Earnings call transcript Q2 2023

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Operator

Good morning, ladies and gentlemen and welcome to the BrightView Q2 Fiscal 2023 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday May 4, 2023.

I would now like to turn the conference over to Faten Freiha, Vice President of Investor Relations. Please go ahead.

Faten Freiha

Thank you for joining BrightView's second quarter fiscal 2023 earnings conference call. of and of Officer Brett the Chairman Chief Andrew are BrightView's call. Officer; Executive Urban, Raether, the Directors; Board Masterman, on Paul Chief Financial

the to comments that filings slides presentation for future company's and the projected. and company's differ on today of Please remember may forward-looking information risks the more financial results that from Please including on detail some are could responses results and SEC materially questions actual the refer and reflected the impact made operating uncertainties condition. those to

today's also Comments made financial the as a today today's forward-looking apply non-GAAP certain prepared financial provided Q&A. to non-GAAP are Reconciliations will press GAAP remarks include comparable as and discussion Disclaimers on measures statements of well to release. in measures. financial measures both

will call turn the of to Directors BrightView's Raether, some the Board Paul Chairman comments. of for now I over

Paul Raether

today, will leader position and offering Thank everyone. May the to He you, that led Earlier Director great Board has Chief from XX. us in his joined public announced BrightView. successfully and company's down effective Andrew Masterman in been good Faten as initial Officer and stepping a we for XXXX. Andrew Executive President, XXXX morning be

safety the executed in organization, tenure, best infrastructure, professionalized and the than expanded capabilities acquisitions, XX its company's our strategic record its his During company the achieved sales technology more history. modernized and finance omnichannel marketing

BrightView. BrightView operated member experience as public Abrahamson, Jim XX BrightView's an meantime, Board, of Andrew's Andrew's successor execute CEO. as in management private dynamic our in an I to Following knowledge in the thank President to experienced in talented May industry step well you executive on years a management confidence companies partnership in of and extensive search behalf your of partnership the again will have Andrew, for team. Interim Directors brings We're the over continue on Jim XX, our full in to to In that large XXXX ability of strategy of with CEO, all firm. last Board searching Jim's as we with since and day and contributions environments. and want for

now will to over the you. I call turn

Andrew Masterman

to over seven high-quality Paul. nationwide proud to CEO industry It's date, Today, privilege the what a team I'm BrightView's and with BrightView's a last we've and you, of BrightView members. a years. future an been success. serve as brand recognized over and is I'm confident in XX,XXX leader with progress Thank footprint accomplished

technology digital The smooth the We over have transition. weeks will that significantly strategic investments, working to tremendously. through to ensure marketing. few company next services has look and I'm improved confident continue. Jim grown our with service customer momentum I forward a positive

land like the that underlying the turning development I'd team I work, and land of thanking high-level am our which dedication. the by expansion proud me BrightView financial our quarter With quarter, consecutive strategic, quarter of delivered and before results. commentary our margin first solid quarter success. We let and third growth, second by margin consecutive their report anchored to in eighth for hard entire start expansion. operational of on organic you their resulted a of give consecutive quarter some to execution to outstanding

from acquisition benefited top strong pricing Our line results sales, actions and benefits. new

of and efficiency we our profitability efforts, technology as expanded, our initiatives and development perspective, From our implemented to strength investments land top continue support to Importantly, execute underlying force the a cost line management maintained approach. and operating disciplined sales durability on in results. continue and pricing margins

to profitable behind strategy invest ability and us Our efficiencies business, our long-term proven to drive in enables gain continue growth. more our to

clear. Our priority remains

to accretive acquisitions mitigate focus driving against land growth, management initiatives sustainable on notably and profitability. headwinds executing implementing elements development most organic driven control, will business externally and on improve We cost can we while

Let quarter by transactions. as performance primarily organic on second was for well X. growth Revenue by me the supported M&A highlights from land accretive Slide begin as the reviewing some contribution

powered revenue in stabilizing many of New significant was organic approximately retention as sales the offset X%. growth rainfall Ancillary coastal year-over-year, land markets. rates flat parts was growth country across growth and by of

