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NV5 Global Inc
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Good afternoon, everyone. And thank you for participating in today's conference call to discuss NV5’s financial results for the Fourth Quarter and Full Year ended January 1, 2022. Joining us today, our Dickerson Wright, Chairman and CEO of NV5; Edward Codispoti, CFO of NV5; and Richard Tong, Executive Vice President and General Counsel at NV5. I we'd now like to turn the call over to Richard Tong.
Thank you, operator. Welcome everyone to NV5's fourth quarter and full year 2021 earnings call. Before we proceed, I would like to remind everyone that today's discussions contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in today's presentation slides and in our reports on file with the SEC. During this call, GAAP and non-GAAP financial measures will be discussed. A reconciliation between the two is available in today's earnings release and on the company's website at www.nv5.com. Please note that unless otherwise stated, all references to fourth quarter 2021 comparisons are being made against the fourth quarter of 2020, and any references to full year 2021 comparisons are being made to full year 2020. In this presentation, NV5 has included certain non-GAAP financial measures as defined in Regulation G promulgated under the Securities and Exchange Act of 1934 as amended. The non-GAAP financial measures included in this presentation are adjusted earnings per share, adjusted EBITDA and adjusted EBITDA margin. NV5 provides non-GAAP financial measures to supplement GAAP measures as they provide additional insight into NV5's financial results. However, non-GAAP measures have limitations as analytical tools and should not be considered in isolation and are not in accordance or a substitute for GAAP. In addition, other companies may define non-GAAP measures differently, which limits the ability of investors to compare non-GAAP measures of NV5 to those used by peer companies. A webcast replay of this call and its accompanying presentation are also available via the link provided in today's news release on the Investors section of the company's website. We will begin the call with comments from Dickerson Wright, Chairman and CEO of NV5, before turning the call over to Edward Codispoti, Chief Financial Officer, for a review of the fourth quarter and full year 2020 results. Dickerson Wright will then provide closing comments before we open the call for your questions. Dickerson, please go ahead.
Thank you, Richard. And a special thanks to everyone that has taken the time to join us for this conference. Let's start by turning the Slide 5 of the investor deck where we'll discuss our 2021 full year results. Total revenues were $707 million, a significant increase over 2020, even though there was one less billing week in year 2021. Our adjusted EBITDA was $133 million, a 26% increase over 2020. Adjusted EBITDA as a percentage of total revenue was 18.8% compared to 16% in 2020. We of course see an uncertain geopolitical environment this year. However, NV5 is entering 2022 with a record backlog of $695 million and a strong pipeline of opportunities. We see many opportunities, including infrastructure and opportunities to grow our position in ESG services throughout NV5. Our cash position and cash flows are strong and not only serves as an opportunity for support in these certain times, but also a great opportunity to grow through mergers and acquisitions. Now turning to Page 3, we'll discuss quarter four 2021 highlights and opportunities. Ed Codispoti, our Chief Financial Officer will discuss the specific results later on in this presentation. Utility services continue to expand and will be further enhanced by funding of specific growth initiatives supported by NV5 Corporate. We also continue to see exceptional results from our LNG Group. Our Real Estate Transactions Group had a record year in revenue, volume and adjusted EBITDA in 2021. We look to expand this service offering in 2022 with the acquisition in late December of Global Realty Services. We are pleased to see the improved growth for our Geospatial Services Group in the fourth quarter. We look forward to significant organic growth and continued profitability for Geospatial in 2022. We also built further upon our EHS platform with the acquisition of PES Environmental Services earlier in 2021. Growth through acquisition has been a key component for the growth of NV5. As you know we completed eight acquisitions in 2021. Page 7 lists the three acquisitions that were closed December 31, 2021. Now let's turn to Page 8 and discuss the strategy for the acquisitions and the subsequent integration process into NV5. During the acquisition process, we ask these questions prior to any acquisition. What is the culture of the target? Does the acquisition give NV5, a competitive edge? Does the target of a history of profitability, a strong reputation in a blue-chip client base? The companies acquired in 2021, which are shown on the right, answer these questions positively. On Page 9, we discuss our integration process. It is something that we have developed over many years and is executed by a dedicated team. The process begins with our due diligence and [indiscernible] the acquired firm is fully integrated in NV5 over a period of up to one year. Organic growth through cross selling is also part of the integration process. An example of our cross-selling, adding to organic growth is depicted by 13 of our most recent acquisitions. You'll see approximately $9 million in revenue added over the last two years by an intentional participation in the cross-selling program. This information will be found on Page 9 of the investor deck. On Page 10, you will see the overall success from our cross-selling program. And our goal for 2022 is $34 million. Turning to Page 11, you will see that we anticipate continued strong organic growth of at least 6% to 10% for 2022. We will measure and focus our organic growth in infrastructure, utilities, EHS and geospatial. NV5 has selected two specific growth initiatives in utility services and geospatial services funded by NV5 corporate, which we will discuss later in the presentation. I will now hand the presentation over to our CFO, Ed Codispoti, to provide an overview of our Q4 and full year 2021 performance. Ed?
