Bubba Sandford – Chief Executive Officer Jeff Wilson – Chief Financial Officer

Matt Campbell - Laridae Capital. John Rolfe - Argand Capital.

Tim Clarkson - Van Clemens Charlie Pine - Van Clemens & Company Dan Gajor - Heitke and Company Tomer Cohen - Fibros Capital Hans van der Burg - Logos Investment Management

Thank you, Taylor. Good morning everyone, I want to thank everyone for your participation in this call and your interest.

I want to give a brief introduction to a couple of items and then I’ll turn it over to Jeff. First, I’d like to start off of which I think is first and foremost on everyone's mind is the gross margin percentage decline.

There are three factors that went into this and I’ll go into each of them individually. The first and the largest was an actuarial benefit we got from 2015 that we did not receive in 2016.

Jeff will talk a little bit more about the specifics of that that resulted in a change of 230 basis points. The second is the decline in North Dakota stores revenue.

The margin stayed relatively consistent year-over-year there, but the decline in revenue brought our overall margins down by 30 basis points. The third is our non-North Dakota stores and I want to give a little background and backdrop onto this to provide a little more explanation.

We give our stores significant economy to run their business that's been our success. We may have the parameters at which they go by, our keys for success which we’ll talk about later guide them.

And everyone's job is to coach train, develop to succeed and to hold them accountable. And additionally we have threshold measures in place that restrict they’re branch's ability to sell below certain margins without getting approval and more so without getting the proper coaching and developing and training on how to price that work appropriately.

Early in the year we’ll watch this on a weekly basis and on a regular basis and we saw there was some small margin decline or erosion. We very quickly implemented some measures to restrict the ability of the branches to sell work at a lower margin without getting the proper coaching.

Later and soon after that we continue to watch it and we implemented more measures both systemwide and organizationally that limited the branches to do this work again without getting the proper coaching from the key personnel in the company. So I feel confident, we feel confident that with these measures in place, we will in the future regain our strong margins like we have before.

Onto the revenue, our overall revenue as a company grew slightly and our stores outside of North Dakota grew by 10%, which again proves our success in executing on the keys to success. Lastly, we continue to deploy our cash in a manner that maximizes shareholder value.

We opened stores, we open three stores, we grew organically as we mentioned and we continue to buy the stock back as it’s under value. With that before going into more of the business development in future, I’d like to turn over to Jeff to discuss the financials.

Thank you, Bubba. Good morning everybody.

So we discussed our revenue for the first quarter was $19.1 million compared to $19 million for the first quarter of last year. Our revenue for the branches outside North Dakota was up 10%, but this increase was offset by a decline of 43% or $1.5 million in North Dakota.

For the quarter the revenue for North Dakota represented 10% of our overall revenue and that’s down considerably from about the 25% of revenue was during the peak of the oil flow. As you’ll recall from our last call, Q1 is traditionally our lowest revenue quarter, representing generally 18% to 20% of our full year business.

Just a reminder Q2 and Q4 are similar representing about 22% to 26% of revenue on a historical basis and Q3 is our highest revenue quarter representing 28% to 30% of annual revenue. Bubba discussed our gross margin for the first quarter was 24.7% compared to 28.3% last year and the biggest impact on the margin was the actuarial adjustment we had in the Q1 of the last year.

So I’d like just a minute to talk about how we go through the process of looking at the actuarial adjustment. So each quarter we provide our independent actuary all of the information on our payroll, on our worker's comp claim, the codes for the different types of work we are doing and each one of the states that we’re working in.

Our actuary takes its information, along with our claims history and open claims and industry information about how other companies in our industry doing this type of work, what their claims history is and they prepare and expected cost. And is a very sophisticated analysis that they go through.

They prepare what they believe our estimated cost will be for the work that we've done and that’s what we book as our worker's comp’s liability. These claims go over five to eight years and the history that they’re looking at goes back over that same time.

