Earnings Call Transcript - APG Q1 2020

Olivia Walton, Vice President of Investor Relations

Thank you. Good morning, everyone, and thank you for joining our first quarter 2020 earnings conference call. Joining me this morning are: Sir Martin Franklin and Jim Lillie, our Board co-Chairs; Russ Becker, our President and CEO; and Tom Lydon, our Chief Financial Officer. Before we begin, I would like to remind you that certain statements in the company's earnings press release announcement and on this call are forward-looking statements, which are based on expectations, intentions and projections regarding the company's future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. In our press release and filings with the SEC, we detail material risks that may cause our future results to differ from our expectations. Our statements are as of today, June 2, and we have no obligation to update any forward-looking statement we may make. As a reminder, we have posted a presentation detailing our first quarter 2020 financial performance on our website. Our comments today will also include non-GAAP financial measures and other key operating metrics. The reconciliation of and other information regarding these items can be found in our press release and our presentation. It is now my pleasure to turn the call over to Martin.

Martin Ellis Franklin, Board Co-Chair

Thank you, Olivia. Good morning, everyone, and thank you for joining our first quarter conference call for APi Group. This is APi's first earnings conference call with investors since the completion of our domestications with Delaware corporation on April 28, followed by the commencement of trading of our shares on the New York Stock Exchange on April 29. The resilience of APi as a public company has been tested early. We couldn't be more proud of the way the entire organization has responded to the challenges, which have been proactive and maintain the forward momentum of the company. As we look to the future, we believe the company is well positioned for success. We are proud of the 15,000 leaders on our team and the efforts they have put forth to continue to serve our customers safely and efficiently. The health and well-being of all of our employees is a core value of the company. Keeping the APi family safe and helping the communities in which we operate are two top priorities for us.

Russell Becker, President and CEO

Thank you, Martin, and good morning, everyone. Thank you for your interest in APi. Before we get started, all of us have been focused on COVID-19 over the last several months, and we will talk about that on this call. Here in Minneapolis as well as around the country, we are hearing from peaceful protesters as well as others. To the peaceful protesters, we want you to know that we hear you and support your message. I am proud of how our team has rallied around the challenges and continue to serve customers despite the headwinds they were facing. I would also like to acknowledge our team for all of the hard work that helped us to reach another important step in the ongoing evolution and growth of the company by completing the listing of our shares on the New York Stock Exchange at the end of April. Lastly, I would like to thank the teams at Citi and UBS for launching equity research coverage on us. We appreciate your interest in APi. We are looking forward to our participation in the virtual UBS Global Industrials and Transportation conference tomorrow. I will now provide you with an update on the business before turning it over to Tom, who will walk you through the financial results in more detail. Following the onset of the unprecedented pandemic beginning in March, we took a proactive approach to managing risk across our platform. As discussed on our last earnings call, we initiated a cost reduction plan to counteract the negative impact of COVID-19. This includes reducing labor costs, eliminating nonessential discretionary spending, freezing the company's nonessential capital spending, suspending employer match 401(k) contributions and working with our vendor partners to improve our pricing. We believe that these measures would result in up to $50 million of savings this year if the COVID-19 crisis and the related cost-saving measures continued throughout 2020, which should go a long way to offset the earnings shortfall from COVID-reduced revenues. Though I know that this is a Q1 overview, I also know that many of you may be more focused on where the business is today versus how we performed in the first quarter. With that in mind, I can share with you that our efforts have been yielding results. While the company's services have largely been deemed essential, through April, we have seen some negative impact in revenue for the month as certain work was deferred by impacted customers, primarily in the Pacific Northwest, California, New York, New Jersey and Boston. However, we have not seen any significant cancellation of planned projects. Our leadership is resilient and has continued to move the business forward. Year-to-date through April, our adjusted EBITDA is in line with internal plan despite the negative impact on revenue attributed to COVID-19. These results are a direct result of the early initiatives I referenced earlier in what we hope to be temporary cost reduction measures. In addition, as many of you have heard me say repeatedly, we believe that the statutory requirements of our work as well as the long-term investments being made across the public and private utilities sector strengthened the resiliency of APi's business. Key highlights from our performance for the three months ended March 31, 2020, compared to the prior year period include the following: Primarily as a result of our strategic objective to focus our Industrial Services business on improving margins as opposed to growing top line, adjusted net revenues declined by 25% or $33 million to $99 million compared to $132 million in the prior year period. Adjusted gross margin of 22.4%, which is an increase of 341 basis points, with all three of our segments successfully driving margin improvements with efficiency and focus. Eliminating low-margin large projects in the Industrial Services segment drove the most dollars in gross margin improvement. In our Safety and Specialty Services segments, margin expansion was driven by mix of service, improved job site conditions and project selection. Adjusted EBITDA margin expansion of 42 basis points, also reflecting our continued margin expansion focus, estimated recurring service revenue increase of $11 million or 7.8% compared to the prior year period and adjusted free cash flow conversion of 86.9%, higher than our stated annual goal of 80%. In Safety Services, our largest and most profitable segment, our number one priority, as discussed on our last earnings call, is to grow the inspection and service revenue, which we believe are recurring in nature. The diversity of the end markets we serve and the regulatory-driven demand for our services helped to build a protective moat around the business, enabling us to continue our growth, irrespective of macroeconomic conditions. Estimated service revenue increased organically 7.2% in the first quarter compared to prior year-end.

