Q4 2023 Willdan Group Inc Earnings Call
Participants
Al Kaschalk; Vice President, Investor Relations; Willdan Group Inc
Mike Bieber; President & CEO; Wildan Group Inc
Kim Early; EVP & CFO; Wildan Group Inc
Moshe Katri; Analyst; Wedbush Securities
Craig Irwin; Analyst; Roth Capital Partners
Richard Eisenberg
Greg Kitt; Analyst; Pinnacle family office
Presentation
Operator
Hello, and welcome to the Willdan Group fourth quarter and full-year 2023 financial results conference call.
(Operator Instructions)
At this time, I'd like to turn the call over to Al Kaschalk. Please go ahead.
Al Kaschalk
Thank you, Kevin. Good afternoon, everyone, and welcome to Willdan Group's fourth quarter and full-year fiscal 2023 earnings call. Joining our call today are Mike Bieber, President and Chief Executive Officer, and Kim Earley, Executive Vice President and Chief Financial Officer.
Copies of our earnings release we issued after market close today. You may find the earnings release and the invest Willdan investor report that accompanies today's call and the press release and stock information section of our Investor Relations website.
In addition, we have prepared a slide presentation to go along today's financial results conference call presentation is available on the Events section of the investor website. Management will review prepared remarks, and then we will then open the call up to your questions.
Statements made in the course of today's conference call, including answers to your questions which are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks and uncertainties. The Company's future results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially and other risk factors are listed from time to time in the Company's SEC reports, including but not limited to the annual report on Form 10 K.
The Company cautions investors not to place undue reliance on the forward-looking statements made during the course of this conference call will then disclaims any obligation and does not undertake to update or revise any forward-looking statements made today in addition to GAAP results will then also provide non-GAAP financial measures, we believe enhance investors' ability to analyze the business trends and performance. Our non-GAAP measures include net revenue, adjusted EBITDA and adjusted EPS.
I'll now turn the call over to Mike Beaver, Williams, President and CEO.
Mike Bieber
Thanks, Al, and good afternoon to everyone. Let's begin on slide 2.
\We had an exceptional fourth quarter revenue, profitability, and cash flow were above our expectations and the analysts' expectations aided by end-of-year program expansions. Strong performance throughout Willdan capped a record year and with an expanding backlog positions us for another strong year in 2024.
I want to take a minute and talk about Willdan and our market positioning will then transitions communities to clean energy and a sustainable future. Today, our revenue is 84% energy focused and 16% civil engineering focus in 2023 will then net revenue grew organically by 19%. Overall, we delivered 20% organic growth in energy and 16% organic growth in civil engineering. By customer type, 47% of our work is from state and local governments. We don't yet serve the federal government utilities come comprised 46% of revenue with 7% from commercial customers.
We are a professional services company, helping customers solve problems with knowledge and software. We help make America's clean energy transition more affordable for communities because of the funding sources of our projects and electrical user fees and government funding. Our business model is resilient and generally less impacted by economic cycles. And inflation. We demonstrated this strength throughout 2023, capped by an excellent fourth quarter.
On page 3 of the slides, a customer's challenge typically starts with our policy consulting analysis software and data analytics services, which provide a highly technical roadmap to a solution. This upfront consulting work also informs Willdan strategy. We are agnostic to the generation sources, solar wind battery gas nuclear, and we help integrate energy generation and energy efficiency into the local grid. At the least cost, our engineering services typically come next and often include financial consulting work and rig studies to help fund a customer's project after engineering design, our program management capabilities manage the delivery of a program on behalf of our customers, we see smaller, higher margin projects at the top of this pyramid, while larger longer term projects are normally at the base.
Let me give you some additional color on our markets and the opportunities we are seeing in 2023, we talked about our goal to grow our consulting software and data analytics business. We did that successfully and entered 2024 with a robust pipeline that supports significant new software wins we anticipate in the first half of 2024.
Our engineering business grew 16% organically in 2023, and much of this work is for state and local government customers counter to the fears about slowdown here, we have seen strong organic growth and are carrying that momentum into 2024. The biggest change to our business in 2023 was the recovery of program management work that had slowed during COVID. This work improved throughout the year as supply chain concerns became more manageable.
Our program management backlog is at a record high entering 2024. It is expected to drive strong performance. Each of these three areas is strategic to our model and provides us with a competitive advantage. The upfront policy clients want to know about practical constraints will then cease in engineering and program management, engineering and program management. Clients want to know about Policy and Planning shifts that might affect their program two years later.
