Sterling Infrastructure Inc (STRL) 2024 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to Sterling Infrastructure 3Q '24 webcast and conference call. (Operator Instructions) This call is being recorded on Thursday, November 7, 2024.

早安，女士們、先生們，歡迎來到 Sterling 基礎設施 24 年第 3 季網路廣播和電話會議。（操作員說明）此通話錄音時間為 2024 年 11 月 7 日星期四。

I would now like to turn the conference over to Noelle Dilts. Please go ahead.

我現在想把會議交給諾埃爾·迪爾茨。請繼續。

Thank you. Good morning to everyone joining us, and welcome to Sterling Infrastructure's 2024 third quarter earnings conference call and webcast. I'm pleased to be here today to discuss our results with Joe Cutillo, Sterling's Chief Executive Officer; and Sharon Villaverde, Sterling's Chief Financial Officer. Joe will open the call with an overview of the company and its performance in the quarter. Sharon will then discuss our financial results and guidance, after which Joe will provide a market and full year outlook. We will then open the call up for questions.

謝謝。大家早安，歡迎參加 Sterling Infrastructure 的 2024 年第三季財報電話會議和網路廣播。我很高興今天能夠與 Sterling 執行長 Joe Cutillo 討論我們的業績；以及 Sterling 財務長 Sharon Villaverde。喬將在電話會議開始時概述公司及其本季的業績。然後，沙龍將討論我們的財務業績和指導，之後喬將提供市場和全年展望。然後我們將開放提問。

As a reminder, there are accompanying slides on the Investor Relations section of our website. These slides include details on our updated financial guidance. Before turning the call over to Joe, I will read the Safe Harbor statement. The discussion 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 obligations to update forward-looking statements as a result of new information, future events or otherwise.

提醒一下，我們網站的投資者關係部分有隨附的幻燈片。這些幻燈片包含有關我們更新的財務指導的詳細資訊。在將電話轉給喬之前，我將閱讀安全港聲明。今天的討論可能包括前瞻性陳述。實際結果可能與今天的聲明有重大差異。請參閱 Sterling 最近的 10-K 和 10-Q 文件，以了解可能影響這些預測和假設的風險因素的更完整描述。本公司不承擔因新資訊、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 US 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準則未認可的財務指標。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。

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

現在我將把電話轉給我們的執行長 Joe Cutillo。

Thanks, Noelle. Good morning, everyone, and thank you for joining Sterling's third quarter 2024 earnings call. I'd like to start by thanking our teams for delivering another record quarter to our shareholders. For the quarter, we delivered $1.97 of earnings per share, up 56% over prior year.

謝謝，諾艾爾。大家早安，感謝您參加 Sterling 的 2024 年第三季財報電話會議。首先，我要感謝我們的團隊為我們的股東帶來了另一個創紀錄的季度業績。本季度，我們實現每股收益 1.97 美元，比去年同期增長 56%。

Our gross profit margin reached 22%, reflecting our continued focus on the most attractive and highest return opportunities. We grew operating income by over 50% on revenue growth of 6% as we continue to shift our mix towards higher-margin services.

我們的毛利率達到22%，反映出我們持續關注最具吸引力和最高回報的機會。隨著我們繼續將業務組合轉向利潤率更高的服務，我們的營業收入成長了 50% 以上，收入成長了 6%。

Backlog at the end of the quarter totaled $2.1 billion, an increase of 2% over the prior year. Combined backlog was $2.37 billion, relatively flat with the prior year period. Backlog alone does not capture the magnitude of opportunity ahead of us. As our work shifts towards large multiphase projects in both Transportation and E-Infrastructure, we have greater visibility into future phases of work. Our historical award rate for these additional phases is near 100%. Our pipeline of high probability work remains at over $0.5 billion.

本季末積壓訂單總額為 21 億美元，較上年同期成長 2%。合計積壓金額為 23.7 億美元，與去年同期持平。僅憑待辦事項並不能反映我們面前的機會有多大。隨著我們的工作轉向交通和電子基礎設施領域的大型多階段項目，我們對未來工作階段有了更大的了解。我們對這些額外階段的歷史獎勵率接近 100%。我們的高機率工作管道仍超過 5 億美元。

In addition, in our E-Infrastructure segment, our line of sight in the jobs being awarded in the fourth quarter and the first quarter makes us confident both our backlog and future phase pipeline will grow significantly into 2025. The bottom line is we are seeing strong tailwinds across our markets and have excellent visibility for multiple years ahead.

