MYR Group Inc (MYRG) 2023 Q3 法說會逐字稿

Good morning, everyone, and welcome to the MYR Group Third Quarter 2023 Earnings Results Conference Call. (Operator Instructions) Today's conference is being recorded.

大家早安，歡迎參加 MYR 集團 2023 年第三季獲利結果電話會議。 （操作員指示）今天的會議正在錄音。

At this time, for opening remarks and introductions, I would like to turn the conference over to David Gutierrez of Dresner Corporate Services. Please go ahead, David.

現在，我想將會議交給 Dresner Corporate Services 的 David Gutierrez 進行開場演講和介紹。請繼續，大衛。

Thank you, and good morning, everyone. I'd like to welcome you to the MYR Group conference call to discuss the company's third quarter results for 2023, which were reported yesterday.

謝謝大家，大家早安。歡迎您參加 MYR 集團電話會議，討論該公司昨天公佈的 2023 年第三季業績。

Joining us on today's call are Rick Swartz, President and Chief Executive Officer; Kelly Huntington, Senior Vice President and Chief Financial Officer; Tod Cooper, Senior Vice President and Chief Operating Officer of MYR Group's Transmission & Distribution segment; and Don Egan, Senior Vice President and Chief Operating Officer of MYR Group's Commercial & Industrial segment.

加入我們今天電話會議的還有總裁兼執行長 Rick Swartz；凱莉‧亨廷頓，資深副總裁兼財務長； Tod Cooper，MYR 集團輸配電部門資深副總裁兼營運長；以及 MYR 集團商業和工業部門高級副總裁兼營運長 Don Egan。

If you did not receive yesterday's press release, please contact Dresner Corporate Services at (312) 726-3600, and we will send you a copy, or go to the MYR Group website, where a copy is available under the Investor Relations tab. Also, a webcast replay of today's call will be available for 7 days on the Investors page of the MYR Group website at myrgroup.com.

如果您沒有收到昨天的新聞稿，請致電(312) 726-3600 聯絡Dresner Corporate Services，我們將向您發送一份副本，或造訪MYR Group 網站，在「投資者關係」標籤下可以找到副本。此外，今天電話會議的網路廣播重播將在 MYR 集團網站 myrgroup.com 的投資者頁面上提供，為期 7 天。

Before we begin, I want to remind you that this discussion may contain forward-looking statements. Any such statements are based upon information available to MYR Group's management as of this date, and MYR Group assumes no obligation to update any such forward-looking statements.

在我們開始之前，我想提醒您，本次討論可能包含前瞻性陳述。任何此類聲明均基於 MYR 集團管理層截至目前所掌握的信息，MYR 集團不承擔更新任何此類前瞻性聲明的義務。

These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance.

這些前瞻性陳述涉及風險和不確定性，可能導致實際結果與前瞻性陳述有重大差異。因此，這些陳述並不能保證未來的表現。

These risks and uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31, 2022, the company's quarterly report on Form 10-Q for the third quarter of 2023, and in yesterday's press release.

這些風險和不確定性在公司截至2022年12月31日的10-K表格年度報告、該公司2023年第三季度10-Q表格季度報告以及昨天的新聞稿中進行了討論。

Certain non-GAAP financial information will be discussed on the call today. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release.

今天的電話會議將討論某些非公認會計準則財務資訊。昨天的新聞稿中列出了這些非公認會計準則衡量標準與最具可比性的公認會計準則衡量標準的調節表。

With that said, let me turn the call over to Rick Swartz.

話雖如此，讓我把電話轉給里克·斯沃茨。

Thanks, David. Good morning, everyone. Welcome to our third quarter 2023 conference call to discuss financial and operational results.

謝謝，大衛。大家，早安。歡迎參加我們的 2023 年第三季電話會議，討論財務和營運績效。

I will begin by providing a summary of the third quarter results. And then we'll turn the call over to Kelly Huntington, our Chief Financial Officer, for a more detailed financial review. Following Kelly's overview, Tod Cooper and Don Egan, Chief Operating Officers of our T&D and C&I segments, will provide a summary of our segment's performance and discuss some of MYR Group's opportunities going forward. I will then conclude today's call with some closing remarks and open the call up for your questions.

我將首先概述第三季的業績。然後我們會將電話轉給我們的財務長凱利亨廷頓，以進行更詳細的財務審查。在 Kelly 的概述之後，我們 T&D 和 C&I 部門的首席營運長 Tod Cooper 和 Don Egan 將總結我們部門的業績，並討論 MYR Group 的一些未來機會。然後，我將以一些結束語結束今天的電話會議，並開始提問。

The strength of our long-term customer relationships and a strong market position resulted in a steady third quarter performance. Our teams continue to execute projects with operational excellence and expand existing client relationships through master service and alliance agreements across our districts.

我們的長期客戶關係和強大的市場地位帶來了穩定的第三季業績。我們的團隊繼續以卓越的營運方式執行項目，並透過我們各地區的主服務和聯盟協議擴大現有的客戶關係。

Bidding activity remains healthy as we strategically pursue and capture new opportunities that position us for potential future growth. A growing demand for electrification, a continued emphasis on the clean energy sources and a focus on grid modernization and hardening continue to be strong market drivers and could present opportunities for consistent success across our business.

