Computer Task Group Inc (CTG) 2021 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the CTG first quarter 2021 investor conference call. (Operator Instructions) As a reminder, today's call is being recorded.

I'll turn the call now over to Mr. John Laubacker, Chief Financial Officer. Please go ahead, sir.

Thank you, John. Good morning, everyone, on the call today. Joining me on today's call is Filip Gyde, CTG's President and Chief Executive Officer.

Before we begin, I want to remind listeners that statements made during the course of this conference call state the company's or management's intentions, hopes, beliefs, expectations and predictions for the future are forward-looking statements. It is important to note that the company's actual results could differ materially from those projected.

These forward-looking statements are based upon information as of today, Thursday, April 29, 2021. The company assumes no obligation to update these statements based upon information from and after the date of today's conference call.

Additional information concerning factors that could cause actual results to differ from those made in these forward-looking statements is contained in today's earnings press release as well as the company's SEC filings.

In addition, the company's press release and management statements during the call include discussions of certain adjusted non-GAAP measures and financial information. These financial measures and reconciliations of GAAP to non-GAAP results are provided in both today's press release and the related Form 8-K.

With that, it is now my pleasure to turn the call over to Filip for his opening remarks.

Thank you, John. Good morning, and welcome to all of you joining us on this morning's conference call.

We had a very good first quarter, highlighted by the achievement of another period of significant year-over-year growth in revenue and earnings per share as we continued to build upon the strong financial performance we delivered in 2020.

Consolidated revenue increased 12% year-over-year, led by exceptional growth of our Solutions business and continued new business momentum in Europe. Revenue from Solutions grew 25% year-over-year and represented 44% of total revenue, which contributed to higher gross profit and margins in the quarter. Overall, non-GAAP earnings in the first quarter increased 30% year-over-year.

Although the business environment has remained somewhat mixed, with prospective clients taking longer to make contract-related decisions, our sales organization continued to drive a healthy pipeline of business development activity at new and existing clients. We continued to see and capitalize on increased demand for CTG's growing portfolio of digital solutions as companies maintained their previous shift toward more employees working remotely. Specifically, the current environment has accelerated clients' needs for new technology as well as the speed in which these solutions are implemented and delivered.

We had a number of notable wins in the quarter, including securing multimillion-dollar contracts over multiple years with 2 different health care clients in the U.S. to provide legacy application support and patient portal solutions.

Additionally, we experienced continued business momentum in Europe, which contributed to our strong consolidated revenue growth and profit margins in the first quarter. Europe revenue increased 30% year-over-year, driven in part by the team securing a double-digit number of new client wins. We also maintained strong utilization across our European operations, as client demand minimized unallocated bench resources and (inaudible) utilization remains high.

During the quarter, we unveiled and successfully launched a comprehensive corporate rebrand, including the introduction of a new CTG tagline, Transformation Accelerated. This company-wide effort was the result of numerous months of planning and very hard work, and I'm pleased to report that it has been extremely well received by both our clients and technology partners.

As part of this rebranding initiative, we also implemented a comprehensive marketing campaign that clearly communicates CTG's go-forward strategy and mission, which is, enabling clients to accelerate project momentum and achieve the desired outcomes and performance improvements from their digital transformation initiatives.

Importantly, this refined positioning reflects our increased emphasis on applying new digital technologies to help clients successfully transform their business models. Digital transformation initiatives are the top priority for nearly all businesses in effectively every industry vertical. And without question, both the pace and demand for delivering these solutions remotely is accelerating.

As I previewed on our last conference call, our go-forward digital Solutions and Service offering strategy is comprised of the following 6 key elements.

Industry-leading digital and technology talent. Regardless of the level of service being provided or how elegant an offered solution may be, success is dependent on having the right people. It's one thing to talk about a goal of recruiting top talent. However, in practice, it is far more difficult to attract and retain a diverse team of industry-leading talent. I am proud to say that CTG has accomplished this by consistently proving to be a great place to work. We have successfully assembled and continue to expand a true world-class global solutions organization. These multidisciplinary professionals bring together leading digital transformation expertise from strategy to design and implementation to delivery and outcome and performance [measurement].

Portfolio of breakthrough digital transformation solutions. We are continuously working to expand CTG's portfolio of digital transformation solutions, with a priority on offerings that enable accelerated achievement of business outcomes. This includes making ongoing investments in breakthrough technologies, such as cloud, IoT, AI, robotic process automation, intelligent analytics and automated testing.

