Edward Pierce - EVP and CFO Peter Dameris - CEO & Director Theodore Hanson - President Randolph Blazer - Chief Operations Officer George Wilson - CEO and President, ECS Federal, Inc..

Edward Caso - Wells Fargo Securities Timothy McHugh - William Blair & Company Tobey Sommer - SunTrust Robinson Humphrey Henry Chien - BMO Capital Markets Mark Marcon - Robert W. Baird & Co..

Ladies and gentlemen, thank you for standing by, and welcome to ASGN Incorporated First Quarter 2018 Earnings Call. [Operator Instructions]. And as a reminder, today's call is being recorded. I would now like to turn the conference over to our host, CFO, Ed Pierce. Please go ahead, sir..

Good afternoon, and thank you for joining us today. With me today are Peter Dameris, Chief Executive Officer; Ted Hanson, President; Rand Blazer, President of Apex Systems; and George Wilson, President of ECS. Before we get started, I'd like to remind everyone that our presentation contains forward-looking statements.

Although we believe these statements are reasonable, they are subject to risks and uncertainties, and our actual results could differ materially from those statements. Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume the obligation to update statements made on this call.

For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website. Please note that on this call, we'll be referencing certain non-GAAP measures, such as adjusted EBITDA and adjusted net income. These non-GAAP measures are intended to supplement the comparable GAAP measures.

Reconciliations between the GAAP and the non-GAAP measures are included in today's press release. I will now turn the call over to Peter Dameris..

Thank you, Ed. Welcome to the ASGN 2018 First Quarter Earnings Conference Call. During our call today, I will comment on the markets we serve, our financial highlights, the closing of the ECS Federal acquisition and our name change.

Ted and Rand will then discuss the performance of our operating segments in greater detail, before turning the call over to Ed for a detailed review of our first quarter results and our estimates for the second quarter of 2018.

On today's call, we will not be discussing the specifics regarding ECS' first quarter performance given the closing of the acquisition occurred post-quarter closed on April 2. However, George Wilson will be available to answer qualitative questions regarding ECS. We will then open the call up for questions. Now onto the first quarter results.

Across all of our guided metrics, our results for the quarter were at or above the high end of our previously announced financial estimates. Revenues for the quarter were $685.2 million, up 9.4% year-over-year.

Our growth rate reflected, among other things, the deepening of many large customer relationships established over the last five years and the continuing increase in the rate of adoption of our delivery model. This marked the 17th consecutive quarter that our company grew above the IT staffing industry's projected annual growth rate.

Our size and service offerings allow us to grow faster than published staffing industry growth rates, and we believe we are well positioned to generate solid above-market revenue growth in the future.

During the quarter, we saw a strong revenue growth at Apex Systems and at Creative Circle, and a return to year-over-year growth at Oxford core and our Oxford segment. Customer demand was strong across our local, mid-market and large national accounts.

Adjusted EBITDA for the quarter was $74.8 million, up 15.8% from $64.6 million in the first quarter of '17. Cash generation continues to be at or above our expectations. And since the closing of the Creative Circle acquisition, we have repaid $297 million of our debt through March 31, 2018.

Free cash flow and non-GAAP measure was $49.6 million for the quarter, or 7.2% of revenues compared with $37 million, or 5.9% of revenues in the first quarter of '17. Our leverage ratio was 1.8x trailing 12 month adjusted EBITDA as of March 31, 2018 and increased to approximately 3.67x with the closing of the ECS acquisition.

During this second quarter, we expect to pay down approximately $90 million of our debt, which will reduce our leverage ratio to 3.34x by the end of the second quarter of 2018.

With respect to recent production at our Apex and Oxford segments, our weekly assignment revenues, which excluded conversion, billable expenses and direct placement revenues averaged $49.8 million for the last two weeks, up 7.1% over the same period in 2017.

As for ECS, we estimate revenues will range between $150 million and $153 million for the second quarter. Our IT business continues to see high demand from its customers, driven in part by greater adoption of staff augmentation as a viable alternative to outsourcing, offshoring and consulting.

