Q4 2020 FirstService Corp Earnings Call
Welcome to the fourth quarter and year end investors conference call today's call is being recorded.
Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward looking statements and involve known and unknown risks and uncertainties actual results may be materially different from any future results performance or achievements contemplated in the forward looking statements additional information concerning.
Factors that could cause actual results to materially differ from those in the forward looking statements is contained in the Companys annual information form as filed with the Canadian Securities administrators and in the company's annual report on form 40 F. As filed with the U S Securities and Exchange Commission Azure.
A reminder, today's call is being recorded today is February nine 2021, I would like to turn the call over to Chief Executive Officer, Mr. Scott Patterson. Please go ahead Sir.
Thank you Jason good morning, everyone.
Welcome to our fourth quarter and year end conference call. Thank you for joining.
Jeremy Rakuten, our CFO is on the line with me today and together, we will walk you through the very strong quarterly results. We released this morning, which again reflect true.
The resiliency of our business model.
Strength of our market, leading brands and the dedication of our teams.
I will start with a high level review of the numbers and some highlights for the quarter.
And then Jeremy will go through the quarterly financials and summarize the full year results.
Total revenues for the quarter were up 15% over the prior year with organic revenue growth at an impressive 11%.
We consider ourselves an organic growth company first.
And are very proud to finish a crazy year late 'twenty 'twenty.
With organic growth in the double digits.
The balance of our growth for the quarter came from tuck under acquisitions, primarily in our commercial restoration platform, but also under century fire.
EBITDA was up 25% year over year.
And reflects 80 basis points of margin improvement.
Driven primarily by higher margins at first service residential but.
Supported by a positive up tick at first service brands also.
Jeremy will break it down for you in a few minutes.
And finally earnings per share were up 55% to a dollar too.
At first service residential.
Revenues were up a solid 4% versus the prior year all organic.
Reflecting continued positive sequential momentum over the last three quarters, we were down 9% in the second quarter flat in the third quarter and now up 4%.
The year over year increase was enhanced this quarter by very strong ancillary revenues, including transfer and disclosure income.
And project management related services.
Home sales in our managed communities and the related services we provide.
Were up in excess of 20% compared to the prior year.
In addition, we saw increases in the services, we provide relating to maintenance project management and construction, particularly in the Midwest, where many of our communities suffered wind and hail damage during the year.
The relative sequential improvement.
From a flat year over year comparison in the third quarter.
Two up 4% in the fourth quarter.
Is in part due to seasonality.
As many of our amenities, which have been impacted by Covid related lockdowns are seasonal.
And normally shut down in the fourth quarter, reducing the negative year over year impact relative to the third quarter.
Looking forward, we believe Q1 will be flat to up modestly relative to prior year.
We continue to be impacted by amenity closures across many regions.
Excluding California, the northeast and Canada.
We did see some openings of year round facilities in the fourth quarter, but most have sales been shut down again.
Longer term in this division as we exit the pandemic, we expect to settle back into that low to mid single digit organic organic growth rate on average.
A highlight at first service residential during the quarter was our acquisition in New York City of mid Borough management.
Mid borough is one of the leading management companies in New York City with a complementary footprint print and a particular focus on co ops.
We now manage more than 600 properties comprising almost 100000 units in the important New York City market.
We welcome the <unk> team to the first service family and look forward to leveraging our respective strengths in the coming months.
Moving on to first service brands revenues for the quarter were up 26% with organic growth at 18% and the balance from tuck under acquisitions over the last year.
Global restoration are commercial and large loss platform led the way in terms of growth.
With revenues up over 60%, 45% organically.
Global benefited during the quarter from the significant backlog of work relating to hurricane Lora and the Iowa wind storms.
It impacted our customers in August.
Organic growth for global adjusted for these specific weather events was low double digit for the quarter.
With strong momentum in National account work and our healthcare vertical.
More than offsetting weakness in our hospitality and retail verticals.
Although we have work through substantially all of the storm related work. We did finished the year with a solid backlog relative to a year ago.
And expect our Q want it to be up modestly from 2020.
Our home service brands, including California, Closets sort of pro painters.
