Greetings. Welcome to the ASGN Incorporated Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

AT this time, I will turn the conference over to, Kimberly Esterkin with Investor Relations. Kimberly, you may now begin..

Thank you, operator. Good afternoon and thank you for joining us today for ASGN's third quarter 2021 conference call. With me are Ted Hanson, President and Chief Executive Officer; Rand Blazer, President of Apex Systems; George Wilson, President of ECS; and Ed Pierce, Chief Financial Officer.

Before we get started, I would like to remind everyone that our commentary contains forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, 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 any 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 at investors.asgn.com.

Please also note that on this call we will be referencing certain non-GAAP measures, such as adjusted EBITDA, adjusted net income and free cash flow. These non-GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between the GAAP and non-GAAP measures are included in today's press release.

I will now turn the call over to Ted Hanson, President and Chief Executive Officer..

a legacy data consolidation solution contract with the Naval Information Warfare Center to support its work for the Defense Health Agency, including achieving new efficiencies and cost savings; three task orders to support the National Oceanic and Atmospheric Administration with the development of decision support tools such as economic impact models; a five-year prime contract with the US Centcom to provide personnel, supervision and services necessary to support critical missions and operations; and a five-year multiple award prime contract with the General Services Administration to aid the development of manned and unmanned systems for the Department of Defense.

With that, I will now turn the call over to Ed Pierce, our CFO, to discuss the third quarter financial results and our fourth quarter guidance.

Ed?.

Thanks, Ted. Good afternoon, everyone. As Ted mentioned, our financial performance for the third quarter exceeded our updated guidance estimates that we announced during our Investor and Analysts' Day conference last month.

This performance was driven by year-over-year double digit organic revenue growth, the contribution from the businesses acquired after Q3 of last year and expansion in gross and adjusted EBITDA margin in both business segments. For the quarter, revenues were $1.074 billion, up 18.7% over Q3 of last year and up 10.1% sequentially.

The revenue contribution from acquisitions made after Q3 of last year was $42.0 million or 4.6 percentage points of the year-over-year growth rate for the quarter. Net income and adjusted EBITDA were both up year-over-year and sequentially and grew at a higher rate than revenues.

Our adjusted EBITDA margin of 12.7% was 140 basis points higher than Q3 of last year, reflecting, among other things, improvement in the business mix and expansion in the gross margins of our two business segments. Revenues from our Commercial Segment were $774.9 million, up 25.8% year-over-year.

For the fifth straight quarter, all commercial divisions were up both year-over-year and sequentially. Acquisitions made after Q3 of last year contributed $10.4 million in revenues for the quarter or 1.7 percentage points of the year-over-year growth rate.

Revenues from our Federal Government Segment were $298.9 million, up 3.6% year-over-year and in line with our guidance estimates. This growth was driven by a number of factors, including the effects of new contract awards and the revenue contribution from businesses acquired after Q3 2020 of $31.6 million.

As you may recall from prior calls, revenues in Q3 of last year benefited from a high level of spending under two AI/ML cost reimbursable contracts. Normalizing for the revenue surge in Q3 of last year and excluding the contribution from acquisitions, revenue growth for the quarter was low single digits year-over-year.

Gross margin of 28.7% exceeded the high end of our updated guidance estimates and was up 260 basis points year-over-year. Both business segments reported year-over-year expansion in gross margin. Gross margin for the Commercial Segment was 32.4%, up 150 basis points year-over-year.

This expansion was the result of the double digit growth of our high-margin commercial consulting, creative marketing and permanent placement services.

Gross margin for the Federal Government Segment was up 340 basis points mainly as a result of changes in business mix, which included a lower level of revenues from certain cost reimbursable contracts, the contribution from high-margin businesses acquired after Q3 of last year and higher profitability on two firm-fixed-price contracts whose initial contract term ended during the quarter.

SG&A expenses were $192.7 million and were above our updated guidance estimates because of acquisition-related expenses, which we do not include in our guidance estimates.

The year-over-year increase in SG&A expenses was commensurate with the growth in the business, the higher mix of high-margin commercial revenues, which carry a higher SG&A expense component than federal government services, higher headcount investments to support future growth of the business and higher incentive compensation and healthcare expenses, which were both down in 2020 from historical levels.

Income from continuing operations was $66.3 million, up 42% year-over-year. Adjusted EBITDA was up 34.1% year-over-year on revenue growth of 18.7%. Our adjusted EBITDA margin of 12.7% was up 140 basis points from Q3 of last year related to the expansion in gross margin. At quarter end, cash and cash equivalents were $679.4 million.

