BrightView Holdings, Inc. (BV) Earnings Call Transcript & Summary

Hello, and welcome to the 2025 BrightView Annual Meeting of Stockholders. Please note that this meeting is being recorded. Questions may be submitted via the Message icon at the top left of your screen by typing in your message then clicking the Send icon to the right of the message box. It is my pleasure to now turn the meeting over to BrightView's Chairman, Paul Raether, Mr. Raether, the floor is yours.

Good morning. I'm Paul Raether, Chairman of the Board of BrightView, and I hereby call this meeting to order. I want to welcome you to the 2025 Annual Meeting of Stockholders. I will serve as Chairman; and Jonathan Gottsegen, the company's Chief Legal Officer and Corporate Secretary, will serve as Secretary. In addition to the meeting notice, circulated with the proxy a copy of the meeting agenda, along with the rules of conduct, are posted on the virtual platform. If at any time during the meeting you encounter any technical difficulties, please call the technical support number that was posted on the virtual meeting login page. Technical support will be available until the meeting has finished. At this time, I'd like to introduce Dale Asplund, our President and Chief Executive Officer and a member of the Board. We also have other members of the Board standing for reelection, participating virtually with us today. I would like to introduce Jim Abrahamson, Kurt Barker, Jane Bomba, Bill Cornog, Josh Goldman, Frank Lopez and Mara Swan. Additionally, Dale and I are also standing for reelection to the Board of Directors. I also want to recognize Rob Grasso and Brandon Sullivan of Deloitte & Touche, our independent auditors, who will be available during the question-and-answer session to address any questions that you may have. And finally, Erica Mackey of EQ, our transfer agent, has been designated to act as Inspector of Elections. Thank you, Erica. As of January 7, 2025, the record date, the total number of issued and outstanding shares of common stock of the company entitled to vote at this meeting was 95,490,008, and the total number of issued and outstanding shares of Series A preferred stock of the company entitled to vote at this meeting was 500,000, representing 54,241,750 shares of common stock on an as-converted basis. Under our bylaws, the holders of a majority of the voting power of issued and outstanding shares of our capital stock invited -- entitled to vote constitute a quorum. The inspector has determined that based on the number of shares of common stock and Series A preferred stock represented at this meeting, a quorum is present. Therefore, this meeting is duly constituted. As you'll see from our proxy statement and the meeting agenda, there are 4 proposals to be voted on today. Proposal #1, the election of 7 directors. Proposal #2, the ratification of the appointment of Deloitte & Touche, our independent registered public accounting firm, for fiscal 2025. Proposal #3, the approval of a nonbinding advisory resolution approving the compensation of the named executive officers. And Proposal #4, the determination in a nonbinding advisory vote of the frequency every 1, 2 or 3 years of the advisory vote on the compensation of the named executive officers. Additionally, Kurt Barker and Josh Goldman have been designated for election by the investors under the terms of the investment agreement. The holders of Series A preferred stock will vote separately as a class on the election of each of Mr. Barker and Mr. Goldman to hold office until the 2026 Annual Meeting of Stockholders. A question-and-comment period limited to these proposals will follow the presentation of the agenda items. You will be able to submit questions live during this meeting by clicking on the Messaging icon at the top left of your screen. Note, this Messaging icon will not be available to those who entered this meeting as guests. We will answer questions relative to meeting matters and that otherwise comply with the meeting rules of conduct. Following the question-and-answer comment period, they will be voting on all agenda matters. Once the formal business of this meeting is completed, we will open the floor for remarks by Dale to be followed by a general question-and-answer session. During the general question-and-answer session, you will be able to submit questions live through the same Messaging icon. I will ask you to please hold any questions unrelated to the agenda until the general question-and-answer session. The first proposal is the election to the Board of non-directors as more fully described in Proposal #1. The nominees named in the proxy are Jim Abrahamson, Dale Asplund, Kurt Barker, Jane Bomba, Bill Cornog, Josh Goldman, Frank Lopez, Paul Raether and Mara Swan, with Mr. Barker and Mr. Goldman to be voted on by holders of the Series A preferred stock as a separate class. Any other nominations for director were required to have been submitted in proper written form on a timely basis to the secretary as more fully described in our bylaws. Having received no other such nomination, the nomination process is closed. Under our bylaws, all of our directors are elected by a plurality of votes cast for a period of 1 year. Our recommendation recommends that you vote for the election of each of these director nominees named above. The second proposal is to ratify the appointment of Deloitte & Touche, our independent registered public accounting firm, for the fiscal year ending September 30, 2025, Our Audit Committee, which is charged with this responsibility under its charter, has reappointed Deloitte & Touche, subject to stockholder ratification. Our Board, upon the recommendation of the Audit Committee, recommends that you vote for this proposal. The third proposal is to approve the nonbinding advisory resolution approving the compensation of the named executive officers. Again, our Board recommends that you vote for this proposal. The fourth and final proposal is to determine in a nonbinding advisory vote, the frequency every 1, 2 or 3 years as of the advisory vote on the compensation of the named executive officers. Our Board recommends that you vote every 3 years for this proposal. This completes the presentation of the agenda items. The floor is now open for questions or comments related to the 4 proposals I discussed. Any stockholder wishing to submit a question should submit their questions through the Messaging icon on the top left side of the screen. The Messaging Secretary will read aloud any questions related to the agenda. Jonathan, have we received any questions related to the agenda items?

We have not received any questions related to the agenda, and we may proceed.