Paul Davis floor coverings international and pillar to post generated topline revenue approximately flat with a year ago and right in line with our expectation.
Leads and sales activity were solid through the quarter, while we continue to build back service capacity after significantly scaling back in Q2.
We obviously continue to deal with Covid and understandably there remains a reluctance in many areas to open a home to installation and service crews.
Until this changes we expect our results with this group to remain.
Relatively consistent with current levels.
For Q1 on a year over year basis that means flat to up modestly as we get into Q2, we will start lapping the beginning of Covid in 2020, and we will see year over year increases with this group.
Century fire was up low single digits versus the prior year.
Our service and inspection side of the business is almost back to pre Covid service levels and reflected year over year growth driven by new national account wins.
This growth was tempered by flat year over year results and sprinkler and alarm installation.
As increases in warehouse and multifamily construction.
<unk> set by declines in commercial construction and the office retail and education verticals.
Similar to the home improvement brands, we expect century to remain approximately at current levels until we emerge from the pandemic.
We were excited during the quarter to announce two tuck under acquisitions for century.
Aegis fire protection, which is a market leading player in the Kansas City area.
Core net.
Our full service fire protection company, serving the Washington DC market.
These deals expand our footprint into two key markets that we had prioritized.
We are excited to partner with the teams at aegis and core net and believe we have an opportunity to significantly grow in these new markets.
Before I pass the baton to Jeremy I want to take this opportunity to again recognize our operating teams in frontline staff.
Most of our employees are essential workers on site at a community or construction job.
We are in homes or businesses delivering an important service.
The collective commitment and work ethic across the company is amazing we grew organically on a full year basis versus 2019.
That is impressive.
Given where we were after Q2.
And it's a reflection on the culture and level of talent, we have working at this company.
Jeremy over to you.
Great. Thank you Scott and good morning, everyone as you've just heard we closed out 2020 with a strong kicked to the finish line in the fourth quarter. Our consolidated results included quarterly revenues of $775 million adjusted EBITDA at $79 $9 million and adjusted EPS.
A $1 <unk>.
Up, 15%, 25% and 55% respectively versus last year's fourth quarter.
Financial results for the full year also showed impressive growth over 2019, particularly given the COVID-19 challenges since last March.
More specifically, we reported annual revenues of $2 77 billion.
15%, including 4% overall organic growth.
Our adjusted EBITDA came in at $283 7 million, a 21% increase with a 10, 2% margin.
Up 40 basis points over the nine 8% level in 2019.
And the bottom line impact was adjusted EPS of $3 46 up 15%.
Our adjustments to operating earnings and GAAP EPS to arrive at our adjusted EBITDA and adjusted EPS.
Results, respectively are disclosed in this morning's release and are consistent with our approach in prior periods.
I will now breakdown, our segmented results within our two reporting divisions first service residential and first service brands.
Leading off with first service residential revenue for the fourth quarter with $363 million up 4% versus the prior year period.
The division reported EBITDA of $35 5 million, a 19% increase together with 120 basis points of margin improvement quarter over quarter.
The strong growth in home resale activity, which benefits, our transfers and disclosures services and drives higher margin revenue.
Had a pronounced impact on our fourth quarter margin expansion at.
A continuation of what we saw in the preceding third quarter.
For the full year revenues were in line with 2019, and we saw improved profitability with 6% EBITDA growth and a nine 8% margin up 60 basis points year over year.
These results reinforce once again, the resilience of our property management business.
And it's recurring contractual revenue base in navigating through the pandemic.
Turning to our first service brands Division fourth quarter revenues with $413 million, a 26% increase and EBITDA was up 28% to $48 6 million.
With margins slightly up year over year.
For the full year performance was also strong including 36% total revenue growth along with the 31% increase in EBITDA.
Robust organic growth at global restoration underpinned this top line strength for both the fourth quarter and the year.
And reflected increased storm and large loss claims activity in the second half of 2020 versus prior year.
The annual revenue growth also benefited from full year contribution of the global acquisition and other tuck under acquisitions.
Our segment EBITDA margin modestly contracted 50 basis points to 11, 4% for the year largely due to the increased weighting of our lower margin global restoration operations within the brands Division for 2020.
