BV - Earnings call transcript Q1 2020 | BrightView Holdings, Inc.

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Operator

Good morning and welcome to BrightView's 2020 First Fiscal Quarter Earnings Conference Call.

As a reminder, this call is being recorded. [Operator Instructions].

The earnings press release is available on the company's website, investor.brightview.com.

Additionally, the online webcast includes the presentation slides that will be referenced as part of today's discussion.

presentation company comments to to may made information in the some listeners questions differ begin, forward reflected the be projected. of today, the materially we from would actual remind like that and looking those Before and will results slides, including responses SEC the financial company's detail future results for and on could the Please refer filings that the to risks impact condition. company's recent more and uncertainties operating

Q&A. Also, contained measures. to revenue will which Comments trends and earnings of today's services Services snow measures Maintenance complete website. on as include will certain affecting within organic forward-looking and remarks company's directly made a factors provides GAAP Landscaping the This -- segment, net Disclaimers the the also discussion understanding to that Managed comparable statements to financial today well The prepared as and non-GAAP most of more a other Commercial include non-GAAP and references from associated in revenue the reconciliations measures the underlying financial does measures financial both company on call today's believes Exits. on this the disclosures measure release of business. are the removal consists of apply the

Please stated, turn the results periods I CEO, the XXXX. respective references year. unaudited the ahead, ending Finally, refer unless Today, now ending Masterman. the otherwise or XX period to or year-to-date for each in call all is December BrightView's to to will years sir. annual results quarterly, Andrew September our fiscal X-month company over XX, go presenting

Andrew Masterman

update morning, are fiscal on. for first for you to focused that Good joining going an well Jacob. on morning, of thank through you, everyone, the key our us initiatives today. sharply we as quarter strategic provide you remain This we as Thank results XXXX the take and

increased positive and Total fiscal first for be contracts our segments. of Turning of and operating strategy, we Today, in Managed revenue source year the quarter are more to maintenance organic volume results by of on summary snowfall for executive revenue M&A reliable benefits tail in to quarter reporting grew versus both a prior negative XXXX. revenue which final company. on our growth segment and our the X.X% offset underpinned growth higher snow strategy. sustainable Revenue the of Slide continues our X. our than from These impact benefited from overall the Exits the Strong-on-Strong our period,

straight of expected, generated These demonstrating XXXX. Additionally, in fiscal the signs as second quarter segment we continue again, backlog, is each quarter. revenues highest the double-digit represent results which the down a robustness growth, of of first the fiscal delivered its during through no Development Services slowing as segment ever showing

and our positive quarter the for in and line guidance growth showed with EBITDA Adjusted expectations. largely was

of the the remain in our fundamentals capture. we ability $X.XXX and the million strong position revenues $XXX to business opportunities EBITDA As our million. between total exit guidance and us to industry XXXX The adjusted and fiscal billion for first to billion between our and confident quarter offer $X.XXX look continues and of $XXX full forward, remain against in we year deliver

we on X look over last our adjusted are EBITDA the quarterly back we as results years, Additionally, encouraged.

XX-month adjusted of XXXX, the $XXX XX, EBITDA. For ending million period approximately generated we December

adjusted XX, X.X%. XXXX, we comparable EBITDA, million approximately the For XX-month December of up generated $XXX period ending

continue our the guidance snowfall us we and to can rest during driving which meet an for believe on Assuming average our investors. we value shareholder trajectory, this XXXX, continue positions of

in segments Moving fiscal our the revenues quarter results the revenue maintenance quarter. for now Slide to first Total XXXX development both our and record driven first results X. on strong X.X% delivering quarter by with grew

a included grew XXXX as X.X% segment this in deals of acquisitions result revenue million completed contribution first as transactions maintenance we during quarter. well incremental quarter in recent wraparound from $XX.X First M&A benefited last and the X.X% as the or versus from completed year, the

Exits, up or was the which quarter. removal versus driven million revenues, a million, were removal expanding representing prior increase revenues, by versus X.X% Managed of XX.X% up year prior services, snow $X.X organic Excluding snow year. This inclusive $X the were

snow optimal and materialized snow the favorable how margins. revenue services removal cadence offer Although where of provided the an most not the tailwind, overall did geographies and

regions, variable primarily lower a to arrangements Mountain variable all. markets due higher our of operates due experienced environment, the arrangements, most region, of Conversely, our fee The which nature and billing the Mid-Atlantic that margins very up complexities margins and to carries fixed Midwest which business. little of at experienced snow, under in the are the carry Rocky made recurring managing fixed snowfall

winding in spring. in work our million, the markets Landscaping revenues to markets were the that we down the to increased about had be in on ability as will of some down Commercial green some ancillary snowfall of our the due up quarter $X contract offset impact projects in seasonal this and seasonal the ramp complete

net we new wins in later the contracts losses servicing become to year during begin impact and and of green those We expect the the right-size contract positive season. when