隨著我們策略性地尋求和抓住新的機會，為我們未來的潛在成長奠定基礎，投標活動保持健康。對電氣化的需求不斷增長、對清潔能源的持續重視以及對電網現代化和強化的關注仍然是強大的市場驅動力，並可能為我們整個業務的持續成功提供機會。

The 2023 North American Electric Transmission Forecast released in September by The C Three Group indicates a strong potential for healthy growth moving forward as electricity demand continues to increase across the country. The report projects $172 billion of spending on new transmission or upgrade over the next 5 years from the top 20 investor-owned utilities.

C Three Group 於 9 月發布的 2023 年北美電力傳輸預測表明，隨著全國電力需求持續增長，未來健康成長的強勁潛力。該報告預計，未來 5 年內，前 20 名投資者擁有的公用事業公司將在新輸電或升級改造上支出 1,720 億美元。

Carbon reduction goals and clean energy targets are other potential spend drivers in the T&D market. We continue to track these major transmission expansion projects and clean energy initiatives that may lead to future work opportunities and growth while remaining committed to executing existing projects for our valued customers.

碳減排目標和清潔能源目標是輸配電市場的其他潛在支出驅動因素。我們將繼續追蹤這些可能帶來未來工作機會和成長的主要輸電擴建項目和清潔能源計劃，同時繼續致力於為我們尊貴的客戶執行現有項目。

In our C&I segment, industrial spend projections are positive in our key markets such as data centers, health care, transportation, and manufacturing even as the overall commercial market are forecasted to slow down into 2024. By expanding existing relationships with our preferred clients and strategically bidding and expanding work in our chosen markets, we continue to experience a steady backlog of work and could see potential growth moving forward.

在我們的 C&I 領域，儘管整個商業市場預計到 2024 年將放緩，但資料中心、醫療保健、運輸和製造業等關鍵市場的工業支出預測仍然樂觀。隨著我們在選定市場的投標和擴大工作，我們的工作量繼續穩定積壓，並且可以看到未來的潛在成長。

The commitment and solution-oriented mindset of our people allows us to remain at the forefront of the industry, and provide our clients with excellent service and customer experience, backed by safe and reliable execution. Our steady third quarter performance is a result of their tireless efforts and I would like to thank them for the fostering of strong culture.

我們員工的承諾和以解決方案為導向的心態使我們能夠保持在行業的前沿，並以安全可靠的執行為後盾，為客戶提供卓越的服務和客戶體驗。我們穩定的第三季業績是他們不懈努力的結果，我要感謝他們培養的強大文化。

Now, Kelly will provide details on our third quarter 2023 financial results.

現在，凱利將提供有關我們 2023 年第三季財務業績的詳細資訊。

Thank you, Rick, and good morning, everyone.

謝謝你，瑞克，大家早安。

Our third quarter 2023 revenues were $939 million, a record high, which represents an increase of $140 million, or 17% compared to the same period last year.

我們2023年第三季的營收為9.39億美元，創歷史新高，與去年同期相比增加了1.4億美元，即17%。

Our third quarter T&D revenues were $549 million, a record high for our T&D segment and an increase of 21% compared to the same period last year. The breakdown of T&D revenues was $358 million for transmission, and $191 million for distribution, both records.

我們第三季的輸配電收入為 5.49 億美元，創下輸配電業務的歷史新高，與去年同期相比成長 21%。 T&D 收入細分為傳輸收入 3.58 億美元，分配收入 1.91 億美元，均創歷史新高。

T&D segment revenues increased due to higher revenue on transmission projects, primarily related to higher revenue on clean energy projects. Work performed under master service agreements continue to represent approximately 50% of our T&D revenues.

由於輸電項目收入增加，輸配電部門收入增加，這主要與清潔能源項目收入增加有關。根據主服務協議執行的工作繼續占我們 T&D 收入的約 50%。

C&I revenues were $391 million, a record high for our C&I segment, and an increase of 12% compared to the same period last year. C&I revenues increased primarily due to higher revenue related to clean energy projects in certain geographical areas.

C&I 營收為 3.91 億美元，創 C&I 業務新高，較去年同期成長 12%。工商業收入的成長主要是由於某些地區與清潔能源項目相關的收入增​​加。

Our gross margin was 9.8% for the third quarter of 2023, compared to 10.8% for the same period last year. The decrease in gross margin was primarily due to labor and project inefficiencies. Some of which were caused by supply chain disruptions and inclement weather. Gross margin was also negatively impacted by rising costs associated with inflation. These margin decreases were partially offset by favorable change orders and better-than-anticipated productivity on certain projects.

2023 年第三季我們的毛利率為 9.8%，去年同期為 10.8%。毛利率下降主要是因為勞動力和專案效率低下。其中一些是由供應鏈中斷和惡劣天氣造成的。毛利率也受到通膨相關成本上升的負面影響。這些利潤率的下降被有利的變更單和某些項目好於預期的生產力所部分抵消。

T&D operating income margin was 6.6% for the third quarter of 2023, compared to 7.6% for the same period last year. The decrease was primarily due to labor and project inefficiencies, mainly related to clean energy projects as well as inclement weather. These decreases were partially offset by better-than-anticipated productivity.

