Barrett Business Services Inc (BBSI) 2023 Q3 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss BBSI's financial results for the third quarter ended September 30, 2023. Joining us today are BBSI's President and CEO, Mr. Gary Kramer; and the company's CFO, Mr. Anthony Harris. Following their remarks, we will open the call for your questions.

大家下午好，感謝大家參加今天的電話會議，討論 BBSI 截至 2023 年 9 月 30 日的第三季度財務業績。今天加入我們的是 BBSI 總裁兼首席執行官 Gary Kramer 先生；以及公司的財務長安東尼·哈里斯先生。在他們發表講話後，我們將開始電話詢問您的問題。

Before we go further, please take note of the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statement provides important cautions regarding forward-looking statements. The company's remarks during today's conference call will include forward-looking statements. These statements, along with other information presented that does not reflect historical fact are subject to a number of risks and uncertainties. Actual results may differ materially from those implied by these forward-looking statements.

在我們進一步討論之前，請注意該公司 1995 年《私人證券訴訟改革法案》含義內的安全港聲明。該聲明提供了有關前瞻性陳述的重要警告。該公司在今天的電話會議上的言論將包括前瞻性陳述。這些陳述以及所提供的不反映歷史事實的其他資訊存在許多風險和不確定性。實際結果可能與這些前瞻性陳述所暗示的結果有重大差異。

Please refer to the company's recent earnings release and to the company's quarterly and annual reports filed with the Securities and Exchange Commission for more information about the risks and uncertainties that could cause actual results to differ from those expressed or implied by the forward-looking statements.

請參閱該公司最近的收益報告以及該公司向美國證券交易委員會提交的季度和年度報告，以了解可能導致實際結果與前瞻性陳述明示或暗示的結果不同的風險和不確定性的更多資訊。

I would like to remind everyone that this call will be available for replay through December 1, 2023, starting at 8:00 p.m. Eastern tonight. A webcast replay will also be available via the link provided in today's press release as well as available on the company's website at www.bbsi.com.

我想提醒大家，本次電話會議將於 2023 年 12 月 1 日晚上 8:00 開始重播。今晚東部。網路廣播重播也可透過今天新聞稿中提供的連結以及公司網站 www.bbsi.com 觀看。

Now I'd like to turn the call over to the President and Chief Executive Officer of BBSI, Mr. Gary Kramer. Sir, please go ahead.

現在我想將電話轉給 BBSI 總裁兼執行長 Gary Kramer 先生。先生，請繼續。

Thank you, and good afternoon, everyone, and thank you for joining the call. We had another strong quarter, and I am pleased with our results. We continue to execute on our short-term and long-term objectives and we surpassed all of our internal controllable key performance indicators.

謝謝大家，大家下午好，謝謝您加入通話。我們又度過了一個強勁的季度，我對我們的業績感到滿意。我們繼續執行短期和長期目標，並超越了所有內部可控關鍵績效指標。

Regarding our client and WSE stack, our controllable growth exceeded our expectations in the quarter as we continued to execute on our various strategies to increase the top of the sales funnel, and I am pleased to say that we once again exceeded our expectations in new clients and in new worksite employees. As discussed previously, we have been able to sell and support larger clients with our upgraded technology stack, national PEO licenses, along with BBSI Benefits. This continues to progress favorably, and the average size of the clients that we are adding are larger than the average size of the clients that are running off.

關於我們的客戶和華爾街證券交易所堆疊，我們在本季度的可控增長超出了我們的預期，因為我們繼續執行各種策略以增加銷售漏斗的頂部，我很高興地說，我們在新客戶方面再次超出了我們的預期以及新的工作場所員工。如前所述，我們能夠透過升級的技術堆疊、國家 PEO 許可證以及 BBSI 優勢來銷售和支援更大的客戶。這一切持續順利進展，我們增加的客戶的平均規模大於流失的客戶的平均規模。

Regarding client runoff, our retention in the quarter was better than the prior year quarter and continues to remain stronger than pre-pandemic levels. I'd like to attribute that to the work we do with our clients and the value our teams provide. The result of all these efforts or what I refer to as our controllable growth, is that we added approximately 4,300 worksite employees year-over-year from net new clients. This was partially offset by slower client hiring in the quarter. Our clients increased their workforce sequentially over the second quarter, but by less than we were forecasting. Anthony will provide more color for the portfolio by geography and industry.

就客戶流失而言，我們本季的客戶保留率優於去年同期，並持續保持高於疫情前的水平。我想將其歸功於我們與客戶所做的工作以及我們的團隊提供的價值。所有這些努力的結果，或我所說的我們的可控成長，是我們從淨新客戶中逐年增加了約 4,300 名現場員工。這被本季客戶招聘放緩所部分抵銷。我們的客戶在第二季度連續增加了勞動力，但增幅低於我們的預測。安東尼將根據地理和行業為投資組合提供更多色彩。

To summarize, we grew our worksite employees by 1%, which was slightly lower than forecast for the quarter as we sold and retained more business, but this was partially offset by slower-than-anticipated client hiring.

總而言之，我們的工作場所員工數量增加了 1%，略低於本季度的預期，因為我們出售並保留了更多業務，但這部分被客戶招聘速度慢於預期所抵消。

Moving to our staffing operations. Our staffing business declined by 25% over the prior year quarter and was slightly better than we anticipated. We mentioned previously that we repriced the portfolio and jettisoned clients where we were not achieving an adequate return. We also shifted our strategy to recruit for our PEO clients and placed 83 applicants in the quarter, which generated equal margin to our traditional staffing model, but resulted in less top line revenue. We also experienced microeconomic factors, including supply and demand imbalances, which vary by geography.

