Greetings, and welcome to the Volt Information Sciences, Inc. Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. 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, Joe Noyons, with Investor Relations. Thank you, Joe. You may begin. Thank you, Paul, and good afternoon, everyone. Thank you for joining us today for Volt Information Sciences second quarter fiscal year 2021 earnings conference call. On the call today are Linda Perneau, President and Chief Executive Officer, and Herb Mueller, Senior Vice President and Chief Financial Officer. After the market closed this afternoon, the company issued a press release announcing its results for the second quarter of fiscal year 2021. The release is available on the company website at volt.com as well as the EDGAR SEC website filed as a Form 8-K. We've also prepared a supplemental presentation which is available on the Investor Relations section of the company's website. Before beginning today's prepared remarks, I would like to remind you that some of the statements made will be forward-looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected or implied due to a variety of factors, including but not limited to potential impacts of the COVID-19 pandemic on our business operations. We refer you to Volt Information Sciences' recent filings with the SEC for a more detailed discussion of the risks that could impact the company's future operating results and financial condition. Also on today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. A reconciliation of those measures to GAAP measures is included in the earnings press release issued this afternoon. With that, I would like to turn the call over to Volt's President and Chief Executive Officer, Linda Perneau. Linda? Thank you, Joe, and welcome everyone to today's call. We are pleased to report continued momentum in fiscal Q2, despite the first seven weeks of operations in the prior year quarter being pre-COVID and the weather-related impacts in February of this year, especially across Texas and Tennessee. Thanks to a combination of new wins and expansion within existing customers, we recorded our strongest quarterly revenue growth in a decade. Gross margin improved primarily due to the continued performance of our retail branch network and accelerated results within our direct hire segment. We also successfully maintained our cost discipline within SG&A. In all, we recorded positive GAAP net income for the first time in 14 quarters. Our performance in the second quarter provides further evidence that the strategy and investments we have made over the prior 18- 24 months are working. We made significant progress on our path to profitability. Over the past 15 months, the pandemic has and continues to present a number of challenges across our business, yet our teams have persevered and have found ways to overcome adversity and emerge as a stronger organization overall. Let me now turn the call over to Herb to provide additional details on the financials. Herb? Thank you, Linda. Revenue for the second quarter of 2021 on a GAAP basis was $221.1 million, compared to $207.3 million in the prior year comparable quarter, a $14.8 million or 7.1% increase. After adjusting for favorable currency translations, overall company revenue increased $12.4 million or 5.9% due to continued improvement in our North American Staffing and international segments. During Q2 2021, our domestic and international direct hire line of business continued to show improvement. For the quarter, we were up 37% from the prior year and up 27% sequentially from Q1 2021. Looking at Q2 2021 adjusted revenue for each segment. Our North American Staffing segment reported adjusted revenue of $184.3 million, an increase of 6.3% from the prior year. Adjusted revenue for our international staffing segment was $27.9 million, up $4.3 million from the prior year, and our North American MSP segment reported adjusted revenue of $9.8 million, a slight increase from the prior year. Our North American staffing segment posted positive year-over-year revenue growth for the second consecutive quarter. The 6.3% increase is primarily attributable to new business wins and a combination of retail and mid-market clients, combined with the expansion of business within existing clients. Direct hire revenue increased 37.4% year-over-year and exceeded second quarter 2019 by 7.5%. Our international staffing segment increased $3.6 million or 14.7%, primarily due to increased managed service business, headcount improvement in France, and increased direct hire revenue, partially offset by results within our U.K. staffing business. Revenue in our North American MSP segment was slightly higher versus the prior year. The increased demand in our payroll service business was partially offset by declines in managed service revenue. Gross margin for Q2 2021 was 16.4%, compared to 15.6% in the prior year comparable quarter, primarily due to improved margins in our North American Staffing and International segments. Our North American Staffing segment increased 100 basis points due to a mix of higher margin business, lower employee-related costs, and a 70 basis point benefit from government wage subsidies. Our International segment increased 210 basis points due to a shift away from the lower margin business and an increase in direct hire business. North American MSP decreased 380 