Q3 2020 FirstService Corp Earnings Call
Welcome to the third quarter investors conference call.
Today's call is being recorded.
Counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements that involve known and unknown risks and uncertainties.
The actual results may be materially different from any future results performances or achievements.
Contemplated in the forward looking statements it.
Additionally, information concerning factors that could cause actual results to materially differ from those in forward looking statements is contained in the Companys annual information form.
Files with the Canadian Securities administrators and in the Companys annual report on form 40 F. As filed with the U.S. Securities and Exchange Commission.
As a reminder, today's call is being recorded to date is October 28, 2020 I.
I would like to turn the call over to Chief Executive Officer Mr. Scott Patterson. Please go ahead Sir.
Thank you Tiffany.
Good morning, and welcome ladies and gentlemen to our third quarter conference call. Thank you for joining today.
I'm pleased to be here with our CFO Jeremy Rakusin.
To walk you through in a strong quarterly results, we posted this morning, which exceeded our expectations in both divisions.
We obviously continue to be impacted by the pandemic across every business.
But the remarkable efforts of our teams in combination with the resiliency and diversification of our business model.
Our naval enough to drive growth through this period.
I will start us off and provide a high level, where you have the numbers and some color around our performance.
And then Jeremy will dive in with a more detailed look at our financial results.
Total revenues for the quarter were up 10% over the prior year, comprising organic growth of 7% and the balance from acquisitions.
Primarily tuck unders to our commercial restoration platform, including Rolling which closed at the beginning of the third quarter and contributed healthy results.
EBITDA was up 15% year over year and reflects 50 basis points of margin improvement.
Driven by higher margins at Firstservice residential and lower corporate costs.
Jeremy will provide more emerging detail in his prepared comments.
And finally earnings per share were $1.19 up 29% over the prior year quarter.
At Firstservice residential revenues were flat versus year ago.
Last quarter, we reported revenue was down 9% year over year. So we are very pleased with the bounce back in quarterly revenues.
The sequential increase primarily reflects reopening of amenities and facilities.
An increase in the property and ancillary services, we provide to our communities as we move closer to our pre pandemic staffing and service levels.
Over the last 60 days, we have worked closely with our clients to successfully opened up club facilities and amenities.
Well following CDC guidelines to ensure the health and safety of our residents and associates.
However, we still have many facilities in the northeast, California, Florida, and our Canadian markets that are only partially open we're still remain closed.
These facilities, which include community pools fitness areas bars.
Bars and restaurants represent about 20%.
Of our amenity management revenues and offset the organic growth.
That we would otherwise have shown.
Looking forward, we believe Q4 will closely resemble Q3 in terms of year over year performance.
Well, we don't believe many of our open amenity facilities will shut down.
It is unclear when our closed amenity facilities will reopen.
Moving on to Firstservice brands revenues for the quarter were up 24% with organic growth at 15%.
And the balance from several restoration tuck under acquisitions over the last year.
Our home service brands, including California, Closets Certapro painters.
Floor coverings international pillar to post and Paul Davis.
Generated topline revenue down slightly from the prior year.
This group was off about 20% in Q2 versus year ago.
So a sequential improvement in Q3 is significant.
Leads and sales activity were growing through the quarter.
But our ability to install and service inside the home still faces kobin related headwinds.
At this point for this group, we expect the fourth quarter to be flat to slightly down versus year ago with a building pipeline, providing some tailwinds for us as we head into Q1 of 2021.
Century fire was up low single digit versus the prior year.
The service and inspection side of the business has come back strongly relative to Q2.
But was still down modestly year over year, which tempered the growth and sprinkler and alarm installation.
And finally, our commercial and large loss restoration platform global was up significantly versus the prior year over 70% including acquisitions.
Over 40% organically.
Global benefited from two significant weather events Hurricane Laura and the Iowa wind stores.
Which together generated generated work that accounted for about 25% of global revenues in the quarter.
In addition, global secured a number of large loss claims during the quarter across North America.
Which together with the storm work more than offset the steep declines experienced in claims.
From its hospitality vertical.
The success this quarter reflects well on the strategic priorities, we have been executing against.
These include expanding our geographic footprint.
Adding new national accounts, and increasing our share of existing national accounts.
In particular, we benefited from the expansion of our footprint during the quarter.
Our acquisitions of Catco in Missouri per.
Perfection in Illinois.
And Roland primarily in the mid Atlantic.