Innovative tools and methodologies. As a complement to these breakthrough digital transformation solutions, we are committed to investing in the requisite tools, training programs and methodology to ensure consistent and reliable delivery. CTG's growing portfolio of solutions enables clients to accelerate time to market, maximize innovation and support high-performance results.

Global delivery network. Today, CTG has an active network of established delivery centers in North America, Western Europe, India and South America. In addition to initiatives aimed at further leveraging this existing network, we are focused on expanding our delivery center platform to provide a broader scope of scalable digital solutions, including process automation; application development and maintenance; testing; infrastructure and cloud solutions, management and maintenance; and services.

Industry expertise. Industry-specific knowledge is critical to both defining and delivering digital transformation solutions. Every industry has unique challenges, requirements and, often, regulations. In addition to leveraging CTG's long history and proven track record servicing clients in key industries, including health care, finance, government, manufacturing and energy, we are committed to continuously enhancing the collective knowledge base and expertise that supports CTG Solutions offerings.

Strategic acquisitions. The final element of our strategy is to selectively pursue acquisitions that serve as either seeds for future growth or accelerate the expansion of CTG's digital solutions capacities and offerings. We've established a successful track record, with 3 acquisitions over the past 3 years, and we'll continue to evaluate potential complementary transactions that meet our strict investment criteria.

Taken together, these 6 elements form a go-forward strategy that addresses a significant market opportunity and will serve as key drivers for future growth.

I also want to emphasize, reemphasize, that this strategy isn't new. CTG has been active in many of these areas for multiple years. These key elements reflect a narrowed focus on digital transformation as part of our larger and ongoing Solutions strategy.

In conjunction with the introduction of our refined strategic focus on advanced digital solutions, during the quarter we also published a vision for the company, for the company to achieve by the end of 2023. In addition to solidifying CTG's position as a leading provider and accelerator of digital transformation services, our 2023 vision includes growing Solutions business to more than 50% of total business, with annual Solutions revenue of $250 million.

We also aim to expand our existing global delivery network, enabling it to service the delivery of 20% of our Solutions business.

And lastly, we believe these 2 goals will result in significant operating leverage, enabling the achievement of $35 million in annual EBITDA.

In summary, our accomplishments and performance in first quarter represent another incremental step towards the achievement of our 2023 vision, while demonstrating that our larger Solutions strategy is producing consistent and tangible results. Together with continued disciplined execution, we strongly believe our ongoing investments in enhanced capabilities and solutions offerings will result in CTG continuing to capitalize on an opportunity to accelerate successful digital transformation for a growing client base.

I will now turn the call over to John for a detailed review of our first quarter results as well as commentary on our outlook for the coming quarters.

Thank you, Filip. And again, good morning, everyone. Thank you for joining us on today's call.

As reported in our press release earlier today, consolidated revenue in the first quarter was $97.1 million, compared with $101.3 million in the fourth quarter and $86.9 million in the first quarter of 2020. The sequential decrease in first quarter revenue primarily reflects 2 fewer billable days as well as the expected completion of a large multi-quarter contract with a Health Solutions client in the fourth quarter of 2020. The revenue increase of 11.7% year-over-year was driven by a combination of a larger mix of revenue from Solutions and continued business momentum in Europe.

Currency translation had a positive impact of $4 million on revenue in the first quarter of 2021, compared with a positive impact of $3.1 million in the fourth quarter and a negative impact of $1.1 million in the first quarter of 2020.

Total billable days in the first quarter were 65, compared with 67 days in the fourth quarter and 62 days in the year ago first quarter.

In conjunction with our focus on delivering digital IT solutions, during the first quarter the company made minor modifications to its definition of the Solutions business. All references made to Solutions revenue and Solutions gross profit on this conference call and in today's press release have been recast using the new definition for consistent comparison across all periods.

Solutions revenue in the first quarter was $43.1 million, or 44.3% of total revenue. This compared to $49 million, or 48.4% of total revenue, in the previous quarter. Year-over-year, Solutions revenue increased $8.7 million, or 25%, compared with $34.4 million, or 39.5% of total revenue, in the first quarter of 2020.