Thank you, Dickerson. And good afternoon, everyone. If you would please turn to Slide 13 of the presentation, I'll now highlight some of our year-end financial results. Looking first at the fourth quarter results, we can see that our gross revenues for the fourth quarter of 2021 increased by 17% over the same period in 2020. Net income, more than tripled as it increased to $15.5 million in the fourth quarter of 2021, compared to $4.6 million in the fourth quarter of 2020, a 238% increase. Our adjusted EBITDA margin on gross revenues increased to 21.1% from 15.2% in the fourth quarter of 2020. This was an expansion of 590 basis points. Our GAAP earnings per share increased to $1.02 per share in the 2021 fourth quarter from $0.35 cents per share in the 2020 fourth quarter. And our adjusted earnings per share increased to a $1.61 per share in the 2021 fourth quarter from $0.82 per share in the 2020 fourth quarter, a 96% increase. For the full year, our gross revenues increased to $706.7 million from $659.3 million in 2020. This represents a 7% increase, but it's important to note that 2021 had one less week than 2020 due to the way our fiscal years are determined, so that one less week during the year affected our growth comparisons. Our net income, more than doubled as it increased to $47.1 million in 2021 compared to $21 million in 2020. Adjusted EBIDA increased to $132.9 million in 2021 compared to $105.4 million in 2020, a 26% increase. Our adjusted EBIDA margin increased to 18.8% in 2021 compared to 16% in 2020, a 280 basis point expansion. GAAP earnings per share increased 95% to $3.22 per share in 2021 compared to a $1.65 per share in 2020. And our adjusted earnings per share increased to $5.11 per share in 2021 compared to $3.72 cents per share in 2020, a 37% increase. On Slide 14 of the deck we can see a comparison of our results compared to pre-COVID fiscal 2019. As you can see, we have showed substantial growth in our results as our gross revenues increased by 39%. Our net income increased by 98%. And our adjusted EBITDA increased by 92%. GAAP earnings per share have increased by 69%. And adjusted earnings per share have increased by 57%. Cash flows from operations more than doubled as they increase to $101.4 million in 2021 from $39.9 million in 2019, a 154% increase. It's also important to note that our cash flows from operations in 2021 were weighed down by the timing of working capital changes, primarily driven by the growth in the business. On Slide 15, you can see that we are well positioned for future growth. We reduced $198 million of debt during 2021 through a combination of our secondary offering in March of 2021 and our cash flows from operations, which were 76% of our adjusted EBITDA. Now with cash on hand of $48 million as of the end of the fiscal year and minimal net leverage of about 0.7 times our adjusted EBITDA. We have reached a scale where we are able to fund substantial acquisitions and growth initiatives out of our cash from operations. As a result, we feel that we are well-positioned for growth going into 2022. I'll now turn it back to Dickerson Wright for some closing comments. Dickerson?
