Barrett Business Services Inc (BBSI) 2024 Q2 法說會逐字稿

Good afternoon, everyone, and thank you for participating today's conference call to discuss BBSI's financial results for the first (sic - see press release, "second") quarter ended June 30, 2024. Joining us today are BBSI's President and CEO, Mr. Gary Kramer and the company's CFO, Mr. Anthony Harris. Following their remarks, we'll 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 2024 年 6 月 30 日的第一季度（原文如此 - 參見新聞稿，“第二”）財務業績。今天加入我們的有 BBSI 總裁兼執行長 Gary Kramer 先生和公司財務長 Anthony Harris 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. 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.

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。請參閱該公司最近發布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。有關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 till August 31, 2024, starting at 8 PM ET 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，本次電話會議將在 2024 年 8 月 31 日之前（美國東部時間今晚 8 點開始）進行重播。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 would 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. Good afternoon, everyone, and thank you for joining the call. I am pleased to report that we had a strong second quarter and our financial results are in line with our full year outlook. We continued to execute our short-term and long-term objectives, and we added a record number of worksite employees for the second quarter.

謝謝。大家下午好，感謝您加入通話。我很高興地向大家報告，我們的第二季表現強勁，我們的財務表現與我們的全年前景相符。我們持續執行短期和長期目標，第二季工地員工人數創歷史新高。

Moving to our financial results and worksite employees. During the quarter, our gross billings increased 6% over the prior year's quarter, which is in line with our expectations. We continued to execute on our various strategies to increase the top of the sales funnel, and we achieved a record number of WSEs from new client adds during the second quarter. Our client retention continues to trend well and is in line with our expectations. 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 controllable growth, is that we added approximately 2,500 worksite employees year-over-year from net new clients.

轉向我們的財務表現和工作場所員工。本季度，我們的總帳單比去年同期成長了 6%，符合我們的預期。我們繼續執行各種策略來擴大銷售漏斗的頂部，並且我們在第二季度新增的新客戶中實現了創紀錄的 WSE 數量。我們的客戶保留率持續保持良好趨勢，符合我們的預期。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，或我所說的可控成長，是我們從淨新客戶中逐年增加了約 2,500 名現場員工。

We previously mentioned that we began to see our clients' workforce stabilize in Q4 and modestly grow in Q1. We are pleased to report that our clients' growth accelerated in Q2. In fact, they experienced the greatest net hiring in six quarters. To summarize, for the quarter, we grew our worksite employees by 4% as we sold and retained more business and benefited from our clients' net hiring.

我們先前提到，我們開始看到客戶的勞動力在第四季度趨於穩定，並在第一季略有成長。我們很高興地報告，我們的客戶在第二季加速成長。事實上，他們經歷了六個季度以來最大的淨招聘人數。總而言之，本季度，我們的工作場所員工數量增加了 4%，因為我們出售並保留了更多業務，並從客戶的淨招聘中受益。

Moving to our staffing operations, our staffing business declined by 3% over the prior-year quarter and was within our expected range. We continue to execute our strategy to recruit for our PEO clients and placed 91 applicants in the quarter, but we were impacted by macroeconomic headwinds, including supply and demand imbalances, which vary by geography. We have seen our staffing business stabilize. And although we are expecting modest decline year-over-year, we are forecasting our staffing business to grow sequentially in both Q3 and Q4.

轉向我們的人力資源業務，我們的人力資源業務比去年同期下降了 3%，在我們的預期範圍內。我們繼續執行為 PEO 客戶招募的策略，並在本季度安置了 91 名申請人，但我們受到了宏觀經濟逆風的影響，包括供需不平衡（因地理位置而異）。我們已經看到我們的人力資源業務穩定下來。儘管我們預計將同比略有下降，但我們預計我們的人力資源業務將在第三季和第四季連續成長。

Moving to the field operational updates. We are very pleased with our entrance into new markets with our asset-light model. We have 17 total new market development managers in various stages of their development. They are doing well in largely achieving their goals of adding and servicing new clients and new referral partners. In two of the markets, we have hired additional local talent to support our clients. And we are in the process of moving into traditional brick-and-mortar BBSI branches. We continue to see positive results from our investments in new markets and are actively recruiting additional new market development managers.