轉向我們的人員配置業務。我們的人力資源業務比去年同期下降了 25%，略優於我們的預期。我們之前提到過，我們對投資組合進行了重新定價，並在未能獲得足夠回報的情況下拋棄了客戶。我們也改變了為 PEO 客戶招募的策略，並在本季安置了 83 名申請人，這與我們傳統的人員配置模式產生了相同的利潤，但導致頂線收入減少。我們也經歷了微觀經濟因素，包括因地理位置而異的供需失衡。

Moving to the field operational updates. We are very pleased with our entrance into new markets with our asset-light model. We have 14 total new market development managers that are in various stages of their development. They are doing well and largely achieving their goals of adding and servicing new clients and new referral partners and have a robust pipeline. Our results thus far are better than we expected and are exceeding our internal return hurdle rate, and we are actively recruiting for the next class.

轉向現場營運更新。我們對透過輕資產模式進入新市場感到非常高興。我們共有 14 位新市場開發經理，他們處於不同的發展階段。他們做得很好，基本上實現了增加和服務新客戶和新推薦合作夥伴的目標，並且擁有強大的管道。到目前為止，我們的成績比我們預期的要好，並且超過了我們的內部回報門檻率，我們正在積極招募下一屆的學生。

Regarding our product updates, we continue to execute on the sales and service of BBSI Benefits, our new health insurance offering. As a refresher, we rolled out our benefits offering in California in the second quarter and are now selling and servicing BBSI Benefits in every market where we operate. I am pleased to report that through October, we have 160 clients on our various plans with more than 3,500 total participants. Our value proposition is resonating well, and we are having success with small and large clients in white- and blue-collar industries, in every state we operate and with a diverse distribution channel.

關於我們的產品更新，我們繼續執行新健康保險產品 BBSI Benefits 的銷售和服務。回顧一下，我們在第二季度在加州推出了福利產品，現在正在我們營運的每個市場銷售 BBSI 福利並提供服務。我很高興地向您報告，截至 10 月份，我們的各種計劃已有 160 名客戶參與，參與者總數超過 3,500 人。我們的價值主張引起了良好的共鳴，我們在白領和藍領行業、在我們經營的每個州以及多元化的分銷渠道中都取得了成功。

We are in the thick of the 1/1 selling season, and our business teams are offering BBSI Benefits to our existing clients as well as potential new clients. It is still too early to provide any definitive guidance but we are pleased with our current pipeline. If we close the current opportunities that are in our pipeline at our historical benefits closing rate, then we are confident that this product will be accretive to earnings in 2024.

我們正處於 1/1 銷售旺季，我們的業務團隊正在為現有客戶以及潛在的新客戶提供 BBSI 福利。現在提供任何明確的指導還為時過早，但我們對目前的管道感到滿意。如果我們以歷史福利結束率結束目前正在醞釀的機會，那麼我們有信心該產品將在 2024 年增加收益。

Next, I'd like to shift to our view of the remainder of the year and the 2024. Our various sales strategies continue to increase the top of the sales funnel, our controllable growth exceeded our expectations every quarter this year, and that trend continued into October. Our qualified prospects at the end of the quarter were approximately 75% greater than the prior year quarter. If we close this business near our historical close rate plus close on our benefits opportunities, and we are setting ourselves up for a strong start to 2024. If there's no dislocation in the economy, and we close out the year in the manner I just described that we expect to see improved gross billings growth in 2024 over 2023.

接下來，我想談談我們對今年剩餘時間和2024年的看法。我們的各種銷售策略繼續增加銷售漏斗的頂部，我們今年每個季度的可控增長都超出了我們的預期，並且這種趨勢仍在持續進入十月。本季末我們的合格潛在客戶比去年同期增加了約 75%。如果我們以接近歷史成交率的價格結束這項業務，加上我們的福利機會也接近尾聲，那麼我們將為2024 年一個良好的開端做好準備。如果經濟沒有出現混亂，並且我們以我剛才描述的方式結束這一年我們預計 2024 年的總帳單成長將比 2023 年有所改善。

Now I'm going to turn the call over to Anthony for his prepared remarks.

現在我要把電話轉給安東尼，聽他準備好的演講。

Thanks, Gary. Hello, everyone. I'm pleased to report we finished Q3 with strong results as we continue to exceed our expectations for profitability and worksite employees added in the quarter for net new clients. Our overall gross billings increased 3% in Q3 '23 to $1.96 billion versus $1.91 billion in Q3 '22. We have achieved diluted earnings per share of $2.68 compared to $2.45 in the prior year quarter. PEO gross billings increased 3.3% over the prior year quarter to $1.94 billion, while staffing revenues decreased 25% over the prior year to $22 million. Our worksite employees grew by 1.1% in the quarter, which was the result of adding more WSEs than expected from net new PEO clients, offset in part by slower hiring within our existing customer base.

