API Group at Jefferies Conference: Strategic Growth Focus

On Wednesday, 03 September 2025, API Group Corp (NYSE:APG) presented at the Jefferies Mining and Industrials Conference 2025. The company highlighted a robust demand environment for its inspection and monitoring services, despite facing macroeconomic challenges. API Group’s strategy to enhance revenue through inspection services and expand its elevator business reflects a commitment to sustainable growth. However, the company also acknowledged the need to improve margins and manage project-related challenges.

Key Takeaways

• API Group’s backlog surpassed $4 billion, providing strong revenue visibility.
• The company aims to have 54% of its revenue from inspection services by 2024.
• A consolidated margin target of 16% is set for the medium term.
• API Group is expanding its elevator business to build a $1 billion platform.
• Leadership development and cultural alignment are prioritized in acquisitions.

Financial Results

• Backlog: Exceeded $4 billion, covering approximately 12 months of operations.
• Revenue: 54% of 2024 revenue is projected from inspection service and monitoring.
• Margin Targets: Aiming for a 16% consolidated margin in the medium term, with a 13% adjusted EBITDA margin goal for 2025.
• Branch Margins: Significant improvement from 2019, with 40% of branches achieving 20%+ EBITDA margins in 2024.

Operational Updates

• Inspection Services: Sustained double-digit growth in North America since 2020.
• M&A Strategy: Focus on cultural fit and strategic alignment in acquisitions, particularly in expanding the elevator business.
• Branch Performance: Emphasis on ranking and improving branch performance.
• Leadership Development: Commitment to nurturing leaders at all organizational levels.

Future Outlook

• Growth Strategy: Continued expansion of the elevator business and focus on organic growth.
• Margin Expansion: Investments in systems and processes to support slower SG&A growth than revenue.
• M&A Appetite: Open to larger deals that align with strategic and cultural values.

Q&A Highlights

• Macroeconomic Impact: Positive economic conditions could enhance discretionary repairs and deferred maintenance.
• CEO Insight: Russ Becker emphasized the statutory demand for inspection services, unaffected by macroeconomic noise.

For a detailed understanding of API Group’s strategies and financial outlook, refer to the full conference call transcript.

Full transcript - Jefferies Mining and Industrials Conference 2025:

Stephanie Moore, Business Services Analyst, Jefferies: Right. Good morning, everybody. Thank you all for joining. My name is Stephanie Moore. I’m the business services analyst here at Jefferies.

We’re very pleased to have API Group with us again, couple years in a row at least. So very pleased to have the team with us. We have Russ Becker, CEO we have David Jackalas, CFO and then Adam Fee with Investor Relations. Thanks for joining guys.

Russ Becker, CEO, API Group: Thanks for having us. Thank you.

Stephanie Moore, Business Services Analyst, Jefferies: Great. Well, I’m going to kick it off with a series of questions. At the end, if we have time, certainly happy to open it up for Q and A in the audience. But I think I’ll start with probably the more obvious question in this environment. But maybe if you could talk a little bit about the demand environment for your inspection and monitoring services as well as across specialties.

Russ Becker, CEO, API Group: Well, demand, especially when you look at the inspection part of our Fire Life Safety business, none of the noise that’s going on from a macro perspective impacts that at all. It’s one of the reasons that we like the space as much as we like the space is that it’s the statutory nature of it. So a commercial office building regardless of whether President Trump is adding more tariffs on the India, it doesn’t matter. They still have to do the inspections of their fire life safety systems for functionality and operability. From a just from an overarching demand perspective, the in general, things continue to be strong and robust.

I think that we’ve said this really pretty consistently that the end markets that you choose to play in really do matter. And end markets such as data centers, advanced manufacturing, healthcare continue to be provide really robust opportunities. And we continue to see that in our business. Proposal activity remains strong. Our backlog continues to grow.

I think when we released our second quarter numbers, we shared that our backlog was in excess of $4,000,000,000 for the first time. So we’re seeing really good demand in the business amidst all the noise that you’re seeing come out of the out of Washington, D. C.

Stephanie Moore, Business Services Analyst, Jefferies: A question we get a lot is what metrics should we look at as we think about just the overall or what we should monitor. So in terms of commercial activity, new construction, ISM activity because I think a lot of that, you know, there’s growth as you said in data centers, but for the most part industrial is pretty weak. So is there anything that you can kind of point us to or as you stated, does it really come down to the end markets you choose to play in?