Thank you, Ed. Why do we feel confident for future success in 2022? Let’s turn to Slide 17. You will see a record backlog of $695 million to support our 2022 budget. We anticipate organic growth and EHS vertical by strengthening our current platform to better service existing markets and to enter new geographic areas. The acquisition of GRS will expand the transactions environmental service nationwide while also supporting our current transaction services group. Mergers and acquisitions are anticipated to continue to be robust. Our pipeline is very full. We in fact have firms in the final stages of due diligence. Based upon these facts and assumptions, we are giving full year guidance of $773 million to $802 million in gross revenue and adjusted earnings for share of $5.39 to $5.70 per share for full year 2022.
At this time, we will now conduct our question-and-answer session. [Operator Instructions] Your first question comes from the line of Rob Brown with Lake Street Capital Markets. Your line is open.
Good afternoon and congratulations on the results.
Hi Rob, thank you.
I just wanted to get a little more color on the M&A strategy for 2022. What sort of areas are you focused on? How is your thinking there looking at this point?
Thanks, Rob. We are fortunate. As you know, we’ve – our verticals – the six verticals that we have now are pretty well mature and established. So now we have the opportunity to look at and be very selective. The first is to what niche acquisitions will support those platforms. And second, what will enter and in turn also let us enter into new markets and grow the company. So we can be very selective. We’re looking at high EBITDA acquisitions. We’re looking at a high barrier of entry acquisitions. And we’re looking overall to strengthen the existing platforms that we have. And we’ll speak later to about some initiatives that will allow us to grow into other areas. So the transitional acquisitions although at the beginning of NV5, we were looking to grow those platforms and now we’re looking to improve the profitability and support the existing verticals.
Okay. Okay, great. And then in terms of the – you had a very good gross margin in the quarter. I just wanted to get a sense of how you’re managing through the cost pressures you’re seeing or what – and cost pressures you’re seeing. And are you seeing them and how are you managing through them?
Well, yes, yes. Let me just first say that businesses should be and support services should be scalable. And so what you see and we – I think we mentioned in the investor deck about the services that we offer from corporate, and those should not be rising in cost anywhere near the increase that we have in growth or in profitability. So the more that we grow, the more we should look – we look for scalability and we look for things that that can help us to be more efficient and be more profitable. So hopefully, you’ll see our continued increase in margin as we grow – as we go further. Although, as we speak many times of the – of our business, the first quarter is usually our slower quarter of the year, but we shall see and we think that the profitability and the gross margin should increase by the scalability of our structure.
Okay, great. Thank you. I’ll turn it over.
Your next question comes from the line of Chris Moore with CJS Securities. Your line is open.
Hey, good afternoon, guys.
Hi Chris.
Good afternoon. Great quarter. Thanks for taking a few questions. So maybe just start with geospatial I know it sounds like you, it was moving in the right direction, the second half of 2021, obviously, really high margin segment and lots of exciting things there. Can you just maybe talk about the momentum that you’re seeing there and how you expect 2022 to compare to 2021?
Well, we – the last portion of your question, we really are looking for good things from geospatial in 2022. They have presented a budget with that shows strong organic growth, and we’ll speak of this later in the presentation. There’s a special initiative. We have to grow the geospatial in the areas of offshore, wind and energy producing geospatial activity in the offshore markets for wind farms. And in fact, we’ve made some corporate investments on that, that part also helping their growth tremendously has been the acquisition of Geodynamics, which gives a deepwater geospatial surveying. So where are we without being too specific, we’re very pleased with the growth that we’re seeing in geospatial this year, and we’re expecting significant growth from them as opposed to last year?
Got it. That helps. You did a coup – three acquisitions right at the end of the year that looks like the bigger one was the Global Realty Services. So as you talked about your prepared remarks, real estate transaction businesses was significant in 2021. It looks like if I’m – it looks like this with Global Realty, it could be close to 10% of your revenue, first of all, is that correct? And secondly, kind of what service offerings, what basis does GRS fill in there?
