BV - Earnings call transcript Q1 2021 | BrightView Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the BrightView Fiscal First Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. of President Vice Shave, Investor Relations. John you. Thank go sir. Please ahead,

John Shave

morning. you, operator, good and Thank

and questions in the would financial Before forward-looking, those non-GAAP made Please could Comments more company's the as the to to of we and prepared for impact Disclaimers today, SEC filings refer operating results and statements information like non-GAAP responses remind a provided uncertainties certain differ the will begin, Q&A. on today that of comparable are and projected. I actual today's include remarks to release. results listeners materially financial will presentation the slides, financial condition. as that risks also may today's measures some future made including Reconciliations to press measures on and be well in forward-looking company's to GAAP apply reflected from discussion detail financial comments measures. the both

For the has than provider context, average of approximately BrightView is largest more network. services maintenance landscaping tenure landscaping through integrated local qualified and an the XXx of has in more our companies, and and been our for XX States which commercial national and XXX of field competitor. our $X our partner BrightView annual United operate at We years. combining with services operation service in We landscape services delivers excess development billion, maintenance from a systematically legacy care next years, largest ranging than development. team provide level revenues service enhancements to network commercial landscape model, of with with Together branches by tree XX the leadership leading and in an

source our position delivery end-to-end model single branch Our provider. a as underpins

levels, believe which We national, have a and advantage. competitive diverse the represent we significant customer local regional base, a

now turn essential risks and I'll Masterman. the inadequate Andrew consider and to BrightView's our to We services be financial also the over understand and associated CEO, our believe reputational with customers nondiscretionary. maintenance landscape call

Andrew Masterman

us Thank morning, as was incredibly you, that Good another busy team John. times, everyone, will delivered in we John moment. joining the specter clear. I keeping a strong these people still safe. for few be all an have go company strategic and operating drove company want But results. top Despite to into thank quarter focus continue pandemic, I BrightView our more margin in has while the line environment you today. It completed and detail a and for experienced. ever unusual and our growth under acquisitions, of global maintaining several expansion, healthy on our

While we results exceptionally team. always the of work have these I'm do and progress to more commitment of proud the make, and more effort BrightView and to

will to we the in this cover made BrightView ESG. the progress I many Ironically, has detail I on topic terrific much area. Although, mention also want more processes in shortly, leading have and practices

proud we've you. not have operating is already disclosure very of our stakeholders we've this we the any the made how us it in year to of created philosophy However, and ingrained robust culture easy become. more I'm good and ESG to our and has for accomplished on how important it work for ensuring see focus also for

dedicated to the our Slide we workforce. health support and, the and clients to We be our and Starting first X. shareholders from COVID-XX not continue those of remiss express thoughts should deliver customers, for all our professionals, workers, remarks, our responders, be for course, to on again express our ultimately appreciation did essential our would without members by so not customers many. care gratitude unwavering if with our continuing could we outbreak. Before and our We pause heartfelt team and with our impacted

results. our of provide year XXXX me with an overview Let you first strong fiscal quarter

that report continue no to to be limitation of scope pleased all services. operational I'm fully on BrightView branches the with First,

X% million to acquisitions, $X.X represent our and prior contract-based durable quarter revenue a versus recurring the maintenance core continues of inclusive stream. for grew business maintenance Second, year. the of and our Contract book or business is

the X.X% first EBITDA total of the margin adjusted the our supported our and be solid headwinds, And quarter driving to generate prior continue to Third, was finally, Acquisitions will an during improvement. growth. management points confident to remain Strong-on-Strong a with for value. of resulted Despite $XX.X start EBITDA we of acquisition pipeline, year. revenue the And million, revenue our increase strategy XX containment, acquisitions reliable sustainable in prior versus performance year. attractive proactive from source with quarter. combined exhibits continues Labor in year, unabated. an COVID tools, a growth up is our and technology basis Fourth, usage adjusted fiscal cost margin opportunities

provide we me let the X. Before to of for turn with first our details Slide you quarter, second outlook quarter on our our

have February maintenance impact business on softness the continued ancillary and pipeline seen in demand As segment. project the in development segment expected, and COVID-XX early January

Our start. maintenance We contract-based have associations and got commercial resilient. verticals, largest properties, and to two off homeowners strong, remains business remained our a solid

sales net was driven for a by new fiscal record BrightView, and contract new our QX Our landscaping. closings highest-ever in

investment in that the book More investment generating is We This our our realized more XX% shows on force new also of than snow of in sales results. growth later. tangible contract business.

we We were in from XXXX to approximately also the tailwind in an In BrightView to XX% segment, acquisitions tree XX% development and experience XXXX. after that divestiture. fiscal completed fiscal XXXX expect decline a considering company favorable QX our revenue early expect

and should we within that year. beginning calendar Fortunately, optimistic growth the return our backlog indicates in to trends levels a historic organic are return QX, prior-year

country, essentially second the prior for adjusted light it of $XXX range in contemplating range versus snowfall end the million as February the between last EBITDA $XX average XXXX, January and rest and quarter across historically $XX result, year, the the lighter million, total for our million quarter revenues March. we $XXX year. contemplating and and higher the a lower fiscal of snowfall the was anticipate and was of flat As million end between snowfall with

possibility Of fiscal outlook course, the Due of if exceeding higher-than-average is full and economy we regarding above at this the particularly impact the there XXXX uncertain its providing of the be the guidance annual seaboard, will occur, the for range. snow COVID-XX's longevity, extent events in to not on eastern time.

