APi (APG) 3 Aug 232023 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to APi Group’s Second Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note this call is being recorded. [Operator Instructions] I will now turn the call over to Adam Fee, Vice President of Investor Relations at APi Group. Please go ahead.

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

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

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

risks we release press expectations. and our material from differ results In cause the our filings SEC, our to future detail that with may

statements August by we to no obligation as statements X, any make law. as today, forward-looking Our undertake update required we and may of are except

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

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

over turn call to to pleasure my the now Jim. It’s

environment. of including EBITDA adjusted share and Good evolving in per morning. APi adjusted revenues, Thank record diluted net strong Adam. another macro results, you, delivered earnings quarter an

first APi is half the continue We of with building momentum with an pleased to outstanding XXXX. be

of consistently the organization the performance to speak of and business as but leadership more business and the the are heading speak direction discipline to company’s will recurring strength of service-focused results well its model detail, financial revenue team. the Kevin as and strong in we the Russ APi’s the

nearly an larger X XXXX. in U.S.-focused years $X and over revenues. significantly billion the delivering with this of approximately in with journey team billion with business a expectation ago in are started We Russ revenue $X as we Today,

the financial our improved quality performance The has significantly. and of also business

fragmented We globally safety are life growing, market. highly the one and in fire a provider number

in to team’s in XXXX have ability to continue service EBITDA revenues. we expand monitoring We beyond increase adjusted as the our confidence XX% margins and to and inspection

decisions public the progress company, a on our and of has macroeconomic record focus maintaining consistently delivering allocation, appropriate becoming measurable results while M&A across track tuck-in Since above thoughtful expectations a demonstrated multiples made regarding team disciplined, financial predictable variable a capital and at backdrop.

confidence believe We value through XXXX have laser our business, generate XX/XX/XX creation and we in will long-term focus outsized great investor targets the on our returns and beyond. that

of adjusted year. margins As free XX% flow these second industry growth XXXX, revenue XX% include revenues monitoring the a of reminder, inspection, average: look from half above We EBITDA of in the to on the progress updating long-term service cash adjusted forward you XX%. and of in the long-term organic and

real results. call that, Russ to hand I over about the And with to the will talk

to see you call Good you once Thank our Jim creation you, time shareholder our this Jim. presentation. Thank taking model again morning, XX/XX/XX the our in everyone. included for that mentioned morning. value long-term join

relentlessly are driving XX% adjusted margins we with of specific quarter, last our XXXX. achieving strategy focus mentioned I As focused EBITDA on this by

us to I’m this when they can help our visiting on the about speak deliver to continue our world. locations around strategy leaders I how

to happen. how as aligned make what to organization in and want are achieve it an We we

our the goals on progress and will volatile. to results. on macro inspection-first stated be remarks will as our During today’s the driving continues call, begin I it’s I strategic organizational in well briefly financial then on our continued towards behind investment results our benefits commenting by record quarter environment as my touch in model a second that delivering that our long-term

Finally, our guidance and the in call before positive more the will detail. M&A over turning and the to our business of momentum walk recent activity results through I’ll financial recap Kevin, who

APi. on customers every XX,XXX calls, heard field you’ve our with believe have grateful APi on of we work well-being to for approach say for health the a our safety, interact remain at me remains one of specifically each leaders to development daily We who their our for We dedication and and prior As priority. hard a leader differentiated leaders, basis. number teammate our but

provide leadership beings prioritize always our human of careers, will and the the leaders job. training, aim field them opportunities. in to each with a investing APi, have advancement and not and development men field as We just women in At

recognize our value. that will and commitment We principles our prioritize shareholder leaders This are only of we the investment one field happens branches foundational believe is continue enhance when success because this to we successful.

we services second the for business. Turning see the global across continue to as with record demand quarter. results pleased we our robust I’m team the delivered the to by again offer

