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ICF International, Inc. (ICFI)

Q4 2014 Earnings Call· Thu, Feb 26, 2015

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Transcript

Operator

Operator

Welcome to the ICF International Fourth Quarter and Full-Year 2014 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Thursday, February 26, 2015, and cannot be reproduced or rebroadcast without permission from the company. And I would now like to turn the program over to Douglas Beck of ICF. Please go ahead, sir.

Douglas Beck

Analyst

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review ICF's fourth quarter and full year 2014 performance. With us today from ICF International are Sudhakar Kesavan, Chairman and CEO; John Wasson, President and CEO; and James Morgan, CFO. During this conference call, we will make forward-looking statements to assist you on understanding ICF management's expectations about our future performance. These statements are subject to a number of risks the could cause actual events and results to differ materially. And I refer you to our February 26, 2015, press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may, at some point, elect to update the forward-looking statements made today but specifically disclaim any obligation to do so. I will now turn the call over to our CEO, Sudhakar Kesavan, to discuss the fourth quarter and full year 2014 performance. Sudhakar?

Sudhakar Kesavan

Analyst

Thank you, Doug. Good afternoon, everyone, and thank you for joining us today to discuss fourth quarter and full year 2014 results and our expectation for 2015. In 2014, ICF reached an important milestone. We surpassed $1 billion in revenue for the first time. This double-digit growth in revenue from the prior year was led by a 19% increase in Commercial business and a doubling of our international business revenue. Revenue from our digital services and strategic communications offering ended the year with a run rate in excess of $300 million, which gives us the competitive scale to bid on and win large contracts in commercial and government markets in both North America and Europe. 2014 performance reflects our success in significantly diversifying our revenue sources while at the same time, maintaining our focus on key markets. Despite the diversification, our key markets, health and energy are broadly defined, continue to account for the vast majority of our total revenues, illustrating the importance of our domain expertise, a key competitive advantage for ICF. From a strategic standpoint, 2014 was a transformational year for ICF in terms of plant mix, scale and scope of operations. We completed 3 acquisitions last year, namely Olson, CITYTECH and Mostra. The November acquisition of Olson deepens our expertise in integrated marketing solutions, extends ICF's current commercial digital services business and enhances digital stakeholder engagement capabilities for our government clients. Earlier in the year, we acquired CITYTECH, a digital interactive consultancy specializing in enterprise applications and a leading partner of Adobe, to further add to the breadth of both our commercial and government digital services. Finally, Mostra, our fully integrated strategic communications firm, has added significant scale with our European Commission clients and provide a strong platform for extending our digital marketing capabilities in Europe. In…

John Wasson

Analyst

Thank you, Sudhakar, and good afternoon. It was another quarter for ICF with continued strength in 2 of our key markets, energy, environment and infrastructure and health social programs, consumer and financial increased 12% and 35%, respectively over the comparable quarter last year, a period when revenues were affected by the 16-day federal government shutdown. Together, these markets accounted for 92% of total revenues for the fourth quarter of 2014. Revenues in our third market, public safety and defense, declined 11% in the fourth quarter as we lost contracts at DoD and DHS to set-asides and also due to the fact that we have disciplined approach to pricing. In our commercial business, we achieved a 46% increase in revenues, thanks to recent acquisitions, particularly the Olson transaction and 6% organic growth. Commercial revenues accounted for a record 36% of total revenues in the fourth quarter 2014, which represents a significant transformation for ICF. One year ago, commercial accounted for 30% of fourth quarter revenues. The composition of our commercial revenues in the fourth quarter is likely representative of what we will see going forward. Digital services and strategic communications accounted for 37% of commercial revenues. And energy markets, which encompass ICF's energy efficiency and energy advisory work, represented another 38%. We achieved record contract wins for 2014. The value of awarded contracts was $1.3 billion, up from what was a record year last year, when we reported $1.2 billion of new sales. In the fourth quarter, we had sales of $262 million, up 17% from the comparable year-ago period. We won a number of strategically important contracts from commercial and government clients that reflect our leadership position as subject matter experts and our increased scale in IT and digital services. In our commercial business. We had several big wins in…

