APG - Earnings call transcript Q4 2020

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Operator

Good morning, ladies and gentlemen, and welcome to APi Group's Fourth Quarter 2020 Financial Results Conference Call. All participants are now in a listen-only mode until the question and answer session. Please note, this call is being recorded. [Operator Instructions] I will now turn the call over to Olivia Walton, Vice President of Investor Relations at APi Group. Please go ahead.

Olivia Walton

you. Thank and call. joining everyone, XXXX fourth you conference earnings thank morning, our for quarter Good

on call Becker, me Financial Lillie, CEO; Joining the Tom Officer. our and Martin and Board Jim Franklin Co-Chairs; our Russ Lydon, our and today President Chief are Sir

from the future this on Before in company's call not regarding anticipated statements, are would based are intentions trends of our matters expectations. statements. the certain I release and and and the press future begin, that guarantee a that results historical that SEC, to release remind could forward-looking our earnings we to that events known and or materially implied are may announcement risks expectations, projections cause are you facts. subject actual performance, like press statements to company's and with on from other other expressed such statements by These results and which those unknown In not and or forward-looking factors we are risks, filings our cause material differ uncertainties differ future detail performance, to

make. statements of today, March may obligation to XX, Our update any are statement we we have forward-looking and as no

XXXX As posted presentation a financial a reminder, website. performance detailing we our our on have

is found over include our key financial of be our other these to press comments reconciliation today Our release will Martin. also my metrics. in It operating turn regarding presentation. can non-GAAP now to items The measures the and and information and pleasure other call

Martin Franklin

have resilience the New and delivering on several model the the and a listed our long-term of our recurring milestones us pandemic, the execute managed shareholders. everyone. strategies York against Thank the as results the you, became the We for a to for challenges while business. and our long-term our company. XXXX year was on completed proactively for We executing revenue complementary Exchange, to Stock people well services-focused that our allowed continue unique morning, believe the good acquisitions as of for goals Olivia, company business of

for avenues entire of investment, significant are services XG, existing service fragmented. Russ. with customers. we strategic whether existing for multiple which attractive services as business. service for safety organic thoughtful and of as we that retrofit for the through focus buildings, infrastructure the the needed leadership and growth acquisitions. ongoing markets the hand see the growth growth contracts over I'll to as With life the continued We APi, upgrade that, required across organic new the We disciplined We for much opportunities for providing believe growth grateful it delivering and call technologies, M&A through or offerings the efforts highly for and are Equally the operates supporting be prospects, The accelerate organization. in , expansion such see company can

Russ Becker

Thank of our morning, you, taking communities remains health priority. we the time and employees everybody. of our which you in The Thank serve one and the our join each number well-being Martin. call. for Good to

the reinforced $X.X COVID-XX $XXX goals. to negative XXXX, in across the I to a and of of our proud compares you prior more safely continue key to made decisions X% December that the tough financial entire the despite providing to am and year to on summary by and adjusted will for to the primarily business execute strengthened our XXXX, customers highlights margin This of through who believe faced to and sacrifices in I and revenues XXXX XX, project us results strong results, organization million the focus headwinds year and our drivers trends serving long-term selection, and over environment. in for allowed the organization efficiently, team. start disciplined ended today's or Tom, expansion of for billion. XXXX segment in outlook results macro our period, each guidance XXXX in commitment Our We performance from before include impacts solid our the to call Key billion net by compared $X.X the prior walk detail. turning of the our XXXX due one, declined will period. following: year and

represented goal Second, service continued helps recurring we more the success in build business. growing of of moat consolidated to a net our believe revenues. which Service our revenue, approximately around XX% protective ongoing

exceeding Third, well $X.XX segment, million a Safety points, or as mix is of job site our driving an year. temporary negative margin adjusted was share Fourth, the of increase of as Sixth, counteract improved $XXX operating million, increased street by successfully containment of estimate from all driven margin primarily and conditions or expansion cash by Specialty basis $XXX segments adjusted gross expansion improvements. which expansion XX.X%, Services gross labor impacts pricing. execution XX Fifth, prior work, margin margins of EBITDA basis early per $X.XX, and margin three to flow In of efforts XX.X% XXX points, largely by with driven increase adjusted X.X% diluted consensus per cost earnings of share. of represented COVID-XX. productivity,

