Greetings. Welcome to ABM Industries Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to Susie Kim, Vice President of Investor Relations and Treasurer. Thank you. You may begin.

Thank you all for joining us this morning. With us today are Scott Salmirs, our President and Chief Executive Officer; and Earl Ellis, our new Executive Vice President and Chief Financial Officer.

Thanks, Susie, and good morning, everyone. Thank you for joining us on today’s call and we hope you and your families are safe and healthy. It’s hard to believe we are already at the close of 2020 and covering our fourth quarter results. On the other hand, we are about to discuss only the second full quarter of COVID-19’s impact on our financials. In Q4, we reported revenues of approximately $1.5 billion for the quarter. This represents a 9.9% decline versus last year and a considerable sequential improvement when comparing to our more than 15% decline in Q3. Once again, our diversified client base demonstrates the resilience of our business. Our Technology & Manufacturing Industry Group grew almost 7% and Business & Industry, as well as Education posted revenue results that were only slightly down. As one would expect, our Aviation segment drove the majority of our organic decline versus last year. Technical Solutions also saw a large revenue decline and continued to see challenges inside access, which affected churn rates. Positively the backlog of committed work in Technical Solutions is healthy and the pipeline for 2021 is robust. So all things considered it was a good revenue story for the quarter.

Thanks for the warm welcome Scott. I am so excited to be part of the ABM team. I recognized early on that the culture here is so special and unique. Even in just my first few weeks here, I have witnessed an exceptional drive to collaborate and execute that clearly sets ABM apart. As I spend the next several months diving into the business, I look forward to developing and sharing my perspectives on our financial strategies over future calls. Now onto our quarterly results, revenue for the quarter were $1.5 billion, a total decrease of approximately 9.9% compared to last year, reflecting our second full quarter of COVID-19 revenue declines, particularly in the Aviation and Technical Solutions segment. Partially offsetting this revenue decline was continued demand for higher margin work orders that we have been providing for our clients through the pandemic, particularly within Business & Industry and Technology & Manufacturing. GAAP income from continuing operations was $53.1 million or $0.78 per diluted share, compared to $48.1 million or $0.71 last year. These results reflect the continuation of favorable claims trend related to health insurance reserves. We saw a benefit of $21.3 million in self-insurance adjustments, of which $6.2 million was related to the current year. On an adjusted basis income from continued operations for the quarter increased to $46.7 million or $0.69 per diluted share, compared to $44.7 million or $0.66 last year. Similar to the third quarter, our GAAP and adjusted earnings growth versus last year was driven primarily by a significant increase in higher margin work orders as clients respond to COVID-19, as well as the continued management of direct labor to align with the demand environment for legacy services. Partially offsetting these results was a $17.6 million reserve for notes receivables for project related to…

Thank you. And our first question comes from Andrew Wittmann with Baird. Please proceed.

Okay. Thanks for taking my questions. Good morning, everyone. I guess my question -- my first question here has to do with the margins and they are obviously very good because of continued to positively surprise here over the quarters and so I wanted to dig into that. Particularly on the gross margin expansion, I guess. I was hoping that you could give us some sense about how much of the gross margin expansion that you are posting is purely from the mix of having towards more tag revenue and less parking revenue things of that nature, so mixed benefit? From what seems like you guys have actively really managed your labor pool against the base business to drive efficiencies there. So I know that might be a hard question to quantify, but I thought I would try and see what you can tell us so we can understand kind of some of the moving pieces inside of it?