Exits reporting strategy are Also, quarter. we that is on quarter this impact be this the will final, we initiative. our albeit the in small, absorbing final of quarterly This Managed

quarter strong XX.X% its XXXX its momentum contribution revenue prior development quarter. were the with maintained versus first highest segment Revenues the ever. year Lastly, up into

leading revenue in in both and the momentum the we this with but to only We indicators we businesses. continue are profile in pleased see for for in segments, quarter, not what recognized both also growth positive overall quarter,

backlog ahead More New balance and XXXX fiscal sales pace our of year's strong last in on development remains business are maintenance the a in robust. business the minute. for of the that in

investments and provide X. Slide members. in we to team a on critical quick are Turning I making the technology want our to update

by our have is Capture The provided operational our enabling team utilization Electronic we full efficiently know, development more members our enterprise. effectively our of manage visibility Electronic by leadership segment Capture workforce. across to you rollout our continuing the Time are Time the drive to As and and completed increased in

portals Salesforce integrating software members Both business, and current and benefiting receive into Connect digital next the HOA the visibility Connect We as manage our properties their base. from BrightView our they continue favorable of these meet can with using and on shifted are communicate team our phase and enhanced managers reviews ease BV proprietary CRM have which customer-facing channels. needs client prospective from to the their account with other our experience the into further how to customers into seamlessly they the and

from fiscal year-end to this decentralized at in to our continued have in has XXX time. at sales over we finally, And invest grown point team, which XXX

All source of new high-touch branch-level business and working opportunities leaders directly them our are our industry. with to in locally validate

signs investment. from positive are We already this seeing

that mentioned years. the redesign I year's evidence are This sales of is experienced is last earlier, fact of continued sales are As we've investment last and pace new results and X ahead our the over maintenance the in strongest working. team

during is trend half sales more third stronger the producing underlying to green as wins portfolios in of revenue pipelines and year The will business in customer past, growth in strong fourth our support and first indicator during new are quarters. particularly of a the maintenance the the new future stable coming fiscal team And quarters, I the how mentioned business.

and technology the of differentiator and Our industry-leading a scale is a ability benefit key to our continue BrightView. in people to of invest

drive how investment approach to our thoughtful capital, in capabilities our While continuing to positioned value-added growth while will pursue value. and we are disciplined our enable maintain utilize that we uniquely a to organic long-term believe we industry we multiple opportunities further shareholder

of Nevada. On their of month companies presence recap portfolios. the Summit the attractive X and BrightView Slide more several These provide addition past M&A Coast, through in Nashville, that customers X strategy serving as last reported Northern markets. We with similar talented the over customers years. Tennessee; joined have customer California along X, we and teams have transactions attractive our in our strengthen the Strong-on-Strong evergreen Group, the serving Landscape in last and a seasonal Signature Carolinas we across and

family. Summit to welcome and the BrightView and senior business. skilled Steve, We the are with entire excited of landscapers to will the along consisting their remain Mike, team leaders, Steve with Mike XXX

team welcome second Coat acquisition landscape Signature the Signature also proud largest XXXX of Brightview. are We members Coast a provider inception services the since XX made to and strategy. the top we've the is acquisition XXX of to Strong-on-Strong our

we and Kelly talents to work will with Solomon, leaders from evergreen position with the important incredibly years, senior months leveraging organization, coming along in strong these other consolidate Over markets. their the our

and industry, our amount the of acquisitions acquirer we XXth acquisitions and choice these a tremendous in have since our them. learned one from XXXX, XXth every of mark As

from on the our evolve approach integration with We to we've have continued what enhance past. learned every acquisition based and

identify pace to integrating started in More also South with Napa in engaging like Carolina. growth, markets ways accelerate in Charleston, geography. we established earlier of have into process attractive especially when branch-level Reno, to started the to leadership accelerate have that branches our presence an existing and specifically, We've acquisitions we

about the industry, growth just fragmented as revenue of consolidate driving ones excited I to are plan such long-term and our continue We opportunities to taking attractive progress for our advantage described profitable BrightView.

discuss to environmental I or focus on to our area the I which governance, before ESG. commitment wanted BrightView and to of sustainability, responsibility turn Slide John, another call X, Finally, over is corporate social

on in to few the of forefront the in made the significant commitment industry, ESG. as areas also last these ensure the we years, strides Over of are have leader we landscape to each that

employees, customers important These our we and stockholders. to concepts all stakeholders, communities where operate, our are the our

including relates technology as and environmental waste use conservation of installations, techniques, LEED-certified and consulting, programs a state-of-the-art landscape roof to reduction zero-emission As innovative environmentally-responsible landscape the in equipment xeriscaping. commercial lawnmowers, practices, is it such water leader green and sustainability, BrightView

been each equipment, currently BrightView strategies. of of technology clients through millions commercial zero-emission largest nation's helping and year honored purchaser we've of design is for gallons freshwater and of also hundreds innovative conserve landscaping irrigation the

the GROW, thought is industry dynamic. made topic in in have workplace. was that it and diversity areas, in of for quarter, take the males, past the second Being responsibility, advocacy inclusion of group laser-focused which we women BrightView. changing up including social employee is the Women. Growth celebrated stands and for of The On in for we name lead Relationships we critical This an the been at anniversary I group of many this an predominantly Opportunities that

has group mission. retention grown at to with GROW in serve personally year participating along an continued sponsor, of GROW Orders, X. look and GROW's Officer I members and I'm the to Co-Founder women mission progress to anniversary forward in hundreds from GROW GROW. the congratulate actively idea the is and the as across a Chief second enterprise BrightView's of recruitment, and on of recently their promoted of executive Amanda advance advocate involved BrightView. Resources women of to promotion the for Human

rolled support just current will for and armed is team that have On members the but with success we and Acknowledging heels the former country. another of BrightView forward support members BrightView bravely the family of internal I have in stands members. is of future progress focused for to served employee which Opportunities, continued that and BRAVO, Veteran advocating out on GROW, of group group Recognizing our and stages the look early new of protected The assembly, the these their engagement forces.

