Earnings Call Transcript - EME Q4 2020

Operator, Operator

Good morning. My name is Lara, and I will be your conference operator today. I would like to welcome everyone to the EMCOR Group Fourth Quarter and Full Year 2020 Earnings Call. Ms. Jamie Baird with FTI Consulting, you may begin.

Jamie Baird, Moderator

Thank you, Lara, and good morning, everyone. Welcome to the EMCOR Group conference call. We are here today to discuss the company's 2020 fourth quarter and full year results, which were reported this morning. I would now like to turn the call over to Kevin Matz, Executive Vice President of Shared Services, who will introduce management. Kevin, please go ahead.

Kevin Matz, Executive Vice President of Shared Services

Thanks, Jamie, and good morning, everyone. And as always, thank you for your interest in EMCOR. We welcome you to our earnings conference call for the fourth quarter and full year of 2020. What a year it's been. For those of you who are accessing the call via the Internet and our website, welcome to you as well. Hopefully, you have arrived at the beginning of our slide presentation that will accompany our remarks today. We are on Slide 2. This presentation and discussion contains certain forward-looking statements and certain non-GAAP financial information. Page 2 describes in detail the forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. The next slide depicts the executives who are with me to discuss the quarter and full year 2020 results. They are Tony Guzzi, Chairman, President and Chief Executive Officer; Mark Pompa, our Executive Vice President and Chief Financial Officer; and our Executive Vice President and General Counsel, Maxine Mauricio. For call participants not accessing the conference call via the Internet, this presentation, including the slides, will be archived in the Investor Relations section of our website under Presentations. You can find us at emcorgroup.com. With that being said, please let me turn the call over to Tony. Tony?

Anthony Guzzi, Chairman, President and CEO

Yes. Let me start the call this morning by congratulating Maxine on her promotion and also welcoming Ron Johnson as our newest EMCOR Director. Maxine, congratulations, and Ron, welcome to EMCOR's Board. I'm going to be covering Pages 4 through 8 here in my opening comments. First, I'd like to welcome all of you and thank you for your interest and/or investment in EMCOR. In 2020, we had a terrific year despite an extremely challenging operating environment. We delivered extraordinary results through disciplined execution and resilience. I am extremely proud of our EMCOR team. I don't think any of us could have imagined this high level of performance when we started to understand the impact of COVID-19 on our operations in March of 2020. In 2020, we had $8.8 billion in revenues and set records on an adjusted basis for earnings per diluted share of $6.40, operating income of $490 million and operating income margin of 5.6%. We also had record operating cash flow of $806 million. Mark's going to cover all the financials in much more detail and especially the key components of our cash flow performance in his financial commentary, inclusive of the fourth quarter and full year 2020 performance. We delivered these stellar results because we have diversity and demand for our services. And we have end markets that have proved resilient and have provided us with opportunities to execute well for our customers. These results are a testament to our skilled employees and our subsidiary, segment and corporate leadership, who kept focused and resolute through the ever-changing environment in 2020. Across our company, we worked hard to keep our employees safe, and it was our #1 priority throughout the year. We innovated and found ways to maintain and even improve our productivity. We became leaner and even more expeditious in our decision-making. And we were able to leverage technology to connect our leadership effectively to the front lines despite COVID-19 protocols. We did not let obstacles become excuses. Instead, we overcame obstacles, and we delivered exceptional results. I now want to highlight some of our segment performance. Our Electrical Construction segment performed well with 8.4% operating income margins. Despite the disruptions in some of our operations from COVID-19 and due to shutdowns, we still posted outstanding results. These results were driven by excellent execution in the commercial sector driven by data center and telecommunication and really excellent execution across all market sectors. We've performed the work well and really innovated on the means, methods, and scheduling so that we can not only keep our employees safe but enhance our productivity. Our Mechanical Construction segment had an exceptional year by any measure. We also had 8.4% operating income margins with exceptional performance across the commercial sector, again driven by telecommunications and data centers. And we also had strength in warehousing, manufacturing, water and wastewater, and the health care end markets. We showed great innovation through increased use of BIM or building information modeling and prefabrication and worked hard to keep our employees safe and productive. We believe in both of our construction segments that we not only met, but we exceeded our customers' expectations. Our United States Building Services segment team showed grit and resilience as they faced the COVID-19 disruption in late March, April and May, with many of our customer sites not accessible, bookings off as much as 40% in some of our subsidiary companies and in some of our product lines and a very cautious resumption of decision-making by our customers to allow us to resume service and projects. We did rebound robustly from mid-June forward, and we're well prepared to execute project work for our customers that optimize their equipment and control systems, improve the wellness of their facilities through indoor air quality or IAQ solutions and sought to help our customers return to work safely and productively. We also served as the boots on the ground for our customers to keep lightly occupied buildings, campuses, and schools operational, functioning and safe over the past 10 months. We are well positioned to keep serving our customers as they reopen and seek to make their buildings safe, efficient, and productive for their employees. Our U.K. Building Services segment mirrored the performance of our U.S. Building Services segment. We navigated the severe lockdown actions in the U.K. and continued to keep our customers productive, operational and able to conduct their businesses. We also made organizational changes that enhanced our leaders' responsiveness by making our organization even flatter, more aligned, and leaner, which has led to crisper and more efficient decision-making. Our U.K. team continues to win in the market as we have a culture of innovation and execution. As you all know, our Industrial Services segment mostly serves the downstream oil and gas or refining and petrochemical markets. These end markets had a severe dislocation of demand as planes stopped flying and people stopped driving. This segment was also impacted at the beginning of the year with a disruption in the global oil and gas markets. We cut costs aggressively and maintained profitability on an EBITDA basis. We are well positioned as demand for our services returns, which is not likely to happen until the fourth quarter of this year. We expect the larger, more sophisticated, well-capitalized service providers to emerge stronger. And yes, we are clearly one of them. We exit 2020 with our remaining performance obligations or RPOs at an all-time high of $4.6 billion, 13.8% higher than the year-ago period. We have very strong RPOs and are continuing to benefit from the very strong demand for data center construction, logistics and supply chain support, especially with our fire protection trade, health care, water and wastewater. And we expect manufacturing to be as strong also as 2021 progresses. We expect to benefit from increasing demand for IAQ, that's indoor air quality, and building efficiency projects and solutions. We depart 2020 with an exceptional balance sheet that allows us the room to grow and build for the future while continuing to return cash to our shareholders through dividends and share repurchases. 2020 was an extraordinary year, and we performed exceptionally well, which is a real testament to our people, our subsidiary leaders, our segment staff and leadership, and our corporate staff and leadership. And really, I'd just like to thank all of them. I will now turn the discussion over to Mark.

