Sterling Infrastructure Inc (STRL) 2023 Q2 法說會逐字稿

Greetings, and welcome to the Sterling Infrastructure Second Quarter 2023 Conference Call and Webcast. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Noelle Dilts, Vice President of Investor Relations and Corporate Strategy. Thank you. You may begin.

您好，歡迎參加 Sterling 基礎設施 2023 年第二季度電話會議和網絡廣播。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係和企業戰略副總裁諾埃爾·迪爾茨 (Noelle Dilts)。謝謝。你可以開始了。

Thank you, Jesse. Good morning to everyone joining us, and welcome to Sterling Infrastructure's 2023 Second Quarter Earnings Conference Call and Webcast. I'm pleased to be here today to discuss our second quarter results with Joe Cutillo, Sterling's Chief Executive Officer; and Ron Ballschmiede, Sterling's Chief Financial Officer. Joe will open the call with an overview of the company and its performance in the quarter. Ron will follow that up with a detailed discussion of our financial results, after which Joe will provide a market and full year outlook. Then we will open the call up for questions. As a reminder, there are accompanying slides on the Investor Relations section of our website.

謝謝你，傑西。大家早上好，歡迎參加 Sterling Infrastructure 的 2023 年第二季度收益電話會議和網絡廣播。我很高興今天能夠與 Sterling 首席執行官 Joe Cutillo 討論我們第二季度的業績；以及 Sterling 首席財務官 Ron Ballschmiede。喬將在電話會議開始時概述公司及其本季度的業績。羅恩將詳細討論我們的財務業績，之後喬將提供市場和全年展望。然後我們將開放提問。提醒一下，我們網站的投資者關係部分有隨附的幻燈片。

Before turning the call over to Joe, I'll read the safe harbor statement. Some discussions made today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Sterling's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise.

在將電話轉給喬之前，我將閱讀安全港聲明。今天進行的一些討論可能包含前瞻性陳述。實際結果可能與今天的聲明存在重大差異。請參閱 Sterling 最近的 10-K 和 10-Q 文件，了解可能影響這些預測和假設的風險因素的更完整描述。公司不承擔因新信息、未來事件或其他原因而更新前瞻性陳述的義務。

Please also note that management may reference EBITDA, adjusted EBITDA, adjusted net income or adjusted earnings per share on this call, which are all financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures in our earnings release issued yesterday afternoon.

另請注意，管理層可能會在本次電話會議中提及 EBITDA、調整後 EBITDA、調整後淨利潤或調整後每股收益，這些都是美國公認會計原則不認可的財務指標。根據 SEC 規則和法規的要求，這些非 GAAP 財務指標與我們昨天下午發布的收益報告中最具可比性的 GAAP 財務指標進行了調整。

I'll now turn the call over to our CEO, Joe Cutillo.

我現在將把電話轉給我們的首席執行官 Joe Cutillo。

Thanks, Noelle. Good morning, everyone, and thank you for joining Sterling's Second Quarter 2023 Earnings Call. It's a fantastic time to be part of the Sterling team. While we started this journey to transform our company 7 years ago, we sought to build a diversified infrastructure solutions business that consistently delivered bottom line growth and strong cash flow. Our results in the second quarter reflect how far we've come.

謝謝，諾艾爾。大家早上好，感謝您參加 Sterling 的 2023 年第二季度財報電話會議。成為 Sterling 團隊的一員真是一段美妙的時光。雖然我們七年前開始了公司轉型之旅，但我們尋求建立多元化的基礎設施解決方案業務，以持續實現盈利增長和強勁的現金流。我們第二季度的業績反映了我們已經取得的進展。

Put it simply, we had a great quarter. We delivered revenue growth across each of our segments to drive a 13% year-over-year increase in total revenue, which reflects 11% organic growth and 2% acquired growth. More important, each of our segments generated significant operating profit improvements to drive an operating income growth of 37%. Cash flow was exceptionally strong in the quarter, and our balance sheet is in great shape. And finally, our combined backlog grew 42% from year-end 2022 to reach a new record level. These results would not have been possible without the hard work and dedication of our Sterling team. Their drive and entrepreneurial spirit enables us to consistently outperform and serve the customer better than our competition.

簡而言之，我們度過了一個美好的季度。我們各個部門的收入均實現增長，總收入同比增長 13%，其中有機增長 11%，後天增長 2%。更重要的是，我們的每個部門都實現了營業利潤的顯著改善，推動營業收入增長 37%。本季度現金流異常強勁，我們的資產負債表狀況良好。最後，我們的積壓訂單總量較 2022 年底增長了 42%，達到了新的紀錄水平。如果沒有 Sterling 團隊的辛勤工作和奉獻精神，這些成果是不可能實現的。他們的干勁和創業精神使我們能夠持續超越競爭對手，並為客戶提供更好的服務。

While we're pleased with our progress, there is still a lot more opportunity ahead of us. As we continue to grow the business both organically and through M&A, we remain committed to our guiding principles, The Sterling Way, which remind us of our duty to continuously improve how we protect our people, our environment and give back to our communities, all we're working to build America's infrastructure.

雖然我們對所取得的進展感到滿意，但我們面前仍然有更多的機會。隨著我們不斷有機地和通過併購發展業務，我們仍然致力於我們的指導原則“Sterling Way”，它提醒我們有責任不斷改進我們保護我們的人民、我們的環境和回饋我們的社區的方式。我們正在努力建設美國的基礎設施。

Moving to our financials. In E-Infrastructure, which is our largest segment and represents half of our sales, we delivered just over 11% top line growth and 250 basis points of operating margin expansion to drive 32% operating income growth. Our revenue growth in the quarter was driven by continued strength and activity related to high-value advanced manufacturing projects and data centers. On the profitability front, as supply chains have eased, we have been able to recapture the inefficiencies that impacted our margins during COVID. Additionally, we are seeing a mix benefit as our large project work picks up.

轉向我們的財務狀況。在電子基礎設施領域，這是我們最大的細分市場，占我們銷售額的一半，我們實現了略高於11% 的營收增長和250 個基點的營業利潤率擴張，推動了32% 的營業收入增長。我們本季度的收入增長得益於與高價值先進製造項目和數據中心相關的持續實力和活動。在盈利能力方面，隨著供應鏈的緩解，我們已經能夠重新克服新冠疫情期間影響我們利潤率的低效率問題。此外，隨著大型項目工作的開展，我們還看到了混合效益。

Looking at our E-Infrastructure verticals in more detail, on the advanced manufacturing front, we ramped up activity on our previously announced Hyundai and Rivian projects in the quarter. These projects are progressing very well. Additionally, 2 weeks ago, we announced that we have been awarded the next phase of the Hyundai project, which contributed to our record E-Infrastructure bookings in the quarter of $424 million. Data center activity remains strong as our customers push to manage increasing data demand and the evolving needs of AI. Bookings in this market also contributed to our strong backlog growth in the quarter. Activity in e-commerce distribution centers has stabilized at lower levels relative to last year. We expect activity to remain roughly at current levels through 2024 and rebounding in 2025.