There were no outstanding borrowings under our $250 million revolving credit facility, and our Senior Secured Debt leverage ratio was 1.08 to 1.0. As noted in today's release, we are updating our guidance estimates for the fourth quarter from the estimates we announced during our Investor and Analysts' Day conference last month.

Relative to our earlier guidance, we are increasing our revenue estimate by $20 million and our adjusted EBITDA estimate by $5 million. Our updated financial estimates for the fourth quarter are set forth in our earnings release and supplemental materials.

For the fourth quarter of 2021, we estimate revenues of $1.01 billion to $1.03 billion, income from continuing operations of $52.5 million to $56.2 million and adjusted EBITDA of $116.5 million to $121.5 million. We are estimating all divisions will be up year-over-year.

At the mid-point of our financial estimates, year-over-year revenue growth for the fourth quarter is approximately 13.3%. On a sequential basis, we expect revenues will be down as the fourth quarter has three fewer billable days than the third quarter. However, for the Commercial Segment, we expect revenues per billable day will be up sequentially.

For our Federal Government Segment, we expect revenues per billable day will be down because of lower expected revenues from certain cost reimbursable contracts and our decision not to renew two low-margin web services contracts that expired at the end of the third quarter.

Thank you for your time, and I'll turn the call back over to Ted for some closing remarks. Ted? Ted Hanson Thanks, Ed. ASGN's success continues to be driven by an incredible team effort across our company. Before we open up the call to your questions, I'd like to speak about one of our team members in particular, our President of ECS, George Wilson.

George, as many of you know, has spearheaded our government business since ASGN acquired ECS in 2018. ECS, now referred to as our Federal Government Segment, has had a long history of delivering excellent financial results.

George and his leadership team have expertly navigated the federal government marketplace to meet the most critical and complex needs of our clients to reach $1.0 billion in revenues well ahead of our initial expectations.

After much planning and internal discussion, George has decided to retire at the end of this calendar year, and while George's official role as President of ECS will come to an end at the close of this year, he will remain in a consultancy role with ASGN through April 2022.

In George's place, John Heneghan, ECS' current Chief Operating Officer, will assume the role of President. George and John have worked closely together for over two decades, and John has been preparing for this new role as part of our planned succession process over the past two years.

John has more than 20 years of experience in emerging technology and digital transformation, IT product development, managed services, business strategy and corporate development. I anticipate that his transition into this new role will be seamless.

On behalf of our Board of Directors and the entire ASGN team, I want to personally thank George for his incredible service to ECS and ASGN. I'd also like to congratulate John on his promotion. John will join us for today's Q&A session. Thank you again for your time this afternoon and for your continued support of ASGN.

This concludes our prepared remarks for the third quarter. We will now open up the call to your questions..

[Operator Instructions] And our first question will be from coming from the line of Gary Bisbee with Bank of America Securities. Please proceed with your questions..

Hey, guys, good afternoon. I guess I want to ask a question about the commercial segment gross margins, obviously up quite strongly year-over-year, and also ahead of the pre-pandemic third quarter '19.

When I think back a few years ago, you tend to talk a lot about stable margins as the right expectation, but clearly with a mix shift going on in the business, this seems to be a good case for margin expansion.

I guess, and you talked about certain extent at the investor day, but as you think out beyond these easy comps you've had for the next few quarters.

And looking forward, how should we think about the case of margin expansion and the gross margin line?.

Well, Gary, I will let Rand hop in here and talk about this but there are some proof points, if you will, underneath the strategy here that we see that are working. One is, we are, in a commercial segment, as we've talked about a lot, moving up into higher margin work.

We're also seeing that we are on the backs of that getting expansion and pay the bill margins. And so, all these kind of underlie the strategy of where we are. I mean, obviously, there can be headwinds and certain skill sets, certain large accounts. But I think the progress that we're making here is incrementally adding to gross margin here.

As we go forward, we've set the guidance for you on a forward basis that they could be stable based on one being a larger firm, but then two, offsetting that with moving into higher margin work-streams here, but I kind of refer you back to the Analyst Day materials for anything on a forward basis. Rand, anything you would add to that.

Rand, you are on mute..

I'm sorry, yes. I wouldn't add anything to it. I think the tailwinds you commented on are great. I think we - obviously the resurgence of Creative Circle and CyberCoders within our commercial unit is helping, the consulting business is helping. By the way, our staffing gross margins have always been best in class.

