Good day and welcome to the EVERTEC Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. At this time, I'd like to turn the conference over to Kay Sharpton, Vice President of Investor Relations. Please go ahead.

Thank you and good afternoon. With me today are Mac Schuessler, our President and Chief Executive Officer; and Joaquin Castrillo our Chief Financial Officer. A replay of this call will be available until Tuesday, March 3rd. Access information for the replay is listed in today's financial release, which is available on our website under Investor Relations section of evertecinc.com. For those listening to the replay, this call was held February 25th. Please note there is a presentation that accompanies this conference call and it is accessible on the Investor Relations section of our website. Before we begin, I'd like to remind everyone this call may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements about our expectations for future performance are subject to known and unknown risks and uncertainties. EVERTEC cautions that these statements are not guarantees of future performance. All forward-looking statements made today reflect our current expectations only, and we undertake no obligation to update any statements to reflect the events that occur after this call. Please refer to the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission for factors that could cause our actual results to differ materially from any forward-looking statements. During today's call, management will provide certain information that will constitute non-GAAP financial measures under SEC rules such as adjusted EBITDA, adjusted net income and adjusted earnings per common share. Reconciliation to GAAP measures and certain additional information are also included in today's earnings release and related supplemental slides. I'll now hand the call over to Mac.

Thanks, Kay, and good afternoon, everyone. Thank you for joining us on today's call. First, I'd like to touch on the recent earthquakes that affected Puerto Rico. I'm incredibly proud that through sound planning and our team's diligent efforts, EVERTEC's service was uninterrupted. While power was only briefly disrupted throughout Puerto Rico there are structures that were impacted, particularly in the southern portion of the island that will require rebuilding. We are also assessing those merchants that were unable to transact as a result of the earthquake and giving them a credit for their terminal costs. Additionally, EVERTEC has committed $50,000 in donations to support the community relief efforts, which are being used to activate a series of rapid response initiatives to address both the short-term needs of the impacted areas as well as long-term initiatives that can help support economic development. Now I'll review our results for the full year of 2019 beginning on slide 4. Total revenue year for the year was approximately $487 million, up 7% compared to 2018, which exceeded the top end of our most recent guidance and well exceeded our initial expectations for the year. We generated adjusted earnings per share of $1.96, an increase of 7%. We also generated significant operating cash flow of $180 million. We returned approximately $46 million to our shareholders with approximately $32 million in stock buybacks and $14 million in dividends. Now, I'd like to give you some more specific updates on our businesses on slide 5. First we are pleased with the continued strong revenue performance in the fourth quarter. Puerto Rico and the Caribbean grew approximately 8%. We benefited from some one-time revenue in Business Solutions and continue to benefit from new managed services. Payment transaction growth was approximately 6% in the quarter. And in our…

Thank you, Mac, and good afternoon, everyone. I'll begin with a review of our consolidated fourth quarter and full year 2019 results, and then review each segment in greater detail. Turning to slide 11. Total revenue for the fourth quarter 2019 was $127.2 million, up 8% compared to $118.2 million in the prior year driven by higher transaction volumes, value-added solutions, new contracts and pricing actions. Adjusted EBITDA for the quarter was $55.3 million, an increase of 5% from $52.6 million in the prior year. Adjusted EBITDA margin was 43.5%, and this represents a 100 basis point decline in our adjusted EBITDA margin compared to the prior year. The decrease in margin year-over-year is primarily attributable to increased project costs, negative FX impact, and higher other operating expenses such as rent and cloud-related expenses that impacted our margin in Q4. Adjusted net income in the quarter was $34.9 million, an increase of 1% as compared to the prior year and $0.48 on a per-share basis an increase of 4%. The increase primarily reflects the increased adjusted EBITDA offset by increased operating depreciation and amortization and a higher tax rate in the quarter as compared to last year. For the full year, total revenue was $487.4 million, and was up 7% year-over-year. Adjusted EBITDA was $226.2 million, an increase of 6% with an adjusted EBITDA margin of 46.4%, down 40 basis points as compared to prior year. Adjusted net income was $143.7 million up 5% and adjusted earnings per common share was $1.96, up approximately 7% year-over-year. Our full year non-GAAP tax rate was 12.3%, slightly lower than 12.4% in prior year. Moving on to slide 12. I will now cover our segment results starting with Merchant Acquiring. In the fourth quarter, net revenue increased 5% year-over-year to approximately $27.2 million.…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question today will come from Vasu Govil of KBW. Please go ahead.