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 17 位處於不同發展階段的新市場開發經理。他們在很大程度上實現了增加和服務新客戶和新推薦合作夥伴的目標，做得很好。在其中兩個市場，我們聘請了更多本地人才來支持我們的客戶。我們正在轉向傳統的實體 BBSI 分公司。我們繼續看到新市場投資的正面成果，並正在積極招募更多新的市場開發經理。

Regarding product updates, we continue to execute on the sales and service of BBSI Benefits, our new health insurance offering. Last quarter, we announced that we entered into a strategic multiyear partnership with Kaiser Permanente for programs effective 07/01/24 and onward. Kaiser is renowned for its excellence in healthcare services and offers one of the most complete and competitive HMO products in the marketplace.

關於產品更新，我們繼續執行新健康保險產品 BBSI Benefits 的銷售和服務。上季度，我們宣布與 Kaiser Permanente 建立戰略性多年合作夥伴關係，計劃於 2024 年 7 月 1 日起生效。Kaiser 以其卓越的醫療保健服務而聞名，並提供市場上最完整和最具競爭力的 HMO 產品之一。

And just like our workers' compensation and existing health insurance offerings, we take no underwriting risk. We are now offering a national PPO side by side with the Kaiser HMO and our results are positive thus far. In July and August, we sold Kaiser to 20 new clients with wins in Southern California, Northern California and Oregon. Our new business resulted in more new subscribers in July and August than over the same prior-year period. I am pleased to report that today we have approximately 380 clients on our various medical plans, servicing more than 8,500 total participants.

就像我們的工人賠償和現有的健康保險產品一樣，我們不承擔承保風險。我們現在與 Kaiser HMO 一起提供全國性 PPO，迄今為止我們的成果是積極的。7 月和 8 月，我們將 Kaiser 出售給了 20 個新客戶，並在南加州、北加州和俄勒岡州贏得了勝利。我們的新業務在 7 月和 8 月帶來了比去年同期更多的新訂戶。我很高興地報告，今天我們的各種醫療計劃約有 380 名客戶，為超過 8,500 名參與者提供服務。

We are pleased with the results of BBSI Benefits, and this product will be accretive to earnings in 2024. We are bullish on this product and will now reap the benefit of leverage through scale. As we look forward to 2025, our focus is on the 1/1 selling season. We have the people, the product, the technology, and the experience to be confident in our various offerings.

我們對 BBSI Benefits 的結果感到滿意，該產品將在 2024 年增加收益。我們看好該產品，現在將透過規模獲得槓桿效益。展望2025年，我們的重點是1/1銷售季。我們擁有對我們的各種產品充滿信心的人員、產品、技術和經驗。

Next, I'd like to shift to our view of the remainder of the year. We've had consecutive quarters of great momentum. We are consistently growing our WSE stack. We ended Q2 with a record number of WSEs, and we continue to be optimistic about the road ahead. We have consistently achieved strong controllable growth by focusing on the needs of our clients and by adding new clients. We have more products to sell, more folks selling it and more referral partners recommending BBSI.

接下來，我想談談我們對今年剩餘時間的看法。我們已經連續幾季保持強勁勢頭。我們正在不斷發展我們的 WSE 堆疊。第二季結束時，WSE 數量創歷史新高，我們繼續對未來的道路感到樂觀。透過專注於客戶的需求和增加新客戶，我們始終如一地實現了強勁的可控成長。我們有更多的產品可供銷售，有更多的人在銷售，還有更多的推薦合作夥伴推薦 BBSI。

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

現在，我將把電話轉給安東尼，讓他準備好講話。

Thanks, Gary, and hello, everyone.

謝謝加里，大家好。

I'm pleased to report we finished Q2 with strong results, consistent with our plan and with continued positive momentum in our sales pipeline. Gross billings increased 6% to $2 billion in Q2 2024 versus $1.9 billion in the prior-year quarter. PEO gross billings increased 6% in the quarter to $2.01 billion, while staffing revenues declined 3% to $20 million in the quarter. Our PEO worksite employees grew by 4% versus the year ago quarter, which was the result of strong controllable growth from net new PEO clients as well as hiring within our customer base.

我很高興地向大家報告，我們在第二季度取得了強勁的業績，與我們的計劃一致，並且我們的銷售管道持續保持積極勢頭。2024 年第二季的總營收成長 6%，達到 20 億美元，而去年同期為 19 億美元。PEO 本季總營收成長 6%，達到 20.1 億美元，而員工營收本季下降 3%，達到 2,000 萬美元。我們的 PEO 工作場所員工較去年同期成長了 4%，這是 PEO 淨新客戶強勁可控成長以及我們客戶群內部招募的結果。

Looking at client hiring more closely, we continued to see improved hiring rates in Q2. We are now seeing positive hiring across almost all industries, including construction. The rate of client hiring remains lower than the long-term average, but the pace of hiring is improving and slightly exceeding our expectations. Looking at wage rates and hours worked, total hours and overtime hours have continued to remain stable, while wage rates continued to increase and average billing per WSE increased 3% in the quarter.