We believe that we are well positioned to continue to service our customers IT needs as technology rapidly evolves and is adopted. We're also continuing to see signs of the ongoing debate regarding the on demand workforce or gig economy is accelerating the usage of contract labor.

Fractionalization of human capital by using the staffing industry's services is the only way to avoid the risk of misclassification of employees as independent contractors. Our customers have and are realizing this creating attractive secular growth opportunities for the entire professional staffing industry.

Our new federal IT services and solutions business continues to see new long-term contract awards, robust spending against existing contracts and the forward positive benefits of increased funding and visibility of defense, intelligence and federal civilian agency budgets, particularly in the areas of artificial intelligence and machine learning.

As a reminder, we announced the closing of the ECS Federal acquisition on April 2, 2018 and ECS' results are not included in this quarter's consolidated results, but will be included in our consolidated results beginning with Q2, 2018.

ECS delivers cybersecurity, cloud, DevOps, IT modernization and advanced science and engineering solutions to the U.S. federal government.

This acquisition nearly doubles our addressable end market to $279 billion as we enter the $129 billion government services space and ECS' highly specialized skill offerings strengthen our position as the premier human capital provider and complements our highly technical IT offerings.

ECS' domain expertise and first-hand experience will position our combined company well to support commercial engagements in cybersecurity, artificial intelligence and biometrics. Also, as we publicly announced on Monday of this week, we will be hosting an Analyst Investor Day on May 23 in New York City.

The meeting will be held at the Lotte New York Palace Hotel and will begin at 8:00 a.m. Eastern time. Our executive management team will present our strategic positioning and long-term growth plans. There will also be a panel discussion on the future of technology, risks and challenges featuring guest speakers.

Seating for this event is limited, and if you are interested in attending, please contact ADDO Investor Relations. Finally, I would like to remind you that we officially changed our name to ASGN Incorporated on April 2, 2018.

I'd like to now turn the call over to Ted Hanson, our President, who will review the operations of the segments and then over to Rand.

Ted?.

Thanks, Peter. We were pleased with our segment results in the quarter with both our Apex and Oxford segments performing better than anticipated. Demand in the end markets we serve, IT, creative digital marketing, engineering and Life Sciences remains steady.

Apex Systems, our largest division continue to achieve growth rates above the market growth rate and led the performance of their segment, which Rand will discuss in a few minutes.

Our Oxford segment, which is comprised of Oxford core, CyberCoders, our permanent placement business and Life Sciences Europe, delivered revenues of $146.7 million, which is up 1.8% year-over-year. Revenues increased 1.6% on a sequential basis.

Oxford core revenues, which account for 74.7% of the segment revenues, were up approximately 1% year-over-year, 1.3% sequentially and exceeded our initial expectations. Growth was led by our European business unit followed by our engineering and Life Sciences service offerings.

CyberCoders, which accounts for 96.5% of the segment's permanent placement revenues, had mid-single-digit year-over-year growth, which was in line with our expectations. Momentum throughout the quarter was strong.

Our Life Sciences offerings in Europe, the smallest contributor to total segment revenue, was up year-over-year mid-single digits and exceeded our initial expectations. Demand for our Life Sciences skill sets in the Benelux geographic markets remains steady.

Gross margin for the segment was 40.3%, down 10 basis points year-over-year due to business mix within the segment. Based on the above and better expense management and productivity within the Oxford core unit specifically, the segment's adjusted EBITDA results exceeded our expectations and grew over the first quarter of 2017.

Much of the hard work to improve lost EBITDA margin at Oxford core continues to show itself in the latest quarter's results. I will now turn the call over to Rand Blazer..

Great, Ted. Thank you. The Apex segment, which consists, of course, of Apex Systems, Apex Life Sciences and Creative Circle business units, once again reported solid results for the quarter. Revenues for the segment in the first quarter were $538.5 million, up 11.6% year-over-year.

