Good day, ladies and gentlemen, and welcome to the ABM Industries Q4 Fiscal Year 2016 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Susie Choi, Head of Investor Relations. Please go ahead.

Thank you all for joining us this morning. With us today are Scott Salmirs, our President and Chief Executive Officer; and Anthony Scaglione, Executive Vice President and Chief Financial Officer. We issued our press release yesterday afternoon announcing our fourth quarter and fiscal 2016 financial results. A copy of this results and an accompanying presentation can be found on our corporate website. Before we begin, I would like to remind you that our call and presentation today contains predictions, estimates and other forward-looking statements. Our use of the words estimate, expect and similar expressions are intended to identify these statements. These statements represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in a slide that accompanies our presentation. During the course of this call, certain non-GAAP financial information will be presented. A reconciliation of those numbers to GAAP financial measures is available at the end of the presentation and on the Company’s website under the Investor tab. I would now like to turn the call over to Scott.

Thanks, Susie. Good morning, everyone, and thank you for joining us today. By this point, I’m sure you’ve had a chance to review our fourth quarter and full year results for fiscal 2016. I’m pleased to report that we continue to navigate change and transition successfully while managing our business at the high level we’ve come to expect from our management team. Anthony will have much to cover on our financials, but let me give you a couple of highlights. We grew revenues to $1.3 billion for the quarter and $5.1 billion for the full year. This represents a 3.5% quarterly increase and a 5% annual increase. We also maintained solid organic growth of 2% for the quarter, which translates to closer to 3% when normalizing for foreign exchange with our UK operation. For the full year, we grew 3% organically or 3.3% excluding the foreign exchange impact. Given the backdrop of our continued shift towards being discerning about the margin quality of the work we take on, I’m unquestionably satisfied with our growth. We delivered adjusted EBITDA margins of 4.6% for the quarter and in line with our previous guidance, full year adjusted EBITDA margin was slightly greater than 4.1%. As you may remember, we finished 2015 with a recasted 3.8% margin. So we are trending up and just as important, we are delivering as we had outlined. These results led to GAAP EPS of $0.16 for the quarter and $1.09 for the full year. The GAAP figures were impacted by our decision to exit our government services business, which we stated in yesterday’s press release. On a non-GAAP basis, we delivered adjusted EPS of $0.51 for the quarter and $1.74 for the full year, which is at the high-end of our previously issued guidance range. Now, let me…

Thank you, Scott, and good morning, everyone. I’d like to reiterate Scott’s sentiment about our performance in fiscal 2016. Our entire organization executed admirably during a highly complex and transitional year. We are pleased to have delivered and even exceeded in some respects our initial plans, while managing all the complex changes associated with standing up our verticals from both an operational and financial standpoint. As I will discuss with you in more detail preparing to report under our new vertical structure has been a tremendous task. I’m especially proud of the finance team for navigating this incredibly complicated project amidst our typically intense year-end close processes. I’ll now review our fourth quarter results and summarize our full-year performance, which are described in today’s earnings presentation. As outlined in our press release, we made a strategic decision to exit our government business during the quarter, to better align our operations with our 2020 Vision. As a result, we recorded a non-cash pre-tax impairment charge of $22.5 million during the quarter, which you will see reflected in items impacting comparability. This change considerably impacted, both our GAAP results on a quarter and full-year basis. Now on to our performance for the fourth quarter. Please note I’ll be referring to results from continuing operations, which continue to exclude the sale of our Security business. However, the operations of our Government business were not material, and therefore, are not classified as discontinued operations for financial statement purposes. Consolidated revenues for the quarter were up 3.5% versus last year, including organic growth of 2%. Excluding the impact of FX, our organic revenue would have been 2.7%, a good indication of the continuous execution of our business, which was driven by Janitorial, Parking, and Other for our Air Serv segment. In addition, acquisitions provided approximately…

Thank you. [Operator Instructions] And our first question comes from Michael Gallo of CL King. Your line is now open.

Hi, good morning and congratulations on a successful first year, Scott.

Thanks very much. I appreciate that, Michael.

I have a – just one, I guess, key question. Scott, I know you kind of glazed over quickly in the prepared remarks. But it would strike me that the opportunity in implementing best practices on the labor side is potentially enormous. Can you give us just some high-level sort of viewpoints on what you’ve seen so far? How kind of unstandardized things are across the organization? And I know you’re not ready to put numbers out, but just some high-level thoughts on how big this could potentially be, because as you mentioned, it is obviously the single biggest expense in the company, and I was wondering just kind of how inefficient you think things are from a best practices perspective based on what you’ve seen to-date so far? Thanks.