pandemic execute national-based margin broad expansion customers pre-COVID-XX our ability variability focused variety call, COVID-XX to the discussed relentless through in focus a including and culture, amidst on compelling on focus dynamics, us our continue we'll leadership across the recurring ability testament factors, remain for relative our having differentiated geographic structure, driving Our its and on execute we markets, decision-makers, a relationships projects, of We allows following. and maintain the our objectives, end footprint, which growing service to industry diversification to close related and to is of customers. as the local with our revenue, last our also ongoing cost to while disruptions

service continuing revenue. revenues recurring mix from XX%-plus of across goal improving all our to long-term towards our segments our First, our come of of and net

estimate approximately XX% margins and are revenue gross calls, have than contract on mentioned revenue. higher on that we we inspection gross on As on service average, margins prior the

project with reducing rate. on customer a selection, disciplined Second, continued our and loss focus contract

customers, new and pricing work increasing for increased includes attracting wallet repeat from and organic growth share increasing services customers. customers through individual opportunities. This Third, our with demand

As do which facilities, example, the something bought we Group, customers the defibrillators. are their provided now Fourth, U.S. Since defibrillators, a strategic we in to their where didn't SK offering we FireSafety are is in start execution. to they service when M&A process, to services an ability we our implementing we're going already

of and move we Jim opportunities Our we with expect M&A Martin opportunistic robust, through and acquisitions pipeline continue as incremental explore is to to XXXX.

to transactions. we which capacity better our us improved we important allow an to expect will leverage to additional and what business move driving and which includes also leveraging further this accretive model, value. we SG&A. to as scale expect will with This ongoing of business to as procurement Fifth, services absorb to purchasing margin We processes, significant us a closer allow margin This expansion. to transformation drive view shared project. ultimately our Our balance sheet we for strong, efforts tie true -- efforts platforms technology is and to and tool increase process through includes shareholder have our expansion refer accelerate

grow such year opportunities year we fulfillment which XXXX We have the to higher about as and health one our End continued resiliency. entered number distribution lie COVID-XX, business strong serve, Services. data backlog, centers, largest a in inspection show our service and their the with ago. like high-tech was that the slightly markets excited than are has ahead Services, just that is centers, that to is a priority In we revenue. through our We Safety for business. it care, resilience shown feel Safety segment, and

systems Nearly continue we by for of believe service inspection between a to drive are inspection revenue annual to or existing will force first, Historically, In cases, dollar law all facilities have covered filled have statutory the that which by required that on basis, safety have inspection national We capacity and whether sales $X to inspection work lead and facility to empty. service build an go-to-market we work the every growth. of system of most generate opportunity revenue, our strategy to is inspected our is $X the selling coordinated regardless further of work. requirements. life

on and execute We to create systems. inspection and with programs private our customers existing we Specialty our contributes who for macro and natural to our is committed which resiliency example of large participate higher-margin the with of in relationship work also public work that business. goal that progress, with a future. if the Services, this utility distribution Services. gas to volatility, and have well-capitalized our will much customers economic capital of water our service well project-related work customers, projects partner continue replacement despite the is with that stickier know in that negotiate we allows to Specialty In us An

natural in tailwinds, and distribution growth under this visibility. in modernization. to by supported segment and including infrastructure segment high this expect provides Agreements build-out, Master We gas us be executed is secular typically Service a with degree XG of The grid work

as top Services, strategic our have margins opposed the In Services. selection a growing line. revenues, Industrial than which through will anticipate total project to industrial net we Lastly, less of represent disciplined XX% improving focus we on

to like are We would maintain ensure are discuss to Tom systems companies the in on transmission which our to statutorily results their required to call growing pipeline is side focused existing by they transmission, Tom? the of more over law pipeline as hand I integrity are driven financial now to detail. safe.

Tom Lydon

negative to and I'll in consolidated year months revenues by Thanks, three reviewing our for or conclude strong impacts was start well to our ended million million our Adjusted attributable the results good as X.X% December $XXX primarily and guidance. million of project and segment-level net decline liquidity, The selection. compared Russ, XX, XXXX financial as discussing COVID-XX period. and prior to by XXXX, balance by $XX morning. disciplined sheet declined and performance the $XXX

margins Adjusted ended of projects. Safety XXX billion higher or XXXX, XXXX, year prior billion due the net of to negative of increase increase revenues ended $XXX three was $X.X disciplined in primarily by Services. For selection representing to revenue The in Services led and XX, decline disciplined compared attributable mix gross million the primarily decrease point compared declined execution service in December combined period. year. project months with and was December $X.X and XX.X%, basis to impacts prior X% COVID-XX, project to to was total volume to year which Industrial XX, for The the selection, adjusted

