Q4 2021 NV5 Global Inc Earnings Call
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Okay.
Good afternoon, everyone and thank you for participating in today's conference call to discuss N V. Five financial results for the fourth quarter and full year ended the January one 2022 .
Joining us today are Dickerson Wright, chairman and CEO of N V. Five Edward Codispoti CFO of N V thought and Richard Tong Executive Vice President and General Counsel at M. B five.
I'd now like to turn the call over to Richard Tong.
Thank you operator, welcome everyone to <unk> fourth quarter and full year 2021 earnings call. Before we proceed I would like to remind everyone that today's discussion contains forward looking statements about the company's future business and financial performance.
These are based on management's expectations and are subject to risks and uncertainties.
That could cause actual results to differ materially from these statements are included in today's presentation slides and our reports on file with the SEC.
During this call GAAP and non-GAAP financial measures will be discussed a reconciliation between the two is available in today's earnings release and on the company's website at Www Dot <unk> Dot com. Please note that unless otherwise stated all references fourth quarter 2021 comparisons are being made against the <unk>.
Fourth quarter of 2020, and any references to full year 2021 comparisons are being made the full year 2020.
In this presentation <unk> has included certain non-GAAP financial measures as defined in regulation G promulgated under the Securities and Exchange Act of 1934 as amended.
non-GAAP financial measures included in this presentation are adjusted earnings per share.
Adjusted EBITDA and adjusted EBITDA margin.
<unk> provides non-GAAP financial measures to supplement GAAP measures as 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. In addition, other companies.
May define non-GAAP measures differently, which limits the ability of investors to compare non-GAAP measures of MP five to those used by peer companies.
Webcast replay of this call and it's a company presentation are also available via the link provided in today's news release and 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.
<unk> fourth quarter and full year 2021 results Hickerson right will then provide closing comments before we open the call for your questions Dickerson.
Hickerson. Please go ahead, thank you Richard and a special thanks to everyone that has taken the time to join US for this conference.
Let's start by turning to slide five of the Investor deck, where we will discuss our 2021 full year results.
Total revenues were $707 million a significant increase over 2020, even though there was one less billing week and year 2021.
Our adjusted EBITDA was 133 million, a 26% increase over 2020 adjusted.
Adjusted EBITDA as a percentage of total revenue was 18, 8% compared to 16% in 2020.
We of course see an uncertain geopolitical environment. This year. However, <unk>. This entering 2022 with a record backlog of $695 million and a strong pipeline of opportunities.
We see many opportunities, including infrastructure and opportunity to grow our position in ESG services throughout <unk>.
Our cash position and cash flows are strong.
And not only serves as an opportunity for support in these uncertain times, but also a great opportunity to grow through mergers and acquisitions.
Now turning to page six we will discuss quarter for 2021 highlights and opportunities.
Ed Codispoti, our Chief Financial Officer will discuss the Pacific results later on in this presentation.
Utility services continue to expand and will be further enhanced by a funding of specific growth initiatives supported by <unk> corporate.
We also continue to see exceptional results from our LNG group.
Our real estate transactions group had a record year in revenue volume and adjusted EBITDA in 2021.
We look to expand this service offering in 2022 with the acquisition in late December of Global <unk> services.
We are pleased to see the improved growth for our Geospatial services group in the fourth quarter, we look forward to significant organic growth and continued profitability for geospatial in 2022.
We also build further upon our EHS platform with the acquisition of P. Es environmental services earlier in 2021.
Growth through acquisition has been a key component for the growth of <unk> five.
We completed eight acquisitions in 2021 page seven list. The three acquisitions that were closed December 31 21.
Now, let's turn to page eight as we discussed the strategy for the acquisitions and the subsequent integration process into <unk>.
During the acquisition process, we ask these questions prior to any acquisition what is the culture of the target does the acquisition give <unk> a competitive edge.
That is the target of a history of profitability, a strong reputation and a blue chip client base.
The companies acquired in 2021, which are shown on the right answer these questions positively.