Russ Becker, CEO, API Group: Well, mean there’s a few things that I would point you to. Number one, just like as it relates to us, we talk about how our North American safety business has had double digit inspection growth pretty consistently going all the way back to 2020 every quarter. So that’s a key data point for us and something that we continue to monitor. I mean we look at all of the data points that are out there, whether that’s FMI has industry specific data by end market that you can follow. McGraw Hill has stuff.

I don’t pay as much attention to the architectural billing index, but all of those things provide just data points as it relates to the overarching health of the industry. But as you’re aware, we’ve continued to try to build and focus our model on the inspection first with this inspection first mindset, continuing to build our inspection service and monitoring businesses to a higher proportion of our total revenue. So at 2024, I think we finished 2024 at 54% of our revenue coming from inspection service and monitoring. And that continues to be important for us so that we there’s less reliance on the lumpiness of, say, the project space.

Stephanie Moore, Business Services Analyst, Jefferies: Absolutely. And I’m going to touch on the inspection business in here just a minute. But just to round out the project space, You did call out on your last call the record $4,000,000,000 project backlog. Can you talk a little bit about just the visibility you do have into project timing and kind of customer capital allocation decisions for 2026 that kind of are embedded in that pipeline?

Russ Becker, CEO, API Group: Well, our average project size the reality of this is the average project size is probably three to four months with the work that we do. Our backlog from a coverage perspective is probably closer to twelve months just in general. So as we work our way into the back half of ’twenty five and we start talking about having a $4,000,000,000 plus backlog and you start thinking about roughly twelve months of total coverage there, you can see that we’ve got really good visibility and line of sight into what 2026 is ultimately going to look like. So we feel good about that. And for us, I think as part of that, it’s the quality of the backlog is just as important, if not more important than the backlog.

And that’s really been an area of focus and emphasis for our business leaders. So we feel really good about, you know, what we’re seeing, what we’re hearing from our from our customers. And, you know, we even have, you know, people reaching out to us, you know, looking to what’s would be the right way to put it. I don’t know if formalized is really the right word, but to, you know, enhance working relationships and building partnerships, because of, some of the demand in semiconductors, data centers and things like that. Some of the some of these project sizes are so big that you need to have the right partners in order to be able execute in the timeframe that your clients are demanding.

Stephanie Moore, Business Services Analyst, Jefferies: Absolutely. Thank you. Maybe switching to the inspection services side. As you noted, it has continued to grow at a really nice clip, even through 2020 and the like. So as you think about that growth, how would you characterize the major drivers?

Is it new business wins, growth of existing customers, pricing?

Russ Becker, CEO, API Group: Well, it’s a little bit of it’s a little bit of everything. You know, I think the for us, you know, everybody always wonders about price and stickiness in in in everything else. And the reality of it is is that, you know, we’re building price, you know, into our inspection agreements. You know, we’re trying our sales leaders are incented to sell longer term contracts. So their, so to speak, compensation is higher for selling a five year inspection plan versus a three year versus a single year.

And we’re building price right into those agreements. And so we are taking price and continue to take price and that price is sticky. I think one of the unique things for us though is that we continue to build out that inspection sales leadership across the portfolio, and we’re taking share. And so it is when we start talking about double digit inspection sales growth, that’s there’s an element there that’s going to be price, obviously, but there’s we’re taking share because there’s very little material included in that. It’s mostly labor, And you’re actually selling the inspections and you’re taking that from somebody else.

Stephanie Moore, Business Services Analyst, Jefferies: I guess it’s just a follow-up. Who do you think you’re taking share from? I mean it is an industry that appears to be consolidating. Lot of mom and peeps definitely been involved, some mom and pops. So how would you characterize I guess the competitive landscape and then who you’re taking share from?

Russ Becker, CEO, API Group: Well even with some of the consolidation in the industry, the industry in general remains highly fragmented. And so I would say in general, you’re taking share from small family owned businesses. You don’t see even some of our peers that you know, like EMCOR has, you know, a fire protection business, but their fire protection business is focused primarily on project related work and not focused on the inspection service and monitoring piece of it. To have a really robust inspection service and monitoring business, you need to have bricks and mortar. You need to be actually have physical locations in communities in order to to be able to properly service those clients.