gross to the with associated XX, costs months gross basis XX.X%, was the the three For compared prior call. margin EBITDA due was mentioned to point increase XXX was XX.X%, in company. with to which to margin increases expansion, transition period year for public in by XXXX, December consistent ended XX, Adjusted offset a representing the margin the year a December ended earlier adjusted prior Russ year, due XXXX, drivers

adjusted containment basis For XXXX, year XX.X%, temporary point representing early compared to execution the by increase margin and ended our COVID-XX. the the efforts a largely December SG&A driven XX, cost XX margin EBITDA of expansion impacts gross negative of year, the counteracting was prior

remained cash generation and has sheet strong Our and liquidity strong. our continued, balance profiles

working receivable The XX%. For cash the balances was our free in $XXX million positive our the driven by adjusted approximately in flow increase that resulted of accounts drove was to rate a cash December in adjusted fluctuations decline cash the XX, in capital capital revenue our reductions cash other representing in in net prior million. $XXX exceeding of our primarily XXXX, was levels increase And working as flow compared flow generation. conversion and year approximately $XXX XXX%, goal ended million, free changes flow year

be flow under cash taxes payroll million the and December two of included the the quarters CARES resulting in XXXX. XX, XXXX, equal year of will installments of repaid deferral $XX Act. ended operating in from fourth the for This certain Our benefit, XXXX

fourth quarter, with accretive $XX we share of cash During flow repurchase. our a the million prudently deployed

total we $X.X we $XXX our have of liquidity, cash comprising billion X.X cash times. and of revolving As of million credit in from of borrowings our We organic equivalents calculated of accordance shelter-in-place and basis for proceeds of mechanical of more our adjusted results with due XX, months warrants, to further to ended borrowing Services. December for EBITDA XXXX, services. approximately XX, COVID-XX, Safety our year-end, approximately net available had impacts agreement, an debt resulting XXXX, of -- and on as our primarily exercise declined $XXX to negative outstanding December three million the X%, million our received cash orders, revenues Safety detail access $XXX Subsequent approximately under million beginning liquidity our net Services million on was the with ratio, facility. gross three the $XXX of outstanding debt with timing will such for building discuss I restrictions strengthened which $XX by along demand in of the and segments, now each profile. in

and on to ended year XXXX, the of XX.X%, quarter. organic increase segment December the for an ended ended the December the point to Service revenues representing XX% by Adjusted For fourth net approximately revenues XXXX, the I margins work. service were factors three three year of represented declined, month revenues basis, XX, due net for to respectively. months mix mentioned X.X%, XXXX, compared XX% due improved December for prior XX, basis gross year the XXX and XX,

ended Adjusted XXX by period. months increase with margin to was the relatively XX.X%, year the XX, was For XX, year, inspection was year service which the of XXXX, towards revenue. December for basis point representing mix work December three adjusted XX.X%, ended gross driven primarily prior consistent XXXX, the margin EBITDA compared prior and

on For basis, X.X% the three to EBITDA ended organic by along job representing due XX, an project improved revenues prior as a XX, of of deferrals year XXXX, timing Services XXXX, projects. the disruptions, COVID-XX, execution. Specialty such of for stronger basis adjusted and ended December due mix to work impacts compared net primarily, negative XX.X%, site and the the with project months was increase point December margin year to declined, XX and service

disruptions year negative representing of deferrals, year. December declined prior and organic XX net COVID-XX, by December an site projects. XX, margins ended as X.X%, on For timing of the XXXX, ended increase XX.X%, the Adjusted XX, project largely months revenues basis to job point such for gross due the was XXXX, impacts three basis compared to a

decline margin increased XXXX, to ended gross pricing. increase XXX three due December prior was adjusted XX, months the year prior year improved the to and stronger negative a Adjusted labor joint compared due compared XX, representing to year prior the COVID-XX of a XX.X%, the the productivity the ended for was XX.X%, XXXX, year basis EBITDA basis For in margins the December and XX our representing from impact point period. contributions to point ventures

year including ended December XX pricing XXXX, was due our the contributions EBITDA XX.X%, year basis margin a to representing point from focus XX, project For improvements selection, prior December to adjusted the stronger months the Services, on in compared by continued and in increase for XXXX. basis the on Services. The XX.X%, net XX, an Industrial Industrial declined XXXX, ventures management joint XX.X% disciplined and as organic for revenues strategic -- In year, respectively. X periods decrease ended year ended as decline and both of volumes result improving gross XX.X%, growing of the months on margin to was to primarily customer and conditions, top XXX to a line the our negative three focus COVID-XX. ended site in by the impacts increase due better margins weather. XX, representing Adjusted basis December prior a opposed the was point compared primarily driven projects XXXX, and favorable project job selection, and