On page 4, I want to provide you with a partial list of wins since the last earnings call. These include at the top of the table, a $46 million program for Clark County School District Phase one provides energy upgrades to about one-third of their schools. This program was two years in development and provides strong backlog for us entering 2024. Phase one will be mostly complete this year, and there is an additional $100 million of opportunity with this client that we are developing for next year.
Next to decarbonization strategies for the building portfolio of a national health care provider. This win is one of our most exciting opportunities in the next several years and touches over 1,000 hospitals and health care facilities for one of America's largest health care provider.
Next, we won a $30 million to $50 million New England utility program for energy efficiency and program management. This new win that is being announced today is our first large anchor program in New England. The energy efficiency program addresses a wide variety of New England energy users, including small and large businesses, industrial facilities, multi-use buildings and municipal infrastructure contract is expected to ramp up through 2024 and is expected to continue its growth in 2025.
Next, the $18 million Puget Sound contract is the seventh consecutive time and content of the $16 million contract is the fifth consecutive time we've won those important recompetes indicating the success of those programs. We've also won a major western utility grid planning contract and two smaller municipal utilities, software and planning services contracts. These new wins on top of our other multi-year contracts and position us well to continue mid to high single digit organic growth in 2024. Kim, over to you.
Kim Early
Thanks, Mike, and good afternoon, everyone. As Mike said, our fourth quarter provided a very strong finish to an exciting and productive year, resulting in record-setting performance in establishing a firm foundation for continued momentum into the new year. The fourth quarter results reflect the highest level of quarterly and annual contracted net revenue, gross profit and operating income in the Company's nearly 60 year history.
Looking on the right side of your presentation and moving to slide 5, for the fourth quarter of 2023, contract revenue was up 37% over Q4 2020 to a record $155.7 million and net revenue was up 25% to a record $80.8 million. The increase was fueled by some exceptional opportunities to over-deliver target quantities on some of our utility programs, providing approximately a $20 million contract revenue boost and a $3 million adjusted EBITDA boost to the quarter.
The quarter also reflect significant year-over-year increases across our service lines as demand for energy and municipal services remains strong. The growth in revenues was accompanied by a solid 35% gross profit margin for the fourth quarter, while G&A expenses increased only half as fast as revenues as lower stock compensation, depreciation and interest accretion on earn-out liabilities partially offset higher wages and incentive compensation derived from the improved profitability.
Interest expense increased 9% over the prior year quarter to $2.3 million in Q4 of 2023 due to higher interest rates. And our income tax rate was 19.5% in the fourth quarter compared to an extraordinary tax rate of 120% for the fourth quarter of 2022. So for the fourth quarter, net income was $8.0 million or $0.58 per fully diluted share versus a net loss of $425,000 or a $0.03 loss per diluted share a year ago. Adjusted EBITDA in the fourth quarter was $17.5 million, up 48% over the $11.8 million for the fourth quarter of 2022. Adjusted earnings per share in Q4 of this year was $0.8 versus $0.36 in Q4 a year ago, mainly reflecting the increase in pretax income in terms of the following year.
Move to Slide 6.
Slide 6 shows that 2023 continued the pattern of double-digit annual organic growth since the emergence from the COVID restrictions. Contract revenue for 2023 increased 19% over 2020 to a record $510 million in net revenue also increased 19% to $270 million, with solid growth across all our service lines, double-digit percentage increases in program management activities in our utility programs were the primary factors behind the higher revenues in the energy segment, while revenue from engineering and consulting services also grow, grew a robust 16% reflect the increased demand for our municipal services.
Right looking again, on slide 7, you can see that adjusted EBITDA nearly doubled in 2023 to $45.7 million, and our adjusted earnings per share also have nearly doubled to $1.75 per share compared to $0.88 a year ago. Gross profit in 2023 increased 25% to $179.8 million and gross margin expanded to 35% from 33.5% a year ago, driven by higher software licensing and improved performance in our restructured California IOU contracts tempered by higher revenue from construction management activities, which carry a lower margin profile.
We realized further operating leverage in 2023 SG&A expenses increased only 5% versus the same period a year ago, while net revenue grew 19% higher employee incentive compensation, consistent with the improvement in income from operations and increased costs related to employee benefits was partially offset by the lower stock-based compensation and lower interest accretion on earn-out liabilities, which have now all been satisfied.
