APG - Earnings call transcript Q2 2021

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Operator

Good morning, ladies and gentlemen, and welcome to APi Group's Second Quarter 2021 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 second you conference earnings thank morning, our for quarter Good

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

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, August may obligation to XX, Our update any are statement we we have forward-looking and as no

second As page posted presentation a quarter Investor a reminder, the financial of detailing we on our performance website. have Relations our

will presentation. our regarding items and can these today measures and in reconciliation information other press other non-GAAP release comments also Our financial The be include and key operating of metrics. our found

Relations now of slides available to to business is the Before I'd my our our Global call July, on webcast XX, website. of the announcing and the with Chubb Carrier acquisition along that turning of is to on from the call over conference replay joined call the to A Martin, Martin. security turn over our everyone pleasure It like presentation agreed page thank Investor fire Corporation.

Martin Franklin

assumed comprise Carrier $X.X other Global and On for transform from cash Corporation. we $X.X The safety countries, to manufacturing anticipate agreement buried the the value XX% as long of was world's over It's life of X.X Chubb comprised Thank the Chubb of fire acquisition time is revenue. as company operates billion United has and leading you, UK, in liabilities Australia, will into exciting transaction billion, approximately its Hong very businesses and Chubb inside million security APi around we $XXX services operated is July adjustments. in Kong, a acquire market customer Olivia. year-end, Netherlands sites, APi. the XX, non-core close a provider. business service which positions which to Carrier. leading serves of an announced from which to and Canada, XX Technologies asset, and million leading approximately France, The Chubb, in

services of the We perfect We same are Chubb. of customers many partner the geographies. the complimentary perform same types in for for

enlarged that leader life the value and products certain is worldwide opportunities in the represents, about cross-selling meaningful. creation expansion services, for believe Our company XX,XXX life shopping We're We talent. excited position services members, and best best to safety will that newly highly and extremely the opportunity creating margin team synergies the when with hoped the us combined we will to concentrating accretive, business thesis follow we as bring revenue believe compelling skilled quality of while security complement attract, the With and through we global recurring clients. retain combined the train one-stop as It’s the the mandatorily original on reach be of service able logical growth for safety transaction the multinational world and investment services. in our had be choice we made leader vast the APi. will required revenue, in will the majority

call over going. we're We and hand the business the And that, in to have direction Russ. the confidence I'll great with

Russ Becker

Good Martin. everyone. the Thank morning, this call join for morning. you you, to Thank time our taking

this is very APi. for mentioned, Martin time exciting a As

provide of I quarter the more During in us, see explaining as of a and walk over detail results summary Chubb, will call will you and recent detail. our what today's the Tom, transformational results comment second outlook I to opportunity in call, who then more acquisition before through front our on of turning to our in

recovery encouraged progress by are of year. time the the pandemic height We towards last made since this at the

performance million of and revenues, is our guidance industrial prior by me in Net enhance an year increased to continue industrial for million This and our $XXX value. other prior offerings, the the one revenues say previously calls, period. period services. shareholder of compared highlights priority. on above number XXXX, contracts. basis decline This ended well-being driven XX.X%, priorities we growth in our compared the you've from net of our safety, months XX, by inspection following: each include foundational which safety service $XXX on offset to our three provides well heard of primarily $XXX remains to communicated continued and the health platform As as prior June year services excluding general from recoveries of Key focus by million, services organic can both market and the specialty employees the as to a first,

protective $X.XX. third, we of revenue, believe of which continued on a to growing share the ongoing earnings around inspection adjusted focus more recurring, build goal per business. and moat Second, service helps our And

chain others on inflation. discussed our the work impact quarter, our work as COVID-XX have markets. disruptions an cases, business efficiency, and certain of in continues As downward number rise causing agility, our to supply manage the effect on our despite and impact with COVID-XX These issues we ultimately projects, and on the pressure team's of the chain we’ve throughout coupled supply

variables We of expect the with these be balance us negative the through year. will

This revenues further on industrial across significant for respectively. the XXXX. and industrial net specialty from meeting In key net segments in limit organic six However, June do achieving for due in not facts. and resulting and months dedicated decline us ended our services, offset old renewed explanation. services. demand of our our they XXXX contracts or by revenues roll markets. This remain goals. long-term decrease three XX.X%, was incredibly volume safety an and robust grateful across The deserves following services is in the we were some the XX.X% our in revenues to I'm Number net believe partially projects not end that a leaders basis organization to to in declined off by XX, the growth the one, replaced and

delay projects. customers certain Second, to our decisions and suspend by

macro Third, difficult market conditions.