On page nine we discuss our integration process. It is something that we have developed over many years and has executed by a dedicated team.
The process begins with our due diligence and ends after the required permits fully integrated and <unk> over a period of up to one year.
Organic growth through cross selling is also part of the integration process.
Ample of our cross selling adding to organic growth as depicted by 13 of our most recent acquisitions youll.
You will see approximately $9 million in revenue added over the last two years by an intangible participation in the cross selling program.
This information will be found on page nine of the investor deck.
<unk> you will see the overall success of our cross selling program and our goal for 2022 is $34 million.
Turning to page 11, you will see that we anticipate continued strong organic growth of at least 6% to 10% for 2022.
We will measure and focus on organic growth and infrastructure utilities, EHS and geospatial.
And <unk> was selected to specific growth initiatives and utility service and Geospatial services funded by MB five corporate which we will discuss later in the presentation.
I will now hand, the presentation over to our CFO , Ed Codispoti to provide an overview of our Q4 and full year 2021 performance Ed. Thank you Dickerson and good afternoon everyone.
If you would please turn to slide 13 of the presentation I'll now highlight some of our year end financial results.
Looking first at the fourth quarter results, we can see that our gross revenues for the fourth quarter of 2021 increased by 17% over the same period in 2020.
Net income more than tripled as it increased to $15 5 million in the fourth quarter of 2021 compared to $4 6 million in the fourth quarter of 2020, 238% increase.
Our adjusted EBITDA margin on gross revenues increased to 21, 1% from 15, 2% in the fourth quarter of 2020.
This was an expansion of 590 basis points.
Our GAAP earnings per share increased to $1 <unk> per share in the 2021 fourth quarter from 35 per share in the 2024th quarter and.
And our adjusted earnings per share increased to $1 61 per share in the 2021 fourth quarter from 82 per share in the 2024th quarter and 96% increase.
For the full year, our gross revenues increased to $706 $7 million from $659 3 million in 2020.
This represents a 7% increase but it is important to note that 2021 had one less week in 2020 due to the way our fiscal years are determined so that one less week during the year affected our growth comparisons.
Our net income more than doubled as it increased to $47 1 million in 2021 compared to $21 million in 2020.
Adjusted EBITDA increased to $132 $9 million in 2021 compared to $105 4 million in 2020 or 26% increase.
Our adjusted EBITDA margin increased to 18, 8% in 2021 compared to 16% in 2020 at 280 basis point expansion.
GAAP earnings per share increased 95% to $3 22 per share in 2021 compared to $1 65 per share in 2020.
And our adjusted earnings per share increased by $5 11 per share in 2021 compared to $3 72 per share in 2020 or 37% increase.
On slide 14 of the deck, we can see a comparison of our results compared to pre Covid fiscal 2019.
As you can see we have showed substantial growth in our results as our gross revenues increased by 39%.
Our net income increased by 98% and our adjusted EBITDA increased by 92%.
GAAP earnings per share have increased by 69% and adjusted earnings per share have increased by 57%.
Cash flows from operations more than doubled as they increased to 101 $4 million in 2021 from $39 9 million in 2019, a 154% increase.
It's also important to note that our cash flows from operations in 2021 were weighed down by the timing of working capital changes, primarily driven by the growth in the business.
On slide 15, you can see that we are well positioned for future growth.
We reduced $198 million of debt during 2021 through a combination of our secondary offering in March of 2021, and our cash flows from operations, which were 76% of our adjusted EBITDA.
Now with cash on hand of $48 million as of the end of the fiscal year and minimal net leverage of about seven times. Our adjusted EBITDA. We have reached a scale, where we are able to fund substantial acquisitions and growth initiatives out of our cash from operations.
As a result, we feel that we are well positioned for growth going into 2022.
I'll now turn it back to Dickerson Wright for some closing comments Dickerson. Thank you Ed why do we feel confident for future success in 2022.
Let's turn to slide 17, you will see a record backlog of $695 million to support our 2022 budget.
