Greetings and welcome to the ASGN Incorporated Second Quarter 2020 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Kimberly Esterkin, Investor Relations. You may begin.

Thank you, operator. Good afternoon, and thank you for joining us today for ASGN's Second Quarter 2020 Conference Call. With me are Ted Hanson, President and Chief Executive Officer; Rand Blazer, President of Apex Systems; George Wilson, President of ECS; and Ed Pierce, Chief Financial Officer. Before we get started, I would like to remind everyone that our commentary contains forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, our actual results could differ materially from those statements. Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume any obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website at investors.asgn.com. Please also note that on this call, we will be referencing certain non-GAAP measures, such as adjusted EBITDA, adjusted net income and free cash flow. These non-GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between the GAAP and non-GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, President and Chief Executive Officer.

Thank you, Kimberly, and thank you for joining ASGN's Second Quarter 2020 Earnings Call. ASGN's business demonstrated solid resiliency in the second quarter. Our scale, high end IT service offerings and large and diverse client base, including over 60% of the Fortune 500 as well as key federal defense and civilian government agencies, provided stability and positioned us well to serve our clients despite the challenges of COVID-19. For the quarter, revenues totaled $936.8 million, down 3.6% from the prior year. Our commercial business, which includes our Apex and Oxford segments, accounted for 74.4% or $697.1 million of consolidated revenues; while our government business, our ECS segment, accounted for 25.6% or $239.7 million of consolidated revenues. Adjusted EBITDA totaled $106.2 million for the second quarter and represented a solid margin of 11.3%. Although we did not provide formal guidance for the second quarter, our results came in well ahead of the midpoint of the illustrative scenarios we provided. Revenues were 4.1% higher and adjusted EBITDA margins 110 basis points higher. Looking at the cadence of revenue during the second quarter, April proved to be a challenging 4 weeks for the commercial market, while our government business remained strong and continued to perform above expectations. Declines in our commercial business continued through the first half of the quarter, flattened in the second half and have remained stable through the first 3 weeks of the third quarter. Our government business remained resilient throughout Q2. Strength in the second quarter was driven largely by industry-leading performance of the ECS segment, which was up 25.8% over the prior year; and the strength of Apex Systems, which only declined 3.4% year-over-year. ECS and Apex Systems together comprise roughly 80% of our consolidated revenues. As I emphasized last quarter, ASGN continues to see the benefit of…

Thanks, Ted. Good afternoon, everyone. Revenues, margins, profitability and cash -- operating cash flows for the quarter were much better than our internal expectations, and better than the potential outcomes we outlined in our illustrative financial scenarios that we provided in lieu of financial guidance for the second quarter. Revenues for the quarter were down 3.6% year-over-year. Revenues from our commercial divisions were generally in line with our internal expectations and were higher than expected for ECS. Revenues from Apex Systems, our largest division, which accounted for 54.3% of total revenues, were down only 3.4%. Revenues from ECS, our second largest division, which accounted for 25.6% of total revenues, were up 25.8% driven by, among other things, high growth in its artificial intelligence, machine learning solutions, new contract awards and the contribution from Blackstone Federal that was acquired in Q1. Revenues from our other divisions, which in the aggregate accounted for 20.1% of total revenues were down 26.2%. Gross margin for the quarter was 27.8%, down year-over-year due to the decline in permanent placement revenues and the high revenue growth of ECS. Permanent placement revenues are essentially 100% gross profit, and the gross margin at ECS is lower than our commercial divisions. Although lower ECS' gross margin compares favorably with other government services contractors, and its EBITDA margin is only slightly lower than our consolidated margin. Our contract gross margin, which excludes permanent placement, was 26.2% for the quarter, down approximately 30 basis points year-over-year. The contract gross margin for our commercial divisions was up 40 basis points to 29%, and the gross margin for ECS was 18.3%, same as Q2 of last year. SG&A expenses for the quarter were $172.2 million or 18.4% of revenues, a year-over-year improvement of approximately 200 basis points in the expense margin. This improvement…

Thanks, Ed. ASGN is now in a better position to manage an economic downturn than any other time in our company's history. Despite some uncertainty remaining, our visibility has improved, and we now have a better sense of how our business is trending as we enter the second half of the year. We continue to evolve our business as a foremost provider of IT consulting solutions and services to the commercial and government industries. Our business model remains resilient. Going forward, we will work to maintain our unique market position, leveraging our long-standing commercial and government client relationships and deploying our in-demand IT services such as Cybersecurity Cloud, computing in mobility through the organic growth of our business. We also remain acquisition-ready. You may have heard me speak about our M&A strategy before, but ASGN does not look for distressed assets. We seek to add high-quality, industry-specific IT solutions in the commercial and government spaces to our service offerings. We will maintain our smart capital allocation, generating strong liquidity and using our free cash flow for M&A or stock repurchases depending on what is in the best interest of our company and our stockholders at any given time. Speaking of doing what is in the best interest of our company and our clients, we have officially changed our corporate headquarters' address from Calabasas, California to Richmond, Virginia. With 2 of our largest divisions, Apex Systems and ECS, based in Virginia, it made strategic sense that our headquarter is located in the comm well. This change in address allows us to remain close to our key customers, brands and their respective management teams. Ultimately, as we look forward to the second half of the year, it is still my belief that the real rate of return of the economy will be based on how fast this health care crisis is resolved. Even with the present uncertainty, we continue to execute against our current contracts, safely leveraging our contingent labor force to drive profitability and margin stability for our company. As it relates to inorganic growth, we will continue to push forward developing M&A opportunities that expand our capabilities and add key clients and contracts to our business pipeline. We have an exceptional team in place who has gone the extra mile to ensure that our business continues to run smoothly and that our clients' critical IT needs remain our top priority. I note that we are positioned to emerge from the current situation even stronger than before, and I'd like to thank all of our employees for your dedication to ASGN this past quarter and always. On behalf of our entire company and our Board of Directors, we thank you for your continued support. We hope you're all safe and staying healthy. We will now open up the call to your questions. Operator?

[Operator Instructions]. And our first question is from Edward Caso from Wells Fargo.

This is Justin Donati on for Ed. Really good performance here this quarter with revenue and margin in particular. Just wondering if you could give a little bit more color around the margin in Q3. It looks like it may be a little bit weaker. What areas are you seeing that might be a little bit weaker relative to the other segments? Hello, can you hear me? Ted and Ed, are you back on?

Did we lose, Ted?

No, I'm here.

Okay. There we go. Can you hear us now?

Have you heard the question?

I did hear the question. Yes. So Justin, I think we've got 2 things going on, and I'll let Ed elaborate on. But you certainly have an evolution going on here with us as it relates to our business mix. And so if you look at it relative to past quarters or last year, you're going to see the business mix certainly affect the margin. And on a secondary basis, we really -- we had a surprisingly strong quarter in EBITDA margins from Apex related to just the pace of their business flow versus some of the lower cost that we had in the second quarter that we think may not continue all the way through the third. Ed, do you want to follow-up on that?

Yes. Justin, if you focus on the sort of the midpoint of the range that we gave for gross margin, I mean it's showing that about a 10 basis point difference between that and where we actually came out for Q2. So a lot of that is going to be mix-driven because our expectation is that ECS is going to grow faster than our other units and become a bigger piece of the mix. So that's a big driver for that. And as it relates to the bottom line margin, you have that or the EBITDA margin, you have that, coupled with -- we did have -- we did benefit from lower health care expenses in Q2, and we're anticipating a slightly higher health care expenses in Q3. So those are the principal reasons as to why you're seeing a sort of differential in the margin.

Great. That's really helpful. And then just as a follow-up question. Given the strong bookings that you had in your consulting business, when do you see that potentially returning to double-digit growth or maybe even better where it was pre-COVID?

Yes. Rand, do you want to talk about that?

Yes. Well, look, I think there's two parts to this. The first is -- and you're talking about in the commercial units here, Justin, I assume. I would say on the Apex side, we're close to double digits, and we should be able to get back to double digits, certainly in this -- the second half of this year. In our other units within the commercial sector, the Oxford segment and Creative Circle, it's a little bit more of a guess. So it depends on the marketing function and how it begins to respond while we're seeing stability in our business flow in the Creative Circle side, hasn't translated out to consulting yet, similar with Oxford and some of the niches that they're in. So I would say I certainly hope by the second half of the year, we're back. But -- and I suspect Apex, part of it will be there. It's the other parts we're still having to watch.

All right. Really appreciate it, and congrats again.

Our next question is from Kevin McVeigh from Crédit Suisse.

Congratulations on the results. Ted, you mentioned M&A a couple of times. And then the buyback, you folks have really done a nice job over the course of time and transformative deals. Appreciating that you're not looking for anything necessarily distressed, but can you help us frame out what kind of the parameters would be depending upon the size. And do we see the appetite given how strong the balance sheet is to do buyback and M&A? Just any thoughts around that would be really helpful, particularly given how strong the results have become.

Thanks, Kevin. Well, look, I don't think that acquisitions and share repurchase necessarily have to be mutually exclusive. I think it depends on at the moment in time, if you will. For this quarter, we allowed cash to build on the balance sheet versus going further into our buyback plan. We hope, as always, that we have acquisitions that are developing, opportunities that are developing because that's where we show the highest return. We've proved that out over a period of time. And just based on kind of our current strategy around acquisition, looking for these opportunities where we have the ability to add industry-specific solution capabilities that we may not have inside of our organic business today, but we have clients and pipeline of business that require these kind of solutions. Naturally, those may be a little smaller and not platform acquisitions, but support Apex in the commercial space and ECS in the government space. So that's kind of where our focus is today, and we're working as hard as we can on pipeline. We're certainly acquisition-ready and feel like we have some holes that we could fill that are going to exist -- going to fill existing opportunities in our current account portfolio and pipeline.

That helps. That helps. And then, I guess, you talked about an accelerating trend towards kind of digital transformation amongst your clients, maybe just flesh that out a little bit. And then just if you could maybe reconcile it, it sounds like Creative Circle still maybe not where you need it to be. Maybe just help reconcile maybe what some of the gaps are in Creative Circle relative to the strength you're seeing on the digital transformation side.

Yes. Well, look, I mean, I think it goes without saying that the current situation we're all in because of COVID and the shutdown of the economy, it's pushed our large customers, both in the commercial marketplace and the government marketplace into remote work scenarios. And that has accelerated, if you will, the need to be able to have remote capability for security around that. It's enhanced opportunities to utilize the cloud, and it's also started conversations around reshoring certain work that was done offshore. So I would say that none of those were new trends, if you will, coming into COVID, but I would say just mostly, those things have been accentuated. If you think about Creative Circle individually, I mean they basically in their business have traditionally served kind of bread and butter marketing and events and also digital skill sets. And what they're seeing in their business today are digital skill sets around UI, UX and other like things are in high demand with their clients. But the other 2 buckets of their business have been more slow as you go. It's something easily turned off by clients when they're worried about their own business. So that will flush itself all the way out here as we go. And the small and mid-market accounts upgraded will come back and begin to spend on their services. In the meantime, it gives them a chance to focus on their large account portfolio and develop that further and really hone in on opportunities around digital skill sets and digital work that'll relate to the creative marketing space.

And our next question is from Gary Bisbee from Bank of America Securities.

I guess first question on really impressive strength at ECS. You called out several things that are driving that. Obviously, there was the acquisition in the first quarter that helped. But any other color you can give? And I guess sometimes when you've had these outsized growth in the past, you've called out some of the hardware and software that supports the contracts as -- but maybe somewhat more lumpy. Was there anything meaningful there? Or is it really just broad acceleration in the business plus the M&A?

Yes, Gary, thanks for the question. I'm going to let George speak to this. Although on the top of it, I'll say we're really excited about how ECS is performing. And while we set your long-term view of kind of high single-digit growth and then a complement of M&A to go with that, we'll get higher growth rates when we can, and ECS certainly has been doing that. George, do you want to talk a little bit about just the components of growth for the quarter?

Yes, sure. Thank you, Ted. And thank you, Gary, for the question. Yes, I would characterize it as more broad and not anything in particular, anything specific. We have, and we do continue to have a strong component of software and hardware and subcontractors in our solutions, where we approach the customer, helping them solve their difficult problems. We're always reaching out and using subcontractors and the best technologies that we can provide. But overall, it's been across the board in a broader executionable mission. So that's -- that provides a little bit more color for you. Is that what you're looking for?

Yes, yes. And maybe one follow-on on ECS. I know that your contracts are durable and it happened sort of no matter what's going on. But as you think about the election this fall, is there anything that you think could sort of change how you approach the business, demand, what the [Technical Difficulty] there's a couple of outcomes there. But is there anything we should be thinking about as it relates to potential change in the administration?

Yes, sure. And this is something I'm sure everybody will talk about a lot over the next several quarters, but I like the position that we're in. I mean we're varied. We're spread between defense and federal civilian. And in the areas that we're in defense, we're in IT modernization, cyber cloud. These things are not going away, and we're not doing overseas operations. We're not providing a whole bunch of bodies on things. It's the technical solutions, which I think both sides of the aisle can agreed on are very important. And then again, on the federal civilian side, which depending on the administration, typically, some things would slide the other way if it changes, we feel very, very comfortable where we are in terms of some of the federal civilian areas. And again, it's in the areas of using very high end solutions, solving our customers' most difficult challenges. So I think you probably read authorization this past -- both folks, I don't think that we're going to see a lot of change in the defense spending at least in the next several years. So -- okay?

Great. And if I could just sneak one quick one in for Ed. The SG&A -- given how much better the revenue was, the SG&A was quite well controlled. I guess how do you think about the -- some of those costs coming back in as we look forward? I think I heard someone say maybe at Apex, you wouldn't have quite that much benefit to the margin in Q3. But any color on how we think about phasing? I realize it -- how revenue goes, obviously, is a key component, but that would be helpful.

Gary, I think as it relates to phasing, I don't think you're going to see much sort of change that will occur in the second half of the year. But clearly, as we continue to add to our headcount, as we see demand in the marketplace, you're going to see headcount costs go up. Okay. But we've spoken many times about the variable nature of our cost base, so you have a pretty good sense of that. But in terms of fixed cost, I think headcount would be the big driver.

Yes. Ed, the only thing I would add to that is, Gary, it's just that we've got capacity here in terms of productivity, I feel like, to push forward. And so Ed's right, we'll add in on a moderate basis in places where we need to allocate resources to certain accounts or certain opportunities. But I don't want to leave you with the impression that we're -- we have some big hiring going before some kind of surge. That's not where we are.

Our next question is from Seth Weber from RBC Capital Markets.

This is Emily Mclaughlin on for Seth tonight. My first question, in the prepared remarks, Ted talked about top accounts growing low single digits and retail and branch accounts down low double digits. Wondering if there's any notable divergence and recent production trends between these 2 groups.

No. I think that's what you've seen from us for a couple of quarters here. And certainly, if you -- I mean if you just think about the parts of the economy that have been the most effective, obviously, small and mid-market accounts are what we call retail accounts have been affected more than large accounts. And so while the rates of growth are different, I think relatively, it's not too much different than what we've seen.

Okay. And just are you seeing anything in terms of price concessions on the commercial side? I think last quarter, it sounded like some of the smaller accounts were asking for concessions. Just wondering if that's continued or lessened relative to a few months ago.

Overall, our contract margins have remained very stable. We've even seen a little tick-up. But Rand, do you want to talk about client account concessions on the commercial side specifically?

Well, no, I think you hit it, Ted. Our -- in Apex, the gross -- the account margins are ticking up. So we always have accounts here and there that are looking for one thing or another, and they're generally short for a specific target in a certain period of time, and we will adjust depending on the strategic importance of the account and what we can do. But in the end of the day, our margins have held very solidly, even ticking up a bit.

Our next question is from Tobey Sommer from SunTrust Robinson Humphrey.

I was wondering if you could give us some color on why the Oxford and Apex businesses are performing differently and if you see them kind of converging at all over the near term.

Tobey, well, I would tell you, the two biggest differences between the Apex and the Oxford business relate to the size of account. So Apex serving mostly Fortune 500, 1000. Oxford serving mostly -- not exclusively, but mostly middle market and smaller retail accounts. And so obviously, that's part and parcel of this. The second biggest thing is Apex is serving every need in the IT world of the CIO in order to help them get their work done. And Oxford is serving individual, hard-to-find niche technical talent. And so there's a difference in that as well. So I'd really say those are two of the biggest drivers.

And on the consulting side, the rate of growth did slow. Was the single-digit rate of growth, is that an organic number? Or does that include some acquisition from some acquisition contribution? And then what drove that? Was that kind of a slowdown of existing projects, cancellations? Could you speak to the reasons for the slowdown?

Rand, do you want to take that?

Yes. Well, let me start, Tobey. First of all, that number is all in. So the Intersys acquisition is part of that, and we don't separate it out, mostly because Intersys, we've taken them and reconfigured them in support of most of the pipeline and opportunities we've had. So while there is still some Intersys revenue that they brought with them as a business, it's not the main driver. We've been very successful at driving new business in consulting with them, but it's been pipeline that Apex generated. So look, we look at it as one total. The other thing I would say to you, Tobey, is if you remember back in the end of last year, Q4 particularly, our bookings growth was not as strong. I mean it was still there, but it was growing year-over-year. And remember, the comps are astronomical, right, for us in this consulting business. So I think that slowdown at the end of last year has affected us and the growth rate this year in quarter one and quarter two, along with, obviously, COVID-19. But I think as Ted pointed out in his remarks, our bookings now are starting to accelerate back up. And the growth in the bookings, particularly as we ended Q2, were very strong. So now the question is, why did our bookings slow down at the end of last year? Well, some of that is normal year when your end of year companies are finishing out their budgets and planning to restart budgets in the beginning of the new year. When we got to the beginning of the new year, they're a little slow. The -- by February, where they're putting those budgets in place, I think they began to see the tea leaves around the COVID-19 scenario and began to slow down a little bit on just what their priorities were. I think they've sorted through that over the period of February through May. And we're now beginning to see an acceleration of bookings and things with our client base. So there are a couple of factors at play here that -- I don't want to overplay one factor or another, but I think our clients were prudent about where they're going to spend their money and redirecting some of the money. And I think we're -- I feel better about it today than I did 3 months ago for sure. But I knew -- and Ted and I knew in the fourth quarter that bookings slowdown had occurred, and that would affect us somewhere along the line.

Our next question is from Jeff Silber from BMO Capital Markets.

I wanted to ask more of a philosophical kind of question that clients have been asking me, but let me ask you this question. So you talk about the shift to remote work, everybody is doing it, everybody is seeing it. Do you think if this is a more profound change that we might see clients use their own workforce remotely as opposed to outsourcing to firms like you? Do we see a shift there?

No. Well, look, I mean, certainly, they're going to be more open with their own internal workforce to allow them to work remotely. I'm sure we all will in certain circumstances. But I think that really, the driver behind using firms like us is you never have the right talent at the right time when you need it. So I think that most of this, if you will, is a supporter of demand for our services. And I think that in many different ways, clients are going to be as open or more open to use us, either for talent or to get certain solutions. And they're going to be more open-minded to look beyond having someone sitting within their 4 walls, which will allow us, in turn, to look in different geographies of the country for the right skill set, even at better price points at some time, which helps them and helps us. And again, will kind of support the demand equation of all this. So I don't really believe that working remotely necessarily as it relates to their internal staff is really going to have an impact, if you will, on the demand equation for the services we provide.

Okay. That's helpful. I appreciate that. You mentioned pricing, and I know a lot of times it has to do with mix, but I'm specifically focused on your assignment business. Are you seeing any less pressure from a wage inflation perspective given what's going on in the labor markets?

Yes. Look, I think that for high-end IT skill sets, I mean they're still -- they're in demand and they were in demand, and so that's not necessarily the group that was furloughed. And I think going forward, you know that the pricing -- not only the wage scenario, but the pricing scenario around all that will have good stability to it.

And our next question is from Mark Marcon from Baird.

Let me add my congrats on performance here. Can you talk a little bit about what you're seeing with regards to the Apex Systems consulting? Just kind of how that -- those bookings are going specifically and whether or not for this coming quarter and as we look out towards even the back half of this -- or the back end of this year, whether you would expect that to grow sequentially? Or how we should think about that?

Sure. So Mark, we don't give out that information underneath the segment quantitatively, but I'll let Rand speak qualitatively about it and give you a sense of where it is.

Okay. Well, Mark, listen, I guess I have to respond two ways. Now first of all, consulting revenue flow and bookings are a function, first, by the account. So in accounts like transportation and some retail and oil and gas, airlines, we're definitely not seeing consulting business, okay, the same as we're not seeing it in the staffing world. So there is an industry-specific impact here in terms of where we're seeing consulting. Now there are areas where consulting is starting to pick up even more, on the government side, business service side picking up a little bit in health care, a little bit more in banks, particularly in wealth management, and in fintech and the regional bank initiatives that we have going on. So when you look at it by industry segment, it's a little bit reflective of what's happening in our bookings and revenue, a little bit reflective of that industry push. In terms of -- I think you're really asking the question about what kind of work are they -- are we getting involved in. It's really similar to what Ted showed in the remarks. It's more around what I call the digital road map, its digitization of businesses, whether linking -- web development or linking the web into order processing, billing and paying, logistics queuing, logistics mandates that are put out to linking your logistics systems with your web. It's all of that work all in the cloud. So I think on the marketing side, yet to come is learning how to use that information to better talk and excite demand from your customer base, which everybody talks about, but I think we're still in the early innings of that kind of work. So it's really around the digitization of the business and linking customers with the suppliers with your own workforce to do things better, faster, more efficiently.

Terrific. I appreciate that, Rand. Can you talk also a little bit about like the trends that you're seeing, both in terms of industry verticals? You mentioned that across the commercial side, things stabilized in the second half of the quarter, and then that stabilization continued through July. Is that relatively uniform across the various industry verticals? Or are there some that are actually discontinuing to grow sequentially? And then some by consumer and industrials, that might even be softening a little bit further? And if there is a change along those lines, what are the longer-term implications? Or how should we think about that?

Well, Ted, do you want me to go ahead and respond?

Please.

Yes. There's a lot there, Mark. I mean I -- we're not reporting against 5 industries. Of course, I'm -- we're managing inside of our business -- commercial business units to really 26 segments that roll into these 5 industries. So I think you're asking a question -- I would say we saw some strength across our 5 industries in different segments. As I was just mentioning, financial services, it's with insurance, fintech, wealth management, a little less than the big banks, okay? In gov, it's with state and local, small business, higher ed, a little less in work we're doing with maybe the large integrators. That ebbs and flows a bit. In consumer industrials, it's not so much in chemicals, gas and energy, airline, hospitality, but it is in specialty retail, e-commerce, tobacco, believe it or not, and logistics are stronger. Our telco business is a little bit weak right now. Diversified telco is good, but the wireless and media, not so strong. In technology, our small business technology footprint and some of the big players like big clients that we have are still relatively strong and hanging in there. On health care, providers coming back a little bit. Payers, coming back a little bit, but it's been down for sure over the last few quarters as they've been busy fighting the virus. So I could go through this in more detail, but we're seeing shifts -- not so much shift, it's just certain industries are still up and running. And when we talk about stability in our consulting or in our assignment revenue, it's really coming from these different industries that still have some strength, and there are definitely some industry or segments of the industry that are not quick back up yet. Did that help, Mark?

Yes. I appreciate that color. And then with regards to just the recent resurgence in the virus, are you hearing any tone from clients where they're -- I know things have been stable for the last three weeks. But in terms of like looking out towards the back half of this year, are there any sort of sounds of like we're going to be a little bit more conservative towards the back end? Or because of the strategic imperative towards digital transformation, that's more than overriding any sort of doubts around that?

Rand, why don't you comment and then George will go...

Yes. I would say we're not hearing -- I think we're hearing steady, steady as we go, but the digital side is the emphasis. Okay? And if we're positioned on that side with them, then we're going to continue to be steady or continue to inch up, okay? George?

And George, upside?

Yes. No, we're not seeing any impact to us on the upsurge in things. Our customers continue to focus and having us do things remotely. And as Rand said, the digital modernization on the technologies provide our solutions in being able to do that. So we continue to hire really great people and provide good solutions to the customers.

Great. And then what are you seeing in terms of acquisition multiples among the good, select types of companies that you would typically look at?

So Mark, I think on the debt side, acquisition -- pace of acquisition has not slowed down. So we've really seen no change there. On the commercial side, mostly because of things around credit and the stall of private equity and what have you, there just haven't been a lot of transactions. So difficult to really discern that, but we'll -- that will flush itself out here as we go.

Great, and congrats.

We have reached the end of the question-and-answer session, and I will now turn the call over to Tim -- to Ted Hanson, CEO, for closing remarks.

Great. Well, we thank you for being with us this afternoon, this evening. And we wish that you stay safe, stay healthy, and look forward to speaking with you on our third quarter call. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.