in the the space improvements we in over several competitive. last While there operate has sector energy been months, which some remains the

integrity will We where on on over are pipeline and we business capital and being customer last focused the and both higher lack We integrity have risk of still a disciplined projects seeing selection, of resist work. XX-months. remain on margin, proposal lower Pipeline side continue transmission the activity focused to is the activity.

reason service for portfolio. XXXX. the focus our continue efforts expect is the and trend revenue the of remainder have we this to will aspects acyclical We continue growing This recurring of to our on

I'd call announced acquisition few like the recently discussing Before Chubb. to a turning of to our spend over Tom, minutes

line why already compelling. felt of fit the math process. and we We've We've our like adjusted X%, Chubb end with the this as position in to here of result combination. this As for the extremely of of in the our this and give all shareholders. And focus year-end value talked performance global strategic expansion is the to shift to picture to will by winning result to community to X% EBITDA needed significant But provided you already margin about day, has very we investment sale at company, creation the of XX% I'd M&A the I growth all historical of for leadership clear revenue have a CEO the XXXX. to guidance a

adjusted at XXXX approximately baseline approximately margin of Chubb the EBITDA and With starting in revenue, billion XX%. $X.X in

We revenue of or end our standalone by of EBITDA with to billion $X.X fleet of margins to $XXX approximately XXXX. projected margin adjusted million expect the adjusted $XXX XX%, an approximating Chubb’s EBITDA exceed million

statutorily on an in do end operational achievable not achieve we our the produce of But EBITDA line lose we will with EBITDA, this required below the Chubb of a But APi of a to of that which adjusted to build. the direct significant sight $XXX excess of to XXXX, local still be U.S. highly APi's comparable from amount be Excluding small should this. revenue services. to will need this objective. steps step, on intend acquisitions, To markets. focus with opportunities any clear, predominantly have margin mandated in of further adjusted tuck-in to We baseline from earnings focus and a by in million the feel There execute global business this

largest a can assist us family some we by of created to leaders, its We be capitalizing required global will center them years We We from drive Chubb combination to value to the and cross-selling look KPI future welcoming for as people-centered to a of as history tech much providing our services will on and recognized is strategic believe solution platform significant safety their Anecdotally, focusing to there leadership through business. if brand. our a opportunities. enlarged businesses, supporting services them. maximizing combined APi. and there's Chubb’s represents. for have this XX,XXX shifts feel statutorily route-based forward operating centers, a the that believe business is non-core customers Similar a we However, leverage paramount have asked the within simply Chubb’s internationally on performance, data employees asset and in XXX-plus now development team business towards and priority fire their our opportunity we of

has drive aligned help incentivize Chubb will performance-based culture APi. at it as Our

that profile the the significant to safety like we the deliver APi believe life regions there's segment. to Another Tom, our financial fleet that in outlook performing provide have to with which and means business now that financial with increased improving businesses the also average. Tom? higher businesses ultimately in support average, we over that to have and to adjusted team below detail. We is realize and I a the APi’s teens in discuss results parallel line call hand are safety between are Chubb would margins, Chubb services high below EBITDA margins, to in more invest the opportunity businesses fleet

Tom Lydon

strong outlook. balance of and to before consolidated Thanks, Russ, review sheet turning segment good our and I level morning. our will performance results,

As Russ by the on to services an the basis XX, three revenues XX.X% year. earlier increased excluding mentioned for months call, ended the prior XXXX, June organic in industrial compared net

offset organic months June prior XX.X% months the an For excluding industrial services ended partially compared ended representing increased decline the in and on margins, disruption prior XX, XX causing by by for basis point driven safety mix compared period. to year, net a basis improved six pressure revenues XXXX Adjusted was three gross margins services. downward to chain supply year XX, the by the XX.X%, XXXX, inflation June on

points XX.X%, prior months year ventures the six in second increase specialty June point basis XX margin representing gross to to disruption was three quarter. XXXX, and less XX.X%, and to for causing due margins contribution the margins, supply on period. the XXXX to year the the ended ended of factors XX, representing services the XXX pressure than for June EBITDA year XX, For chain mentioned due Adjusted basis compared decline, downward joint a months prior prior compared the inflation adjusted from

