Computer Task Group, Incorporated

Greetings, and welcome to Computer Task Group, Inc.' 's first quarter fiscal year 2022 financial results conference call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the conference over to your host, Craig Mahalik, with investor relations. Please proceed, sir.

Yeah, thank you, and good morning, everyone. We certainly appreciate your time today and your interest in CTG. Joining me are Philippe Pidet, our president and CEO, and John Laubacher, our chief financial officer. We released our first quarter 2022 financial results this morning before the market opened. You can access that release at our website at ctg.com. After Philippe and John's formal discussion this morning, we will open the lines for Q&A. Let me first mention, as you are likely aware, that we may make forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated on today's call. These risks and uncertainties and other factors are provided in the earnings release as well as with other documents filed with the Securities and Exchange Commissions. These documents can be found on our website or at sec.gov. During today's call, we will also discuss non-GAAP financial measures, which we believe are useful in evaluating our performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided the reconciliation of non-GAAP measures with comparable GAAP measures in the tables in today's release and SEC filings. I'll now turn the call over to Philippe to begin. Philippe?

Thank you, Craig, and good morning, everyone. We appreciate you joining us today. The first quarter of 2022 continued to demonstrate our success at capitalizing on the market demand for digital transformation solutions and was a strong testament to the disciplined execution of our strategy to increase the business mix of IT solutions, and ultimately drive profit margins higher. Our gap earnings per share grew 50% as improving margins drove earnings power, despite revenue being down from lower margin non-strategic technology services and foreign currency headwinds. As a reminder, last quarter we introduced our new financial reporting structure with three business segments. IT solutions and services are disclosed for each of North America and Europe and represent our higher margin IT services. We are only making investments in these two segments. And during the quarter, we achieved strong earnings growth, even when continuing to invest in our business development solutions and delivery resources. We also continued to disengage from the lowest margin staffing business, which can be seen in our non-strategic technology services segment, where revenue decreased 6.2 million in the quarter as compared with the prior year. We strive to be a leader in the delivery of digital IT solutions and services that create opportunities for our clients to succeed despite the headwinds they may face. This includes finding more efficient ways for our clients to operate by digitizing their processes and assets. As an example of the steady progress we are making, during the first quarter, we won our largest digital solutions development contract in the company's history in North America. The contract will span five years. and provides a significant foundation for us to further drive digital IT solutions in the future. Wins like that are a result of our people, who are our most important assets and are critical to our success. In a tough and competitive labor environment, we have been successful in adding talent and continue to advance our colleagues in support of our strategies. as we look to strengthen our team to meet the ever-changing needs and challenges of our clients. We recently promoted Brett Hunt to a newly formed position of Vice President of Solutions and Delivery for North America. Brett joined CTG in July 2020 after 20 years with HP. In his new role, Brett will be responsible for executing and continuing to evolve CTG solutions and delivery strategies in North America. I am extremely encouraged with the progress we are making on executing our strategies, despite macroeconomic hazards. Our pipeline of organic opportunities and digital solutions continues to expand and has grown significantly over the past year. Equally important is our focus on acquisitions, where we have a well-defined process that is producing a solid pipeline of opportunities. We believe we have the financial flexibility to execute and acquire companies, but as always, we will be prudent with our capital allocation. Our acquisition criteria are focused on businesses that provide digital expansion opportunities, have accretive margins and earnings, and are good cultural fits. As we mentioned on our last earnings call, we anticipated a soft quarter for REDI due to the timing of engagements and lower utilization due to a higher rate of illness from COVID variants that impacted the beginning of 2022 on our billable Based on current project timing and opportunities in the pipeline, we expect our quarterly revenue cadence to strengthen in the second half of the year. As we look further out, our objective is to grow IT solutions and services revenues in the mid-to-high single-digit organizations and deliver contribution margins for these segments in the mid-teens We expect this will enable us to achieve our goal over the next two years of adjusted EBITDA margins increasing to 7% to 8% of revenues. With that, let me turn it over to John to review our results in more detail. John?