Q4 2024 UniFirst Corp Earnings Call
Good day and thank you for standing by welcome to the fourth quarter 2024 unique first earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need a press star one on your telephone you will then hear an automated message.
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Speaker Change: Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Steven Suntrust, President and Chief Executive Officer. Please go ahead.
Steven Suntrust: Thank you and good morning.
Speaker Change: Steve Finch Rose unit first President and Chief Executive Officer, joining me today is Shane Oconnor Executive Vice President and Chief Financial Officer, I would like to welcome you to unit First Corporation Conference call to review, our fourth quarter results for fiscal year 2024.
Speaker Change: This call will be on a listen only mode until we complete our prepared remarks, but first a brief disclaimer.
Speaker Change: This conference call may contain forward looking statements that reflect the company's current views with respect to future events and financial performance. These forward looking statements are subject to certain risks and uncertainties. The words anticipate optimistic believe estimate expect intend and similar expressions that indicate future events and trends identify forward looking statements.
Speaker Change: Actual future results may differ materially from those anticipated depending on a variety of risk factors for more information. Please refer to the discussion of these risk factors in our most recent Form 10-K, and 10-Q filings with the Securities and Exchange Commission.
Speaker Change: I am pleased to report that we closed the year with a strong fourth quarter modestly exceeded our expectations in both top and bottom line performance.
Speaker Change: We accomplished a lot of the team in fiscal 'twenty four that will help strengthen our company as we move forward continuing to grow our company as well advancing our technology and other organizational initiatives.
Speaker Change: I want to sincerely. Thank all of our team partners, who continue to always deliver for each other and our customers as we strive towards our vision of being universally recognized as the best service provider in the industry all while living our mission of serving the people who do the hard work we serve the people who do the hard work are they as they are the workforce that <unk>.
Speaker Change: <unk>, our communities up and running they are our existing and prospective customers as well as our own unit first team partners. Our mission is to enable those employees and their organizations by providing the right products and services to do their job successfully and safely.
Speaker Change: That means providing uniforms workwear facility services first aid and safety clean room or other products and services. Our goal is to partner with our customers to ensure that we structure the right program products and services for their businesses and their team all while providing an enhanced customer service experience.
Speaker Change: Shane will provide the details of our quarter shortly but a quick recap of our full fiscal year.
Speaker Change: Our full year revenues came in at a record 2.4, $2 7 billion, an increase of eight 7% from fiscal 2023 or.
Speaker Change: Our full year revenue growth benefited from an extra week of operations as well as a full year of revenues from our March 2023 acquisition of clean uniform.
Speaker Change: Our core laundry operations organic growth for fiscal 'twenty four was a very solid four 6%.
Speaker Change: Operating income and adjusted EBITDA increased significantly for the full year compared to fiscal 'twenty three benefiting partially from lower cost expanded during the year related to our key initiatives excluding.
Speaker Change: Excluding these benefits.
Speaker Change: We still experienced strong operating income and adjusted EBITDA growth for the full year. The result of solid growth as well as moderating cost trends in key areas.
Speaker Change: We are also pleased with the improvement in our cash flows from operating activities for the full year, which grew 36, 8% compared to fiscal 2023.
Speaker Change: As a reminder, we have been incurring costs over the last couple of years related to our technology transformation.
Speaker Change: As expected the expense we are incurring related to these key initiatives declined during the current year due to activity surrounding the deployment of our CRM largely winding down and the amounts we are expanding on our ERP project now being largely capitalized as we entered the implementation phases of the project.
Speaker Change: During the quarter, our sales organization continued to perform well selling prospects and the value that <unk> can bring their businesses.
Speaker Change: Overall, we are pleased with the organic growth for the quarter, despite a more challenging pricing environment.
Speaker Change: Although we would classify our existing existing customer wearer levels is mostly stable. We have seen we have continued to see a sequential decline in our net where a metrics, indicating a less robust hiring environment.
As we discussed last quarter as the market emerge from a period of significantly elevated inflation levels, the more challenging pricing environment and its corresponding impact on our retention rates has impacted our sequential revenue trends, which will impact growth rates in fiscal 'twenty five.