James C. Morgan

Analyst

Thanks, John, and good afternoon, everyone. As mentioned previously, we reported solid year-on-year comparisons in the fourth quarter. Total revenue was $276.4 million or 20.3% above last year's fourth quarter. Organic revenue growth, which is total revenue excluding acquisitions completed in the last 12 months, was up 3.5%. Fourth quarter 2014 gross profit margin was 39%, an increase over the 37.7% reported in the fourth quarter of last year. The year-over-year increase was primarily driven by the greater mix of higher-margin commercial business as a result of the Olson acquisition. Indirect and selling expenses for the fourth quarter were $83.4 million. The $14.6 million year-over-year increase and indirect and selling expenses was primarily due to the additions of Mostra, CITYTECH and Olson, and included approximately $800,000 in acquisition costs related to the Olson transaction. We achieved strong year-on-year profit growth, thanks to the increased contribution of higher-margin commercial business in this year's fourth quarter and the impact of the 16-day federal government shutdown during the comparable period last year. Operating income was $16.6 million for this year's fourth quarter, up 32% year-over-year. Adjusted to exclude acquisition-related expenses in both periods and special charges related to the international office closures, operating income was $18.7 million, 42.4% above the similar period last year and significantly ahead of our revenue growth rate for the fourth quarter. Reported EBITDA was $24.5 million for the quarter, 38.1% higher than the $17.7 million reported in last year's fourth quarter. Adjusted EBITDA, which excludes acquisition-related expenses and special charges related to office closures, was $26.6 million for the quarter or 45.4% higher than the $18.3 million adjusted EBITDA reported in last year's fourth quarter. Adjusted EBITDA margin increased to 9.6% from 8% in the fourth quarter of 2013. Depreciation and amortization expense was $3.9 million, up from…

Sudhakar Kesavan

Analyst

Thank you, James. In summary, we expect to continue to grow profitably in 2015. Our assumptions include: Low double-digit growth in our commercial business, continued growth in our international government business in constant currency terms, a decline in our state and local revenue as a result of the wind down of Superstorm Sandy recovery work that will begin in the second quarter. And despite a higher backlog, we're assuming a slight decline in federal government revenues. In today's release, we included our full year 2015 guidance across several metrics. We expect revenues to range from $1.175 billion to $1.225 billion, representing year-on-year growth of 14.3% at the midpoint. Keep in mind that roughly $20 million in revenue that we had in 2014 will not recur in 2015 due to foreign exchange translations and office closures. EBITDA margin is estimated between 10% and 10.5%. Non-GAAP EPS, which excludes amortization of intangibles is expected to range from $2.78 to $2.93. The GAAP diluted EPS range is $2.25 to $2.40. Operator, we would now like to open the call to questions.

Operator

Operator

[Operator Instructions] And we have our first question from Bill Loomis with Stifel. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: Sudhakar, just on the -- your margin goal, 10% to 10.5% EBITDA, that's pretty close to what the goal was prior to Olson. Olson had much higher margins. What are some of the incremental costs on that? Why aren't we looking at, say, 10.5% to 11%?

Sudhakar Kesavan

Analyst

Bill, we took the Olson margin and weighted averaged them with our margins. And we basically said in the Olson guidance that we will -- our margins will increase by 80 to 100 basis points, which is what we did. We added 80 to -- 80 basis points to the 9.4% and that's how we came up with 10.2%, 10.25% midpoint for the EBITDA range. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: And the margin improvements from international closing those unprofitable offices, does that help in 2015?

Sudhakar Kesavan

Analyst

Yes. We certainly hope it helps, which is why there is a range, which we've given you from -- so it will -- hopefully, that will help. And we certainly are quite focused on profitability, especially making sure, as I said, that we want to make sure we have scale in certain locations. And obviously those locations are in Europe and the ones which are sort of marginally scaled, we want to -- we don't want to necessarily continue to commit to. So we certainly hope that, that will happen. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And just on -- in terms of negative impacts on profitability in 2015, can you go over that? You talked about the revenue but -- for example, obviously exchange rate won't impact margins, just dollars, right?

Sudhakar Kesavan

Analyst

Yes. Margins -- James, why don't you...