XX, three was to was top gross to line. EBITDA fourth prior result a point XXX increase strategic basis opposed compared basis I representing months quarter. growing XXXX, a to the the increase a primarily margins to for ended year improving For XX.X%, on as compared year, point year mentioned adjusted December as ended for due December XX.X%, factors focus the the of XXXX, prior our the margin representing margin the the XX, Adjusted XXX

margin margin year prior largely to XX.X%, representing adjusted the improvements to For XX, point year, due a mentioned XXXX, the basis increase XXX December gross ended EBITDA earlier. was compared

to move guidance. Now I'll XXXX

we and billion. in $X.XX will range adjusted expect between press for detailed billion release, revenues net As $X.XX XXXX XX March our

We million expect for between XXXX and range EBITDA $XXX $XXX million. will adjusted

our XXXX I anticipated expect the We approximately spend level to a in more as call to $XX turn systems, mentioned, in we return business are expenditures approximately now capital of normalized we process procedures, over and million. previously our total to processes of million. And and million Jim. transformation $XX for of spent XXXX will $XX investing

Jim Lillie

across on demonstrated balance on Good goals, services-focused and XXXX financial strong company's to the of ability challenges sheet its the to recurring to pandemic Despite execution the the the driving additional a all its company's deliver results. team's the business its Tom. speak continued with goals, capacity acquisitions. morning, presented, accretive and ability model. cash growth Thanks, to We everybody. focus higher-margin segments year against revenue APi's continued the ended of deliver and plenty generate absorb despite to strength the

We our XX. are growth expansion to providing expanded environment. holding earnings, to opportunities, an and future flow and addition the the and discussion looking M&A Thursday, and our including highlight commitment to key on free first We company to outlining in on update Investor strong Analyst initiatives, forward driving cash certain strategic plan about margin Day April

in in delivering we reminder, XXXX; which, to average; fiscal average target revenue achieved conversion XX%; cash long-term SG&A; targets, progress four, and to leverage of adjusted above previously expand XX%-plus EBITDA value the times. are: of year adjusted over remain With leverage free industry maintain stated times our XXXX, confident net margins ratio X long-term by growth long-term high earnings our creation growth; continuing to the as organic single-digit X.X generate flow a

warrants, debt-to-EBITDA X the to the over call current to ended know, I'd year above now ratio for you open X.X conversion the times. EBITDA we times, of back operator, while the slightly call As -- with is net Q&A. the our turn like the about and to

Operator

Andy from question first Kaplowitz [Operator of Instructions] the line comes Our of Citigroup.

Andy Kaplowitz

already major segments but higher at growth you've was organic end giving QX? of comparisons, forecasting any Specialty confidence give you in year easier you recover forecasting the high us in a of update got at ago into know in you're but on 'XX. year, we're QX, growth We your that And and APi's slightly you continued given talk the than mentioned the the end you can Russ, Safety whether single-digit what acceleration? can has to for is backlog about

Russ Becker

well regarding come going with with Well, in of the the about we've fall. we provided we -- good February, through quarter. way as QX, provided. confident weather still QX during is we've but the that to at in our month we We're guidance dealing as guidance of the I -- where as to impacts We're mean, COVID where continuing felt and deal rest feel we work we're that feel some we're

to look moved Services beginning as up and the of were Safety plan we and customer mix, we we into and Services year, project as right system. segment, at integrity Industrial that focus i.e., in segments, drive was As continue on the associated to growth down for the along to with both and try the the the the opportunities all the we the continue transmission right us Specialty backlogs as in work was

recall, I quarter you had of one on Safety third also, -- at shared up were inspection think our at quarter. call, I basis the I if during X% it the Andy, year-over-year Services So that was think in end point, a revenues

everybody While with inspection I'm X%. up ended the year that share revenues to happy

is fiscal that's going we and a So off earlier accelerated positive $X quarter, this which the for service our focus us to we And inside continue of segment. we're builder work. of worth to fourth move show inspection some remarks, that the into some to us know between generate is emphasis year. of we Because, growth really where for that as work that again, place of the and back $X some some actually momentum going that through and

give this move good So if I into those us items, will, confidence you we year. as guess, two,

Andy Kaplowitz

[indiscernible] Russ.