此外，在我們的電子基礎設施領域，我們對第四季度和第一季授予的工作的關注使我們相信我們的積壓訂單和未來階段的管道將在 2025 年大幅增長。最重要的是，我們看到整個市場的強勁推動力，並且在未來幾年擁有良好的能見度。

Shifting to our balance sheet. We had another great cash generation quarter with operating cash flow of $152 million. Our net cash position is now $326 million, and we are in great shape to pursue acquisitions that will build upon our strong platform and accelerate growth. The Sterling Way continues to guide us as we grow and expand our company. This is our commitment to take care of our people, our environment, our investors and our communities while we build America's infrastructure.

轉向我們的資產負債表。我們又度過了一個出色的現金產生季度，營運現金流達 1.52 億美元。我們的淨現金部位目前為 3.26 億美元，我們處於良好的狀態，可以進行收購，以建立我們強大的平台並加速成長。Sterling Way 繼續指導我們發展和擴大公司。這是我們在建立美國基礎設施的同時照顧我們的人民、我們的環境、我們的投資者和我們的社區的承諾。

Now I'd like to discuss our results for the third quarter of 2024. In E-Infrastructure, our largest and highest margin segment, revenue increased 4% and operating profit grew 89%. Operating margins expanded over 1,100 basis points to reach a very strong 25.8%. This exceptional margin expansion reflects our continued focus on large mission-critical projects and excellent execution.

現在我想討論一下我們 2024 年第三季的業績。在我們規模最大、利潤率最高的電子基礎設施領域，收入成長了 4%，營業利潤成長了 89%。營業利益率擴大了 1,100 個基點，達到非常強勁的 25.8%。這種非凡的利潤成長反映了我們對大型關鍵任務項目的持續關注和卓越的執行力。

The data center market was the primary driver of E-Infrastructure revenue growth in the quarter as revenue from this market increased 90% over the prior year period. Data center work now represents over 50% of our E-Infrastructure backlog. The strength in data centers more than offset challenging revenue comparison in the manufacturing market. While the small project market remained below prior year levels, we did see some nice sequential improvement in the quarter.

資料中心市場是本季電子基礎設施收入成長的主要驅動力，該市場的營收比去年同期成長了 90%。資料中心工作目前占我們電子基礎設施積壓工作的 50% 以上。資料中心的實力足以抵銷製造業市場中具有挑戰性的收入比較。雖然小型專案市場仍低於去年水平，但我們確實看到本季出現了一些不錯的連續改善。

E-infrastructure awards were $314 million, driving backlog to $919 million, up 3% from the prior year period and an increase of 13% from the beginning of the year. The data center market was again the largest driver of awards as customers are racing to build the capacity needed for technology advancements, including AI.

電子基礎設施獎勵金額為 3.14 億美元，使積壓訂單達到 9.19 億美元，比去年同期成長 3%，比年初成長 13%。資料中心市場再次成為獎項的最大推動力，因為客戶正在競相建立包括人工智慧在內的技術進步所需的容量。

We continue to lever our resources across the business segments to expand E-Infrastructure into the Rocky Mountain region, where we now have multiple data center projects. As our work continues to shift towards large multiphase projects, our pipeline of high probability future work has expanded, providing strong visibility into 2025 and 2026.

我們繼續利用各業務部門的資源，將電子基礎設施擴展到落基山地區，目前我們在那裡擁有多個資料中心專案。隨著我們的工作繼續轉向大型多階段項目，我們未來高機率工作的管道已經擴大，為 2025 年和 2026 年提供了強大的可見性。

Moving to Transportation Solutions. Revenue increased 18% and operating profit grew 28%. Margins expanded 67 basis points from the prior year to reach 8.2%. Our markets are the strongest we have seen in our company's history and margin opportunities are very attractive.

