Ladies and gentlemen, we would like to thank you for standing by. Welcome to the Third Quarter 2018 Earnings Conference Call. [Operator Instructions]. And as a reminder, today's call will be recorded. I would now like to turn the conference over to our hostess and facilitator, Laura Bainbridge of ADDO Investor Relations. Please go ahead, ma'am.

Thank you. Good afternoon, and thank you for joining us today. With me today are Peter Dameris, Chief Executive Officer; Ted Hanson, President; Rand Blazer, President of Apex Systems; George Wilson, President of ECS; and Edward Pierce, Chief Financial Officer. Before we get started, I'd like to remind everyone that our presentation contains forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and 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 the 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 Web site. Please 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 Peter Dameris. Peter?

Thank you, Laura. Welcome to the ASGN 2018 third quarter earnings conference call. During our call today, I will comment on the markets we serve and our financial highlights. Ted, Rand and George will then discuss the performance of our operating segments in greater detail before turning the call over to Ed for a detailed review of our third quarter results and our estimates for the fourth quarter of 2018. Now on to the third quarter results. Across all of our guided metrics, our results for the quarter were above our previously-announced estimates. Revenues for the quarter were $906.4 million, up 35.9% year-over-year on a reported basis or 10.5% on a pro forma basis. Our growth rate for the third quarter was up over the second quarter and reflected, among other things, the deepening of many large customer relationships established over the last five years, a healthy U.S. economy and Federal marketplace and the continuing increase in the rate of adoption of our delivery model. Our size and service offerings allowed us to grow faster than published IT services industry growth rates and we believe that we are well positioned to generate solid above-market revenue growth in the future. During the quarter, we saw strong double-digit revenue growth at Apex Systems and Creative Circle and a return to year-over-year growth at Oxford Core and our Oxford Segment. Our Federal IT services and solutions business, ECS, grew revenues at roughly twice the projected annual growth rate of its peer group for 2018. ECS has grown above its peer group's organic growth rate in the last two quarters since it was acquired by ASGN. Customer demand was strong across our federal, local, mid-market, and large national accounts. Adjusted EBITDA was 35.3% year-over-year to $112.9 million and cash generation continues to be at…

Thanks, Peter. For the third quarter, all three segments contributed to ASGN's growth. The Apex segment, which Rand will review, grew 14% year-over-year, which is an increase from the growth rate in Q2 of 2018, and the Oxford segment grew 2.1% for the third quarter. The Apex and Oxford end markets we serve in IT, Digital/Creative Marketing, Life Sciences and Engineering all remained stable and productive throughout the quarter. Secular changes remain in our favor in regards to how our customers approach solutions to supporting their business and getting projects completed. While our staffing services continue to grow, and we are taking share, our value added service offerings, or consultative work, are growing at a much faster pace. Now on to the Oxford segment results. The Oxford segment is comprised of Oxford Core, CyberCoders, our permanent placement business, and Life Sciences Europe. For the third quarter of 2018, Oxford segment revenues were up -- were $152.8 million, up 2.1% year-over-year. Adjusted for constant currency and same number of billable days, the third quarter revenues grew 3.7% year-over-year. Oxford Core revenues, which account for approximately 75.1% of the segment revenues, were up approximately 2.5% year-over-year, or 3.6% on an adjusted for billable day basis, in line with our expectations. CyberCoders, our permanent placement service offering, which accounts for 96.2% of the segment's permanent placement revenues, had 3.9% growth year-over-year, or 5.6% on an adjusted for billable day basis meeting our initial expectations. Gross margin for the segment was 41.1% performing in-line with expectations, but down 70 basis points year-over-year due in large part to business mix within the segment. As we typically do, let me give some color on the progress in Oxford Core. We have seen moderate year-over-year revenue growth year-to-date through Q3. Growth was driven by momentum in our domestic IT and Engineering disciplines and strong performance in our European business. It is a longer road to fully institutionalize our sales strategies and build upon the productivity we’ve created over the last few quarters. However, our results provide us the confidence that our actions have and will lead to better growth and bottom line results in the future. I will now turn the call over to Rand Blazer. Rand?

