Everus Construction Group Inc (ECG) 2024 Q4 法說會逐字稿

Good morning. My name is John and I will be your conference operator today.

At this time, I would like to welcome everyone to Everus Construction Group fourth quarter earnings call. All lines have been placed in view to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions)

I would now like to turn the call over to Paul Bartolai, Everus Investor Relations. Please go ahead.

Welcome to Everus Construction Group's fourth quarter 2024 results conference call. Leading the call today are CEO Jeff Thiede, and CFO Max Marcy.

We issued a news release yesterday detailing our fourth quarter and full year 2024 operational and financial results.

This release, together with the accompanying presentation materials are publicly available on our website at investorsdotEverusdotcom (inaudible) commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature, are uncertain and outside of the company's control.

Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially.

For a discussion of some of the factors that could cause the actual results to differ, please refer to the risk factors section of our latest filings with the SEC.

Additionally, please note that you can find reconciliations of historical non-gap financial measures in the news release issued yesterday ending the appendix of today's presentation.

Today's call will begin with prepared remarks from Jeff, who will provide a review of our recent business performance, followed by a financial update from Max.

At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Jeff.

Good morning to everyone joining us on the call today.

We are very excited to be here with you all today as we report our fourth quarter and our full year 2024 results, which wraps up a transformational year in our company's history highlighted by our spinoff from MDU Resources that was completed at the end of October.

Over the past 28 years, we have built Everus into a leading specialty construction solutions provider.

Through our dedicated focus on our people, execution, and customer relationships, the key pillars of our forever strategy, we have developed strong competitive positions in a wide range of diversified and markets.

We have demonstrated a history of delivering consistent, attractive financial results, and based on the favourable demand trends benefiting many of our key markets combined with our discipline execution of our strategic framework, we look forward to further building on our track record of success.

With that, let's begin with our fourth quarter performance which we highlight on slide 4.

We generated solid fourth quarter results highlighted by strong revenue growth, consistent project execution, continued financial discipline, and strong backlog, positioning us for continued positive momentum in 2025.

Our fourth quarter revenue increased 20%, driven by balanced growth across our diversified in markets, driven by commercial data centre growth, institutional and utility.

Our electrical and mechanical revenues increased 21% while our transmission and distribution revenues grew 15%.

Our fourth quarter EBITDA remained relatively flat as higher revenues were largely offset by incremental public company stand-up costs, as Maxwell discussed in more detail. While our consolidated fourth quarter EBITDA was essentially flat from last year due to dis-synergies costs, our segment EBITDA showed strong year-over-year growth.

Our total backlog at the end of the fourth quarter was $2.8 billion, an increase of 38% from the end of the fourth quarter last year.

Our backlog was consistent with the third quarter reflecting the strong fourth quarter revenue performance and typical seasonality and timing factors.

Our year-over-year backlog growth highlights our deep customer relationships and our strong strategic positioning in markets that are benefiting from favourable secular demand drivers.

Our current backlog remains at an extremely healthy level and provides us with good visibility into our near-term growth outlook.

Based on our solid fourth quarter performance and our strict financial discipline, we ended the year with net leverage of one times, which is nicely below our long-term target.

This gives us significant financial flexibility to continue executing on our strategic growth objectives.

We are very pleased with our solid fourth quarter financial and operational results, and based on our backlog strength, favorable and market trends, and continued focus on execution, we expect strong momentum to continue into 2025.

Based on these factors, we are providing 2025 financial guidance that calls for revenue to be in a range of $3 billion to 3.1 billion and EBITDA in a range of $210 million to $225 million.

Now let me shift gears a bit and remind you of our forever strategy which forms the foundation for our value creation framework and is detailed on slide 5 of today's presentation.

I spent quite a bit of time describing our forever strategy last quarter, so I won't go into too much detail today.

But as you can see, our forever strategy is focused on attracting, retaining, and training our most critical asset, our employees, creating value for our customers and shareholders, delivering safety and high quality execution, and maintaining and growing our customer relationships.

Our forever strategy is the basis for everything we do and is designed to deliver value creation through sustained profitable growth, operational excellence, and disciplined capital allocation.

Our value creation framework is highlighted on slide 6 in today's presentation.

