Volt Information Sciences, Inc.
Q2 2020 Earnings Call Transcript

Published: 16 Jun 2020

[Operator:]

Greetings, and welcome to the Volt Information Sciences Second Quarter 2020 Earnings Call. [Operator Instructions]. I will now turn the conference over to our host, Joe Noyons of Investor Relations. Thank you. You may begin.

[Joe Noyons:]

Thank you, Diego, and good afternoon, everyone. Thank you for joining us today for Volt Information Sciences Second Quarter Fiscal 2020 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 second quarter of fiscal year 2020. 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. Before beginning today's prepared remarks, I would like to remind you that some of the statements made today 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 risk that the company -- 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 to our second quarter fiscal 2020 earnings call. I hope that everyone on the call is safe and healthy. The second quarter of 2020 was certainly an unprecedented one for our organization. The magnitude of the shelter in place mandates around the world triggering a rapid shutdown of the global economy was unlike anything we have seen in Volt's 70-year history. To that end, I would first like to thank our Volt colleagues around the globe for their incredible and resilient response to this health and economic crisis. As a talent company, the health, safety and well-being of our teams has been and continues to be our top priority. Despite having a high percentage of colleagues working remotely, our talented and capable teams have risen to the challenge admirably, continuing to support our valued clients and field employees with the same high level of service they have become accustomed to from Volt. Today, I will provide an overview of our Q2 results and some high-level commentary on our response to the COVID-19 pandemic. Herb will provide a more detailed overview of our financial performance and the initial 2 phases of our cost reduction efforts. I will then share further details about Phase III reduction efforts, some of which were introduced during our annual shareholder meeting, followed with some recent trends we are realizing as reopening phases begin. As we have previously reported, in the first 6 weeks of the second quarter, we were experiencing favorable revenue trends across all business operations. In our North American Staffing segment specifically, revenue from both contracts and direct hire were showing improvement from not only Q1 2020, but also when compared to prior year same time period. Of course, in mid-March, the COVID-19 pandemic drastically impacted our operations around the globe, resulting in immediate client shutdown, extensive reduction in demand, canceling of open orders and ending of assignment. Demand was most impacted in industries such as nonessential manufacturing, automotive retailers, aerospace and defense and retail support operations. Partially offsetting the decline were increases across our branch network as well as in contact centers, food and agriculture and the addition of COVID-19-related support roles for essential businesses. Despite the valiant effort of teams across the globe, the new business opportunities were not sufficient to offset the COVID-19-related decline. During the quarter, adjusted revenue declined 14.1%. Operationally, the work we have done over the past 16 months prepared us to respond quickly when the national and global shutdowns occurred. The operational, back office and technological efficiencies and enhancements we previously made were paramount to successfully moving to the sustainable remote environment we are in today. We took swift actions to ensure the safety of our Volt colleagues, valued clients and field employees. We mobilized efforts to support ongoing and rapidly fluctuating client demand in both essential and nonessential businesses and guided many through uncharted territory. In response to the revenue decline, we have taken decisive and significant actions to reduce our overall SG&A in the short term and longer term. These options align with substantive COVID-19-related impact, leaving Volt well poised and positioned as business conditions improve. I am proud to work aside our current leadership team and Board of Directors during these trying times. All of our executives and many of our directors have held leadership roles through tough global economic environment. We entered the pandemic with solid momentum and remain steadfast in our commitment to navigate through the COVID-19 pandemic and capitalize on new opportunities as the nation recovers. Let me now turn the call over to Herb to review the quarter's financials. Herb?

[Herbert Mueller:]