I appreciate the question. It really is hard for us to quantify right now. One of the things that we’ve been true to and committed to is until we get a line of sight on something, we don’t want to get over our skis right. I will tell you that we’ve done well over 100 site visits across the country. And I think more than anything what we’re seeing is that, people approach this differently, and we found pockets of real excellence. We’re calling them bright spots in the organization, and we’re going through and codifying right now and we’re just initiating our pilots right now. So it really is hard to tell how this could have significant upside for the firm from what we’ve seen in talking to BESG who have worked on these kinds of processes with other services firms, there could be some good trajectory here. But it is early days. And the truth is, we weren’t very standardized across the country. So and that gives us some we think good opportunity in the future. But I just don’t want to get out there and throw out numbers yet until, at least, we get through the pilot stages, which are going to happen the next three to six months.

And then just as a follow-up to that, Anthony, is there anything in the 2020 Vision savings for standardization of best practices or whatever you find in this program would that be 100% incremental to that? Thanks.

Yes, we have – if you think about the buckets of our initial 100 basis point, roughly it’s coming – half is coming from org, maybe a third from procurement, and the rest is what we’re codifying the initial stages of the standard operating procedures, the vertical acceleration, et cetera. So there is some line of sight to the initial amount in our 100 basis point. What Scott is alluding to is really what that upside potential could be as we look at it in more detail and we look at it across the enterprise. That’s little harder to quantify, but for the bright spots of the pockets, where we’ve done the analysis, we do see an ability to capture that and it is in our 100 basis point trajectory.

And I would add, this is a huge priority for us, right. So, these pilots are going to be great. We’re kind of, we’re branding them internally our quick wins. So we’re going out there and we’re trying to capture saving and see what we can learn as quickly as possible, so we can finalize these. So, when you think about 2017 for ABM, think about standard operating practices across all of our work streams, that’s kind of where we’re heading operationally and frankly culturally as a firm.

Thanks very much.

Thank you. And our next question comes from Joe Box of KeyBanc. Your line is now open.

Good morning.

Good morning, Joe.

Anthony, can you maybe just give us a goalpost or give us a little bit more color on revenue growth that’s factored into the FY 2017 guide? I guess aside from the Government Services business, I’m curious if you’re still rightsizing some of your customers, and if we maybe could see a little bit of a lower growth rate because of that, or if we’re at the point where your sales org is set up, the industry verticals are in place, and we could start to see accelerating growth?

I think it’s too early for 2017 to anticipate much of the delta from what we’ve historically been able to accomplish on the service line basis. If you think about it Joe, we’ve remapped the business, we are standing up the vertical. This is the first year that operators are really going to be operating under the new vertical structure. To think, that can accelerate, it’s really more of a 2018 and beyond plan. So for expectations, as we’ve committed to, we are going to look at contracts across the enterprise. We are going to continue to be very diligent from a margin perspective. But overall, we are still seeing the growth in 2017, but I would not anticipate an acceleration of that growth or a material difference in what we’ve historically been able to accomplish as an enterprise.

And then, a big part of your value proposition was moving up the chain and extracting better price from your customers. So I guess to that point, can you maybe just deconstruct the 2% organic growth that we saw in the quarter and maybe help us understand how much of that was price versus volume?

Yeah, so for the pricing, that exercise is actually something that we are going to address and what we are calling the next phase of the evaluation with BESG. So if you think about what Scott alluded to that we see good opportunities both in pricing and in procurement. The pricing side, we haven’t really addressed this from a systematic process. So this is part of our standard operating procedures and not so much about the fact that we are going to look a customer and say, we are going to be able to charge more. It’s how do we operationalize the best practices. How do we ensure that when we are in a customer site, we are looking at it consistently in terms of how we are pricing the square footage, how we are pricing the tag, so that we are able to extract more value from the proposition versus doing it in pockets and doing it independently we maybe not have the same consistency. So the growth that you saw in Q4, it’s more same business as usual from a volumes perspective. And recall it’s closer to 3% when you exclude FX. So good mix of both volume; I wouldn’t say that there was really a concentration yet on the pricing side.