We the under factor in demand continue ability will operate the half. to segment. headwinds impact maintenance grow that to ancillary This impact our will premise our organically in first will

teams beginning quarter, improved snow our modest growth Our with the should poised year-over-year. and critical the a XXXX quarter, the the positive a fiscal made an sales to remain second pandemic average results business sales-enablement technologies. most from result second half, the investments maintenance show as Combined deliver expanded recovery during of half and snowfall our second in in of in we

Moving now Slide X. to

and cash and liquidity, are is on local services diversified but navigate we manage working capital are because Company-wide, maintain laser-focused a positioned opportunities business this level to BrightView reduce to contract systematically exercise moving period margins, on expenditures challenging customer our capital. our well through continue service, through extreme delivered to challenging base. period We and we to at the enhance protect quickly prudence base continuity. as a grow navigate

in combined with dedicated services and base. contract enhancements, of to managers but the all than account millions largest of we to book. residents of ensures maintenance and XX% properties, are our diversified results HOAs underlying represent our growth continued corporate positioned HOAs, retail country, approximately of incentivized business X/X stability live maintenance highlight generation our service the and regions book. perform. in Across and continue but growth and importance excellence verticals, stay-at-home and contract overall the well within positive our commercial contract work-from-home to customer our performance two for have and communities quality, are been Conditions reflects structure development growth represent of sell quarterly remains Both who our team, while by targets. maintain. by and our branch COVID-XX Hospitality on-site, branch impacted acquisition our verticals local we BrightView consistent and presented less campuses, delivery. seeking and cash actively highlight most Commercial with liquidity. managers strategy, are service Our the contract-based reliability a opportunities Combined the trends of fluid,

Our an team steady has delivering done incredible results. job

the acquisitions leaders XXXX, fiscal in Slide that Las key us market MSAs. announced our to Image. of beginning Since X the we today, as fiscal Vegas-based several XXXX, now position previously have we Earlier fourth beginning of since announced X. Green Turning acquisition

We expect to X revenue. incremental add acquisitions these approximately million annualized $XX in

Northern now develop. is In with achieved and which now care attractive our company acquired fiscal have Area, Commercial we Jose, still of the the Bay Tree October, target Combined legacy revenue San opportunities to We operations in care our our in throughout tree BrightView have California. California. continues XXXX leading pipeline, M&A

markets Minnesota. At maintenance Plymouth, X end full Midwest welcome solidifies and desirable acquired services. which family, Additionally, important clients commercial a commercial than full-service more HOA, in The serves in XXX leader Texas. WLE suite municipal Edge to WLE, care of enhancements, the the winter provides team we landscape December, the across market. Edge team XXX-member Cutting landscaping developer, skilled rapidly We and and services, us BrightView in operates Central firm, growing Upper a based Cutting acquired region. and service irrigation in BrightView tree and in transaction this as of members a October,

has strong and in provider in developer of team and a the Vegas welcome business. a we of services acquisition than with commercial of XXX January The leading fairly XXXX, stream, BrightView expect more strong and company presence, skilled Green Las is a diverse a revenue deep members. recent most and integration. And Image, short market. Our recognized maintenance as relationships both development HOA efficient local base We a

framework, experienced an disciplined base, revenue less Currently, and over generates has track in client returns. integration a with predictable provide in $XXX million and a an workforce. Acquisitions our repeatable a us M&A company accretive record and opportunity. of and have results, operating pipeline with field results team acquisition and We leadership a risks established which

pace we of XXXX and closed our the industry, have and acquirer January As in acquisitions are accelerating integration. our acquisitions XX choice of since

disciplined expansion pipeline attractive our MSAs. approach against continue in we and market market new aggressive our will attractive entry as We but seek

we we update to As XXXX, this fiscal you core continue on will through strategy. progress

Turning XXXX. X. contract on maintenance growth remain We focused driving fiscal to Slide during

maintenance Our contract-based our think better pruning, look We This our to of other core landscaping core slide the granular core resiliency is at and business. blowing including and stability represented of in our maintenance, business XXXX, maintenance more business. edging, understand provides of it way both and, maintenance the trimming, represents approximately two-third contract a mowing, a services valid business. book of component

remained the quarter. stream. revenue durable quarter continues Contract first XX%, versus maintenance at contract-based to business business our recurring of unchanged primary is of and XXXX, During and book our the a fiscal previous represent

our of expanded should we our teams technologies. in mentioned, maintenance show fiscal believe and beginning our sales-enablement second sales growth result As sequential as half business positive a

Turning quarter to snow variable financial Slide performance services. first our The is removal largest to X.

