Q3 2021 NV5 Global Inc Earnings Call
Bind and regulation G promulgated under the Securities Exchange Act of 1934 as amended.
These non-GAAP financial measures included in this presentation are adjusted earnings per share adjusted EBITDA and adjusted EBITDA margin <unk>.
<unk> provides non-GAAP financial measures to supplement GAAP measures because they provide additional insight into <unk> financial results.
However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance or a substitute for GAAP and.
In addition, other companies may define non-GAAP measures differently, which limits the ability of investors to compare non-GAAP measures of <unk> to those used by peer companies. All forward looking statements are based on information available to the company on the date hereof and the company assumes no obligation to update such statements except.
As required by law.
A webcast replay of this call and its accompanying presentation will also be available via the link provided in today's news release on the investors section of the company's website.
We will begin the call with comments from Dickerson Wright, Chairman and CEO of <unk> before turning the call over to Edward Codispoti, Chief Financial Officer for a review of the third quarter 2021 results.
Dickerson Wright will then provide closing comments before we open the call for your questions.
<unk>. Please go ahead thank.
Thank you Richard and thank you to everyone joining us for <unk> third quarter 2021 conference call. Many of you have the Q3 presentation deck, so I will be referring to it in our presentation. Today. Please turn to slide five where we will provide an overview of <unk> performance in quarter three.
Revenues of $186 million and adjusted EBITDA of $35 million were our highest to date.
We also had strong adjusted earnings per share of $1 25.
And our margins continued to expand versus last year.
The focus on the <unk> business model resulted in sustainable industry, leading margins a record backlog to date and a resurgence of geospatial contract awards.
Merger and acquisition activity is also very high.
Therefore, we can better focus on high margin high growth sectors. We.
We have multiple potential acquisition opportunities in due diligence and our pipeline of opportunities is growing.
We strengthened our position on energy efficiency and de carbonization in quarter, three with the acquisition of Sage, which we will speak to in more detail later in the presentation.
So now, let's turn to slide six.
Can see our launch of <unk> ESG solutions to help our clients reach their goals for sustainable and socially responsible future.
ESG will be a focus of all of the MB five verticals.
Now, let's turn to slide seven where we will give more detail on our recent acquisition of Sage renewable energy consulting.
Sage complements our existing verticals and has a positive influence on the organic growth of our energy and efficiency service offering.
As well as our infrastructure service vertical.
<unk> has a history of managing clean energy programs, having supported over $2 billion in clean energy projects.
On slide eight Alex Hockman, <unk>, President and CEO will provide an update on our historic service verticals per quarter three.
Thank you <unk> and good afternoon, everyone. The core business continues to deliver strong growth and margins in 2021.
The utility services vertical continues its impressive performance with 96% growth in our LNG utility business and 33% growth in our power delivery business in the first three quarters of 2021 versus the same period last year.
We continue to see opportunities as utilities are investing to underground there power lines to mitigate fire risk and improve service reliability.
The strength of our utility backlog and pipeline indicates sustainable growth in this business.
And the testing inspection and consulting business, we have seen double digit growth through the first three quarters, and we have performed well and our forensics business, which provides insurance claims evaluation and expert witness services as well as both the eastern West Geotechnical and testing businesses are also growing.
An increase in the industrial development and infrastructure projects has been a significant driver of this group.
The strength of public sector budgets, and a healthy pipeline of projects continue to drive opportunities for our infrastructure business.
One example is the $4 million contract NV five was awarded by the North Carolina Department of Transportation to support engineering design and inspection of roadway improvements in the western part of the state.
These opportunities along with our backlog growth entering Q4, we will continue to drive our infrastructure vertical.
Environmental Health Sciences continues to gain momentum as we are integrating our Q2 acquisition of <unk>.
Yes.
A real estate transaction services delivered another record quarter growing 125% compared to Q3 2020.
Domestically our buildings and program management services were impacted the most by the pandemic and as the <unk> vertical with the greatest proportion of private sector clients. It has been the slowest to recover.
However, we have begun to see signs of recovery in our MEP and technology design businesses.
We're optimistic that this business will rebound in 2022.
Internationally, our <unk> business has already rebounded across Asia, and the middle East or.
