Greetings and welcome to ASGN Incorporated's first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kimberly Esterkin, Investor Relations. Thank you. You may begin. Thank you, Operator. Good afternoon, and thank you for joining us today for ASGN's first quarter 2021 conference call. With me are Ted Hanson, President and Chief Executive Officer; Rand Blazer, President of Apex Systems; George Wilson, President of ECS; and Ed Pierce, Chief Financial Officer. Before we get started, I would like to remind everyone that our commentary contains forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, our actual results could differ materially from those statements. Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume any obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website at investors.asgn.com. Please also note that on this call, we will be referencing certain non-GAAP measures such as adjusted EBITDA, adjusted net income, and free cash flow. These non-GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between the GAAP and non-GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, President and Chief Executive Officer. Thank you, Kimberly, and thank you for joining ASGN's first quarter 2021 earnings call. ASGN reported very strong results for the first quarter, with revenues, adjusted EBITDA, and adjusted EPS all exceeding the high end of our guidance ranges. I want to thank all of our incredible employees for making the first quarter such a success, especially as we continue to navigate the challenges of the pandemic. Revenues at $1,026,000,000 for the quarter were well ahead of our guidance range, representing the highest quarterly revenues ASGN has achieved to date. Our prior revenue record was set in the fourth quarter of 2019. Adjusted EBITDA of $108.6 million also topped expectations and improved 4.9% from the prior year quarter. With revenues topping $1,000,000,000 for the third consecutive quarter, there is no question that demand is returning to our business since the lows of last year, and I'm very pleased to report that we saw consistent month-to-month growth across all of our operating segments. Our commercial business, which includes the Apex and the Oxford segments, accounted for $767.9 million, or roughly 75% of consolidated revenues, while our government business, the ECS segment, accounted for $257.8 million, or approximately 25% of consolidated revenues. Commercial bookings, in particular, are on a very strong trajectory, with the growth rate of bookings as we enter the second quarter higher than that of which we saw going into Q1 of this year. Our significant exposure to mission-critical government work, combined with our ability to provide high-end digital transformation services to the commercial marketplace, has continued to support our growth. At the same time, our unique deployment model, combined with the increased penetration of our large accounts, has helped to propel the business forward. Our cash position also remains strong, with free cash flow totaling $110.5 million for the first quarter and an increase of 126.4% year-over-year. Our strong free cash flow generation supports investments in both our company's organic growth as well as in strategic tuck-in acquisitions. As I noted on our Q4 2020 call, ASGN remains acquisition-ready in 2021. Each of the companies we acquired last year, including Blackstone Federal, LeapFrog Systems, Skyris, and ISM, have been fully integrated and are performing in line with our expectations, if not better. With that said, let's now turn to our segment performance for the quarter, beginning with our commercial business. Apex, our largest segment, which includes Apex Systems and Creative Circle, services clients across multiple commercial and markets. For the first quarter, the Apex segment generated revenues of $630.4 million, or 61.5% of revenues, up 0.2% year-over-year or 1.8% on a day-adjusted basis. Our results for Q1 were higher than we had anticipated. Apex Systems improved 5.1% on a day-adjusted basis, while Creative Circle was down from the first quarter of 2020. Importantly, both Apex Systems and Creative Circle continue to grow off trough-level revenues in mid-second quarter of 2020, reporting the third straight quarter of sequential growth. Creative Circle's weekly volumes, while down year-over-year, exited the quarter well above expectations. Digital-related skill placements continue to drive Creative Circle's sequential growth, but Apex Systems and the overall Apex segment have shown positive growth not just on a year-over-year and sequential basis, but on a two-year comparison as well. Revenues for Apex Systems demonstrated some notable trends in the first quarter. Day-adjusted revenues in two of our five reported industries, including financial services and healthcare, exhibited positive growth year-over-year, leading to the aforementioned 5.1% day-adjusted growth rate. Consumer and industrial industry accounts, though down from the first quarter of 2020, were up sequentially due to the strength of consumer staples, e-commerce, and utilities. While retail, energy, hospitality, and transportation remained down from prior year quarter, it is important to note that each vertical continued to experience positive growth on a sequential basis. Our technology and telecommunications, or TMT, vertical was flat year-over-year on a day-adjusted basis. Within the vertical, technology accounts saw growth over Q1 2020, while telecommunication accounts declined year-over-year. Finally, government and business services, which was down low single digits, saw growth in aerospace and defense and government accounts over the first quarter of 2020, while business services accounts were down year-over-year. Overall, revenues in applications and project management skill areas like Agile, digital, ERP, and cloud continue to perform well, while infrastructure and scientific skill areas remain soft. Looking at