Q1 2022 ABM Industries Inc Earnings Call
Okay.
Good afternoon, and welcome to the a M best first quarter fiscal 2022 earnings call.
At this time all participants are in a listen only mode. Please note that there will be a brief question and answer session. Following the eight b our management teams formal remarks, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded it is now my pleasure to introduce Paul go Goldberg.
A b M. Mr. Goldberg you may begin.
Afternoon, everyone and welcome to our first quarter 2022 earnings call. My name is Paul Goldberg and I am the senior Vice President of Investor Relations at ABM with me today are Scott found mirrors, our president and Chief Executive Officer, and Earle analysts, our executive Vice President and Chief Financial Officer. Please note that earlier this app.
Afternoon, we issued our press release announcing our first quarter fiscal 2022 financial results a copy of this release and accompanying slide presentation can be found on our website ABN dotcom.
After Scott Narrows prepared remarks, we will host a Q&A session.
But before we begin I would like to remind you that our call and presentation today contain predictions estimates and other forward looking statements.
Use of the words estimate expect and similar expressions are intended to identify these statements.
Statements represent our current judgment of what the future holds while we believe them to be reasonable. These statements are subject to risks and uncertainties that could cause our actual results to differ materially.
These factors are described in a slide that accompanies our presentation as well as our filings with the SEC.
During the course of this call certain non-GAAP financial information will be presented a reconciliation of historical non-GAAP numbers to GAAP financial measures is available at the end of the presentation and on our company's web site under the Investor tab.
And with that I would like to now turn the call over to Scott.
Thanks, Paul Good afternoon, and thank you all for joining us today to discuss our first quarter results ABM is off to a great start in 2022 as demonstrated by our results I'm, particularly pleased with our organic revenue growth of over 9%, which was broad based and reflected not only a pandemic recovery but.
Also robust demand for services that enable healthy buildings sustainability and energy efficiency.
Our service offerings closely align with these trends and we were successful in winning new business with World class clients and this momentum is positioning ABM for strong growth in 2022.
First quarter revenue grew nearly 30% to $1 9 billion and adjusted EPS was <unk> 94 cents, both above our expectation.
Margin was solid at six 6% in the quarter and reflected the expected change in mix from a high volume of enhanced cleaning and disinfection related work orders to a more traditional mix of janitorial and other services.
Due to our stronger than anticipated first quarter performance, we are raising guidance for adjusted EPS to $3 50 to $3 70.
Which is a 5% increase at the midpoint of the range.
I'm pleased with the resilience of our business has shown throughout the pandemic and excited about our future as we shift toward a more normal operating environment, while we still face labor challenges as things continue to ramp up we are confident in how we are structurally positioned relative to labor cost inflation and I'll explain why in a few minute.
First let me comment on the demand environment.
Beginning with being high office occupancy rates remain at low levels, but are gradually increasing and this trend is expected to continue throughout 2022.
The eastern West Coast are about 15% to 25% occupied with the Midwest higher at about 30% to 40%.
The omicron variant delayed return to office plans, but we expect activity will pick up in April assuming no. Further setbacks demand has greatly improved for special events, such as concerts and sporting events as venues are operating at Fuller capacity looking forward as occupancy rates rise we will benefit.
From increased volume, but we'll also see an easing in the labor efficiency, we've experienced for the past several quarters.
Moving onto aviation.
Travel rebounded significantly from the prior year with U S passenger volumes now much closer to pre pandemic levels, mostly driven by consumer travel.
We believe travel demand will continue to trend higher, especially in the second half of the year as both business and consumer travel is expected to pick up we are pleased with the margin improvement for aviation, which has been aided by our focus on optimizing our service mix.
This is the first quarter, we are reporting results for our new industry group manufacturing and distribution.
<unk> is off to a great start and the strategic logic of aligning. These key verticals is already paying dividends as we are expanding with existing clients like Amazon and winning new business.
Occupancy rates and MD have remained high largely driven by consumer demand for goods and services through both the e-commerce and retail channels.
The growth in demand we are seeing is coming from the expansion of distribution facility square footage to meet the continued strong growth in e-commerce .
Demand is also coming from larger clients, who want to partner with a service provider with the resources and scale to support their growing footprint.
B M is clearly uniquely positioned to meet this need.
In education, K through 12, and colleges and universities are operating with 100% impression learning.