mentioned adjusted X.X%, factors prior for XX decline XX, compared For June second the the basis EBITDA quarter. months year, ended to XXXX, representing six the margin to due was point the the

to continue strong. driving and and strong profile remained liquidity our cash on sheet We balance flow, free focus

our the was given operations as most COVID-related expected, base. our as absorbed by experience, capital cycle, business well from in comparative working historical in a our of As rebuild swings cash normal

cash rate six months million. the June compared free adjusted flow For was XX%. free $XXX million our was million, $XX year conversion XXXX, ended And of approximately the XX, decrease cash prior representing adjusted to $XXX flow

trends As was revenue capital in higher service increased our Investor and historical in first-half decline in during cash post-COVID-XX, revenues we working increased with capital we rebounded to the expected the year. cash Working line margins. discussed of to the drive experienced and fund flow as April, Day in used

the was million $XX cash to a timing largely the by year. income for of prior the driven in decline related paid a taxes, driven addition, by In increase payment

$XXX XX, the safety in under outstanding majority now June had revenues June for our inspection three due we discuss million more no service facility. detail XX.X%, across and our results in Safety XXXX, segments, net XX, will growth the to recovery with credit HVAC services businesses in of revenues of an our increased and of on services three revolving basis months primarily continued strong organic beginning cash our for and ended $XXX our As XXXX, and borrowings I equivalents, by million cash services. markets.

for revenues an June quarter. organic XXXX, consistent three second due ended months months the period. XX.X%, six XX.X%, Adjusted to XXXX margin basis was increased net XX, ended by the the for June XX, For with year the mentioned items on prior gross

June ended and mix service prior months project customer was XX.X% for representing with months the basis compared improved increase in to prior period-over-period. XXX increase six representing and selection. XXXX due revenue, Adjusted the the EBITDA point to combined costs of XXXX, June XX, leveraging point XX, gross For inspection SG&A towards discipline, revenues year, adjusted a increase to our year, due XX.X%, work the margins of ended on the three compared basis to was XX margins

representing and XXXX, to SG&A class leveraging in services factors point mentioned by revenue margin. lower of specialty ended organic specialty For on services, ended XX.X%, increased increase as due and June period-over-period, due XXX basis services, XX.X%, in the prior drivers revenues the our our by six on the offset demand businesses. basis our to year, was utility adjusted the EBITDA to compared timing margin gross primarily for infrastructure Specialty increase of of and volumes months I increased the fabrication XX, XX, net partially an XXXX, contracting and three June months

the driven well an For factors unfavorable months conditions due job increased quarter, and revenues the XX.X%, XXXX, June basis as in causing pressure three net point the project site margins. inflation, for was weather compared six disruptions, by on gross by the ended second XX, XX.X%, and XX, deferrals quarter. on as representing months June XXXX XXX due mentioned to prior the to organic decline margins first the chain for ended disruptions downward basis Adjusted to year supply

the first decline XXXX, XX, unfavorable productivity, quarter to to in representing point months the June year quarter. basis margin conditions weather representing to joint six gross ventures a prior was mentioned period. June reasons months the for was year, second ended impacts ended compared contribution margin, and the gross point Adjusted the less the and three XX to the XX.X%, EBITDA lower margin to the XX.X%, compared For adjusted basis due for mentioned prior XXXX XX, decline due for from due XXX

items leased XX, respectively, due was respectively, for driven X.X%, three and and gross year unabsorbed call. earlier ended EBITDA volume. cost an margin the services, adjusted June primarily due points XXXX, XX%, in compared equipment X.X%, to period. June the the respectively six For the XX, for industrial The services margins months EBITDA factors revenues prior to prior noted basis ended the basis XXXX to three to Adjusted Russ in lower XXXX, and for compared representing XX.X% by months second Industrial for was net XX, the June and primarily adjusted decline year, margin XX.X%, XXX declined and quarter. to was organic the ended XX% X.X% decline on the the six mentioned months due by

months XXXX was remains our and adjusted XXXX for margins XX, and zero upcoming acquisition. ended from any contribution does XXXX guidance, margin June X.X%. EBITDA reflect adjusted was For not the unchanged negative the year full gross Chubb six guidance