Led to significant incremental work during the quarter.
The expended expanded footprint in storm affected areas.
He gave us an on the ground presence and ability.
To sell the larger capability and resources of global which resulted in work that far exceeded the previous capacity give each each tuck under.
We have also made tangible progress in landing new national accounts.
Several of rich, which contributed during the period.
A number of the new accounts are in Canada.
Led to strong year over year organic growth in our Canadian operations.
This is particularly impressive in a market that is estimated to be down by over 20% due to moderate weather and Colby.
Our backlog heading into Q4 is quite robust.
Our work in Louisiana, and Iowa continues plus.
Plus we have a number of large loss jobs in process.
We expect a strong Q4 with revenues well above prior year and approaching those achieved in Q3.
We are very pleased with our momentum in commercial restoration. The operating leadership at global has done a fantastic job in terms of strategic execution.
We have a lot of work ahead of us in this business, but our path is clear and we remain very excited about our opportunity.
Before I hand off to Jeremy I want to recognize our operating teams and frontline staff our cross for service.
The perseverance and positive energy that I see and hear about every day is awesome.
We have a strong culture built around customer experience. It permeates every brand and motivates our teams and it is the principal reason behind our ability to deliver 7% organic growth in a very tough pandemic environment.
Jeremy Let me hand off to you.
Thank you Scott and good morning, everyone.
Third quarter financial performance was strong and above expectations as Scott indicated.
The consolidated results included revenues at $742 million, adjusted EBIT da at $88.7 million and adjusted EPS at $1.19 up.
10%, 15% and 29% respectively.
On a year to date basis, we have executed and delivered growth in similar fashion in the face of COVID-19 headwinds.
Further testament to the essential services nature, and enduring ability around businesses to perform in challenging market conditions.
Financial highlights for the nine months to date include.
Revenues of $2 billion, even up.
Up from $1.73 billion in the prior year period, an increase of 15%.
Adjusted EBITDA at.
$203.8 million, a 19% increase over the $171.3 million last year.
Aided by both growth on the topline and an improvement.
In our consolidated margin by 30 basis points up to 10.2%.
And adjusted EPS of $2.44 up modestly over the $2.38 per share reported for the same period last year.
Adjustments to operating earnings and GAAP EPS in providing adjusted EBITDA and adjusted EPS, respectively are disclosed in this morning's earnings release, and our consistent with our approach in prior periods.
I'll now walk through our segmented highlights for the third quarter.
At Firstservice residential we generated revenues of 70 $374.8 million inline with the prior year.
Scott referenced the year over year decline in our amenity management services from co bid related facility this facility closures, which tempered topline growth.
Our EBITDA for the division increased 5% to $41.8 million with a margin increasing by 60 basis points to 11.2%.
The margin improvement was primarily attributable to strong growth in our higher margin transfers and disclosures revenue driven by increased velocity of home resales in the quarter compared to prior year.
Shifting over to our Firstservice brands Division, we reported revenues of $367.2 million for the third quarter, an increase of 24% versus the prior year period.
Scott has already provided color on the top line drivers of growth for the quarter.
EBITDA during the quarter increased to $48.7 million up 19% over the prior year and our margin came in at 13.3%.
Compared to 13.7% in last year's Q3.
Margins improved at our home improvement brands from prior expense reduction initiatives.
Offset by the impact of stronger topline growth at our lower margin company owned operations in restoration and fire protection.
Our consolidated EBITDA and operating earnings also benefited from a 50% reduction in corporate costs versus the prior year quarter.
Compensation expenses were lower reflecting our focus on cost containment in the current environment together with favorable foreign exchange.
Below the operating earnings line, we achieved superior earnings per share growth of 29% in Q3.
Two key drivers compared to the prior year quarter.
We're an improved 24% tax rate.
And lower interest expense, where we benefited from both a lower cost of debt funding and significant debt pay down.
Contributing to the debt Paydown was another quarter of strong cash flow be.
Before working capital changes cash flow from operations was $67.5 million up in line with the earnings increase at 28% over the prior year quarter.
Operating cash flow after working capital was $42 million a little more than doubled the prior year as we continue to effectively manage our working capital during the pandemic.
On the capital deployment front, we outlaid $9 million in capital expenditures during the third quarter with $31 million now incurred year to date.
These are both lower than prior year levels again, reflecting cost containment discipline.
And tracking well within the pacing about 45 million dollar full year Capex target.