Great. Thank you, Ted. The Apex segment, which consists of Apex Systems, Apex Life Sciences and Creative Circle business units, again reported solid results for the quarter. Revenues for the segment in the third quarter were $589.6 million, up 14% year-over-year. Apex Systems, which accounts for 75.5% of the segment’s revenues in the quarter, continues to lead the way with 15.1% year-over-year revenue growth. Our Creative Circle unit again posted double-digit year-over-year growth at 11.3%, and our Life Sciences’ unit was up 8.9%. Gross margin for the segment was slightly up compared to the previous quarters, again reflecting stable pricing in our end markets. Our segment's EBITDA also grew double digits in the quarter and once again outpaced topline growth. Our EBITDA performance and conversion of gross profit to EBITDA was driven by revenue growth and continued strong productivity of our sales, delivery and infrastructure teams. As we usually do on these calls, we give you insights with respect to factors driving Apex Systems performance. Apex Systems’ revenue growth again was driven by broad based growth across accounts in all of our industries. Double-digit revenue growth in four of the seven industry verticals we service including: Financial Services, Healthcare, Consumer Industrial, and Technology industry accounts. Of the remaining three industry verticals: Aerospace & Defense and Business Services accounts grew high single digits while Telecommunications accounts exhibited lower-single digit growth year-over-year. Growth was achieved in both our top accounts and retail or branch centric accounts with top accounts again growing double digits and outpacing our overall revenue growth rates. Retail accounts also experienced high single-digit growth rates. Growth in SOW or consulting type work remained strong in the quarter and continues to outpace our expectations and our overall revenue growth rate. Finally, as mentioned, field and back office teams exhibit exceptional productivity during the quarter while supporting Apex Systems’ EBITDA performance. Creative Circle grew revenue double digits in the quarter as I mentioned and continues to exceed our expectations for overall profitability. Generally, the digital marketing end market remains favorable and we continue to see growth in corporate business as our accounts are shifting more work internally and to us versus using ad agencies for support. Our Life Sciences business revenue growth was also up, again driven by strength in our top accounts and in our clinical skill sets. Overall, the Apex segment had yet another solid quarter and continues to significantly outpace the published growth rate of the overall staffing industry. I will now turn the call over to George Wilson. George?

Thanks, Rand. ECS had very good performance in the third quarter, both from a revenue and profitability standpoint. ECS reported revenues of $164 million, an increase of 7.1% year-over-year and 5.7%, sequentially. This growth was ahead of the industry average for peer companies operating in the federal IT services space. We have seen continued strong demand for services and solutions in areas of cybersecurity, cloud and artificial intelligence, key business areas for ECS. We have also seen increased funding and customer interest in IT modernization where ECS is well positioned to support our clients with deep customer knowledge, the required IT skills, and the relevant contract vehicles. In the third quarter, we received a total of $306.4 million in contract awards across a variety of customers and we continue to see a high level of proposal activity into our fourth quarter. Included in our awards this quarter were new task orders in AI and machine learning work for Defense and Intelligence customers and a new award to support the army’s Integrated Pay and Personnel System, referred to as IPPS-A. With a Q3 book-to-bill ratio of 1.7 to 1, ECS's end of third quarter contract backlog of $1.5 billion equates to a healthy coverage ratio of 2.5x our trailing 12-month revenues. In the third quarter, ECS continued to strengthen its technical skills and business partnerships with commercial providers in cloud, cyber, risk management and artificial intelligence. During the third quarter, we were awarded a contract with U.S. Transportation Command referred to as TRANSCOM to manage commercial cloud services. More recently we were awarded a contract with the United States Marine Corp to plan and support cloud migrations. In addition to our premier status with AWS and Microsoft, we were recently designated as a Premier Partner for Google’s Cloud Platform. We were also awarded the Machine Learning Competency Status from Amazon Web Services and continues to deliver critical AI solutions to customers in Defense and Intelligence communities. From a profitability standpoint, ECS’s adjusted EBITDA grew faster than our revenues in the third -- in the quarter. We largely attribute the growth in adjusted EBITDA to higher top line revenues, which allow us to leverage our fixed indirect costs over a wider contract base. I will now turn the call over to Ed Pierce to discuss ASGN’s overall financial results. Ed?