across and half Board BrightView women, best-in-class committed XXXX. from level a at of governance appointment a fiscal of industries. independent to by Directors independent wealth during of we of our corporate spectrum all finally, executive whom evidenced driving of was a of now X leadership, consists of Half structure. remain directors, new and the board broad whom of directors and experience are bring This expertise And our

industry, As areas in performance I'll to charge facets now will ESG. the work John, turn especially to over continue of all on opportunity of detail. and pursuing we our to financial lead forward, we landscaping move will who in discuss greater the it identifying

John Feenan

everyone. good Thanks, Andrew, and morning to

results with on our Let snapshot of me start quarter first XX. a Slide

already have revenue in the from up the revenue on snow total was and M&A maintenance book removal business development activities. contribution heard, increased the of the revenues for in the company segment, the you As strong our continued segment in of quarter back a

to X.X% up our with for service line in maintenance the us client versus overall while our able new right allow adjusted deliver sales prior in results, consolidated our and even year. improved funding that EBITDA At results to were will Our quarter. We streamline the million, segment. $XX.X stronger growth totaled additional level, investments the believe were delivery the we retention further expectations drive

Slide the to on Turning details XX.

basis management XXX the of Development although in a EBITDA million. first our regions, was for point excellent SG&A $XX.X this approximately people was As in plus related I timing the expenses segment. This These to segment well mentioned, to as adjusted total segment's quarter and EBITDA $X.X primarily by factors historically driven technology in in certain of up XXXX, contraction X which led decline corporate by maintenance the earlier. quarter of segment Services was headwind muted prior one solid year by This in compensation momentum versus mentioned variable the million adjusted of this snow at X.X%, expenses. as in margin our X.X% declined strongest higher quarter. profitability results, spend The the driven of to increased amounted investments

higher Additionally, down snow fully quarter. of adjusted of margin was snowfall to offset quarter. year book basis timing we region, a compensation in was points of Mid-Atlantic the from margin for while investment. business realized up The snow the year-over-year, year in experienced variable with profitability this certain the higher revenue from BrightView, overall with cost in not which versus to volumes line prior the the the in enough in prior generally roughly Due grew to contribution segment is due profitability the the XX.X% EBITDA segment's XX.X% XX of development -- expenses the lower

To to centralized initiatives the reduce several partially increased we implemented SG&A spend, offset maintenance costs.

points million corporate and quarter the basis a year lower prior as were represented X.X% down revenue, revenue. result, expenses As of of a $X.X percentage versus XX

capital expenditures XX. look a capital were on and Net with the take million our our line our of is expenditures in expectations representing and revenue, Slide Let's X.X% framework. which capital at long-term for quarter $XX.X allocation

fiscal an the XXXX half by for as saw prepare you some accelerated investments in As second we in opportunistic some of the may well expenditures driven purchasing to as snow capital recall, season. uptick

seeing longer-term levels in now are with spend targets. those line We come back our

quarter. Net debt decreased $X.X million compared year to prior the

X.Xx the with prior ratio compared leverage ratio of leverage for Our year was our quarter X.Xx. QX

ratio range as generation, with be XXXX. guidance below result. at pleased are EBITDA to and our we previously, of We fiscal leverage improved X.Xx by expect this cash stated adjusted with end or And our the

line back over let me I shared a deliver first remain we reiterate in call. the Before our our to and in ability the message expectations full marketplace with earlier ahead us, year against With we call turn conveyed he on to confident continued opportunity last results XXXX Andrew, call. our the in the of quarter guidance

total are net billion, adjusted $XXX XX, you'll capital X.X% Slide believe what on $X.XXX track $XXX to see revenue and we recap between and On of a We on of expenditures billion between we million shared that and and between $X.XXX revenues. deliver call. million EBITDA X%

and the Our assumptions are XXXX. for segment between the maintenance segment to grow realized organically million to between $XX to X% development X% $XX and wraparound about including least deliver of and in revenue, acquisitions from X%, X% at grow million

the adjusted for average Our EBITDA total revenue for guidance rest contemplates removal XXXX. of and range revenue snow

fiscal or allowing Finally, M&A our of With XXXX. our improved Andrew. the should cash call end our I'll to generation to back also reduce support while to that, strategy us leverage X.Xx continue over by to turn the lower

Andrew Masterman

John. you, Thank

are and by underlying we of Overall, and with growth were results. our XX. are We delivering continue Slide bottom we pleased encouraged quarter remain line that the able to top in many trends to seeing both of now segments. Turning our positive first

new they've quarters. sales in as segment been highest revenue the upcoming Our how I indicator the ever in in maintenance of strong the will are past, the trend represent mentioned a and

no were results, and segment. stronger our overall shows our of down the field-based in drive Development client that able to delivery signs further quarter sales maintenance And operations backlog while a and adjusted service in double-digit Services EBITDA with a investments delivered new straight improved through growth second fiscal leadership retention sales growth XXXX. we deliver even streamline slowing of increasing to

of signs years for source and growth Additionally, our pipeline X reliable down slowing a of delivered has no running. M&A shows

excited progress consolidate growth BrightView about to you We long-term interest Thank and your attention industry our morning. taking for continue BrightView. are of your and fragmented in plan our to advantage attractive and for this profitable opportunities drive for

for call questions. your now open the will We

Operator

[Operator Instructions].

from question a We have Judah Sokel.

