Ladies and gentlemen, thank you for standing by and welcome to the Kforce Inc. Q1 2020 Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. David Dunkel, Chairman and CEO. Thank you. Please go ahead sir.

Good afternoon. I would like to remind you that this call may contain certain statements that are forward-looking including statements regarding the impact opportunities and benefits from actions taken related to the COVID-19 economic and health crisis. These statements are based upon current assumptions and expectations and are subject to risks and uncertainties. Actual results may vary materially from the factors listed in Kforce's public filings and other reports and filings with the Securities and Exchange Commission. We cannot undertake any duty to update any forward-looking statements. You can find additional information about this quarter's results in our earnings release and our SEC filings. In addition, we have published our prepared remarks within the Investor Relations portion of our website. We are all navigating the unprecedented negative impacts of the COVID-19 health crisis on the U.S. and global economies. Beyond the economic impact is the very real and personal human cost which has taken an immeasurable toll on global societies and families. Lost jobs uncertain futures and the ripple effect throughout small the large businesses, non-profit industries and churches are staggering. At Kforce, we have endeavored to balance our responsibility to each of these constituencies with a particular focus on our associates, clients, and consultants. The sudden and dramatic impact has caused each of us to reflect and appreciate some of the simpler and more important things in life; our families and relationships with each other. We are forever changed. I'd like to extend my deepest thanks to my executive team and each of our people who suddenly had to balance working from home often with their spouses in tight quarters; home schooling their children; and with restrictions, and a lack of support none of us have ever experienced. You have been magnificent. With respect to Kforce's performance as mentioned…

Thank you, Dave, and thanks to all of you for your interest in Kforce. During the course of my 32 years with Kforce, we've navigated several economic downturns and taken proactive strategic steps that have strengthened our firm's ability to weather subsequent economic downturns. Coming out of the dot-com recession, we began evolving and diversifying our target client portfolio by building significant relationships that would strategically position us as a top provider within Fortune 1000 companies, who are the largest users of flexible technology services. We now have client relationships across virtually every industry with very little concentration in any one specific industry or client. To better serve the high-volume demand from this client base, we began building out the initial phases of our centralized delivery capability. We also redesigned our operating model to significantly reduce reliance on Direct Hire as a percentage of revenue, while making the necessary structural adjustments to overcome the loss of that profitable revenue stream and significantly improve our operating margins. These adjustments to our model yielded results during the 2008/2009 Great Recession as we experienced revenue deterioration of less than 8% overall and declines in our technology business of only 6.5% in comparison to the overall sector revenue declines in the mid-20s. Coming out of the Great Recession, we began a strategic journey to narrow our focus by shedding noncore business with limited market size and growth potential and focusing investments in our largest business to take greater advantage of the secular shift in technology demand that was beginning to unfold as all organizations began investing in their digital transformation efforts as new business models emerged. Throughout the most recent cycle, we continued to experience the acceleration in technology-driven, mission-critical strategic consumer-facing initiatives within world-class companies. We believe our 100% domestically focused service offerings…

Thank you, Joe. I'll first give some additional details and insights into first quarter performance and then, given the current environment, provide some commentary around the strength in our liquidity and cash flows. Revenues of $335.2 million in the quarter grew 1% year-over-year and earnings per share of $0.42 grew 31.3% year-over-year, or 10.5%, after excluding a charge related to actions taken as a result of the KGS divestiture in the first quarter of 2019. Our gross profit percentage in the quarter of 28.2%, decreased 30 basis points year-over-year, primarily as a result of the lower Direct Hire revenue mix, which was partially offset by improved Flex gross margins. Flex gross profit margins improved 40 basis points year-over-year, driven by a 70 basis point improvement in Tech Flex, which was partially offset by declines in FA Flex margins. Flex margins in the first quarter benefited principally from a favorable payroll tax environment on a year-over-year basis. Bill/pay spreads were stable sequentially in our technology business and down slightly in our FA business. Looking at April results, bill/pay spreads in our Tech Flex business have remained stable and we've seen an increase in our tech average bill rates. The bill rate increase is primarily a result of changes in assignment mix. The revenue reductions we've seen in our technology business have been more concentrated in lower bill rate assignments, while those with higher-level skill sets have seen less attrition, relatively speaking, likely due to a combination of criticality of role and work remote capability. We will experience overall declines in FA Flex margins, primarily as a result of the large-scale support of the COVID-19-related initiatives Joe mentioned, which, while driving significant revenue, have average margins lower than our core FA business. We've continued to gain operating leverage and improved cash flows,…

