequential basis, gross margins improved 260 basis points over Q4 2004.

Lab Support US added 179 new or reactivated clients in the quarter and billed 977 clients. Our largest customer accounted for less than 1.5% of our total revenues, compared to 2.7% of revenues in Q1 2004. Our top 10 customers represented approximately 8.7% of total Lab Support US revenue, compared to 14.1% of revenue for the same period one year ago. This improvement directly correlates to the 2004 revitalization plans and our intention to minimize client dependency.

Early in the second quarter of 2005, I am encouraged with our revenue trends, direct-hire placement activity, job order flow, RFPs and number of new and reactivated client engagements. Lab Support US' average weekly revenues have grown sequentially month over month since January, and we have started Q2 at highs for the year in weekly revenue, number of contract professionals, average markup and average bill rate. Our average bill/pay spread is currently at its highest level since Q1 2004. New business lines such as Clinical Research continue to progress, recently securing sizable contracts in the CRO and pharmaceutical areas, and our first managed staffing services program is exceeding expectations.

I'm optimistic about our Q2 gross margin targets, and expect a greater percentage of gross profit contribution to come from improved pricing, conversion and direct-hire placement offerings as we enter the historically two strongest quarters for Lab Support. I am very pleased with our first-quarter performance, and would like to thank everyone involved for making this quarter a success -- our management team, sales and recruiting professionals and contract professional workforce.

I would now like to turn the call over to Mike Holtzman, our Senior Vice President and Chief Financial Officer.

Thanks, Emmett. Consolidated revenues for the quarter were $49.8 million. This is an increase of 7.3% from the first quarter of last year and down 2.9% from Q4 of last year. There were 63 billing days in this quarter, compared with 62.5 days in Q1 last year and 62 days in Q4 of 2004. For Nurse Travel, there were 90 billing days in Q1 of this year, compared with 91 days in Q1 last year and 92 days in Q4 of 2004.

In the Lab Support segment, consisting of Lab US and Lab Europe, revenues were $21.8 million, an increase of 11.3% from the first quarter of last year and essentially unchanged from Q4 2004. Lab Support US revenues increased 9.8% from Q1 last year to 18.6 million and decreased 1.3% sequentially. Lab Support Europe revenues increased 21% from Q1 last year to $3.2 million, and are up 2.1% sequentially. The Company's foreign revenues were 6.4% of total revenues for the quarter. On a constant currency basis, Lab Support Europe's sequential revenues were essentially unchanged. The Lab Support segment accounts for 43.8% of total revenues for the first quarter.

Healthcare Staffing segment revenues for the quarter were 28 million, up 4.3% from Q1 2004 and down 4.5% sequentially. This segment represents 56.2% of total revenues. Within the Healthcare Staffing segment, Nurse Travel revenues of $19.7 million were down 5.2% from Q1 2004 and decreased 7.1% sequentially.

Excluding $737,000 in Nurse Travel revenues derived from staffing hospitals experiencing strikes in Q4 2004, Nurse Travel revenues were down 3.8% sequentially. Nurse Travel made up 39.5% of total revenues for the quarter.

Medical Financial and Allied revenues, which we call MF&A, increased 36.7% from Q1 last year to $8.3 million and increased 2.5% sequentially. MF&A comprised 16.7% of total revenues for the first quarter. Conversion and direct-hire revenues totaled $857,000 in Q1, compared with $493,000 for Q1 2004 and $703,000 for Q4 2004. Conversion and direct placement revenues represent 1.7% of total revenue for Q1 versus 1.1% of total revenue for Q1 2004 and 1.4% of total revenue for Q4 2004. Consolidated gross profit was $13 million for the quarter and consolidated gross margin was 26%, compared with 25.4% for Q1 2004 and 25% for Q1 2004.

The 100 basis point sequential improvement is due to lower holiday pay, contract worker expenses and an increase in the bill/pay spread, as well as higher direct-hire and conversion revenues in Q1 of this year, offset by higher workers' comp expense. In addition, Nurse Travel, which has lower gross margins, was 39.5% of consolidated revenues in the first quarter versus 41.3% in the fourth quarter of last year.

Lab Support segment gross profit was $7 million for the quarter, which was a gross margin of 32.1%, compared to 29.8% for Q1 2004 and 29.9% for Q4 2004. The 220 basis point sequential improvement was due to lower holiday pay and workers' comp expense, as well as an increase in direct-hire and conversion revenue.

Healthcare Staffing segment gross profit was $6 million for the quarter, which was a gross margin of 21.3%, compared to 22.3% for Q1 2004 and unchanged from Q4 2004. Within the Healthcare Staffing segment, Nurse Travel gross profit was $3.8 million, which was a gross margin of 19.1%, compared with 20.9% for Q1 last year and 18.8% for Q4 of last year. The 30 basis point sequential improvement was due to higher bill/pay spreads, lower nurse expenses, offset by higher benefits and workers' comp expenses.