謝謝，加里。大家好。我很高興地報告，我們在第三季度取得了強勁的業績，因為我們繼續超出了盈利能力的預期，並且本季度為淨新客戶增加了工作場所員工。我們的總營收在 23 年第 3 季成長了 3%，達到 19.6 億美元，而 22 年第 3 季為 19.1 億美元。我們的稀釋後每股收益為 2.68 美元，而去年同期為 2.45 美元。 PEO 總營業額比去年同期成長 3.3%，達到 19.4 億美元，而員工收入比去年同期下降 25%，達到 2,200 萬美元。本季我們的工作場所員工數量增加了 1.1%，這是由於淨新 PEO 客戶增加的 WSE 數量超出預期，但我們現有客戶群的招聘放緩在一定程度上抵消了這一影響。

Looking at client hiring more closely. We have seen overall hiring trends stabilized in the quarter and increased modestly on a sequential basis, but the pace of hiring remains slower than historical trends and slower than expected. We continue to see this slowness primarily in the construction sector and most concentrated in our Northern California region.

更密切地關注客戶招募。我們看到本季整體招聘趨勢趨於穩定，並環比小幅增長，但招聘步伐仍慢於歷史趨勢，也慢於預期。我們仍然看到這種放緩主要出現在建築業，並且最集中在北加州地區。

Average hours worked and overtime hours per employee have continued to stabilize in the quarter as well. Average billing per WSE increased 3.5% in the quarter, driven by higher average client wage rates, which remain resilient and which will continue to be a source of billings growth going forward.

本季度，每位員工的平均工作時間和加班時間也持續穩定。在平均客戶工資率上升的推動下，本季每個 WSE 的平均帳單增長了 3.5%，該工資率仍然具有彈性，並將繼續成為未來帳單成長的來源。

Looking at overall PEO gross billings growth by region versus the prior year third quarter, East Coast grew 12%, Mountain States grew 8%, Southern California grew 5%, the Pacific Northwest decreased by 3%, and Northern California decreased by 3%.

從各地區的整體PEO 總帳單成長來看，與去年第三季相比，東岸成長12%，山區各州成長8%，南加州成長5%，太平洋西北地區下降3%，北加州下降3% 。

As Gary discussed, staffing revenues are down year-over-year, driven by strategic shifts in our model and the current economic environment. That said, our staffing revenues increased sequentially and we expect this stability to continue through year-end.

正如加里所討論的，由於我們的模式和當前經濟環境的策略轉變，員工收入較去年同期下降。也就是說，我們的員工收入連續增加，我們預計這種穩定性將持續到年底。

Our workers' compensation program continues to perform well and benefit from favorable claim frequency trends and favorable claim development. This strong performance has once again resulted in favorable adjustments for prior year claims. In Q3 '23, we recognized favorable prior year liability and premium adjustments of $2.2 million. This compares to favorable prior year liability of premium adjustments of $1.4 million in the third quarter of 2022. As a reminder, our client workers' compensation exposure is now primarily covered by our fully insured program with no retained liability by BBSI.

我們的工人賠償計劃繼續表現良好，並受益於有利的索賠頻率趨勢和有利的索賠發展。這種強勁的表現再次導致對上一年索賠的有利調整。在 23 年第三季度，我們確認了有利的上一年負債和保費調整 220 萬美元。相較之下，去年 2022 年第三季的保費調整負債為 140 萬美元。提醒一下，我們客戶工人的賠償風險現在主要由我們的全額保險計畫承保，BBSI 不保留任何責任。

Our gross margin rate improved in the quarter due to the cost savings from lower workers' compensation expense and our ongoing focus on pricing discipline. In addition, our profitability continues to benefit from cost management efforts that have largely offset the impact of our ongoing investments in the launch of BBSI Benefits and our expanding team of market development managers. As a result, SG&A for the year continues to grow slower than prior year and slower than our billings growth rate.

由於工人補償費用降低以及我們持續關注定價紀律而節省了成本，我們的毛利率在本季度有所改善。此外，我們的獲利能力繼續受益於成本管理努力，這些努力在很大程度上抵消了我們持續投資推出 BBSI Benefits 和不斷擴大的市場開發經理團隊的影響。因此，今年的銷售、管理及行政費用 (SG&A) 成長持續低於上年，也低於我們的帳單成長率。

Moving to investment income. Our investment portfolios earned $2.3 million in the third quarter, up $700,000 from the prior year due to higher yields and more favorable cash flow timing associated with our current fully insured program. Our investment portfolio continues to be managed conservatively with an average duration of 3.5 years and average quality of investment at AA. Our balance sheet remains strong with $129 million of unrestricted cash investments at September 30 and no debt.

轉向投資收益。我們的投資組合在第三季賺了 230 萬美元，比前一年增加了 70 萬美元，因為我們目前的完全保險計劃帶來了更高的收益率和更有利的現金流時機。我們的投資組合繼續實施保守管理，平均期限為 3.5 年，平均投資品質為 AA。截至 9 月 30 日，我們的資產負債表依然強勁，無限制現金投資為 1.29 億美元，無負債。

Continuing under the Board's July 2023 repurchase program announced last quarter, BBSI repurchased $11 million of shares in the third quarter, to $64 million remaining available under the program. The company also paid $2 million in dividends in the quarter and reaffirmed its dividend for the following quarter.

繼續根據董事會上季度宣布的 2023 年 7 月回購計劃，BBSI 在第三季度回購了 1,100 萬美元的股票，使該計劃下剩餘的可用股票達到 6,400 萬美元。該公司還在本季度支付了 200 萬美元的股息，並重申了下一季的股息。

Turning to our outlook for the year. We are updating our outlook to reflect our year-to-date results, and we now expect gross billings to increase between 4% and 5%, a slight decrease from the 4% to 6% in our prior outlook. And we expect average WSEs to increase between 2% and 3% for the year, a slight decrease from the 2% to 4% in our prior outlook. We continue to expect gross margin as a percentage of gross billings to be between 3.1% and 3.15%, and we continue to expect our effective annual tax rate to remain between 27% and 28%.

