Good morning and welcome to Kelly Services First Quarter Earnings Conference Call. All parties will be on listen-only until the question-and-answer portion of the presentation. Today's call is being recorded at the request of Kelly Services. If anyone has any objection you may disconnect at this time.

I would now like to turn the meeting over to your host Mr. Peter Quigley, President and CEO. Sir, you may begin. .

Thank you, John. Good morning everyone and I hope everyone is staying safe. Welcome to Kelly Services first quarter conference call. With me on the call is Olivier Thirot our CFO. We have a lot of ground to cover so let me give a quick outline of what to expect.

I am going to share some Q1 headlines and comment on Kelly's response to the COVID-19 pandemic. Then Olivier will walk us through highlights of our quarterly performance including the impact of COVID-19 and the goodwill impairment we announced in this morning's release which was triggered by the stock market's response to the crisis.

I will then share some trends we are seeing, the precautionary actions we have take to create some financial flexibility, and the proactive steps we are taking to prepare Kelly for growth on the other side of this crisis. Olivier will provide insight into our scenario planning and some perspectives for Q2.

And finally I will turn to what's next for Kelly including updates on our specialization strategy and new operating model which are designed to capture and accelerate growth. So let's jump in. We saw progress in the first part of the quarter and so we saw signs of stabilization in our U.S.

staffing business and continued growth in our outcome based and consulting businesses. We completed an acquisition in our education specialty. We continued the accelerated roll out of our new front office technology. We completed the sale and leaseback of our headquarters unlocking capital to invest in our specialty growth platforms.

We restructured parts of our operations as we continued to dedicate the company to effectively managing costs and aligning them with expected revenues. We made significant progress on our new operating model which we believe will yield improved revenue growth in our chosen specialties.

And we launched our fresh new Kelly logo to reflect the dynamic, forward-looking company we've become. We're encouraged by these foundational improvements in our business and the continuation of the growth oriented initiatives I discussed during last quarter's call, which will remain a key operational priority until we return to top line growth.

Of course, the COVID-19 pandemic turned the world upside down. During our nearly 75 year history we've never seen economic, stock market, and labor conditions all change as suddenly and dramatically as they did starting in mid-March, impacting every aspect of operations and triggering the non-cash goodwill impairment charge.

The charge does not change our views or confidence in our ability to navigate the COVID-19 crisis or to capitalize on opportunities when the crisis ends. Operationally, we responded quickly and decisively to the pandemic.

Our emergency management team was prepared for a possible pandemic and our team executed our plans as the crisis spread and led to global shutdowns. While we continue to closely manage the financial impact, as a talent company our first priority in this crisis has been and continues to be the health and safety of our people.

More than 90% of Kelly's full time staff are working from home. Our recent restructuring efforts are accelerating our transition to a more agile, tech enabled service delivery model.

And coupled with our recent IT infrastructure investments, this allowed us to transition quickly to remote work, connecting our teams to talent, clients and each other, enabling Kelly to respond to rapidly changing needs while supporting our people in accordance with national and local guidelines.

We've also taken steps to support the well-being of temporary employees and contractors who have been impacted by the economic shutdown. In addition to redeploying them whenever possible so they can keep working, we are offering free online training and certification courses. We're expanding access to licensed counselors in Kelly's wellness program.

We're partnering with online platforms to redeploy furloughed temporary workers. We are waiving registration fees for retraining programs and we're launching a trending jobs website to help talent connect with any and all employment opportunities, whether they're with Kelly or not. Our commitment to talent stands strong.

We have also been supporting our customers every step of the way, holding virtual roundtables with clients to identify their concerns, sharing best practices for remote work, answering questions about safety and well-being of workers, and delivering creative, flexible talent solutions to help them navigate through unprecedented circumstances.

Before Olivier looks at Q1 financial highlights, I want to emphasize how incredibly proud I am of Kelly's teams and how they've risen so admirably to this moment in history.

Their flexibility, creativity, and unwavering commitment to the talent and customers we serve is an inspiration to me professionally and personally and at buoys my enthusiasm about Kelly's transformation, even in the face of current challenges. .