2023 年第三季 T&D 營業利益率為 6.6%，而去年同期為 7.6%。下降的主要原因是勞動力和專案效率低下，主要與清潔能源專案以及惡劣天氣有關。這些下降被好於預期的生產力部分抵消。

C&I operating margin was 3.6% for the third quarter of 2023, compared to 3.1% for the same period last year. The increase was primarily due to favorable change orders and better-than-anticipated productivity on certain projects. These increases were partially offset by labor and project inefficiencies, all of which were caused by supply chain disruptions and inclement weather. C&I operating income margin was also negatively impacted by rising costs associated with inflation.

2023 年第三季工商業營運利潤率為 3.6%，去年同期為 3.1%。這一增長主要是由於有利的變更訂單以及某些項目的生產力好於預期。這些成長部分被勞動力和專案效率低下所抵消，所有這些都是由供應鏈中斷和惡劣天氣造成的。工商業營業利潤率也受到通膨相關成本上升的負面影響。

Third quarter 2023 SG&A were $60 million, an increase of $1 million compared to the same period last year. The increase was primarily due to higher employee incentive compensation costs and higher employee-related expenses to support the growth in our operations.

2023 年第三季 SG&A 為 6 千萬美元，比去年同期增加 100 萬美元。這一增長主要是由於員工激勵薪酬成本增加以及支持我們業務成長的員工相關費用增加。

Third quarter 2023 interest expense was $1 million, an increase of $200,000 compared to the same period last year. The increase was primarily due to higher interest rates partially offset by lower average debt balances during the third quarter of 2023 as compared to the same period last year.

2023年第三季利息支出為100萬美元，較去年同期增加20萬美元。這一增長主要是由於 2023 年第三季平均債務餘額較去年同期較低，部分抵消了較高的利率。

Third quarter 2023 net income was $22 million, compared to $18 million for the same period last year. Net income per diluted share of $1.28 increased 17% compared to $1.09 for the same period last year.

2023 年第三季淨利為 2,200 萬美元，去年同期為 1,800 萬美元。攤薄後每股淨利潤為 1.28 美元，較去年同期的 1.09 美元增長 17%。

Third quarter 2023 EBITDA was $47 million compared to $40 million for the same period last year. Total backlog as of September 30, 2023, was $2.62 billion, 6% higher than a year ago. Total backlog as of September 30, 2023, consisted of $1.14 billion for our T&D segment, and $1.48 billion for our C&I segment.

2023 年第三季 EBITDA 為 4,700 萬美元，去年同期為 4,000 萬美元。截至 2023 年 9 月 30 日，積壓訂單總額為 26.2 億美元，比一年前增加 6%。截至 2023 年 9 月 30 日，積壓訂單總額包括 T&D 部門的 11.4 億美元和 C&I 部門的 14.8 億美元。

Third quarter 2023 operating cash flow was $13 million compared to operating cash flow of $14 million for the same period last year. Third quarter 2023 free cash flow was negative $10 million compared to free cash flow of negative $4 million for the same period last year, with the decrease primarily due to higher capital expenditures to support our continued growth.

2023 年第三季營運現金流為 1,300 萬美元，去年同期營運現金流為 1,400 萬美元。 2023 年第三季自由現金流為負 1,000 萬美元，而去年同期自由現金流為負 400 萬美元，減少的主要原因是支持我們持續成長的資本支出增加。

Moving to liquidity and our balance sheet. We had $292 million of working capital, $62 million of funded debt and $432 million in borrowing availability under our credit facility as of September 30, 2023.

轉向流動性和我們的資產負債表。截至 2023 年 9 月 30 日，我們的信貸安排下擁有 2.92 億美元的營運資金、6,200 萬美元的融資債務和 4.32 億美元的可用借款。

We have continued to maintain a strong funded debt-to-EBITDA leverage ratio of 0.33x as of September 30, 2023. We believe that our credit facility, strong balance sheet and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions and opportunistically repurchase shares.

截至2023 年9 月30 日，我們繼續保持0.33 倍的強勁融資債務與EBITDA 槓桿率。我們相信，我們的信貸額度、強勁的資產負債表和未來的營運現金流將使我們能夠滿足我們的營運資金需求，支持我們業務的有機成長，尋求收購並趁機回購股票。

I'll now turn the call over to Tod Cooper, who will provide an overview of our Transmission & Distribution segment.

我現在將把電話轉給托德·庫珀 (Tod Cooper)，他將概述我們的輸配電部門。

Thanks, Kelly, and good morning, everyone.

謝謝，凱利，大家早安。

Our T&D segment steady financial performance in the third quarter demonstrates the strength of our long-term customer relationships and the reliability of our sound business principles.

我們的輸配電部門第三季穩定的財務表現證明了我們長期客戶關係的實力以及我們健全業務原則的可靠性。

Our districts continue to maintain and expand strong client relationships, while a healthy bid environment and strategic wins throughout our markets have produced a very nice backlog of work.