So, I think steady is certainly what we put the least that we would expect, right..

Okay. And then just to follow up, I'd ask on the commercial consulting business. I know you've had relatively easier comps but the growth has been terrific.

If we were to think about the number of acquisitions you've done in the last couple of years that added capabilities and how important those have been to the organic growth you've been delivering versus penetrating clients more with these services or any other sort of relevant driver? How important has the M&A been in continuing to add those capabilities versus just your views of how you're penetrating the market? Thank you..

Well, it's been very important. Rand, I'll let you talk to that..

Yeah, I think, look, there's - we have an excellent reputation with the clients, we've always said that our past experience as a staffing firm is critical. The account relationships we've built over the last decade have put us in good stead with a client and make us present in the discussion about future needs.

The muscle that we've added to the acquisitions has been unbelievable. It's really propelled us in areas like cloud, agile development, overall integration and ERP implementations, so they have all contributed, it's a combination of the things. So it's, I think they've been instrumental, Gary, to our strengths in consulting.

And if you look at the numbers in consulting, by the way, I mean, it really has jumped up right, since even to '19 to '20, if look back at all the revenue numbers, we've more than doubled these numbers in this year, and so right time, right place, and fortunately for us, we had the right set of technical strength to step up..

Thank you terrific performance..

Our next question comes from the line of Tim Mulrooney with William Blair. Please proceed with your questions..

Hey, this is Sam filling in for Tim. Thanks for taking our questions here. We've seen strong growth, both organic and total growth coming out of the ECS in the broader federal business for several years now.

I'm not asking for guidance on fiscal 2022, specifically, but just more broadly speaking, I'm curious under a more normalized environment, how you think about the organic growth rate potential for this business based on the portfolio as it stands today..

So Sam, if you go back to the 2018, the acquisition date and still kind of holds true today, I mean, we've kind of guided you to mid to high single digits for organic growth rates for ECF. They fortunately, have gotten much higher growth rates than that, here in the past, very difficult comps are kind of catching up with us.

But I think for your modeling purposes, I would look to mid to high single digits. And I think, again, I'd refer you back to Ed Pierce's numbers for our three year targets in the investor and analyst a presentation..

Perfect, appreciate it. Switching gears a little bit here, our team read an article from FIA the other day that shared how cybersecurity accounted for more than 20% of all IT job postings this year.

Curious if this is what you've been seeing on your side of things and in particular, cybersecurity has had a larger impact on your growth this year than in previous years? And if so, is that trend, something you might expect to carry forward over the next few years here?.

Yeah, so I'll let Rand answer the commercial side of this and John, comment on federal..

I would say on the commercial side, Sam, cybersecurity, we look at it as it's embedded in every solution we provide. So you always have to consider the security aspects of whatever you're doing in the technology area.

If you looked at our actual, what we call counted revenue toward the cybersecurity skill area or solution area, it has increased, definitely, but it's not our fastest growing or largest solution area. But I go back and say, again, cybersecurity, we view it as an important element in everything we do.

So you can be working with a cloud, you can work in the ERP, you can be working with code development, dashboards, you have got to consider cybersecurity, your security and all of that. So it's embedded in everywhere. George.

Hey, Randy. Yeah, John, here and Sam, listen, cybersecurity makes up about 20% of the ECS segments, business. But like Rand said, cybersecurity really is in and around everything that we do.

It's a big part of our devops model, so cybersecurity also is an area where we are highly invested, and is a big part of our future growth where we're kind of leading the space in zero trust and in cyber analytics and manage cybersecurity offerings.

So it is a place that we're highly invested, we have great depths of capability and look for that as a continued market priority for our federal customers. And so we are prepared for that and excited about where cybersecurity is going from business..

Appreciate you guys..

The next question is from the line of Tobey Sommer with Truist Securities. Please proceed with your question..

Thanks. I had a question on, well, wage inflation, certainly a broad topic out there today.

Does it both internally and externally in your business, does a higher rate of wage inflation over the next several years make it easier or harder for you to hit your multi-year goals and could you explain how it might impact the attainment of those goals? Thanks..

Yeah, well, good. Good question, Tobey. I mean, look, we've always lived in wage inflation in technology, skill sets in our business where in typical years, maybe it's a couple of three points and we kind of plan on that, both in the current period and forecasting pricing for the future periods.