更仔細地觀察客戶招募情況，我們繼續看到第二季的招募率有所提高。我們現在看到幾乎所有行業都在積極招聘，包括建築業。客戶招募率仍然低於長期平均水平，但招募速度正在改善，略超出我們的預期。從工資率和工作時間來看，總工時和加班時間持續保持穩定，而工資率持續上升，本季每份 WSE 的平均帳單增加了 3%。

Looking at year-over-year PEO gross billings growth by region, East Coast grew by 19%, Mountain States grew by 7%, Southern California grew by 6%, Northern California grew by 4%, and the Pacific Northwest declined by 3%. The Pacific Northwest region continues to be the most impacted by slower client growth, including being the only region with net negative client hiring and sustained lower average hours worked. The East Coast growth is driven by a combination of strong controllable growth and above average client hiring.

從按地區劃分的 PEO 總帳單年增來看，東海岸成長 19%，山區各州成長 7%，南加州成長 6%，北加州成長 4%，太平洋西北地區下降 3% 。太平洋西北地區仍然是受客戶成長放緩影響最大的地區，包括成為唯一一個客戶淨招聘為負且平均工作時間持續較低的地區。東海岸的成長是由強勁的可控成長和高於平均的客戶招募共同推動的。

Turning to margin and profitability, 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 Q2, we recognized favorable prior year liability and premium adjustments of $8.9 million. As a reminder, our client workers' compensation exposure is now primarily covered by our fully insured program with no retained liability by BBSI.

談到利潤率和盈利能力，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。在第二季度，我們確認有利的上一年負債和保費調整為 890 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劃承保，BBSI 不保留任何責任。

We renewed our fully insured workers' compensation policies effective July 1, 2024. The program continues to perform well, and we once again renewed with favorable terms including cost savings, a multi-year commitment, no downside risk to BBSI for any adverse claim development and the continued ability for BBSI to participate in any favorable claim development via a return premium.

我們更新了全額投保的工人賠償政策，自 2024 年 7 月 1 日起生效。該計劃繼續表現良好，我們再次續簽了有利的條款，包括節省成本、多年承諾、任何不利索賠開發對 BBSI 沒有下行風險以及 BBSI 能夠透過返還保費。

Last year, we introduced more favorable payment terms for the premium for the fully insured program, and we were able to renew with similarly favorable terms that allow us to hold these premium dollars for longer. As a result of these terms, there's a balloon premium payment in June of each year, which we just paid in Q2 for the prior policy period, and which in turn, reduced our restricted investment balance and a corresponding premium payable balance. These investment balances will continue to build again over the policy year until next June payment and investment income will continue to correlate with the investment balance.

去年，我們為完全保險計劃的保費引入了更優惠的支付條款，並且我們能夠以類似優惠的條款續約，使我們能夠更長時間地持有這些保費。由於這些條款，每年 6 月都會有大量保費支付，我們剛剛在上一個保單期間的第二季度支付了保費，這反過來又減少了我們的限制投資餘額和相應的應付保費餘額。這些投資餘額將在整個保單年度繼續增加，直至明年 6 月，付款和投資收入將繼續與投資餘額相關。

Payroll taxes remained higher than the prior year as we discussed last quarter. These higher rates are being contemplated in our pricing, which will contribute to higher gross margin rates in the latter half of the year. Overall, our gross margin rate remains in line with expectations. Our overall profitability has continued to benefit from operating cost management. For Q2, SG&A expense increased by approximately 4%, growing slower than our billings growth that's providing ongoing operating leverage.

正如我們上季度討論的那樣，工資稅仍高於去年同期。我們的定價中正在考慮這些較高的利率，這將有助於提高下半年的毛利率。整體而言，我們的毛利率仍然符合預期。我們的整體獲利能力持續受益於營運成本管理。第二季度，SG&A 費用增加了約 4%，成長速度低於我們提供持續營運槓桿的帳單成長。

Moving to investment income. Our investment portfolios earned $3 million in the second quarter, up $0.9 million from the prior year. Our investment portfolio continues to be managed conservatively with an average quality of investment at AA, an average book yield of 2.9%. The combined results of these activities was net income per diluted share of $0.62 compared to $0.62 per diluted share in the year-ago quarter.