I agree with you, Peter. Good morning, everyone. Before the Q1 highlights, let me remind you that any comments made during this call, including the Q&A, may include forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments.

We have no obligation to update the statements made on this call. Please refer to our SEC filings for a description of the risk factors that could influence the company's actual future performance. In addition, during the call certain data will be discussed on the reported and on an adjusted basis.

Discussion of items on an adjusted basis are non-GAAP financial measures designed to give insight into certain trends in our operations. We have also provided more information on our performance in the first quarter slide deck, which is available on our website.

As Peter just laid out we started the quarter with positive momentum and an economy that was continuing to grow [indiscernible] in a world that was much different. I will cover our quarterly results and provide some color on the impact of the COVID-19 crises on our first quarter results including a related goodwill impairment charge.

During the quarter, we also completed a previously announced restructuring plan, a real estate collection, as well as the acquisition of insight in K-12 education that are important to Kelly's strategy and impacted our financial results for the quarter. I will cover those in greater detail too.

Revenue for the quarter totaled 1.3 billion, down 8.8% from the first quarter of the prior year, including a 50 basis point unfavorable impact from foreign exchange. As announced, we acquired Insight on January the 14, 2020 and added 110 basis point to our reported revenue growth.

So on a constant currency and organic basis, our revenue for the first quarter was down 9.4%. We did begin to see the impact of the COVID-19 crisis in March. Demand declined as customers closed facilities to protect their workforces and in response to governmental directives. Our education business was particularly impacted as most U.S.

school districts had closed in response to the crisis by the end of March. And the overall impact of the COVID-19 related demand declines was approximately 270 basis points in the first quarter. Looking at each segment on a reported basis, the Americas staffing revenue trends pre-crisis were in line with Q4 trends.

But the rate of decline was higher in March as a result of the impacts from COVID-19. The international staffing revenue decline reflects a continuation of the challenging market conditions in Europe and the beginning of the COVID-19 impact in March. And finally, GTS continued positive revenue growth.

The GTS segment saw the smallest impact from COVID-19 as many of the segments customers are in essential ancestries [ph] were able to facilitate remote work or continue to maintain rather than lay off their talent, including talent provided by Kelly.

Permanent placement fees were down 23% year-over-year as fees declined in Americas staffing and international staffing. Overall, gross profit was down 11.3%. Our gross profit rate was 17.7%, down 50 basis points when compared to the first quarter of the prior year.

The rate decline was primarily driven by higher employee related costs, which offset the structural rate improvement in GTS from shifts in product mix. SG&A expenses were down 6.5% year-over-year, including the expense for the quarter is 8.7 million restructuring charge. Excluding for restructuring charge, expenses were down 7.7%.

The declining expense reflects our ongoing cost management efforts in response to our pre-crisis top line trends. In addition, incentive based compensation expense for the quarter is also lower, as we now expect full year results to be lower than the targeted threshold payment levels, which were set in early February.

As I mentioned, the first quarter results include 8.7 million of restructuring charge. In the quarter we took restructuring actions to align costs with expected pre-crisis revenues to position the organization to adopt our new operating model later in 2020 and finally to align the U.S.

branch network facilities footprint with a more technology enabled service delivery methodology. These actions will result in expense savings of approximately 20 million in 2020, and we believe that they position us well to respond to the more challenging environment resulting from the COVID-19 pandemic.

These actions also align with our growth strategy and will allow us to enter the recovery period following the crises with a more agile and focused organization. We also completed the sale and leaseback of a portion of the headquarters campus during the first quarter.

The transaction allows us to relocate capital for using [ph] invested in real estate to our growth strategy. The net proceeds from the sale were 55.5 million and were used in part to repay outstanding borrowings related to the Insight acquisition and allowed us to end the quarter with no borrowings on our U.S. credit facilities.

The resulting gain on sale of the headquarters campus facilities was 32.1 million. And finally we recall the 148 million non-cash goodwill impairment charge. As the quarter unfolded there was a significant decline in the global equity markets including the stocks of many of the publicly trading staffing companies and our own common stock. Under U.S.