And that’s really how we’ve built our business versus, say, just booming into town, doing a large project and then packing up our bags and leaving.

Stephanie Moore, Business Services Analyst, Jefferies: Absolutely. And then as you think, I don’t know how many years forward, but, you know, how consolidated can this industry become?

Russ Becker, CEO, API Group: Well, I don’t I mean, I had a crystal ball, Stephanie. You know, the reality of it is is like, you know, like, don’t even really lose sleep over that, to be honest with you. Like, so if you if you think about it, we’re we’re we’re the largest player in in the space. And if you look at every major metropolitan market, you know, in in, like, just say The United States, we have, for sure, less than 10 of the market, and I would say probably less than five. And I mean and so like I know Buffalo is not Houston, but just to give you an example, we we’ve had a company that we’ve owned in Buffalo for a long period of time.

We did a small acquisition in Buffalo and bolted it onto this business. And so we and our team thought that they were crushing it. They thought, man, we’ve got Buffalo locked up. And the woman who leads national sales for us, her and her team were out there for some training and development stuff, and they did a market study and analysis. And we only had 4% of the market.

And our team thought they had, you know, like 50% of the market share. And and, like, I can tell you, we can go to Saint Paul, Minnesota. We can go LA. We can go to Houston, and we’re gonna find the exact same thing. So the opportunity, you know, to to continue to build our business is really robust and real.

It’s not it’s not some, you know, fictitious thing. It’s so it gets me excited. And, the reality of it is is, even with the entree of private equity into the space, that doesn’t really concern me either. And the reason it doesn’t concern me is because companies that want to sell to private equity probably aren’t going to get through kind of our kind of analysis. You know, like I talk all the time about, you know, the different gates when that we use when we evaluate potential acquisitions.

And the the most important of those gates is culture values and fit. And, you know, we want you know, we’re going to own these businesses forever. We’re not selling the business in three years. And so we want companies to join the API family that fit our culture. And they don’t have to have the exact same values, but the values have to align.

And I always kind of make a comparison to Thanksgiving dinner. And if you have a choice when you’re inviting people to Thanksgiving dinner, excuse my language, you’re not gonna invite an asshole. And and, I mean, you don’t always have a choice for Thanksgiving dinner, and everybody’s got those family members that, you know, maybe fall into that category. But if you have a choice, you’re not gonna invite an asshole. And so it’s it’s no different with, you know, when you buy these small companies and you bolt them onto your business.

You’re you’re inviting these people to a permanent Thanksgiving dinner. And like, you know, like, I’m not that old, but, like, I’m old enough to know that I just wanna work with really good people that share kind of our value system and and are are gonna be additive to what we’re trying to accomplish. And if all they care about is price, then they should sell their business to private equity. If they care about, you know, a forever home for their team and, you know, finding the right place for their people to land, then that’s us. And that’s that’s that’s how we’re gonna continue to to build our business.

Stephanie Moore, Business Services Analyst, Jefferies: Got it. Two follow-up questions to that because I think it’s important. So the first is, how do you generally measure culture? Because I think, Russ, especially at your Analyst Day this year, you talked a lot about the importance of culture. You obviously just talked a lot about it now.

So, you know, how do you constantly manage the culture of your organization as you grow as well as as you evaluate new organizations? And maybe if you could talk a little bit about just your focused leadership development program as well.

Russ Becker, CEO, API Group: Well, we I could take the next twenty minutes in. So it’s it’s kinda like I’m gonna try to separate them. So, like, assessing culture, like, during the m and a process. So when when we’re looking at small bolt on type m and a, you know, geographic fit is important to us. The services that the business offer is important to us.

The financial profile of the business is important to us. And then culture values and fit is the most important gate, you know, that we have to get our work our way through. And the only way you assess that is by spending time with these people. And, you know, like, I’ve got, you know, my own little funky things, you know, that I like to do and which includes, you know, going out to dinner with people and and seeing how they treat the wait staff and the hostess and, you know, those those types of things. You can tell a lot about people just walking around their business.

