Title

Presentation

FirstService Corporation beats earnings expectations. Reported EPS is $0.934, expectations were $0.9.

Operator: Good day, and welcome to the first quarter investor conference call. [Operator Instructions] Today’s call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the company’s annual information is filed with the Canadian Securities Administrators and in the company’s annual report on Form 40-F as filed with the U.S. Securities and Exchange Commission.

As a reminder, today’s call is being recorded. Today is April 23, 2026. I would now like to turn the call over to Chief Executive Officer, Mr. Scott Patterson. Please go ahead, sir.

D. Patterson: Thank you, Olivia. Good morning, everyone. Thank you for joining our Q1 conference call. We reported solid results this morning that were generally in line with expectations. I’ll provide a high-level review, touch on some highlights and then pass to Jeremy Rakusin for a more in-depth discussion of the results. . Total revenues were up 5% over the prior year, with the organic growth accounting for over half of the increase. [ EDA ] for the quarter was up 2%, reflecting a modest an expected decline in our consolidated margin. Jeremy will walk through the detail in a few minutes. And finally, our earnings per share for the quarter were $0.95, up 3% over the prior year. Looking at our divisional results. FirstService Residential revenues were up 4% in the seasonally weak first quarter.

All of the growth was organic. We had a solid core contract wins and renewals in our core management business at the upper end of expectations. And as we discussed in our year-end call, divisional growth was tempered by modest declines in ancillary services, including pool construction and renovation and contracted labor for commercial maintenance. Looking forward at FirstService Residential, we expect similar or slightly better organic growth in Q2 and some sequential improvement for Q3 and Q4. Moving on to FirstService Brands. Revenues for the quarter were up 6%, balanced between organic growth and tuck-under acquisition. Organic growth was again this quarter driven by increases at Century Fire. Organic revenues within restoration, roofing and home services were all approximately flat with the prior year.

Looking more closely at our segments, our restoration brands, First ONSITE and Paul Davis together were up mid-single digit over the prior year, and as I said, flat organically. We’re pleased with the performance in Q1 after entering the quarter with a soft pipeline relative to prior year due to the mild weather we experienced in Q4. We saw increased activity from winter storm work that benefited both our brands. The work was primarily quick-turn water mitigation and very little carried into Q2. As a result, our overall restoration backlogs at quarter end are at similar levels to year-end and down modestly from the prior year. Based on current activity levels and the quarter end backlog, we expect Q2 revenues to be flat to slightly down from prior year levels.

Moving now to our Roofing segment. Q1 revenues were up 7% over the prior year, driven by tuck-under acquisitions, primarily Lakeland, Florida based Springer Peterson during Q3 last year. Organically, revenues were flat with the prior year and in line with our expectation. We expect a similar result in Q2 with single-digit top line growth from acquisitions and approximately flat revenue organically relative to a year ago. Outside of data center work, the new construction market remains depressed, and the commercial reroof market is flat to slightly up while becoming increasingly competitive. We have a strong team in our roofing platform and solid underlying branch operations. We firmly believe we’re in a position to accelerate when the market improves.

Moving to Century Fire. We had a strong quarter with total revenues up over 10% and organic growth at a high single-digit level. The Century results continue to be balanced between strong growth in repair, service and inspection revenues supported by solid growth in installation and contract revenues. The backlog is robust we expect a similar result in Q2 and for the balance of the year. Now on to our [ Home Services ] brands, which as a group generated revenues that were up slightly from year ago levels, modestly lower than our expectation. We started the quarter with an uptick in lead flow and some optimism. However, this dissipated moving into February and reversed with the onset of the Middle East conflict. Leads and activity levels dropped immediately.

Our teams made a decision to increase promotional spending and marketing spend to maintain momentum and capacity utilization as we ride out the storm. We were successful in holding our revenue, driving higher conversion rates and larger job size and certainly taking share in a tough margin. It did impact our margin for the quarter, and Jeremy will speak to this in his comments. Our lead flow for Q1 was down double digit with a steeper decline in March. It remains at depressed levels and is moving in line with consumer sentiment, which is 10% lower than a year ago. It’s expected to increased gas prices and inflation in general will dampen home improvement demand in Q2 beyond what we foresaw at the beginning of the year. Based on our sales and backlogs currently, we expect to get close to prior year revenues in Q2.