我們的地區繼續維持和擴大強大的客戶關係，而健康的投標環境和整個市場的策略性勝利產生了非常好的積壓工作。

As Rick mentioned, we're seeing significant investments in electrical infrastructure throughout North America, including many transmission upgrades, substation expansions and distribution partner programs.

正如里克所提到的，我們看到整個北美地區對電力基礎設施進行了大量投資，包括許多輸電升級、變電站擴建和分銷合作夥伴計劃。

According to the 2023 North American Electric Transmission Forecast recently released by The C Three Group, the total electric transmission capital spend in 2022 was over $43 billion, and is forecasted to grow as high as $67 billion in 2027. This investment is expected across the country with Texas and California, 2 focus areas for MYR Group having the highest planned transmission capital expenditures.

根據C Three Group最近發布的2023年北美電力傳輸預測，2022年電力傳輸資本支出總額超過430億美元，預計2027年將增長高達670億美元。這項投資預計將在全國範圍內進行德克薩斯州和加州是MYR 集團計劃輸電資本支出最高的兩個重點地區。

The report also indicated that significant load growth driven by hyperscale data centers is increasing the need for additional substation infrastructure and transmission interconnections around North America.

該報告還指出，超大規模資料中心推動的負載顯著增長，增加了北美各地對額外變電站基礎設施和傳輸互連的需求。

Overall, The C Three report stated that investor-owned utilities represent roughly 60% of the total U.S. electric transmission market, and it is considered the most stable and predictable of all sectors.

總體而言，C Three 報告指出，投資者擁有的公用事業公司約占美國輸電市場總量的 60%，並被認為是所有行業中最穩定、最可預測的行業。

The need for new and upgraded electrical infrastructure has the potential to create future opportunities for our business.

對新的和升級的電力基礎設施的需求有可能為我們的業務創造未來的機會。

Our traditional T&D operations continued their strong execution of work throughout our operating territories. Our Eastern region was awarded multiple transmission line projects as well as substation expansions and upgrades to the third quarter. Considering the L.E. Myers Company extended several master service agreements in multiple districts and continues to bid others, while E.S. Boulos and Harlan Electric executed 3 around that setting.

我們傳統的輸配電業務繼續在我們的營運區域內強有力地執行工作。截至第三季度，我們的東部地區獲得了多個輸電線路項目以及變電站擴建和升級項目。考慮到 L.E.邁爾斯公司 (Myers Company) 在多個地區延長了多項主服務協議，並繼續競標其他協議，而 E.S. Boulos 和 Harlan Electric 圍繞著該設置執行了 3 個項目。

In our Western region, we continue to expand work with trusted long-term clients, including a fast-track storm damage transmission line repair project in Texas by Great Southwestern Construction.

在西部地區，我們繼續擴大與值得信賴的長期客戶的合作，包括大西南建築公司在德克薩斯州實施的快速風暴破壞輸電線路修復項目。

Rising labor costs and project inefficiencies, some weather related and most notably in the solar market persisted across the segment. These along with supply chain disruptions impacted financial results for Q3. While we see rising labor costs stabilizing, our strategic insight survey appliance conducted this year shed some light on supply chain constraints our clients face. To help mitigate supply chain constraints, our clients are expanding their roster of suppliers and working diligently with them to form better working relationships.

勞動成本上升、專案效率低、一些與天氣相關的問題（尤其是太陽能市場）在整個細分市場中持續存在。這些以及供應鏈中斷影響了第三季的財務表現。雖然我們看到不斷上升的勞動成本趨於穩定，但我們今年進行的策略洞察調查工具揭示了我們的客戶面臨的供應鏈限制。為了幫助緩解供應鏈限制，我們的客戶正在擴大供應商名單，並與他們努力合作，以建立更好的工作關係。

MYR Group also continues to work in close collaboration with our robust network of vendors and our customers to help mitigate supply chain challenges and advance projects to successful completion.

MYR 集團也繼續與我們強大的供應商網路和客戶密切合作，幫助緩解供應鏈挑戰並推動專案成功完成。

In summary, our T&D segment remains committed to partnering with our valued customers, safely provide excellent project delivery, while strengthening and expanding those relationships for mutually beneficial outcomes.

總而言之，我們的輸配電部門仍然致力於與我們尊貴的客戶合作，安全地提供卓越的專案交付，同時加強和擴大這些關係，以實現互惠互利的成果。

And thank you to our talented employees for helping us reach our high-quality standards every day. We are excited about the outlook of the T&D industry, and look forward to playing a key role in helping to meet the future demand in North America.

感謝我們才華橫溢的員工每天幫助我們達到高品質標準。我們對輸配電產業的前景感到興奮，並期待在幫助滿足北美未來需求方面發揮關鍵作用。

I will now turn the call over to Don Egan, who will provide an overview of our Commercial & Industrial segment.

我現在將把電話轉給 Don Egan，他將概述我們的商業和工業部門。

Thanks, Tod, and good morning, everyone.

謝謝托德，大家早安。

The third quarter saw steady performance in the C&I segment as we continue to strengthen and leverage strong relationships with our valued customers, while professionally executing projects and strategically bidding opportunities in our chosen core markets.