更詳細地審視我們的電子基礎設施垂直領域，在先進製造方面，我們在本季度加強了之前宣布的現代和 Rivian 項目的活動。這些項目進展順利。此外，兩週前，我們宣布我們已獲得現代項目下一階段的合同，該項目為我們本季度電子基礎設施訂單創造了 4.24 億美元的記錄。隨著我們的客戶努力管理不斷增長的數據需求和不斷變化的人工智能需求，數據中心活動仍然強勁。該市場的預訂量也促進了我們本季度積壓訂單的強勁增長。與去年相比，電子商務配送中心的活動穩定在較低水平。我們預計 2024 年經濟活動將大致保持在當前水平，並在 2025 年反彈。

In Transportation Solutions, we delivered a 5.9% revenue growth and operating margin expansion of 130 basis points, which drove a 33% growth in operating income. Operating margins reached a new high of 6.5%. Our laser focus on improving margins, coupled with the strong activity associated with the infrastructure build are enabling us to meet our margin thresholds and grow the business. We believe we will continue to see growth in both margins and revenue in this segment as we go forward. Notably, aviation bid activity, which had been slow to release picked up significantly in the quarter. As a result, we had some nice awards in the quarter and anticipate more to come in the second half of the year.

在運輸解決方案領域，我們實現了 5.9% 的收入增長和 130 個基點的營業利潤率擴張，帶動營業收入增長 33%。營業利潤率達到6.5%的新高。我們高度重視提高利潤率，再加上與基礎設施建設相關的強勁活動，使我們能夠滿足利潤率閾值並發展業務。我們相信，隨著我們的前進，我們將繼續看到該領域的利潤和收入增長。值得注意的是，發布緩慢的航空投標活動在本季度顯著回升。因此，我們在本季度獲得了一些不錯的獎項，並預計下半年會獲得更多獎項。

In Building Solutions, we grew revenue nearly 30% in total and over 16% on an organic basis. We expanded operating margin by 70 basis points to drive an operating income growth of 38%. Our residential revenue increased over 21% in the quarter as we set new records in each of our geographies for both the number of slabs poured and revenue generated. Our commercial revenue increased nearly 50%, reflecting strong market demand and more attractive margins. The increase in our second quarter Building Solutions operating profit was driven by the recovery in residential volume, improved mix within commercial and better margins across both.

在建築解決方案方面，我們的總收入增長了近 30%，有機增長超過 16%。我們將營業利潤率提高了 70 個基點，推動營業收入增長 38%。我們的住宅收入在本季度增長了 21% 以上，因為我們在每個地區的澆築板數量和產生的收入都創下了新紀錄。我們的商業收入增長了近 50%，反映出強勁的市場需求和更具吸引力的利潤率。第二季度建築解決方案營業利潤的增長是由住宅銷量的複蘇、商業產品組合的改善以及兩者的利潤率提高所推動的。

In our -- in view of our strong first half results, record backlog position and excellent execution, we are raising our full year guidance. The midpoint of our increased guidance would represent a 13% increase in revenue and 32% increase in net income relative to 2022 levels. With that, I'd like to turn it over to Ron to give you more details on the quarter. Ron?

鑑於我們上半年的強勁業績、創紀錄的積壓狀況和出色的執行力，我們正在提高全年指導。與 2022 年水平相比，我們上調指引的中點將意味著收入增長 13%，淨利潤增長 32%。說到這裡，我想將其轉交給羅恩，向您提供有關本季度的更多詳細信息。羅恩？

Thanks, Joe, and good morning. I am pleased to discuss our outstanding and record second quarter performance. Let me take you through our financial highlights, starting with our backlog metrics. At the end of the quarter, our backlog totaled a record $1.769 billion, up $321 million from the beginning of the year. The gross margin of this backlog was 15.5%, a 120 basis point improvement over the beginning of the year. The 15.5% backlog margin represents the highest in our history. The higher proportion of E-Infrastructure backlog and increased Transportation backlog margins drove this improvement.

謝謝，喬，早上好。我很高興討論我們出色且創紀錄的第二季度業績。讓我從我們的積壓指標開始向您介紹我們的財務亮點。截至本季度末，我們的積壓訂單總額達到創紀錄的 17.69 億美元，比年初增加 3.21 億美元。本次積壓訂單毛利率為15.5%，較年初提高120個基點。 15.5% 的積壓利潤率是我們歷史上的最高水平。電子基礎設施積壓比例的提高和運輸積壓利潤的增加推動了這一改善。

Unsigned Awards at June 30, 2023, totaled $657 million. As you may recall, substantially all of our Unsigned Awards relate to Transportation Solutions. We expect to have these multiyear projects move into backlog by the end of the year. We finished the quarter with record combined backlog of $2.393 billion, a $704 million increase from the beginning of the year. Our gross profit in combined backlog was 14.7%, an increase of 50 basis points from the beginning of the year, another historical high watermark. Our current book-to-burn ratios were 1.2x for backlog and 2.4x for combined backlog. Revenue for the quarter was $522 million, up $61 million over the 2022 quarter. As a result of strong backlog and opportunities across our markets, our updated and increased full year revenue guidance is now $1.95 billion to $2.05 billion.

截至 2023 年 6 月 30 日，未簽名獎項總額為 6.57 億美元。您可能還記得，我們幾乎所有未簽署的獎項都與運輸解決方案相關。我們預計這些多年期項目將在年底前進入積壓狀態。本季度結束時，我們的積壓訂單總額達到創紀錄的 23.93 億美元，比年初增加了 7.04 億美元。綜合在手訂單毛利潤為14.7%，較年初增長50個基點，再創歷史新高。我們目前的預訂銷毀比率為 1.2 倍（積壓訂單）和 2.4 倍（合併積壓訂單）。該季度收入為 5.22 億美元，比 2022 年季度增加 6100 萬美元。由於我們市場上的大量積壓和機遇，我們更新並增加的全年收入指導目前為 19.5 億美元至 20.5 億美元。

Moving to our second quarter income statement. Our current quarter E-Infrastructure revenues were $260 million, a $27 million increase over the prior year period. The E-Infrastructure revenue growth of 11% reflects a continuing strong market demands. The aforementioned revenue growth was partially offset by lower volume from our large e-commerce distribution centers. Transportation revenues were $151 million in the quarter, an increase of $8 million or 6% over the comparable 2022 quarter. The revenue in the Transportation backlog growth were attributable to a number of federal, state and local infrastructure investment programs. Building Solutions revenues were $111 million in the quarter compared to $86 million in the prior year period. The 30% growth was driven by both residential and commercial activities with revenue growth of 21% and 50%, respectively.