Today, it's maybe in the - maybe more in the mid-single digits. I don't think that that necessarily hinders or helps, if you will. I guess you could make an argument for we're doing a good job today, passing that through to higher bill rates with our customers, they understand that they want the best talent.

So they're making the appropriate accommodations in order for that to happen. So maybe if bill rates are a little higher then it's a little easier to get to our targets. But I think that those are kind of just incremental problems kind of around the edges. I mean, I think the story is here that there's wage inflation, for sure.

We always experienced this. We have been adept at passing that to the customer, because they have the desire to get the best talent. And you can see that in, the performance of our gross margin profiles, we've got some incremental expansion here..

Thanks.

Shifting gears to the ECS in the federal government segment, do you see a good pipeline of awards pending adjudication and that kind of thing, even as we stare at a continuing resolution and haven't really had a lot of what seems like tangible progress on the multiple appropriations bills that are floating around Congress right now?.

Right. So, Tobey, we had a good quarter for bookings this quarter, here in the third.

But John, you want to talk to Tobey about future bookings, kind of just what's in the pipeline and what - how our customer is interacting with us?.

Sure, yeah. And Tobey, we do have a very strong and healthy pipeline and as we articulated earlier with you in the investor day presentation last month, we have seen a delay in RFP releases over the first half of the year. But we've seen that accelerate and are expecting in Q4 a lot of RFPs to release.

And then as you know, in this space, you wait for those RFPs to be awarded and there are potential protests and all that. But we do see that acceleration has finally picked up post-COVID and compounded by the presidential transition, so excited about 2022 and beyond. The pipeline is strong..

Thank you.

And if I could just kind of apply my first question that Ted answered to the ECS business and you, John, is there anything about your contracts mix, cost plus T&M fixed price, in which there's a sort of a distinct negative or positive implication from higher wage inflation over the next several years?.

No, I think Ted answered that appropriately. We've seen that our customers understand the market, and they want the talent we bring to bear and we've been able to find ways to increase the wages - I mean increase the bill rates as appropriate to match the labor.

And as you know, a third of our business is cost reimbursable and that makes that a little bit easier. And some of our most high value type of work is in that cost reimbursable space..

Thank you very much..

Our next question is from the line of Jeff Silber with BMO Capital Markets. Please proceed with your questions..

Thanks so much. I was wondering if we can focus on the assignment business within your commercial segment. And I'm just curious how fill rates are running compared to what they normally run because of all the supply constraint issues you think that's holding back some of the business there..

Rand?.

Well, let me understand the question, Jeff.

Are the bill rates holding us back on what we can deliver?.

Fill, fill, F..

Fill rate..

Sorry about that..

No, I'm sorry, our fill rates are - no, I don't think that's holding us back. Our fill ratios have gone up this past year quite significantly. More importantly, the quality of the requisitions or the requirements we're getting, or what we call higher quality wrecks.

What we find a lot of our bigger clients and Fortune 500 clients is they're working with a fewer number of vendors, and they expect us to step up and to deliver. Our clients are very concerned about building their own workforces and so this is not a time to dibble and dabble, if you will. They're anxious to work with the best and get the best results.

And so our fill ratios have moved up very nicely and it is part of our success this year..

Okay, that's great to hear and then just a question about the near-term guidance. I know at your investor and analyst day last month, you positively pre-announced and yet you beat those expectations a few weeks later.

Did I hear you say that that changes have actually accelerated since that point in time?.

Well, Jeff, I don't know if they've accelerated more than the pace that they were on, but it accelerated through the end of the quarter. So I would just say the pace continues is probably the best way to put it..

Was there any meaningful - I'm sorry, just any meaningful business that was different in terms of that acceleration?.

No, just steady acceleration across the board..

Okay, great. That's great to hear. All right. Thanks so much..

Yeah..

The next question is coming from line of Surinder Thind with Jefferies. Please proceed with your questions..

Hello, this is [indiscernible] in for Surinder. Thanks for taking my question and congratulation on the quarter. In terms of just a few housekeeping items, given M&A has become a bigger part of your strategy, we just want to have a better understanding on how much inorganic revenue is embedded in the 4Q guide. Thanks..

Ed Pierce, you want to take that?.

Yeah. As it relates to the contribution from acquisitions this past quarter was 42 million, it would be acquisitions that we made after of Q3 last year and we're estimating it's going to be roughly 42 million in Q4.

So in our earnings release and our supplemental, you can see us set out separately what the organic growth rate is not only for the consolidated enterprise, but also by segment. So it's in the information that we grew that it..