basis points, primarily due to business mix. SG&A expense for Q2 2021 was $33 million, compared to $36.2 million in the prior year comparable quarter. The decrease of $3.2 million was primarily due to strategic cost reductions, including labor and related costs due to lower headcount and lower facility costs due to consolidating our real estate footprint, partially offset by higher incentives on the increased sales volume. Restructuring costs in the second quarter of fiscal 2021 was primarily due to $0.5 million related to ongoing costs of facilities impaired in the second half of fiscal 2020. The prior year quarter included charges primarily related to the strategic cost reduction initiative. In addition, the second quarter 2021 included impairment of $0.3 million related to previously capitalized software costs. Operating income for the quarter was $2.7 million, compared to a loss of $4.4 million in the prior year comparable quarter. The year-over-year improvement is a result of the actions previously mentioned. Operating income for North American Staffing segment was $9.5 million, compared to $2.6 million a year ago. International Staffing operating income was $1.1 million, a $0.9 million increase from the prior year, and North American MSP operating income declined $0.2 million. For Q2 2021, we reported GAAP net income of $1.9 million, or $0.08 per diluted share, our first positive GAAP net income quarter since the fourth quarter of fiscal 2017. We reported a net loss of $5.4 million, or $0.25 per share in Q2 2020. The improvement was primarily due to higher gross margin and a 9% reduction in operating expenses related to our strategic cost initiatives. Adjusted EBITDA for Q2 2021 improved by $7.4 million to a positive $6 million, as compared to a - $1.4 million in the prior year comparable quarter. Moving on to a few key items from cash flow and the balance sheet. We ended the second quarter with $47.2 million in cash equivalents, an additional $12.8 million in restricted cash and short-term investments, a combined increase of $0.7 million compared to the prior year end, an $8.1 million increase sequentially. Our long-term debt remained at $60 million, the same since last year, and total available liquidity increased 12% from $24.2 million in January to $27.2 million in April. We provided $8.3 million in cash flow from operations as a result of positive net income, an increase in accounts receivable collections, and lower payroll tax payments in the second quarter of fiscal 2021, with capital expenditures of $0.8 million. All right. Trends for Q3. Looking towards the third quarter, although the labor market remains tight, we expect revenue to improve 12%-15% over last year. We expect gross margin to be in the low to mid-16% range. SG&A should be in the $33.5 million-$34.5 million range. We believe a combination of increased revenue and favorable cost comparison should result in improved operating income and EBITDA over the prior year quarter. Overall, Linda and I continue to be encouraged with the performance in the second quarter of 2021, with consistent year-over-year revenue growth and positive operating income. I'll now turn the call back over to Linda. Linda? Thank you, Herb. The performance of our North American Staffing segment continues to lead the way. Our strategic initiatives are showing progress and becoming increasingly impactful. We maintained our momentum coming out of first quarter with new logo wins, recovery of some existing customers, and expansion within others. Across the organization, we have fallen into a nice rhythm of work models. Some colleagues are working full-time, either in an office or on-site at a client location. A portion of our branches are working on a hybrid model, three days in and two days remote, and the remainder continue to work remotely on a full-time basis. Revenue from retail for our branch network grew over three times the rate of our enterprise clients during the quarter. The first time this has occurred since we implemented the model in 2019. We made headcount investments in several branches throughout the country and have held three retail boot camps already this calendar year. Retail continues to represent approximately 20% of revenue on a higher overall base this quarter. Our direct hire discipline continues to mature and produce strong results, surpassing pre-COVID levels as well as same-quarter results in 2019 and 2018. We are seeing direct hire revenue from every region across the country, with every branch having generated fees during fiscal Q2. As this discipline is a critical component of our gross margin improvement strategy, we have a multi-pronged approach and intend to continue to invest in this area to capitalize on current market conditions and fuel ongoing growth. During Q2 specifically, we hired a tenured industry veteran as our national director of professional search. He brings over 30 years of professional search experience, including several decades as the head of direct hire for a global professional staffing organization. His charter is to expand our executive search capabilities across the disciplines of accounting and finance, HR, IT, and engineering. The fees in these disciplines for the scope of roles we will pursue are typically four to five times higher than fees on general staffing disciplines. As was the case in fiscal Q1, we continue