轉向運輸解決方案。收入成長 18%，營業利潤成長 28%。利潤率較前一年增長 67 個基點，達到 8.2%。我們的市場是我們公司歷史上最強勁的市場，利潤機會非常有吸引力。

We ended the quarter with Transportation Solutions combined backlog of $1.4 billion, approximately flat with the prior year period. Third quarter awards for Transportation Solutions were $150 million and Unsigned awards totaled $308 million. In addition, we continue to work through the initial design phase of multiple large progressive design-build highway projects. The design work and backlog represents only a fraction of the anticipated total value of the projects.

本季結束時，運輸解決方案積壓訂單總額為 14 億美元，與去年同期基本持平。第三季交通解決方案獎勵金額為 1.5 億美元，未簽名獎勵總額為 3.08 億美元。此外，我們也持續完成多個大型漸進式設計建造高速公路專案的初始設計階段。設計工作和積壓工作僅佔專案預期總價值的一小部分。

Moving to Building Solutions. Total segment revenue declined 10% in the quarter and operating income declined 12%. Results varied across our markets and our geographies. Revenue from our residential concrete slab business declined 29%, driven primarily by softness in the Dallas market. Affordability remains challenging and homebuilders believe that the potential for additional rate cuts may be keeping buyers on the sidelines. However, the builders are bullish regarding a significant rebound in 2025. PPG continues to generate strong margins but also saw some revenue softness in the quarter related to the Dallas slowdown.

轉向建置解決方案。本季部門總收入下降 10%，營業收入下降 12%。我們的市場和地區的結果各不相同。我們的住宅混凝土板業務收入下降了 29%，這主要是由於達拉斯市場疲軟所致。負擔能力仍然具有挑戰性，房屋建築商認為，進一步降息的可能性可能會讓買家保持觀望。然而，建築商對 2025 年的大幅反彈持樂觀態度。PPG 繼續創造強勁的利潤率，但本季營收也因達拉斯經濟放緩而出現一些疲軟。

Building Solutions operating margin of 11% was slightly below prior year levels. As a reminder, we are able to quickly adjust the cost structure in this business to match demand. We remain very bullish on the long-term demand dynamics in our key residential markets and anticipate strengthening as we move into 2025.

建築解決方案營運利潤率為 11%，略低於去年水準。提醒一下，我們能夠快速調整該業務的成本結構以滿足需求。我們仍然非常看好主要住宅市場的長期需求動態，並預計隨著進入 2025 年需求將會增強。

With that, I'd like to turn it over to Sharon to give you more details on the quarter and our full year guidance. Sharon?

說到這裡，我想將其交給莎倫，向您提供有關本季度和全年指導的更多詳細資訊。莎倫？

Thanks, Joe, and good morning. I'd like to take you through some of the details of our financial results, beginning with our backlog metrics. Our third quarter backlog totaled $2.06 billion, a 2.2% increase over the year ago period. The gross margin of this backlog was 16.8%, a 170 basis points improvement from the same quarter last year. A higher level of E-Infrastructure backlog margin and an increase of both the amount of transportation backlog and its backlog margin drove this improvement.

謝謝，喬，早安。我想向您介紹我們財務表現的一些細節，首先是我們的積壓指標。我們第三季的積壓訂單總額為 20.6 億美元，比去年同期成長 2.2%。本次積壓訂單毛利率為16.8%，較去年同季提高170個基點。電子基礎設施積壓利潤率的提高以及運輸積壓量及其積壓利潤率的增加推動了這一改善。

Unsigned awards totaled $319.6 million in the quarter. We closed the quarter with combined backlog of $2.37 billion, which was in line with prior year levels. Third quarter 2024 book-to-burn ratios were 0.92 times for backlog and 0.86 times for combined backlog. Award timing is inherently lumpy in our business and is best viewed over a multi-quarter period. Year-to-date book-to-burn ratios were 0.99 times for backlog and 1.0 times for combined backlog.