[Operator Instructions] Our first question comes from Tobey Sommer with SunTrust. Your line is now open.

Thank you. I wanted to start off by asking a question about, F&A in the projects related business, that you said might contribute $20 million or $30 million, in the quarter. When did or does that start? And do you have any indication for, how long it may go beyond the quarter? Thanks.

Tobey, this is Joe Liberatore. Yeah that business is already engaged. The different projects some of those started several weeks ago, some of those are just engaging now, because they're in different parts of the overall government. And what we're hearing from the partner, that we're working on with this business is, probably most of it is expected to go four to six months. There's obviously -- some of the projects could extend further than that, just based upon, how the overall crisis plays out.

Great. And so is it fair enough to say that $20 million to $30 million is not a full quarter run rate of project ramps, but something less than that? What would the F&A business has been -- growth have been in the month of April, if you strip that out, or did you make that adjustment when you gave us the monthly figures?

Yeah. No, the monthly figure that I gave you in my opening comments, that was the legacy FA business with that stripped out, so that, you could do your modeling, as necessary.

All right. Tech business obviously holding up well -- to-date, very well, could you talk about the way you think that business unfolds maybe referencing prior cycles? As people get back to work, and perhaps they realize demand for their own services once they're back kind of functioning at a more normal rate, isn't as high. And they pull in their own purse strings et cetera. How do we think about it beyond this current, kind of lockdown stay-at-home phase?

Yeah. I would say in general, what we've experienced to-date is really two different playbooks being exercised, by the end clients. Obviously you have clients on the one end that have been involved, in industries that are directly impacted. And then, I would put everybody else, in a separate playbook, in terms of those that obviously, they are being impacted, but not anything, like travel, and leisure, or the bricks-and-mortar retail, where they've had to do really harsh reactions. So, I would say, those that have directly been impacted. They reacted very quickly to adjust their expenses inclusive of scaling back or eliminating certain projects. And obviously the associated resources based upon how critical those projects were. Clients that weren't directly impact -- negatively impacted, in industries like financial services or communication, they more so shifted into what I would say is a stabilization mode or really some of them are even operating business as usual. So subsequent to all that, initial hard stop. What we did see most clients do was basically go through and look at, what technology roles were not really equipped or capable of being handled remotely. And so there was some alignment that went through those. Some organizations just furloughed the people, others reduced those staff. And a lot of that had to do with how critical the nature of the roles was. And so here more recently what we've been seeing is clients really evaluating, their overall project portfolio. We've seen really nominal total elimination of projects, at least the ones that our teams are working on. However, we have seen some of those projects extend out further. So to adjust for cost, what they're doing is, they're extending the project and aligning some resources with that. So the project has fewer people on it, but it's intended to go for a longer duration to manage costs. So, we've also seen and begun to hear about some early requests for bids, for work which organizations are looking at bringing back onshore from offshore because of some of the exposures that they dealt with, those countries that don't have quite a robust infrastructure. And then, I would say in closing, the last thing that we're seeing is really companies are looking at where the opportunity here is to accelerate, what they've already been working on, in terms of digitizing their business. So I think this has a big potential to be one of those positives that may come of this unfortunate situation. It's just a little too early to tell right now, if there's going to be a real significant push in that area. But we are hearing companies talk about that.