This outlook is impressive in the current environment and again, reflects on the tenacity and commitment of our teams. We do remain optimistic that there is pent-up demand in the market and believe we could see a pop in activity with stability in the Middle East and reduced concerns around inflation. On the acquisition front, we acquired 2 of our larger franchises during the quarter. Our Paul Davis franchise covering the Cleveland and Akron markets and our California Closets operation that owns the franchise territories encompassing Indianapolis, [indiscernible] Lexington and Cincinnati. As a reminder, we’ve had company-owned operations at Paul Davis and California Closets for many years now. We selectively acquire franchises if we believe we can drive incremental growth in the market in partnership with local operators, always in the best long-term interest of the brands.

We have other tuck-unders in the pipeline across our segments and expect to complete further deals over the balance of the year. I will now pass over to Jeremy for his comments.

Jeremy Rakusin: Thank you, Scott. Good morning, everyone. We reported consolidated first quarter results in line with the outlook we provided on our prior year-end call. And in particular, top line performance in each of our brands matched our expectations, as you just heard from Scott’s walk-through of each business line. Highlights of the consolidated quarterly results included revenues of $1.32 billion, reflecting 5% growth over the $1.25 billion last year. Adjusted EBITDA of $106 million, up 2% year-over-year, with an 8% margin, down 30 basis points versus the 8.3% margin in Q1 ’25 and adjusted EPS at $0.95, a 3% increase over the prior year. Our adjustments to operating earnings and GAAP EPS in arriving at adjusted EBITDA and adjusted EPS, respectively, are consistent with our approach in prior periods.

Turning now to the segmented results for our 2 divisions. I’ll lead off with FirstService Residential. The division generated revenues of $546 million, up 4% over last year’s first quarter while EBITDA was $46 million, a 10% growth rate over the prior year. This resulted in an EBITDA margin of 8.4%, a 50 basis points increase over the 7.9% level in Q1 ’25. The margin expansion was driven by broad-based labor cost efficiencies across our operation. This encompassed both a continuation from last year of the initiatives around our client accounting and portfolio management functions as well as other productivity gains across our teams. Now to FirstService Brands, where we reported revenues of $771 million for the current quarter, up 6% over last year’s Q1.

Our EBITDA for the division was $64 million, a 5.5% decline versus the prior year quarter. The resulting margin was 8.3%, down 100 basis points compared to last year’s 9.3% level and primarily driven by our Roofing and Home Services businesses. The [indiscernible] in our roofing platform was expected. As we indicated on our February year-end call, the forecast decline was due to job margin pressures in a heightened competitive environment against the backdrop of dormant commercial new development activity. At our Home Services business, we saw the need during the quarter to increase our marketing spend to preserve our top line performance in the face of macroeconomic uncertainty and the weakening consumer sentiment that Scott referenced. Remodeling spending in our home improvement brands is influenced by interest rate levels and consumer sentiment and home affordability indices, all of which have been undermined by recent geopolitical developments.

Periodically, in the past, when we have encountered these types of exogenous challenges impacting our key performance indicators, we have tactically deployed promotional initiatives to support the brand and our market share. We expect to continue with these investments at least over the short term, covering the second quarter but we’ll be keeping a close pulse on our leading indicators to pull back the spending once the environment improves. A second factor contributing to the first quarter margin compression at our Home Services brands was reduced capacity utilization of our frontline teams. While we delivered revenues in line with prior year, job volumes declined, and we were reluctant to flex our labor cost down in portion to these reduced activity levels until conditions stabilize, and we have greater clarity of market demand trends.

With respect to our consolidated operating cash flow we generated $88 million during the first quarter, a sizable level during our seasonal trough first quarter and up more than double compared to Q1 2025. Capital expenditures during the quarter were $28 million, slightly below prior year, and we now expect to have our full year CapEx coming modestly lower than the initial guidance of $140 million. The resulting high free cash flow conversion rate is a function of our business model and focus around generating cash even when we have periods of more tempered growth on the P&L. This translated into further deleveraging on our balance sheet, where our leverage is measured by net-debt to EBITDA ticked down to a very conservative 1.5x compared to 1.6x at prior year-end, and versus the 2x level at Q1 last year.