轉向我們的第二季度損益表。我們當前季度的電子基礎設施收入為 2.6 億美元，比去年同期增加 2700 萬美元。電子基礎設施收入增長11%反映了持續強勁的市場需求。上述收入增長被我們大型電子商務配送中心的銷量下降部分抵消。本季度運輸收入為 1.51 億美元，比 2022 年可比季度增加 800 萬美元，即 6%。交通運輸積壓收入的增長歸因於許多聯邦、州和地方基礎設施投資計劃。本季度建築解決方案收入為 1.11 億美元，而去年同期收入為 8600 萬美元。 30% 的增長是由住宅和商業活動推動的，收入分別增長 21% 和 50%。

Approximately $11 million of our current quarter residential growth was attributable to the Arizona Concrete Foundation business, which we acquired in late 2022. Consolidated gross profit was $92 million in the quarter, an increase of $21 million over the '22 period. Gross margins increased to an all-time high of 17.7% or a 230 basis points over the 2022 quarter. The consolidated margin reflects margin improvements in each of our 3 segments. The key driver of the increased margins include the progress on the recovery from previously experienced supply chain challenges and operating leverages from increased demands for each of our segments.

本季度住宅增長中約 1100 萬美元來自我們於 2022 年末收購的亞利桑那混凝土基金會業務。本季度綜合毛利潤為 9200 萬美元，比 2022 年同期增加了 2100 萬美元。 2022 年季度毛利率增至歷史新高 17.7%，即 230 個基點。合併利潤率反映了我們三個部門的利潤率改善。利潤增加的關鍵驅動因素包括從之前經歷的供應鏈挑戰中恢復的進展以及我們每個部門需求增加帶來的運營槓桿。

General and administrative expense was $24 million for the quarter, an increase of $3 million when compared to the same quarter of last year. The increase was driven by general inflation, increased revenue-related costs and G&A related to the late 2022 Arizona slab business. The continued -- we continue to expect our full year G&A expense to be approximately 5% of revenues. Operating income for the quarter was $60 million, an increase from $44 million in the prior year quarter. Our current year operating margins increased 11.5%, the highest in Sterling's history. Operating margins in the prior year quarter were 9.5%. Our effective income tax rate for the second quarter was 26.5% and our tax rate benefit from increased tax deductions related to our stock-based compensation. We expect our full year of 2023 effective income tax rate to be approximately 27%. The net effect of all these items resulted in a record second quarter net income of $39.5 million or $1.27 per share.

本季度一般及行政費用為 2400 萬美元，比去年同期增加 300 萬美元。這一增長是由總體通脹、收入相關成本增加以及與 2022 年末亞利桑那州板坯業務相關的一般管理費用 (G&A) 推動的。繼續——我們仍然預計全年一般管理費用將佔收入的 5% 左右。本季度營業收入為 6000 萬美元，較去年同期的 4400 萬美元有所增加。我們今年的營業利潤率增長了 11.5%，是 Sterling 歷史上最高的。去年同期營業利潤率為 9.5%。我們第二季度的有效所得稅率為 26.5%，我們的稅率受益於與股票薪酬相關的稅收減免的增加。我們預計 2023 年全年有效所得稅率約為 27%。所有這些項目的淨效應導致第二季度淨利潤達到創紀錄的 3950 萬美元，即每股 1.27 美元。

With our strong performance in the first half of 2023 and the strength of each of our key markets, we have increased our full year 2023 net income guidance to $125 million to $131 million. Our EPS guidance is now $4 to $4.20 per share from our prior EPS range of $3.33 to $3.53 per share. Both midpoint net income and EPS guidance reflect an increase of 20% over our prior guidance. EBITDA for the quarter totaled $73.5 million, an increase of 29% over the prior year quarter. As a percent of revenues, EBITDA improved to 14.1% and up from 12.3% in the prior year quarter. Our 2023 EBITDA guidance is now $250 million to $260 million from our initial 2023 range of $220 million to $235 million. Our equivalents increased by $97 million from the beginning of 2023 to $278 million at June 30 of 2023.

憑藉我們在 2023 年上半年的強勁表現以及每個主要市場的實力，我們將 2023 年全年淨利潤指導上調至 1.25 億美元至 1.31 億美元。我們的每股收益指引目前為每股 4 美元至 4.20 美元，之前的每股收益範圍為 3.33 美元至 3.53 美元。淨利潤中點和每股收益指引均比我們之前的指引增長了 20%。該季度 EBITDA 總計 7350 萬美元，比去年同期增長 29%。 EBITDA 佔收入的百分比從去年同期的 12.3% 提高至 14.1%。我們的 2023 年 EBITDA 指導目前為 2.5 億美元至 2.6 億美元，而我們最初的 2023 年範圍為 2.2 億美元至 2.35 億美元。截至 2023 年 6 月 30 日，我們的等值金額從 2023 年初增加了 9700 萬美元，達到 2.78 億美元。

Cash flow from operations -- operating activities for the first 6 months of '23, with a very strong $181 million compared to $42 million in the prior year period. The operating cash flow improvement was driven by significant organic growth of each segment as well as favorable improvements in our working capital. Cash used in investing activities was $16.3 million for the first 6 months of 2023 compared to $31 million for the 2022 period. The decrease was driven by the timing of net capital expenditures, offset by the first quarter receipt of $14 million from the late 2022 Myers divestiture. We continue to expect our full year net capital expenditures to be $55 million to $60 million, reflecting the strong organic growth of our E-Infrastructure Solutions segment.