第三季度，工商業領域表現穩定，我們繼續加強和利用與尊貴客戶的牢固關係，同時在我們選擇的核心市場專業執行專案和策略性競標機會。

As Rick mentioned earlier, while overall commercial spending is forecasted for a slight slowdown going into 2024, there are positive signs of growth in our chosen markets such as data centers, health care, transportation, and manufacturing.

正如 Rick 之前提到的，雖然預計到 2024 年整體商業支出將略有放緩，但我們選擇的資料中心、醫療保健、運輸和製造業等市場出現了積極的成長跡象。

The consensus construction forecast from the American Institute of Architecture released in July projects growth in industrial construction spending into 2024, particularly in public safety with a forecasted 5.3% increase, and health care at a projected 3% increase.

美國建築學會 7 月發布的共識建築預測預計，到 2024 年工業建築支出將成長，特別是公共安全領域預計將成長 5.3%，醫療保健領域預計將成長 3%。

Data centers remain an active and high-demand market due to shifts toward hybrid cloud environments and increasing use of artificial intelligence, and forecasts predict record growth in the market.

由於向混合雲環境的轉變和人工智慧使用的增加，資料中心仍然是一個活躍且需求旺盛的市場，並且預測該市場將出現創紀錄的增長。

According to a report from McKinsey & Company released earlier this year, demand for data center projects is forecasted to grow by 10% year-over-year, reaching 35 gigawatts by 2030, more than doubling current consumption.

麥肯錫公司今年稍早發布的報告顯示，資料中心專案的需求預計將年增10%，到2030年達到35吉瓦，是目前消耗量的兩倍多。

These encouraging forecasts could generate growth for our business, and we continue to leverage our expertise to place us in a leading position to win opportunities in these markets.

這些令人鼓舞的預測可以為我們的業務帶來成長，我們將繼續利用我們的專業知識使我們處於領先地位，以贏得這些市場的機會。

Our backlog of work remains steady in the C&I segment, thanks to strong long-term relationships with clients, and our subsidiaries continue to see healthy bidding activity in key markets across North America.

由於與客戶建立了牢固的長期關係，我們在工商業領域的積壓工作保持穩定，並且我們的子公司在北美主要市場繼續看到健康的投標活動。

Transportation projects remain underway in Colorado and Vancouver as well as data center build-outs and upgrades across our C&I business.

科羅拉多州和溫哥華的交通項目以及整個工商業業務的資料中心擴建和升級仍在進行中。

Sturgeon Electric continues to execute pharmaceutical projects in Colorado, while closely monitoring opportunities for additional battery storage, solar and electrical vehicle charging station projects.

斯特金電氣公司繼續在科羅拉多州執行製藥項目，同時密切關注額外電池儲存、太陽能和電動車充電站項目的機會。

CSI Electrical Contractors and Huen Electric continued to serve clients in the clean energy space, executing both solar and energy storage work, while also seeing solid bidding opportunities for additional work in those markets.

CSI Electrical Contractors 和 Huen Electric 繼續為清潔能源領域的客戶提供服務，執行太陽能和儲能工作，同時也看到了這些市場中額外工作的可靠投標機會。

Supply chain and material headwinds persist in the C&I segment. Although we have seen some improvements in the second half of '23, we continue to work closely with our vendors and clients to mitigate these challenges and best serve them with exceptional project delivery.

工商業領域的供應鏈和材料逆風依然存在。儘管我們在 23 年下半年看到了一些改進，但我們繼續與供應商和客戶密切合作，以緩解這些挑戰，並透過卓越的專案交付為他們提供最佳服務。

It's thanks to the tireless effort of our experienced and committed employees that we continue to overcome obstacles, maintain a healthy pipeline of work and remain a trusted and agile partner for our valued customers. I would like to thank all of our employees for their hard work and placing us in a position to succeed.

由於我們經驗豐富、忠誠的員工的不懈努力，我們不斷克服障礙，保持健康的工作流程，並繼續成為我們尊貴客戶值得信賴和靈活的合作夥伴。我要感謝我們所有員工的辛勤工作，他們使我們取得了成功。

Thanks, everyone, for your time today. I will now turn the call back to Rick, who will provide us with some closing comments.

謝謝大家今天抽出時間。現在我將把電話轉回給里克，他將為我們提供一些結束語。

Thank you for those updates, Kelly, Tod and Don.

感謝凱利、托德和唐的最新消息。

Our third quarter 2023 performance illustrates the strength of our core markets, our ability to maintain and expand long-term customer relationships, and our ongoing commitment to strong operating principles and sound business strategies.

我們 2023 年第三季的業績體現了我們核心市場的實力、我們維持和擴大長期客戶關係的能力，以及我們對強有力的營運原則和健全的業務策略的持續承諾。

We recognize the importance of adapting to market conditions and being an agile partner for our customers as we respond to industry changes. This is supported by our continued investment and development of our teams who enable us to maintain our status as an industry leader by the work they perform each day.

在應對產業變化時，我們認識到適應市場條件並成為客戶敏捷合作夥伴的重要性。這得益於我們對團隊的持續投資和發展，他們使我們能夠透過他們每天所做的工作來維持行業領導者的地位。

Thank you to every employee for your dedication and invaluable contributions to the organization. It does not go unnoticed.