Speaker Change: We will provide more detail on our guidance for fiscal 'twenty five shortly but we currently expect organic growth in our core laundry operations to be between one three and two 3% in 2025.
Speaker Change: Although these are not the growth rates, we ultimately aspire to deliver we do feel there are reasons to be positive about some of the trends we have recently experiencing.
We finished fiscal 'twenty four with a strong year in new account sales and many of our leading indicators would suggest that we are poised to have an improved performance in fiscal 'twenty five from a revenue trend in retention perspective.
Speaker Change: For example, we were renewing contracts at improved rates, our NPS scores, which is a newer program from us have been steadily increasing throughout the year and we feel as good from a service staffing perspective as we have in the last couple of years and.
Speaker Change: In addition, our teams are becoming more and more comfortable with our new systems and taking advantage of their benefits.
Speaker Change: As a company we continue to focus on investments in the business to enhance our ability to attract new customers sell additional products to existing customers as well as enhance our customers experience and drive improved retention.
Speaker Change: In addition to our ongoing efforts to drive growth, we continue to focus on our operating excellence and cost reductions to enhance our margin profile.
Speaker Change: We are pleased with some of the recent progress in this area and the related trends and key costs, such as merchant merchandise and as well as other input costs.
Speaker Change: As I mentioned, our team continues to be more proficient utilizing and optimizing the capabilities of our new CRM, including leveraging some of cleans proprietary technology across all universe with all efforts focused on deploying standard processes across our local operations and driving productivity.
Speaker Change: In addition areas such as strategic pricing and account profitability as well as strategic manufacturing and sourcing represents significant margin enhancement opportunities.
Speaker Change: Although some of these benefits going forward will be more significantly enabled through the implementation of our ERP. We continue to focus on these areas and others that we feel can move the needle in the near to mid term.
Speaker Change: We continue to believe strongly in the bright future of our first aid and safety Division.
We finished fiscal 2024 with this segment exceeding 100 million for the first time, and we expect double digit growth again in fiscal 2025.
Speaker Change: We continue to make investments in sales and service infrastructure on the van operations to expand our footprint and ensure we can reach existing unit first customers as well as new prospects in the market that have a strong need for these products and services.
Speaker Change: Customers expect solutions to their most pressing pressing issues and first aid and safety is an important contributor to these integrated solutions.
Speaker Change: These investments have delivered strong growth that we once again achieved in the quarter.
Speaker Change: As we continue to improve route density as well as penetrate our customers with the full breadth of services that we provide we expect the profitability of this segment to steadily improve.
Speaker Change: And last but certainly not least we are thrilled to welcome Kelly Rooney to our senior leadership team and the role of Chief Chief Operating Officer.
Speaker Change: Kelly brings significant experience working in route based business to business services coming out of a long career in the waste industry.
Speaker Change: The role of COO as new to unit first but one that we feel strongly can help us enhanced service and operational execution, especially given how well we feel kelly's experiences translate to where we are on our journey as a company.
Our experience and ability to effect positive change will be critical as we continue to evolve.
Speaker Change: Alongside her deep operational experience her talent and passion for empowering workforces to succeed fits like a glove with our culture and our promise to always deliver for our customers and our employees.
Speaker Change: With that I'd like to turn the call over to Shane who will provide more details on our fourth quarter results as well as our outlook for fiscal 2025.
Shane Oconnor: Thanks, David.
Shane Oconnor: Consolidated revenues in our fourth quarter of 2024 were $639 9 million, an increase of 11, 9% from $571 $9 million a year ago.
Shane Oconnor: As a reminder, the fourth quarter as well as the full fiscal year included an extra week of operations due to the timing of our fiscal calendar.
Shane Oconnor: This extra week accounted for revenue growth in the fourth quarter and full fiscal year of fiscal 2024 of approximately 8% and 2% respectively.
Shane Oconnor: Consolidated operating income for the quarter increased to $54 million from $36 1 million or <unk> 49, 8%.
Shane Oconnor: Net income for the quarter increased to $44 6 million or $2 39 per diluted share from $27 6 million or $1 47 per diluted share.