We made important progress against these key pillars during 2024, and we remain committed to our framework as we look to drive value creation for our shareholders in the coming years.

During 2024 we made key advancements on our growth priorities as demonstrated by our year-end backlog growth of nearly 40%.

Our long-term customer relationships and history of strong execution enabled us to take advantage of the favourable demand drivers in our key and markets, resulting in meaningful backlog growth and positioning us for continued momentum in 2025.

Importantly, a key aspect of our growth strategy is to expand geographically through satellite projects, and during 2024, we continue to follow our long-term partners into new markets. This enabled us to further strengthen our key customer relationships and allows us to expand our reach.

2024, was a strong year when we think about our operations. Execution is the second E in our forever strategy, and it is always an important priority.

During 2024, we benefited from very strong execution on several projects which resulted in excellent margin capture during the year.

Despite lower full year revenue, we actually exceeded the midpoint of our EBITDA guidance during 2024, due in large part to our strong project execution.

Max will discuss our 2025 guidance in more detail.

While we always strive for this level of execution, it is not the baseline assumption where we start the year.

So, while we work hard to repeat our performance during 2025, our guidance assumes a more normal level of project execution.

During 2025, a key priority of our growth strategy will be strategic M&A. We will remain disciplined and look for the right deal, but as we've discussed in prior presentations following our spinoff from MDU Resources, a key opportunity is the ability to have full discretion over our free cash flow to ramp up investments in both organic and inorganic opportunities.

Timing is difficult to predict, but we are excited to ramp up our M&A efforts.

Our business benefits from an asset-like model that generates strong free cash flow conversion and enables us to execute on our capital allocation strategy.

We have entered 2025 in a very attractive financial position with a net leverage well below our targeted 1.5 times to 2 times range, which allows us ample flexibility to execute on our growth strategy.

As a reminder, our capital allocation strategy prioritize investments in organic growth, the pursuit of strategic acquisitions, and maintaining financial flexibility.

Our full year 2024 CapEx increased from 2023, which reflects our desire to step up our investment in organic growth, and as we just covered, we are focused on ramping up our M&A efforts.

We do not have a dividend policy or share repurchase authorization in place. However, we will work with our board to decide when those returns are prudent in the future.

As a new stand-alone company with meaningful growth opportunities, we feel it's best to invest in ourselves to drive maximum shareholder value.

As we highlight on slide 7 of today's presentation, we expect our forever strategy to drive us toward a financial framework of compound annual revenue organic growth in a range of 5% to 7%, which combined with our discipline focused on operational excellence, will enable compound annual EBITDA growth of 7% to 9%.

We remain committed to these targets and are confident that we are in a strong position to deliver on these promises.

Before I turn it over to Max, I would like to spend just a few minutes discussing some key and market trends, especially given the new administration and some of the recent activity in the market.

Overall, we continue to be encouraged by the demand drivers in our key markets. When we look at our T&D business, the demand outlook remains favourable. Significant investments are needed by our customers to simply maintain reliability of the existing infrastructure which is dated.

The investment needed to modernize and update the grid is meaningful. When you combine that baseline investment with utilities, needing to invest in meeting the projected low growth expected in the coming years from factors such as EVs, the electrification of the industrial economy, and increased power needs coming from data centers, we see a very attractive market environment.

These factors will not only benefit our T&D business. But also our E&M business as the electrification of our economy and data centre construction will continue to be growth drivers.

There's clearly been a lot of noise that deep seek may impact the pace and magnitude of CapEx spending from domestic technology companies. We are in the early stages, and the potential impact from deep seek or any other emerging technologies remains to be seen.

Industry participants in the data centre space have recently made positive comments about their future CapEx plans. It did not signal any expected changes in their spending outlook.

We will of course continue to work with our customers and closely monitor the situation, but we are not expecting any material changes in the pace of investments at this time.

That said, an important driver of our success has been our ability to quickly pivot when we see market trends evolving.

We benefit from a very diversified business, and there are several favorable market drivers benefiting our business beyond data centers, including high tech reshoring, government and industrial projects, and infrastructure investments.

We continuously monitor the market and adjust our resources as needed in order to drive growth and generate the highest return on our assets.

We remain optimistic about our key markets. There are several factors that we continue to closely monitor, including potential market impacts from the new administration in washington.