Interest expense for the year increased by 77% to $9.4 million in 2023 compared to the same period a year ago, primarily due to the higher interest rate. Income tax expense was $3.7 million or an effective tax rate of 25.1% compared to an income tax benefit of $3 million from the loss in 2022. Our 2023 net income was $10.9 million, or $0.8 per diluted share compared to a loss of $8.4 million or minus $0.65 per diluted share in 2022. Improved results throughout the company enabled a significant turnaround.
On slide 8, highlights of some of the important metrics, reflecting our significantly improved balance sheet and financial condition are presented. With $39.2 million in cash flow from operations and $29.3 million in free cash flow for the year, our leverage ratio of net debt net of our $23.4 million year end cash balance improved significantly to 1.6 times trailing 12 months EBITDA from 4.3 times at the end of 2022.
Net debt was $75.1 million at the end of 2023, a reduction of $24.1 million over the course of the year with the refinancing of our bank credit facilities and our new three-year credit agreement, no outstanding borrowings under our $50 million revolving credit facility to a leverage ratio below 2.0, and we're well positioned to pursue strategic acquisition opportunities.
Moving to slide 9, and it provides our financial guidance for 2024, we're expecting contract revenue of $525 million to $540 million and net revenue in the range of $270 million to $280 million. Adjusted EBITDA is expected to be in the range of $48 million to $50 million for the year, and adjusted earnings per share is expected to be in the range of $1.80 to $1.87 per share, assuming a 25% tax rate and 14.2 million shares outstanding. This guidance does not include any potential future acquisitions by factoring.
Thank you.
Mike Bieber
And in summary, solid execution in the fourth quarter has capped a record year for Will. Then we've broken through the $0.5 billion revenue mark and have strong momentum and backlog entering 2020 for demand for our services remains healthy as our clients trying to navigate America's energy transition. Strong operating results have now delevered our balance sheet. So we are resuming our acquisition program. We now have a growing pipeline of potential deals that we are cultivating will then is in the right markets and we now have the means and opportunity to build a multi-billion dollar world class company.
Operator, we're now prepared for Q&A.
Question and Answer Session
Operator
(Operator Instructions)
Moshe Katri, Wedbush Securities.
Moshe Katri
Thanks, and congrats on very strong and solid results. So maybe we can start by talking a bit about the the pending deal pipeline. What are you seeing there in terms of maybe is there if there's any way to kind of compare the current deal pipeline versus where it was a year ago, including software, obviously, and then maybe talk about the nature of the deal flow and visibility? Thanks.
Mike Bieber
Sure. How long we're continuing the momentum we've built up in the back half of the year and especially the fourth quarter motion looks really good on with static software. I specifically called that out. We just attended our big DistribuTECH conference and met many customers that are in the pipeline. That looks very good and we're optimistic that we'll have some significant announcements there in the first half of this year. Certainly, looks very good on the pipeline here continues to grow. And I would say it's in our It supports that type of 10-sh percent type growth that we saw last year.
Moshe Katri
Okay. And then the nature of the deal flow, is there anything different in terms of what you're being asked to do by clients, the grid is becoming more complex.
Mike Bieber
And as you know, nuclear plants retire, especially coal-fired power plants, retire. That complexity is causing them to choose a lot of software solutions which are required. You can no longer analyze these problems with spreadsheets and a lot of consulting services that are required. So those are the areas I'd point out. The other is that as the cost of energy goes up, the value of energy efficiency that we provide also goes up. So those programs are robust as well as you saw from that big wins that we had in New England.
Moshe Katri
I've understood. And then just the couple of questions related to the guidance. What's embedded in the models from the recent credit refinancing versus maybe some of the fences before that?
Kim Early
Well, I'm not sure what you mean by that motion. I mean the interest rates the table was I mean, the spread provides us the opportunity to lower the rates, particularly over what the spreads were for us in most of 2023 and 2022. So by reducing the leverage we can produce this spread over the sulfur numbers, but there isn't a whole lot of difference.
Moshe Katri
And any of the costs related to the agreement beyond the interest expense and what's the delta between what it was and where it was, where it's expected to be in and 2024?
Kim Early
Well, our interest rate here in the first quarter compared to the fourth quarter will be about 1% lower annual.