Thank you, Linda, and good afternoon, everyone. Revenue for the second quarter of fiscal 2020 was $207.3 million. Adjusted revenue, which excludes the effects of the businesses exited, the impact of clients shifting to a managed service delivery model and foreign currency translations, decreased 14.1% year-over-year. As we stated in our previous earnings call, revenues for the month of February trended better than January, and the first 2 weeks of March were trending in line with our expectations. The full impact from COVID-19 started to reflect in our revenues during the last 2 weeks of March and into April, with revenues for that period decreasing between 15% to 20%. This was particularly true for our direct hire line of business, which recorded a positive year-over-year revenue comparison for January and February, followed by a flat March as we began to see -- to realize the effects of COVID-19, with the biggest impact reflected in the month of April, as many of the roles were put on hold and shifted out into later in our third quarter, resulting in a 22% direct hire revenue decline during the second quarter. After hitting a low point in the week ending May 10, revenues have sequentially increased. As more states gradually loosen their restrictions on physical business locations and activity, we anticipate that our revenue outlook for the latter part of June and July will improve. Looking at our business segment results. North American Staffing represented 84% of overall revenue during the second quarter. Revenue from this segment was $173.4 million with operating income of $2.6 million, consistent with a year ago. Adjusted revenue decreased 14.9%. The decrease is primarily attributable to the decline in demand beginning in mid-March related to COVID-19. As I mentioned, the revenue trends we saw early in the quarter prior to this impact were tracking to deliver sequential improvement compared to the first quarter. Our International Staffing business with revenue of $24.3 million, which represented 12% of total revenue in the second quarter and operating income of $200,000. Adjusted revenue decreased by 13.2% year-over-year, primarily due to adjustments of work orders related to pending statutory legislation changes in the U.K. Belgium and Singapore were both actually up double digits year-over-year for the quarter as a result of improvement in contract labor, partially offset by COVID-19-related decreases in direct hire revenue. At 5% of total revenue, North American MSP revenue was $9.7 million with operating income of $500,000. Adjusted revenue increased 50 basis points during the second quarter. The increase is primarily attributable to expansion within existing clients and the incremental revenue associated with certain clients shifting into this segment over the previous 2 quarters, mostly offset by the impact of COVID-19 head count reductions in a small number of clients. Moving down the P&L. Gross margin for the second quarter was 15.6% compared to 14.4% in the year ago quarter. Excluding a business exited in the prior year, gross margin increased 90 basis points from 14.7% in the prior year. The primary driver for the change in gross margin was a $1.1 million positive workers' compensation adjustment related to reduced claims liability from 2015, '16 and reduced payroll tax rates. SG&A expense for the second quarter was $36.2 million compared to $38.9 million in the second quarter of fiscal 2019. The decrease was primarily due to reduced labor and related costs as a result of our cost savings initiatives introduced in the fourth quarter of fiscal 2019, coupled with the swift actions we took in the early stages of the COVID-19 outbreak. In addition, incentive compensation declined due to the reduction in business and lower head count and lower share-based compensation. These decreases were partially offset by higher depreciation expense and a $486,000 increase in expenses due to the elimination of a deferred real estate gain offset under the new lease accounting rules. As a reminder, the comparative impact of this change will recur in the third and fourth quarters of fiscal 2020. For the second quarter of fiscal 2020, we reported a net loss of $5.4 million or $0.25 per share compared to a net loss of $5.2 million or $0.24 in the second quarter of fiscal 2019. The loss during the second quarter of 2020 included $411,000 of costs related to the ongoing cost reduction efforts throughout the company. Adjusted EBITDA for the second quarter was a loss of $1.4 million, a $100,000 improvement from the prior year quarter. Moving on to a few key items from cash flow and the balance sheet. At the end of the second quarter of fiscal 2020, we had $26.2 million in cash and equivalents and an additional $19.4 million in restricted cash and short-term investments. Our long-term debt was $60 million, and we have total available liquidity of $12.1 million. During the quarter, we drew down an additional $5 million to ensure additional flexibility in our end. We had a positive relationship with our -- we have a positive relationship with our lender and, in the first quarter, extended our financing program with them to extend the term of the program by 2 years to 2023 and deferred the net income covenant by year 2021. In June, we entered into a new amendment to our securitization facility with DZ Bank to reduce our minimum tangible net worth covenant to $20 million through Q3 of 2021, which will provide us greater financial flexibility as we continue to navigate this pandemic. We also decreased our maximum credit available under the facility from $115 million to $100 million to better reflect our asset base level and to reduce borrowing costs going forward. As a reminder, the average interest rate on our long-term debt is approximately 3%, and there are no principal payments required during the term of the loan. We generated $2.9 million in cash flow from operations in the second quarter with capital expenditures of $1.7 million. Next, I'll review the recent actions we have taken prior to and in response to the COVID-19 outbreak. During our earnings call in January, we announced Phase 1 of our cost savings plan, which included an expected $3 million in fiscal 2020 savings through the offshoring of certain U.S.-based back-office functions. During our investor call on April 14, we shared Phase 2, which consists of a number of additional cost-saving measures that were swiftly executed and raised our targeted fiscal 2020 savings to $9 million. We're pleased to announce that our first phase is substantially complete with all but a handful of targeted positions transition to our facility in Bangalore, India. We transitioned 133 positions, which will result in annualized savings of $6.6 million. We will see over $3 million in savings in this fiscal year. We're also on track to reduce our costs an additional $6 million in FY '20 from a combination of furloughs and permanent head count reductions. In a few minutes, Linda will walk you through the Phase 3 savings. Through the passage of the CARES Act legislation in March, we were able to defer the payment of the social security portion of our calendar 2020 payroll taxes. Based on our current payroll, we will likely defer $22 million to $24 million of payments this calendar year. Half of this balance will be due at the end of calendar 2021 and the other half due at the end of calendar 2022. This action will provide greater financial flexibility for Volt over the next 18 to 24 months. We have also reviewed many other U.S. federal and international programs that have been offered in recent months. But we are either ineligible to participate or the programs are so restrictive that it does not make sense for us. We continue to monitor these programs as additional modifications are announced to determine that access of these programs should be feasible going forward. In conclusion, based on the situation analysis we have done, incorporating multiple revenue declines and recovery time lines, we believe that because of the actions we had taken prior to the start of the COVID-19 outbreak and additional steps taking sense, we have sufficient liquidity to endure the near and medium-term effects of the COVID-19 pandemic. I will now turn the call back over to Linda, who will give greater detail on the second quarter and review our strategies.