Yeah, and just to add on to that and why I think we are optimistic about where our pricing could go for us and again it’s really a 2018 story as we start going through the process of figuring this out is the fact that we don’t have that standardization from market to market. Let’s take something as simple as carpet cleaning, how we price it, how we construct the price, how we bake in our cost, we just think there is going to be a lot of ability to capture value by standardizing that. So I will go back to my earlier comment about standard operating procedures, just in pricing I think there is going to be great value. But again, it’s aggressively back half of 2017 story, but realistically 2018 story.

Understood. Okay. And then maybe just one last quick one for you. I’m assuming that the government services business, all those attributes were largely available to you back when you guys did your strategic review over a year ago, so I guess I just want to understand why now? Are there some tentacles in this business where you just have to provide the services maybe to win other businesses or really what was your reluctance to exit this business before?

I think it’s like everything else. We had our kind of priorities and the cadence of our transformation. And as you can see, it had a very low revenue profile in the firm; we are talking about $120 million odd in revenue and the concept of bigger fish to fry, right. And I don’t think we were completely resolved early on that we were going to exit this business. I think we saw a trend over 2016 that just really solidified for us that if we weren’t going to invest and grow to scale, it just wasn’t going – it wasn’t going to be a good long-term move for us. So this was one where security for us was pretty kind of black and white, this was one early on where it wasn’t as black and white, but shaped up that way over time. So it’s the right time now.

Thanks.

Thank you. And our next question comes from Andy Wittmann of Robert W. Baird. Your line is now open.

Great, thanks and good morning. I guess, Anthony, could you help us just decompose the margins a little bit that were reported in the quarter? You mentioned the day, I think that’s about 30 bps, you tell me. Insurance, Vision 2020, I also think that maybe last year had an incentive comp reversal. I mean, margins were down, but you’ve got a lot of good things going on, so I think some details to quantify the moving parts would be helpful for us to understand better.

Yeah, sure. So I think you nailed all the major items. So if you decompose, the upside is primarily from 2020 Vision and some operating mix. We had some performance challenges in our parking business and really startup costs associated with very large contract in aviation on the West Coast and then we had some margin compression on some of our legacy accounts, which we are actively looking at as part of our overall process. So when you isolate that for parking and then janitorial, two items impacted the quarter, one was the review of our inventory, which is normal for us in tightening up and then there is also a review of our UK operations as we merged the operational contact under one leadership through the Westway acquisition and that’s kind of occurred throughout the year. When you isolate those two items and the bonus reversal, the rest of the operations were at or exceed plan from our anticipation. So really it’s 2020 Vision plus the impact of loss and other things from a net income standpoint offset by the increase in insurance, the one additional working day and then the operational factors that I just alluded to.

Okay. So the day, 30 bps insurance about 30 bps, what were the inventory and UK transition costs? How much was that as an impact to margin?

It’s roughly $3 million plus or minus.

Okay. And then…

And then parking was another, call it, $2 million.

And so, I guess, you said, for parking it was mostly startup cost, but you also mentioned some operational issues. Are there – how much this you think would be between – you mentioned some underperforming customers parking, how much of this you think kind of might stick around as we move here into 2017?

Yeah, I think, if you look at our parking business and as you recall, there’s really two components, the management side and the lease side. This is predominantly on the lease side and that’s a little bit harder to predict exactly the cadence of how parkers and how that revenue stream and the profitability of that revenue stream translate. We don’t anticipate continuing derogation, but it’s – it’s difficult to say how many parkers are going to park in a particular parking lot in a particular market. But we have our operators looking at things with an attentive eye and trying to drive move volume and value in that chain.

Okay, all right, that’s helpful. And then I wanted to talk a little bit about the tax rate guidance here. Obviously, you got the headline number of 42. You’ve got WOTC quantified in cents per share. I guess by my calcs I think the reported number for the full-year basis would work its way down probably closer to 37% if you include the ASU 2016-09 and the WOTC. I guess I wanted to confirm that. And how can you help us? It seems like this number is going to be bouncing around quarter to quarter a little bit more. I think you talked about this when you first talked about the ASU change. Can you help us quantify it quarter to quarter? And also I think previously you mentioned that there would be an offset to the tax rate benefit from the ASU that would maybe be a result of higher share count and then it wouldn’t be an actual net EPS effect now. I could be wrong on that, so I wanted to give you a chance to address that factor again.