轉向投資收益。我們的投資組合第二季獲利 300 萬美元，比去年同期增加 90 萬美元。我們的投資組合持續採取保守管理，平均投資品質為 AA，平均帳面收益率為 2.9%。這些活動的綜合結果是稀釋後​​每股淨利潤為 0.62 美元，而去年同期稀釋後每股淨利潤為 0.62 美元。

Our balance sheet remained strong with $110 million of unrestricted cash investments at June 30 and no debt. We continue our approach to capital allocation, making investments back into the company through product enhancement and geographic expansion, and distributing excess capital to our shareholders through our dividend and stock buyback plan. Continuing under our $75 million July 2023 repurchase program, BBSI repurchased $7 million of shares in the second quarter at an average price of $31.63 per share, with $45 million remaining available under the program at quarter end. As announced today, our Board of Directors also approved an increase in the quarterly dividend rate from a split-adjusted $0.075 per share to $0.08 per share. This equates to a 7% increase in our dividend pay rate and reflects our ongoing optimism about our strong recurring cash flows and growth plans.

截至 6 月 30 日，我們的資產負債表依然強勁，擁有 1.1 億美元的不受限制的現金投資，且沒有債務。我們繼續採用資本配置方法，透過產品增強和地理擴張對公司進行投資，並透過股利和股票回購計畫將多餘資本分配給股東。繼續根據 2023 年 7 月 7500 萬美元的回購計劃，BBSI 在第二季度以每股 31.63 美元的平均價格回購了 700 萬美元的股票，截至季度末該計劃剩餘 4500 萬美元。正如今天宣布的，我們的董事會還批准將季度股息率從分割調整後的每股 0.075 美元提高到每股 0.08 美元。這相當於我們的股息支付率增加了 7%，反映了我們對強勁的經常性現金流和成長計畫的持續樂觀態度。

Looking to our outlook for the full year, our results for Q2 are in line with our plan and our expectations for 2024 remain generally consistent with prior outlook. We continue to expect gross billings to increase between 6% and 8% for the year. We continue to expect average WSEs to increase between 4% and 5%, and we are tightening our range of expected gross margin as a percent of gross billings to be between 3.0% and 3.1%. And we continue to expect our effective annual tax rate to remain between 26% and 27%.

展望全年，我們第二季的業績符合我們的計劃，我們對 2024 年的預期與先前的展望基本一致。我們繼續預計今年的總帳單將成長 6% 至 8%。我們繼續預期 WSE 平均成長率將在 4% 至 5% 之間，我們正在將預期毛利率範圍（佔總營業額的百分比）收緊至 3.0% 至 3.1% 之間。我們繼續預期有效年稅率將維持在 26% 至 27% 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。

Chris Moore, CJS Securities.

克里斯摩爾，CJS 證券。

Hey, good afternoon, guys. Congrats on another good quarter and congrats on the share split. I think that was a great idea. Maybe we can start on the workers comp adjustments, one of my favorite topics, $8.9 million favorable adjustment. That's the biggest adjustment I can remember, at least over the last six or seven years. Just trying to understand kind of expectation first, how much visibility do you have, say, over the next 6 to 12 months on adjustments? And then just any additional thoughts in terms of, was there something significantly unusual in this quarter? Or any other thoughts you might have there?

嘿，下午好，夥計們。祝賀又一個良好的季度，並祝賀股票分割。我認為這是個好主意。也許我們可以從工人薪酬調整開始，這是我最喜歡的話題之一，890 萬美元的有利調整。這是我記憶中最大的調整，至少是過去六、七年以來的最大調整。首先想了解預期，例如，您對未來 6 到 12 個月的調整有多少了解？然後還有任何其他想法，本季是否有什麼明顯不尋常的事情？或者您可能還有其他想法嗎？

Hey Chris, we entered that one similarly, I want to say, last quarter or the quarter before. Just the way that we design our programs, we're conservative by nature. We've got a lot of focus and attention on workers comp, right? We've got best-in-class structural partners. We've got a team of risk managers. We've got a full underwriting shop. We've got our own claims folks. We've got operations that are tied to where we have our own actuaries. I say that because it's a very mature organization, we're tech adopters. We make sure that wherever we partner with has great tech, we use AI. And we've got a couple of hundred -- 200-plus folks directly or indirectly that their focus and attention is on workers comp, right?