And, we have one of our business leaders, a newly acquired company that’s with us, and I was just in in their office, just I don’t know, what, four, six weeks ago. And, you you know, you not even that. I mean, you you walk through, and, like, you can just tell. You know? I mean, this is a funny story.

Anyways, I walk in to the office, and there’s a picture of me on the front desk. You know what I mean? I’m like, that’s really weird. So I would turned it over. And they every workstation in every office, they had a picture of me in it.

And and it was actually, like, you couldn’t make it up. And it was so damn funny. And, you know, and so then next thing you know, I’m walking into somebody’s workstation to to say hi to him, and I’m looking for the damn picture. You know what I mean? And, it was the weirdest thing.

And then so one of the guys that was traveling with me stole one of them, and I showed up on Monday for a meeting, and he’s got one of those pictures on the on the conference room table. But my my point in sharing all that is, like, there’s culture there. You know? And these people, like, love their work, and they love what they what they do. That’s what we’re looking for.

You know? And then, you know, like, when I think about API’s culture, our our culture at API is centered on our enduring purpose, and our enduring purpose is building, you know, great leaders. And we’ve been on a journey of leader development since really 02/2003. And in a business like that’s structured like ours, where we have 500 branches across the world, every person in our organization deserves to have a great leader. And it starts at the company level or the country level, and then it, you know, then it moves to the branch level, and then it moves to the department inside the branch.

Every person, you know, deserves to have a great leader, and we’ve actually moved to a point where, you know, we say this all the time. It’s one of our foundational beliefs at APIs that everyone everywhere is a leader, which means that every person in our organization has the opportunity to be a leader. It’s just that your role is different, and that’s okay. And when you think about leadership and leader development at API, we we look at it through like it sits in three different pillars. The first pillar is leading self.

The second pillar is leading others. And the third pillar is leading teams and businesses. And every single one of us, including me, has an opportunity to be a better version, you know, of ourselves from a leadership perspective. So what am I doing to improve my leadership in how I show up every single day? And, and I think it’s something that’s important to us.

And, like, when I think about API and and everything else, you know, like, everybody you ask somebody, you know, what keeps you awake at night? The first thing they’re gonna say to you is, you know, can’t find enough people. Like and I just call kinda BS on that. Like, that’s an excuse. Like, we we’ve all known that this, you know, competition for good people, like, we’ve been talking about it for seven years.

You know? So, like, for me, it’s like, what are you doing about that versus, you know, using it as an excuse? So I view that as more of an excuse. For me, what keeps me awake at night is culture and how do we continue to not only, you know, maintain our culture, but build our culture. And for us, it’s gonna be it’s centered around our purpose of building great leaders and the investment we’re making in every single API team member around the world, from a leadership perspective.

We want to invest in people as human beings versus training and all that other stuff that comes with it. It’s a big part of who we are.

Stephanie Moore, Business Services Analyst, Jefferies: Thank you. Appreciate it.

Russ Becker, CEO, API Group: That’s how I get a little excited about it.

Stephanie Moore, Business Services Analyst, Jefferies: Well, I think I do think it’s important. It is a people business at the end of the day. But on the same the same thread, as you think about your inspection for strategy, through our conversations, we’ve talked to maybe some competitors or some smaller players, and we really haven’t heard of many that follow that approach. So I guess, could you walk through maybe just the competitive boat that you created with this strategy? Why you don’t think competitors have followed?

Maybe it is to some of the culture you just outlined. But maybe just talk about the strength that you get from this inspection first strategy.

Russ Becker, CEO, API Group: Alright, I’m going answer this one, and then you got to ask these guys a question. So I think that, number one, again, going back to this highly fragmented nature of the industry and you’re still competing mostly with smaller family owned businesses, to build a really robust inspection, sales, execution kind of piece of your business takes resources and it takes time and takes energy. And, you know, if you’re, you know, if it’s you’re a $15,000,000 a year, you know, company, it’s a lot easier for you to go out and, say, book a $750,000 new installation project than it is to build $750,000 of revenue, a thousand bucks at a time. You know, your average average ticket size for an inspection is going be about a thousand bucks. And it takes a tremendous amount of infrastructure to to execute, all of that work, you know, because you got to have somebody sell it, and then you got to have somebody dispatch the inspector and then the inspector’s got to go do the work and then there’s the deficiency report.