轉向我們對今年的展望。我們正在更新我們的展望，以反映我們今年迄今為止的業績，我們現在預計總帳單將成長 4% 至 5%，比我們之前展望的 4% 至 6% 略有下降。我們預計今年 WSE 平均成長率將在 2% 至 3% 之間，比我們之前預期的 2% 至 4% 略有下降。我們仍然預計毛利率佔總帳單的百分比將在 3.1% 至 3.15% 之間，我們繼續預計有效年稅率將保持在 27% 至 28% 之間。

I will now turn the call back to the operator for questions.

我現在將把電話轉回給接線員詢問問題。

(Operator Instructions) Our first question comes from the line of Jeff Martin with ROTH Capital Partners.

（操作員說明）我們的第一個問題來自 ROTH Capital Partners 的 Jeff Martin。

Wanted to dive into a little bit more on the sales funnel. What are some of the things you're doing differently this year versus years past, maybe that's leading you to hit your internal controllable targets?

想深入了解銷售漏斗。與過去幾年相比，您今年所做的一些事情有哪些不同，也許這會導致您實現內部可控目標？

Jeff, I would say that we've had laser focus on the top of the funnel. We've tried and refined over the past couple of years to make sure that we're getting as many looks as we can, targeting clients directly, targeting referral partners, targeting benefits brokers. So it's really not just one easy button. It's a lot of different strategies that we have been executing on over the past, I'll say, 2-plus years. And then we're really just seeing good results for that now. We've -- I said in my prepared remarks that our prospects, right? So these are qualified prospects that we're in the process with -- we're about 75% higher at the end of September than we were against September of '22. So we've got that many more possible potential clients that can join into Q4 into Q1. So we're just -- we've got a lot of energy going there, and hopefully, we're going to see the reward of it going into Q4 and Q1.

傑夫，我想說我們已經將雷射聚焦在漏斗的頂部。在過去的幾年裡，我們不斷嘗試和改進，以確保我們能夠獲得盡可能多的關注，直接針對客戶、針對推薦合作夥伴、針對福利經紀人。所以這真的不只是一個簡單的按鈕。我想說，過去兩年多來，我們一直在執行很多不同的策略。現在我們確實看到了良好的結果。我在準備好的發言中說過我們的前景，對吧？因此，這些都是我們正在處理的合格潛在客戶 - 9 月底的價格比 22 年 9 月的價格高出約 75%。因此，我們有更多可能的潛在客戶可以加入第四季和第一季。所以我們只是——我們有很多精力去那裡，希望我們能在第四季和第一季看到它的回報。

And then remind us on the BBSI Benefits side, what's the investment this year and next year that you've got to essentially cover to become earnings accretive there? And then second part to that question is, can you give us an update on some of the new referral partners that you've brought on board some specifically for BBSI Benefits, would be helpful.

然後在 BBSI 福利方面提醒我們，今年和明年您必須進行哪些投資才能增加收益？這個問題的第二部分是，您能否向我們提供有關您專門為 BBSI 福利引入的一些新推薦合作夥伴的最新信息，這將會有所幫助。

This is Anthony. Jeff, I'll take the investment question, and then Gary can speak to the referral partners. But we spent about $3 million of total expense investment to operate this program. So that's essentially the run rate we're at right now. Obviously, as it scales over time, that could change a little bit, but that's where we're at.

這是安東尼。傑夫，我將回答投資問題，然後加里可以與推薦合作夥伴交談。但我們花了大約 300 萬美元的總費用投資來經營這個項目。這基本上就是我們現在的運行速度。顯然，隨著時間的推移，情況可能會發生一些變化，但這就是我們現在的處境。

And then on the referral partner side, we -- I have the stat, I just don't have it with me for how many new referral partners we brought in, in the quarter, but we have a constant discipline to attract new referral partners. We've got army of folks in the field, that's what they do on a day-to-day basis, and they're doing it very well as far as making -- we call it making new friends. But we're -- part of that strategy is as we talk about our total addressable market is, we're now able to go to employee benefits brokers where -- before they could refer to us, but we didn't really have a product that they could sell into their clients because it wasn't -- didn't have the health insurance. But now that we have the health insurance, we're able to tap into almost twice as many employee brokerages out there.

然後在推薦合作夥伴方面，我們 - 我有統計數據，我只是沒有關於我們在本季度引入了多少新推薦合作夥伴的統計數據，但我們有持續的紀律來吸引新的推薦合作夥伴。我們在這個領域有一大群人，這就是他們每天所做的事情，而且他們在結交新朋友方面做得非常好——我們稱之為結交新朋友。但我們 - 該策略的一部分是，正如我們談論我們的整體潛在市場一樣，我們現在能夠去員工福利經紀人那裡 - 在他們可以推薦我們之前，但我們確實沒有一個他們可以向客戶出售產品，因為它沒有健康保險。但現在我們有了健康保險，我們能夠接觸到幾乎兩倍的員工經紀業務。

And then last one for me. In terms of growth drivers for next year, obviously, a rebound in hiring from clients would be a big one. But is potential for workers' compensation rates in California, in particular, is that -- are you viewing that as a potential growth driver next year?

