Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded. Thank you. I would now like to turn the conference over to Mr. Ed Pierce. Please go ahead, sir.

Thank you. Good afternoon, and thank you for joining us today. Before we get started, I'd like to remind everyone that our presentation contains forward-looking statements representing our current judgment of what the future holds. Although we believe these statements are reasonable, they are subject to risks and uncertainties and our actual results could differ materially from those statements. Some of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume the obligation to update statements made on this call. For your convenience, our prepared remarks can be found in the Investor Relations section of our website. Please note that on this call we will be referencing certain non-GAAP measures, such as adjusted EBITDA and adjusted net income. These non-GAAP measures are intended to supplement the comparable GAAP measurements. Reconciliations between the GAAP and non-GAAP measures are included in today's press release. I will now turn the call over to Peter Dameris, our CEO and President, who will provide an overview of our results for the quarter. Peter?

Thank you, Ed, and I would like to welcome everyone to the On Assignment 2016 third quarter earnings conference call. With Ed and me today are Rand Blazer, President of Apex Systems; Mike McGowan, COO of On Assignment and President of Oxford Global Resources; and Ted Hanson, Executive Vice President of On Assignment. During our call today I will give a review of the markets we serve and our operational highlights followed by a discussion of the performance of our operating segments by Rand and Mike. I will then turn the call over to Ed for a more detailed review and discussion of our third quarter results and our estimates for the fourth quarter of 2016. We will then open the call up for questions. Now on to the third quarter results. Our results for the quarter exceeded the high end of our previously announced financial estimates for revenue, were in line with our estimates for gross profits and adjusted EBITDA, and above the midpoint of our guidance on earnings. Revenues for the quarter were $629.4 million, up 10% year-over-year. This marked the 11th consecutive quarter that our company grew above the IT staffing industry's projected annual growth rate since January 1, 2013. Our growth rate reflected, among other things, the deepening of many new large customer relationships that we have established over the last three years, and higher overall productivity. Virtually all of our divisions contributed to our strong third quarter performance. Our size and service offerings enable us to grow faster than the published staffing industry growth rate of 4%, and we believe that we are well positioned to generate solid above-market revenue growth in the future. Revenue growth came from both our local, mid-market and large national accounts reflecting strong customer demand. We believe, based on current…

Great, Peter. Thank you. Let's take a little pause here and we'll get into the Apex segment. The Apex segment, which consists of the Apex Systems, Lab Support and Creative Circle business units, reported strong results for the third quarter of 2016. Revenues for the segment were $473.6 million, up 12% year over year. Revenues for Apex Systems, which accounts for 74% of the segment's revenues, were up 12.1% year-over-year. This performance is particularly noteworthy considering clearly revenue growth rate tax was 14.8% in Q3 2015 on a year-over-year basis. Lab Support's revenue growth was slightly above the growth rate from the prior quarter, and Creative Circle reported revenue growth outpacing the growth rate for the segment. The Creative Circle unit continues to perform well, with year-over-year growth rates for the quarter continuing at our expectations. Our gross margin for the segment was 30.3%, which was in line with our estimates for the quarter and reflects stable pricing in our markets. Our segment's contribution in terms of EBITDA remains strong, with very solid conversion of gross profit to EBITDA, paced by the increasing productivity of our sales and delivery teams. With respect to Apex Systems, our IT staffing division, revenue growth was propelled by a number of factors, including growth in six of our seven industry verticals, with double-digit growth in aerospace defense, financial services and healthcare sectors. Our technology industry did not grow year-over-year. It's the only one that did not, although the technology industry revenue growth in Q3 2015 was our highest industry vertical in terms of revenue growth. Growth in our top accounts led the way, with continued strong revenue growth. Our local branch or midmarket accounts also contributed at a double-digit growth level in the quarter. Finally, as mentioned, field productivity continued to gain strength in the corner, supporting our revenue performance, and, importantly, our conversion rates. Our Lab Support and Creative Circle units saw continued good opportunities for growth, with the opportunity to place creative marketing skill sets remaining strong. So, in conclusion, overall the Apex segment had another strong quarter, with revenue continuing with double-digit growth on a year-over-year basis, with each of its business units contributing very strong conversion of gross profit to EBITDA. I'll now the call over to Mike on the Oxford side.