Thanks, George. As Peter mentioned, revenues for the quarter were up 10.5% year-over-year on a pro forma basis and exceeded our previously-announced estimates. Our pro forma growth rate was approximately 40 basis points higher than last quarter's growth rate of 10.1%. On a constant currency and same billable days basis, our pro forma growth rate was approximately 10.9%. Gross margin for the quarter was 29.8%, which was in line with our previously-announced estimates. SG&A for the quarter totaled $177.3 million and we are lower than our previously announced estimates. Despite sequential growth in revenue and gross profit, SG&A expenses, excluding acquisition and integration-related expenses, were flat from the second quarter as a result of favorable variances in compensation and healthcare expenses. Interest expense for the quarter was $14.6 million, down $6 million from the second quarter. The sequential decrease was mainly attributable to one-time expenses of $5.8 million in the second quarter related to the amendment of our credit facility on April 2nd. Interest expense on our credit facility was also down sequentially as a result of principal repayments of $221 million over the last two quarters, partially offset by increases in LIBOR. Our effective income tax rate for the quarter was 17.5%, or 9 percentage points lower than our previously-announced estimate of 26.5%. The lower rate was the result of: one, changes, based on recently-issued IRS guidelines, to our provisional estimates for the transitional tax on deemed foreign dividends and the tax treatment of executive compensation, two, excess tax benefits from stock-based compensation of approximately $1.1 million, which we do not include in our guidance estimates, three, higher employment tax credits and four, a one-time cash and earnings benefit of approximately $1.8 million related to the acceleration of tax deductions for deferred loan costs into 2017. On a prospective…

Thank you, Ed. As our quarterly results continue to prove out, our scale, size and breadth of services has us well positioned to benefit during a period of historic secular growth for the services industry. Without a doubt, the world of work is changing. accelerating digital transformation, coupled with favorable labor and immigration legislation and an improving U.S. government market are all market forces occurring in our space. We are optimistic that ASGN is well situated to continue experiencing strong results into the foreseeable future. The entire ASGN team is pleased with our third quarter performance. We look forward to carrying this momentum into the last quarter of 2018. Our focus remains on growing the business profitably along with maintaining our healthy rate of growth. We would like to once again, acknowledge and congratulate our many loyal, dedicated and talented employees whose efforts have enabled ASGN to progress to where we are today. Thank you for your time. I would like to now open the call up to participants for questions. Operator?

[Operator Instructions] Our first question comes from the line of Kevin Buddhdew with Credit Suisse. Please go ahead.

Great. Thank you, and Peter and team. Congrats on the results. So you just continue to really build tremendous numbers. Hey, Peter; just any thoughts, number one: on what drove the upside to the estimates, because it obviously came in above the high-end of the range. Just -- let's start with that. And then, just, what conversions were in the quarter, if we could?

Okay. Well, I will start and then I will turn it over to Ted and Rand. First, just on a high level basis, our growth and revenue was driven by hours -- increase in hours build and an increasing number of billable consultants. And the least -- the smallest contributor was increase in bill rate. Our bill rate I think in our largest segment, Apex, only grew like 1.6%. The real growth was in the number of billable consultants and the hours that they build. As it relates to specific demands and things that we saw, Rand and Ted -- Rand, I want you to go first and Ted follow-up with your second? Rand are you on mute?

Yes, I’m sorry. So I guess as you said, Peter, I think the growth is coming across the board in every industry and every account. Kevin, you recall, we’ve -- an investment in our segment is really an investment in the client base and a portfolio of clients that then sales are healthy and are spending money on technology. So if you look at our skills that we’re providing, it's across the board. Both the application, the high-end, the growth skills as well as the infrastructure. So if you look by industry, you can see pretty much growth across the board. Telecommunications is the only one that’s a little slower than the others. But it's just our consulting business is growing. Everything I just said, it's kind of across the board and I think it took a lot of bread and butter work that the clients are doing to themselves continue to achieve efficiency and cost effectiveness in their internal operations.

Ted, you want to add something?

Yes, I would just add may be that five division, if you looked at, Apex systems and Apex life sciences and ECS, all came in above where they were. So in that way it was pretty broad based in the restaurant units. Came in basically in line with where we expect it.

Got it. And then, Peter, this is more just picturesque, obviously, with the stocks in a relative market. I mean, it seems pretty clear there's no recessionary clouds on the horizon. But can you just kind of take us through the process like what client conversations are like here versus heading into the last cycle versus what it was in -- frame a more realistic case for investors?

