Q4 2020 First American Financial Corp Earnings Call
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Okay.
Greetings and welcome to the first American Financial Corporation fourth quarter, and full year 2020 earnings Conference call.
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A brief question and answer session will follow the formal presentation.
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Copy of today's press release is available on first American's website at Www dot for.
First a M dot com forward Slash Investor. Please note that the call is being recorded and will be available for replay from the Companys investor website and for a short time by dialing 870, 766 06853 for 20161 to seven four.
One five and by entering the conference I day 1371 for 735.
We will now turn the call over to Craig Barberio, Vice President of Investor Relations to make an introductory statement.
Good morning, everyone and welcome to our 2024th quarter and year end earnings Conference call.
Joining us today will be our chief Executive Officer, Dennis Gilmore, and Mark Seaton Executive Vice President and Chief Financial Officer.
Some of the statements made today may contain forward looking statements that do not relate strictly to historical or current fact.
These forward looking statements speak only as of the date. They are made and the company does not undertake to update forward looking statements to reflect circumstances or events that occur. After the date for forward looking statements are made.
Risks and uncertainties exist that may cause results to differ materially from those set forth. In these forward looking statements for more information on these risks and uncertainties. Please refer to this morning's earnings release and the risk factors discussed in our form 10-K, and subsequent SEC filings.
Our presentation today contains certain non-GAAP financial measures that we believe provide additional insight into the operational efficiency and performance of the company relative to earlier periods and relative to the companys competitors for.
For more details on these non-GAAP financial measures, including presentation with and reconciliation to the most directly comparable GAAP financial please refer to this morning's earnings release, which is available on our website at www Dot first a M. Dot com I will now turn the call over to Dennis Gilmore.
Good morning, and thank you for joining our fourth quarter earnings call.
2020 was another strong year for first American.
Our revenues are running well above the prior year and then the pandemic hit impacting our business overnight.
Top priorities for to protect our people and serve our customers and we achieved.
We quickly transitioned the majority of our employees to working from home is still closed over 1 million real estate transactions in 2020.
This accomplishment testifies to the dedication of our people and their commitment to our customers.
It also validates our many digital investments we have made to improve the customer experience.
I would now like to shifting economics for the full quarter results.
We generated earnings per share for $2 49.
Excluding realized investment gains earnings per share were $2 11.
Revenues in our current insurance segment were up 26% in the fourth quarter, and we effectively manage our expenses achieving a 53% success ratio, which contributed to a pretax margin of 18, 9%.
Our focus on automating title production and digitizing the closing process paid off in 2020.
In a year of rapidly surging volume.
<unk>, 32% more orders for this quarter than the prior year with just 6% more employees.
Our direct purchase revenue rose, 32% in the fourth quarter.
We experienced an 18% increase in closed transactions and an 11% increase in the average revenue per order.
This growth is a sign of the continued strength of the housing market.
Refinance revenue continued to benefit from low mortgage rates with revenue rising 79% over the prior year.
Commercial rebounded strongly in the fourth quarter.
Since the onset of the pandemic commercial has been slower to recover than residential.
Commercial revenue was down 39% in the second quarter, 29% in the third quarter and the fourth quarter and true to a 5% decline for the ultimate annualized fourth quarter of 2019.
We are encouraged that the order momentum over the last few months has picked up and we expect to have a strong commercial year in 2021.
Turning to our specialty insurance segment revenues were $141 million, a 7% increase over the prior year.
As we disclosed in January our property casualty business entered into a book transfer agreement.
Which provide qualifying agents and customers an opportunity to easily transfer their policies.
As of February one we are no longer reporting new policies and expect to discontinue policy renewals in may.
We anticipate the transfer will be complete by the end of the third quarter of 2022.
This transaction enables us to maintain focus on our core business and redeploy the capital to areas with higher expected returns.
In the fourth quarter, we raised our quarterly dividend from <unk> 44 to 46.
And we repurchased one 3% of our shares outstanding.
Average price of $49 20, and have continued our buying in 'twenty 'twenty one.
We believe both the short term and long term prospects of first American are stronger than the market is giving us credit for and as a result of aggressively repurchase shares.
Turning to our outlook early indications are that the real estate market will remain robust this year.
The strong open order pipeline, we built in the fourth quarter is converting to revenue.
Traditionally our slowest period.
In January our purchase orders were up 17% and we opened 3200 refinance transactions per day.