Net ended XXXX, higher three the of XX, revenues for mid-single-digit organic growth. representing by X.X% X.X% months June $X.X the reaching ninth quarter the organically grew billion or and by in quarter year-to-date, straight

march line and double-digit of XX% net service towards total revenues our service and revenue and our saw initiatives, inspection, monitoring in in as Importantly with a strategic of long-term monitoring. increase we inspection, from we goal

second with by achieved Safety have performance Life of continued quarter XX% in our and organic inspection quarter since which approximately year-to-date plus strong double-digit in the we business each U.S. XX% U.S. its pandemic. Life approximately the growth, Safety led growth

in quarter, with driving work and to pleased our line continue basis am team’s gross growing activities, XXX second improvement service in higher-margin initiatives, end I market project discipline year-over-year points. through leadership on-going pricing In customer, margin improvements strong commitment the strategic with to gross we selection. maintaining up and margin see adjusted in the

business. allows targeting critical results, and for take statutorily that customer drives believe financial helps inspection-first to customer decade around to at more over We organization have this relationships. mandated protective moment and existing disciplined fundamentally commitment become inspections we I to project you sticky update inspections last a on a service excellent and made how selection the and creates want providing to on investment drives build an moat facilities repeatable the a those business and

driving revenues, global comes When those But we and can core best continuing more expansion we inspection down competing as growth. on are focused what inspection. our selling it to but target this believe than with no our opportunities. excellent double-digit the position solely plans, instead a in we sales to build provider to service higher-margin are inspection an on the organization lot is customers just leverage We quarterly longer price, growth installation consider customers drive

field them right equipped coordinated infrastructure with significant leaders collaboration develop technology best-in-class enable This our and and customer. leaders office in help service in multistep field. a our as diverse field and do provide process requires programs and to multiple highly invested process help to to We’ve the centers well customer are a our the the field instruction leaders great training with Inspections well training to as to and requiring amount of base.

inspection Most competitors higher large recurring, would invoice rather pursue installation work. than margin, jobs smaller

would replicate entry. we investment have and and And barrier to a increasingly last inspection-first our over We created inspection a who to are the believe of made ahead and differentiator this competitor has model Our scale investments, commitment strategy. our attempt within any large the growing key sales decade control. is in to force

$X reminder, in take to every some at an subsequent a most more of need $X that core of year have or service once of least average place inspection per we to inspections As revenue these frequently. cases, to And revenue. in cases, data dollar leads

project On We the inspection was of adopter in strategy in revenue. service than on at of the included comes margins brand’s journey a its slide average, inspection-first impact presentation and shows core XX-year that of higher one an that time. and profitability gross the over branches that early revenue our XX%-plus

customers An expansion beyond of underappreciated side and on to margin we in be is do, ability on choose continuing the revenues installation well. then selective business of the to our much service inspection, to more better the monitoring project the resulting as work grow benefit serving

-- in less less XX than expanded XX digits specific this from single low branch, EBITDA than to For margins in mid-XX% years.

we an of straight see for healthy remains the can come through results of quality benefit our strong. expansion approach the delivered projects which in and margin X and in where have consolidated backlog, You quarters improved our this gross

to this international our strategy in continue across where this are opportunity strategy. business network, long-term the leaders for our in Our execute excited the branch only and of we instilling I’m stages early

of about targeting The international plan, remains EBITDA is growth million The XX% that track. margin our business we another is achieving to our contributor on only continues target, with to show intentional XXXX as be which work capture value key additive another progress continue to adjusted $XXX to XX% quarter target. solid

Moving M&A. on to

leverage of first to the M&A. in in our free ability us flow line in to our generation the reduce of to returning growth while X times EBITDA and year end Our of net target net bolt-on gives leverage the the range year confidence near cash with X.X half

have are synergies. to and in before As attractive on operate that immediately M&A EBITDA fragmented, The within bolt-on team seen adjusted the accretive release, opportunities focused may pipeline. we the identifying we remains return in July to acquisitions most announced our a you are robust margin press our our markets highly

and the continue businesses I’m family. excited to to to leaders APi new add their

provide to our the across year, full financial half global increase momentum our Kevin of platform updated will as year enter on details our guidance. strong have we guidance. We the us back allowing again

remain In of results we of back commitments year, and executing XXXX. the I’m record on and the we on our proud produced our while far team in financial summary, focused so delivered in half how

be where grateful what to our to them of continue to each are today. we the of get driving force truly has performance. leaders field Our done I’m for us

our over hand like detail. guidance Kevin? to would to and I discuss the results now to Kevin more in call financial