Thanks, guys. Thanks for taking my question. I guess first on the BPOP resolution it was good to see that happen within the quarter. Was there any pricing change or results and the economic impact from the new deal? Just trying to understand the, sort of, give and takes to come to the resolution.

Yes. Thanks, Vasu. This is Mac. So we talked about the pricing dispute on the last call because we felt like it was potentially a headwind going into this year. But given that we were able to resolve it through the quarter we're not going to comment a lot further than that. Often these have to do with some type of product issues, service-level issue other considerations, but we're not going to comment more than we already have except that it's resolved and it's baked into the guidance.

Great. And then Joaquin, I know, you gave us a lot of color on the outlook. I'm just trying to make sure I got everything. But it sounded like you were saying the margins would be kind of flat to slightly up but at the low end it could also be down a little bit year-on-year? And then could you, kind of, talk to like so what are the sort of puts and takes towards the low and high end of the range? And then just based on the EPS guide like, am I missing something? Did you say the D&A was going to be higher? Is that the delta?

Yes. So I'll let -- I mean we -- margin is going to be flat to up. I'll let Joaquin, sort of, walk you through the pieces.

So yes, Vasu. To kind of take your last question first. D&A is the main component going down to EPS. That will be higher. And if you look at where we ended up in Q4 and kind of run that through next year that has an impact of an increase plus we have obviously additional projects that we expect to go into production. As we kind of go through 2020 that should make up the remainder of the difference that we called out. So all-in-all it's a $4 million to $5 million increase in D&A. In terms of -- and also we're considering buybacks to the extent of the dilution from our long-term incentive plan. So we're really considering a flat weighted average share count going forward. In terms of the margin, yes, we called out a flattish margin on the high end. We will see some expansion in that margin. Obviously, some of the puts and takes in terms of the segments. We can run very quickly through that. In terms of Merchant Acquiring, we continue to see declining average ticket. So that's key in terms of being able to maintain that margin at a flat to negative level, which is what we expect for the full year. If we think about our payment Puerto Rico segment, we had a big -- a one-timer in the beginning of Q1 of last year that was high margin. We won't have that going into 2020. And as we called out, we had some higher expenses related to the -- going into production with a key platform for EBT. And we've had some additional expenses flow through the P&L as we stabilized that platform. That will flow through Q1 a little bit as well. So that should impact the margin negatively. If we look at LatAm, we expect negative margins there, mainly as we've called out in the past, we have $3 million to $5 million of expected attrition. And as we said, this is high-margin revenue that's coming out. And we're still growing the top line healthy, right? But the revenue that's coming in won't be enough to offset that margin erosion from that attrition. And as we look at Business Solutions we expect a flat to slightly positive margin. As we continue to put volume through these platforms, we should be able to potentially see some margin expansion. But as we've seen throughout 2019, we have other one-timers on hardware sales that might lead us to the lower end of that range of being flattish. And then, in terms of corporate expenses, we're kind of keeping those lower than this year. So that's a positive. And that's kind of the puts and takes as we see the different segments for next year.

Great. Thank you very much. And if I could just sneak one last one. I don't know if -- I didn't catch it, but did you sort of size the contribution on revenue and EBITDA expected from the PlacetoPay acquisition in the 2020 outlook?

We did not.

I guess could you offer some more --

So, what I would say is, I mean, if you look at our LatAm segment, we're pretty excited about what's occurred. We feel like the acquisitions that we've had in the past have now given us a portfolio and a market presence and a Rolodex to where we're adding organic business nicely, if you look at Santander Chile, if you look at Citibank and now if you look at this transaction that we have with Alelo. PlacetoPay is nice. It's very small and it's going to give us a gateway. Already, this is operation in Colombia and we plan to activate it within Central America this year, but we're not breaking that out separately. But it's a relatively small acquisition.

Got it. Thank you for the color.

Yes . Thanks,Vasu.

Our next question will come from George Mihalos with Cowen. Please go ahead.

Hey, guys. Thanks for taking my question. Maybe just to follow up on some of the prior questions around margins. Can you help us think of sort of a long-term framework or how you're thinking about longer-term margin expansion that the company could deliver? I know there are a number of puts and takes that obviously are going to be impacting 2020. But as we kind of think on a normalized basis, is there a framework to think about longer-term margin expansion on an annualized basis?