本季未簽署的獎勵總額為 3.196 億美元。本季末，我們的積壓訂單總額為 23.7 億美元，與去年同期水準一致。2024 年第三季積壓訂單的預訂銷毀比率為 0.92 倍，合併積壓訂單的預訂銷毀比率為 0.86 倍。在我們的業務中，獎勵時間本質上是不穩定的，最好在多個季度的時期內進行觀察。年初至今，積壓訂單的預訂與銷毀比率為 0.99 倍，合併積壓訂單為 1.0 倍。

Turning to our third quarter income statement. Revenue was $593.7 million, an increase of 6% over the prior year quarter. Current quarter consolidated gross profit was $129.8 million, an increase of 41.3% over the 2023 period. Gross margin increased to 21.9%, a 550 basis points improvement over the third quarter of 2023. This margin increase reflects improvements in E-Infrastructure and Transportation.

轉向我們的第三季損益表。營收為 5.937 億美元，比去年同期成長 6%。本季綜合毛利為 1.298 億美元，較 2023 年同期成長 41.3%。毛利率增加至21.9%，較2023年第三季增加550個基點。這一利潤率的成長反映了電子基礎設施和運輸的改善。

General and administrative expense was 5.2% of revenue in the quarter, which was consistent with our expectations. Operating income for the third quarter was $87.5 million, a 53.1% increase over the prior year quarter. Our operating margin increased 454 basis points to 14.7%. Our effective income tax rate for the third quarter was 26.4%. We expect our full year effective income tax rate to be approximately 24%.

本季一般及管理費用佔營收的 5.2%，與我們的預期一致。第三季營業收入為 8,750 萬美元，比去年同期成長 53.1%。我們的營業利益率增加了 454 個基點，達到 14.7%。我們第三季的有效所得稅率為 26.4%。我們預計全年有效所得稅率約為 24%。

The net effect of these items resulted in a record third quarter with net income of $61.3 million or $1.97 per diluted share, an improvement of 55.8% and 56.3%, respectively, compared to the third quarter of 2023.

這些項目的淨效應導致第三季創紀錄的淨利潤為 6,130 萬美元或每股攤薄收益 1.97 美元，與 2023 年第三季相比分別增長 55.8% 和 56.3%。

Third quarter EBITDA totaled $100.8 million, an increase of 41.5% over the prior year quarter. EBITDA margin improved to 17%, up from 12.7% in the prior year quarter. Cash flow from operating activities for the first nine months of 2024 was a strong $322.8 million compared to $331.2 million in the prior year period. Cash flow used in investing activities for the first nine months of 2024 included $57.5 million of net CapEx.

第三季 EBITDA 總計 1.008 億美元，比去年同期成長 41.5%。EBITDA 利潤率從去年同期的 12.7% 提高至 17%。2024 年前 9 個月的營運活動現金流量高達 3.228 億美元，而去年同期為 3.312 億美元。2024 年前 9 個月投資活動使用的現金流量包括 5,750 萬美元的淨資本支出。

As a result of the significant growth in our Transportation segment, we are raising our expected net CapEx for the year to $65 million to $70 million. Year-to-date cash flow from financing activities was an $84 million outflow, primarily driven by share repurchases of $50.6 million at an average price of $103.90 per share. $20.5 million was used in the quarter to purchase roughly 188,000 shares at an average price of $108.99. $149.4 million remains available under the existing repurchase authorization.

由於運輸部門的顯著成長，我們將今年的預期淨資本支出提高至 6,500 萬至 7,000 萬美元。年初至今，融資活動產生的現金流量為 8,400 萬美元，主要是因為以每股 103.90 美元的平均價格回購了 5,060 萬美元的股票。本季使用 2,050 萬美元以平均價格 108.99 美元購買了大約 188,000 股股票。現有回購授權下仍有 1.494 億美元可用。

We ended the quarter with a very strong liquidity position consisting of $648.1 million of cash and debt of $322.6 million for a cash net of debt balance of $325.5 million. In addition, our $75 million revolver -- revolving credit facility remained unused during the period.

本季結束時，我們的流動性狀況非常強勁，其中包括 6.481 億美元的現金和 3.226 億美元的債務，扣除債務後的現金餘額為 3.255 億美元。此外，我們的 7,500 萬美元循環信貸額度在此期間仍未使用。

With our strong year-to-date results and significant opportunities in each of our operating segments, we are updating our financial guidance for the year. Our updated guidance ranges are as follows. Revenue of $2.15 billion to $2.175 billion. Gross profit margin of 19% to 20%. Net income of $180 million to $185 million. Diluted EPS of $5.85 to $6. EBITDA of $310 million to $315 million.

