Volt Information Sciences, Inc.
Q3 2021 Earnings Call Transcript

Published: 13 Sep 2021

[Operator:]

Greetings. Welcome to the Volt Information Sciences, Inc. Third Quarter 2021 Earnings Call. Please note this conference is being recorded. I will now turn the conference over to your host, Joe Noyons of Investor Relations. You may begin.

[Joe Noyons:]

Thank you, Shamali and good afternoon everyone. Thank you for joining us today for Volt Information Sciences’ third quarter fiscal year 2021 earnings conference call. On the call today are Linda Perneau, President and Chief Executive Officer and Herb Mueller, Senior Vice President and Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the third quarter of fiscal year 2021. The release is available on the company’s website at volt.com as well as the EDGAR SEC website filed as a Form 8-K. We have also prepared a supplemental presentation, which is available on the Investor Relations section of the company’s website. Before beginning today’s prepared remarks, I would like to remind you that some of the statements made will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors, including, but not limited to, potential impacts of the COVID-19 pandemic on our business operations. We refer you to Volt Information Sciences’ recent filings with the SEC for a more detailed discussion of the risks that could impact the company’s future operating results and financial condition. Also, on today’s call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon. With that, I would like to turn the call over to Volt’s President and CEO, Linda Perneau. Linda?

[Linda Perneau:]

Thank you, Joe and welcome everyone to today’s call. Our third quarter financial results mark another milestone for the company, recording year-over-year revenue growth and positive net income in consecutive quarters for the first time in over a decade. In addition, we achieved year-over-year improvement in gross margin and SG&A as a percentage of revenue, further narrowing the GAAP to third quarter 2019 levels and our EBITDA target of at least 3% by the end of 2023. Despite lingering effects of both COVID-19 and most recently, the Delta variant, our Volt colleagues remain disciplined and focused on executing against our strategic initiatives. All three of our operating segments

[Herb Mueller:]