We expect demand for our services to be relatively stable the roll off of three education accounts in the back half of fiscal year 'twenty. One resulted in Q1 revenue declining 1% year over year. However, on a sequential quarterly basis revenue operating profit and margin all improved.
In fact operating profit improved $4 $6 million and margin increased over 200 basis points as we manage labor costs related to the ramp up of in person learning.
It's important to note that education operating margin is now over 100 basis points above pre COVID-19 levels, even after the return to in person learning.
Technical solutions is seeing robust demand in the E mobility market E mobility has grown from a small service line to the largest portion of Ats as backlog, we have programs with several auto Oems to installed EV charging stations and their dealer networks, and we are winning new business with municipalities.
<unk> and corporate fleets.
We expect demand to rise as the funds dedicated to EV charging within the U S infrastructure bill begin to be allocated to <unk>.
Transition to electric vehicles is just getting started and we aim to capitalize on our leading position to broaden our growth opportunity to include initial design and service and maintenance complementing our easy installation services.
Sustainability and energy efficiency will also drive long term demand for our HVAC and bundled energy solutions, where we guarantee our clients energy savings. This has been our core offering and Ats for many years.
Overall in addition to a constructive demand environment, we are distancing E. B M from the competition as we integrate the <unk> acquisition and move forward with our elevate initiative.
The April integration progressed, well in the first quarter and our teams will continue this work for the balance of the year.
Our initial focus has been on combining team members clients and operations into a unified service delivery platform.
As we undertake this process client satisfaction remains paramount and our customers have responded favorably our.
Our next step will be to onboard able to a common shared service and it infrastructure. Our team remains confident that we will achieve the synergy targets, we laid out when we announced the acquisition.
We also made good progress of course core elements of our elevate program last month, we launched a cloud based tool, which streamlines the candidate application process and provides hiring managers with more visibility into the hiring process.
This investment is especially timely now and should improve the yield of our recruiting efforts.
In addition, we are driving increased employee retention through more data driven methods.
We recently launched a tool that provides greater insight into labor trends at our job sites. This data helps our teams to create an action plan to improve retention.
We'll continue to share the progress, we're making on elevate in the coming quarters.
Before I turn it over to Earl to discuss the financials I will briefly discuss the labor environment I know, it's top of mind with our investors as it is with our team.
Let me start by stating the obvious.
No company is immune to labor cost escalation or the tight labor market.
That being said the majority of the abms wage inflation risk is mitigated by the makeup of our direct labor workforce.
As a percentage of our contract revenue roughly two thirds of our direct labor is represented by collective bargaining agreements were wage increases are fixed or they are part of a cost plus arrangement or part of some other arrangement where wage rates are known.
Within that two thirds. The majority is unionized labor and the annual increases are generally in the range of 3% to 4% and have now been locked in for the next two to three years and are transparent to our clients.
Parents see mixed capturing increases less difficult as clients know that our increases are a direct result of stated contractual wage increases.
So that leaves about one third of our labor costs that are not contractually protected.
In these instances, we seek adjustments to cover cost escalations when appropriate.
Our success in adjusting wage rates as a reflection of the value our clients place in a b M and our ability to provide essential service even during the most challenging of times like we just saw during COVID-19 .
We have good success rates and recovering these costs, we would point to 2018 and 2019 as labor prices as good validation.
And in those instances, where we can't come to an agreement with our client we have the courage to let our services be rebid and repriced.
On the topic of labor availability like everyone else, we feel the effects of the labor shortage and we are proactively responding through several initiatives, including greater use of data and analytics.
Enhancing our preemployment onboarding process and the initiation of a candidate care services team.
These actions are helping to drive important short term and long term benefits to our recruiting and candidate retention programs.
Data supports the progress we're making.
July of 2021 mark the point, where we had the highest number of job openings. Since then we've been trending down and since then the number of job applications is up 14% and the number of applications for open job is up 25%.
We believe that the number of people coming back to the workforce will only increase as inflation continues to take a toll and forces people back into the market.
We remain confident in our ability to manage through today's challenging labor environment, just as we've done in the past.
With that let me now turn it over to Earl for the financials.
Thank you Scott and good afternoon, everyone for those of you following along with our earnings presentation. Please turn to slide five.
First quarter revenue increased 29, 7% to $1 9 billion.
Primarily driven by a full quarter contribution from the <unk> acquisition.
A continued recovery from the pandemic, most notably in aviation and solid demand for our janitorial and engineering services.
