Good day, ladies and gentlemen, and welcome to the Q2 2014 TrueBlue Earnings Conference Call. My name is Steve, and I'll be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. Now, I would like to turn the call over to Stacey Burke for the Safe Harbor speech. Please proceed.

Thank you, and welcome. We appreciate everyone joining us for our call today. Please note that on this conference call, management will reiterate forward-looking statements contained in today's press release and may make or refer to additional forward-looking statements relating to the company's financial results and operations in the future. Although we believe the expectations reflected in these statements are reasonable, actual results may be materially different from the forward-looking statements set forth in today's press release and presentation slides, which were filed in an 8-K today. Examples of factors which could cause results to differ materially can also be found in our most recent filings with the Securities Exchange Commission. The discussion today also contains certain non-GAAP financial measures. Information relating to comparable GAAP financial measures may be found in the press release and presentation slides, which are posted on our website at www.trueblue.com. We encourage you to review that information in conjunction with today's discussion. On this call today is TrueBlue's CEO and President, Steve Cooper; and CFO, Derrek Gafford. I'll now turn the call over to TrueBlue's CEO, Steve Cooper.

Thank you, Stacey, and good morning, everyone. Today, we reported 2014 second quarter revenue grew 7% to $453 million, which produced $25 million of adjusted EBITDA and $0.39 of net income per share, which was in the midpoint of our previously disclosed expectations when all one-time costs and timing differences are taken into consideration. Our second quarter was impacted by many items, which we will discuss with you here today, to give further light on our fundamental trends and results, which continue to improve. There are 5 items I want to call to your attention here today. First, our revenue growth trend from both organic business and our acquired business from prior year continued to perform well, given the impact of the Q1 related negative GDP and the severe weather we experienced. As the second quarter matured, our trends continued to improve and the momentum we saw in June and continue to see here in July is stable and improving slightly. Second, our gross margins have held consistent with prior year, which is a fantastic result, given there have been continued regulatory cost increases this year, such as minimum wages. We've continued to be successful in passing through these types of cost increases and maintaining our gross margins. Third, our operating expenses have been impacted by certain acquisition-related expenses, some of which are classified as nonrecurring. We have had other costs in Q2, and some forecasted for Q3, related to the acquisitions and other items. Derrek will reconcile the larger items for you later on this call. My main point is to emphasize that we remain committed to our core operating expenses, they will remain in line with our previous expectations and that we continue to see the ability to leverage our fixed cost structure to improve our operating leverage…

Thanks, Steve. I'll start off today with a high-level overview of our results this quarter, then we'll drop in to a deeper discussion of our business results, the Seaton acquisition and future expectations. Earnings per share of $0.39 was $0.15 above our midpoint expectation of $0.24. Lower income taxes contributed $0.12 of the difference and lower nonrecurring acquisition costs contributed $0.03. In my commentary, any reference to our performance is based on a comparison to the same period a year ago unless stated otherwise. I'll be discussing adjusted EBITDA, which excludes nonrecurring acquisition and integration costs. We use this measurement within our business and believe it provides additional perspective useful to shareholders. Now let's take a deeper look at this quarter's results, starting with revenue. Total revenue growth this quarter was 7% as expected in the guidance issued June 2. Organic revenue contributed 3 points of growth, and the Q4 2013 TWC acquisition contributed 4 points. Monthly organic revenue trends were as follows: April, 2%; May, 3%; and June, 3%. Now let's cover gross margin and SG&A expense. Gross margin for the quarter came in as expected at 26.4%, resulting in gross margin being roughly equal to Q2 a year ago. SG&A expense of $96 million was $1 million less than expected, largely due to lower nonrecurring acquisition costs due to the acquisition of Seaton, which was completed on the first day of our third quarter. Compared to Q2 last year, SG&A was $7 million higher due to the following items: $3 million of ongoing operating cost from the TWC acquisition; $2.5 million of unique administrative cost, the largest being fees associated with the income tax benefit discussed earlier; and $1.5 million of cost to support the growth of the business. We also incurred $2 million of nonrecurring costs related…

Thank you, Derrek. Appreciate that analysis and commentary. The key to success for us is to ensure our growth efforts continue to remain focused on specialization. In regards to our customers' businesses, we have found that customers want a specialist out there serving them. At the same time, they expect those specialists are easy to access. This is where we have excelled, being structured in a manner so that it is easy for our customers to access our specialized services. Our focus in these important areas sets us apart from the competition. For our shareholders, they have an easy-to-understand investment that is focused on high-demand jobs with a specialized approach to customer service and candidate recruiting. This has proven to result in both strong growth and margin stability for us while we continue to focus on what's important for customers, that is, stabilizing their own cost structure and their own operating structure. We understand the importance of maintaining strong gross margins. We reflect that specialization we bring to the marketplace and we're pleased with our progress here in 2014. We believe we are well prepared to handle further minimum wage increases and the Affordable Care Act costs that will go into effect over the next year. Just as we have shown great results again here in the first half 2014 in absorbing and properly pricing employment cost increases, we feel we can continue this trend. The addition of the newly acquired service lines will quicken our pace in expanding our service offerings to our current customers, along with the acquired customers that need expanded services from our existing capabilities. TrueBlue is now the largest industrial staffing provider in the U.S. Our combined companies shares the purpose of putting people to work. Together, we can do more to help get people…

[Operator Instructions] And that's from the line of Paul Ginocchio from Deutsche Bank.

Just a quick 2 questions. I guess, one about SeatonCorp. I'm sorry, I just jumped on the call. Is there any trend or is the seasonality between the third and fourth quarter any different than you expected back when you talked about the deal? And it looks like there's a few more nonrecurring costs in the third quarter than originally expected. I think I had $1 million in my model. I think you're talking about $3.5 million. Is that correct?

So with the seasonality with Seaton, it's maybe a little bit more than we originally had in the fourth quarter. If we kind of break down what we talked about when we announced the transaction, we broke down a forward 12-month look into a back half of '14 look and a first half of '15. For the most part, the revenue there has largely stayed the same. We have, in that forward-looking guidance, moved $2 million of EBITDA to the first half of '15. That's not because anything really has changed in our overall expectations. When we originally did our estimates, we made the EBITDA distribution between the third quarter, the first quarter and the second quarter the same. And as we have gotten to know the business better, there's some cost that go into the third quarter to prepare the business for that big push that comes in the fourth quarter. So that there is the main change. When it comes to one-time costs, there is more in the third quarter, one-time cost that has to come with timing. So originally, we had expected in the second quarter, $4 million of one-time costs related to the integration and acquisition of Seaton. We came in $2 million less than that. So in the third quarter, in our expectations, it's $3.5 million. There's some more detail in the decks. I think to kind of wrap up the one-time cost, our total expectations of $7 million haven't changed, it's just the timing.

Yes. Thank you for that, Derrek. And Paul, appreciate your questions. Just to reiterate what Derrek said is, no change overall to our estimates, just a slight timing difference between quarters on both the revenue estimates, EBITDA estimates and the recurring cost estimates. So yes, we remain where we were a month ago, it's just in different quarters.

Great. And then, Steve, we're seeing a nice acceleration in the ASA Staffing Index. And this morning, obviously, initial claims breaking out to the downside, which is quite positive. We're just not seeing quite in your kind of implied fourth -- third quarter 4% organic growth, we're just not quite seeing the acceleration that maybe the ASA Index is showing or maybe that -- maybe we had kind of optimistically hoped for. Is there anything going? I mean, do you see that in the marketplace or is the ASA Index maybe overstating the acceleration?

Well, you have to remember that index is a broad index of lots of different types of jobs. And so that's the first thing that's hard to peel out of there. As I mentioned, Q2 was hit pretty hard. And we do know that our Staffing Solutions, especially the project-based business, is somewhat the tip of the spear on both a rising economy and a falling economy, and Q1 hit us a little harder than we'd realized. And when we saw the reestimates of what GDP did in Q1, it all made sense. Not just -- I mean, maybe the weather drove that GDP and it's all the same thing, but Q1 hit us a little harder than we realized. That's one of the reasons, I mean, you hear us applauding and being excited about 3%, 4%. It grew from 2% to 3% to 3%. And now here in July in the third quarter, we're seeing 4%. And I know that, that's not robust, but it's stable. And we are in the right sectors and recruiting the right types of jobs. And we remain very optimistic that onshoring of manufacturing, logistics, and we're in those spots, and as we mentioned, the power of bringing these 2 groups together. So no, we're not disappointed. And I hear the callout of the different types of jobs of what might be growing now, but we have the momentum we need right now.

Great. Steve, you're not seeing any slippage in revenue from the branch closes, are you?

No. We're on target for that. And like I mentioned, we're going to take it day by day and ensure that there's a benefit there and that the teams are coming together and that we have the opportunity to serve the customers. And actually, on the customer side, it's going very well. The ability to contact and be with the customer and the way we're running our sales teams is not the concern. What we're really taking day by day is with unemployment drop being quickly, we need to find the right worker count every day, day in and day out, for our customers. And so as we're using more of the centralized nonline recruiting services, we have to analyze that day in and day out until we find the worker count we need to, without as many branches. And so that's what we're careful of right now.

And your next question is from the line of Sara Gubins from Bank of America.

Could you give us some more color on the seasonality of Seaton in the first and second quarter? Just how revenue breaks down and if their margins are -- if there's much of a variation in margins?

Sure. Almost 45% -- let's call it 45% to 50% of the revenue is coming in -- well, let me make sure I get this right here. Seaton, on a pro forma basis, will do about $700 million of revenue this year. Remember, that's pro forma. So not actual. About $250 million of that comes in the fourth quarter, and the rest of that revenue is spread quite evenly across the quarters. When it comes to gross margin, remember, the overall gross margin directionally that we're expecting out of this business is about 16%. What you'll see seasonality-wise from the first quarter to the third quarter is that growing, say, 100 and 150 -- 100 to 150 basis points. That's mostly as folks in the OWM business hit payroll tax thresholds, and that cost comes down. And then in the fourth quarter, the gross margin can drop, say, somewhere around of 100 basis points in that quarter. That's not due to any change within the different service lines, but more of a mix issue, because that OWM business is so seasonally focused in the fourth quarter, which carries a lower gross margin than the rest of the business, bringing the blended average down in that quarter.

Okay, great. So if we think about the $330 million to $340 million that you're forecasting for revenue in the first half of next year, kind of splitting that evenly isn't an unreasonable way to do it?

No, not at all.

Okay. The 4% organic growth target for the third quarter, is that now back to normal or are there any project drags in there? And then if you can give us an update on construction and energy projects?

Sure. The 4%, that was not any big overhang out there, just to give everybody a recap here where our organic trends have been. Remember, we got hit pretty hard in February with the weather trends, so if we took a look backwards here on revenue -- let me see if I have that handy and I'll give it to you by month. Organic revenue in April was 2%, and May and June came in at 3%. As we ended June, that was the back half of June, that was closer to 4%. That's where we've started off in July, and I expect that trend to continue. From a construction perspective, we -- I think, well, April was about 10% negative overall year-over-year in our construction business. And we finished June at flat, so that was a nice trend to see. We hoped that, that would, and saw some initial signs. And I can't really comment on where things are headed in July, it's too soon to comment on that. But we're pleased to see the turnaround in those construction trends.

Great. And then just last question about the branch location closings. It sounds like it's going quite smoothly, given that you're able to do another 20 in the third quarter. I know that you were planning on watching the summer and making sure that it was all smooth. Were there any things that surprised you in terms of either client or potential worker behavior that's causing you to make tweaks to the way that you're thinking about this?

No, we haven't had any big surprises come out of this. The third quarter here, it's primarily in the labor-ready business, and that is its seasonal peak. So we're moving forward cautiously with that timing. Those 20 branches are very doable. So we are watching it closely and paced. And if we can get 20 done, that's kind of our target here for Q3. We'll certainly do that. But we also want to watch this really carefully through the busy season. But bottom line, there haven't been any big surprises and this is going right on track with trend and plan on what we hoped we would leverage out of these, and no disruptions to the business.

And your next question comes from the line of Kevin McVeigh from Macquarie.

Wondered if you could just give us an update, Derrek or Steve, on how the current pricing environment's been, and if you're able to widen out the spread in terms of bill to pay rate.

Well, I'll preface this saying it's always been competitive. It still is. I will say that our teams are doing an outstanding job here, and I think that's reflected in our gross margin. Now I didn't comment on it in my script, the overall gross margin here for the business is almost the same as it was a year ago. I think it was just 10 basis points lower, despite the fact that we have about 40 basis points of headwind from the TWC acquisition. So that's strong evidence that our teams are executing very well on bill to pay rate spread and adjusting the bill rates as needed, just doing great blocking and tackling, month in and month out. So I think we're doing a good job, really across the board, in managing both those dynamics.

Got it. And then, Derrek, along those same lines, how should we think about, obviously, you're doing a real nice job on the step-up in productivity vis-a-vis technology. But how are we thinking about that relative to overall margins and kind of the one-off, if you will, in the worker's comp kind of improvement on that? Should that be net neutral over the course of the cycle, or do you think the productivity enhancements offset any kind of headwind, if you would, from workers' comp, or am I not thinking about that right?

Well, I think we should probably put those in different categories. I mean, I don't think there's really anything to talk about right now on worker's comp. We've had pretty stable trends there. When it comes to the productivity, we're really looking at what we are doing on an SG&A percentage and what we're doing with billable hours and revenue and gross profit per employee, and those are all really headed in the right direction. And I think we've got, while we're not prepared to talk about all that today, as far as numbers go, where we're headed with technology and the size of the branch footprint that we have, we have so many opportunities in reducing this. And the Seaton transaction, as Steve has mentioned, is going to be a big help for us on that. We have a lot of planning going on in that right now. It's too early to talk about all that. But I'm confident that both of those things are going to really help us in the leverage that we've got in our legacy business.

And your next question comes from the line of Jeff Silber from BMO Capital Markets.

We've been reading a lot about supply constraints in a number of different areas, and I know it's creeping in, potentially, to some of the areas that you focus on. I was wondering if you can address that, if you're seeing that and what measures you're taking to offset that?

Yes, with unemployment coming down, we do feel the impact. As we all know, part of that unemployment coming down is people dropping out of the workforce. And the long-term unemployed is becoming a larger number, and those folks that have totally dropped out, it's quite a shame, actually. So that's part of the number dropping. But there is a slight constraint there. It is getting harder to find certain jobs and especially those with skills. But that's why clients bring us to the table, is the hunt for those folks. And in certain specialty jobs, our unfilled order rate has ticked up slightly, which would mean there's a little bit more demand than supply. It's not totally out of balance. We're paying attention to it, increasing our online presence and our ability to source workforce through an online ability is increasing, and that's helping. And we're not pulling back on our branch structure to the degree where we can't fill all of our general labor jobs right now. So in the general labor category, we're doing fine. In certain skilled jobs, the hunt is getting slightly tougher.

Okay, great. And as a follow-up, actually Derrek, I have some question about the guidance. Your third quarter EPS guidance of $0.38 to $0.46, does that include the impact of the nonrecurring acquisition costs? And if not, what would the impact be of those costs on EPS?

Yes, Jeff, our third quarter EPS guidance does include those costs, which are -- we expect to be about $3.5 million.

And how about the after-tax impact of that?

Just take it at 60%.

Okay, great.

Excuse me, 40% tax rate, so multiply by...

Sorry, about that. And in terms of interest expense for the quarter?

Yes, so let's talk about that for a moment. The interest rate on our debt is running about 2%. We started out the quarter with about $190 million outstanding on that. We'll finish at $170 million, so that gives you a kind of a breakout run at, run 2% on 180 -- excuse me, $180 million, not $180,000, $180 million of debt and drop that in to, as an addition to your model.

And the $20 million in lower debt at the end of the quarter, is that the run rate going forward?

I would guide you this way. I'm glad you asked that question. Let me address that. We'll drop down to, I'll say, $170 million of debt at the third quarter, because of the seasonality, particularly with the Outsourcing Solutions group and their OWM business, that will climb up to about $200 million at December. And then if we want to take a look towards January, I believe I have that number here for you, that's going to drop down considerably, maybe up to 150 -- down to $150 million of debt. Let me take a look at that one real quick before I give that to you. Actually, let me come back to that one, Jeff, if you don't mind.

Not at all. Actually, that will be very helpful. I think that's it for me.

Let me -- I got it. Why wait when you have it. All right. So that $200 million of debt that I talked to you about, that will drop down close to, say, $150 million, $160 million in January. And then we'll start a slight seasonal build. You can just kind of take a look where our accounts receivable is, but the main thing here is the jump from Q3 to Q4 that will happen each year with that seasonality.

[Operator Instructions] And your next question comes from the line of Randy Reece from Avondale Partners.

I was wondering if we could discuss the seasonality of the RPO business in particular. Does that business look more linear, or is there a particular quarter or 2 where they have more activity?

Yes, I want to say a little bit more at the Outsourcing Solutions group level, but what I can say here, I think the best thing to think about this, Randy, is that the other offerings that are provided there, these are going to be fairly linear types of margin profiles. The one thing that's a bit different in the areas that are not Staffing is these are our larger customers, and there can be a little bit of lumpiness, but not that much. It's just when you bring on a large customer, let's say an RPO, it's -- the economics here is not as cookie cutter as Staffing. In other words, you have to prepare, right, for that large customer, bring on -- you've got startup expense, you got to gear up ahead of that revenue stream. Whereas in a traditional Staffing-type of environment, the economics are pretty cookie cutter, everything kind of falls in line with that revenue. With that said, I don't think that's too much for you to worry about, as you take a look at future expectations and if there's that type of lumpiness, we'll certainly explain it. But I don't think it's anything to be concerned about.

It's early on after this acquisition, but what are your thoughts about balancing the desire to invest in the growth opportunities of SeatonCorp versus -- to maximize current earnings from that business?

It's a great question and we've got to let the dust settle here on the integration. But as mentioned here today already several times, we are excited about these platforms. They are the high-growth items out there in the HRO space, and we're mainly North America, so we feel like we've got a big field out there to go play in, in both RPO and MSP. This is exciting stuff for us. We're going to stay mainly focused in North America for right now, because what we have found is the amount of request for proposal in the staffing services, because we couldn't serve the larger accounts at the lower margins that the bidding process was going for, we now have a partner. We can flip those RFPs over to the outsource group. And the same thing is going on over at the outsource group. They come across client requests and requests for proposal that they just can't quite fill the demand at the local market level in the speed that's necessary or the order size or the type of position, and now we have a place to flip those back. So the main thing for us is one, get it integrated, get the efficiencies out of those things that we can do. And two, then jump right in to grabbing these cross-sell opportunities here in the U.S. We'll get that. We'll grab that quickly. I think we're going to be better prepared to answer that question in 6 months. Now what? As Derrek talked about, the debt levels, and we've got to make sure we really understand the seasonality of the business and what it does to cash flow demands and the debt levels. And by spring, we're going to know that we got it right. Just as we mentioned here today, that 1 month ago, we didn't quite guide properly between Q3 and Q4. And now we've got that under play. And so we have a lot to learn here.

Looking at the business mix on the staffing side for Seaton, how much of that business is essentially managing the customers' employees, as opposed to more like temporary staffing? And is there a difference in the growth rate between the two? The more of the outsourcing business you do, you're not going to get the same gross margin managing the customers' employees, but I would think that your cost structure would be different, too.

Yes, that's the goal there. And as we've mentioned, getting similar EBITDA margins out of these is going to be important for us. When things are booming and the construction business is booming and we're getting higher gross margins out of our staffing services solutions, they're going to drive higher EBITDA margins. But in an overall cycle, and the averages of all this and really where construction's been in the last 5 years, we can drive similar EBITDA margins out of these businesses. And we can surely grow them from where they are on a consolidated basis.

And your next question is from the line of Mark Marcon from RW Baird. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: First of all, just wanted to ask about the base business, the legacy business. Can you give us a feel for where Boeing turned out?

Yes, I can talk about that, Mark. The Boeing business, the run rate, what we turned in this quarter, has been the same run rate of revenue that we've had for the last 3 quarters. You'll find us talking about that much less going forward, just from the standpoint that now that has come down to a pretty stable level, it's -- I mean, now, it's less than 1% of our pro forma revenue running forward, but it's stable. It's just a small amount at this time. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: I appreciate that. I was just trying to take a look at your organic revenue growth rate ex Boeing since that's still a drag.

Yes, not too much impact there, Mark, from Boeing. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: All right. And then can you break down what you're seeing with regards to the various brands that you have, in terms of the legacy business, in terms of what's growing and what isn't, in terms of that 3% to 4% organic growth?

Well, maybe what I can do here is just kind of talk directionally what's going on and I'll talk about this a bit at a -- starting at kind of a quarterly level. I mean, if we were to compare back to what was going on in Q1, I think the main change here, particularly as we look through this quarter, was the reversal of the construction trends. It's running, say, down about 10% and that coming around to flat as we finished the quarter. Most everything else in the business has been pretty consistent, both from an industry perspective, as we look across the board, and also geographically, not any big standouts. So I think this theme that we've been talking about over the last, let's call it, year or 2, about this being widespread across sizes of customers, across geographies, really still applies to this quarter. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay, so no real regional differences, no real differences between the various elements of the brands in terms of the trends?

Not really, Mark. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then with regards to the closing of the 20 branches, where would you expect those savings to come in?

Are you talking about time periods or where we would see the value in the P&L? Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: No, how much would you expect? You've given metrics before in terms of how we should think about those.

Yes, thank you for clarifying that. The general EBITDA impact per branch would be roughly about $100,000 annually, and about half of that is from headcount, from a position, and the other half related to reducing fixed cost. This is net, by the way of some estimate of revenue loss and associated gross profit. So let's call it about $100,000 of EBITDA benefit that will pace in, not all at the time we close it. Half of that will come relatively quickly because of the fixed cost nature of it. The variable piece with the headcount, we'll phase that in. I mean, if there's a position open somewhere in that market, it comes quite easily. If it's not, we go through a process of making sure we retain the best folks and oftentimes, other positions open up and we move folks into those positions. So that's how I would think about it. So that other half may take a couple of quarters to phase in. And I would also say as we go in here to the third quarter, we're doing our closings, we're going to be careful about that, because we have -- we want to watch this headcount really, really closely and make sure that we're not reducing that too fast in the third quarter. This is mostly labor-ready, hits its peaks here. We're managing that very close as we look forward to the rest of the year, for sure. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Great. And then can you talk a little bit about the texting initiative and the mobility initiative, just in terms of how that's going? And what sort of impact are you seeing with regards to the fill rates that you alluded to earlier?

It's been a real efficiency gain and really turned out to be a huge benefit for the workforce and the feedback and the comments there have been our largest gainer so far. While we have these branches still open though, the dependency hasn't been totally cut off and so we don't force it. We take the path of least resistance there. One thing we do know is it can happen. As far as use of, and the number of workers flowing through there, it continues to increase. The number of messages continues to increase every quarter. The use of the system increases and -- which just feeds our confidence level of really not needing that branch for morning dispatch purposes. So that gives us the ability to push the consolidation efforts a little bit stronger, especially as we're building a sales force outside those branch walls also that covers a given marketplace, and we know the customers are being taken care of, and -- without that branch location. So it's kind of a larger package than a one-off thing. It comes into play with paying in the afternoon and building the sales force, along with our most current initiatives that are underway is, how does the worker really find us and apply in a branch? And that's the #1 initiative underway, is without that branch in play, can they still find us? Can they find us online? Can they find us in other ways, at community events and job fairs? And what does that pipeline look like? So it's so larger than just the one item to isolate. What I can say is we're happy with the effort. It allows us to go -- take it further and really reduces the functions that are going on in the local market to a deeper level. So it is the thing that provided the spark to move everything else forward. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: And so given that you are proceeding with that, in the regions where you've done more of these closures, obviously, you're not pulling out of any specific market. But where you've done more of those, you haven't seen a material change in the fill rates that's different than the other markets where you haven't done as much?

Well, we have a few one-offs that were pretty bad examples. We won't talk about those, because we have some one-offs that were home runs. So you look at the mainstream, you know, how the 80% are going, and they're going as expected. We just got to watch it closely, like we stated here. It's a day in and day out thing in the middle of this busy season, and as unemployment trends change and it's pocket-based. The main thing is fill all the job orders and that's more important than consolidating the branch. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Yes. And then can you discuss the bill rate changes that you ended up seeing during this past quarter, in terms of where bill and pay rate changes ended up coming in?

Yes, I -- we've been a little hesitant to share that because of mix changes, but let me see if I can give you some directional piece of guidance here, Mark. When -- if we're taking a look at where bill and pay rates are going, I would say, I'm just kind of scanning things through here, because I don't have a mix-adjusted calculation here in front of me, but I would say we are running approximately, let's call it here in the second quarter particularly, around 2%-plus on bill rate inflation. Let's call it 2%, just around there, and pay rates are averaging something less than that, maybe in the 1% range. So we saw some nice pickup here. And actually, we've been doing quite well on this whole area over the last couple of years here with our pricing. So we don't see any changes to that. We're doing a good job here and feel really good about where we're headed. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Okay. And do you think that, as we take a look at like the California minimum wage changes, as we look ahead, that bill rate change continues to edge up?

Yes, I think you will. I think we can give some more color on that in the third quarter. Let me kind of address that and give you a little bit of fill-in there in California. That is our biggest minimum wage increase for the whole year of any particular state. The minimum wages increases that we have for the year this year, that's about half of it. I'll tell you, we are thrilled at where we have started this process. We take a look back where we ran in July -- I'll throw out the first week of July, because you got the holiday week in there, where things can look at, could come into trends on those holiday weeks. But you take a look at the 2 weeks following that, we executed extremely well here. We, not only have we passed everything through, gross margin has stayed the same as what it exactly where we expected. We had no slippage right out of the gates. The thing that we need to be, I'll just caution everybody here on, while we are thrilled, we couldn't have started any better, the thing that we haven't seen is well, what happens in the next month or the next month, is there any attrition from clients, or competitively, folks that didn't do those types of pass-throughs where that trend could erode. But we're thrilled about it and think that that's just another kind of testament to our confidence to be able to continue to pass through these regulatory costs, particularly in the Staffing Solutions group, with our track record and history there. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: All right. And then I'm sorry I missed it, I know you mentioned it, but I didn't copy it down as quickly. What was the assumption with regards to the tax rate for the third quarter?

40% effective income tax rate. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: So no assumptions with regards to WOTC?

When it comes to the -- I'm glad you brought this up, I know this can sometimes be confusing for those that may not follow this day in and day out with the staffing industry. When we're talking about WOTC, and I think what you're referring to here, Mark, is the renewal of WOTC for the 2014 year, which that has not yet happened. And so from a GAAP perspective, we can't recognize any of that until the approval goes through in Congress. And by the way, I don't have really any updates on that. And at that time, we will recognize it from an accounting perspective. And we don't pull into our guidance any speculation around those types of things. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: And some of the exceptional performance that you had during this last quarter with regards to recognizing some things that occurred previously, is there any anticipation that any of that could come through at all, or you've pretty much captured everything?

Well, I would describe it this way, Mark, we don't have anything that we're anticipating in the tax line that we have a high confidence enough that we can put that into the forecast. What I will say when it comes to WOTC and our overall tax planning strategies, is we're always working that very, very hard. And I don't have anything to report here, but there could be in Q3, could be in Q4. But I don't have anything that I'm speculating or have ready to talk about there. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Can you just describe the early interactions, both with regards to the Seaton folks in terms of what sort of levels of turnover you're seeing over there, relative to what they were experiencing prior to the announcement, the level of enthusiasm, and some of the early interactions that you may have had with some of their clients?

Yes, thank you for that. It's been powerful. We've been together 3 full weeks, heading into our fourth. That first week, we got senior teams together, and I've got to tell you, there was more enthusiasm and more ideas about how to share these requests for proposals that both couldn't fill. That recognition was strong. And so we immediately put that process in play to capture that work and I'm excited that that's really going to drive some better results as the process takes hold and we actually address those gaps. So that's good news. Turnover of senior team meetings -- members, has not been -- hasn't even happened. We've retained everybody that we intended to. I know we are only a month into it. Key leaders, down 2, 3 levels, there's just been no change. They're quite excited over there. They were owned by a great private equity firm, but they knew they were for sale, and when they were ready to go through the process and where they might land, and they're thrilled that they landed with an organization that's just building a new platform in outsourcing, rather than landing in one where the senior team might have been marginalized and been called a synergy. And they're excited that that's not what they're being called right now. And they're part of our growth strategy and the importance of running that business and retaining them. So they've been engaged, not only in integration, but how to run the businesses better. So we're real excited about that. Interaction with customers has been strong. In our legacy businesses, we serve 140,000-plus customers. Besides a handful of intimate customers that we've discussed on this call once in a while, most of the customers are small, regional, even if they're a large player, they're served on a smaller regional basis, and the customer intimacy side on our legacy businesses isn't that high. They serve 150 accounts, and the customer intimacy over there is really strong. And then, so getting to know those customers and understanding what their needs are, what their concerns are, is a lot more important on that side of the house. It's larger accounts. And so I've been spending time back there in Chicago every week, talking to their customers, talking to their leaders, attending their client forums, been involved with some of their largest accounts, and the enthusiasm and the acceptance of being part of a large publicly-traded company that's governed well and the investment is stable. Most of those accounts are pretty thrilled that their management team has a fairly stable home and that the asset won't be trading regularly amongst private equities. So again, the private equity owners, Leeds, managed this one very well, grew it nicely, and the team was very -- enjoyed working with them. But they're also excited to be part of one of America's most trustworthy companies now, as identified by Forbes. So all that's good.

And your next question comes from the line of Josh Vogel from Sidoti. Josh Vogel - Sidoti & Company, LLC: I'm sorry, I missed the comments you had about the branch consolidation in your prepared remarks. So I was curious, what you -- how many branches you ended Q2 with?

Josh, Derrek here. So we ended the second quarter 2014 with 722 branches. Included in that count is, as we count them, are 3 additional branches. I will just point out though that those 3 aren't the traditional branches. These are more, let's call them, temporary on-site locations without bricks and mortar. So they're included in the count, but that's not new fixed cost structure there. Josh Vogel - Sidoti & Company, LLC: Okay. And you said it, on the last call, you had plans for about 40 more closures throughout 2014. So you had 15 in the quarter. Are you still on pace for the 25 in the back half of the year?

Yes, directionally, we're on pace with that. We're very comfortable with that number. It's a matter of timing and making sure that we don't disrupt any operations. The only thing that we've talked about here and I'm not hedging against this at all, we're very comfortable with the number. I just want everyone to know that as we go into the third quarter, it is our busy season. So what we don't want to do here is not serve the customer well, disrupt operations. Put this another way, we don't want to step over dimes -- step over dollars here of long-term value and pick up dimes in the quarter. So we're going to just continue to manage that way. But we're very much on track for that 60 branches. Josh Vogel - Sidoti & Company, LLC: And you also, on the last call, talked about and you even mentioned it this call, that your average revenue per branch is up 40% over the last 5 years. And you did give us some numbers of, I think it was like $1.65 million in '08, $2.3 million per branch in 2013. So now that we're halfway through '14, do you have a sense where average revenue per branch is today?

I think I have that, let me take a look here for you. I don't want to quote that one. So average branch revenue right now is running about, let's call it, $2.2 million per branch. That does exclude any skew that could happen by including the PlaneTechs operation. Josh Vogel - Sidoti & Company, LLC: Okay, great. And just lastly, building off one of the earlier questions about the e-mail and texting platform. This may be hard to answer, but is that -- are those placements, or is that at a scale yet where you could give us a sense of what percent of your placements come from that platform and where that stands versus a year ago?

Yes, no, we can't give you the number, nor do we feel that it's meaningful for you. Maybe a better number as we develop out our online recruiting, how many people are we contacting or recruiting online, it might be a more meaningful number. Because keep in mind, all of these workers we're texting, we've already dealt with and onboarded at the branch level. And it's just how we get them assigned out to the job each day. They don't need to come into the office to pick up their work ticket. And so really, the benefit of giving you that number, how many went through text assignment versus came in and got the paper doesn't drive results. From a management point of view, it helps us understand, can we really consolidate another branch? Do we have enough people being texted and getting their assignments? Or is that branch necessary for morning dispatch, but it's not driving anything else. A more meaningful item would be, without a branch in play, can we still find the workforce? And how many are signing up online in other ways that we're finding that workforce? And so as this gets a little deeper into the year and into early next year, we will possibly be talking to you more about that, because that's the next giant step forward in really reducing that dependency.

And now, I would like to turn the call back over to Steve Cooper for closing remarks.

Well, thank you. We appreciate you being with us today and sticking with us and understanding how our trends are performing and especially this newest acquisition, as we're learning and disclosing and guiding you through that process. Really appreciate you hanging in there with us. We're excited about our momentum. And although, in a large acquisition, the first quarter or 2 takes a bit to get it straight, hang in there with us, the momentum is there, the revenue's growing and the EBITDA margins are -- have all the ability [ph] to keep expanding. So thank you, and have a great day out there.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.