Yeah. Sure, Andy, and good to hear. Look, a majority of the margin increases come from pandemic-related work orders and also our EnhancedClean. And then also our labor management is probably about 50-50 in terms of contribution and so it’s been a really good story for us. And I think the better story is that we are continuing to see momentum into the first quarter, which is reflected in the quarterly guidance. And we wish we could give full year guidance to give you a better sense of it. But -- it is really still early on. But I will tell you, Andy, the one thing that has changed, I think, if you were to look maybe a couple of months ago you would think that, this was with the vaccine coming it would be more of a binary event and is this all going to be over in October, right? And I think what we are starting to learn now that this isn’t a quarter-by-quarter event. There’s going to be a rollout of these vaccines. There’s going to be some supply chain issues. And we have even seen that from all the polls I have seen at least 50% of the population isn’t even going to take the vaccine. So we think this is going to be a longer term story than something that again is going to be feeling like a more binary. And then you think about kind of the office environment and you can have some people that are taking the vaccine some people that aren’t taking the vaccine. So there’s still going to be people wearing masks. There’s still going to be a need to disinfect, because I am not sure they have even figured out whether or not if you have been vaccinated you can still transmit it, right? And then the question is how long does the vaccine last. So there’s so many uncertainties there, so whereas, again, I think, earlier in the year we thought this could be maybe a quarterly story, I am not sure it’s not a longer term yearly story right now. So -- and we are seeing the heightened awareness. So I don’t think the momentum is going to change anytime soon.

Yeah. I wanted to dig in on that. I am glad you kind of went that direction, Scott, because as -- I mean, you have obviously had to de-scope with your customers, obviously, not occupying so much space. And it feels like and I guess you just said that basically as they descope, you have managed your labor probably even better and that’s afforded you some margin improvement. I guess the question -- the addendum to that is, as we do reopen at whatever pace that is and you do have to re-layer in labor as your customers are more occupied and need more services? Do you expect that you will be able to retain some of this margin, all of this margin or do you feel like you will have to progressively give some of the profit margins back to your customers? I was just wondering how you see that playing out.

Sure. So look, I think, the labor efficiencies that we are getting now, because remember, offices of are 10% occupied, right? And think of this, with its 10% occupied. But you had -- our revenues are only 10% down, you could make a case wide aren’t they 90% down, right? So I think as we re-staff we will lose some of that labor arbitrage. Our goal is to maintain some of it, but we are certainly not going to maintain all of it, that wouldn’t be sensible. So I think we are going to we are going to capture permanently some of that labor arbitrage. And then from the COVID-related activities, I think, we are going to retain a fair amount of that just because of the awareness. And the flipside to all this Andy is that as we reoccupied it’s going to turn into a revenue story, right, because people are going to be back and you know so I think we will start seeing growth again and we are thinking that’s probably more of a back half story. For us it’s always been about momentum. We just want confidence and momentum. So I think the vaccine is going to start doing that. So whereas you may see a little trail down in margin from the labor efficiency, you will see revenue go up.

That makes sense. If you will offer me just one last question. I wanted to ask about some of the investments. I think you said the word investments a few times on a conference call. It does seem pretty material here and I would just want to make sure that we are all understanding this correctly. I think when you when fiscal 2020 started before the pandemic, the pre-pandemic guidance you guys were talking about putting in an incremental like $20 million mostly related to IT initiatives and digitization process things, if I am not mistaken pretty sure that’s correct. But now we heard here in this quarter that it was $10 million of just for this quarter and that there’s another $10 million for next quarter. So that’s $20 million already and it feels like the run rate of investments, obviously, therefore is a lot larger than you thought about at a year ago at this time. So I guess, first of all, can you validate that? And then the second thing is, what else are customers and shareholders going to be benefiting from? How else is that going to be seen in your results so that we know that you are getting a good return on these incremental investments?