Yes. So I'll give you my view and then I'll hand it Joaquin. What I would tell you is, we already have fairly high margins as a company, when you look at our peer group and the Puerto Rican growth. We'll continue to come through with good margins and we'll continue to manage cost to try and maintain those margins and invest in products, so we maintain that business. When you look at Latin America, it certainly is at a lower margin. You can see we break those segments out. And so, hopefully, over time that will grow at a significant rate. So that it will put pressure on the margins. So we're very focused on it. And, like I said, we've already got some of the best margins in the industry.

Yes. The only thing I'll add, George, this is Joaquin, is that, we've kind of called out our transition to a processing model in LatAm. And we -- when we acquired the Chile operation, it was mostly license-based. We continue to have license sales today which are not a -- its not model where we can take advantage of our economies of scale. So as we continue to move and execute on that strategy of processing over time, we should put ourselves in a position to be able to expand margin. But we're still, obviously, investing and executing on getting those up and running.

George, do we loose you?

Hey, sir. I can --

Okay.

Yes. Sorry about that. Mac, just outlook on M&A in the pipeline and maybe any sort of color you could provide around there. Thank you.

Sure. So George we are very focused on M&A, as we have, since I've started the company. I would say, we continue to have a pipeline that we're focused on. We won't comment, of course, on any deals as -- before we actually have them. But we're focused and we're happy with what we're currently evaluating.

Our next question will come from Bryan Keane of Deutsche Bank. Please go ahead.

Hi, guys. Wanted to just ask about some of the implementations Santander Chile, Citi and then some of the pipeline update that you gave. How does that impact 2020? Are these -- are any of these material changes to the growth rate in 2020? Or are they having a material impact?

Yeah. So what I would say is again for the first time in several years, we're really adding significant business that are organic wins. So Santander Chile has a meaningful impact to the segment, and then Citibank to a lesser extent. So they'll impact 2020. And then we hope that as we grow those relationships and as those businesses grows and volumes grows, it will have a positive impact in the future years as well. And then we also hope to continue to have organic wins just like these. So that's what was core for us to tell you about Alelo and that win as well. But they will have an impact on the growth rate in 2020 and beyond.

The only thing I would add is most of that impact will be back half-weighted. And as we said in the prepared remarks, we're still bringing these up. Citibank, we continue to bring clients onto the platform. Banamex which was kind of the bigger region that we announced a few calls ago is still ongoing. So that's still in the implementation phase. And once we're able to get both Santander and Citi is when we'll start to see some of that revenue come through the LatAm segment.

And then I do think it's important to note and we said on the call, I mean, I said at the beginning of the call is, we're pleased with the progress. I mean, with Santander Chile, we are already processing Visa and Mastercard transactions at their internal barista at their headquarters.

Got it. Got it. And then Joaquin just thinking about the margins they came in a little bit below our estimates. I know you talked about last quarter for full year 2019 adjusted EBITDA margins being at 47% and they fell a little bit below that. Is there anything to think about in particular that caused a surprise to kind of be lower than expected on the EBITDA margin for the quarter?

So I would say the two things that worked against us this quarter was one foreign currency. So in Latin America we had a negative effect from FX that impacted margin. And then as I mentioned, we put our EBT project into production towards the latter half of Q3. And we continue to work on stabilizing that platform, which is a very complex project, multi-year project that we're now running on a day-to-day. And so now as we continue to kind of get a handle on the operation, we have some additional expense running through OpEx. And as I mentioned in the last question, we understand that that will flow a little bit into Q1. But it's something that at the end of the day if you look at our full year guidance, we're still expecting 46% to 47% margins or a slight improvement from where we are in 2019 for 2020.

Got it. Thanks so much guys.

Thanks, Bryan.

Our next question will come from John Davis of Raymond James. Please go ahead.

Hey, good afternoon guys. Can you maybe just start on the balance sheet? I think leverage is I believe all-time lows at just a shade over two times to get the interest expense you said I think was going to be flat year-over-year. So kind of a twofold question. One is there an ability to refi that debt or do anything there? And then also feels like the cash interest being flat maybe just talk a little bit about the puts and takes especially given kind of where rates are. Remind us what's fixed and what's floating and how we should think about that going forward?