to realize order volumes and demand from new and existing clients that exceed pre-pandemic levels. Identifying sufficient volumes of candidates available and willing to work throughout fiscal Q2 proved increasingly challenging, particularly in the lower wage roles. Traditional unemployment benefits, combined with the additional $300 weekly payment and the ongoing stimulus payments, are generating supplemental income that is similar to, or in most states, greater than the hourly rates being offered for the job openings. We expect the decision by 25 states to opt out of the additional $300 supplemental unemployment payments beginning mid-June through the end of July may cause some return to the labor force and alleviate a portion of the pressure. We have taken immediate steps to address the candidate shortage and ensure we can meet the hiring needs of our clients. We continue to leverage our technology platform partners and expand usage and availability across our branch and large program networks. We are also exploring additional tools that will accelerate sourcing and screening of potential candidates. We have increased headcount in our central recruiting team and have even leveraged our Arctern team in India to source for specific clients off hours, increasing our operational hours to 24/7 in these instances. In March of this year, we introduced the creation of Better U Academy, our new online upskilling program for our valued contingent employees across North America. This is yet another way that we are aggressively addressing candidate attraction and retention challenges impacting our clients. Through a partnership with education leader Penn Foster, Better U Academy provides free skills development courses which are flexible, accredited, and mobile-friendly. The goal of Better U Academy is to support our contingent employees in furthering their education and achieving their personal and professional goals, while at the same time cultivating a better-skilled pool of talent for our clients nationwide. Our clients need skilled workers, and the current talent shortage and skills gap makes it harder than ever to find them. We anticipate improved loyalty, commitment, and retention to improve, and we expect to attract determined workers who want to learn and do more. In just a short 12 weeks, we have over 1,000 enrollments and have already celebrated over 60 graduates. The value of education was always championed by Volt's founders, and that legacy continues as we increase our investment in employee development and in providing our employees the opportunity to bolster their desired skill sets and help secure jobs with better pay. Our International segment is showing early promise on the road to recovery. Helped in part by the easing of COVID restrictions, specifically in the U.K. and France, both reported a sequential double-digit revenue increase in contingent staffing and direct hire. However, we do continue to experience challenges due to lockdown measures in both Belgium and Singapore during the second quarter. As of May 8th, restrictions in Belgium have eased slightly. However, many domestic restrictions remain in place for the foreseeable future. Singapore's restrictions, on the other hand, have gotten more strict, beginning with additional lockdown-like conditions on May 16th. Historically, Singapore has been a substantive contributor to our overall direct hire results, and as expected, the continued COVID-related lockdowns have impacted results. We remain cautiously optimistic about the recent performance. The international teams are working hard to capitalize on opportunities as the economic landscape slowly recovers. We understand there's work to be done, and our recovery will happen in fits and starts as restrictions ease and all countries that we operate in are fully operational. During last quarter's earnings call, I shared that for our MSP segment, we were seeing a slight recovery from the initial pandemic impact. This slower than anticipated rebound continued into fiscal Q2. Our ability to accelerate growth in this segment has been hampered by delayed decision-making on multiple RFPs, vast M&A and consolidation activity within multiple clients, and of course, the lack of available candidates willing to work. Our sales team remains focused on adding prospective new targets to their pipelines, which paid off last quarter with the notification of two small wins slated to go live at the end of our fiscal Q4. The program management team, tasked with identifying expansion opportunities in our existing portfolio, currently have multiple projects within our top 10 accounts to include location expansion and SOW solutions. Based on our frequent business solution planning conversations we are having with our MSP clients, we are hearing that they anticipate increased talent demand in late 2021 and into 2022, specifically in the healthcare and manufacturing sectors. Lastly, we were recognized by Forbes Magazine as one of America's best temporary staffing firms for the second consecutive year. In addition, we were also named as a best professional recruiting firm for 2021. The lists are comprised of the best staffing and recruiting agencies based on the results of the independent surveys involving over 31,000 recruiters and 7,200 job candidates and hiring managers who have worked with the firms. More than 26,000 