Yeah. No. That’s a great question. So I think, let’s go back where you started. Pre-pandemic, we were talking about the ERP, right? That was the big deal for us. And we did say that we were going to pause that, because we were, obviously, it was a liquidity of that, right, the pandemic. So as we started getting strong from a liquidity standpoint in our results, we said, we got to go back at this again. But I think the pandemic changed so much and it caused us to rethink our longer term tech roadmap and with a remote workforce with -- at ABM and with clients being remote, we said we have to rethink that. So, we are going through this, what we would call, an exploration phase, of how do we move forward? How do we create this digital platform? How do we look at how we are going to interact with clients and how do we look at how we are going to interact with our workforce from a workforce management standpoint? So all that is underway and that’s the investments that you are really seeing when you talk about that $20 million, the $10 million and the $10 million, and it’s all going to be founded on the ERP system as the first leg of this thing, right, because you need to have your data, you need to have a good financial system. So I think as the year unfolds, we will have a better story of how much we are spending? How much will be capitalized versus OpEx? So we will be thinking about that. And, so we will give you more color as it goes on as the strategy framework shapes up. But I think the backdrop to all this is we are going to be prudent we are still middle in the pandemic. So even with these investments, Andy, if things get squishy in the economy with resurgences we could always pull those back. Is that helpful?

It is. Thank you very much. Happy New Year. Happy holidays to everyone.

Thank to you.

Our next question is from Sean Eastman with KeyBanc Capital Markets. Please proceed.

Hi team. Thanks for taking my questions and Earl welcome. Welcome. And…

Thank you, Sean.

I wanted to go back to just the sustainability and margins. I am just trying to understand this transition from shorter term planning work order dynamic to EnhancedClean uptake. What has been sort of a margin impact from moving over to that more permanent contract structure within EnhancedClean and maybe you could just comment on the uptake on EnhancedClean since inception there?

That’s great. I am glad you asked that actually because we can clarify that. So when you think of pandemic-related activities, which -- and just think large scale disinfecting spaces, right, and I think, we have talked about this before, it’s basically the types of chemicals that we were using in pantries and in bathrooms is now being used in general office space to disinfect, right? And there’s two ways that clients are going about it. There is a hiring us space on a work order basis, which again just to make it real simple is, they talk to us on a Monday, and say, hey Thursday night can you come and disinfect and could you bring two more people to take care of such services. So that’s one way. And then the other way is what we call the branded EnhancedClean, where a client will come to us, and say, listen, I want to talk about a longer term program over the next three months, six months, nine months. So can we just make sure like every night you come and you disinfect. We have four people permanently, right? So work orders or short term in nature and EnhancedClean is longer term. We are seeing similar margins in both and they are not competitive, right? And taking a work a client that’s on a work order and moving on to EnhancedClean, if we don’t do that, it’s really not a sale. It’s really dictated by a client themselves, because you may be a client that’s saying, listen, I can’t really judge yet the occupancy cadence of my team. I am not sure how many people are coming back when they are coming back. I don’t want to commit to a longer term spec right now. It could be a client that’s saying, the pandemic has shifted our business. We are having our own financial issues right now. So I don’t want to commit to the longer term. So let’s just do this on a short-term basis. So they are not competitive projects and we like EnhancedClean better, because we always like, like any business you want to lock into a longer term contract. But in our mind work order is not a sale. It’s just a reflection of a client’s own situation. And if you think about what we did this year, $300 million worth of pandemic and EnhancedClean activities in such a short period of time, because remember COVID wasn’t a full year. So I think we are super excited about that and the $300 million that we did in sales in this area ended up being $200 million in a year on the P&L and we expect that to more than double next year.

Okay. Super helpful. And then also just piggybacking on Andy’s question, just wanted to understand as we think about and I don’t want to steal the thunder of the strategy day next year, but as we think this digital transformation, leveraging data, is it more of a market share angle? Is it a customer stickiness angle or is it a margin angle? Just sort of curious how you are thinking about that payback and that benefit from these investments?