The for development business expectations of our result quarter outperformed our as backlog. the a strong

projects and organic backlog. engagement for Our the on to team which second customer We be growth and about high-quality fiscal XX% extremely of remain focused is XXXX resulting markets development very remains year. robust expect new adding development in an in optimistic plus half this targeted fiscal

above as high initiatives underlying expectations, pricing range our the to cost half $XX and land of $XX for quarter disciplined was the fiscal XXXX Adjusted see management. guidance development million are end driven this by we our It starting and and that we of second clear continue of second profile margins in an our expect to million, margin million, is inflection point EBITDA $XX beyond. for improvement to the outperformed and

capital. by free stewards capital remain the than Lastly, our of flow more doubled prior QX, disciplined to and compared year. In XX% reduced we expenditures we cash

we to results by continued the focus underscore QX debt. utilizing $XX on reducing reduce to reduced effectively net These relative debt addition, leverage. million In our cash

continues around Slide power we see and pillars. Let's business three move our our to centered main drive remain to strategic long-term review the to growth. strategy in pillars to X This momentum

members dedicated our sales of locally on focused organic customers. force First, team XXX-plus through new growth acquiring delivering driven

accretive select strategic Second, executing attractive on M&A markets. our enabling into expansion transactions efficient and

delivers continues grow value and resulting customer Third, and share. investing services pipeline digital technology, to opportunity in expanded market marketing our proposition a differentiated in

confidence execution fiscal our beyond. organic XXXX growth and force business. in sales consistent drives sales for growth The year is driving expectation across the behind our strong Their

business to development customer our see robust. remains continue and demand pipeline solid our We contract-based in

indications not are any markets. seeing our landscaping Importantly, a slowdown we of in

very local our of our strategy acquisitions services acquisition new portfolio and markets density profile. That year cash slowed two multiples. the deliberately leadership fiscal Our acquisitions current existing being an markets, improve capabilities to enter prior prioritize enhancement have and we remains our M&A opportunities attractive attractive said, technical of specialized our select and position for and effort large services. pipeline at We relative geographic this to a balance our us to in landscape expand and strategic increase in affording years

turn platforms to to number organic Furthermore, Let's X innovation across helped several a reasons continue a drive enjoy more tool organization. digital net rates. initiatives of discuss has we This implementation fiscal BV around years and of a customer digital future-focused more to our digital growth business into in customer streamlined a engagement of industry is Leveraging our technology time launched Slide the continue we enabling our continue us bit tools detail. to now based have to features we Connect our roll one feedback. growth exceeding on new as horizon year, and transform to

Through continually awareness and to service upon site maintenance engagement assessments to receive one and improve couple a we in A BV sales we further place. Connect. to retention. of all spring launched quality with on submit access contact able are Connect confirmations campaign ago, BrightView intend their tool generate requests and review efforts drive of robust based proposals our was BV and activities service schedules weeks team feedback created This enhancement it customers in marketing view to conjunction customer omnichannel

larger information on educate hosting and commercial benefits interest HOA sessions seeing customers. are and with customers and its engagement significant to we our Furthermore, particularly

the of majority excited and fiscal expect we our this marketing digital proactively to end services unique engagement. our to continued see are the customer top year, be of and differentiated We customers platform. utilizing By the

over our expansion structure the near Let's Slide are to maintain long-term. move we margin managing to how cost X to discuss and

the you snowfall prices. lower X-plus top last and historically period know, high have average over profitability in of years. externally has line significantly including factors strong inflation business been driven spikes that Over As we in our time impacted total than fuel by seen growth

is To company drive help headwinds, a productivity. these Project reorganize the ongoing overall faster, mitigate this that Accelerate. we headwinds get and improving duplicative enhanced costs. the deliver and efficiency will to Project future operating potential better work work, company-wide efficiency and will eliminating program business launched Essentially, reducing against by drive processes done in Accelerate

strategically eliminating are be Furthermore, and workforce remainder the for our year of expenditures. for in through hiring fiscal The this discretionary reducing freeze. positions will IT benefit and reductions are reflected these marketing and T&A and result, a consultants the guidance managing from As expenses, spending, actions third-party next we we costs year.

