Q4 2019 Earnings Call
We were flattered you continue to operate effectively at 106.9% of Base oil capacity as we produce 15.5 million gallons of Base oil compared to thirteen point two thousand gallons during the fourth quarter of fiscal 2018 an increase of almost 17%
on a weighted-average basis. We were still in a pay for oil position for the fourth quarter as a whole are average pay for oil increased $0.01 during the fourth quarter compared to the third quarter of 2019 decreased $0.13 per gallon compared to the fourth quarter of last year as most of you know, in mid-January the major virgin bass oil producers of dead posted price increases in the 20 to 30 per gallon range.
All these increases have been implemented slowly we did see our base oil net bag begin to recover the price erosion experienced during the fourth quarter father at the end of February birthday oil producers announced the posted price decrease this recent price decline will negatively impacts bread and our plan is to quickly lower our pay for oil to recover a portion of this contrived.
This price decrease appears to be driven primarily by the declining crude crude price driven by the fear of the negative impact of the coronavirus. We will continue to monitor the impact of the Corona Fire outbreak and are prepared to take the steps necessary to keep our employees safe.
I'll continue to deliver the high level of service. Our customers have come to expect from HTC.
The end of the fourth quarter so lighting of the spread between the price of high sulfur fuel oil and crude.
Unfortunately is the price of crude began to fall during the first quarter. The price for number six oil was relatively stable which led to a contraction in the spread between the price of crude oil and number six months. We're not completely surprised at the pricing relationship between high sulfur Fuel and crude oil has been choppy in the first few months post the effective date of birth IMO twenty-twenty regulation.
We believe that if we move deeper into the year the spread between high sulfur fuel oil and crude oil begin to widen again and presents an opportunity to drive our feedstock cost low moderate perspective. We continue to make progress during the fourth quarter and to get it in the first quarter of 2020 on our programs from mechanical integrity and the establishment of an inventory of key spare parts and equipment.
Getting in the first quarter of 2020. We've officially raised the name plate base oil capacity to approximately $49 million gallons annually in 2020.
Well, we have begun to see slower growth in some of the markets we serve in our Environmental Services segment. We believe we have enough momentum over all the support mid-to-high single-digit organic growth during mm.
From an operating margin perspective. We are taking steps to lower our cost in the areas of logistics disposal and Fleet which back to have our operating margins back up 27% range and the second half of 2020.
For example regarding our Fleet program. We engage the new Fleet Management Company in the second half of last year to help us better maintain our Fleet and manage our overall costs.
Based on the proof provided maintenance discipline. We saw an increase in preventive maintenance work on our Fleet during the fourth quarter while this contributed to a short-term increase in our cost on a long-term. This should result in less significant maintenance events and lower overall costs as we work to address at least portions of our Fleet which were at the end of life in a higher than expected cost when turning in these trucks. We are confident that our increased focus on preventive maintenance will allow us to lower. Our Fleet related costs in the future wage. Was that Mark when I walk us through our fourth-quarter and full-year financial results in more detail. Thanks, Brian and good morning everybody. I'd like to begin discussing the charge. We took in the fourth quarter related to a settlement to resolve claims made against us in a class action litigation pertaining the fuel surcharges back in 2015. We became one of many companies off.
waste industry base with little
Involving fuel surcharges, like most of those companies eventually determined. It was most prudent to enter into settlement rather than continue to incur the costs necessary to get this matter.
Under the settlement the company agreed to fund up to $11 less deductions and payments for administrative expenses attorneys fees and other expenses for claims and Plus members wage based on analysis of crime rates from similar class action settlements. We are aware of the expect our actual cash payments related to this settlement including Texas attorney fees am straight-up fees and other related. She could be less than four and a half million. Although we cannot be sure that this expectation will be accurate.
We expect the final amount sold pursuant for the settlement will be determined by the end of the second Circle quarter of 2020.