Thanks, Rand. The Oxford segment is comprised of Oxford core. CyberCoder is our permanent placement business, and Life Sciences Europe. Our Oxford core unit accounted for 77.2% of segment revenues, CyberCoders 15.3%, and Life Sciences Europe 7.5%. For the third quarter of 2016, Oxford segment had revenues of $155.8 million, up 4.3% year-over-year and 1% sequentially. Assignment revenues were $134.4 million, up 5.4% year-over-year, and permanent placement revenues were $21.4 million, which was down 2.2% year-over-year. The decline in permanent placement revenues reflected lower demand from our technology-based clients, specifically early-stage companies, and a very tight candidate pool. As we have stated in the past, our clients have had less urgency in filling their permanent employee needs. Gross margin for the segment was 40.7%, down 90 basis points year-over-year, which was primarily due to a lower mix of permanent placement revenues, which was 13.8% of segment revenues for the quarter, down from 14.7% in the third quarter of 2015. Oxford's core revenues for the third quarter were $120.4 million, up 5.8% year-over-year. In each of the first three quarters of 2016 Oxford core had year-over-year revenue growth above the published IT staffing growth rate. This growth was primarily driven by growth in our key accounts, increased demand for EMR implementations, upgrades and optimization projects within our healthcare IT business unit, and strong growth across most skilled disciplines in our European IT operations. Throughout 2016 our traditional ERP practice has been relatively flat, which reflects the transition to cloud-based computing. Our high-end engineering skill area also has experienced low growth, in line with the published 2016 SIA growth estimates. During 2016 we have made investments in a number of emerging skills. While we have become to see some traction from these investments, it has been slow and below our expectations. As Peter previously mentioned, we are committed to these investments and expect to see higher returns on them in the future. I'll now turn the call over to Ed Pierce. Ed?

Thanks, Mike, and, as Peter mentioned earlier, revenues for the quarter were above the high end of our previously announced financial estimates. Our revenue growth rate for the quarter was 10%, which was double the public IT staffing industry growth rate. Assignment revenues were $596.4 million, up 10.6% year-over-year, and permanent placement revenues were $33 million, up 0.7% year-over-year. The year-over-year fluctuations in foreign exchange rates had an immaterial effect on the revenue growth rates for the quarter. Gross margin for the quarter was 32.9%, which was below the low end of our previously announced estimates and down 60 basis points year-over-year, primarily because of the lower mix of permanent placement revenues and higher growth in our high-volume, lower margin accounts. SG&A expenses were $142 million, or 22.6% of revenues. After adjusting for the $0.7 million in acquisition and integration expenses, SG&A expenses were in line with our previously announced estimates. The acquisition and integration expenses mainly related to the integration activities of Oxford, which should be completed by the end of the year. Net income for the quarter was $29.8 million, or $0.55 per share on a diluted basis, up from $24.9 million, or $0.47, in the third quarter last year. As we mentioned at today's press release, starting with this quarter we changed our determination of adjusted net income non-GAAP measure to remove the cash tax savings on indefinite-lived intangible assets and instead disclose these savings in a footnote to the table that shows the individual components of adjusted net income. These tax savings are approximately $6.7 million per quarter, or $0.12 per share. Accordingly, adjusted net income for the quarter was $40 million, or $0.74 per diluted share, up from $37.2 million, or $0.70 per share in the third quarter of last year. These earnings were in…

Thank you. We continue to believe our scale, size and breadth of services has us well positioned to take advantage of what we believe will be historic secular growth for the staffing industry and dynamic changes in the technology world as it moves more into a digital one. While the entire On Assignment team is very proud of our performance, we remain focused on continuing to profitably grow our business and increase our rate of growth. I would like to once again thank our many loyal, dedicated and talented employees, whose efforts have allowed us to progress to where we are today. Operator, I would like to now open the call up to participants for questions.

[Operator Instructions]. And our first question comes from the line of Gary Bisbee with RBC Capital Markets.

Hi, guys. This is Jay Hanna on for Gary today. I was wondering if you could give a little more color on what client spin levels are like at Creative Circle this quarter. I think they declined a little bit last quarter.

The growth rate was mid to high teens. Bill rates continued to be attractive. We actually saw a little reacceleration to a higher rate of growth at the end of the quarter than the beginning. So continues to be the fastest contract service growing division of On Assignment at this stage. So we're quite confident of the continued growth.

Great. And was acceleration through the quarter, did you see that in the other business lines, or could you give any color there, as well?