Yes, I mean, all I can do is give you an insight into how we view our business. Our businesses is having -- it never had a larger backlog or visibility than it does today, because of ECS and also the SOW work that we're doing at Apex on top of -- as you know, Apex's business it tends to be more mission-critical than it is CapEx driven. The second thing is our business really with greater adoption really can exist and perform satisfactory in any environment except job destruction [ph], because more and more work is being performed with contract labor, outsourced labor, offshore labor, project consulting labor versus internal labor. So as long as there's not job destruction, work has to be performed and our model can take market share from other models. And finally, as you see from our results, our profit margin is very durable because we have a very, very small contribution of profit derived from permanent placement. That's just not our model. I mean, we do permanent placement at the request of our customers and to stay close to our customers and not to invite competitors into our meaningful accounts. But if you look at our contribution from permanent conversion fees, it's less than 4%. It's about 4% of revenue. So, we feel equally confident with regard to our ability to generate attractive margins, profit margins in the event of an economic slowdown. So I don't -- everything is cyclical. GDP growth drives certain decisions, but so much of the money that’s being spent with us is a must-have where customers are digitizing their business and automating their businesses and it's not replenishing inventories. And then, George, why don’t you give him a little bit of an insight into the government space in your backlog and spending today versus two, three years ago because of budgets etcetera.

Yes. Sure, Peter. What we’ve said in the call, so what we’re really seeing is a lot more money flowing into the AIML projects that we're doing and also our cloud services. Also IT modernization tying back to our customers feeling: a, more comfortable with the technologies and, b, more comfortable with the budgets and such. So in all the IT modernizations include cloud and cyber components. And as I mentioned, our AIML, which is really targeted at this point in time in defense areas, but we look forward to providing AIML solutions and things like document management, document review and business analytics down in the future. And again, it all ties back to like Peter said, they’re feeling a lot. Our customer is feeling much more comfortable with the current budget environment.

Very helpful. Congrats again. Thank you.

All right. Now we will go to the line of Gary Bisbee with Bank of America Merrill Lynch. Please go ahead.

Hey, guys. My congrats as well on the quarter. I guess, a couple of questions. The consulting or SOW work at Apex, you talked a lot about the Investor Day. I guess, the question for me is, is this getting you deeper into customers, is that really the driving force behind doing it? You’ve got a relationship and this allows you to get more share, if you will, or is it that there's shift in each, what they want from you and that's more of what you're seeing in some places?

So I will let Rand address that. But it's really not something that we’ve come up with that we’re selling into the customer. It's really the customer who is driving us in a collaborative fashion to work with them. Rand?

You said it right, Peter. It's just -- Gary, it's about serving the accounts, serving the client. And what they found is our efficiency in relationship we already had with them and with high performance support, they’ve said, hey, how about this, how about that, can you help us here? And we stepped into that and served and provided that support and it just builds on itself. Does it in fact end up strengthening the relationship after-the-fact? Of course, it does. But we have to have it first and just as Peter said, it's just about focusing on providing real value to the client.

And should we think that there's any real meaningful difference in economics of those relative to how your Apex business has performed, or is it -- are you able to do that at a level that's not much better, not much worse?

Rand?

Yes. The economics of the consulting work are a little stronger than the traditional staffing work. But our upsides again, Gary, if it's hand and foot, they go together. You have to be excellent in both size of that and strengthen the relationship. But you can get a little better. Look, you are taking on more value creation for the client and you’re taking on some risk, although it's manageable risk given the way we set this up. So by virtue that you're going to get better economics as long as you can execute correctly.

I would just add Gary that the sales cycle is a little bit longer and the length of the assignments tend to be -- the projects tend to be a little bit longer.

Okay. That’s helpful. Thanks. And then maybe one for Ed. I think all of your debt at this point is floating rate given that you've taken debt up and down, but maintained the balance for a while. Is there any desire given the way rates are trending to lock any of that in or are you comfortable with the balance sheet the way it is? Thank you.

Well, we are considering a lot of things.

What I would share with you, Ed, because we are in the midst of considering it right now is that the CLO market is relatively attractive where there might be an opportunity to reprice our debt downward again. And so we don’t look to fix the rate at this point, mostly because we are deleveraging so quickly. Our absolute cost of debt [ph] dollars out the door to service, our interest expense is down year-over-year because we're paying down debt so rapidly. So I don’t think you will see us fix in that rate, Gary, and I don’t think it's going to create a lot of volatility to the P&L.