Moshe Katri
Okay.
Kim Early
If you look at the course of the year, you know, I'm expecting the interest expense, net interest expense to be probably at least $2 million lower than it was in 2023.
Moshe Katri
Okay. $2 million. And then how does the year look like in terms of first half versus the second half in terms of net revenue contribution?
Kim Early
Yes, I think this year it's about, you know, 60-40 back half the first the front half, and it's not not quite as back-end loaded as that as 2023 was, which was, you know, closer to maybe 70-30 kind of split. This will be a much smoother transition, won't have quite as steep a hockey stick into the fourth quarter and maybe we've seen in the past.
Operator
Craig Irwin, Roth.
Craig Irwin
M evening, gentlemen. Congratulations on another impressive quarter. It's something happened retaining that's happening routinely now, Gary. So actually, Mike, I wanted to ask specifically about the character of the business from this past year. It seems that there's been a a fairly substantial shift in the on the volatility or I would say a lack of volatility compared to what we saw over the prior couple of years.
Can you maybe talk us through about what's becoming more predictable and what's working for you with your customers found that that eliminates some of the downside volatility that we've seen. I'm not saying that it can't happen again, but you know, you've repetitively surprised everybody to the upside and with some very healthy numbers and healthy profitability. What's changed that set that's delivering this in the business?
Mike Bieber
Well, thanks, Greg. Will then should be a very predictable business and we were that is from 2015 to 2019, very predictable. And that is because of the nature of our long-term engagements with clients and the funding sources to fund our projects. They tend to be very resilient and consistent, the difference was the volatility you saw with COVID and the startup of the California IOU contracts could barring those two events, we should be a very consistent producer. Our results. And you saw the resumption of sort of our performance prior to COVID this year, and we're expecting that to continue into next year.
Craig Irwin
And that's absolutely essential and news So then can you talk us through a little bit of the success with Integral Analytics this year? How has overall our momentum taking shape for this business? And can you maybe share with us what the fourth quarter and full year contribution and both on a revenue and EBITDA basis was from this business?
Mike Bieber
Software is a big part of our business. It's doing very well. It grew a few million dollars year over year. This year was around $15 million in revenue. We don't break out EBITDA by the it was, I believe the highest margin business that we have at will land so outstanding and even better yet, they have a great pipeline going into the beginning of the year and we're expecting some contract notifications here very soon that we'll be able to talk about.
So that looks really good going into next year. And it's all driven by the fact that we have it's very little competition in that area. It's really the competition of inaction by clients on. We have a dominant solution that's been widely adopted by large utilities around America right now. And it's also starting to spin off consulting work, the partnership with the consulting side of the businesses, very effective. These newest contracts are about 50 50 software and consulting, so very good.
Craig Irwin
Okay.
Excellent.
And then the on the project close-outs or the the sort of top end of your budget flush and that did help us a little bit this quarter on. Can you can you maybe scope out for us what where that came from? Was that from several customers sort of broadly across the customer base wanted to customers? And if you could give us any color on the on the relative outperformance there versus the organic growth? And obviously that is organic, but the organic growth from the core business?
Mike Bieber
Yes, it was very clearly three different areas Supras, the California IOUs, First Energy on the East Coast and Con Edison. All three of those customers were behind in their energy efficiency goals and came to Willdan and asked us to expand our contracts if we could, in every case, we made those expansions in the fourth quarter of the year and hit the bigger the higher number and the results were very clear. It was $20 million in gross revenue, about $15 million of net revenue and $3 million in EBITDA.
I think Kim mentioned that in the script, some came right out in the fourth quarter that we just couldn't have expected. When you look at that, obviously, it was great results for the fourth quarter. We didn't factor that in you can't rely on that happening next year. So that's why in guidance, if you back into our organic growth or revenue growth, you only see like 5% to 7% well, the $15 million of extra revenue that we booked in the fourth quarter of this year. It's about a 5.3% headwind the next year or so, if that happens again next year, then we'll see two types of double-digit organic growth that we've been printing here for many quarters now.
Craig Irwin
Excellent. And last question, if I may. On CRA it's been a little bit of a headwind from many of the other companies in the energy efficiency space, but it will then you've seen quite a lot of activity with your customer base, some looking for you to provide consulting to help them figure out how they would use IRA money and what makes sense for them as far as a long-term investment that this could unlock.