Sure. So in terms of the interest, we have our -- we had a forward swap that we entered into as part of our last refi. So Q4 of 2018, when we completed the refi. We entered into a -- so that starts April of 2020. Obviously, that's what will -- given where rates are will work against us for the remainder of 2020. So that's unfortunate in terms of how rates have moved. Having said that, the -- about 50% of our debt continues to be floating. So that 50% that's still floating we'll get the benefit of the lower rates and that should offset the negative impact from the fixed swap. As it relates to just our overall refinancing strategy, I mean it's -- that's not something that we comment before we actually engage or close on a refinancing. And what I do want to clarify is our capital allocation strategy hasn't changed. We will continue to look to invest for growth first through M&A like we just did the PlacetoPay acquisition and through CapEx for innovation and new products. We'll continue to pay down our debt based on scheduled pay downs, although we also have this excess cash flow sweep that we mentioned as part of the remarks that will hit in Q1. And to the extent we have additional cash we'll go through repurchase and continue to pay our dividend.

Okay. But just to clarify, there's nothing that would keep you there a little bit call premium or any big kind of penalty fee for you to refi that debt? That's just -- you're not going to comment on it but there's -- I just want to see if there's any make sure there's not anything that prohibits you from refi-ing that debt that's maybe not clear to us from the outside?

No. No there isn't anything specific that I can put out that would put us in a position where we couldn't make that an option.

John that question doesn't have anything to do with 10-year treasuries hitting an all-time low, does it?

And then Mac bigger-picture question here. I think you've commented -- we've got a lot of questions on the margin so far. I think 11% revenue growth in 2018 on the rebound from the hurricanes. It was 7% last year kind of guiding to 3% to 4%. How should we think about both the revenue growth algorithm of the company, as well as the EPS growth? It seems like margins were going to be flat give or take maybe some onetime items. I'm not asking for long-term guidance but just how should we think about -- or how do you manage the business? Is it a revenue growth? Is it EPS growth? Is it cash flow growth? Just maybe some higher level commentary on kind of how you think about managing the businesses over the next several years?

Yes. So what I would say is, we are very focused on being opportunistic in pursuing opportunities in Latin America. We -- as we said at the beginning of the year last year we are confident. At the beginning of last year we said we believe. At the beginning of this year we say we are confident that these markets are opening as demonstrated by some of the transactions and demonstrated by some of the business that we've been able to win. So we are very focused on continuing to expand our footprint continuing to expand our Rolodex and continuing to expand our products so that we're building a unique franchise which frankly we believe are one of the few fintechs that are really focused on the region given both the complexity and given the relative size that it means to other players. So we will be focused on continuing to accelerate revenue growth in LatAm by making those investments and by executing well. I do think that you can look at how we've done that over the past couple of years. We've done a good job I believe in not only maintaining, but in some years growing margin by being very careful about those expenses. But albeit overall it does have a lower margin. So we are very focused on growth in LatAm. In Puerto Rico, we already have significant share and the island has been through a lot of different phases over the past couple of years. We're very focused on maintaining our share, maintaining our margin and then growing as best as possible which ends up in sort of the low single mid-single-digit by taking advantage of new trends as more transactions are moved to electronic forms like we just talked about with the Medicare product. So that's sort of the focus is just sort of maintain our margin and our share in Puerto Rico and grow as things continue to move to electronic payments, but then really, really focus on accelerating growth in LatAm. And I feel pretty good about what we've done over the past couple of years on both fronts.

Okay. And then last one for me. Maybe just zoom in a little bit on M&A in Latin America. I think for myself and probably most people on this call, it's difficult for us to see what's out there what's trading. Is it -- has it been relatively active? Maybe just help us kind of -- with a little bit of color on deals that you look at nothing specific. But size of deals are these $10 million, $20 million, $30 million deals? Are these $100 million deals? Are they both? Just maybe help us think about how active the LatAm M&A market is and where multiples are if they're rational or not and just kind of a state of the LatAm M&A market in your view if you don't mind?