[Linda Perneau:]

Thank you, Herb. As Herb discussed over the last several quarters, we have announced a series of prudent cost savings initiatives designed to further align our cost base with current performance levels and provide for additional financial flexibility longer term. During our Annual Shareholder Meeting on April 21, we introduced the initial actions of our Phase 3 plan. And today, I will share the additional actions that have since been implemented that will allow us to reduce spending, preserve financial resources and strengthen our balance sheet, specifically in response to the prolonged COVID 19 impact. Phase 3 actions include a temporary pay cut for myself and Herb; reduced fees for the directors; a substantial reduction in incentive plan compensation; temporary suspension of the company's match to retirement accounts; a broad-based hiring and salary freeze; additional reductions of head count and extension of certain furlough periods; and the closure and/or consolidation of underutilized real estate throughout North America. These actions, combined with the Phase 1 and Phase 2 actions Herb previously discussed, add an incremental $5 million, bolstering 2020 savings to approximately $14 million and an additional $18 million in 2021. By the end of fiscal 2021, we will have reduced SG&A by $32 million in a period of 24 months. These substantive actions bolster Volt's financial position during this health and economic crisis and beyond, while still allowing us to maintain sufficient resources to properly prepare for postcrisis growth and aggressively resume our transformation journey. Let me shift now to the trends we are seeing across the business as various phases of reopening are enacted. The majority of the COVID-19 impact was felt from mid-March through the end of April, hitting the lowest levels during the last 2 weeks of April and carrying forward into May. The bottom point was not as we had expected, rather, it was a bit more prolonged, dipping to roughly a 20% decline for the month of April. Over the last 6 weeks, however, we are beginning to see a shift in client activity, indicating a positive yet gradual rebound, leaving us cautiously optimistic about the remainder of fiscal Q3 and into Q4. The pace of this rebound varies by country, state and often by city as businesses attempt to implement local, regional, federal, WHO and CDC guidelines into their operating model. Overall, I can categorize the recent shift in 3 key buckets. First would be what I would call full return to work. So roughly 15% of our estimated COVID-19 impact falls into this category. These are clients who have fully and very recently returned to work, and they are currently running above pre-COVID levels. Second would be what I will call gradual recovery. This bucket of clients represents a majority of our essential businesses who remained operational yet with materially less demand due to reduced hours, shift or short-term furloughs of specific roles. Roughly 40% of our estimated COVID-19 decline falls into this category. As situations are normalizing in various areas, we are beginning to realize gradual head count ramp with the intent to return to pre-COVID levels. The third category is what I will call dormant and represents 40% of our estimated COVID-19 decline. So these are clients who made decisions early on to reduce their entire contingent labor workforce and, at the present time, do not have any concrete time line to either ramp or bring back their contingent workforce in its entirety. These are not lost clients. We fully anticipate that they will return, but the timing and the degree is uncertain. We continue to maintain quality relationships with these clients and remain in constant contact, prepared to accommodate needs as they emerge. In addition to these specific shifts, we are seeing positive trends in several key leading performance indicators. Over the last 5 weeks specifically, order volume and placement volume have been at or near prior year and above pre-COVID levels. This has translated to 4 straight weeks of increased time cards processed and net head count growth. Our retail branch teams have demonstrated solid performance throughout the pandemic. And collectively, this group has had 6 consecutive weeks of head count growth. Strong sales activity and accountability were crucial and allowed this team to capitalize on many of the emerging jobs created during the pandemic to protect businesses and employees. We expect such new roles to be vital in safe return to work practices for the foreseeable future. As we continue to manage through the many facets of the crisis, I'd like to emphasize 4 key points. First, the health and safety of our colleagues, clients and field employees is our #1 priority. Our colleagues have been resolute in their commitment to our clients, our field employees and to each other as we confidently manage social distancing, enhanced safety standards and critical health and wellness protocols. Our teams will continue to go above and beyond. And as an industry workforce leader, we'll continue to assist our clients with navigating these uncertain times as they commit to keeping essential workers healthy and properly prepared to return to work. And we will partner with our field employees to support them in this turbulent market, placing them in new opportunities within Volt's valued clients. Second, we have taken considerable cost savings measures, which will benefit Volt over the short term and long term. These options are designed to preserve cash and protect liquidity. And as Herb mentioned, we believe we have sufficient liquidity to endure the near and medium-term effects of the COVID-19 pandemics. Third, we have developed formal sales and recruiting strategies to capture emerging COVID-19-related roles and ensure strong pipelines of candidates to immediately deploy to existing clients as they return to work. And fourth, we have a knowledgeable and experienced executive team capable of leading through these uncertain times. We remain confident in our ability to regain pre-COVID momentum and continue our transformation journey. I remain confident in our ability to manage these short-term challenges, rebound together with our clients and emerge a leaner, more nimble and focused organization as the health and economic prices improve. Given, however, the continued uncertainty around the time line of the recovery and when businesses will be able to meet guidelines and reopen around the globe, we will not be providing revenue guidance for the third quarter. We will continue our steadfast execution of our operational strategies, including expansion of retail and direct hire business, and we anticipate improvement as we head into Q4 and subsequent quarters. I will now open up the call for questions. Operator?