So since 2013 our claim’s history has been coming down each year, but as they look at this obviously there’s a lag time between as they look at it at the trend over time and revise that history over time and that’s what happened in Q1 last year, as they looked at this history and what brought estimate down by this $440,000. So that’s the process that we go through each quarter to determine our liability there.

With that, I want to go back to the financials. Our SG&A expenses for the first quarter increased slightly to $5.2 million compared to $5.1 million last year.

And during the first quarter of this year we booked an additional $250,000 reserve on our worker’s compensation deposits and these are the positives that we made on our worker’s compensation insurance during the timeframe of 2009 to 2011, when we recovered the master policy issue by Dallas National. Our operating loss for the first quarter was $495,000 compared to income of $189,000 last year.

And the change was driven by the two items that we discussed the $440,000 worker’s comp credit last year and $250,000 reserve for deposits this year. Our net loss in the first quarter was $538,000 or $0.01 per share compared to $82,000 or $0.00 per share last year.

On an adjusted EBITDA basis our loss in the first quarter which excludes the noncash compensation, noncash taxes, depreciation and amortization, interest expense as well as the reserve deposit was $74,000 loss or $0.00 per share this year compared to $396,000 of income or $0.01 per share last year. Our cash at the end of Q1 was $5.1 million compared to $7.6 million at year-end.

We ended quarter with no debt compared to $480,000 at year-end. During the quarter we paid out approximately $700,000 of worker's comp claims.

As we discussed these claims were for instance that had occurred in prior period and had been accrued for in prior periods, the payments came in this quarter. This is reflected as a reduction in our workers compensation liability during the quarter.

In addition we paid out approximately $4000 in payroll related accruals. The other factor that impacted our cash balance was our accounts receivable balance.

AR balance was flat from your end, typically because our revenues lower in Q1 we would expect our AR balance to decline. We’ve taken the steps internally to work on improving the collection from the AR including bringing in additional help and working closing to the branches to improve they AR balance.

As Bubba mentioned we repurchased approximately 502,000 shares of our common stock or approximately $220,000 during the quarter and we continue to be aggressive in our repurchases. With that, I’ll turn it back over to Bubba.

Thanks Jeff. I’d like to discuss a few highlights and main points and then I’ll move on to the business development going forward.

And these results are largely attributable to our execution of our keys to success. As we mentioned our revenue was up overall slightly and our stores outside of North Dakota were up 10%.

While our gross margin percentage was down as a lean flag company that we feel keep our finger on the pulse. We caught that early and we implemented measures and we plan and hope to see that turn in the near future.

We opened three stores. We ended up with significant cash balance and we have a strong balance sheet.

Again as I mentioned these are result of our executing on a keys to success which I'd like to talk a little bit more about here as it relates to the store specifically. These aren’t just words that we put up on a wall here, these are tenants and principles that everyone in our company lives by and we use to guide the branches to their success and everyone uses to coach the branches.

There's three and I'll mention them, pick summary first and go then through that. The first is sell good accounts, the second is increase the margin and third is service with excellence.

Sell good accounts, I mean, we have 3,300 customers. We feel our customers are quality customers, they’re people that value the service we provide and they pay on that service and not on price.

We continue to see quality customers in terms of our creditworthiness and that in turn, when we will work with good customers who value us, are willing to pay a premium. The second is increase the margin and we had a misstep there.

We give the branches a lot of economy, but we caught that early on and with the dedicated field personnel we have incorporated the personnel, we feel confident that as we did before we were able to coach and train them to selling better margin work and work that meets our standards. The third is service with excellence and this is something that requires a daily focus on everyone in the company and everyone in really a coaching position.

It's what allows us to retain excellent workers and workers are our product and they’re absolutely key to us. And it allows us to differentiate from our competitors, the service we provide.

And again we see this in the pricing we get. It is I think worth noting that while our margins decline slightly on the stores outside of North Dakota, we still have very strong margins as related to the industry.