憑藉我們今年迄今的強勁業績和每個營運部門的重大機遇，我們正在更新今年的財務指引。我們更新的指導範圍如下。收入為21.5億美元至21.75億美元。毛利率為19%至20%。淨利潤為 1.8 億至 1.85 億美元。稀釋後每股收益為 5.85 美元至 6 美元。EBITDA 為 3.1 億至 3.15 億美元。

Considering the diversity and strength of our portfolio of businesses, our strong liquidity position and our comfortable 1 times EBITDA leverage ratio, we are well positioned to take advantage of additional opportunities to generate significant shareholder value in 2024 and beyond.

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舒適的 1 倍 EBITDA 槓桿率，我們完全有能力利用更多機會在 2024 年及以後創造可觀的股東價值。

Now I'll turn the call back to Joe.

現在我會把電話轉回給喬。

Thanks, Sharon. We see years of opportunity ahead associated with the revitalization of America's infrastructure. Sterling is playing a critical role in building the data infrastructure that enables today's way of life, the manufacturing production coming back to the US, the highways, the bridges and the airports that connect us and the homes we live in.

謝謝，莎倫。我們看到未來數年與美國基礎設施振興相關的機會。Sterling 在建設資料基礎設施方面發揮關鍵作用，這些基礎設施使當今的生活方式、製造業生產回流美國，以及連接我們和我們居住的家庭的高速公路、橋樑和機場成為可能。

In E-Infrastructure Solutions, we anticipate that the current strength in data center demand will continue for the foreseeable future as current capacity represents only a fraction of what is needed to support artificial intelligence and other emerging technologies.

在電子基礎設施解決方案中，我們預計在可預見的未來，資料中心需求的當前強勁勢頭將持續下去，因為當前容量僅佔支援人工智慧和其他新興技術所需容量的一小部分。

Our customers are discussing multiyear capital deployment plans and are focused on how to align with the right partners to help them achieve their targets. Our customers are highly focused on speed to market and are looking for proven trusted partners.

我們的客戶正在討論多年資本部署計劃，並專注於如何與合適的合作夥伴合作以幫助他們實現目標。我們的客戶高度專注於上市速度，並正在尋找經過驗證的值得信賴的合作夥伴。

On the manufacturing front, we anticipate that in the remainder of 2024 and 2025, we will see a fairly steady pace of mid to large-sized onshoring-related projects. As we look to 2026 and 2027, there's a very big pool of mega projects on the horizon. This would include planned semiconductor fabrication facilities. The size and duration of these projects is staggering. Given the complexity involved with their development, we believe it will take some time before awards start to flow.

在製造方面，我們預計在 2024 年剩餘時間和 2025 年，我們將看到大中型在岸相關專案的步伐相當穩定。展望 2026 年和 2027 年，大量大型專案即將出現。這將包括計劃中的半導體製造設施。這些項目的規模和持續時間是驚人的。考慮到其開發的複雜性，我們認為獎項開始流動還需要一段時間。

We expect the e-commerce and small warehouse markets will remain soft through 2024, but are encouraged by the preliminary activity we are seeing for 2025. These dynamics support strong profitability growth opportunities over a multiyear period for E-Infrastructure.

我們預計，到 2024 年，電子商務和小型倉庫市場將保持疲軟，但我們看到 2025 年的初步活動令人鼓舞。這些動態為電子基礎設施在多年內提供了強勁的獲利成長機會。

For 2024, we expect to deliver strong operating profit and believe we are well positioned for both revenue and profitability growth in 2025.

2024 年，我們預計將實現強勁的營業利潤，並相信我們已做好準備，在 2025 年實現收入和盈利能力的成長。

In Transportation Solutions, we are now in the second half of the federal funding cycle. We have built over two years of backlog and continue to see a robust level of activity ahead. We believe we are now in a market environment where we can sustain elevated growth relative to historical levels so long as margins remain at current levels or higher. We are very confident that our Transportation business will deliver strong revenue and profitability growth in 2024.