Organic growth of nine 1% was supported across all industry groups with the exception of education, which had a slight year over year decline.
Moving on to slide six net income in the first quarter was $76 million or $1 11 per diluted share compared to $74 6 million or $1 <unk> per diluted share in the same period last year.
The increase in GAAP income reflects favorable operational earnings and a higher benefit associated with self insurance adjustment related to prior years.
Largely offset by investments in our elevate initiatives.
Integration costs and higher corporate expenses.
Adjusted net income for the first quarter decreased 6% to $64 $4 million or <unk> 94 per diluted share.
Compared to $68 3 million or $1.01 per diluted share in the first quarter of last year.
The decrease primarily reflects higher corporate expenses and one additional workday compared to the prior year period.
Partially offset by higher segment earnings.
Adjusted EBITDA for the first quarter was $123 million compared.
Compared to a $123 7 million in the prior period.
Adjusted EBITDA margin for the quarter was six 6% versus eight 6% last year.
Primarily driven by the anticipated decline in higher margin disinfection services.
Please note that our calculation for adjusted EBITDA margin has changed in order to provide a clearer understanding of our operating margin.
Specifically, we are revising our calculation for adjusted EBIT margin for all periods presented to exclude parking management reimbursement revenue.
This revenue and the associated costs, which net out to zero are both recorded on a gross basis and generally have no associated margin.
Fiscal year 2022 parking management reimbursement revenue was included in the calculation of adjusted EBITDA margin.
With the addition of Abel corporate expenses were $23 $2 million higher compared to the prior period due.
Due to investment in our elevate initiatives able integration expenses and costs related to hiring activities.
Which more than offset the benefit from self insurance adjustment related to prior years.
Now turning to our segment results beginning on slide seven.
<unk> increased 49, 2% year over year to over $1 billion.
Driven primarily by a full quarter of contribution from April increased year over year office occupancy and growth in special events.
Excluding the contribution from Abel DNI organic revenue increased four 6% over the prior year period.
Operating profit Eni increased 14, 6% to $83 $3 million driven.
Driven by higher revenue.
Operating margin of eight 1% reflects lower enhanced cleaning and disinfection related workforce.
Aviation revenue increased 42% to $200 3 million.
Marking the third consecutive quarter of robust year over year revenue growth.
This improvement was largely driven by increased quality airline traffic with U S passenger volume now moving closer to their pre pandemic levels.
Aviation operating profit increased to $8 9 million compared.
Compared to $3 1 million in last year's first quarter, driven by the significant rebound in revenue as well as our efforts to emphasize higher margin airport facilities services.
The year over year operating margin improvement of 220 basis points reflects greater economies of scale.
Turning to slide eight.
Revenue within our manufacturing and distribution industry group grew five 4% to $359 $1 million.
Strong organic growth in this segment was driven by new customer wins and expanded business with leading e-commerce clients.
Operating profit increased two 3% to $40 6 million on higher sales volume.
Operating margin decreased 40 basis points to 11, 3% due to low levels of enhanced cleaning and disinfection related work orders.
Education revenue declined one 1% to $205 7 million.
Largely reflecting the roll off of a couple of accounts.
Looking forward, we are optimistic that several new bidding opportunities are opening up.
Operating profit totaled $12 6 million.
Down from $21 7 million in last year's quarter.
The decline in operating profit in large part was due to the ramp up in labor required to support 100% in person learning versus 25% last year.
Operating margin was six 1% and in line with our expectations setting.
Technical solutions grew $25 9 million to $141 $8 million driven by continued strong growth in our emerging E mobility service offering.
Operating income included a $7 $7 million gain on the sale of selected healthcare related customer contracts.
Excluding the gain operating profit improved 53% to $9 2 million and operating margin increased 120 basis points to six 5% as we benefited from operating leverage on higher revenue.
Moving on to slide nine.
We ended the first quarter with total debt of $1 2 billion.
Including $167 million in standby letters of credit, resulting in a total debt to pro forma adjusted EBITDA ratio of two one times.
At the end of Q1, we had available liquidity of $796 million, including cash and cash equivalents of $46 6 million.
Turning to capital allocation.
We initiated a share repurchase program during the first quarter, we repurchased approximately 300000 shares at a total cost of $13 3 million.
The repurchase program has continued into second quarter.
Lastly, we are proud to have paid our 220 <unk> consecutive dividend in the first quarter.