Going forward we will continue to deploy our cash in a way that maximizes shareholder value and there is five ways we look to do this going forward. The first is same-store sales.

that is absolutely key for us, as we grow our existing stores that money goes straight to the bottom line. There isn’t significant capital cost required to grow our same-store sales, so it’s one of our primary goals, is to continually coach and train the develops to do better business.

And that includes a wide range of things, not just in pricing but in how they value the work and how they look at the work and treat their workers. The second is new stores, we will continue to look at new store - opening new stores in areas where we have concentration.

We have brand recognition and we can get efficiencies on our field visits there. We opened three stores this past quarter and we continue to look where we can allocate our resources most effectively and open successfully.

The third is mothballing in clothing stores or really closing underperforming assets. We want to maximize our allocation of our money and people in the most effective manner, that’s our obligation to the shareholders.

And when we feel the value of a certain store or stores does not exceed the cost, when we say cost it means the resources associated with having that store, which ranges primarily from back office and all that goes on with supporting to the store to the field. If after an exhaustive analysis and study, we feel those resources are better allocated to another store then that’s our obligation to move those resources where the shareholders will get a better return.

But I also want to note that sometimes it does cause some confusion with the store count. Because we may mothball a store and wait until we find an excellent manager or can backfill that with national accounts.

But we’re always looking for store value in all of our stores. The fourth is acquisitions.

We remain diligent in sourcing acquisitions and speak with them and searching for them. We’ve spoken with many of them, while we are I guess somewhat frustrated, we haven't been able to close on one.

We will remain steadfast to the shareholders, that we will not let our frustrations sway our decision-making. We have to find something at the right price that we can integrate.

And we feel in time our patience will pay off and we will find an excellent acquisition that will be accretive and add value. The fifth is stock repurchase.

We will continue – dependent upon our cash situation to buy the stock back when we feel its undervalued. We feel that’s a significant return to the shareholders, we’re buying certainty, we’re buying what we know.

So in summary we have a strong cash position. We’re debt free.

Our business continues to improve our national accounts, our VMS, our non-North Dakota stores, those that we can control better. Our worker's comp continues to improve.

We feel we’re in a very good position going forward. With that I’d like to turn it over to Q&A.

Back to the operator.

Good morning gentlemen. Thanks very much for having a quarterly call.

I think it’s really important and quite honestly its helpful to understand what the causes for the contraction on your gross margin work were? So thanks for doing this.

And should I expect going forward that gross margins, we should start to see those expand and to what level?

Matt, good morning. Thank you for the question.

One of the ways I'd like – I guess to phrase is this is we’re not obviously the size of IBM Titanic, but we’re also not a small boat. So these things take time to turn.

We were on this early. Obviously we will hope to get these done as fast as possible.

I can’t predict when they will be done, but I can tell you that it’s something that goes on on a daily basis. I see the emails come in, I hear the coaching call, so its’ something we work on on a daily basis.

And obviously like everyone, me hope sooner rather than later, but it takes some time.

But I guess just to follow-up, on a going forward basis it sounds like you’ve done some coaching. So we’re going to reprice projects at a better level, so we should start to see gross margins go up from the level we saw in Q1.

Is that fair to say?

I mean, yes, that’s the plan. That’s the plan.

And then if I have two more if I could. Just thanks for breaking out North Dakota, if I heard it correctly its now 10% of overall revenues down from 25%, is that right?

And if so, are you starting to see North Dakota start to bottom?

I'll let Jeff confirm, if I’m wrong, but I think your numbers are correct on the 10% and 25% and so if I can just a follow-on that. I mean, I guess, the silver lining is for the decline in North Dakota is it has less impact on overall business.

In terms of your second part, it’s very hard to predict that. I can’t predict North Dakota, I can tell you that, two things.