Yes, no, I guess, I was more thinking you might want to buy back some stock given what's happened lately and if that led to keep not paying debt down so quickly at some point that maybe it might make sense, but, fair enough that's a good answer. I appreciate it guys. Thank you.

Right now we will go to the line of Jeff Silber with BMO Capital Market. Go ahead, your line is open.

Thank you so much. I noticed in your supplemental material, excuse me, when you talk about the number of staffing consultants, a ramp up in the number staffing consultants hired at Apex. I know you typically do that in 3Q, but I’m just curious, was there anything driving that specifically and what are your internal hiring plans going forward?

So, Ted?

Thanks. You know up a little bit in third quarter, but in response to business opportunity. I think going forward, we won't be hiring ahead or behind, we will be matching it up with the opportunity in the market. You typically see us add to headcount, but not at the -- as faster rate as we grow the business and that's really what we are shooting for, for a long window of time.

And would that hold true in your other divisions as well?

That’s how we treat the other divisions as well.

Okay, great. And then, Peter, when you answered the question about the upside, you did mention that billing rates, were only up, I think about 1% in Apex, if I remember correctly. Was there any specific reason, was it a mix shift issue? Are you seeing pushbacks on increases, any color would be great?

Well, I will go first and I will pass it on to Rand. Our business model was such that we’ve deep meaningful ongoing relationships with Fortune 400 companies, Jeff. And I can't tell you precisely how much we are going to do each year with them, but I know we are going to do a meaningful amount of work with them each year. So our pricing model is not as dynamic as someone who is putting one or two people in a retail account and their customer has 50 internal employees. We are just taking advantage of the supply/demand imbalance. We are building a relationship that’s durable, do tight labor market and otherwise. So I don’t think you would ever expect the wage and -- the bill rate increase you see at other smaller retail IT services businesses translating to what we are seeing in our market. Rand, would you add or subtract to that please?

Yes. Well, Peter, again you said most of it right on. Jeff, listen, I don’t think given our client base and the nature of our contracts with the clients, we are not negotiating bill rates every day, we are usually setting bill rate today a year or two ahead into these master service agreements and then we are executing against those. We will get reliefs in bill rates if it's a tough skill set or a tough -- in a tough geography or if it's a consulting piece of work and we can mix together a different theme. But those are the times where we will get some change in the bill rate composition. And our bill rates are increasing this past year a little close to 2%. Pay rates by the way are not -- are a little below that number, which is allowing us to add to our margin. But, Jeff, it's not, don't think of this as a day-to-day auction. This is, I think, longer term, as Peter implied, contracts and relationships in bill rates. And so we have to find labor that fits the bill rate to the client and/or get relief, which we do on occasion.

Okay. Really appreciate you guys clarifying that. Thanks so much.

All right. Now we will go to the line of Edward Caso from Wells Fargo. Please go ahead.

Hi, good evening. Could you talk a little bit about the noise out of Washington with the Trump administration squeezing tighter on professional visas, particularly H-1Bs. If that has had any indirect impact on your business, are you hearing any concerns from your clients?

So, Ed, we are pretty well verged on this for a number of reasons. There was an enormous amount of abuse of the H-1B visa system with regard to whether people were truly advertising and offering a prevailing wage, who was the true employer of record. And the lottery system where true Indian body shops where outsourcers were overwhelming the visa lottery system. Whereas, an offshore may put in 39 visa lotteries and someone like a Google or an Apple or Facebook, this is all public data, might put in a 1,000 applications. And if you look at the data, the visa applications that were awarded to the same stock names, the big tech names, they’re paying these people on average a $110,000 a year. And the visas that were awarded to the body, the offshore body shops, the average was about $71,000. So the true talent was getting squeezed out just because of the lottery system and the gaming of the situation. So what the Trump administration really has done is tightened up on really requiring strict adherence to the rules about prevailing wage publication, amendments etcetera. And that has forced to greater attention and focus on domestic labor. We are fortunate in our business that added 23,000 people. I've gone by memory, but less than a 1,000 of them are really on H-1B visas. These are truly green carded or domestic labor people. So it makes our model a lot more credible and reliable that the people are going to be available to perform the work, there's not a threat of a visa not being timely awarded. So it's actually helped our business. It hasn't hurt it. And it actually has helped the American tech worker. And so where there was a wage arbitrage, that's being eliminated by the adherence to prevailing wage. And the other thing that's also going to be changing how these visas are awarded is, the lower-end stuff is getting automated. So some of the lower-end stuff that was being done with cheap offshore labor is getting automated and those visas just aren't going to be applied for.