嘿克里斯，我想說的是，我們在上個季度或前一個季度進入了類似的情況。正如我們設計程式的方式一樣，我們本質上是保守的。我們非常關注工人的薪酬，對吧？我們擁有一流的結構合作夥伴。我們有一個風險經理團隊。我們有一個完整的承保店。我們有自己的索賠人員。我們的業務與我們擁有自己的精算師相關。我這麼說是因為這是一個非常成熟的組織，我們是技術採用者。我們確保只要我們的合作夥伴擁有先進的技術，我們就會使用人工智慧。我們有數百 - 200 多人直接或間接地關注工人薪酬，對嗎？

So, we've got a lot of focus and attention on it. We've got good tack on it. We're conservative by nature. We set these programs up so that they're designed to have returns that come back to us. If we stay true to who we are and stay true to our discipline, then we're going to set ourselves up for this in the future, right? So, if you look at trend, I want to say that this is 22 quarters in a year of favorability -- 22 quarters in a row of favorability. And then honestly, trend is your friend, right? It doesn't turn quickly. We anticipate that this trend will continue.

因此，我們對此給予了許多關注和關注。我們對此有很好的策略。我們本質上是保守的。我們制定這些計劃的目的是為了讓我們獲得回報。如果我們忠於自己，忠於我們的紀律，那麼我們將來就會為此做好準備，對嗎？所以，如果你看一下趨勢，我想說，這是一年中 22 個季度的好感度——連續 22 個季度的好感度。老實說，趨勢是你的朋友，對吧？它轉得併不快。我們預計這種趨勢將持續下去。

Got it, it's helpful. In terms of the Kaiser relationship, it sounds like it's off to a good start. Just trying to get a sense as to how long from a revenue standpoint, would the Kaiser be incrementally noticeable? Are we talking 12 months, 24 months? Just trying to get a sense as to kind of the trajectory.

明白了，很有幫助。就凱撒關係而言，聽起來似乎有了一個好的開始。只是想知道從收入的角度來看，凱撒會在多長時間內逐漸引人注目？我們說的是 12 個月還是 24 個月？只是想了解一下軌跡的類型。

Yes, it's a good question. I want to say that I've been here about eight years, and this is the first quarter that I can recall that our gross billings growth is the same as our GAAP revenue growth, right? You're kind of seeing that inversion, I'll say. And part of that is because of the medical benefits that's flowing through the GAAP revenue line, right? So, we're starting to get measurable health insurance premium and then commissions on this premium. Kaiser for 7/1, 7/1 is not a huge selling season. We moved business. We had a good 7/1, but 7/1 and 8/1 are nowhere near the volume of business that we expect on 1/1. We launched on 7/1 because we wanted to learn how to dance better before we got to 1/1.

是的，這是一個好問題。我想說，我在這裡工作了大約八年，這是我記得的第一個季度，我們的總帳單成長與我們的公認會計原則收入成長相同，對嗎？我會說，你有點看到這種顛倒。部分原因是透過 GAAP 收入線流動的醫療福利，對嗎？因此，我們開始獲得可衡量的健康保險費，然後根據該保險費收取佣金。Kaiser為7月1日，7月1日並不是一個巨大的銷售季節。我們搬家了。我們的 7 月 1 日表現不錯，但 7 月 1 日和 8 月 1 日的業務量遠低於我們預期的 1 月 1 日的業務量。我們在 7 月 1 日推出，因為我們想在 1 月 1 日之前學習如何跳得更好。

And I'll say we were successful in the operations. We have a good, what I'll say, plan for our branches for 1/1 and more importantly, we have the confidence, right? And it's the confidence that we went through it for 7/1, we know that 1/1 is the big selling season. We kind of got some experience getting through it this quarter, but really, that gives us the optimism for 1/1 of the optimism in the product, the optimism in the process, the optimism in the underwriting. So, as we think of this -- as these relationships right, in 2025 is where -- it's all going to come down to how we do 1/1, but in 2025 is where we start to expect that we'll have better meaningful contribution to gross margin from these products.

我想說我們的行動是成功的。我們對 1 月 1 日的分支機構有一個很好的計劃，更重要的是，我們有信心，對吧？而且是我們經歷了7月1日的信心，我們知道1月1日是銷售旺季。我們在這個季度獲得了一些經歷，但實際上，這讓我們對產品、流程和承保中的樂觀情緒有 1/1 的樂觀情緒。因此，當我們想到這一點時 - 由於這些關係是正確的，到 2025 年 - 一切都將取決於我們如何做 1/1，但在 2025 年，我們開始期望我們將擁有更有意義的這些產品對毛利率的貢獻。

Jeff Martin, Roth Capital Partners.

傑夫馬丁，羅斯資本合夥人。

Thanks. Good afternoon, guys. Gary, I wanted to start with how you're feeling about the referral partner network, has been any noticeable improvements within that, particularly with some of your newer referral partners that may relate to BBSI Benefits?

