Peter Quigley: Thanks for those insights, Olivier. Change at this scale and speed is never easy. But together team Kelly is proving that it is achievable. When I announced this transformation in May, I committed to you that we would optimize our business and functional operations in a sustainable manner that we would unlock additional value-creating opportunities and most importantly, that we would find new avenues of growth. Six months into our journey I can confidently say that we are delivering on our commitments. The measures we implemented in July to further optimize the company’s operating model have taken root, catalyzing a significant improvement in our EBITDA margin with additional runway ahead. We further strengthened our balance sheet and with significant capital available to us, we committed to unlocking value through organic and inorganic growth.
And through our large enterprise account strategy, we formulated a comprehensive approach to sales and delivery across business segments that will unleash the full revenue generating potential of our blue-chip customer base and accelerate profitable growth over the long term. Through these efforts, we’re closer than ever to realizing our collective ambitions for this great company. I’m grateful for the work of each and every member of Team Kelly, for embracing this moment and acting with urgency and agility to deliver on our commitments. With our team moving forward together, united by our noble purpose, I’m confident that Kelly’s best days are ahead of it. Kailey, you can now open the call to questions.
Operator: Thank you. [Operator Instructions]. We’ll go to the line of Kevin Steinke with Barrington Research.
Q – Kevin Steinke: Good morning, guys.
Peter Quigley: Good morning, Kevin
Q – Kevin Steinke: I wanted to start off by asking about the growth initiatives that are part of the transformation, you mentioned driving early results or favorable early results. I think you touched on the local branch initiative. I guess is that part of the transformation and maybe any others that you’d want to highlight?
Peter Quigley: Yes, Kevin thanks for the question. Yes, that is a significant part of the transformation. As I mentioned, we are revitalizing and reengaging our local branch network, adding resources to local markets the high-growth local markets, adding new technology and essentially creating our resources or putting our resources closer to the talent and customers as opposed to supporting them in a more centralized manner. And we’ve seen successful results in the pilot markets and that’s why we’re moving quickly and aggressively to roll it out in more US markets, as we speak.
Q – Kevin Steinke: Okay. Yes. I was going to ask about that, if this signals the emphasis of the centralized staffing model or how meaningful that will continue to be going forward?
Peter Quigley: It will continue — we will continue to deliver large enterprise customers through a centralized model where it makes sense, in markets where they have very large locations a single location or a few locations, but where large enterprise customers have distributed facilities. We found that the local delivery is more efficient and effective and we have a higher customer and talent satisfaction. So, we’re going to optimize both models, and we will continue to look for ways to do that and expect to see the significant benefits when the macroeconomic conditions improve.
Q – Kevin Steinke: Okay. Great. Can I just — can you touch also on the macro headwinds? I guess they are more pronounced in the third quarter, maybe what you’ve seen in the environment and what maybe kind of changed since you reported second quarter results.
Peter Quigley: Well, we typically as you know Kevin in our industry typically see an improvement in Q3 and then in Q4 in terms of demand and that just hasn’t materialized this year. I don’t think, there’s a significant change. It’s just a continuation of customers being more cautious. They’re uncertain about their own economic outlook. So they’re taking longer to make decisions. They’re dialing back on permanent hiring and being very judicious about how they spend their dollars. So, again, we don’t expect any significant change relative to what we’ve seen in the last few months.
Kevin Steinke: Okay. Yes. I wanted to dive down into a couple of the segments here. Really, when I look at education the operating leverage you’re getting there on SG&A has been impressive in terms of improving operating margin over time. It doesn’t look like you really took cost out there related to the transformation. But maybe just speak to the operating leverage you’ve been seeing there and the opportunity for further leverage going forward in education?
Peter Quigley: Yes. Thanks, Kevin. I’ll turn it over to Olivier to provide some details. But we’re very pleased with the impressive growth we’ve seen in education not only with existing accounts and customers but with new school districts that we’re winning pipeline looks strong. The fact is that, we’ve our business is growing at a pace that we need more people to support the school districts the new wins and standing up some of these big programs. But the education business unit did participate in the transformation review and analysis and in fact created a number of — took a number of optimizing steps that will continue to — in order to benefit of their overall results.