We anticipate organic growth in EHS vertical by strengthening our current platform to better service existing markets and to enter new geographic areas.
The acquisition of GRS will expand the transactions environmental service nationwide, while also supporting our current transaction services group.
Mergers and acquisitions are anticipated to continue to be robust.
Our pipeline is very full we impact that firms in the final stages of due diligence.
Upon these facts and assumptions, we are giving full year guidance of $773 million to $802 million in gross revenue and adjusted earnings per share of $5 39 to $5 70 per share for full year 2022.
Okay.
At this time, we will now conduct a question and answer session. If you'd like to ask a question. During this time. Please press star followed by the number one on your telephone keypad.
Your first question comes from the line of Rob Brown with Lake Street Capital markets. Your line is open.
Good afternoon, and congratulations on the Hi, Rob.
Thank you.
Just wanted to get a little more color on the on the M&A strategy for 2022, what sort of areas are you focused on how is your thinking there.
Looking at this point.
Thanks, Rob.
We're fortunate as you know with US are vertical saw the six verticals that we have now we're pretty well mature and established so now we have the opportunity to look at and be very selective. The first is to what niche acquisitions will support those platforms and second what will enter.
And in turn also at let us enter into new markets and grow the company. So we can be very selective we're looking at high EBITDA.
Acquisitions were looking at a high barrier of entre.
Acquisitions, and we're looking overall to strengthen the existing platforms that we have and we will speak later about some initiatives that will allow us to grow into it to other areas. So the transitional acquisitions although.
At the beginning of <unk>.
<unk> five we were looking to grow those platforms and now we're looking to improve their profitability and to support the existing verticals.
Okay, Okay, great and then in terms of the you had a very good gross margin in the quarter I just wanted to get a sense of how you are managing through the <unk>.
Cost pressures you are seeing in cost ratios. You are seeing are you seeing them and how are you managing through them.
Well, yes, let me just first say that.
They should be and support services should be scalable and so what you see and I think we mentioned in the investor deck about the services that we offer from corporate and those should not be rising in cost anywhere near.
The increase that we have in growth and profitability. So the more that we grow the more we should look we look for scalability and we look for things that that can help.
Us be more efficient and be more profitable. So hopefully youll see our continued increase in margin as we grow as we go further although.
As we.
Speak many times of the of our business. The first quarter is usually our slower quarter of the year, but we shall see we think that the profitability in the gross margin should increase by the scalability of our structure.
Okay, great. Thank you I'll turn it over.
Your next question comes from the line of Chris Moore with CJS Securities. Your line is open.
Hey, good afternoon, guys good afternoon.
Great quarter, Thanks for taking a few questions.
So maybe just start with the with geospatial.
Now it sounds like it was moving in the right direction in the second half of 'twenty one obviously.
Really high margin segment and lots of exciting things. There can you just maybe talk about the momentum that you're seeing there and how you expect 22% compared to 21.
Well we.
The last portion of your question.
We really are looking for good things from geospatial and 2022.
They have presented a budget with that shows strong organic growth and we'll speak of this later in the presentation. There's a special initiative we have to do.
To grow the geospatial in the areas of offshore wind and energy producing geospatial activity in the offshore market for wind farms and in fact, we've made we've made some corporate investments on that that part of it also helping the growth tremendously as has been the acquisition of geodynamics, which gives the deepwater.
Water geospatial surveying, so where are we without being too specific we're very pleased with the growth that we're seeing in geospatial. This year and we're expecting we're expecting significant growth from that mass opposed to last year.
Got it that helps.
You did.
Three acquisitions right at the end of the year that it looks like the bigger one was the global Realty services. So yeah. As you talked about your prepared remarks real estate transaction businesses with significant <unk> and 'twenty one it looks like if I'm.
It looks like this one with global Realty it could be close to 10% of your revenue first of all is that correct and secondly, kind of what's what service offerings lets basis does GRS fill in there.