Free cash flow during 2020 was also exceptionally strong.
Operating cash flow after working capital for the fourth quarter was $97 million and for the full year surged to $292 million both significant increases over 2019.
We benefited from strong operating earnings growth and a positive swing in our working capital as we focus on harvesting cash in the face of COVID-19.
We expect to revert back to a modest level of working capital investment as we gradually emerge from the pandemic and as our businesses resume their normalized growth path.
In terms of capital expenditures, we incurred $39 million in 2020% lower than our most recent guidance and also lower than the prior year.
Capex was reduced by roughly 30% from our original budgeted level at the outset of 2022 once again manage cash flow during the pandemic.
For 2021, we are targeting maintenance capital expenditures at around $60 million, reflecting a more normalized level of annual spend.
We also had a solid year on the acquisition front in 2020, we deployed almost $100 million during the year on six tuck under acquisitions, which in aggregate generate roughly $120 million in additional revenue on an annualized basis.
We are pleased with our activity level for the year, particularly given that the M&A market was closed for roughly half of the year during the height of the pandemic.
Currently we continue to see a solid transaction pipeline.
Turning now to our 2020 year end balance sheet net debt was $405 million with our leverage at one four times net debt to adjusted EBITDA, one turn lower than at 2019 year end.
The strong free cash flow that I, just highlighted was a significant contributor in this debt reduction.
We have previously indicated our comfortable running leverage in the mid two times range and so we currently have ample headroom to deploy capital prudently towards future growth.
Our liquidity is also at record levels exceeding $600 million, reflecting.
Significant cash on hand.
And almost full draw capacity under our revolving credit line.
We have always believed that maintaining a conservative capital structure and maximum financial flexibility is a cornerstone of the first service business model.
In light of this balance sheet strength, our board of directors yesterday approved an 11% dividend increase to 73 cents per share annually in U S dollars up from the prior 66 cents.
We have now hiked the annual dividend by 10% plus for the past six consecutive years since at 2000, Fifteen's spinoff into a new public company.
For a more for a total of more than 80% cumulative dividend growth.
Looking forward Scott has provided some commentary on the near term top line outlook for some of our business lines.
Putting it all together on a consolidated basis for Q1 2021, we.
We expect that our revenues will be up mid single digits versus last year's first quarter.
We also see a likely modest year over year improvement in our consolidated margins.
Help drive further profitability for the upcoming first quarter.
This concludes my prepared comments and I would now ask the operator to please open up the call to questions. Thank you.
Certainly at this time, if you would like to ask a question. Please press star and low number one on your telephone keypad, we'll pause for just a moment chicken Paul the Q&A roster.
Your first question comes from the line of George generic from Scotiabank. Your line is open.
Hey, good morning, guys, congratulations on a very strong quarter.
Thanks to clarify Jeremy's comments.
On the guidance for Q1 does that does that exclude all restoration activity.
Or is that inclusive of it.
It is inclusive of it but theres very little spillover from the activity that we saw in Q3 and Q4 in terms of storm and large loss.
Claims work relating to those storms.
That's helpful and maybe you guys alluded to kind of the rebranding efforts from restoration.
Expecting a higher cadence of organic growth ex weather related events in the first half can you maybe provide us with an update on how thats going.
Sure George it's it's in process.
We're in the middle of it the name was unveiled couple of weeks ago.
And the official brand logo and messaging will be formally launched in March next month. The name the name will be first onsite.
Two words.
Very similar to the brand we operate under in Canada, which is one word first on site.
Sure as I said, we're in the middle of it it's a big step a lot of work, bringing together.
Seven brands as one but it's also.
Very exciting and there is a lot of.
Momentum internally.
The teams learn more about the logo on a large share and coming together as one company. So it's in the future you will you will hear us refer to our platform as first onsite.
Okay, Thanks for that and maybe looking at.
Ed.
Beyond Q1.
Can you maybe talk a little bit about.
Margin, Jeremy like you know as we anniversary and maybe the higher ancillary piece.
As we re embark in terms of hiring some folks that we let go.
How should we think of the margin expansion.