Jim Lillie

of I we comp remind it's if we QX. that just correct you you in front have Andy, didn't a to everybody I I that the know be us. disappointed COVID in didn't want on Jim. have good fact would

there's And compared quarter so of QX as to actually a think comp year. of as is last relatively But said, progress. tough lot I Russ a

believe relative quarter. revenue represented about you earnings to service call, the I the presentation, the XX% If at in look PowerPoint fourth

this focus seeing the we as is of service we're profile, us driving certainly, move higher-margin which into year. helping a revenue, So

Andy Kaplowitz

to up XX% starting you're say take think really Jim, in the do more that's QX. contracts? up terms where of follow share And you that what I growing Services Safety exactly of of you level Would The like could in XXXX? would you service get on. in service to number

Jim Lillie

Russ, I'll you. leave that to

Russ Becker

it's aspect for shown business. organic mean, want that of to it we're I some inspection we work. the from our of and of think is, come Well, that will this our our but again, we've mean, and emphasis, of our to service lion's growth, I be continuing project-related forecast share growth try the I in grow reality and to X% year. that And focus

Andy Kaplowitz

sort your more progress can And Russ, But relatively gave for Great. talked And about of already And detail then headwind how you Maybe larger margin sales on cost 'XX? back XXXX us and of for expectations the coming margin. you is making sort there? you on out. in give structural the growing you color cost just two see equally little you're finally, do a in temporary segments? much

Russ Becker

is guidance I can that XX.XX% of capacity is, really you much my back and entertainment is back the and that's general, level. other we and the we're provided and will and to between And most fiscal itself and types those we of expect good basis, general to the make And the goals, towards that's we achieve margin travel expenses, fully XX% share expect returned will certain normalized Well, of that cost, probably a more a a our business, regarding cost an thing, more expect that. the level. types probably on year But, never which year. expansion at thing. more come again. we that EBITDA temporary the We're and of expenses normalized really to part, and normal expecting that finish mean, been the to progress response, this normal positive we've most in have a in travel than There's yet, Tom, the operating lion's to haven't entertainment maintain for business a complement cuts through reality that and

Jim Lillie

Andy, in year. add, Yes. would we that last I took big the just SG&A QX remember cuts

basis, that QX year be So growth as lessening and on business. we'll be EBITDA that natural, will comparable, the see a COVID then march we we see QX in and and our comparative the the impact see through the more tougher as on

Operator

comes of line Your UBS. Markus question of the Mittermaier from next

Markus Mittermaier

follow sort incremental should Maybe said, XXXX? at that these target? If Tom X, have as buckets, up in and then I we accretion margin last about in about I'll target for year out remarks, that how your on this the here Russ, $XX of million of roughly? different under would from How the X split guide just you XX% get just just that the transformation, like that element, how think towards big to transformation XX%. by business bucket, mix, on as mentioned towards over Appreciate XX% you selection, XX.XX% side prepared $XX year's And the think XX% getting this sort think the in project cost business the years you of the on for margin you million. between that next

Russ Becker

the, I we buckets, will, expansion. the the you break if we Well, individual don't guess, of find margin where out

contract customer silver from one, selection and factors selection in of will to a recall, you a rate. it's that And come number bullet. than singles our loss bigger hitting us, around any going the is reduction is one contribution that If of project more for to one number places: lead

area. that's So one

to service the be, of a stand would to our reported model, it. margin the came us of as department, costs leverage and towards two towards business and of will, and continuing try the shared One there's entire will goals. is we XX% XX% in from And Second revenue approximately XX really march a you buckets. the enterprise. we we mix. And that our -- drive improve to to scale Inside our be define business which procurement would service, as really across our transformation, And work increase reduction process moving SG&A. expansion up leverage our contributor we second to our as allow true if

M&A you businesses and expansion with It's Next would and margin then And continue and be execution pricing that the would opportunity with that I we -- of going you tell X.XX look point XX%, goals. our work margin to and can't or I combination of And but opportunities on. that the efforts X.XX allow achieve that you our very that. eye improved important we're from in increased across different say to be a we point to we goal that just that will of sure M&A expansion lastly, to our tell strategic just to achieve that's going businesses. all very accretive Follow us. us that, improve high that the to get have this making it's that's better from something to those and the have confidence is we

Markus Mittermaier

that so on you've already next the of on mentioned $XX years? -- XXXX in the we that that remaining model or remaining the total on over the you had Great. And million How business for $XX cost or the million Tom should maybe just for process. million kind then $XX XX million

Jim Lillie

Yes.

will at in in the come I it and then to remainder XXXX. of the half XXXX, we think look think we three first the of majority as that, quarters

Markus Mittermaier

then on briefly Okay. That's just grid. helpful. And

the You flagged obviously, on out infrastructure grid, specialty your that side? today is an upside mix potential investments. for you of big the in How

Russ Becker

and give infrastructure color. actually bill, Congress we you can then Let's an wait for approve some to

Operator

the of Your line next comes Julian Mitchell question of from Barclays.