Well that is correct. It is closer to 10% of our revenue and obviously, what we think that we're <unk>.
<unk> the global real estate services, we think will support our existing operation that we call Bakken Clark soon to be up both rebranded two and be five transactional services.
But we think the markets that are different and where we feel the enhancement is a global <unk> services really.
Concentrates more on the federal funding that Ginnie Mae and Freddie Macs as opposed to up and insurance companies as opposed to Bakken Clark was mostly working with.
Hi.
Attorneys and real estate transaction, so we think that whole network will be complementary.
And we're looking for we're looking for some organic growth. Although in backlog you can't really look too much at backend Bakken Clark or global reality services, because that backlog is really a churn and burn they don't produce a much of a backlog, but we are anticipating to have a good stable year from those two.
From those two combined organizations.
Got it that's helpful.
Last one for me just a free cash flow was I think $87 million for the year, which quite good even though you had a little working capital build is that level.
Expectation for 'twenty two.
Well I'm always the internal optimist, but as far as far as specifics of where we are now and how we ended up result, I'll turn that question directly to you at Ed maybe you can respond.
Hi, Chris.
I would expect 2022 to continue to increase <unk> seen a nice trend in our <unk>.
Our cash flows over the last two years and.
For us it's a it's pretty straightforward when you think about our cash flows.
Looking at our EBITDA and <unk>.
Our capex stays relatively consistent and so as we grow EBITDA for the company I would expect cash flows to track along with that so all else being equal I would expect.
An increase in cash flows next year for this year in 2022.
Got it I appreciate it I'll jump back in line. Thanks, guys.
Your next question comes from the line of Jeff Martin with Roth Capital Partners. Your line is open.
Thanks, Good afternoon guys.
Jeff.
I wanted to drill down on just finished a little more I believe a double digit growth expectation for 2022 marks.
Modest acceleration from perhaps what you were thinking three to six months ago. So I was wondering if you could comment to that and then secondly could you comment to the backlog specifically NGL space all the way back to that kind of a normal level in other words have we made a lot of the federal contracts that were delayed.
As part of a 2021.
Well, Jeff. Thank you Hugh you did answer them.
The one question.
You are correct.
Dissipating a double digit organic growth from the budget that we received in what we thought the ground truth, we've had with geospatial. So we're excited about that.
But what does that consist of it really consists of projects that were delayed and new work that they anticipate in some of that new work as well.
Looking at new work is coming from our Geodynamics acquisition, where we are able to now do deepwater <unk>.
<unk> work and a lot of that is coming from an initiative that we're going to speak up a little bit later on the wind energy initiatives. So.
The combination that we're expecting from it.
From geospatial and organic growth is going to be from delayed projects.
Began to come to fruition slowly in the second half of the year.
The start that Theyre off to this year. So it's nice to see that they are anticipating a double digit organic growth and it's a very profitable segment of the business.
Okay and then my other question is around.
M&A side of the business.
It sounds like you're focused primarily on our niche acquisitions that are accretive to margins.
Are there any in the pipeline that are.
On the larger side and by that I mean $50 million to $100 million of revenue I think has been some.
As mark at the larger end of the spectrum, just curious kind of.
Get a get a look under the hood if theres anything.
A larger than average in the pipeline.
Yes, yes, there is.
I think.
We are always in due diligence and some of the small it does comes on how they are in the queue.
Right now we have a couple of smaller acquisitions that are further ahead than the larger ones, but there are three acquisitions in particular that we're looking at they're all three are over $50 million in revenue and that's.
I don't want to I don't want to call. The game in this in the third quarter, let's see we what we're seeing right now.
Active in due diligence and some of these larger targets and let's see what comes to fruition in the year, but.
By me, saying at the first comment that I made it has really nice that we have that we have mature platforms, where we can look for these niche high profitable acquisitions and that gives us that gives us some breathing room to go for the larger acquisitions and go for some of these operates.
Communities that we had that we wouldn't have had before the before the verticals where as established as they are now so.