James C. Morgan

Analyst

Yes. There could be a little bit impact. We think that's going to be fairly small. Certainly, from an EPS perspective, you have an impact, Bill, with the translation of the income statement and balance sheets, but it should be fairly small. We're talking $0.01 or $0.02. William R. Loomis - Stifel, Nicolaus & Company, Incorporated, Research Division: And then just the margin on federal that you're looking for in 2015, how do you see that versus 2014? Improving or the same or worse?

Sudhakar Kesavan

Analyst

I do believe it's going to be the same. But we are striving to see how we can improve it. But our assumption for the purposes of going forward is it's going to be the same.

Operator

Operator

Our next question comes from Tim McHugh with William Blair.

Matt Hill

Analyst · William Blair.

This is Matt Hill in for Tim this afternoon. One of the questions I had was in relation to the federal government, you talked a lot about some headwinds, the spending there. Is this a change from what we've seen before with the strong awards in previous quarters? Was there anything unique in the fourth quarter? I think we were -- with the easy with comparison with the shutdown, I think we were looking for a little bit more there.

Sudhakar Kesavan

Analyst · William Blair.

Yes. No, I understand your sentiments. I think we -- our awards have been pretty good for the last 2 years, if you recall. We had $1.2 billion of sales in the prior year. We had $1.3 billion this past year. I think that we are still trying to figure out the rate at which the government will come back to normal in terms of the award translating into revenues. And we certainly saw a bit of budget practice this past year, things would improve and perhaps, the normality would return. We found over the last month or 2 that it hasn't quite gotten back to normal the way we'd expect it to. So we're assuming that the patterns, which have existed over the last year, 2 years or so will continue. And with this DHS thing has not helped our overall feelings about the federal business. So we think it's a reasonable pragmatic assumption to make that things will remain the same in terms of translation of awards to revenues. We were a little more optimistic at the beginning of last year, if you recall. But we didn't quite hit those numbers. So we thought that we should learn and we just assume that the pattern will remain the same going forward.

Matt Hill

Analyst · William Blair.

Okay. And then a question -- do you have any -- are you willing to give any commentary around organic growth in the digital interactive or energy efficiency business? And then maybe what are you expecting Olson in 2015, revenue wise for Olson?

John Wasson

Analyst · William Blair.

I mean -- this is John Wasson. I think on the energy efficiency and the digital front, I mean I think generally, we've guided in our commercial markets to low double-digit growth, organic growth. And I would think that's a reasonable number for both the digital and the energy efficiency in our commercial markets. I know when we did the Olson acquisition, we had indicated 12% growth. And so I think growth rates in that range, I think, would be appropriate for those markets.

Matt Hill

Analyst · William Blair.

Okay, great. And then one final one with -- any commentary on the size of impact from the roll-off of the Superstorm Sandy work?

James C. Morgan

Analyst · William Blair.

Yes. If you -- in total, it's somewhere in the neighborhood of $5 million to $7 million.

Matt Hill

Analyst · William Blair.

So $5 million to $7 million that won't be repeating in '15?

James C. Morgan

Analyst · William Blair.

Yes. Year-over-year decrease in revenues associated, that kind of thing.

Operator

Operator

Our next question is from Edward Caso with Wells Fargo Securities.

Tyler Scott - Wells Fargo Securities, LLC, Research Division

Analyst

It's actually Tyler Scott on for Ed. I was just hoping you might be able to give us some color on how the integration is going with Olson so far and maybe any early success in cross-sell? Or is that still a little too early?

John Wasson

Analyst

This is John Wasson. I think the integration is going quite well. I think as we talked about in the last call, this is the first year we created a new digital services group that brings together both the creative capabilities in Olson and the technology capabilities on the legacy ICF side. And so we're quite pleased to be able to sell across the entire value chain. We have begun looking at specific clients and going in and telling the full story. So for clients that were working on, more on the creative side, we're helping them understand our new technology capabilities and in the same vein, more technology clients were certainly sharing the Olson story. So we're certainly out making those -- having those meetings and having those discussions. But that's been 1 or 2 bids that we bid together that I don't think either firm would have bid independently. I know we bid to an energy companies in Canada. An opportunity -- we've also, I think, won some work at Fannie Mae. We had some small project success at Fannie Mae. And so there is -- there's good signs that we're actually finding clients, where we can sell the integrated story by bringing Olson and the legacy ICF capabilities together.