Once the final amount though, they're determined we will make the final adjustments to the $11 tool to the extent our actual cash payments are less than eleven million is difference will be taking the income at the time.
The impact of the charge just want us to a net loss attributable, shareholders of 2.2 million or -9 cents per share diluted for the fourth quarter of 2019. This compares to net income attributable of common shareholders of 2.5 million or 11 cents per diluted share in the year-earlier quarter.
It's good in the settlement charge that income attributable common shareholders was 6.1 million or 26 cents per diluted share in income attributable the time and shareholders for fiscal 2019 with 8.4 million at 36 cents per diluted share compared to net income of 14.7 million and 63 cents per diluted share for fiscal 2018, excluding the same charge that income attributable to Common shareholders for the year is 16.8 million or 72 cents per diluted share.
An alternative Services segment in the fourth quarter, we posted Environmental Services segment revenues of 96.9 million compared to 85.9 million in the fourth quarter of 2018 the 11 million or twelve Forty-Eight percent increase in Revenue. We've driven mainly by strong growth in our Field Services containerize way home businesses the growth in our Field Services business is mainly due to a large project in which we recorded four million dollars of Revenue during the quarter. We expect to record approximately 6.5 million in Revenue related to the same project during the first quarter of 2022 growth in our containerize waste business is volume driven with a slight increase in price off. Well, our entries are affecting business growth is the result of both volume increases and price Improvement.
volume increase an item
Speak with some really due to an acquisition. We made during the first quarter of 2019 revenue from this acquisition was approximately 1.2 million during the fourth quarter overall Branch revenues grew approximately 12.4% on a year-over-year basis during the fourth quarter same Branch revenues after adjusting for the field services project mentioned earlier with 7.7% during the quarter.
Moving on profit before pedestrian are extent and environmental services segment was 24.3 Million compared to twenty three point four million in the year-ago quarter operating mom felt the 25% 25.1% compared to last year at 27.3%
A segment operating margin cut short of expectations primarily due to higher-than-expected food and repair cost which Brian already discussed higher health care costs and excessive disposed of during the quarter these three items resulted in approximately 140 basis points of operating margin headwind.
In the oil business segment, we sold approximately fourteen point five million gallons of Basil during the fourth quarter 2019 compared to twelve point seven million gallons during the fourth quarter of 2018 wage increase of over 14%
topic before corporate sg&a expense and increase 4.4 million and improves ten point six percentage points or 3.5% in the fourth quarter of 2019 compared to negative 7.1% during the same period of 2018. The Improvement of margin was mainly due to luxury Refinery down time which led to lower shutdown expensive as well as lower Catalyst cost compared to the year ago quarter.
Next let's talk about corporate sg&a expense overall expenses as a percentage of Revenue came in at 12.1% compared to 12.2% from the year-ago quarter, but overall expenses up 1.3 million mainly driven by higher non-management salaries bad debt expense and employee health benefits partially offset by Lowell Professional Services fee and lower management salaries.
the company
Income tax rate for 2019 was 27% compared to 26.6% for fiscal 2018.
Fourth quarter ebitda 1 million compared to nine point four million in the year-ago quarter adjusted ebitda for the fourth quarter was 16.7 million compared to eleven point two million a quarter of 2018.
And the balance sheet perspective cash on hand at the end of the quarter was 65.7 Million. We generated $17 billion in cash flow from operations during the quarter compared to a point 1 million in the fourth quarter of 2018 total debt remain steady at $29 million year-over-year you continue to identify opportunities to deploy our Xbox cash on potential acquisition targets and organic growth initiatives. We feel will improve our business and help Drive value for our shareholders in conclusion. We are pleased with the fourth quarter of those are reporting segments and look to continue our strong Revenue growth in the Environmental Services segment and increase profitability in both segments during 2028 to thank everyone for the interest in here is Chris McLean. Thanks for joining us today on the alternate call back to saranda to take your questions. Thank you. Ladies and gentlemen's club.
