Greetings. Welcome to Gibraltar Industries Fourth Quarter 2019 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

I would now like to turn the conference over to Carolyn Capaccio, Senior Vice President of LHA. Thank you. You may begin..

Thank you, Operator. Good morning, everyone, and thank you for joining us today. With me on the call is Bill Bosway, Gibraltar Industries President and Chief Executive Officer; and Tim Murphy, Gibraltar’s Chief Financial Officer.

The earnings press release that was issued this morning, as well as the slide presentation that management will use during the call are both available in the Investor Info section of the company’s website, gibraltar1.com.

As noted on slide two of the presentation, the earnings press release and slide presentation contains forward-looking statements with respect to future financial results.

These statements are not guarantees of future performance and the company’s actual results may differ materially from the anticipated events, performance or results expressed or implied by these forward-looking statements.

Gibraltar advises you to read the risk factors detailed in its SEC filings, which can also be accessed through the company’s website. Additionally, Gibraltar’s earnings press release and remarks contain non-GAAP financial measures. Reconciliations of GAAP to adjusted financial measures have been appended to the earnings release and slides.

Now, I will turn the call over to Bill Bosway.

Bill?.

Thanks, Carolyn. Good morning, everybody and thank you for joining the call this morning.

Let me begin with sharing highlights of the quarter and then we will have Tim review our overall financial results, as well as results from each of our business segments and then after Tim’s review I would like to take a few minutes and just preview some initial thoughts regarding our go-forward strategy, which I will do an in-depth review of our strategy at our Investor Day on March 18th in New York City and I hope all of you will be able to join us.

Then I will finish up with our 2020 guide -- guidance and then we will open the call for your questions. So let’s start with slide three. Our fourth quarter results reflected our momentum from the third quarter. We continue to execute our growth and margin plan and delivered solid operating financial results.

We finished the fourth quarter consistent with our expectations with revenue growing just over 7% to $258 million, of which 5.3% of that was generated organically.

The remaining 1.8% was generated from our Renewable Energy and Conservation segments acquisition of Apeks Supercritical, which is our first strategic investment into extraction processing and we completed that in the third quarter.

As well we delivered solid earnings and cash performance with our GAAP EPS of 10%, adjusted EPS of 32% and cash from operations of $57 million.

Our results reflect more consistent operating performance, better productivity across our operations and supply chain, with some obvious solid volume, leverage and continued focus on a working capital management performance.

We also benefited from market, business and product mix during the quarter and our backlog continued to strengthen in the quarter up 35% to $218 million as we expanded our participation in Renewable Energy and Conservation, as well as Infrastructure and Residential end markets.

For the year, we delivered solid results as well, revenue grew 4.5%, of which 2.8% was organic, GAAP EPS grew 2%, adjusted EPS grew 21% and cash flow from operations grew 33%. So it was a solid year for us. I am proud of our team for the performance that we delivered in 2019.

I’d say we all know we have a lot of work yet to do but I have a conference with our momentum and that will continue as we enter into 2020. So now, I will turn the call back over to Tim for give you the results of each of the -- of our segments..

Thank you, Bill, and good morning, everyone. Let’s move to slide four in the presentation entitled Consolidated Financial Performance.

Consolidated revenue increased 7.1% above the midpoint of our guidance range as Renewable Energy and Conservation segment revenues continue to accelerate, while Industrial and Infrastructure and our Residential Product segment revenues were down slightly.

Of the 7.1$ increase in revenue, 5.3$ was driven by organic growth and 1.8$ by our third quarter 2019 acquisition of Apeks Supercritical. As Bill noted, backlog at quarter end was $218 million, up 35% from the prior year, driven primarily by our Renewable Energy and Conservation business.

Consolidated GAAP operating income was up 4.3% and adjusted operating income increased 25.1% in the fourth quarter. Fourth quarter 2019 operating income included $3.2 million charge related to our decision during the quarter to exit a Multiemployer Pension Plan at one plan in the Industrial business. A plan that was significantly underfunded.