Thank you, Linda. Revenue for the third quarter of 2021, on a GAAP basis, was $217.5 million compared to $185.9 million in the prior year comparable quarter, a $31.6 million or 17% increase. After adjusting for favorable currency translations, overall company revenue increased $29.3 million or 15.5% due to continued improvement across our operating segments. During Q3 ‘21, our domestic and international direct hire line of business continued to show improvement. For the quarter, we were up 93% from the prior year and up 26.6% compared to Q3 2019. Looking at Q3 2021 adjusted revenue for each segment. Our North American Staffing segment reported adjusted revenue of $179.4 million, an increase of 15.9% from the prior year. Adjusted revenue for our International Staffing segment was $28.3 million, up 17.3% from the prior year and our North American MSP segment reported adjusted revenue of $9.8 million, up 3.8% from the prior year. Our North American Staffing segment posted positive year-over-year revenue growth for the third consecutive quarter. The 15.9% increase is primarily attributable to new business wins and a combination of retail and mid-market clients, combined with the expansion of business within existing clients. Direct Hire revenue increased 139% year-over-year and exceeded third quarter 2019 by 29.2%. Our International Staffing segment increased $4.2 million or 17.3% due to increased payroll service and staffing business in the UK and France as well as increased Direct Hire business in the UK and Singapore. Direct Hire revenue increased 43.9% year-over-year and exceeded third quarter 2019 by 22.3%. Revenue in our North American MSP segment was up 3.8% compared to the prior year, primarily attributable to increased demand in our payroll service business. Gross margin for Q3 ‘21 was 16.6% compared to 16.1% in the prior year comparable quarter, primarily due to improved margins in our North American Staffing and International segments. Our North American Staffing segment increased 70 basis points due to a mix of higher margin business and a benefit from government wage subsidies. Our International segment increased 80 basis points primarily due to an increase in direct hire business. North American MSP decreased 140 basis points, primarily due to business mix. SG&A expense for Q3 ‘21 was $34 million or 15.6% of revenue compared to $31.2 million or 16.8% of revenue in the prior year comparable quarter. The increase of $2.8 million was primarily due to higher incentives on increased sales volume, increase in labor and higher medical claims experience partially offset by lower facility costs due to consolidating our real estate footprint. Restructuring costs in the third quarter of fiscal ‘21 was primarily due to $0.5 million related to ongoing cost of facilities impaired in the second half of fiscal ‘20. The prior year quarter included charges primarily related to our strategic cost reduction initiatives. Impairment charges in the third quarter of fiscal ‘21 was primarily related to capitalized software cost as a result of the change in expected useful life of certain assets. Impairment charges in the third quarter of fiscal 2020 primarily relates to consolidating and exiting certain lease office locations throughout North America, where we could be fully operational and successfully support our clients and business operations remotely. Operating income for the quarter was $1.6 million compared to a loss of $4.2 million in the prior year comparable quarter. The year-over-year improvement is a result of the actions previously mentioned. Operating income for North American Staffing segment was $8.3 million, an increase of $5.6 million compared to a year ago. International staffing operating income was $1.2 million, a $0.6 million increase from the prior year, and North American MSP operating income was $0.6 million, a decrease of $0.4 million. This is our 14th consecutive quarter, recording positive operating income for each operating segment. For Q3 ‘21, GAAP net income improved by $5.5 million, $2.6 million or $0.03 per diluted share compared to the prior year. Adjusted EPS, which excludes restructuring and impairment charges, was $0.05 per diluted share. Adjusted EBITDA for Q3 ‘21 was $4.7 million or 2.2% of revenue, a $3.7 million improvement compared to Q3 2020. Moving on to a few key items from cash flow and the balance sheet, we ended the third quarter with $49.6 million in cash and equivalents, an additional $11.9 million in restricted cash and short-term investments, a combined increase of $2.2 million compared to the prior year-end and $1.5 million increase sequentially. Our long-term debt remained at $60 million, the same since January 2020, and total available liquidity increased 18.1% from $27.2 million in April to $32.1 million in July. We provided $3.1 million in cash flow from operations as a result of positive net income, an increase in accounts receivable collections and lower payroll tax payments in the third quarter of fiscal ‘21 with capital expenditures of $0.9 million. Trend for Q4, as we look towards the fourth quarter, although the labor market remains tight, and we continue to be impacted by restrictions in areas we operate, we expect revenue to improve 5% to 7% over last year. As a reminder, last year’s fourth quarter marked a significant sequential improvement as we capitalize on the economic rebound. We expect gross margin to be in the low to mid-16% range. SG&A should be in the $34 million to $35 million range. We believe the combination of increased revenue and favorable cost comparisons should result in improved operating income and EBITDA over the prior year quarter. Overall, Linda and I continue to be encouraged with the performance in the third quarter of ‘21, given the consistent year-over-year revenue growth and positive net income. I will now turn the call back over to Linda. Linda?

[Linda Perneau:]