Mark Pompa, CFO

Thank you, Tony, and good morning to everyone participating on the call today. For those accessing this presentation via the webcast, we are now on Slide 7. Over the next several slides, I will provide a detailed discussion of our fourth quarter results before moving to our full year performance, some of which Tony outlined during his opening commentary. As a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings release announcement and Form 10-K filed with the Securities and Exchange Commission earlier today. So let's discuss EMCOR's fourth quarter performance. Consolidated revenues of $2.3 billion in quarter 4 are down $122.4 million or 5.1% from 2019. Our fourth quarter results include $55.4 million of revenues attributable to businesses acquired pertaining to the period of time that such businesses were not owned by EMCOR in last year's fourth quarter. Acquisition revenues positively impacted both our United States Mechanical Construction and United States Building Services segments. Excluding the impact of businesses acquired, fourth quarter 2020 consolidated revenues decreased $177.9 million or 7.4% organically. Our segment performance was mixed within the quarter, with most of our reportable segments experiencing quarter-over-quarter organic revenue declines. In general, we have seen reductions in revenues in those geographies or market sectors which are continuing to be most significantly impacted by the COVID-19 pandemic. However, when we consider the incremental revenue generated from our acquisitions, we were successful in generating fourth quarter revenue growth from three of our five reportable segments. Specific segment revenue performance for the quarter is as follows: United States Electrical Construction segment revenues of $493.5 million decreased $71 million or 12.6% from quarter 4 2019. Revenues declined across multiple market sectors due to the continuing impact of the COVID-19 pandemic, including the associated containment and mitigation measures as well as the curtailment of capital spending by some of our customers. Consistent with my third quarter commentary, this segment experienced a significant reduction in revenues from industrial project work within the manufacturing market sector, where certain of our electrical businesses perform services for both midstream and upstream oil and gas customers. Additionally, the segment's operations that serve the metropolitan New York and California markets continue to face revenue headwinds as these geographies remain some of the most restrictive with regards to COVID protocols. United States Mechanical Construction segment revenues of $969.4 million increased $73.8 million or 8.2% from quarter 4 2019. Excluding acquisition revenues of $24.2 million, the segment's revenues increased $49.6 million or 5.5% organically. Revenue growth within the quarter was broad based across most market sectors, with commercial and health care representing the most significant period-over-period increases. These revenue gains were partially offset by a quarterly revenue decline in manufacturing market sector activity due to the completion or substantial completion of certain large projects during the early part of 2020. This revenue performance represents an all-time quarterly record for our United States Mechanical Construction segment and surpasses the previous record set in 2019's fourth quarter. EMCOR's total domestic construction business fourth quarter revenues of $1.46 billion increased $2.7 million or less than 0.25%. United States Building Services revenues of $568.1 million increased $29.1 million or 5.4%. However, when excluding acquisition revenues of $31.2 million, this segment's quarterly revenues decreased $2.1 million or 40 basis points. Revenue gains within their mobile mechanical services division resulting from incremental contribution from acquired companies and their commercial site-based services division due to new contract awards or scope expansion on certain existing contracts were partially offset by a quarter-over-quarter revenue decline within the segment's energy services division due to reduced large project activity when compared to 2019's fourth quarter. Consistent with our United States Mechanical Construction Services segment, revenue performance within our United States Building Services segment represents an all-time quarterly record. United States Industrial Services revenues of $135.5 million decreased by $163.7 million or 54.7% as this segment continues to be impacted by the negative macroeconomic conditions and uncertainty within the markets in which it operates. Cost control and cash preservation actions taken by customers of this segment have resulted in the suspension of capital spending programs and the curtailment of maintenance activity, which has severely impacted demand for our Industrial Service offerings. With the rise in telecommuting and the various restrictions on travel in response to COVID-19, there have been significant reductions in both vehicle miles driven and airline miles traveled, which is further prolonging the weakened demand this segment has been experiencing since late quarter 1 of 2020. United Kingdom Building Services segment revenues of $115 million increased $9.4 million or 8.9% from last year's quarter. Revenue gains for the quarter resulted from strong project activity as well as incremental revenue from new contract awards. Additionally, fourth quarter 2020 revenues were positively impacted by $2.9 million as a result of favorable foreign exchange rate movement in the period. Please turn to Slide 8. Selling, general and administrative expenses of $244.6 million reflects an increase of $3.7 million from quarter four 2019. The current period includes approximately $4.4 million of incremental expenses from businesses acquired, inclusive of intangible asset amortization, resulting in an organic quarter-over-quarter decrease of approximately $700,000. A reduction in salaries expense due to a decrease in head count necessitated by lower organic revenue as well as reduced travel and entertainment expenses due to a combination of cost-avoidance measures as well as restricted company travel were the primary reasons for the organic decline in SG&A. These decreases were largely offset by an increase in quarterly incentive compensation expense due to EMCOR's actual operating performance exceeding its previously forecasted 2020 full year results. As a percentage of revenues, selling, general and administrative expenses totaled 10.7% in quarter four 2020 versus 10% in the year-ago period. The quarter-over-quarter increase can be attributed to the reduction in our consolidated quarterly revenues without a commensurate decrease in certain of our fixed overhead costs, including those of our Industrial Services segment as we do not deem the current operating environment to be permanent. Our assessment continues to be based on our evaluation of future market opportunities. And we expect to see some return to normalcy in industrial maintenance and capital spending when we ultimately move beyond the depressed demand caused by the COVID-19 pandemic. Reported operating income for the quarter of $137.6 million represents a $14.7 million or 12% increase when compared to