[Operator:]

[Operator Instructions]. Our first question comes from Josh Vogel with Sidoti.

[Joshua Vogel:]

Linda and Herb, good to hear you guys. My first question, there was a line in the press release you talked about it, but these opportunities are being created to meet COVID-19-specific demand with new and existing clients. I was wondering if you can maybe quantify this. Talk about the nature of this work, expected duration, and then maybe, if possible, kind of break it down. Are these opportunities being seen more so from the existing client base? Or is this just new business, new clients altogether?

[Linda Perneau:]

Yes. So I'll take that. It's a combination of both. So we quickly identified ways that we were able to support our existing clients as they -- particularly the essential businesses, as they needed to be operational during the pandemic. We were able to very quickly supply them with health and safety workers, health monitors, folks that were doing temperature scanning, individuals that were ensuring social distancing requirement, individuals that were doing safety and cleaning, sanitation. So those were the types of positions that we saw quickly emerged with our existing client base. We leverage those opportunities then to -- with new clients as well and, throughout the last 13, 14 weeks, has secured multiple new wins with these types of roles.

[Joshua Vogel:]

Okay. That's helpful. And Linda, you did talk about this, but obviously, the recent events have certainly accelerated some trends, and many companies are coming to realize that they can operate and operate very effectively from a more remote or virtual environment. It seems like you're seeing this, too. And it does open the door for potential cost-cutting maneuvers, you did mention on the potential real estate footprint, and you did talk to more cost savings. But other areas where we could think about with these SG&A cost cuts that have come about because of the ability to work so effectively remotely? And is this -- is that going to be kind of a new norm for your business?