We're very excited we think that we still are very very active in M&A activity and what was mentioned I want to comment on this the acquisition of GRS and I don't speak specifically, but.
We paid for that mostly in cash and it was.
No stock of some restricted stock was given out but we have an unused line of credit.
Bank of America for $400 million in Ed Didnt speak up, but what we've done to mitigate some of the interest rate risk that that could come about but we're in a very very good position that we can make the smaller acquisitions out of cash flow, but that leaves us very opportunistic for larger acquisitions.
Great that's very helpful and thanks Congrats.
Congratulations on a strong.
Yes.
Thanks, Jeff.
Yeah.
Your next question comes from the line of Lisa Springer with singular research. Your line is open.
Good afternoon.
Hi, Lisa I wanted to ask you about the data center commissioning and engineering segment.
As expected trends in that business to stay strong in 'twenty two as they were in 'twenty, one and is that primarily an outside the U S business for you.
Well.
Let's start with.
Obviously as you know through the stock market a lot of the high tech firms have been taking a lot of hidden valuation, but we still think there is there is a.
It's kind of a <unk>.
Very good.
Different among the.
The different view of things.
Most of the companies that we have.
We're looking at are clients of ours have been very strong earnings.
The data center work continues to move forward and the specific things, although I can't mention the names the acquisition that we did 80.
Is that really specializes with all of the well known.
Hi Tech firms that you would know if we mentioned their names and we're doing that data center work one of those firms.
<unk> firms that is doing work a lot of work in the U S. As far as data Center work is and also a well known name that we're not allowed to use so the majority of it to very specific things that are going on in Singapore right. Now we are very excited about and that's where a lot of the data center work is being done.
Nationally, but we still have a lot of opportunities with current clients in the domestic.
Area four for commissioning work.
Okay, well, thank you for the color.
Your next question comes from the line of Marc Riddick with Sidoti Your line is open.
Hi, good evening.
Hi, Mark how are you.
Good do it yourself.
Good yes, well so far so good I will let you know in this call's over.
So I wanted to just ask a big bigger picture question, because it seems as though when you put the pieces together as to some of the commentary around both the existing business the backlog.
The visibility that you have there.
The commentary around the acquisition.
Potential pipeline it seems as though if you could give my wasn't silicon from what your views are on reaching the goal of one.
$1 billion by 2024, it seems as though.
That seems to be more visible now than the one.
That goal was originally set and I was wondering if you can just share some of your thoughts on whether that's the case.
Yeah, well I think we're well along the way and on track to do that and it's for the end of 2024, where we think will be a $1 billion in total $1 billion in total revenue and when this goal with established it came from our people is coming from the ground up.
And it looks like we're going to grow a little over 50% by organic growth and reaching that.
Not quite 50% and M&A activity, but we're well on the way and the previous question that we had from Jeff Martin was.
What type of acquisitions or what are you looking to do that we think that some of it is going to come through acquisitions in and a lot of it will come from organic growth.
Now that our verticals continue to be more and more established.
So to answer your question.
We're certainly not backing away from the $1 billion by 'twenty, four and I think we have a good pragmatic approach to to being intentional about that.
Great and then the last one from me I was wonder if you could talk a little bit about maybe what youre seeing on the ground as far as.
Any change as far as spending patterns or priorities that you've noticed since.
Since the infrastructure Act as Pat as far as how active your customers or maybe some of the priority areas.
Is there anything that you could share with us maybe or even maybe a little different than maybe what you were expecting.
Thanks.
Thank you.
Well perception is reality in the infrastructure Bill what we're seeing right now is perception.
Four we had a tremendous amount of headwinds where infrastructure was not being spent but now that that funding has been appropriate appropriated it's nice to be in the infrastructure space. Although we're not expecting any immediate returns on on that work a lot of the a lot of the infrastructure work that speaking of theres not going to be.
So to speak shovel ready projects that we see because a lot of the permitting process takes a tremendous amount of time, but we think that.
We think that infrastructure is.