A question on the government side, of the $306 million, how much is sort of new-new work and how much is sort of repeat -- re-compete or extensions?

George?

Hi. Yes, it's new work, new task orders coming from our customers and then a competitive awards that we've gotten.

That is none of it that is just sort of ongoing work that you sustained?

No. No.

Okay. And my last request is that, Ed Pierce repeats the tax reasons 4x fast, so -- but thanks, congrats.

All right. Well, everybody enjoyed that. Operator And now we will go to the line of Tobey Sommer with SunTrust. Please go ahead.

Thank you. With respect to consultative services and SOW work, what do you feel like the differentiators are? If you are taking share and why?

Well, the differentiator is that it's -- we are not envisioning or architecting the solution, but the customer is making a conscious decision that they're going to retain a little more of the responsibility of the project on the envisioning, the architecture and some of the project consulting and then giving some to us. And by having that blended project development, Tobey, that they can avoid the complete higher end project consulting. So to the extent that the projects optimization or that the carry on, [indiscernible] embedded software, they feel comfortable in doing that and they’re using a more cost effective, control and visibility delivery model than just the old project consulting. So, vis-à-vis taking market share from a particular competitor, I don't think that’s what we are really trying to focus on. We are just saying that our delivery model is shared resources or shared responsibility is taking market share from other deployment models.

Okay. Thanks, Peter. How would you describe the competitive threat (technical difficulty) from new online [ph] platforms?

I'm sorry, you broke up a little bit. Could you repeat it?

Yes. How would you describe the competitive threat or lack thereof from new online platforms?

Yes. So it varies by company, but if you really look at some of the noise in the marketplace right now for things like Takl, TaskRabbit, Upworks. If you really dive into the revenue streams, we are not competitors at all. I mean, first of all, one of them just went public and they got $250 million of revenue and 83% of the revenue comes from North America and they call our core customers, somebody to pay the $100 in fees to them over the past 12 months. And the vast majority of the business is non-IT. So it's -- those models I think are durable on a business-to-consumer basis. If you need someone to clean your gutters, walk your dog, give you a massage, maybe even do a static web page and you're not a Fortune 400 company that has to worry about labor department audits and HR and legal department reviewing what you're doing and you're not worried about cyber and personal security, you may use one of those kind of marketplaces. But you see what our growth rate is, and it continues to grow. And so those really are on the IT space, the clinical research and especially in the government space, meaningful threat, and they’ve been around forever. Look, if you are able to go back in history and look at the job postings on Craigslist, Craigslist has been putting graphic designers and content writers on their postings forever. So this isn't -- these businesses have been around for some time and they're still relatively small vis-à-vis the total spend in IT. And so I don't see on a true commercial basis that they're a threat. Now with that said, I think they have an application if you're working with day laborers and there's been a rock concert in Central Park and you need people to come pick up trash or breakdown the event facilities and you only need them for two or three days, but SunTrust is not finding somebody off, Upworks to go help them with the mobile banking app, we're just not seeing that.

Thank you, appreciate that. What's your strategy for internal investments in consultant headcount growth?

Well, I'm going to let Ted speak to that again, just I will reiterate what he said, that's steady state. We have the privilege that we have never held back on our investments. So there's no deferred maintenance here. And you'd not once heard through this whole period from us that things are so strong, we're adding ahead of the curve and it's going to affect our profits, we're exactly the opposite. Ted, why don't you give him more granularity to where you see maybe bigger spend?

I think that's it, Peter, I mean, I don't think I have too much to add. It's a steady state, and we will keep adding where there's [indiscernible] business opportunity. We will keep working internally on different things that we think make us more productive or efficient from an automation and toolset standpoint, but it's steady as we go there.

Thanks. Last one is just a numbers question. What was the leverage ratio at the close of ECS? Thank you.

Yes, it was 3.7 on April 2, 2018.

Thank you very much.

All right. Now we will go to the line of Tim McHugh from William Blair. Please go ahead.