the top accounts, top accounts achieved high single-digit growth rates for Q1, while retail and branch accounts remained down low single digits as compared to the prior year. From an industry perspective, top accounts' revenue on a day-adjusted basis at Apex Systems was up in three of the five industry verticals we target, while Creative Circle posted positive growth across all of their top accounts in Q1 2021. Gross margins for the Apex segment were 28.9%, down roughly 40 basis points from Q1 2020 due to lower permanent placement business attributable to COVID-19. Gross margins at Apex Systems were flat with the prior year period, largely benefiting from higher margin consulting work. EBITDA margins were up year-over-year in the Apex segment based on higher productivity in our workforce. We also continue to grow our commercial consulting revenues, which totaled $137.7 million for the quarter, up 34% year-over-year. Additionally, our pipeline of consulting work grew again at high double-digit rates over the prior period and is trending very positively in the second quarter, as previously mentioned. ASGN's high-end consulting offering remains an important source of value we provide our clients, so we continue to identify acquisition opportunities that expand our consulting capabilities. As we grow our consulting revenues, we see an increasing amount of work in digital innovation and modern enterprise solutions across cloud, data, and analytics, and digital business transformation engagement, enabling us to implement many of the elements of our clients' individual roadmaps for the digitization of their businesses. Work in Agile and DevOps, in particular, is a large component of our support as our clients tie together applications and customer interface capabilities. This is especially true with applications such as Salesforce and ServiceNow. Let's now turn to ECS, which provides mission-critical solutions to the federal government, including the Department of Defense, intelligence agencies, and other civilian agencies. ECS recorded another quarter of strong revenue growth, with Q1 2021 revenues of $257.8 million, up 21.2% year-over-year. ECS's year-over-year improvement is primarily due to the government's continued high demand for artificial intelligence and machine learning services, a high volume of cloud services and solutions, and new opportunities presented through strategic M&A, such as through our recent acquisition of ISM. ECS's new business pipeline remains strong, with approximately $291.5 million in new business awarded in the first quarter and a book-to-bill of 1.1-1 for the quarter. Contract backlog totaled $2.7 billion at the end of the first quarter, or a healthy coverage ratio of 2.5x ECS's trailing 12-month revenues. Our high-end solutions in cybersecurity, digital transformation, AI/ML, data science, and analytics remain areas of focus for the federal government. During the quarter, some of our new contract awards included an expansion of AI/ML activities across the Department of Defense and Intelligence Community, including AI integration with intelligence, surveillance, and reconnaissance systems. We also continue to win programs that expand our ServiceNow modernization efforts, as well as the win of a recompete classified IT program. Last but not least, ECS expanded its reach at Department of Energy and the National Labs with three new contracts, most notably a contract at Sandia National Labs to provide comprehensive enterprise and mission-embedded IT support. Turning to our last segment, Oxford. Oxford offers on-demand consulting talent for commercial IT, healthcare, life sciences, and engineering clients, as well as permanent placement talent through our CyberCoders division. The Oxford segment reported revenues of $137.5 million for the first quarter of 2021, and while down year-over-year, the segment was up 6.5% sequentially. Both Oxford and CyberCoders are seeing a very solid recovery from the low in the first half of 2020. I am very pleased with ASGN's first quarter performance. Between the organic growth of our commercial and government markets and the strong performance of our strategic acquisitions, our business continues to be positioned for success. It is clear that the marketplace is strengthening, with growth in bookings and some of our commercial industries accelerating even faster than that of revenue. To discuss this performance in further detail, I'll now turn the call over to Ed Pierce, our CFO. Ed? Thanks, Ed. Good afternoon, everyone. As Ted mentioned, our financial performance for the quarter was above guidance estimates, reflecting better than anticipated sequential growth of our commercial business and double-digit year-over-year growth of our federal government business. Revenues for the quarter exceeded $1 billion for the third consecutive quarter and were up 3.6% year-over-year. This was achieved despite one fewer billable day in the quarter, and the difficult prior year comp as the first quarter of last year was only minimally affected by COVID. Sequentially, commercial revenues were up 1.4%, reflecting continuation of the strong momentum of the business exiting Q4 last year. Net income and adjusted EBITDA for the quarter were up year-over-year and grew at a higher rate than revenues. Our adjusted EBITDA margin of 10.6% was up slightly from Q1 of last year and above the high end of our guidance estimates. Commercial revenues for the quarter were $767.9 million and were slightly up year-over-year after adjusting for one fewer billable day in the quarter. Sequentially, commercial revenues were up for the third consecutive quarter across all divisions. Federal government revenues for the quarter were $257.8 million, an increase of 21.2% year-over-year. This strong double-digit year-over-year growth was driven by a number of factors, including increased volume on certain existing programs, new contract awards, and the contribution