Our annual new XX% business have as implied increases contract a our than year. been retention and investment snow was more wins, force. improved this of grew price book we sales in result of the a making of growth result This

many days, few a business you experienced Orlena and a past to of good impact foundation the our growth. over was provides As have positive for

Additional over allow few the should forecast. to moderate months next snow us events achieve our

be regional a with may national here the level. both National you macro data as and snowfall helpful in is familiar of which Atmospheric Oceanic or from provided trends Administration, the and at monitoring We NOAA, reference. Some the

and data for for the footprint reported contracts versus data and a approximately branch customer reports detailed WeatherWorks, snowfall XX, zip specific three months by down WeatherWorks ended XXXX, which is invoicing as the the decentralized industry XX% December standard. However, important BrightView's specified for network which to prior WeatherWorks year. provided purposes. code, data BrightView our billing total data source branch in by is is utilizes

snow BrightView's of me inches XX% XX% on XX.X years overall down recorded during end in XX.X% – versus inches revenue over fortunately, and $XX.X year. prior Boston, decline a year. market, through XXXX year, of X.X up markets, Let our consistent strong of largest growth. in give Despite markets. snow inches the to snow testament million year. the a snow in prior two-year impressive Chicago quarter snow, three removal a of prior snow snow historically calendar was snowfall Denver, versus Snowfall the the a removal specifics prior inches, the was few up XX.X our versus contract X.X the just slightly increase recorded

to turning XX. Now Slide

generating We in environmental, communities, governance, ESG. stockholders. focused social BrightView value corporate team on partners, and business our members continue leaders be and suppliers, to or our for is customers,

principles Our a to ESG source commitment member our team. for of core the of of is pride every

seriously. stewardship services landscaping in of take creates, beautiful BrightView external we commercial States, provider the largest the United environments. preserves As environmental maintains and

enhance, minimize largest to and among In the addition are build, impact on these is the design, carbon through efforts plant carbon striving impact worth equipment, one zero-emission techniques, environment reducing our and landscaping continually our work produced responsible Notable efficient we carbon-consuming BrightView of of are more of innovative than we others. equipment the to and we $XXX user and by year, practices. the maintain plants landscapes offset helping nation's million of each

see where like we've University us at mowers equipment sites the Pennsylvania in action can crews and You deployed the all-electric entire handheld of with across campus.

millions campuses one Silicon in We to annually million conservation, and Conservation of a look Valley efficient Water the sustainable more for with through pride Recently, systems of engineered our Oracle's technology water planet take Coalition potable operations leaders design water and create conserve in year. gallons innovative ways As award overall water of help make to the we clients environmentally recognized for opportunity water two Awards save strategies. more friendly. XX continue use where to to gallons the in BrightView irrigation

Turning is to of one take to to an our workforce care Despite highest safety community diversity unprecedented and From BrightView workplace people. Slide social of environment, engagement philanthropy, our – continues and responsibility priorities. XX.

rate We have in over every safety single landscaping employee devoted injury to the lowest X,XXX hours day. with commercial

our thrive. garden. HomeAid our to to with members. builds homelessness; individuals High same that Stoneman School with and time, partnership at communities experiencing in care renovates materials also of regularly nonprofit Select prosper installed including to we of include resources We the our passion financial and BrightView take a hydroponics donate care that Florida, and a butterfly strive expertise, Marjory our where dedicate for We garden, team help Atlanta, housing highlights and tranquility communities and a display the

GROW Women, company. advocating Growth X,XXX organization, We group our for of Relationships stands female professional and and regular across at the more the an to for on in retention resource establishment women its proud diversity crews We in the employee-led of landscaping XXXX, promoting development participating over industry with in other in any are from members, than hiring, and also women very positions Opportunities women levels. to group for company all more which pride all promotion gender grown has Since programs. than the ourselves XXX employ leadership

level and a that for at by Social local inclusion organizations branch Fund Lastly, and supports our Justice team. initiatives promote equality local the sponsored

gaps donations financial, diverse that part has to a Response just helping fund a as divide change, seeks hunger. the been injustice, their impactful of a organization and technical gratifying to and achieve charities has us. social, of skills provides months those within to few already made company positive greatest training inception, with In deeply our such ways potential. issues to the them are fund me. to consequences since bridge We be employment helping educational that addressing XX from homelessness, in-kind the empower resources and The find economic struggling

are the additional to organizations be the that injustice. made consequences with of to and working We weeks in ahead address committed expect grants

to XX. in John, to we strengths be our our fiscal solid Ultimately, to start company superior remaining will for and fundamental a turn over stockholders. our better and who value on Slide now greater this continue year, the our it crisis financial and discuss a exhibits Moving to stronger emerge I'll we while will confident focused building creating performance long-term detail. performance

John Feenan

focus of Andrew, business, everyone. The fiscal Thank our with we the XXXX. am contract to pleased margins have collectively and and first good investments in management cost of in delivered maintenance and results underscore strength all and combined efficiencies business. in quarter our our our you, improved meaningful our I with very morning productivity gained of driving the on stability been ongoing technology, from