operating income of $122.9 million in last year's fourth quarter. This operating income performance eclipses our previously established all-time quarterly record, which was achieved in 2020's third quarter. Our fourth quarter operating margin was 6%, which compares favorably to the 5.1% of operating margin reported in 2019's fourth quarter. We experienced the operating margin expansion within each of our reportable segments other than our U.S. Industrial Services segment, which is reporting an operating loss for the fourth quarter and our UK Building Services segment, which achieved a consistent margin in each year's quarterly period. Specific quarterly performance by reportable segment is as follows: our United States Electrical Construction segment had operating income of $43.4 million, which increased by $2.1 million from the comparable 2019 period. Reported quarterly operating margin is 8.8% and represents a 150 basis point improvement over 2019's fourth quarter. This increase in both operating income dollars and operating margin is largely attributable to increased gross profit contribution from commercial market sector activities, inclusive of numerous telecommunications construction projects. These gross profit gains were partially offset by reduced gross profit contribution from the transportation and manufacturing market sectors due to both the closeout of projects in prior periods as well as the continued headwinds attributable to the COVID-19 pandemic. Fourth quarter operating income of the United States Mechanical Construction Services segment of $100.4 million represents a $31.5 million increase from last year's quarter, while operating margin in the quarter of 10.4% represents a 270 basis point improvement over 2019. This segment has continued to experience strength in the majority of the market sectors we serve, most notably demonstrated by increased gross profit contribution from project activity in the commercial, health care, and institutional market sectors. In addition, our Mechanical Construction segment experienced a more favorable mix of work than in the prior year and benefited from strong performance by our fire protection operations. Our combined U.S. construction business is reporting a 9.8% operating margin and $143.7 million of operating income, which has increased from 2019's fourth quarter by $33.5 million or 30.4%. Operating income for United States Building Services of $28 million represents a $3.8 million increase from last year's fourth quarter, and operating margin of 4.9% represents an improvement of 40 basis points when compared to the prior year. This segment experienced improved gross profit performance from its mobile mechanical services division, inclusive of incremental contribution from acquired companies. In addition, the segment continues to benefit from reduced levels of selling, general and administrative expenses due to cost-mitigation actions implemented in response to the COVID-19 pandemic. Our United States Industrial Services segment operating loss of $8.2 million represents a decline of $21.3 million, which compares to operating income of $13.1 million in last year's fourth quarter. As mentioned earlier on today's call, as well as during my commentary on each of our last two quarterly conference calls, our Industrial Services segment has been significantly impacted by the adverse macroeconomic conditions within the oil and gas industry, including the dramatic decline in demand for refined oil products resulting from travel restrictions and other containment and mitigation measures imposed in response to COVID-19. These conditions have resulted in considerable reductions in capital spending by certain of our customers, which has led to a decrease in demand for this segment's service offerings. This environment was further exacerbated by an active hurricane season, which resulted in the suspension of planned maintenance activities that would have occurred during both quarters 3 and 4 of 2020. Tony will speak to our 2021 expectations overall as well as our expectations for this segment later in this morning's call. United Kingdom Building Services operating income of $4.2 million represents an increase of approximately $300,000 over quarter 4 of 2019. Operating margin was 3.7% for both quarter periods. We are now on Slide 9. Additional financial items of significance for the quarter not previously addressed are as follows: quarter 4 gross profit of $383.9 million or 16.8% of revenues is improved over last year's quarter by $19.1 million and 160 basis points of gross margin. Restructuring expenses in 2020's fourth quarter pertain to the realignment of management resources within our combined U.S. construction operations. Diluted earnings per common share of $1.45 compares to $1.54 per diluted share in last year's fourth quarter. Adjusting our 2020 quarterly performance for the negative impact on our income tax rate resulting from the nondeductible portion of the noncash impairment charges recorded during the second quarter of 2020, non-GAAP diluted earnings per share for the quarter ended December 31, 2020 is $1.86, which favorably compares to last year's fourth quarter by $0.32 or nearly 21%. Our tax rate for quarter 4 of 2020 is 41.8%, which is significantly higher than the tax rate for the corresponding 2019 period due to the nondeductibility of the majority of the impairment charges just referenced. My last comment on Slide 9 is with respect to our $259.5 million of operating cash flow in the quarter, which favorably compares to $178.8 million of operating cash flow in the year-ago period and reflects the continued effective management of working capital by our subsidiary leadership teams. Our operating cash flow was aided by the organic decline in revenues, which resulted in a contraction in accounts receivable. Additionally, the deferral of the employer's portion of social security taxes in the United States benefited our cash flow by approximately $35.2 million during the fourth quarter of 2020. On a full year basis, the social security tax deferrals, coupled with the deferral of value-added tax in the United Kingdom, has favorably impacted our 12-month operating cash flow by approximately $117.3 million. These amounts will be repaid in 2021 and 2022. And obviously, we'll have the opposite effect on our operating cash flow in such future periods. Please turn to Slide 10. With the fourth quarter commentary complete, I will now augment Tony's introductory remarks on EMCOR's annual performance. Consolidated revenues of $8.8 billion represent a decrease of $377.6 million or 4.1% when compared to our record annual revenues in 2019 of $9.17 billion. Our year-to-date results include $269.6 million of revenues attributable to businesses acquired pertaining to the period of time that such businesses were not owned by EMCOR in the 2019 period. Acquisitions positively impacted each of our United States Electrical Construction, United States Mechanical Construction, and the United States Building Services segments. Excluding the impact of businesses acquired, year-to-date revenues decreased organically 7.1%, primarily as a result of the significant revenue contraction experienced during quarter 2 as the majority of our operations were most