Thank you, Herb. Before sharing commentary on the performance of each operating segment, I would like to reflect on the shifting impact of COVID-19 and the Delta variant as well as share some thoughts relating to the labor shortages in the U.S. Candidate availability and supply chain challenges have become increasingly more apparent as the economy rebounds and hiring needs across various industries are multiplying. As mentioned on last quarter’s call, we anticipated we might see some return to the labor force due to 25 states that, at the time of the call, were discontinuing extended supplemental unemployment offerings. Having trapped this now for nearly 13 weeks there has been no material change in the candidate availability in those specific states. The lingering safety fears due to COVID, new concerns around the Delta variant, and continued childcare issues are contributing to many jobs on a macro level going unfilled. One additional shift since last quarter’s call is the increase in the number of businesses mandating the vaccine as a condition for hire. This is leading to some initial turnover as well as further limiting the available pool of candidates available for these specific jobs. Last week, as I am sure you have heard, the Biden administration announced a new plan to implement vaccine mandates or routine testing at companies with more than 100 employees. Details are still forthcoming, and we will take appropriate action in collaboration with our clients as we learn more in the coming days and weeks. The good news is that order demand remains well above last year and 2019 levels, same time period. We believe this dynamic will continue for the time being. Yet we remain cautiously optimistic that the reopening of schools for in-person education, the continued push for all Americans to get vaccinated and the recent expiration of supplemental benefits across all states will alleviate some pressure on the talent supply front. Today, I received a preview of candidate applied to last week, which was the first week without the additional unemployment stimulus. We saw applied nationwide increase notably over the last 6-week average and week over week. These improvements are early, yet encouraging. I am pleased to report that we have aggressively addressed the labor shortage situation through use of technology and intensified efforts related to candidate attraction. We continue to expand our candidate engagement and chatbot technology across broader streams of the organization. For the quarter, we engaged 61% more candidates than in the second quarter through automated surveys, client-specific communications or pre-placement confirmation. As we seek to leverage technology to connect with more candidates from their initial point of interest, we introduced a new function during the quarter, a scheduling tool, which provides candidates with access to our recruiters’ calendar and allows them to schedule an interview. Our effectiveness with our chatbot is maturing. To date, the overall usage of this technology has saved approximately 20 hours per recruiter per month, allowing them to redirect that time to high payoff activities for our clients. Finally, we have invested in an AI-powered job board, which will replace our current job board functionality. This new AI-powered job board will not only provide a much better user experience for any candidate searching for an opportunity on job.com or volt.com, it will also allow us to capture candidate behavior, which we can leverage for future opportunities. We will also launch Volt recruiting assistant chat function as well as customized landing pages for clients, giving them visibility to recruiting efforts. We expect implementation to begin at the end of October. Now, let me turn to third quarter highlights on each of our operating segments, beginning with North American Staffing. For the third consecutive quarter, our North American Staffing segment recorded top line and bottom line growth when compared to the prior year quarter. We continued our strong trajectory of new logo wins and expansion within others. Revenue growth from retail or our commercial and technical branch network delivered 28% growth over prior year and continues to outpace the growth of our enterprise clients. Representing 21% of revenue for the third quarter, this business line has proven to be less susceptible to economic downturn and the ongoing progress in this area will be a key contributing factor to achieving our desired EBITDA target of at least 3% by the end of 2023. We continue to enhance and mature our retail bootcamp training, now conducting sessions twice per quarter at a minimum. Our focus remains on accelerating growth of this business line and critical to that, success will be purposeful headcount investments in branches throughout the country. I am pleased with the ongoing progress our teams are making with direct hire. Our direct hire discipline continues to strengthen with results again exceeding pre-pandemic levels. We are seeing momentum across the commercial and technical branch network with nearly every branch generating fees during the quarter. We’ve even seen our strategic sales team get in on the action, winning a large volume direct hire partnership with a major corporation in Southern California, placing 250 plus positions. The team currently had several large volume direct placement opportunities being negotiated as we continue to broaden our scope and build this as an additional offering. The recently hired teams focused on accounting and finance and HR roles specifically are showing early promise. Although this model takes time to build out, I remain confident in the team’s ability to be a substantive contributor to the acceleration of Direct Hire in 2022 and beyond. Similar to retail, direct hire remains critical to our margin improvement strategy, and we will continue to invest to capitalize in specific markets to boost growth. Our new business and existing client expansion wins on the mid-market and large account side, also continued to gain traction as we saw multiple opportunities closed, enter implementation and design stage or move to contract negotiation. One such example during the quarter was a large win with a packaging company on the West Coast, generated by one of our field leaders, beating out the incumbent competitor and generating immediate revenue; or another one, a hugely successful 6-week plus project for a major box retailer, won by one of our growth and expansion directors. Our teams across the country stepped up and quickly built nearly 1,000 positions. In the Midwest and East Coast, we have had multiple client expansions led by various field leaders and new wins in collaboration with our sales team. These represent just a few of the many new wins and expansion opportunities, some that have already contributed revenue and margin, some that will be realized in subsequent quarters and others that will go live in fiscal 2022. Overall, our field and program teams continue to demonstrate resilience in the face of labor shortage headwinds and are focused on delivering quality talent to meet the hiring needs of our new and existing clients. Our International segment continues to gain traction with the ongoing maturation of our strategic initiatives, most notably in the disciplines of IT, life sciences and engineering. During the quarter, the UK, France and Singapore showed progress, while Belgium remained flat, given the ongoing COVID-19 restrictions and expanded shutdown due to Delta variant that have escalated throughout the summer. Various talent supply challenges in each individual country, including fewer foreign candidates particularly from Europe post-Brexit, unprecedented talent shortages in countries like Belgium and much longer work visa processing time lines in countries like Singapore, present ongoing headwinds to our business. And although social restrictions have eased in the UK since July, they are experiencing what is being referred to as a new pandemic. As a result of the rise in Delta variant cases and the easing of the social rules, anyone coming in contact with a new COVID case is being pinged by the National Health Services app, leading to a large number of people having to return to isolation for 10 days. This has resulted in candidates deferring and/or withdrawing completely from processes and canceling their job search. The leadership team remains diligent around the changing landscape and is working to address the issues through expanded candidate outreach, candidate engagement campaign, more extensive social media presence and participation in multiple recruiting and thought leadership events. We remain pleased with the recent positive trajectory overall despite the obvious headwinds. And although we remain optimistic, we believe the anticipated progress may not necessarily be linear as we continue to navigate restrictions in the countries in which we operate. On our last earnings call, I indicated our North American MSP segment was realizing a slower-than-expected rebound from their initial pandemic impact, which for this group began in mid-2020. We continue to be hampered by delayed decision-making on RFPs, robust M&A and consolidation activity within multiple clients and of course, the lack of available candidates especially in the manufacturing and professional skill sets. And although the focus remains on driving and targeting new business, the team has prioritized sales efforts in three areas. First, to have candid conversations with clients that have unfilled jobs due to low hourly rates, a lack of benefit or arduous screening requirements. Second, the expansion of business and/or skill sets within existing MSP clients domestically or globally, that currently do not fall under the program today. And lastly, to introduce our MSP to specific and targeted existing staffing clients, where we believe a first-generation MSP program would be advantageous. Recently, I had the pleasure of having dinner with several North American MSP colleagues. They confirmed what I already knew. We have an experienced and knowledgeable team who can consult and deliver an amazing talent management program experience to our clients. In summary, I concur with Herb. Our performance throughout Q3 2021 leaves us well poised to continue the projected growth trajectory for fiscal year ‘21 and lay the foundation for 2022. I am incredibly proud of our colleagues this quarter for having again achieved improved financial and operational results. I want to extend my sincere appreciation for their flexibility and willingness to adapt to this ever-changing operating environment, their ongoing commitment to each other and the organization and their unparalleled passion for our field employees and clients. Across the organization, we remain focused on continued and accelerating growth across all areas of our business, strategic alignment of resources to high payoff activities, leveraging technology to drive candidate attraction and retention as well as cost and operational efficiencies, all of which drive value for all stakeholders. Now I would like to open up the call for questions. Operator?