Revenue from IBM in the first quarter was $19.6 million, or 20.2% of total revenue, compared with $20.1 million, or 19.9% of total revenue, in the fourth quarter and $19.9 million, or 22.9% of total revenue, in last year's first quarter. No other client represented more than 10% of revenue during the first quarter of 2021 or in recent comparable periods.

Gross profit in the first quarter was $20.8 million, or 21.4% of revenue, compared with $21.6 million, or 21.3% of revenue, in the fourth quarter of 2020 and $17 million, or 19.6% of revenue, in the year ago first quarter.

SG&A expense in the first quarter of $18.7 million reflected our continued investment in Solutions and business development resources consistent with our digital solutions strategy. This compared with $18.3 million in the fourth quarter and $15 million in the first quarter of 2020.

GAAP operating margin in the first quarter was 2.2%, compared with 3.3% in the fourth quarter and 2.4% in the first quarter of 2020.

Non-GAAP operating margin in the first quarter, which excludes approximately $640,000 of acquisition-related and rebranding expenses, was 2.8%, compared with 3.5% in the fourth quarter and 2.9% in the year ago first quarter.

The effective income tax rate in the first quarter was 22.6%, compared with 45.6% in the fourth quarter and 39% in the first quarter of 2020. The lower-than-historical effective tax rate in the first quarter of 2021 reflects the deduction of expenses that were previously nondeductible for tax, and the higher tax rate in the fourth quarter was a result of certain expenses incurred during that period which were nondeductible for tax purposes.

GAAP net income in the first quarter was $1.5 million, or $0.10 per diluted share, and included approximately $500,000, or $0.03 per diluted share, of acquisition-related and rebranding expenses. Non-GAAP net income for the first quarter was $2 million, or $0.13 per diluted share.

For comparison, GAAP net income for the fourth quarter was $1.9 million, or $0.13 per diluted share, and included a net $140,000, or $0.01 per diluted share, of acquisition-related expenses. Non-GAAP net income for the fourth quarter was $2 million, or $0.14 per diluted share. GAAP net income in the first quarter of 2020 was $1.1 million, or $0.08 per diluted share, which included $300,000, or $0.02 per diluted share, of acquisition-related expenses. Non-GAAP net income was $1.4 million, or $0.10 per diluted share, in the year ago first quarter.

Adjusted EBITDA in the first quarter of 2021 was $3.7 million, compared with $4.9 million in the fourth quarter and $3.4 million in the first quarter of 2020. Adjusted EBITDA for the trailing 12 months as at the end of the first quarter of 2021 is $16 million.

CTG's total headcount at the end of the first quarter was approximately 3,700, compared with 3,900 at the end of the prior quarter and 4,000 at the end of the year ago first quarter. Approximately 90% of our first quarter 2021 headcount was billable.

Turning to our balance sheet. Cash and cash equivalents at the end of the first quarter were $33.5 million. At quarter end, the company had no outstanding balance on its revolving credit facility and no long-term debt.

Capital expenditures in the first quarter were $891,000, compared with $169,000 in the fourth quarter and $683,000 in the first quarter of 2020.

Looking forward, visibility into future activity across our end markets and clients continues to be limited compared with historical periods prior to the COVID-19 pandemic. As such, we are not providing quantitative guidance for the second quarter and full year 2021.

That said, we remain very pleased with our strong performance and the team's continued focus and execution in the first quarter. As highlighted in our prepared remarks, we continue to realize tangible benefits from our strategic focus on digital solutions and the increased contribution from higher-margin Solutions revenue, which continues to drive improvement in the company's operating performance.

As we continue to invest in resources, new digital transformation solutions and the expansion of our delivery center platform, we expect to drive future growth and profitability during the remainder of 2021. Specific to the second quarter, we currently anticipate revenue that is comparable to the first quarter on a per billable day constant run rate basis.

John, could you please initiate and manage our question-and-answer session, please?

(Operator Instructions) And we'll go to the line of Josh Vogel with Sidoti.

I have a couple of questions for you here. Going back a little bit to earlier in the year, you talked about winning some COVID-related help desk and vaccine support projects. And I was wondering as COVID lingers and new variants pop up, is there a potential for those to become long-term engagements? And secondly, are there any other COVID-related opportunities that you're seeing in the marketplace, whether from health care providers or government agencies?

Sure, Josh. Now looking at those projects, basically, our aim whenever we win a new client and a new project is that this is the first project of a long series of projects. So any help desk or, for that matter, any other development or integration project for us is the beginning of very strong and focused account management to find other areas within that client where we can help them. That's just the way we operate, and that's also how we grow.