Shane Oconnor: Over the last six quarters due to the increase in noncash amortization expense that we started to incur as a result of the acquisition of clean uniform in March 2023, the company started to disclose EBITDA as a more prominent metric and it's commentary.
Shane Oconnor: Starting this quarter the company will migrate to an adjusted EBITDA metric that we believe is more meaningful and is defined as net income before interest income taxes, depreciation and amortization further adjusted for share based compensation expense acquisition costs and other items impacting comparability.
Shane Oconnor: We believe that this more wholesome non-GAAP measure will provide a more refined view of the company's profitability and is a better indication of the company's capacity to generate future cash flows.
Shane Oconnor: The adjusted EBITDA metric does not adjust for the key initiative costs, we incur but the company will provide visibility to those items separately.
Shane Oconnor: Consolidated adjusted EBITDA for the quarter increased to $95 million compared to $71 7 million in the prior year or 32, 5%.
Shane Oconnor: Our financial results in the fourth quarters of fiscal 2024, and 2023 included $1 8 million and $6 $1 million, respectively of cost directly attributable to our key initiatives.
Shane Oconnor: The effect of these items on the fourth quarter of fiscal 2024, and 2023 decreased operating income and adjusted EBITDA by $1 8 million and $6 $1 million respectively.
Shane Oconnor: Net income by $1 $3 million and $5 million, respectively, and diluted EPS by <unk> 27, respectively.
Shane Oconnor: Our core laundry operations revenues for the quarter were $564 1 million, an increase of 11, 7% from the fourth quarter of 2023.
Shane Oconnor: Core laundry organic growth, which adjusts for the estimated effect of acquisitions fluctuations in the Canadian dollar as well as the impact of the extra week was three 9%.
Shane Oconnor: Core laundry operating margin increased to 8% for the quarter or $45 4 million from 6% in prior year or $32 million.
Shane Oconnor: And the segments adjusted EBITDA margin increased to 14, 9% from 12, 7%.
Shane Oconnor: Cost we incurred related to our key initiatives were recorded to the core laundry operations segment and decreased the core laundry operating and adjusted EBITDA margins for the fourth quarters of fiscal 2024, and 2023 by <unk>, 3% and one 2% respectively.
Shane Oconnor: Segment operating and adjusted EBITDA margin comparisons benefited from the additional week in the fourth quarter of fiscal 2024, as well as from lower merchandise payroll and other operating input costs as a percentage of revenue.
Shane Oconnor: Energy cost for the quarter were four 1% of revenues down from four 3% a year ago.
Revenues from our specialty garments segment, which delivers specialized nuclear decontamination and clean room products and services.
Shane Oconnor: Were $46 5 million for the fourth quarter of fiscal 2024, an increase of 12, 3% over prior year.
Shane Oconnor: After adjusting for the impact of the extra week organic growth was four 4% primarily due to growth in this segment's clean room business and stronger results from the U S nuclear operation.
Shane Oconnor: Segment income during the quarter was $8 6 million an increase of 26, 2% over the prior year as we mentioned in the past. This segment's results can vary significantly from period to period due to seasonality as well as the timing and profitability of nuclear reactor outages and projects.
Shane Oconnor: Our first aid segment's revenues in the fourth quarter of 2024 increased to $29 3 million or 15, 1% organic.
Shane Oconnor: Growth within this segment was six 8% primarily due to growth in the segments route baseband operations.
Shane Oconnor: Segment operating income was nominal in the quarter and continued to reflect the investments we are making to grow our first state bank business.
Shane Oconnor: At the end of our fiscal year, we continued to reflect the solid balance sheet and financial position with no long term debt and cash cash equivalents and short term investments totaling $175 $1 million.
Shane Oconnor: In fiscal 2024, we continued to see solid improvement in our cash flows from operating activities, which increased 36, 8% to $295 $3 million, primarily due to improved profitability and lower working capital needs of the business.
Shane Oconnor: Capital expenditures for fiscal 2024 totaled $164 million as we continue to invest in our future with new facility additions expansions updates and systems that will enable us to meet our long term strategic objectives.