from acquired businesses. Gross margin for the quarter was at the high end of our guidance estimate. On a year-over-year basis, gross margin was down due to business mix and higher state unemployment tax rates. Business mix changes included lower revenues from our high margin creative marketing and permanent placement services and a higher mix of revenue from our federal government business, which carries a lower gross margin than our commercial business. The effect of these changes is partially offset by the high growth of commercial consulting revenues, which grew 34% year-over-year and totaled $137.7 million for the quarter. SG&A expenses were 18.9% of revenues, down approximately 100 basis points year-over-year and up approximately 100 basis points sequentially. The year-over-year reduction in the SG&A expense margin reflected, among other things, lower travel and entertainment, healthcare, and headcount expenses. The sequential increase in the expense margin reflected the effects of the payroll tax reset, higher compensation expenses related to headcount additions to support the growth of the business, and higher incentive-based compensation related to improved growth and profitability. We anticipate our expense margin will gradually increase over the course of the year as COVID-related restrictions are relaxed, and we continue to make the necessary investments in our operating divisions to support higher growth in our business. Net income for the quarter was $48.7 million, up 11.2% year-over-year. Adjusted EBITDA for the quarter was up year-over-year, and our adjusted EBITDA margin was above our guidance estimates and up 10 basis points over Q1 of last year. Free cash flow for the quarter was $110.5 million. The conversion rate of adjusted EBITDA into free cash flow exceeded 100% and was well above our historical conversion rates. The higher-than-normal conversion rate mainly related to a reduction in the number of accounts receivable, days, sales outstanding. Over the course of the year, we expect the conversion rate will return to historical norms. At quarter-end, cash and cash equivalents were $386.5 million. There were no outstanding borrowings under our $250 million revolving credit facility, and our senior secured debt leverage ratio was 1.13 to 1. Our financial guidance estimates for the second quarter are set forth in our earnings release and supplemental materials. These estimates are based on current production trends and assume no significant deterioration in the markets that we serve. For the second quarter of 2021, we estimate revenues of $1,058,000,000-$1,078,000,000, net income of $56.4 million -$60.1 million, and adjusted EBITDA of $119 million -$124 million. We expect all operating divisions will be up both year-over-year and sequentially. Our SG&A expense estimates include sequential increases for additional headcount investments to support the expected growth in our commercial business, as well as increases in other expenses that were curtailed due to COVID. Certain of these expenses, such as travel and entertainment, will be gradually reintroduced back into the business and will be weighted more to the second half of the year. For the full year 2021, we expect our cash SG&A expense margin will be slightly above our expense margin for 2020, but below our expense margin for 2019. We also expect our gross and adjusted EBITDA margins for the full year 2021 will be in line with to slightly below our margins for 2020. Thank you for your time, and I'll turn the call back over to Ted for some closing remarks. Ted? Thanks, Ed. Following the unprecedented year endured by our company, our employees, and people around the globe, there is no doubt that ASGN's commitment to the environmental, social, and governance, or ESG, causes has never been more important to ensuring the financial health and stability of our business. Assuring the health and well-being of our people while also being mindful of our environmental footprint will contribute to ASGN's profit, the triple bottom line. At the end of March, thanks to an exceptional company-wide commitment, we debuted our second annual ESG report, which significantly progressed our tracking efforts to develop a more robust analysis for our stakeholders. I believe that our 2020 ESG report more closely reflects ASGN's identity as a leading IT services and solutions provider. While we certainly accomplished many achievements in 2020, from more than doubling our volunteer efforts from the prior year to significantly advancing our diversity, equity, and inclusion efforts across all levels of our organization, we recognize that excellence is not an act, but a habit. There is a solid runway ahead of us for continued ESG progress. In terms of responsibly managing our environmental impact, our advancement as a company will be gradual and strategic. Beginning in 2021, we have committed to effectively measuring and establishing a baseline for ASGN's carbon usage. We've also established a green leasing policy and sustainable office guidelines to further promote these efforts. To improve our social impact, we've created a corporate social responsibility committee to unite company best practices. We are also pledging to become a member of the United Nations Global Compact, aligning our corporate goals with that of the UN 17 Sustainable Development Goals. Accountable corporate governance, including policies that comply with relevant laws, regulations, and ethics principles, has been core to ASGN's business since our founding. Much of these principles and practices come down to the strength of our management team and our board of directors. As you may have seen, we recently announced several changes to our board, including the upcoming retirement of Chairman Jerry Jones at the end of his current term. Jerry has served on our board since 1995 and has been our chairman since 2003. I want to thank Jerry for his incredible service to our