We work with the union in this business to modify their contracts and provide a benefit under our companywide 401(k) plan.

Consolidated GAAP and adjusted EPS grew 10% and 32%, respectively, excluding the $0.07 per share related to the Industrial Pension Plan exit charge, GAAP EPS would have been within the guidance range provided on our third quarter earnings call. Adjusted EPS exceeded our guidance range.

The improvement from last year resulted from organic growth in the Renewable Energy and Conservation segment, lower interest expense related to the repayment of our outstanding debt in the first quarter and continuing benefits from 80/20 operational initiatives, partially offset by lower earnings in the Residential Product and Industrial and Infrastructure Products businesses.

Including GAAP results were cost of $7.2 million or $0.18 per share associated with acquisitions, restructuring and senior leadership transition. During the quarter we achieved $2.8 million interest savings from the first quarter repayment of our outstanding debt.

Now let’s review each of our three reporting segments starting with slide five, the Renewable Energy and Conservation segment. Segment revenues increased 26.4%, driven by organic growth of 21.4 and 5% growth in the third quarter acquisition of Apeks Supercritical.

Organic growth was primarily driven by strong demand for our commercial greenhouse growing solutions, including design, structures system integration, field project management and general contracting services.

Operating margins expanded over last year, we continue to execute well and through volume leverage, as well as favorable product and vertical market mix. With respect to our initial tracker installations, field modifications are substantially complete.

Approximately 25% of sites are not yet turned on as our customers finalize work outside our projects scope. The performance of the modified systems is meeting our expectations.

We entered Q1 with strong backlog across the segment, up in excess of 50% from the prior year as we gain further participation and see strong customer demand in both end markets. Backlog from Conservation is up 60% and Renewable is up 43% from the prior year quarter. Let’s move to slide six and our Residential Product segment.

Residential Products revenues decreased $1.1 million from last year as modest increase in volume were offset by market pricing. Our teams work with their retail and wholesale customers to ensure these customers are able to offer market competitive pricing to the ultimate user of our products.

Adjusted operating margin decline 30 basis points as a result of unfavorable product mix, partially offset by improved material cost alignment and 80/20 simplification initiatives.

Looking ahead, we expect market demand in 2020 to be consistent with 2019 and operating margins to improve based on continuing operational excellence initiatives and better execution. Let’s move to slide seven to review our Industrial and Infrastructure Products segment.

Segment revenues decreased 9.9% in the Industrial and Infrastructure business, driven by lower industrial revenue as lower demand for core products resulted from customers delaying purchases to optimize their inventories and the declining steel price environment. The Infrastructure business was consistent with the prior-year fourth quarter.

GAAP operating margin was down 690 basis points. This decline was caused by the $3.2 million charge related to our decision to withdraw from a Multiemployer Pension Plan, without this charge, GAAP operating margin would have increased 10 basis points.

Adjusted operating margins increased 30 basis points through a more favorable mix of higher margin products and continued execution on 80/20 profit improvement initiatives. As we enter the first quarter, we expect to see solid margin performance continue.

Let’s move to slide eight titled our Balance Sheet Supports Investment and Growth Plans to discuss our Liquidity Position. During 2019, we generated cash from operations of $130 million, up 33% over the prior year, driven by better inventory management and improved payment terms.

We used net cash of $100 -- of $11.2 million for the purchase of equipment and $8.6 million for acquisitions. And during the first quarter, we used to $212 million to repay all of our outstanding debt. At December 31st we had cash on hand of $191 million and an undrawn revolving credit facility of $400 million.

Our untapped liquidity supports the execution of both organic and inorganic growth strategies. Now, I will turn the call back to Bill..

Thanks, Tim. So let’s move to slide nine. I want to talk a little bit about how we are accelerating our transformation.