Well, that is correct. It is close to 10% of our revenue. And obviously, what we think that we’re GRS or the Global Realty Services, we think will support our existing operation that we call Bock and Clark soon to be all both rebranded to NV5 transactional services. But we think the markets that are different where we feel the enhancement is the Global Realty Services really concentrates more on the federal funding, the Jenny Maes and the Freddie Macs, as opposed to and insurance companies, as opposed to Bock and Clark was mostly working in with attorneys and real estate transactions. So we think that whole network will be complimentary. And we’re looking for some organic growth, although in backlog, you can’t really look too much at Bock and Clark or Global Realty Services because the backlog is really a churn in burn. They don’t produce so much of a backlog, but we are anticipating to have a good stable year from those two combined organizations.
Got it. That’s helpful. Last one for me, just free cash flow was I think $87 million for the year, which quite good. And even they had a little working capital build. Is that level reasonable expectation for 2022?
Well, I’m always the internal optimist, but as far as specifics of where we are now and how we ended that result, I’ll turn that question directly to you Ed and maybe you can respond.
Yes. Hi, Chris. I would expect 2022 to continue to increase. You’ve seen a nice trend in our cash flows over the last two years. And for us, it’s a pretty straightforward when you think about our cash flows looking at our EBITDA and our CapEx stays relatively consistent. And so as we grow EBITDA for the company, I would expect cash flows to track along with that. So I – all else being equal, I would expect an increase in cash flows next year or this year in 2022.
Got it. I appreciate it. I will jump back in line. Thanks, guys.
Your next question comes from the line of Jeff Martin with ROTH Capital Partners. Your line is open.
Thanks. Good afternoon, guys.
Hi, Jeff.
Dick, I wanted to drill down on geospatial a little more. I believe a double-digit growth expectation for 2022 marks a lot of acceleration from perhaps what you were thinking three months to six months ago. So I was wondering if you could into that. And secondly, could you comment to the backlog specifically and geospatial a way back to kind of a normal level. In other words, have we recouped a lot of the federal contracts that were delayed in the first part of 2021?
Well, Jeff, thank you. You did answer that the one question, we are – you are correct. We’re anticipating a double-digit organic growth from the budget that we received and what we’ve the ground truth we’ve had with you geospatial. So we’re excited about that. But what does that consist of? It really consists of projects that were delayed and new work that they anticipate. And some of that new work is what we’re looking at. New work is coming from our Geodynamics acquisition, where we are able to now do deepwater geospatial work. And a lot of that is coming from an initiative that we’re going to speak up a little bit later on the wind energy initiative. So the combination that we’re expecting from geospatial and organic growth is going to be from the delayed projects that, that’s began to come to fruition slowly in the second half of the year and the start that they’re off to this year. So it’s nice to see that they are anticipating a double-digit organic growth, and it’s a very profitable segment of the business.
Okay. And then my other question is around the M&A side of the business. Sounds like you’re focused really primarily on niche acquisitions that are accretive to margins, but are there any in the pipeline that are on the larger side and by that, I mean, $50 million to $100 million in revenue, I think has been some – as marks the larger end of the spectrum. Just curious to kind of get a look under the hood, if there’s anything larger than average in the pipeline.