在交通解決方案方面，我們現在正處於聯邦資助週期的後半段。我們已經累積了兩年多的積壓訂單，並且未來的活動水準將繼續保持強勁。我們相信，我們現在所處的市場環境是，只要利潤率保持在當前水準或更高，我們就可以維持相對於歷史水準的高速成長。我們非常有信心我們的運輸業務將在 2024 年實現強勁的收入和利潤成長。

In Building Solutions, the business is well positioned for growth over a multiyear period. Our key geographies of Dallas, Houston and Phoenix are expected to see continued population growth, driving demand for new homes. Additionally, there is a significant opportunity for share gain in both Houston and Phoenix.

在建築解決方案領域，該業務已做好多年成長的準備。我們的達拉斯、休士頓和鳳凰城等關鍵地區預計人口將持續成長，從而推動新房的需求。此外，休士頓和鳳凰城都有巨大的份額成長機會。

We anticipate that affordability challenges and the timing of interest rate cuts will continue to impact demand in the near term. Our conversations with our customers indicate a significant step-up in activity in 2025. We're continuing to work hard to find the right acquisitions to grow the company and enhance our service offering.

我們預計，負擔能力挑戰和降息時機將繼續影響短期內的需求。我們與客戶的對話顯示 2025 年的活動將顯著增加。我們將繼續努力尋找合適的收購來發展公司並增強我們的服務。

The E-Infrastructure market remains our top priority for M&A. We will remain patient and disciplined in our inorganic growth strategy. As it relates to share repurchases, we will continue to be opportunistic. As a result of our strong year-to-date performance and our backlog position, we are raising full year profitability guidance. The midpoint of our new guidance would represent 10% revenue growth, 33% diluted EPS growth and 21% EBITDA growth.

電子基礎設施市場仍然是我們併購的首要任務。我們將在無機成長策略中保持耐心和紀律。由於涉及股票回購，我們將繼續機會主義。由於我們年初至今的強勁業績和積壓訂單狀況，我們正在提高全年獲利指引。我們新指引的中點將代表 10% 的營收成長、33% 的稀釋後每股收益成長和 21% 的 EBITDA 成長。

With that, I'd like to turn it over for questions.

說到這裡，我想把它轉過來供大家提問。

(Operator Instructions) Brent Thielman, D.A. Davidson.

（操作員說明）Brent Thielman，D.A.戴維森。

Joe, just on E-Infrastructure, I mean, tremendous profitability here in the quarter and it looks to me like you finish out somewhere in excess of 20% this year, I guess, with the backlog increasingly skewing towards data centers. I'm trying to think about that in the context of maybe some of these other markets that might come back for you that don't carry as high margins, e-commerce, manufacturing. How do you sort of think about sustaining this level of profitability in E-Infrastructure into kind of 2025? Yes, make some things. --

喬，就電子基礎設施而言，我的意思是，本季度的盈利能力巨大，在我看來，今年你們的盈利能力將超過20%，我猜，積壓的訂單越來越多地偏向數據中心。我試著在其他一些市場的背景下思考這個問題，這些市場可能會為你帶來回報，但這些市場的利潤率不那麼高，包括電子商務、製造業。您如何看待將電子基礎設施的這種獲利水準維持到 2025 年？是的，做一些事情。--

Yes, I would tell you -- yes, a couple of things. We did see a nice rebound in some of the small projects, the industrial projects in the quarter. And the hard thing for us is these projects, to kind of give you a perspective, we can get a call today. I can give you a real-life example that happened last week when I was with our e-commerce guys.

是的，我會告訴你——是的，有幾件事。我們確實看到一些小型項目、工業項目在本季度出現了良好的反彈。對我們來說最困難的是這些項目，為了給您一個視角，我們今天可以接到電話。我可以舉一個上週我和我們的電子商務人員在一起時發生的真實例子。

We can get a call today, negotiate a contract tomorrow and be starting by Monday on these small deals. So they pop up quick, move quickly. We saw a nice rebound in the quarter that I think most people would have thought would have diluted our margins but they didn't. The growth of the margin on these large mission-critical jobs just continues to get better. And even as that stuff comes back, we believe we're still going to see margin improvement in E-Infrastructure as we go into 2025.