Yes, so, I mean, if you look at the pure billable days, we just reported $629 million of revenue, and we told you that there are three fewer billable days, business days, fourth versus third, so that's, and $10 million a day. So that's $30 million on top of the high end of the guidance we gave you at $618 million would show you that the average revenue per business day is up over the third quarter. There are just fewer days in the fourth quarter. So we really didn't see, as we said in our prepared remarks, a noticeable deceleration, and things continue apace, albeit it there are fewer days to bill in the quarter.

Okay. Thank you.

Our next question comes from the line of Tim McHugh with William Blair & Company.

Yes, hi. Peter, you called out the investments in Oxford, which I wonder if you could just elaborate on them. I guess it's not a huge dollar amount relative to the total, but obviously recognize you want to see some improvement, and you mentioned it specifically, so what, can you talk more about what the investments are, why it isn't showing up the way you hoped so far?

Well, look, its headcount. Its sales headcount and some recruiting headcount for some of these newer digital practices. And, I mean, just do back-of-the-envelope math. We spent $2.4 million to get $4.2 million of revenue. If you just apply 12% EBITDA margin to the $4.2 million, that looks like we lost about $2 million, right? So, and it's been about 9 to 12 months. And we're disappointed. But we're not going to give up, and we're going to rearrange their day and hopefully get a little closer execution. But it's headcount. And those aren't the only investments that we've made, by the way. Those are just ones that really were outside of what we had kind of contemplated and budgeted in the 2016 budget.

Okay. And what about, you gave the comment that in the last few weeks there was 11% growth. You just made a comment that Creative kind of got better as the quarter went on. I guess, but I recognize there are fewer billing days, but on a same-day basis the guidance does show a little bit slower growth than Q3. So can you help me reconcile kind of those two points?

Well, I don't mean to confuse people, but now instead of looking at business days, look at billable days that takes into consideration furloughs, when the holiday falls, and if somebody's going to take an extra workday off, et cetera. We just took into consideration what we thought the impact would be from fewer billable days in the fourth quarter, and as you get later in the quarter it starts to wane a little bit. That's all we're saying. It's not because of purchasing behavior. Its people want to work fewer hours. They don't want to travel around the holidays. Projects get completed and new ones don't get started.

Okay, fair enough. Thank you.

Next question comes from the line of Jeff Silber with BMO Capital Markets. Please go ahead.

Thanks so much. Just wanted to follow up on Tim's first question. You mentioned the issues at Oxford were headcount. I just want to understand, is this a lack of headcount or a lack of the right type of headcount?

A lack of production from the headcount that we added.

Okay. And what changes are you contemplating to improve the level of productions?

Well, two things, and then I'll let Mike add to it. The first is the people are longer in the chair. We are restructuring their daily activity in some of these newer practices to see if that has a different impact. We have changed some senior leadership at the Oxford core business. And we hope to see a different impact. Mike, do you want to add anything?

No, I think that really covers it. It was some organizational and process changes that we're in the middle of as well as, as Peter said, more time in the chair for some of these folks, and they're slower to come to fruition, if you will, than what we expected. But so far so good.

I mean, Jeff, not to sound defensive, but the business grew, the Oxford core business, taking the perm out and the life sciences out, it grew 5.8% in the third quarter over the third quarter of 2015. Now, we're not satisfied with that, but nobody else is, even our slowest growing division, contract division, is outpacing everybody else by 400 basis points.

Yes, no, that's very fair. I understand that, so I appreciate you pointing that out. Just a quick question on the guidance. I don't know if it's possible to give any color on the revenue side by segment what you're expecting in the fourth quarter.

We didn't get that granular. We tried to give you as much clarity as possible on billable days that we think, we told you we haven't seen a dramatic change in purchasing, but we're not getting into specific growth rates per division.

Okay, that's fair. And, Ed, I've got one for you, and I know you knew this one was coming, but I'm just curious about why the change in the adjusted EPS calculation.

Well, it's actually, Jeff, it's actually pretty simple. We changed mainly to better align with the non-GAAP measure guidelines that have been put out by the SEC.

Okay. That's a good explanation. Thanks so much.

Next question comes from the line of Kevin McVeigh with Deutsche Bank. Please go ahead.

Great, thanks. And just to follow up on Jeff's question, if you look at the guidance for Q4 EPS relative to where the Street is, is there a bridge in terms of, as a result of the new methodology on the EPS calculation?

Yes, it's actually pretty simple. If you're looking at, to get it on the same basis as our published number, or our financial estimates, it's just a $0.12 difference. Okay? That's the effect of the change that we made.