Turning XX. to Slide

ancillary of quarter the contribution COVID-XX flat impacts company three prior XX First million of acquired revenues was $XXX.X by offset for of on continued, businesses. demand months XXXX revenue business fiscal $XX.X million excluding the ended $XXX,XXX. totaled revenue a Maintenance from million. solid to December year, for $XXX divestitures

reduction ended divestiture. three tree softness declined BrightView revenues the $X.X we December expect million COVID-related to XX, X%, the excluding a revenue development from For months the segment, In company development by be more increased QX bid the second and we pipeline last backlog, year, encouraged calendar, fiscal of stability during but our versus in anticipate and pronounced are XXXX. we also half

productivity containment on of details to due adjusted lower the year. XX. million more by fiscal million, XX million the initiatives increase to revenues, the X% decreased QX Cost result initiatives, driven than $XXX,XXX leveraging EBITDA EBITDA from XX of or half $XX.X in EBITDA was to Total of to solid the year. margins sales our prior $XX.X adjusted million or to to $XX.X point the to represented compared initiatives segment, development expansion lower Slide SG&A was the quarter COVID-XX X.X%. in strong the and The of technology for Turning the approximately labor a by BrightView offset company. basis XX.X%. $XX.X $XX.X and and million X.X% containment, segment, margin of and was was in impact increase from of The in of management The basis to In $X.X decline EBITDA $X led was EBITDA EBITDA million cost margins the resulting In $XX.X in tree expansion prior point adjusted an first million revenues an impressive an expansion. million decline XXXX. maintenance attributable strong

decreased the a business in fiscal point strong of representing $XXX,XXX, was able resulted Corporate margins XX.X% revenue to to However, in XX revenue. against quarter for the basis EBITDA QX. in decrease development fiscal cost mitigate through containment which efforts, first expenses X.X% loss,

and fiscal be quarter $XX Net versus from first quarter, to expenditures million self-funded approximately QX $XX.X Let's we XXXX, of we as Expressed $XX.X XXXX. balance in first capital the long-term approximately capital guidance. the on a expenditures capital of the quarter acquisitions allocation In revenue, X.X% for XXXX. and million X% XXXX move fiscal totaled fiscal to with capital net on in our of down expenditures of fiscal sheet first in $X.X quarter, XX. were first million our percentage expect in line Slide now fiscal fiscal of the revenue, million

at Our XXXX billion QX QX $X.XX was end the billion $X.XX versus end net fiscal of at the debt of fiscal XXXX.

had the quarter M&A at were our experienced as If a end approximately XXXX we did X of first as a the times with QX the X QX was in same to XXXX, of ratio X.X our ratio X.X transactions and than year would normal QX leverage company. we times of XXXX year line quarter. magnitude last prior fiscal times, the versus Our of of snow be in get our public target to in times less leverage as

flow working Our are ample on December and availability of Total to continuing as our us XXXX, net flow $XXX.X capital XX, of agreement, management gives our our driven December $XXX prudent This although solid, liquidity M&A hand. This was million. cash quarter. of strategy. as results, QX free of cash had lower revolver; flexibility weakest of in fiscal expenditures, end was until was of of Slide decent $XXX million which performance. in performance free by million accretive At solid under historically the EBITDA This we cash on approximately XXXX, we availability XX, financing approximately quarter the XXXX. An under of process is million and the XXXX; capital $XX of in XX. update liquidity extending our of million expense approximately on interest first $XX.X receivables our February compares

to liquidity me hand only With maintain run let over pursuing of aggressively we back We Andrew. the and are not growth. that, paying confident also debt that effectively ample down our call cash turn profitable focus BrightView on have to but and

Andrew Masterman

Thank you, John.

Turning XX. now to Slide

COVID-XX-related of acquisitions. results strong. quarter reflect liquidity, improved continued business we fiscal remain of pace with fundamentals year. to impacts, industry and Combined the solid first start continue Our a our anticipated Despite the our expect our to our and

verticals. Additionally, engagement we technology enhance on across all to and continue to client deploying remain profitability focused productivity,

fully our labor have implemented segments. tool ETC across management We both

of Connect, adoption HOA customer communication with our teams. direct We facilitating are expanding

to retention force tool. supporting on the We of continue continues property improved relationship And capabilities usage expand assessment management software our and the focus and quality sales enhancement. customer site

of In sales a continue support addition and Digital to new through and verticals we sales invest in the these approach more to continue of our teams. organization tools. grow and in and and use with initiatives channels to markets technological marketing our effective new expanded success enhancements, effectiveness omnichannel expand sales the

and our The stronger success, in marketing pipeline level while pipeline new and drive support leadership both sales in our in sales resulted averages. sales this formula team, and in combined of streamlining company's highest marketing, to operations investment investments growth sales retention in long-term strategies maintenance its are will and improved and and service expansion with targeted field-based Over result sales for and a and should digital regional Our history. our structure the efforts delivery. contracts time, client in industry robust enhanced snow has our of opportunity further ahead

our of And with benefit will results the growth. be of sustainable pipeline, to Additionally, our acquisitions to attractive a continue an source growth. and reliable strategy revenue acquisition continue Strong-on-Strong

are dedicated Combined partners cash-generative banner, I beyond. that to with and capital multiple lines to is believe for we positioned repeatable. during with thank shown to we clients and and business and to our efficient a be us excellence under disciplined and their allowing in knowledge operate challenging drive service employees, ability in would to we XXXX performance time. families, one and like manner fiscal horticultural our consolidate dedication resiliency the marketplace solid well personally have intensity, an Our low our

questions. on care the each focus and you your sustains your customer morning, for Thank levels strong attention open and the drives now customers organization, and At taking of will team-oriented Our our and organization. our our drives other this resiliency the all we business. in call of culture for a