Trish Gorman

Gorman Trish is on Julian. for This

progress to last question So XX.X%. from margin It good industrial. one just XX.X% maybe made year really on

as just XXXX? and are Safety little margins Can rationale bit higher Specialty. talk the in now you unwind than So a guys same for more about the

Olivia Walton

you're just confirm, businesses divesting in two to question, rationale XXXX? your the Trish, about asking the Is for

Trish Gorman

and Safety I -- well year. we're just of the And like there but in called than Yes. so why because if margins out you selection much just they this you taking and as everything, had light the performed some higher for and the margins same can the color seem that being the guide wondering industrial, down think give project Specialty? more

Russ Becker

really bringing working was, was was the number the project an to selection that speak, customer Well, sure contract that making I favorable and by right and profile such selection all we the risk it were so that were in And increased terms that, and think focus to us. one for and design. place under

well. continue oil And to is -- we it. so taking gas our really business was have really selection it's Number has we one, to exposure side two, disciplined to that there's you sort And sure that. the -- -- service focus the to is -- much some emphasize we're And able that us one in as has space. transmission version in approach are our the the continue the industry. also that we and tightened, project their in opportunity that it of And making change forced as the segment selection emphasizing be that work, very market integrity that as be and number to of to and that customer

it's that that to combination designed. sure a we of can perform the So make are segment to inside efforts happening continue as

Trish Gorman

maybe just for Got it. And helpful. cash the this a year. follow-up on flow outlook That's then

year? about conversion then the anything you maybe working CapEx you more term, around Near million. there? through If out the EBITDA is to $XX in still kind call if of XXXX, think mentioned movements I XX% could And capital the talk there's target?

Jim Lillie

Yes, sure.

working the XX% numbers and we that receivables the grow, improving in and our it, but see march back we're positive put we each the with here very absorbed comfortable we due that, it movements, anticipate as provided traditional adding get profitability coming that, XXXX revenue, as flow down the about revenue a the as will that if cash year, is the for to good. levels. The capital more We had yes, think that's us So declined, that in we're quarter. the lever up through capital COVID-XX, positive you working to and will it adding of that target

Russ Becker

But Trish, unique to there's cash this what's no occurring year. out call in

Just up, receivables see more you'll ramps up. investment and as dollars business go

Operator

of next Baird. Andy from Your comes Wittmann the of question line

Andy Wittmann

looking lower-than-expected surprised the a lower the expense I from I I just we in with corporate quarter, were guess, than that -- was was you guys. I little thought least previous conversations for at EBITDA

was there expense us? in corporate quarter anything you was notable if I EBITDA could Tom, And wondering this the so if for that is address just

Tom Lydon

No. Yes.

as where the corporate all the segments, got we the their had cost getting from a team bit energies. the -- delivering into segments they're them segment move little of and actually through of we've we march our from segment I and to the members aligned think year, actual

our think $XX than million that, I of think, at look other you in could would quarter be So we about. a ballpark that that run kind a going-forward rate we'll basis, on

Andy Wittmann

Okay.

a think jump. So I'm I'm What's and And at talking this not it's we've this about if seems to like -- XX mistaken. the between XX quarter, quarter what difference the looking this XX I so seen then big quarter, I today? you're guess,

Tom Lydon

of benefits the were out into Yes. about items moved restored we're the the fourth the the allocations year, talking those XXX(k), quarter. And there of some is the to some we what various and to and corporate of segments the in

quarter. the So disproportionate in down that in up was in it quarter, lever it was the segments but picked

Andy Wittmann

timing in mechanical that mentioned I then you And guess, offerings you Safety, around Russ, particularly Okay. provide. the

that I you quarter. that or mentioned last quarter as think very similar well something to last

what give what around in you on commenced little here bit So for Or to discussion waiting us that progress? these Have of XQ? just were a I means? in that time delayed are was XQ they projects hoping XQ, could