然後是我的最後一張。就明年的成長動力而言，顯然，客戶招募的反彈將是一個重要因素。但是，特別是加州工人賠償率的潛力是否是——您是否認為這是明年的潛在成長動力？

We're not seeing any -- I think I said in the prior calls that we're seeing -- we're seeing some carriers be less aggressive than they were. There's still competition in the marketplace, but they're less aggressive than they were. We are not seeing anything that is driving accounts to market as far as rate increases on the workers' comp side. We're seeing some of that on the health insurance side. We're seeing clients go to market because in some markets they're getting 20-plus percent rate increases on their medicals. So that's driving some accounts to market. But on the workers' comp, it's still trading in that plus or minus 2%, plus or minus 5%. It's not really a pain point that's driving business to market yet, and we're not forecasting that.

我們沒有看到任何——我想我在之前的電話中說過——我們看到一些運營商沒有以前那麼積極了。市場上的競爭仍然存在，但競爭已經不像以前那麼激烈了。就工人補償方面的利率上漲而言，我們沒有看到任何推動帳戶進入市場的因素。我們在健康保險方面看到了其中的一些情況。我們看到客戶湧入市場，因為在某些市場他們的醫療費率上漲了 20% 以上。這推動了一些帳戶進入市場。但就工人補償而言，其交易價格仍為正負 2%、正負 5%。這還不是真正推動業務推向市場的痛點，我們也沒有預測到這一點。

Our next question comes from the line of Chris Moore with CJS Securities.

我們的下一個問題來自 CJS 證券的 Chris Moore。

Maybe just a quick follow-up. The $3 million incremental expense on health care. Some of that is in '23 and some in '24. Or where does that get placed?

也許只是快速跟進。 300 萬美元的醫療保健增量費用。其中一些是在 23 年，一些是在 24 年。或它被放置在哪裡？

Annual expense is in 2023, and we ramped a little bit, but we were fully -- mostly fully staffed for the year. So that's the approximate run rate for '24 as well.

年度開支是在 2023 年，我們略有增加，但這一年我們的人員配備齊全。這也是 24 年的大致運行率。

And maybe just one more on the health care side. So do you expect the ultimate penetration here to match the penetration of existing business, for example, 75% of the health care to be in California. Is it a [geography] bias? Is there some other bias by type of employment? Just trying to kind of get your thoughts there.

也許還只是醫療保健方面的一個問題。那麼您是否期望這裡的最終滲透率能夠與現有業務的滲透率相匹配，例如，75% 的醫療保健將在加州進行。這是[地理]偏見嗎？就業類型是否有其他偏見？只是想表達你的想法。

As we are mastering our craft for benefits, we've had better success selling it into our installed base. So I think we said 160 clients that have enrolled through October of those 160, 20% of those are new business. So that's new to BBSI. We wouldn't have brought those clients on to call that 30%, we would not have brought those clients on if we didn't have benefits. So that's allowing us to pick up additional business that we wouldn't have received.

當我們掌握我們的技術以獲取利益時，我們在將其銷售到我們的安裝基礎方面取得了更大的成功。所以我想我們說的是截至 10 月已經註冊的 160 名客戶，其中 20% 是新業務。這對 BBSI 來說是新鮮事。我們不會讓這些客戶稱之為 30%，如果我們沒有福利，我們就不會吸引這些客戶。因此，這使我們能夠獲得原本不會收到的額外業務。

But as we're learning our craft, it's a little bit easier to sell it to your friends, right, in our clients. They know us well. They know the products we deliver. They trust us. It's a little bit of an easier sell to sell it into your installed base than to sell it to a new. But what we want to get to in the future is, after we sell through the -- our installed base continue to sell into new clients. But you can kind of see how this will ramp over time, right? We doubled the book on 7/1. We'll probably double it again on 1/1 as far as our portfolio of clients that buy the benefits, and then we'll see where it goes from there.

但當我們學習我們的手藝時，把它賣給你的朋友，對吧，賣給我們的客戶會更容易一些。他們很了解我們。他們了解我們提供的產品。他們信任我們。將其出售給您的現有客戶群比將其出售給新客戶要容易一些。但我們未來想要實現的是，在我們通過銷售之後，我們的安裝基礎繼續向新客戶銷售。但你可以看到隨著時間的推移，這種情況會如何發展，對嗎？我們在 7 月 1 日將書翻了一番。就我們購買福利的客戶組合而言，我們可能會在 1 月 1 日再次將其加倍，然後我們將看看它的走向。

And just kind of big picture. Just trying to get a sense as to how much visibility you have in fiscal '24 as of November 1. Do you know much today that you didn't know 3 to 4 months ago. Just trying to get a better sense as to how you're seeing early '24.

只是一種大局觀。只是想了解一下截至 11 月 1 日的 24 財年您的可見度有多少。您今天是否了解了 3 至 4 個月前所不知道的資訊？只是想更了解 24 年初你的情況。

We feel -- looking at our pipeline that we have, we've got 2 pipelines to think. We've got a pipeline of benefits opportunities. And we feel good with that loan if we close that at our historical benefits closing rate that we're going to have an accretive year for benefits in '24. So it's going to be -- we're going to make more than the $3 million we're going to spend, right? We're not going to give a number until we get into '24, but we're going to make more than the $3 million we're going to spend on it.