$X.X to Thanks, billion prior ended the Good the morning, Reported compared three everyone. XXXX, in for months revenues to year X.X% period. June billion increased net Russ. by XX, $X.X

same in for by organically led X.X% driven by increased revenues revenues. growth both service in period organic growth by and the Safety Services double-digit Specialty strong Net

by segment half quarter, in segment were was one Specialty driven second approximately through increased Safety measured growth by the Services the while by volumes, labor was growth in hours. In driven primarily and price which one Services half volume,

and increases, pressure representing three margin offset partially Adjusted both compared by revenues increase prior to grew a which the margins. across gross project segments. growth price downward expansion XXX on to by in driven margins XX, inflation, basis point These for ended period year the service were factors caused June XXXX, XX.X%, outsized months

representing the offset build-out continued on of gross XXXX, XX by for the Adjusted growth XX.X%, EBITDA the three margin EBITDA our primarily currency a June XX, in the by at to and capabilities investments year to infrastructure. margin, partially impacting to due global compared period factors support revenue increased basis and an months ended coming basis adjusted fixed increase XX.X% point with prior

earnings margin partially diluted share both to increase Safety The Adjusted quarter compared driven quarter. in share Specialty and primarily by diluted Services, a expense, to $X.XX $X.XX earnings $X.XX, a expansion in offset representing per second the the representing growth per was year for strong prior period. in headwind was increase interest adjusted increase an by the and organic

I $X.X billion billion compared detail XX, will results June Services our the year reported now ended by prior Safety revenues XXXX, to more months $X.X Services. the for to Safety discuss increased in three period. in for X.X%

in Safety, selection Net and business driven by customer discipline HVAC revenue U.S. increased customer and project robust core attrition planned Life international revenues offset in increased business. inspection growth by our partially by X.X% organically growth double-digit in in and our

margin XXXX, the for high adjusted increase caused on margins a offset XX, service as the representing basis driven well year point by partially as was XXX Adjusted revenue improvement by inspection three and gross compared gross months which mix and downward price adjusted increases, prior significant XX.X%, ended improved in pressure margins. business on June margin with gross project inflation, margins, record monitoring

XX, three factors partially June to made increase margin, by by was due prior a impacting Adjusted support fixed the growth. EBITDA compared margin revenue investments EBITDA gross to basis XXX on XX.X% increased XXXX. And for basis year the adjusted point the currency to XX%, adjusted representing a months offset primarily ended period

in driven by growth million results ended the service XX, Services our in detail by utility three It’s selection. to led I partially disciplined million segment. revenues Specialty our and Services to specialty $XXX markets. offset months Specialty will infrastructure discuss contracting, by continued compared $XXX for reported by customer increased year revenues for period primarily in and project the growth double-digit in more now X.X% XXXX, prior June

project Adjusted gross well to revenues project ended driven XXXX, three point in gross as improvement XX.X%, year customer a XXX basis and months service organic was margins the margin significant as representing the increase by for strong disciplined XX, June period prior driven compared primarily by selection.

months EBITDA the some And adjusted by basis XX XX, June was of three XXXX. EBITDA offset year increase the point representing by period partially adjusted margin, XX% to Adjusted other factors timing an and prior margin compared primarily XX.X%, impacting to increased employee-related onetime expenses the ending due for costs. gross

free long-term our focus flow cash conversion improvements conversion. flow free of cash goal progressing We XX% continue on driving to towards year-over-year,

came cash an of For versus year the three XX, reflecting improvement June XXXX, of in prior flow months flow million, $XX $XX free cash adjusted conversion adjusted an ended the and period free at million XX%.

a the million six than of the free improvement in six first the delivered reminder, compared of months flow the year, slower as is back For of months seasonally year, $XX the which, when XXXX. to cash we half

performance at priority all the to positions to us be XXXX continues million our flow representing flow conversion, of our adjusted half year free midpoint free first or cash above our the adjusted of the Free $XXX an And and of has deliver in updated guidance. generation XX% over a cash APi. guidance flow cash been of adjusted across at of on delivery EBITDA

and even net QX, remain X.X the leverage to EBITDA below with approximately X.X bolt-on accretive current to EBITDA net M&A return times to our in XXXX. the to through generation target margin adjusted the debt We year-end X deleveraging stated on by of with At times expectations of long-term be X.X quarter. end focused debt laser was to net times adjusted cash our