significantly impacted by the COVID-19 pandemic during such period. In addition, our annual revenues were negatively impacted by a decrease in demand for certain of our service offerings within our United States Electrical Construction services and United States Industrial Services segments as a result of the adverse conditions experienced within the oil and gas industry. Discrete segment revenue performance for full year 2020 is as follows: United States Electrical Construction segment revenues of $1.97 billion decreased $243.2 million or 11% from 2019's $2.22 billion of revenues; acquisitions contributed $25.4 million of incremental revenues, resulting in an organic decline of $268.5 million or 12.1%. Revenue contraction within the majority of the market sectors in which we operate. Most notably, the commercial and manufacturing market sectors were the primary drivers of this year's year-over-year decrease. As I mentioned in my commentary on our fourth quarter results, although this segment has a diverse geographic footprint, a number of its operating companies within both the metropolitan New York and California markets were severely impacted by COVID protocols, which resulted in a decrease in the number of short-duration project opportunities as well as various project delays. These impacts, coupled with the completion or substantial completion of certain large projects in 2019, contributed to the decline in organic annual revenues. In addition, and as previously referenced, certain of our operations in the segment which are exposed to the upstream and midstream oil and gas sector experienced a significant decline in demand in 2020. Partially offsetting these revenue reductions were increased revenues from project activities within the institutional and hospitality market sectors during the year. United States Mechanical Construction revenues of $3.49 billion increased $145.2 million or 4.3% compared to 2019. Acquisitions contributed $188.8 million of incremental revenues to the segment, which, when excluded, results in an organic revenue decline of $43.7 million or 1.3% from 2020. This organic decrease can be largely attributed to reduced project volume within the manufacturing market sector with a heavy concentration in the food processing submarket sector as a result of the completion or substantial completion of certain large projects in 2019. Similar to our United States Electrical Construction segment, this segment additionally experienced the negative effects of the COVID-19 pandemic, which resulted in a reduced number of short-duration project opportunities during calendar 2020. United States Building Services segment revenues of $2.11 billion increased $3.2 million or less than 0.5%. Acquisitions contributed $55.4 million of revenues, resulting in an organic revenue decline of 2.5% when compared to full year 2019. The decrease in project and building controls activities within the segment's mobile mechanical services division, largely as a result of the impact of the COVID-19 pandemic, which resulted in the temporary closure of certain customers' facilities, coupled with the decrease in large project activity within the segment's energy services division were the primary contributors to such organic revenue reduction. In addition, the segment experienced a decrease in revenues from its government services division as a result of the loss of certain contracts not renewed pursuant to rebid. These revenue contractions were partially offset by increased customer demand for certain services aimed at improving the indoor air quality within their facilities as well as an increase in revenues within the segment's commercial site-based services division as a result of new contract awards and scope expansion on certain existing contracts. United States Industrial Services segment revenues of $797.5 million decreased $290.1 million or 26.7% from 2019's $1.09 billion of revenues. At the risk of sounding repetitive, for most of 2020, the segment has been severely impacted by negative conditions and uncertainty within the markets in which it operates due to the dislocation between crude oil supply and demand resulting from COVID-19 and geopolitical tensions within OPEC. In addition, during the back half of 2020, the segment experienced suspension and deferral maintenance in capital projects by its customers as a result of hurricane and tropical storm activity in the United States Gulf Coast region. Revenues of our United Kingdom Building Services segment for 2020 increased 1.7% to $430.6 million, primarily as a result of new maintenance contract awards within the commercial and institutional market sectors. Revenues were also favorably impacted by $2.3 million as a result of exchange rate movement in the pound sterling year over year. Please turn to Slide 11. Selling, general and administrative expenses of $903.6 million represent 10.3% of revenues as compared to $893.5 million or 9.7% of revenues in 2019. Full year 2020 SG&A includes $29.6 million of incremental expenses, inclusive of intangible asset amortization pertaining to businesses acquired. Excluding such incremental amounts, our SG&A has decreased $19.4 million on an organic basis, primarily as a result of certain cost reductions resulting from our actions taken in response to the COVID-19 pandemic. As referenced during my quarter commentary, the increase in SG&A as a percentage of revenues is a result of the organic decrease in our revenue without a commensurate decrease in certain of our fixed overhead costs, as we do not deem the current operating environment to be permanent. 2020's year-to-date operating income is $256.8 million. Adjusting this amount to exclude the noncash impairment loss on goodwill, identifiable intangible assets, and other long-lived assets recorded in the second quarter, our non-GAAP operating income for the year was $489.6 million. This compares to operating income of $460.9 million for full year 2019 and represents a $28.7 million or 6.2% improvement year-over-year. Despite the headwinds experienced in 2020, three of our five reportable segments achieved higher operating income and higher operating margins than that of the prior year. Of the two segments which did not, United States Building Services is reporting a modest decline of just over 1%, while our United States Industrial Services segment suffered a significant year-over-year reduction, resulting in an operating loss for 2020. With regard to each segment's discrete performance, I will start with our electrical, United States Electrical Construction segment. Their 2020 operating income of $166.5 million represents an all-time segment record, and it is an increase of $4.8 million or 3% compared to the prior year. Operating margin for 2020 is 8.4%, which is 110 basis points higher than 2019. This year-over-year improvement in operating income dollars was due to a reduction in selling, general and administrative expenses due to cost-control measures enacted during the course of 2020. The increase in operating margin for the year was a result of an increase in gross profit margin given favorable project execution and a more profitable mix of work within this segment. These improvements in gross profit margin were partially offset by an increase in