It's good to have to know that there is funding its good that our federal government recognizes the need for it.
We've always positioned the company to be.
Not so much in having to identify markets, but more by need.
People don't worry about the economy, when they need to drink clean water people not worry about so good or bad economy. So I'm going to go for a bridge or not or are used transportation. These things have to be delivered in a safe manner and so we've always lean towards.
Infrastructure improvement and positioning the company and looking at things that that are needed by a growing population. So so.
It's nice to see that the infrastructure is being recognized but were not seeing any immediate we're not seeing any immediate.
Funding for that work.
Much appreciate it thank you.
Your next question comes from the line of Andy Wittmann with Baird. Your line is open.
Great. Thanks for taking my questions. This afternoon guys I appreciate it I guess, maybe Ed I just wanted to try.
Trying to get a good sense of the quarter, a little bit more and get some numbers out if possible here. So first I'd just related to the acquisitions could you talk about how much revenue.
It will be noted in the 10-K is having come from companies acquired in the past 12 months. So that we can get a good sense of what the organic growth rate was in the quarter.
Sure Andy Hi, how are you, it's just under $30 million.
For the 2021 year that came out of those 2021 acquisitions got it and then what does that mean what does the.
What is the revenue contribution from acquisitions.
We are closed in 'twenty, one that will be inorganic towards next year in other words, how much of this revenue guidance comes from acquisitions that's inorganic.
For 2022.
We've got when you think about the run rate for all of those acquisitions.
It's about $80 million or so maybe a little bit less maybe just under 80 mill.
Got it helpful.
And then.
Sure. So I wanted to go here and then just.
Yes.
On the quarter and just noticed was there any.
Changes in the reversal of any contingent liabilities that war.
Yes.
Realized in the quarter and were they included or excluded if they existed from the adjusted numbers that you're reporting.
Yes, so there was a $2 $3 million adjustment to the contingent consider one of the contingent consideration for one of our acquisitions and that flowed through the G&A on the income statement, but for purposes of adjusted earnings per share. It is added back as an acquisition related costs.
Because their terms that we came up with as part of the initial acquisition.
Got it. So these were these were payouts that you had to recognize so basically a cost there was expense in SG&A and then backed out.
Incremental cost was backed out of the adjusted numbers you reported just wanted to make sure I have the direction of the adjustment the right way there okay.
And then.
Maybe Ed just in terms of the.
Let's see where someone wanted to do here just on backlog can you talk about how much of the backlog was inorganic in the fourth quarter.
So in the fourth quarter, if you recall in Dickerson just spoke about this a few minutes ago, but.
GRS, which was the largest of those year end acquisitions.
Doesn't it doesn't really have a large backlog associated with it because it's more churn and burn right and so it is high volume and it turns over quickly without long term contracts. So the backlog.
As high as you might expect it was about $12 million.
Thats tied into those those three late year acquisitions okay.
All very helpful. Thank you very much and have a good evening gentlemen.
Thanks Peter.
This does conclude our question and answer session I will turn the call back to Mr. <unk> for closing remarks.
Thank you we spoke earlier concerning the initiatives for 2022 of the initiatives that would help us grow the company organically and what did we what initiatives would be funded by corporate So let me just speak a little bit about that.
We want people to grow the company, we don't want a business unit to be not looking for initiatives to grow because I think he would affect their budget. So we've decided that all of our all the initiatives. We had what would be things that could really grow the company. So we have two specific initiatives that are paid for by the.
<unk> service center or the corporate.
And the five and what specific area. So the two we had one in geospatial and one for the utility services. So I've asked up Mark.
Mato to speak of what we're doing with geospatial as far as that initiative and then Alex will speak of what we're doing with utilities as far as the initiatives that we are.
We're supported by corporate so Mark perhaps you can go ahead with the geospatial services.
Sure.
The investment that Dickerson, referring to we will expand our existing capacity to support the offshore wind energy market.