Shane Oconnor: During the year, we capitalized $16 $7 million related to our ongoing ERP, which consisted primarily of both third party consulting costs and capitalized internal labor costs.
Shane Oconnor: As of August 31, 2024, we capitalized $18 9 million related to the project.
Shane Oconnor: During fiscal 2024, we also repurchased $23 $8 million worth of common stock.
Shane Oconnor: I'd like to take this opportunity to provide our outlook for fiscal 2025, which will include one less week of operations compared to fiscal 2024 due to the timing of our fiscal calendar.
Shane Oconnor: At this time, we expect our full year revenues for fiscal 2025 will be between 242, 5 billion and $2 four or $5 billion.
Shane Oconnor: We further expect that our fully diluted earnings per share will be between $6 79 and <unk>.
Shane Oconnor: $7 19.
Shane Oconnor: This guidance includes $16 million in costs that we expect to incur directly attributable to our key initiatives, which.
Which reduced our EPS assumption by 64.
Shane Oconnor: And at this point relate primarily to our ERP project.
Shane Oconnor: At the midpoint of our range our guidance further assumes consolidated adjusted EBITDA is $330 million.
Shane Oconnor: Core laundry organic revenue growth, which excludes the impact one last week of operations is one 8%.
Shane Oconnor: Core laundry operations operating and adjusted EBITDA margins of five 9% and 13, 2% respectively.
Shane Oconnor: Key initiatives costs are recorded to our core laundry operations and decreased both operating and adjusted EBITDA margins by <unk>, 7%.
Core laundry operating results continued to benefit from favorable trends in merchandise and other input costs are result of inflationary headwinds continuing to subside. The company capitalizing on investments that have made in building procurement capabilities and enhanced merchandise controls in the CRM system that we recently.
Shane Oconnor: Deployed.
Shane Oconnor: Energy costs are expected to be four 1% of revenues in fiscal 2025, and next year's effective tax rate is assumed to be 25%.
Shane Oconnor: Our specialty garments revenues are forecast to be down from 2024 by approximately 4% due to projected declines in the nuclear business and the impact of the ex the extra week in fiscal 2024, partially offset by continued growth in the clean room business.
Shane Oconnor: The change in business mix will have a larger impact on the profitability of this segment and we expect operating income to be down approximately 12%.
Shane Oconnor: As we have commented in the past. This segment's results can vary significantly from period to period due to seasonality as well as the timing and profitability of nuclear reactor outages and projects.
Shane Oconnor: Our first aid segment's revenues are expected to be up approximately 13% compared to 2024 and the segment operating income is projected to be nominally positive.
Shane Oconnor: We expect that our capital expenditures in 2025 will approximate $155 million, which remained elevated as a percentage of revenues primarily due to higher application development investments, we are making most significantly related to our ERP implementation.
Shane Oconnor: For an update on our ERP initiative, we are pleased with the progress we made in fiscal 2024, we continue to expect our ERP implementation will carry through 2027 with fiscal 2025 focused on master data management and progressing the implementation of the solutions finance capabilities.
Shane Oconnor: Through fiscal 2025, we have capitalized approximately $18 $9 million related to this initiative and expect that the project totals will be between $85 million and $100 million.
Shane Oconnor: Our guidance assumes our current level of outstanding common shares and no unexpected changes generally affecting the economy.
Shane Oconnor: This concludes our prepared remarks, and we would now be happy to answer any questions that you might have.
Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced withdraw. Your question. Please press star one again, one moment, while we compile our Q&A roster.
Speaker Change: And our first question is going to come from the line of Manav Patnaik with Barclays. Your line is open. Please go ahead.
roni Kennedy: Hi, Good morning. This is roni Kennedy on for Manav. Thank you for taking my question can I just ask for your thoughts on recent industry activity.
And if theres any insights from the discussions with <unk> on their potential entry into the U S market, if youre an inclined to comment further on that.
Speaker Change: As for our current assessment of the uniform services industry and competitive dynamics et cetera.
Sure. Thanks, Ronen I mean in general I don't have much to add other than I think what we said publicly by by both companies I think they expressed interest in the U S market.