the ratio of selling, general and administrative expenses to revenues as a result of the year-over-year revenue contraction within the Electrical Construction segment. United States Mechanical Construction operating income of $292.5 million increased $67.5 million or 30% over 2019 levels, and the operating margin reached 8.4% versus 6.7% in the prior year. Acquired companies contributed incremental operating income of $9.3 million, inclusive of $12.7 million of amortization expense associated with identifiable intangible assets. The increase in operating income for 2020 was primarily due to strong project performance throughout the year in the majority of the market sectors served by this segment, resulting in an increase in annual gross profit. The 170 basis point improvement in operating margin was also a result of our solid project execution and improved gross profit margin, most notably within the manufacturing and commercial market sectors. These increases in gross profit and gross profit margin were partially offset by an increase in selling, general and administrative expenses, primarily as a result of an increase in incentive compensation expense due to the improved year-over-year operating performance for this segment. United States Building Services operating income for 2020 of $113.4 million declined by $1.3 million or 1.2% due to a reduction in year-over-year large project activity within the segment's energy services division as well as decreased project and building control opportunities within their mechanical services division due to both temporary closures and restricted access to certain customer facilities impacted by the COVID-19 pandemic. These reductions were partially offset by incremental operating income contribution from companies acquired, which totaled $4.5 million, inclusive of $3.2 million of amortization expense associated with identifiable intangible assets. In addition, this segment experienced increased gross profit resulting from greater demand for certain services aimed at improving indoor air quality as various customers made changes to their HVAC systems in advance of their employees returning to work, as recommended by the Center for Disease Control. Operating margin of 5.4% was consistent with the prior year as a reduction in gross profit margin was offset by a decrease in the ratio of selling, general and administrative expenses to revenues due to certain cost-reduction measures taken during 2020. Our United States Industrial Services segment incurred an operating loss of $2.8 million for 2020 as compared to operating income of $44.3 million in 2019. As referenced numerous times during this morning's call, this segment was the most severely impacted by the pandemic as well as the other macroeconomic factors affecting the oil and gas industry. This segment implemented significant cost reductions during the year in an effort to mute the year-over-year decline. However, as previously discussed, this segment's overhead structure includes a significant investment in fixed infrastructure, including plant and equipment. As we view current market conditions to be temporary, that infrastructure is needed to respond to changes in demand patterns once they ultimately recover. Operating income of our United Kingdom Building Services segment of $20.7 million or 4.8% of revenues compares to operating income of $18.3 million or 4.3% of revenues in the prior year. The $2.3 million improvement is largely due to an increase in gross profit from new maintenance contract awards, while the 50 basis point expansion in operating margin is attributable to both the increase in gross profit margin as well as a reduction in the ratio of selling and general and administrative expenses to revenues. SG&A of this segment benefited from various cost-control initiatives implemented by our UK team. We are now on Slide 12. Additional key financial data on Slide 12 not addressed during my full year commentary is as follows: year-to-date gross profit of $1.4 billion is greater than 2019's gross profit by $39.5 million, while gross margin of 15.9% is higher than last year's 14.8% by 110 basis points. Total restructuring costs of $2.2 million are increased from 2019 due to actions taken during 2020 to both realign certain management functions as well as right size our cost structure in light of the revenue headwinds we faced. Diluted earnings per common share was $2.40 compared to $5.75 per diluted share a year ago. When adjusting this amount for the impact of the noncash impairment charges recorded in 2020's second quarter, non-GAAP diluted earnings per share of $6.40 as compared to the same $5.75 in last year's annual period. This represents a $0.65 or 11.3% improvement year-over-year. We are now on Slide 13. As outlined on this slide, EMCOR's liquidity profile remains strong despite the headwinds we faced during the course of 2020. Our cash balance has increased from $358.8 million at December 31, 2019, to $902.9 million at the end of 2020. Operating cash flow of $806.4 million, aided by the FICA and VAT cash tax deferrals previously referenced, was the primary driver of this increase. Operating cash flow was partially offset by cash used in investing activities of nearly $95 million, predominantly representing payments for acquisitions of businesses and capital expenditures as well as cash used in financing activities, which totaled $172 million and consisted of the repurchase of our common stock, net repayments under our credit facility, and dividends paid to our stockholders. Working capital has increased by over $236 million as a result of the increase in our cash balance, partially offset by a reduction in accounts receivable given the lower organic revenue during the period as well as an increase in contract liabilities due to advanced billing on certain long-term construction projects. Other changes in key balance sheet positions of note are as follows: goodwill has decreased since December 31, 2019, as a result of the noncash impairment charge recognized during the second quarter of 2020, partially offset by an increase in goodwill resulting from businesses acquired or purchase price adjustments made during the year. Our identifiable intangible asset balance has decreased since the end of last year largely due to $60 million of amortization expense recorded during 2020, which was partially offset by incremental intangible assets recognized as a result of the acquisition of three businesses during calendar 2020. Total debt has decreased by $35.7 million since the end of 2019, reflecting our net financing activity during the year. And course, debt-to-capitalization ratio has decreased to 11.9% from 13.2% in the year-ago period. Lastly, our stockholders' equity has decreased slightly since December 2019 as our net income was offset by share repurchases, dividend payments, and postretirement plan liability adjustments made during 2020. Our balance sheet, in conjunction with the credit available to us, continues to put us in a position to invest in our business and achieve our strategic objectives as we look forward to 2021 and years beyond that. With my portion of the formal slide presentation concluded, I would like to get a drink of water, and return the call back to Tony.