And, oh, by the way, we have to invoice for the work and then we have to collect it and all that stuff. And so it takes infrastructure there. And and, you know, typically, you know, when the industry would see slower periods of time, you see people try to migrate towards, like, I’ve gotta build a robust inspection service and monitoring business. And then as soon as the industry recovers, they just snap right back to, you know, doing doing project related work. And, and so for us, you know, we have that infrastructure.

You know, we’ve been on this this mission, for an extended period of time, And so we have those those resources there. And for us, you know, we’re at a position now where it’s scalable. So as we continue to, you know, add inspection sales leaders, you know, we’re backfilling with inspectors, and then we’re backfilling with service people to, you know, to do the pull pull through service work. So to me, that’s the the biggest biggest part of it. And, you know, there’s there’s we saw actually a small company that came up for sale that, had a similar similar philosophy as us that we were interested in potentially acquiring.

And for whatever reason, it didn’t didn’t work out, but small firm. You know what I mean? So you just for for whatever reason, it just hasn’t been been adopted. And it takes hard work, and that’s probably the biggest thing. It’s not easy.

Stephanie Moore, Business Services Analyst, Jefferies: Got it. Well, I’m going to give you a break for us and maybe kick it over to David, and we can talk a little bit about margins here. So on the margin front, I think we’ve talked a lot or you guys have talked a lot about branches eventually getting to 20% plus EBITDA margin. So maybe you could just talk a little bit about the levers it takes for the kind of percentage of your current business that is still trying to reach that level?

David Jackalas, CFO, API Group: Yes, absolutely. So at the Investor Day, we shared a chart that had the margin profile of our branches. And if you look back at 2019, I think something like 9% or 10% of our branches in North 9% or 10% in total of our branches in North America were north of 20%. And and in in 2024, that number was was closer to 40%. And when you think about that, it it first starts with the leader of that branch.

And when you have a a great branch leader, great things happen. I mean, we talk all the time about how having a great playbook is important. But if you don’t have a great quarterback who’s leading that playbook, you’re not gonna cover a lot of yards. And so it all starts with the leader. Second, I I think is really adoption of the inspection first mindset that that Russ talked about earlier.

And we’ve got branches that are at various stages in that journey, but but the adoption of that inspection first mindset. And one of the things that we started to talk more about is this critical point in a branch’s life journey where they’re able to cover their entire overhead cost from the gross margin that they generate from inspection service and monitoring revenue. And when that happens, that’s really when the magic in the branch starts to happen and allows them to become so much more focused and so much more disciplined on the projects and the customers that they’re selecting. And then not only are their inspection service and monitoring margins moving upward, but you’re able to get really accretive gross margins on the project side as well. So so that’s really the playbook in getting to that critical point where your overheads are covered by by service work allows that extra level of customer and project selectivity.

Stephanie Moore, Business Services Analyst, Jefferies: And then maybe just as a follow-up. As you think about, obviously, you have a lot of branches all over the world. But is there anything unique you can point to certain branches? I mean, does it matter what market you’re in? Does it matter pricing, growth of that market retention when it comes to kind of ultimately hitting a, you know, 20% plus branch level margin profile?

David Jackalas, CFO, API Group: Absolutely not. Absolutely not. We believe that every branch within our network has the potential with the right leader and the right mindset to be a 20% margin or or more. No issue there. One of the things that that we do across the business is we we rank order and we stack order the performance of our branches all around the world, and we show that performance with our operators.

And so, you know, one of the most important things we talked about this over and over again is is mindset. And in the international business, I was over there for the last two and a half years, when I joined, they did not share branch performance across the business. So everybody was going along thinking that they were delivering 12% adjusted EBITDA margin, and they were doing a great job. And they didn’t know that there were businesses within international that were north of 20%. And so you show them what’s possible, and you get those competitive juices flowing.

And all of a sudden, you start seeing performance across the network improve, and that’s really important.

Stephanie Moore, Business Services Analyst, Jefferies: And just sticking on the margin front, maybe switching a little bit to the project or specialty side of the business. I think on the quarter, you did talk a little bit about margins just being pressured just given project starts. So could you talk a little bit about maybe the margin trajectory as projects progressed? And then how we should think about just margin expansion in the second half of this year and just as more project starts come online?