Continuing the same trend we experienced for the last several months.
And as previously mentioned, we think this will be another good year for our commercial business.
While we are encouraged by the strength of our markets. We remain focused on the long term opportunities of our business.
In 2021, we will continue to invest in automation of our title production process and the refinement of our digital closing platform.
We plan to increase our technology spend in areas of product development cloud migration and security and we are building digital solutions across our company to transform the customer experience.
An example of this endpoint our title and escrow companies that was built from the ground up to deliver a re imagined clothes and experience. We believe these investments will enable us to continue to generate strong earnings for the years to come I would now like to turn the call over to Mark for a deeper dive into our financials.
Thank you Dennis and the fourth quarter, we earned $2 49 per diluted share. This includes net realized investment gains totaling $56 million or <unk> 38 per diluted share.
Excluding these gains were $2 11 per share.
In the title insurance and services segment direct premium and escrow fees were up 24% compared with last year.
This growth reflects a 32% increase in a number of closed orders, partially offset by a 6% decline in the average revenue per order.
Average revenue per order decreased to $2500 due to a shift in the mix of direct title orders to lower premium refinance transactions.
However, at the product level, we continue to see higher average revenue per order for all order types.
The average revenue per order for purchase transactions increased 11% refinance increased 3% and commercial increased 2%.
Agent premiums, which are recorded on approximately a one quarter lag relative to direct premiums were up 25%.
The agent split was 79, 1% of agent premiums.
Information and other revenues totaled $282 million up 39% compared with last year.
A number of factors contributed to this growth.
The growth in mortgage origination that led to higher demand for the company's title information products and our acquisition of <unk> Tech, which isn't included in the prior year results.
Investment income within the title insurance and services segment was $52 million down 26%, primarily due to the impact of the decline in short term interest rates on the investment portfolio and cash balances.
Partially offset by higher interest income from the Companys warehouse lending business.
This quarter our.
Our investment income benefited from a $4 4 million catch up related to our warehouse lending business.
On a go forward basis, we expect investment income to be somewhere in the neighborhood of $45 million per quarter with short term rates at current levels.
Personnel costs were $515 million up 14% from the prior year.
This increase was primarily due to higher incentive compensation and salary expense and higher costs as a result of recent acquisitions.
Other operating expenses were $300 million up 34% from last year.
The increase was primarily due to higher production related costs as a result of the growth in order volume.
The provision for title policy losses, and other claims was $81 million or five zero percent of title premiums and escrow fees, an increase from a 4.0% loss provision rate in the prior year.
To recap, we raised our loss provision rate in the first quarter of 2020 from 4% to 5% due to the extreme economic uncertainty that existed.
Economic factors are a key variable entitled claims experience and given the deterioration in some of those factors, we raised our loss provision range.
But the housing market in general economy have improved since then.
By raising our loss provision rate 100 basis points, we have added 52 million of additional IV in our reserves on our balance sheet.
Yet our incurred claims in 2020 were $49 million below our internal expectations set at the beginning of 2020.
Paid title claims show a similar trend with claims $30 million below our expectation.
As always we will monitor our claims experience and market conditions, when evaluating our reserves and we will evaluate it next in connection with our first quarter earnings report.
Depreciation and amortization expense was $37 million for fourth quarter up 24% compared with the same period last year, primarily due to higher amortization of intangibles related to recent acquisitions.
Pre tax income for the title insurance and services segment was 377 million for fourth quarter compared with $284 million in the prior year pre.
Pre tax margin.
For the record of 18, 9% compared with 17, 8% last year.
Excluding the impact of net realized investment gains pretax margin was 16, 8% equivalent to the prior year.
And our specialty insurance segment pretax income totaled $27 million.
We recorded a benefit of $18 3 million.
Related to a reversal of an impairment initially taking in the third quarter relating to our property and casualty business.
In the third quarter. This accrual was taken so the book value of our property and casualty business match the expected proceeds from the sale.
We subsequently determined that a book transfer rather than a sale was a more attractive alternative.
This decision required us to reverse this accrual in our property and casualty business is currently carried at tangible book value.
The ultimate proceeds will earn into book transfer will be immaterial.
Net expenses in the corporate segment were $22 million up $4 million compared with last year, largely due to higher interest expense associated with our $450 million senior notes transaction, which closed in may.
The effective tax rate for the quarter was 26, 4% higher than our normalized rate of 23% to 24%.