Now I'll briefly discuss our updated guidance as shown on slide 10.
As Scott mentioned earlier, we are increasing fiscal 2022 EPS guidance.
Specifically, we now expect GAAP EPS to be in the range of $2 65.
So $2 85.
Also our guidance for adjusted EPS is now expected to be in the range of $3 50.
To $3 76, compared to $3 30 to $3 55 previously.
The increase in our adjusted earnings forecast is due to our strong financial performance in Q1 fiscal 2022, as well as our favorable outlook for the balance of the year.
The updated guidance represents a 5% increase at the midpoint of the range over the previous guidance.
Also due to the change in the calculation of adjusted EBITDA margin. We now expect fiscal 2022 EBIT margin to be in the range of six 4% to six 8% compared to our prior guidance of six 2% to six 6%.
This update is merely a reflection of the change in methodology of the calculation.
With that let me turn it back to Scott for some closing comments.
Zero.
<unk> continues to operate from a position of strength supported by favorable secular growth trends like healthy buildings sustainability and energy efficiency and solid cash flow.
We have a world class client base, the industry's best team and the scale and product breadth to support our clients in a way our competitors just can't.
And with the recent acquisition of Abel, we significantly expanded our capabilities to comprehensively address our clients' evolving needs across the spectrum of facility services and engineering solutions.
Elevate initiatives will serve to further strengthen our market position and widen our competitive moat.
With that.
Let's take some questions.
Thank you we will now be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is there any question queue. You May press star two if you like to remove your question from the Q4 participants using speaker equipment, it may be necessary to pick up.
Your handset before pressing your stock before passing the Starkey. Please limit yourself to one question and one follow up so we may get to everyone's questions.
Our first question comes from the line of Sean Eastman with Keybanc capital markets. Please proceed with your question.
Scott Carl Good evening, Thanks for taking my questions.
I just wanted to start on the guidance just so I understand what shifted around.
Does the updated full year guidance just flow through the stronger than anticipated results in <unk> with sort of a status quo outlook over the balance of the year versus internal expectations.
And then.
The midpoint of the updated guidance would imply that the first quarter represents quite a bit more of the full year outlook than normal. So just wondering why that would make sense.
Sure let me take that so yes, I think a lot of it is the flow through in the first quarter, but we are optimistic and we think Q2, we'll start seeing a little bit of headwinds because returned to work we will have us lose some of that labor efficiency, but we are getting more benefit than we expected when we originally got.
Right because people still are back to work and they're just starting to head back now. So we have that we do have that as a tailwind going into Q2 and Q3, but we have to remember we're still in the labor situation that we're in now and even though we think we're handling it really well we still have to be core.
Cautious as we think through the rest of the year.
Okay Fair enough fair enough and then and then since there is a lot of moving parts just be great to level set on how the margins are expected to trend over the balance of the year right. We have the.
Labor efficiency element kind of abating.
But then we've got some <unk> synergies, maybe ramping up and then.
Of course, elevate benefits ramping up so just trying to think through what a good expectation is.
Yes.
Over the balance of the year. After this first quarter result.
Yeah sure I mean look we didn't change our guidance on margin.
And I think.
For us that's a bit of it's the same kind of themes.
Themes that I said earlier to one which is like again, we think we will have some good tailwind.
For Q2, because of the delayed return to work, but again cautious with the labor environment. So too soon for us to make a call on margins raising right now I think we're just we're being real cautious about this.
Okay got it I'll turn it over there thanks, a lot guys and great start to the year.
So thank you I appreciate it.
Our next question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question.
Scott Good afternoon.
Good afternoon.
So I wanted to ask about the manufacturing and distribution segment I think you used to be manufacturing and technology.
So I mean, I guess im curious how youre thinking about organic growth in this business for 'twenty two as it's contemplated in your guidance and how that would compare to what we would've seen relative to historical standards.
We're still optimistic about this group and the trends are with us right with E Commerce and logistics so.
We're pretty excited that we made this pivot proactively and while we don't guide to organic growth.
Segment, this will be a higher growth rate I think.
If you'd asked me, where this will land with technical solutions is typically our highest growth rate in the high single digits.
I'm not so sure that <unk> is going to be far behind that.
So we really feel like we got a winner here and its proving out already with what we've seen since we formed it.