Sure. It’s all type of elements of all three, right? But, clearly, the key to our future is, how do you connect better with clients, how do you give them data, dashboards, insights that is going to make them more sticky with us, right, where they don’t want to detach from us, right? But then there is this whole other element internally about how we manage our workforce, more and more it’s a mobile workforce, right? So what are the tools that we could give our team in terms of task orders every day, safety moments in the morning, how could they punch in and punch out. So the ability to like to enhance our workforce and create margin on labor management by being more efficient by dealing with our co-workforce in real-times through digital tools, it’s just phenomenal and you will find that there are a lot of service companies, especially with a distributed workforce that are all working on these tools. So, we are just trying to jump ahead of it and I think in the short-term, it’s going to be about kind of stickiness with clients. It’s going to be about getting a data foundation, because if you don’t have good data. There’s no point, right? So you have to create a data framework. And then over the long-term if we can actuate and activate on our distributed workforce, we expect to see margin accretion there for sure.

Okay. Got you. And then one last one from me. I mean, it is noteworthy to see you guys exiting fiscal ‘20 in the low 2 times range from a leverage perspective. So I just have to ask how you are thinking about use of cash. Clearly, we have this digital transformation as a big priority? But it seems like you have enough dry powder to start looking at acquisitions or maybe even the buyback? So just curious how you guys are thinking about putting this huge free cash flow number in fiscal ‘20 to work?

Yeah. Sean thanks for the question. It’s Earl. I would say a couple of things, first of all, I’d love to take the opportunity to really thank the teams for the focus and efforts put forward in really managing our cash this year. It’s been amazing job and that they have actually been able to take four days out. So we are sitting on a fair amount of cash and we feel really good about our liquidity. As far as our hierarchy of priorities when looking at cash allocation it first -- we first look at really investing in our organic growth, while maintaining our dividend program and then followed by that looking at opportunities with respect to both M&A and share buybacks. So this strategy we do not see this changing at this point in time. However, in light of the uncertainty with regards to our current environment, we are going to be very prudent and cautious with regards to making cash choices.

Our next question is from Tim Mulrooney with William Blair. Please proceed.

Good morning, Scott and Earl. Thank you for taking my questions and Earl congrats on the new gig.

Thanks very much. Appreciate it.

Yeah. So I had a bunch of margin questions, but that’s been beaten to death on this Q&A. So I am just going to ask a couple on your segments. So on your T&M segment, do you think the technology side of this business will be a headwind moving forward? I have seen quite a few articles cross my desk from tech companies CEOs who are planning to shift some of their workforce to a permanent work-from-home situation. Obviously, the manufacturing side should stay strong, but I am curious how you are thinking about the tech side of the business from a three-year to five-year perspective?

Yeah. So -- good morning, by the way.

Good morning.

I am still bullish. I am still bullish on the tech sector. I think that’s the fuel of the economy. I think that that’s where we are going to see growth as a country and it’s funny. You read about, I am reading the same things you are reading, right? But we are talking to our clients, saying, what we keep seeing is, the Googles of the world, the Amazons of the world taking more space, right? They are expanding in New York City now. They are expanding in Texas. So I think the narrative out there for them is work-from-home. But when you really drill down and you talk to employees they quite like being back in the office and so I think there’s going to be a mix. I think you will see possibly less people in the office. But I think those companies are in such growth trajectories, Tim, that I think I am just bullish on that sector. And we have talked about this before, but I just want to keep hitting home, because what I am about to say is, what I have heard from the top real estate companies in the country is, even if there is this foundational shift, where 25% of the people work-from-home and that is a massive shift, right, for a pandemic, that’s only nine monthsin. But even if 25% of folks start working from home, you still have to space out your existing office space, because we have been jamming people in. We have been having people at trading desks and cubicles. So I think you are going to see workplace shift. And so I am as optimistic as ever in office space in general, because I think people want to collaborate and work. And on the tech side, I am super optimistic.

Okay. Thank you, Scott. And then, on the Technical Solutions Business, which has been humming along really nicely the last several years and then, obviously, much decelerated materially in 2020. How does this setup look for 2021? I know school budgets across the country are tight and you can sell them on the payback period with your solutions and indoor air quality is a growing concern. So I also – let’s call it kind of distracted with other things right now. So just how do you think about 2021. Is it a rebuilding year for technical solutions or do you think we could have potentially another strong year like we saw in 2018 and 2019?