company. While his shoes will be tough to fill, we are fortunate to have Arshad Matin, who has led a very successful career across the software, security, and IT industries, and who has been a director on our board since 2014, to step into Jerry's place as our new Chairman this June. We also recently welcomed two new directors, Vice Admiral Joseph Dyer and Carol Lindstrom, to our board. Both Joe and Carol previously served in an advisory capacity to our board, and we are glad that they have both taken on full-time director roles with ASGN. Ultimately, as we continue to evolve and enhance our board membership, by 2022, we are committing to advancing gender equity by having at least three female directors. While there is no doubt that the world of work has changed, ASGN remains committed to supporting our clients' digital transformation efforts while also engaging and mobilizing tomorrow's workforce responsibly and sustainably. Part of that client support will come from our current set of advanced IT solutions and capabilities, while additional support will be developed over time through new and expanded services and contracts brought to ASGN through strategic tuck-in acquisitions. With a strong balance sheet and ample cash flow, we will continue to look to make acquisitions in both the commercial and government markets that provide us with new capabilities, new customers, and new contract vehicles. Our pipeline of acquisition opportunities remains solid, and there are several interesting opportunities we are currently exploring. Throughout the process, we will remain thoughtful and measured in our M&A strategy. As important as it is to identify acquisition targets, so too is ensuring that each of the companies we acquire is successfully integrated into ASGN. As I mentioned earlier, all of the acquisitions we completed in 2020 have now been fully integrated and are performing in line or, in some cases, better than anticipated. With that said, this concludes our prepared remarks today. On behalf of our entire company and board of directors, we thank you for your continued support of ASGN. We will now open up the call to your questions. Operator? Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. If you'd like to ask a question, you may press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star key. Our first question comes from the line of Maggie Nolan with William Blair. Please proceed with your question. Hi. Thank you. Can you hear me okay? Hear you great. Thank you. Great. Congrats on the strong results. I wanted to talk a little bit more about the recovery that you're seeing. When you think about some of the softer industries within Apex Systems, it seems like there are those positive trends in the verticals. They're growing on a sequential basis. Do you have any updated thoughts on the timeline of the recovery for some of these segments and when they may return to year-over-year growth? Now, let Rand talk about the individual industries. I will tell you, Maggie, that while the government business has been very strong and steady through all of this, obviously, some of the commercial industries have been up and down over the last few quarters. The commercial business, as a whole, has been on a really steady march forward back to kind of mid-May of last year, so Q2 of 2020. I would say that's accelerated, if you will, coming out of Q4 and now into Q1, where we saw a really strong progression of revenue growth through the quarter. That's at a high level for all the commercial industries. Then, Rand, on the individual industries that remain down, are you seeing anything there? Yeah. I think, Maggie, you're referring to the parts that we're still a little soft on, our business services. Also, the parts of consumer industrial that were COVID-hit, particularly transportation, the airlines, for example, retail, and hospitality. Lastly, the telco side of our business. I would tell you that all three, if you looked at bookings that we've had over the past two quarters, I think we're seeing a surge in those areas of business opportunity and certainly some business that we're starting to book. I would suspect they're all going to get into more positive growth pretty quickly. Okay. Great. Thanks. When you think about there's such unique demand patterns right now when you think about the three different segments of the business, and you kind of layer in the acquisition strategy that you have on top of that and recognizing that the mix of the business has changed so significantly over the last several years, how do you envision that mix towards the end of this year and on a couple of years out from that in terms of those segments and the percentage of revenue? I think that we're in a pretty good place here. Approximately 75% of the revenues are in the commercial market. In the federal government market with ECS, it's about 25%. We obviously look to see both of them grow. Our long-term expectation for the federal government market is kind of high single digits, and then we'll layer in acquisitions here as we go. That has always been our target at ECS and within that marketplace. In the near term, just because of the step down last time or this time last year, I think you're going to see stronger growth, most likely, in the commercial industries we serve. Our guidance generally reflects that. How dramatic will that affect the mix? I don't think it will dramatically affect the current mix of revenues. Got it. Thanks for taking my questions. Our next question comes from the line of Gary Bisbee with Bank of America Securities. Please proceed with your question. Hey, guys. Good afternoon. I guess first question for me, the consulting businesses had another terrific quarter. When you think about that over the next few years, I mean, how are you thinking about the growth potential? And maybe as part of that, given how well clients seem to be responding to those offerings, what are the gating