In general, we expect the administration to be positive for our industry given the pro-business strategy and the promise of fewer regulatory headwinds. However, there are factors such as tariffs, potentially higher inflation, and higher interest rates that could impact economic growth and therefore our business.

We believe that favorable secular drivers will more than offset any potential headwinds, and we will remain diligent in managing our business and focusing on maximizing our resources.

In summary, we are extremely excited about the opportunities in front of us as we begin our first full year as a standalone public company.

We are in an excellent competitive position to take advantage of the favorable secular trends benefiting our end markets. We are in an advantageous financial position that provides opportunities to invest and growth.

And we are committed to executing on our strategic framework and delivering value for all our key stakeholders.

With that, I'll turn it over to Max.

Good morning everyone. I will provide additional details on the quarter, give an update on our liquidity and balance sheet, and wrap up with some additional details on our guidance.

Beginning on slide 9 in today's presentation, net revenue for the fourth quarter of 2024 was $760 million an increase of 19.5% compared to the same period last year.

The increase in revenue during the quarter was driven by E&M revenues increasing 21% and T&D revenues increasing 15%.

The growth was highlighted by our E&M commercial market led by the data centre submarket and momentum in our T&D utility and market led by the storm, underground, and substation submarkets.

Total EBITDA was $58 million during the fourth quarter, a modest increase from the same period last year that was driven by solid revenue growth and increased income from joint ventures, largely offset by incremental public company stand-up costs of $6.3 million during the fourth quarter.

This resulted in fourth quarter margins of 7.7%, down 150 basis points from last year.

As for our full year 2024 results, net revenue was $2.85 billion on par with last year.

E&M revenues softened 5%, while T&D revenues rose 14%. The E&M segment saw increased revenue growth in the back half of the year, particularly in the data centre submarket.

The T&D segment continued its momentum throughout the year. The T&D utility and market was led by the transmission, distribution, and substation submarkets. The T&D transportation and market saw increases in traffic signalization and street lighting submarket.

Total EBITDA was $232 million in the 2024 fiscal year, up from $223 million last year. The increase in EBITDA was driven by increased income from joint ventures and solid project execution, partially offset by higher selling general administrative expenses.

EBITDA was also negatively impacted by $6.3 million of public company cost.

This all resulted in an even margin of 8.1%, up 30 basis points from last fiscal year.

At December 30th first, total backlog was $2.8 billion in line with the third quarter and up 38% from backlog of $2 billion at the end of last year.

Our backlog growth reflects strong momentum in our E&M business combined with the impact of project timing as we have seen some E&M projects get pushed out of it.

As a reminder, our backlog burn can move around from quarter-to-quarter based on the type and size of projects. Additionally, a portion of our revenues, including our M&A work, do not go through backlog.

Given the current mix of our backlog, which includes some larger multi-year projects, our backlog conversion may be extended relative to our historical pattern over the coming quarters.

Now turning towards segment results, let's first look at E&M, where our fourth quarter revenue increased nearly 21% to about $550 million.

The increase was driven by higher workloads in our commercial, institutional, and service in other end markets, particularly in the data centre submarket, partially offset by decreased workloads in the industrial and renewables and markets.

Our E&M EBITDA was $42.7 million in the fourth quarter, up from $36.4 million in the fourth quarter last year, which is an increase of 17%.

This was the result of strong revenue growth and increased income from joint ventures, partially offset by increased selling general at administrative expenses and higher standalone insurance costs.

As a result, our E&M EBITDA the margin was 7.8%, down 20 basis points from last year.

Our fourth quarter T&D revenue was $213.3 million up from $185.1 million last year, or an increase of 15%, driven by growth in our storm, underground, and substation submarkets within the utility and market, partially offset by timing of work in our distribution business.

We also benefited from growth in our transportation and market due to higher workloads and our traffic signalization and street lighting services.

T&D EBITDA was $30.6 million during the fourth quarter of 2024, up from $27 million last year.

Our T&D EBITDA margin was 14.3% during the fourth quarter, down 30 basis points from last year, primarily as a result of additional stand-up insurance costs.

Now let's turn to our balance sheet liquidity, and free cash flow.