Our international and energy efficiency businesses have grown 63% year to date compared with last year's first three quarters and we have a strong pipeline in these businesses to build on our momentum.
As we enter the final quarter of 2021 weather cooperating we are well positioned for strong future results. We entered the fourth quarter and 2022 with our largest backlog ever and Theres, a strong pipeline of opportunities to support our continued growth.
We believe that our benefits of scale and increased utilization and drive sustainable margin improvement.
Our businesses is largely support the public sector are well positioned to benefit from the increased public investments in transportation utility water and broadband infrastructure that will be funded when an infrastructure Bill is ultimately funded.
Now I'll turn it back over to Dickerson. Thanks.
Thanks, Alex Let's now go to slide nine where Mark Amato, President and COO of <unk> Geospatial will provide an update on our geospatial activity for quarter three.
Thank you Dickerson.
We used to report that the pipeline of key deals in what we call our commercial or private sector market reached their final contracting phased over the past several quarters and as a result core commercial bookings have grown 38% through quarter three year to date.
And demand for our UAV services have grown 70% year to date.
The projects that commenced in quarter, two and quarter three had driven 35% revenue growth across the commercial sector here in quarter, three and we expect to see full year revenue growth in the mid to high single digits.
The government sector. However continues to experience procurement delays impacting the timing of project Awards and project starts.
That said the demand drivers for our geospatial services appear to be accelerating because of the critical role we play in the infrastructure and environmental spaces.
Whether it be advanced survey and asset management or coastal resilience water and natural resource management.
Importantly, although project awards have experienced delays, we're highly encouraged that long term contracting vehicles like the U S. Geological surveys $850 million multiple award <unk> IQ are falling into place.
We announced that renewal in September and we secured $6 million in new business under the contract already.
Across our government portfolio as we indicate on the right hand side deal activity is accelerating with proposal volume growing 42% year over year.
The other growth signals, we are looking at over the short to intermediate term include a backlog heading into quarter four that has grown 54% over the prior quarter.
The opportunity to expand our environmental resume in states like California, and Florida.
To initiate programs aimed at wildfire mitigation and climate resilience.
And we're excited to enter the offshore wind energy market with offerings that combine the capabilities of the core <unk> business.
Legacy quantum spatial and our recently acquired Geodynamics team.
And the final point that I'll make is that these growth opportunities are available to us with or without the infrastructure bill or the climate change legislation.
But the expected incremental spending over the next several years in the environmental and infrastructure spaces transportation airports water and other natural resources, all where we are focused further aligns with our growth people.
With that let me turn things back over to Dickerson Wright to talk about backlog.
Thank you Mark.
You'll see on slide 10, we underscore the health of future business as represented in our record backlog, which demonstrates an increase of 19% over the same period last year.
I would also like to mention our cross selling efforts and key wins for quarter three.
And that's on slide 11.
Cross selling does not just create margin improvement, but it also creates opportunities for all of our 115 offices to grow we are well on plan to meet our full year goal of $31 2 million in cross selling our.
A recent key wins are representative of our various services provided throughout the <unk> network.
Geospatial is recent wins indicates an anticipated strong growth for 2022.
So we continue our positive outlook for all of them in <unk> future growth.
I will now hand, the presentation over to our Chief Financial Officer, Ed Codispoti to provide an overview of our Q3 2021 performance with our specific results Ed.
Thank you Dickerson and good afternoon, everyone.
If you would please turn to slide 13, I'll review our results for the third quarter of 2021.
As Dickerson mentioned, we had a record third quarter as our gross revenues increased by 9% compared to last year.
And I will mention that due to the cycle of our accounting periods last year's third quarter included 14 weeks of revenue versus 13 weeks during the third quarter of this year.
Therefore, the 9% growth in gross revenues was achieved despite having one less week this quarter.
Our net income of $12 $6 million was 62% greater than last year's third quarter and our adjusted EBITDA margin was a record $34 7 million a 16% increase over last year.
Adjusted EBITDA margins in terms of revenues generated by employees increased to 27, 7% compared to 24, 7% last year. This was a 300 basis point expansion.
And if we look at adjusted EBITDA margins as a percentage of gross revenues or margin expanded to 18, 7% from 17, 6% last year, a 110 basis points expansion.