Thomas Lydon, Chief Financial Officer

Thanks, Russ, and good morning to all on the call. First, I'd like to echo Russ' comments in thanking all of our fellow employees, who are leading by example and helping us to navigate the COVID-19 world, and to all of our team members for their great work preparing us for the listing on the New York Stock Exchange and the continued efforts in our transition from private to a public company. Let's start with our consolidated financial results, followed by an overview of the segment-level performance and conclude with an overview of our strong balance sheet and liquidity. We have presented adjusted numbers in the press release and investor presentations to assist investors in understanding the underlying performance of the business, exclusive of the noncash impairment charge, the purchase accounting adjustments associated with the APi acquisition, business classified as held for sale or divested as of March 31, 2020, and nonrecurring changes related to our listing and public company readiness work. For the three months ended March 31, 2020, total adjusted net revenues declined by $21 million or 2.5% to $820 million compared to $840 million in the prior year period with segment growth of 4.9% in Specialty Services, offset by a decline of 25% in Industrial Services as we delivered on our strategy to improve margins as opposed to growing the top line. Shelter-in-place orders that went into various levels of effect in March slightly reduced our volume of work year-over-year in our Safety and Specialty Services segments. Our gross margin was 22.4%, representing a 341 basis point increase compared to prior year adjusted gross margin of 19%. The increase was primarily due to the improved project selection, conditions and execution in our Industrial Services segment. Adjusted selling, general and administrative expenses increased by $25 million from $119 million in the first quarter of 2019 to $144 million due to business growth related to increases of $17 million focused on compensation and adding resources to drive our organic growth strategy, unabsorbed overhead of $3 million and noncash share-based compensation of $1 million. Additionally, we incurred recurring corporate costs related to being a public company of $3 million. During the quarter, we took a $208 million noncash impairment charge concentrated in our Specialty and Industrial Services segments, triggered largely by the COVID-19 outbreak and the domino effects on our business of the local, state and national shelter-in-place orders. The noncash impairment charge was calculated according to GAAP accounting requirements in relation to our preliminary estimates of each of our reporting units' carrying values and may change in future periods as the accounting for the APi acquisition is finalized. Capital expenditures were $11 million or 1.3% of adjusted revenues for the three months ended March 31, 2020, which represents a decrease from capital expenditures of $22 million or 2.6% of adjusted net revenues for the prior year period, primarily due to timing. We operate an asset-light model, which allows us to increase our volume without the need for significant additional capital expenditures. On an annual run rate, our capital expenditures historically are less than 2% of net revenues. Operating cash flow for the first quarter was $55 million. Capital expenditures, as I mentioned, were $11 million. And we had $9 million of nonrecurring items resulting in adjusted free cash flow of $53 million. Based on adjusted EBITDA of $61 million, this implies adjusted free cash flow conversion of approximately 87%, exceeding our goal of 80%. Cash flow in the quarter largely benefited from lower working capital needs in our Industrial Services segment and specific actions to temporarily hold payables a bit longer than normal at the end of March due to the uncertainty of COVID-19.