謝謝。下午好，夥計們。蓋瑞，我想先談談您對推薦合作夥伴網路的感受，其中是否有任何明顯的改進，特別是與您的一些可能與 BBSI 福利相關的新推薦合作夥伴？

Yes. I mean just in general, right? So, we have folks whose responsibility it is to just manage the referral partners and go get new referral partners, and they're doing a fabulous job in the markets we're in and then in the new markets, right? So, as we think of our market development managers, half of their time is spent really recruiting new referral partners. The fun part there is when they -- when we go to a market, they make new relationships, number one. And then number two, we're able to take the brand in our national relationships and help them out, right? So, we can introduce them to national referral partners that have a local presence in those areas.

是的。我的意思是一般情況下，對吧？因此，我們有人的責任只是管理推薦合作夥伴並尋找新的推薦合作夥伴，他們在我們所在的市場以及新市場中都做得非常出色，對嗎？因此，當我們想到我們的市場開發經理時，他們一半的時間都花在招募新的推薦合作夥伴。有趣的是，當我們去市場時，他們建立了新的關係，這是第一名。第二，我們能夠將品牌納入我們的國家關係中並幫助他們，對嗎？因此，我們可以將他們介紹給在這些地區擁有當地業務的國家推薦合作夥伴。

So, our referral partner channels are growing, and this has been a strategy for ours for the last three or four years is just to grow our referral partner bench, and we're doing a really good job at that. We've got more active referral partners now than we've ever had. And part of this is when they're making new referral partners, now we have it into our discipline to go talk to the benefits brokers because of our Benefits product. We're seeing some traction there, not as much as I would like. That's a little slower than I was hoping for. But we are seeing programs come in from benefits brokers that we honestly never would have solved if we didn't have this product. So, I would say we're out of the gate there, but we have not hit our stride on the benefits brokers side.

因此，我們的推薦合作夥伴管道正在成長，這一直是我們過去三、四年的一項策略，只是為了擴大我們的推薦合作夥伴隊伍，我們在這方面做得非常好。我們現在擁有比以往任何時候都更多的活躍推薦合作夥伴。其中一部分是當他們建立新的推薦合作夥伴時，現在由於我們的福利產品，我們已經將與福利經紀人交談納入我們的紀律。我們在那裡看到了一些吸引力，但沒有我想要的那麼多。這比我希望的要慢一點。但我們看到福利經紀人提出了一些計劃，老實說，如果我們沒有這個產品，我們永遠無法解決這些問題。所以，我想說我們已經走出了大門，但我們在福利經紀人方面還沒有取得進展。

And then I wanted to drill down on California, since it's your largest market. Any detail you can provide on the Northern California and Southern California regions? I think Northern California, going back 12 months ago, it was largely hit by construction and that seems to have turned the corner. Just curious if you have any visibility there as to whether that may accelerate from what we've seen in the last quarter or two?

然後我想深入研究加州，因為它是你們最大的市場。您能提供有關北加州和南加州地區的任何詳細資訊嗎？我認為，追溯到 12 個月前，北加州在很大程度上受到了建築工程的打擊，但現在情況似乎已經好轉了。只是好奇您是否了解這是否會比我們在過去一兩個季度所看到的情況加速？

Yes. If you look at the monthly trends -- Jeff, this is Anthony -- we continue to see steady growth in Northern California, an improving growth, and we are seeing [really] nationally, really everywhere else except for the Pacific Northwest. We are seeing positive client hiring across industries, including construction in Northern California. So, we saw some early signs of growth, but that trend is continuing and honestly, it looks like it can continue to build.

是的。如果你看看每月的趨勢——傑夫，這是安東尼——我們繼續看到北加州的穩定增長，不斷改善的增長，而且我們在全國範圍內看到，除了太平洋西北地區以外的其他地方。我們看到各行各業都在積極招募客戶，包括北加州的建築業。因此，我們看到了一些早期的成長跡象，但這種趨勢正在持續，老實說，它看起來可以繼續發展。

And then are you still seeing much customer migration out of the state? I mean I know that's been a headwind for you, maybe not so much going back more than a couple of years, but it has to have been the trend in the last three, four years.