This margin expansion demonstrates that we continue to execute our business model focused on the growth of our high margin businesses, while at the same time, leveraging our scale across the enterprise.
Our adjusted earnings per share were also strong as we generated $1 25 per share compared to $1 13 per share last year, an 11% increase.
As Alex mentioned earlier, we had strong results in several of our business areas that helped drive this growth in particular, our real estate transaction services increased 125% and our power delivery increased 16%.
The Geospatial segment continued to experience delays this quarter in particular with respect to federal contracts.
However, although revenues were down one 7% in this segment, we did see an increase in profitability as its EBITDA increased by 31% this quarter when compared to the same quarter last year.
It is also very helpful to see how our results compare to pre pandemic levels.
If you turn to slide 14, we can see that compared to 2019. We also had very strong third quarter results.
Our revenues increased 42%.
Net income more than doubled as it grew by 115% and our adjusted EBITDA nearly doubled as it grew by 97%.
Adjusted earnings per share grew by 54% and our cash flows from operations increased by 284%.
Turning to slide 15.
We see that our balance sheet continues to look strong.
We had $121 million in cash as of the end of the quarter, which was a 90% increase over the same time last year.
We brought down our net leverage from two five times last year.
Four times this year and 84% reduction.
As a result of our increase in debt and right pricing. We were also able to realize a 60% decrease in interest expense this quarter as our interest expense decreased to $1 5 million.
From $3 7 million.
We believe that the strength of our balance sheet combined with our strong cash flows and M&A strategy continues to position us well for further growth.
With that said I'll now turn it back to Dickerson Wright for some closing comments hickerson.
Thanks, Ed, let's turn to slide 17.
We have set a goal of $1 billion in revenue for 2024, and we will achieve this goal by focusing on high growth segments high margin technology and continued emphasis on M&A and scale and synergy to increase growth and profitability.
This completes our prepared remarks and now we'd like to open the call for your questions.
If you'd like to ask a question at this time. Please press star one on your telephone keypad, if you need to withdraw your question. Please press star one again.
Our first question is from Chris Moore with CJS Securities. Your line is open.
Hey, good afternoon, guys. Thanks for taking the questions.
Hi, Chris.
Hey, good afternoon, maybe just on the.
On the guidance I see where the adjusted EPS is going on the revenue side. After Q2 was $705 to 727.
Is that changing is that just a bias more towards the higher end of that or how are we looking at that.
Well thanks for the question, Chris We are fourth quarter is usually.
If you could tell us how the weather is going to be and we may not lose eight we'd rather we.
We'd rather be.
We'd rather be conservative and maintain the guidance because we may and we don't want to be a glass.
A glass half full but we may lose some work days most of our work in our engineering service work is in the field and you know how winter can be I can talk about two years ago. When we lost a good four days of revenue because of that so we're tending to be a bit conservative it doesn't really.
It doesn't really move.
Mean that we are expecting any drop in business. It's just that we're going to be very infected affected by the weather.
Whether that time of year and so the fourth quarter is usually.
Theres holidays in that fourth quarter and.
We have the impact of weather. So I just so we would just rather be conservative and we're maintaining the guidance.
As it was.
Got it I appreciate that.
Yes, maybe we could talk a little bit further about this the $850 million <unk> with the U S. Geological survey. So I'm just trying to understand kind of how many how many players are in there and is it is.
This a Q.
<unk> had operated on.
Previously and then won a recompete.
Maybe we could start there.
Okay, I'll, let Eric talk a lot.
On the call marks a bottle on the call and I'll, let him speak specifically, but before.
Mark answers your question.
Can tell you that we are we are the driving supplier of this services and we are actually doing work for others on this and I think it'd be noticed in the slide market said, we've already realized $6 million.
Of this contract, but Mark maybe you can go ahead with more.
Staticity on on the on the contract and how many people.
Answer Chris's question.
Sure Chris.
Youre absolutely right. This is a recompete, we've actually booked under predecessor contract to this chip before.
Five year multiyear award contract for several decades as a matter of fact.
There are usually up to about 10 different providers on a contract that size, but it's the combination of large and small.
Small business providers to Dickerson point.
Enjoyed.
Significant share of wallet.
Relative to the contract above and beyond those in the space.
And just a little bit.