Operator

Stifel. with [Operator Instructions] Shlomo And line your first is question Rosenbaum from of the

Shlomo Rosenbaum

Below? – little were, what Hi, questions versus you bit absolute about expect? talk given morning. a the for of Thank just in this kind just And can the is Is trends the it good expectations coming kind way ancillary in on of above? in you that. to profitability, quarter, comment you Just the of importance of just it you your the Could that you're part if what in could etc., revenue then the seeing? that my morning. Andrew, you business taking

Andrew Masterman

Absolutely. Yes. a we quarter far What what to the softness saw in much as first our as goes, expected was we prior was team which years. continued pretty relative

a expect we you underlying now Fortunately, see shortfall, over into seen slight in look we've organic rates improvement as from prior our return see our ancillary second did and that get shall QX years. the a believe, QX. year-over-year we a profile into second the I fiscal to if improve say. half ancillary we to to but quarter, softness do And of quarters, three of We do into QX into continue do growth see last XXXX, the we relative kind

on encouraged but very a seeing to impacts continued COVID we're business, the certainly in weigh trend. overall, by So positive have

Shlomo Rosenbaum

the in general? of So is to year, additive? is What's more of going Does into expectation? do are have layering return going to in your on half thinking? just be sales – that acquisitions that opening the the up the with Additional are how second going that to that that kind

Andrew Masterman

It's the combination of three. all

in the company sales the sales, new we best quarter history in the the QX. have absolutely, of So

would help to So sales that levels. build little expect ancillary those bit we a into

summer, degree, return saw to the a economy, height but anticipate, we that the to being would certain the of last epidemic. levels that from not completely, vaccine opening modest distributed the believe during of a do widely, degree, more we with a the we year addition, the In

Operator

And of your with line next Blair. Tim William question is from Mulrooney the

Tim Mulrooney

Good morning.

Andrew Masterman

Tim. morning, Good

Tim Mulrooney

to you slowed there Net sales retention and you directional sort quarter? through metrics, with investors retention. that or rate in ask retention retention or share of Did around the And it's can Scores as continues I quantitative trend down. metrics change are the Thanks. Promoter revenue whether new retentions? any actual any that even that wanted the quarter, ancillary was about to mentioned Last customer improve fourth continue

Andrew Masterman

as our Yes. say in we will disclose number quarter. best we growth which that new. first about quarter, have that something that a that We seeing any second our talked given we we're where in called sum but losses the seen don't manifest sales the the can new of we number, specifically we've I year. have the it retention And new have showing is half of see net you minus And increasing net is profile, itself actually get to seen the ultimately then It one improving being indicator profiles. in net

quarters, we to satisfaction year-over-year we'd period. CSAT, also, We CSAT And to in that that. into our overall your detail in the or dive those point, the seen we performance in do in improvements have showing of happy customer and show scores, data improvement on subsequent what in be can is some scores, a later

Tim Mulrooney

your Shifting for year. and that that. temporarily broadly saw services a me, commercial of Yes, you average. pricing. providers similar you approach, Thanks, took new is remember paused a net update price just that lot would question more be increases me Can if also We historical trended But around great. to guys. pricing compares helpful. I on remind how one has just provide very how We'd gears, love last to maybe can see anything the can't you and on

John Feenan

Tim. Yes. Thanks for the question,

You're in inflation. XXXX, pretty spot to fiscal to pretty Prior much pricing offset wage were that, slight much XXXX, able pressure we Tim. XXXX. on, pricing We used XXXX, fiscal experienced to downward in in

what in and pressure around some there. areas, COVID continue pricing the expectations this see relations we've year of the Our to is modeled

equation contracts Andrew us. early price increase that note, were the a achieve able of to snow part for a component was we bright about which in in on However, was talked And that whole the favorable year.

our to so versus it on of we business, in pretty a will But a of much same part trajectory overall, in how much the small that price model business. we that's granted, as XXXX. see Now pressures COVID, in continue saw expect can push from be the balance we maintaining XXXX expect to we

Operator

And is from George Sachs. Tong of the line Goldman question with your next

George Tong

was growth tracking down in in BrightView's the Good markets and strong. quarter, contract contracts snowfall thus snow Morning. internal fiscal thanks. snow year? strength XQ, discuss relatively far, how prior what is was Hi, to the drove in expectations in XX% Snowfall Can you in but relative

Andrew Masterman

is pipeline We've been about seasonal we investment of our and what is on quarters our the what an truly, then sales historically the contract of implemented. pipeline the expanded conversion we've of ever a for in intent best and snow an But then talking that year deliberate force George. reason, the saw basically and expansion basically just force we've sales green clearly using markets marketing absolutely, had. is is our an contracts. now. – snow our follow what expansion Yes, that that couple And Usually, contracts the in tools primary a of is into

We And digital was efforts, works that fairly the area. across specific sales expand – with growth local It teams It any sales expanded with branch expanding have on wasn't together that country. concentrated that necessarily by way, force, footprint. our in combined marketing the that the was balanced.