那麼您是否仍然看到大量客戶遷出該州？我的意思是，我知道這對你來說是一種逆風，也許幾年前並沒有那麼嚴重，但它一定是過去三、四年的趨勢。

No. We haven't seen that really affect us. I mean just to kind of piggyback on what Anthony said, like Northern Cal last year was our worst as far as clients reducing for us. This year, it's been our strongest region as far as our clients hiring. So, we've seen the rebound in Northern Cal, specifically in the construction industry. So, we feel better than we did a year ago when we're talking about Northern Cal. Southern Cal continues to grow, too. California in general, it's still competitive, especially on workers' comp. We hit workers' comp pressure, but we've got good products, we've got good people, we've got good process that we can pick our spots for what we want to do. But as far as clients leaving to go to other states, we haven't really experienced that. Part of our market development managers is if they do leave and go to Texas per se, where most are going, we've got a flag in every large metropolis in Texas now. So we're getting to that point on a national scale that if they're going to leave somewhere, we've got a place for them to go.

不。我們還沒有看到這真正影響我們。我的意思只是藉用安東尼所說的話，就像去年北加州是我們客戶減少的最糟糕的一年一樣。今年，就我們的客戶招募而言，這是我們最強勁的地區。因此，我們看到了北加州的反彈，特別是在建築業。因此，當我們談論北加州時，我們的感覺比一年前要好。南加州也在持續成長。總的來說，加州仍然具有競爭力，尤其是在工人補償方面。我們減輕了工人的薪資壓力，但我們有好的產品，有好的人才，有好的流程，我們可以選擇自己想做的事。但就客戶離開去其他州而言，我們還沒有真正經歷過這種情況。我們的部分市場開發經理表示，如果他們確實離開並前往德克薩斯州本身（大多數人都去那裡），我們現在在德克薩斯州的每個大都市都有一面旗幟。因此，我們正在全國範圍內達到這樣的目標：如果他們要離開某個地方，我們會為他們提供一個地方。

Makes sense, okay. And then last one for me on the benefits side, are you primarily signing existing clients up on plans? Or are you seeing this and maybe too early for this but are you seeing new clients come in the door because you've got the nationwide footprint now and you've got the healthcare offering now.

有道理，好吧。最後一個關於福利方面的問題是，您主要是為現有客戶簽訂計畫嗎？或者你是否看到了這一點，也許還為時過早，但你是否看到新客戶進來，因為你現在已經在全國範圍內覆蓋，並且現在已經提供了醫療保健服務。

It's still heavy selling into our existing base for the 7/1, 8/1 season, it was about 20% new business and then the rest was selling into our installed base.

7/1、8/1 季節，我們的現有基地仍然大量銷售，大約 20% 是新業務，然後其餘的銷售到我們的已安裝基地。

And how do you envision that over the intermediate to longer term?

您如何看待中長期的狀況？

If I could wave my magic wand, we would sell to all of our clients, right? And then after we get that, we could get new clients. But we're now at the balance of -- it's interesting because we never had this term, and we now have coined the phrase of a PEO takeaway. Typically, when we brought on new business, that business was adopting the outsourced model for the first time. What we're seeing now is because of our health offering where we can be competitive with a lot of the other PEOs in the marketplace. So, we've coined the PEO takeaway, and that's where we're seeing most of our new business come from. It's coming from the, I'll say new-new, that's coming from PEO takeaways because they want the local product. They want the local service. And now that we have the benefit, it's a compelling value prop.

如果我能揮舞魔杖，我們就會把產品賣給所有客戶，對嗎？然後在我們得到這個之後，我們就可以得到新客戶。但我們現在正處於平衡狀態——這很有趣，因為我們從來沒有這個術語，而我們現在創造了「PEO 外賣」這個短語。通常，當我們開展新業務時，該業務首次採用外包模式。我們現在看到的是因為我們的健康產品，我們可以與市場上許多其他 PEO 競爭。因此，我們創造了 PEO 外賣，這就是我們大部分新業務的來源。它來自，我會說新的，新的，來自 PEO 外賣，因為他們想要本地產品。他們想要本地服務。現在我們已經獲得了好處，這是一個令人信服的價值支柱。

Vincent Colicchio, Barrington Research.

文森特·科利奇奧，巴靈頓研究中心。

Yes, Gary, could you provide some more color on the Pacific Northwest? Construction was an issue there. It seemed to be improving. It's improving nationwide. And now it's, I guess, taking a step back there. Do you think this is temporary? What are your thoughts?

是的，加里，你能提供更多關於太平洋西北地區的資訊嗎？那裡的建設是一個問題。情況似乎正在好轉。全國範圍內的情況正在改善。現在，我想，它又退了一步。你認為這是暫時的嗎？你有什麼想法？

Yes. Hey Vince, this is Anthony. Yes, really, we saw this last quarter as well in the Pacific Northwest. It had -- the construction industry has been slower to rebound and honestly had some deterioration that we saw last quarter as well. So, it's really a continuation of a trend there. And it's a smaller region by volume. And so, there's a few larger clients that can sometimes have an effect on that, and that's really what we're seeing. So, it is -- represents Oregon and Washington is with that region. So, there is some economic factors that play for sure in that region. But in terms of intra-quarter, there's some stability there. So, we're not seeing deterioration sequentially, but we'll keep watching that for sure.