The question you would need to press start it.
And your telephone to install your question, press the pound key again to ask the question. Please stand by while we can file the Q&A roster.
Our first question comes from the line of David with bear Alana's open. Hey, good morning, guys. How are you? I am I'm doing well. Thank you. First question mark right there at the end of your prepared comments. I think you gave some general statements about the Outlook and maybe I didn't catch it off or did you give any specifics in terms of Revenue growth or even gross margin in 2020 that I that I just didn't catch? Yeah. I talked about that at least someone organic standpoint and the the subject of part here is we are working on a lot of Acquisitions at least get us as far as we have them describe is a pretty robust Pipeline and you can go back and see you know, if it's between five days or five percentage points or less quarter-to-quarter.
How much the inorganic people?
Meant to us but some of those ganic standpoint we look to continue the mid-to-high single-digits at least Environmental Services. Anyway, Revenue growth rates, and we have seen some problems obviously from a marketing standpoint Brian and I both alluded to you know, free healthcare was up almost a million bucks you every year and to 4 we have some other headlines which we touched on or can dig into it if we want but to get back to that 27% area. We think it might take until the second half of the year. So we see something here short-term and that could be also impacted by any downturn from the coronavirus in any impact that might have on business in general.
Yeah, we went to high single-digit was driven by the oil field branches. We are Mark alluded to seeing slowdown mostly relating to oil field activity in our Southern branches. Cuz the rest of our friends are holds out fairly. Well pretty happy with what we see so far.
Okay, and then as it relates to the pricing component of your growth does this settlement have any impact on your ability to price generally going forward or may not a factor you concerned about. It is not effective or concerned about, you know, this case I mentioned it dates back five years, but the actual activity dates back even much before that and long since we got to this point, we had changed our process as far as assessing energy surcharges in the light bulb. We shouldn't see any impact on what we've been doing the last couple of years. I mean it it's driven by, you know commodity price. So to the extent we see let's say we see a route Thursday so price. Well, you're going to have less fuel structured surcharges, but then of course our cost will be coming down as well.
We really felt like we had to get that piece of litigation. All the weather was a major distraction.
For us we were spending a ton of money on legal fees.
You know, the appeal process was pending which is going to be expensive and we just felt like we had to get it we had to get it resolved as long as you age. I kind of went through what in my prepared remarks was the accounting will probably look like but from a cash 10:40 to 4, we really haven't written any other cheek and they had some legal costs and whatnot. But material either wasn't really any cash impact or not. It's not surprising why we get real stuck in fabulously High operating cash flow figure. So we expect to see in q1 and Q2 off cuz like whatever checks are going to have to write related to them. Okay? Yeah, maybe last one if I can sneak one in here anything you're seeing right now on the Edge motor oil supply and demand picture or there any imbalances starting to form post the carriage band and and then just generally you can speak to
You know your top competitor.
They believe that they'll see benefits on both ends of the spread during 20/20. Just just trying to check your head on how you're thinking about 20 20 and and I am allowed. So, yeah, I'll take up until this point. I was a little bit disappointed in the supply-demand balance on used motor oil especially in our core Marketplace wage Midwest and Northeast, you know, everybody went into SFO with extremely high pricing last year was in their best interests knowing that the price could potentially collapse and the differentials will spread out to sell as much as Motorola as they could into that high price market last year. So everybody went into the fall season, which is our slower season less oil change is less activity off. So we struggled a little bit moving the needle on used motor oil Jeeps off of my prepared remarks. We're still bullish on the fact that it will change over time. We know it will because wage
Noel was for used motor oil outside of the glances three refineries, so we think over the long haul that we're going to get in to see the the differential spread out like it's a
To the added wrinkle here is what's going to happen relative the coronavirus and demand for Commodities. I mean you guys tell us we don't know I mean shipping was down. I just rather report this month or just a report of l a 25% and the month of February. So we are going to see a little bit of a struggle here over the next couple of months until it's all levels off at the fundamentals are strong as you all we know that we're going to able to get the price on used motor oil. We're going to get it one way or the other and I think our competitors here the same way we have to because everybody saw with the majors have done on on basic if we got to go get spread back.