感謝每一位員工的奉獻精神和對組織的寶貴貢獻。它不會被忽視。

And finally, I want to thank each of you for your continued support of MYR Group. We look forward to progressing our business strategies while emphasizing our client relationships and creating shareholder value.

最後，我要感謝大家對 MYR 集團的持續支持。我們期待著推進我們的業務策略，同時強調我們的客戶關係和創造股東價值。

Operator, we are now ready to open the call up for comments and questions.

接線員，我們現在準備好徵求意見和問題。

(Operator Instructions) Our first question comes from Justin Hauke of the Baird Company.

（操作員說明）我們的第一個問題來自貝爾德公司的 Justin Hauke。

Yes. I guess my first question here was you guys called out a 130 basis point impact to gross margin from the estimate revisions on your fixed price contracts. I guess, I was just hoping to get a little bit more detail on that. I mean, was that primarily weather-related as kind of a onetime thing for the quarter? And then also maybe the split between the segments, how that go through? I would assume it's mostly in T&D.

是的。我想我的第一個問題是你們指出固定價格合約的預估修訂對毛利率產生了 130 個基點的影響。我想，我只是希望能了解更多細節。我的意思是，這主要與天氣有關，是本季的一次性事件嗎？然後也可能是各部分之間的分裂，這是如何進行的？我認為主要是在 T&D 領域。

It was mostly in T&D and it was primarily on our solar side of the business, the clean energy side, where we had some weather impacts on projects. We had some, as Tod said in his script, some rising labor costs that affected us on a few projects and some design issues that we're working through. So that was primarily where it was at. The rest of the T&D performed pretty well as expected.

主要是在輸配電領域，主要是我們業務的太陽能方面、清潔能源方面，我們對專案產生了一些天氣影響。正如托德在他的劇本中所說，我們遇到了一些勞動力成本上升影響了我們的一些項目以及我們正在解決的一些設計問題。所以這就是它的主要位置。 T&D 的其餘部分錶現良好，符合預期。

Okay. And then I guess maybe a follow-up to that is, just looking into 4Q, typically, seasonally, 3Q is a higher margin, more profitable quarter. But to your previous point, it sounds like there were some kind of onetime things here. But if I look at the estimates that are out there for 4Q, the EBITDA margins are materially higher than 3Q. So I guess, I mean, just the tenor of maybe the margin contribution that you would see out there. I mean is 3Q kind of unusually light, and maybe the better comparison for 4Q is kind of year-over-year?

好的。然後我想也許一個後續行動是，只要看看第四季度，通常，季節性地，第三季度是一個利潤率更高、利潤更高的季度。但就你之前的觀點而言，聽起來這裡好像有一些一次性的事情。但如果我看一下第四季的估計，就會發現 EBITDA 利潤率大大高於第三季。所以我想，我的意思是，這只是你會看到的利潤貢獻的期限。我的意思是 3Q 有點異常輕，也許 4Q 更好的比較是年比？

I would look at it similar to probably where we were last year. I wouldn't look at it, maybe, where people are at today. We don't give guidance, but it seems like it's on maybe high side there when you compare it to where we're at, especially when we talk about the impacts that we've had on some of our clean energy projects on the T&D side that those that we think had stabilized, those will continue to carry out lower margins for the next quarter or 2 as we finish up those projects. But overall, it's still a very good strong market.

我會以類似去年的方式來看待它。也許我不會看人們今天所處的位置。我們不提供指導，但當你將其與我們所處的位置進行比較時，它似乎可能偏高，特別是當我們談論我們對 T&D 的一些清潔能源項目的影響時另一方面，我們認為那些已經穩定下來的項目，隨著我們完成這些項目，這些項目將在下一個或兩個季度繼續實現較低的利潤率。但總體而言，這仍然是一個非常好的強勁市場。

Okay. And then if I could just squeeze in one more for Kelly. The unbilled receivables balance has kind of been increasing. So the revenues on orders that are under negotiations, so that's increased to just under $60 million here, and it's been kind of steadily increasing in the last several quarters. Can you give any context as to what that's related to, and maybe the time line for resolution, and maybe a benefit to cash flow instead of the working capital drag that you've been having?

好的。然後我是否可以再為凱利擠一張。未開票應收帳款餘額一直在增加。正在談判中的訂單收入增加到略低於 6000 萬美元，並且在過去幾季中一直在穩步增長。您能否提供有關相關內容的任何背景信息，也許是解決方案的時間表，也許是對現金流的好處，而不是您一直面臨的營運資金拖累？

Yes, sure. Happy to talk about that. And maybe just to back up a little bit. So part of this comes down to just the growth of our company. So of course, as our revenues grow, unbilled revenues will also be likely to grow in some proportion to that.

是的，當然。很高興談論這個。也許只是為了備份一點。因此，這部分取決於我們公司的發展。當然，隨著我們收入的成長，未開票收入也可能會隨之成長。

A couple of other factors. Our DSOs have risen a bit from where we were at the end of last year, which was near record lows. And a couple of things have contributed to that. So one is really project timing. And I talked a little bit about this last quarter, that as we have projects that are wrapping up, we do start to build some balances related to contract retainage. And you can see that in the quarter. We were up another 12% in contract retainage versus the second quarter. So that is part of it.