Thank you. Last question for me, as you think about the portfolio, you've been shifting more and more to focus on Tech. Yes, F&A is getting some significant project work over the next four to six months. But organic decline, demonstrates it's a little bit more cyclical. How do you think about that business? And if you could comment on your appetite for share repurchase having the 10b5-1 lapse here recently.

Yeah, I'll handle the first part of that question, and then I'll let Dave handle the second part of the question. So, on the first part of that question, as we look at our FA business, yeah, similar to what you have heard from many of our competitors that play in that space or in and around that space, many of those roles not capable of really being able to be handled remotely. So we did see some pretty sharp declines there as they aligned staff just because they couldn't keep those people and then be able to perform their role. So we are going to be taking this as an opportunity to step back and say, as we rebuild that business coming out of this, what do we want the business to look like? So we do believe this will provide us an opportunity to look at what our true capabilities are to deliver at scale, in-volume quickly highly talented resources. So we see some opportunities for repositioning of some aspects of the business while still staying very firmly entrenched in what we look at. And those F&A skills that are going to be imperative on a move-forward basis especially with everything that's happening in the business intelligence in the analyst world and everything else, we've made some good strides in that area. So we'll continue to push in those directions because actually we've seen a lot of those positions stay on-board and be able to be handled from a remote standpoint. So that's how we're looking at the overall FA business.

Yes, Tobey, this is Dave Dunkel. With respect to the share repurchase, as we watched the crisis unfold and saw what was effectively a collapse in the staffing sector pricing, it was clear to us that the -- it was too unpredictable to know how long and how deep it would go. So we made the decision to withdraw that to preserve capital and at the same time to let our shareholders know that we were still performing well. As we look in the future, we will be balancing that against any other capital needs. As I mentioned in my prepared remarks, we've got an M&A pause on right now. We are not going to be pursuing that at this point or in the near-term, although we are going to continue to evaluate prospects, because we are going to preserve the capital. But as we look at the next couple of quarters if we do see business stabilization or improving, certainly we'll look at allocating capital back to share repurchase again.

Thank you.

Thank you.

Thank you. Our next question comes from Tim Mulrooney with William Blair. Your line is now open.

Yeah, good afternoon. It looks like hours worked in your Flex IT business were up 2% year-over-year I guess on a pretty tough comp in the first quarter of last year. Can you tell us how this metric trended through April? And the same thing for bill rates in your Flex Tech business, which were up 3% I think, how did that -- how has that trended or how did that trend through April? Thank you.

Yeah, Tim. Yeah, this is Dave Kelly. So in terms of hours worked well, I think Joe had given you in his prepared remarks some metrics as it relates to tech in terms of total revenues. Total revenues in March I think were down 1%. We ended -- or I'm sorry, March. April were down 1%. We ended in the last week in April then down about 2% that last week. Also one of the things that I noted is some of the ends that we've seen in our tech business were from positions that had actually lower bill rates. So that 2% decline that we're seeing is really a mix of two things. Certainly we've seen a reduction and I don't have a precise number in terms of hours worked that are down, but it is down from where we entered the quarter but we bolstered that by an increase in bill rate. As a matter of fact, I think our average bill rate in tech is up about $2 at least if we look at April versus the first quarter. Again speaks to the criticality of the roles that we place in tech. We've always talked about our average bill rate being in that sweet spot of areas where companies have critical needs and we think that's helping us here. As we look at this, as it relates to our FA business, Joe had parsed this business clearly. We talked about in April, a decline of 23% I think. In the last week in April bill rates in that business are relatively stable, the core FA business. And so you think about hours worked this is number of people on assignment down again. This is in large part about how this business is done, right? Tech business very much a business that remote capabilities exist certainly less so in the F&A business that we are in.

Okay. Yeah, that's helpful. Thinking about building on your comments about the types of work being done, I mean in your Tech Flex business, can you just talk a little bit more about where you're seeing pockets of strength, the key trends and skill sets? And conversely where there's been maybe more softness than what you were expecting?