運營現金流——2023 年前 6 個月的運營活動，與去年同期的 4200 萬美元相比，達到 1.81 億美元，非常強勁。運營現金流的改善是由每個部門的顯著有機增長以及我們的營運資本的有利改善推動的。 2023 年前 6 個月投資活動使用的現金為 1,630 萬美元，而 2022 年同期為 3,100 萬美元。這一下降是由淨資本支出的時機推動的，但被 2022 年底 Myers 資產剝離帶來的第一季度 1,400 萬美元收入所抵消。我們仍然預計全年淨資本支出為 5500 萬至 6000 萬美元，反映出我們電子基礎設施解決方案部門的強勁有機增長。

Cash flow from our financing activities was $72 million outflow for the 6 months of 2023, primarily from debt repayments of $68 million. The debt reduction included voluntary early debt repayments of $53 million. Considering the diversity and our strength of our portfolio of businesses, our strong liquidity position and our very comfortable EBITDA leverage, we are well prepared to take the advantage of additional opportunity in 2023 and beyond.

2023 年 6 個月，我們融資活動產生的現金流量為 7200 萬美元，主要來自 6800 萬美元的債務償還。債務削減包括自願提前償還 5300 萬美元的債務。考慮到我們業務組合的多樣性和實力、強大的流動性狀況以及非常舒適的 EBITDA 槓桿，我們已做好充分準備，充分利用 2023 年及以後的更多機會。

Now I'll turn the call back to Joe.

現在我會把電話轉回給喬。

Thanks, Ron. As we look forward, we are confident in our ability to drive sustained profitable growth and create value for our shareholders. We see years of opportunity ahead of us as we work to build America's infrastructure. We are a key partner in building the manufacturing plants that are bringing production back to the U.S., the data infrastructure that enables today's way of life, the highways, the bridges and the airports that connect us in the homes we live in. We expect E-Infrastructure Solutions will remain our fastest growing, highest margin segment for the next several years.

謝謝，羅恩。展望未來，我們對推動持續盈利增長並為股東創造價值的能力充滿信心。當我們致力於建設美國的基礎設施時，我們看到了未來數年的機遇。我們是建設將生產帶回美國的製造工廠、實現當今生活方式的數據基礎設施、連接我們住所的高速公路、橋樑和機場的重要合作夥伴。我們期望-未來幾年，基礎設施解決方案仍將是我們增長最快、利潤率最高的領域。

We continue to see a robust pipeline of large manufacturing projects tied to renewable, battery and other next-gen manufacturing. These onshoring related opportunities are emerging faster than we anticipated and are larger than we've ever imagined. Data center activity is poised to accelerate even further as data demand continues to surge. We believe current market trends, coupled with our proven capabilities, will continue to deliver strong double-digit organic growth over a multiyear period.

我們繼續看到與可再生能源、電池和其他下一代製造相關的大型製造項目的強大管道。這些與外包相關的機會出現的速度比我們預期的要快，而且規模也比我們想像的要大。隨著數據需求持續激增，數據中心活動有望進一步加速。我們相信，當前的市場趨勢，加上我們經過驗證的能力，將在多年內繼續實現強勁的兩位數有機增長。

In Transportation Solutions, we think we are now in a market environment that will continue to provide opportunities for both growth and margin expansion. As margin opportunities improve, we will accelerate our growth. In Building Solutions, the lack of secondary market homes is helping us on both the residential and commercial fronts. We continue to see strong residential activity in all 3 of our markets, and our core customers remain very bullish on the remainder of the year. On the commercial front, multifamily starts continue to grow, and we are encouraged by the improved margin opportunities that we are seeing. We are proud of how far we've come, but even more excited about the opportunity ahead of us associated with the build-out of U.S. infrastructure over the next 3 to 5 years.

在運輸解決方案方面，我們認為我們現在所處的市場環境將繼續提供增長和利潤擴張的機會。隨著利潤機會的改善，我們將加速增長。在建築解決方案中，二級市場房屋的缺乏正在為我們在住宅和商業方面提供幫助。我們繼續看到所有三個市場的住宅活動強勁，我們的核心客戶仍然對今年剩餘時間非常樂觀。在商業方面，多戶住宅開工繼續增長，我們看到利潤率改善的機會令我們感到鼓舞。我們對我們所取得的進步感到自豪，但更對我們未來 3 到 5 年內美國基礎設施建設所面臨的機遇感到更加興奮。

Given the current trends in our markets and the excellent execution, we anticipate a strong finish to the year and are confident in our ability to deliver within the guidance ranges we have provided. With our backlog and visibility, we are well positioned for 2024 and already thinking about 2025. With that, I'd like to turn it over for questions.

鑑於我們市場的當前趨勢和出色的執行力，我們預計今年將取得強勁成果，並對我們在所提供的指導範圍內交付的能力充滿信心。憑藉我們的積壓工作和可見性，我們已經為 2024 年做好了充分準備，並已經在考慮 2025 年。有了這個，我想把它轉過來提出問題。

(Operator Instructions) Our first question is coming from the line of Jean Ramirez with D.A. Davidson.

（操作員說明）我們的第一個問題來自 Jean Ramirez 和 D.A.戴維森。

This is Jean Ramirez for Brent Thielman. Congrats on the quarter, by the way.

我是布倫特·蒂爾曼的讓·拉米雷斯。順便說一句，恭喜這個季度。

Thank you very much. We had a great quarter. It's nice.

非常感謝。我們度過了一個美好的季度。這真好。

Yes. I'll start with a 2-part question. Looking at Building Solutions, can the business sustain higher margins with potential inflation costs come in, in the second half? And are there any thoughts on expanding Building Solutions beyond its current market?

是的。我將從一個由兩部分組成的問題開始。看看建築解決方案，在下半年潛在的通脹成本出現的情況下，該業務能否維持更高的利潤率？對於將建築解決方案擴展到當前市場之外有什麼想法嗎？

Yes. We think we can continue to maintain the margins as we go forward. We'll continue to see some price increases on the concrete side in the back half of the year, at least we anticipate that. But we believe we can continue to maintain those margins. On the expansion front, we're really looking at two different opportunities. The nice thing before we expand between the low market share we have in both Houston and Phoenix, candidly, we can double that business with those 2 markets alone. So we've got some really nice runway within the existing markets we're in.

是的。我們認為，隨著我們的發展，我們可以繼續保持利潤率。今年下半年，我們將繼續看到混凝土價格上漲，至少我們預計如此。但我們相信我們可以繼續保持這些利潤。在擴張方面，我們實際上正在尋找兩個不同的機會。坦白說，在我們在休​​斯頓和菲尼克斯的低市場份額之間進行擴張之前，我們可以將這兩個市場的業務增加一倍。因此，我們在現有市場中擁有一些非常好的跑道。

If we look at where we go next, really two different potentials. One is adding more vertical kind of capabilities within the portfolio that we have. We continue to look at plumbing and [branding] and electrical and some other areas like that within the footprint or geographies that we're in. And then down the road, the next logical market for us would be somewhere in Florida, probably Central Florida would be a logical place for us to expand. But right now, we've got so much opportunity ahead of us within the markets that we're in, candidly. We haven't even begun going beyond kind of just the market data for the Florida market.