For the remainder of the year.
George I wouldn't ascribe too much.
Margin improvement for the year on a consolidated basis, well first of all for Q1, I said margins a little bit higher than I would skew that towards first service residential because there is.
We're only partway through the quarter, but.
Continued momentum on some of that higher margin service revenue, but assuming that normalizes.
First service residential and first service branch should see pretty flat margin profile year over year.
Pre pandemic. We said this was a topline growth story, primarily in each business continues to try and grind out margin improvement in that that would continue to be the case.
Going forward.
In terms of the cost savings, we talked about that a lot of that coming back on.
As we reopened facilities as we brought some of our labor driven services back in place a lot of our costs are labor and variable cost driven.
And we do have some savings in other areas like travel entertainment and so on but it's less material too.
To the top line, we continue to evaluate our staffing models and if we can continue to optimize costs. We will we will always look to do that.
Okay. Thanks, and just one last one from me.
In your prepared remarks, you've been obviously talking about a full pipeline and also.
It seems to be maybe a historically under levered balance sheet.
Hi.
As COVID-19 restrictions ease into.
Into the back half of the year.
Should we expect accelerated M&A activity.
George.
We're back into a rhythm.
On the M&A front, and so I don't really see.
Emerging from the pandemic as as changing that honestly.
The market is very active right now.
Sure.
Despite despite the pandemic and the competition is for acquisitions is probably never been greater.
Uh huh.
So, but we're holding our own and as Jeremy said our pipeline is solid.
Okay. Thanks for answers great quarter.
Thanks.
Your next question comes from the line of Stephen Macleod from BMO capital markets. Your line is open.
Thank you and good afternoon, Richard Good morning, guys. Good morning, good morning.
I was just wondering if on the first service brand side, if you could just provide.
Some color as you've done in the past couple of quarters about what the dollar or an EBITDA impact may have been from the outsized.
Weather related and large loss claim activity.
Jeremy why don't you handle that.
Yeah.
Steve.
Is that $60 million of revenue. So when you combine that with the 45 in Q3.
Half of this year storm related activity, a little over $100 million.
Margins pretty in line with.
Similar to Q3 in line with the overall margin profile for the.
For global.
She is in the area of 10% you know there was some lower margin.
Arjun jobs scattered within their sprinkled within there.
But.
Pretty close to the.
The margin profile that we have to get a Q3, which again is around 10%.
Yeah, Okay. Okay. That's great. Thank you and then just as you think about the storm.
<unk> levels going forward I mean, obviously nobody has a crystal ball, but.
When you look back on Q3 activity.
Does it does it seem like a potential outlier in terms of the magnitude of activity or is that maybe too hard to pin down at this point.
Gotcha Yeah.
Yeah, when we looked at.
At this opportunity.
And looked at global in its history.
On average.
Between 15, and 20% of annual revenues come from.
The large storms the type that we saw this year.
And that's what we're going to and that's where we ended up in 2020. So it was right in line with that long term average.
But you will have years, where you have more or less in 2019 was.
Was a year, where we saw.
Well less than 10%.
And strong activity Jeremy.
Jeremy anything to add to that.
No echoes Echo your sentiments.
Okay.
Helpful. Thank you.
And then just maybe within within the first service brands business did.
Did I understand correctly that when you think about home improvement century fire global restoration or maybe now first on site you would expect those businesses each to be up sort of low single digit in the first quarter or is that is that right or were there. Some other movements that I didn't quite catch.
I think Thats I think Thats fair.
The century fire and home improvement brands will certainly be below single digit.
We do have a solid pipeline on the restoration side.
And that would be.
That will be single digit and it's just unclear where it'll fall at this point.
Okay. Okay. That's great and then maybe just finally on the residential business.
And you've had some strong strong resale activity, helping the ancillary services.
As you think about amenity amenities sort of opening back up.
As the as the vaccinations take hold.
Do you see an opportunity to for organic growth to accelerate beyond coming to that 3% to 5% range in 2021 or even beyond.
Okay.
That's not clear to us.
You know the amenity management Bill.
Business.
Will we will come back, but I think it will also change.
And.