GAAP accounting rules the significant decline in our stock price triggered an entering goodwill impairment test and ultimately the conclusion that as of the end of Q1 a goodwill impairment had occurred.

As Peter noted in his opening remarks the charge is non-cash and doesn't change our views or confidence in our ability to navigate the COVID-19 crises or to capitalize on the subsequent economic recovery. Including the items I just mentioned our reported loss from operations was 111.8 million in the first quarter.

Excluding the goodwill impairment and restructuring charges as well as the gains on sale earnings from operations were 12.5 million. Q1 2019 reported earnings of 16.8 million also contained a 6.3 million restructuring charge so on an adjusted basis Q1 2020 earnings from operations declined 46% versus last year.

Kelly's earnings before tax also include the unrealized gains and losses on our equity investment in Persol Holdings. For the quarter we recognized a 77.8 million pretax loss on our Persol common stock compared to a certain 0.2 million gain in the prior year.

This non-cash gains and losses are recognized below earnings from operations as a separate line item. Income tax benefit for the first quarter was 36.2 million compared with our 2019 income tax expense of 6.4 million.

Q1 2020 income tax benefit includes 23.8 million related to the non-cash benefit on the loss of Persol stock and a 23 million benefit on the non-cash goodwill impairment charge. And finally reported loss per share for the first quarter of 2020 was $3.91 per share compared to earnings of $0.56 per share in 2019.

You know that to better understand the underlining trend in earnings let me provide some additional information. 2020 earnings per share was unfavorably impacted by the goodwill impairment charge, the loss on Persol common stock, and the restructuring charge partially offset by the favorable impact of the gain on sale of the HQ buildings net of tax.

In 2019 EPS was positively impacted by gain on Persol stock and negatively impacted by our restructuring charge. Overall adjusting for these items Q1 EPS was $0.20 compared to $0.45 per share in Q1 2019. Now moving to the balance sheet, cash totaled 48 million compared to 31 million a year ago. That was 2 million consistent with Yuan 2019.

We ended the quarter with no borrowings on our U.S. credit facilities. As we navigate this period of economic uncertainty our traditionally low level of debt provides flexibility. We continue to manage our cash and debt closely but we may maintain higher levels of cash than we have historically including borrowings on our U.S. credit facilities.

Accounts receivable was 1.2 billion and decreased 4% year-over-year. Global DSO was 59 days, an increase of one day over year end 2019 and the same period last year. To date we have not experienced an increase in DSO as a result of the COVID-19 crises.

In our cash flow for the quarter we generated 5 million of free cash flow compared to 17 million of free cash flow in the same period in 2019. We did begin to benefit from some additional free cash flow generation due to the current market conditions.

If you still recalling we generate free cash flow during the initial periods of an economic downturn and as we continue to collect our receivables while payroll costs declined in line with demand. However, this impact was offset in Q1 by the timing of certain cash payments.

As we move further into the economic cycle we would expect this additional free cash flow generation to continue for the next several months assuming that customers continue to pay on time. We also anticipate taking advantage of the ability to differ certain U.S. payroll tax payments in line with the CARES Act to provide additional liquidity.

Thank you, back to you Peter. .

Thanks to Olivier. Clearly the quarter didn't unfold as anyone envisioned. Talent and customers are struggling to navigate a new normal without knowing the depth or duration of COVID-19's impact. Customers in vulnerable industries, closed facilities, and ended assignments.

As Olivier noted Kelly's education specialty is being hit especially hard as schools across the U.S. switch to remote learning or temporarily close. Non-essential manufacturing automotive and oil and gas also saw dramatic slowdowns. Kelly's minimal exposure in U.S.

hospitality and retail industries limited the impact of those sectors sharp declines and we are seeing some increased demand in areas such as life sciences, contact centers including our Kelly Connects Solution and areas associated with certain food distribution and supply.

Still it should come as no surprise that the short-term opportunities do not offset the dramatic impact of COVID-19 on our business. As we announced last month we made a series of prudent decisions designed to reduce spending, preserve key resources, and bolster the strength and flexibility of Kelly's finances.