如果我們看看接下來的發展方向，就會發現確實有兩種不同的潛力。一是在我們擁有的產品組合中添加更多垂直類型的功能。我們繼續關注管道、[品牌]、電氣以及我們所在的足跡或地理位置內的其他一些領域。然後，沿著這條路，我們的下一個合乎邏輯的市場將是佛羅里達州的某個地方，可能是佛羅里達州中部將是我們擴張的合乎邏輯的地方。但坦率地說，現在我們所處的市場有很多機會。我們甚至還沒有開始超越佛羅里達市場的市場數據。

And pivoting to [E-Infrastructure]. How much more is the company seeing on data centers now within the segment? And you talked a little bit about e-commerce. Are you seeing any distribution/warehouse activity picking up? Or is that being impacted by this end market?

並轉向[電子基礎設施]。該公司目前在該細分市場的數據中心方面還有多少發展？您談到了一些關於電子商務的問題。您是否看到任何分銷/倉庫活動有所回升？還是受到這個終端市場的影響？

Well, let's start with that one. We see good activity with -- still in e-commerce distribution. The big difference between last year and this year, normally, we would have 4 to 6 Amazon -- big Amazon projects going at any given time. Right now, we have 1. And it's one in the Northeast, and it's the only one on the East Coast, (inaudible) it's happening. But the rest of the market stays -- has remained very stable and very consistent. So we've seen a transition from Amazon to some other customers. Based on our conversations with Amazon and their strategic planning, we believe that picks back up significantly in 2025. So that market hasn't gone away. It's just you've got one big behemoth that is not producing like it used to, and they are a major customer of ours.

好吧，讓我們從那個開始吧。我們看到電子商務分銷領域仍然表現良好。去年和今年之間的最大區別是，通常情況下，我們會有 4 到 6 個亞馬遜——大型亞馬遜項目在任何特定時間都在進行。現在，我們有 1 個。這是東北部的一個，也是東海岸唯一的一個，（聽不清）它正在發生。但市場的其餘部分仍然非常穩定且非常一致。所以我們看到了從亞馬遜到其他一些客戶的轉變。根據我們與亞馬遜的對話及其戰略規劃，我們認為該市場將在 2025 年顯著回升。所以這個市場並沒有消失。只是你有一個龐大的龐然大物，不再像以前那樣生產，而他們是我們的主要客戶。

On the data center activity, we still see data center activity extremely strong, if anything, picking up more as we see more speculative warehouses coming online, data centers. Yes, I'm sorry. I said warehouses -- speculative data centers coming online to offset. What we believe is happening is the demand is outpacing the big guy's capital budgets and planning budgets. So what they're doing is speculative warehouses are coming online. They're leasing those spaces and have kind of a lease buy program in place. So we're seeing strong activity from the majors, but also from the speculative [piece,] which are a little bit smaller warehouses in general, but still very good data centers. I keep saying warehouses. I need one more coffee this morning.

在數據中心活動方面，我們仍然看到數據中心活動極其強勁，如果有的話，隨著我們看到更多的投機性倉庫、數據中心上線，數據中心活動將會增加。是的，對不起。我說的是倉庫——投機數據中心上線以抵消。我們認為正在發生的情況是需求超過了大公司的資本預算和規劃預算。所以他們正在做的就是投機性倉庫上線。他們正在租賃這些空間，並製定了某種租賃購買計劃。因此，我們看到了各大巨頭的強勁活動，但也看到了投機性的活動，這些倉庫總體來說有點小，但仍然非常好的數據中心。我一直說倉庫。今天早上我還需要一杯咖啡。

No problem. And then if you don't mind, sticking with the infrastructure, do you need to make more significant investments in equipment when you're tackling this growth in data centers. We just want to understand the revenue potential for the business considering this market backdrop along with what you've actually been able to perform with the people and equipment you have today.

沒問題。然後，如果您不介意，堅持使用基礎設施，那麼在應對數據中心的增長時，您是否需要在設備上進行更多重大投資。我們只是想了解考慮到這一市場背景的企業的收入潛力，以及您目前擁有的人員和設備實際能夠執行的操作。

Yes. I think the great thing is 12 to 18 months ago, I would have told you equipment was an issue because of availability. It's readily available now in the market. So we can buy it, we can lease it. We can even rent some of the big stuff. So equipment is not a concern. We're going to stay within our guidance on capital. It's at $55 million to $60 million in total for the year, and we can support the growth that we have in front of us and feel very good about where we're positioned.

是的。我認為最棒的是 12 到 18 個月前，我會告訴你設備是一個問題，因為可用性。現在市場上很容易買到。所以我們可以買它，我們可以租它。我們甚至可以租一些大東西。所以裝備不是問題。我們將保持在資本指導範圍內。今年的總額為 5500 萬至 6000 萬美元，我們可以支持我們面前的增長，並對我們的定位感到非常滿意。

Our next question is coming from the line of Sean Eastman with KeyBanc Capital Markets.

我們的下一個問題來自 KeyBanc Capital Markets 的 Sean Eastman。

This is Alex on for Sean this morning. Congrats on the quarter.

這是亞歷克斯今天早上為肖恩做的。恭喜本季度。

Thank you.

謝謝。

So I wanted to start on the guidance raise. It kind of implies a much higher second half outlook than the street was modeling. Can you just talk about what the biggest changes were in the second half outlook relative to the last guide? It kind of sounds like the margins are coming through stronger. And then secondly, if there's any like major swing factors you would point out in the range, like what could drive you to the high end versus the low end?

所以我想從指導加薪開始。這有點意味著下半年的前景比街道模型要高得多。您能否談談下半年展望相對於上一份指南最大的變化是什麼？聽起來利潤率正在變得更強。其次，您是否會在該範圍內指出任何類似的主要波動因素，例如什麼可以推動您達到高端而不是低端？

Yes. I'll start at 50,000 feet and let Ron get into the details. I think you're right on. A couple of things. We've talked about the margin impact of the supply chain really across all of our businesses with the exception of less in Transportation, but big on both residential and E-Infrastructure. We've talked all along, we thought that would come back in the second half of this year and into next year. The good news is it's coming back a little quicker than we anticipated. So we have that tailwind on top of the great market tailwinds that we picked up in the first quarter, especially in E-Infrastructure, we never anticipated the amount of advanced manufacturing projects and the size to go through the year. So they have kicked off. They're running well. We've got better line of sight to the impact of that for the rest of the year and we have better line of sight of what our margin clawback rate is.