Russell Becker, President and CEO

Our balance sheet and liquidity profile remain strong. As of March 31, 2020, our $436 million in cash on hand included $200 million drawn against our revolving credit facility. As discussed on our last call, given the uncertainties regarding COVID-19 global pandemic, in late March 2020, we drew down $200 million under our revolving credit facility, which we subsequently repaid in April. After noting the strong actions taken by the central bank to ensure stable banking and debt markets, our strong cash generation has continued. And as of the end of May, we had approximately $275 million in cash and cash equivalents on our balance sheet. Based on our early expense reduction actions, recent operating results in our cash and available borrowing, we believe that we are well positioned to manage our way through the COVID-19 economic upheaval. I will now discuss results in more detail for each of our three segments, beginning with Safety Services, which represented more than half of our adjusted net revenues for the quarter. Safety Services adjusted net revenues for the three months ended March 31, 2020, were relatively flat. This is due to a combination of the mix and timing of contract revenues, combined with some impact of temporary customer closures due to COVID-19 and shelter-in-place orders in March. Adjusted gross margins of 30.2% represented a 61 basis point increase from prior year, largely attributable to mix of our services. Adjusted EBITDA margins of 12.5%, a 65 basis point decline from prior year, was due to added employee costs and increase in unabsorbed overhead costs due to timing of demand for our services. Specialty Services net revenue for the three months ended March 31, 2020, increased by $14 million or 4.9% compared to the same period in the prior year. The increase in net revenue was driven by increased demand from our customers and timing of contracts, slightly offset by negative impacts of COVID-19 in March. Adjusted gross margins of 12.7%, representing a 183 basis point increase due to improved job site conditions, project selection and mix of work, adjusted EBITDA margin of 6%, a 41 basis point increase from prior year. Industrial Services. Excluding businesses classified as held for sale or divested as of March 31, 2020, Industrial Services net revenues for the three months ended March 31, 2020, decreased by $33 million or 25% compared to the same period in the prior year due to decreased volume as we delivered on our strategy of improving margins as opposed to growing top line. Adjusted gross margins of 18.2% represents a 1,591 basis point increase from our prior year as a result of productivity increases due to improved project selection, conditions and execution. Adjusted EBITDA margin of 10.1% is a 1,086 basis point increase from prior year due to the factors mentioned above.

Thomas Lydon, Chief Financial Officer

We expect the remainder of 2020 will continue to be affected by COVID-19. And accordingly, it's too early to provide full year guidance for 2020. However, I can reconfirm some insight for modeling purposes. We expect capital spending for the year to be approximately $30 million to $35 million. We expect annual future depreciation of approximately $70 million. Our cost of capital is approximately 5% and our adjusted mid- and long-term effective tax rate should be approximately 21%. Our fully diluted share count, assuming the conversion of all 64.5 million warrants outstanding, is approximately 195.5 million shares. I will now turn the call over to Jim.

James Lillie, Board Co-Chair

Thank you, Tom. Good morning, everyone. We remain confident in APi's operating model and the team's focus on driving higher margins as well as the company's ability to generate cash. We are focused on repeat business with long-term, well-diversified customers across a variety of end markets, which we believe provides us with a stable cash flow profile and substantial runway for organic growth. We believe that we are prepared to seize both near- and long-term opportunities and that our strong balance sheet and our new partnership with the NYSE will help allow us to take advantage of opportunities in 2020 and beyond. We appreciate the leadership and sacrifices demonstrated across our entire organization during this unprecedented period of time and history. We believe that the tough decisions and sacrifices made across the entire organization will help strengthen the business as we move through 2020 and continue to execute on our long-term goals.

Russell Becker, President and CEO

Operator, we'll now turn the call back over to you and open the call for Q&A. Thank you.

Andrew Kaplowitz, Analyst, Citigroup

Russ, could you give us a little more color on how your businesses are faring during the pandemic in the sense that Safety Services obviously almost half occurring. So how is that business performing to the sense that you can talk about in April and May? And then can you give us color on your ability to get into buildings to do inspections? You had talked about that, whether you would be able to do that. And then how much of it all in Specialty Services has been impacted by shelter at home or permitting delays? And one other thing that I would ask there is you talked about being able to accelerate inspections in some cases. Have you been able to do that?