One, we will constantly evaluate those stores and again if those stores like all our other stores, the value doesn't exceed its cost, we will shut them or mothball them until with the Bakken comes back. But we can control, at least our coaching, training of the stores outside of there and we’ll continue to focus on our same-store sales and the other aspects of our growth and shareholder plan.

And then lastly, you guys have gone through a number of changes over the last year, you relocated your office, your headquarters. I guess you’ve said you've been frustrated with some of the acquisitions that you tried to make.

Do you have at this point all the people and the bricks in place to really push the gas pedal a bit to either open more stores or make some acquisitions. Do you feel like we’re at that point as we've gone from your coming out near bankruptcy a few years ago to a company now ready to play offense.

Thank you.

Well, a couple of things on that. I mean, we’re always adjusting our bench and our players and moving people to where they can have greater success, that’s something that, I think it’s a task I take seriously and its responsibility, I guess as the coach to constantly be looking to improve our position.

So I think we have a very, very strong team now, in terms of opening stores, we have to be diligent in that. We have to be very thorough when we do that.

It’s an allocation of not only financial resources, but human capital in opening those stores and we want to ensure that when we do it, we have a high probability of success. Keep in mind with a $500,000 deductable, you open a store incorrectly and it can impact you.

And one of the things that I think we tend to forget is not only can you get hit with a $500,000 deductable, but that will then trail with for a number of years that claim. So we want to look at opening stores in a concentration where we have that brand recognition.

We gain the efficiencies of the travel there, we’re able to cover geographical area better. So and then in the acquisitions, that has nothing to do with our team.

We’ve tried to go to the dance and we've gotten close. There’s 50% of the deal that we cannot control, but we can control that our obligation to our shareholders and we won't overpay for something that we don't think will be accretive or add value.

We’ll continue look into new add it though, we’ll be persistent and I think in time our patience will pay off.

Sure. But the thing you can control is is your own stock and I do appreciate the fact that you're being aggressive in buying it back.

So continue to do that until we see something that makes sense. Thanks very much.

Have a great day.

Thanks, Matt.

Hey guys, a couple of questions. One, the 250,000 charge to the reserve, it sounded like that what was for the business that guided down back in 2009 and 2011 timeframe.

Can you just confirm that you are not or have not received a reversal of the favorable trend that you’ve been seeing lately in certain current level of workers expense that you’re running through the P&L.

Yeah, John, this is Jeff. Yeah, certainly I can confirm that.

We continue to see our overall workers comp, number of claims and the cost of the claims and the trend going in the positive direction. Those workers comp deposits were deposits for insurance coverage, as you said it was back in the 2009 to 2011 timeframe.

Okay. And just following up on the prior caller’s question, I mean, with respect to the Greenfield opening, the new stores.

What are - if you had the kind of rank the gating issues there, look and I’m certainly supportive of you being cautious and making sure, you’re going to get a reasonable return on the opening. But if you had to rank the gating issues in terms of finding good locations, finding good markets, finding the right people.

How would you sort of rank those with respect to challenges in terms of this movement?

Yeah, I can rank them one, two, three, the first is people, the second is people and the third is people. If you look at – that’s we want to go to more of a concentration.

If you look at our stores that are in a concentration, where you have remoteness, it’s absolute essential you find the right person. They have a lot of economy, they control their P&L and he knows I guess it's like any multiunit business, an excellent manager can do very well and a poor manager cannot do well.

And it’s a balance of giving them the coaching, training and developing dot dot dot, holding them accountable. So it’s a challenging hire, but it's something we continue to - we feel we improve upon, but its I think anyone in obviously hiring and recruiting knows it's a challenge.

But we find that in when we do it in areas of concentration, we increase our likelihoods of that. We can't guarantee it, but we increase it, so that's the big challenge.

We’ve talked about the cost to open a store is under $200,000, but this significant allocation of human capital associated with that. So does that answer your question, John?