是的。我將從 50,000 英尺的高度開始，讓 Ron 詳細介紹。我認為你是對的。有幾件事。我們已經討論了供應鏈對我們所有業務的利潤率影響，除了運輸業以外，但對住宅和電子基礎設施的影響很大。我們一直在討論，我們認為這會在今年下半年和明年回歸。好消息是它的恢復速度比我們預期的要快一些。因此，除了我們在第一季度獲得的巨大市場順風之外，我們還擁有這一順風，尤其是在電子基礎設施方面，我們從未預料到今年先進製造項目的數量和規模。所以他們已經開始了。他們運行得很好。我們對今年剩餘時間的影響有了更好的了解，也對我們的利潤回補率有了更好的了解。

And then on top of it, the residential market has rebounded very quickly on both margins and volume. We've seen nice margin improvements in the commercial business that we haven't seen historically. That was -- that's kind of a pleasant end to what we're doing. And then as we've said all along, we thought we had 200 basis points of margin to continue to pick up in Transportation, and we thought that would take 12 to 18 months. The good news is we're picking that up faster than we anticipated, and we still think we've got plenty of runway there. So it's the tailwinds of the market plus the more rapid pickup of margin improvement plowing back some of the inefficiencies and supply chain issues that we had. (inaudible) talk about more detail.

除此之外，住宅市場的利潤率和銷量都迅速反彈。我們在商業業務中看到了歷史上從未見過的利潤率大幅提高。這對我們正在做的事情來說是一個令人愉快的結局。然後，正如我們一直所說的那樣，我們認為運輸業的利潤率有 200 個基點，可以繼續回升，而且我們認為這需要 12 到 18 個月的時間。好消息是我們的恢復速度比我們預期的要快，而且我們仍然認為我們有足夠的跑道。因此，市場的順風加上利潤率改善的更快回升，解決了我們遇到的一些低效率和供應鏈問題。 （聽不清）談論更多細節。

Sure. A couple of things. So I neglected to mention in my opening comments that we have updated our (inaudible) considerations in our website package. So in there, you'll see that our growth margin expectations for the year are 16% to 17% and really, that's the key number towards the bottom line that we've talked about earlier today. The reality is in our big -- in our project (inaudible) businesses, specifically the Transportation group and the large projects within E-Infrastructure, the second half is pretty much locked in, frankly. What we're selling today and what's in our combined backlog, that's really 2024 and beyond, which is great. We have -- it's been probably 2 years or 3 years since we've had that many large in excess of $50 million and up to (inaudible) million projects. And as you saw in the huge growth in the Unsigned, we expect that to really help us in 2024 and forward.

當然。有幾件事。因此，我在開場評論中忽略了提及，我們已經更新了網站包中的（聽不清）注意事項。因此，您會看到我們今年的增長率預期為 16% 至 17%，實際上，這是我們今天早些時候討論過的盈利的關鍵數字。坦率地說，現實是在我們的大型項目（聽不清）業務中，特別是運輸集團和電子基礎設施內的大型項目中，下半年幾乎已經鎖定。我們今天銷售的產品以及我們合併後的積壓訂單中的產品，實際上是 2024 年及以後的產品，這很棒。我們可能已經有兩年或三年沒有做過這麼多超過 5000 萬美元和高達（聽不清）百萬美元的項目了。正如您所看到的 Unsigned 的巨大增長，我們預計這將在 2024 年及以後真正幫助我們。

So I think when you go through that and you say, okay, you got those 2 kind of segments pretty much locked in with kind of growth consistent with the first 6 months, another -- back 6 months looks as healthy as that, maybe a little bit better on the margin side than in the second quarter. But I think that's -- that leaves the residential and commercial business and [knock on wood], it's been highly volatile in the last 12 months probably. But certainly, what we've seen in -- thus far (inaudible) July is a very healthy runway for us for not only residential, but probably the best commercial side that we've had since we acquired them in 2017. So pretty much locked in on 2023, I think, at this point in time. If the world (inaudible) go crazy on us, which it has in the past, but that's what we believe what our scope looks like today.

所以我認為，當你經歷這個過程時，你會說，好吧，這兩種細分市場幾乎鎖定了與前 6 個月一致的增長，而後 6 個月看起來同樣健康，也許是利潤率比第二季度好一點。但我認為，除了住宅和商業業務之外，[敲敲木頭]，它在過去 12 個月裡可能非常不穩定。但可以肯定的是，我們所看到的——到目前為止（聽不清）7 月對我們來說是一個非常健康的跑道，不僅適用於住宅，而且可能是自2017 年收購它們以來我們擁有的最好的商業方面。所以幾乎我想，就在這個時間點，鎖定在 2023 年。如果世界（聽不清）對我們瘋狂，就像過去那樣，但這就是我們相信我們今天的範圍的樣子。

Very helpful. And then my next question, the cash flow in the first half has been a lot stronger than we expected. It's well above that operating income proxy you guys always provide. Like how do we think about cash flow into the back half of the year? Was there some pull forward into the first half? Should we expect some reversion to the mean over the coming quarters? Just any color there would be helpful.

很有幫助。然後我的下一個問題是，上半年的現金流比我們預期的要強得多。它遠遠高於你們總是提供的營業收入代理。比如我們如何看待下半年的現金流？上半場有一些推進嗎？我們是否應該預期未來幾個季度會回歸均值？任何顏色都會有幫助。

Sure. As I've talked about before, it's one of our more difficult things to predict. But (inaudible) sitting here and trying to explain why our front half was so slow and really kind of backed off the full year only to crush it in the back half. So certainly, we saw that in the front part of this year. Some of that is as we -- when you watch large projects, it's crossed all of our entities with the exception of residential, which doesn't have large projects. The start-up is very cash positive to us. So we're seeing a little bit of that in both our Transportation and our E-Infrastructure group. That certainly helped our working capital numbers.

當然。正如我之前談到的，這是我們更難預測的事情之一。但是（聽不清）坐在這裡，試圖解釋為什麼我們的前半程如此緩慢，並且確實有點後退了全年，結果卻在後半程將其壓垮。當然，我們在今年上半年就看到了這一點。其中一些是我們的——當你觀察大型項目時，它跨越了我們所有的實體，但住宅除外，住宅沒有大型項目。這家初創公司對我們來說現金非常積極。因此，我們在交通運輸和電子基礎設施部門都看到了一些這樣的情況。這無疑對我們的營運資金數字有所幫助。

And I think we'll have a slower -- year comparison-wise, slower 6 months than we did last year in the future, the back half of the year. That's just timing and everything else. So I'm not backing off at all from -- we will generate some more cash flow from ops. But I'll just say third -- second quarter was incredibly good, and we expect it to be good for the balance of the year. But it's hard to beat that one (inaudible) multiple times [over] operating income. That's a good thing -- that's a good problem to have.