No thats, what im looking for Scott. So just some directional help but that's really helpful. Thank you and I wanted to ask about something you've mentioned in your prepared remarks that your education segment margins of 100 basis points above pre COVID-19 levels, even though everyone's returned to school. So I mean I assume that means endemic relate.
Good labor efficiencies are now gone, but can you talk a little bit more detail about why those are margins remain so high relative to pre pandemic levels and how much of that you think is structural.
Well look I really feel good that we're hitting.
Payable rates.
We are very very focused on profitability I think culturally the firm has been changing and pivoting towards.
<unk> margin as much as revenue growth rates. So I think it's just a higher quality of clients. We are able to re staff more efficiently and this is something if you remember we were talking about for the last couple of years about the fact that when we get to re staff jobs, we will do it more efficiently.
Lee and keep some of that labor.
Efficiency that we got through it so I think that's proving out as well.
It's early to call a soft first quarter, but just the fact that we're operating at a 100 basis points higher than we were pre COVID-19 .
Encourage everybody.
I do recall you talking about.
Holding on to some of that labor efficiency as you move beyond the pandemic and it appears you are executing on that so.
We will we will stay tuned congrats on a nice quarter.
Thank you.
Our next question comes from the line of Andrew Whitman with Robert W. Baird. Please proceed with your question.
Hey, good evening. Thanks for taking my question guys I guess, maybe first just to start off with a couple of number questions here.
Can you talk maybe about what your outlook is for Capex and free cash flow.
For this year and maybe just comment I just want to make sure that the change in the.
And the margin calculation.
About a 20 basis points impact was that included.
At Analyst day, as part of your 7% target or should we expect that your long term target nos seven 2%.
Sure.
Yes. Thanks for the question. So let me answer the last question first so with regards to the margin change on the parking that was not included in the guidance that we actually gave back in December and again, we've anticipated that on an annual basis, it's anywhere between 20% and 30 basis points of that so that would actually be tacked on to the guidance.
We actually provided.
Based on your first question associated with the outlook for cash flow and Capex. So our capital expenditures still are.
Estimated to be about $45 million on the year with regards to cash flow our underlying operating cash flows continue to be very strong. However, now what youre going to see this year is a number of onetime items that will offset that no most notably in.
In this last quarter, we started to repay the deferred payroll taxes that we actually had through the cares Act.
It was about $66 million on top of that we estimate are.
We are looking for about $140 million of the legal settlement, which most likely will likely will come in this next quarter and then with the $80 million that we've actually earmarked around elevate those all total up to.
Close to about $280 million, not really that offset the strong cash flow that we will be generating so we're looking at really flattish cash flow when you take that into consideration and it keeps our leverage while still even with kind of zero base cash flow. We're still at two leverage which is really opportunistic for us.
Yeah, and you felt comfortable enough to do a little buyback too so and then just Scott.
I guess just on technical solutions going back to that segment for a second I mean, it sounds like this.
E mobility, but a lot of that is I guess a lot of that is what just installation of.
Car charging stations can you just talk to us about.
The size of what you expect that business to be this year do you expect that the technical solutions business will have maybe more.
Even seasonality I mean, historically that business has been a.
A lot of summer work for schools to.
Improve their energy efficiency with the.
Things that you put in an upgrade but it sounds like the discharging business and the E mobility is getting to be pretty significant you said, it's the biggest part of your backlog. So I'm just wondering if.
The quarterly revenue contribution becomes a little less seasonal.
And maybe if you could just talk about the overall size of this business today sure. Yes first of all you're really onto something there I think it will take a couple of years frankly, Andy for us to feel like the seasonality has gone it's still a nascent business for us.
I think we did about $40 million or so.
EV charging last year and it could be triple that it could be even more than that.
This is this is a field that we're going to you're going to see ABM, putting a lot of resource around because right. Now we're mostly focused on the installations, which is actually a lower margin part of the business right probably margins that replicate more of our janitorial margins versus the traditional technical.
Solutions margins, but that being said.
Think of the installation as kind of the centerpiece of the E mobility ecosystem, whereas.
There is the opportunity for us to actually do the design work prior to the installation and we do that with our bundled energy solutions. So we have good proof points for being able to engineer and design solutions and then think about after it's installed the ability to do maintenance right, which is a recurring revenue stream and we're even talking about can we even.
<unk> power now we may not self perform all of those things, we may be getting to different partnerships, but.