Yeah. This is Joe. I'd say with most of the majority of our tech business where we've really positioned is in that app development, project management, BI and other high skill areas. And I think if you were to look at our average tech bill rate versus some of the other competitors out there you'd see that's really what's causing that. So we probably don't do quite as much business in that help desk, support infrastructure areas some others. And I think that's partially benefited us here because we've seen these higher skill roles have really been much more equipped to move remote. So the other thing that we look at is they're much more strategic assignments in nature and linked to very critical projects. So that's really where we've been positioning ourselves within the client base that we operate within.

Okay. Thanks, Joe. Maybe one more from me. So you talked about accelerating investments in technology in your prepared remarks. Can you talk about some of the other technology-based investments that you've been making recently? I know you've talked about your talent management relationship system, but I also know in talking to Denis that you're making investments in a number of different areas. Obviously, we know competitors listen to these calls, but is there anything you can talk about with investors today about where you've been focusing your resources?

Yeah, I would -- I guess I'd answer that maybe a little bit more broadly versus specific just from a competitive standpoint I'd say. But with our core team as we've mentioned, we've been making investments for many years in technologies in and around not just the technologies themselves, but how they link into our processes, how it ties into our operating model. And I think this has been one of the big positives of our simplified operating model because it allows us to go much faster. So I guess part -- this is part by design and part by luck. So we're beyond fortunate with the commitments that we made several years ago with the Microsoft Dynamics platform, which is what we built our customer relationship management system in and now our Talent Relation, because the ties into Outlook and Teams has just really paid use dividends, especially for us over these last several weeks for a seamless transition to really a fully remote work environment, because we were already up and running our teams. I would say what is really meant for us is we kind of went from face-to-face meetings to basically virtual video meetings overnight. And our people have actually gotten to know each other a lot better through that platform. It's been interesting. When you're on calls I've gotten to know everybody's pets and their kids and everything else as they show up in the cameras. So -- as, I'm sure we're all dealing with, right?

Yes, exactly.

But I think this current operating environment for us, what it's really played out is I think it's been an accelerator, because I think in a matter of six or seven weeks, we probably have accomplished what it would have taken us several years in terms of adoption and coming up with best practices. So, just a very, very powerful platform. But what they -- what's that old staying, right? I mean crisis is the mother of invention. And I think that's part of what we're experiencing. So, I would attribute it a lot to Denis. I mean our CIO is a very visionary CIO, and our tech team is top -- I mean they're just top class and they work very well with our operations. So we are continuing to do a lot in our innovation area. A prime example is like when we were staffing everything with these really high-volume needs some of the platforms that we have put in place in and around referral capabilities. I mean we were generating thousands of referrals in a matter of 24 hours. So we're really getting dividends out of work that we've been working on for the better part of the past three or four years.

Yeah. This is Dave Dunkel. A comment on how quickly we were able to go to work-from-home. Yes, being in the part of the country that we're in we've battle-tested our systems to be able to do that. And unfortunately, in the past due to weather conditions we've often had to test it. So as Joe said, our Tech team did a fantastic job and we were actually shocked at how smoothly everything went. We were sharing at our Board meeting and several of our Directors serve on other Boards and they were kind of astounded. They said, we have -- we sit on other Boards we've never seen how smoothly everything went on any of our other Boards. So truly hats off to our team. And they've been very responsive as we've adjusted to BI needs and special tools. And so a lot of the work that was done in the past is starting to pay off. With that said, there's still a lot more to go and we still have, as Joe mentioned, with our TRM tool lots of leverage there for us as well. So we're very optimistic about it. If you look at the other side, I wanted to add one other thing. If you look at the other side of this, what's it going to look like? I mentioned in my prepared remarks, we're going to have less real estate likely. We're going to be doing less travel, using more tools, driving greater productivity as a result of those tools. So, we're actually excited about it. We've already shifted gears and started thinking about what's the other side look like and making adjustments to the way that we're thinking about that. Joe, do you want to add something else?