Anthony Guzzi, Chairman, President and CEO

Hey, Mark, that was a great presentation. Year-end is always challenging, and we've been navigating it together for quite a while. Thanks again, Mark. Now, moving on to page 14, let me discuss the remaining performance obligation, or RPO, by segment and market sector. I'll briefly cover the numbers before diving into the market trends we're witnessing. As I mentioned, total RPOs at the end of 2020 were just under $4.6 billion, an increase of $559 million or 13.8% compared to last year’s total of $4.03 billion. We were pleasantly surprised by the strength of our RPO and the corresponding bidding activity, especially considering the uncertainties brought by the pandemic and the economic disruptions throughout the year. Historically, in times of uncertainty, we've observed a trend where quality and financially stable construction and service providers tend to thrive. Though it's still early to definitively say how 2020 will shape up as we move into 2021, it appears to be one of those times. Apologies, my microphone was off earlier, so let me reiterate: RPOs increased by $559 million or 13.8%, and we’re seeing a noticeable flight to quality as we transition from 2020 to 2021. Our domestic construction segments saw significant project growth in 2020, with RPOs up $495 million or 15.2% from the end of 2019. The demand for electrical mechanical systems, both in new construction and retrofit projects, remains strong. In our United States Building Services segment, RPOs increased this quarter as the small project repair services continue to recover from their abrupt halt at the beginning of the COVID-19 pandemic. This recovery is partly due to the resumption of regular maintenance on mechanical systems and a return to small project work, with a focus on modifications and improvements in indoor air quality, which I will elaborate on shortly. The recovery from the March, April, and May timeframe when this segment experienced significant booking declines is notable. On the right side of the page, you can see RPOs by market sector. Throughout 2020, we experienced strong year-over-year growth in the commercial, healthcare, and water and wastewater sectors. Commercial projects, making up 41% of total RPOs, increased by $297 million or nearly 19% for the year. Demand for hyper-scale data center construction and high-tech manufacturing remains robust, and we are also seeing strength in warehousing and logistics. As a leading player in the commercial market sector, I don’t foresee any slowdown in activity. We are currently engaged in design discussions for several large design-build projects. For the healthcare sector, project RPOs increased by $207 million or 56%. Additionally, the water and wastewater sector grew similarly, with RPOs rising 57% to $173 million. Given the pandemic’s impact, the healthcare sector within non-residential construction is expected to see slight growth in 2021, which bodes well for us as our customers undertake new construction and retrofitting of existing facilities. Notably, RPOs in these three sectors are at all-time highs since we transitioned to RPO reporting from backlog reporting back in March 2018. The nonresidential market, according to the U.S. Census Bureau, was approximately $800 billion in put-in-place activity by December 31, 2020, reflecting a 5% decline in 2020. However, this market is diverse, and opportunities persist. On the next page, I will explain how our careful capital allocation strategy has facilitated growth in our RPO base, even amid uncertain markets. I am now on page 15, discussing capital allocation. Our strong market presence in mechanical and electrical construction services has prompted us to strategically invest in filling geographic gaps and enhancing capabilities in these segments. We've also utilized our capital to develop leading expertise in HVAC services, building controls, and mechanical system retrofits. Our capabilities have been built through ongoing organic growth and acquisitions over many years. We are also recognized as a leading life safety contractor, largely within our mechanical and electrical segments. This expertise was cultivated over an extended period through both acquisition and organic investment, allowing us to serve a diverse range of customers effectively. Since 2017, we have completed over 20 acquisitions, investing approximately $555 million, while simultaneously returning considerable cash to our shareholders through share repurchases and dividends. Moving to page 16, titled Resilient Markets, we’ve demonstrated strong demand diversity at EMCOR, leveraging our capital to foster this diversity and resilience. This success is part of a deliberate long-term capital allocation strategy. For instance, our data center capabilities developed gradually over the years, starting with financial institutions and early hosting providers nearly two decades ago. We now construct data centers that are significantly larger than those early projects, continuing to strengthen our capacity through organic growth or acquisitions. We are leaders in specialty contracting for these complex facilities, which encompasses all electrical trades, mechanical trades, and sprinkler fitters. Data center construction is a vital market for us and is projected to remain so in the coming years. Furthermore, we have robust demand from our customers as they seek to enhance their e-commerce capabilities, construct large cold storage, and adapt warehouses for accelerated growth. We firmly believe we are well-positioned to assist our customers as they enhance the resilience of their supply chains through reshoring projects. Additionally, there remains substantial potential in large and small design-build food processing clients. The healthcare market continues to be a strong area for us, adapting facilities for greater flexibility in care delivery. Water and wastewater sectors present significant opportunities now and over the next three to five years, especially in Florida. Lastly, our position as a prominent HVAC services provider allows us to deliver indoor air quality solutions effectively. Current demand is robust and expected to sustain itself for years to come, with ongoing needs for upgrades and enhancements to HVAC and building control systems across all market sectors. As we enter 2021, we are still navigating the ongoing COVID-19 mitigation strategies and restrictions. The oil and gas markets remain subdued, and we anticipate a further modest decline in the non-residential market by 3% to 5%. Despite this backdrop, we expect strong performance in 2021, forecasting revenues between $9.2 billion and $9.4 billion, with earnings between $6.20 and $6.70 per diluted share. 2021 should be another outstanding year, requiring careful execution to maintain our 2020 operating income margins of 8.4% in our segments. Underlying this revenue range, we have some assumptions: the Industrial Services segment may not see material improvement until the fourth quarter, with refined products demand expected to remain challenged through the first half of 2021. The non-residential construction market is projected to see slight declines. However, we plan to execute effectively in resilient sectors, including manufacturing driven by data center and logistics demand, water and wastewater, energy retrofits, and healthcare. Our diverse end market continues to be a significant strength for EMCOR. We do not anticipate any drastic shifts in the restrictive COVID-19 environment we currently operate in. We expect a more normalized pre-COVID-19 operational environment to evolve as the year progresses. Our job sites are operating near full capacity with minimal COVID-19 related disruptions. Our leadership and workforce have adapted to function comfortably and effectively while adhering to COVID safety measures, prioritizing employee safety, which has long been one of our core values. We look forward to continuing to assist our clients in enhancing air quality through indoor air quality solutions, improving energy efficiency through project upgrades, and easing the return of their employees to work with a sense of reassurance. Our success in reaching the upper range of our earnings guidance will rely on several factors: stronger performance in non-residential markets, especially our more resilient sectors, the comfort of refining and petrochemical clients regarding re-refined product demand, continued momentum in indoor air quality projects, and maintaining strong productivity levels as we transition towards more normalized operating conditions. Regarding Texas' recent developments, our significant operations there were affected by the recent power disruptions, impacting not just our operations but also our employees and their families. Many of our clients operated with minimal staffing or halted operations altogether. However, we have largely resumed activities in our Industrial Services, construction services, and Building Services customer sites, although some first-quarter projects may now extend into the second quarter. We have already discussed our capital allocation strategy in detail. We plan to continue as balanced capital allocators while ensuring our discipline in investments, acquisitions, share repurchases, and dividends. That concludes my remarks, and I'll now turn it back over to Lara for questions.

Operator, Operator

So your first question will come from Mr. Brent Thielman from D.A. Davidson.

Brent Thielman, Analyst

Tony, you've gone from sort of a temporary lull in demand to what feels like some real urgency in the market to secure specialty service providers like yourself. I guess I'm wondering, is this an environment now where you feel like you can be even more selective about what you're after versus 3 or 6 months ago? Does this overall pressure on the non-res market that you think happens in '21, does that still leave some loose capacity out there and more competitiveness even on these more technical jobs?

Anthony Guzzi, Chairman, President and CEO

No. We didn't flinch. We don't operate in an environment where we just try to fill capacity. A couple of things we don't pay attention to is market share. We try to figure out the best opportunities for our market. And we really don't pay attention to chasing low bids to just fill up our companies. So yes, somewhere back in May, there was nonsense floating around the market where people came back and wanted a COVID discount, and we respectfully said no. We are disciplined bidding. We have discipline on capital allocation. That doesn't change whether it's good markets or bad markets.

Brent Thielman, Analyst

Okay. And margins continue to be exceptional in the construction businesses. I guess I'm wondering these upticks in health care, water, wastewater, some of the other technical areas in the business, I mean, I assume that offers some more margin tailwinds as we work our way through 2021. Is that fair?

Anthony Guzzi, Chairman, President and CEO

Look, business is always a mix. And this mix is not only of end market served, but also contract structure. We pay attention, at this point where we're at right now, I think Mark would concur with me, we're a lot more focused on margin dollars than we are margin percentages. We like these margin percentages. But we've always said that our businesses operate in a band. We're up, at the upper end of that band. The midpoint of this band is fine with more volume, and I feel really good about how we're executing in the field right now. Mark?

Mark Pompa, CFO

Yes. Thank you. Brent, I can add, clearly, our performance in the last two calendar years has been quite exceptional from a margin contribution basis and would certainly distort the averages if you look at them for certainly over the short period. And I think Tony mentioned the discipline with regards to bidding and ultimately project and customer selection earlier to your first question. That hasn't changed and it's not going to change. Ultimately, if it makes sense for us to participate, we're going to do whatever we need to participate. We know what our track record is, and we don't see any reason why that's going to change as we go forward in time.