These actions include a temporary 10% pay cut for full time salaried employees in the U.S., Puerto Rico, and Canada, regionally appropriate actions in EMEA and APAC substantially reduced CEO compensation and reduced compensation of 10% or more for senior leaders, temporary furlough and a redeployment of some full time employees, suspension of the company's match to certain retirement accounts, reduction of discretionary expenses and projects including cutting capital spending by a third, and suspension of the quarterly dividend starting in Q2 until conditions improve.

Kelly's Board is also expected to take formal action this week to reduce compensation of its Directors. We have taken these precautionary actions as temporary defensive measures to further strengthen our balance sheet, preserve key resources, and protect our ability to quickly go on the offensive coming out of the crisis.

Olivier will provide a more detailed perspective on the short-term impacts and how we're thinking about the next quarter..

As we announced in mid-April we withdrew our previously issued full year guidance. As Peter noted the impact of the COVID-19 pandemic and the resulting near term economic conditions have introduced a level of uncertainty that we haven't experience in the past.

Given the level of uncertainty we like many companies have been working through a variety of scenarios and building out response plans that align with the priorities that Peter mentioned at the beginning of the call.

These scenarios take into account a variety of demand scenarios based on both the severity and duration of the economic contraction and the speed of the subsequent economic recovery. In addition to economic forecasts we are utilizing information from our customers as well as predicting internal activity based metrics to inform our scenario planning.

Taking into account these demand scenarios and the cost reduction actions that Peter mentioned we have reviewed the resulting impact on earnings, cash flows, and debt covenant matrix.

We have thrice tested our cash flows and debt covenants and at this point we remain confident that we have adequate financial resources and liquidity to weather the crises to capture emerging growth opportunities and to take advantage of the recovery and subsequent periods of economic growth.

Given where we are in the cycle we are determined that we will not be providing guidance at this time but we will provide some perspective on the second quarter. As mentioned in my remarks on the first quarter results revenue declines will not be even across the segments.

Declines will be more pronounced in America staffing where our education and light industrial business will be most heavily impacted. And the national staffing declines will also be significant but moderated to a degree by existing labor laws and efforts by governments in Europe to subsidize and protect employment.

The impact on GTS will be less severe as many customers in this segment operating essential industries support remote work or maintain workforces in an effort to resume production quickly when health and safety issues can be adequately addressed.

As we continue to work closely with our customers we have not yet seen any material sign of mounting pressure due to the current environment. And as Peter discussed we have taken some additional steps with respect to G&A expense levels both in advance of and in response to the crisis.

This includes the expense savings from our Q1 restructuring actions, savings from the actions Peter described in response to the crises, and decreases in performance based incentive compensation expenses. That said while we have made significant cost reductions we will not be able offset the expected Q2 revenue declines as a result of the crises.

I will now turn it back over to Peter for his concluding thoughts. .

Thank you, Olivier. There is no question that the COVID-19 crisis presents unforeseen challenges for Kelly, our talent, our customers, and our industry. While the impact is temporary it is real and it cuts deep. There is also no question that Kelly is the company fortified by the best employees in the industry to take on this crisis.

We are confident in our ability to support our talent and customers during this time and emerge well positioned for growth.

I serve alongside a seasoned leadership team and a Board of Directors that has successfully managed through prior labor market disruptions and economic turmoil and we entered this crisis with a healthy balance sheet, a better expense profile, a well defined growth strategy, and a clear plan of action.

We are moving forward with that plan as I laid out last quarter confident that it includes the ingredients to grow our business as a specialty talent solutions provider.

I discussed how the plan would intensify Kelly's focus and accelerate our growth by forming five distinct business units; professional and industrial currently known as commercial, education, stem which includes our science, IT, and engineering solutions, OCG and international.

We expect to change our reporting structure in the second half of 2020 to align with these five specialty businesses.

We have identified Presidents for each business and together we are identifying how we will combine our assets and resources into the five business units and stand up a new operating model with clear strategies and measurable targets to inform each specialty's M&A plans and allocation priorities.