我們今天可以接到電話，明天談判合同，並在周一開始處理這些小交易。所以它們出現得很快，移動得也很快。我們在本季看到了不錯的反彈，我認為大多數人都認為這會稀釋我們的利潤，但事實並非如此。這些大型關鍵任務工作的利潤成長持續變得更好。即使這些東西回來了，我們相信進入 2025 年，我們仍然會看到電子基礎設施的利潤率提高。

And I've never been able to say 1,100% improvement or 1,100 basis points improvement year-over-year. But I feel really good. Brent, we're in the best shape we've ever been in. And when I look at what we're seeing on the horizon in the fourth quarter and first quarter, we're not even to the second quarter projects. It's unbelievable. We're very optimistic on both margin and growth in the Infrastructure right now.

我從未能夠說同比改善了 1,100% 或 1,100 個基點。但我感覺真的很好。布倫特，我們正處於有史以來最好的狀態。當我看到我們在第四季和第一季看到的情況時，我們甚至還沒有進入第二季的專案。真是難以置信。我們目前對基礎設施的利潤率和成長非常樂觀。

Yes. I mean, it seems like the Mountain market sort of organic expansion is working out really well for you in E-Infrastructure. Are there other areas you can do that organically? Or at this point, I mean, to your point, you're sort of looking at acquisitions in that segment. Is that what you need to do in order to get into new regions?

是的。我的意思是，山地市場的有機擴張似乎對電子基礎設施領域的您來說非常有效。還有其他領域可以有機地做到這一點嗎？或者在這一點上，我的意思是，就你的觀點而言，你正在考慮該領域的收購。這是您進入新地區所需要做的事情嗎？

Yes. So we've seen some nice growth organically through the Rocky Mountains. It's -- we look at kind of how far we can take the assets. At some point in time, there's a diminishing rate of return to all equipment halfway around the country. We still have some room with our footprints to expand another, call it, half a state to state. But what we've done is we put a map together where we think the highest growth opportunities are, where we can reach and then looking at acquisitions to fill those on the gaps.

是的。因此，我們在落基山脈看到了一些良好的有機增長。我們著眼於我們可以將這些資產發揮到何種程度。在某個時間點，半個國家的所有設備的報酬率都會遞減。我們仍然有一些空間來擴大我們的足跡，稱之為半個州。但我們所做的是，我們繪製了一張地圖，我們認為最大的成長機會在哪裡，我們可以到達哪裡，然後考慮收購來填補這些空白。

And then just last one on Building Solutions, it sounds like some slowness in Dallas, maybe that persists for a couple of quarters here. Interested in your feedback on that, just given what you're hearing from builders. But also, Joe, just what -- maybe what's going on in Houston and Phoenix? Are you still seeing growth in those markets?

最後一個關於建築解決方案的內容，聽起來達拉斯有些緩慢，也許這種情況會持續幾個季度。鑑於您從建築商那裡聽到的消息，我對您對此的反饋感興趣。而且，喬，到底是什麼——也許休士頓和菲尼克斯正在發生什麼？您仍然看到這些市場的成長嗎？

Yes. So a little different dynamics in each one of the markets. Dallas, definitely down in the quarter, a combination of affordability. We've heard some rumblings with one or two builders on land availability. The overall market is down, candidly. I will tell you, though, in October, on the plumbing side, we saw the starts double in October from where they finished in September, which is a great sign for us that, that could be going in the right direction very quickly. That's a leading indicator to us on what's happening. So that's good.

是的。因此，每個市場的動態都略有不同。達拉斯，本季肯定有所下降，這是綜合承受能力的結果。我們聽到一兩個建築商關於土地可用性的一些傳言。坦白說，整體市場正在下跌。不過，我會告訴你，在10 月份，在管道方面，我們看到10 月份的開工量是9 月份完工量的兩倍，這對我們來說是一個很好的跡象，這可能很快就會朝著正確的方向發展。這是我們了解正在發生的事情的領先指標。所以這樣很好。

We continue to see growth in Houston, saw nice growth year-over-year. Not only is the market growing but we're working on how to be even a little more aggressive on growing market share in that market. Phoenix, I would tell you, is still growing. Phoenix is -- quarter-to-quarter is a little bit more volatile than what the Houston and Dallas markets are. They're usually very consistent up and to the right. Phoenix goes up and to the right but we tend to see a little more of a spike one quarter, a little less of a growth in the next quarter. But directionally, we're certainly happy with the Phoenix market and where that's going and don't have long-term concerns with it.