Apex Systems, which accounts for 74.9% of the segment's revenues, led the way with 12.5% year-over-year growth in the first quarter. Our Creative Circle unit's revenues grew high single digits and slightly exceeded our expectations in all performance areas.

Our Life Sciences unit, including StratAcuity, achieved double-digit revenue growth in the quarter on an as-reported basis and also exceeded our expectations. As we usually do on these calls, I'll provide you a little additional insight into the performance of our principal IT services business unit, which is Apex Systems.

Revenues for that unit were propelled by a number of factors, including, growth - continued growth in our accounts and all industry verticals we service, with double-digit revenue growth in aerospace defense, financial services, consumer and industrial, telecommunications and technology industry accounts; business services and healthcare also exhibited positive single-digit growth year-over-year; double-digit growth was achieved in both our retail, which are brand-centric and smaller accounts and our top accounts with retail accounts growing more than our top accounts in the quarter.

Our bookings for SOW type work remained strong, as has been reported in previous quarters and continues to exceed our expectations.

Gross margin for the segment was also higher year-over-year, largely reflecting increased bill rate/pay rate differentials, a higher mix of perm placement revenue and some reduction in payroll tax expenses on a year-over-year basis. Our segment's EBITDA contribution also grew and is up on a percent of revenue basis year-over-year.

This performance reflects high conversion of gross profit to EBITDA and is driven by continued strong productivity in our sales, delivery and infrastructure teams. Overall, the Apex segment had another very successful quarter. I'll now turn the call over to Ed to discuss ASGN's overall financial results.

Ed?.

Thanks, Rand. As Peter previously mentioned, revenues for the quarter were up 9.4% year-over-year on a reported basis and up 9.2% after adjusting for year-over-year changes in foreign exchange rates and the differences in the number of billable days.

Revenues for the quarter included $5.3 million in revenues from StratAcuity, which was acquired in August of last year. Gross margin for the quarter was 31.8%, which was at the high end of our previously announced financial estimates and up 20 basis points year-over-year.

The year-over-year expansion in gross margin related to lower state unemployment tax rates in certain states and a slightly higher mix of higher-margin business in certain divisions. SG&A expenses were $164.4 million, or 24% of revenues and were in line with our previously announced estimates.

SG&A, included $9.8 million of onetime expenses related to the ECS acquisition. Interest expense for the quarter was $6.5 million, down from $8.5 million in the first quarter of 2017.

Interest expense for the quarter was comprised of $5.3 million of interest on the credit facility, $0.9 million of amortization of deferred loan cost and $0.3 million of expenses related to the amendment of our credit facility to fund the acquisition of ECS.

The year-over-year decrease in interest expense reflected lower debt balances and a lower average interest rate as a result of the amendments to our credit facility in 2017.

Our effective tax rate was 25.3%, which was lower than our previously announced estimate, primarily related to excess tax benefits on stock-based compensation, which we do not include in our financial estimates.

Net income for the quarter was $29.1 million, or $0.55 per diluted share, up from $22.4 million or $0.42 per diluted share in the first quarter of last year. Net income for the quarter included $9.8 million or $7.4 million after tax in expenses related to the ECS acquisition.

Adjusted net income and non-GAAP measure, which among other things adjusts for amortization of intangible assets and acquisition, integration and strategic planning expenses and credit facility amendment expenses were $44 million or $0.83 per share, up from $32.2 million or $0.61 per share in the first quarter of 2017.

Adjusted EBITDA for the quarter was $74.8 million. Reconciliations of net income to adjusted net income and adjusted EBITDA are both non-GAAP measures, are included in today's press release. Cash flows from operating activities were $55.8 million and free cash flow and non-GAAP measure was $49.6 million.

Before commenting on the overall financial estimates for the second quarter, please note that our financial statement or estimates for the second quarter include estimates for ECS, which accounts for approximately 17.5% of total estimated revenues for the quarter and 17% of our adjusted EBITDA for the second quarter.