David Jackalas, CFO, API Group: Yes, absolutely. So I’ll talk about the two different reportable segments. So in Specialty, our margins were down year over year largely due to project starts, as we mentioned. We expect margins in that segment to improve sequentially Q2 into Q3, Q3 into Q4 and then be year over year accretive as we get into 2026. In the Safety side, I think you’ll see margins in the back half of the year improve sequentially much at the same rate as they did in the first half.

Stephanie Moore, Business Services Analyst, Jefferies: Got it. And then at your Analyst Day, you did provide some medium term margin targets, think, in total consolidated margin of 16%. As you think about the trajectory of hitting that target, how would you kind of outline the path to hit those targets over the next couple of years? And then as you think about any major tailwinds, how should we think about the major buckets as well?

David Jackalas, CFO, API Group: Yes. Great question. So largely, levers and the drivers that got us to our well, we haven’t finished 2025 yet, but our the midpoint of our guide is north our thirteen percent 2025 adjusted EBITDA margin goal. But largely, the levers that got us to 13% are going to be the same levers that get us to 16%. It’s investments in systems and processes that will allow us to grow our SG and A at a slower rate than we’re growing revenue.

The mix impact of inspection service and monitoring, which on average has a higher gross margin profile than contract work, being really disciplined about the customers and the projects that we work on, getting margin accretive pricing year over year and benefits of procurement and then, most importantly, the improved performance of our branch network year over year. So the drivers really haven’t changed. In terms of cadence, you know, this year because of the mix of project work that’s driving our revenue growth year over year will be maybe a little bit lighter than the margin expansion that we saw in 2024. We haven’t started the 2026 budget process yet, so I can’t give you a great answer of how that’ll go twenty six, twenty seven, twenty eight. But my expectation is that it’ll be largely consistent across the three year period.

Stephanie Moore, Business Services Analyst, Jefferies: Great. Well, just being mindful of time, do want to touch a little bit on M and A. And Rusty talked on some of this a little bit. But maybe digging in a little bit further, wanted to get a sense of anyone can answer this, but wanted to get a sense of your appetite for maybe larger deals. We talked a little bit about the tuck in of deal and that pipeline remains robust as you noted.

But now that you’ve digested elevated, talking about your appetite for maybe doing something the size of elevated or even bigger and then kind of what area of your business you would be most interested or if there’s any new services you would look to enter into?

Russ Becker, CEO, API Group: Well, I mean, I think I can comment on your last part of your question first. As it sits right now, I’d say not necessarily looking at adding another leg to the stool. I feel like we have a lot of work to do building out our elevator business. We’ve said publicly that we see an opportunity to build out a billion dollar plus platform there. You know, and we’re really just in the bottom of the first inning, you know, on that journey.

So I feel like there’s a lot of work for us to continue to do that. Now all that being said, if the right opportunity came along, you know, we would dig in and do some do some work on it. Appetite for something bigger, like, I don’t look at, like, Elevated like it was a very big deal. It might have been the headline number might have been fairly good sized because, you know, we paid up to, you know, kinda get our entree into this into the space. You know, basically, it was just north of a $200,000,000 business from a revenue perspective.

So I don’t really view that as being very big. So we do do something like that tomorrow. You know what I mean? If if that opportunity came if the right opportunity, came along. You know, something bigger, you you know, I mean, I think that we’ve shown that we’re pretty disciplined.

And, you know, if the right fit came along for us, we would you know, we’re always kind of doing some work in the background and digging in on certain opportunities. And for us, it’s really about finding the the right fit in businesses that are gonna be accretive to our long term, you know, goals and objectives. So, are we doing anything, like, you know, Chubb esque right now? No. You know, are we, you know, sticking our nose underneath the covers on a few things?

Yes. You know what I mean? But there’s nothing that’s that’s imminent. And if there’s something that fits us, you know, we’ll do the work and make sure that it is the right fit. And so it’s kind of I’m not really answering your question, but the so the answer is yes, if it’s the right fit.

We would be interested and willing to take a peek.