U S is far behind its European counterparts, and installing this clean energy alternatives, but it's looking to catch up in a hurry. There are 16 projects along the eastern Seaboard alone that are in progress and another six leases closed just last week. So the market is poised for significant growth and <unk>.
Play a substantial role in this highly specialized near shore cable corridor environment with the hydrographic and the Geophysical survey capabilities that we acquired through the Geodynamics acquisition, we've been awarded over $4 million in offshore wind energy contracts to date.
And the investment that we're going to make will position us to grow along with this attractive market segment over the next decade.
Thank you Mark that was very helpful. Alex perhaps you can.
Speak a little bit concerning the other initiative, we have in expanding our services to utilities.
So.
Actually just to piggyback a little bit on what market said, it's actually a great initiative for both the core business as well as geospatial Theres a lot of opportunities for our core business and for these type of services that are fall under our traditional geospatial work.
Specifically, though for core we are looking as we have developed.
And our San Diego Operation, a very robust power and utilities group to be able to expand that throughout the United States, we have a investment.
That is designed to promote.
The services that we provide for utility operations, not just in southern California, but throughout the United States, and particularly we see huge opportunities in northern California as well.
Thanks, Alex.
So you can see that we want to be intentional in our grace aggressive in our organic growth and support these initiatives that we feel can really have an impact on our 2022 budget year and then and then beyond that so we are anticipating a very successful 2022.
We also see a positive impact on some of the.
Areas of our service that was impacted by Covid, and we starting to see things coming out.
And in growing further our business building technology business and our MEP support services was impacted by the downturn in the hospitality group, we start to see the hospitality industry coming back strongly we're starting to see work and expansion of work in the gaming area in the travel area in.
The areas in hospitality and as far as hotels and various things that were impacting our program management and our MEP group and are building technology group. So we see that area of positive.
A positive effect on our budget for 2022. So we also see organic growth in a number of different areas. We see a strong organic growth in utilities, we see organic growth we had a very good year in our LNG offices and work. We also see an opportunity to expand our environmental services.
And we think in supporting environmental we will also support many of our companies as they focus on ESG.
ESG and look at that not only as a way to.
And increase our visibility with the environment to grow the company.
So organically, we think it's going to be a very strong year, but I also want to talk about the M&A work, a little bit and we really have a robust pipeline that is very full and we have many opportunities. The phone continues to ring and we now are very selective in the targets that were <unk>.
We're going.
After.
I want to mention one thing though.
We don't like to be considered a roll up strategy. We really are an aggregator our team. Our team has been at this for a very long time. So we're looking for opportunities that we can grow organically through our cross selling program, we want to measure that cross selling program that we're doing and see how that and if you look at.
On the Investor deck, you will see that our cross selling program, which is our internal working for all the offices has really increased the organic growth of some of the targets that we've had in some of the acquisitions that joined the family. So these are things that there has to be a strategy for M&A and the first strategy is to <unk>.
Really.
Embraced those those companies look for the good opportunities look for the client base that they've had look at.
Profitability and then.
The structure is how do we really include them in the organization. So we think that we have a very very good opportunity for M&A growth and we look forward to 2022.
I don't want to say too much about what the quarter looks like but we're very pleased with the budgeting process. We're very pleased with what we're doing.
And we're very pleased with where the organic growth can go and grow and so some of these areas that we're looking at to be neutral this year seem to be growing so.
But how do we do this I think.
It is really because all of us have been working together for a long time I want to thank the people in there our organization everybody is working very hard.
We want to visit with all of our our people we want them, let them know that everything they're doing it really benefits. Our overall company. So I want to thank everybody for the time that first my thanks goes out to all the people that have been with NP five and second to our investors and people that are listening on this call and we.
Look forward to having a very good successful 2022, and I want to thank you for the opportunity you gave us the data speak about the company. So I think thats.
That will conclude our comments for today, but we look forward to seeing everyone in talking everyone in the future in coming months. Thank you.
This concludes today's conference call you may now disconnect. Thank you for joining.
Okay.
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