Russ Becker

health as last year, went financial and then they sector was, that also of in. number as HVAC bracing sort hold as out, project-related but in a was industry services we the work, that the the relates care we the specifically so to kind in for to lot COVID found the health was themselves Well, situations and part care deferrals space. of just everything health Yes. to through that had, middle it of care And trying on one, the the our

seeing suspect forward. QX. start from that would on we that up. But we'll all of is that activity to we're is ramp and So QX that I planning will in more moving were QX we appearances than today, -- in see everything

Andy Wittmann

that just in had And was just mentioned you wanted large some during than you some dynamic lockdowns the there your I ones European did, against we've new included business were that And impact But then wondering particular, it's initial performing the a are the probably fairly And base acquisitions And to think had had slightly just Europe impact. call. there far that your -- to the here so your that expectation recently so COVID, just I it to is? question. Germany. purchased you obviously, announced what that's the my business on I new in how these expectations had and for? acquisitions. COVID has more situation, domestically, final here platform, seen you I on including touch large

it'd So you. update worth I an thought from be

Russ Becker

no we're XX% comes actually Germany, the that to fourth has not to performed that good see Yes. That's question part from But expectations. revenue They're relief bit choppiness. the where about question. there's Benelux of land really -- and in I here. say just there, of positive. that's progressing a that going primarily it, fair of yes, the feel bit we're SK just no line about seeing dealing the for business dealing in the the like it going good of in a as it with in We're is been year, of restrictions. up -- with -- impacts that increased north in We being the service, starting over to little with like a little to dealing they're with forward. very is There and see starting it the But we're little are Scandinavia. question we're relates we're they're so because Again, bit they a would seeing lockdowns. quarter,

things have in with been line general, in So expectations.

Operator

Your question CJS comes of of Tanwanteng next from line John Securities. the

John Tanwanteng

end now. or on impacted pressures rising, of people if you're various And pickup maybe little prices trucks by steel lower your a get I prices kind of in seeing availability right inflationary this. that have fuel there's the to know seeing color want just components is any that been markets? other more I maybe then

now? priced your guidance? you Just any that seeing are any have And into right you

Russ Becker

for you our I point and time. I business project one some would for so period right? model. of for have business bode sure, factors mean, that prices mean, rising I our been commodity Yes. well size. is well, average to Number a our of couple

is at Services $XX,XXX. Specialty So size $XX,XXX. And if average is our in you Safety look project Services,

types steel you're some the not pricing. and going And turn of rapid be vulnerable projects, quick so very escalation, to around of to quick specifically hitting,

for that positive part of So it's us. been

Specialty being and not at Industrial Services the is look even of you material Services, necessarily our If by customers, supplied most in really and supplied by us.

their into long on tracking for regular said, a to We certain a weekly our we on escalation businesses from protect communicate where being in so that are, degree, with we're how somewhat to prices been commodity all about about a basis proposals themselves commodity rapid that. and And and we've we see time. documents. prices contract going, properly their basis in a With immune

for So over all how good feel time, it we we've really of but been period it. about we've some managed

John Tanwanteng

to to then you do least EBITDA, perspective, acquisition environment, your tuck-ins just valuation think the changes the at have X the from historical M&A skyrocketed? X smaller see where I current your at And any in ability levels, drive in times times multiples

Russ Becker

X and we're we times, on model, that buying funnel for same business And robust opportunities and -- fit tuck-in to sellers and -- in in times we a multiples that have part, the focused right their most M&A X execute businesses. right typical those their the family-owned of the are And APi from employees. times, continue and X finding home for for range. we see So with in

rate you equity-owned firms, And lower multiples. have so not as when to those acquiring so as, a speak, much. that, businesses so Private find greater you at much success

ownership And of matters. the really so business, size and all who the the that is it's stuff

John Tanwanteng

if then increase is by of recent, build investment how one. And foundry that meaningful is view, or billion? a out customer last those I'm How service in is you yours. their I to $XX very is you have you? believe Arizona facilities them? their to Intel a This meaningful not Did And sure large of but so kind announcement

Russ Becker

very ours, business facility. we So and Arizona at do is a Intel their good customer of Chandler,

So things, those us. a of and types any is expansion for typically of sort announcements positive

Operator

time for have one We question. more

Your come of Thompson final Thompson Research. of line question the Kathryn from will