We have a well-balanced mix of floating and fixed rate and varying maturities of debt instruments. And lastly, our liquidity reflecting cash and undrawn credit facility balances exceeds $1 billion, the highest level in the history of the company, which puts us in a strong financial position to deploy capital as opportunities in our acquisition pipeline arise. Looking forward, in the upcoming second quarter, we are forecasting similar year-over-year trends as we just saw in Q1 across both divisions. We see a continuation of similar EBITDA margin expansion and growth in the FirstService Residential division. This will be largely offset by brands division declines, reflecting the ongoing margin pressures in Roofing and Home Services I referenced earlier and which are dictated by the current uncertain geopolitical and macroeconomic environment.

This all aggregates on a consolidated basis for Q2 and to mid-single-digit top line growth and EBITDA performance flat to slightly up compared with the prior year. That concludes our prepared comments. Olivier, you can now open up the call to questions.

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Operator: [Operator Instructions] Our first question coming from the line of Stephen MacLeod with BMO Capital Markets.

Stephen MacLeod: Thank you. Just wanted to ask about the roofing vertical, which obviously you’re seeing some pressure and both in the end markets as well as from competitive intensities. And I’m just curious, are you still expecting that some of those reroofing jobs are being delayed into later points in the year or beyond this period of geopolitical and macro uncertainty?

D. Patterson: I think, Stephen, it has delayed a rebound. The reroof market, certainly stabilizing, but stubbornly weak. I think the persistent uncertainty does continue to impact decision-making around major projects, I mean we’re seeing it in some of our other businesses. So we do believe we’ll grow organically this year. We expect to. We expected to see some organic growth in Q2, but I think that the rebound has been pushed out. We do expect to see sequential improvement in Q3 and Q4. There are opportunities that were delayed last year that we’re seeing scheduled now. We’re bidding work, we’re winning work. Generally, we’re feeling optimistic. We believe that we’re — we have a very solid branch network, and we’re poised to really take advantage when the market improves.

Stephen MacLeod: Okay. That’s helpful color, Scott. And then maybe just with respect to capital allocation. You have a strong free cash flow. Leverage is not very high. You do have an NCIB outstanding. Just curious if you would consider a buyback in — or being active on the buyback in this — given where the stock is and given sort of some of the weakness in terms of the outlook.

Jeremy Rakusin: Yes, Stephen, it’s Jeremy. Yes. No, it’s 1 of the alternatives that’s always in the forefront of our minds, particularly over the current environment. And as you said, leverage giving us ample room. First and foremost, we’re a growth company and we’re looking to deploy capital towards those growth initiatives and supporting the brands where we have capital allocation opportunities. So I think that’s our primary focus. You’re right, we can pull the trigger on the NCIB at any point in time. we have given consideration to — but I think for now, it’s a pause just given potential opportunities in the pipeline, the growth mindset and really where the uncertainty is in the geopolitical and it influences stock market valuations.

Stephen MacLeod: Okay. That’s great. And then maybe just finally, just on the M&A. Scott, you referenced that you have done some tuck-ins recently. I guess when you think about M&A and the outlook from here, would it mostly be kind of bringing in those company turning franchises into company-owned? Or do you see other alternatives in your other verticals as well?

D. Patterson: No, I really think it’s tuck-unders in the other verticals. Nothing has really changed as we approach the company-owned strategies at Paul Davis or California Closets. Those will be very episodic, 1 or 2 a year at each brand. So we’re not looking to accelerate that.

Operator: Our next question coming from the line of Daryl Young with Stifel.

Daryl Young: I just wanted to touch on Century Fire for a second. It seems to continue to defy gravity and amid a soft commercial construction market. So I’m just wondering, has there been any regulatory changes that might help explain some of the growth here in terms of maybe frequency of inspections or system retrofits or anything else that can explain that growth?

D. Patterson: No. The growth has really been in the service repair and inspection side has been very consistent in the last number of years, and it continues to be a driver for them. There’s just a real focus on it across all the branches. And they’re still in the process of layering in service expertise at some of the branches that were primarily installation focus. So there’s nothing on the regulatory environment, certainly that we’re aware of that’s accelerated the growth in the service side. It’s just a continued focus on it.

Daryl Young: Okay. And then with respect to restoration, the outlook is maybe a little bit lighter than I would have expected in the short term. Is there any loss of market share or anything going on with national accounts that might explain that as well? Because I would have thought there’s a lot of white space from a geographic expansion perspective.