nominations were considered in the final analysis, and Volt was selected as one of the best. These recognitions are the result of the hard work across all of our teams to support our candidates, as well as providing a high level of service to our clients during an especially difficult year. I am honored to work beside this global team of colleagues. In summary, I concur with Herb. Our performance throughout the first half of 2021 leaves us well poised to continue the projected growth trajectory for fiscal year 2021. Before I turn the call over for questions, I would like to express our heartfelt appreciation and well wishes to our Arctern colleagues in India as the country continues to battle surges in COVID-19 cases. The recent announcement by the government that all adults can receive the vaccine free of charge and an increase in doses available for daily distribution will hopefully offer relief to everyone. On behalf of the management team and the board, I would like to thank you for your dedication to Volt during this difficult time and hope you and your families all remain safe and in good health. Now I would like to open up the call for questions. Operator? Thankyou, we will now begin our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star two 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. One moment while we poll for questions. Thankyou. Our first question comes from Josh Vogel with Sidoti & Company. Please proceed with your question. Thank you. Good afternoon, Linda and Herb. Hope you're both doing well. Yes. Great. My first question, obviously the big theme seems around the lack of workers or the supply constraints, especially on the blue-collar side, and you gave some good insights there. I'm still curious though, when I think about the North American staffing business, can you talk about how much of the client base you would classify as facing challenges with finding available talent? Maybe just a little bit more detail, which specific end markets are the toughest for you to find the workers? Thank you. Yeah. I'll take that one, Herb. I have not heard about a client yet that isn't experiencing challenges in identifying talent. It is pervasive across the board, irregardless of skill set, irregardless of location across the country. This is a dynamic that we have not seen. It's a different dynamic than what occurred when the pandemic initially started. It is one that certainly is posing a number of challenges. Particularly, as I mentioned, in the low-wage roles. We generally are having a more significant challenge in those roles, and the reason really is because what individuals are getting between the supplemental unemployment as well as stimulus generally exceeds the wages that they were making in a lot of those roles. In many areas, we've been working very closely with our clients to address this. We have had clients that have increased pay rates to the extent that they're able. There is a glass ceiling to where they start butting up against their own internal employees' pay, and that starts to present a challenge. We've had clients that have looked at specific bonuses, other types of benefits that they can provide flexibility in shifts. We certainly have been very fortunate that we've got a portfolio of clients that understand the challenge and are addressing it to the extent that they can. We are optimistic that we'll start to see some relief here as we start to see some of these states opt-out, which started this week. We're expecting that that will hopefully provide some relief as we continue to move through the remainder of the calendar year. That was really helpful. Thank you. Some of your commentary leads into my next question. Thinking about wages, and I was just wondering, when I think about wage and general bill pay spread trends, can you just give some commentary there? I want to get a better understanding of the dynamic today, where wages are seemingly going to go up, potentially, to entice workers to come back. Would that compress the bill pay spread early on for you but ultimately benefit you longer term on the pricing side? How does that work? Yeah. Typically, when we increase wages, it is done obviously either through a state increase, right, in a wage base, and we pass along the commensurate bill rate. As we have been working over the past 15 months, we have been extremely proactively working with clients to increase wages, and we have passed along the commensurate bill rate. That is generally how it works. Are there situations where we work with our client, and it might not be 100% of the commensurate bill rate? Yes. That is really an exception, not the rule. Okay, great. Shifting gears a little bit, always a great job on the SG&A line. Heard you gave some guidance around Q3. I guess looking out maybe late this year, certainly as we get into next year, how should I be thinking about investments as we think about whether it's technology capabilities or new service offerings or headcount? How should we think about the level of SG&A spend longer term for anywhere from 3- 15 months out? Right. and as you saw in my guidance, I'm upping the number a little bit from what we've had in the last couple of quarters. as we look to invest in the business, both with the direct hire that we talked about, and then as well as in our sales function, it's going to be very important. Technology