You saw our released we can.
Speaker Change: Continue to think it's not surprising that companies would be interested in unit one given the quality of our company.
Speaker Change: But as we've said publicly and I think in the release, we feel we have a lot of untapped potential and that's what we're executing towards as far as the general industry dynamics.
Speaker Change: It continues to be a competitive industry and I think we continue to position ourselves well for the future and our place in that industry and that's what we're focused on.
Speaker Change: Got it. Thank you that's helpful. And then can I just could you further impacts. So you had said there was a more challenging price environment and there is of course, a corresponding impact on retention rates, but you also highlighted renewing contracts and improving rates NPS scores improving so can you just further.
Speaker Change: Give some further insight into the challenges and pricing the impact retention versus sustaining.
Speaker Change: High quality service levels, and renewing contracts with kind of.
The dynamics there yeah, absolutely I think we've been talking over the last year.
Speaker Change: The impact of the last couple of years in the inflationary environment and obviously after going through a period of such as historic inflation.
Speaker Change: All of the companies in the industry. We're no exception, we're trying to work through that with our customers trying to get more price, where we could offset higher labor input and other costs and I think as that period is sort of transition now companies are looking to try to recoup costs wherever they can.
Speaker Change: Companies in our industry, we're no different.
Speaker Change: Talked about some of the things we've been able to do on the sourcing side to recoup from from our vendors and I think our customers are trying to manage their costs. The same way after going through such heavy inflation more contracts are being put out to bid and thats, having some impact.
Speaker Change: My comments around recent trends on contract rates, obviously, we we track.
Speaker Change: <unk> of contracts that are being renewed and so on.
Speaker Change: As well as NPS and these other things in my commentary there is saying I think we've worked through.
Speaker Change: Year of transition coming off too heavy inflationary periods, but that we feel good about.
Speaker Change: How things are trending and how we are positioned to improve those outcomes. So I think some of what we're experiencing is cyclical.
Speaker Change: Very unusual couple of year period.
Speaker Change: But we feel poised to show better performance in those areas in the next year.
Speaker Change: Thank you I appreciate it thank.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question is going to come from the line of Kartik Mehta with Northcoast Research. Your line is open. Please go ahead.
Speaker Change: Hey, good morning.
Stephen Chin: Stephen Chin with UBS.
Stephen Chin: I know you talked a little bit about kind of add stops and I'm wondering.
Speaker Change: As you look at the business today.
Speaker Change: Are you at a point, where add stops are neutral or are they starting to go neck.
Speaker Change: Negative considering where we are kind of an economic cycle.
Speaker Change: Yes, I think my comments.
Speaker Change: We're meant to say that they're a little bit incrementally. They are negative at this point, but not to an extent that.
Speaker Change: We would say is a overly concerning trend, which is why I categorize them as mostly stable, but if you kind of look at it sequentially over the course of fiscal 'twenty four into where we are now yes, you have seen sort of a consistent sequential decline in that activity to where a year ago, we were getting some.
Speaker Change: Decent.
Speaker Change: Decent boost from where levels now it is sort of <unk>.
Speaker Change: Negative to a small extent.
Speaker Change: And then just on the pricing clarification I think in the past you've said.
New contract wins are always competitive and they've gotten a little bit of incremental competitive but on your existing customers are you still able to get some price increases or has that environment changed as well.
Speaker Change: I think in general the answer is yes, they're kartik, but I think.
Speaker Change: The level you can get from existing customers today is certainly different than it was two years ago and more customers I think upon renewals are challenging pricing just in the normal course, and I view that is somewhat cyclical based on like I said the challenges over the last couple of years.
Speaker Change: Or is that all companies have been experiencing and we're working through that but in general as I've also said before your ability to two.
Speaker Change: Drive and retain pricing is multifaceted and ultimately lands on am I doing a good job as the customers seeing the value in our service do we have the right relationships and so on so those are things we continue to enhance to make sure. We have the best outcomes, but I think some of the recent trends are are cyclical.
Perfect. Thank you very much I really appreciate it.
Speaker Change: Thank you.