還有其他一些因素。我們的 DSO 較去年年底上升，去年年底接近歷史低點。有幾件事促成了這一點。因此，其中之一就是專案的時間安排。我在上個季度談到了這一點，隨著我們的專案即將結束，我們確實開始建立一些與合約保留相關的餘額。你可以在本季看到這一點。與第二季相比，我們的合約保留率又增加了 12%。這就是其中的一部分。

The other, as I've talked about some of our mid- to large-size transmission and clean energy projects can have some pretty favorable billing profiles as we start those projects, and then those balance out as we wrap up.

另一方面，正如我所談到的，我們的一些中型到大型輸電和清潔能源項目在我們開始這些項目時可以有一些相當有利的計費配置，然後在我們結束時這些配置會平衡。

And so that's also a bit of what was a positive for us in the fourth quarter of last year. And then in the second and third quarters has been a bit of a drag as we look at DSOs.

因此，這也是我們去年第四季的一些正面因素。然後，當我們觀察 DSO 時，第二季和第三季出現了一些拖累。

I think the good news, though, is that when you look at our DSOs relative to our peers, still in a pretty favorable position. And of course, we do recognize though that in a higher interest rate environment, our customers are just naturally likely to want to hang on to their money until the last minute when it's due and may start to push more on payment terms. So we, of course, keep a close watch on that. But I think the good news is even with needing to have working capital to support our growing business, we still ended the quarter in a very minimal leverage position.

不過，我認為好消息是，當你看看我們的 DSO 相對於同行時，仍然處於相當有利的位置。當然，我們確實認識到，在利率較高的環境中，我們的客戶自然可能希望保留自己的資金，直到到期的最後一刻，並可能開始推動更多的付款條件。所以我們當然會密切關注這一點。但我認為好消息是，即使需要營運資金來支持我們不斷成長的業務，我們在本季結束時的槓桿率仍然非常低。

And our next question comes from Brian Russo from Sidoti.

我們的下一個問題來自 Sidoti 的 Brian Russo。

If we could just focus on solar for a minute. The challenges facing that industry has been well publicized as of late, mostly due to rising interest rates, higher cost of capital, supply chain, inflation, headwinds.

如果我們能關註一下太陽能就好了。該行業面臨的挑戰最近已廣為人知，主要是由於利率上升、資本成本上升、供應鏈、通貨膨脹和逆風。

And I'm just curious, what are you hearing or from your customers, whether it's on the C&I side or the T&D side, whether it's utilities or independent power producers or third-party developers. What are you seeing in the market? Because you referenced solar several times throughout your opening remarks as negatively impacting margins?

我只是很好奇，你從你的客戶那裡聽到了什麼，無論是工商業方面還是輸配電方面，無論是公用事業公司還是獨立電力生產商還是第三方開發商。您在市場上看到了什麼？因為您在開場白中多次提到太陽能對利潤率有負面影響？

Yes. I think let's divide it into 2 things here. I think when we're talking future work in the market, we still see it as a very strong market going forward. But it's one that will continue to be very selective on as we pick up projects because of some of the impacts that you mentioned and we talked about in our script.

是的。我想我們在這裡將其分為兩件事。我認為，當我們談論市場的未來工作時，我們仍然認為這是一個非常強大的市場。但由於您提到的以及我們在腳本中討論過的一些影響，我們在選擇項目時將繼續非常有選擇性。

So we continue to see those impacts, and supply chain is an issue out there. I mean, materials are tighter and tighter in that marketplace because there's a lot going on worldwide in that market. Labor is always a concern and we'll grow steady in that market, like we are in our other markets and continue to push that side, but very cautiously. So I would say from a client standpoint, they're bullish on what's going forward. But again, we're going to be very selective going forward.

因此，我們繼續看到這些影響，供應鏈是一個問題。我的意思是，該市場的材料越來越緊張，因為該市場在全球範圍內發生了很多事情。勞動力始終是一個令人擔憂的問題，我們將在該市場穩定成長，就像我們在其他市場一樣，並繼續推動這一方向，但非常謹慎。所以我想說，從客戶的角度來看，他們看好未來的發展。但同樣，我們將非常有選擇性地前進。

Okay. Great. And then just on the backlog, not necessarily sequential trends because I know start and stop the projects, it could create some lumpiness there. But when I look year-over-year, T&D is still up double digits each quarter this year. But it looks like C&I peaked up 12% in June year-over-year to the September quarter, which is up less than 2% versus September a year ago. And I am just wondering if you can give some more insight into that. And is that tied into your early comments of seeing some commercial slowdown as we move into 2024?