In total, annualized in at million least expected drive $XX Project savings. Accelerate cost is to

As control. I offset earlier, these mentioned by our be may outside savings macro of headwinds

Accelerate, Project we across committed to addition improvement In our margin our long-standing segments. initiatives remain to

remain In pricing land track. maintenance, on efforts

have wage the offsetting succeeded in implementing last of initiatives, years most material our couple half we which Over rates and risen in significantly, increases. we year, pricing of costs the through these second of began last

drive result, land margin expect our we a to As maintenance expansion continue business. within to

XX times to months commitments in the increase by shifted business, the of during XX development to which pandemic, pricing in days last our lead in six And material In the impacted resulted allow we three to three contract margins the was has an development improvement in this costs quarters. to historically. compared

backlog focused drive our margin a continue building quality time. addition, to team In over development is to expansion on

even perspective, we revenue. relative which fiscal to in managing remained our billion with expenses, committed very From and flat corporate cost XXXX protocols management remain a corporate to are total on strict laser-focused $X.X more

can are see we you to approach expansion. dynamic As margin driving a taking

cost SG&A costs are We through and and fixed are operating measures pricing efficiency and reductions. offsetting and initiatives we our labor managing through expenses

business the existing success on our Accelerate We an us we margin The for in environment. confidence expansion ever-changing control development. to and land positioning give in coupled in deliver and continued margin expansion are what both initiatives macroeconomic with Project focusing can ability

of over like remain why Before to short BrightView I'd reiterate long-term. and optimistic turning about the over of prospects its some and it Brett, key to highlights the we

a have business. we strong and resilient agile First

customer our customers' value in sustainability. services our an supported industry leaders our in address able We investments with are to digital these invested We and heavily areas behind to unparalleled be capabilities by in needs. proposition

multiple and long-term that will power have opportunities and We drive M&A growth profitability. our organic

executing margins quarters. strong two organic are in our strategic and initiatives driving momentum against land growth for the expanded underlying quarter-over-quarter and delivered consecutive our two land We We in of business. years growth consecutive segment

momentum We the the expect this year. continue into to second of half margin expansion

inflation. we to including are enabling drive against external revenue mitigate business and Accelerate efficiencies reorganizing Project Through headwinds us the to of variability snow ongoing macro

in Our flow and free of improve strength XXXX underscoring fiscal to our model. business continues scalability cash the

in performance it financial discuss greater over Brett detail. will I'll now turn our who to

Brett Urban

I strong improvement. underlying Thank everyone. margin you, morning another to growth organic Andrew, quarter good am report land pleased supported to by and core and on

our priorities value. executing growing improving top our remain balance plans allocation line, shareholder for the consistently and well as that, to long-term create With our as turn let's that quarter. sheet results Our capital second profitability unchanged, on

revenue slide segment. showcases to for XX. Moving slide quarter drivers by This the

incorporated we decline is into our impacted to revenue a see, $XX was revenues snowfall, snow macro a As by due total you can control. million dynamic and below-average our guidance in outside a organic

for XX% For was second across XX-year snowfall XX% to our reference, the average prior footprint in quarter, compared at year. of the the

we growth pricing initiatives acquisition stabilizing business, consecutive saw as land growth eighth line by organic rates. land new well X.X% organic Land our our sales, by anchored growth, organic top In robust driven as quarter was growth solid of and retention benefits.

In remain development very optimistic of results expectations but the in well business, XXXX. of XXXX fiscal our by were pipeline strong fiscal due a to about of as our projects and mix We impacted ahead business the projects development in as came backlog.

slide total significantly quarter approximately million, by decline driven to year. relative snowfall, the impacted to on for now a adjusted the Total Turning million the XX. second million, below and which $XX reflecting EBITDA by average prior adjusted $XX details EBITDA of $XX was profitability

As quarter and driven results came was were within guidance by $X the in adjusted above roughly the the EBITDA our land our development Since million. end high expectations, outperformance for by EBITDA. of no underlying noted, Andrew range

on It's for a significant the clear snowfall that had quarter. impact our results

million slide to grew XX the excluding of acquisition-related million revenue growth. turn organic Total of from Maintenance In margin the and declined prior discuss by $XX both segment, expansion year. land $XX.X million EBITDA composed let's So by snow. approximately adjusted land segment to by $XX

headwind was approximately million. I EBITDA mentioned the earlier, snow $XX As

growth land maintenance As and $X excluding a our pricing, EBITDA. drove This growth impact, was focus management. operational snow continued adjusted on the driven million cost by our an we result, prudent in efficiencies

to of Development In year. quarter to points guidance the XX year-over-year up adjusted EBITDA EBITDA adjusted at XX million, segment, XX the the compared was for second prior high-end X% basis margin approximately our range points. $XX.X Development the of basis up was

second than this half more expansion Although with year-over-year of expect of consecutive our the declined development in revenue due offset to combined we cost mix margin material to we with efficiencies. year. to continue projects, development operational management able This our deceleration that marks this and quarter were strict of third fiscal