decline We expect for we to combined with adjusted continuing in pleased or customer to and selection. focus inspection approach towards incentivize $X.XX services in of progress as would segment, but while have aspects legislation. on renovation service are smaller disciplined an infrastructure, net previously, and industrial $X.XX said between have billion, are a built budget benefit the see in revenues as our and investment billion stimulus Also, driving and and revenue not our we certain infrastructure we range we project XXXX best for would recent there to business existing the our that that senate of anything build do into the our

disruptions our We the to supply by the in COVID-XX primarily pandemic. end expect at XXXX impact $XXX industrial or decrease services and EBITDA driven be ongoing range adjusted million, chain approximately segment, of for our lower of and

capital to expenditures depreciation $XX continues million, million. be expect and be approximately $XX We to approximately normalized

effective adjusted estimated count X% approximately approximately diluted and is approximately And adjusted our capital and rate is of share cost remains million. our mid Our fully XX%. long-term tax $XXX

this year, adjusted XX%. of approximately we earlier for flow our free XXXX conversion expect mentioned cash As rate

build from is prior flow ‘XX, more we over in build turn working base, year consistent our now capital As I that reduced cash the to our of rate. run Jim. call back-half with traditional will the

Jim Lillie

Thanks, Good morning, Tom. everybody.

future we the and the Chubb meaningful, is year about strategic this long-term excited following more transaction. progress Our even APi, are

reach previously our While as in long-term the Chubb we acquisition execute a leadership are stated business. in suppliers, coming COVID-XX our protective to announced goals ability our cash their revenue, an and geographical well with behind and transaction history Chubb support of our will our opportunity, and strengthen of well market, organizations and They The confident We're and acquisition as statutorily after as investment impact continues The on revenue key cost from supplement to We and flow plus experienced value remain customers those recurring our team. meets expand realize two with creation our closes. criteria. our operations. of as for mode them has synergies. niche significant have believe required revenue existing generation. free there service to strategic Chubb their XX% strong leaders business we operations future to team our greater as will the our invest the is combine enthusiastic

are partner. addition, as to excited a In Blackstone we add

X.X compete real we're for over a and of globally, comprised multiple provide excited the real significant portfolios in new billion of to square Blackstone's estate company their we combined total you which to global customer know, estate expect business. markets. opportunities has many commercial of Blackstone feet As portfolio, property

to Chubb. provide for color I'd additional regarding assumptions Before opening model like call the some for Q&A,

previous to we our closed. on more noted look once the details transaction has call, As sharing forward

billion As billion, contingent $XXX is approximately some process. at million of Martin assumed liabilities include is deductions all mentioned, deductions quantified These known in for transaction liabilities, cash value of which which of have $X.X be to and which up and our $X.X chewed diligence the closing. adjustments, will comprised other of and been

XX-month base strong headwinds supply global believe approximately March and and which Chubb navigating COVID-XX from transaction will and consultation EBITDA disruptions, around $XXX approvals. XXXX, chain combination expected revenue of funded hand, and had we financing to year-end faced XX, to which the billion, $X.X approximately is in is adjusted process period XXXX, we despite regulatory perpetual close can a subject emerging build. equity pandemic cash For preferred trailing million, debt. ending of The standard a the is on through be It of and

$XXX a auction the preferred payable time or common there in of is million dividend by perpetual in annual the of X.X% stock. at quarterly For cash shares a equity company’s basis financing, on additional payment

our XXX% holder into at the common any to of force the or volume the days. when average decide The converted XX is The price, if conversion ability share approximately $XX.XX. will in conversion company is price stock sheet the time stock, the expected be time at for to conversion common $XX.XX $XX position. at flows any We preferred dividend stock annual of on company's perpetual be the weighted whether per by trading The amount share exceeds the based dividend due of pay at million. may cash cash a we balance consecutive price or and time, has

reflect avoid important cash way. modeling, future it's For the the to either is the payment, converted counting one, preferred along two, purposes the double or to of

of net X.XX times goal net with be to expeditiously. around pro at closing, X returning We expect leverage at forma the to of times leverage ratio a below

our this deliver the cash will transaction flow Our free then operating and which of in will closing expect focus deleveraging excess high through year, cash million. near-term model, $XXX we be asset-light, conversion on

to while open concludes call I Operator, period. to We continuing statement for like call call this the in please additional operator, will before and end do an lines. the Russ Q&A the of Q&A, invest our leaders open back at business the now the all and process turn improvements. of over to the with the our would