We also spent $65 million in acquisitions during the quarter with the rolling restoration transaction, comprising the bulk of that total.
Our deal pipeline is active across our service lines with the re acceleration of our tuck under acquisition program. After having gained greater comfort in navigating through the pandemic environment.
Our balance sheet continues to be strong and supportive these initiatives at quarter end, our net debt was $446 million, resulting in leverage of 1.6 times net.
Net debt to trailing 12 months EBITDA.
Our liquidity and debt capacity remains strong with $575 million of total undrawn availability under our credit facility plus cash on hand.
These metrics remained largely in line with the prior second quarter, demonstrating the ability of our operations to generate free cash flow.
Between terminally fund our acquisition spend during the quarter.
In closing my prepared comments.
We reiterate our outlook from the second quarter earnings call. We're on the back half of the year, we called for flat consolidated topline growth and margins consistent with prior year absent any storm related activity.
This baseline is consistent with what we see for the remaining quarter.
And then adding the impact from recent storm related and large loss claims backlog at global.
Our consolidated results should see modestly positive growth in Q4.
During our next scheduled earnings call in early February summarizing our 2020 year end results.
We will provide some high level comments on outlook for 2021.
I would now ask the operator to open the call to questions. Thank you.
Last question. Please press star one on your telephone keypad likes.
Makes it the queue. Please press the pound key.
Your first question comes from the line of George Tonight Scotiabank. Your line is open.
Yeah, Good morning, guys and congrats on yet another strong quarter.
Thank you George.
Scott I think you might have mentioned this in your prepared remarks on the restoration piece, but I might have missed that can used to tell us how much GE or age.
Was up year over year and can you maybe talk through the improvement in margins up business.
It was up 70% including acquisitions.
40% organically with the two weather events, the two principal weather events driving about 25% of the revenue for the quarter, that's what I.
Disclosed in the in the prepared comments.
Jeremy do you want to talk about the merger.
Yes, George margins pretty comparable to prior year.
Okay.
Okay and you guys also call I've spoken about the large loss portfolio. Currently at your age can you maybe give us a sense of the size of that portfolio, what's what's in the backlog.
Well, George I want to differentiate between large loss and and storm activity.
Large losses a.
Is a part of our business.
That.
We expect to be right.
Recurring.
Perhaps not every quarter, but certainly every year, we expect large losses some of them will come from storms.
Some of them will come outside of storm activity fires accidental water claims and so on so we we don't we're not disclosing necessarily how much large loss work we're doing.
What we're trying to provide guidance around is it.
The hurricane work, the large storm work and and for this quarter, which the Iowa wind storm and Laura in Louisiana.
Okay. Thanks for that and I think Scott you might have alluded to this last quarter.
Just wondering if you expect the safety protocols.
I mean, many business should impact utilization rate, especially I guess in the context of what.
Where we seem to be a pretty strong second wave here.
It is definitely reduce capacity.
Add to many of the facilities that we manage and that in turn.
Has reduced our.
Level of service, which is essentially the number of people we have on site associated with that facility.
We thought that that would.
Perhaps when we spoke last quarter I think we were thinking most of our amenities would be open by year end, it's clear now that that.
That will not be the case and we'll be dealing with this well into 2021.
Okay.
And one last one if I may.
Looks like you guys mentioned the home services, there is a pretty strong backlog.
Bill not part of the business, but there's an ability to get into homes. So I'm. Just wondering as you look into next quarter is that going to kind of impacts our ability to convert some of those sales.
I think it will in Q4, I think Q4 is going to look.
Similar to Q3.
In that respect.
There.
Home sales are up.
Home prices are up home equities up and generally that bodes very well for home improvement longer term into Q into 2021.
We think our home improvement businesses are going to increase in and show some strength.
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You know the timing around when we are able to.
Fully convert leads into jobs is is a little bit uncertain right now.
Okay. Thanks for your answers.
Your next question comes from the line of Stephen Sheldon with William Blair. Your line is open.
Thanks, and congrats on the results within residential.
Residential obviously really good stabilization there.
And you gave some good detail on impact from some entities still being close is that the only major drag you're seeing on organic growth in Threeq, you and as we look at for Q.
And I guess asked another way if amenities were fully opened would you be back to the normal 3% to 5% organic range that youve normally targeted.
And we will be tough to drive organic growth without amenities opening back even more broadly.
If.
If amenities were fully back and we were through this.