Our fundamental strategy is to improve the growth and margin profile of the company and accelerate returns by being as well-positioned as possible in attractive end markets where we can actually solve customer problems and also help shape the industries that we operate in. I believe we have a clear view of our markets.

We -- I think we understand the inherent growth landscape, the profit share of the entire value chain, the role we play today and how well we play it and the expected role we have or the expanded role, we have the opportunity to play and what is required to play it well. So slide nine really outlines our market assessment rubric.

It’s a disciplined thought process. We used to assess market attractiveness and our ability to generate value in that market or in those markets. Not only just for our customers but also for our shareholders. So the first assessment step is about market attractiveness and what good really looks like.

So we forced ourselves through a series of questions, like, does the market have a strong outlook based on sustainable growth, margins and returns, is the demand profile stable and predictable, is the market structure based on the solid foundation? The second assessment step is about our ability to create sustainable value in these markets that we are in.

So it’s important we build leading relevant positions in our markets.

Such that we do solve customer problems and create opportunities for them better than anyone else can and this really does require us to have a direct connection and relationship with our customers and deliver innovation, not just through new products and services, but broader solutions and business models.

So our rubric thought process is foundational to how we approach all our opportunities. How we are prioritizing our key initiatives. How we are deploying our capital, our time, our talent, our energy and managing everything about our business and executing our plans.

So, with that, let’s move to slide 10, I want to talk about two of our recent acquisition. In January, we acquired assets of Thermo Energy Systems. It’s a $75 million full service provider of commercial greenhouse solutions directly serving the commercial growth -- certain commercial growers in North America.

So really Thermo expands our leadership position in the design, manufacturing and installation, and systems integration for the organics -- for organic growing food market, which is really important to us. This is a very attractive market. It’s $1 billion North American commercial growing market for fruits and vegetables.

We believe it’s very attractive and we think it fits our rubric thought process quite well. The market is growing mid-to-high single digits, supported by rising consumer demand for healthier food grown in an environmentally friendly way and the market has an attractive and sustainable return profile as well. We are excited about the Thermo team.

They bring us great experience and main knowledge in commercial growing and they have designed and enabled over 600 acres of growing space in the past 10 years alone. So we are excited to have them join our team and expect this business to be accretive in 2020.

Let’s move to slide 11 and we will talk about our second recent acquisition, Delta Separations, which just occurred a few weeks ago.

So with Delta, we expanded our suite of extraction solutions for plant-based biomass processing with the acquisition of Delta’s assets, a $46 million engineering and manufacturing company, also an industry leader in centrifugal ethanol-based extraction systems.

So this is our second acquisition in the extraction processing market and combined with Apeks Supercritical, the industry leader in CO2 extraction processing, we feel we have really broadened our leadership position in this space. This market is also emerging.

It’s very attractive and is also growing mid-to-high single digits with strong end consumer demand for emerging product categories, whether it’s medicinal, nutraceuticals, oil extracts, cosmetics, beverages and even edibles.

Delta sells directly to processors of biomass, hemp and cannabis, focused on the production of botanical oil extracts, and also provides onsite service and education. I would say that Delta team truly does lead this space with commitment and passion and really look forward to further building and scaling our extraction processing platform.

We also expect Delta to be accretive in 2020. So let’s move to slide 12. Now we talked about our recent acquisitions, I want to talk briefly about how we are optimizing our portfolio and some of those key initiatives as we move into 2020.

So our portfolio does continue to evolve with the relative position of our three platforms changing as we move into 2020. Renewable and Conservation becomes our largest platform, increasing as a percentage of our total revenue by 10 points versus 2019. It’s our fast -- and it’s our fastest growing business in the company.

As some of you may know, the platform is made up of solar racking systems, which represents our Renewable side of the business and also our commercial growing and processing businesses, which represent our Conservation side of the business.

We started the solar business with the acquisition of RBI Solar in 2015 and subsequently acquired SolarBOS in 2018. The solar market continued to experience very solid growth as the economics of solar energy continue to become more attractive.