[Operator:]

Our first question is from Josh Vogel with Sidoti & Company. Please proceed with your question.

[Josh Vogel:]

Hi, Linda and Herb. Hope you are both doing well. Thank for taking my questions.

[Herb Mueller:]

No problem. Good to talk to you.

[Josh Vogel:]

Yes, always. And I apologize I actually got booted from the call for like a couple of minutes during the second part of your commentary, Linda. I’m sorry, if you covered any of this, but my first question, you had a lot of commentary around supply constraints. I’m curious in thinking about KPIs, can you just give some commentary around the order flow you had coming in last quarter and how fulfillment metrics look like in the quarter versus a quarter or two prior to that or even at the height of the pandemic?

[Linda Perneau:]

Yes. So our order volume continues to be extremely high. Order volume is exceeding pre-pandemic levels. And in fact, it’s even exceeding 2019 levels. So we are continuing to see nice demand across the organization of clients all size, primarily manufacturing, logistics also in a lot of the professional skill sets. From a fill rate perspective, it really depends on the type of business that you’re looking at, right; as you’re looking at fill rates. But despite a lot of the headwinds, despite the candidate shortages, the teams have managed to deliver fill rates that are in line with pre-pandemic levels, which I think is a significant accomplishment. They have done that through, in some cases, additional investments we’ve made to add some more hands to the mix in order to source and screen more candidates. They have done that through the great work that the team has had around leveraging the technology. And they have done that through really a lot of the expansion of the recruiting net to grassroots efforts and additional recruiting strategies that have allowed them to get more candidates in the funnel.

[Josh Vogel:]

That’s helpful. Thank you. And last quarter, you mentioned these supply constraints they are pervasive across the board, but not specific to any skillset or location. Is that still the underlying theme or are you starting to see some easing in certain sectors or skill sets or geographies, I am just curious about high level there?