Right. So is it fair to say for that Q4 EPS guidance relative to the Street, if you were to add back $0.12, that would be the --.

Yes.

Apples to apples comparison?

Yes. Yes. On an adjusted net income basis, yes.

Okay, because that makes some more sense relative to where the revenue guidance looked really good relative to where the EPS was, so that's super helpful. And then I guess my only other question, Peter, was on the Creative side, as you think about budgets heading into 2017, any thoughts around client spend? And obviously the IT continues to be real resilient. Any thoughts on bill rate [indiscernible] just to tie that into an anniversary while the sales force invests [indiscernible] in terms of the revenue contribution there?

The comment I would make, Kevin, as follows. We continue to be very confident in the sustainability of their margins and their growth rates. And publicly what we always say, even though we can post, we have posted better, for modeling purposes, count us in for 200 to 300 basis points faster than the published growth rate for the industry, or the particular industry that a division operates in. And just like this quarter we did better than it. If we can do it, we will. But for modeling purposes that's probably a pretty good starting point.

It's helpful. And then just, and I'll jump off, so for 2017 we should take our EPS down by $0.48? Is that fair? Just to kind of sync up with where the estimates are for the tax, new tax treatment?

Yes, well, it really is to your adjusted net income per share.

Adjusted, yes. Okay. Awesome. Thanks, guys.

And we will continue to, Kevin, we will continue to footnote it to remind people. It's a real guide. But you pointed out, and I appreciate you pointing out the disconnect between the published fourth quarter number and the guidance we just gave is the removal of that $0.12.

Yes, and we'll definitely, we'll highlight that to investors in the notes. Thank you.

Our next question comes from the line of Randy Reece with Avondale Partners. Please go ahead.

I was just looking at your staffing consultant numbers and looking at the year-ago numbers adjusted for the Creative Circle acquisition. It looks like that you're adding staffing consultants at a similar pace that you did in third quarter of last year. Is that accurate?

You know, if that's what's on the supplemental financial information it is, if that's what you're quoting me. I don't have that committed to memory, Randy. I think that's right.

I didn't really see any change of direction there. As far as your view on the need for investing in growth at this point, have you had any change through the past few months?

No. I mean, Randy, I heard the comments of others talking about controlling their headcount, et cetera, et cetera. We've had the privilege of continuing to grow, and we, a lot of pundits believe that as anemic as 2% GDP growth is that 2017 may be better than 2016, we have the luxury of being able to continue to hire and increase our internal headcount, and that's what we're doing, because we haven't seen an environment which would dictate to us to start pulling back.

It seems like we're starting to hear from IT staffing companies that changes in the technology end markets have had a disruptive effect on pockets of demand for IT staffing. You mentioned in the comments that there's more need for cloud-related skills, and maybe there are some other areas that are softer. Have these influences affected your business over the past few quarters?

That's an absolute fair comment. I will tell you there is not as much demand for infrastructure as there once was. There's not as much demand for, maybe, call center as there once was. Look, there's not as much demand for bookkeepers and accountants. We don't do that because there's QuickBooks and TurboTax. So, yes, technology disrupts. And our job is to constantly make sure that we're not doing commoditized skill sets. But the answer to your, and the place where we've seen it real time where Mike McGowan addressed it in his prepared remarks is the traditional non-cloud-based ERP implementations.

Thank you very much.

Our next question comes from the line of Mark Marcon with Baird. Please go ahead.

Hi, good afternoon. I've got a question for Rand. Rand, strong growth within legacy Apex Systems. I was wondering if you could talk a little bit about how much of that growth do you think is due to share gains, maybe a superior footprint for us, aggressiveness, positioning, relative to what you think the budgets are doing at some of those clients. And how have the discussions unfolded as they start looking towards next year and how they're anticipating kind of like end-of-year projects and then what happens in the first quarter after, post-election.

All right. Well, Peter, I'll go ahead and respond. First of all, as we transition into the next year we always find clients go through a process where they're reconciling, closing out the year, reconciling their budgets for the next, for the coming year. So we'll go through a little bit of a lull in the first quarter, as we normally do. That's what we always do. But notwithstanding, there's a lot of things going on in our marketplace, Mark, right now. First of all, I would say we are gaining equally in gain share as much as adding new accounts. So flip that in half. First of all, the gain share is coming in part because in some of our sectors the clients are beginning to still scrutinize their vendor base and shrink it a bit. And as they shrink it a bit and we're still left standing, which we are in almost every case, we're getting more market share with that account. Plus we're obviously trying to do better in the digital skill areas and the skill areas that they're needing the most, which is where we're growing the most. In terms of new accounts, every year we set out to attack new accounts and add them to our client list. And we've done a really pretty good job of that in the last two, three years, for sure. So did I answer your questions, I think, all of your questions?