Russell Becker, President and CEO

Yes. Thank you, Andy, for joining the call, and thank you for providing coverage on the company. So our Safety Services segment has, I would say, fared fairly well going through it. We've obviously had some impacts, and it's been primarily based on the shelter-in-place orders that have come down in different jurisdictions. One of the biggest challenges across really both Safety Services and Specialty Services has been the varied nature of the different shelter-in-place orders. Not all of the rules are the same. And the rules of engagement change on a municipality-by-municipality basis. And that's been one of the biggest challenges for our business leaders to overcome. And the man hours for our inspection work in Safety Services have been pretty consistent and solid, showing the resiliency to the business model. And so that's been very positive. There's been some locations where it's been difficult to get into the facility to perform the service work. However, we see that, that service work is just being deferred and put off, as an example, would be health care institutions. Most health care institutions right now are focused on the health and well-being of their patients. And we're focused on the health and well-being of our service technicians. And so the work is being deferred and not necessarily happening in those types of facilities. That work will get done. It has to get done. It's statutory by nature. And so we look very optimistically to get in on the other side of the pandemic. In Specialty Services, the opportunities really, as we said, in our comments earlier, the opportunities really have continued to be strong. And we are really looking forward to the later part of this summer and getting things really rolling in our business. The biggest challenge there comes from the shelter-in-place orders, to be totally honest with you. And when you're doing natural gas distribution systems, water distribution systems, in a lot of cases, there is an interaction with the residents. And at some point, that system has to be cut over to the residents. Our customers have taken different approaches with interaction to homeowners. They've actually taken different approaches with interactions with commercial properties as well. And sometimes the direction that they're providing us varies from a week-to-week basis. And that's been the biggest challenge that we've seen in that segment. And we're pretty optimistic as the shelter-in-place orders start to get lifted that it's going to return more to a normal pace, and the interactions that we're seeing with our clients are being much more positive. So hopefully, things will continue to progress and improve as we march into June.

Andrew Kaplowitz, Analyst, Citigroup

Russ, that's all helpful. Maybe just stepping back, I know you don't want to give us guidance, but can you give us any color, where coming into 2020, you talked about this baseline of $3.7 billion? You mentioned some of the project delays you're seeing. But you also seem to hint at optimism regarding your profitability so far this year, so when you talked about April EBITDA being in line with your plan. So could you give us more color into what that means? There aren't many estimates on the Street. But a couple of us that are out there have adjusted EBITDA in the mid-$300 million range for the year. Does that seem reasonable or even conservative based on what you've seen so far through the spring?

Russell Becker, President and CEO

We believe that we will meet or exceed the analyst expectations of $330 million. And we are optimistic and hopeful that we will do better than that. The cost savings measures that we've put into place really to the credit of our business leaders and to our individual employees for their personal sacrifices to put the company first really have shown to be making a difference and have allowed the profitability of the company to continue to meet expectations. And so that's been very positive for us. And we look forward to a return to normalcy and getting to a more regular cadence from a revenue perspective. We want the cost savings measures that we've put into place to be temporary. And we look forward to having the opportunity to return our employees to, I guess, what I would call more normal from a compensation perspective.

Andrew Kaplowitz, Analyst, Citigroup

Helpful. Let me just ask one more question and then I'll get back in queue. You generated $53 million of adjusted free cash flow and almost 90% of adjusted EBITDA, obviously above your goal of 80% that you've guided to in the past. I would assume that Q1 tends to be a seasonally slower quarter for you. I don't know if that's the case, you tell me. But with the good start to 2020, is it fair to say that there could be some upside to that 80% conversion goal for the year?

Thomas Lydon, Chief Financial Officer

Andy, this is Tom. Yes. So Q1 is seasonally our slower quarter out of the gate. So we do produce good cash flow there. And as we talked about with the focus on reducing the level of revenue in industrial, that was very helpful to us in that period as well as you note that we've put out that we're going to be lower on CapEx this year as we're monitoring that through COVID down into the $30 million range. So those things will all be positive throughout the year.

Russell Becker, President and CEO

Thanks, Andy, for launching on us, and we look forward to catching up to you later.

Christopher Snyder, Analyst, UBS

So there's obviously some pretty significant macro headwinds heading into Q2 but also feels like we should get some positive seasonality, particularly for the specialty business. Can you maybe just provide some color around seasonality as we head into Q2 and what we should expect for the back half of the year? Just on the seasonality, obviously excluding the macro.

Russell Becker, President and CEO

Chris, thank you, and thanks to UBS for starting coverage on the company. We are looking forward to the virtual conference tomorrow. The seasonality related to Specialty Services is normal and expected. We are hopeful to see some pent-up demand drive business forward. The main concern is the uncertainty around COVID, particularly regarding a potential second wave and its impact on us. We are preparing the business to handle any challenges that might arise. However, we are optimistic that things will return to a more normal state by the end of June, or at the latest, early July.