The tax rate was adversely impacted by $7 4 million or <unk> <unk> per diluted share due to a permanent tax difference related to the property and casualty business.
I'd like to provide an update on matters arising from our 2019 information security incident.
As previously disclosed we received a wells notice from the SEC in September 2020.
We submitted our response in October and have had no substantive communications with the commission.
We continue to believe that the SEC matter along with all other matters relating to the security incident will be immaterial from a financial perspective.
Finally, turning to capital management 2020, with an active year for our balance sheet. We spent nearly 400 million on acquisitions, the largest of which being Doc Tech, which has been a great addition to our company.
We also returned significant capital to our shareholders, we paid nearly $200 million in dividends and raised the dividend by 5% on two separate occasions during the year.
Pursuant to <unk>, one plans, we also repurchased $139 million of stock at an average price of $43 40 for 2020.
We continued our repurchases under these plans early in 2021 deploying an additional $27 million at an average price of $52 97.
During 2020, we also invested $83 million in venture investments in the prop tech ecosystem, which gives us insights into high growth technology companies, many of whom have become strategic partners. We believe our capital management activities accretive value for shareholders and will continue to hunt for opportunities with.
Track the risk adjusted returns.
I would now like to turn the call back over to the operator to take your questions.
Thank you we will now be conducting a question and answer session.
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One moment, please while we poll for your questions.
Our first questions come from the line of Mark Devries with Barclays. Please proceed with your question.
Yes. Thank you I was hoping you could discuss kind of the net earnings impact for you of of exiting the P&C business both.
In terms of the revenue losses.
Any offsets you may have from the redeployment of the capital that this frees up.
<unk>.
Yes, thanks Mark.
So in 2020.
Our P&C revenue was about $138 million.
And so we're sort of in a wind down mode right now we're not issuing any.
New policies or we start quoting new policies as of February 1st it's going to take us.
Roughly a year from the time, we start non renewing which will be sometime around may. So it can take a little bit over a year to wind it down we will lose about 138 million of revenue but.
Again, because of the losses in the loss rates in P&C.
2020, even if you exclude the.
The impairments that we took in terms of goodwill we lost $31 million in 2020. So we think it's going to be earning accretive over time, we do separate.
Finish winding down here.
Let me just add on that more to be clear the business has been at a loss for us. So it's a headwind no question and that.
That will continue for the first quarter, probably the second quarter, but we look for the P&L itself to improve pretty markedly by the third and fourth of 2010 and in the press release, you mentioned kind of freeing up capital how material is that and is that part of where they are kind of the accretion comes from us being able to redeploy in more attractive uses.
Not really it's accretion comes from less less losses right that this has been under pressure for formalized in the capital it's not a material amount to us, but we will we will ultimately redeploy back to the quarter ended up.
$70 million of contributed more capital as of 12 31, Okay, Great and then.
Then.
Happy to see the repurchases.
It's obviously been a while since I was.
A meaningful part of your capital deployment strategy, just curious as to kind of what's changed and that's made that for you an attractive use of excess capital.
Well, it's always been something that we've looked at I think admittedly we've been conservative with respect to the prices that we buy back shares I mean, we don't do it just because we have excess capital. We don't do it just to increase our earnings per share. We do it when we think it's going to be a really good investment for our shareholders. We saw those conditions happening.
In March and April we bought back shares I mean, obviously it was a big correction and we kind of knew that we were going to do better than what the market was giving us credit for and those steam conditions existed in the fourth quarter too I mean, when we look at our outlook. We just felt like it's a lot more optimistic again that the market was giving us credit for.
I will say that we.
We're not in the market at this moment right now, but I think there's a general consensus that we want to be more aggressive in buybacks in the future than we've been in the past, yes, Mark and ill just add you mentioned capital deployment overall, our strategy has been very consistent.
What we've added is a new component to it and Mark mentioned in his script, we deployed $80 million last year and venture investments and over the last few years, we deployed $200 million venture investments 12 individual companies and we will continue to look for those opportunities going forward to really give us two things bring us closer to new Gen customers and will allow us to help solve part of also reported.
Our innovation strategy for that will also will be part of our strategy going forward.
Okay got it thank you.
Thanks Mark.
Thank you. Our next question is coming from the line of Jack <unk> with <unk>. Please proceed with your questions.
Hi, good morning, guys.