Can you maybe describe for us a little bit about what you're doing to prepare for a next phase on when the actual the actual funding for these projects becomes available, do you expect to have material profit participation on the projects where you've been advising and consulting for them? Would you expect the consulting business to remain the driver there?
Mike Bieber
Yes, good question, Craig. We don't quite know what's to come, but we are helping more than 20 clients and they're generally municipalities of figure out and apply for IRA funding right now. These are not material contributors to revenue right now, and they weren't in 2023 for small dollar studies, less than $100,000 apiece. So not material in aggregate, but there's a lot of activity going on in the small front end consulting work trying to figure out how to access IRA data.
We have a number of opportunities. If those if the funding is received by those communities and that turns into projects, we have a number of opportunities where we will likely follow some of that funding into the next phases of design and implementation. But it's still early and none of that money has hit the street at this point. It's still in the application phase.
Operator
Richard Eisenberg, Private Investor.
Richard Eisenberg
Good afternoon, gentlemen, and congratulations on a great quarter.
Mike Bieber
Thank you, Richard.
Richard Eisenberg
On the top, the software contracts that you are anticipating in the first half. Is that embedded in the guidance or that if they come through then you can raise guidance for the year for money in the $1.27 range? And also is there potential business in states like Florida, Texas, North Carolina's, South Carolina? And the last question is what is the company able to take advantage of this huge demand for artificial intelligence, like data centers and your engineering segments. Thanks again, Mike, and congratulations again. Thank you.
Mike Bieber
Thanks, Richard, and I'll take them in order of your questions here. The first part, I think was is there upside. We've embedded some of what we can foresee the software licensing into guidance, but there's still upside. We factor those down as of probability and our probabilities are going up, especially after the meetings last week. So that looks really good. There is upside on both the first half and the second half of the year.
On the second question, and I'm glad you asked it is what opportunities are we seeing outside of California? Very specifically, the hottest states for us are Florida and Texas, right now of the population, the demographic shift is noticeable in those states. Activity for municipal clients is up very robust in both places. I was just in the Orlando office and I'm heading to Texas next month. It is the growth market for Willdan right now, especially with its municipal clients. So a lot of opportunity there. The third was AI. and we have a working group and a guy that's been in place for about a year, but still early on will be adopting AI tools across the company in 2024.
We're evaluating those tools right now because we want to be at the forefront of using those tools to help solve our customers' problems on the working group is, I would say, close to world-class. We hired a I experts when I was not a well known term. This was more than five years ago, and they've been working on this and preparing both our software and the tools that we're using across our businesses to solve those problems.
Richard Eisenberg
Thanks, Mike. Appreciate that.
Operator
(Operator Instructions)
Greg Kitt, Pinnacle family office.
Greg Kitt
Hi. Congratulations on the great quarter cubic foot FlexRig. I wanted to ask on I can't remember a period in which you've had so many meaningful customers and contract wins with Clark County and the New England program announced that health care provider, which was a big commercial on, which is not the majority of your business.
And then the recompetes with Con Ed and Puget Sound, is that is there some is among others, is there some thing happening that you think has there been some change that's helping you win business more effectively? Maybe can you help us understand what's going on?
Mike Bieber
I don't think there's a change other than we're a big company and we've focused on a lot of those contracts two years in the making guy, you mentioned Clark County and New England, specifically, both of those contracts were well over two years in the making. And the impressive part I think was yes, we knew about them. They were both competitive. In both cases. We thought the customers would make multiple awards to many of our competitors.
And in both cases, in those examples, they selected Willdan. I'm very surprised. So the contract sizes were larger than we even we expected to receive there. And we're seeing that. We're also doing a good job of delivering you saw that in the fourth quarter. And that's what allows, I think customers to have confidence in us. And when the customers came and asked for expansions in the fourth quarter, we actually delivered those higher numbers on a very short order. So that's what we're seeing.
Greg, the contracts are getting larger because of that.
Greg Kitt
That's great. Thank you very much on. And maybe just I wanted to make sure I understood the guidance because I think you did if I saw it correctly, just under $270 million of net revenue in '23 and the forward commentary was on it $270 million to $280 million. And so to me, it sounded like a lot of the commentary was that mid to high single digit growth. It made sense off of that $270 million that you did in 2023. And but first, I guess was that commentary I know you're talking about opportunities for mid to high single digit growth. Was that on a contract revenue basis or a net revenue basis.