[Linda Perneau:]

So I think we're going to see -- I'm going to start with the second part of your question first. I think we're going to see a combination of remote work in certain areas where we can appropriately service our clients where the skill sets of the employees allow us to do that and where we've got a strong operational profile and can continue to work remotely longer term. In other areas, we have situations where our specific clients or our specific field employee skill set require the need for us to be in an office for them to do testing, drug screening, those types of things. So it's going to be a combination of both. And as you alluded to, the real estate that we are going to be impacting was all evaluated based on all of those key points. And we will determine where we'll need -- where we won't need offices because we'll continue to work remote and where we will continue to have a physical brick-and-mortar. Some of the other areas that we've seen have been in travel and expense reductions. So significant savings across travel and expense, significant savings in utilities in offices as we have not been working in offices, certainly, office products, all of those types of things that you think about when you're fully operational, working in an office building.

[Joshua Vogel:]

Okay. Great. When you had the Investor Day, I guess, already 2 months ago already, you gave some nice statistics about partnering with clients to identify work-from-home opportunities, and I was wondering if you could just kind of update those statistics. I know that 13 of your staffing field employees were working from home, 66% of professional and technical and 100% of international folks. Any update there?

[Linda Perneau:]

Yes. So those continue to still be pretty accurate. We have not seen much movement in those companies that have employees working from home. They continue to obviously be concerned about the employees and are moving cautiously and purposefully in terms of bringing those folks back. Some we have definitive dates as to when those folks will be brought back to an office; others, we do not. But those statistics are all pretty much still accurate.

[Joshua Vogel:]

Okay. And maybe for Herb, the DSO seems stable from a historical perspective. I was wondering if you could talk about dialogue with clients, if at all that they were asking for better payment terms and maybe just about the overall quality of your accounts receivable portfolio in general.

[Herbert Mueller:]

Yes. I'll start with the second part first. The quality has been very strong. Our clients are hanging in there. It's tough, but they've got good balance sheets and are doing well. We have had a few though that have been pushing out their terms a little bit, trying to go from 30 days to 45 days and stretching out a few weeks here and there. But overall, we've been able to manage that very, very closely. And I think it's possible that you could see a little bit further deterioration from where we were at the end of Q2 but not significant.

[Linda Perneau:]

And I'll actually give a real-life story. So we actually have a client who came to us and wanted extended terms. We went back to them and pointed out to them that they were actually already paying us past their contractual terms, which were better than the terms that they were asking for. And they were so appreciative that -- and thankful that we had pointed that out and done the right thing, that we're now seeing a significant uptick in orders from them as a result.

[Joshua Vogel:]

Very nice. Very nice. And just last one. You're talking about all these cost cuts and kind of getting these savings on an annual basis. And clearly, you don't want to overcut, you want to remain positioned for when things do rebound. I guess given the current cost structure and personnel you have in place, how much available capacity do you have? Or how much revenue growth can you handle with the existing cost basis?

[Linda Perneau:]

So I feel very confident in our ability to regain momentum, support the needs of the client, add additional business. We have been very smart and purposeful while simultaneously being bold and decisive in our SG&A reduction, and we have ensured that we've allowed ourselves to remain well poised to capitalize on that growth.

[Operator:]

Our next question comes from Ray Miller [ph].

[Unidentified Analyst:]

This is for Herb. Just a quick follow-up. Earlier, you had mentioned that you redid the covenants in our bank facility in June. And it just kind of caught my eye just a little bit. I know that in your last 10-Q filing for last quarter, in mid-March, I know you guys redid the tangible net worth covenant from $40 million down to $35 million. And then it was supposed to go back up after the third quarter back to the $40 million. So basically, for 2 quarters, you were looking for some relief there. It caught my eye just a little bit. You mentioned that -- and if I remember what you said, I think you were -- adjusted that down to $20 million. Just a little worrisome on that, that just implies some -- if I'm reading that -- if I'm hearing that correctly, that would imply some pretty substantial losses near term. And I know you can't comment on revenue and stuff like that going forward. But that seems -- right now, your net worth is around 42, if I'm reading your press release correctly, that would be almost half.

[Herbert Mueller:]

Right. And the reason for this was to allow us plenty of flexibility. We just don't know what the future holds. And when we went back and talked to our lender, they worked with us and said, look, the bottom line right now, that it's not a significant measure for them. They're more worried about making sure that we've got quality receivables since they are fully secured. So basically, we just went ahead and dropped it down to a number that we're very, very comfortable that we wouldn't be in a position where 6 months from now that we'd have to go back and make an adjustment.