Yeah. The one thing I was going to add, because I didn't really touch upon this, but it's the other side of the equation right, because we're talking about the core tools. But our teams have also become pretty darn proficient with some of the online tools that support really more virtual project-type work where we're working with our clients. And some of these are really more agile development methodologies, which is about as face-to-face as it gets from a methodology. But our teams have really gone and come a long way in being able to handle combine boards virtually handling daily stand-ups really in a completely virtual situation. So no doubt this is just another area that's going to be impacted from a long term on how we drive efficiencies within our business as we're doing projects for the end client. I would also say what we have discovered over the better part of the last seven weeks is, I think there's a lot of aspects of our business our normal day-to-day operations that will live long past what we're experiencing in this 100% work environment, because we've really picked up some productivity and efficiencies on certain parts of the overall placement process. So just really exciting what we're seeing come about.

Yes. Yes. And as I mentioned earlier, given where we stand with the balance sheet and whatnot, we're going to continue to invest. Because we think the enabling tools really are going to be one of the determining factors in how successfully we're able to capture share on the other side.

Okay, understood. Thanks for all the color, everybody.

Thank you. Appreciate it.

Thank you. Our next question comes from Kevin McVeigh with Credit Suisse. Your line is now open.

Great. Thanks, and Dave hopefully you roll safely managing this pandemic. Dave or Joe, just it seems like you're definitely better positioned into this event than any other, I mean relative to whether it was Tech or GFC. You just talked a lot about emerging stronger. What are some key things that you're focused on as you think about incremental share shift? And I want to tie that into your client mix in terms of how much of the clients you serve were kind of directly impacted by this versus kind of not directly impacted.

Yeah. I'll take the last piece first. Small percentage of our overall clients, fortunately we're in those industries that were directly impacted. We do some business within there, high concentration in certain customers within there, but as a percentage of the overall portfolio very small percentage. When we look at Tech in how we're positioning and how we're thinking about this, that's part of -- and I didn't mean to go long on the front-end of my opening comments, but I thought it was very important to step back to how we came out of the dot-com what we did to the business to reposition the business on a move-forward basis. And I think we made all the right moves at that point in time. And then when we came out of the financial crisis we did the same thing. We stepped back and we said what did we learn from this experience? And how can we have a healthier business the next time something hits us? And that's when we started our long journey of really narrowing down the business lines that we're in. And I think if you look at where we are today, domestic tech is probably -- out of all the sectors that you could be in, it's the best place to be right now for a variety of reasons. It's because of the secular drivers that are going on in Tech which are the things we saw back in 2008 and 2009. And then beyond that, now when you look at this remote work environment and being in the upper end of Tech which are very remote capable, so that obviously wasn't part of our thinking when we did that. So that -- we got lucky on that one but it plays well. But I think it just tells you the critical nature of technology to companies today they are not turning off their customer-facing activity. They cannot turn those things down. And in fact, what we saw in the retail space is those organizations that have migrated more into digitizing their business, they've held up much better. Those that were laggers are the ones that have felt the pain. So now how are they going to react, obviously, in positioning their business? So we're just very optimistic in terms of the things that we've done from our client portfolio our market segmentation efforts that we went through back in 2015 and 2016, which is really where we looked at industry concentration and everything else those have really played out well for us up to this point.

Hey, Kevin, this is Dave. Sometimes you're lucky. Sometimes you're smart. I don't know which one we were. But when we look back at 2008 and 2009 and realized where the market was going with the transition with Joe stepping into the President's role in 2012 and 2013, we had a strategic discussion and agreed that it was time to exit the other businesses and now are focused on tech and concentrate here domestically. So looking back this has been something that we've started seven, eight years ago and it wasn't something that we just woke up one day and said, well gee, let's go after tech. So we saw what was coming. And whether we were lucky or good, we don't know, but it appears that we were right about where we've been positioned. So tech domestic right now at least from what we can see in the foreseeable future, certainly looks like the place to be. And as Dave Kelly mentioned in his opening remarks, we went from 50% of our revenue being tech now to today being 80%.

