Brett Urban : Yes, Q1 is the hurricane comp issue for ancillary, that’s why we called it out in the Q. But as you think about the health of the business, the market, we see no signs of any type of weakness in the market. We see ancillary backlogs in our land business, up about 10% year-over-year. We see our new sales pipeline in the land business up year-over-year. And if you look at our development business, we are seeing extreme positivity in that business, not only on the margin side, but from a revenue growth side, it’s been 6 quarters in a row. We’re really growing that business at mid-single-digit growth rates. And our backlog for development is essentially sold through this year, and we’re selling into the first half of 2025 at this point. So we see really positive signs of momentum, not only on the upselling on the land side of the business but also on the development side of the business.
Operator: Our next question comes from Andrew Steinerman with JP Morgan.
Andrew Steinerman: This is Alex Hess on for Andrew Steinerman. I just wanted to dive into sort of the tension between centralizing and decentralizing here in the business. I know this isn’t the first time that BrightView has made structural changes and what roles become centralized, what roles become decentralized. Dale, it may be helpful to hear your thoughts on that. And then I have a follow-up question on capital allocation.
Dale Asplund : Yes. There’s — it is the #1 way that we can add value to our field operations people by taking noncustomer-facing work away from them and centralizing it and allow them to spend more time with customers, which will inevitably help us be a better partner to our customers. So there are things, Tim, when we talk about interacting with the customer, that for — I’m sorry, Alex, that we definitely want to do at our branches, and I want every branch focused on those customer-facing activities. And then there’s the nonvalue things that you have to do to process whether it be AP or collect AR or support financial functions that we don’t want our operators distracted by. We want them focused on customer-facing work. So I know that the company has come back and forth from centralization to decentralized.
But even when they decentralize stuff, a lot of the area was just decentralizing it to different markets. It wasn’t giving everything directly back to the branch. So if we’re going to centralize, we’re going to put the right way, and we’re going to bring it all the way to upside, we can get the maximum value for.
Andrew Steinerman: And then thinking about capital allocation at BrightView. Obviously, there have been some priorities here that maybe got you into some non-core businesses and led to some acquisitions that didn’t scale the way that they were desired. Just from like a metric standpoint, how are you sort of thinking about measuring success in capital allocation to return on invested capital framework? Is there anything sort of you’re thinking of how to measure success that maybe moves beyond these consolidated measures that you guys discussed?
Dale Asplund : Yes. I think the — you mentioned some of the challenges we’ve had is we’ve deployed capitals, and we haven’t traditionally been great stewards of that capital as we’ve deployed it. So our M&A process, that — the first thing I did with the team, and I am so happy with the progress we’ve made is tap the brakes on M&A because like I’ve said, M&A is not just a financial move. It has to fit the company strategically and culturally as much as just making the math work. And even the process for integrating that M&A that we’ve done in the past, when we buy a company, we have to own that company and be a better owner of that asset immediately. We can’t have earn-outs. We can’t just let the asset linger out there for a period of time before they become part of the BrightView team.
So our M&A process is going to drastically change, and our field operators are right now reviewing — we have over $700 million of potential M&A, and our group has reviewed it to say which one of these potential targets make the most sense for us to bring into our company that we can be a better owner and they can help us that we can grow their revenue faster or drive more efficiency and create bottom line returns. We haven’t done that in the past, and that is a major shift for us. I am a huge believer in M&A, but M&A has to be done the right way. It can’t be a financial calculation that nobody understands the business and the people that work there actually are involved in the decision. So it is changing. And look, we’ve got to monitor M&A and how we’re a better owner.
We’ve got to make sure, post deals, we know what improvements we’re making to make more EBITDA and more revenue on the business that we acquire.
Andrew Steinerman: And then maybe to wrap up, can you highlight any sort of tangible or intangible strategic assets that when you look at BrightView now from your sort of outsider becoming an insider vantage, you say, oh, these are true strategic and competitive assets that are distinct from our competitors and distinct in the market.
Dale Asplund : It’s a great question. I would tell you, what excites me most about this is the closer — I’ve visited not quite 1/3 of our branches, but I’ve been spending most of my first 120 days out interacting with our frontline team. The closer you get to the customer, the more dedicated they are to what they do every day to make sure they deliver the right service. We, as a corporation, as a company has to provide them the tools and resources they need. We have to upgrade some of our fleet. We have to get them better mowers. We have to get them tools and training and safety equipment. So every day, when they’re out servicing our customers, our customers understand why we’re the best provider in this industry. That’s why you heard from Brett; we’re going to take those proceeds that we got from U.S. Lawns.
We’re going to reinvest that back in the business to make sure those frontline employees get the benefits that they deserve, and they can service the customers. And that’s the most positive part of this business. And yes, we had some different segments of our business that might have been a little siloed with as we announced, we’re integrating Golf and Tree. But even those businesses have dedicated people that are experts in what they do. But when we bring all the resources we have together and they all work seamlessly going in the market to our customers, nobody can compete with BrightView. We have experts from turf to development, to tree care to irrigation, the general land maintenance. We have the best people in the industry, and I see that every day when I visit the branches.
So that is our secret sauce. We just have to support those people so they can spend more time doing what they do best every day.
Operator: [Operator Instructions] We now turn to [Stefan Moore] with Jefferies.