Yeah, that’s certainly helpful. And then lastly, could you just restate you had given the sort of typical revenue percentage by quarter with regards to seasonality.

Could you just repeat those numbers for me, I didn’t catch it.

Sure, this is Jeff. So for Q1 its 18% to 20%, Q2 and Q4 are similar at kind of the 22% to 26% and then Q3 28% to 30%.

Okay. Great.

Thanks very much.

And John, I’d like to follow-up on your - first part of your question. We did renew our worker’s comp, this past April.

We have a A plus carrier and this is results in our ability to manage our claims, which drives down to the third tenant. Our service was excellent.

These are not I guess just words, I mean, how we treat our workers and look out for worker’s results at the end of the day when you follow the path to a better worker's comp policy. Our premium went down and the collateral required was significantly less and those are big items for us.

So we’re doing better in that, that flows right through to the shareholders.

Okay. And I’m sorry, so you said you just renewed it in April, so basically the last month, you’re saying, you had just favorable development with respect to the deposit amount and the sort of rates you’re looking at going forward?

Right. We were able to add another year of coverage so this will be our third year with this carrier with no increase in our collateral deposit.

So if you go back, year one, it was $3.6 million, $3.7 million and last year it was $2.3 million. Now we’re sitting with no additional premium or additional deposits for the third year.

Okay, great. Thanks very much.

Thanks, John.

Hey, guys. Just wanted a couple of questions.

First of all, I was just wondering in terms of the our gross margin issue the problem was like 20% of the stores or was the problem more like with 80% of the stores?

We don’t typically disclose to that level, but it wasn’t 80%. It’s something, it fluctuates on a weekly basis.

We give the branch a lot of economy, they are outsourcing clients. We have a lot of clients and our best clients are clients that are on-demand, that’s the sector we do that well in.

And so you may have a client that uses you for a short period and is gone for a period of time. So it in some of our stores, in the margins are affected by the regions they’re in.

Some of our regions are obviously higher economic growth areas, and not as I guess as depressed. So it's something that we look at overall and again at the end of the day, as shareholders what you're looking at is the cumulative effect of all the stores.

And we get a weekly report on each of the stores that we manage and watch and we look at the cumulative effective to all the stores.

Okay. Great.

Yeah and my other issue is the limiting factor with your business more on the demand side with how many customers you have, or is on getting good employees?

I’m sorry, can you repeat that Tim?

Yeah, is the limiting factor in terms of growing your business, is it more about getting more customers and more demand for the labor services or finding the right skilled people that are willing to work for you and do a good job?

It’s a combination of all of them, finding the locations where either we can open new stores or grow our existing stores and then finding quality managers and quality staff that can execute on our principles and operate autonomously. And then finding the workers and that’s a challenge every branch manager has.

Finding more work and then have enough workers to fill them and conversely not having too many workers and not enough work to fill them. It’s a challenge for every branch manager.

At the end of the day, ideally they would net zero. They would have so much work and no worker sitting in their branch, it’s tough I think balance and challenge they go through, sourcing for new workers and new work and something we constantly coach and train and develop them on.

So it's a combination of all those.

Okay. One last question, is I mean, what would be the typical profile of somebody that's working for you.

I mean, is it 40 years old with a high school education and some industrial skills. What would be the typical profile of that worker that you're looking for?

That profile - its wide ranging and there is no specific profile. The way I like to describe someone is regardless of their background or profile, the people we look for and the people that can succeed are people who can operate in an autonomous environment, make the correct decisions under duress when no one’s watching, that’s all we’re looking for.

It’s hard to find, but that’s who we find, I guess an example would be someone who I guess would be like, a second lieutenant or gunnery sergeant or master sergeant. They’ve been on the field, they’ve had a lot of responsibility, they’ve had to make decisions on the fly, it’s not bureaucratic, they move in, they’re looking out for their people and their looking out for the overall mission.

And so we source, we do try source for military, they were veterans in that and we have a lot of fairs that we go to trying to find those people.