We'd be showing our 3% to 5% organic growth our core business in the third quarter, including most of our Ancillaries.
<unk> was up over the prior year.
And this is.
It's important it represents our way.
Win loss ratio.
And is reflective of where we might be and it's in that range Steven.
There isn't anything else that is a significant there's lots of ups and downs with our acceleration.
Collections are down.
Project management is down there are certain things that Kobe continues to impact, but it's not material.
Like the the amenity closures are.
Okay got it and then on the Nash and the National accounts and restoration, how much of your work within the restoration business outcomes through the larger national accounts, how impactful that the recent wins then is there a way to frame the traction there and what that could mean over the next few years.
I don't know that I have a percentage I mean, it's it's I would say most of our work commerce through our national account relationships.
These are the customers that we mobilize around.
Particularly when there is an event.
We've made traction definitely in the last year, and adding new accounts and also when increasing the share.
Of our existing accounts.
So were.
We're definitely making progress.
You know, let me put it another way key takeaway acquisitions and you take away the impact of the two events.
Global grew organically by over 10% for the quarter.
And that would be largely reflective of our.
Momentum with National accounts.
Got it Thats really helpful. Appreciate the color. Thanks.
Your next question comes from the line of Stephen Macleod with BMO capital markets. Your line is open.
Stephen Macleod with BMO capital markets. Please go ahead.
Oh. Thank you serves on mute there good morning, guys. Thanks for answering my questions.
I just wanted to circle back around on the brands business and I know I know Scott you gave some good color around the storm related activity and what the impact was in the quarter.
You know what when Q3 was a Q3 19 was an unusually weaker you were able to give some sort of more specific.
Revenues and EBITDA impact is that is that something that you're able to do for this quarter or should we just work with the mountain gave us and figure it out on our own.
Uh huh.
Ask me more specifically Stephen what exactly do you want.
Is there any way to quantify the dollar an EBITDA impact from on a year over year basis from the two major storms that were so significant toward get a gross yeah. Okay.
45 million range.
Their boats.
Yes.
Okay, So 40 fives to revenues.
Yes.
Able to disclose what the EBITDA impact was.
Jeremy.
Yeah again, Steven it's pretty comparable to how the business performed overall in the quarter I mean, each each band is going to be different in terms of mix of types of jobs, but for this quarter.
The types of jobs that we did at those two events resemble the.
The margin for the.
For the business as a whole.
Including the non storm events.
Okay. Okay. That's that's helpful.
And then maybe as you look to Q4, you know obviously, there's lot lot of moving parts, but on a net basis, you're sort of seeing like a flat underlying.
Flatten underlying plus plus plus the backlog in the storm activity or.
Are you able to quantify like what that number looks like as you roll into Q4.
Well, we as I said in my prepared comments, we do have a strong backlog.
We continue to work on Louisiana and Iowa.
We have a number of other large loss jobs are.
In process Q.
Q4 may not get to the same level as Q3, but it will be close will be strong.
Okay. Okay. That's good.
That's that's helpful.
Turning to the residential business.
One of the things you talked about recently was it was a lot of homeless homeowners associations weren't looking to sort of change.
Change operators have you seen any movement in terms of like market share gains on the core property management side of things or a lot of a choice still in a holding pattern with respect to switching out their service providers yeah, no we're starting to see it.
Our sales have been off I think I've mentioned that the last couple of quarters, but we're starting to.
Starting to see a pickup.
And and I think as we as we head into 2021 will settle back into that.
When last rhythm.
That drives the 3% to 5% organic growth that's our expectation currently.
Right.
Okay. Okay.
Okay. That's.
That's so that's it for me thanks, guys appreciate it.
Thanks to.
Your next question comes from the line of Matt Logan with RBC capital markets. Your line is open.
Thank you and good morning.
Winning.
Jeremy appreciate your comments on the you know the dollar impact of the storm activity in Q3.
So just to confirm that was $45 million of revenue and I'd put a 30% margin that would be roughly $6 million of EBITDA.
No well, Okay first of all 40 fives, a ballpark number.
The division.
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Globals Globals margins are lower than the 13.3 for the division I was talking about the margin on those two storm events resembling the.
The margin for the rest of the business at.
Global it would be lower than 13, it would be more in the tennis range.
Okay.
Okay, so, but a 10% margin and kind of a ballpark $45 million figure in terms of revenue.
Was there any storm activity of consequence in Q1 hundred Q2 or would this be it for kind of the nine month period to date.