Second, our estimate for interest expense includes a onetime expense of $5.8 million related to the amendment of our credit facility in April to fund the acquisition of ECS. This expense is added back in the determination of adjusted net income.

Third, please note that stock-based compensation expense is increasing $3.8 million over the first quarter of 2018 due to awards granted to ECS management and employees and the expense of the 2018 performance awards that for accounting purposes were calculated using a stock price of $85.53, which was the closing price on the day the performance targets were approved by the compensation committee.

Now moving on to our overall financial estimates for the second quarter of 2018. We're estimating revenues of $860 million to $870 million, net income of $31.1 million to $34.8 million, or $0.59 to $0.66 per diluted share.

Adjusted net income of $53.6 million to $57.3 million, or $1.01 or $1.08 per diluted share and adjusted EBITDA of $100 million to $105 million. Adjusted net income does not include the cash tax savings related to the amortization, deduction of goodwill and trademarks.

With the acquisition of ECS, the quarterly cash tax savings are now $6.8 million, or $0.13 per diluted share, up from $4.5 million or $0.09 per diluted share in the first quarter. As we have previously commented, the acquisition of ECS is accretive to our adjusted net income.

We estimate the accretion in the second quarter to be approximately $0.11 to $0.13 per share. On a pro forma basis, which assumes our acquisition of ECS occurred at the beginning of 2017, our consolidated revenues estimates for the second quarter imply year-over-year growth of 7.7% to 9%.

I will now turn the call back over to Peter for some closing remarks..

Thanks, Ed. We continue to believe our scale, size and breadth of service has us well positioned to take advantage of what we believe are historic secular growth for the IT services industry and dynamic changes in the technology world, as we move more into digital one.

While the entire ASGN team is very proud of our performance, we remain focused on continuing to profitably grow our business and increase our rate of growth. We'd like to once again thank our many loyal, dedicated and talented employees, welcome our new partners at ECS, whose efforts have allowed us to progress to where we are today.

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

Operator?.

[Operator Instructions]. And our first question comes from Edward Caso of Wells Fargo..

Trying to understand the guidance for gross margin for the second quarter, 29.5% to 30%, down sequentially.

I understand you had a good quarter in Q1, but is this the effect of rolling ECS in? And can you sort of help us reset our expectations going forward, if that's the case?.

Yes. So, Ed, I'll start and then I'm going to turn it over to Ed Pierce. But as you know, there are other things that go into cost of services and the federal contractors that aren't in kind of the contingent labor.

And so ECS, it's more pertinent to focus on their EBITDA margins, which were quite nice and comparable to ours than really the gross margin. And by - we're required according to GAAP to include them in our consolidated gross margins, but they are substantially lower than our historic business. So just because of the cost of services inclusion.

So you need to really kind of dissect it and look at the old On Assignment versus just consolidated gross margin.

Ed Pierce?.

So Ed, let me give you some additional, sort of, data points that probably will help you in terms of, sort of, framing this. But you mentioned the guidance, the guidance we gave for Q2 of 29.5% to 30%.

So if you, sort of, bifurcate this and look at the ASGN business, excluding ECS and look at ECS alone, the gross margin for our core business is pretty much what it has been running, may be slightly better. But that's 32.5% to 32.7%. For ECS, it's going to be somewhere around 18%.

And bear in mind, in our prepared remarks, we mentioned that ECS will account for about 17.5% of our total revenues..

My other question is looks - if I did my math right your organic revenue estimate is about 8% at the midpoint for the second quarter, what would get you to the high end of the range? What would have to go right?.

Well, we just continue to see the trends that we saw exiting the first quarter..

And now to the line of Tim McHugh from William Blair..

Maybe, Peter, just can I ask you to elaborate on that and maybe from a step above, I guess, any conclusions you take away from this quarter? I guess, it seems like broadly each of the businesses were just a little bit better, I guess, is that just a statement about the macro? Are there any, I guess, I'd be curious with any insights you drew as you look at the underlying trends this quarter other than just a little bit more favorable macro?.