Okay. All right.

Good I’m done. Thanks.

Great. Thank you.

Hello and good morning.

Morning.

I just want to ask you to address a little bit of thoughts because you made in the – and you narrated in the press release where you’re talking about diversifying clients and the industries that you are currently servicing. And I'd like have repurchase expand on that for a little bit and just give us a little bit of breadth on how much diversification, what you’re doing as far as adding new clients and what you doing as far as changing the mix of industries that you are moving into.

And when you think you might begin to some positive effects on that.

Well, we’re seeing positive effects of it immediately because the stores outside North Dakota grew 10% and so in those cases, those branches are probably correctly diversifying their client base. And what we mean by that is you want the branches to have a wide range of clients in multiple sectors.

It’s not always possible, you’re going to some of our regions and they’re dominated by certain industries. But when they diversify their client base, they’re basically hedging.

They’re hedging their bets that they’re not skewed towards just one customer and they can balance that workflow from some long-term contracts, long-term weekly tickets versus the on-demand where you get better margins. And so we’re always coaching them on balancing that of trying to go out and source new clients to get more on-demand work at the same time getting longer-term work.

The longer-term work is typically lower margin, but it’s steady work and you can keep your workers engaged and employed and the on-demand typically will hire. In terms of the client base, we coach the branches, again, we’re not very bureaucratic.

We want to give them the economy to go out execute and close on sales quickly. That's why we are constantly talking about coaching them on evaluating good business versus bad business.

Good customers versus bad customers, the credit worthiness, the risk of the work. So we let them, they have the ability to go out and look at a wide range of work and then evaluate it.

This work that is good for our workers, are they going to be safe, can I price it appropriately, can I manage it appropriately, how much time it this going to take from my management time that will then prevent me from growing the business elsewhere. So they have a lot of latitude to which they can grow their business.

There are some parameters in terms of the work, the worker's comp, but we’re seeing. We’re seeing the effects of that with our stores outside North Dakota.

Are there any new industry verticals or professional verticals that you’re looking at right now. Or are you still sort of focused more on the style or is that you have illuminated to in your prior conversations that we had and in your slide decks.

Normally, when you understand this to be light investor, retail, hospitality those phase. Are you looking at any other areas at all?

Yeah, we look at anything that where someone needs a temporary worker, provided it is not overly risky, we can do it and that's how we really want our branches to look. Not in terms of narrow kind of what do I have to do, it’s more of I was taught in lacrosse, what can I do, not what do I have to do.

And that’s what we want them do, what can they do. So as long as they price it appropriately, can manage it in its, is that a risk-adjusted basis we’re okay with it.

Our national accounts are out developing more and more I guess, avenues or pass for us to get into different verticals. They also still fall in really the temporary business, but they're getting into different stuff.

We continue to grow our auto auction business and our VMS related work.

Okay. And the last follow-up.

The operations in North Dakota is still cash flow position for you?

Yes and we will constantly evaluate them. We get reports weekly on those stores and if it anytime in the near future we feel they are not cash flow positive, we’ll make a decision in the interest of the shareholders.

But they’re still, while they're down year-over-year they’re still strong stores, they’re still doing well, they are healthy stores.

Okay. All right, Bubba Thank you very much and also thanks a lot Jeff.

Thank you.

Hey guys. Thanks for hosting this call.

A quick question just operationally, let’s say with the Affordable Care Act and all that sort of stuff. Let’s say a few employees a person, five days straight full time.

Would that person be, do you all look at that person as just an independent, general, contractor.

Everyone we employ is is an employee of ours. All of the temporary workers are employees, they get W2s.

Okay. And so with that been said, will you’ll have to start paying for health insurance for them?

Well, we already are. We are fully compliant with the ACA.

We have people on staff that manage this. They’re on top of it, we have an outside party that works with us to manage the benefits.