factors to growing this business at a really rapid rate for a long time? Gary, I think if you think about the IT staffing marketplace here in the U.S., pre-COVID, it was like a $30 billion market, and surely it's down a few points since then. But IT consulting in the U.S. is about a $300 billion market. So the total addressable market opportunity is a lot bigger. Then we have behind that secular trends going on, which are causing our clients to think differently about how they purchase certain services within their IT spend, right? I think we're definitely getting a favorable wind in our sails here around the changes that are going on in terms of how the CIO thinks about getting things done. That's not new. That's been going on for several years, but it's evolving here. Gating factors, Rand, you may have a few things on your mind, but I think, Gary, the one thing I'd say before Rand takes it is just that we think this is an enormous market opportunity for us, and it's a part of our business that will be as large as our IT staffing business just based on these growth rates. That's a good thing, right, for us. Also, we like our IT staffing business. It enables what we do in the consulting space for our clients. Rand, anything you'd add to that? Yeah. I think, Gary, when you talk about things we have to do well to continue to grow, both in consulting and staffing, and I guess I'd go back to my 30 years at KPMG Consulting as the Chairman and CEO of that business as well as Apex, it's three things. It's number one, having a strong reputation and delivering excellence to our client in the services we provide. It's the deepness of the account relationship that we've built over the decades. Third, it's bringing real value to our client, particularly in the key skill areas like digital transformation, modern enterprise, some of the applications that were talked about in the script, that we build strength and have what I call technical muscle in that area that delivers value to the client. I think we're on a path where we have all three when you look at the combined relationship with our accounts. We have a strong reputation. We have great account relationships that have been there for a long time, built by the staffing side of our business, and now adding technical muscle and value in the kind of work we're doing and muscling up in the key solution areas that are important to them. I think we've got those things in the works. I think it's working. We just have to stay with it. Does that help? Does that answer your question? Yep. Yep. Definitely. That's good. Ted, you said twice in your prepared remarks that bookings or sort of demand as you enter Q2 is stronger than how it was a quarter ago entering Q1. I guess, is part of that the easier comp, or really are you thinking in sequential terms and sort of absolute dollar terms, not year-over-year, that you're seeing things improve? All I'm really trying to get at is sort of momentum versus the fact that we're facing really easy comps and the numbers will look a lot better almost irrespective of how well they're doing. Sure. Yeah. It was more about momentum, Gary. Definitely coming into the quarter, we had good momentum. We pretty far outperformed our guidance. That tells you there was momentum building throughout the quarter and continued into the beginning of Q2. One last quick one. You cited you're going to start spending more on headcount to support the commercial staffing growth. I guess the SG&A guidance indicates that. Should we think that that kind of sequential growth Q1 to Q2 continues if you continue to deliver the kind of revenue growth you're doing now? Or is it sort of smooth growth from here? Or anything about how you think it would phase during the year that's worth calling out? Thank you. Ted, anything you'd say to that? No. Gary, we did mention that we talked some about the sequential increase, and we talked about where we thought we would be for the full year. And so we're really not getting into the individual quarters, Q3 and Q4, but I think we're good enough on the full year and sequentially that you can probably draw some good conclusions from. Yep. Fair enough. Thanks. I appreciate it. Our next question comes from the line of Kevin McVeigh with Credit Suisse. Please proceed with your question. Great. Thanks so much. Let me add my congratulations as well. Hey, Ted, I guess I want to start with more of a higher level in terms of how are you thinking about where we are in the cycle? I mean, it's been such a kind of a volatile time over the last kind of 12 to 18 months, and just trying to figure out where you think we are from a cycle perspective. Is that maybe based on client conversations or demand? Just anything you'd call out one way or the other. I wanted to start there if possible. I mean, I guess the economist would tell you that we've been through, by definition, an economic event, right? A downturn, and that we're at the beginning of a new business cycle. I do not pay as much attention to that as I do the trends of our clients and their spending trends, their conversations, and what are kind of themes going on. There is definitely here a launch and a renewed push around digital transformation. It did not just start this quarter. It started in the second half of last year, and it has been steady and building, if you will, here as we go. I guess you could say there is a business cycle, but I think more importantly, there has been a leap forward in terms of where all our clients expect to be. By the way, us internally at ASGN, as it relates to our technology platforms and the digitizing of our own business. Ted, that was part of my second question, post-COVID. Obviously, there has been an accelerated shift online. Maybe help us understand the scope of work you're doing on the consulting side versus the staff aug. And then, are you using the staff aug as a feeder for the consulting? And if so, does that revenue sit