Omega Mapping Services, Inc. Q3 FY2020 earnings call

• The effects of COVID-19 continued in Q3, with revenue showing moderate month-over-month improvement from May's low point. Revenue hit a low in May at 25% down, then rebounded to 16% down in June and 14.6% down in July. • Swift and decisive actions to align SG&A with current operations, like pay cuts, reduced fees, hiring freeze, etc., have improved financial position, leading to positive adjusted EBITDA in June, July, and Q3 overall. • Technology enhancements were implemented in Q3 to improve candidate onboarding, retention, and satisfaction, with over 30,000 surveys sent in the quarter. • Retail revenue expanded, now representing nearly 20% of North American staffing revenue, with higher margins. • Thousands of field employees were returned to work, 23% of clients had accelerated recovery with headcount exceeding pre-COVID levels, and 20% more placements in Q3 vs Q2. • Virtual processes adopted for remote operations, with phased return to work planned in safe geographies and markets.

North American Staffing represented 83% of overall revenue during the third quarter. Revenue from this segment was $154.7 million and operating income was $2.7 million. Adjusted revenue decreased 18.6% or $35.4 million during the quarter. International Staffing business reported revenue of $21.7 million, which represented 12% of total revenue in the third quarter and operating income of $551,000. Adjusted revenue decreased by 23.9% year-over-year. North American MSP revenue was $9.4 million with operating income of $944,000. Adjusted revenue decreased 2.1% during the quarter.

• Early indications for Q4 show continued week-over-week incremental improvements but at a slower rate than expected. • Ongoing uncertainty due to unexpected shutdowns, positive COVID cases, client cost savings efforts, etc., leads to no guidance for Q4. • Anticipates Q4 performance to improve compared to Q3, trending toward positive adjusted EBITDA.

• Potential unforeseen resurgence of COVID-19 which could impact business. • Gradual labor market recovery which may slow overall performance. • Ongoing uncertainty from unexpected shutdowns due to positive COVID cases, client cost savings efforts, supply challenges, and natural events like those in Texas and California.

Q: Talk about new business wins, pipeline size, retail vs non-retail client size, technology enhancements reception, COVID-specific demand business, and real estate rationalization outside NA.

A: Linda Perneau mentioned new business wins, pipeline doubling year-on-year, retail clients generally spending $1 million or less (with flexibility), short-term partnerships for tech enhancements in the short-term, ongoing monitoring of tech tool reception with over 30,000 surveys sent in the quarter but too early to talk about trends, some COVID-specific skills becoming long-term capabilities, and Herb Mueller stated they are evaluating real estate rationalization outside NA on an ongoing basis.

Q: Any sense of restructuring and impairment charges in Q4?

A: Herbert Mueller stated there is nothing definitive at this point regarding restructuring and impairment charges for Q4