as well. We're expecting to start easing back into that. We've really cut back on that over the last 12 months or so, and we've got some opportunity to ease that up a little bit. that's why you'll see the guidance that we're giving there is a little bit higher. really, beyond that, we expect to be able to maintain those levels longer term. We're really committed to continuing to find additional opportunities for savings as we move into next year. Okay, great. I was curious, what's the average size you're seeing today of a new engagement with a retail or mid-market client versus prior to the pandemic, whether it's in headcount or annualized revenue dollars? I'm just curious how that's been trending. Yeah. We continue to kind of look at our buckets in three different ways. Generally, when we say something is retail, right, or in our branch network, we look at something that's one $1 million in annualized spend or less. Again, on average, mid-market clients are generally over $1 million to potentially $8 million or $9 million. Generally, we sit on site. Our large clients are over that $9 million mark and could have one or many locations across the country. That's really how we look at it. It's how we think about it when we sell it. It's how we think about it when we solution design the delivery model. We really haven't seen much change from that throughout the pandemic. Okay, great. Just one last one here. Given the unfortunate situation in India, and my thoughts and prayers go out to everyone over there. I'm just curious, has it affected or turned at all in your ability to operate and maintain back-office functions over there? Yeah, great question. We could not be more proud of the job that our ArcTern team did. We had about a month ago when COVID was at its peak there on the second flare-up, we had a significant impact on our team. We were scrambling to have contingency plans in fact if it was to get worse. These people at great personal sacrifice stepped up and pulled together, and we got to combine some teams. In some cases, people took on new roles to get us through and just really scrambled to make it work. We really got through this pretty much unaffected. Of course, we are doing our billing over there, we're doing our collections, and all that. We were able to still hit our metrics. It was just really a testament to the resiliency that that team has. Again, Linda indicated, and I'll back it up, we could not be more proud because some of these people had losses in their immediate family, and it was just a devastating impact there. They rallied through it and pulled each other up. I think, things are rebounding over there, getting a little bit better. We had actually started a program where we were paying for the vaccines for our team as well, and now the government stepped in to do that. Again, it's just been really impressive what they've done there. Yeah, really remarkable. Yes, hoping for a speedy recovery for everyone over there. Well, thanks for taking my questions, and impressed results. Looking forward to seeing the rest of the year play out. Thanks, Josh. Thanks, Josh. Thank you. Our next question comes from Mike Hughes with SGF Capital. Please proceed with your question. Good afternoon. Thanks for taking my questions. First one, can you just repeat your revenue expectations for the July quarter, please? Yes. We expect them to be up about 12%-15% from a year ago. Okay. That would imply about a roughly 4.5% sequential decline. I think there are two fewer days in the current quarter versus the April quarter? That's correct. There are. It's staying fairly close on the top end on the revenue per day. You also with those days, with those holidays, it's beyond just a one-day impact because you typically, especially getting to the Fourth of July holiday, you have people not just taking the one day off, but they take both the Friday and the Monday after for the weekend. You run into that. Same thing with Memorial Day. It's a little bigger than a two-day impact when you have those holidays. I'll just jump in, Mike. You mentioned that it does imply a 4% decline. The reality is that it's very hard to look at it in that very literal way that I think you might be looking at it. If you think about our COVID impact last year versus our COVID impact this year, because we continue to have COVID impacts. What I mean by that is we have clients that have not recovered. We have clients that have recovered and are doing a little better, and then others that, like I said, that aren't. Our COVID-related impact this year in Q2 worsened by $7 million when compared to last year. Now, keep in mind, seven weeks of Q2 last year were pre-COVID. what the punchline of that is that the overall growth that occurred this quarter came from the combination of existing customers' recovery, customer expansion, and new business wins. these factors actually exceeded the negative COVID impact. our underlying business is actually growing quite significantly. Okay. Just turning to the labor challenges that you and your clients and everyone faces. Just thinking month- by- month, did the fill rates kind of stay the same throughout the quarter, or did they actually become more challenging? Yeah. certainly fill rates became more challenging. Fill rates, while it's a metric that we look at, there are so many different factors that go into fill