We also undertook restructuring actions in Q1 to streamline resources to create more efficient support systems and position Kelly for moving forward our specialty growth strategy in a meaningful way. These actions are indicative of the shift I mentioned earlier from defensive to offensive.

We have proven that in areas where we specialize in line with demand we deliver stronger performance. Coming out of this crisis we will be well positioned to combine our own organic expertise with inorganic opportunities to grow within our chosen specialties.

And our company's structure and business strategies will be aligned with and able to accelerate that growth. Our decision to move forward with our transformation speaks to the agility of today's Kelly and our confidence in our plans.

We are simultaneously making difficult yet necessary decisions, embracing a more acquisitive specialization strategy, monitoring current levels of disruption and uncertainty, preparing for post crisis growth, and building accountability into every aspect of our business.

In the meantime we are weathering the current storm together, caring for and connecting with talent whose safety is our top priority, guiding clients through uncharted territory, knowing that this crisis will end and as always standing ready to face what's next.

I'd like to thank Kelly's internal teams, our external talent, our customers, and our Board of Directors for their support. I'm proud of the work we're doing together and I look forward to Kelly's ongoing transformation in the months ahead. John, you can now open the call to questions. .

[Operator Instructions]. And we will go to the line of Josh Vogel with Sidoti. Please go ahead. .

Thank you. Good morning Peter and Olivier, I hope you both are doing well..

Thanks Josh, thanks. .

Yes, so a couple of questions here.

I guess the first, you had the announcement in mid April that the Board supported the drawdown from the credit facility and Olivier I was just wondering if you could talk about the liquidity position today, how much is available to you on that credit facility, and also with the deferral of payroll taxes how much do you think that could add to liquidity this year?.

Yes, thank you Josh. Well basically I mean I'm going to start to confirm that we have basically not in use of our facilities in the U.S. at the end of Q1. I mean we have local use of local facilities for 112 million.

You might remember that we have renewed our facilities in December of last year confirming the securitization program of 150 million and the revolver of 200 million. So I think it was the right timing to basically secure these two facilities.

What we said is basically due to the current environment we are aiming to give us a little bit more flexibility to our liquidity and additionally our level of cash to run this business is around 25 million to 30 million. We may time to time increase this level and that could include basically using some of our facilities.

And it's really to give us more flexibility in the short run due to the current environment as opposed to anything else..

Okay, and I'm sorry sir, to confirm you said you have a 150 million in credit facility and another 200 million in the revolver?.

Yeah, we have 150 million on the securitization and 200 million on the revolver facility. Back to your question about the CARES Act, basically the main item we use is basically the payroll tax deferral.

You might know that basically the deferral is going to push our Q2, Q3, Q4 payroll tax payments from the Q1 [ph] to half of it at the end of 2021 and the other half at the end of 2022. Roughly if you want to know the impact I would size it but it's going to depend on how was Q2, Q3, Q4 going to look like.

Something might tell you only in the region between 100 million to 125 million..

Alright, that's helpful, thank you.

And just when we think about the CARES Act were there any other government programs that you apply for and then when we also think about any continuous programs overseas we have operations…?.

So we have looked at of course U.S. and also outside of the U.S. and we have tried to classify opportunities if I may say on P&L impact on one side, cash flow impact on the other side. Cash flow only. So in the U.S. I would say for us the biggest benefit would be on what I've said the deferral of payment of payroll tax.

We are looking at as we speak at what is called the U.S. retention credit. That might be what I would call a P&L opportunity. We are waiting IRS guidance on that, we got some of them late last week but we are still in the reviewing process to see if it may create opportunities for our own cost base or the cost base of our customers.

It's a little bit too early to say because the IRS feedback that we got on Friday was slightly different than our initial expectations. So we are going to continue to follow up and see if we can confirm some opportunities. Outside of the U.S.

P&L impact it's about around 3 million so not very material, mainly in the EMEA and it is going to be basically employment subsidies as I was mentioning during the script. And it is going to be Q2 mainly. On the cash flow standpoint outside the U.S.

we will benefit from some postponement on payment of payroll tax but it is not really material and it is going to be really, really short-term, meaning a benefitting Q2 payment in Q3 of 2020.