Christopher Snyder, Analyst, UBS

And then next, on M&A. The company continues to generate cash despite the difficult macro. And it sounds like acquisitions remain a priority for the company. Can you maybe provide some color on what you're seeing in the M&A market? Are you seeing the breadth of opportunities pick up as the downturn maybe pressures some of your smaller competitors?

Russell Becker, President and CEO

Yes, that's a great question. I can answer it, and Martin can add his thoughts as well. We had a pipeline of M&A opportunities that aligned with private company APi. However, when the pandemic began, we decided to pause those activities, as we believed it was important to ask employees to make sacrifices while also ensuring the company's balance sheet remained strong. Now, as we begin to emerge from the pandemic, we have maintained active discussions with potential M&A targets and are looking to advance those opportunities. There will certainly be chances arising from this situation for various reasons, whether due to economic stress on others or simply the exhaustion from navigating these challenges. We are actively working to ensure we keep our pipeline full, identifying targets and opportunities to move forward. Martin?

Martin Ellis Franklin, Board Co-Chair

I completely agree, Russ. For some of the larger opportunities, there will be a transition as people move past the delays caused by COVID-19. As we recover, I believe some companies that have been exploring these opportunities will return to the market, and we will be well positioned to take advantage of that. We continue to generate substantial cash, giving us the resources to pursue emerging opportunities. I think the second half will be quite interesting.

Christopher Snyder, Analyst, UBS

Is it reasonable to expect that M&A will prioritize life safety, or would you also consider specialty if the price is right?

Martin Ellis Franklin, Board Co-Chair

Yes. I mean, initially, the life safety and the service aspects, inspection service aspects of the business are what we're focusing on growth. So that would be, if you like, top of the list. Or to the extent there are other opportunities in the specialty segment, we're obviously going to be looking at those two. But the whole idea is to continue to build the business towards a more repeat business model. So businesses that tick that box will obviously be a high priority.

James Lillie, Board Co-Chair

Russ, do you want to take that? But I would just remind everybody of our long-term goals is to drive margin improvement across all three of the businesses. And that's why we tactically focus less on revenue growth, particularly in the industrial side of the business, which historically had been both focused on growing its revenue and expanding its margins. But we want to accelerate that margin growth. So we're putting the brake on revenue for the sake of revenue, if you will. But our goal is to get everything into the double-digit neighborhood. And you know we've got the long-term range of 12%-plus EBITDA margins by 2023. And so we think that we're off to a solid start, as Russ said in his comments. But Russ, do you want to add incremental color?

Russell Becker, President and CEO

Yes. I think it's important for us to focus on project and customer selection. We need to be disciplined in deciding whom to work with and what types of projects to pursue to maximize our opportunities. Our priority is to ensure that we are allocating our resources towards profitable work. While there are additional considerations, such as obtaining the right contract terms, we believe that project and customer selection is one of the most straightforward areas for improvement across all our segments. Achieving our goals requires us to be disciplined in these choices, which will help reduce our loss rate. We have made progress in this area.

James Lillie, Board Co-Chair

We'll see you at the conference. No pun intended.

Jonathan Tanwanteng, Analyst, CJS Securities

Hey Jon, before you ask your question, I just want to mention that while we've expressed a lot of appreciation for Citi and UBS, we also value CJS and your coverage of us equally. That's much appreciated, and we look forward to seeing you at our virtual conference as well in July. Just first one is you mentioned in the press release and your prepared comments that adjusted EBITDA was in line with your internal plan. I'm just wondering, was that internal plan a pre-COVID or a post-COVID number and kind of what that target was for the quarter, if you're willing to get into a little bit more of the details there?

James Lillie, Board Co-Chair

We developed a plan before COVID and established a budget. As Russ mentioned, we are aligned with that plan. While we haven't provided guidance, we are operating based on the numbers from January 1, when we began the year. That was the point Russ was referencing. It remains consistent with our original plan, which we understand we haven’t disclosed publicly. We are optimistic about our current position, especially with the recent positive trends.

Jonathan Tanwanteng, Analyst, CJS Securities

Got it. That's helpful. And just from a cost savings perspective, I'm wondering how much you realized in Q1 and kind of how much you've accomplished in Q2 so far.