Yeah. I think Technical Solutions is going to be sequentially strong, right? So I think the way you have to think about this, there’s a couple of ways we look at it, right? First is our sales pipeline, right, which is really what are the qualified leads that we are going after. We haven’t closed they yet with a qualified lead that we are going after. Our pipeline is as big if not bigger than ever. So that’s pretty exciting for us. But then you have to look at backlog, which is the other term that we use. And backlog is committed work like signed contracts that we have, that we just haven’t started yet, right? And our backlog is really strong for ‘21. It’s just the other term that we use is churn rate, which is how fast do you take that backlog and turn it into actual work. We really have people in the field installing the equipment, right, changing out the lighting. And that’s what’s been the inhibitor. We are probably you know maybe 50% down in terms of churn rate recently, just because they haven’t had access to the facilities, right, because of COVID. So, we would love to see the churn rate higher, it would be great, right, because that’s really -- that’s in-year revenue. But as long as you have that strong backlog, you have the committed work. And that is really strong and we think now with the vaccine and with the economy getting some momentum, I think, our churn rates are going to start picking up. And I think this is going to be a big back half of the year story, which you know, Tim, the back half is always the big time for ATS, right, because generally speaking, we do so much in school. So that’s the time when schools are closed and we have ultimate access. I think that’s going to happen again. So, and the last thing I will say, which is pretty obvious, the tailwinds in this business are just so strong with energy, sustainability, all the green that’s happening in society. And then you take that coupled with what you mentioned, educational facilities being so strapped for cash and this is a clear path…

Yeah.

… to freeing up energy efficiency, I am still all in on Technical Solutions.

No. That’s great color, Scott. I mean, backlog very strong, churn rate improving. That’s very helpful. I appreciate your time this morning. Thank you, gentlemen.

Thanks. Thanks for calling.

Our next question is from Marc Riddick with Sidoti & Company. Please proceed.

Hi. Good morning, everyone.

Good morning.

Earl, welcome to ABM, looking forward to working with you going forward. I wanted to just touch a lot of -- first of all, thank you for being as thorough as you have been on your commentary. So, a lot of my questions have already been answered. But I wanted touch a little bit on future pricing dynamic and how we should think about how that’s evolved particularly with EnhancedClean. And I was wondering if you could touch a little bit maybe on the parts of the program that are gaining the greatest level of client receptivity, even if it’s not necessarily what they did during the fourth quarter, what they are doing right now. Scott, if you talk a little bit about what’s the part that they like the most and maybe if you could talk about maybe what -- how that pricing structure has evolved so far and how it may evolve going forward? Thanks.

Sure. So, I think, what they like, particularly about ABM is the thoroughness of our program. Because there’s a lot of janitorial companies that are coming, and saying, we can disinfect. We can do electrostatic spraying. And certainly, we can do that, but we haven’t taken that approach. We have basically said no, no, no. We are different than everyone else and we have an expert advisory panel with people from the outside from medical schools, from famed educational institutions that formed up this advisory panel with our own folks in the healthcare business, because as you know we have a healthcare business. So, they like the fact that they will get this extra piece of advice outside of just looking at the World Health Organization of CDC. Then we are doing extra training of our people and we have signage in place, right? We are doing evidence-based testing after we have done. And the way you think about it, you are literally going to -- if you have our EnhancedClean program for your facility, you literally get the proverbial sticker in the window that, says, this facility EnhancedClean certified. And when people come back to work, would you have to establish if you are a facility manager is trust and safety. People have to feel good about where they are going to for their own health or for their family’s health, right? So, when you are dealing with a company like an ABM, big public company that has these resources, we have really started differentiating ourselves. And what Marc, because of all the things I just said, we are getting a premium on pricing, because it’s not purely labor-based function. This is more of an up skilled function because of the training, because of the equipment that we use, and the chemicals we are using. So, we are seeing elevated pricing and that’s not going to change only because of what we are doing and everything that has to go into it. So, we are enthusiastic about that. And we haven’t had pushback yet. Now, go in the future, if clients are strange and they are looking for savings. My sense is and I bet you will agree with me, where they are not going to cut back is in disinfecting. I don’t think any facility manager or landlord wants to say, we are going into tough times, so we are not going to be disinfecting. So, we feel like we have some resilience in that product line. So, the arrows are pointing up in this area for us.