I guess for 64000 dollar question on volume.
<unk> resiliency I think Mark you called it out early a year ago.
Longer for longer and here, we are a core <unk> numbers are strong with January numbers look strong.
Maybe giving myself a little bit I remember back in the day, when we have normal refi cycle, there would be a little bit of a spike when rates moved a little bit higher I think as you had 10 printers come off the sidelines.
The January and the link.
For key trends.
Is that reflecting some of the move.
Index point, the mortgage rate isn't that much but.
Or is that just core continued sort of.
Backlog working its way through the system.
How do you think about 'twenty, one I mean, obviously purchase should be pretty good sell in commercial could begin.
You had a good deal last go round about a year ago on refi how do we think about how are you thinking about that now.
John on the book this is Dennis I'll start we're optimistic going into 'twenty, one and so you kind of mentioned really quick purchase is going to be strong with income 21.
I'll, probably get a question for commercial the commercial very optimistic going into 'twenty. One refinance is always a harder one for us to forecast, but last year, we were anticipating about 3000 orders per day.
We hit it pretty close actually in the fourth quarter, we were running at $2900 to day January running at 32 until we think still the 3000 a day is good and I think it's going to stay there in the foreseeable feature for a few reasons don't forget the lenders have all built a lot of capacity over 20, and they will deploy that capacity in 'twenty, one even if the spreads start to come.
And the other thing people should remember about us too I think it gets sometimes lost is even if we start to trend down a refinancing sales later in 'twenty. One what's probably happening is mortgage rates are starting to trend up and we're going to get the benefit in our investment income.
<unk>.
It goes both ways, if refinances start to go down and investment income kind of recovers, we will still be doing very well.
Okay. Thanks for that.
Bob.
You had about an $80 million year over year growth rate than norm information side.
Obviously docking question Omar.
So can you sort of size for us how much of the year over year growth from $1.
Was driven by <unk> Corp, first volume growth.
Versus growth in other products.
We keep acquiring companies is there.
For a way to sort of thinking that <unk> re different buckets.
Sort of how we think about modeling that on a go forward.
Yes so.
So the other $80 million, we had about $22 million of that growth was <unk>. So we had so for <unk>, we had 22 million for fourth quarter of revenue and we Didnt I wanted a year ago, So zero a year ago.
We've seen growth in our data and analytics business to the tune of about $19 million year over year, we continue to so data and information products.
Customers net growing very nicely.
We also have $15 million of growth in kind of our centralized.
Mortgage business, where we do a lot of post close activity and then finally I'll just point out our international business was up about $10 million in terms of year over year growth from them.
And looking for this is Dennis looking for it in 'twenty, one I think all of those trends will continue but I would like to highlight the data is really hitting its stride right now for <unk>.
For two issues from number one the data is really coming together for us as we've talked about over the last few years for.
For both internally for our own innovation efforts and our own automation efforts and Thats really.
Moving forward fast on our opportunity to sell to our partners and our customers out in the field.
Alright. Thank you thank.
Thank you.
Thank you. Our next question is coming from the line of Bose George with <unk>. Please proceed with your question.
Hey, guys good morning.
The commercial recovery year over year, obviously is strong.
Curious.
There is some sort of a catch.
Catch up happening in that sector.
Or just curious how would you characterize what's going on because it looks like youre getting close to somewhat normalized levels now.
Yes, Great question I don't think it is a catch up and will be explained we were dealing with 39% in the second quarter commercial 29% down in the third quarter and then the fourth quarter rolls around and we really gained momentum in November December the momentum continued in January were only down 5% on revenue of the fourth of 19.
Which was a record quarter for us and interesting enough inside of those numbers, we were lagging still on large deals.
So it's broad based it's kind of I'll call it more than one of the mill kind of deals and I actually think we have the opportunity to see the large deals will start to kick back up in 'twenty one.
Im not sure I doubt 'twenty will be a record year for us, but it will be a strong commercially anymore. What I believe second I think also probably investors didn't appreciate through the whole cycle of 2020, we were meaningful meaningfully profitable to us.
First of the visit whole year loans.
Okay, Great. That's helpful. Thanks, and then actually just can you revisit normalized title margins.
Given the range in the past can you just talk about where you see that whether anything in terms of what happened this year your business mix et cetera.
Yes.
I think we don't give a guidance on that but I think people should understand is regardless of what the market brings to us for always going to strive to have incrementally improving margins year after year.