Yes. Yes, there is. I think we are always in due diligence and some of the small; it just comes on how they’re in the queue. Right now we have a couple of smaller acquisitions that are further ahead in the larger ones, but there are three acquisitions in particular that we’re looking at their all three or over $50 million in revenue. And let’s – I don’t want to call the game in the third quarter. Let’s see we – what we seeing right now we’re very active in due diligence in some of these larger targets. And let’s see what comes to fruition in the year. But by me saying at the first comment that I made, it is really nice that we have mature platforms where we can look for these niche high profitable acquisitions, and that gives us some breathing room to go for the larger acquisitions and go for some of these opportunities that we have that we wouldn’t have had before the verticals were as established as they are now. So we’re very excited. We think that we still are very, very active in M&A activity. And what was mentioned that I want to comment on this, the acquisition of GRS and I don’t speak specifically, but we paid for that mostly in cash. And it was no stock of some restricted stock was given out, but we have an unused line of credit that would Bank of America for $400 million and Ed didn’t speak of, but what we’ve done to mitigate some of the interest rate risks that could come about, but we’re in a very, very good position that we can make the smaller acquisitions out of cash flow, but that leaves us very opportunistic for larger acquisitions.
Great. That’s very helpful. Thanks. Congratulations on a strong…
Thanks. Thanks, Jeff.
Your next question comes from the line of Lisa Springer with Singular Research. Your line is open.
Good afternoon.
Hi, Lisa.
I wanted to ask you about the data center commissioning and engineering segment. Can you expecting trends in that business to stay as strong in 2022 if they were in 2021. And is that primarily an outside the U.S. business for you?
Well, let’s start with – obviously, as you know, through the stock market, a lot of the high tech firms have been taking a lot of hit and valuation, but we still to think there’s very – there’s a – it’s kind of a very different view of things. Most of the companies that we have we’re looking in our clients of ours have had very strong earnings. The data center work continues to move forward. And the specific things, although, I can’t mention the names, the acquisition that we did AT is really specializes with all of the well known high tech firms that you would know if we mention their names and we’re doing that data center work. One of those firms that is doing work a lot of work in the U.S. as far as data center work is an also a well known name that we’re not allowed to use. So the majority of it’s a very specific things that are going on in Singapore right now, we are very excited about that’s where a lot of the data center work is being done internationally, but we still have a lot of opportunities, these with current clients in the domestic area for commissioning work.
Okay. Well, thank you for the color.
Your next question comes from the line of Marc Riddick with Sidoti. Your line is open.
Hey, good evening.
Hi, Marc. How are you?
Good, good. So – good. Yes, really well, so far so good. I will let you know when this call’s over. So I wanted this as a bigger picture question, because it seems as though when you put the pieces together as to some of the commentary around both the existing business, the backlog, the visibility that you have there, the commentary around the acquisition potential pipeline. It seems as though if you could give and I wanted to sort of confirm this, what your views are on reaching the goal of $1 billion by 2024. It seems as though – that seems to be more visible now than one that the go – when that goal was originally set. And I was wondering if you could just share some of your thoughts on whether that’s the case.
Yes. Well, I think we’re well along the way and on track to do that, it’s for the end of 2024, where we think will be $1 billion in total, $1 billion in total revenue. And when this goal was established, it came from our people, it’s coming from the ground up, and it looks like we’re going to grow a little over 50% by organic growth in reaching that and not quite 50% in M&A activity, but we’re well on the way. And the previous questions that we had from Jeff Martin was, what type of acquisitions are we looking to do that? We think that some of it’s going to come through acquisitions and a lot of it will come from organic growth now that our verticals continue to be more and more established. So to answer your question, we’re certainly not backing away from the $1 billion by 2024. And I think we have a good pragmatic approach to being intentional about that.
Great. And then the last one from me, I just wonder if you could talk a little bit about maybe what you’re seeing on the ground as far as – any change as far as spending patterns or firms that you’ve noticed since the infrastructure act as path, as far as how active your customers are and maybe some of the priority areas. Is there anything that you could share with us that maybe is – or even maybe a little different than maybe what you were expecting initially. Thanks.