maturity years the X with of remains sheet XXXX. in with approximately average strong earliest maturity a weighted balance Our

year discuss I QX will XXXX. our now full guidance and for

second a our the expect in compared half year exchange we of of foreign impact reminder, half incorporates after headwind when be a As guidance a the the XXXX. XXXX first expected to tailwind the fluctuations, which of to in modest being

net billion reported adjusted to and $X.XXX our represents net We year-to-date current which full to to performance reported momentum to prior the X%. X% raise guidance net and growth from up year with EBITDA. approximately $X.XXX the billion pleased confidence for currency full now revenues billion, of reported expect This at gives year business, of I’m the $X.XXX us billion revenue $X.XXX expectations. revenues of

and up adjusted of approximately from to EBITDA adjusted EBITDA million growth at million represents margin We which year approximately now XX% expect adjusted full $XXX to million, reported of the $XXX XX% $XXX EBITDA to $XXX of million, XX% midpoint.

expect revenues $X.XX approximately billion. expect QX, net to of represents of guidance $X.XX In we we terms net billion net revenue growth reported This -- reported revenue X%. of X% to

adjusted $XXX million, reported of QX million expect growth EBITDA EBITDA approximately XX%. represents of $XXX to adjusted which XX% We to

prior For XXXX, any equipment of be approximately effective to approximately million, be $XX million, $XX million cash rate we XX%. $XXX tax anticipate expenditures be interest be to our depreciation expense approximately to sale and approximately capital to adjusted potential to

adjusted We the $XXX to our share average for million. expect diluted approximately be count weighted third quarter

I more year. look updates on with of XXXX. and progress results the quarter pleased half I’m to the Overall, forward throughout team our our by in second the first delivered global sharing

call now back turn over to Russ. the I will

Thanks, Kevin.

APi to first delivered the The our half record second quarter in to business well, continue and year. of the perform As commitments. financial on we heard, deliver the you’ve continues results and

inspection, and I’m service confident historically execution to revenue, continued through and environment their expansion macroeconomic operational macro focus consistently environment project ability in -- build increasing pricing in leaders’ on momentum customer the any our drive initiatives, in generate high-margin and any on margin business, selection. and monitoring improvements strong relentless

just global work right the remains across reflected guidance continue as our the planned, markets. we’ll right through, As on platform. focus strong Backlog increased the healthy. we in had customers for went the in right Kevin to And momentum

by sustainable XX/XX/XX create creation value value targets. shareholder our believe We can focusing long-term on we

above-market reminder, adjusted XXXX. of these a XX%-plus margin As and growth include by EBITDA organic

heading. As we confidence and the look in to have business XXXX beyond, we’re and great we direction the

With that, turn the Q&A. and the call back open call to I would the like now for over operator to

CJS [Operator Securities. Instructions] Tanwanteng of Jon comes Your first from question

color that taking the changes helpful. my for Thank of from How guidance. much My just that contribution made be morning. one, acquisitions FX? you would any good is recently Any first Hi, on you in that increased and questions. on

Jon, me the second to on. come And of question, I first answer have heard so I’ll part part, to you’ll the the that. back

recent of acquisitions guidance. in The back year impact our our from an So of the lease announced part most are at couple the that in our as of is standpoint a July half around EBITDA million dollars. or

That’s was as contribution great. I wondering about FX well?

contribution? FX

Yes, if any.

to approximately at somewhere $X million at back of in FX EBITDA year currency the million current $X the half expectations. be will

even term, at seeing tuck-ins accelerated been seeing Okay. for And Great. doing? I’m be the smaller opportunities there pipeline? that out or you a that more the there? might Thank look about as And is that M&A you more then talk little just larger, a the Are you’re opportunity you anything with longer at bit looking you. pipeline you’ve can an

thank company. the and in interest you Jon, Thanks, for your continued

our we’ve Our Life U.S. primarily And opportunities M&A But international in just robust. the been that us America our business. to in value executing in space North see pipeline and past, on program the we in remains Safety the focused available because we’ve partly of remain our on business. in we really the same on part focused capture shared as