Right. So I'll start and then I'll turn it over to Ted. But we did - as you said, we did see a sequential growth first over fourth, and our estimate pretty much imply incremental growth second over first. So we continue to see good momentum in our business. We see a productive market.

We see our service offering continue to be broadly accepted and adopted, and we see that our scale and size benefits us vis-à-vis others.

And as it relates to ECS, the guidance, again, implies sequential growth second over first, healthy growth year-over-year and a productive end market, where the contracts that we've already won, we can go forcefully compete to get more than our fair share of business there.

And we have a budget, and we're not operating under continuing resolutions, which is a little bit of visibility.

Ted, why don't you guide them through more specifics about what we saw in the businesses and specifically the Oxford segment?.

Sure. Well, I think, Peter summed it up pretty well in his prepared remarks where he said that we were kind of led by strong growth at Apex and Creative Circle, which just had improving growth rates.

On the Oxford side, we're now back to growth, and we weren't at growth levels in the prior quarters and that business in our guidance for the second quarter we help - hopeful, continuing to march forward. And I think, Peter, hit on the ECS..

Okay. And touching on Oxford, I guess, from a margin standpoint, you've made - it seems like pretty good progress in the last year on showing improvement there.

How much room is left, I guess, for Oxford specifically? And I guess, how do we think about excluding ECS to kind of underlying margin expansion opportunity over the next few quarters?.

I think in the supplemental piece that we put out, you can see in there that we've got increasing productivity at Oxford. And we're not done. It has further to go, but we're going to have to get it from our growth rate instead of just SG&A management, but I think we're on the right track and we just need to stay the course there..

And now to the line of Tobey Sommer from SunTrust..

With respect to your staffing consultant headcount and kind of investments, how do you think about that given what you described as a slightly incremental faster growth in 2Q kind of you mapped that out, because this is one area where you have to playing with a little fight in the longer-term horizon than what you guide to us for?.

Toby, we stayed ahead of the curve. So we're starting to get some operating leverage off of some of these previous hires. We have recycled some of the investment dollars at Oxford, and they've been more focused and better impact than we had in Q4 of '16 from those investments.

And ECS is hired - their internal hiring is billable staff because they work off of bench model. But they've done significant hiring to meet the needs of the contracts that have been awarded to them that they're working against. So hiring continues. There is no need for search.

You saw what we were able to grow double digits, which is normal hiring because we're getting better productivity and the benefits of having had high levels of recruitment and hiring over the past couple of years..

Would you expect staffing consultant headcount at Oxford to start to grow from here given the revenue growth? Or are you - you're still trying to harvesting that improvement in gross profit versus staffing consultant?.

No, I think you should see a growth. I think we've come through a cycle, if you will, where we've - where our headcount shrunk a little bit. Where we've kind of evened out and now we expect in the back three quarters of this year for our headcounts to grow..

Tobey, just to add to that, if you go back and look at the prepared remarks for the fourth quarter of '16 and the first quarter of '17, I think we gave you some specifics about how many people we hired and how much revenue we got from those people we hired.

So the headcount being down a little bit at Oxford is really not that significant considering how many people we had hired and we were getting virtually no revenue from..

With respect to the bill rates, some decent growth, I guess, particularly at Oxford, does that represent underlying compensation inflation? Or is this kind of a snapshot of mix in other factors?.

I think, it's more business mix, Tobey, than anything else..

Okay.

And then with respect to ECS, just to the extent you can comment on what you expect in terms of the pace of the - of contract awards given the refreshed budget and kind of bulk offers as you look at this quarter and 3Q, what does that contract award environment look like?.

Right, we'll answer on a qualitative basis.

George, do you want to give a little color on that?.

Sure. I mean, I think a lot of the things that we're seeing out there right now with the budget being passed, still some concerned about sequestration. But the numbers that we're forecasting take an account, a pretty nice flow of business opportunities.