Operator

question first from our take with Barclays. Mitchell we'll And Julian Instructions] [Operator

Julian Mitchell

morning. Chubb aspect. second-half cash capital big wanted a sort to also, And just perhaps capital when circle working Hi, pieces looking assume to free move conversion should free more us Maybe we will the year, in early to year? good assuming for normal up? as cash to how the back Maybe the get what integrated give in is next flow XXXX, assuming you're at clarity the bit that flow dynamics, of more conversion that working

Tom Lydon

as Julian, dramatically So last you came capital. line in. the flow look where And reduction for address we was in year's last is brought Right cash all our by of with expectations we me to quarter we the working that quarter. if with down back you'd year, second this that shared XXXX, let in COVID impacted revenue,

right are had through as fourth of the line historic will weeks, quarter. our the second-half that the end our projects into the in in with you and up came our at quarter, the comes wrapping flow and budgeted, wrap we and cash we So cetera. revenue et see projects in what we holiday run in that happen get up, as and Historically, the

time this And And where that so expecting same normal a flow year. our cash we're comes it's in.

flow be disclosed on with is seen expect that consistent. amount details discussed blending the we closer closing. Chubb’s have the their But more on past be to it conversion cash to theirs XX%. as I in we'll at think ours, rate you've and we'll And get

Jim Lillie

it's Julian, Jim.

wrong, in me in and serves I'm million we free if XXXX this the our I $XX year, if correct of million but second much conversion Tom quarter the think, did think rate correct, $XX memory higher. me flow about versus was I cash

Tom Lydon

Yeah.

we've us. lower XX% are think you base XXXX in year, this XX.X% that's positive the versus versus online a you conversion million year, COVID when and $XX close. this very rate And So off growth second million conversion a so different, coming XXXX for $XX About in year. slightly this but of quarter Jim, because had, conversion of

Jim Lillie

through EBITDA. but had question CapEx go about historically we This -- call budgeting our less EBITDA by that on was conversion. XX% process, Chubb had a think divided XXXX, said you I think cash we'll last a free the flow I And minus

don't real so plus. And trending is historical our in see that we change in and a XX%

we give So when you the color. but conversion, strong budget, very we deal give free when still more guidance cash do the we'll flow closes, and

Julian Mitchell

to And for question, much so second EBITDA implies detail. at my the up year-on-year specialty that And wanted just second-half you guidance in in had the margin are services, just that. looking your the specifically pressure does more I maybe full margin within very Thanks the the year sort margin, check in around QX, margins the EBITDA in substantially how swing slightly think back-half, guidance? of

Russ Becker

Julian services as have keep cost battling on continue to specialty the supply through disruptions Russ, And to pressure battling. that goods, to pressure, just to the of we're well going to year. as to of going see some margin think be us are we're And chain going remainder cause in inflationary we're headaches. this going continue through as I to

to we're that think really what and seeing to and there [Technical through But safety in services positive the good going I we're results we see second-half. improvement. about battle feel Difficulty]

Julian Mitchell

firm-wide Is that overall guidance fair? in that should the year-on-year the The up Thanks. at EBITDA adjusted of sort slightly be midpoint second-half. margin

Russ Becker

Fair.

Julian Mitchell

Great. Thank you.

Operator

with our question we'll take Mittermaier Markus UBS. And next from

Markus Mittermaier

your Russ, thoughts much to good develop I’ll Hi, start on morning, for so you will think Maybe Chubb. thanks this providing here XXXX. how with everyone.

connected have? average already APi of and you know this fleet early you the little sort I comment to you on XXX visibility current about selectivity? it's think that about? I the think you do to days. the programs billion of kind XX%. Like you Can current your points Is basis customer of that, mostly side margin project on of safety said that bit sort obviously, still $X.X a getting life obviously, margins we of have business, is. seen, already get industrial then specific And where how business your below to

how you do much you about So, this? comfort have? thinking are how And

Russ Becker

put really We and very to Chubb’s branch didn't I to focused is are we the these start and wouldn't safety the business, are will safety confidence. they how services branch there, ownership saying, that if similar They in with achieve So team, leadership very, we would goals. work them having life built be which by we leadership, out Brennan’s have a under Anthony we're to confident focus great level. pushing the very our at model, and able