M&A the continue making the of opportunities, helping really sure a leadership and that the company add good right pursuing leaders to businesses of robust. But think APi to inside we the pipeline do that us look forward I really company. job and pipeline But there’s And our to build along is family. we our plenty them

we’re do at we we why reasonable have that, the of find criteria number I to aligned bolt-on is And us of think common we able we etcetera. one the about these companies primary culturally we’re purchase for acquire as acquisitions, that’s right sure make think, and fit, when one the, to benefits On these values. the prices, share one

So for to lots for is us. year of of what next the year. opportunities bring the and rest Excited going in potentially the

you guys. Great. Thank

comes of Julian Barclays. Mitchell Your question from next

This strong. ask Patel-O’Connor wanted there organic is the on in pretty growth I Kiran was first quarter and on the just to for Life Safety. Julian. The half

just curious versus how gains? much market-related organic was I that year-to-date Thanks. that So is growth market share of seen you’ve

share Safety I that that gains. say the Hi the Life is Kevin. Kiran, growth this U.S. lion’s we’re the in business share is would seeing of

going business that’s the we’re to through win feed business them continue side and continues and of taking service inspection-first competition, We that But there the primary driver. model to business. and our the out

helpful. market very getting these the are players larger gains market share market smaller from? about being taking Got -- And competitors you’re that know that it. gains share That’s you’re Is I talked are you really there the Or from? it fragmented. it

I mean, and when little that as I group of share. is And bit us a sales you continue it. think take growth we continue to about build continued will it’s the driver both probably there key out, think build-out team. our for of And inspection to we the

capturing do approach first. they inspection And XX% in I installation inspection way when contract. that my work the a basically the on traditional installation complete, work and remarks, more try is As customer is to work sell mentioned of to the and service them companies service and

environment. building that is really, on relationships customers. potential put sales force really calling pavement, the already built focused model on are And we’ve And on the pounding out with and that here

that a a and so small we tactic player. that’s taking go a share that having from player business. about a different And large it’s different you’re And approach or after away whether as

any a focused and you. any then you’re are just follow-up Thank these as Thank you talked pricing getting where be initiatives. I Got strategic customers you. And And result? curious, them would pushback about if on just if from churn my and there’s was it.

service basically, typically labor and in So That with escalation especially price build that -- along wage I with with is mean, escalation. associated we number our and we our timed price inspection in the come the contracts, one, increases with it. rate

and that building contracts as these we’re price out we’re So actively increase into pitching. selling

I these sticky. that say would and very in some have been I say very, -- would general, price We have increases situations

in attrition; some of of more has purpose. business. had have say We on been that attrition potentially the some would international this I

last go White to had New we November And showed if and in we his Day for. customer Investor plan back all you he basically that the the presentation, to attrition Andrew that made York way X%

with would that through that because of we poor deal to increases price Some performing come contracts the pricing needed had on. we

customer have But sticky. like We that. haven’t It’s price in been to attrition. increases general, something seen X% X% our probably been X%,

Great. Thank you.

comes Research question next Thompson Group. from Kathryn of Your Thompson

To morning. the in good I’ve Biros of this is trends out expect business, going I Hey part for you just start This questions. but more some that you Can on was business? the called we revenue at don’t digits for Thank -- Kathryn. single heard quarter, forward? of onetime performance event the you talk quarter? I high about Or much. think think like in contract in kind part actually Brian taking on about a that of the the Can is of talk solid that my

Good morning, Brian.

Our grow was contract at quarter but did up pace revenue same the service it not the in on organically, side. the

in the just contract Our single-digit around to at clarify, growth revenue, mid-to-low quarter. was

Okay. Got it.

I you right margin to margin of that on the we to growth continue customers expansion work which right think focus talk markets. the in to continue end wanted on moderate with we side higher purposely was while the the business, about what

the growing Slide that And XX, presentation that Okay. deck, in branch Got margins. visual shows then the it.

trying I you get are sense many versus remarks. closer either out general stage maybe Can going to to beginning just this think you end to a just guys of services. the has that the touched of on bucket more of journey? how much prepared the closer impact push how Just or it that the branches for on forward

breadth that entire piece business, I if our about just say Well, you would I’ll you it’s the I our look and of think branch, at -- consider you it I if -- this across say, fully if at mean, and you business, mature, you of it international premature. mean, think look it’s the from then