James Lillie, Board Co-Chair

As Russ said, and sorry to jump in on this, but we're looking at about $50 million of savings for the 9-month period. And so it's not all level-loaded across the months. But you're basically looking at $5 million to $6 million, $7 million per month, which gets you into the $15 million to $20 million neighborhood per quarter, depending on the timing of some of those expenses.

Jonathan Tanwanteng, Analyst, CJS Securities

Okay. Great. I think you mentioned on the last call that you sold the businesses in the industrial segment. I'm not sure that made the quarter or not. It didn't look like it did. I'm just wondering what the proceeds were for those.

Russell Becker, President and CEO

This is Russ. Jon, this is Russ. So we did close on the sale of one of the acquisitions. We have a confidentiality agreement with the buyer, and we are not disclosing the proceeds from the sale.

Jonathan Tanwanteng, Analyst, CJS Securities

Okay. Fair enough. And then I think I caught you saying that you saw a net pickup in May as states reopened. Do you have any idea to what extent on a month-to-month or sequential basis you're seeing versus April in terms of either revenue or whatever kind of metric you want to provide?

Russell Becker, President and CEO

We expect May to be similar to April in terms of revenue. We're beginning to see an increase in man hours across various businesses, although this isn't consistent in all areas. For instance, while there are improvements in New York, the Chicago market is still facing challenges due to the pandemic. Therefore, I anticipate that the results for May will mirror those of April.

Jonathan Tanwanteng, Analyst, CJS Securities

Got it. And then finally, recognizing that you're really focusing on the recurring and long-term contract and services side. I was just wondering, can you talk about new construction opportunities that you see them now in bid market. To the extent you participate in them, how much of a slowdown are you seeing there? And when does it become an issue for you in terms of business going forward?

Russell Becker, President and CEO

Well, as I mentioned earlier, my comments were focused on Specialty Services. We are experiencing strong proposal activity across the organization. Our signed backlog is robust and stable. We are not significantly impacted by some of the end markets that are currently facing challenges, such as hospitality and retail. Therefore, we are not as reliant on those sectors. We continue to emphasize the key areas of our business. The proposal activity remains quite strong, and it will be interesting to observe the industry challenges that arise over the next 12 months. Nevertheless, our business is performing well.

Christopher Snyder, Analyst, UBS

I figured I'd take advantage of the time. And I had one for Martin or Jim or both. Now that you guys have been with the company for almost three quarters, what has surprised you most about the company, the business or the industry in general? And I imagine kind of facing a downturn like this pretty early on, you kind of get up to speed on the learning curve, maybe even quicker than you normally would.

James Lillie, Board Co-Chair

I'll start and then let Martin back in. Honestly, I don’t think there have been any surprises. The reason we liked APi in the first place was its strong competitive position and economic resilience. As Martin mentioned, we didn’t anticipate being tested this soon. If there is any surprise, it's how well the business has performed. What hasn’t surprised me is the culture, the commitment of the team, and the leadership, with everyone working together towards the best results for APi and its stakeholders. We entered this business believing it had a strong competitive edge, a solid management team, and a strong presence in niche markets. We expected it to thrive, even in a downturn, generating substantial cash and operating with a low capital expenditure model. It's been encouraging to see that these attributes are indeed present. The company continues to perform well, and I’m consistently impressed by how the entire team has risen to meet the challenges for the business. Martin, would you like to join us again?

Martin Ellis Franklin, Board Co-Chair

After 17 years of doing this with Jim, we kind of speak with the same voice nowadays. I couldn't agree more. I would tell you though that one of the hallmarks for us of doing due diligence and getting to know a business before we get in bed is not to have surprises. So I would tell you that I'm not surprised that there's not a lot that surprised us. But thankfully, we knew the business, we called it the warts and all when we do our due diligence and we know the good things. We know the things that will need to be worked on. And I think, as Jim said, I think the business has performed admirably during all of this. And I think we're very grateful. And I think that, that will reflect itself in the market at some point. But this is a long game for us. We're very relaxed.

Russell Becker, President and CEO

Well, I would just take this opportunity to thank each of you for your interest in the company. And please know that we are working hard and doing the best we can, not only for every one of our employees, but for our investors and the communities that we serve as well. So thank you again for joining our call this morning, and be safe and be well.

Martin Ellis Franklin, Board Co-Chair

Thanks, everybody. Take care, bye.

Operator, Operator

This concludes today's conference. You may now disconnect.