Mike Bieber
And I spoke, Greg, we wanted to be appropriately conservative coming into the beginning of the year announcing guidance, but you've seen the wins out there. Although only note I would say is, you know, the $15 million. And with that, we faced due to the exceptional revenue in Q4 and we don't know if that's going to happen again next year, doesn't happen every year, but it looks very good to expand our existing contracts. We've already missed the beginning of the year, and we're already talking about contract expansions with a couple of places. So we're optimistic that as we get into the year, we'll be able to potentially beat and raise that number.
Greg Kitt
Thank you very much. And then on the contract expansions, that you had we've talked about the California IOUs First Energy and then Con Ed, is there some change in how you're working with those customers? Or was that every couple of years, you just get a dramatically larger budget flush. I'm wondering if those customers are looking at use more like a partner in giving you a little bit more lead time versus hey, it just all kind of shows up at the end of the year.
Mike Bieber
No, I think you're exactly right, Greg. That's a result of us earning their trust throughout the year. The California IOU program, you know the story. Others were new programs, new clients we had to earn their trust before they would come to us with that kind of year-end expansion with that kind of problem really, and we appreciate the opportunity to deliver and we did that for them.
Same thing with First Energy we had to earn their trust that was a difficult program. It started off. It was a small program, but it started off rock. And as we got into it and approached the end of the 1st year, they came to us with a problem we were able to solve. Again, we earned their trust Con Ed is a client that has trusted us for years. And when they have these issues they come to us and us we deliver for them. So that's what happened.
Greg Kitt
Thank you very much. Congratulations, and thank you for your hard work.
Mike Bieber
Thank you.
Operator
Moshe Katri, Wedbush Securities.
Moshe Katri
Thanks. This is for Mike. Maybe talk a bit about the company's strategy and positioning under your leadership. Any changes or what should we expect on an ongoing basis?
Mike Bieber
Thanks for the question on. I've worked with Tom for a number of years. He's been my mentor and is still the Chairman of the Board. Having said that, the differences between this are probably that Tom is a little more business development focused than I'm probably a little more operationally focused. It's just our nature, and it was the nature of our partnership. I'll bring that to Willdan.
And if there's anything, I'll spend more time on, it's developing that operational excellence that leads to the contract expansions and other opportunities I talked about and that that's something I'm going to focus on. Other than that, we're on a good course. Tom started this down a good path and the opportunities are to capture this point. I think it's important.
Moshe Katri
And what about of coming out with some new offerings that are that will make the business a bit more recurring in nature?
Mike Bieber
We talked about that on a lot of our business acts more like a U at an annuity and the energy efficiency programs are very much behave that way the funding doesn't change that much year over year for like steady building blocks that you build the business on top-up. So as our business already behaves very much like recurring revenue for the most part, the area that we're trying to do better at is the software area where the revenue recognition standards cause it to be lumpy. The customers want to capitalize that software rather than expensive, which causes us to have to recognize all the revenue upfront.
The things we've done to augment that I mentioned are pairing services with software, which we were not doing very well two years ago now the average software license that we signed is about half services, which is up from almost no services before years ago. So that's the one area we're trying to do that.
Moshe Katri
And on consulting, in terms of the role of the consulting business, I'm looking at this more as a kind of a network effect I guess I think there's a lot of cross-selling opportunity that we could still realize it will.
Mike Bieber
Then I talked about how the business model works for the front-end business. It leads to engineering opportunities two, three years down the pike and engineering leads to those program management opportunities. We see a couple of years later. We're just starting that right now because we added the front end of the triangle, if you will, in 2019.
So we're just starting on that journey. We have a lot of cross-selling opportunity. A lot of our organic growth. I think that will be focused on that in the next couple of years. And certainly we just went through our key pursuit list. A lot of those opportunities are coming out of funeral policy work in the states that E. three started out or IA. started out where we're seeing later on each program is developed.
Moshe Katri
Thanks.
Operator
Thank you. We appreciate it question-and-answer session. I'd like to turn the floor back over to Mike for any further or closing comments.
Mike Bieber
I'd just like to thank our employees, shareholders and the customers out there for standing by us during the tough times in COVID. And it's certainly been brighter year, a really a great year in 2023. We're off to a great start in 2024 also. So thank you, and we'll talk to you at the end of Q1.
Thank you.
Operator
That does conclude today's teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