Thank you. Well, perception is reality. In the infrastructure bill, what we’re seeing right now is perception. Before we had a tremendous amount of headwinds where infrastructure was not being spent, but now that funding has been appropriated, it’s nice to be in the infrastructure space, although, we’re not expecting any immediate returns on that work. A lot of the infrastructure work that’s speaking of, there’s not going to be, so to speak shovel-ready projects that we see, because a lot of the permitting process takes a tremendous amount of time. But we think that infrastructure is – it’s good to have to know that there’s funding. It’s good that our federal government recognizes the need for it. And we’ve always positioned the company to be not so much in having to identify markets and – but more by need. People don’t worry about the economy when they need to drink clean water, people don’t worry about it’s a good or bad economy, so I’m going to go for a bridge or not or use transportation. These things have to be delivered in a safe matter. And so we’ve always leaned towards infrastructure improvement in positioning the company and looking at things that are needed by a growing population. So it’s nice to see that infrastructures being recognized, but we’re not seeing any immediate funding for that work.
Much appreciate it. Thank you.
Your next question comes to the line of Andy Wittmann with Baird. Your line is open.
Great. Thanks for taking my questions this afternoon, guys. Appreciate it. I guess, maybe Ed, I just wanted to try to get a good sense of the quarter a little bit more and get some numbers out of if possible here. So first I just related to the acquisition, could you talk about how much revenue that will be noted in the 10-K as having come from companies acquired in the past 12 months so that we can get a good sense of what the organic growth rate was in the quarter?
Sure, Andy. Hi, how are you? It’s just under $30 million for the 2021 year that came out of those 2021 acquisitions.
Got it. And then what does that mean? What is the revenue contribution from acquisitions that were closed in 2021 that will be inorganic towards next year? In other words, how much of this revenue guidance comes from acquisitions that’s inorganic.
For 2022, we’ve got, let’s see, when you think about the run rate for all of those acquisitions, it’s about an $80 million or so maybe a little bit less, maybe just under $80 million.
Got it. Helpful. And then let's see, where else do I want to go here? And then just on the quarter, I just noticed, was there any changes in the reversal of any contingent liabilities that were realized in the quarter. And were they included or excluded if they existed from the adjusted numbers that you were reporting?
Yes. So there was a $2.3 million adjustment to the contingent consider – one of the contingent considerations for one of our acquisitions and that flowed through G&A on the income statement, but for purposes of adjusted earnings per share it is added back as an acquisition related cost because there are terms that we came up with us part of the initial acquisition.
Got it. So these were – these were payouts that you had to recognize. So basically a cost there was expense in SG&A, and then backed out that incremental cost was backed out of the adjusted numbers you reported. Just want to make sure I had the direction of the adjustment is the right way there, okay. And then I guess maybe Ed, just in terms of the – let's see what do I want to do here? Just on backlog, can you talk about how much of the backlog was inorganic in the fourth quarter?
So in the fourth quarter, if you recall and Dickerson just spoke about this a few minutes ago, but GRS, which was the largest of those year-end acquisitions doesn't it – it doesn't really have a large backlog associated with because it's more churn and burn, right. And so it's high volume and it over quickly without long-term contracts. So that the backlog is not as – as high as you might expect, it was about $12 million, that's tied into those, those three lay year acquisitions.
Okay. All very helpful. Thank you very much and have a good evening gentleman.
Thanks, you too.
This does conclude our question-and-answer session. I'll turn the call back to Mr. Wright for closing remarks.
Thank you. We spoke earlier concerning the initiatives for 2022. The initiatives that would help us grow the company organically, and what did we – what initiatives would be funded by corporate? So let me just speak a little bit about that. We want people to grow the company. We don't want a business unit to be not looking for an initiative to grow because they think it would affect their budget. So we've decided that all of our – all the initiatives we had, what would be things that could really grow the company. So we have two specific initiatives that are paid for by the shared service center or the corporate, NV5 and what specific areas? So the two we had one in geospatial and one in for the Utility Services. So I've asked Mark Abatto to speak of what we're doing with Geospatial as far as an initiative. And then Alex will speak of what we're doing with utilities as far as the initiatives that were supported by corporate. So Mark, perhaps you can go ahead with the geospatial services.