Kathryn Thompson

and a margin job improvement Industrial done On job appreciated great I you've color demonstrated you've Services, with given, the selection. with

dialed there is much are terms projects? Just perhaps could in a bit how the more, at pulling better you a the give in. little for choosing bit color, more go opportunity? of you type job project where little of Just doing strings are that to good example margin a of a a more And those

Russ Becker

relatively just total that Well, Industrial our I a Services in point opportunity I of think less small representing of out Services. XX% business, one mean, there's I'd margin of than our piece every not segments, Industrial revenue. is our

continue us on of do focusing to focus biggest our and component just thing the that systems the side mix the for we the integrity of of new maintenance different So again, transmission to, capital in on versus the, is existing business customers' say, the budget.

us, Kathryn, type And if project of And work for really, customer you who typically, it's most about customer talk most prudent it's you of selection when for. this, we particular think selection, will. time, a probably heard project, of with it's and So really centered again, I me and selection. the around being you say not

the work. working making capabilities we're the right sure the and for We the to It's do have customer that person. right

success dialogue. whether work if going And negative that going part that you a selection, be me selection focus is have about services as to project can of to the the for of when who together it relates little kind a customer we provide process, our go checklist offer. But we success it go, we So so primary when deceptive. or lump have And drive will, client. through no-go we experience, my and and to typically it the I'm is you is customer like not talk bit the as not

Jim Lillie

customers of But compensated not that? And of an meant in factual us implementing neither the or we but how for process of start day it's getting But and Russ, supplement third get so APi, who directional, start that do that. be control X weather, as the weather And things Because per mean, do pays shouldn't that, just with I they can we were day? the you I to when delays? we said, Does penalized days? the treat we it's when if could is getting came contracts one raining it on the we what the second for for compensated be -- scene modified example, se. with on this

really are realistic business think, that modifying and negative has the along understand and of it's good team and customers and go with that, our others certain the don't the the done So there And margins that that there job, impact a I are looking are to contracts. want at variables important.

things help contracts, putting improve to address team the kudos trying that and the you're margins. then for headwinds that in recognizing and So to

Kathryn Thompson

And seeing things contractor taking the systems this alarm wide variety key maintenance. to consistent in of Is ground work, And type players spent about drive on with of is recently particular, in one anticipation world? focuses more that non-res work. a we're noted major folks the to to you seeing a uptick including work a you're really bit that the bids field, that what these managers of a work in post-COVID -- in more upgrade we seeing of coming talking are the on to And that back with are trend, periodically, wanted an seeing? also back fire a are of anticipation see of interesting I as people thinking if as or in you're way, are something finding, time opportunity this to coming are building you they that more

Russ Becker

we've a observation. say it's alarm We for post-COVID work that and But say in growth we that, uptick fire specifically of seen because perspective. alarm in That's alarm. wouldn't just a specifically us a emphasis seen fire and an focus in from certainly have I can't that an fire being world. I interesting the like an space,

Kathryn Thompson

have 'XX, little aspects of services, And inflation. or into impacting end, just been not terms inflation business be Okay. you're and of has certain we've at doing still a through. to Maybe the Understanding in inspection on may your going starts question, been, final inflation that more manage playing more just though now? focusing color may you bit Great. and how

Russ Becker

been we've pass fortunate those to that to costs think along. able I be Well,

workforce primarily Our union. is

doing that women the are rates wage men the us the well-established and So in the field. the are for work for

going it's easy so escalation for effect. very it's us go to understand and those to And when into when

-- of our of customers. you adjust move a it's cost, as to quick job again, the our point I the just portion we continue that's we chunk for So we the small in And or that services easy to our have small if pricing sizes deliver turnaround, in to very will, the big that to us along.

and I -- guidance with in it's baked the managing having anticipate into substantive prices. it for is forecast and we So factored mean, issues it's reality year, into inflation of the rise our the the don't in any and commodity the

Operator

I you. for Becker to the will Russ call now comments. return closing Thank

Russ Becker

great our gratitude Well, thank delivered benefit the to, our sharing you, number morning, Thank during continued you. And in with very time And company first in in the a last for just putting I shared to year. want hope and result everybody. call look my you, much of a and we one, great all that they've the great on forward the course I Thank that the sacrifice reiterate journey of It's appreciate of the of and result. shareholders commitment employees company, taking interest their the join we you. this company. for to this everybody, great your us to result. feel APi

Operator

APi Thank participating call. you XXXX for results financial in Group's conference fourth quarter

You may now disconnect.

APi (APG) 24 Mar 212020 Q4 Earnings call transcript