[Unidentified Analyst:]

Okay. I totally understand that. And I think it's -- the big positive for me is that last quarter or recently, you guys have extended that and got that off to 2023, which is great for liquidity. Just wondered -- kind of tag teaming with that is just a question of your overall liquidity. I know as of the end of last quarter, you had around $17-or-so million in liquidity. I know you mentioned earlier in this call, you've got about $12 million. Again, kind of tag teaming with changing that covenant to $20 million tangible net worth, assuming obviously a difficult environment and some losses coming up, are you still comfortable? If you can just address just a little bit about your liquidity position. I know Linda had mentioned, basically, we're -- you guys are in great shape near term and medium term, which is comforting. But can you just kind of address, we've gone from $17 million available liquidity. Now you got about $12 million. How does this look going forward given that, again, you're going to be -- I'm implying some losses obviously with the net worth, and I know I asked for cushion and stuff like that. But if you can just address that, that'd be great.

[Herbert Mueller:]

Right. No problem, Ray [ph]. So basically, again, as we stated, we feel comfortable that we have this handled, and we don't expect significant losses from this. And I think we're in good shape, but we just wanted to make sure that we have the flexibility that we need.

[Operator:]

[Operator Instructions]. Our next question comes from Samuel Koenig with Delta Analytics [ph].

[Unidentified Analyst:]

And thank you for such a wonderful quarter and especially that you took strong pay cuts, and let's hope that in the future you'll be able to double that. But the question I'd like to ask you is what industry -- I know you touched upon it, but what industries would you say was most affected by the COVID-19 and also see as a possible potential with the COVID-19? And as you mentioned -- Herb mentioned that you seem secure about the short term and the midterm, wondering whether you have any plans like many small companies to finance -- to do any financing, either convertible bond or extra stock is what I was worried about. If you can answer that, I appreciate it.

[Linda Perneau:]

Yes. So Herb, why don't I take the industry one, and then you can take the second part of that? Does that work?

[Herbert Mueller:]

Sure.

[Linda Perneau:]

Okay. So let me start by answering your question around the industries that were most impacted. So leisure and hospitality really was one of the biggest, most significantly impacted industries. The good news for Volt is that we don't have a significant amount of business in that industry and in that sector. So that certainly was a positive for us. Retail and retail operations support certainly also was most significantly impacted. So those are really two of the industries if you look at really the Top 2 that were very much impacted during the pandemic. And we're starting to see some rebound in both of those, which is nice, as well as many of the other segments that were not as significantly impacted.

[Herbert Mueller:]

Right. And if you don't mind, you broke up on my phone in the second part of your question. Could you repeat that for me?

[Unidentified Analyst:]

Yes. Yes. Well, basically, a lot of companies, even small companies, you mentioned the confidence in the short term, midterm of having cost cuts and other things. And I was wondering, a lot of companies now, even small companies, even bankrupt companies, have been coming out either with convertible bonds or additional financing to ensure that they'll be ready for -- we don't know about a second wave, third wave, whatever the wave it is. But the question is whether it is a possibility. You do have very little shares outstanding, and I was wondering if there's any plans for doing a financing. And more important, I also want to ask with the 40 million people out of work, what areas are there that you might expand into is what I'd like to ask you about.

[Herbert Mueller:]

Okay. On the stock question and additional debt, right now, we don't foresee the need to do anything right now in convertibles. We think our stock is at a very low point right now and wouldn't be a good use of that currency to try to convert or set up a convertible. So we're very comfortable again with our liquidity. And then I'll turn it back over to Linda to ask that follow-up question on the 40 million people and the opportunities.

[Linda Perneau:]

Yes. From an expansion perspective, certainly, these -- the roles that I mentioned earlier to Josh's question regarding some of the new opportunities that came about as a result of COVID-19 have definitely created new opportunities for us, which is very exciting, right? So that entrée into nonclinical health care, which will get back to growth and continue growth post-crisis. So that is certainly an area of opportunity for us. We expect that these roles will remain for the foreseeable future. They are critical roles as companies are looking to reopen safely and ensure -- provide confidence to employees that the work site is safe. So we anticipate that this will be a nice expansion, some nice expansion opportunities for us for the foreseeable future.

[Operator:]

Thank you. That concludes our question-and-answer session. I'll now turn it back 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 when we report our third quarter fiscal 2020 results in September.

[Operator:]

Thank you. This concludes today's conference call. All parties may disconnect. Have a great evening.