Yes. Agreed. I would say that the harder you work, the lucky you are Dave. My other question was just around cutting the business in terms of -- and again Tech is exactly more prone too, but what percentage of the business is truly able to work remotely as opposed to needs to be on-prem and potentially 100% off versus on, or...

Yes. Relative to our tech at this point in time, the people that we have out with clients outside of those that now might be migrating back into office in certain marketplaces very, very high percentage of the overall population in a remote capacity. Again that was part of what I was talking about. Just the nature of the type of work and projects that we're putting people on facilitated that capability. We don't do a lot of the lower-end roles that aren't as capable of being moved remotely.

Yes. I would say that most of -- nearly, when the crisis was at its peak, nearly everybody was working remote in the tech side. The skills that were rolled off were the ones that either assignment ended or they weren't capable of working remote. So at a point in time right after everyone was told to quarantine and stay at home, nearly all of our Tech consultant population was working remote.

And as you use Kforce is an example of that because our Tech department covers the whole spectrum. We moved our entire – entire tech population was remote and that was inclusive of all skill sets. Now easier for us to do that because we control all those functions, but it's similar with the end clients that we work with. I mean Tech is just very geared to be able to function well in a remote environment. And as we sit here with the pandemic today and now things are starting to open up, we don't know what the fall is going to hold or anything else. So we're very -- just very confident and blessed to be positioned the way we are with the footprint that we have.

Our next question comes from Andre Childress with Baird. Your line is now open.

This is Andre Childress calling in for Mark Marcon. Just wanted say thank you for taking my questions and I hope, everyone is safe and healthy. So you kind of provided some color that with SG&A 80% is variable. And as well you're taking several cost-cutting measures. How are you expecting your expenses to trend throughout quarter two?

Yes. This is Dave Kelly. So I would say a couple of things. I think important to reinforce our philosophy as to how we're managing this business, which is we think whereas David and Joe both said, we're in an enviable position and our goal here is to continue to make strategic investments and keep the key critical resources that we have to allow us to grow quickly as things turn. So I would say, you're not going to see a situation where the costs are going to align as they might have historically. I made a comment as well as we look to managing the business and the productivity of our associates sometimes there's a bit of a lag there. I think generally speaking, I think costs are somewhat difficult to predict as well and -- because we don't know what's going to happen. So I think generally the important point to note here is we want to retain the people that we have. We want to make sure that we have that are very productive they're going to drive us out of this. We've got the financial strength the cash flows that allow us to do that. So generally speaking, we're looking to the future. So that's going to have an impact in terms of where expenses are relatively speaking to what they otherwise might have been. We're looking to the future.

Yes. I would add a couple of other comments. Number one, we are not and have not -- number one, we have not done an RIF; and two, we don't plan it because as Joe's comments, we just manage this business operationally, consistently throughout this process so there wasn't a need to do that. And I would say also that due to the tenure of our people, particularly our four-plus people and even our two to four people and are now moving up with their performance and productivity continuing to go up there's really no need to do any staff reductions at all. In fact, our focus is on retaining them and giving them the tools to help them be more productive.

All right. Thank you for that. And on the IT Flex side, you gave some color about how contracts weren't being lifted or ended prematurely, but new starts were still a bit lower. What are you seeing in terms of like new starts on a year-over-year basis?

Yes. We haven't historically provided starts level so I'm not going to go there on this call. But what I will tell you if I look at it from an earlier indicator in summary, we're experiencing decreased job order level probably like you've heard from everybody else as one would expect. However, one thing that we have observed is the job orders that we're getting are of a higher quality. They're also of a higher bill rate and we're actually experiencing higher fill rates within the job orders we're getting. So we believe, this can yield the same or better results over the long run driven by less time being wasted; reduced competition, which we always experience during these times; and really a greater end client focus to fill the roles just because the ones that they have out there they're critical in nature.

Okay. Following on with that. With pay/bill spreads, have you seen an uptick in request for concessions recently?