in the consulting, or would it be reflected on the staff aug? So, Rand, you want to take that one? I'm sorry. Didn't catch the last part of that. The revenue for what is in either consulting or staff aug? Right. If you're using the staff augmentation as a feeder for consulting projects, if you are, does that revenue get reflected on the consulting side of the ledger or on the staff side? No. Staff aug is staff aug revenue, and it's based on the client's staff aug programs. That's a separate program in most Fortune 500 accounts. The consulting program is also run by them, and we're in that side of the program as well. That's different work. That's work that's packages of work with real accountability for performance and outcomes. No, we separate the two very cleanly and distinctly. Did that answer your question, Kevin? It did, but I guess part of my question was, do you source some of the labor from your staff aug to do the consulting work? I would say in a different way, Kevin. Yeah. I would say a different way. We source labor for our some of our labor in consulting is contingent labor that we take from our database of qualified people. I wouldn't call it staff aug. It's not taking away from staff aug. It's just we have access to 18 million IT professionals out there, and we will assemble teams with our own internal team and capability and leadership and methodologies along with some contingent labor with the right skills at the right time. We are using some contingent labor in our consulting work. Yes. That's our deployment model. It's very helpful. I guess, average go ahead. I'm sorry. I didn't mean to cut you off. Go ahead. I was just going to say, what about kind of average length of engagement on the consulting side versus staffing? Ted, I'll go ahead. It's longer. If you've noticed, we don't report the two separately, but our length of assignments in general within Apex Systems and Creative Circle and Oxford are lengthening from 26 weeks to now 30-some weeks. Some of that is the influence of consulting, which tend to be longer-term projects. Okay? Very helpful. Thank you very much. Our next question comes from the line of Tobey Sommer with Truist. Please proceed with your question. Thank you. In ECS, I was wondering if you might be interested in expanding more into civil work given the substantially faster spending outlook per Biden's initial budget request as well as potential other spending initiatives, infrastructure, etc., that are more geared that direction? Tobey, I'll say one high-level thing, and I'll let George comment on that. We're very happy about where we're positioned in that marketplace. With the solutions that we provide to the Department of Defense and intelligence, those things are going to be funded, and the funding is going to grow for those when you think about the kind of work we're doing, which is cybersecurity, AI machine learning, IT modernization, cloud, and data migration. At a high level, I mean, we remain really pleased with where we're positioned there. Obviously, as you note, the winds are blowing different ways as it relates to the Department of Defense versus the civilian agencies. George, you can comment on that. Yeah. Sure. Thanks for the question, Tobey. I agree with everything Ted has been saying there as well as to point out that the proposed FY2022 budget, it does tilt, as you say, towards civilian agencies. We are in several civilian agencies, and we will continue to expand there. The defense, although it is flat, is still, from a historical context, very high, and it is in the areas that we are doing very well. As Ted put it very well, we are happy where we are right now. If the winds continue to blow and more federal civilian agencies get the technology modernization funds and some of the agency IT initiatives, we will be chasing those. Okay. Do you have the contract vehicles to be able to compete effectively on kind of short notice with the civil agencies that are going to see big budget increases? We do. One thing that we are very fortunate about is we have several of the best-in-class contracting vehicles, and there are many articles out there that talk about how the government is using those more and more. We are in good position with respect to our contract vehicles. If possible, could I get a little bit more color on the mix of the contract awards that you announced in the quarter? I'm thinking of what proportion of them might have been, what percentage might have been new work versus existing or recompete kind of work, just so we can get a sense for what this book-to-bill means for future growth. Sure. The Sandia that we mentioned, that's a brand new job, brand new work for us. Several of the others I would put in one category of continuations. Some of those are what we call contract growth, so that's an expansion of existing work, which, and this is not just a one-up. The majority of the work that we report at this time is long-term new work. Okay. I guess since I've got you, I got one more sort of ECS question. The book-to-bill, while over one in the quarter on a trailing basis, has been trending down now for a longer period of time. Are there any changes afoot, like stepping on the accelerator and bidding proposal investments or something that you're planning on changing to kickstart what has, for a period of time, been sluggish contract awards? Yeah. I mean, even though, as you point out, it's been less than what we've had in the past, we still have a very healthy 2.5 contract backlog, which is very good, about the middle of for this field. Regarding business development, we're constantly looking at and adding business development resources. The one thing we cannot control, and that's the timing on when the government completes things and then when they award things. You will have these up and down and these troughs in book-to-bill, but I would not say in any way whatsoever is that due to a fundamental shift in how