And leadership, right But going to me, branch their combination so people. lot making of different investments a it's for we make the start people a sure the starting different and that individual these in really of leading to it with have is things. branches

As quickly as out investment. that to here. leaders, bring they we very we the very, haven't level of that We think something of can them come that's gates had

move So, opportunity we confidence us here, improve really like just to tremendous goalposts the But business. have going Markus, a and help goals for with we're team just amount are going the of Chubb achievable. improvements. achieve keep expansion goals, And really good forward to that margin we we're these when there's the those to on moving

Markus Mittermaier

then transferred service how liabilities, the here, contingent fire over you. the from what's and Great. known largely, the not Thank are of confident underlying transaction? that you And a on like sort of obviously liability [ph] being here TSAT dated background making just question long million sure is of that and they that The $XXX is over around manufacturing? Carrier business with the moves

Russ Becker

You are correct.

purchased the of Technologies. manufacturing, with piece are the business. so services and business, product was UTC, stayed of when liabilities keeping speak carved United manufacturing TSAT have out the these Carrier back the They side to the We of the

to the with comfortable very speak we're environmental. So, so

Markus Mittermaier

much. very you Thank Okay.

Operator

from our Wittmann take Andy Baird. next we with will And question

Andy Wittmann

morning. was like, helpful But I EPS guys is helpful if that the convertible understand just I articulated. think that share you for think everyone. the count correct from in gets you to to please. preferred was good accretion and I just that? share that, Thanks Maybe be clarify be here wanted to it recognizing you level on And me think that going questions underpins of that But accretion. the the to and if expense Great. interest some depreciation trying assumption regarding I'm the I be the prior with call it please, dividend $X.XX understand number Chubb would said would could, wrong. wrong, there of that complicated

Russ Becker

the you Can repeat question?

Andy Wittmann

detail that was Chubb call. hoping bit I more last could little you Yeah, with the articulated a on just bridge conference you on us accretion the that

the If that share I again commenting that I of understand. would long-term around think interest what and $X.XX so and box. could to accretion, accretion, preferred out your We count box of you're numbers comments the depreciation, But the accretion understand made you or expense, the underpins you helpful think then out comment EPS be today. just dividend EPS some as that

Russ Becker

the have runs and would depreciation just under don't I don't I the last front their was they give back of actually, probably come XX%. the about think to their you we is business them the of in XX%, we've invested because have on rate. call breakdown XX%, but It have certain of the was they it And at breakdown And about Well, now. to think million. I'll I said XX%. but degree. XX%, in I said it's XX% front think, me, I in was XX%, $XX say the about me those right in figures call, it CapEx in a -- about

Tom Lydon

EBITDA. $X.XX, but we $X.XX, back the Andy, think We what – or share where I looking But existing $X.XX up at it to still came that's number so. said, counts. call were approximately we we of I remember looking million the the at $XXX it with And were goes our

Andy Wittmann

what Okay. Yeah, thought. that's I

as call XX%. You you and I'm trying said to it just what clarify. That's was $X.XX said the to get on

Russ Becker

No, XX%. $X.XX and

Andy Wittmann

said? a XX% sorry, broke you and that $X.XXX, bit. Was that little was up what

Russ Becker

Yeah.

Andy Wittmann

Okay. That makes sense then.

I've just is I Russ jobs? you I How and relatively saw the execution of quarter. rapid supply that of you anything and of challenges when always projects. when bidding understand they're insulation average nature the inflation projects bidding extended from given obtaining if the products then between older And get I much are is the of And kind you do a disruptions, what as today, had bid chain that on of you thought there the of inflation the guess, little do, duration of about for could then, just execution in those some your the can the inside today. maybe the and and the about you just how executed. size, talk the you as jobs maybe smaller supply specific between chain have grabbing in bit products? well project much as pricing an that short backlog proximity to inflation, guess, So that the they're if

Russ Becker

we're being is of lot work, don't by by bid would than And we we a start in propose that we our than because to safety make the I value on services average say Because going safety customers, services, sure our that to And, $XX,XXX. table. is reminding work. the bring chosen Sure, our size to want I'm that less shop the services, we because you specialty more insulated there.