Thank you. We will now vote on the proposals before the meeting. Please note that you must be a holder of record or hold a valid proxy from the holder of record to vote at this meeting. If you have already voted do not wish to change your vote, there is no need to vote again at this time. If you have not yet voted or do wish to change your previously submitted vote, you may vote your shares online now by clicking on the proxy voting site link on the left side of your screen. Please note that if you vote now after voting previously, only your last proxy vote will be we tabulated. Okay. I declare the polls for each matter to be voted upon at this meeting open as of now 11:12 a.m. Eastern Time. Please vote your shares online now by following the on-screen voting instructions. We will close the polls momentarily. [Voting]

I now declare the polls closed, and the voting results on today's proposals will be as previously tabulated by the Inspector from proxies given prior to this meeting. We will now pause again while the Inspector of Elections retabulate the results to add any online votes that have been submitted at this meeting to the tabulation previously done by the Inspector from proxies given prior to the meeting. I will now ask Jonathan to report on today's voting.

Thank you, Paul. Based on the preliminary results reported by the Inspector, it appears that the stockholders have voted to elect by a plurality of votes cast each of the 7 director nominees named in the proxy to hold office until the 2026 Annual Meeting and until his or her successor is duly elected and qualified; and Mr. Barker and Mr. Goldman have been so elected by the holders of the Series A preferred stock. With respect to the second proposal, it appears that the stockholders have voted to ratify the appointment of Deloitte & Touche as the company's independent registered public accounting firm. With respect to the third proposal, it appears that the stockholders have voted to approve the nonbinding advisory resolution approving the compensation of the named executive officers. And with respect to the fourth proposal, it appears that our stockholders have determined in a nonbinding advisory vote every 3 years with respect to the frequency of the advisory vote on the compensation of the named executive officers.

Thank you, Jonathan. The results reported today are preliminary. The final tally remains subject to certification by the Inspector of Elections and will be provided in a Form 8-K that will be filed by the company with the SEC. With the formal portion of the meeting now concluded, I declare this meeting adjourned. We would like now to proceed with an update from Dale Asplund, our CEO, followed by a general question-and-answer session. You will be able to submit questions live during the general question-and-answer session throughout the Messaging icon. Dale, the floor is yours.

We just want to make sure that Dale's Mic is unmuted.

You're on mute, Dale. Here we go.

Thank you, Paul, and welcome, everyone. Fiscal 2024 marked a transformative year for BrightView, both culturally and financially. Central to our transformation is our commitment to operating as a unified One BrightView. This starts with prioritizing the well-being of our team members who deliver exceptional service to our customers. This focus on internal alignment and customer satisfaction enables us to become the service provider of choice, which is reflected in the significant improvement in customer retention we achieved in fiscal 2024. This past year, we also made significant progress across several other areas, including streamlining our operating structure, aligning compensation to support profitable growth and continuing our focus on centralization, scale efficiencies and margin expansion. I'm proud to lead BrightView through this multiyear transformation. And I am especially grateful for the increased commitment from our team members to put our customers at the forefront of everything we do. Our success achieved in fiscal 2024 was a result of both the hard work and dedication of our team members as well as the execution of key strategic initiatives. Despite our total revenue decreased 1.7% to $2.77 billion driven by the challenges of the strategic unwinding of our noncore business in fiscal 2024, our adjusted EBITDA rose 8.75% to a record $324.7 million. Our adjusted EBITDA margin increased from 10.6% in fiscal 2023 to 11.7% in fiscal 2024. Additionally, we strengthened our balance sheet and generated significant free cash flow, which enhanced our financial flexibility and positioned us to reinvest in the business, reinforcing our path to sustainable, profitable growth. Our financial and operational outlook continues to improve as we implement key strategic actions. A key milestone was the successful strategic sale of our noncore U.S. Lawns franchise business in the second quarter of fiscal 2024, along with continued progress in winding down the unprofitable noncore aggregator business, BrightView Enterprise Solutions. As we continue to execute on these initiatives, we expect to see substantial operational and EBITDA margin improvements along side an optimized capital structure. Looking ahead, we are confident in our ability to drive both customer retention and profitable growth. This confidence is rooted in our belief in the power of One BrightView as well as our ability to leverage our size and scale through a variety of initiatives, including realignment of sales to operation, route density, cross-selling, fleet management, strategic capital allocation and centralized support. In closing, we're pleased with our results for the year and proud of our accomplishments. We are optimistic about our perspective for fiscal 2025 and beyond, and we are committed to achieving a second consecutive year of record EBITDA -- adjusted EBITDA. As an industry leader in a resilient, scalable business, we are well positioned to continue leveraging our culture and scale advantages to become the service provider of choice, driving long-term profitable growth. I'm honored to continue to lead the BrightView team into this next phase of growth and transformation, and I'm deeply appreciative of the ongoing support of our stockholders. With that, I'll conclude my remarks, and we'll move right to your questions. Paul?

Thank you, Dale. We will now proceed to the general question-and-answer session. You will be able to submit questions live during the general question-and-answer session through the Messaging icon at the top left of your screen. All questions should be addressed to the meeting secretary. And if appropriate, he will read the question aloud and refer them to the appropriate respondent for response. Jonathan, have we received any questions for the general question-and-answer session?

Paul, we have not received any questions, and we may proceed.

Thank you, Jonathan, and thank all of you for your support, and thank you for attending the 2025 Annual Meeting of the Shareholders of BrightView. We are now adjourned.