我們覺得——看看我們現有的管道，我們有兩個管道需要考慮。我們擁有一系列福利機會。如果我們以歷史福利結束率結束這筆貸款，我們對這筆貸款感覺良好，我們將在 24 年獲得福利增值。所以，我們賺的錢將超過我們要花的 300 萬美元，對嗎？直到進入 24 年後我們才會給出具體數字，但我們將賺到比我們花在這上面的 300 萬美元更多的錢。

And then if you look at the pipeline for our traditional non-benefits prospects, that's the largest pipeline we've ever had at the end of Q3. So if we do what we do, and we're good at doing that, right? Over the last 2 years, we've really been executing on our controllable, right, of adding clients and adding WSEs. If we keep doing what we're doing with the pipeline we have, we feel very optimistic about '24. So if you say, all right, we've got all these good things going on the controllable side and then even if, say, our client hiring is flat, it's going to be easy for us to have a better gross billings year in '24 over '23.

然後，如果你看看我們傳統的非福利前景的管道，這是我們在第三季末擁有的最大的管道。因此，如果我們做我們所做的事情，並且我們擅長這樣做，對嗎？在過去的兩年裡，我們確實一直在執行我們可控的任務，即增加客戶和增加 WSE。如果我們繼續利用我們現有的管道做我們正在做的事情，我們對 24 年感到非常樂觀。因此，如果你說，好吧，我們所有這些好事都在可控的範圍內進行，然後即使我們的客戶招聘持平，我們也很容易在 ' 23 年 24 歲。

Our next question comes from the line of Vincent Colicchio with Barrington Research.

我們的下一個問題來自 Barrington Research 的 Vincent Colicchio。

Gary, [site] construction is a weak sector. If I remember correctly, that's been weak for some time. I'm curious, are you seeing that deteriorate?

加里，[現場]建設是一個薄弱環節。如果我沒記錯的話，已經弱了一段時間了。我很好奇，你看到情況惡化了嗎？

No, we're -- I mean, we actually saw it come back some in Q3. So sequentially, our clients hired in Q3 over Q2. Now it was a slight positive. It wasn't a big positive, but it was still positive. And I will take a positive over a negative any time. But if you think of when we started to see the slowdown in our clients, it was November, December of '22. And then we saw it come back into Q1 of '23, Q2 of '23, and we've seen it slowly come back, reverse out in Q3. So it's still early, but we're thinking, especially in the Bay Area where we're seeing it come back. We're hoping that, that trend is reversed.

不，我的意思是，我們實際上看到它在第三季度有所回升。因此，我們的客戶在第三季僱用的員工數量依次超過了第二季。現在這是一個輕微的正面因素。這不是一個很大的積極因素，但仍然是積極的。任何時候我都會採取積極的態度而不是消極的態度。但如果你想想我們什麼時候開始看到客戶數量放緩的，那是 22 年 11 月、12 月。然後我們看到它回到了 23 年第一季、23 年第二季度，我們看到它慢慢回來，在第三季度逆轉。所以現在還為時過早，但我們正在考慮，特別是在灣區，我們看到它捲土重來。我們希望這種趨勢能夠扭轉。

And one clarification. Did you say the profits gained from staffing clients within PEO offset losses from clients that you shared in the staffing line?

還有一項澄清。您是否說過，在 PEO 內為客戶提供人員所獲得的利潤可以抵消您在人員配備線中共享的客戶的損失？

So this is a challenging one to try to explain. We do recruiting for our clients now. And when we booked the recruiting phase, say $10,000, right? We hire -- we recruit for our clients and they hire somebody and we get paid a $10,000 recruiting fee. So that recruiting fee is profit for us. The sale we recognize on that is $10,000. The profit we recognize to keep it simple is $10,000.

因此，解釋這一問題是一項具有挑戰性的工作。我們現在正在為客戶招募。當我們預訂招募階段時，比如說 10,000 美元，對吧？我們招聘——我們為客戶招聘，他們僱用某人，我們獲得 10,000 美元的招聘費。所以招募費對我們來說就是利潤。我們確認的銷售額為 10,000 美元。為簡單起見，我們確認的利潤為 10,000 美元。

Now where that's different is if that was traditional staffing business and say that person was making $75,000 in wages, we would book the wages plus taxes plus other things into the revenue line. So that revenue would have been, call it, $100,000, but we would have made our $10,000 in profit. So it's a little bit of a shift in the accounting for recruiting for staffing. And all we're trying to say is, we're making adequate margins on staffing. We're just not realizing -- we're making an adequate profit on staffing. We're just not realizing as much revenue as we used to, nor are we realizing the cost of it.

現在不同的是，如果這是傳統的人力資源業務，並且說該人的工資為 75,000 美元，我們會將工資加上稅金和其他費用記入收入線。因此，收入將是 100,000 美元，但我們會賺取 10,000 美元的利潤。因此，人員招聘的會計處理發生了一些變化。我們想說的是，我們在人員配置上獲得了足夠的利潤。我們只是沒有意識到——我們在人員配置上獲得了足夠的利潤。我們只是沒有像以前那樣實現那麼多的收入，也沒有意識到它的成本。

And then you mentioned staffing. I believe you mentioned should grow sequentially. What's driving that -- is in particular?