Anthony Guzzi, Chairman, President and CEO

Yes, and I think it ties a little bit into the capital allocation. We're not big capital, organic capital users, a fixed investment in our business. But we do know how to supply it smartly. And I think some of the margin stretch you're seeing, in fact, I know some of the margin improvement we're seeing is because our means and methods have gotten better. We have gotten the implementation of technology, not only from point siting and job siting as we lay out a job and think about how that's going to construct on the site. Our prefabrication in both our mechanical and electrical business continues to get stronger. We can kind of put more full-time resources against that to make sure best practice is spread throughout the company. And then that is enabled by what I would say is as good as anybody or maybe better than anybody use of building information modeling. Our subsidiary leadership and our segment leadership really understand this technology and how to implement it to drive efficiencies for our customers and for our employees to not only build faster and smarter but safer. And that's really helped us in this COVID environment because our means and methods and planning has always been good, but it really became exceptional over the past year. And I'd tie in another point here. I agree with you on the point that these more technically complicated systems, but the contract structure has changed. So typically, a water and wastewater job is very good work, and we have a terrific team that does that work. It's not going to be as profitable as a quick-turn commercial job doing energy efficiency work. I mean, that's just not how it works. And just something that I'd caution everybody on. Contract structure and type of work matters. And again, like I said earlier, margin dollars actually matter too.

Brent Thielman, Analyst

Yes, that's helpful color. My last one is just on the indoor air quality opportunity. We've been talking about this for the last few quarters, and it seems to be perking up. One of the questions I had, Tony, is there anything about that type of work that might require additional investment in your platform and capabilities, things to address that opportunity? Do you feel like the platform is set to address that as we go forward?

Anthony Guzzi, Chairman, President and CEO

It's set. Training matters, and we have a great training platform set, and we have some people to drive that training for us. And that's an underlying strength of EMCOR that's only gotten better through this COVID period. We're using our technological tools to drive out training faster and to a broader group of people as are we leveraging our peer groups better from data centers, low voltage, BIM, prefabrication, and just our standard electrical and mechanical construction. Our guys are really sharing means and methods and how to service different customer demands. And that's one of the benefits of being EMCOR, the amount of learning that can go on across our organization. That sounds like a soft benefit. But when you're dealing with technical people, technical supervision, and trades, it matters a lot because these are highly skilled people that know how to take the information, tailor it to their local market and their customers, and drive a more effective solution for those customers. That's not easily replicated by a mom-and-pop contractor.

Operator, Operator

Thank you, Sir. Your next question will come from the line of Mr. Adam Thalhimer from Thompson Davis. Sir your line is now live, go ahead please.

Adam Thalhimer, Analyst

Hey good morning guys. Great quarter, good outlook. Hey, Tony, it's been a long time since I've been taking up my revenue forecast to try to match consensus. Pretty healthy revenue guide for this year. Just curious, how does that flow down at a segment level, the revenues for 2021?

Anthony Guzzi, Chairman, President and CEO

Look, we don't give segment guidance, but I mean, you have to look at the RPOs and that will give you an indication in segment, right? Clearly, electrical, mechanical segments are our biggest segments, and their RPOs are up, healthy. And Building Services has momentum building. We're going to take a pass on having any discussion on why we see revenues flowing out for the year in Industrial Services. And you can see our commentary; we're not expecting anything heroic there until we get into 2022 when we think the market will have recovered.

Adam Thalhimer, Analyst

And then the minus 3% to 5% for kind of general nonres, is that basically in line with what you've been thinking for the last three to six months? Has that changed at all?

Anthony Guzzi, Chairman, President and CEO

No, that has not changed. And Adam, I think the wildcard that I can't really prognosticate on, these are consensus from every source that comes out of them. More guys are looking at them, the gals are looking at the same thing you're looking at to get there. It really hasn't changed. We didn't try to make an estimate back in the height of COVID restrictions back in April or May, June last year. We thought that was sort of a silly event to try to project 2021 at that time. Things have really solidified here in the last five months, both from our external sources and the way we view the market from a compilation of those external sources. One thing none of us quite understands yet is especially on the smaller project side and the delay of award on the large project side there for a couple of months. What does this disruption that we all experienced in March, April, May last year, how does that manifest itself in a nonresidential market that has less restriction this year? Is that baked into the forecast? Is it not? I don't think anybody could figure that out, and I certainly can't either.

Adam Thalhimer, Analyst

Okay. Last one for me. Is it geographically focused, Tony? I mean, you threw in a little comment about weak New York and weaker California.

Anthony Guzzi, Chairman, President and CEO

The way Mark said that is California and New York were weak in 2020, weaker because of COVID-induced shutdowns. And where you really see that is some of the quicker-turn construction work. And then also not being able to revenue on sites because some of the sites were shut down in 2020, so we're catching back up. Here's what I would say. California, I think, should be OK. We do some very good energy savings work there, control systems work on the Building Services side. And on the construction side, we see our customers getting busy again and booking work. New York City is a different animal for a lot of people, right? I think the commercial part of New York City will be fine for us going out through the third quarter when it should start rebounding as people come back to work and the city becomes busy again. I think the part that will remain challenged for us, and it's part of what we do, right? We did the Tappan Zee Bridge. We did Brooklyn-Battery Tunnel. We are good electrical infrastructure or providers of electrical services to those infrastructure projects in the New York City metro area. Clearly, those agencies that control that work are trying to figure out what their fiscal outlook looks like, part of which rests with this stimulus plan with its aid state and local governments. Whatever happens there, we'll see. And then that will take a lot to trickle down and figure out how to rebuild these folks' budgets to allow them to work on some actual maintenance infrastructure projects or capital projects in the future in New York City metro area. That's a very specific comment for us.

Adam Thalhimer, Analyst

Yes, that should be a strength for you.

Operator, Operator

Thank you Sir. Your next question will come from the line of Ms. Noelle Dilts from Stifel. Your line is now live, go ahead please.

Noelle Dilts, Analyst

Hi guys. Again, congrats on the strong quarter outlook. My first question was just looking at kind of the strength in data centers. And so looking at the growth in RPOs, you're probably facing a lot of growth on the mechanical side. So I was just curious, when you look at some of those data center opportunities, could you speak to the extent to which you're doing kind of both electric and mechanical work? Is there still some opportunity to sort of cross-sell those services? And are there any services you might look to add through acquisition that might kind of strengthen your offering or expand your offering in that market?