For MF&A, gross profit was $2.2 million for the quarter, which was a gross margin of 26.4%, compared with 27% for Q1 2004 and 27.8% for Q4. Higher bill/pay spreads and direct-hire conversion revenues, as well as lower holiday pay, were offset by a negative adjustment to workers' comp expense in Q1 2005, which caused the gross margin to decline 140 basis points sequentially. Without the workers' comp adjustment, the gross margin for MF&A would have been approximately 30%.

Total SG&A expense for the quarter was $16 million or 32.1% of total revenues. This compares to $14.3 million or 30.9% of revenues for Q1 of last year, and 16.6 million or 32.4% of revenues for Q4. The sequential decrease of $600,000 reflects our ongoing focus to control leverage our SG&A expense. In particular, in Q1, we had lower field and back-office headcount and greater savings and controllable expenses, as well as a reduction in one-time quarterly charges. We plan to maintain the same sense of diligence in controlling SG&A expense going forward.

Depreciation expense for the quarter was $1,242,000 compared with $845,000 for Q1 2004 and 1,161,000 for Q4. The year-over-year increase in depreciation expense is principally due to the accelerated write-off of our website and, to a lesser degree, our ongoing investment in PeopleSoft.

Amortization expense decreased to 281,000 from 819,000 in Q1 2004 and 455,000 in Q4 2004. This sequential decrease is the result of a step-down in the accelerated amortization of customer relations.

As a result of our decision to fully reserve against the Company's income tax assets in Q1 2005 and Q4, we believe it is more meaningful to compare our operating loss in EBITDA when comparing the current quarter's results to prior quarters. Our operating loss was $3 million for the quarter, compared with an operating loss of 2.5 million for Q1 last year and an operating loss of $3.8 million in Q4 of last year. EBITDA for the quarter was -1.5 million or $0.06 per share, compared with -$872,000 or $0.03 per share for Q1 2004, and -2.2 million or $0.09 per share in Q4 2004. We are continuing to demonstrate positive trends, due to the investments we made under our revitalization plan last year. We ended the quarter with cash, cash equivalents and marketable securities of $22.8 million, essentially unchanged since year end.

Cash provided from operations was $1.1 million, while capital expenditures were $1 million, down from 1.7 million in the preceding quarter. Net accounts receivable were 25.5 million at the end of the first quarter, a decrease of 1.6 million from Q4. On a consolidated basis, days sales outstanding were 49, down from 51 days sequentially.

DSOs for Nurse Travel decreased to 48 from 50 sequentially, while DSOs for combined Lab and MF&A were down to 49 days from 51 in Q4.

During the quarter, there were no repurchases of our shares in the open market.

Now, turning to productivity, we define productivity to be the quarterly gross profit generated by the average number of staffing consultants for the quarter. For the first quarter, we averaged 228 staffing consultants, and they each generated $56,800 in gross profit. This compares with an average of 232 staffing consultants in the fourth quarter, each generating $55,200 in gross profit. Based on our 2005 operating expense targets, our consolidated 2005 productivity goal to achieve breakeven EBITDA is $63,000, while breakeven operating income will require $69,000 in gross profit per staffing consultant.

In Q1, each staffing consultant had an average of 12.6 contract professionals out on assignment. Getting to EBITDA breakeven translates to about 13.5 contract professionals per staffing consultant, and reaching operating income breakeven translates to approximately 15 contract professionals per staffing consultant. Performance required to achieve these levels is well below the performance previously sustained by each of our divisions.

Turning to guidance, based on the current sales trends and progress in our efforts to rationalize and leverage our corporate overhead, we are currently projecting revenues of $53 to $54 million and a loss per share of $0.08 $0.10 for the quarter ending June 30, 2005. Our tax assumptions are based on a nominal tax provision until a valuation allowance is no longer warranted.

For Lab and MF&A, there are 64 billing days in the second quarter of this year, compared with 63 for Q1. For Nurse Travel, there are 91 days in Q2, compared with 90 days in Q1.

We project SG&A expense will range from $16 to $16.5 million, including depreciation and amortization of $1.4 million per quarter for the remaining quarters of 2005.

For the year, assuming fairly stable labor markets and no loss of major clients in Nurse Travel, we reiterate previous revenue guidance of $211 to $215 million, which represents growth of 9 to 11% over 2004. We're projecting average gross margin for the year of approximately 26%, and we continue to target to reach EBITDA breakeven in the second half of the year. Our CapEx budget for 2005 continues to be approximately $3 million, which is down from $6.8 million in 2004. As you know, these estimates are subject to the risks mentioned in today's release.

Now, back to Pete for some closing comments before we open the lines up for questions.

Thank you, Mike. In closing, there will be no change in our focus for strategy. On Assignment's growth opportunities still are largely dependent on our own internal execution and not on any improvement in the end markets we serve. We think we're doing a lot of things better than we did in the past, and we went to continue doing what we set out to do. I would like to, once again, thank our many loyal, dedicated and talented employees, whose efforts have allowed us to progress to where we are today.

I would like to now open the call up to participants for questions.

(OPERATOR INSTRUCTIONS). Jim Janesky.

You did come in on the operating expense line much lower than I had expected in the quarter. Yet, as we look going forward, the range that you expect in the quarter is where you came in, in the March quarter, of 16 million, but it could go as high as 16.5 million. What would be the reasons behind that possibly going up?