Net XX expenditures, flow now $XX to the million prior and a year-over-year for was quarter. year, review cash $XX in compared million million second capital the free $XX Let's quarter for to to the turn reflecting slide CapEx our debt decrease.

these As we approach capital a very results, evidenced to taking disciplined our expenditures. by are

In our target revenue total fiscal to of addition, less quarter. to provided the we are for X% or X.XX% range X% enhancing we compared XXXX be last to

million incremental We reduced expect this Sequentially, pay cash as to free our million expectations. flow versus debt down net benefit we $XX our debt. by our by quarter an flow this cash to prior we utilize $XX

our Looking our we EBITDA our ratio leverage ahead, growing improving and debt. to intend focus by on reducing

with working great Free associated and it to remainder Cares flow year feel than For to benefited for of XXXX. this QX more of the and cash of was improvement capital the management in flow continue free improvement doubled compared about fiscal cash one-time purposeful We fiscal a $XX XXXX, from the benefit prior million. Act. and CapEx, expect

XX review full fiscal now turn quarter our XXXX. outlook year the Let's to slide to third for and

EBITDA As $XX you of can total we million see on to $XXX adjusted million and of $XXX million. revenues total for to expect million third $XXX the the quarter, slide,

year, billion $X.XX total $XXX for $XXX $X.XX billion to of As of revenues full EBITDA and total we the million. expect million adjusted to

$X for to X% margin fiscal us if of inflationary XX%; the X% annualized prices lastly, Project land points; following: points; the XX in of half the a fuel year XX basis averages; million and expect margin anticipated the of Our small consistent guidance a assumes headwinds. organic to growth to of maintenance organic development north realize to from to development from expansion growth; enabling remain to $X current million XX benefit with portion the expansion net offset XX we of fourth Accelerate basis quarter, of second savings

come benefits through of XXXX. majority fiscal Project expect in the to from We Accelerate

strength We ahead. remain optimistic about the our business, prospects its underlying our of fundamentals and

and despite as snowfall and the the business. of XXXX, said growth first to year, quarter, expansion both strong in in margin last fiscal deliver development land we half For historically we our intend the organic low

path we've Andrew, expansion; Before like turning one, margin to the the address back we questions adjusted two how our to getting investors. number Number and plan to been from I'd call drive balance to that de-lever two, EBITDA sheet.

margins Let's one on XX. start with discuss slide first the and

expansion, margin focused on we drivers can we we As think are about control.

enhanced business. efforts pricing First, and maintenance continued productivity in our

Second, in continue expect offset business and will to business material we efficiencies to our drive our across headwinds. our cost enhance of third, improvement. management And the deliver margin development externally Accelerate Project cost driven savings impact our and

result and project our we adjusted basis points half of XX the year. guidance EBITDA a as As implies, midpoint of of second margin the the approximately of these efforts expansion year-over-year for

maintain Looking as normalizes this upside. XXXX, additional ahead XXXX, would expect snow fiscal to in to momentum we fiscal and we anticipate

highlight our Let's turn to second discuss question slide the and delevering. path XX to to

ratio taking are to two-pronged time. improve We leverage our a approach over

expansion free strong top flow debt. through expenditures EBITDA improving on cash managing And reducing reviewed. our line capital, focused interest working efforts capping are the second, growth just expense, our capital paying we are and improving down we I First, through and margin

to and executed over note our on all EBITDA our evidenced growing these results. debt. we important are time quarter, we of dedicated our levers It's this paying ratio adjusted as to Ultimately, by leverage improving down by that

to over Andrew. the back let that, me turn With call

Andrew Masterman

Brett. you, Thank

very Now, and for amid pleased financial proud let's up. dynamic turn we Year-to-date our progress to with slide and environment. fiscal of XX results strategic to XXXX, wrap a are the

technology to growth. our organic investing sales We and are solid which team on our leading executing is in and growth drivers, sustainable

consistent source of Our to a continues sustainable growth. M&A and strategy be

And expenses reducing cost maintaining approach we offset Project efforts build on our are from support prudent our Our a and managing headwinds. expansion that to lens, and a profitability ability pricing to Accelerate. through

to disciplined continue addition, to business long-term management investments cost In will enable our the growth. in drive

to of committed secular the macro requirements. in face and are the thrive changing We to positioning business external regulatory headwinds, trends

of stewards remain perspective, we allocation From a capital disciplined capital.