Sure. The investment that Dickerson is referring to will expand our existing capacity to support the offshore wind energy market. The U.S. is far behind its European counterparts in installing this clean energy alternative, but it's looking to catch up in a hurry. There are 16 projects along the Eastern Seaboard alone that are in progress and another six leases closed just last week. So the market is poised for significant growth. NV5 will play a substantial role in this highly specialized near-shore cable corridor environment with the hydrographic and the geophysical survey capabilities that we acquired through the Geodynamics acquisition. We've been awarded over $4 million in offshore wind energy contracts to date, and the investment that we're going to make will position us to grow along with this attractive market segment over the next decade.
Thank you, Mark. That was very helpful. Alex, perhaps you can speak a little bit concerning the other initiatives we have in expanding our services to utilities.
Sure. Actually just to piggyback a little bit on what Mark had said it's actually a great initiative for both the core business as well as geospatial. There's a lot of opportunities for our core business and for the type of services that are all under our traditional geospatial work. Specifically, though for core, we are looking as we have developed particularly in our San Diego operation, a very robust power utilities group to be able to expand that throughout the United States. We have an investment that is designed to promote the services that we provide for utility operations not just in Southern California, but throughout the United States and particularly, we see huge opportunities in Northern California as well.
Thanks, Alex. So you can see that we want to be intentional and aggressive in our organic growth and support these initiatives that we feel can really have an impact on our 2022 budget year and then beyond that. So we are anticipating a very successful 2022. We also see a positive impact in some of the areas of our service that was impacted by COVID, and we're starting to see things coming out and growing further. Our building technology business and our MEP support services was impacted by the downturn in the hospitality group. We start to see the hospitality industry coming back strongly. We're starting to see work and expansion of work in the gaming area in the travel area and the areas in hospitality and as far as hotels and various things that were impacting our program management and our MEP Group and our Building, Technology Group. So we see that area of a positive effect on our budget for 2022. So, we also see organic growth in a number of different areas. We see a strong organic growth in utilities. We see the organic growth. We had a very good year in our LNG offices and work. We also see an opportunity to expand our environmental services. And we think in supporting environmental, we will also support many of our companies as they focus on ESG and look at that not only as a way to and increase our visibility with the environment, but to grow the company. So organically, we think it's going to be a very strong year. But I also want to talk about the M&A work a little bit, and we really have a robust pipeline that is very full. We have many opportunities. The phone continues to ring. And we now are very selective in the targets that we're going after. I want to mention one thing, though. We don't like to be considered a roll-up strategy. We really are an aggregator. Our team, our team has been at this for a very long time. So we are looking for opportunities that we can grow organically through our cross-selling program. We want to measure that cross-selling program that we're doing and see how that, and if you look at on the investor deck, you will see that our cross-selling program, which is our internal working for all the offices has really increased the organic growth of some of the targets that we've had and some of the acquisitions that joined the family. So these are things that there has to be a strategy for M&A. And the first strategy is to really embrace those companies, look for the good opportunities, look for the client base that they've had, look at profitability and then the structure is how do we really include them in the organization. So we think that we have a very, very good opportunity for M&A growth, and we look forward to 2022. I don't want to say too much about what the quarter looks like, but we're very pleased with the budgeting process. We're very pleased with what we're doing, and we're very pleased of where the organic growth can go and grow. And so some of the areas that we're looking at to be neutral this year seem to be growing. So, but how do we do this? I think that it is really because all of us have been working together for a long time. I want to thank the people in our organization. Everybody is working very hard. We want to visit with all our people; we let them know that everything they're doing really benefits our overall company. So I want to thank everybody for the time that first up, my thanks go out to all the people that have been with NV5 and second to our investors and people that are listening on this call, and we look forward to having a very good successful 2022, and I want to thank you for the opportunity you gave us to speak about the company. So I think that's – that will conclude our comments for today, but we look forward to seeing everyone and talking everyone in the future in coming months. Thank you.
This concludes today's conference call. You may now disconnect. Thank you for joining.