As a reminder, in October 2024, we entered into a senior secured credit agreement with our bank group consisting of a $300 million term loan and a $225 million revolving credit facility. We drew down $40 million under the credit facility as of October 31 to fund projected working capital needs which we fully repaid one month later in November of 2024.

As of December 31, we had $70 million of unrestricted cash, $300 million of gross debt, and $209 million available under the revolving credit facility, Net leverage of credit.

Net leverage, therefore, was approximately 1.0 times.

We generated a free cash flow of $129 million during 2024, down from $152 million in 2023. Our full year CapEx was $48.3 million or approximately 1.7% of revenue versus CapEx of $35 million in 2023, or approximately 1.3% of revenue.

The increase in CapEx during 2024, and the resulting decline in free cash flow reflects our strategy to increase investment in growth to support our organic growth strategy.

Wrapping up with guidance, as Jeff said, we are providing 2025 guidance that calls for revenues in the range of $3 billion to $3.1 billion EBITDA in the range of $210 million to $225 million with $65 million to $70 million invested in capital expenditures.

When looking at our revenue guidance, there are a couple of factors I'd like to highlight.

First, as we have discussed, we are seeing a slightly longer backlog conversion cycle given that we are often being brought into projects earlier and we are winning larger projects.

We expect this will continue, which we view as a positive because it gives us increased visibility and is reflected in our guidance.

Additionally, project timing is always difficult to predict because it often shifts, and we have continued to take a cautious approach in our modelling of project timing.

As we relate for EBTDA to guidance, we continue to forecast dis-synergy cost of $28 million on a full year basis.

As Jeff highlighted, our 2024 results benefited from strong project execution with positive project efficiencies on several jobs. While we of course strive for upside execution benefits every year, our 2025 guidance assumes more normal levels of project execution.

Overall, we are very pleased by our fouth quarter and full year 2024 financial results. We continue to benefit from favorable market trends. We're executing at a high level, and our prudent financial management has put us in a strong financial position to execute on our strategic growth plan and remain on track to deliver on our long-term financial targets.

That completes our prepared remarks, operator. We are now ready for a question and answer portion of our calls.

Thank you, ladies and gentlemen. We will now begin the question and answer session.

(Operator Instructions)

Your first question comes from the line of Brent Thielman with D.A. Davidson Companies. Please go ahead.

Good morning Jeff, Max, I guess just, morning, just my question would be, maybe digging a little more into, how you approach the revenue guidance for 2025.

Are there areas of the business that you won't typically embed into that forecast and then I guess just trying to get a sense, Max, you talked about, longer kind of backlog conversion and in the past.

Are there any figures you can provide around that just in terms of your mix of larger, longer duration projects today maybe versus a few years ago,

thank you.

I'll start with the answer and then turn it over to Matt's traditional comments

As we built our company up and trained our people and cross trained our people, we've been able to build large complex projects. We've got more projects that are large and so with those large projects that we get involved with the owner and the general contractor early on our E&M side, we are able to plan, procure materials.

And because those jobs are so complex, they are taking longer to build because they're big and so. We like that area of and markets, especially in the data centers or hospitality or even industrial, and we'll continue to be able to look where our resources match the needs of our customers and build upon our success with large complex projects with a very qualified workforce.

In terms of, what the numbers are, I don't think we're going to give any numbers today and what that looks like from a burn percentage, but it can be, upwards of 10 points different from what it what it has been in the past.

So, I just think, as these jobs are big and a lot of them are getting started now, they just take longer to get completed so, I think that's that's as much as we can comment on the burn.

Got it. Okay, I'll get back in. Thanks guys.

Thanks. Brent

Your next question comes from the line of Brian Brophy with [evil]. Please go ahead.

Good morning everybody. Curious the latest you're seeing from a project pipeline perspective here and how you're thinking about backlog trends, given what you're seeing on the pipeline side.

We still see strong demand for our services in the commercial area which includes data centres, which is the largest part of our backlog, also in hospitality, which is commercial market, steady growth there and we're looking at similar workloads in 2025 as we saw in 2024.

You take a look at our industrial, market and also our institutional markets we're seeing some more water projects we're seeing manufacturing of battery plants and that complements our T&D work which of course high demand for transmission and distribution in substation where things that we do very well.