And so we business. stretch the of across breadth the

it’d -- have XX, the be or business. we’re X different of so, America, And places, at me X. adoption really a we inside because North tell what In scale our been you hard last X levels even on the decade where on inside different X places, I of in at we’re look probably to strategy say to parts some you or X for we’re for can that X a if at we’ve at so XX. or some of And or focused

But can what out this basically that is has you working build understands embraced tell actively And businesses of I one every now sales our are force. that we philosophy. and to

we force, add build As work, we to need to inspection continue then and do to out that key that inspectors service recruit, component work to to actually be inspect, sales a continue still definitions And -- do support that train as to go it. which and the of out well. develop can that have we able is the

So say, turn well and business. little our America. it’s more in probably North grease we’ve I’d flywheel starting And international to reasonably turning, the needs got a -- the just in in

Thank you.

Andy Your of Citigroup. comes Kaplowitz from next question

about market you terms so driving market everyone. low color markets U.S. mentioned digits gains. slowing? concerned what Life regarding us focus, markets could organic. growth? And APi are quite I inspection we still any more more is of growing talked its nimble about morning end double you that there but good into share Safety are you give are that in And Russ, Hey know

markets really some primary shown to as focus our infrastructure. the Really, as to. on thank well higher would strength those to aviation Well, has end are really really semiconductor, leaders that degree, -- we you. our data say a And health I steer business centers, institution, care, trying keep consistently critical certain is

is course we kind these need Obviously, next to to real months, of to an going -- of all to remain estate, over XX what have. the waiting of be loans for XX drop refinanced everybody commercial there that’s the shoe as impact the

small you’re the If and very estate for chasing commercial really basically that’s work that’s you projects, what And that water. in of piece is us, do. the dead business developer-led a we fortunately, our that do, real and very,

honestly that I can always at. disciplined. be feel is can the the we’re selection always it. markets more good that business probably selection at we’re selection, tell project all-time showing feel leaders And on discipline an where really, We better. so I that can of really end good really end customer our you We I’m in. about But about high. market And And proud are be and I

could the it’s something more, the we really gross have beating likely that important is plus lot we’re And demonstrator a out expansion. so and at the we and would of margin long-term margin this target that. good project-based by us it be we’re to go beating fact really to if growth. most and XX% a to revenue speak, to, And showing And wanted But take gross of work expansion margin expense And drop. of for very beating we been gross if going XXXX. achieve that’s accelerate

Yes, that’s helpful. And maybe the same Europe. question for

looks general. November. a Is is like lower characterize European us the there is little told the in Investor last think that’s attrition still of at sort you mid-single lower. already the it I growth customer would And mentioned markets? you And what You How digits? bit Day

international to monitoring the way I Investor Yes, makes that back going inspection would the all one fair. think XX% of point their is and I just revenue our service is thing to the Day business you that’s mix. and that up And actually

And so high. of just the as that generalized really pretty a statement, is business resiliency

minimal And performance our seen in to robust the positive to the And and see margins going And demand improve the customer seeing, be we business. for we’re in it’s have with attrition the is attrition, you, business. we honest quite have and continued business. to customer

So is where we’re confident and business the going. business the in

Helpful. And then maybe one last one for Kevin.

moving what the all in had little price about that coming half your Just that the and revenue a volume XX-XX maybe you you think QX. in a on steel Is in down versus I year? maybe since bit split with at the And of spring, does price forward? Kevin, mentioned cost. margin would your help expect second

yes, Andy, thanks.

the as year. the So baseline safety would the our move expectation sort the seeing a through year-to-date we’re was the of side I and XX-XX on business. of back we And basis of that’s half on what say

talk but worked costs, material inflation, little And that the work our quarter we we we not we material year-on-year, proposing were And on second started last the were it rolled work were The hot versus safety when business. of side we a and of where just coil. largely the -- necessarily work bit was QX run-up proposing costs in look in costs versus at on both have a steel let’s in business, sort late was we QX, seen year.