Yeah, got it. All right. Thanks very much guys.
Thank you. Thank you. Our next question comes from the line of Michael Huffman with seafood is open.
All right. Thank you. Brian Mark. Hope you're feeling better Mark. Thanks, Mike. At least it's not the cross bars. We hope not, you know, we gotten somewhat used to the idea that the oil business has this month bounces around because you can't control the spread as much as you'd like to we've gotten better at that control. But I'm a little surprised that it's almost feels like you got stuck up on a yes. There's no such and such a reliable repeatable do it over and over again. So can you help us a little bit understand what was going on with the the pieces and the 220 volt 220 basis points and you identified three of them are two thirds of that but they're still 80 basis points are other stuff. How much of it like, can you get rid of right away how much of it to you're going to have to drag you through the first name?
phir to get to the 27th just
Trying to understand that cuz it's out of character for that segment. Yeah, good question. Let me add some color and hopefully this will paint the rest of the picture so to speak so often mentioned the recalls out larger than normal Field Services project that actually were still working on in q1, but had or was impactful during Q4 and while that bring in higher margin dollars to get some of those bigger projects relative to the rest of our business in that line of business. We're typically and expectedly going to bring that in at a little lower-margin. So that was about twenty just went ahead one and then our antifreeze business if you look at it year-over-year the margin for Q4 the margin was down in that line of business alone and over off the es segment that was about thirty basis points and additional headwind. We've seen the impact there as you probably experienced or at least they're aware. We've had a pretty mild winter dead.
The back happened to for that first part of winter was pretty mild. So that was a heavy one to our business the other, as in a lab antifreeze.
We in the acquisition took on a few additional plants that were going to be rationalizing and I've already started and they will be out of the system by the end of this month and that will help us, you know ride size the cost. We had too much capacity and used antifreeze production the seat and production and obviously that comes with plants at home at some people and and we made those changes and it was always our plan to develop that over the course of the year after we do the acquisition.
And our Healthcare it's just you know self-insured. So is it that's timing and that kind of goes away, but the fleet's going to be a carry. The antifreeze is probably a carry-out. That's the drag that's through the first-half. That's how to be yeah. The certainly the first quarter now, we've got a started the oil business in 2011. So we have a lot of trucks that are you know, seven plus years old that released and we're turning those trucks back in and inevitably when you turn the truck in you're going to get a maintenance bill for repair work. So that's that's a function of the oil business what warranty that we got obviously older trucks and Iniesta, we're doing the same thing there but they're not prepared remarks we talked about our desire to have this a better Fleet Management program, and we got to do more preventative maintenance captured some of the pent-up expense and in the fourth quarter a little bit will happen in q1, but we feel like we're getting on top of birth.
You know getting rid of.
Phlox that we don't need the agent Fleet. We had excess spare trucks that were eliminated. So we take over the first half of the year. We cleaned that up for sure and we're also working on other initiatives like and we talk to agent on the last call relative to disposal as you know that you talked to our competitors and they've all raised their prices of which we get settled with a price increase because we're primarily a broker month. We've been working extremely hard to gain control of our our own internal processing capabilities relative to some of our larger waste streams that via not as and you'll see over the course of the year with the pipeline that Mark is generated through our m&a program that we're going to augment these plants and have the ability to process some of our own internal waste we should drive our disposal cocktail and make us not. So right now we're obligated to our third party competitors is obviously we push you out a price increase, but it doesn't give us any margin Bob and we want to barge involved.
and we'll get that for
Internalizing some of these waste streams over the course of the year.