Our Commercial Growing and Processing business started with the acquisition of RBI’s commercial greenhouse business in 2015. We then acquired Nexus, a commercial greenhouse manufacturer of specializing and serving the cannabis market in 2017, and recently, as I just mentioned, Thermo Energy Systems has been added to the team.

In parallel to the acquisitions, we have also expanded our customer offering to include not just the design and build of commercial growing structures, but also the selection and integration of key operating systems for each growing site, as well as general management oversight for site build out and startup for our customers.

In 2019, we also made our first investment in the extraction processing market, with the acquisition of super -- Apeks Supercritical, and again, as I just recently mentioned, we added Delta Separations expertise in ethanol-based extraction just a few weeks ago.

We are excited about our other two platforms as well, Residential Products and Industrial and Infrastructure, and we are well positioned in these markets. Our Residential Products platform is made up of four businesses, mail and parcel, home ventilation, roofing accessories and home improvement.

And our Industrial and Infrastructure platform consist of two businesses supporting a variety of industrial transportation and infrastructure markets. All three platforms playing an important role for us in accelerating our growth and returns, and we allocate our support for each of these businesses, capital, time, talent and energy accordingly.

And we will provide -- I am going to provide a lot more insight, our team will about our business overall during our upcoming Investor Day. So let’s move to slide 13. I want to talk a little bit about our operating foundation.

We began our journey five years ago, building our operating foundation on four pillars, operating -- operational excellence, innovation, portfolio management and M&A. And our four pillars continuing their importance to our business but we are going to consolidate those into two operating pillars.

First, we are consolidating operational excellence and innovation into pillar number one. We are going to call that our business system. Now, our business system includes disciplined focus on a number of things, business model optimization, 80/20, productivity, supply chain management, innovation, new product development and IT digital systems.

Second, we are going to consolidate portfolio management and M&A into pillar number two, which we are going to call portfolio management. Our portfolio management is focused on optimizing our existing assets, but also allocating and prioritizing our capital on the right initiatives to execute our plans.

We are also adding a third pillar called organization development, which really focuses on talent development, the design and structure of our organization, creating -- and creating the best place to work for our team.

I think we have good alignment among our pillars, and I think, we are providing the necessary systems and processes, as well as tools, and we are building our organizational skills to help develop our plans. So now let’s move to slide 14 and I want to talk a little bit about our 2020 guidance.

So in 2020, we expect to deliver another solid year of performance with organic and acquired revenue up between $160 million and $180 million or 15% to 17%, reaching $1.21 billion up to $1.23 billion. GAAP EPS will improve between 30% and 38%, reaching $2.58 up to $2.75 and adjusted EPS will improve between 14% and 21%, reaching $2.95 to $3.12.

For the first quarter, we expect revenue in the range of $246 million to $256 million, that’s up 8% to 13% versus last year. GAAP EPS for the first quarter is expected to be $0.27 to $0.33 and adjusted EPS between $0.37 and $0.43.

We are confident in our 2020 plan and in the opportunity to deliver increasing returns, we are better positioned in faster growing markets and we continue to build on our solid and growing backlog. Our new products and services are resonating well and we are strengthening our positions with our ongoing investments across our businesses.

So I mentioned in the beginning of today’s call, we are hosting our Investor Day in New York on Wednesday, March 18th. I hope all of you will be able to attend. We do plan to provide much more insight on some of today’s thoughts I have shared with you and our leadership team, which will be there is looking forward to spending some time with you.

Again, I hope you have time to join us and we will look forward to seeing you on 18th. At this point, now we will open the call for your questions..

Thank you. [Operator Instructions] Our first question is from Daniel Moore with CJS Securities. Please proceed..

Bill, Tim, good morning..

Good morning, Dan..

Good morning, Dan..

And just quickly, Frank, if you are listening, congrats on your success. Thank you for all your help and best of luck in the future. I wanted to start with, Bill, you gave a lot of great detail on the recent acquisitions Apeks and Delta.