those continue that a on We margin going the like first year, a they’re as work see the we we that pickup of the bit we should to -- of to as and on Similarly, come come QX in creates that down in run-up so that. down, the lost half headwind it half. looks back and

color. the all Appreciate

Andy, Jim. I plans and with in. to get in were the meeting growth the both and the want just went And Minneapolis this XX% international week, team to EBITDA to plus through its chime domestic earlier margin. team. everybody Martin their I

question years by who that international in set historically, over earlier business to the negative remember, have Carrier. you of new our But so. you in most said your lower business. or growth And just was people had growth XX the be last I acquired level may want international that

as the It’s initiatives. well within line compared pleased growth the thoughtful right And with that of we’re with side growth couldn’t its we’re spending performance of behind so and balanced in plan is the and to we business. performance. measured international more sure our making the seeing the historical and that strategic But be

the Appreciate Jim. color, additional

comes Snyder of UBS. Chris from next Your question

you. Thank

not the around like, and first year half and long-lasting in which is regulation also this kind ultimately, gains, business And So feels really of feel low organic growth the double-digit drivers hanging of the macro-dependent. of share it level. are the

the drivers are low levels? doubles the kind have it mid-single-digit more normalization been organic or push for growth that to just selection what that’s the normalized the the the about? going from that, to with project guys the you talking the of So headwinds Is

we’re sure to making purposeful that we’ve the segment difference. in that a really I And discipline our the making just trying as And we’re pursuing make in Services opportunities as earlier, team it’s showing work as installation right sure to think our and that they’re in HVAC the selecting And business whole. Specialty opportunities. I as of and a pursue the XXX%. been very our mentioned right for proud well I’m

despite to that. preannounced my then for month. guess that you. these company margins to wanted there bolt-ons? the they’re about you maybe follow-up, talked on being And the transactions are guys these And ask a accretive or is little kind the kind talk the what of businesses. we surprised premium? that? margin in EBITDA what immediately bolt-ons on us an said Or X expect maybe I that just obviously bit about you unique I EBITDA that all for -- that about Can you coming at of smaller something last Thank should was Thank is to

being -- these mean, them I currently EBITDA talked at immediately we their accretive, that’s APi. margin performance about that Well, the fleet average is when bolt-ons recently an executed we higher at than

so that you they’re to at. they’re form make the assumption And going where to continue

continue which hopefully and is businesses integrate a to those quickly really big going We’re our very their performance, of start margin to model. part improve to

from will X, making businesses assumption. So accretive, be day that those

to mean of mean, or Does business to area want that a the a in wouldn’t we XX% say that that that’s I is our acquire, XX% on business say, companies, accretive, geographic to continue companies general, I a we We we in pre-synergy would that that’s only are as right? basis? want that acquire focus. maybe that acquire performance

see EBITDA how of say, right a can and clear something If it the doing we was business certainly that. area, like in path we culture, it fit, performing look would get our geographic margin, at from criteria to that we XX% values at, all met can and

is with of tell we they that. in honest, acquire total that inspection them, their it’s a less you Chris, XX% find usually And start be when and service their totally might to So that you, lot digging businesses, monitoring XX%, you out revenues. when these than you of

and and get have mind-set forward moving right that very very a playbook inspection-first the how it path. on can those we clear quickly, take it the business road We map instilled get businesses, on in glide get

and especially our our important broaden complementary footprint, we -- national expansion map us and of that’s looking looking accounts. for try it’s so continue to we at important as to something us to base geographic, at for And the existing geographic as that’s

the actively any not out for performing of imagination. looking So -- or stretch -- but we’re like to that not businesses going we’re poor by anything

you. Thank that. Appreciate

from Instructions] next [Operator question Baird. of Your Wittmann comes Andy

Your is line open.

is, Hey question the you the growth so rates market? to and service tight inspection side? inspection you’re business between inspection, your growing side your flywheel the on you’re my that’s move business, labor growth business about where side just I project so project guess being the staffing relative the from Russ, business that the really given having of talk to just so given you of and monitoring that this the well personnel you’re on are Can how focused selective,

Yes.