Okay, thank you. Thank you. Thank you. Next question comes from the line of Jim Richards. Thank you. So it sounds like there's there's some benefit that you're anticipating on the es side of the business from some margin Improvement, but the bulk of it is going to occur in the back half. Is that weighted more toward Q4 or do you see the would you anticipate some of these changes these initiatives beginning to play out in Q3 as well. Yeah, we would definitely expect to see some of them earlier than Q forth. So that is that is what we're planning for and what we anticipate.
And and Market it it sounds like you've got a number of initiatives that you're pursuing to to drive some margin Improvement in this part of the the business. Is there any way that we might think about looking out a year? What kind of you know Target margin you might be looking for all else being equal just given some of the the various things you're doing. Well, I think that 27% Target that Jim we've had in place now for a couple of years is a good Target or not organic growth environment that we're in fact, we have to have some struggles in growing as fast as we want from a head count standpoint, which hasn't really impacted surprisingly. Our top one goes that much but I will tell you that it would be better if we will be able to bring on as many people as we kind of put on the chalkboard. So to speak with the hiring Market hasn't gotten any easier to last year-and-a-half two years. So you really suck.
have to answer that question saying
If you stop trying to throw other than just General Route density, but you're not heading headcount. You're not going to finance facilities. You could maybe even see March and start to approach. We did this life more than a couple of years back you get even closer to 30% in a repulsive 27% range, but when you think as you look out Beyond even twenty-twenty that we will fail opposed to home and probably keep marching in that range.
You know a balance sheet is so strong and we talked about this on other calls. I board I mean Market a test of that. They're very charged up about all organic growth and Thursday. We're going to continue to pursue it. Yes, we can talk her down and get the margins to 30% But that's not what we want to do. And as you open branches out west and you don't have the debt to me it's expensive to operate outside of our core Market places and it's simple 11,000 allowed to get supplies out to Seattle would be an example and those are some of the things that actually build density may have capabilities out west or we can Source Commodities locally will have a hub out there which will lower our costs for distribution will have better plans and programs to manage waste time, but you got to have the density that comes with the time. So we're going to continue to suggest if we're going to be in that 27% range until we decide to slow down the growth which is not what we're going to do because
We like the opportunities that we're seeing.
How did it just with respect to the those comments just about increasing density? How how?
Significant is that in terms of focus on the m&a side is looking to to really add density particularly in some of the the reasons that you were just mentioned. It is definitely a focus. I'm glad you brought that up. This is a recurring theme if you would have asked this question even a year or so ago or even two years ago we have while we're I mean, we definitely have a preference for helping us build density in the less dense areas. Those are high priorities. We're not forsaking other opportunities, but certainly if left in a in a vacuum to do two deals, we're going to do the one first and prioritize the one first that's in areas where we have less density. So in general we're talking about for the most part the Western us and in Eastern, Canada.
And the last question it sounds like the pipeline of Opera.
And you said you're seeing there is is fairly active right now. Yeah, we're real excited. I mentioned I think on the last call that we have a director of a name for the first time and brought him in. I think he starts about six months ago and you know, you got both of them fracturing and also an MMA or Investment Banking background. He's coming up to speed on the industry. And the rest of the stuff is really well. So we couldn't be more pleased with at least the early results now again, like similar to a sales cycle Jimmy if I know that that they're not going to walk in here and close a bunch of deals with the pipeline wasn't that bad but we do see several deals here coming into one and two two that we're going to get closed. Yeah pretty excited about it's probably blown.
Got it. Thanks very much. Good luck. Thank you. Thank you.
Our next question comes from the line of Jerry Sweeney with Wolves Capital Grille on is open. Good morning Brandon mark question for him to pay for oil side jobs obviously will prices have come down quite a bit in the last week's you mentioned that on your in your remarks, but how fast or how responsive do you think about your customers can be or you can push those pricing through your through your chain?
You know mechanic.