If you wouldn’t mind, maybe talk a little bit more about how they fit together as far as the extraction market is concerned, how much additional opportunity you see for consolidation, what that could look like, just ultimately, what’s the market size opportunity and the kind of margin profile you expect for this business?.

So, Dan, one, we are excited about these two companies in particular. When we looked at this market months ago, we did a pretty detailed assessment of all the players and our strategy has revolved around as much of finding the right people, the founders and the right leaders in these businesses as anything else. So that was kind of step number one.

And that’s important when you start bringing these companies together. How they operate going forward really is people dependent with strong leadership and systems and processes, as well as technology and products. So those are two companies that we thought were important to have on the team.

We are spending a lot of time with the team together today laying out our roadmap of how we are going to approach this market. As I mentioned earlier, we want to continue to build and scale this platform. We think there is runway here.

I think it’s a solid market, as I think I referenced earlier and there are -- it brings us two of the three core technologies that the market deploys today.

So, I guess, maybe answering your question, there’s still some work to do and looking at maybe adding the third technology that would build out the platform further, but good businesses, good end markets and we are excited to have them..

All right. Look forward to hopefully more to come at the Analyst Day there. Tim, guidance for 2020 implies some really healthy continued margin expansion 50 bps to 90 bps adjusted operating margin uplift.

Maybe can you break that out or rank order mix versus continued operating efficiency gains versus any favorability in raw materials or any other assumptions there?.

As I go through that, I would say that, building products get a lot of restructuring, 80/20 work throughout 2019 and you get some carryover impact And to a lesser extent that’s also in the Industrial and Infrastructure segment, plus the new projects they have planned and modest growth. So that’s how I think about those two segments.

And then we got Renewable and Conservation which has, I mean, we did a lot of -- fair amount of revenue from acquisitions, right? 75% of the revenue growth we think we will see is from the acquisitions of Apeks at the end of ‘19 and the back half, and then the two we did January, February.

Those will come in, Dan, probably a little lower margin year one then the core group, with the expectation that as we integrate and apply our business systems we will improve those up above, so they will help pull up in the future. You also have from an adjusted basis, we did have tracker field retrofits, which we are calling out.

It’s about $7.5 million full year and we think that’s behind us and won’t recur. So you get margin expansion from that. And then I would say, in the Renewables business, there is both operational efficiencies, there’s volume leverage. Material hasn’t really been an issue either way for us in the past.

I think we have been doing a good job of just keeping that somewhat neutral and you will see, we are going to generate earnings from all those things.

We are investing more in the business, you just see SG&A go up a little bit because we have got some investments we want to make to drive future growth and so we have made some of those already in people and in systems. And we will continue to invest a little bit of our incremental earnings and making sure we can drive growth going forward..

Got it.

And then lastly, if I am paying attention to what I heard so far, just as far as that the organic piece of revenue growth guide, Renewables mid-to-high single somewhere continued solid growth, Industrial positive but lower single and kind of flattish on Resi, is that the right kind of way to think about it?.

We will have modest growth in Resi, I would say..

Helpful. Okay. I will jump back with any follow ups. Thank you..

Thanks..

Our next question is from Julio Romero with Sidoti. Please proceed..

Hey. Good morning, everyone..

Good morning, Julio..

I wanted to ask on patented products, can you talk about the earnings contribution in the fourth quarter and maybe what you expect there for 2020?.

Our patented product portfolio tends to have a higher gross margin than our regular product portfolio. So I think year-over-year, there wasn’t a huge difference in what we sold from our patented portfolio. And what I would say is as we look at it patented is a piece of it, but probably a broader view of just new products and services.

And so, certainly, Renewable and Infrastructure, I am sorry, Renewable Energy and Conservation segment, we have expanded the scope of work we do, where we are doing more full service for our customers and that certainly helps from a just a volume leveraging perspective it helps our margins..

Got it.