我認為，與去年相比，未來下半年，我們將有比去年更慢的 6 個月。這只是時間和其他一切。所以我根本不會退縮——我們將從運營中產生更多的現金流。但我只想說第三-第二季度的表現非常好，我們預計今年剩餘時間也會表現良好。但很難比營業收入多倍地擊敗這個（聽不清）。這是一件好事——這是一個好問題。

Got it. And then just one more question, if I can. Transportation, 6% growth in the quarter. It looks like the comps get a lot easier for the remainder of the year. You have these design-build projects ramping and IIJA is still strong. Like you guys have always said this is a low single-digit growth business, but am I wrong to assume that growth over the next 12 months can outpace this pretty easily?

知道了。如果可以的話，還有一個問題。交通運輸，本季度增長 6%。看起來今年剩下的時間裡比賽會變得容易得多。這些設計建造項目正在不斷增加，IIJA 仍然很強大。就像你們一直說的那樣，這是一個低個位數增長的業務，但我認為未來 12 個月的增長很容易超過這個數字，這是錯誤的嗎？

Well, here's what I would say. The market right now, I just got the numbers yesterday for the 2024 budget is up about 14% total federal spend. So we're obviously not growing anywhere near that. But what we've said is focus on margins and when margins get to a certain point of strong double digits, then we'll grow revenue. I would tell you our margins are in those strong double digits, and we will grow revenue a little more than we have historically. But I don't see it going -- we're not going to go from 5% to 10%. I think we're going to stay more around that 5% growth rate. But we're opportunists if the right projects come along, and we think we can have those very strong margins and it drives it up more, we'll take advantage of it.

嗯，這就是我要說的。目前的市場情況是，我昨天剛剛得到的數據顯示，2024 年預算的聯邦總支出增長了約 14%。所以我們的增長顯然遠沒有達到這個水平。但我們所說的是關注利潤率，當利潤率達到兩位數的某個特定點時，我們就會增加收入。我想告訴你，我們的利潤率達到了兩位數，而且我們的收入增長將比歷史上多一些。但我不認為這種情況會發生——我們不會從 5% 上升到 10%。我認為我們將保持在 5% 左右的增長率。但如果有合適的項目出現，我們就是機會主義者，我們認為我們可以擁有非常強勁的利潤，並且它會進一步推動利潤增長，我們會利用它。

I think the great thing to keep in mind is -- and Ron touched upon this, is we really need to hit this home. We're locked and loaded for 2023. Everything we're working on right now is '24 and '25. And we're in a very good position on the Transportation side in '24 already with the backlog and the projects that we have in place. We'll still take more for '24, don't get me wrong. But we're in the best position we've had at this time of year already looking at the next year and going forward. And I will tell you there are several very nice projects on the horizon of which we would hope to win something out of those, not all of them into the back -- in the back half of the year for Transportation.

我認為要記住的最重要的事情是——羅恩談到了這一點，我們真的需要擊中目標。我們已鎖定 2023 年的目標。我們現在所做的一切都是 24 和 25 年。 24 年，我們在運輸方面處於非常有利的位置，我們已經有積壓的訂單和已到位的項目。我們仍然會在 24 年採取更多措施，請不要誤會我的意思。但我們正處於每年這個時候的最佳位置，我們已經展望了明年並繼續前進。我會告訴你，有幾個非常好的項目即將出現，我們希望能從這些項目中贏得一些東西，而不是全部進入後半年的交通運輸項目。

And I'd add one more thing. I think the -- for both E-Infrastructure and for Transportation, the length of our backlog is probably at an all-time high. We used to say that E-Infrastructure was probably a 9-month forward-looking items and Transportation was around a year and a quarter. Those numbers are going to be significantly long at the same time just because of the size of the projects is growing quickly, both in e-commerce and in (inaudible). So that's one of the reasons that we feel so good about going into 2024.

我還要補充一件事。我認為，對於電子基礎設施和交通運輸來說，我們的積壓訂單長度可能處於歷史最高水平。我們過去常說，電子基礎設施可能是一個為期 9 個月的前瞻性項目，而交通運輸則大約是一年零一個季度。這些數字將同時變得相當長，因為電子商務和（聽不清）項目的規模都在快速增長。這就是我們對 2024 年充滿信心的原因之一。

Our next question is coming from the line of Brian Russo with Sidoti.

我們的下一個問題來自 Brian Russo 和 Sidoti 的對話。

If you could just elaborate on the mix of projects within your E-Infrastructure segment that allowed you to report such high margins? And kind of when we look at the backlog or even into 2024, is the mix just getting better so that these margins are sustainable? If not, there's potentially upside there?

您是否可以詳細說明您的電子基礎設施部門中的項目組合，使您能夠報告如此高的利潤？當我們查看積壓訂單甚至到 2024 年時，這種組合是否正在變得更好，以便這些利潤率能夠持續？如果沒有，還有潛在的上升空間嗎？

Yes. Well, I think there's 2 pieces to the margin that we need to consider. The first is that we lost, we believe, 200 basis points during COVID due to supply chain inefficiencies as a combination of pricing and the inefficiencies that would cause on the jobs. In the quarter, we [caught] back pretty much all of that, right? So that's a big, big movement for us. And then we pick up a little bit with mix. However, as we look forward, the bigger the projects in this segment unlike other segments, the bigger the projects here, generally the better the margins for us and the better leverage we get out of assets.

是的。嗯，我認為我們需要考慮兩點。首先，我們認為，在新冠疫情期間，由於定價和工作效率低下導致供應鏈效率低下，我們損失了 200 個基點。在本季度，我們幾乎收回了所有這些，對吧？所以這對我們來說是一個非常非常大的運動。然後我們開始進行一些混音。然而，正如我們展望的那樣，與其他細分市場不同，該細分市場的項目越大，通常我們的利潤率就越高，我們從資產中獲得的槓桿作用就越大。

So as we see these large onshoring of manufacturing jobs in these multiyear campuses for data centers that keep getting bigger and bigger, they certainly help us on the long-term trajectory of the margin. But I would tell you, one of the biggest pieces in the quarter was really getting back, getting into the next level of contracts with new pricing and getting some of the supply chain issues out of the way to pick up some of the efficiencies on the jobs.