Play we can push it through our system in 24 hours. If it could not be any easier dynamically out in the marketplace. It's a little bit trickier, but everybody that's selling into a lower commodity price Market has to do something. I know we took a thirty to forty percent starting to $0.40 price decline just a week ago. So we're going to get out aggressively this week and get at least half of that back through our used motor oil program and everybody else is going to have to do the same thing, you know at this point when I look at where the markets edit. It really needs to be taken away stream like every other liquid waste. I mean, we spend a lot of money collecting used motor oil. It's not cheap to run. These routes shops around picking up used motor oil off of what it's not always high quality. So we've got to be aggressive as an industry and and try to change the Dynamics because none of us can control things a little pricing. It's extremely volatile and very frustrating.
so
Only control the used motor oil. Peace and we've got to do a better job of it. But even Jerry just put in perspective, even if we're successful because I mean I'm willing to give them more rat you're not going to see much am I just being a realist? You're not going to see much in the print if you want as far as wow, you know, we were able to lower our sense for like the twenty cents or whatever. We just left here also black rabbit arose, you know baseball price and either which will help it's not going to immediately become a 30% decline. Yeah, exactly.
Got it. That's helpful. And I you know, because the last go around a bunch of years ago, obviously their pricing changed and there was a little bit of I guess click allow psychology going from a phone not getting paid for it all to pay for versus Charge et cetera and but it sounds like the environment a little bit different this go around that if yeah, I would tell you since it's been so long to earlier time. You were referencing that same Dynamic no one wants to get paid less or be charged more no mistake about it. But in general that whole catharsis should be a non-issue that we went through a couple years ago.
Shifting gears that field service is obviously a pretty large contract.
Pretty impactful. What's the backlog or opportunity look like for this business every once awhile. We see something pop in just curious, you know, seeing more activity, you know opportunity and should we, you know, keep an eye out on it more in the future. Yeah. We're seeing you know, we have 90,000 details. We're seeing plenty of opportunities to do smaller and cleanup projects for our core client base. We we've added to our Field Services reps. We've encouraged our branches we put in their club to go out and help Market field services. So it's a major piece of our focus and you know, it's all part of this desire to
Fall lawn mower industrial customers to augment what we do out in the field. We're adding the plants. We're adding, you know some capability to process Our Own Way strange focused on our core client base, which is mostly non-regulated regulated stuff will continue to broker to our partners. But we like we like this business like we're taking this. I mean, obviously the the larger project impact larger that's what happened in beautiful. You're not going to mark up a large Field Services. You have that much you can't just bring em, you know a few projects that we do if you look at the kind of project count that we're doing at entities or companies that start a customer for something else so long, this is one of the benefits of just trying to basically what we like to say is give our people the opportunity to just say yes when a customer is Rita Rises and not dead.
So we don't do that. So, you know, this is a business that is not something we have to go out and solicit.
Separate customer based on there are some projects that maybe we haven't done anything with someone but that's the exception. It's just worth. It doesn't fit into the traditional Bridge Approach and we we have these guys are out there that are experts are doing these smaller cleanup projects and they take over for the branches to make it easier so they can focus on the core business of collecting small quantity waste streams and edit and manage the parts washer services.
Got it. I'll take the gross profit dollars any day of the week. So I appreciate it. Thank you. I agree. Yeah, thank you as a reminder ladies and gentlemen to ask the question. You would need to press star eight thousand one on your telephone.