然後你提到了人員配置。我相信你提到的應該依次增長。是什麼推動了這一點——特別是？

Yes. We had sequential growth in this quarter and we're projecting modest sequential growth next quarter. Again, we're talking small positives here, not large percentage sequential increases. But the key takeaway is the large declines really, we think, are behind us. And so the -- for example, the 25% decrease in revenue now is really representing just that year-over-year compare where if you look at the trend line now, it's flat to positive. So we're really holding that. We've seen, as Gary said, the activity in staffing that we're excited about is not necessitating to large increases in revenue, but it's still showing up as some revenue and certainly margin.

是的。本季我們實現了環比增長，預計下季度將出現適度的環比增長。再次強調，我們在這裡談論的是小的正面因素，而不是大比例的連續成長。但關鍵的一點是，我們認為，大幅下跌確實已經過去了。因此，例如，現在收入下降 25% 實際上代表的是同比比較，如果你現在看趨勢線，它是持平到正值。所以我們確實堅持這一點。正如加里所說，我們已經看到，我們感到興奮的人員配置活動並不需要大幅增加收入，但它仍然表現為一些收入和肯定的利潤。

As you go after bigger clients and the competitive, I think the competition is a little different. Are you seeing competitive pressures increased in the current environment?

當你追求更大的客戶和競爭者時，我認為競爭有點不同。您是否認為當前環境下競爭壓力增加？

No more than normal. I mean, there's competition everywhere. But with our product and our people in the field, it's really our differentiator, right? We can talk about all these different tools that we have as far as workers' comp or health insurance and yada, yada, yada, but the people in the field doing the work being there with the business owner, that is the core product, and that's what we're able to sell in the market. That's what keeps the business on the books. That's the one that the clients truly find the value is in those -- this unit.

不超過正常水平。我的意思是，到處都有競爭。但憑藉我們的產品和該領域的員工，這確實是我們的與眾不同之處，對嗎？我們可以談論我們擁有的所有這些不同的工具，包括工人補償或健康保險以及雅達，雅達，雅達，但是現場工作的人員與企業主一起工作，這是核心產品，並且這就是我們能夠在市面上賣的東西。這就是將業務記錄在案的原因。這就是客戶真正發現價值所在的地方——這個單位。

Our next question comes from the line of Marc Riddick with Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 Marc Riddick。

I wanted to just touch a little bit on the follow-up on the construction commentary. And if I want to -- I just want to sort of go back because if I remember correctly from a timing perspective, first, last year, there was -- there were impacts some beyond the controllables, if you will. If I remember correctly, you had weather impacts, I think in -- if I remember correctly, book at the fourth quarter and into the first quarter, I was wondering if you can talk a little bit about the timing of maybe what you saw then and how that might sort of play out if -- I don't know if easing comparison is a fair way to put it, but I was wondering if you could talk a little bit about maybe what you saw there in -- how we might see it flow through this time around?

我想簡單談談施工評論的後續內容。如果我想——我只是想回去，因為如果我從時間角度沒記錯的話，首先，去年，有一些影響超出了可控範圍，如果你願意的話。如果我沒記錯的話，你受到了天氣影響，我想——如果我沒記錯的話，在第四季度和第一季度預訂，我想知道你是否可以談談你當時看到的時間安排如果——我不知道放寬比較是否是一個公平的方式，但我想知道你是否可以談談你在那裡看到的——我們如何這次看到它流過了嗎？

We saw our clients start to shrink Q4 and it accelerated into Q1. It happened at the same time you had interest rates going up really high. You had a shift in the macro economy and then we also had terrible weather in California, specifically Northern California as well. So you had a confluence of all of these happening at the same time. It left us in that position of we think -- it's a piece of -- it's a little bit of each. It was hard to discern from where we were sitting, what was going to happen. We thought it was going to come back in Q2 of '23, but ultimately, it didn't come back. But our confidence now is in those clients that reduce staff that we just referenced, we saw them hire more folks in Q3, and we saw sequentially our clients grow in Q3. So that's what gives us the optimism of -- they dipped for 3 quarters and then they pulled back and get started to add people back into Q3 this year.

我們看到我們的客戶在第四季度開始縮減規模，並在第一季加速縮減。這發生在利率上升非常高的同時。宏觀經濟發生了變化，然後加州，特別是北加州也遭遇了糟糕的天氣。所以所有這些都是同時發生的。它讓我們處於這樣的位置：我們認為──它是其中的一部分──它是各自的一點點。從我們坐的地方很難看出會發生什麼事。我們原以為它會在 23 年第二季回歸，但最終它沒有回歸。但我們現在對那些我們剛才提到的裁員的客戶充滿信心，我們看到他們在第三季度僱用了更多員工，並且我們看到我們的客戶在第三季度連續成長。這就是讓我們感到樂觀的原因——他們下降了三個季度，然後他們回撤並開始在今年第三季度重新增加人員。

Actually that's where I was going with that. And then I was sort of curious as to -- on a different track, but there's a little similarity there. So (inaudible) bring us up to speed maybe what you're seeing with the banking and finance customers. I mean, as we showed to anniversary those challenges that again or outside of the controllables, maybe you could sort of bring us up to speed -- maybe on what you're seeing there?

事實上，這就是我的目的。然後我有點好奇——在不同的軌道上，但有點相似之處。所以（聽不清楚）讓我們來了解一下您在銀行和金融客戶中看到的情況。我的意思是，當我們向周年紀念日展示這些挑戰時，再次或在可控範圍之外，也許你可以讓我們了解最新情況——也許你在那裡看到了什麼？

I mean we really weren't that affected by the banking crisis a year ago. We don't have a lot of direct clients in that space. Obviously, all of our clients use banking services. So we were watching very closely to see if there are impacts of our clients. It wasn't a prevailing pain point beyond a few anecdotal stories. So we then recover very quickly from that. I mean for our clients in the blue- and gray-collar space, the biggest headwind has been construction and really driven by the cyclical nature of that with interest rates.