As Peter mentioned earlier, a lot of the stuff that we've got this year is simply staffing out contracts that we've already been awarded, and that's really our focus and our attention on as we close out this - move forward on this year..

Okay. Last thing for me.

Peter, could you comment on what if any impacts you're seeing in the business from H-1B visa reform executive orders and kind of scrutiny on the business model that have been built and are reliant on that sourced international labor?.

Right. Well, we continue to see a benefit, and that there is more focus on the domestic labor. There was - in a couple of weeks ago, there was a story in The Wall Street Journal, and it's actually working the way it's supposed to.

Whereas, these Indian offshore companies that we're bringing in mid-tier, lower-tier skill set people and using up all the H-1B visas, they weren't the Top 3 people getting awarded visas this year. The Top 3 people getting awarded visas were Apple, Microsoft and Google. And those people are - they're average pay is $110,000, not $60,000.

So it's actually working the way it's supposed to, and 99% of our workforce is W-2 domestic labor. So as there's more focus on domestic labor, they're going to the people who have them and we're the other ones that have them. So again we're seeing that.

We're seeing business that might have been awarded to those models, offshore models are not getting awarded. Some of the stuff that had previously been awarded is getting work through and it's not getting repatriated.

But we're seeing that on new work when a customer is looking at, do I it internally? Do I do it with the offshore labor? Do I do it with project consulting labor? Or do I do it augmenting my internal staff? They were winning market share against some of the offshore models..

And now to the line of Jeff Silber from BMO..

It's Henry Chien on for Jeff. I just had a question on just digging into your delivery model.

As you grow and build out your scale, I'm just curious how you're thinking about, if there is any margin benefits that come from that? Or is that mostly from, say, a growth perspective in that you can fill larger projects and larger orders?.

Well, we'll save some of that for the Analyst Day. But what I will tell you is that the SOW business, if we're talking about gross margin, tends to have a higher gross margin. If you're looking at EBITDA margins that the federal business and our legacy business or nice double-digit EBITDA margin businesses.

The real reason of moving further into the IT solutions business is that's where our customers are taking us. It's not necessarily higher profit gain that's driving us there, it's if we're going to be a valued partner to our customers, we have to help them the way they want to be helped.

And so we're seeing customers take more and more responsibility on in-house. But by doing so, that requires them to augment their internal staff. We very much like in the digital creative world, we're seeing and this has been well documented that work is moving away from the ad agencies and going back in-house.

That means that the in-house departments need specialized skill to augment for particular campaigns or projects, and they come to us versus the ad agencies. So it's just - it's a trend that's going to continue. It's the reality of tech cycles getting shorter and disintermediating or disruptive technology being developed quicker and quicker.

And how large corporations want to manage their cost and turning human capital more into variable cost versus the fixed cost..

Okay. Yes, that's really helpful. And if we think about that model and ECS, is there a different sort of metric or framework that you look at to either forecast or kind of judge performance of the business, whether it's longer projects or number of projects, just kind of curious.

I imagine you'll speak to that on the Analyst Day, but just curious right now..

Yes, let us educate you at the Analyst Day. But as you know that they're working off of a backlog. And so they have projects that have been architected that need to be completed, and it's getting the work performed versus getting a set of needs or orders from a customer and then seeking to fill them in and having start date.

So in some ways, there is greater visibility as to what the revenue may be save and except if a customer stall something. But we'll flush that all out for you on the Analyst Day, to just draw the distinctions on how view kind of forecasting and the different segments..

[Operator Instructions]. And now to the line of Mark Marcon from R.W. Baird..

With regards to Apex, just in terms of the strong growth there. To what extent do you think it was due to the growth on the SOW side? And then on the straight staff augmentation that's done on time and materials basis.

Are you seeing a similar level of growth? And if so, is that being driven by an improved demand across the board? Or would you say you're taking share? I suspect it's bit of both, but....