Anthony Guzzi, Chairman, President and CEO

Yes. Good question, Noelle. I mean, we don't necessarily bundle the services together, electrically, mechanically. But we work with the same customers. They know the EMCOR companies are there when we have both capabilities in the market. And there, both can execute well. So yes, I mean, it's something we look to do. I think we've made acquisitions to strengthen our market presence. An example of that is what we did with the company we bought in Central Iowa, which was a terrific company. And it's really been aided, they're good at what they do, and I think they would agree that they've been aided by EMCOR's strength in data center construction. And I would say the BKI acquisition, although many things that terrific team can do, data centers being one of it in markets we weren't in, in Oklahoma, Alabama, Georgia, and South Carolina. And then we built both organically and through acquisition over the last couple of years our capability to service not only data centers but warehousing logistics and the fire protection, which for us means sprinkler fitter work. I would say we probably are one of the leaders or have a very strong technical position to serve those very complex structures. So I don't think we're looking to get into the concrete business, the curtain wall business, or landscaping business around data centers. But we will continue to look to strengthen our electrical, mechanical, building controls, and life safety offerings into those facilities and also the other facilities that are supporting e-commerce.

Noelle Dilts, Analyst

Okay. And then on U.S. Industrial Services, obviously, the market remains very challenged, but you do have some competitors that have either announced that they're looking to kind of exit or sell some of those operations or at least streamline, permanently streamline some of their operations. Do you think as the market comes back, that might kind of strengthen your competitive position and potentially allow you to gain some share as you move forward?

Anthony Guzzi, Chairman, President and CEO

Look, we've got a very good management team. We've got good operators in our local product lines and companies there, and we're one of the leading providers. We think we can help those facilities continue to become more efficient, stronger, and help them as they look to do things that they've worked on for a while like introduce renewable diesel. We look to be there to help them. I certainly don't think that this would be the time to exit a market on the bottom that I think will come back because I'm pretty sure we're going to be using refined products for quite some time. And then we have the ability to continue to strengthen pipeline networks in the midstream. So yes, I like being one of the leading providers. And I'd just point out here, it's less than 8% or so of what we do. We achieved what we did in 2020 with no significant contribution. They were profitable on an EBITDA basis. And from where we look at it now going into the back half of this year and into 2022, it should be upside from there.

Noelle Dilts, Analyst

Okay, great. And then for the last question, there have been reports of shortages in items like copper cabling and other equipment. Additionally, there's been a lot of discussion regarding rising construction input costs and raw material expenses. Is this something you’re concerned about or monitoring, and is it affecting how you view the timing of projects?

Anthony Guzzi, Chairman, President and CEO

No. We believe we will have sufficient supply. I've been here a long time, and I can count on one hand the number of times we faced supply constraints. This is largely because we have strong national relationships with top distributors and suppliers. Our team can trace back through the distributor system to secure essential materials like copper, sprinkler pipe, and corrugated products. We maintain strong partnerships with our distributors during both good and challenging times, which often benefits us during shortages. For smaller jobs, pricing is constantly updated due to their quick turnaround times. For larger projects, our strong customer relationships and strategic supply chain management typically allow us to secure what we need for the long term. When that's not possible, we've been effective at addressing rising commodity prices by incorporating those considerations into our contracts.

Operator, Operator

Your next question will come from the line of Mr. Sean Eastman from KeyBanc. Sir, your line is now live. Go ahead.

Sean Eastman, Analyst

So you beat the top end of the pre-COVID earnings guidance, so not a bad outcome there. Congrats on that. I just wanted to level set on the guidance for '21. So clearly, the top line growth is pretty solid in the mid-single digits, but we're not getting the same flow-through on the earnings growth guidance. So just wanted to understand the moving pieces there. Is the biggest kind of chunk of that sort of just an assumed normalization in the construction segment margins in '21? Or am I not thinking about that correctly?

Anthony Guzzi, Chairman, President and CEO

I think it's saying we could operate within the bands that we operate in when we're executing well. And some of that has to do with mix and timing of projects. We can't sit here in March and know exactly how our significant work will we roll out, how much will be finished this year, how much won't be finished this year, how things will accelerate through the year. So we take a tempered view when you get to the bottom end, which is still very strong margin performance. And also, I think we are working to understand better the progression in Industrial Services, and that's sort of a hedge against that progression in Industrial Services. Mark?

Mark Pompa, CFO

Yes, Sean, to really kind of amplify Tony's comment, and I harken back to kind of commentary we had in 2019. 2020 was an unusual year for a whole host of reasons that everybody on this call is very aware of. But we had more significant work complete in 2020, and that leads to an uptick in margins as we close out projects, right, as those projects mature. And as we look at how the revenues are going to develop for 2021, we don't see the same level of significant project completion occurring in the calendar year. That's not to say that we're not going to get the same level of performance but certainly leaves itself to an environment that would lead you to believe that at least on the electrical and mechanical side, you might see margins flat to slightly back up towards more historical averages. I mean, we're clearly well ahead of the 5-year and 10-year average for both of those segments. That's not to say that we're not striving to reset the bar at these new levels, but it's clearly mix-dependent. And more so, it's clearly dependent on project life cycle. And it's just too early in the year to make that call.

Anthony Guzzi, Chairman, President and CEO

Right. Exactly. And look, we're talking 10 to 30 basis points on either side of this. I mean, we're not, we don't foresee a margin, big margin decrement. We also don't see big margin pickup either. So we're talking, like Mark, this could be a couple of projects finish or start. And we're certainly not going to say, hey, we don't want to start that project because we're worried about, we don't want to take that big work as we're worried about margin dilution of 10 or 15 basis points. I mean, you would agree that would be silly.

Operator, Operator

And presenters, I am now, I'm not seeing any more further questions from the line. I'll be turning the call over back to you for any closing remarks.

Anthony Guzzi, Chairman, President and CEO

Thank you all very much for listening. It's a long call. It always is at the end-of-the-year call. I think I heard four times or five times that our execution was good, but also that we have a very positive outlook on our view of 2021 with what we know today. And of course, I'd always like to thank all of our employees. It's been a heck of a year, and we're performing, and we've learned how to work with adversity. We know we're contractors. We do know how to adapt and overcome. Thank you all very much.

Operator, Operator

Thank you, sir. Thank you so much, presenters. And again, thank you everyone for participating. This concludes today's conference. You may now disconnect. Stay safe, and have a lovely day.