Hi. Thanks. Most of my questions have been asked, but just on ECS that backlog number I know given the acquisition, there's some noise, but can you give us a sense of the backlog growth rate that you are seeing on a year-over-year basis?

So, George I want you to answer that more on a historic qualitative basis, but we have not published your historical quarterly backlog. So just kind of compare it form of what you've seen in prior cycles and historically, if you could.

Yes, sure. And I have been with the company for almost seven years now and this is a very, very healthy pipeline that we have as well as a submitted [ph] waiting award. I will say last quarter reported at 2.3x was our coverage ratio. So that's going a bit 2.3 or 2.4, so it is accelerating. We have moved now to 2.5x in terms of the backlog, okay?

Thanks.

All right. And now from the line of Mark Marcon from Robert W. Baird. Please go ahead.

Good afternoon. I was wondering if you could give us a little bit more color with regards to the guidance outside of ECS, specifically within Apex. Would you assume that Apex Systems will continue to lead the way in terms of the growth followed by Creative and that maybe Life Sciences ends up being the slowest grower, but still solid?

One, Mark, I'd tell you, we gave you the two weeks revenues exiting the quarter. We exited the quarter with good momentum, fortunate for us our largest division grew the fastest and we kind of continue to expect that. Our next largest division outside of ECS grew 11.3% and the Apex Life Sciences grew, but it's the smallest division. And it was -- it had I think 8.9% growth this year, but it's on a much smaller base of revenue. So I think what you should take away from my kind of wondering comments is that momentum was good exiting the quarter.

Great. I got that. I was just thinking about Apex Systems, specifically. With regards to the statement of work business, can you talk a little bit about how much that has grown or what percentage of the revenue it is at this point?

Rand, given some qualitative comments, we are not prepared to break that out on a specific revenue basis yet, but give him some qualitative comments if you would please.

Yes. So, Mark, first of all, it's growing faster than the numbers we posted for Apex Systems overall. So if Apex System is in the quarter was 15.1%, consulting is growing faster than that, that's the first data point. Does that answer your question or do we --

I was wondering magnitude or help …

The magnitude of consulting?

Right.

It's -- well, it's certainly double-digit percent of our revenues. I think it's -- we haven't given that number. We spent the last ex number of years jumping into providing more value to the clients and it's becoming material and it's an important part of how we serve the client. So -- but it's definitely into the double-digit range now and as a percent of our revenues overall in Apex Systems. And by the way, Creative, Life Sciences and the Oxford team also have consulting revenues in their client in account base.

Great. And then with regards to the bill rate increases and the wage rate increases, what are you anticipating, particularly, on the wage rates and how's that impacting recruiting trends in terms of trying to sell bill rates, and just when we think about the tightness of the labor market?

Rand?

Well, I think we’ve launched our pay rates. Our pay rates are migrating up not as fast as the bill rates in general, but I would say it's obviously different market by different skill types. So there are some skills that are in higher demand, it may have less availability in certain regions around the country. But for the most part, the IT world I think we've talked about this before, has been in a very high employment status for years. And so while the overall economy is now had a 3.7% unemployment rate, IT is already been a very low unemployment rate. So it's nothing new from what we've seen over the years. And I think, remember, people are rotating off the jobs constantly and we've built a certain brand awareness and loyalty with a candidate base, if you will, that knows that not just what the pay rate is but certain benefits and healthcare, medical, insurance and pay time off and 401K opportunities. So -- as well as technical training and continued support and almost a concierge service to help them through some of their issues. So it's a combination of thing that I think keep that factory there. But we haven't -- look, I’m knocking on wood, we haven't run into a situation where we found a big disconnect between what we need and what we can provide our clients.

That’s great. And then with regards to the SG&A this past quarter, it was actually a little bit lower than what we were looking for even though there were headcount additions. What was the key driver for that?

Mark, as we said in our prepared remarks, we had some favorable variances in certain expenses and we are also giving guidance obviously for Q4. And we expect it to be on a cash basis before acquisition related expenses, about 18% of revenues on a go-forward basis, at least in near-term.

Great. Thank you.

[Operator Instructions] And there are no more questions at this time. Please go ahead.

All right. Well, thank you for your attention and we look forward to reporting our fourth quarter results. Everyone have a good evening. Thank you.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and using AT&T Teleconference. You may now disconnect.