Got. Thank you.

And then just switching gears a little bit in terms of client demand trend, in terms of how many positions are being filled in remote capacity now versus pre-pandemic, is there any sort of meaningful changes versus the height of the pandemic, when almost all the jobs were remote?.

We've seen an incremental return to onsite work. I wouldn't say it's been half or more than half by any means but certain clients in certain industries where it's more important to be onsite, we've seen some return to work there but more than half of our resources continue to work on a remote basis..

Got it. Thank you..

Next question comes from the line of Kevin McVeigh with Credit Suisse. Please proceed with your questions..

Great, thanks, again. Nice quarter. Hey, you talked about, Ted, M&A and the highest return of capital, and it sounds like you're hired a relatively senior person.

Any thoughts around that? And is that purely addition or obviously, maybe CyberCoders there is like that starting to scale? Do you still have to refine a little bit or would deployment primarily be targeted M&A?.

Yeah, it's really targeted M&A, Kevin.

The addition of some - you are bringing more muscle to the table, if you will, to help us prosecute M&A here is important in my view over the next three years, given the amount of capital that we have the opportunity to deploy there, and the number of targets and the size of targets that are out there in that opportunity set.

So I think that this is, while we're historically very capable of executing M&A, this is the time to invest there and I would say the pipeline - right now we're in a mode of building pipeline and the pipeline is becoming more robust and there are target rich opportunities out here in both the commercial and the Federal segments.

And we have to continue to plod through that to find the right technical capabilities with the right domain expertise, so that fits with what our current view is that we want to add into the business..

And just not only obviously you can do it in organically, but as you think about sourcing candidates in the current environment, Ted, how do you think about today versus - is it tougher today versus -.

Did we lose Kevin?.

Yes, sir. It appears we lost Kevin's line. I'm moving on to our next question. It is for the line of -.

Operator, hang on one second, I think we are connecting together..

Sure. Sure, please go ahead..

No, no, I am still here..

Oh, good. Okay. So, Rand you want to take that.

Kevin was asking about difficulty to source candidates today versus past I believe, right, Kevin?.

Yep.

Sorry about that Ted, my phone?.

Yeah, no problem..

Well, I guess you expect me Kevin to say it's more difficult today but I I'm not going to say that. It's always been difficult. We have a large database of candidates that we indigene to us, we have an alumni network that's very strong.

We have obviously turn in the candidates coming off jobs and going on jobs, that sort of thing but I think it's the automation of all that, that we have that makes it a little easier to get to the right candidate and to respond to the clients.

If you look at our fill ratios and our growth and everything else, there's nothing that points to, we're having more difficulty. I think sometimes we've said in the past, when you want a certain person with Java skills in New Jersey, and you only want to pay $50 an hour for them that's a difficult fill, okay.

So there are something - things like that that jump into it. But today, with remote work, with using labor across the country, or even near shore, we found that we have more avenues now to address the needs. So, it's no more and no less difficult than it was before..

And Kevin, just to emphasize that last point, with clients more open now to bring on remote workers, they've opened their aperture here quite a bit across the country and nobody is better positioned here than we are as one of the largest providers of IP resources to identify that across the country, find the right skill set, find a more precise match on experiences and industry expertise and bring that to bear.

So, while there is a balance here, demand and supply, there's also kind of a new view here around remote work and then, obviously, we're the best positioned here to bring that to bear for our clients..

That make sense. And then, Ted, just one quick one, if I could, one follow up.

Has there been any - on the government side, any kind of subcontractor awards with the [indiscernible] contract, or is that still too, too early for that?.

John, you want to take that one..

We've had several subcontract awards. Not so much [indiscernible] is the one where we've seen that as well as a few others and that's a part of our business that remains healthy. Hope I answered your questions Kevin..

Yep, that helps. Thank you..

Thank you..

This next question comes from the line of Mark Marcon with Robert W. Baird. Please proceed with your questions..

Good afternoon, everybody and congratulations on a terrific quarter. I'm wondering, this is a question for Rand or Ted, can you talk a little bit about the consulting business on the commercial side, and your ability to continue to transition some of the Apex Systems clients over to consulting assignments.

I'm just wondering what percentage of your top enterprise clients are typically using you for consulting services and how has the nature of those consulting assignments changed or evolved over the last few quarters as you think about just the size of them, the number of consultants on assignment, the length of the projects, etc..

Rand?.