The capacity levels at many of these facilities will.
Not immediately get back to where they were pre COVID-19 and perhaps they never will and that will impact our staffing levels.
So.
Yes.
There is some uncertainty around that side of the business I would say right now and where we finally ended up with it.
And in terms of the long term growth rate.
The low to mid three to five whatever it is as is.
That's where we believe we will be on average.
Yes.
Okay, well, that's so low.
Great. Thank you very much and congratulations on a strong quarter. Thanks, Steve.
Your next question comes from the line of Frederic Bastien from Raymond James Your line is open.
Hey, good morning, guys, you've addressed some of those.
Questions already but obviously your 2020 results were far better than what you and all of US had anticipated that the onset.
But it does raise the bar for 2021 and 2022, how are you feeling about your ability to tack on additional organic growth, especially on the first service brands side.
Over the next couple of years.
I think fredrik.
Fredrik if you normalized for storms, we expect to grow in every business organically.
The storm activity will influence quarter to quarter year to year.
As we've discussed in the past.
But.
We expect all our businesses to growth in the future.
And our long term goal is mid mid single digit on average.
Alright, but given given how strong the.
Housing market has been in the U S. I mean would you expect brands too.
To outpace that type of growth in the short term.
Well the housing market has helped us.
On the first service residential side with the transfer and disclosure income, particularly in the third and fourth quarter and I think we'll get a little boost in the.
In the first quarter net.
You know on that on the home improvement brands.
Certainly home sales.
Benefit us but.
It's offset by this by the Covid and the reluctance on the part of homeowners to bring crudes into their homes. So there is.
As we emerge from the pandemic, we would expect to see.
Organic growth with those home improvement brands and we we haven't.
From 2020.
Alright.
Okay.
That's all I have thanks, guys.
Thanks Ryan.
Your next question comes from the line of Stephen Sheldon from William Blair. Your line is open.
Hi, Thanks.
On the comment I think you talked about adding service capacity in the home improvement businesses any commentary on when you began to add those resources and maybe what that reflects in terms of your outlook for those businesses or are you may be expecting activity to pick back up.
Later in 2021.
And are investing a little bit ahead of it just any detail there.
Well, we cut back in Q2.
Significantly.
And in retrospect, perhaps we were too severe.
And our cutbacks, but we just didn't know what was in front of us.
And in terms of building back that that labor force in getting our capacity back online.
Designers installers painters.
We run into a labor market that.
Is.
Has tightened and because of that because a lot of companies are looking to do the same and in new home construction. In particular is very very strong right now it's create creates competition for.
Painters and frontline staff at Paul Davis from global and and.
And installation.
<unk> talent at Cal Closets so.
We we are.
Hiring.
And building back our capacity.
We do have solid leads and sales activity.
As we.
Begin to emerge from the pandemic and homes open up.
We do expect to see.
Stronger performance with the home improvement price.
Got it that's really helpful.
And then congrats on the prior acquisitions in the quarter as you continue to complete tuck in acquisitions in that business I guess what types of synergies do you realize is there anything similar to what you see on.
The restoration side, where more scale drives a stronger ability to win national accounts, or California, Closets, where you have the ability to shift manufacturing more in our company owned operations, where you have incremental capacity, you're just any detail on how we should think about.
The synergy that we continue to scale that business, Yeah, I think it's very similar to global restoration.
And national accounts.
The vs.
These these tuck ins actually worked with us on our National account program they were.
Value.
Company as part of our vendor network.
And so anytime you can bring that in house I think Hugh you benefit.
But you.
Having them close to us we got a great sense for the cultures and the quality of the organizations.
So it does help us in terms of selling.
<unk>.
Future National accounts.
But I think there's also an opportunity to fill out their service line.
One of the priorities at century fire from day one.
To have full service capability at each and every branch location and there is an opportunity for us to build out the service side of these.
These two tuck ins aegis from core net.
Great. Thanks for taking my questions and congrats on the results.
Steve.
Your next question comes from the line of Matt Logan from RBC capital markets. Your line is open.
Thank you and good morning.
Hey, Matt.
Scott when you talked about the storm revenues within global restoration being in line with the long term average of about 15% to 20%.