Tyler Scott - Wells Fargo Securities, LLC, Research Division

Analyst

That's good. And your -- and that goes for both on the commercial and the government side, you're kind of -- that applies to both sides of the business?

Sudhakar Kesavan

Analyst

Yes. I think in the government business we have a very strong group. I think -- we talked about the $100 million smoking cessation contract we won last year, the whole thing about how you can get to segmented populations through social media, et cetera, which we won for the health and human services department. I think we certainly want to take Olson into the government. But I think right now our priority is to make sure that we take them into all our commercial clients first, the utility clients, the health care clients, et cetera, where we see enormous opportunity. It's not like we won't take them to the government. But the government group at the moment is quite large and is doing really well in the digital arena. And now combined with some of the intellectual property which Olson has like the loyalty platform, et cetera, we are finding ways in which we can use those loyalty platforms with specific government clients. We've had 1 or 2 meetings where there is some interest in seeing how those could be used in a way which is actually quite interesting for stakeholder engagements. So we certainly see a lot of potential going forward. But our focus right now is on our commercial clients, which is utility and health care clients where we take Olson in.

Tyler Scott - Wells Fargo Securities, LLC, Research Division

Analyst

Absolutely. That was great. And then did you -- I don't know if I missed it or if it's not been provided but for -- what exactly -- has there been any change to what we're expecting in Olson from 2015 from the guidance call? Or what's the organic growth rate assumption for the total company for 2015?

Sudhakar Kesavan

Analyst

Yes. I think that for Olson, there has been no change. I think we said around 12%, as John mentioned. And that should certainly -- we are quite -- we believe that, that will happen going forward for Olson.

Tyler Scott - Wells Fargo Securities, LLC, Research Division

Analyst

Okay, great. And then in terms of -- I know you got down to -- you got the leverage down a little bit. Do you have any longer term plans sort of where -- maybe where you want to exit 2015 in terms of how much debt you have on the balance sheet? Or any color around that?

James C. Morgan

Analyst

Yes. I would just say that certainly from -- I don't think there's a specific target. But certainly as we generate $90 million to $100 million of operating cash flow, the primary use of that will be to pay down the debt that we have during the year. And that will be a focus and obviously, as I mentioned, we had about -- we're expecting some capital expenditures in the year of about $18 million to $19 million. But primary purpose we'll be using that cash flow to pay down debt as of today, unless we identify some good acquisition targets between now and the end of the year.

Tyler Scott - Wells Fargo Securities, LLC, Research Division

Analyst

And then do you have maybe -- how high you're willing to bring the leverage? Or is that -- it would all depend on the acquisition?

James C. Morgan

Analyst

Well, currently, our credit facility, we are capped at a leverage rate of 3.5 of bank EBITDA to debt. So that will be the cap.

Operator

Operator

[Operator Instructions] And our next question is from Tobey Sommer with SunTrust.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Analyst

So I just wanted to follow up on the slightly down federal government guidance. Is there something in the market that has changed recently or kind of is this a function of maybe a year ago, thinking that things were going to heal a little bit and not seeing that come to fruition and therefore, just trying to cautious again, because you have had a decent amount of contract awards.

Sudhakar Kesavan

Analyst

Yes. I think the latter is a good summary, Tobey. I think that last year, we, as I just said in answer to another question, we had record contract awards and we therefore expected a 2% increase in our government business, which was a reasonable assumption we thought. I think it was like a 2% decline in our government business, which we ended up with. So we think that we have had great awards. We're quite focused on getting the awards and making sure that we have all the contract vehicles and all the stuff which we need. But we -- until such time we see those awards translating more quickly into revenues. I'm confident they will. It's just that it doesn't translate as quickly, you start sort of thinking about the assumptions you have made at the pace of translation. So I think the -- your latter assumption is a good one.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Analyst

Okay. And so there isn't any particular, like, a single contract or some sort of protest of something you previously won that colors your outlook?