rates, particularly when you're doing MSP business, other business with programs where there is a software tool that is handling all of the aspects of that. The fill rate can get a little funky. What I can tell you is that year- to- date, despite the candidate challenges, our placements are up 25% for the year-to-date number versus prior year. We have managed, despite candidate challenges, to drive a higher placement, more placements, higher placement, through leveraging technology, becoming more efficient, more effective, and overall has year-to-date driven revenue, year-to-date placements with less head count. Okay. I think part of the bridge to the 3% goal is pricing. It sounds like your key performance indicators continue to improve. That would mean that you're still on track to maybe garner better pricing on a go-forward basis. Is that fair? Yeah, I definitely think so. We're turning that way, really heavily focused on it. Again, the other key KPIs involved, the direct hire and our retail performance, which are both up year-over-year despite a tough labor market. Okay, and then just two more questions. Not to beat a dead horse here, but, I think about roughly 5% of your revenue comes from Texas. They're rolling back the extra $300 a week on June 26th. One would think that people in Texas receiving that would be looking for work now. Have you seen any change of behavior in the state of Texas or any other states that have rolled it back? Have you actually started to see that yet? Yeah, a couple of things there. One, overall, of those 25 states that have announced a rollback, the rollbacks really just started June 15th, so nothing direct from that. I think July 15th is the latter date for that. Those 25 states represent 22% of our overall revenue. It's not going to have a huge effect, but it is a positive impact. The other part of it is how well do the states enforce people having to go out and look for work. It's one thing, the $300 is part of it. The other part is, all right, there's jobs that are available. Are you looking? Are the states holding the people accountable? The short answer to your answer is, from my standpoint, I don't think I've seen a significant impact yet. Linda, I don't know if you're starting to see anything or, from the field, people are starting to feel like it's getting better, but I haven't seen it measurable. Yeah. It's hard to pinpoint where exactly or why exactly it's happening in certain areas. We very proactively, Mike, started to reach out to candidates that had previously turned down roles. We put together a whole presentation and talking points so folks could have conversations, encouraging and inspiring folks to get out ahead of this and begin to look for work and go to work before the benefits expired. Over the last couple of weeks, anecdotally, I hear different things from my field teams that things seem to be a little better. I'm hearing that in Arizona, we're starting to get more candidates. I'm hearing that we've done a couple of job fairs for various clients. A month ago, when 50 people would register and two would show up, we're now getting the full number of applicants that are registering, actually showing up. Again, slight changes. Nothing that I think is going to materially move the needle yet. I do think it's promising. Okay. Is there any way to think about how much the labor shortages are holding back the revenue potential in the current quarter? Yeah, I think it's a key factor. That's our concern because again, our order activity is extremely high. We're very happy with that. The opportunity is there. It's just a matter of how fast we can fill it. To the extent that the labor market improves for us, I think we can definitely, we've got some upside. I'm just hesitant to project that in this quarter as we're close to halfway through the quarter, and again, we're starting to see signs of some upside, but I really held where we're at for the balance of the third quarter. Okay. Makes sense. Last question. I think you're trying to sublease part of your corporate headquarters. Any progress on that front? I would say that there's progress, but nothing to announce at this point. I'll probably hold off saying much more until we actually get something done. We're very aggressively doing it. I feel better about it now than I did six weeks ago. At the same time, I felt really good about it six months ago on a deal that I thought would happen that didn't happen. Until it's done, it's not going to happen. The one dynamic in the marketplace that has changed that does make me feel better about it is the potential of industrial developers having interest in the property, and the market value has gone up considerably in Southern California over the last six months in that area. Okay, great. Thank you very much. Good talking to you, Mike. Thanks. Thank you. There are no further questions at this time. I would like to turn the floor back over to Linda for now for any closing comments. Thank you, Paul. Thank you for your participation in today's call and for your continued interest in Volt. As a reminder, we are participating in the Three Part Advisors Virtual East Coast Ideas Conference on Thursday, June 17th. We look forward to speaking with you again during our third quarter fiscal 2021 earnings call in September. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful evening.