Yes, there was nothing of any significant consequence in the first half of the year.
That's great and when we think about normal course storm activity in any other year.
Would it typically be in line with the average margin for global would be usually be a higher flow through EBITDA in most cases.
Again back to my prior comments.
The prior questions with the early analyst it does vary from job to job and storm to storm event to event.
We could get higher than 10% in some in some events situations.
You know I would call this kind of a down the fairway.
Type of margin that we got this quarter from from those events.
Okay.
Your question more focused on the margin as opposed to the you know how much top line revenue as a percent of.
Of the of the annual revenue your questions more driving to the margin.
Yeah, if we think about the last five years of hurricane activity would like if we get.
Say $50 million of hurricane activity.
Given quarter would it typically flow through.
In line with the average global margin that roughly 10%.
Yeah, and then there'll be some element of fixed costs that drives kind of a higher margin for the incremental revenue.
No and in many instances that extra volume would drive operating leverage and higher margins in this in these these.
These particularly bands there was some lower margin work that kind of netted out to.
Something in line with the overall.
Global business performance for the quarter.
Makes sense I appreciate that.
Maybe taking a step back and thinking about the business more broadly would.
Wouldn't be look at the impact of the rebranding.
The momentum with national accounts.
How should we think about organic growth over the next three years say.
As opposed to say the 10% that was delivered ex weather in Q3.
You know I think the 10% is a is a new.
Number we're very very proud of this.
This year.
Certainly organic growth is.
Is a priority for us and all our businesses.
And we would expect mid mid single digit.
At a minimum in this business, but the rebranding.
Is.
Currently targeted for.
Early 2021 and.
Our experience with Firstservice residential.
Really shows us how powerful this can be when you're bringing many brands under one with a unified message.
And so we're very excited about both at launch in 2021.
I think that that could be.
An accelerator certainly.
You know over the near term after launch.
Okay.
And it would would it still be fair to say that you have a view to potentially double the size of restoration over say a five year period.
Absolutely.
And in terms of your pipeline you know.
Would that deal flow be more kind of the near term given some of the dislocation.
In the marketplace or is there sufficient.
Capital chasing these deals that theres, a lot of competition and it will be a little more leg work to get the deals over the finish line.
I think I think all the above I mean.
There is competition.
But we do we do have a pipeline and we do have a priority.
Regions and areas and companies.
But.
Like our tuck under program's been in place for over 20 years and.
You know it takes it does take time with these relationship deals and so we expect it to.
To be a multiyear effort.
And last question from me before I turn it back you've done a number of tuck unders for global since you acquired it.
Can you give us some color on the synergies between the acquisitions like would there be an ability to cross sell or.
Augment services in one component door geography in the same way that you've done with century fire over the years.
Yes, a lot of it.
At this early stage has been about the.
The footprint and expanding the footprint.
And.
Taking advantage of the present in those regions both too.
Game.
Greater share.
Of our national accounts.
And and their facilities in that in that region, but also.
To be there on the ground.
When there is a weather event and we saw that.
This past quarter with the IRO, Iowa wind storms.
We had two.
Two tuck Unders CAD Cohen perfection Midwest Tuck Unders that we've completed in the last year.
And these are very strong regional organizations with.
With Midwest relationships and.
Today as I said in my prepared comments, they were able to leverage those relationships into work.
That.
You know far exceeded what they were capable of previously as a standalone entity and that's you know what thats part of our strategy.
To to leverage these relationships and leverage their national accounts, and what role and we've done the same they.
They've got strengthened.
In the health care vertical and with a number of.
National organizations, and and we've been able to partner with Rowan.
And leverage those in the past quarter.
That's great color I appreciate the commentary that that's all from me ill turn the call back.
Your next question comes from the line of Marc Riddick with Sidoti Your line is open.
Hi, good morning, gentlemen, good morning.
So I just wanted to piggyback on one of the earlier questions around residential because one of the things that I thought was fairly interesting is the common Jim and I really appreciate the color that you gave on some of the work that was done on the grounds. She will work with the you know the service offering openings and getting as much.
Activity with those facilities as possible I was wondering if you could talk a little bit on whether or not you're seeing any change or increase in outsourcing activity for for some of these these managers and maybe sort of compare that to potential market share gains that may be coming and some from actual operational compare.
It was as opposed to increase outsourcing growth.
Mark I, we have not seen any any increase in outsourcing.