好的。偉大的。然後就積壓而言，不一定是連續趨勢，因為我知道專案的啟動和停止，它可能會在那裡產生一些混亂。但當我與去年同期相比時，T&D 今年每季仍以兩位數成長。但截至 9 月季度，C&I 似乎在 6 月同比增長了 12%，與去年同期相比增長了不到 2%。我只是想知道您是否可以對此提供更多見解。這是否與您早期的評論有關，即隨著我們進入 2024 年，商業會出現一些放緩？

I would say, our markets are strong in what we're looking at. Again, as we said before, our backlog is always going to be lumpy. We're not trying to sign a contract and get it forced into our backlog for quarter end so we can report something higher. We want to make sure we have the right contract in place. And with higher risk interest rates and some of the terms and conditions we push for, sometimes it takes a little longer to push a contract forward or for them to get their budgets approved. But from a visibility standpoint, a very strong market out there going forward.

我想說的是，我們的市場在我們所關注的方面很強大。同樣，正如我們之前所說，我們的積壓總是會很混亂。我們並不是試圖簽署一份合約並將其強行納入我們季度末的積壓工作中，以便我們可以報告更高的數據。我們希望確保我們擁有正確的合約。由於風險利率較高以及我們推動的一些條款和條件，有時需要更長的時間來推進合約或讓他們的預算獲得批准。但從可見度的角度來看，未來的市場非常強勁。

Okay. And then lastly, the operating cash flow relative to free cash flow, it looks like you're -- you have a free cash flow outflow for the first 9 months of the year. And I'm just wondering, I suppose that means we should see quite a meaningful improvement in free cash flow in the fourth quarter to kind of match generally your historical trends?

好的。最後，相對於自由現金流的經營現金流，看起來今年前 9 個月有自由現金流流出。我只是想知道，我想這意味著我們應該看到第四季度自由現金流量出現相當有意義的改善，以符合您的歷史趨勢？

Sure. I'll address that one, Brian. So part of the negative free cash flow is the higher CapEx this year, which really aligns with the growth we're having, particularly on the T&D side of the business, as that is the more asset-intensive side of the business. So we do expect that to be a way that we'll continue to support our growth is investing in fleet and equipment.

當然。我會解決這個問題，布萊恩。因此，負自由現金流的一部分是今年較高的資本支出，這確實與我們的成長相符，特別是在業務的輸配電方面，因為這是業務中資產更密集的方面。因此，我們確實希望投資機隊和設備是我們繼續支持成長的一種方式。

So that's one aspect. The other is on operating cash flow and some of the dynamics I talked about in response to Justin's question, which really comes back to project timing being a big driver of that. So we do expect there are some retained balances that we'll bill and collect starting here in the fourth quarter, but some of that will also push into the first part of next year. So we do expect that, that will normalize over time, but it is a bit of an ebb and flow tying back to project timing.

這是一方面。另一個是關於營運現金流以及我在回答賈斯汀的問題時談到的一些動態，這實際上回到了專案時機是其中的一個重要驅動因素。因此，我們確實預計我們將在第四季度開始收取和收取一些保留餘額，但其中一些也將推遲到明年上半年。因此，我們確實預計，隨著時間的推移，這種情況會正常化，但這有點與專案時間相關的潮起潮落。

Okay. Great. And then just lastly, you mentioned Texas and California as big markets on the transmission side. Are you seeing any movement or increased activity with utility transmission projects tied to the MISO Tranche 1 projects?

好的。偉大的。最後，您提到德克薩斯州和加利福尼亞州是輸電的大市場。您是否看到與 MISO 第 1 階段專案相關的公用事業傳輸專案有任何變動或活動增加？

Yes, I'll take that Rick. Yes, we are. Actually, we've been bidding a few of those projects over the past year, and there's 3 of them out right now, and we're seeing more in the future. So that activity is picking up. And right now, like I said, we're pretty optimistic about where we stand, and our capabilities in that are aligned pretty well with a lot of those clients who are existing MSA partners. So that activity is picking up.

是的，我會接受那個瑞克。是的我們是。事實上，我們在過去的一年裡一直在競標其中的一些項目，現在已經有 3 個項目出來了，而且我們將來還會看到更多。所以這項活動正在興起。現在，正如我所說，我們對自己的現狀非常樂觀，而且我們在這方面的能力與許多現有 MSA 合作夥伴的客戶非常吻合。所以這項活動正在興起。

And I think I've mentioned in the past, Brian, that we're going to -- that kind of spread out evenly from 2020 through 2029 on the construction side of things.

Brian，我想我過去曾提到過，從 2020 年到 2029 年，我們將在建設方面均勻分佈。

(Operator Instructions) Okay. I'm showing no further questions at this time. I would now like to turn the call back to Rick Swartz, President and Chief Executive Officer of the MYR Group. Please go ahead.

（操作員指示）好的。我目前沒有提出任何進一步的問題。現在我想將電話轉回給 MYR 集團總裁兼執行長 Rick Swartz。請繼續。

To conclude, on behalf of Kelly, Tod, Don and myself, I sincerely thank you for joining us on the call today. I don't have anything further, and we look forward to working with you going forward, and speaking with you again on our next conference call. Until then, stay safe.

最後，我代表凱利、陶德、唐和我本人，衷心感謝您今天加入我們的電話會議。我沒有任何進一步的信息，我們期待與您繼續合作，並在下次電話會議上再次與您交談。在那之前，請保持安全。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。