Well the start of your question is what I love is that there's not a lot of visibility to transactions in Latin America and that's one of our advantages. So what I would say is when we look at some of the transactions that we've consummated we paid pretty good multiples, if you look at the environment today with what's going on in the payment space particularly those that are harder to find and those that are more of a tuck-in niche for us that we can blow out across our network of customers. Those have been extremely valuable. There are some property valuations when you look at Brazil and some bigger transactions, but that's not where we've spent our time. So they're -- again Latin America has been less active as the U.S. and Europe and Brazil, but we still are finding opportunities that we think we continue to build the franchise. Every once in a while a big may come along like Prisma in Latin America. But they're still tend to be the ones that we're seeing are of the smaller size. But again I think those are perfect for us because we can fill those in get them a good multiple and create value for shareholders. Again if you think about four years ago this segment was $37 million in revenue. This year it's going to be north of $90 million. And it was $11 million in EBITDA and this year it's going to be more than $30 million. And I think a big part of that was the M&A strategy, and then turning those assets into organic growth.

Okay, all right. Thanks guys.

Thanks, John

Our next question will come from Bob Napoli of William Blair. Please go ahead.

Thank you, and good afternoon. The -- just a follow-up on Latin America growth. What -- I missed the – Joaquin, the revenue growth for Latin America that you're forecasting for 2020. And then Mac what are your thoughts on longer-term organic revenue growth for Latin America?

Hi, Bob, so we -- what we mentioned was high single to low-double-digit growth for 2020.

Okay.

But that includes $3 million to $5 million rolling off.

Right.

So if you call it round numbers $90 million you've got some negative -- you've got a decline in the top line of a couple of percentage points. So if you normalize that you'd probably be in low double digits fully. So we do have the headwind that's been living with us for a long time, but it's now low-double-digit. What I would say Bob long-term is, we don't give long-term guidance but we can tell you what we're doing this year, which is going to be high single low digit, again with $3 million to $5 million coming off. So to me organically and with a little M&A that's low double. A lot of that growth this year is organic. It's Santander Chile, it's Citibank, it's Alelo. It's these deals that we're posting on the Board those will continue to grow over time as transactions grow and/or if the relations grow. And we hope to continue to win more business like that. So we're pretty optimistic. Five years ago the markets really weren't open like they are becoming now. And I don't know that we were in the same position that we were at that time as well reputationally and from a product and services perspective. So we're pretty optimistic and we feel like this is a good year for growth in LatAm.

No. I mean, I think the market forecast is for growth in LatAm for payments in high single digits. I mean, I guess you would expect to grow at least in line with the market and preferably above given your market position long-term?

Yeah. Absolutely. I mean if we're picking up share in some of these markets then in some markets where we're going from the very small banks, we should be growing faster. Again if you look at Chile specifically, which we don't we won't break out, we're going to see significant growth. So you have to look market by market. But yes we intend to grow as fast as the market if not faster.

Okay. And then just on the bank tech side if you will. I mean, your -- you have a very, very large customer on the bank tech side and there's a lot going on in bank tech digitization. I mean, are you investing in technology to the extent, obviously you have a big contract coming up but even to the point where you can expand and offer more services, not only to Popular, but also to -- I mean it's a pretty active Neo bank or New bank market in Latin America. And I think you had mentioned a partnership last quarter in that area. So what are you investing to the point that you need to on the digital banking side to keep up with all the innovation that we see in other companies for your clients? And then can you expand that into other Latin American relationships and then particularly just on the New bank or Neo bank space?

Sure. It's a great question. So as we talked about I think it was one or two calls ago, C6 Bank in Brazil is one of our customers and they're using our risk products. So, even some of these new banks across the region are using our products. What I would tell you is we're focused on continued innovation whether we do it in-house or externally. That's why we bought PlacetoPay because it gave us a gateway. So we're continuing to invest in products. And I think specifically to your point with Popular, we're continuing to make sure that we stay close to our clients understand, the service levels that are acquired, the products that are acquired and building sort of a long-term view on that. But even with Banco, if you look at the product we have for the bank today it's one of the products they're most pleased with. It's their online digital product, where people can check deposits do transfers, access ATH Móvil. And we're pretty proud of that product.

And then just the – I mean, people have talked about the balance sheet. But assuming that you don't make an acquisition of materiality you are going to buy back stock. Would – and so we would expect to see that share count go down. You don't have any buyback other than to the extent to keep the shares flat for the incentive plans correct?

I mean, that's right Bob, we'll continue to apply our capital allocation strategy.

But I think he's asking about guidance. Guidance just assumes share buyback –

Yeah. The guidance assumes that they're flat – that we're just buying the valuation from the long-term goal.