因此，當我們看到這些大量的製造業工作崗位在這些多年的數據中心園區內外包，並且規模不斷擴大時，它們無疑對我們的長期利潤軌蹟有幫助。但我想告訴你，本季度最重要的事情之一確實是回來了，以新的定價簽訂了下一個級別的合同，並解決了一些供應鏈問題，以提高生產效率。工作。

Yes. I would add, I think when you look at our backlog in a footnote, which compared at the beginning of the year to, obviously, June 30, the big increase is in the E-Infrastructure side. And I would say that while there's been lots of ups and downs, the majority of that -- that 50% increase in backlog, the majority of that is the onshoring and (inaudible) manufacturing side. And of course, those projects are large and heavy similar to data centers, a long duration, which helps us a lot. Transportation in that same period is up a little bit, pretty flat, but I don't believe we've ever had almost (inaudible) million of unsigned work. So that work is -- several large jobs, which will -- which by their very nature, very lumpy. So the good news is we have those works. I mean the better news is we're going to be starting filling in our revenue driving numbers in 2024 or 2025.

是的。我想補充一點，我認為當你看腳註中我們的積壓工作時，與年初相比，顯然是 6 月 30 日，電子基礎設施方面的大幅增長。我想說，雖然有很多起伏，但其中大部分——積壓訂單增加了 50%，其中大部分是在岸和（聽不清）製造方面。當然，這些項目像數據中心一樣又大又重，持續時間長，這對我們有很大幫助。同一時期的交通運輸略有上升，相當平穩，但我不相信我們曾經有過近（聽不清）數百萬未簽名的作品。因此，這項工作是——幾項大型工作，就其本質而言，是非常不穩定的。所以好消息是我們有這些作品。我的意思是，更好的消息是我們將在 2024 年或 2025 年開始填寫我們的收入驅動數字。

Okay. Great. And then just a follow-up on Transportation. It seems like this is the first quarter year-over-year that you've actually had positive top line growth in the segment, probably since before 2021. And I'm just curious, is the higher risk or lower margin projects that you were looking to complete, I mean, are we past that? And so 5.9% year-over-year increase in June, it could be even better than that. Just curious what we might expect going forward?

好的。偉大的。然後是交通方面的後續行動。這似乎是自 2021 年以來，您在該領域實際上實現收入正增長的第一個季度。我只是很好奇，您所從事的項目是風險較高還是利潤率較低期待完成，我的意思是，我們已經過去了嗎？所以6月份同比增長5.9%，可能會更好。只是好奇我們未來會發生什麼？

Yes. I mean we're out of historical stuff. We really are. The fundamental difference is that we have said our focus on Transportation is driving margin growth, right? We have way too low margins, way too high risk profile that's taken us several years to do. That focus, coupled with the market dynamics that are taking place, pricing is going up, capacity is full with a lot of places, is enabling us to -- we have a very solid threshold of what we allow to take jobs at. If they go over that threshold, we'll take on more jobs. We're at that point where it's over the threshold. We think we can still get more margin.

是的。我的意思是我們已經沒有歷史的東西了。我們確實是。根本區別在於，我們說過我們對運輸的關注正在推動利潤增長，對嗎？我們的利潤率太低，風險狀況太高，我們花了好幾年的時間才做到這一點。這種關注，加上正在發生的市場動態、價格上漲、許多地方的產能已滿，使我們能夠——我們在允許工作的方面有一個非常堅實的門檻。如果他們超過這個門檻，我們將承擔更多工作。我們正處於超過閾值的階段。我們認為我們仍然可以獲得更多的利潤。

Don't get me wrong with the combination of what we're driving for productivity. But also keep in mind that the first half of this year was very slow on the aviation bid activity. We saw that pick up significantly in the second quarter and we think there's some very nice jobs in the back half of the year that we have opportunities on, which will move that margin again. So we think we have margin expansion and growth expansion now if the market is delivering projects above that threshold that we're willing to go after.

請不要誤會我對我們所推動的生產力的結合的誤解。但還要記住，今年上半年航空招標活動非常緩慢。我們看到第二季度的情況顯著回升，我們認為今年下半年有一些非常好的工作機會，我們有機會，這將再次提高利潤率。因此，我們認為，如果市場提供的項目高於我們願意追求的門檻，那麼我們現在的利潤率和增長就會擴大。

And I would add, I think you've never done shifting the mix to higher-margin work. But I think from a hard bid side, we have that to the point where we're doing hard bid work that we want at this point in time. In other words, there's some strategic benefit in it from either a gross margin standpoint or a follow-on work. And that's really what it's made up of today. So we're not -- we don't have any -- our bad list is almost empty, never empty total, but there's nothing in there that is residue from chasing work -- chasing low-margin work because we needed the work. We just don't have those projects anymore. That's the major reason why that mix changes happened with moving to design-build and other alternative delivery work, particularly in the Rocky Mountain and west side of our territories.

我想補充一點，我認為你從未將產品組合轉向利潤率更高的工作。但我認為，從硬性投標的角度來看，我們已經達到了目前正在做我們想要的硬性投標工作的程度。換句話說，無論是從毛利率的角度還是從後續工作的角度來看，它都有一些戰略利益。這就是它今天的真正組成部分。所以我們沒有——我們沒有任何——我們的不良清單幾乎是空的，從來沒有空的總數，但其中沒有任何東西是追逐工作的殘留物——追逐低利潤的工作，因為我們需要這些工作。我們只是不再有這些項目了。這就是為什麼隨著轉向設計建造和其他替代交付工作而發生組合變化的主要原因，特別是在落基山脈和我們領土的西側。

We have reached the end of our question-and-answer session. I would like to turn the floor back over to Mr. Cutillo for any additional concluding remarks.

我們的問答環節已經結束。我想請卡蒂略先生髮表任何補充的結論性意見。

Thank you, Jesse. Thanks again, everyone, for joining our call today. If you have any follow-up questions or wish to schedule a call, please feel free to contact Noelle Dilts. Her contact info can be found on our press release. I want to thank everybody for taking the time this morning and all our employees that are on the phone. Have a great day.

謝謝你，傑西。再次感謝大家今天加入我們的電話會議。如果您有任何後續問題或希望安排通話，請隨時聯繫 Noelle Dilts。她的聯繫信息可以在我們的新聞稿中找到。我要感謝大家今天早上抽出時間以及我們所有接電話的員工。祝你有美好的一天。

Ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation, and you may disconnect at this time.

女士們先生們，今天的電話會議和網絡廣播到此結束。我們感謝您的參與，此時您可以斷開連接。