Right. Rand, why don't you address that? And we don't break out the growth rates between SOW and staff augmentation, but you can address the relative size qualitatively..

Yes. I think, Mark, we look at the growth and then account, whether it staffing or consultative or value-added services, and the client doesn't differentiate. They're looking for services, and we're providing services what they need.

As our consulting business is growing, our value-added service is growing a little faster than staffing, the answer is probably yes in the macro sense, but it's an account-by-account decision based on what the client needs and requirements are.

But we're logged on to accounts and try to grow our portfolio of accounts and round that out and make sure we're servicing all the needs that we can value add to the clients in those areas, so..

And Rand, your growth is really broad-based, I was just wondering if you could comment as to whether some of that strong growth that you are experiencing is coming as a result, not only just the displacement in terms of some of the offshore and the conversion over to the staff aug model? But within staff aug, do you feel like you're gaining share?.

I don't think there is any question we're gaining share in staff aug, and we looked at as Peter related to, we look at it by account. We know how much the account spends and what percent of the account spend we are. And so we know we're growing in the accounts that we're focused on and we know we're growing against our competitors.

So obviously, we're taking market share. I think you're right. The markets it is broad-based. As we have said all along, the CIO has five resources they can use, organic, consulting, staffing, offshore and offsource, and we are seeing a migration of work from all those different bubbles into the companies that can best stand up and service them.

And we happened to be one that's winning in that battle, but we focus on transactional excellence, the account relationship and bringing value to the client and that seems to be working across the board..

That's great. And then I was wondering if George could comment a little bit qualitatively in terms of how we should think about acceleration or deceleration in the ECS business? And just how is it - does it tend to be lumpy in terms of the growth from quarter-to-quarter just as you're fulfilling some of the projects.

How should we think about that just in terms of thinking about the guidance for the second quarter? And what that potentially means on a longer basis?.

George, would you address that on a qualitative basis, please?.

Yes, absolutely. So the term you used, lumpy, that's probably a really good qualitative term to use on a quarter-over-quarter, quarter-to-quarter, quarter-by-quarter basis, we can have some swings as we close out certain projects and startup other projects, buy materials and things like that and completing certain projects.

But we got a pretty good way of doing forecasting. And we think, overall, we are going to give - continue to perform in the high single-digits growth year-over-year. And we feel comfortable about what we're doing this year in terms of forecast we previously provided..

Great.

So I mean the high single-digits for the year still stands or just basically we've got some project ends and some project starts and that leads to a little bit of lumpiness from quarter-to-quarter?.

Mark, we've kind of given you some guidance and we're not going to make any further comment on that..

We gave full year..

We gave you full year guidance, and we are not going to give any additional color to that..

Okay, just wanted to understand it. That's all..

No, I understand. I appreciate..

So I mean everybody else is going to ask the same question. So just figured might as well ask it on the call, in that way you can get the message out to everybody. With regards to Creative Circle, you ended up seeing some nice growth there.

Is it - do you think the environment is better or do we think there is account wins that are occurring?.

Well, I'll let Rand address it. But as we've said in previous calls, we - it's a good business, it's a great end market. We did some things in '16 to improve the long-term sustainable high growth rate, which can pause you to be a little bit internally focused.

We're further away from that, and some of the things we've done are now starting to positively impact first pause growth rate.

Rand, what would you add?.

Yes, I don't think, Peter, what you say is correct. We're doing things to make sure we're keeping up or getting ahead of the market. The market is shifting a little bit in shades from creative marketing to digital marketing. And I think we're being pretty good about recognizing that and responding to our client needs.

And we're fanned out on probably more accounts than we were in the previous years. So there is a lot of things going on all at once, and I think, all positives..

We have no more questions in the queue. Please continue..

Well, we appreciate your time and attention and look forward to seeing many of you at the Analyst Day on May 23. Thank you for your attention..

Thank you. And ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive Teleconference Service. You may now disconnect..