So, power, gas communications and also undergrounding of utilities is. Is a strong part of our business. It lines up with our capabilities and based upon what we're hearing from our customers and what we're reading as far as market trends, we're very much aligned for doing that work and growing our business.

That that's helpful. And then I guess on the backlog, obviously there was a little bit of slowdown sequentially, new awards slowed as well.

Any comments on some of the drivers here and is this a reflection of any sort of changing demand environment at this point?

And I think when you see if you're talking about the third quarter backlog versus fourth quarter, that's really timing. We've got some of those projects secured in the third quarter. It's always better to get those commitments earlier than later.

So, I think it's mostly timing and if you look at year-over-year. Year from the end of last year to the prior year it's up 38% so we do see momentum and demand for our services as far as mix it's fairly consistent with what we had over prior recent periods.

And then One, I guess on corporate expenses, they were a little bit higher than we were expecting this quarter, the fourth quarter, even including the $6 million of this dis-synergies that you touched on.

Is there anything that's more of one time in there, and I guess how should we think about corporate expenses going forward?

So, nothing really one time. I mean we do have some timing of things like our audit fee for the year had to all be paid in the last, two months of the year, but nothing really one time, I mean, we're just kind of building our corporate teams here as we're standing ourselves up.

So I mean we still feel really good about that $28 million number for the full year, and other than the (inaudible) [Odysseyee] nothing really want just some timing maybe of some, contracts we sign as a new public company but I think all that would be included in our our $28 million dollar number for for a full year basis so.

Okay, that's helpful.

just to say you can't really take the 6.3 divided by 2 and extrapolate that.

And then I guess just just one more for me excluding the dis-synergies, it appears that the midpoint of the EBITDA margin guide is down about 30 basis points from 2024, I guess. Can you talk about what is driving that?

I mean we took a very close look at backlog timing of our backlog, and also taking a look at 2025 versus 2024. So we are looking to continue to build upon our year that we had in 2024 and took a very thorough look at what those numbers look like for us and landed where we did on our guidance.

I think we, Jeff and I both touched on it during our portions of the script, right. I think we had really good execution in 2024 in the fourth quarter as well, and I think, we're assuming more normal kind of execution based on where we're holding our backlog on the 25th fiscal year, but your numbers are correct.

Okay, appreciate it, thank you. I'll pass it on.

Your next question comes from the line of Ian Zafino with Oppenheimer. Please go ahead.

As far as the backlog taking longer, are we still kind of at the 75% delivered over the next 12 months and what would be your assumptions for kind of the non-backlog business so like the book and burn, the MSAs, year-over-year.

Thanks.

And so as I mentioned earlier, the average project size is getting slightly larger, and our ability to handle those projects and get on board early with our customers is really adjusting or changing slightly.

The the backlog burnt as those projects are larger, more complex, and longer, that has changed in the mix of all of our work, which is fairly diversified as far as the MSA work, the non-backlog work still very strong for our business.

We've got dozens of MSAs, and you take a look at our the work that we do for our utility customers and the forecast and our ability to be able to continue building projects for.

Especially with the customers that we have relationships with for 20 or 30 years, so we'll continue to be able to leverage our performance through our execution and and strengthen those relationships and build that backlog and continue to diversify our business.

I guess the way I'm looking at it is if I'm using like the 75%, and adding a billion or so for, the non-backlog it just I'm getting higher than than where you guys are, but, regardless, maybe we shift the M&A, what are you thinking on the M&A side, how large, what do you need, is it, people, is it trucks, is it tools, what is it?

And then. As you invest on the [prefab] side, when do we expect to see sort of the benefits of the investment in the prefabs.

Okay, great question. I'll start and I have Max add to my comments. So on the M&A side we're we're really excited about that. We've got the financial capabilities to have a discipline M&A approach. We're going to look for companies.

We are looking for companies that have high integrity and get their work not price based and really based upon overall value and relationships. Looking for companies that have strong leadership and a very strong culture of safety, are also looking for the geographic expansion in both our T&D and E&M segments.

So, M&A is something that we're very excited about and we've got a strategy and approach to that.

As far as prefab, we have expanded our prefab facilities and we are leveraging our prefab. Our customers care about what we do in prefabrication because it helps reduce congestion on the projects, that's good for us.

That's good for the other sub trades on the project. So we'll continue to grow our prefab capabilities and provide that capital support, and that is part of our plan in 2025 and beyond.