是的。嘿文斯，這是安東尼。是的，確實，我們在上個季度在太平洋西北地區也看到了這一點。建築業的反彈速度較慢，而且老實說，我們上個季度也看到了一些惡化。所以，這確實是那裡趨勢的延續。而且它的體積較小。因此，一些較大的客戶有時會對此產生影響，而這正是我們所看到的。所以，它代表俄勒岡州，華盛頓州則屬於該地區。因此，一些經濟因素在該地區確實發揮作用。但就季度內而言，存在一定的穩定性。因此，我們不會看到情況連續惡化，但我們肯定會繼續關注。

I would just add on that. If you think of the Northwest, our largest operation is in Portland. And Portland right now is, I'll say, from a business perspective, it's a challenge to make investments. It's a challenge to invest more capital in Portland right now with the way it's being run.

我想補充一下。如果您想到西北地區，我們最大的業務就在波特蘭。我想說，從商業角度來看，波特蘭現在的投資是一個挑戰。從目前波特蘭的營運方式來看，投入更多資金是一項挑戰。

And Gary, sometimes in the past, you've compared your new client pipeline of qualified leads to historical levels. Could you do that for us versus the year ago level?

加里，過去有時您會將合格潛在客戶的新客戶管道與歷史水平進行比較。與去年同期相比，您能為我們做到這一點嗎？

Yes. I mean our pipeline continues to grow. From the top of the funnel to the lead until we get to the prospects, which is when we meet with clients, our volume continues to outpace the prior year volume. And that's got a lot to do with our multiple strategies that we are executing on to make sure that the more chances you have, the more clients you're going to add, and we've got a ton of focus and attention on it's really like four or five different channels that we work to make sure that, that top of the funnel stays at a real high acceptable place.

是的。我的意思是我們的管道繼續增長。從漏斗頂部到領先，直到我們到達潛在客戶，也就是我們與客戶會面時，我們的銷售量繼續超過前一年的銷售量。這與我們正在執行的多種策略有很大關係，以確保您擁有的機會越多，您要添加的客戶就越多，我們對此給予了大量的關注和關注就像我們努力確保漏斗頂部保持在真正高可接受的位置的四到五個不同管道一樣。

And last one for me, are you seeing some progress in terms of adding larger clients to your pipeline?

最後一個問題是，您在向通路中添加更大的客戶方面是否看到了一些進展？

No. I mean we're never -- we know our space, and we're comfortable in our space, right? We know that we serve the small business community. We're never going to be the mid-market company. It's just not our value prop. So, we're comfortable with our sweet spot. We know our lane, we stay in our lane. We get large clients that join us as well because they like the value prop, they want the services. And now with the Benefits, it's a more compelling value prop as well. But just in general, in my prior life, I used to be a [whale owner], and it was Easter famine and we're not operating on that business model. We know who we are, what our value prop is, who our ideal client is, and we stay in that lane.

不。我的意思是我們從來不知道我們的空間，我們在我們的空間中感到舒適，對吧？我們知道我們為小型企業界服務。我們永遠不會成為中階市場公司。這不是我們的價值支柱。所以，我們對自己的最佳位置感到滿意。我們知道自己的車道，我們留在自己的車道上。我們也有大客戶加入我們，因為他們喜歡價值支撐，他們想要服務。現在，有了這些好處，它也成為了更具吸引力的價值支柱。但總的來說，在我的前世，我曾經是一名[鯨魚主人]，當時正值復活節飢荒，我們並沒有採用這種商業模式。我們知道我們是誰，我們的價值支柱是什麼，我們的理想客戶是誰，我們會留在這條路上。

At this time, this concludes our question-and-answer session.

至此，我們的問答環節就結束了。

I would now like to turn the call back over to Mr. Kramer for closing remarks.

現在我想將電話轉回給克萊默先生，讓其致閉幕詞。

Sure. Thank you. I just want to thank all the BBSI professionals for a great quarter and a great first half of the year. And thank you, everybody, for joining the call. I appreciate your time.

當然。謝謝。我只想感謝所有 BBSI 專業人士度過了一個美好的季度和上半年。感謝大家加入這次電話會議。我很感激你的時間。

Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.

謝謝您，先生。女士們、先生們，今天的會議到此結束。感謝您加入我們。現在您可以斷開線路。