So, the one that I wasn't clear on was with regards to what you're hearing from some of those accounts with regards to how they're thinking about the budgets, because you are, you're clearly growing, and I'm basically trying to differentiate between your growth in terms of either gaining new accounts or share gains, as opposed to what's going on in the budget of those various clients. Because the performance that you're executing is markedly different than some of the other public companies, some of which are not as focused as you are.

Yes, I think, I wish there was a good measure we could look at the IT spend in corporate America. My feeling is, and, Peter, you might jump in on this, as well, that the IT spend is actually going to start inching up, certainly in sectors. Financial services sector, because that sector's got a little bit more profitability. The government side, government services side, definitely, because I think of the spend in defense, homeland security that we've seen there in the past six months or so. Our healthcare spend is continuing to grow up in IT as those accounts understand the value and power of IT in helping them work their way through everything that's going on in their industry. Technology accounts for us, we still have a good business there. I think spend ebbs and flows a bit with them. Telecommunications has been strong, and there's a lot of merger activity right now in the telecommunications media business that I think will mean more spend on IT. So I think you have to go sector by sector and look at it. And we certainly have, I think, capitalized. So, to answer that, I think there is a modest increase in IT spend which is helping us win new accounts and position ourselves, but I also think we're gaining market share because we're just in a better position with a lot of these accounts.

You know, Mark, the only thing I would add is that on top of what Rand said about sector, there's also deployment model gains. So, as we always tell you, a customer can develop or deploy technology either using internal staff, Indian-centric offshore development, outsourcing, project consulting or staff augmentation. And they each have their strength and weakness. But for every IT service dollar spent right now, I think that the staff aug model is gaining a little bit on the offshores because of the quality, flexibility, visibility and control. And that share gain's coming, not at the expense of one of our staff aug competitors, but at the expense of a different deployment model.

And that's something that you're seeing right now, Peter, in terms of when you talk about some of those share gains within some of those accounts?

Yes. I mean, some projects that would've been done by an offshore country, company, are being domestically performed with staff aug. And I just think the footing that we're on as a nation with regard to protectionism, it takes a lot of courage to outsource for 10 years 2,000 jobs to India these days and then defend that domestically. So there's a lot more reliability and control of augmenting an internal staff with domestic labor than offshoring it.

Well, Peter, if I could add, because Peter's on the right train, and we'll offshore [indiscernible] is one trend. Mark, you've heard us talk about consulting spend, and the better staffing firms are able to wedge into that spend and provide value through all the things Peter talked about. So that definitely is a trend, as well. So there's a lot of things at work here all at one time.

Great. And then can you just talk a little bit about what your expectations would be for CyberCoders beyond this coming quarter and how you think about that vis-à-vis the kind of general environment that we're in and what sort of thoughts you might have with regards to the impact on gross margin?

Well, one, it's the most directly tied to cyclical growth of the economy. CyberCoders is actually going to either meet or exceed its Board budget for 2016. We kind of predicted what we were going to see. We took a very conservative approach. So we would hope with some of the work that we're doing in the latter half of 2016 that the year over year growth comparables being a lot easier than the 38% that we mentioned to you during our prepared remarks that we would be able to get back to a growth trajectory. But it's still going to be, I think, a very challenging marketplace, for a variety of reasons. The good news for us is CyberCoders' perm business represents about 3%, 3.5% of our total revenue. So it's manageable.

Great. And then lastly, you mentioned bill rate increases for next year. What do you think we should model on the IT side just in terms of general rate of inflation for wages and for bill rates?

You know, Mark, I don't think we've ever given any guidance for that. So I know others speak about it, but that's a very, very fluid conversation we have with customers, and I don't feel comfortable giving you guidance on just a we're going to be able to push this percent through. It's really a conversation with the customer. And it's not the same with each customer.

I appreciate it. You just, you had mentioned it on your remarks, so I was just trying to get a sense for as a general rule.

What I was trying to allude to is we do believe that we'll be able to have a conversation with our customer and say if you want the fill rates and the timeliness of the fill, then we need to have, you need to be open to having a conversation about pay rates and bill rates. And historically when they see tight labor markets they're willing to have that conversation. But I can't tell you at what percentage level increase it'll be.