The contract is.
You May know that this was the primary funding vehicle for the three dimensional elevation program or <unk> and that program is aimed at creating a nationwide land elevation that for applications, such as infrastructure planning and environmental and climate research.
Natural resource protection, including coastal resilience.
The new contract which is the.
Funding a program called Nextgen three that continues that mission and it updates that nationwide land elevation map, but it also is going beyond that and creating first of a kind elevation maps for the nation surface water and groundwater land wet lab.
Land and national wetlands, and mandate storm water system. So that's.
That said and advancement.
Well beyond what the predecessor program offered and we're very well positioned to capture a significant share of wallet for that portion as well.
And you would see that thank you.
'twenty two.
I'm sorry, Chris can you repeat that you would see that talk about capturing.
Additional wallet share that that would be in fiscal 'twenty, two where you would start to really feel that.
Well as <expletive> as you point out we've already received about $6 million.
Under the program and that that will continue into 'twenty, two and beyond again. This is a five year contract.
Understood. Chris This is <expletive> and if it's any help but looking in the rearview mirror. The last time. This contract was awarded we Invoiced our.
Our geospatial group Invoiced to $135 million on the previous contract. So it is substantial and we think we will be able to increase.
On that amount over the same period of time.
Perfect.
Now Theres a lot of people online I will jump back in line I appreciate your time.
Thank you.
Our next question is from Rob Brown with Lake Street Capital markets. Your line is open.
Goodbye.
Just wanted to dig in a little bit on the geospatial business you had some pretty strong growth in backlog and some of the metrics you reported what sort of the organic growth you see in geospatial going forward to 2022.
Well.
Once again, I'll defer to Mark, but I can say, what we are we're in the middle of our budget in our budgeting process now and we're assuming anywhere from 5% to 9% organic growth and Thats about representative of our of our entire business but.
But I think we could we're looking in the high single digit.
Sure.
Mark maybe you have some board color you'd like that.
Sure I think if we look at our couple of different vertical commercial being extensively utilities and oil and gas.
We have a lot of room to run in these core markets given that it's still a space that.
In the early innings of adopting technology solutions like like Lidar to manage risk across their entire power grid.
It's a very underpenetrated market and we see the opportunity, especially if youre cross selling and being able to get access to NV five entrenched client base in the utility space is a real accelerator for us to grow that.
Significant opportunities in the private sector on the government side.
With or without the infrastructure bill or the climate resilience legislation.
We're very well positioned to grow in the environmental solutions as well as infrastructure because of the solutions, we offer relative to climate resiliency in water availability and consumption decarbonization. So these are all themes that are certainly going to play out over the course of 2022 and beyond.
Rob.
We have we're in the budgeting process now and we are looking for.
Batesville and.
High singles.
5% to 9% a real growth area is announced.
You mentioned that.
We are really tremendous.
Transactional environmental real estate and our international.
Like over with our devote Ed.
Good morning, and they're projecting.
<unk>.
Alidade group now.
A little over $30 million.
Protecting almost.
Organic both the weak.
Really look at the opportunity internationally.
Kind of wished Atwood.
All of our segments.
Our highest growth areas that organic.
Our transactional real estate.
And from our international.
Internationally.
Okay, great. Thank you for that overview, and then and then on the on the overall infrastructure Bill what sort of your latest thinking on how that will impact two areas. You think you will see growth and maybe how that sort of closer to your business.
Okay, I'm going to give a general comment and then Alex.
We'll answer with more specificity at two.
Two to that growth, but normally our business I mean, it can only help the infrastructure, both only going to help us and we're in the right position and a lot of that a lot of that positioning is through our municipalities in the state transportation agencies as far as direct the direct.
Worked for the federal government and infrastructure that is usually through the municipalities unusually through the transportation agencies, but we are expect we haven't baked anything like that into our budget. We just released the backlog. So it can only help but there are specific areas that we think we can.
Be well positioned for so Alex you may want to comment.
Thank you <expletive>.
When you consider.
And the way we segment internally, we have our infrastructure division, which is primarily designed and survey.
We'd be able to take advantage of any type of funding for transportation utility infrastructure water infrastructure broadband we have the ability within our tick through which is the testing inspection and consulting as well as our project management. So theres a number of ways as these projects.