In provided to very, the got optic product So makes your again, on showing and sure fronts. workforce types really in your to to manage that up is impacts services, your language allow supposed that those customers, availability, many, efficiently proactive very necessary. negative we're say happening are and ability that's much contracts has your doubled. late though quicker our managing make managing to on on And, in we've proposals up sure and sure protected us with basically built pipe hitting. lack like But, those show the prices to get ourselves ourselves to many into of our steel businesses work. or escalation have we've our make we've documents it's we've And, when it oftentimes and are right making to people, protecting the the when not materials for when had showing up for our our and proposals, and difficult been very and by things even your those cable execute work, fiber specialty of

said You're seeing that seeing optic cable. like fiber pipe, with with, you're that I

out business, We months. joist have one manufacturing deck and is nine

very So of they're quantify toes, proactive, their our be would turns business. managing in quickly. very through looking at on that those as to challenges, what be how is, backlog backlog be their people have our backlog much risk from and in I our can't have to -- they

we going, feel sure have businesses in talking very very quite where think it. are and about strong. we we've we prices that we that been there's in and to general, Our commodity on that good protected, haven't businesses with believe been And like guidance proactive our backlog because has our giving instances done, I job. really that are done I'm a good I'd

Andy Wittmann

Great. customer delays? from you Then case recourse you do change your any that have final to they and regarding them, I the are guess one procuring get cost just your materials, incur where for follow-up the orders is, on that can't the their in customers

Russ Becker

too. customer, But Yeah, fair your that balancing balancing being you being is they're a to for a that But It's act that's sure do. have sure you're make with them, you. it so with and act. sure you to make want fair you delicate

to to work to in their there difference can reacting significant problem. our that versus work you it's through positive to on that important they inevitably those ultimately challenges. their push with But very You're customers to there. have they just their business that's to it are relationship down leaders back They where make a so problem, client. work. have proactive and be comes But that so going for is need your going leading customers try have you, relationships the their with And

Andy Wittmann

Got it.

much. Okay. Thank good a you day. very Have

Russ Becker

Andy. Thanks,

Operator

question Group. from And Thompson we Research will take our with Kathryn next Thompson

Kathryn Thompson

taking for questions you Thank today. my

but what end Just overall? driving demand, and the standpoint? color first looking a market, of the you. give from Could on regional end color market, in for you Really focusing also an is end services specialty rather. more demand additional market especially terms Thank

Russ Becker

Our remain in end the segment strong. markets

And, some private serving opportunities sliding feel provide we telecom in the even with right. front out utilities, to the to the us have such. that strong, we providers, We that of public end really, services remain to markets of and we're utilities, very continue

going So as some credits, and I slid and grounding was going some going work work think related an that I interconnecting And, project what wind example, reticence administration. not And tax the was but new with one just It's XXXX. XXXX. amount of splits. push of of that their consider it's to to our and happen into of farms, with with some number a into what away, opportunities of certain a businesses does would fair

the positive investments. flowing we system to at won't dollars of serving we be infrastructure feel on to choppiness very segment. that the markets about a our markets $XX about It's It's serving. going the that like able be kind into as the to those good there's services. business. to those until we're most and end likely just the some XXXX. start billion through the back-half, there's great you again, going feel and going where be that and Well, broadband we're the bill, look when But, for forward that's But deliver of end in buckets So, we're it comes

Kathryn Thompson

or it what for color of proposed plan, terms Any may that APi? to or Okay. mean infrastructure the infrastructure thoughts in if pass, were

Russ Becker

$XX the $XX electric number Actually, infrastructure, down guess, bill investments, But, of of the an partisan Yeah. existing in, tell opportunities I allocated bipartisan place floats grid in and mentioned did buckets water middle a night. participate bucket, there's for going and and dollars on area that for allocated resources renewing areas on us that systems all benefit being customers. work the in, Olivia I there. boats, water not opportunities that, a of portable that late with also create for is to one broadband in job of waterways the that more to the, that's other breaking our the the that is place us. billion passed us a which and on of would are be that firms there's basis and tide in the nice that ports plus there's And I but infrastructure a parts rising yesterday, first primarily billion bill will the passed senate we The the on places you basis power versus just east share upgrading in will will other put spent like the other take the a market in participate existing of where their coast. to the infrastructure we infrastructure

for general us create which for our of a more industry, to an existing will do positive customers. it's So the in work with some opportunity