And that -- I am glad you mentioned that, because that was one of the things that was sort of kind of wrestling with this, if you look at the videos and things that you have on the site. I was wondering if you could talk a little bit more about that visibility to the end user and how that kind of how you are seeing that evolving, because basically to put it in a different way at least the way I am looking at it, it’s almost like, A, it’s a branding extension, B, it’s kind of like a good housekeeping seal of approval that is going to now be in people’s visuals going forward. So, I was wondering if you could talk a little bit about that, because that basically to me seems like something that, that’s going to expand your brand going forward for years to come, is that a reasonable way of looking at this?

Yeah. It is. And I am so glad you brought that up, because this is the first time in ABM’s history that we productized a service, right? EnhancedClean, registered trademark, it’s our product, if you will for a service company and we have done a ton of social media outreach. We have been branding it Safety Seen and there’s been ad campaigns on the web. We have -- we are going to be rolling out in calendar year ‘21 a very aggressive campaign. And we have talked about the investments and that was brought up earlier by Andy. And we have been so focused on the IT side. But we are going to be investing in EnhancedClean too. That’s part of our investments. We are going to take this and run with it. Awareness is heightened and it’s such an amazing opportunity for a company like ABM and the resources we have to differentiate ourselves between our competitors, which largely speaking are smaller regional companies such just don’t have the ability to put together an expert advisory council or to do the kind of social media outreach that we are doing and the branding and the advertising. So, there’s a lot more to come and really excited to follow-up with you. Remember this question, because we will be talking about it on the next quarterly call.

Excellent. Thank you very much.

Our next question is from Tate Sullivan with Maxim Group. Please proceed.

Hi. Thank you. Good morning, everyone, and welcome Earl, and just a follow-up question. Scott, on Technical Services and thanks for all the detail on there and I understand that Theme Park related project, it sounds like that’s a small end market in Technical Solutions for you. But can you remind us, is most of your other work in the backlog for Technical Solutions, Education or can you provide more context on that market exposure for your backlog?

Yeah. Yeah. Yeah. We really have two foundational areas of Technical Solutions, the Education space, which is a large majority and then we do a lot of government work, whether it’s mission critical work, we have special clearances that we do for the government and just in general, government buildings. It’s a sector that we have been growing in. So, yeah, the Theme Park one was a little out of what we normally do. But in terms of, from a safety and security standpoint, you should be thinking of that backlog as education and government facilities.

Thank you. And has the bidding activity for technical solutions just shutdown or are there still opportunities out there, you have recently…

No.

…in Technical Solutions?

Yeah. No. It’s actually gone the other way. It’s banking up right now. We are seeing more activity. And I would also remind you from a salesperson’s standpoint we cut back on sales people in 2020. From this standpoint, right, we furloughed people, we have reduced hours. All the things you do in -- I say, it has hitting, but the liquidity playbook, right? So now we are getting back on the track of hiring sales people. We historically over the last couple of years have targeted net increases of 10% in sales people. And if you remember, the majority of those are Technical Solutions people and what we typically say is we are going to hire 20%, but 10% would fall out of the bottom just because we keep raising the bar, this year our aspirations to grow by 20%. So, we are going to be very aggressive about bringing people in, really strong people that understand Technical Solutions. Because again the opportunities are so strong especially on the Education side where every single community has cut their Education budget and are cutting teachers and after school programs and we have the answer. We have the answer in our Technical Solutions segment, so super optimistic.