Most of the time, we can achieve that so looking at 'twenty, one I'm optimistic that we've got a strong purchase market at least for the beginning part of the year. We think we'll have a strong refinance market, which I think will last a little longer than people think and commercial strong.
We're seeing great leverage on the business right now, where we're seeing real benefits from our automation from Pat automation or digital closing and we're seeing real strength from her day to businesses.
We're going to we're going to always do is look to have top tier performance top quartile margin performance.
But nevertheless expense of the long term, we're going to continue to invest in this business as I mentioned in the script. So that's always going to be a balance for us, but we think it is going to be a good year in 'twenty one.
Okay, great. Thanks.
Thank you. Our next question comes from the line of Mark Hughes with true Securities. Please proceed with your questions.
Our bodes quite good in the quarter.
You comment on how much of that might have been mix versus price appreciation.
Well, it's hard to know exactly I think it was that I mean, a lot of it was the HPA tip.
Typically.
Housing prices rise of the dollar the rule of thumb is we'll get about 60 of that into to our purchase fee per file.
But we also did see a mix I mean, our California business was up 15% on direct side.
Obviously, California has higher housing prices. So I would say most of it was HPA, but some of it some of it was mix and none of it was.
Raising rates, that's not something we're.
We've been doing so we have no rate increases and there it is.
Just a matter of.
HPA in banks.
Operating expenses the margin was obviously quite good.
Were there any unusual items in that when you look at it sequentially.
It was up a bit.
Just curious.
So the question any unusual items in the quarter I couldn't quite hear you there.
The other unusual items in the other operating expenses your margin was a very good overall, but the other expenses were up a bit sequentially. So just curious.
No I think in the other operating expense line.
Non there was there was nothing unusual there.
Thank you as a reminder, if you have if you would like to ask.
For the question. Please press star one on your telephone keypad.
Our next questions come from the line of John Campbell with Stephens. Please proceed with your questions.
Hey, guys. Good morning, Congrats on a great quarter. Thank you.
Mark in the specialty segment I am getting I think of about a 15% pre tax margin for just a home warranty business for 2020. So first is that about the right Mark there and then.
If that's the case would you guys expect.
<unk> kind of an improvement on a run rate basis as you guys get away from some of the Covid driven kind of higher claims for the home warranty business.
Yes.
Yes.
We were impacted this last year that the whole industry was on the Covid I'll call. It the COVID-19 related clients and our clients and our plumbing they were up about 18% by the way in the fourth quarter, but the business is growing nicely both in our real estate channel.
Direct to consumer so what we've done is adjusted for prices and from policy coverage issues and those will flow over the next 12 months as the policies renew.
Okay, and then I'm guessing we could probably gets us in the 10-K, but I don't know if you guys have this on hand, but what was the provision rate for just the home warranty business in 2020.
The loss provision rate right.
<unk>.
The loss provision was 53% in 2020 and it was 50% 50% in 2019. So we have seen as we've been talking about higher higher claims, but obviously still still pretty attractive loss return for that business.
One thing to remember on that business, it's difficult to forecast, though is that we have extreme weather in the summer months, we're going to see an uptick in our.
Our air conditioning claims so there is a weather component on that one in the summer months typically.
Makes sense and then on the macro I mean, you guys have had a good crystal ball of late I think Dennis I think you nailed the refi call last year for sure I mean, it looks like the MBA is calling for I don't know if down almost 25% year over year that feels a little overly conservative to us, but Dennis you did say you said a couple of times you expect a pretty healthy market. This year, but just curious on.
Your thoughts on that forecasts.
And then maybe I don't know what Flemming has for you guys. There internally about kind of what he is taking the market for for 'twenty 'twenty, one a little bit of my forecast for now and that's not far off from our budget, what we anticipate for 'twenty. One we're a little more aggressive in the 'twenty five, but what I think's going to happen as the spreads are going to come in and Theyre going to the lenders are going to deploy this.
<unk> right. So I think it may last a little longer than people think it's Michael right now.
Okay.
We are going to go though is irrespective, we're starting really strong in the year both purchase and.
And refinance which is obviously good for us in are typically the seasonally slowest quarter. So a real strong start for the year, we will see how it plays out.
Okay. That's helpful. And then last one for me on commercial.