Can you confirm that that was on a revenue basis.
Yes revenue.
And maybe just for some some color in terms of how we're thinking about the long term effect of storm revenue.
The long term average margin on those storm revenues be around that 10% mark or would that be higher.
Jeremy.
Yeah again, Matt I think I commented on this last quarter.
It really varies depending on the types of storms the customers that we're dealing with and the types of jobs and.
Even within the the jobs that were done these last two quarters.
A more higher margin some were not a mitigation tends to be higher margin than the bigger reconstruction work. So it really also depends on the type of damage thats been done.
Very hard to describe it but I would say 10%.
Is it good.
Middle of the fairway type margin to ascribe to.
To whatever we call out on there on the revenues and if there's anything unusual that deviates from that.
We would we would specifically.
Flag it.
So that 10% would be in line with say the five year average for the business.
Yes, roughly yes.
Okay, and then maybe turning to acquisitions, you talked about an M&A pipeline and having just a high degree of activity both for yourselves and for your competition.
What business lines are the focus of acquisitions are there any that really stand out to you that you'd like to build out more than others.
Well, we've we've certainly been more active.
In commercial restoration.
And.
And century fire.
And I think that.
Part of the reasoning certainly strategically we have very specific.
Ideas on where we want to grow geographically and what service lines, we want to focus on.
But those are both.
Markets that are consolidated.
And so I think a lot of the families and small business owners are recognizing that and so there are there are more opportunities I would say that.
And some of our other lines.
Okay.
And in terms of other opportunities to bring in service providers that youre already doing business with.
Would that be one of the the channels for acquisitions going forward are there more opportunities like that.
Sure I mean thats.
That's certainly when we're when we're looking at a particular area.
Geographically I mean, who do we know who's servicing us.
Today, who do we partner with.
For sure that's how we start.
And the multiples for those acquisitions can you give us a sense for the general range of what Youre seeing for buyer and restoration acquisitions today.
There is certainly going up.
There's a lot of private equity capital prowling around.
Our markets.
And.
And that is tending to drive purchase price is up so.
<unk>.
Averaged in a.
Five range two years ago that's.
That will be that will be higher.
In 2020 and higher than in 2021 and go forward I expect.
Charted chart day, I cant I am not going to give you a number because of the raw.
There's a lot of variability.
Fair enough and in terms of the cadence of deploying capital on the balance sheet would you expect to have leverage in the mid two times range in 2022.
It depends on the size of the acquisition those would be pretty sizable.
Matt because again when we acquire a business you get credit for the acquired EBITDA. So going from one four times to mid twos would be.
So you'd have to have to be a lot of acquisition activity or upsize to move it that significantly over the next 12 to 15 months.
Any sense for how we should be thinking about that would this be in and around two turns would that be a better estimate for thinking about leverage.
It really depends if we if we.
Just deploy and and add acquisitions to the tune of kind of 5% revenue growth.
I don't see our leverage.
Increasing much from where we are today, maybe goes to high ones, but it really depends on it really depends on how many deals we close in the size of them.
So certainly if the right deal came along there could be a larger acquisition that's more than the 5% of revenue.
But otherwise it's kind of leverage in a steady state.
One and a half turn range.
Yes, it's just the nature of the industries, we're playing and they tend to be smaller more fragmented. So the acquisitions tend to be smaller, but we've got the capacity as I said in our comments, we've said it before we feel comfortable being a two to two five times, but it just the landscape of acquisitions.
We don't really build those.
More sizable acquisitions into our.
Default thinking.
Well I appreciate the commentary that's all from me. Thank you very much. Thank you. Thanks, Matt.
Once again, if you would like to ask a question. Please press Star then the number one on your telephone keypad. Your next question comes from the line of Daryl Young from TD Securities. Your line is open.
Good morning, guys.
And maybe one quick one for me and following up on Stephen Sheldon question about a century fire.
Coming out of it a little bit of a different way I can't help but see the kind of overlap in the strategy there of winning national accounts.
Moving at spending geographically.
Compared with what you're doing at global restoration is there an opportunity there to two.