Kathryn Thompson

a your for of question what final light then the mix are proposed today, this as goals do acquisition for And the where of the to see noted, percentage long-term day, continued you broader a as also, business just going mid services, rightsizing forward? of Thanks. services. Chubb great. Okay, this industrial industrial question and In for you division? And

Russ Becker

Kathryn. Thanks,

with in be work in the worse very disciplined pursuing performing with to work. industrial And slow, low continue and very, slow than we're we there's being being services. opportunities nothing So, the that

continue in to opportunities reasonable work sure strong make are us the profit and gross we make a margin of to to to is we start bottom, business how some we're to evaluate the at that results, pruning. that the that our going demonstrating and back the business. that chipping on. hope at we the And get to need that My we game if goals. need is that we can need our in can spot do improved some But piece disciplined at that need do to pruning, so margin we we what away And going at doing what's been are be of very have looking execute, to where the to top continue do of And, we we looking on what's then front there. a in complementary there in to are we and we're and and

Kathryn Thompson

very Great. much. Thank you

Operator

And question with it to we'll our closing CJS we back Securities. one take statement. have Tanwanteng more from final Russ, before for question time a for And turning Jon

Jon Tanwanteng

phasing pandemic My is Thank color as before. question. head for I don't the first second-half and we there set morning, between revenue of things guys. what one, any Should earnings this going should near-term, in and anyone revenue now quarter? considering? fourth on takes into But the my the the know more if that on released taking that we and on as and COVID QX? earnings in good are the Hey, asked pressure you QX and are with more we not, if puts be deal Or the and you even

Tom Lydon

things, XX% fourth. then little quarter, XX% seen XX% of way and Typically, the we've XX% maybe and in those just Yeah, third being of to Jon. more we've a the supply quarter quarters revenue things with to than two the And great moving our are question, seen past. chain balanced kind in the

that. we through we'll And we have march through the to working we're it. insight quarter, more so, you as as And provide

Jon Tanwanteng

then is much win approach Thank Blackstone time? very over opportunity rate you That's what helpful. more. portfolio today? dig when And business? that you. to And cover deeper hoping into What the of of do the to How second, you little property you their can bit could of their I usually new percentage get you expect Okay. was cover kind a a we

Russ Becker

tough a going you But I'm that's give an example. question. to Well,

approximately we currently of in today, in that Memphis XX provide in their that have marketplace. additional from know work they at service marketplace, an the and And facilities inspection XX So, distribution what we marketplace. facilities

that and company business. go it. of than a in to we other, them sister our we like we expect that need it is not challenge. can't the think in national great need It's think an with go to we're up and a we're different international So and their no do, earn now we We with we we're Blackstone And us customers for And to business, to And them. business. has earn huge. give win opportunity opening we the record going their an opportunity and opportunity, expect just their across portfolio track speak, particular their base companies base to to and win one lines. other not us. to so each much us that's to there's caveat afraid is the going that of have as but that think handed it working twice market, to But, go

Jon Tanwanteng

for Okay, you thanks again. got color. that And it. Thank

Martin Franklin

since stepped turn will Well, I've feet comment. it on done job. over for we one Russ, operator. your did your I'm I've you to it, sorry, and final

Russ Becker

everybody. you, Thank you. Yeah. Thank

personal have many who of with Specialty goodbye, say a Investor our of this death during message Walsh, inform It all met the Joe Day. of from really heavy I our of we you is Head Services, Before us. of heart, untimely to a very is you

quintessential will leader, all missed. a Our his plan family him. who shared those and was in are of man condolences organizational be to know to to a an succession have and standpoint, widely respected From go a Joe's and APi we enough was He presence out place. fortunate

in much you Joe's be the and organization However, year. the family for everybody APi the well entire of with rest was thoughts both company. time for APi. this as updated Joe's move thank joining industry. I the again as far now, exciting as Thank us. time with reaching, forward the appreciate call to your our the throughout as are family, impact you through within We for want our morning. We interest continued the for taking This is to you to look truly we keeping very a very

So, thank you.

Operator

This does conclude today's participation. program. Thank your for you

any may disconnect at You time.

APi (APG) 11 Aug 212021 Q2 Earnings call transcript