As you guys kind of look at the pipeline could you just kind of broadly talk to what that mix looks like purchase versus refi, that's pretty similar to <unk> or if you guys are seeing a little bit more purchase strength.
The mix Hasnt really.
Changed much I mean, when you look at our commercial revenue.
About 25% of our revenue is refi related in the fourth quarter and was the same number of 25% and.
In the fourth quarter.
2019, so we've seen a pretty consistent mix of refi, obviously, we don't have the volatility that we havent zone.
Okay, great. Thanks, guys. Thank you.
Thank you. Our next question is coming from the line of Geoffrey Dunn with Dowling and partners. Please proceed with your question.
Thanks, Good morning.
Dennis I wanted to get some higher level thoughts from you on the.
Technology and Digitization efforts.
Can you just discuss a little bit going forward how important is.
Automated underwriting a refi automated underwriting purchase relative to really digitizing the front end and back end experience per customer it seems like we.
We kind of blend the concept of digitization, but theres different aspects here in terms of what could be meaningful for production meaningful from an expense standpoint et cetera. So can you, perhaps that out a little bit more.
Yes, great question.
We do blend that together, but they are separate issues right. So let's break them down at.
At the fundamentals of a title automation, which we've made great strides and are great strides to gain in the future.
Core of that is the data right. So we've made tremendous gains of the data we have the largest public record database now in the last couple of years, we've made tremendous gains on the automated capturing of the data. So we're able to go larger content larger Geo right now which leads us to build.
Significantly more title plans in the years to come and we are already the title plant leader and why I bring that up Jeff and that's the fundamental for the title automation, both refinance and purchase. So now go to go to the title automation itself, we continue to add I'll call. It our data scientists and others to refine the title automation.
<unk> on the purchase and refinance and Theres more to go there so that that component. The second component is the closing which will probably be more incremental because we have more obviously regional variations, but thats part of the Doc Utech and many of the other things we're doing right now to I'll call to digitize the closing process.
Including by the way our endpoint investment that I don't think people probably have focused enough on.
We launched their native digital endpoint.
Native digital company called endpoint, I guess, it's about a year and a half ago or so.
19 started to hit its stride and Thats a completely re imagine the way to close no connection to how we've done it historically, we launched in Seattle, We got a 2% and growing share there, we've launched and I'm looking at Mark for five three and three more markets this year more to come.
And I think theres, a lot of opportunity in endpoint and by the way that's been a $70 million commitment to us internally that we're going to continue to fund.
To re imagine their closing aspect and all of that wraps backed up by the way to the margin question, we're always going to strive for.
Top tier margin performance for never ever at the expense of the long term investment to move this business for for a digital future.
And what about the front end experience aspect of it.
Jeff qualify a little bit so I know exactly what you need other front end.
It seems like you saw some news out about <unk> and I believe you guys as well about the.
In terms of.
Secure digital opening sites and I think particularly.
Escrow deposits and fraud prevention are another big area. That's been focused on I guess, what I'm also trying to get at is.
Jeff.
She has to play out we're doing the same thing.
Called our secure portal, we've been rolling that out for a number of years, making great strides so think of that more as incremental endpoint more.
More materially different approach so once an incremental approach, making great strides endpoint kind of I'll call it more revolutionary approach.
Okay, and I guess.
The ultimate conclusion I'm looking for here is.
It strikes me that this is more about better operating leverage on future business not necessarily having to expand the expense base.
As much as you might have traditionally needed to on top line growth rather than a material expense reduction.
Is that the right way to think about technology.
Absolutely the right way to think about it I mentioned in my script, we're upping our spend in technology profit develop and other things we're trying to wrap up this year.
Majority of it in our cloud migration, which will allow us even greater flexibility. So if anything Jeff we're not cutting back expenses and technology accelerating them and just thought in our fourth quarter numbers by the way I look at our orders were up 30%.
Our head count was up.
6% 400 people that would have never been the case, Jeff as you note 510 years ago ever.
So this isn't about for us at all costs for them to cut expenses. This is about looking forward and getting greater automation and other business.
Yes.
Alright, great. Thank you appreciate the comments thank you.
Thank you there are no additional questions at this time that does conclude this morning's call for.
We would like to remind listeners that today's call will be available for replay on the company's website or by dialing 870 760 debt.
Five three.
Or 2016 points to that.
For one five and by entering the conference I'd day 1371 for 735.
The company would like to thank you for your participation. This concludes today's conference call you may now disconnect.