Yeah. That's a good question, Mark. I'm pleased to answer it. First of all, we do about a third of our enterprise clients are also consulting clients, if you will. So with that has propelled our growth with, but also shows we have a lot of room to go.

If you look at the three major groupings of solutions we have and offerings we have to the client, workforce mobilization, modern enterprise and digital transformation, all three are growing, all solutions in all three areas have grown over this past year, quarter-to-quarter; digital transformation solution and sales have been highest; okay, they've grown the most.

Workforce mobilization actually declined a bit, and now it's starting to come back. And that's around companies who are recognizing the need to build a workforce strategy.

They're concerned about the shortage of labor and they are starting to think differently about how they build their workforces for now and for the future, with some staying power around that. So we're benefiting from that.

And then in modern enterprise, a lot of that is ERP work, for example, our new acquisition of Avaap gives us a strong position there with a package we think is up and coming and doing very well in the marketplace in the healthcare and manufacturing sector called Infor.

So I mean, I think there are things that we're doing that are helping us propel growth. The digital transformation definitely has been the biggest grower..

That's great. And Rand and Ted, I appreciate that you all have lots of consulting experience.

If you think about just the types of assignments that you're winning, relative to the other bidders that are out there, can you just talk about, like, who you're going head to head against, and like some of the wins, that you're kind of the most proud of that exemplify the progress that the overall consulting practice is making?.

Ted, I will go ahead..

Yeah, go ahead please..

Yeah, Mark, I'd say first of all, the good news is now as we've been at this for a number of years, is we're starting to get multi-year contracts and awards as well as seven figure or higher awards per year. So we've migrated up to bigger jobs and longer term jobs and jobs that go over a period of time of years. Who are we competing with? It varies.

There are a couple staffing firms that offer consultative solutions, but not really, I wouldn't say they're a principal competition in this work, I'd say it's generally a boutique consulting business and/or some of the big players, some of the accounting firms, some of the bigger players.

We won, I'm not going to mention the account or who we be, but there actually we won an architecture job for building a cloud architecture for a client and it was a Fortune 500 client who wanted to rethink their cloud environment and the way they were distributing that cloud and embedding security.

And we had a better answer, and a quicker answer, because we could pull the workforce together and get on it more quickly. So there are different reasons why we win. The good news is because of our account relationships through the staffing business over the last two decades, we're in the dialogue.

And as long as we're in the dialog, that gives us a chance to muscle up and present. And remember, because we build teams that are industry specific, we do use contingent labor, along with our own tools and artifacts, and technical expertise to lead these engagements.

So we found, what I'd call, a unique way of putting together the right team of people to address the need and move them forward, and I think that wins today, particularly when some of the consulting firms are having a hard time getting talent..

That's great.

And if you look out like a few years, like two, three, four years, what do you think of the remaining two thirds of the enterprise, Apex clients that you have like, what percentage do you think those could start migrating towards using you for consulting services?.

Ted, I shall go ahead..

Go ahead..

I don't want to be too bold but if we have 300 of the Fortune 500, I expect all 300 we can do an array of services for them. I'm sure we'll miss a few but I'm also sure there's some of the other 200 where we do not provide staffing services that we can provide consulting services. So I think we see a big, wide open market.

And by the way, we've pointed ourselves toward the Fortune 1000. Now, I mean, we have a strong enough footprint and the sales team that can step up to that. So we have a lot of market to still go after..

That's great.

And then one last one, just with Randy Phillips joining, can you just talk a little bit more about the size of the acquisitions that you might end up looking at or just the cadence of the acquisitions? It's obviously a robust environment and a big pipeline but just wondering how we should think about it relative to recent history?.

Yeah. Well, look, I think Randy brings years and decades long expertise in M&A, both in the commercial marketplace and in the government marketplace.

And while we are able to build pipeline on our own, Randy just enhances that, if you will, and then accelerates our ability to prosecute that while we're all on the day job as well, which is serving our clients.

So I mean, you should just think about Randy as an experienced piece of incremental muscle to help us prosecute pipeline, build pipeline, and then get to final outcomes here. So we're excited to have him on board and I think this is the right time to make an investment in this part of the business..

Perfect. Thank you..

Thank you. At this time, we have reached the end of the question-and-answer session. I'll now turn the call over to Ted Hanson for closing remarks..

Great. Well, I want to thank everyone for being on the call today and we look forward to discussing our fourth quarter results with you in the first part of 2022. Thank you and be well..

Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation..