Good afternoon. My name is Connor and I will be your conference operator today. At this time, I’d like to welcome everyone to the First Quarter 2016 TrueBlue Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions] Thank you. Derrek Gafford, TrueBlue CFO, you may begin your conference.

Good afternoon, everyone. Here with me is CEO Steve Cooper. Before we begin, I want to remind everyone that any forward-looking statements made by management during today's call are subject to the Safe Harbor statements found in TrueBlue's press release and SEC filings. Any forward-looking statements in today's call speak only as of the date of which they are made and we assume no obligation to update or revise any forward-looking statements. The company's first quarter earnings release and related financial information are available on TrueBlue's corporate website at www.trueblue.com under the Investor Relations section. This call is being recorded and a replay will be available on the Company's website. The discussion today contains non-GAAP terms including but not limited to EBITDA, adjusted EBITDA and adjusted earnings-per-share. Adjusted EBITDA excludes non-recurring integration and acquisition cost and processing fees related to the capture of the worker opportunity tax credit. Adjusted earnings per share excludes non-recurring acquisition and integration costs, amortization of intangible assets, WOTC processing fees and adjusted income tax expense to the ongoing expected rate of 32%. These are measurements used by management in assessing performance and in our opinion provide investors with additional insight on the underlying trends of the business. Please refer to the non-GAAP reconciliation on our Investor Relation’s website for a full reconciliation of both current and historical periods. I’ll now turn the call over to Steve.

Thank you, Derrek. Good afternoon, everyone. Today, we reported our 2016 first quarter results. First quarter revenue grew 13% to $646 million which included 4% organic growth and 9% from acquired businesses. Adjusted EBITDA and adjusted income per diluted share both grew 9% for the 13-week period. Our results for the first quarter were disappointing compared to our expectations. I want to share five areas impacting our results and the outlook provided today. One, organic revenue has recently slowed; two, gross margin compression related to wage inflation; three, SG&A increases outpaced revenue growth; four, change in scope of services for our largest customer; and, five, the recent acquisitions are performing better than expected. First, organic revenue slowed in our Staffing Services during the quarter and in particular March resulting in less overall revenue than expected by $20 million. We missed our expectation regarding organic revenue growth. We had expected 7% organic growth during the first quarter and only produced 4%. Our organic growth was over 8% in January. It reduced to 5% in February and for the month of March it was negative by almost 1%. There was surely a shift in demand as the quarter came to a close. The quarter slowing through the quarter was across many geographies and industries that we serve. The slowing was especially pronounced for our large national customer base and the retail industry in particular. On a more promising note, our services to construction clients grew at about 10% in Q1. And our services to our small and mid-sized clients also grew at about 10%. The outlook we have given today for revenue growth has been impacted by the mixed trends I’ve just discussed with you. Regarding our outlook, it remains promising that we’ve seen smaller accounts and our local accounts continue to…

Thanks Steve. Total revenue grew by 13%, with four percentage point from organic growth, and nine percentage points from previously announced acquisitions. Total revenue growth for the quarter was, or total revenue dollars for the quarter was $646 million or about $20 million less than our midpoint expectation, as a result of slowing growth during the quarter. The revenue shortfall was concentrated in the staffing services segment, with roughly half of the shortfall coming from the branch base operations and half from on-premise operations. From an industry perspective, overall growth in retail was flat, but down 10% within the branch base business. On an overall basis, manufacturing grew by 5%, aided by new customers in the on-premise business. Excluding the success in on-premise, manufacturing declined by 10% across the larger customer base of the branch based operations. Transportation and logistics related industries were down roughly 5%, while construction continued to show promise for the year ahead with growth of 10%. On a segment basis, revenue for the Staffing Services segment was up 10%, or 3% on an organic basis. Results were generally mixed for the quarter in this segment. Large customer growth was flat for the quarter, versus an expectation of mid-single-digit growth. We saw some movements towards a leaner workforce strategy within parts of our national customer base, and these trends continued to show softness entering the second quarter. Less demand from the company's largest customer contributed to the shortfall in the on-premise business. Small to medium-sized customers showed signs of strength, growth accelerated to nearly 10% in comparison with 5% growth in Q4 2015. Revenue for managed services was up 84%, or 17% on an organic basis. Organic growth was driven by strong growth in the MSP business. Now let's discuss the company's profitability for the quarter. Total…

[Operator Instructions] Your first question comes from the line of Kevin McVeigh with Macquarie. Your line is open. [Indiscernible]

Kevin McVeigh, your line is open.

Steve, Derrek, can you hear me?

Yes. Yes. We can hear you now. We were getting a lot of feedback there for a minute.

Sorry about that. Hey, thank you so much for the detail very, very helpful. My question is Steve, if I heard you right it sounds like this is more of a soft patch as opposed to meaningful change in fundamentals and make just the Amazon change in scope weighing down the results a little bit. Can you help us understand if we're thinking about that right number one and, number two, how much and I can do the math unfortunately just I don't have my model in front moment of me how much of the business is Amazon today and how should we model that over the next couple of quarters as that scope runs out?

Yes, thanks, thanks Kevin. I will take first part of that question while Derrek will grab those numbers on that account. We’ve been here before where the first quarter is a bit soft and organic revenue falls of a bit and really the last couple of years we haven't had strong organic growth in the first quarters and we're -- the year turns out as a whole okay and last year we had a booming second half. This is a bit different. The strong economic growth and especially temporary staffing has been driven by large accounts the last five years wherein our branch based delivery system we’ve moved our large accounts from 7% up to 25% plus and now we're seeing that at the front end of 2016 that some of these larger accounts are -- they have reduced their orders and a lot of its project based work, where we were helping them with remodels or resets or very large projects, even our energy business is very project driven and some of these larger projects with larger customers have become soft. That's the downside of what we're seeing, Kevin here in Q1. The upside is the small and mid-sized accounts and the investments that we've made in our business during 2015 are really paying off because that other 75% of our business is growing and so we believe the things and the strategies we put in place are working, but when a large account changes its strategy to not do any remodels in the first quarter there's not much we can do about it. So that's the first part of that question. I think I will walk through our largest account with Amazon and the reasons why they made a shift what that means for us and it's a little busiest a slowdown here in 2016 but we will be back on the high growth engine with them as soon as we stabilize and help transition the business around and as they do it a different way so we can re allocate our resources to their highest growth. That's some of the outlook.

That business represented about $350 million of revenue in 2015 and we're talking about a revenue base this year of approximately $200 million.

Okay. And is that -- is it fair to say, Derrek, [Indiscernible]?

Try repeating that one more time, Kevin. You cut out.

Sorry about that. The margins associated with that business are they below the corporate average in line or how should we think about it from a margin perspective?

Yes. They're a little bit south of the company average.

Okay. And then just my final question. How long would it be before you would start to see some of that come back in terms of change of scope of services with Amazon? Is that two quarters or three quarters or how does that typically play out?

Yes. These are new conversations we're having and they're sharing their plans with us an where they need us so -- it's going to take us a couple quarters to ramp down some of the sites and we're not going to help them in certain fulfillment centers in U.S. during the busy season and we’re going to restart reallocate some of those to the delivery stations. That ramp-up some of it will take place in 2016 and that's built into our outlook that we’ve provided today with the net effect is and then we kind of draw a line there and 2017 might not show a lot of growth from the numbers that we provided today as we still have a little bit of takeout here in the next couple quarters replaced by these fulfillment centers -- or these delivery stations, but what they have shared with us and the growth of -- as they bring those on it's pretty exciting and we are re-establish that growth in -- it's going to take us four quarters, Kevin to work through this start seeing the growth again.

That's helpful but again my kind of key take away feels like it’s more one-off-ish as opposed to macro specific.

Oh, I think so on this one. This is an account that is -- has rapid growth in them and they have had it the last, five years and this is a new form of business trying to get the delivery station closer to the customer so they can deliver faster and they're basically sorting centers where the fulfillment is done in a bigger center and now they're trying to get the package sorting on more timely delivery to the customer. So it's a growth part of the business for them and we're excited about it.

Understood. Thanks, guys.

Your next question comes from the line of Jeff Silber with BMO Capital Markets. Your line is now open.

Thank you so much. Just to focus again on the business with Amazon. Can you break out the business between the Staffing Services and the Managed Services? You mentioned $350 million in revenues last year. What was the breakdown for that?

Yes. This -- hi, Jeff. It's Derrek here. The revenue that I talked with you about this is really all Staffing Services. There's a very immaterial amount that we do outside of the staffing space. So this is a staffing conversation.

Okay. Great. That leads to my next question. I'm just curious why we're looking for such a sizable decline in organic growth in the Managed Services business if Amazon doesn't really have much to do with that?

From an organic perspective you're talking, Jeff?

Correct. You did 17%, I think, in the first quarter.

Yes. Of organic growth?

Yes.

And you're saying why wasn't that.

I'm sorry. Your second quarter guidance looks very really steep decline in that number. What's impacting that?

Yes. Sure. Sure. Well, let's talk about what boosted the performance in Managed Services. A portion of that was our MSP business, which what we're talking about here is in Managed Services is roughly a -- you know, let's call it a 150 to $175 million business. We have an MSP business that makes up 125 million dollars million dollars of that and they had a very strong quarter this quarter, brought on some nice accounts. It was drilling well last year and those accounts picked up pace. That's been offset by some softness, though, in the legacy RPO space. As we finish the fourth quarter and entered the first quarter we were -- had some push-back from customers just as far as our larger customers, their feelings about the economy and some hiring freezes and that's really incorporated into our outlook. That did tend to loosen up a bit here towards the end of the quarter as far as feedback we were getting with clients but our largest customers in our RPO space here domestically have been very cautious with their hiring outlook and that's the main thing.

Okay. Let me play definitely advocate a bit here. I do appreciate the fact that you guys do give annual guidance most staffing companies do not but considering the relative lack of visibility in the business why continue to stick your neck out by giving 2016 guidance?

Yes. I appreciate that. We did it in the first quarter because the two new acquisitions did come on and there was a bit of noise even in our own numbers so just to bring clarity around our cost structure and what we feel margins would be. Now here we are in the second quarter and there’s been a change with large account, the new acquisitions are still coming on. So this is really about if you take Q2's revenue which we feel we have some, you know, sense of what it will be and then build in a cost structure on a margin structure around that. So it's just giving you our best hands, Jeff. As Derrek mentioned a couple of time, it's not us trying to make guess on the long-term economy. It’s just what we see today. So, we can better give you what's on our mind because we have a bit more information than you have, but not trying to reach out and us understand any better today than we knew last year when we didn't know.

And let me adjust a little bit of color to that, Jeff. I appreciate the question. Steve rights on the mark here. We can’t really say it enough times of visibility of precision that we have but given the fact that we have given an EBITDA outlook and revenue outlook as we started off the year and clearly things have changed two reasons, you know, for that to add to Steve's conditions. One is, clearly conditions have change and if we didn't go out with that we feel like we would be doing everybody at the services. And secondly, as if you would imagine with some change and operating trends have questions about how we're going to run the business outside of the second quarter and if we're not out there with some form of annual guidance, it -- from regulation perspective it limit what we can say and we wanted to be able to talk openly and freely about how we see the year, how we're going to make adjustments and hit it from a big picture perspective outside of our normal guidance that we provide for the most upcoming next quarter.

Okay. I appreciate that. It sounds like you put a lot of thought into that. Just a quick numbers question, I will let somebody else jump on. The adjusted EBITDA guidance what's embedded from a gross margin and SG&A perspective? Thanks.

From an overall gross margin perspective we're talking about, you know, in the neighborhood of oh, about 24.5% on a gross margin basis. And we're talking about an SG&A increase over the same quarter a year-ago of roughly what we had in Q1, call it 16%, 17%. That would put you in the neighborhood of, you know, on an SG&A basis between $135 million to $140 million of SG&A. Included in that number that I just provided is about $3 million of integration-related costs that will be excluding from adjusted EBITDA.

Okay. Thanks really helpful. I appreciate it. Thanks so much.

Your next question comes from the line of Sara Gubins with Bank of America Merrill Lynch. Your line is now open.

Hi. Thank you. I wanted to follow up on a couple of things. First just going back to Amazon, were there any service issues or other issues that came up that might explain why they're pulling back in one area and growing in another as opposed to just growing with you as they grow?

No. We have really tight metrics with them and we have really hit those service metrics well. This is a shift in how they want to grow and as certain lines of business mature, they're showing their hand that they can do some of this themselves and some other lines of business that mature they're going to figure out a little bit different way to do it. So now in these new delivery stations it's new and there's of more of them, they're smaller staff and they're going to need more help because it's more spread out, but in some of these larger centers they're -- the growth is stabilizing how many they need in the United States and now it's time for them to focus on something else so.

Okay. So you're not being replaced by a competitor in this case it’s just that they're bringing it in-house?

I think there's a mix of what they're doing. We don't have all of their compact plans, but there’s a couple different strategy shifts that -- that they have put in play and some of it is learning how to do some of it in-house, some of it is switching it to the other partner they have so we could be freed up to work on l some other things. So they do like to have more than one partner doing things so for us to continue to grow and take on more and when they reduce scope for all partners then they it consolidate some of the other services to the other partner.

Okay. And given the -- the $175 million cut this year on the base of 3 $30 million of revenue, can we think about 175 as being like $240 million on an annualized basis just given the time of the year that they're doing the cutting?

There’s two important numbers here when it comes to this client, Sarah. So compared to last year we're talking about roughly $150 million less of revenue. In our earnings release deck we are bridging between our last guidance that we provided and the updated guidance from a revenue perspective and that is where you're picking up the $175 million of revenue. The difference between the two is the amount of growth that we expected to have in that accounts this year. So put another way we did about 350 last year in revenue and we were expecting to do approximately $380 million this year. We are now saying we will do approximately $200 million this year.

Got it. Okay. Okay. And that will kind of bleed into 2017 as we think about it because it will take time for the new business to start to ramp-up.

There will be some bleed into 2017, from an EBITDA perspective, though, what we have now and some discussions about the potential for some future business which has been discussed with us, we think we're at a relatively stable EBITDA base at this point.

Great. Okay. Then just turning back to gross margins and the challenge of passing on the wage increases, are you finding that your competitors are willing to give up something on pricing in order to get business? I'm wondering if these or competitive issues where your clients are saying that they wouldn't take the markup or is it more just negotiation and not wanting to lose the compliant perhaps to them hiring on their own? I'm wondering what the competitive dynamics look like.

Yes. It's a tough questions because we have 130,000 customers and it's hard for me to represent all 130,000 of those conversations so a lot of mine has to go off trends and conversations I have broader sales teams of what's going on, but in the face of a little bit slowing demand and as Derrek said we made some pretty good headwinds the first six weeks compression in the last six weeks. That was the exact same time that we were feeling a little bit of fall-off in demand. So when you're not re placing new work and there's not growth in your demand historical we have had a bit more struggle getting pass-throughs done. So it's more of an environmental issue than a competitor taking us out or competitor getting it done. But there's been some pretty stiff minimum wage increases around the country and we have had those conversations and as Derrek mentioned, we get the wage pass-through, but it takes a bit of time to gets the extra markup passed through. We still work for it. As we take on new accounts or we reprise business it's easier, but when you're working with an account that's not growing or a an account that's not change in their volume, it's a little bit tougher to move those bill rates as fast so it's kind of a mixed bag right now.

One additional challenge that we've had here, Sara and I don't want to make light of the challenge here in front of us because it is -- it is something that we still have to work on and we're seeing some movement on this gross margin side but one dynamic that's a built unique is the minimum wage in California this year began this year moved up by a dollar. It's a big increase and along with that there's some new sick pay regulation in the state of California along with that that's our single biggest challenge and so it's not uncommon when we come out of the gates particularly in a region like that with that size of increase to not be getting -- it's not that decent generally get the costs passed through. It's getting our markup on top of that that's the primary challenge. Now, getting that with existing customers is more challenging than it is in pricing in new business. We saw elements of this in the -- about a year and a half ago when we had a similar increase in the State of California. So we're still optimistic that we'll worked out of this like we did before, but it is a tighter overall labor market out there and so it is the challenge that we're talking about does extend some beyond the State of California.

Got it. Okay. Thanks so much.

[Operator Instructions] Your next question comes from the line of Mark Marcon with R. W. Baird. Your line is now open.

Good afternoon, Steve and Derrek. Can you talk a little bit about what you can do on the SG&A front in terms of making adjustments? You allowed to making some changes but wondering if you can give a little bit more clarity with regards to the scope and extent and when those would start hitting.

Certainly. You certainly can, Mark. I think it would help to frame this discussion into two categories. The first I'll call it the blocking and tackling area. This includes things that would fall into talking a look at headcount that's been added, is it productive, also looking at our productivity levels internally compared with the economic dynamics that are going on in a certain metro market we want to be look at from an internal perspective as well as what the opportunity is in a market and so a lot of that has to do with some basic blocking and tackling there. We've been working on and still believe that we have some additional synergies from a vendor perspective that are out there. Somewhat related to the consolidation or the integration of bringing Seaton on and some volume discounts and such. So let's -- right about that first category. The second is our more fundamental changes and sustainable changes and how we do business and so Steve talked about one example here and that's the -- our use of technology to automate -- further automate the matching of jobs within our branch network. So, what we're talking about here are more algorithm matchings that will we believe drive -- can drive a sizable amount of efficiency from an operating expense perspective as well as capture some more wallet share. Other things that would be on that list as far as changing the game from a cost center perspective. We're excited about some of the India operation that came with the RPO acquisition that we did from Aon Hewitt earlier this year, both in not just leading down the path structure and how we deliver our RPO services, but leveraging that model and that environment to lower our overall cost structure and how we're doing some services at TrueBlue holistically. And there were some other things in there as far as centralized recruiting and technologies that we can use to attract candidates. All of those would fit into category B to further lower our operating costs.

And so those operating efficiencies are built into your full year guidance, is that correct?

No. Really what's built into the guidance is about $25 million of cost reductions built-in right now and so of the revenue decline that we talked about those are -- and this has come on relatively fast by the way both the drop-off and the broader business as well as this news from our largest customer. So what has incorporated in there now is really the costs to size the SG&A base related to those specific revenue drops or put another way take the variable costs associated out of that and exit some on-sites and such. So, this other area of the category -- the second category I talked about more sustainable ongoing changes to our -- the approach that we take in delivering our sources or services there's really nothing built-in for that right now.

And I mean you -- we have been talking about technology improvements for a while and you've been executing against those. I mean how attainable would some material change be relative to what you have already captured and particularly in terms of putting it in place this year or in the next 18 months?

Yeah. It's been an initiative of ours for quite some time and we're making good progress. I kind of broke it down to three categories when we first started this over a couple years ago reducing the dependency on our local branches so we could bring a number of them down. As Derrek talked about the largest cost that we have is headcount and so that's about half of our SG&A and then the next largest is facilities. And so ensuring that we have those right-sized at all times is something that's really important. The initiative to say how do we reduce the dependency on that local branch for its recruiting and operational needs is we first started in the morning over three years ago that we started texting out the job assignments so the workers didn't need to come to the offices in the morning about the same time we started paying them on pay cards so they didn't needs to come into the offices and night and pay them. And over the last couple years we have been work on how can we reduce the dependency on the day time operations of what takes place in these branches so we can take one more large swipe at right-sizing the organizational facilities which is the key to right-sizing the headcount. Because once you have a facility, you need at least a minimum of three to four people to run it and our goal is in larger markets is to work in teams and reduce the facilities and then we can right-size the headcount faster. So, this last day time push is all around recruiting the candidate and interacting with the customer and so how does that work? How do they submit orders? And how do they know what's available?…

And of the 150, how many are closed?

No, they're all open. I'm just saying we could take another 150 out when all of these initiatives are done.

So, over the next two years?

Yes. Probably not start again for another six months to ensure that we have some of these things in play and then over a 12 months, 18 months window from there take another 150 out. So, your timeline is about right.

Okay. Great. And then with regards -- you mentioned the SMB portion of the business is doing well. How -- when you talk about that portion of the business, how big of your staffing services is that?

Well, it's about 75% of our business.

75% of the staffing business exclusive of the largest client?

Yes. Yes. In the branch base business.

Okay.

Of staffing.

And this with regards to what you ended up seeing between February and March, was that consistent across the country or was it really just some of those really large accounts that -- where that really practices pronounced?

Yes. No, it's where those large accounts existed and it's spotty. We have some strong states that are showing strong revenue growth and so it's -- really it's where those large accounts were. So, for instance, Wal-Mart we didn't serve them heavily in the West and California is growing through that even though as Derrek mentioned we're having some margin compression that we're fighting there, but at least topline is growing through that and we're working through that. That's what gives us hope that that's going to bounce here, but things like that it's around where these large accounts were being served, it's very spotty.

That's not necessarily a reflection of the macro-environment per se.

It doesn't feel like it except related to those large accounts and you would have to know what they're feeling and whether that's macro or not, but it's hard for us to give you a state-by-state run down and say that's macro driven. It's really being led by these relationships with these largest accounts.

And then the last question and I'll jump off and follow-up offline, but with regards to Amazon just, as you think about what the prospects are beyond this year, when they talk to you about those smaller delivery centers, how are they -- what sort of opportunity does that look like in a year or two years from now?

Yes. They have shared with us what their outlook and that's not for us to share for them, but it looks good for us and we have great relationships there. I mean we were asked a question earlier is this service related and it's absolutely not. They have put us on one of their toughest problems to solve based on our track records with them. The unfortunate part is business matures and they figure out how to do it in-house and they figured out how to do it for a lower cost and they come up with a new formula that is one of the challenges of being in our business. That's why people customers use us is -- and that's what we sell is that flexibility and then when that flexibility happens it's [hard] to talk too our investors today that it happens with these very large accounts. We've had to do it a couple times over the year, but it's nice to ramp up with them and on a day have a bit of a scope change, makes it a little bit more difficult, but what we do know is that their business moves rapidly and they are a leader out there in the online commerce and they have given us news over the past at times from here there and sometimes it can change in a few months based on their own volumes and their own business. So, we've kept a great relationship with them. We're work through these transitions on a great partnership level with them and keeping our head up and moving forward with them because that's the best way to be a great partner with that account.

I mean would you expect that that account would change -- would return to its prior size within a couple of years or is that too hard to say?

Well, there's certainly forecast for that. We're having a hard time just getting through 2016 and forecasting what that looks like. But we're -- yeah, as everything balances it's not an overall disappointing place for us. We just have to work through the balance in a 12 to 18 months window.

Great. Thank you.

Your next question comes from the line of Randy Reece with Avondale Partners. Your line is now open.

Good afternoon. First question where did you expect staffing -- or let's just say how much different were the staffing gross margins versus your expectations in the first quarter and how much did they change for the year?

Hi. Good afternoon, Randy. The staffing gross margins are about 50 basis points -- 50 to 60 basis points -- actually for the year the gross margins are probably looking up about 50 to 60 basis points lower than what we had originally expected and that's incorporated in our guidance here. For the first quarter, it's maybe 60 to 70 basis points disappointment.

It's kind of hard to peel off because of the effect of the acquisitions. The SG&A margin was elevated, I would think that would be primarily just the deleveraging effect, but you had indicated that there were some inefficiencies in the managed services business that you were hoping to take care of. Did you make progress on that front?

Yes. Our team has done a really nice job in the managed services side of the house as far as restructuring the -- what the headcount looks like there. I mean we've been really pleased well some of the movement that's been made there. From a consolidated perspective you're right. I mean SG&A -- I'm talking out any differences in one-time costs that we had planned. Let's call it on an adjusted SG&A basis, the costs actually came in $3 million less than what we had expected and so the difference in the SG&A as a percentage of revenue is really all about the deleveraging.

When I look at the construction business, I'm wondering if that is coming in-line with your expectations or is that has continued to be a little soft at the beginning of the year?

Well, the overall -- construction was up 10% for us. So certainly above the organic trends that we have been talking about here. So, we're really pleased with that. The first quarter is a seasonally -- our seasonally lowest from a total revenue perspective in the quarter, so it's lower in our mix. So, we're still quite optimistic about the season ahead as we get into some warmer weather months. So 10% growth we'll take that. We continue to get good feedback from our sales teams about what the pipelines look like. I think we'll have a much better indication of that if that holds its ground or possibly even accelerates once we close out the second quarter with some of the more traditional warm weather work that we do in that area.

All right. Thank you very much.

Your next question comes from the line of Kevin McVeigh with Macquarie. Your line is now open.

Hey, guys. Could you just give us a sense of how the trend in April have been relative to March?

Yes. It's a little tough because we have with this Easter holiday moving around, but -- Kevin you might need to put yourself on mute -- coming back in there.

Okay. Sorry about that can you hear me?

Yes. I can hear you. Okay, that's great right there. So, going into April the trends are generally right in line with our guidance small to medium-sized businesses still looks -- the growth looks good there. The larger customer trends -- our national account trends as Steve mentioned continue to be soft. From a gross margin perspective, early on it looks like we're getting a little bit more movement on this. So that looks like it has some opportunities as we go into the second quarter. And that's probably about as much as I can give you until we -- April is a tough one to give exact percentages with the Easter holiday moves around, but it looks right on target with what we're talking about from a guidance perspective.

Got it. Thank you.

There are no further questions at this time. I will turn the call back over to Steve Cooper for closing remarks.

Yes. Thank you. We sure appreciate your questions today and the interest in being on the call and we'll update guidance as we go through the next quarter. Thanks.

This concludes today's conference call. You may now disconnect.