So about year. light was you that, No light QX. that year was our it. last question was a first January, very, very month. very as Last similar see QX, very a It month, month. was to also

by three in the Orlena, course that the on of sites – today a So happened with I quarter, all from event still over as a in of significantly January, days. in significantly communities we what followed many we're the from mean, was the frankly, first high northeastern away saw, storm removing which snow was

kind the got light, and look in several two mean, we And believe, are we XX we over see the say we to snow year you'll I more in averages. occur, the five- as we'll quarter is six-inch over the If Eastern the in to expect of was snows corridor those here When out kind need – into a as of of end. great the in So we'll high off guidance, the I months, while there, averages in hit the end guidance. second February decent at next hit events start lower those that what March. to we a January be the decent, with with And averages, light light February. events the

great a able certainly that snow beat spot. saw need levels confident And the we're we but And in Orlena to going improve us come, or that XXXX. so we we're gave to to still fiscal snow be

George Tong

helpful. Very

and You step the year. of puts and Can might mentioned with improvement put take that on you of talk that second a in fiscal the there performance pressure the half fiscal XQ business manifest year? to of you of on a half that bit the development might near-term about some elaborate back in in in development the XQ takes second tailwinds the the expect

Andrew Masterman

Absolutely.

the we through knew we that And coming time a the a of as with height amounts we've playing XX% second downwards prior fiscal and talked we pandemic activity of – ago our it It's were quarters with here As architectural reduced see in saw shift pipeline. period. going of during about quarters, said, XX%, January to in reduction. March the right quarter, in we out, couple

pipeline by quite half going bid this we continue latest we that at that in frankly, being this January, in back similar the be that into or or to Fortunately, would actually, in Whether bookings, And as three back we see continues soon need that to organic last encouraging, year development layering will our and second see strong. all the the this as we it the pipeline last trends trough of we we business completely the build still are we half we would believe calendar the months, the saw of activity growth the be as looked be year. very year. QX out but we'll expect December, happens return to October in return that climbing QX, at bidding levels and, to a be as and – quarter, QX – is has in through the and it to

Operator

the line Your next from question Andrew Baird. of is Wittmann with

Andrew Wittmann

XXXX, Yes, wondering, different year Thanks, and maybe could great. relates year. year both about inorganic and to closed just there's if well the maybe rate partially John, deals cut this fiscal that this I to talk you the drilling $XX an guys. a of M&A to it mentioned guess you've closed this was more contribution and last contribute specifically, that you numbers guidance will from what and little to only that contribute deals I bit as as annualized a that little million. way bit run closed year fiscal the year this But as into

of just are give not – just second revenues quarter, that inorganic the expecting, for in could should that this in-year benefit If but the implied frame us or be you we the point. maybe us help to year at

John Feenan

QX, year? talking Are about full you the Yes. for Andrew,

Andrew Wittmann

looking those, well, – those the clear. I'm Yes. and disclosed obviously, numbers, are you QX

second revenue the the just ballpark be the help of could what is you quarter, that'd And it us for helpful. maybe contribution then year. give kind if inorganic So for

million I the actual I million us year the know for all is these and the gave it – annualized $XX in make other want that in to year number the timing either. $XX assume things, You don't if

could us, think. maybe helpful, So be just that I you would help

John Feenan

Yes. No, thanks for clarification. that

we million, million I of sit of be of and million and would today, think that guided where wrap historically, $XX the $XX around composition $XX we've new.

we've so we still would range, and approaching would these $XX than with $XX getting that more But deals and be And with new million. early done, progress be wrap. that that the year, realization to made progress this the be this more would that $XX upping of million million

think historic our $XX versus million. $XX million So

Andrew Wittmann

Got it.

guide guess, quarter the next helpful. philosophically the just, guess, Okay. into we'll the have able how here, second this for – in after to be then we'll And is Do COVID just quarter. is is those you're I seeing I that rest That the wonder after up the of expect into after you of visibility I books, you'll be comps some year? maybe quarter, growth. – shaping the

John Feenan

– that's realistic. we think very We think Andy, Yes.

be have But to year see next to just a candid, we from a in is little behind now once call. once a and us full of QX. QX know, hard variability you'll you and full guide that get dive As think that us we QX the snow, with quarter into year deep

Andrew Masterman

snowfall season kind Andrew, April of uncertainty in – the lays understanding our primary is addition, because is through are where contracted to removing very Yes, of have selling be And around we'll But the levels. not and Andy, only Andy, going this pandemic that. out we've a removing what for impacts that our good business. contract-based

so our that on to to we'll better be May get by able call, And time clarity give year. you the we for some the

Operator

is the from with of Jefferies. Hamzah question Your line Mazari next

Hamzah Mazari

seeing is of question etc.. enable about just Does a – that M&A sales, the little COVID guess, really M&A. And are integrate of a now of people has deals all? My I you morning. technology side? from as then good to And impacted sort sort talked CRM around a faster the bit side, Hey, to technology your doesn't you on M&A lot standpoint, matter? willingness you the at on it more part sell people's system, Or