<unk> are funded at our existing service lines would be able to take advantage of new opportunities.
Okay, great. Thank you for the overview I'll turn it over.
Our next question is from Michael Feniger with Bank of America. Your line is open.
Yes. Thanks.
It was a cash from officers down here a year I don't know if it was just a quarter timing or some lumpiness in any color you can give their.
Yeah, Let me get a general answer and they may be Ed can.
CFO can speak specifically, but historically our cash flow is the lowest at our busiest time of the year and I imagine if Michael if you will we pay all of our employees every two weeks.
And we collect our money in every 60 days, so the busy or.
We are.
The cash flow will be lower and then in our slower months like in in our first and second quarter, we've talked to build crash and cash start the bill. So it's only a reflection on just how good we are and generate new revenues.
You may have some specific thoughts bone loss.
That's exactly right.
Along with that if you if you're comparing again.
Last year, which was a COVID-19 year and we've had the impact of yoga has got that effect now we're wrapping back up as you can see the growth in our revenue and along with that you have that cycle of that percentage, referring to where our bill's receivables increase.
In a in a disproportionate way and so that you have that draw on working capital, but it really is just added it.
It's working capital when you think about our business.
You wanted to exclude.
Exclude the impact of working capital.
Adjusted EBITDA and.
Capex right as a as a.
As another way of looking at it if you want to exclude the impact of working capital, but it really is just normal cycles of of ER collections and payments.
Helpful. Thanks, and what what sizes.
Are you guys see in the pipeline for M&A are these smaller type deals on a mid size the bigger and can you just remind us what areas I think you're focusing on Mondays closed areas.
What those those and markets look like.
I would say starting with the size you know it depends on who US we think of $48 million revenue $50 million revenue is one of our larger ones. We are though focusing right now and we have the luxury of doing this.
Michael when we're building our company we were just looking at how to build the platforms are platforms now the verticals. If you will are pretty seasons.
And pretty solid so we're looking at the smaller acquisitions or the tuck in second support the verticals. Our focus now is on energy efficiency Es G related.
Acquisitions and.
Technology that has some more higher Barry bond tray, and we're looking from higher EBITDA.
However, those that that those type of acquisitions tend to be less than 40 million. So our normal size now is about $3 million to $5 million. We have some very good opportunities that we're looking at right now and believe me the pipeline is very robust and.
We are now we have the luxury of focusing on things that can really increase or strengthen our platform and increase our EBITDA.
Perfect and lastly, like this year I can squeeze more one more in this year the margin expansion year to date, depending on how you slice. It's been impressive it's been up 170 to 200 basis points year to date, depending on how well metrics you use how do we think about that.
Going forward is there any give back in 2022 is that Martin you've mentioned the right numbers to think about also in 2022 and 2023, just curious how much of that is sustainable going forward and maybe some <unk>.
What are the Tailwinds and headwinds you guys are thinking about when you look at your margins going into 2022. Thanks team.
Okay. If I understand the question, let me make some general comments.
There has to be scaled available, which we are shared services group has a very strict budget and we look for scalability, obviously, when we acquire something that doesn't necessarily mean, we have to put on a whole new accounting staff or if we acquire a company that we don't need to have to put on a whole human resources staff to support.
That or.
We may have to put additional people, but it's.
And a reflection of the growth are shared services need to be flexible and so I think you're going to see a profit improvement just from our scale ability of our support services that is one the second as I mentioned, we are looking and now the higher profitability higher EBITDA.
Services, So I would say.
I wouldn't look for I would look for an improvement and I'm not saying that we're going to continue at the same rate of improvement because you see we are we are very very a much higher than our E&C group, but I don't see it that we would regress or I don't see any any that.
That we had the beggar nation from that EBITDA, but I don't know if we're going to grow it at the same at the same EBITDA rate, but.
Every time, we make an acquisition scalability really helps us and our support services and we're looking now for acquisitions that have the higher EBITDA. So.
At worst I think we're going to be the same if not a little better.
Yeah.
Our next question is from Lisa Springer with Cingular Research Your line is open.
Thank you I wanted to ask about the customer next to the stage business is it primarily governor government customers as a commercial customer isn't what are the opportunities across sell to their customers.