We to reducing the a flow underscore model cash to These growing improving and environment. ability BrightView's expenditures, the in are our while company succeed actions debt. the reducing and of ever-changing our position and dynamic free flexibility business, our capital business

as I right the I'm smooth over leadership month a and position I believe confident profitable that will the Jim the succeed. team plan for growth over the to team's the next efforts transition and President to CEO, and term. Jim, Interim and be partnering have strategy ensure and will to continue with BrightView long near

for maintaining and company's the on thank Earth. response the We want to to very and to creating, best our designing, all future dedicated optimistic winter landscapes continued enhancing and teams remain storms about their the their attention I

and for now call and Brett for Thank your your interest you attention your the morning. questions. will open for this I

Operator

Thank and ahead. [Operator session will gentlemen, question Instructions] begin Mulrooney. go from Your we now you. Tim first please Tim, Ladies question-and-answer comes the

Tim Mulrooney

morning. good Brett Andrew

Andrew Masterman

Hi, Tim.

Brett Urban

Good morning, Tim

Tim Mulrooney

BrightView, your on and congrats your Andrew, good tenure with luck at next adventure.

Andrew Masterman

it. appreciate I Yes,

Tim Mulrooney

You bet.

hear. you just through got you land wrong, dig any as the a I and said prepared in maintenance your selling things of numbers can moving wins net How new you're to this queue. think folks if customer sure are slowdown remarks it's which like seeing I'm you little retention business great more, trending correct In So indication in that, the evident But that you're a just bit couple into for is not of a I'm in year, Andrew me. now. trending? happening a is How lot the key season, me this idea that? your customer

Andrew Masterman

of And here in quarters -- that the seeing are some year pricing in offset new stability our somewhat it's were our selling and And key initiated rekindled we I tell we a to we're Yes, had to or a market. side, company. April can initiatives certainly, especially, ever May retention selling best as on one were March, obviously, or of months, as market you key we've in business March markets to that level. key the selling as the well the and seasonal was exited not month our last inflation the

I offset need think are that to to we pricing understanding increases our accustomed, becoming inflation. customers

stabilizing. in about each So continues results. made our No year-over-year sales it. question team confident, because of the to retention we've that is month I'm and improvements have investments that And our sales

Tim Mulrooney

a, Got hear. That's question month other That's CapEx. Strongest That's selling it. My to quite great ever. is about helpful. statement.

am I equipment maintenance means new pride trucks was You a flow, cut that down. costs for something about, those cuts of the equipment CapEx else. great keeping that's trucks new if and were those future know you but young it primarily, base, Because what of cash free curious your or that and keeps high-quality where I fleet yourself for on

I two a my line? down today or costs, Thank CapEx So is, guess question you. cuts year how might OpEx impact the

Brett Urban

Yes, Brett. Tim this is

Let and kind is, state. different One twofold. years where think management the like your CapEx me pandemic in other in we've question a address I in was business the past the years of done of

deliberate that we year, with snowfall, our to kind of this of reducing balance Given flexibility sheet. -- the CapEx took showing approach a

we're heightened future operating this X%. call. additional to well less anticipate than this lack and reducing As our you given, to now to X.X% X.X%. approach of expenses in adding then we a coming QX that originally year, enhancing in the where CapEx and as years And earnings we've cash question as guided any the taking target There's our OpEx, just your snowfall don't had think We about and on the been future.

Andrew Masterman

X% that. year. which resiliency snowfall, is And our sheet really able of be the shows of normal targets, company. suggests, balance This however does X.X% a lighter this have that to the in that a kind in flex I we our to years, we've to think not where withstand overall we in reduced Tim, that what

Tim Mulrooney

very Got you, it Thank helpful.

Brett Urban

comment. Tim, just last one

in fleet year, over age Your fleet point the our of we million It invested by as public age our Last in a on and year, turn highest or CapEx by $XXX of newer. we making the we've the a over the reduced invested business. fleet. it a year, of was company

this lot a us a CapEx, last flexibility of gives did reduce we the bit So, It more year. even investment year. to

Operator

Thank you.

Your Labick comes Bob, from next ahead. Bob please question go

Bob Labick

taking my for Thanks morning. questions. Good

Andrew Masterman

Bob. Hi,

Brett Urban

Hi, Bob.