Judah Sokel

wanted already the you X pipeline. us knowing still fiscal skilled is that's think the through million about know for just previous assume these Just maybe was M&A. these a same question it in were incorporating in that $XX XXXX ask math. in making the I because the help acquisitions. deals guidance guidance, despite I the to X But

million above thought wraparound like $XX couple million $XX above looks mentioned have above it made bring I million, that, of that now and of have a $XX You would brought well $XX us you incremental deals. to really would that million. an us

the think had deals math deals, us the from new previous contribution through of as you please? as help well maybe these So

Andrew Masterman

able upside of It's look these we've with an into already you're some picture, to do had been time, on uncertainties we get we'll already do that we is in But we've there that able quarter, update flow-through We beginning earnings the said, from since the When the those still give entire we the around been the M&A just what to we quarter, and right. deals deals. call. Judah. we have able four look Sure, the four call second overall two to yes, at as on ancillary during deals that of next with -- revenue we've the accomplish the be as we completed. at being known the about last the believe

still to removal services, the for In quarter those understand through what year holistically. to the an have before update overall it the company, the reality remaining full give we and when comes is are can second to we which second quarter there addition, outlook the impact the the snow

Judah Sokel

Understood.

growth far question as organic revenue is development concerned. Just one other quick as

X% to for You've is straight in the for of yet full development, organic X quarters revenues double-digit now year. X% still had guidance the

sounds down fairly pipeline understand So going that why strong. is to maybe like so the us It slow is materially. help

and organic of the So just trying to development. understand growth revenue cadence

Andrew Masterman

continues. indications second for whole being pipeline quarter, quarter to the year given expect growth pace. The quarter, the not yet, growth we That the expect year be are booked the highest what bookings fully there we throughout organic development yes. first for going said, revenue the this be quarter this -- continues the development. we Sure, strong quarter revenue to sorry, see And although the We're for forward. segment about strong very entire

several to you and into we the development As able get next again, to be better May, as continue over give layer we book for feeling. in months, we'll a

and we'll business. growth project-based revenue revenue of and better breadth a complete, is the as be able, complete bookings the the more a again, to we provide a or less we our company, development give know, into and stable next several you are, visibility should we does Overall, XXXX and with level and be months. fairly given the As profile it for size within

Operator

question Mazari. a have from We Hamzah

Mario Cortellacci

some Mario filling market the Cortellacci side. give This leadership. for of for tightness talent. I about what some in looking was the you're know an side, curious could I'm on you're if wage I retain idea just you're operational us it in is know investment just about at know there's you lastly, don't and seeing didn't in We also sales for field if inflation what -- that or to Hamzah. on XXXX? also the the maybe thinking labor And management in

John Feenan

and additional driver, decisions degradation. through quarter focused talk in headcount SG&A those then basis first main field I clear resources addition on about Yes, This of was to to the force in to side. degradation That deliberate that added John. want maintenance the be operational sales in XXX margin. is your XXX support in very points we basis CRM. the the the point reported margins that that that and were question, Mario. We technology to answer we're the I'll degradation

some around other on incentive performance The our comp. better snow just timing and piece was

from talked margin come they lower process as standpoint to we up then to a the our to And M&A, in, when first versus getting our months them XX level. of about they're XX

piece of So a that smaller was walk. that

as telling what We as I haven't quarter, to And in testament well. that's far to anything if we're our is quarter able look a to we to you that's in profit thing as labor I other We've ability That's disclosed, our and labor far gross as evident to on our other And year-to-year. the seen. not quite we've the focus I continue productivities wage been factored in at think As the which think to inflation. think, efficiencies inflation. on we flat side, manage dead really pricing offset that, and modeling different X%. the any X% consistently nuts seen

Mario Cortellacci

and And one Great. just I'll more, over. turn it

seeing that in stories in other other urgency we're specifically private some smaller there's So sellers, or roll-up from businesses. and what sectors is

just unknown tax get trying in before the seeing thing landscaping know on the Just you're same I who's in it consequences, industry. election, office. the done some just to didn't depending if

Andrew Masterman

this -- the Over last is Andrew speaking.

see. our at several size dramatic discipline and is or can -- companies are say we and a last and robust it time that that really strategy, what the fairly to across we potentially be the stays years, that engaged very disciplined. But or are or with looking we dozen that one changed we've at can't companies the dramatically pipeline. we continue I our strong Over continue would of we'll joining different quality there's strong Strong-on-Strong another. say to way country a say pipeline given seen no looking M&A pipeline, see of a I that of that any degree And really is with are I at BrightView.