And just housekeeping one here, I don’t know if you called out an expectation for tax rate in 2020 at all?.

I think in the press release that works out to be about 27% on an adjusted basis and about 28% on a GAAP basis..

Got it. I will hop back in queue. Thanks..

Thanks..

Our next question is from Walter Liptak with Seaport Global. Please proceed..

Hi. Good morning, guys..

Hi, Walt..

Hi..

Congratulations on the great end to the year. I wanted to ask one of the questions that’s already been asked but in a different way. You talked about the M&A as being lower margin in 2020. So I guess a little bit dilutive to the margin, but over time that will start coming out.

So, I guess, the question is, what’s the timing of, I guess, 80/20 improvements on the M&A that you have done and just as a single point, in 2020 what’s the EPS accretion that you are expecting from M&A?.

So, I would say that the integration process, which includes a whole host of processes and opportunities for improvement, including 80/20 and some other tools. It will be -- its part of our planned earnings for 2020 and beyond.

Well, when we do acquisition we usually target sort of a three-year run rate to get to what we think is a maybe a view of a longer term margin profile. It doesn’t mean it won’t get better every year. But the incremental improvements might slow after three years if we do the first three years of work right.

So from an expectation they should be providing some incremental revenues and margins over the next couple of years. And your other question, Walt, at the end I missed that one..

Okay. Well, just -- maybe just for the final point on this, so for 2020, the EPS accretion, it sounds like it’s going to….

Yeah..

…be modest from these M&A deals because of system integration investment..

Yeah. I mean, it’s probably around $0.30 on a standalone basis, if just run out their earnings..

Okay. Okay. Great. And then if I can ask one about the Renewables.

The change that happened to the tax incentive was -- I wonder, maybe you can explain to us, how that impacted the order trends in the backlog for 2020?.

Walt, I guess, my first reaction is not -- it wasn’t much on the high side, I think, as the industry thought it might be and any time you have this, of course, you have this last minute rush and so up until December 31st, we had a lot of customer conversations.

But it did not -- it was not a windfall for us and I don’t think it was for the industry either as much as maybe some people anticipated. So I would say, as a contribution to overall backlog, it was relatively minor.

I mean, we got something out of it, but nothing impact -- nothing in Q4 -- nothing impacted Q4 and the stuff that you get from that will be spread out throughout 2020 as well..

Okay. Great. Okay. Thanks, guys..

Our next question is from Ken Zener with KeyBanc Capital Markets. Please proceed..

Good morning, everybody..

Good morning, Ken..

Good morning, Ken..

Well, I see you have a new slide deck here. So I am excited to see all this stuff, Bill.

If we could go through the, well, before that first the $0.30 was in reference to what, Tim, just for me to be clear?.

So, that’s probably the -- and its approximate but that’s about the contribution we would expect from the acquisitions that we completed end of last year and then the ones we did at the beginning of this year..

With -- so just to be clear, I think, revenue of $45 million in your deck, $75 million and is it $17 million approximately?.

Yeah. But if you wanted to do it a different way, we called out the growth being 75% from acquisitions,, so you are right..

It’s about $130 million?.

In that ballpark, yeah..

Okay. Okay. So I am going to -- so the reason I am asking this is, right, so that’s about a 10% margin, okay? Slide, I believe, 10 for Thermo Energy and I really look forward to your Analyst Day as you educate us around this.

But $75 million of revenue, is that $7 million purchase price and $25 million working capital investment, that’s what’s in your box there. But can you kind of talk about what that means about the industry and it looks like you have got the revenue very cheap and you have used a lot of working capital.

How should we think about what that implies for -- what that means, it seems like a different profile than we are used to?.

Yeah. I guess, I would say that it was probably nothing to do really with the industry other than the growth and it was more a specific situation. So Thermo experienced some pretty explosive growth and to smaller team. So they got a little bit behind, how they would like to perform, how they had historically performed..

Right..