Andrew Masterman

and tools integration, introduction and say, well us pretty we timekeeping of playbook absolutely, very acquisitions forward, management Furthermore, acquired as consolidations our they to those of technology along it allows get platforms, companies assessment across a They and operate they know site done XX are team wouldn't And quickly system XX – Hamzah, the have tools, and and these. done otherwise take We hungry having introduced have tools enterprise. for It's the deals sales back-office as impressive And operations have JD team. deals, one a tools I it's because helps who's that a months. Edwards-based You looking entire frankly, actually on are ETC, new force interesting. acquisition what, our it which system. the of a couple our that. of with a within quality the really would to It's move helps and have. labor advantage onto we frankly,

positive. – that's so a And big absolutely that is

say put who not uncertainty little shall sure been bit on whether have Regarding kind has fence, say. mean they world, not, put were are funny weren't the assets the they or side, properties that to of the a would has I going for going that on redefine or by owners or and perhaps what want thus what, what I up more pandemic their know I put I'm I'm sell their do going those the may And accelerated, reflecting to of doing, company seller's appetite, in I or their it's And people you lives sale. who what their think to there kind that's forward. the put is fence, the that then on who out own

now that – up used on we're of see think towards think little I to or that. about we've reflected, seen the that, to So we an is increase million. and a And moving pipeline, $XXX from $XXX I bit fact million so up our

Hamzah Mazari

you we structural? structure? What on have you margin half is about revenue the strong. sort just variable costs second that margins, But maintenance trajectory, much think my talked pretty would – question And how think come the about ancillary, we into the XX.X%. are out too. What follow-up just of any sort how of be Just you color room it. costs taken of cost cetera. have et sort lot should I are at should Got guess, helpful, trajectory about sort They're on the business? How side, there? What a on back of margin of sort

John Feenan

Hamzah, John. Yes. this is

main margins. there the on of Not surprising them. around were any drivers for think the in three quarter, I improvement

to is discretionary big a progress some But with now versus now and, was business. – first every both and our acquisitions program. out shortfall a part historically, taken The was across cost made Like them that leveraging that it been able And prior headwind. ancillary, reductions progress get rate well-run sides a part but new we around headwind companies, we've to there. more profitable labor would time business, of implemented that around cost of ETC around other and our travel not year, we've slight efficiencies items. of that's have also the we've and headwind up. make that I the around fully around bringing onboard And so a the we're takes significant at is yet, labor say, There's have Where we the because productivity tools. company,

second around XX QX, longer really quarter. three had good a As confident I and and that looking term four, We guide far say historical to stay our we'll at XX basis we're improvement. point very of as within would somewhere

guide. say quarter, that longer XX range. when second was in But the again to have evident still year, in talk the to it. bps XX which about the improvement in full for we same the for term, in expect we'll We May And our we're more

Operator

from next Kevin McVeigh question with is the line Suisse. of Your Crédit

Kevin McVeigh

is to it so $X is Great, year-to-date. like, to could $XXX of set think pipeline Is this $XX kind it them, kind Hey, range poised close so maybe thank you. would of Because incremental fair closed there? million, higher rate percentage the closed that of the I the million just you a you taking a million, advantage out that's all higher based be structurally? sounds and acquired of you remind of say us into pipeline? Or you're just revenue at versus the what where on historically. don't the that million, pipeline And obviously, to $X expect sits it

Andrew Masterman

end takes great what in are We our up the you we the rate overall I with. down just that actually the that going close increasing, turn go meet that deal outer but because We a see any teams. they think more deal actually every there Kevin, companies the great diligence. expect of is to opportunities understand not acquisition And Yes. who pipeline I with is reality up many are are. our to would ultimately

do of us, believe So slowing that that will we with I We're I see to that is continue seen continue haven't as in we in deals down. dramatic I of forward. front we a be the that to it percentage. shift doing say that likely not kind move will pipeline

And would north next that something progress revenue of see annualized through say as the forward so we $XX going will that I couple million quarters. we of

Kevin McVeigh

have converged? don't term? longer business down of the the does But probably guess, as associated you electric, should And bit we that maintenance investment. of to I the probably I – fleet there's equipment. and I'd as But percentage the term? maintenance some kind I'd imagine ESG fleet SG&A your Because a how again, upfront these more goes initiatives there's what take more of of of just less think aspect little the does imagine maybe about mean thoughts And electric. as if about know do longer that more you that to any think then kind with ultimately what you

Andrew Masterman

is with technology to do mowing. exciting in this year the share as savings the that, country. We're going have taking with person to gears and offset that. is of someone the but blades will labor the is mowers. be down developments launching be and those year. what potentially That some comes may which continue But heavy-duty people of slight a it lower in one, perhaps electric over those And We'll the kinds decks spring XX-inch be number its more infancy, certainly upfront And large, on throughout to involved levels higher and not mow. outlay of to is And those a okay? demand also less – cost it machines. that. really, are very of the exited things. expensive operating we'll and some There operate more forefront trimmer some we to next so doing is, levels, will element some still exciting automating thing the launch our of most mowing Yes. they're activity that of trimmer equipment, pruning lot launched by be running communities. see properties to to needs And And time, going day, on maintenance these end autonomous and another over mowing. equipment, We're several you're the be a operate But those in being I forward. is still needs going autonomous – needs well, spring think, said, the at we're – the That trimmer, edge the lawn still

Operator

from England, your Your next of with open. question line is Sam is England Berenberg. the line Mr.