Now specifically on these help desks, well, that's part of the fact that though with vaccination, definitely in the states we see things picking up again and COVID getting under control, there is no saying what else is still going to happen with those new variants. At this moment, it's more Europe that gets the negative influence of those new variants. But obviously, where there's new evolutions, new elements, there is additional questions from patients, from public, which increases the workloads on those service desks.

And so that is -- that was the first part of your question. Could you repeat the second?

Yes. Basically, you pretty much answered it. I was just curious, are there other COVID-related opportunities that you're seeing in the marketplace?

Well, we're still seeing a lot of the evolution from everybody moving to work from home because of COVID. That's indirectly. And we're seeing now that companies are trying to determine what they are going to do after COVID. And that's a new thing. So let's say, 3, 4 months ago, our clients were are not thinking about that yet. Now you see them determining are they going to come back fully to the office, part time, or some already have decided that they stay work from home for a long period. So that's an indirect consequence of COVID.

Yes, understood. Shifting gears a little bit. Obviously, really encouraging news about the new health care contracts. And I was just thinking about when you're selling breakthrough tech services, like cloud, AI, or [BA], versus legacy application support, are the sales cycles any different? Can you just give some commentary around that?

The sales cycles are not necessarily different from classic IT efforts. At least, we're not seeing that. But we're still seeing that there's a slowdown compared by pre-COVID sales cycles, where when clients come to the contract decision moment that there's still some hesitation because they also don't have enough visibility on the near-term future.

I got you. Okay. Obviously, very strong results. Nice to see the momentum in Europe. You highlighted utilization of the bench resources. I was just curious, how much additional capacity do you have overseas to handle new and expanded projects where you have to meaningfully add headcount?

Well, our European operations have the habit, no, they have the best practice, of recruiting ahead of time and to estimate the time necessary to recruit the notice periods that are following. So in any circumstance, they are keeping pipelines of candidates. They are hiring people for the projects that we expect to close within 3 to 6 months.

We obviously are prudent in hiring those people ahead of time, but the fact that we have a very limited bench really means that they're doing a fantastic job, and we are not having to postpone client engagements because we don't have enough people.

I think also if you look at our Great Place to Work certifications everywhere, we're kind of an organization that people are attracted to and are following to. So our inflow and our potential candidate pool in Europe is significant.

Great. And maybe this one is more for John. You mentioned, if I heard it right, headcount in Q1 was 3,700, down 200 sequentially. Is that just seasonality? Or was there anything else there?

John?

Yes, I'll take that one, Filip. It was mostly timing, if anything else. Really, as Filip has said, our utilization is high and robust, and the European teams have done a fantastic job with minimizing their bench resources. We were coming off of that very significant health care project that we had completed in the fourth quarter. And so we still had some of those resources onboard that bled very slightly into the new year. So once that project was fully ended, those people came off the headcount list, and that was really the big difference between year-end and end of the first quarter.

That makes sense. And you mentioned Q2 revenue to be comparable on a billing day basis. Do you have the billing day number for Q2? I just want to make sure I have the right one.

63 days in Q2.

Okay. And now just thinking about that, I understand you're not giving guidance, but with the ongoing investments towards the digital transformation, can you give any sort of directional commentary around how we should think about SG&A in Q2 and the balance of the year? And then is there also any other areas that you plan to invest in that aren't necessarily related to digital transformation?

John, do you care to continue?

Sure. No problem. I think our run rate on this, Josh, is we look at more of it as an investment opportunity for the SG&A, and that's really what we did in Q1. We took the opportunity because of really good sort of robust numbers. And again, for the reasons we've mentioned on this call as far as utilization and minimizing the bench rather. And you saw the gross profit margin, I'm sure, was up year-over-year as well, pretty robustly: 21.4%, from 19.6%. We took that opportunity to make investments back into the business to grow for later this year and next year and so on.

So I don't necessarily anticipate the run rate for SG&A to dramatically increase from here because I think we've made some of those investments here in Q1. What I do -- I don't expect it to necessarily go down either until revenue starts to grow a little bit from those investments that we've made and they start to produce new engagements.

So from that perspective, I think the run rate that we've established in Q1 will be pretty consistent throughout the year.