I think the point is this is going to be a very fast growing field and it's really good to start from a position of strength and being the number one installer in the country right now so we'll be talking a lot about E mobility and hopefully we're going to see some really strong growth over the next two to three years and again coming full circle.
To your point, it probably than less seasonality in Ats should keep growing in an outsized manner.
Great. Thank you very much.
Thanks.
Our next question comes from the line of Marc Riddick with Sidoti. Please proceed. Please proceed with your question.
Hey, good afternoon gentlemen.
Hey, Mark.
So wanted to touch on a couple of things and I guess, maybe frame it from the standpoint of the.
The comments around education sort of being 100% back in and having the margin benefit I was wondering if you can sort of and this is more of a broad brush I'm kind of looking for as far as thoughts, but I wanted to get a sense of what role visibility might play in something like education versus other verticals, where you kind of know in there.
When school is about to start right, but I wanted to get a sense of maybe you can shed some thoughts as to.
Some of the learnings that you had.
Take from the education process, and how that sort of translates to some of the other.
The other verticals, particularly around pricing labor and the role that visibility plays in that.
Yes.
Terrific, because I'd love to talk about that.
It was a good learning for us and we are pleased actually that we didn't have everything come back at the same time, just from a labor ramp ups standpoint, so for us.
We got a lot of learnings on how to re staff jobs efficiently. We got a lot of learnings on how to find and attract labor in this environment market by market and some of the learnings. We have is that it's a very market driven approach in each geographic market has different.
I guess really different dimensions to it. So this was a good test case for us a good pilot for us as the rest of our industry groups ramp up. We're obviously really pleased with how we performed again settling in at a 100 basis points higher than pre Covid, we'll see if that translates through with the other industry groups.
We've got a really good.
Lesson from an education from from the Education group.
Just add to that in addition to what we've learned with regards to the deployment of labor.
The education, probably has a higher percentage of non unionized labor and therefore, we've really honed.
Honed in our skills on how to really accelerate price escalation across the the increase in wage and that's something that we're going to transfer those learnings across the other <unk>, that's a great point.
Great and then just my follow up is and again its going to be a little squishy. So forgive me, but if we were to look at it particularly for the folks that were turning to it too.
Office work and particularly with <unk> right.
What was the best scenario would look like for the ramp up as far as the timing of that because obviously, we're seeing a lot of companies come out with various announcements post omicron as far as we are starting to bring folks back so.
And our ABM perfect World, what type how would that look as far as.
What you would prefer to see that you think would be beneficial for the management of that process, Yes, I mean look.
What I would say is we pride ourselves on how agile we are and how we adopt resource with COVID-19 . So.
It doesn't matter how this plays out we feel really confident we will do well, but that being said a slower ramp would be better for us right because it's a slower ramp up to office means slower.
In terms of hiring.
Finding people and re staffing so and it looks like that's playing out so there's no magic to that right. I don't think there is anybody that thinks April one there's going to be some kind of a big Bang back to the office.
So we like the way this is playing out more.
Excellent. Thank you very much.
Thanks Mark.
Our next question comes from the line of Tate Sullivan with Maxim Group. Please proceed with your question.
Alright, Thank you Scott I apologize if you touched on it earlier, but you called out Amazon in your prepared remarks, and then can you touch a little more on the EV charging opportunity with your existing customers I mean does it.
The evolution of that as it starting mostly with education of parking customers and can it go to more companies like Amazon or is it spread out among your end markets. Please yes.
Yes, that's a good question.
We think there is going to be and look the one thing. We know that's happening everybody is going to need EV charging in their facility right, whether it's a school whether it's an office building, whether it's an airport right and so we think there'll be a good opportunity for cross selling it's just us getting out there and starting to have those.
Conversations.
We just unveiled something called our smart parking new.
It's more of an artificial intelligence way thinking about parking.
We did this in la and its taking EV charging, it's taking revenue dynamics and putting it altogether for an offering so.
For us the EV charging space and E mobility space combined with our different end markets and our parking assets should be a real accelerator for us in the future.
I'm sure you can quantify that cross selling as well to well. Thank you for all the detail on that opportunity.
Thanks for the question.
There are no further questions at this time I would like.
I hand, the call back over to Scott <unk> for closing remarks.
I just want to thank everybody for joining Tonight and we.
We're looking forward to getting back to you next quarter, but as you can tell we're really optimistic about the future.
And clearly Super proud of the results that we just posted so.
More to come thanks, everybody have a great night.
<unk>.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.