Mastech Digital, Inc

Greetings, and welcome to the MazTech Digital Inc. 4th Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jennifer Lacey, Manager of Legal Affairs for Mass Tech Digital, Inc. Thank you. You may begin.

Thank you, Operator, and welcome to Mass Tech Digital's fourth quarter 2022 conference call. If you have not yet received a copy of our earnings announcement, it can be obtained from our website at www.masstechdigitals.com. With me on the call today are Vivek Gupta, Mass Tech Digital's Chief Executive Officer, Jack Cronin, our chief financial officer, and Michael Fleischman, our recently appointed chief executive officer of the company's data analytics services business segment. I would like to remind everyone that statements made during this call that are not historical facts are forward-looking statements. These forward-looking statements include our financial growth and liquidity projections, as well as statements about our plans, strategies, intentions, and beliefs concerning the business, cash flows, costs, and the markets in which we operate. Without limiting the foregoing, the words believes, anticipates, plans, expects, and similar expressions are intended to identify certain forward-looking statements. These statements are based on information currently available to us and we assume no obligation to update these statements as circumstances change. There are risks and uncertainties that could cause actual events to differ materially from these forward-looking statements, including those listed in the company's 2021 annual report on Form 10-K, filed with the Securities and Exchange Commission, and available on its website at www.sec.gov. Additionally, management has elected to provide certain non-GAAP financial measures to supplement our financial results presented on a GAAP basis. Specifically, we will provide non-GAAP net income and non-GAAP diluted earnings per share data which we believe will provide greater transparency with respect to the key metrics used by management in operating the business. Reconciliations of these non-GAAP financial measures to their comparable GAAP measures are included in our earnings announcement, which can be obtained from our website at www.massdigital.com. As a reminder, we will not be providing guidance during this call, nor will we provide guidance in any subsequent one-on-one meetings or calls. I will now turn the call over to Jack for a review of our fourth quarter and full year 2022 results.

Thanks, Jenna, and good morning, everyone. Fourth quarter 2022 was clearly a difficult quarter for MassDepth Digital, as we saw both of our business segments negatively impacted by economic uncertainty, including customer concerns regarding inflationary conditions and a possible recession. Revenues for the quarter totaled $57.2 million, representing a 3% revenue decline compared to $59 million in Q4 2021. Our data and analytic services segment contributed revenues of $9.1 million in Q4 2022 compared to $10.1 million in the 2021 fourth quarter. As order bookings in the second half of the year came in short of expectations, And as a result, utilization rates were well below our historical norm. Q4 2022 revenues in our IT staff and services segment totaled $48.1 million compared to $49 million in the fourth quarter of 2021. Customer demand declined during the quarter, which when combined with seasonal high levels of assignment ends, resulted in our lower revenues. Consolidated gross profits in the fourth quarter of 2022 totaled $14.2 million compared to $15.7 million in the fourth quarter of 2021. Gross margins as a percent of revenue in Q4 2022 was 24.8% compared to 26.6% in the 2021 fourth quarter. This margin decline was entirely related to our D&A services segment and was attributable to lower utilization and reduced margins on several long-term assignments, largely due to compensation increases in today's inflationary environment. Gap net income in the fourth quarter of 2022 was $1.5 million or 13 cents per diluted share compared to $3.9 million or 32 cents per diluted share in Q4 2021. Non-GAAP net income for Q4 2022 was $2.8 million or 23 cents per diluted share compared to $4 million or 34 cents per diluted share in the fourth quarter of 2021. SG&A expense items not included in Q4 non-GAAP financial measures, net of tax benefits, are detailed in our fourth quarter 2022 earnings release, which is available on our website. Highlighting our full year 2022 results, revenues were $242.2 million, which were up 9% year over year as both of our business segments achieved revenue growth during 2022. IT staffing services had 10% revenue growth in 2022, and D&A services had 6% revenue growth. Consolidated gross profits grew to $63.2 million in 2022, up 6% compared to $59.4 million in 2021. GAAP diluted earnings per share were 72 cents in 22 compared to $1.02 in 21. And non-GAAP diluted earnings per share were $1.13 in 22 compared to $1.19 in 21. During 2022, our liquidity and overall financial position remained strong. Today, we are 100% debt-free. We have cash availability of approximately $32 million under our revolving credit facility. Additionally, our credit facility's accordion feature can provide us up to an additional $20 million in term loan capacity for M&A activity. and our day sales outstanding measurement at December 31, 2022, improved to 59 days from 61 days a year ago. I'll now turn the call over to Vivek for his comments.