Yeah. So I mean, we still have the stock purchase – the stock buyback authorization and plan $31 million?

That's right.

And – but right now the guidance – just assumes flat share count. So that's what you're looking?

Right. But you would obviously expand that buyback unless you make a significant acquisition. That buyback authorization I would guess – I would expect.

Yeah. We definitely are focused on how do we use cash efficiently.

Yeah. Okay. Thank you. Appreciate it.

All right. Thank you, Bob.

[Operator Instructions] Our next question will come from James Friedman of Susquehanna. Please go ahead.

Hey, guys. Congratulations on the numbers.

Thank you.

I'll just ask my two questions upfront. The first one is about this page 6. Mac, you referred to it in your prepared remarks. I'm just trying to understand in the Medicare payment process who should we be thinking of as EVERTEC's customer in here? Is it the health insurance company, the beneficiary? That's my first one. And then I'll just get in my second one. Joaquin some of these segments the – and this is a very simplistic question, but in both Merchant and Payment Puerto Rico we are seeing revenue grow faster than volume. I think in your prepared remarks you referred to ATH. Is this the pricing that you're referring to? Or is there something else going on? So, first one on payments in Medicare and the second one on volume versus revenue. Thanks.

Yeah. Good questions. So what I would say on the Medicare payment program that the customers are the big insurance companies on the island MCS and MMM. And what I would say is, they're big customers in other areas in the Business Solutions segment specifically. So this is an example of our scale and our presence on the island. When there are new opportunities to just digitize transactions, we're in a sort of the perfect position to assist them. So this specific product is – the customers are the big insurance companies. And then on the other question, I'll hand it to Joaquin.

Actually both – the merchants continue to be our customers as well. So these participants within this program will use these benefit cards our merchants as well. So we are kind of in two places for purposes of this program, where we are providing services to the Medicare companies in terms of enabling their access to this type of electronic payment. And at the same time, we are using our network and our merchant and network to acquire those payments. In terms of your other question, Jamie, so in the case of Merchant Acquiring, we did have pricing actions right, that help us keep our spread up compared to previous years. Even though sales volumes coming down, we've been able to keep revenue growing in part because of those pricing actions. In the case of payment processing the same applies. We also had ATH Movil and ATH Movil Business fees come through the second half of 2018. So, we saw kind of grow over all through 2019 of those fees coming in. And as we also mentioned in our script, as we look at 2020, we will have obviously a moderation of that growth from the ATH Movil and ATH Movil Business fees, because we've lapped the implementation of them.

Got it. Thank you.

Our next question will come from James Faucette of Morgan Stanley. Please go ahead.

Thank you very much. A couple of questions from me. Going back to the OpEx, and specifically D&A, that you mentioned will be up during the course of the year as new projects come on. Should we be thinking about that D&A remaining at elevated levels as we go into 2021? Or do we start to have that come off a little bit? And I guess the second thing I wanted to follow-up on drawing out my two questions at once. You called out ATH Movil as a benefit in payment services. Can you give us some color as to what adoption looks like there? And whether the growth is just continued adoption itself? Or improvement in what you're able to monetize there?

Okay. This is Joaquin. So, I'll start with your second question. In terms of adoption, we continue to have over 1 million users on the ATH Movil app. What we continue to see is more payments flowing to the platform being used on a more frequent basis. And we haven't given specific numbers, but we continue to see a sequential growth as it relates to the P2P app. And we continue to push the use of our ATH Movil Business side of the equation given that we still have -- see opportunities of P2P users actually using it for business purposes. So, we continue to see also a healthy growth in the business side, and we continue to see an opportunity to improve in the utilization as we move forward. In terms of D&A, obviously we did have some multi-year projects coming to production in the second half of 2019, which are really the drivers of the uptick through all of 2020. We usually have projects of significance that we're working on. I would say that the projects that we're talking about this time around are larger than usual. So, I don't think that this uptick would be something sustainable into the future. We're not giving 2021 guidance, but it's definitely something that we continue to monitor and that we will manage accordingly as we move through 2020.

Great. Thanks.

Ladies and gentlemen, this will conclude our question-and-answer session. At this time, I'd like to turn the conference back over to Mac Schuessler for any closing remarks.

Thank you, and thanks to everyone participating on the call. We look forward to giving you updates throughout the year. Good night.

The conference has now concluded. We thank you for attending today's presentation. And you may now disconnect your lines.