I think, is your question, part of your question there, and I mean the reality is we're at one time net leverage today and I think we've been pretty public about where our leverage targets are. So a turn of EBITDA still gets us keeps us within those long term targets, right?

Then you look at the cash flow that we we spit out this year over $100 million of free cash flow, you can kind of see, the magnitude of what we could accomplish and still be within our long-term goals.

From the CapEx side, again, we want to continue to invest in as we grow our fleet and vehicles, bucket trucks, dirt dirt diggers, right? So I mean all these things help us be more efficient and effective for the long-term.

And from a prefab perspective, when is that going to really show on the results, I mean this is a multi-year thing, right? The goal is to continue to build more and more prefab facilities closer to some of these larger projects and as those get completed and we're very efficient and execute well on those projects with those prefab facilities, they start to show up in the results.

So it's more of a multi-year opportunity for us, and then it should continue to expand as we continue to add those.

Okay, thank you very much.

Your next question comes from the line of Chris Senyek with Wolfe Research. Please go ahead.

Quick question, Max, on the dis-synergy cost of $28 million and kind of using that as a run rate, is that something that we should just expect to continue as we look at modelling some of the outer years, or do you expect there to be some type of synergies that develop over time where that number might fall or or and maybe even if there's duplicate cost right now with TSA's going on at the same time that you're trying to build stuff out yourself, how should we be thinking about that?

I think what we're really looking at is that's more of kind of our stand up cost that that stays around. Again, I don't know what happens with insurance markets as we've talked about sand-alone insurance is probably the biggest component of all that.

So I'm not sure what happens with insurance costs. Hopefully we continue to do better, get ourselves as a player in the market, and hope to do better on that, but I, given where we're at in the world and what's transpired and even in the last several months, I don't know if insurance is going to be going down anytime in the future.

In terms of the rest of the cost, the reality is we're kind of building this corporate team, right? And until we can, make sure we have the the mass and the right people in the right places, I don't think we're looking at cutting some of those costs as we go forward.

You specifically talked about the service agreements, TSA, right? I mean, I think we actually have a pretty well planned whereas the TSA tails off we're adding people full time so I don't think there's a big opportunity for savings there.

I mean, yes, the reality is we want to do the most with the available labour and the available people. But the reality is, we want to make sure we're servicing and supporting and growing, and as we grow and become a larger and larger company, you might have to add another incremental corporate position three four years down the road, right?

So I would model it as that is kind of in there as a $28 million of run rate and then as we get bigger that should become a smaller and smaller percentage of our revenue.

Okay great thank you.

Thanks Chris.

Your next question comes from the line of Chris Ellinghaus with Siebert Williams Shank. Please go ahead.

Hey guys, how are you?

Jeff You did a good job of sort of walking through the new administration. I wanted to get some thoughts. I would agree it seems like if anything the data centre CapEx is really just balloons.

But on the downside, what are your thoughts of areas where you might have some concerns like maybe renewables or battery storage or something along those lines? Have you got any thoughts there?

We're paying very close attention to that and especially with our customers listening to what their plans are. I think it's early since the election and to see where those will play out. Our renewables is a small part of our business, but it's actually this past year.

So, in that diversification strategy that we have for our business, we're going to be able to pivot and capture markets that are increasing and also redeploy our cross train people from markets that have maybe cooled off.

So we have some concern over tariffs, but we're watching that closely, it looks a little bit like what COVID brought to us, and we mitigated our risk and our customers' risk by being very close to our suppliers and spending more time evaluating procurement, providing alternative products and solutions to be able to You stay on schedule.

We actually in COVID year 2020, we had a record year, so we'll continue to be anticipatory, mitigate the risks, and communicate with our customers on the T&D and E&M side to avoid any sort of impacts that we have for our business and to our customers' business.

You touched on this a little bit, but I'm kind of curious on a couple levels.

We just had the big wildfire disaster in California.

Are you seeing geographically broader undergrounding, I don't know what the right word is, momentum from some of your T&D customers and also, some of the data centres are fairly remote.

Are you seeing undergrounding becoming a feature of the data centre design for their interconnections?

Now, let's talk about the California wildfires first, and we were honoured to be able to answer the call from our utility customers and provide restoration and repair of services.