[Linda Perneau:]

Yes, you may have missed the comments that I made where just literally right before the call, I had gotten a preview of our candidate applied for last week. And last week would have been the first week without the unemployment stimulus across all the states. And we saw a pretty significant material uptick in the number of applied nationwide over our six-week average as well as week-over-week. So coincidence, I don’t think so. Trend, one week doesn’t make a trend. We will monitor it closely, but I certainly think it’s an encouraging sign.

[Josh Vogel:]

For sure and thank you for that. Shifting gears a little bit, when the – in the environment today in your new business pipeline, are you seeing meaningful changes in mix or in terms of client size or number of orders that they are putting in for. And I guess on a slight tangent, I have seen some other – some of your peers talk about larger businesses who predominantly did things in-house are now starting to open up to the outsourcing model, especially given the supply constraint environment. I was wondering if you were participating in that?

[Linda Perneau:]

Yes. I can’t really pinpoint that – really, our order volume is coming from clients that didn’t necessarily use and now are using. I am sure there is a little bit of that. We are really seeing a lot of new business come from either new expansion opportunities where we have not serviced in the past, business that we are taking away from competitors or business that we are convincing the client to perhaps take something that they were doing and tweak it a little bit and allow us to assist them with it in a different way a.k.a. the large direct hire project that I talked about with a major company in Southern California. So, that’s really where the majority of our new business is coming from.

[Josh Vogel:]

I got it. Because you kind of answered my next question, because I was just thinking about when you talk about the expansion with existing clients and I am thinking about retail and mid-market and the traction you are getting there, and considering that relative to the history of the firm, you are going after retail mid-market is more of a recent initiative of yours. I was just curious if any – given the clients that you have added there over the last 1 year or 1.5 years, are you growing with that base as well, or is it still mostly when you say expansion from new clients, is it like solely coming from your larger legacy base?

[Linda Perneau:]

Oh, no. We are definitely growing on the retail side. We continue to expand that. They are expanding existing clients it’s a lot easier Josh, to add a second, third, fourth to an existing client than it is to get a new client. So, that’s very much a part of what they do each and every day and we consistently are adding new business in that model as well.

[Josh Vogel:]

Okay, great. And I will sneak in one more if I can, and then I will let someone else ask, but the digital and tech-enabled capabilities, you gave some good insights on how those initiatives are going? And I guess when we think about future investments beyond that October implementation you talked about, and capital allocation in general, with where you are at today, do you think investments are to be targeted more internally, like focus on productivity and efficiency or would it still be more client and candidate facing?

[Herb Mueller:]

Yes. I think there is going to be a combination of things on the investment front. Obviously, our priority is things that makes us more efficient on the business. We are going to be continuing those. We have got a major project coming up to help our recruiters across the board as well as our sales force. So, there is definitely an opportunity there. We are not looking at any major back office investments. We have had considerable savings with the moves that we have made with the back office going to India. So overall, I think it will continue to be focused on improving our servicing of our clients.

[Josh Vogel:]

Alright, great. I will hop off for now. Thanks again for taking my questions.

[Herb Mueller:]

You’re welcome.

[Operator:]

Our next question is from Mike Hughes with SGF Capital. Please proceed with your question.

[Mike Hughes:]

Good afternoon. Thanks for taking my questions. I just wanted to follow-up on your comments about the candidate applications picking up last week. What’s your theory that we are seeing a pickup now whereas we didn’t see it with the other 25 states, if I heard your other comments correctly, is it just the fact that COVID, the Delta variant is hopefully peaked at this point and it was ramping when the other states rolled back, what’s your theory on that?

[Herb Mueller:]

Yes, Mike, it’s a great question and a couple of things on that. One, you have to remember the 25 states that rolled back the unemployment benefits earlier are those states that already had much lower unemployment rates than the remaining 25 states. It also represented about roughly a quarter of our overall business. But those were in states that have been – also pay lower average unemployment benefits. So, it wasn’t really necessarily a great indicator. As you know, the Wall Street Journal recently did an article on that saying they didn’t see any major impact. But at the same time, we are not surprised now that it’s been lifted on the other 25 states that have much higher unemployment and also they pay higher unemployment rates that this is a bigger impact and will make a difference, but we will see. Again, one week doesn’t make a trend, but certainly, it was eye opening to us when we just got that data.

[Mike Hughes:]

Okay. And then I believe California is your largest state as a percentage of revenue. And there are those Golden State stimulus checks. I think there was one round that hit a few weeks ago, and there is another round that hit this Friday, and they are relatively sizable. So, how do you kind of think about that when it came to guidance?