Bob Labick

negotiations, So labor? of kind like in through can you labor I tie to And labor I -- so talk please? labor with the to it with about inflation? wanted start more trends little start then in your inflation trends bit availability availability pass guess cost your ability the pricing So and and a in price, to but then of just

Andrew Masterman

a I mean March is season. but luck we're business of peak speaking say, end year this season. better dramatically Generally slightly employees slightly. little spring into and the different. environment not say we've them is this I obviously finding with hire I'd certainly a of the about between folks deal more the to X,XXX May, heavy bringing recruiting But What ever seen We our having so would It's locally. end hiring the in

addition HXB a released XX,XXX after to for or released quickly the of were visas country. just than due available the acceleration XX,XXX the additional of released expansion rather and that XXXXX visas the very for then program by year the an In beginning government total of the the were at XX,XXX

We actually more than had were last year. securing in successful visas we slightly

last And so but the HXB into position of feel have to season, people very as we an we year. from we a local-sourced only go position that enhanced relative not also great comfortable

a I pricing. guess a to receptivity right at was question pricing on customers follow-up see your on pricing we on continue

levels managing direct see of level we understanding labor at this HOAs there's long which managers them. As have content most and other these I as things the property an they're in think inflation and

to And able and those, inflating the continues a our costs to inflationary environment with customers. discussion so positive they being recover are managing be that as they're see environments our around also

Bob Labick

driving margin you out year. of on you slide Super. you talked or about a lay half have core this factors and improvement, back couple nice Okay. of And think XX then so I a

to there And get the kind are the core if horizon? in expand maybe seen components the margins the so broad the to -- you've the today upon back back about bridge to time that margins of us a Could past XX%-plus talk in maybe opportunity? improvement key we're a what you XX.X% XX%

Brett Urban

a XX Yes, the a core look out saw deck and when EBITDA I'll driving we Brett. touch land snow of in improvement. the put the quarters that half in million underlying you have questions it's land if on normalize you Bob, there. business Yes, for on last for think the we slide I couple Slide at margin two improvement. totality of strip showing half land earnings in in grew revenue We slide roughly that and margin that year-over-year year-over-year a $X in earnings drove M&A land. roughly $XX organic million

So, quarter extremely basis in in improvement. underlying land margin snow, margin improvement see then excited posted the second you And a quarter normalized that QX development marked in for sequentially points development. well business once third XX of as

to in half of to basis second development the points And ahead second we're margins calling to in the as see XX margin continued will maintenance we points in half XX basis to of year. improvement the for closer the half to look year maintenance be of XX XX year up the the second and

of the So, development now we're and looking be would margin five at of sequential the maintenance improving end by four. quarters year

about equal. margin year path to margins, back as that to as be should being year, heading year momentum the things think next both of And maintenance and roughly of about roughly points XX.X% And midpoint half all margin of then company around which building going the it's XX expansion you pre-pandemic improvement on XX next the kind the the in that you into basis XX in this to development back of we're guidance. back that basis points in at seeing is and continued be think year,

XXXX. have fiscal little but QX mainly you as that in Accelerate in a about impact think Project that's then to And XXXX, an layering fiscal bit in mainly going

between and $XX million So, of somewhere improvement. underlying million that would EBITDA be an $XX incremental

the of then year of And XX% it the or range. prior way range. those in in takes which high averages you below that's is to anywhere normal, the to somewhere back up a back snow together, if low things put gets by you kind you close normalizes And XX% mid-XX% marching to path

Bob Labick

that’s bridge. Appreciate Okay, that super. you. Thank

Operator

Thank you.

question Tong. please next go ahead. from comes Your George George,

George Tong

on wanted Hi, to the thanks. Andrew also ahead. morning. best Good and wishes congrats I say tenure

Andrew Masterman

George. Thanks,

George Tong

to you you? second helpful. you're that half plus into What growth? half. growth would pushed deals does there you have do be Any into your backlog in development half of second XX% the first from details that much help guiding So here visibility tell growth the outlook? How clinch the would that Were

Andrew Masterman

Sure. me and booked is address development. with And both our in Starting into it fully and development, maintenance in let QX QX. backlog

that have it So before XX% many down comes by the or is ability plus not and delays we our by really too and to having subcontractors get us. in – our growth well it to secure

So really that's the really do. that's projects the the as only the of subs really that is they thing making rest normally sure going to impact continue that and

and as large confidence execute that. we have but to we summers by there is but – go most So and across enterprise the growth will that booked

business the is gives side confidence business, play business. around pulled really through It the side is that in from the ancillary ancillary variable place, only our of that we growth have. which we is the that On maintenance booked. us degree side contract the the comes into the The of

we those backlog. maintenance, have with But side actual is – revenue only is the is we ancillary variability again, to into QX, for growth see support X% maintenance booked of we us But of now right before rate business. of that in May that development – can overall into of look we the The results. indications course, X% moved business. maintenance we we have As need through booked to the contract into June, post kind