Speaker Change: Thank you and one moment as we move on to our next question.
Speaker Change: Our next question is going to come from the line of Luke Mcfarlane with William Blair. Your line is open. Please go ahead.
Speaker Change: Hi, Thanks, so much for taking our questions today.
Luke Mcfarlane: Just kind of sticking on the theme around add stops I was just curious.
Luke Mcfarlane: Are there any particular end markets, where youre seeing a slowdown in sort of the CNET, where metrics most acutely or does it seem to be a bit more broad based.
Speaker Change: Yes, I would say, it's just more broad based at this point, we look at things kind of regionally and I think it's it's sprinkled throughout the country I mean in the past years, we've talked about things like the energy sector, but that continues to kind of tick along pretty pretty steadily. So at this point I would say, it's pretty broad based.
Speaker Change: Understood and just.
Speaker Change: My follow up.
Speaker Change: You indicated that net where metrics have continued to slow in the this quarter.
Speaker Change: Due to softer employment environment.
Speaker Change: We're curious if that softer environment has also impacted new account growth or if you could just talk a little bit about how that has trended during this quarter and heading into the new year.
Speaker Change: Our new account growth in the quarter was solid we finished the year with.
Record levels of new sales and I talked about this last quarter, but somewhat bolstered by some large accounts, we're able to win earlier in the year, but overall I think the ability to to sell new business is pretty steady and I wouldn't categorize that as.
Speaker Change: Like the add stops is fading.
Speaker Change: Understood. Thanks, so much thank.
Speaker Change: Thank you thank.
Speaker Change: Thank you and one moment as we move on to our next question.
Speaker Change: And our next question is going to come from the line of Josh Chan with UBS. Your line is open. Please go ahead.
Speaker Change: Hi, Good morning, it's Stephen Shane Thanks for taking my questions.
Speaker Change: And I think.
Speaker Change: Hi, good morning.
Speaker Change: Would you classify the slower growth in 2025 as the result of the retention of challenges in 2024 is that the right way to think about it I'm just curious based on the way that you've responded to some of the prior questions.
Speaker Change: Yes, absolutely I mean, I think when you look at our business as I think most of you understand when you when you look forward to growth in a subsequent year.
Speaker Change: A lot of your ability to provide growth in that year is based on the activity of the year before because really when you look at what we bill it and obviously we're very.
Speaker Change: Steady recurring weekly billing model.
Speaker Change: The activity of the year before influences that next year very heavily.
Speaker Change: And so it's really that pricing environment and the impact on retention that we experienced in 'twenty for that mostly impacts 25, I think my comments about where we stand today and our ability to drive better.
Speaker Change: Sequential results through 'twenty five.
Speaker Change: Is more of a harbinger of what we think is achievable in 2006.
Speaker Change: Kind of understanding the way that the business sort of builds on itself.
Speaker Change: Great. Thank you for that color.
Speaker Change: Maybe can I ask a margin question. It seems like in your guidance, you're expecting margins to be down in the core laundry business, maybe DNA has something to deal with it but could you talk about what's pressuring margins in the coming year. Thank you.
Speaker Change: Yes, certainly from an operating income perspective, and Shane can talk about this a little bit more in a minute.
There is some margin decline now there is two things when you look at operating margin the way we've disclosed.
Speaker Change: The biggest impact or is that DNA and its the impact of <unk>.
Speaker Change: Significant investments, we continue to make in the infrastructure technology. Some of it's the impact of amortization related to our acquisitions.
Speaker Change: Which is why we continue to disclose EBITDA as well and EBITDA in general when you look at our margins from an EBITDA perspective, we expect them to be very stable over the course of next year and I think Thats a testament to some of the things we've been doing in trends, we've been seeing recently from a merchandise perspective, where.
Where we expect actually merchandise trends to be a little bit lower next year. So Shane can add any color to that.
Shane Oconnor: Yes, no I think that pretty much sums it up it could take a look at the operating margin. Yes. Some of the things that are impacting that are slightly elevated expected costs, we're going to incur related to our key initiatives and then the other two noncash items that are contributing to that would be elevated.