[Herb Mueller:]

Yes. There is still obviously an impact there. It’s hard to say exactly what that’s going to be. We had some of the other stimulus with the child credit as well that goes in. So, there is still a lot of money floating around there, and it does factor in overall. And again, as we stated our 5% to 7% range we still expect some tightness in the candidate market. So, there could potentially be some upside once we get past this.

[Mike Hughes:]

Okay.

[Linda Perneau:]

I think one of the other things that we are also factoring in, Mike, to piggyback on that, is the initial turnover that we are seeing in some of the companies that are mandating the vaccine. So, we are seeing that. We are continuing. Each day there is more conversations that are coming up. Today, we had another client that joined the list of those that are going to mandate vaccine. So, that is certainly beginning to show some initial turnover. It’s certainly limiting available candidates that are applying for that job or willing to take those jobs. So, all of that we really looked at and factored in given some of the brief experience that we have had over the last several weeks on this.

[Mike Hughes:]

So, the new Biden mandate for employers with 100 or more employees either have a vaccine or a weekly testing, I assume that, that would cover the vast majority of your revenue base in the U.S., is that right?

[Herb Mueller:]

That’s correct. Yes. Though, let me put a caveat there, we haven’t seen the regulations. They are not due out for another roughly 10 days, 11 days. So, there is still a lot of unknowns there. So, we haven’t really come to any conclusion on the overall impact that this is going to have yet, until we see the details.

[Mike Hughes:]

Right. So, maybe it’s probably far too early to tell, but if people are quitting at the larger employees or 100-plus employee organizations, do you think that benefits, I don’t know, the 50 to 100 employee firm? And does that help you at all?

[Herb Mueller:]

Yes. Potentially, it could. However, on the flip side, longer term, if everybody is in the same boat. And again, you have got the 100 employee plus impacts close to 100 million employees right now. If they don’t have any option, an easy option to go elsewhere, then overall, that can help the environment for us. Now, the trade-off is that some may elect to go to the smaller firms, but at the same time, some of those smaller firms may elect to follow suit and start requiring vaccinations. I mean there is just so many and we have gone around and around with this over the weekend just trying to think through the different ramifications. And it’s just really hard to say right now, you can argue both sides of it.

[Mike Hughes:]

Right. Two last questions for you. Just can you talk about the pricing environment and your success at putting pricing through and on a go-forward basis? And then secondarily, just any update on potentially exiting the lease agreement on the California headquarters?

[Herb Mueller:]

Yes. I will take the California headquarters first and then turn the other one, first part over to Linda. On that, the ownership of the – of our California headquarters just changed hands, literally just two weeks ago. So, we will be having discussions with the new owners. They were really interested in talking about it beforehand. It was acquired by a company that specializes in industrial distribution centers and typically they are not in commercial real estate. So, we are certainly going to pursue that. If they decide they want to hold for a long period of time then we are working at a Plan B would be to sublet the space.

[Mike Hughes:]

Okay.

[Linda Perneau:]

And then I will take the pricing environment. So, really – recently, we have started to see more pricing pressure as we have been in conversations with several of our larger clients. Most of these directly related to the challenges that they are having supply chain and looking to find something to help with costs. We have done a really nice job over the last 18 months of pricing and maintaining our margins amidst the tough environment and some pricing pressures. We anticipate we are going to continue to do the same thing. We are having those individual conversations. We are remaining disciplined as we are pricing new business and going after new opportunities. We are having conversations with clients about wages, ensuring that we are paying the right wages and benefits and certainly, along with the commensurate bill rate. So, those are all conversations that we are having on a daily basis with our client base and new prospects.

[Mike Hughes:]

Okay. Thank you very much. I appreciate it.

[Herb Mueller:]

Thank you, Mike.

[Linda Perneau:]

Thanks Mike.

[Operator:]

And we have reached the end of the question-and-answer session. And I will now turn the call over to Linda Perneau for closing remarks.

[Linda Perneau:]

Thank you everyone for your participation in today’s call and for your continued interest in Volt. We look forward to speaking with you again during our fourth quarter and full year fiscal 2021 earnings in January. Have a great day.

[Operator:]

And this concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.