Yeah. So, yeah, I don’t think that’s technically correct, but in terms of the tax benefit in our numbers, right now, what we are predicting is $0.11 impact from WOTC and $0.04 as we’ve mentioned from our stock-based compensation, which is a known number at this point. If you recall, it’s really predicated on a calendar year and based on how our fiscal years – we pretty much know that number in advance. So the $0.04, we feel pretty good. Could there be variability slightly? Sure. The other thing that makes it very difficult to project the effective tax rate is, we do have other discreet that potentially could impact our tax rate and those could include 179D, additional WOTC. So we’ve tried to provide a best case estimate and that’s what we are doing with the annual guidance. How we will breakdown per quarter and then how that obviously translates for the full year, we will keep you abreast. But, Andy, it’s a hard task with those unknowns.

Okay, great. And then I guess maybe my final question, Scott, I wanted to get you involved here a little bit too. Just thinking beyond the 100, we heard procurements and a new bucket there that you are going after that you had previously addressed. What do you think of the kind of primary buckets that will allow you to drive beyond the 100? And it sounds like the piloting is the next three to six months, is that, do you think that’s the right timeframe to have a more solid outlook as to how far beyond the 100 and where it will come from, should we be thinking mid fiscal year?

Yeah, I think it’s more of a back half of the year story, because it’s going to take us to really get the right kind of learnings, it’s going to take six months because there is a continuous improvement process with this and refinement that happens. So I think we will be at you with better line of sight in Q3, Q4. But I mean I have to tell you, the labor management area is so exciting. And the other area that we haven’t talked a lot about is our account management area in terms of how we manage our client relationships, whether or not we are instituting quarterly business reviews across the platform, how we are thinking about engaging with our clients, how we are thinking about cross-selling on a kind of more tactical basis about having those conversations and raising opportunity. So I think that’s going to be an area that maybe longer-term, but I think it’s just going to help us with retention and it’s going to help us find margin over time. So I think these new initiatives which is going deeper into procurement and exploring pricing that are really exciting to get us pass the 100 basis points, but I think the stuff that we’ve put in place now through phase one as they mature are also going to give us great opportunity. But I think it’s really those two things, the stuff we already initiated in phase one, getting more mature over time and the new stuff that we are initiating in phase two, which is procurement pricing.

Great. Thank you.

Thank you. And our next question comes from Jeff Kessler of Imperial Capital. Your line is now open.

Thank you for taking the question. In talking about standardization, which is going to be a big priority of yours over the next 12 months, are you going to be looking at what is the, if you want to call it, the standard operating rate or the standard operating performance measurements that you have average company-wide? And taking a look at the bottom performing divisions, I should say, that bottom performing offices branches and looking at those variances and trying to get those variances up to average, is that part of --?

Yeah, I think that – that’s one of the core functions of what we are trying to do. When you get the standardization, you start creating benchmarks and you start creating averages, you create these metrics, right. And I think that’s one of the core principles of this is how do we help optimize accounts and that’s the key. And now through the standardization and getting data to help us figure this out, I think that’s going to be the huge trajectory. So for us it’s all about how can we optimize kind of the bottom, and it doesn’t mean that we’re operating them badly, or we have less than capable managers just they haven’t had the tools, they haven’t had the insight, and they haven’t had the resources of having standard operating practices, and that’s what’s going to make this so powerful.

And some of the variability is going to be expected variability by market. It’s really driving within a particular market why one branch is operating differently then the other branch to try to get that lower performing branch up to that mean. You can’t look at it enterprise wide and say well, X is the right percentage and that’s what the whole enterprise, because there’s going to be variability by market that may be known.

Yes, and I think just to just finish the concept, I think it’s even, not even branch by branch, it’s account by account. So, I don’t think and we don’t believe that there are holistic branches that are operating below the mean. We just think maybe within the branch and maybe particular accounts that may have not have gotten the focus that needed to or again, they didn’t have the standard operating practices to help them, manage them up to the mean.

Okay. And following on to that question, with regard to your new segment structure, are you going to be looking at the same types of standard – standardization procedures as they pertain to these divisions and what the – if you want to call it again, getting the lower performing accounts in those divisions up to what would be average or typical for that division, and where can you – where do you – amongst those segments, where do you think the biggest opportunities are?

Yes. So I don’t necessarily think there’s any one segment that has more opportunity than the other with standard operating practices. I think there are certain elements that run across every, every segment. So if you look at labor management, the basic concept of are you scheduling the day’s labor, and do you have the tools to appropriately schedule the labor, well, that can run across every one of our industry groups. But they’ll be nuances between doing it in a wheelchair format in an airport and possibly janitorial in an educational facility right. So there will be again, little nuances between the services and those. But everyone should think about scheduling their work at the start of the day. Everyone should have the opportunity to have a tool that helps them do that. Everyone should have the opportunity to understand how similar accounts are performing, so they can figure out how to get up to that or exceed that. So I think there’s tenets that run across, but there are also specifics that’ll have to be figured out industry by industry.