Great. And telling on that, just last one for me. I mean, how receptive are your clients today in the current environment to hearing about your integrated solution? I mean I am talking about combining other facility services into contracts and in addition to janitorial services. Can you comment just on that kind of -- those kind of conversations you are having please?

I think more of the conversations are cross-selling within our industry groups, right? So it’s less about, I want to hear more about how parking and janitorial are integrated. It’s more about if you think about our Education segment -- a proper Education segment, where we are starting to see traction. If we get a janitorial bid for -- in our Education segment, we will come back and we will respond to that bid. But we also say we will also, say, hey, here’s alternative B. We can also look at a bundled energy solution offering that could lower your costs on your facility. So if you hire ABM for your janitorial, we could really you know come up with a solution that could really offset some of those janitorial costs. So there’s been a lot of reception from clients in our Education segment to hearing about how we can enhance a basic janitorial RFP. That’s really encouraging for us.

We have time for one final question from David Silver with CL King. Please proceed.

Yeah. Hi. Thank you. Scott, I wanted to follow-up on your comment in your prepared remarks about shifting from defense to offense. And in particular I was just wondering about the client, the customer choices that you might be making? In other words, Scott, I think, historically, for you the right customer retention rate was 100%, if not more. And I am just wondering, but obviously the business environment has changed a lot. You have come out with a differentiated offering? You are investing in training and other kind of upgrading of the workforce. So is this the type of environment where over time you might be trying to target a particular more suitable or more ideal customer demographic, ones that are willing to pay the higher prices for the upgraded services that you are investing in. And maybe going back couple of years ago I mean you have talked about calling your contract portfolio of kind of lower margin or less attractive forms of business? And I am just wondering again that, that was more defensive, but maybe now do you target certain customer groups that maybe are not fully represented and but the ones that represent the most ideal fit with the way your service offering is evolving? Thanks.

Yeah. That’s a good question. There’s a lot there to unpack. But what I would say is that, our sales group is really focused on that. We have an area called sales effectiveness, which are just basically data analysts that look at all these segments and figure out where we want to play, right, which is super important. You may have seen or we have talked about in the past how we have started gravitating towards retail distribution, like kind of the Amazons and the WalMart’s of the world people that, because that that’s a really strong growing segment and we have been doing really well there, and we see that as opportunity in the future. And historically to our retention rate, last year you may remember it was about 90%, this year we were 92% to 93%, which is a really good trend and kind of we know where we are looking to go in the future. So I think this is something that we will always be focused on. And when we -- when I talked about you know going from defense to offence. That was really more in terms of investing into the business and making these investments. I have to tell you there’s so much data out there from past recessions, past we have bumps in the road like we are seeing here with the pandemic. There’s so much data out there about companies who at this time kind of hunker down and go on in expense versus companies who take the opportunity to go on the offensive and that’s extraordinary in terms of the long-term profitability successive companies to take this opportunity to build on the offense and that’s exactly what we are doing about investing in, again cautiously investing in. But that’s where that comment came from, which is we are not hunkering down. We are not going into shelf. We are doing really well. We are liquid. We are having record profitability record growth. So it’s really a sentiment that, you look at ABM and you look at a company that’s excited about the future and excited to have the ability to go on offense.

Okay. Thank you very much.

Thank you.

We have reached the end of our question-and-answer session. I would like to turn it back over to management for closing remarks.

Yeah. Well, thanks everyone for coming on today’s call. I will just make it brief. I think we are -- you have heard the sentiment here, we are super excited about where ABM is going. I think ‘21 is going to be a great year for us. There’s still a lot of uncertainty. But we are going to navigate it as adeptly as we did in 2020 and just we are going to be continuing to build the muscle strength. But the most important thing I can say at this time is just have an amazing holiday everybody, and more importantly, don’t let your guard down, stay safe and let’s look forward to ‘21 and an effective vaccine and we will get back to normal. So thanks everybody.

Thank you. This does conclude today’s conference. You may disconnect your lines at this site and thank you for your participation.