And we really havent seen any changes.
You know in the past quarter and the competitive environment.
Around.
These facilities for residential property management.
More broadly.
Don't know if that and some of us.
No no. Its I was sort of curious as to whether that that had begun because it seems as though the work that has been done during the quarter or two to accelerate the pace of the E activity at those facilities seem to be quite positive and it seems as though that will be competitive advantage that that could lead to future.
James this future market share gains well I mean, we are just to be clear we were helping the communities we manage reopened.
They're amenity facilities that.
Previously been closed due to profit cobot and still in many cases remain partially open or closed.
So as you know as part of our responsibility as manager of those communities to provide that service.
And the amenity management piece has long been a differentiator for US there are very few full service management companies that provide.
Provide that ends Hillary service.
Right right that makes sense and then I wanted to sort of circle back on the.
On the brand side, I think and I'm not 100% certain but this this.
This quarter represents the first time, where brands revenue was was nearly.
Nearly matched that of the residential side and I was wondering if you had any thoughts as to going forward what the overall revenue mix of the company could be given the current.
The growth plans that you have it seems as though overtime that brand.
Revenue, which could ultimately.
You know on a longer term basis, not just storm related on a longer term basis approached out on the residential side and what that brand mix that could ultimately.
Only be for future margin gains.
I think it's going until continued to tilt towards brands. There is more acquisition tuck under acquisition activity.
In that division and.
The organic growth.
Would be.
Would be a bit stronger.
Over the next few years in that division. So so that will continue Jeremy do you want to add to that.
Yeah, I mean, I think that's something we've been saying for several years.
To Echo Scott sentiments Mark.
More tuck under growth, particularly at restoration and and fire protection in those newly added platforms over the last five years.
And as those grow faster and they bring a higher division margin it'll uptick the consolidated margins all other things being equal.
The brands division margin being higher than the than the Reds you won in both just to maintain flat margins.
The brand is growing faster that assists the consolidated margins.
Makes sense. Thank you very much I appreciate all the commentary thanks.
Thanks Mark.
Your next question comes from the line of Frederic Bastien with Raymond James Your line is open.
Hi, Good morning, guys. Just a follow up question on the last one that was asked on the M&A front Q you partly answered.
My question My saying your focus would still be on the global or at least the restoration and the century business and expanding the services. There are you are you starting to see or more interesting opportunities in other verticals.
That you either already in or.
Verticals that you might be interested in getting into.
Well, we'll fredrik, we we do have activity across.
All of our platforms.
Currently in the pipeline so.
I think restoration is certainly.
Been front and center in the last year following the global acquisition.
But we we expect to close deals over the next 12 months really.
In every division were.
I would say, there's there's nothing in terms of new platforms that we're looking at.
Likewise, we have when you have lots of opportunity and lots of activity currently in and our current platforms.
Okay, and when we look at your revenue sort of growth profile than what youve been sort of.
Telegraphing The street, you're you look longer term to look at you know, 5% organically and add another 5% through acquisitions.
In the current environment would you expect that you were able to exceed that M&A growth rate of 5% on a go forward basis.
No not necessarily.
I don't think the current environments really changed our.
Our view.
Okay Fair enough yeah, that's that's a good answer.
Also a quick question just.
For my own benefit did you see any digital restoration business see any.
Scene in the third quarter or expect to see in Q4 any activity related to the wildfires out west.
So I mean.
We're servicing our national accounts.
In California.
But the level of work.
Was not material to the quarter I want X. I wouldn't expect it would be in the fourth quarter primarily relates to.
Retail offices distribution centers.
No air quality and and smoke damage. So we're providing.
Air Scrubbers.
For equipment versus manpower and and.
So it is quite different in terms of.
The revenue opportunity relative to.
Some of the ocean or if were dealing well okay. So when when if you were to rank you know on a.
The natural disasters in terms of opportunities it creates for restoration.
Wildfires would kind of rank at the bottom where whereas storms are way up there.
It's.
Certainly for US at this time, we don't have.
The same presence.
West that we do in some of these other areas so thats a factor but.
Yeah.
In general I would say, yes, okay.
Okay. That's helpful. Okay.
Thank you Scott.
There are no further questions in queue at this time.
Thank you Tiffany and thank you everyone for joining us today.
Be safe and well talk at yearend.
Ladies and gentlemen, this concludes the third quarter Investor's conference call. Thank you for your participation and have a nice day.
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Oh.
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