So we've got businesses in Southern California we do primarily underground work and we deployed many crews over to help those in need.

So, undergrounding has been a big part of our business on the T&D side. We've been doing it for decades, and we do see a continued trend for more undergrounding work from our customers.

As far as the data centre side haven't really seen much on the undergrounding changes from what is is designed as far as getting services over to primarily electric to our customers, so I don't don't know about any changes on the data centre side, but certainly with the risk there, I believe our customers are looking at that as an option.

There's a cost element to it, Chris, as and I think, we'll be involved with providing those constructability reviews as we get on board early with these projects and look at best methods and best opportunities to be able to provide the customers what they need.

Lastly, you sort of touched on this very briefly about storm restoration work in the fourth quarter. Obviously there was some California work recently, but it was a pretty stormy fourth quarter.

Can you give us any kind of Color on what storm restoration work in the 4th quarter look like year-over-year or was it a particularly high margin quarter for you?

Yeah, typically we don't give the detail on our storm work again, we're available to go do the recovery work and storm work.

So California I mentioned earlier, but also some of the other related weather work, it's important for our business, it's more important that we're able to help those in need to be able to restore and repair and get them back on their feet, so. Don't go to that level of detail.

We do that work and we don't necessarily plan for that because we can't predict the the nature and the weather. So, the storm work is something that we're we're honored to do to help and answer the call to our utility customers.

I get it. It's difficult to sort of plan for storm and restoration work in general, but given the outlook for wildfire proclivity, let's say, and storm activity, sort of expecting to gain momentum over time, is that an area where you'd like to have more resources available?

We definitely want to be able to respond to our customers and to be able to help out and get those services back in place so we've got the capital necessary to be able to build up our equipment and our people.

So yes, we want to be able to help those in need and we look for the readiness for our crews and our equipment to be able to.

Do any of that work going forward. The most recent storm work or storm that we had in in the east, we didn't have a lot of storm work associated with that, just typical type of weather conditions, type of snow drier snow versus that could tear tear down lines and poles.

So we've got a good plan to be able to deploy quickly. And when you think about margin too, I mean the margin, we're taking crews away from our our fixed price at MSA work so there could be some trade off there.

So I just want to emphasize that. We're pleased to go do the work It takes us off of our plan of doing our normal work and then we get back to our regular work, we're back to our our core of what we do.

Gotcha.

Thanks so much. I appreciate the details, Jeff.

Thank you, Chris.

Your next question comes from the line of Brent Thielman with the Davidson Company. Please go ahead.

Hey Jeff, I mean if I look at the business over the last number of years, you've had a positive book to burn or at least one times or greater.

If you think about everything that's happening in your end markets and the pipeline over the course of 2025, is there any reason to think, your book to bill would be less than one time so your bookings can't grow this year again with with all the activity in the space?

Yeah, I think there's a lot of optimism on our side as far as the work that we have in our backlog, our ability to be able to execute that work, and also the non-backlog work.

So a lot of excitement in the economy and I think, we see some enthusiasm and optimism on our side and look forward to be able to beat those expectations.

Yeah, and maybe just one more from a seasonality perspective is there something different to the cadence and revenue you're expecting this year maybe versus just looking at it in the past because you talked about these large projects and the timing of those.

So, I don't know if you know this is a more back and loaded than usual type of year, but if you could just comment on that, that'd be great.

Yeah, with most of our work in our E&M segment, we are not as affected by weather as we could be in our in our T&D and we work year round with both segments and have had some impact with weather, but usually not that impacted overall by weather, especially when those projects are planned in those particular regions in accordance with weather patterns.

As there are no further questions at this time, that concludes today's Q&A session. I would now like to turn the call over to Jeff Dean for closing remarks.

Thank you, operator, and thank you all again for joining us today.

We are very excited about the opportunities ahead for Everus. We are scaled for success and we're built for growth, and we are confident that we are well positioned to create long-term value as a stand-alone public company.

We've enjoyed the opportunity to meet with many of you over the last few months since our span, and we look forward to continuing the conversation in the coming quarters.

Thank you for your time and interest in Everus, and this concludes today's call.

That (inaudible) [to] today's meeting.

Thank you for your participation. You may now disconnect.