Great. Final question, that is, historically the company has sought, and this is – this goes, we’re going back 20 years now to try to develop some type of cross-selling programs between the segments as they existed then Now you are looking at trying to cross-sell across new, I guess, not – they’re not completely new, obviously, they’re just segmented differently. Is there any strategic difference in the way you’re going to try to go about cross-selling amongst the new segment structure?

Yes, there is. I think and it really stems from something I talked about early, which is our account planning process. So here’s a way you can think about for many of our accounts of any kind of scale. They’re going to have a fully built out account plan that’s going to look at it. And one of the key tenets is going to be cross-selling how many services do you have. So, picture your project manager of a large scale account. And every month, when you’re looking at your account plan, you’re looking at how many services you have, right, and you’re going to be metrics on that. You’re going to be kind of benchmark on that across the organization. So, it’s going to be front and center to how you’re managing that account. And with our new – newly formed center of excellence, they’re going to have all these protocols on how you go about cross-selling and tools to help them do that. So I think when it’s front and center and you know you’re getting metric based on it, and then you additionally have the resources to help you do that. That’s a dramatic shift than where we’ve been in the past. And so we’re really hopeful over time, you’re going to see us move up in terms of how many services per client.

Okay. Is there a timeframe, which we can hope for to hear you begin to talk about guidelines or results towards this, are we talking again around 2018?

Yes, it will be only, because we’re going to almost need a year of baseline information to really understand where we’re starting from, right. So I think part of it is the fact that we’re just initiating these metrics now and then and they take time to get going and to get acculturated, that’s number one. But then you also again, you need a baseline, so that you can show where it’s heading.

And we’re hopeful that as if you recall historically, if you were in Janitorial, there was really light incentive to selling the other service. And now if I own an education customer, I’m owning the customer. So the incentive to try to sell more to that customer is in my best interests from a revenue and profitability standpoint. So we’re hopeful that we see some of that in 2017, but we’re not – it does not reflect our guidance in terms of that multiple sale to Scott’s point. It will be more of a – I think with data, our focus area for 2018 to really start to drive that measurement going forward.

Yes, and that’s not a minor point that Anthony is making, because in our old format, if you were in the janitorial segment, you always wanted to cross-sell engineering, but you weren’t incented to do it. It wasn’t going to be captured on your P&L and so much of what we do is, we look at our P&Ls and we want to maximize our P&Ls now in this new format, as Anthony points out, you own the customer. So when you’re cross-selling in services, you get that on your P&L. You’re responsible for it. You’re responsible for the execution of it. So it’s a big shift.

Thank you. And our next question comes from George Tong of Piper Jaffray. Your line is now pen.

Hi, thanks. Good morning.

Good morning.

Scott, can you elaborate on your immediate next steps in your 2020 Vision strategic plan over the next, call it, two to three quarters, which areas are priorities for you and assess the potential sales risk of realigning your sales force by vertical?

Yes. So I’m not concerned about the sales risk of realignment. We’ve had that in place now for a few months and things are going really well. And so I’m not worried about that. I think there’s two things I would think about that are on my mind in the near-term. One is the standard operating practices across the work streams of labor management, how we manage our accounts, safety and risk, and then lastly, employee engagement, because employee engagement is the other piece of it. So I look at kind of 2017, and what immediately comes to mind to me are standard operating practices and employee engagement, how we get 100,000 workers activated and being promoters of everything we’re doing engaged, we work really hard crafting our purpose vision and mission to get people to know the hearts and minds with AVM and how we make them feel like valued employees, value part of our proposition to our client, so I’m so excited about where we’re heading in terms of employee engagement. So a big focus for us outside of the standard operating procedures.

Got it. Very helpful. Anthony, given your workers comp claims experience over the last 12 months, can you discuss trends you see in insurance expense and how you expect insurance expense in 2017 to compare to 2016?