Operator

We McVeigh. have Kevin question a from

Kevin McVeigh

do for Or see development? on translates of then And those perspective, narrowing a kind just if perspective? opposed of maintenance you maintenance in of maintenance revisit within on kind as margin to Given you us see the on revenue into do trends can margin we'll of same sensitivity or I that think historical the from of you the a kind continue kind sensitivity the the any from deltas? to how development of wonder just and ultimately side strength the the terms rather, development

Andrew Masterman

every business. see the given have branches we we country, take actually the It's in looking I'll development across most the Well, question the fact -- strength see, that -- part at a first area. XX within is projects development we continued major overall of metropolitan on your

in a fairly indicator. in side I now think it that out that is see we're projects steady coming looking fact, the XXXX extend down. and we revenue And see that into development at XXXX. Don't

some inquiries into do we still the periods guidance, this while to out year, optimistic to quite our very for going falls fill strong So that room on and remain have within future development filling we're continue the the in be where development scope. backlog we

between margins. customers development historically, into to see XX% that conversion The our our manager shifts again, The maintenance maintenance be nature into the customer a of the some customers. being That question of of property projects to occurs be happens good customer development move a maintenance but opportunity The transaction definitely to a or of nature we general. the said, maintenance is right? maintenance, contractor roughly on the your and how customer pipeline bit in XX% different. And really Is is times, general property owner. between tends the a That maintenance hand group. and was second continues off it our development for a

Kevin McVeigh

kind development The expect you and kind narrow of relative spread or maintenance should Yes. over continue margins if any time? versus to of

John Feenan

the look still maintenance historically. closer or widely near Kevin. don't margins changing cost don't different types that the translates We see one. those in versus take term They're the differentiate of differentiation to I we differentiation that in we if Look, have I'll see historically expect to line what different structures, the seen or is businesses, different gross into Yes, together versus development. And margins. where that of cetera, EBITDA John. expect et we to out. et bottom we've seen margin This come them profiles, in cetera.

Kevin McVeigh

real Can margin and quick what snowfall. us the overall? remind mix of the Super, in is difference And contracts you the the terms then fixed is variable versus what the just super. on on

Andrew Masterman

snow. snow you business. carry the to you In a folks does of into like what Number Chicago, that support between the in typically a general, pretty nice snow tell it predictable tend some those very of the can break Detroit, that. solid which Northeastern to times in more margins. I benefit when you regardless much model of less actually it down in like But a areas it the on -- And of And snow, there Philadelphia, deployment or the fixed you go fee north, Baltimore, the lot, it Colorado, a doesn't see of more and we arrangements, to across to to don't extra areas kind industry, that, Carolina, paying as have much it that's fee you're in Denver, as can all not. is the be where a In have of average, the means because you predictable such high it's are or fixed places areas service actually, one, snows really guidance Southern, snow When it the cost give. variable Mid-Atlantic go nature. can whether we Boston what pricing out then Delaware, snows within places of North those like way see when who waiting periods certain Washington, D.C., for you some

Kevin McVeigh

Got decision factor into to increase it. Did follow-up. that kind the in-sourcing? in earlier And one of the quick year just the

Andrew Masterman

In that ways, stream it mean revenue some especially I we the our we does. a predictable. quite pretty markets, idea which have is in-sourcing have, much fixed in fee

fixed our main team right then -- those arrangements into stability to provide the build predictable the to for that allow that fee-type fixed cascade utilize then labor fee us and both in allows employees to to season. force us more So the

Operator

question We from Andrew have a Wittmann.

Andrew Wittmann

on bit revenue go Great. to to different a I'm way ask going in the back guidance. the it and first little question

on $XX at said year conference of million that the more. least last you then you'd last I as the last about You call, to conference there at that want you on upside. be a it some guys or seems there's understand like touched thought this of call. upside there's more bit in talked wrap for previously you said And also maybe and little revenue year. this the million you this side, might But Because closed from $XX already factored

So fill. looks two you of hole big. $XX like you've acquisitions, a then, had only had these since and it's one pretty to And million

mean acquisitions don't somewhere combined feels I just based revenue. of deliver, kind know, alone, of headcount to I in like this annual these neighborhood on of X $XX million the

quarters probably would of that year, the imply should X this than be million $XX hole which $XX more to had So you that about million of fill. revenue

why higher or mean plan? above isn't high end than coming So I revenue in substantially

Andrew Masterman

Yes, Andrew, Andrew. this is

You're right.

point revenue, at what in As where expect we million overall would this coming kind done, plus sitting. we're for $XX basis is to as we in the acquisition already at with in we've the of the deals look at, time come the to M&A, to relative

when company, snow know revenues comes just the don't quarter. said, it we just in as the actually Although where for to come we've overall exactly

long positive year, at as of revenue remainder for get revenues revenue in with period on of to forecast comes the at snow snow long in. the the into move we we XXXX, May the expect we average As what overall that as come a be looking would as as the

correct that able capital that can looking of the be think calling should the at on deployed side business. new to up you That overall M&A -- yes, you in analysis your use be you're of And the deals.

Andrew Wittmann

Okay.

know $X.X on my the And a I to margins. million then will snow just these maintenance mean next maintenance basis, this is as the segment's the I P&L see made relates And you now. for go-forward if look P&L to wondering called is as the some segment of you you margin the was couple don't are over -- guess, John. helpful. clearly investments question Okay, guess you just in well. probably that's margins part continue the I entirely. of the Basically, I is for a the see it John. if factor I if explain that that of headwinds that quarters, as these investments out

was year out I So for how as here you takes could hoping out the margins the puts goes work on. tease and the

investments compares base inside maintenance the some when start, the the lift margin the when other asking showing I of these that again, way question mean segment? would you or maybe could do be, of in where are

John Feenan

Yes, Andy. great question,

pretty that's year and important reiterated starting as a full I guidance, reaffirmed think our point. think as I we

This the be quarter's year. impact will highest the of

revenue a was in contemplated will we grows, And developed full future this But again, guidance. our year they'll our You're when be be there quarters. degree. impacts right, lesser to as all