我的意思是，一年前我們確實沒有受到銀行危機的影響。我們在這個領域沒有很多直接客戶。顯然，我們所有的客戶都使用銀行服務。因此，我們非常密切地關注我們的客戶是否會產生影響。除了一些軼事之外，這並不是一個普遍的痛點。所以我們很快就能恢復過來。我的意思是，對於藍領和灰領領域的客戶來說，最大的阻力是建築業，而這實際上是由利率的周期性所推動的。

And then the last one for me. I was wondering if you could circle back to benefits for a moment. Are there any particular client verticals or any particular customer groups that are -- who have responded more positively than others? Or are there any differentiation that you're seeing as to those who are being part of that add. And then also maybe you talk a little bit about the sales cycle and maybe how that's played out compared to what your expectations were.

然後是我的最後一個。我想知道您是否可以暫時回到福利問題上。是否有任何特定的客戶垂直領域或任何特定的客戶群—他們的反應比其他人更積極？或者你認為那些屬於該添加的人有什麼不同嗎？然後也許您也可以談論一下銷售週期，以及與您的期望相比，銷售週期的實施。

If you just think of who we're selling to, we're primarily trying to sell into our installed base. So that's really no new vertical for us, but we're having good success selling it into our installed base and really in every state, right? There's not a state that we're not able to sell into. So we feel comfortable that we have the product that works in every state and that our clients are eager and willing to pay for. So we feel good there.

如果您只想到我們的銷售對象，我們主要是想向我們的安裝基礎銷售產品。所以這對我們來說確實不是什麼新的垂直領域，但我們在將其銷售到我們的安裝基礎以及每個州都取得了巨大的成功，對嗎？沒有一個州是我們不能銷售的。因此，我們感到放心的是，我們擁有適用於每個州的產品，我們的客戶渴望並願意付費。所以我們在那裡感覺很好。

The one thing I would just say that we're seeing success on is in our new markets, right? So our market development managers, about 80% of the business they're bringing on for new business, they're selling benefits as well. So we feel pretty optimistic that in these greenfield, they have many different products to sell, and they try to figure out what's the best way to crack the market, and they're doing a great job cracking the market. I'm proud of all of them.

我只想說我們看到成功的一件事是在我們的新市場，對吧？所以我們的市場開發經理，他們為新業務帶來的大約 80% 的業務，他們也在銷售利益。因此，我們非常樂觀地認為，在這些未開發的領域，他們有許多不同的產品可供銷售，他們試圖找出打開市場的最佳方式，而且他們在打開市場方面做得很好。我為他們所有人感到驕傲。

So just in general, in those new markets, we are seeing more white-collar than blue-collar just because of their comfort and maybe their (technical difficulty) and the folks that they know because we're typically hiring folks that come from in and around the business, I'll say, from our industry or adjacent industry. So feel good with the growth there.

所以總的來說，在這些新市場中，我們看到的白領比藍領更多，只是因為他們的舒適度，也許還有他們的（技術難度）和他們認識的人，因為我們通常僱用來自美國的人我會說，圍繞著我們的行業或鄰近行業的業務。所以對那裡的成長感覺良好。

And then as the sales cycle, right, this is -- we know that this is not a quick sales cycle, right? It's typically going to take you 3 months to 4 months, right, from the time you sell it. From the time you do the underwriting and you sell to -- then you have to get the employees through the enrollment process. It just takes a little more lead time to get -- to make sure it's done properly, make sure it's done accurately. But like we wish we could give you a better number right now, but we're right in the middle of the sick for the 1/1 season. Most of the folks are going to make their decisions. Most of the clients are going to make their buying decisions in mid-November, mid-to-end-November with the idea of start your enrollments around Thanksgiving or in the first week of December, so the kind of everything wrapped up by mid-December. But until we get through those enrollments, we're not going to have a real good definitive estimate on what we think our sell-through was for the 1/1 season.

然後作為銷售週期，對吧，這是——我們知道這不是一個快速的銷售週期，對嗎？從你賣掉它的那一刻起，通常需要 3 到 4 個月的時間，對吧。從你進行承保和銷售開始，你就必須讓員工完成註冊流程。只是需要多一點準備時間來確保它正確完成，確保它準確完成。但就像我們希望現在能給你一個更好的數字一樣，但我們正處於 1/1 賽季的生病​​之中。大多數人都會做出決定。大多數客戶將在 11 月中旬、11 月中下旬做出購買決定，並希望在感恩節前後或 12 月的第一周開始報名，所以一切都會在中旬之前完成。十二月。但在我們完成這些註冊之前，我們無法對 1/1 季度的銷售情況做出真正準確的估計。

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

隊列中沒有其他問題。我想將電話轉交給管理階層以供結束語。

Thank you. Just again, I want to thank all the BBSI professionals for another great quarter on controllable growth. Everybody is doing a great job, and we appreciate everything you do for the organization. Thank you, everybody.

謝謝。我要再次感謝所有 BBSI 專業人士，他們在可控成長方面又迎來了一個偉大的季度。每個人都做得很好，我們感謝你們為組織所做的一切。謝謝大家。

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。此時您可以斷開線路，度過美好的一天。