Effectively merge those businesses in the future and benefit from sort of a cross sell of customer base and full service offering.
Well I don't think merge but certainly collaborate national account programs are.
Very similar to the clients are similar.
And one of the things in particular in the last year.
The virtual selling environment.
Can be a challenge, particularly around new relationships.
New introductions and it can be very helpful to get a warm handoff, where a warm introduction, so that's where we're focused.
Particularly in the last quarter. So there is there is collaboration around national accounts with <unk>.
With global and century.
Okay excellent.
And then.
On the restoration side.
But a year ago, we saw intact enter into to the restoration space. Just wondering if theres been any sort of evolution. There in terms of their desire to get bigger in the space or if you are seeing in the U S and yet the insurance direct entry similar to that.
We have not seen.
Any other acquisitions of restoration companies buy.
Insurance carriers at least I'm, certainly not aware of it.
And not not.
Terribly close to this strategy in and what's happening at intact and on side I mean, we we.
We certainly took note of the acquisition when it happened and it's been pretty quiet since then for us.
Okay, and youre, not seeing sort of any indications of that happening in the U S. As well no no no we're not at all.
Okay, Great. That's it from me great quarter guys. Thanks.
Thanks.
Your next question comes from the line of Marc Riddick from Sidoti Your line is open.
Hi, good morning.
Morning.
So a very strong way to finish the year I did want to sort of touch a little bit and first of all I really appreciate all the color that you've already given in the detail. There. So it's greatly appreciated I did want to touch a little bit on maybe sort of bigger picture.
Thoughts around the branding effort and sort of how on the on the on.
On the brand side sort of bringing everything under.
Brian how are you sort of thinking about the.
The weighted that might be unveiled.
Customers as well as.
Educating your own workforce to sort of get that collaboration build that that national a ton of opportunity in the warm hand as you described it as sort of maybe the kind of timeframe that youre thinking about as far as that because generally branding efforts.
Sometimes it takes a couple of years to fully get to where you want them to be as far as.
The benefits from it I was wondering if you sort of think about that from a bigger picture standpoint, how youre looking at that.
Well certainly our experience with first service residential.
When we rebranded in 2013, we began that effort probably two years in advance and we've been building on it to this day and expect to continue to show it.
No.
We expect the same kind of.
Incremental path.
At first on site.
We've been working on it for 18 months now.
And will the formal launch will be March 29th.
The name's been unveiled.
But.
The work we what we do know is that the work is just beginning and.
We will have a kick off with with lots of excitement and communication.
So that all our customers and everyone knows what we stand for who we are.
And then we've got to get out and deliver on that brand promise every day.
And certainly that's.
Theres awareness around what we need to do an and but great excitement around it also.
That's certainly understandable and I guess, one other part from me just wanted to touch a little bit as far as our technology spend.
As far as the needs and kind of where you want to go maybe if you could give a bit of an update there.
What we may be looking at some potential target areas as far as.
Yes.
Proving any any data analytics.
Contributions that that might be helpful.
Yes.
The technology platform.
Low restoration I am assuming you are at first onsite.
Correct Yeah.
Well it really goes hand in hand, with the brand, we're going to come out and and.
As first on site, one organization across North America, and we need our platform to behave.
And deliver on that on that brand promise. So we have to behave like one company across North America, and we're we're working hard on.
Implementing that platform today and again this it'll take it'll take some time few years.
But.
The path is clear and.
And we're on it.
Terms of dollars.
Theres really no.
Capex or operating expense that will materially move our numbers it becomes a steady investment really.
Which we started last year and will continue for the next several.
Okay. That's very helpful. Thank you very much.
Thanks.
Sure.
There are no further questions I would triple the call back to management for closing remarks.
Thank you everybody for joining.
Once again, we're very pleased.
With where we ended up and extremely grateful.
For our 24000.
First service employees that are that are bringing it every day so it's really.
It's really all.
Related to them and what they've been able to accomplish in the last year.
We look forward to connecting at the end of April after Q1. Thank you.
Okay.
Ladies and gentlemen, this concludes the fourth quarter and year end investors conference call. Thank you for your participation and have a nice day.
Moving on.
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