It inside we a force. by separate up to to what done the recruit. really we’ve I’ll Life inspectors is say, future workforce, really out morning Safety continued centers a we’ve to separate that’s We’ve and is to of way. business Good sales speak, continue build And inspection workforce. the So Andy. set train, as excellence new so that our

And that build that’s our women. actually as we execute be sales force to work. train sales men or inspector -- able build those and to we have going we need inspection sales And to inspector to the force,

as design do well, centers We train excellence like overflow, a of we have excellence center we other we design of where and designers. have

a for letting really we’re for is so We a need not workforce. our can have But that to skilled make technician technicians of -- we one become accredited separate sure alarm apprenticeship bottleneck fire businesses us. develop that programs that it’s

your just do every if need general, is of And important. keeping very are most in to they really installation customers doing going separate don’t two in They service And they to monitoring and you’re a van. day work, with people them have to the segregated. small really but moving be want that and jobs robust do around and installation to a and -- have different want inspection, business, work, different interests them

synergies you. And follow-up, Okay. second second into that us tracking capture you how the plans this exiting give year their Kevin, That for the the about for as and to you my of Could run year, on calendar you quarter cost cost for exited then the capture cost status? expect Maybe half of talk incur sense. XXXX just I you’re you rate maybe do head those and captures. guess how cost makes an in the much update on

Sure. Good morning.

So from our an expense $XX standpoint, in to still full XXXX. million our year expectation of prior for $XX million the year is guide

had $XX As we that on back XXXX. of the a reminder, that’s in million

the from of the from for We P&L basis accrue million a between charge should $XX charge. that year’s XXXX to standpoint savings last million still be expect that one-for-one $XX $XX and about talked we year savings. to the We’ve in to million accrue expect

year’s there. This expect between our additional million, so but savings from $X to back-half $X XXXX loaded, million be approximately probably savings charge. we they’ll will some and And charge somewhere be of activity see and $X

Thank you.

from is question next JPMorgan. Your Tusa of Steve

good the strong the quarter. Hi, on cash morning. flow Congrats in

Thank you.

that that energy a utility what The I’m commercial Is to piece bucket. I at that telecom sales office? you the have, think of It How much is power I’m is -- part of pie actual guys something like well. looking trying maybe XX% of like utilities is exposure like it is that of Or bucket. like then telecom? the mostly seems you as it’s that. have like transmission that out figure or -- just And

Just chart. on two those curious pie parts of the

is rise telecom small I X%. end it’s The referencing inside say you’re about. of or talking amount sort would a being So those would in of bucket, be that that remainder the areas. other areas estimate of very commercial the that We markets you the some the are and high that of

trend? just you Are half, on how stable those expect pretty little or the segment a the or Great. just accelerating Thanks. And sales organically decelerating? guidance in then forecast second those to

problem. no Yes,

We’re to sort the back planned, the segment and of end the not I’ll in the right you we a right margin year. specialty customers of businesses; breakouts tell gross good specific driving as what done of growth job we’ve half the markets is expansion. But focusing guiding managing on and

half, talked half. And safety look at saw business I our we and back lot there those say U.S. expectations. Life the similar Safety the performance in the obviously, are about the you would and first as businesses we a

Specialty going to continue growth organic to Services side, the to we’re side. share safety capture We’re moderate growth and continue gain and on going from and manage the to

Great. Thanks a lot.

are concluding the any call no this happy further our to And remarks. be time. questions there return to I’d at hosts for

remarks, Jim. one it’s please? jump Russ, just you Can before I on Hey in concluding your thing do

Sure.

on lot conversation a the today M&A. call of been about there’s So

we our want we tuck-in ramping our return talked larger these week, as doing focus we and live world. we remain doubling ones while considering leverage So to up likely spending on in the about that when it I Minneapolis focused move acquisitions, the across into to we there smaller tuck-in what’s think staying thoughtful XXXX the in we were the within out much on still clarify they well so just to targets as M&A, on want that desk because deals, can this more so and come educated

term goals. And believe for earlier, still spending done on just that historically live appropriate near can have the Russ them. real But so is team within focus ratio the I multiples our as these well debt-to-EBITDA ramp I we our well the in on said tuck-in and deals that paying and up

I’ll Russ, that, back you. to Thanks. with over So turn it

for the which Thanks, else people would to color. dedication foundation like In support we Jim, built. closing, Without all do our of for the our I believe our on not business. and continued their are members thank is to them, team exist. everything We

our and throughout look forward shareholders you recently your of the support. for their have like year. as the appreciate also We to remainder I’d APi, of ownership us thank we updating our as those progress on well to long-term that joined

in again do you. everything to you all the And our this APi Thank call. you environment. please win grateful we’re for thank for taking time that teammates to the to us So across join of that help know globe,

This does conclude conference. today’s

may great day. now and You disconnect have everyone, a your lines,