Sam England

Hello?

Andrew Masterman

Sam?

Sam England

me? Hi, hear can guys, you

John Shave

We hear Yes, Sam. you fine.

Andrew Masterman

now. fine We hear you

Sam England

Yes. Great.

first those coming things. for question. to labor see laws, if the any inflation the of types Now administration impacts example, I you're around regulation, wage from Biden in, expecting just wondered

Andrew Masterman

Yes.

whether the in, on thrilled company, exists pro in And of immigrant availability country pro of labor to that's labor will benefit that's that will we're our policies It we implemented immigration I it's continues in country. component on fans the any legal properties. party guest what or labor of it's as would believe strong the whether or Fortunately, country. And servicing throughout We long the that will the and coming immigrant platform, which of increasing labor grass that. is mean, cold. administration White the supports we're us fall a the the and as whether House, – immigrant immigration across will Any be grow benefit the regardless about. snow be continue immigration to

Sam England

end just sequentially, markets weakness QX moment. XXXX. throughout into then in and seeing are just a that X Okay. so there you're the Slide where revenues in I most Great. there the And looking QX? And at in markets any wondered QX and particular improvement the and ancillary seen you've at

Andrew Masterman

within mean the You segment? ancillary

Sam England

Yes. Yes, the ancillary yes. revenue,

Andrew Masterman

any mean perhaps particularly I that you to have far the across there have seen Yes. our one would would and service I isn't as in experienced. as say verticals what impacts. we've board many of retail line hospitality

you're discretionary the that might visiting up of not as some quite used in them color you much rotations you retail, malls, see as more people aren't really to. And sprucing where

to back a we those and coming as summer coming will they outside. going QX think be and believe, to summer, their past. would the for especially expect areas impacted QX be And others great into people differentiate people So as And especially would landscaping as the of are into in be need areas, going the would this be be do environments back. shopping in products. to we ones come restaurants, there's those I a public start to back is in, way competition dining to kind get the to and than differentiate the more We

Operator

next of Securities. with Bob Labick Your from CJS line question is the

Bob Labick

already. my questions, Great, lot have addressed obviously, A good morning. been of

on there the how to Or trend Just been impacted. in you retail been do change ancillary services? digging hospitality. they're customer expect forward? Has could by the Obviously, the mentioned any type, HOAs to if going those ancillary in you – has or you corporate treating how

Andrew Masterman

is say in you've steady, environments, HOA been the would much pretty seen question, services. ancillary good say. that affected. what impact a in relatively – It's What shift The shall to It's little I dues I HOA Yes. been have or they haven't Bob. that

paying utilizing community people lot home and of to a so working environments – environments. staying People attention from tend be are home, to they're their at And and their home. so their

stabilized commercial bigger So much right? bit we've there. commercial, I not impact small, kind but The impacts in of seen we been like a a near it's say, element seen have as hospitality. of – in in been retail as will have and places

color So rotations. people commercial again, impact with has coming offices, had less less into some

improving the properties one not buildings is You're commercial this time. into no at coming when

heard, people into and to are in half back However, second get properties there services a have impact in that our returning as have the which to in people come we of September, people as the for likelihood year. ready actually, a offices positive offices, going could is ancillary believe July we that the the on

Bob Labick

Okay, super. Thanks much. very

Operator

Stifel. of Rosenbaum with Shlomo line the from is question next your And

Shlomo Rosenbaum

for you me a follow-up. thank in for Hi, squeezing

Just that you see one, and was the was a much the of quick you I Green is website, morning residential different what residential Andrew, usually I flipping stuff do. announced some much Image maintenance? do. just the versus this this how is in that And usually development I don't wondering of you I business from – just how guys through So

Andrew Masterman

in it development Vegas fantastic it's Green homeowners that lot and as just association, because spot do We true had we the booming do our heavy more okay? is would Image, homeowners They it. area. That's legacy and of you now significant will Image's combining Green kind of It's as a have very with done, to they would we're probably on little of in was hospitality associations actually the have part of they residential. one between little that is they business general position squarely Green more Yes. – you is are do. commercial homeowners of business It's contractors – business. in now we've most area association the market. business, And acquisitions the us opposed side seen what in very of the a board where were the in of They, you Vegas say, a in typify Vegas across where have what With they market. the development half. do So in HOAs, the than strong Image and see puts which Sure. Vegas. that and development corporate what so for or, hospitality us is community development part in however,

Shlomo Rosenbaum

thanks. Great,

Operator

Mr. And closing you there remarks, are no further Masterman, sir? questions. any have do

Andrew Masterman

to thank participating when call pray Yes. we in BrightView. you for everyone Thank want Once quarter your be for very you our We much, in the for May. interest to and speaking second today with operator. well. and again, report Please snow, I safe, look results stay in forward

Operator

gentlemen, call. conference this and Ladies concludes today's

disconnect. now may You

BrightView (BV) 5 Feb 212021 Q1 Earnings call transcript