A couple of things -- and if I leave anything out, Mike, please follow up. One is we had some marketing programs that didn't get instituted in the first quarter that we still think are appropriate that may occur in the second, so a little bit of a catch-up there.

The second is, when and if we find talented people in the marketplace, and we have budgeted openings, we may have a higher headcount in the second. Correspondingly, you can tell from our performance for the first month of the second quarter we're running at a pretty good rate. So we continue to look for talented associates in all of our disciplines, and specifically in some of our newer practice areas.

And, three, we continue to do a review of front-office systems to complement the PeopleSoft back office that we have.

Mike, did I -- is there anything --?

Yes, that pretty much covers it. I mean, there were some IP savings (ph) in the first quarter that could possibly have slipped into the second quarter, but other than that, I think Pete pretty much wrapped up.

But, you know, Jim, we are committed to getting the number down and continuing to grow the top line so we can get back to historical levels of profitability we've had.

And in the Nurse Travel area, you talked about the increased level of demand now for several weeks. What are you hearing from the hospitals, and what is driving that demand? Is it a change in the buying patterns of the hospitals? Are more nurses returning to part-time? What are you hearing there?

I'll take a stab at it, and then I'll have Shawn add to it, but a couple of things. As you and I have discussed in the past, the hospitals have had great success, maybe, in recruiting the lower-level, plain vanilla nurse. But censuses are up, as you can tell from the publicly-traded hospital chains, and the hospitals have not done anything to alleviate the shortage in the critical care areas in the more relevant skillsets. And the population continues to age, so I think we're getting back into a situation where our growth is going to be constrained by candidates versus orders.

Shawn, do you have anything to add?

I would just certainly reiterate, Jim, that the census is certainly up. And there is a need for the relevant type of nurses that we do place. So, as supply and demand start to continue to shift, we will start seeing the large continued demand for our type of level of nurse, which is a much higher-demand, much more competent non-commoditized relevant nurse.

And then, finally, what is perm -- direct hire or direct placement, however you folks look at it? What is perm as a percentage of revenues right now, and where could you see that number going over time?

I'll let Emmett speak to that, but I think we quoted you for the first quarter it was 2.1% of first-quarter revenues. And I think that if you listen to some of the other publicly-traded staffing companies, some of them want to get as high as 7%. But Emmett, why don't you kind of walk them through -- this is really a new initiative that started in August of '04 for On Assignment.

I can't speak to the percentage, but it is growing; we're very excited about that. Number one is demand for this service. With our customers, it's always been there. Number two, we are starting to sell it. The Lab Support model really frowned (ph) against us in the past. And so now that we have a strategy and a plan to treat (ph), we are executing well. And so the field has really embraced this initiative, and that is why you're seeing these great results.

So, Jim, the 2.1% is conversion and direct placement, and if you just look at direct placement, currently it's only at 1%.

(OPERATOR INSTRUCTIONS). Tobey Sommer.

I guess I'm going to follow up and ask a couple more questions about your staffing. You did give an awful lot of detail, and I appreciate that. I hope I caught it all. When thinking about the census, you said it's up and was up in the quarter. Is it still up now? And if so, do you think that we are ex-flu-related admissions at this point?

I don't attribute our growth, really, to kind of a heavy flu season or anything like that. It's kind of the opposite; the amazing thing about the strength of our business, Toby, is that we are growing at really nice week-over-week rates without having kind of an epidemic like we saw in the first quarter of '04 in the Bay Area and in Arizona. So I would attribute it to just solid strength. And the other thing I would attribute it to is -- I mean, just look at the -- we built 123 hospitals last week. That's a two-year high for us, and it just shows you how big the market is, because more people are buying our services.

And in thinking about the supply aspect for your business in nursing, do you have any anecdotal evidence that nurses are looking more favorably on these kind of assignments these days?

Well, I'm going to just say a couple words, and I'll let Shawn pick it up. But our assignments -- I think it's a different decision for the nurses that work for us, versus a lower-level woman or nurse that wants to work 36 hours and be in a just go check out San Diego or the Bay Area for 13 weeks.

Shawn, can you add to that?

Yes. I just think think that across the board, we have seen strength on both the supply and demand side. Supply is certainly tightening up a little bit, but our nurses are much more relevant; it's more of a lifestyle for them. And many of our nurses come in through referral programs that we put in place. We have been re-engaging that specifically, and have found our nurse headcount continuing to increase because of our active candidate base and recruiting approach.

And just to check a detail that I jotted down, did I catch this right that you said you had 570 nurses in the field versus 492 average in the quarter?

Correct.

And regarding the bill/pay rate spread, are you getting some of that -- I think you mentioned $68 an hour. How does that compare to -- out of the fourth quarter or a year ago?

Pretty consistent, maybe a little bit up. But as you know, it's probably anywhere from $15 to $18 an hour more than the other publicly-traded healthcare staffing companies.

At this time, there are no further questions. Mr. Holtzman, are there any closing remarks?

None from me. Pete?

Just that we appreciate your attention, and look forward to reporting our second-quarter results. Thank you for your attendance today.