Yes. This is Dave Kelly. So I would say, the way to think about it is in those industries that were most heavily in depression and we saw this early, we saw some requests. But I would say no. I mean, recently there has not been a significant wave of those. So just as Joe had said we've seen some signs of stabilization. That's probably one of those other things that we aren't seeing that much of as we did just a few weeks ago. And I would tell you by the way comments – I made comments that our spreads in the aggregate are stable. So those things are being – and from a mix standpoint offset by some of the higher bill rate activity that we're seeing. So we think we're in a really good place in terms of the portfolio as a whole. And frankly that is inclusive of the clients that we do business with. So we've got great relationships with them. So hopefully that gives you the color you're looking for.

Yes. What I would add on – can I just add on to that a little bit? Because I think there's a really important point that we don't want to miss here. When we work with clients, I mean these are very strategic relationships. So we are in a long-term partnership with them. And when they're going through certain dynamics, we're not digging our heels in and just watching out for $1 of margin. We're working with them for the long-term, positioning of their business to help them through certain periods of time. So we've worked different types of arrangements with different organizations that fit with them what they're trying to strategically accomplish because at the end of the day even some of those organizations that were directly impacted they really needed to keep certain of our talent on board because of the strategic initiatives they were focused on. So client by client we handle these things and it's in a partnership because the clients that we're working with these aren't clients that we just started relationships with last year. Many of these clients we've been working with for a decade. And you don't just abandon somebody during tough times. You hang in there with them and those kind of decisions have been what paid us dividends over the years coming out of the dot-com, going through the financial crisis. And so we are about the long-term relationship with our clients and with our consultants and doing right by both of them.

That’s good to hear. Thank you for the color.

Thank you. Our next question is a follow-up from Tobey Sommer with SunTrust. Your line is now open.

Thanks. I was just wondering if you could touch on two topics. One would be the NRC, which we used to talk about 10, 11 years ago, as being a differentiator for the company. I'm not sure how that's evolved or whether it's even a relevant topic. If you could just refresh us. And then with respect to perm, you mentioned technology pressure and competition. Could you elaborate a little bit and maybe delineate as to why there's pressure there but not on the Tech Flex side? Thanks.

Yes. So NRC, which really we've recast how we handle that delivery capability, it's really more of a centralized delivery capability now. So it's not it's not really identical to what it used to be, right? This has been a 20-year journey in building out that capability. But that capability provides us to service bulk opportunities quickly and efficiently and source things through some of the technologies that we've been deploying such as our KFORCEconnect technology as well as – because in essence, we've utilized that platform and that offering to service basically some of these projects. You can see it by the revenue estimates that we gave you for Q2. I mean, we serviced, I don't want to say tens of thousands of candidates but I mean north of mid-thousands of candidates in a matter of two or three days and processed those candidates through and started people hundreds on a Monday. And without that centralized capability we would have never been able to do that. So – I mean I give those teams credit, because when these requirements come in they always seem to come in on – we work out the arrangement on a Thursday. We lock it down on a Friday. Our people work all weekend and we're starting hundreds of people on a Monday. So it's not – because they have the commitments on their end that they will deliver that on a Monday. And what our teams have done has just been totally mind blowing. So that's on that side of the equation. Relative to the perm versus the Tech Flex, it's not a – it's a demand problem. It's not a supply problem and it's not a delivery problem. I mean as these cycles always happen the first thing that locks down is…

Thanks for leveling – I’ll have other question offline. Thanks.

Okay.

Thank you. I am not showing any further questions at this time. I would now like to turn the call back over to David Dunkel, Chairman and CEO for any closing remarks.

Thank you very much, Dale. I appreciate it. And thank you all for your interest and support of Kforce. These are truly unprecedented times and I'd also like to say thank you to each and every member of our field and corporate teams for their tremendous efforts over the last four to six weeks to our consultants and our clients for your trust in Kforce and partnering with you during these tremendously uncertain times and allowing us the privilege of serving you. We're excited about our future and we're looking forward to talking with you again next quarter. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.