Where it is.
Experiencing let me mention the ladder first.
We are really that is one of our more successful businesses in cross selling it's cross selling to our existing platform and it's really on commissioning and.
And work that we can help them within that they can now expand the platform. The their services is pretty much a 50 50 mix between government and.
What we call government and private sector, because their energy efficiency as is.
In the private sector.
Has.
Is a real focus their client, but in the in the public sector, where including universities, and we're including school districts and we're including a number of quasi public.
Agencies, but the cross selling I'm, just really pleased with it.
We don't want the sledgehammer dangerous ahead, but we're really really happy with how sages.
Performing so now and how they have been able to cross sell with the rest of our platform.
Okay, great well, thank you for the color.
Our next question is from Andy Whitman with Bird your line is open.
Okay, great. Thanks for taking my question.
Help understand the quarter, a little bit better tomorrow, and your 10-Q, when you file it it's going to have a number in there that talks about the revenue that was contributed from acquisitions are from companies owned less than one year. I was wondering if you could tell us what that number is and if you could tell us what the backlog.
Contribution was from acquisition closed during the third quarter was as well.
Yeah.
And we don't have that Ah 10-Q number.
Quite yet.
But as as I have said in the past.
The backlog in that first no.
Number one is taking into account pro forma information that is preacquisition.
Related to those acquired entities and we also have the the.
The effect of that.
One last week and the numbers. So we're finding our 10-Q tomorrow and so those numbers will be available tomorrow, but.
I just want to give you that color.
Prior to receiving that information.
Got it Okay, we'll take a look tomorrow on that.
I was wondering if you could comment on the impact of the labor markets and the personnel availability that's out there we're starting to hear from.
Others in the industry that it's getting tighter.
Wages and other packages.
Might be moving around today, maybe more than they have in some time and I was wondering what your experience was of this phenomenon and how it's impacting your profitability or how it might affect the profitability looking into 22.
Well.
You took out you took some of the comments I was going to make them, including comments, we're really in a talent for right now.
And we think that.
We think that other companies and other firms we have to be competitive I think the effect, though it's going to be more on revenue then it's going to be on profitability because most of our service or in a unit price basis subject to far on it and we got a net fee multiplier on what we.
What we charged for that person. So obviously using an example, if we charged $10 an hour for a person in our our overhead farm audited overhead rate is three point O. We would we can charged $30. If it's $15. We could charge 45, so it's not is and obviously.
Though where it will affect profitability, if we're losing people and we have not losing people, but we have a lot of open slots, we can't build for those people. So the revenue was affected we are very aggressive very pleased with what our HR group is doing in recruiting define people, but it is.
Just right now I don't think any engineering consulting firm.
Has all the people that they would like to have and we have a we have open positions that need to be built so and we are really starting to feel in all firms are starting to feel this this war for talent.
That's helpful commentary. Thank you for that maybe for you Alex I just noticed a comment on your LNG business up basically doubled over last year and I can just think back over the last few quarters clearly did see those awards kind of hit so it's not surprising that it's up but I guess, maybe if you could provide us a little bit of context.
Is what I'm looking for and what I mean is.
Is.
How long in duration are these projects if I'm not mistaken. This is like the one part of the business that you do which is done in EPC basis for.
You can correct me, if I'm wrong and I know you subcontract on a lot of the work, but I think you guys are the the prime on that type of work. So how many projects are you working on maybe today versus historically.
And is it is it an unusual amount of work right now and your LNG business that.
I think it tends to be a little bit lumpier than some of the other things that you do so I guess I'm just looking for context as to what that growth rate means and if it's sustainable more than anything else. Thank you.
Sure. So you are correct.
Chr acquisition is in the <unk> arena.
The.
Type of revenue mix is.
Frankly, it's some larger projects and then there are smaller projects, where they're in a due diligence birth feasibility study.
One of the things that we initiated.
Covered was expanding geographically, we now have Chr has a as a Houston branch. So the intent actually is to continue to see that organic growth by expanding geographically.
And the large project is the EPC phase that consulting phase leading up to that is in the due diligence and that is purely an engineering assessment.
Got it.
I think I'll leave it there thanks guys.
Thank you.
Our next question is from Mark Riddick with Sidoti Your line is open.