D. Patterson: No. I mean I think we are definitely holding our own. These storm events are all very, very different from 1 to the other and what areas they impact, where we have branches relative to the affected areas. So we feel — we continue to feel very good about our position in the marketplace as it relates to national accounts. And it’s just — this is a weather influence business. And it’s hard for us to call from quarter-to-quarter. We do see some activity. We have some large loss opportunities. So there’s potential upside. But based on where our backlogs are, we do think the revenues will be flat, perhaps even down a bit in Q2.

Operator: Our next question coming from the line of Stephen Sheldon with William Blair.

Stephen Sheldon: Nice to see strong margin improvement once again in the residential segment with the labor efficiency gains we’ve called out. So curious if you see opportunities to leverage AI and other businesses and segments, similar to what you’ve done in potential around client accounting and call center operations.

Jeremy Rakusin: Yes. Stephen, Jeremy. In our brands businesses, obviously, we’ve done it in residential, as you’re aware, and that’s part of the efficiencies. And the brands businesses, all of them are exploring tools to be more efficient on the front lines. I can point out 1 example of restoration where walk-throughs job estimating and scoping. AI tools are being used to speed the process, be more productive for those estimating teams and also helping enhance the accuracy, making sure nothing is missed and we captured in that scoping exercise. That would be 1 example to call out, but all of our brands are using AI in an early stages, incremental way as we speak.

Stephen Sheldon: Got it. Makes sense. And then on roofing, I guess how are you thinking about the margin trajectory over the coming years? Those activity hopefully picks back up? Are there still a lot of levers to pull where there could be structural margin improvement over the medium term and a better backdrop with more pricing power and things like that? I guess what — how are you thinking about the long term or the medium term margin trajectory there?

Jeremy Rakusin: Yes. I think short to medium term, meaning 2026. We’ve called the margin compression right on the outset again largely due to competitive pressure. So once we get through that and once new construction, new development sort of resumes its normal course, we think the competitive pressures in reroof will abate, we’ll get more pricing power. The other thing that’s tempering our margins a little bit. We’re pulling together 1 ERP financial reporting platform for all of our branches. That’s a bit of investment that we knew about into ’26 and ’27. And once we get that and again a better environment, I think there are opportunities. There could be opportunities even on the cost synergy side around procurement, using our scale to garner materials at better prices and just as we scale up the platform. But I think that’s too early to map out at this juncture. But directionally to your question, yes, there would be opportunities medium to long term. .

Operator: Our next question coming from the line of Erin Kyle with CIBC.

Erin Kyle: Jeremy, just a follow-up on the margin side on the residential side. Good to see that margin strength in the quarter. Could you maybe expand a bit more on the labor and cost efficiencies we achieved. It was my understanding that most of those cost savings are EBIT implemented in 2025. So is it the AI efficiencies that you’re speaking to that’s kind of contributing to the efficiency in the quarter? Or how do we think about that?

Jeremy Rakusin: Yes. So a portion of the 50 basis points would have been a continuation of last year’s initiatives around client County that’s offshoring a lot of some of the financial statement and accounting functions, lower cost opportunities there as well as AI-driven portfolio management efficiencies where we can reduce head count in our call centers and enhanced portfolio manager productivity. So that’s just a continuation. And then a little bit on the mix. Scott spoke about the exit from low-margin accounts at the beginning of the year around ancillary, commercial maintenance and pool reno services. Those are lower margins. So we get a little bit of a tick up. And then really, a little [indiscernible] we’re a 20,000 associate division, very labor-intensive.

So both the timing around contract wins and when we add head count to support that as well as just incremental pockets of efficiencies across our 100-plus offices. Those would be the sort of 3 or 4 reasons that aggregate to the 50 basis points. We’ll see more of it in Q2 and then I believe, it will flatten out to second half of the year. .

Erin Kyle: That’s helpful color. And then maybe just on the M&A side. If I go back to M&A spending and looking forward for the rest of the year here, you touched on the tuck-in acquisitions of franchise operations that was announced a few weeks ago. Just wondering, maybe more broadly, what you’re seeing in terms of the broader market valuations remain elevated and what the strategy would look like and keep that. If deals do remain elevated, do you expect to do more of those franchise operation, acquisitions?