Our next question comes from the line of cabinets Nike same key with Berrington research your line is open. Hey, good morning. How are you? I'm good. Thanks. So, you know you've talked on the last couple of calls here about the the inflationary for some of the inflationary pressures you're seeing and just want to talk about that truck to the price increases. You look to implement in Environmental Services going into twenty-twenty. Have they been large and their normal, you know, what's been a customer uptake of those price increases and do you think you can largely offset the inflationary headwinds? Have you been experiencing in general managers? Yes health health care. I can talk about that in a second. It's been its own Beast so to speak, but if you remind everyone we used the normal Cadence, I say normal though the Cadence we've used phone number.
for most of the twenty years we've been in business and have implemented at the
End of last year or and it's usually early November issue when we begin to implement that is varied somewhat, but that's what we did this past year for our annual price increase for basically most of the revenue or most of the services offered under our Environmental Services reporting segment and usually will plan to get a portion of that or realise it off of that into forth because we give our field Sales and Service Personnel some flexibility and implementation of this as I'm sure you remember Kevin. So if you really want overall, we'll probably close to about 3% realization sound lines of business or more or less than others as far as realizing price, but overall for the segment. And again, this excludes Field Services Field Services is not recording Project work, but for you know, all the other lines of business, which is at Lion's Share of the revenue that's about where we're at and what we went out with to get wage.
You realize which I just spoke on what we went out with was something that was about middle of the road not more aggressive than normal but not less aggressive. It was a little more Taylor we had sometimes we'll take a very generic approach of X dollars for X percent across a certain line of business on existing dollars. And this time we have differentiated by things like discount rate of the existing business and other factors that do more of a we like to say a rifle as opposed to a shotgun approach.
okay, that's
Twisting helpful, um, and we have seen less inflationary pressure recently. Obviously if you see the transportation numbers which are down so we're actually seeing some opportunity to lower our costs going forward. Yeah. I mean Health Care is a real wide because it's been a wild card too because of the tight Market you have people having, you know catastrophic illnesses, which we for some reason just had a rash of we talked about it in Q3, but they continued down in Q4. There's nothing that said that's going to continue now are we insurance premiums are higher in 2020 now because of what happened but the actual claim rate there were hopeful that they'll come back some stuff alone allies level.
Okay, but you you're trying to capture the the higher health insurance premiums with those price increases at least. Yeah, okay, and then also related to Environmental Services, you mentioned given the tight labor market. It's you know can sometimes be challenging to to add people how to say play into the growth Investments. You're looking to make an 2020. I believe you had been talking about four to five new es branches this year as well as trying to add a similar number of sales personnel as you did, you know in 2019. So are those still roughly what the plan change or maybe just any comments on on those those items for the computer really from a facilities or Branch standpoint? We're trying to take a holistic approach and birth.
the diagnostic weather is
Facility or Branch territory. We open up through an inorganic approach reading acquisition for one that we do from a Grassroots standpoint. You know when you look at a lot of deals and that's one of the great things about potential positive thing about overall General economic headwinds, whether it's driven by coronavirus or on the factors. Yep, we're seeing a glimpse of the acquisition Market may be loosening up to where we can not have to be faced with a lot of that insanely High multiples of earning that we've been looking at or staring at the last couple of years. So I think my gut tells me it'll be more toward maybe inorganic or kind of the biases instead of make if you look a classic economic approach, but we acquire three sites and we require one. They're still trying to get to that 4 to 5 ish in 2020 wiener dog.
Did not hit that in 2019.
And as far as headcount we had at about 14 ends. That was much better than in 2018. We had four we had about forty and 2017 and I think around that same Target from the run that same number that we had last year for twenty twenty is really what we're shooting for for my new position standpoint. I think we touched on June still want me maybe in Q3. We had 90 plus vacancies were still at $85. So we want to continue to work to recruit people to support our existing branches. I agree with Mark that we we certainly like the acquisition route. It's much easier because you require people as well and put them into our system and we could grow off of that. It's much easier now, obviously we can't pull off the Acquisitions. We are going to open organically because we we need to increase definitely in the western half of the us and we will do that one way or the other.
Okay.
That's really helpful Colorado. That's all I had today. Thanks. Thanks for taking the call. I appreciate it. Thank you.
I'm showing no further questions in the queue ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect everyone. Have a wonderful day.
No.