Sudhakar Kesavan

Analyst

No, no.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Analyst

No? Okay. I wanted to ask a question about the energy efficiency work. Where do we sit as far as the big catalyst this year, the EPA in its rule-making process and in the California projects that are coming to market? Any kind of update you can give us on those 2?

John Wasson

Analyst

Yes. This is John Wasson. So we still have a robust pipeline in energy efficiency. I think as I mentioned, we certainly see it as a growth market, continue to see it as a growth market as we go forward. I think we are still working hard on the opportunities in California. I think those will play out in the second half of the year in terms of the timing of those opportunities. And I think the Clean Power Plan has the potential to kind of take the energy efficiency to the next level or step up that market. I think that, that rulemaking has been delayed a little bit within EPA. And so I think EPA is now talking about trying to finalize it by mid to late summer. And so frankly, I think the Clean Power Plan is probably a play for 2016 and beyond. And so really our focus in the latter half of the year is in California. And then I think there's a real strong potential that the Clean Power and regulatory activities around carbon will step up that market as we go into 2016 and beyond.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Analyst

Do you think that any utilities will -- are they all going to wait for the EPA or will some sort of see the writing developing on the wall and start to move either coincident with it or maybe even prior?

John Wasson

Analyst

There's always -- utilities who are out front and early adopters. And so I think there are some potential to that. But I think frankly to really see a step up in the market, you're going to have to see these rules implemented. And you really see the movement in the market once the rules go final and the states put in place their implementation under the kind of federal umbrella and the utilities have to comply with it. So I really think it's going to take the implementation of final rules to really take us to the next level.

Tobey Sommer - SunTrust Robinson Humphrey, Inc., Research Division

Analyst

Okay. My last question is just from a competitive standpoint. Are you well-positioned in your -- from perspective to capture your fair share of the opportunities out there in California that will result from the EPA rule?

John Wasson

Analyst

Yes. We feel -- we feel like we're a market leader. We have a strong position. And I think we -- obviously, it's a competitive environment and you have to work hard to win the work. But we think we're in a good position. And we're, as I said -- we're bullish on the market.

Sudhakar Kesavan

Analyst

Yes. I would add that we have hired some very senior people who have lots of utility experience, especially energy efficiency area on the West Coast over the last year. So we -- and we also have many more people on the West Coast. So we certainly think that we are well-positioned and have a knowledge of the market, which will help us in getting our fair share.

Operator

Operator

Our next question is from Stefan Mykytiuk with ACK Asset Management.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Just want to follow up on a couple of things. I'm sorry if I might have missed this. What was the federal book-to-bill in Q4 and what was it a year ago?

Sudhakar Kesavan

Analyst

Federal in Q4 or for the whole year? Q4?

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Well, I'd take both, if you have them.

Sudhakar Kesavan

Analyst

I think we have them. We...

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

While you're looking for that, I'm just curious. What -- how much stock comp is built into your guidance? And can you give us how much of that is -- there's obviously kind of an incremental piece for Olson for a period of time as almost like an earnout, if you will, for some key people?

Sudhakar Kesavan

Analyst

Let me give you the -- first, our book-to-bill. The federal book-to-bill for the year was 1.33 -- no, for the quarter 4 was 1.33...

James C. Morgan

Analyst

It's year-to-date..

Sudhakar Kesavan

Analyst

For the year-to-date, sorry. So 1.33 for the year was the federal book-to-bill and for the quarter was 0.74. Usually, Stefan, most of the -- a lot of the federal revenues are coming in Q3.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Q3 was huge, right?

Sudhakar Kesavan

Analyst

Was huge, right. So usually, that's what happens in the fourth quarter usually not that high. So 1.33 to 0.74. And the prior year -- do we have the prior year? I don't think we have the prior year handy. But we certainly provided it in the -- we can certainly provide that. We'll get back to you on those numbers.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Great. And the stock comp built into your guidance?