we're approaching business development or anything. I'd say just simply a timing. Okay. If I could ask one sort of broader corporate question. From a balance sheet perspective, you now kind of quote your debt leverage on a secured debt basis. Where do we sit on an overall debt basis, because I think I recall the historical 2.5 x being an area that was, if you fell below that, considered suboptimal, and we could maybe look for you to buy back more stock in those kind of situations? We've been kind of steady at 2.3-ish, Tobey. I think this quarter was 2.35. Yeah, and our feeling is still the same. Kind of when we're sub 2.5, we're kind of suboptimal, and we're looking to deploy capital, obviously. I would say this, and I say this every call, I think the highest return on next dollar deployed is in M&A, but obviously, we're ready to buy our stock back if we don't think we have the kind of pipeline opportunities that we at the moment that we may be able to execute on. You saw in the we mentioned it in the script, and you saw it in the materials, that we just basically renewed our existing $250 million repurchase authorization that was going to expire here in another few weeks. That is full and ready and so remains on the shelf so we can access it. Thank you very much. Our next question comes from the line of Surinder Thind with Jefferies. Please proceed with your question. Thank you. Congratulations on the quarter. Ted, any additional color you can provide on the M&A front? It sounds like you may be close on a few deals. Are the targets maybe within the federal consulting space, or also you're looking at something within the commercial segment? And then maybe the size of the targets. Continue tucking acquisitions, or is there maybe an opportunity to think about doing something bigger? Thanks for the question, Surinder. We are pursuing opportunities in both marketplaces. On the federal side, we have opportunities to either add to or augment current capabilities, new clients and contract vehicles in key parts of the market where we may enter more efficiently by acquisition versus trying to get there organically. Obviously, in the commercial consulting marketplace, we have a blue ribbon account portfolio of large Fortune 500 accounts. If we can bring in consulting expertise with industry quals and knowledge and deploy that across our current accounts, that's really the strategy. We've got good momentum there. Obviously, we're trying to build on that. Looking at both marketplaces, I'd say when I think about strategic tuck-ins or kind of sub-$100 million in revenue targets, that's really the things that we're pursuing, although we're open to things of more scale. As those become available, we're obviously thinking about those as well. That's helpful. A question on expenses. Obviously, good guidance on kind of the SG&A side of the equation. In terms of thinking about the, I'll call it the COVID-related savings in terms of some of that expense coming back, how should we think about it structurally over the long term? Should we expect most of those expenses back, or are you guys going to be able to realize some level of efficiencies at this point where you kind of see the firm evolving to the point where not all of those expenses will come back? Look, I'll talk about it in detail, but we're always on a march for better productivity, Surinder. While we expect that some of these expenses are going to kind of matriculate back into the business over a long period of time, we're on a march to be more productive so that our revenue growth and gross profit growth is greater than our expense SG&A growth. That's the way we're going to get our EBITDA margins from where they are today and kind of march them forward towards our long-term targets. Ed, in the near term around SG&A? Yeah. I think in the near term, you're going to see SG&A and our probably tick up, as we said, over the course of the year, but we expect our expense margins to be below what they were in 2019. In the near term, that's what you can expect. I think longer term, we're going to benefit from the things Ted's talking about. I think the other thing that's pretty important is we're going to benefit from improved economies of scale as the business continues to grow and outperform. It's all those things together. Understood. One question on kind of the it sounds like the businesses where you guys are seeing strength, obviously, demand is very robust. Those clients are healthy. You also outlined some areas where demand hasn't quite recovered yet, kind of talking about whether it's business services or consumer industrial. Is there any additional color you can provide on kind of the conversations that you're having with those folks? Are they kind of truly in a hold position, or do you sense that they're maybe close to pulling the trigger where we may see a meaningful rebound in demand, perhaps in the second half at this point? I mean, it seems clearly that demand across the board, not just for you guys, but just it's recovered a lot faster than everybody else has. Just trying to understand that part of the equation, the one where you're seeing a little bit of something. Yeah. I'll let Rand comment. I mean, I guess, and Rand, if you agree with this, I mean, there's green shoots in places in those industries for sure, right, Rand? Yeah. I think I commented earlier that if you look at bookings, our pipeline in bookings, there is certainly growth in these what you call hard-hit COVID sectors of the economy. I expect to see positive things to come in the future. Thank you. That's it for me. Our next question comes from the line of Mark Marcon with Robert W. Baird. Please proceed with your question. Good afternoon, gentlemen, and congratulations. I was wondering if you could talk a little bit about some of the dynamics that we're seeing. First of all, given the tightness in the labor market, what are you seeing in terms of bill rate increases