As far as making investments other than in Solutions, it's Solutions in sales. So it's business development. We've made investments. As we saw, we did add some of those back for the specific rebranding exercise. But in marketing, making sure that our recruiting teams have the right talent to recruit Solutions and Solutions-adjacent type skills, going forward.

So are we making significant investments outside of business development or Solutions or activities that drive our Solutions business or digital Solutions business? The answer is, no.

And we have a question from Kevin Liu with K. Liu & Company.

The recast of the revenues from Staffing to Solutions, can you just talk about the nature of what those services were? And it looks like it also kind of boosted the Solutions gross margin, at least on a historical perspective. So again, just kind of curious what those services were and perhaps how much of that may have contributed to Q1 Solutions, just for comparability purposes.

Kevin, I'll maybe start with the general picture and then pass it on to John for more color.

As we are expanding our portfolio of services into digital solutions, what we did is we reviewed all of our Solutions definition to ensure we have clear consistency going forward across the portfolio. We then evaluated what we provide to the clients against our business, technology, operation solutions to ensure everything is correctly identified and categorized. And we also looked at high-margin Staffing services we provide to determine if a portion of those were instead solutions rather than staffing, because primarily given the margin when you have staffing services at really high margin that's an indicator that it's more perceived and bought by the client as a solution than as a staffing.

So basically, that was the process that we went through to make sure we have strong rules and processes going forward with the digital solutions portfolio.

John, do you want to add some color?

Sure, Filip. So Kevin, the second part of your question was around maybe the change in numbers from one period to the next. As we indicated, we recast all numbers presented in the release and in today's call, so going back to Q1 of last year, under these refined definitions.

And so when you look at the year-over-year increase of nearly 25%, $8.7 million in Solutions revenue, those are using the same definitions both in Q1 of 2021 and again applying those same definitions back to Q1 of 2020.

So the change in definitions didn't really cause an increase in or a change in the numbers from one period to the next, because you're using consistent definitions. It really was just a fantastic job across the organization as far as selling Solutions business in Q1 of '21 at a higher pace than we did in Q1 of '20.

Understood. And then just in terms of the momentum in Europe that you're seeing, what services are driving that currently? And given that Europe seems to be a little bit slower than maybe the Americas in terms of vaccinations and lifting of restrictions and such, I'm curious that as things start to be eased over there, do you expect further acceleration in terms of sales cycles and the growth rate there?

Well, Kevin, I think if you look at our digital transformation portfolio, we see good traction and good pipeline in all of the 3 main areas. And if you look to the digital accelerators, the general areas we're looking at in digital transformation, we see a lot happening in agile, DevSecOps, intelligent automation, cloud, automated testing. It's not a surprise, because testing has been one of our flagship offerings in Europe and is starting to evolve like that in the States, too, automated testing is going forward in that direction.

So it's kind of well spread over the portfolio. I think that's a tribute to our global Solutions team that really have put that portfolio together very well. So selling something in one area triggers an opportunity in another area.

On your question of acceleration, yes, we see, finally, I might say, that vaccination is picking up a little bit of speed. But still, we're by no way in the area where already all the States is already in. I've kind of heard that almost anybody who wants a vaccine can get one and doesn't even have to make an appointment. Well, in Europe, we're not there yet. Just to say, Belgium, well, they're starting to vaccinate my age group, and I'm over 60. So we're really not there yet. And there's a concern about that new Indian variant that could come into our countries.

So I see the impact of that on the business is, yes, we see traction. Yes, we see a good pipeline. But for the moment, we don't see the sales cycles significantly accelerate. I think we need a little more confirmation about that.

And well, frankly, if you look at the countries, France is in lockdown, Germany is in lockdown, Belgium is now opening the outdoors of restaurants for the first time in, what, in 4, 5 months. So it's very, I would call it, fragile at this moment.

Got it. That's helpful context. And then just I know Staffing isn't a core focus for you guys anymore. But at the same time, it did return to growth this quarter. I was curious whether that's kind of a sign of things starting to reopen again, particularly in America. And then as you move into the next few quarters here, kind of what your outlook is for the Staffing business.

Well, for Staffing, our strategy is very clear. It's, on the one hand, looking at the lower-margin Staffing business and critically evaluate and continue to disengage those lower-margin Staffing agreements we still have.