Sure. So if you recall, 2016 we took a large increase in our insurance expense with the premise of the backdrop of until we see sustainable long-term trend either way not to adjust the rate. And we are committed to that so we’re heading into 2017 with accrual similar to 2015 from work comp and general liability perspective. Some of the trends that we are seeing with some of the standard operating procedure and consistent excellence on the day-to-day is starting to have initial impact of the huge focus. It’s one of our key tenants of our 2020 vision, it’s one of the key tenants from Scott and the Executive Management team to make a clear focus not only for the short term, it’s not 2020 but this is for the – to help in the long-term objectives of the company. So you should see any current year changes in our accrual rate in 2017, it’s a similar year-over-year.

Got it. And then lastly, Anthony, you’ve guided to $18 million to $22 million of anticipated incremental 2020 Vision savings in fiscal 2017. Can you talk about how much of that you expect to flow through to drive margin expansion taking into account potential margin offset such as reinvestments?

Yes, sure. So if you think about, we ended the year with roughly $22 million of realized savings and a run rate of 34 million. So the targeted amounts that we’re looking at from clearly 2020 is really a coupling our additional procurement, the full run rate of org and the beginning stages of our consistent excellence which are some of our standard operating procedures. So we have good line of sight into those three metrics. As it relate to the rest of the business as we mentioned earlier, we stood up these verticals and we stood up the industry groups in terms of the operational performance that pretty much were operating and put together from a budget perspective as they performed in 2016. So not a lot of margin accretion or degradation in any of the metric from what we expected. So what you’re looking at as 2017 plan is really a continuation of our 2016 progress we’ve made in addition to the 2020 saving that will come in over the next 12 months.

Very helpful. Thank you.

Thank you. And we have time for one additional question. And our last question comes from the line of Marc Riddick of Sidoti. Your line is now open.

Hi, good morning.

Good morning.

So I wanted to just ask about the revenue growth and the impact of and/or effects of tag revenue during the quarter and then also maybe what you see going forward there as far as contribution? And then I have a quick follow-up on those efforts.

Sure. So for tag, it continue to remain a focus area for the organization and we had a good Q4 tag penetration. As we alluded to tag typically run around 6% to 7% of our janitorial and facility services, those are the two primary areas where tag really has a benefit and where it’s really a focus and that’s where the margin accretion could occur. So we had a good execution in 2016. We expect the same level of momentum heading into 2017 and it is a focus area for the organization and is one of the key components of our metric dashboard around penetrating, ensuring that it continue to be a focus area for the firm.

And then maybe can you share a little bit as how that bridges with some of the commentary around best practices? I wanted to get a sense of maybe where you were currently with pursuing that revenue, whether you were in the early stages or maybe compared to some of the other businesses where you were as to?

Yes, sure. Tag for us, if you think about it, it’s always been a part of our business model. What we’ve done as part of the 2020 vision and starting the discussion around the margin projection it really goes to the account plan. And when you look at an account that has scale, what are you doing in that account? Are you selling additional services? Have you penetrated the right amount of tag? So we are not expecting significant tag increases in 2017 because we think it has historically been a good focus area. Where I think that benefit the tag over long-term is when we look at the standard operating procedures and were a customer says, hey, I have a tag job related to a carpet cleaning, we may have not placed that consistently between accounts. So looking at that pricing methodology and the consistency across, we see benefit in just making that standardized. But in terms of increasing our tag penetration obviously as an objective, I don’t want to seem like we haven’t had a focus on tag in the path, it’s always been a focus and it continues to be a focus going forward.

And then as a quick follow-up, maybe if you can give us a quick overview on where you see Westway and how that’s progressed during the course of the year and what expectations we may see from there?

Yes, the Westway is performing as planned. So our objectives when we acquired Westway is to provide a complement to our cleaning business that we had acquired back in 2014 to get the technical component, higher-margin business and we’ve seen initial stages of those two businesses coming together and really the cross-selling aspect of taking the technical solutions and putting it into the GBM business or the historical B&I business we’ve seen some good progress there. So it’s operating as intended and as planned, and we see good prospects going forward.

Yes, and I would just add one of the thing we’re so excited about is now we have this full IFS offering in Europe and we had our first contract we talked about last quarter and we have a good pipeline of accelerating that offering, so it’s quite exciting.

Okay. Excellent. Thank you very much.

Thank you. And that concludes our question-and-answer session for today. I’d like to turn the conference back over to Scott Salmirs for closing remarks.

Okay, thank you. So thanks everyone for your support and interest. You need to know we really appreciate it and wish everybody a happy holiday, look forward to reporting back in Q1 and just note that as a firm we are so excited about 2017 and are really energized about what’s possible with this firm. So thanks very much.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. You may all disconnect. Have a great day everyone.