They have to qualify with X amount of hours and typically our workforce even though we put I think 33,000 or 32,000 workers out, it's a very small percentage that actually qualify under the rules. So we haven’t seen –

Well, that’s what I wanted to figure out, if you looked at them as an independent contractor because you’d almost cater around that whole that side if you’re employing people.

This is Jeff, yeah, there’s other rules around that. Those are our employees and to the extent they qualify under the Affordable Care Act and we provide that coverage.

But as Bubba mentioned a very small percentage have qualified under that act right now.

All right. Well, that’s all I had.

Thank you guys.

Thank you.

Hey guys, thanks a bunch for doing these calls, I agree with the first caller it would be great if you get them every quarter. I had two questions on the North Dakota business, the first one is it really comes back in Bakken, you think your branches are set to ramp up and meet that demand or is there additional work that needs to be to get them ready again to get business there?

Based on past experience which is obviously no guarantee for future success, but based on what they’ve done in the past, the answer would be yes, they would be ready to ramp it up?

Okay. And do you think you would come that business would come in at the more margins or do you think, you think it came back the nature of the demand is such that it might not be as good a business as it was in the past?

That’s a good question. I think that would be interesting to see what happens.

I'm not sure how much North Dakota has changed, how much they’ve learned, it will depend on I guess the volume or how much it increases. And I guess, the migration of workers back up there.

They had a massive influx of workers in the past up there and a lot of left. So I think a lot of variables would go into that.

But I know a lot of the companies are you know - they haven't pulled out completely, they're just ready for the prices to change and then turn it backup.

Okay. Well, like I said, it would be great if we could do these calls every quarter.

Thank you.

Hi, guys, can you hear me.

Yes.

It’s great. Hi guys.

I got one last question thanks for squeezing me. I got one last question about the gross margin of business and maybe we could a focus little bit on the business outside of the high margin work that you do and did in North Dakota.

So historically say over the last one or two years, could you may be provided an approximation of the gross margin level for the business as a whole, excluding the high margin North Dakota work? ,

This is Jeff. Yeah, I think overall if you look at the trend on our gross margins, we’re right around 26%, I think last year and we were like plus or minus a few basis points from that each quarter.

North Dakota historically as Bubba said the loss there was about 30 basis points. So I think that’s depending on high the revenue was, it would be anywhere from that 30 basis points to maybe as high as 60 basis points.

Okay. So just that I understand correctly, the North Dakota where normally then its maybe in the 27% gross margin rate, is that how we should think?

Again, we’re not doing. We haven't disclosed gross margins on a regional basis, but I think that’s in a ballpark or kind of in the range where we see.

All right, great thanks. And then one last one, you were talking about that these branches outside of North Dakota experience some erosion of their gross margin at the beginning of this year.

And I was wondering was the foremost sort of variance or did these branches actually experience may be a fundamental change in the conditions in the market that caused this erosion say maybe higher competitive pressures or that sort of stuff?

Well it’s a combination of things that that affect the gross margin. In some economies it is competition - is dependent upon what's going on in the economy.

Some of them where we talk about diversifying the client base, if one branch was too heavily skewed towards a client and the client either leaves or they get a new client at a lower gross margin, they make the trade-off to get a higher volume client at a lower gross margin. Some are out obviously trying to grow and fell through their negotiations.

They would be better off trying to negotiate lower gross margins in return for higher work. We constantly coach work smarter, not harder.

Your limited constraint in this business is your workers. It’s similar to you’re selling a product, you’re making widgets and if you can only make so many widgets a month, you only have so many good workers that you can put out to work and you want to maximize the value of that worker and get the highest premium price you can for each good worker.

So to answer your question, it’s a wide bunch of variables that affect them, but rest assured we’re constantly working on getting them to price more appropriately.

That’s very helpful guys. Thank you for answering.

Thanks.

Thank you.

Thank you everyone for your participation. If there is no further question this will conclude the call.