George Tong

you Has Got level balance in view you. when And M&A sheet. slowing helpful over your you're activity? consistent historical on the prioritize color. expect Thank your and M&A that's would it. strengthening And That's M&A then the near with cash to a changed? reengage broadly term as at to

Andrew Masterman

paid is of Yes. a and balance cash to issue this we million cash debt down here that $XX we're pay used right It quarter. just really down, sheet that prioritizing

We confident generate out as we we to picky, we're robust as as being M&A those But pay will – able at more to we've a it's at look expect We're as just look as million. we continue the $XXX It's execute right debt been being use priority now transactions little pipeline, down that we're today. cash to on as to primarily ever. in as ever there.

We going think expect towards to debt year. do doing probably flow always it year, it range look a just given look things lined X% accelerating of we range of to next somewhere X% we've now. between And as to transactions X% improve level. as they one cash that we're fiscal to if back end of lower into We're to before of three the that the as be And right we end up M&A. will be and we we'll the

George Tong

helpful. Thank you. Very

Operator

Thank you.

next Steinerman. ahead. question from Andrew, please Your comes Andrew go

Unidentified Analyst

is highlight to Alex two, in your contract you helped I'll all and the for and that a all Andrew for [ph] Hess in four then the has last land, – luck now on the right next book book ancillary us Yes, the follow-up. This degree on. venture you with thanks a have sticking business of in you how Andrew the Maybe some years? is of within could best wishing as three, Steinerman. even it maintenance that changed

Andrew Masterman

in very that in rate. X% base been remained a a grown our at of have rate, hasn't to look contract the think dramatic we modest Yes. is The very, general, I the the contracts at of of has stable. – X.X% maintenance behavior change say there It's property any owners. business, contract side I'd very business as the the to And it

three, evidenced property their have have by Not very they two, to especially actually the I improving the just rates four improvements in continue the And ancillary – years. slightly improvements. after to be interested increases property say as and over In to fact exit their or dramatic slight pandemic. continued we last but how that's think looks, slightly fact, that I'd improve our

think I approach property So been consistent. to general their has fairly management

Unidentified Analyst

cycle? on in Got then, but thinking term will view your that ability I in And longer it. anything there taking be that, caps your a structurally there land the is grow? route and next BrightView. on some mid-single-digit to step maybe BrightView maintenance your Is back hitting by then, organic venture to really you over know

Andrew Masterman

as I overall a there mean, the you the there grow of if out that to foreseeable organic kind to why room doable we at that's market is And in X% I fact look to given grow abundant future. a is have very No. There's X% inorganic algorithm, reason about as out marketplace, that range, we in for see well growth Yes. think sustained no ability both only that X% share there. the do. the

and able run to great attract X%, The and can folks that we to and only would to ability find we is able run And limit to retain handle develop them that ability that kind be we staff growth business. to level and to of X% our as the be in being grow internally looking see the to our digest be people to manner. growth of able to exceed that grow and thing able and branches are -- occasionally the jobs

there's to that the I indicative would our really ability market is think grow. don't of So anything that impede

about optimistic of at correlate basis opposite market that. to being able forward. consistent above the In on very rates fact, a going I'm it's quite grow

Alex Hess

it. you much. Got Thank very

Operator

please ahead. next Andy [Operator you. go Andy, Instructions] comes Wittmann. Thank question Your from

Andy Wittmann

best luck. Yes. Andrew, It's of been nice Great. working And you. with

Andrew Masterman

so Thanks, much.

Andy Wittmann

a tone and I the M&A bit on the little to guidance bet. ask point finer You range just slight given what's to you've reducing to debt. us. wanted wanted understand that I put change with in here maybe a

to this looking I were year. And that deals saying were notes, previously, there another my I deals year? at in guidance the think from closed still new million year closed going a there implicit the this that last different approach was you were correct contribute $XX this be assumption capital previously that's year is with numbers you as $XX expecting fiscal towards about those million allocation, of year. revenue probably this or was XXXX Are from that were that to to

Brett Urban

Hey, posted two about revenues year, we of through Andy, In this it's $XX the M&A Brett. guidance quarters million.