Hi, good evening.
You actually.
Good evening. Thank you actually hit on several several things and and that that was going to ask level. One area that I wanted to touch on was I think you mentioned in the past as far as kind of.
Reevaluating throughout the pandemic and coming out the other side as to how.
How much certain expenses were or unnecessary versus not necessary, particularly elsewhere, we're thinking about travel and the like.
I was wondering if and and I don't want to steal your Thunder from any comments area or if this is something that's pulling into the the the budgeting process. So I was wondering if you.
The view is sort of what what things you could do continue to do well without entering a additional expenses that maybe you you have a moment.
Thanks, Smart what we've learned we certainly like any other firm. We certainly have learned from from what has happened on the pandemic and what we've learned is this.
We've learned that and we've been very focused on the travel we've been very focused on conferences and so were loose.
Actually not having the expenses that we would have had pre-k.
And most of our traveling now is to support clients to support offices, so and all of those things that are.
That relate to expenses such as hotel airfare.
I can say personally for an example, we do a lot of the conferences virtually I mean that we have one coming up in.
And we'll do that right from this office in and through assume call and so we.
For the same thing we really watch the expenses, we have facility costs, obviously not everybody is working at in an office. Many people are working from their homes. So we're questioning really with the facilities that we have and how much data do we really need. So we're we're learning a little bit about that.
The nice thing that I've seen it's our utilization rate.
Has gone up since this pandemic because you know people working from home are very focused on projects and what they can do so I think where you're going to see.
Are we going to can can you know.
But we are certainly can improve I mean.
When I mean continue where we have a complete dropoff in all of our expenses no they'll they'll start to creep up but we're learning and what we've learned is that perhaps we don't need we don't need all of those in person visits.
Two or conferences that we can handle some of those things.
We can handle some of those things virtually so.
I think that I think that we will watch the indirect costs very closely and I think what were the lessons. We learned from the pandemic has been that we can really manage better those indirect costs.
Excellent much appreciate it.
At this time. This concludes our question and answer session now like to turn the call back over to Mr. Right for closing remarks.
Well. Thank thank you very much.
I want to thank everyone or another successful.
Quarter I want to thank our employees I Wanna. Thank God the adjustments that we've had to make concerning this the.
The pandemic and how they've adjusted and how they're working and so we really owe a lot to our people.
I want to thank our clients.
We have had clients that we really feel have been supportive of us and they are supportive because we want to continue to do work that is really we're considered a very value the consultant.
Andy mentioned before the talent more.
We want to create we're taking a very close look at our benefit package and how we what we can do to really recognize all of our employees and and recognize that that what they what they are adding it is valued and we realize.
When we have people working for us and we have people staying with us it's certainly less.
I also want to mention our scalability as our revenue increases that does not mean, our support services has to increase.
It's <unk> as well, we feel that we will constantly be scalable we feel that we feel that in that scale believe we will see the benefits increased margin and.
We have a budget for all of our support services and we want to make sure that we are in that budget and then on the consolidation we can certainly see the margin improvement.
I think one of the things that it's really important as we are known as an inquisitive company. We've made 47 acquisitions since we've.
Since the inception of the company, but we are now developing specific plans. So that we can grow these acquisitions organically and and it's not as the straight road is you see because some of some of these with the acquisitions and it's very difficult to manage organic growth because some there's some.
Services that we acquire a company that we just will not do but the services that we keep it's really important that our team looks.
Looks to how we can grow those those firms organically either through cross selling or advantage or opening.
Standing there markets are giving them a national platform.
Going back to our people, though I think it's really important that all of our people are our partners and that's why we want them to have equity in the company. We wanted to create ways that that people can share in the success of the company and so we certainly recognize our employee.
So I wanted to what I really wanted to do is think.
With our employees and our clients for for our success and we wouldn't have that access if we didn't have a good management team and we didn't have good employees.
Working for us and and clients that have been.
A source of reoccurring revenue for us. So thanks again, everyone. I. Appreciate we all appreciate very much the your interest in the company and we'll see you again in the first quarter of 2022, and hopefully with the delivers.
Deliver the results for <unk>.
Four thank you very much thank you everyone.
Ladies and gentlemen. This concludes today's conference call you may now disconnect. Thank you.
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