So I would qualify them as nice to have, not really impactful for the year whether it's because of the limited size of them and also because there will be more play between Q2 and Q3. So these are where we are now as we speak but of course whether it's in the U.S. or I would say the U.S.

value teams are scrutinizing what is going on at radar level in the U.S., at state level and of course in other countries outside of the U.S. namely in EMEA as we speak..

That's really helpful, thank you.

Shifting gears a little bit, looking at next gen in GTA just curious how those two paired I guess through the first one to two months of the COVID crisis relative to the legacy business?.

Well I mean, you might have heard that what we have seen so far in our Global Talent Solution or GTS segment is that we have not seen any COVID impact or material impact even in March. And knowing the type of business, next gen and GTS in -- and you know that GTA is in GTS segment and next gen in America segment.

I would say both of them I would say did behave little bit like what I was describing for GTS, meaning apparently weathering the downturn pretty well..

Okay, great and just one last one please, saw that you recently had the rollout of the human cloud platform aggregator and seems like a nice step towards facilitating the process and implementing more cost efficient solutions for clients.

I know it's still a little early but what -- can you give us any sort of insight on the margin profile of this platform versus your more traditional staffing channels and could you also talk to maybe some other rollouts that we should be looking forward to particularly in the second half of the year hopefully when the crisis has disappeared?.

Yeah Josh, so I think it is too early to tell I think. I think the aggregator is an excellent response to customer demand for getting a fix on how to navigate the human cloud and how to take advantage of the talent that is going to work in different ways. The timing of the launch sort of coincided with a lot of the disruption from COVID-19.

So while we think there is going to be a lot of and there has been expressions of interest I would say it's too early to tell about the margin impact.

The thing about the COVID-19 pandemic that has revealed itself to us here at Kelly is the speed with which we have stood up a number of very innovative solutions for our customers to help them for example keep furloughed employees warm during the furlough period, and we have used those opportunities as a way of streamlining our product development processes.

And we're very encouraged that coming out of this there will be a number of new solutions that will potentially come to market at a more accelerated pace than pre-crisis..

Great, well thanks for taking my questions and great to hear from you guys. Stay safe out there. .

Yeah, you too Josh. .

Thank you Josh..

And next we will go to the line of Joe Gomes with Noble Capital. Please go ahead..

Good morning.

Good morning Joe.

I was just wondering, you made the Insight acquisition and I don't know if our timing could have been a little better with what's been happening here but just if you could talk a little bit how that integration has been going in and how that business is held off so far here given the circumstances today?.

Thanks Joe. Well needless to say any of the solutions that are deep in education are impacted by the disruption and the temporary suspension or closings of schools. That said there are a number of school districts that we've been partnering with to maintain levels of some employment working with school districts on return to work programs.

There are opportunities that have come up in the last four to six weeks in early child care. As you can imagine the demand for child care is people are sheltering in place and working from home, essential workers.

So we have entered into a deal with one of the largest providers of early childhood, we are also engaged with a e-learning practice that we think has got some potential. So while the impact on Insight is like the impact on Kelly education overall is significant.

We're very encouraged by the pace of the integration pre-crisis, customers are continuing to let contracts even in the crisis. We've had a number of nice wins recently and Insight is a big part of the future. So we're still very encouraged by the acquisition notwithstanding the unfortunate timing as you mentioned..

Okay, great. Thanks for that insight and just keep going along that same line, one of the pillars here of some of the new strategies is being a little more aggressive on the acquisition side and presumably one would think some valuations have come down here again given that the crisis.

Are you guys seeing more opportunities, it's something you're continuing to look at or kind of hit the pause button on that, just looking to conserve capital?.

Well we haven't hit the pause button Joe. We are continuing to pipeline opportunities that we think are going to create value for the company and our shareholders. The pandemic as you can understand does throw some of the activity into an elongated state.

And some people are taking deals off the table for now or saying let's get through the next quarter. But we believe it's going to be temporary and we are hopeful as you mentioned that some of the multiples that we were seeing pre-crisis come down to more achievable levels.