And not revenue any end. about assume new came X% if and any bank. tick do our X% on is in we given $XX we of do midpoint. to contributions QX or in debt So we the when the transactions, said to up revenue, higher we it with X.X% the guidance towards year, we would about were than million have transactions the just M&A that does out to more it cash call heightened And do at this that focus

to at that M&A in us of the minute potentially this the But at being looking one at revenue. end But more process. multiples point, year. Andrew I just higher push ago, towards additional would And we're and we're very they're mentioned this three a that transactions right selective for think range up guidance only that's if

Andrew Masterman

are smaller potentially the nature. deals that Also, to are looking M&A going relatively we in conclude forward,

to begin big should on XXXX, XXXX. cannot impact that fiscal any number them you X% year So have towards the have for expect build but overall to in significant

Andy Wittmann

you for guess, interest to I is, some for I in are expense helpful. this this that thinking about guess, implication hedges -- the That's Okay. year? put what's you've the or what question now that the in as outlook cap your make to just or year. to we exposure I -- rising cash so, question place upside flow exposure affects your and sure too it rate ask for corollary want free

Brett Urban

Yes.

last we in opportunistic put place about that loan very our April extend we're pleased term hedges that we've As to we're we're And to January. XXXX. last call, our our pleased talked in earnings in

we the horizon. on no significant have maturities So

curve expect QX our fiscal timing we expense, the million related XXXX. as that to the million capped $XXX based come And interest as some here to $XXX There's that cap. we'd the XXXX. We've for SOFR in on sticking we're but around then in essentially hedges, of XXXX into down to future go essentially

Andy Wittmann

be realize. a to you. you Thank number to to hope I That's EBITDA I hear that then, the used. Accelerate and was number cash what when wondering well. didn't helpful $XX cost that million cash you guess could expect as And Project I it be attached

Brett Urban

QX. I of would the QX, Yes Project associated that would the cash Andy, to good We question. number be in majority say, number material. the be Accelerate with don't -- expect

look be or it, be could would other the Project million towards from the Accelerate, As Project items. it in end see QX, $X cash Accelerate, items But you'd than which only beginning any one really the net impact of that, of at call QX. of cash FTE the employee-related some would that sometime consume you to $X million,

Andy Wittmann

way, guess, your understand kind of good. a bigger want in here Also, that of the prepared is because one just just you're to little that, bit there Andrew pipeline I is helpful. what heard good picture kind what is for macro times remarks several I different booked. I And you're Backlog then development thinking Okay. very you. about fully that the

So the any the think there think macro cyclical could if said but from macro of about I the had your the that's million think $XX of that and you're we would change. about kind up part But there's -- that good. and when qualification I would impacts you talking Accelerate, business first. as most it's you always hey, show Project also like

So you hedged a little bit.

just it we least I just out? how comments, -- the way you're about thinking plays this could upon the at So, expand think you it, so can about all

Andrew Masterman

Absolutely. Yes, first with booked into booking development XXXX now of into rate faster a we all we at are than XXXX.

to kind slight better actually at we X% That's XXXX. a again, XXXX, growth. gives more XXXX positioned organic pace we're for and booking than So did X% confidence us a faster of into We're even which growth. vis-à-vis on that's now

visibility that rate And the Development things the us entire about that the give have into bookings future of confidence of business. in the the best overall some that's does segment. our So out

that to you see intended fuel whether spike macroeconomic spikes, has the and to weight other of snowfall the should or is of maintain significant manifest potential or say Accelerate continued if grow But headwinds, of able on the be the comes which is macroeconomic on itself other comments -- I variable factor, it's on margins Project the what past it event, cost or potential that level to This business Project unanticipated to put to When profitability. other kind offset any my P&L. P&L. Accelerate in is some but there mean by no the impact expect

Andy Wittmann

Okay. $XX factor hedge know recession demand gets that million was where That's didn't and if got you a hits more clear. back side cut ancillary that I in. on the to equation

So like on side that not demand -- shocks. shocks focused really sounds cost you're side it

Andrew Masterman

Correct. correct. absolutely That's

Andy Wittmann

you. Thank Okay. Got it.

Operator

ahead. I Please no turn Thank are go you. questions at will further Masterman, CEO. time. it There back Andrew to this now

Andrew Masterman

I and for Thank want you, once everyone forward your you operator. talking again, with for be participating interest And thank look as and again And move the we safe call to BrightView. to today forward. in in

Operator

call concludes that lines. and Ladies participating gentlemen, you. disconnect We today. Thank ask your for you thank please this conference and for your you

BrightView (BV) 4 May 232023 Q2 Earnings call transcript