across the board? Because it seems like that should be an aid coming to you, should be building over the course of this cycle. We're definitely seeing volume increases primarily. We are seeing bill rate increases. I would say part of that is because we're doing higher-level work, right? So you're seeing that push up. But Rand, just on an apples-to-apples basis, what would you say? I think we've been on a for about over a year, we've been on bill rate increases, slight, steady bill rate increases. So that's been happening for some time, Mark, not just now. Yeah. No, I'm just wondering if it's going to accelerate. I think it's going to. I hope so, I guess I would say. Yeah. Okay. I'm sorry. Go ahead. Can you talk a little bit about your ratios on the staffing side? What are you seeing there? There are all sorts of stories about the tightness of talent. How's that impacting you? The first part of your question is blipped out. You said I'm sorry. You said something about just the ratios. Just the fill ratios and how they're trending? Oh. Okay. Rand? Very positively. Fill ratios are up. As Ted has said many times in the past, Mark, we've been in a tight labor market in the IT world for a long time. It's not just IT in general. It's really around certain applications, certain skills. We understand that. The fortunate part of our job with our clients is to think forward. We know where the trends are in some of these skill areas, and we're trying to use our Apex Talent University to help develop skills or to create a pipeline of people that are going through school or training to be ready to take these positions in some of our clients that are capable of thinking forward a year or two. There is a combination of things at work here that has been going on for some time. I mean, our clients, I can assure you, Mark, are as concerned about the availability of talent a year from now and two years from now, and we are quick to counsel with them about proper planning, proper by skill area and by location. The fact that we can use remote workers now has actually helped or enhanced our ability to meet some of these skill requirements in harder-to-fill places like New Jersey, where you can now have people sitting in Wyoming doing the work in New Jersey. There is a combination of things at work, including training, using our talent university, and building the workforce for the future. All that has been going on with many, many of our clients. Give them credit for that. That is great. When we think about bill pay spread on an apples-to-apples basis within Apex Systems, I mean, with the demand levels that you're seeing and particularly things picking up, should that be an aid? Ted, should I go ahead? Mark, I think you know this over the years. There's a lot of things that affect bill pay spread: the skill level of the worker, the different kinds of clients and accounts. For example, in one industry, the bill pay spread may be higher or leads to a higher gross margin than another industry. Depending on the flow of our work in different industries for different skill types, our margins will float, if you will. If you've looked at our margins just for Apex Systems, let's say, over the past years, you'll see pretty good steadiness to slight increases in that. Now, obviously, consulting is helping a bit, giving us some boost. Depending on which industries are hot and are buying and what skills, it can affect. Infrastructure skills carry a different gross margin than the higher-end application skills or some of the artificial intelligence skills. I think it is more a flow of work. It is not hard negotiations around bill pay spread. It is around different parts of our business growing at different times. I would first point that out. I would just say, generally speaking, we have seen good bill pay increases over the past year and a half. We have had bill increases. We have had some pay rate increases. Overall, it has been a net positive for us for some time now. Great. I mean, my sense is with consulting picking up and growing at a faster rate, and then I would imagine perms also going to pick up and come off the trough and easy comps. I'm just trying to reconcile the rapid growth on the commercial side that we should end up having relative to the easy comps with the commentary in terms of gross margins potentially being slightly lower over the balance of the year. I'm just trying to figure that part out. Go ahead. Yeah. I wouldn't say that. I would agree with what you said. Now, remember, permanent placement is a very small part of our business, so that's not really going to be as much of an influencer. I would expect that you see pretty consistent margins here and that you kind of see the same trends that you've been seeing on the commercial side of things that you see in our numbers now. I just wouldn't call out perm placement as a big influencer in all this on our side of the ledger. Okay. Great. One last one. On the Sandia contract, I mean, congrats on that. That seems really large. How much of that will you end up getting within that split? How many more opportunities are there that could be like that over the next couple of years? George, you want to take that one? Yeah, sure. The numbers reported on our book, that's the amount that we're getting. That's not the total contract. We're a subcontractor to a joint venture. That's our revenue. We expect that there'll be some expansion. We're very excited about the opportunity and the whole area out there in terms of a new customer market for us. Thanks again. Okay. There are no further questions in the queue. I'd like to hand the call back over to Ted Hanson, CEO, for closing remarks. Great. I want to thank everyone for being on the call. Again, our great team for their performance this quarter. I look forward to being with all of you here in another 90 days to talk about the performance for Q2. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.