Got it. Thank you.

[Operator Instructions]. We have a question from the line of George Tong with Piper Jaffray. Please go ahead.

Hi, thanks. Good afternoon. Peter, can you comment on trends you saw in order flow growth in Apex and Oxford during the third quarter and discuss if you've seen any further elongation of the sale cycle compared to earlier quarters?

We did not see that in our business.

Great, and then order flow trends, if growth was stable in each of the segments throughout the quarter, or if there were trends of acceleration or deceleration?

Right, so we said that, we gave you kind of what the two-week revenue was exiting the quarter, and it was a little bit higher than what we actually posted for the third quarter. So we didn't see a deceleration.

Great. And then, Ed, your 4Q guidance for gross margins shows year-over-year contraction. Can you elaborate on what shapes your view around 4Q gross margins, including bill pay spread per mix and temp to perm conversions?

Well, it's predominantly the year-over-year drop in the perm placement mix. Okay? Because last year I think Q4 --.

38% growth.

Yes, Peter mentioned 38% growth is what we had in the perm business, but it was 5.7% of our mix.

Right.

And so you're looking at roughly 5% for Q4 this year. So that's 0.7% change and reduction in mix. And, as you know, that, for the most part, is pure gross margin. It's almost 100% gross margin business.

George, the other thing that would it around is size of customer and skill set mix.

Got it. Very helpful.

But the change in perm mix is probably the main driver.

Great. Thank you.

Our next question comes from the line of Tobey Sommer with SunTrust.

Thank you. I was curious, do you think your growth rate at the revenue line is exceeding industry growth rate by a wider margin recently, or do you think you're kind of staying the same degree ahead of the growth rate? Just curious how you would compare that.

I don't know how to, if I'm interpreting your question correctly, but --.

You've been performing by a wider margin.

Yes. Based on the numbers that have been released by some of the public companies that have IT staffing as a component of their overall revenues, we're growing much faster than the industry growth rate. I mean, I think some of the competitors were saying they shrunk a negative 1% or 3%. And the most current industry data, Tobey, which hasn't been updated recently, was, I think, IT's growing 5% in 2016.

Yes.

So, if I'm interpreting your question right, if the public peers' data is more current than the SIA 5% growth rate, then, yes, we're growing a lot faster than the industry at large.

Okay. Could you comment on your cash conversion and maybe just with respect to the change in the calculation to adjusted EPS? That doesn't really influence your ability to generate cash, does it?

It has no effect on cash generation. It's just presentation.

Okay.

We still get the full economic benefit. It's just presentation.

And then with respect to your long-term financial goals, could you maybe update us on how you're feeling about those, and I guess we're not too many years away from hitting them?

Yes.

Thank you.

Well, we said, in 2014 we said we hoped to be able to get to $3 billion in revenue, somewhere between $3.45 and $3.75 in adjusted EBITDA, and somewhere between 11.5% and 12.5% EBITDA margin. Well, we just reported a 12.4% EBITDA margin. You've got an estimate for the full year which will get us with kind of 10% growth into the midpoint of the adjusted EBITDA. And on the revenue side if we end up growing 8% or 9%, then we probably have ahold of a couple of hundred million dollars, which over a two-year period could easily be acquired with internally generated cash. So we feel that the targets are still obtainable and realistic, and if they weren't we would adjust them.

Okay. And are there, kind of turning the conversation towards acquisitions, could you talk about what you're seeing in the marketplace and your interest level in executing something?

Well, the industry still remains highly fragmented. There are some interesting properties out there. And, as you know, we take quite seriously whether the business is acquirable, not whether it's accretive, and that's why they Apex, Oxford, Creative Circle acquisitions have gone well, because we have a similar culture and business model. Based on current sector sentiment, Tobey, public valuations are less than private valuations. So we're pretty, right now, balancing debt repayment and creating capacity to do acquisitions with also buying us at what we think is a reasonable valuation, we're trying to balance that. And we're continuing to purchase us versus something else right now because of the valuation disparity.

Thank you very much for your time, Peter.

And there are no further questions at this time.

All right. Well, we appreciate your interest and attention and look forward to speaking with you when we report our fourth quarter. Everyone have a good evening.

Ladies and gentlemen, that does conclude our conference for today. Thank you again for using the AT&T Executive Teleconference Service. You may now disconnect.