I year recently the for second the obviously the at had first second end that historically have of quarter. our We would to year we snow be guidance have said or also full the the with the in the of year. the contend of half said half than think day, stronger

we But into see a and harder predict. green some quarters in we the half year, bit to that's of the little So back to expect improvement. the once get

that in the And our to was any expect definitely think I with right? could we've be the any highest. quarter wouldn't historically this the we've do. they gross there a And was XX% deliberate I the between able to I'd we somewhere to And it's thing business. But in cadence if decision. and more concerned SG&A, that right it. this been what our Andy, the but those on expect why profit. basis controllable XXX was would then related year. depending time, I over to up difference, results, we're mentioned M&A, the on a it come said, as this and XXX what be or we demonstrate regarding able exactly basis, headwind XX% were points to think issues really and EBITDA get And -- I said that's margin an -- there, to add

Operator

question George next comes Tong. from Our

George Tong

and ancillary by was lower organic on landscape have down landscape in to impacted Can and of initiatives Your you reaccelerate wind specific maintenance headwinds elaborate maintenance? growth you this contracts. revenue the these certain quarter sales

Andrew Masterman

the pretty that offset the have biggest of positive down the much Yes, sure, That really as to growth the contract ramp-up snow the -- can small we had, segment. one to little the and snow recall, additional gap coming we snow timing. again. of with on contract seasonal then Midwest the was the a segment the combined and That's with up primarily -- snow we primarily It others, some you impact. fact in there seasonal the -- imagine timing -- if side, organic you was start and was contracts comes It the all before October our Rocky regions, November. growth. wind of did season. has really what And maintenance start when in was the bit a they early that was somewhat was in pretty down It George. it caused that the it off saw Mountain by It can relatively

early to were So the all that by that we projects necessarily get books. the on start, able with happening to ancillary weren't that

busy folks growth as business, green into will season, incremental we these latent that year. where we as it seeing should had resurface with into get as we we into coming the demand above as the -- start sales incremental the comes last believe increased season, the fact get well when We

to in sales the going even have sales and XXXX, an impact team, impact it's it's to XXXX. in have an going On that incremental bigger through

George Tong

guidance and Got margin and where if confirm fiscal it. to range discuss takes within in reiterating XX of you to expansion determine margins, can then That's respect helpful. or with And you're EBITDA XX XXXX this of puts land? you your bps the

John Feenan

Yes. We our we improvement to not our guidance, obviously, to revenue we deliver incremental the the long-term they definitely XX a and -- upfront, And margins we've are reconfirmed EBITDA. Taking George, are. margin on of on wavered guidance bps. XX objective as those said what

these very to the in we first which bode to will we some year results long feel with As confident second we're should land the We're we the growth the the said as bottom well in think half normal have than in being line. able stronger organic quite maintenance good term. in year, assuming the second weather. well, of of the investments, see business half improvement business which dealing But the be of for our half

We year. headwind, there? risk If headwind. in quite managing can too Unfavorable I second a Labor much labor. the be half but penetration, could the that be be enhancement rain And of a always we're get What weather. well. could potential that think much as had don't we

in sales folks investment the really our into past alluded on business a West and those side, three discussions, along the we've the are hone of discrete retention, and first Evergreen to fact drive leaders, East, what's to number some to growth. everybody that hived We really the business, allows very, we a And and know in driving and very we and Andrew have team. we've Evergreen is in to plus maintenance want that. excited maturing got the think On that knows tied of functions with leadership quarter, our early about the the initiatives the the as and that I CRM profitability myself, days, I improve three Seasonal business, to

Andrew Masterman

where might more pressure. view company, it we be I to is really a able And year. to George, going we've and and thing that, this EBITDA, lower we we to the and that and margins as margins, that this that business. by Coast companies little understand going the better M&A. add that into great in positions calls They of to to at the continue relative these more pressure albeit May The average more think, put little months, into might time the in get the We'll layer might in come more our It's the lower leadership with couple market. develop the sit as are margin putting how our pressure do earnings time overall fantastic last is on is thing August fact we have slightly of one Summit we is, Andrew. puts found little continue a as to to great involve teams a over impact a been than Signature in and

Operator

question comes next Shlomo from Rosenbaum. Our

Shlomo Rosenbaum

investment wanted Where kind going lot kind X.X% this a amount investment I bit. Where see in economic about and quarter? where can of normalized the business you about a expectation you for level? of momentum terms talking this of a where little the sales been We're over we of a think at follow-up of leadership on should get this where question that Andrew, just decent just kind what's of resources There's to decent of sales. going? in of to? A organic we this looking business into and I mean building, amount in realistic last cycle a are. do it are there. terms

Andrew Masterman

the for question. thanks so Yes,

delivering entire invest humming. our is It year, X% -- enterprise across to stable double double prognosticators. that that's I itself growth X% the confident we the year, grows that to the grow Last retention the in believe when very guided I last a this new didn't and at some and X% an very saying meaning widespread we've overall, at as we sales at and continue continue more the far keeping level years. to I optimistic get here generating isn't that team compared overall look group. a doable industry kind that force to X% result X% X.X% of believe the because you according segment necessarily that kind growth. and team what believe diverse -- will very that growth immediately as force The year, the introduced at the we're But that X.X% deliberate we of potentially, of comes levels very sales And thing But we've sales as who's to we IBIS bring X%? where to very, forward. in rate, Yes. doesn't today the to a If full as is look to Can and industry of been to couple out you it at forward organic a training at. industry. going happen the grow sales at we strongly person in we that. have, and while and do as across sales getting person of we incredibly the I'm we that can go really