James C. Morgan

Analyst

Yes, we -- I mean we typically don't give that level of granularity, what our stock compensation expense is.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. But for the year -- for '14, it was, what, $13 million and change? And I think on your last call, you did say that there was, I want to say it was, a few million dollars of step up from the Olson acquisition because of those awards given to some key people. Am I right on that?

James C. Morgan

Analyst

Yes. I mean -- I guess the way I would look at it is that for the compensation, what we gave to the Olson folks was roughly $15 million. That is vesting over a 4-year period. So you can straight line that and add that to the numbers you have.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. But there's no reason why -- is there any reason why it would be on the base business dramatically different from '14 other than if you guys happen to hit the ball out of the park somehow?

James C. Morgan

Analyst

No. There's no major change from what the historical has been.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. Have you -- and that's not -- that is not built into your adjusted EPS, correct?

Sudhakar Kesavan

Analyst

No.

James C. Morgan

Analyst

No, it's not. That's in our baseline EPS after debt.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Right. It's coming out of GAAP but you're not adding it back. You're only adding back...

James C. Morgan

Analyst

Yes. We're not adding it back for adjusted, no.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. And just lastly, on the CapEx side. The $18 million -- you said $18 million to $20 million or $18 million to $19 million. Is there some -- is there any CapEx related to the Olson deal specifically or the integrations or are we -- is this $18 million to $20 million kind of our new baseline spend?

James C. Morgan

Analyst

Yes. So if you look at historically the core company has run somewhere between $13 million to $14.5 million or so. Olson typically runs around $4 million or so of CapEx. So adding those 2 together get you pretty -- gets you to the range that we're guiding to for next year.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. All right. Just going back to the federal one more time, sorry to beat this to a dead horse, but you did have very strong federal awards. And so many of your competitors, so to speak, are public comps had said that they feel like the environment is getting better and looking for perhaps an improvement in the back half of the year. Again, is there anything really different in your business? Or is it more just how you want to view the world or how you'd like to kind of start off the year in terms of our expectations?

Sudhakar Kesavan

Analyst

As I said to, I think, someone's question prior, Stefan, I think we view the world in a similar way as some of our competitors, as you pointed out, perhaps are viewing the world at the moment. But we have learned -- we want to be a learning organization. We have learned and perhaps hopefully things will improve in the second half of the year. But we aren't willing to go out and say that in so many ways in explicit sort of terms. But we certainly hope there's nothing -- I don't think our business is different from the civilian business, which everybody else has. But most of our business is civilian agencies and maybe most of our comps are DoD and intel and maybe there are some difference in the nature of what they do versus what we do. But I think that we just -- I think I would put it down to our view of the world is colored by our experience over the last year.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. And then lastly, I'm sorry to take up so much time, just on the Olson -- I think when you bought Olson and on the last call, there was the discussion about the potential to reinvest a bit in that business and accelerate the growth. Have you built any of that? It sounds like you haven't built any of that into your guidance in terms of your kind of taking your growth rate at face value rather than assuming some potential for acceleration?

Sudhakar Kesavan

Analyst

Yes. We've taken that growth rate at face value. What we've learned is over the many acquisitions we have done, the investments start yielding fruit but they take about 12 months to yield fruit, 12 to 18 months. So it's not like we instantly make it and then the guy goes out and sells a big job sort of thing. I mean it's just one of these things which takes at least 12 months to get in gear. So we certainly hope that in 2016, that acceleration will perhaps come about based on the investments we make this year.

Stefan Peter Mykytiuk - ACK Asset Management LLC

Analyst

Okay. And since you've owned it now for a few months, is there anything you've seen in the business that makes you think you're not going to be able to accelerate that?

Sudhakar Kesavan

Analyst

No. I think we -- the 6 weeks or something we've had -- or 2 months we've had it, 2.5 months, I think we are quite bullish about it. I think it's an excellent business. And we certainly think that combining them with some of our clients, et cetera, and doing the things which we are trying to do, which I outlined in my remarks, I think we can certainly accelerate it.

Operator

Operator

And we have no further question at this time. I will now turn the call back over to management for closing comments.

Sudhakar Kesavan

Analyst

Thank you for participating in today's call. We look forward to keeping you up to date and we will see you in May sometime for Q1. Thank you.