Shane Oconnor: Depreciation as well as some headwind from stock based comp not one of the reasons why we do provide added adjusted EBITDA metric is we think that that is a better indication of the profitability and you can see that that's relatively flat.
Shane Oconnor: If you take into account the additional expense that we expect to incur related to our key initiatives.
Shane Oconnor: Yes.
Shane Oconnor: The profitability of the business is expected to be relatively consistent.
Shane Oconnor: From a margin perspective with 24.
Speaker Change: That makes sense. Thank you both for your time and good luck in 25. Thank you.
Speaker Change: Thank you and one moment for our next question.
Speaker Change: Our next question is going to come from the line of Andrew Steinman with Jpmorgan. Your line is open. Please go ahead.
Andrew Steinman: Hi, This is Andrew I just wanted to ask about your NPS score I know you said, it's a new program I definitely commend you for having an NPS program.
Andrew Steinman: We're willing to tell us what level of NPS score you currently have in any ambitions you have there and then also when you have your long term ambition to have the highest quality service in the industry are amongst the highest quality service.
Andrew Steinman: You're seeing that reflected in your current NPS score.
Speaker Change: Yes at this point I think the programs a little newer Andrew in terms of starting to disclose the baseline for that so thats something we can consider going forward.
Speaker Change: But we've had the program in for about a year now obviously, we are building trends of <unk>.
Speaker Change: Sample in terms of how we're looking at it but yes that is why we put the program in when you look at retention. There's a lot of things that can impact retention customers going out of business and other reasons and we think that NPS score is the best way sort of unfiltered, we can get that feedback from our customers that say, how we're doing I would.
Speaker Change: Say again that I think we've opened that program in the samples were getting and looking at it compared to other companies.
Speaker Change: And out of our industry I think we are starting from a solid place, but like I said in our <unk>.
Prepared remarks.
Our vision is to is to be great and really create a differentiator and we're starting to establish those goals internally by location and by region.
Speaker Change: Great. Thank you for that context. Thank you.
Speaker Change: Thank you and as a reminder, if you would like to ask a question at this time. Please press star one on your telephone.
Our next question comes from the line of Andrew Wittmann with Baird. Your line is open. Please go ahead.
Andrew Wittmann: Yeah, great. Thanks for taking my question guys.
Andrew Wittmann: Steve I guess, you mentioned here earlier in the call.
Andrew Wittmann: Calls that we're early in fiscal 'twenty four there were some larger accounts that you picked up and that helped this year's growth rate as those annualize. That's part of the reason why you're expecting organic growth rate in <unk>.
Speaker Change: We introduced color and I'm, just kind of curious as to the market for large accounts are you seeing the same number of large accounts.
Andrew Wittmann: On the street today.
<unk> as you were seeing back then or has the large contract.
Andrew Wittmann: Environment changed where its slowing down and youre not seeing quite as much opportunity there and it's more.
Andrew Wittmann: More back to normal times, I think I guess.
Speaker Change: It seemed like last year was a little maybe unusual in its uptick but I was just thought maybe you could comment on these national accounts on the prospect list and how it compares today versus a year ago, Yes, I think it's I think it's in a similar place Andrew I think when you look at a year ago, we talked about adding a top three account now by nature. There is only so many occur.
Speaker Change: <unk> of that size when we talk about national accounts, they can be anywhere from $10000 a week to $200000 a week. So theres, a big range and I think overall, we still see the environment is reasonably healthy for those.
Speaker Change: What we consider national accounts.
Speaker Change: But the challenge of.
Speaker Change: Getting one of that size to match, what we did last year.
Speaker Change: Yes, it is challenging but at the same time, we feel we feel good about some of the prospects were out there talking to and the opportunities.
Speaker Change: Okay. That's all my questions for today. Thank you for your kind of have a good day. Thank you.
Speaker Change: Thank you and I would now like to hand, the conference back over to Stephen Suntrust for closing remarks.
Stephen Suntrust: I'd like to thank everyone again for joining us today to review our results. We look forward to speaking with you again in January in January when we expect to report our first quarter performance. Thank you again and have a great day.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
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