Shlomo Rosenbaum

walk think an you you've about EBITDA quarter? of can if in of cash this flow Okay. how And us kind talked to Is kind what year? real through flow, John, to of about versus last then, about to free there And should cash past year? think changes kind how any we it this what you done free just in the

John Feenan

there I anything on with we year. changing That we don't I point. a We -- the based quarter. know, of you starting off talked see on or assumed had that, hit Yes, side would the any be year. scrutinizing development where that. side. I the business We're whether to million anything on that obviously to right that, don't there's changing more ebbs right really see weather want where there. million that Again, a especially the the Working and don't we $XXX patterns capital, Shlomo. drastically we're first maintenance and Capital, as good use to $XX for guidance normal million. assuming be. flows, is, time But $XX start had on business of about And the good our the spending million, in assuming changes, think $XXX it's we our and

million interest, our in doing foresee interest last any fiscal good we a changes which had some Our called year, managing of job expense. approximately We out refunds Cash $XX we're don't for the there. XXXX. helped year. And I prior had taxes,

I don't think I see million. there. this year, we about had $XX talked changing anything

little talked you and math, certainly that bit we million had nonrecurring if you between get million. little And that a the and of around XX-ish, first in was move $XXX and infrastructure do and The would on mainly we're nonrecurring. somewhere costs, quarter, about IT wavering only not bit estimating outside CRM But is an not was item $XXX tool. that of now. that, that, the predominantly but a some that could M&A That higher by driven

Shlomo Rosenbaum

about kind project year. receivable of of in this big last that didn't flowing that that terms kind there -- update what into on a And a Is of occur through any year? was of there some

John Feenan

The -- business is maintenance capital on of our the our business. than it's -- lot development around think less I Yes, on the it's stellar. XX%. It's working a timing terms

seen little expect that paid unwind the you challenging to like with you're and to things that and we because have related paid. we've year. in there, with It's more to dealing it's a side, during when deal ramp-up development but the GCs the business the that On bit

Shlomo Rosenbaum

should this So upside already be this is Or number? that an that number? to factored into

John Feenan

to to thought We working we working But was to Yes. prudently tell capital. to sure a our we opposed I we can to be are into do working But improve would factored we're aggressively as as we and versus that we guidance you into as to capital that, guide that But can it what going a aggressively. us. look make Shlomo, possible, money benefit year as hard are collect that the source in which the turn working full use? do, say in prudent to

Shlomo Rosenbaum

Is detail? Great. coming the Like of And factor bit a just kind it through incentive strong? more in then terms can you that comp little of more? development in the you go is just a the quarter so guys in seeing where are

John Feenan

uptick the they're a seeing a maintenance strength the little the development It's side, in year. pronounced more in the side. by little in Maintenance by driven less development exactly. Yes, snow, bit on in the half what driven the first of

Operator

from Mulrooney. next question comes Our Tim

Timothy Mulrooney

renewal for the you're your markets. X process I renewals, renewal how you you're and improvements what going frame help Can is months the contract think targeting? seasonal least at pricing season, in this about Regarding year

Andrew Masterman

Yes, absolutely, Tim.

on. spot You're

of seasonal a months April, starts the It primary in December trending of of usually end well. beginning are in. time We of is really through and Things the are the period renewal lasts markets. the couple

we the as last last were be retention in, had that achieve, beat, we're in-house. trending not we than have. getting year if the as little at renewals which fact, we far feel to and the pace In able renewal a We confident we're that will better we very year rates rates

there's So obviously overall, with. dealing of accounts you're thousands

targeting is that that of when period come, big and minuses pluses for have been see will when time of period the there's start-up really time happening the most May March middle The lot of thrust however, in really into done and you April the of day. that So a the a heavily then -- signed. contracts every that come kind season, of in and

on that see in we really service continue same of change. good pretty about able primarily get between seen the -- average pressures type competitors with to X% feel labor forward there's the we about We range somewhere and pricing, we've tend across the see past. inflationary sees. to that same X%, inflation. said -- So It's we the that. of an to be as to going our X% that see industry plus depending pricing we The increases on no before, the And to pricing all that cover we've around whole X% focus client,

Timothy Mulrooney

next how quarter I'll April Maybe and you Okay. went. May ask again

Andrew Masterman

Yes, that's right.

Timothy Mulrooney

a That's one? big

Andrew Masterman

from And was we'll able how be right. because through spot we'll we markets. that be absolutely renewal call, -- we on that seasonal we'll a retention to May because have when that That's our how We'll CAR, -- done. renewal to the on. and Really, next time you're process it's timely really be rate report

Timothy Mulrooney

Got you.

me. for more one Just

are in light only You're so Well, can I snow Mid-Atlantic areas. is X/X January. quarter the through you your way a looking far? think it's say big How we the definitely here. It was thing Northeast and the

at being snowing Chicago, those look it's and there. of right It's too a and places Denver can You early call. in said, now lot That that. to

thing left X. full show January eight of that's We've what been the weeks business a it will quarter. on got is that run, sometimes we about And -- there have times up one

will up March XX. show it on Sometimes

quarters, forecast on you some a months, but -- that. you averages. some historical know just You they're and some We averages, don't weather fly, and late, we going particular just can how make the look they're look early, quarters, to don't at at is the