And they created a situation where with our -- we have a little bit larger scale from our greenhouse just the size of our team and the processes we use, so it made a lot of sense for them to join us. The leader of that business is incredibly respected in that organic fruits and vegetables.

We have always -- it’s quite honestly one of those competitors that you will lose work to because they are really good. So we are really excited to join the team and we paid a fair price in total, but instead of all of it being purchase price some of was just investment back into the business..

Now as I look at these pictures and read your language, this is more, I mean, this is the type of greenhouse that you are building or is it the systems in terms of vertical -- the full service turnkey site provider? Is it similar to what you do and what’s -- who’s the leader in this market?.

Ken, it is both of those things. So it’s a full service from design of the structure itself, all the way through specifying, integrating and installing the systems and getting it up and running, very similar to what we do. So it’s really a mirror image of what we do.

It’s just -- they have been really focused on the organics and that’s been a pretty explosive growth market the last 10 years and so these are quite complex and very technology driven sites, if you will. So it’s a nice complement to what we do.

But it looks very similar, we are just able to leverage our scale with their front-end and I think operationally we are excited about what we can do with this going forward, particularly given the end market it is in..

It does look very attractive. I agree with you..

Yeah..

Tim, if I could just clarify, the $7.5 million that you had from the solar retrofit, is what I assume, the $7.5 million was referring to. That’s about 200 basis points of drag in FY’19.

Could one assume that, in terms of the margin in Renewable, I mean, all else equal, it would go up 200 basis points because of that $7 million lacking, but you have growth, growth from acquisitions, which is at about 10%.

Are there any other factors that we should put into the margin expectation for FY’20 in the Renewable segment, it seems like those are the two big puts, minus $7.5 million and EPS contribution you just highlighted?.

Yeah. I mean, I think, that and both of the -- both sides of the business continue to grow at a decent rate too, so..

Correct..

I’d say as those think of, yeah..

Yeah..

And interest expense for the year, I am sorry, if I missed it, Tim..

Effectively nothing, right, we paid off our debt at the beginning of the year. We don’t have any debt, as we said. So I hope to have some interest expense to report to you if we can complete some of our strategic work that we are working on, but nothing in the plan..

Thank you, gentlemen..

Thanks, Ken..

Thanks, Ken..

And we now have a follow-up question from Daniel Moore with CJS Securities. Please proceed..

Thank you, again. If you gave this and I missed it, I apologize.

Just backlog on an organic basis, what would that have looked like on a year-over-year?.

I did not give it, but give me a second, I need to take a quick look. We break it into the beginning, Dan. So I don’t have it in front of me. I am looking what I have is summarized. But I know when we do our backlog numbers. We do sort of pro forma and I am sure that the acquisitions have some backlog increase, but it shouldn’t be....

Here..

Yeah..

They weren’t in it..

Yeah. Yeah..

Okay. We can talk offline. That’s fine. And then one other quickly, just perimeter security, one of the drivers….

Hey, Dan….

Yeah. Go ahead..

Yeah. 33%..

Up 33%. Got it..

Yeah..

Okay. Very helpful. And then perimeter security, just can you give us a sense of the size of that business run rate basis coming out of 2019, and you mentioned, as you just called it out as one of the potential drivers for 2020. What kind of growth we are looking at? Thank you..

So, it’s small. It had in excess of 20% growth last year and we expect that same kind of growth level that sort of single, I am sorry, double....

Mid-double digits..

Mid-double digits, not teens and not 50%. But it should be in between there and it is margin accretive. It’s been really helping along with a bunch of other work. That team has done great work over the last two or three years. You can see it in their margins and they have continued plans to improve..

Very good. Thank you..

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

Well, again, guys, hey, thanks for calling in today, and hopefully, you will be able to join us March 18th in New York City at our Investor Day and we are looking forward to seeing you then. So have a great day, and again, thanks again..

Thank you. This concludes today’s conference. You may disconnect your lines at this time and thank you for your participation..