We have indicated in the past that we're going to embark on a more aggressive acquisition strategy but we've also been pretty clear we're not going to overpay for properties and that they will be aligned with our strategy of mixing up in the higher margin products and solutions..

Some day we are going to move our balance sheet from a very defensive mode where we are now and when we see that the recovery is starting to be clean and we have more understanding about the near future we can switch very quickly our balance sheet from a defensive mode to a more offensive mode like Peter was mentioning few minutes ago..

Okay and one quick last one here. I heard you say I believe that you had identified the managers for the specialty segments.

Are they all internal candidates, did you go outside for some of those, are you going to make an announcement of who each of these people are here in the near future -- my questions?.

Yeah, thanks Joe. I had indicated in February that we would have announced them by the end of the quarter which but for the pandemic we would have. But they're all in place. They're not all internal, we're very, very glad to have attracted some really good talent from the outside.

We announced the addition of Hugo Malan to run our stem business which as you know is a business that we are very keen on and very excited about. So Hugo has been a great addition to the team. And when we get closer probably to the end of the quarter we will announce all of those positions but thanks for the question Joe and I hope you are well..

Yeah, the positions are going to be effective when we move to our new segments so now we are transitioning and we have said and again today the tip of the window focus the second half of 2020. .

[Operator Instructions]. And we do have a follow-up from Josh Vogel. Please go ahead. .

Thank you.

Peter you had in your prepared remarks I think you said about 90% of your staff is working from home, can you confirm that?.

Yeah that would be our full time work force Josh. .

Okay, great. And then so you are taking steps to better align the cost structure to withstand the crisis and we know in recent years you've been making these IT infrastructure investments that have positioned you well from a technical standpoint.

I'm just curious are there any other investments that need to be made on the IT infrastructure front to help you maintain this work from home platform?.

Well I think probably not so much the work from home platform Josh.

Those investments that we've made over the past few years with our progressive Kelly anywhere program and also moving to a more tech enabled delivery model in our branch network has really served us well in this not only in going remote but also stress testing that model as a way of being able to toggle resources in a more agile way.

There will never be an end to the technology that we will need to invest.

It's not going to be at the magnitude of our new front office for example but THE way in which the talent wants to be dealt with, the way our customers want to be dealt with will require us to be continuously exploring and looking for the best in class technology whether it's matching technology or video interviewing technology or of the sort like those kinds of examples.

We will be regularly working and evaluating and then investing in and I think our new front office technology provides us a excellent platform to do that quickly and with a keen eye on the expense. .

Okay, great and it's really nice to see you taking the steps to help the temp employees redeploying where possible and offering some of the free services.

We have known for quite some time that there's been a big supply demand imbalance on the labor front and the crisis kind of resets that and I'm just curious if these steps that you're taking to help you know promote employee or on the temp side, is this only for the existing candidates in your system or is this actually are you offering this to anyone and is it maybe kind of giving you a competitive advantage in bringing more candidates onto your platform?.

Well, the answer would be both Josh. As an example we have set up our trending jobs website which is really designed to -- it was in response to a request we got from a large hotel chain because they were releasing thousands of their employees and they were looking for a way to help them find work.

Of course if we have opportunities we'll put them to work with Kelly but we felt it wasn’t the right thing to do to create this website that will allow individuals who are out of work to look for spikes in demand whether it's with Kelly or not.

Will that create some kind of allegiance or loyalty to Kelly? You know, hard to tell at this point, but, we're very invested in creating a better talent experience for workers that want to work with Kelly and that do engage with us. And we think that that's an area that we have invested in the last couple of years.

And we intend to make it a focus in the future because we think that there is a differentiation that can be achieved by engaging with talent in a different way.

And so we're excited about some of the things we've got underway and how we treat employees and how we interact with temporary contractors during this pandemic, hopefully will pay dividends because they'll see Kelly as a different kind of company..

Great, well thank you again for taking my questions. .

Yeah, thanks Josh. Thank you..

And Mr. Quigley we have no further questions in queue. .

Okay John. Thank you very much. Thank you, everyone. And I hope everybody stays well. .

Thank you very much. .

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect..