Good morning, everyone. This is Brad Vizi, Executive Chairman of RCM Technologies. Welcome to the RCM Technologies 2020 Second Quarter Earnings Call. I'm joined today by Kevin Miller, our Chief Financial Officer. Kevin will begin with a legal disclaimer, and then I will summarize the operating results for each of our business units before opening it up for questions. Kevin?

Good morning, everyone. Our presentation in this call will contain forward-looking statements. The information contained in the forward-looking statements is based on our beliefs, estimates and assumptions and information currently available to us. And these matters may materially change in the future. Many of these beliefs, estimates and assumptions are subject to rapid changes. For more information on our forward-looking statements and the risks, uncertainties and other factors to which they are subject, please see the periodic reports on Forms 10-K, 10-Q, and 8-K that we filed with the SEC, as well as our press releases that we issue from time to time. Thank you.

Thanks, Kevin. Like many companies, RCM was materially impacted by COVID-19. We lost significant revenue in the second quarter primarily the result of broad school closings. However we believe that we performed well against our COVID plan that we outlined when we last spoke in May. Broadly speaking we outlined a plan where we would surgically cut non-critical SG&A expenses; focus heavily on utilization and gross margin, while at the same time, working to maximize cash flow from operations. We are pleased with the results on all three fronts. Before discussing our segments, I want to highlight a few areas of our cash flow statement and balance sheet. We generated $16.9 million in cash flow from operations in the second quarter. Robust cash flow from operations allowed us to reduce our net debt by 51% from $32.1 million to $15.7 million. We're pleased about the flexibility this debt reduction affords RCM going forward. Our second quarter cash flow does not reflect the $7.4 million arbitration award from the first quarter. We expect to collect 100% of the award this quarter and use those proceeds to reduce that further. RCM also purchased 1.8 million shares in the second quarter at an attractive purchase price by executing a note payable for $2.2 million. We're optimistic that we will be able to pay that note off before the coupon starts on September 1. Finally, we negotiated flexible financial covenants on our line of credit during a challenging economic environment. COVID has had most significant impact on our Healthcare Staffing segment. As compared to initial expectations, we were somewhat surprised on two fronts. One, we thought our non-school revenue would be higher due to the pandemic. And two, we thought our school revenue would be lower. Our non-school revenue in Q2 2020 was about…

Sorry about that, I was on mute. So our first question will come from Bill Sutherland. Bill, your line is now open.

So I wanted to ask you just a couple of things on the Healthcare Group and mostly because you do have a fair amount of your revenue from three school districts, what's the latest update on their plans and how that could impact how your third and fourth quarters look?

Sure, well, New York City has filtered out some ideas. But I feel like they haven't really formalized anything. They're allowed to open for New York State, they surveyed a lot of parents and they believe approximately 74% of students are expected to participate in whatever in-person school is offered binding work. Right now, we believe, basically what's out there is that kids are going to go to school every other week, two days, one week, three days the other week, there are other options on the table for the schools to choose from. How well -- whether that's going to happen day one, normally they would -- they would open September 8. There has not been anything out there that I've seen that says that they're definitely going to open September 8 whether or not. There's not anything out there that they may, we haven't heard anything in terms of them going fully online for some period of time. Our best intelligence right now is if they're going to open around September 8 with a hybrid model that will impact us compared to previous levels exactly how we just don't know. We think that our nursing and therapy revenue won't be impacted a lot. That's our belief. But that our professional, which is the biggest component of New York, we believe, that's going to be impacted, at what level we just don't know. And obviously, it's all subject to change because there's almost a month to go. And schools are changing their plans daily as you know. Hawaii was -- as of Friday was scheduled to open on August 17. They normally open the first week of August. But Hawaii announced on Friday that for the Island of Oahu, which is about -- which represents about 70% of our…

Great, that's a great rundown. But nursing, a component of New York City, is that going to be shifted to Telehealth like Chicago or --?

We believe that -- we believe that our nursing will be a combination of Telehealth and then using our nurses in centers where they have kids, even if they're not in school, or where they just need them at certain facilities. So we don't believe our nursing is going to take a big hit. But the biggest portion of our New York City revenue is coming from paraprofessionals. And there's just a lot of uncertainty around. We do believe there's going to be some sort of Telehealth offering for the paraprofessionals, and you believe that we're going to be utilizing them on the three and two days, but a lot needs to get on between now and the time school starts.

All right. Just one more from me, and I'll hop in the queue. I understood what Brad said by using Telehealth as a means of gaining share. So can you give us any color on kind of what you're intending to do there?

Yes, I'll take that one. So we're still in early days of that initiative. When this all happened, it was clear that we were going to have to service our case one way or another. And we had already had a Telehealth offering. This was -- it just made the decision really easy to invest behind it. And now we're looking at all sorts of options in terms of taking it to market. But really the underlying premises is to leverage our leading position as a provider of therapists and nurses to schools to ultimately gain share against many of our competitors with which ultimate tend to be regional and don't have quite the presence and the wherewithal panoply of offerings, et cetera. So but that is certainly front and center for us and an opportunity we're focused on.

[Operator Instructions]. All right. At this time there are no further questions in queue. Thank you.

Okay. Thank you for attending RCM's second quarter conference call. We look forward to our next update in November.

Ladies and gentlemen, at this time, you may now disconnect.