D. Patterson: I think this year will play out similar to last year where we allocated about $100 million for acquisitions. Multiples do remain high across all the platforms. And the market, it’s still active, but it’s still slower than we’ve seen in previous years. I think many sellers are waiting for more stability in the [indiscernible]. Certainly, in roofing and restoration, we’ve seen deals pull back. Results are generally down. So sellers are waiting until there’s a rebound. But we do have prospects in the pipeline across most of our segments and believe we will close incremental tuck-unders over the next 3 quarters, not — probably not incremental franchise acquisitions because we’re just not aggressively pursuing those. Those — I mean, we obviously know all our franchisee owners and we’re taking that 1 step at a time as a transition makes sense for those owners and families.

Operator: Our next question coming from the line of Tim James with TD Cowen.

Tim James: First question, just returning to the residential segment. You mentioned some headwinds there in property management related to pool construction and some commercial maintenance, I think it was. I was wondering if you could elaborate on what the drivers of that are or what you think they may be? And kind of how sustainable that you expect that pressure to be as you go through the balance of the year?

D. Patterson: Right. We’ve been in the pool management, renovation construction business for many, many years. And the renovation construction side of it is facing the same headwinds we’re facing in roofing in many of our businesses just with the reluctance to allocate CapEx to major projects and the deferral. We are entering seasonal period, and we’ll see a resumption of that activity, probably not at the same level as prior year. So it will continue to be a bit of a drag on our organic growth. And then the we referenced the other ancillary service, which is the provision of janitorial front desk personnel to the multifamily market, primarily in the Northeast, and there were a few contracts and with — they tend to be REITs and owners of several buildings.

And often you — when you win or lose a contract, it can be for a number of buildings. And we just made a decision on price to move away from some contracts, which will continue to be a drag of a — modest drag. But we feel very good about where we are with our core management business, solid quarter and end of ’25 in terms of renewals, retention and wins, and expect that it will — the core business will hold our growth in this division at mid-single digit, and we expect to see incremental sequential improvement through the year.

Tim James: Okay. That’s super helpful. Just turning to the home services and the promotional activity that you kind of kicked up in the first quarter there. It sounds like that’s due to sort of the macro environment, the overall demand environment. I’m just trying to understand when you step up promotional activity in an environment that’s impacting all your competitors, is the idea here that your competitors are getting more aggressive on pricing and therefore, you’re trying to offset some of that and sort of get the brand back in front of them? Or I’m just trying to understand, I know you’ve had experience with this in the past, so maybe it’s more a matter of refreshing on kind of the success that, that drove and how it works.

D. Patterson: Yes. Certainly, there’s some of what you suggest. The key — the real key for us is try to maintain momentum and take share in a very tough environment, and then keep our teams busy. I mean, we invest a lot in training our people. And with the lack of clarity we have today, we don’t want to move quickly to adjust that unless we have more clarity about the market that we’re dealing with. And as I said in my prepared comments, we do believe it could turn positive quickly. with some stability and clarity around the Middle East and inflation. So we’re currently trying to ride out the storm, as I said. We’ve got our fingers on the dial around the marketing spend and the cost structure. And if we — Jeremy mentioned it in his prepared comments, if we do see [indiscernible] that this is a prolonged downturn, we will adjust quickly.

Tim James: Okay. The last question, just turning back, and you’ve touched on the kind of the M&A environment. But I just wanted to kind of focus in on 1 particular aspect here. And I’m wondering if you’re seeing any evidence or hearing of any evidence that kind of the recent challenges related to funding for private equity, if that’s had any impact on their approach to M&A in the markets, in the industries where you’re looking in terms of their activity levels, their pricing behavior? Just if you’re seeing any sort of knock-on effect from that at all?

D. Patterson: The 1 thing I would say that while it appears that the multiples are not trending up or downward they remain very high. But the number of bidders for opportunities is probably lower right now. As you suggest, some funds and buyers have pulled back. So there aren’t as many people at the table but the valuations appear to be holding. The other thing I would say is that for the first time, we’re seeing and hearing about distressed platforms, particularly in the roofing space where the bank is getting involved either through their special loans group or in 1 instance even taking control.

Operator: Our next question coming from the line of Himanshu Gupta with Scotiabank.

Himanshu Gupta: So first on the restoration business. It looks like organic growth is likely to be flat in the first half of the year. What are your expectations for full year 2026. I think previously, we got an impression that it could be high single-digit growth business for the year.