But what's helping the growth and what's new in our Staffing effort is that we're aligning our new Staffing engagements with the skill sets that we need for our digital transformation solutions, which means that our recruiting engine is fully focused on those skill sets and we can use them to staff our own solutions and also staff client needs in those areas.

So it's the same digital transformation trends and momentum that is fueling our Solutions business and is also helping our Staffing business to grow in the areas where we want it to grow. But there's still a combined movement, areas that are growing in Staffing and areas that we're disengaging from.

Great. And then just a couple of quick ones on the 2023 vision here. I guess the first one is just, obviously, acquisitions are likely to play a role in that. If you aren't able to find something in that time frame, can you just talk a little bit about how confident you are you'd still achieving the goals that you've outlined there?

And then just separately, can you give us kind of a baseline for what percentage of your Solutions business is currently going through the delivery centers and any sort of numbers you can put around what it means in terms of margin improvement if 20% of that business is going through there?

Sure. Now I was -– hello?

I think you're good, Filip.

Hello?

Yes, you're back.

Okay. Sorry about that. Sorry, Kevin. At getting lost, I also lost your question. Could you briefly repeat?

Yes, no problem. Just 2 questions on the 2023 vision. First one is just if you aren't able to complete an acquisition kind of in the next couple of years here, how much does that impact your ability to reach your targets that you've talked about?

And then the second part is just asking for a baseline for how much of your current Solutions business is going through your delivery centers and what the uplift to 20% would mean from a gross margin perspective.

Okay. Well, the first part of your question, yes, when we look at our vision, our 2023 vision, we're looking at a combination of organic and acquisition growth. But if you look back to the acquisitions we have done so far, the 3 acquisitions, you definitely can see that we're not acquiring for adding a volume of revenue. We're adding capabilities in Solutions that we're not having yet or that we want to develop faster. We're looking at adding a client portfolio or a talent pool that we didn't have. So it's more like an accelerator than it is adding an amount of revenue.

So I think, though, we are looking and continuing to look at acquisitions, going forward. We're confident that we will get to the targets that we have put forward with a very reasonable look at acquisition potential.

I'm not sure, John, if you want to add something to that?

No. I thought that that was very good. It certainly, Kevin, is part of the plan and part of ultimately coming up with the numbers in the 2023 vision. But it's more of acquire solutions and something that's additive to the Solutions portfolio to drive revenue in that manner, going forward.

Great. And just on the gross margin aspect of that, I was curious what the delivery centers and shifting more business into there, what does that do from the margin perspective.

Well, if you look to, for instance, moving work offshore to India, that easily could lower the delivery costs with 2/3 or even more. Obviously, delivery is one part of the equation. If you move work offshore, you always have to be careful for what they call the double-edged sword, that clients who are sophisticated also know that the delivery costs are lower and you won't be able to shift work offshore unless you also have an incentive profit for the client. So revenue could also be affected.

But when you look at selling new business and having a better mix, like the end goal of 20% being from our global delivery network, then you can definitely lower delivery costs significantly, even though at some places you sometimes need to add resources because the communication and the interaction isn't always easy.

John, do you want to add color?

That was great. Kevin, I think part of your question, too, originally was talking about maybe the numbers or the headcount. That's not something we've released, as far as the headcount we currently have. But I can tell you that we have hundreds of people in the delivery center concept today, and our plan by the end of '23 would be to more than double that.

So it is a significant increase in the total people working out of delivery centers. And as Filip indicated, as you leverage those delivery centers, whether that be India, Bogota or other locations, you can then maximize the efficiency, the effectiveness, the price efficiency at which you deliver those services.

And with no further questions, I'll turn the call back to management for closing comments.

Thank you, John. In closing, our accomplishments and financial results in the first quarter represents a solid start to the year. Fundamental to our success is the team's ongoing execution of our strategic plan as we continue to drive the growth of CTG Solutions business. Looking forward, we will continue to expand our portfolio of digital solutions and enhance our global delivery capabilities while supporting these offerings with industry-leading talent.

Together with our recently launched rebranding, I believe we are poised to build on our recent momentum in the coming quarters and solidify CTG's new positioning as a catalyst for digital transformation. As we pursue and execute on our mission to help IT and business leaders accelerate their digital momentum and achieve their desired outcomes, CTG, in turn, will succeed in our strategic objectives of driving above-market growth, improving profitability and increased value for shareholders.

Thank you for participating on today's conference call and for your ongoing support of CPG. John, you may now disconnect the call.