Stephanie Moore, Business Services Analyst, Jefferies: Great. And you touched on elevated a little bit, so I do want to touch on that a bit. So you’ve owned that asset for over a year now. As you think about what are some of the biggest lessons that you’ve learned from that business, cross selling opportunities, how have those kind of materialized, maybe combining sales teams. I’d love to get a bit of an update on just that asset.

Russ Becker, CEO, API Group: Well, it’s not an asset. It’s a company.

Stephanie Moore, Business Services Analyst, Jefferies: Sorry. It’s got full

Russ Becker, CEO, API Group: of living, breathing organisms in it.

Stephanie Moore, Business Services Analyst, Jefferies: You can tell I’ve never run a company, Ross. Shows. It’s

Russ Becker, CEO, API Group: So these guys are wondering if I was gonna bust your chops about saying that. You know what I mean? So you know? But I hate when people call our businesses assets because an asset is this table. It’s you know?

Companies are people. And to me, that’s there’s an important differentiation there. So I apologize, Stephanie. So we’re happy with where where that business is at. And we think that there’s, you know, like a lot of these companies, you know, they they have a tendency to take a little dip, you know, kind of post acquisition because everybody’s so focused on getting the deal across the finish line, that, you know, they kinda take their eye off the ball on the day to day stuff.

And we saw that in elevated just like we see it in probably 90% plus of the deals that we do. But we’re really happy with it. We did, we bought another elevator company. We call it a tweener because it’s not quite a bolt on, but it’s not quite the size of elevated. So we’re continuing to expand in the space, and we see the opportunity for those businesses to, you know, perform at the same level as our as our life safety and security businesses.

So so super happy with the business. You know, we’ve taken one of our, you know, best and brightest and put, you know, this individual in charge of our of our elevator business. We’re calling it an API elevator. You know, as we continue to build out that platform, not everything is gonna be bolted on to to elevate it. So we felt like we needed to dedicate some additional leadership, you know, to the to the space so as we continue to build it out.

But I’m fired up. You know, we’re hopeful that, that we’ll get something done here in the next month or two, which would be more of a pure play bolt on to elevated. That will be a good test for that business to I didn’t say this when I was talking about the hurdles that we evaluate bolt ons through. But one of the hurdles also that I failed to mention was the company that we’re bolted it onto has to have the ability to take it, accept it and integrate it. And, and they you know, Elevated hasn’t done any sort of bolt on even going back three years, I think, prior to us owning the business.

So, you know, we need to buy one, go through that process of integrating it, see how that goes, before we go and buy another one. And and but the pipeline is really, you know, we’re we’re building a nice pipeline of of opportunities in the elevator and escalator space. So I’m really optimistic. I think the investment we make in people, the culture that we have, kind of our branch led operating model that we have allows these businesses, the sellers who become leaders in our organization to maintain some individuality and being entrepreneurs in their businesses is attractive. And I think we’re going to be an attractive place for people to sell their business businesses in that space, just like in the fire life safety space.

So I’m really fired up about it.

Stephanie Moore, Business Services Analyst, Jefferies: Great. Well, I’ve monopolized a lot of the time here. Anyone in the audience with questions for the team while we have them?

Unidentified speaker: If the macro done better, do you think they’re a tailgate? Not just on the project side, Greg. Kinda easy to see that, but more on the inspection side. Is there anything this could it get a little bit easier if you can add a couple of points to to the growth rate there? How do you think about that?

Russ Becker, CEO, API Group: You know, I think I think I mean, positive economic times are gonna be positive for everything, you know, in some in some way, shape, or form. So, like, you know, when you think about the inspector goes through and does the inspections on a building, they’re gonna identify things that are deficiencies. And some of those deficiencies, you know, the code is gonna mandate that they make those repairs. In some of it, the client gets to decide whether they wanna make make those repairs. So do if everybody’s a little bit more flush, you know what I mean, are they gonna be more likely to spend a little bit of that, you know, some extra dollars on some of those discretionary items?

Yeah. For sure. You know, people are going to be thinking a little bit differently about things maybe that they’ve deferred and put off and, all that stuff. So do I think that there’s that, really robust positive economic times is gonna help every aspect of our business? I do.

So

Stephanie Moore, Business Services Analyst, Jefferies: Alright. Well, appreciate your time. Thank you.

Russ Becker, CEO, API Group: Thanks, Stephanie. Thanks, Stephanie. Thank you.

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