D. Patterson: Jeremy, why don’t I let pass that to you.

Jeremy Rakusin: Yes. I mean, Himanshu, our expectation is mid to high historically, we’ve looked at it since we’ve owned the commercial restoration business, and we’ve averaged about 8% organic growth. But it’s not a business that goes in a straight line. Scott spoke about the weather-driven events where we’re positioned, where our branches are. So a quarter-to-quarter fluctuation is 1 thing that people should realize this business can be a little more — have greater fluctuations in terms of top line and bottom line from quarter-to-quarter. And also, we exited we exited ’25 on a very mild weather year. So the backlog that Scott mentioned, entering 2026 we’re quite low. We did get a shot in the arm from winter storm [indiscernible], but it was a small event.

So it’s still an early part of the year, the backlogs from last year, again lower due to mild weather. And we just think that the randomness of weather is 1 aspect. But on average, we do expect weather events to resume their normal level of activity, and we’ve captured share over the years. So that’s why we feel confident in doing better in the half of the year and for the year than we do in the front half of the year being flat.

Himanshu Gupta: Got it. through the color Okay. And then now moving on to roofing segment, and I know a bit of discussion already has happened so far. Can you speak about the roofing backlog? I mean in terms of quality of the backlog or directionally, how is it trending?

D. Patterson: Yes. It’s down modestly from a year ago, really due to the shift from having some new construction of backlog down to primarily reroof. And — but it’s stable the last few quarters and starting to build. Our branches are bidding work and generally active and winning. And as I said, we’re feeling optimistic that we just need to battle through this period of uncertainty because the reroof market, the fundamental demand drivers are there. And we feel like we’re in a great position to capitalize on it.

Himanshu Gupta: Got it. And is the new roofing mostly tied to industrial warehouses, new supply, construction cycle? Is it a thought to add exposure to data center here, I mean, given that you’re seeing a fair amount of construction?

D. Patterson: I mean the new construction outside of data centers, office, retail, industrial, those markets are all weak if you look across North America, there are pockets of activity. But generally, those areas are weak. Data centers is — it’s a big driver of the new construction market.

Himanshu Gupta: Yes, fair enough. And I assume you don’t have much exposure to the data center within the roofing segment?

D. Patterson: Not on the roofing side, no, we don’t, Himanshu.

Himanshu Gupta: Yes. And there is no thought to add exposure in that segment anytime soon?

D. Patterson: Well, it’s not so easy to add exposure. The operations that comprise Roofing Corp of America, have not historically participated in data centers. And part of the reason is that the focus has been reroof and repair and maintenance. That’s our strategic focus long term. So I mean we will be opportunistic, but it’s not something we’re aggressively pursuing, no.

Himanshu Gupta: And my last question is on FSR on the residential side. I mean, do you have visibility in terms of new contract wins or losses in the next 3 months or 6 months? Any color there?

D. Patterson: Yes. We have visibility in that business, absolutely. And as I said in my comments, I believe, will be — show growth at similar or up in Q2 and for the balance of the year.

Operator: Next question in queue coming from the line of Daryl Young with Stifel.

Daryl Young: Just 1 quick follow-up. You mentioned some distress in roofing. What would your appetite be to take on a more complicated acquisition that maybe has some distress? And then secondly, has your appetite in roofing to deploy capital into roofing changed at all just given the market dynamics you’ve seen over the last 12 months? Or is it still a core vertical for the long term?

D. Patterson: It’s very much a core vertical for the long term. We’re focused on an active in terms of looking at opportunities. And certainly, most of these businesses were familiar with and have a have a view on in terms of their position in their local markets. So we’re keeping a finger on the pulse of all the activity in the roofing space and absolutely interested in opportunities as they present.

Operator: Our next question coming from the line of Stephen MacLeod with BMO Capital Markets.

Stephen MacLeod: Just 1 follow-up question. I just wanted to ask about — I just want to confirm on the FSR margin side. Because I believe you talked about inorganic sales growth being up and sequentially improving through the year. So just on the margin side, would you expect a similar trend on margins. Just noting that last year, you had very strong kind of margins in the 11% range in Q2 and Q3. Were there — were those anomalies to the high side?

Jeremy Rakusin: Well, I said in my prepared comments and in some of the Q&A, we expect the trend in Q2 to resemble Q1. So we’re up 50 basis points, something of that order [indiscernible] wouldn’t assume anything more than that. And then I think we’ve flattened out in the back half of the year of Q3 and Q4 on a year-over-year basis. .

Operator: And I’m showing no further questions in the queue at this time. Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, and you may now disconnect.

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