Operator

Weber. Our next Seth question comes from

Gunnar Hansen

more segment, just to answered A -- onetime people particular. been maintenance technology in Or Seth. that's on on the is what Or likely this just Gunnar to back -- margins was some just lot incremental recur? questions on of are clarify you can related cost? already. to to but timing, that. of the But I It's investment it clarify know that and for have go particularly Hansen the something John, these to

John Feenan

what said that, me the XXX CRM. to mainly in us on headcount around we sales the had to conjunction around the in investment articulated just let with side. get additional to quarter that support force reiterate Andrew up We Yes, technology maintenance the headcount

-- of year. lesser And chunk. it in highest year will of when as this, a future will was headwind grows, a headwind biggest or sure. This full we all said, of quarters. feel impacts we our our be it looked less -- of quarter's the the to said, the at was But impact of will we for guidance. be be There as degree, as in was the that the revenue in be factored quarter, will That a less I

piece The tied and piece was around snow. as the the other incentive mainly development in I said, around increase comp,

We've in the they expected. on new. year. in first very then half more piece, they're when been And bit M&A little that's the of had a come and clear that We've the

XX-month Some discussion that of and I was year. the does, to these that hit. impact just we future, alluded the as deals Andrew hit team. -- are didn't And and on happened myself meeting to that -- happen they're depending expect could things happen But that full those be hit a when will materialize. That it for the quarters. it when that -- in said, showstopper time-sensitive, don't and That when It combination between like deal overnight. a of just That Andrew to. a

Gunnar Hansen

standard pretty I average. And makes guys an sensitivity That few sense. years revenue. I know the variable. its last of of handicapping with kind has just kind snowfall the baseline second the of contribution obviously in revenue kind the Okay. been place for the guess is that there? around expectations The the What are you snow average of are for QX quarter

Andrew Masterman

back If how consistent. If second 'XX. you I last in fiscal quarter very second of story, the Well, XX- plan. That's million and we the second at at If look 'XX was different look second I quarter $XX know, over back the fiscal years, go quarter to a the go XX-year two and snow fiscal I quarter 'XX, revenue very, we it's less. averages.

it variability. lot lot We're a early Andrew into We'll obviously I There's out, some materializes. a see have is left. second quarter in the there quarter. answered So And what to days it how call say on again, perfectly. we'll shakes think our and

Gunnar Hansen

Yes.

that are Okay, of expanding have that's what you obviously, and how maybe of initiative. guys Andrew, for development of since have of expectations ramping guys Could they're to been people? XXX performed kind on guess, hires the And personnel and the you fair. mature I made, more business this just speak introduced how have some you kind that's group the of kind

Andrew Masterman

at on, not folks are the going targets XX what for goals each that natural now they're rate is a the brought sell We team brought the on salesperson. up to to individual same first to going we our not that It yes. Sure, That's leaders. we out going with net We're salesperson. tenured the for slower. as -- XX assume start or in quarter, to them that other seasoned disclose relatively folks

every between able X in market We months to company. is to folks those have take reality leaders in guide able way an to to the sell the somewhere all entire the that what we would be it regional average to will the business. by help on person really XX sales months see And ramps before being -- across up

years. we little So actually some that and coming we we -- folks the of as pace believe, That's are 'XX, accelerate as an impact. we the that we statements growth outer sheets, see get less their year, first in why really 'XX. these impact into before would go will into my a sales expect is But into

Gunnar Hansen

salespeople? white to early that. is this Or continue maybe up that, to on or add kind And more are space to -- much how innings? just Yes. to I opportunity I mean mean, follow of there speak you is

Andrew Masterman

$XX we in $XX a and billion The a market removal maintenance snow in operate country. the -- Yes. industry is billion

If continue of the and the that, that a markets pace our MSAs absolutely space you hiring, the digest to you into amount strategically look at pace grow look this can at that ability there well as to beyond the top significant XX look is white as subtier it at to within those we and teams. of of some actually

or salespeople as years. single-digit for we year XX% our several that of kind last going believe for the kind getting quarter of We in it that right kind but something digest adding XX% steady now, so and next we the is about rest be feel -- may of the growing, pace the that of high high foreseeable that not as adding can and

Operator

remarks there Thank any presenters? from everyone, the other or speakers in. or you, for closing Are dialing comments

Andrew Masterman

of as we the course Have early as report our soon. well great results speaking look forward in want again to of I in with BrightView. want the everyone your for fiscal May. everybody -- again, Yes. calls look do quarter in with a to once and interest participating forward you second over quarter just the thank speaking XXXX day when I and We for to

Operator

everyone, today's joining you, for Thank conference.

time. at may this You now disconnect

Andrew Masterman	President, CEO & Director
John Feenan	EVP & CFO
Judah Sokel	JPMorgan Chase & Co.
Mario Cortellacci	Jefferies
Kevin McVeigh	Crédit Suisse
Andrew Wittmann	Robert W. Baird & Co.
George Tong	Goldman Sachs Group
Shlomo Rosenbaum	Stifel, Nicolaus & Company
Timothy Mulrooney	William Blair & Company
Gunnar Hansen	RBC Capital Markets

BrightView (BV) 7 Feb 202020 Q1 Earnings call transcript