我們繼續看到休士頓的成長，年成長良好。市場不僅在成長，而且我們正在研究如何更積極地擴大該市場的市場份額。我告訴你，鳳凰城仍在成長。菲尼克斯的季度比休士頓和達拉斯市場的波動性更大一些。它們通常向上和向右非常一致。鳳凰城向右上升，但我們往往會看到一個季度的高峰較多，而下一季的成長則較少。但從方向上看，我們當然對鳳凰城市場及其發展方向感到滿意，並且對此沒有長期擔憂。

Remember, these are the three biggest markets in the US, all have population growth. People are either going to be buying homes or renting apartments and we'll bounce between the commercial business if the apartment world multifamily takes off or back to the first-time home buyers on the residential side. So I think a little bit of a lull.

請記住，這是美國三​​大市場，人口都在成長。人們要么購買房屋，要么租賃公寓，如果公寓世界多戶住宅起飛，我們將在商業業務之間來回切換，或者回到住宅方面的首次購房者。所以我覺得有點平靜。

The other feedback we're getting from builders is it looks like there's a lot of people on the sidelines waiting for interest rates to drop again. So they're trying to figure out how fast and how far these rates are going to drop. And I get it, if I was them and I hear all the buzz that the interest rates are going to drop and I'm out there looking at a house and I think I could get another 0.25 point or 0.5 point by waiting a couple of months, I'd probably do the same thing. So we're not negative at all.

我們從建築商那裡得到的另一個回饋是，看起來有很多人在觀望，等待利率再次下降。因此，他們試圖弄清楚這些利率會下降多快、下降多少。我明白了，如果我是他們，我聽到利率將要下降的所有傳言，而我正在外面看房子，我想我可以通過等待幾個時間再獲得 0.25 點或 0.5 點幾個月後，我可能也會做同樣的事情。所以我們一點也不消極。

I think we saw a little slowdown in the quarter but the outlook and talking to the builders actually just two weeks ago, what I will tell you is the numbers that they gave us for growth in 2025 are higher than the historical numbers they've given us the last three years on growth projections. So we're hoping they're correct. They're much more bullish than we thought they were going to be. And so they obviously know more about that market and dynamics than we do.

我認為我們在本季度看到了一點放緩，但實際上就在兩週前，展望和與建築商的交談，我要告訴你的是他們給我們的2025 年增長數字高於他們給出的歷史數字我們對過去三年的成長預測。所以我們希望他們是對的。他們比我們想像的要樂觀得多。因此，他們顯然比我們更了解這個市場和動態。

Adam Thalhimer, Thompson, Davis.

亞當·塔爾希默、湯普森、戴維斯。

Actually, I just wanted to keep going on that. If they give you good growth projections for 2025, is that -- does that start early in '25? Or would your experience tell you it's kind of a mid-'25 recovery?

其實我只是想繼續這樣下去。如果他們為你提供了 2025 年良好的成長預測，那麼是不是從 25 年初就開始了？或者您的經驗會告訴您這是 25 年中期的復甦嗎？

Yes. Adam, we will -- we'll really know in January. One of the biggest sales seasons for the builders is that spring sale. And for them to hit that spring sale number, they've got to come out of the blocks pretty heavy in January to get the -- we're the first operation with slabs. They've got to get the slabs in there and call it, 90 to 120 days after that, they're selling the house.

是的。亞當，我們會——一月份我們就會真正知道。春季銷售是建築商最大的銷售季節之一。為了讓他們達到春季銷售數字，他們必須在一月份從街區中拿出相當大的重量才能獲得——我們是第一家使用平板的公司。他們必須把板子放在那裡，然後打電話，90到120天后，他們就要賣掉房子了。

So sometimes we'll see it late December but with holidays, it usually doesn't kick off until January. Again, we're pretty -- we're very happy with the starts that we saw in the plumbing world in October. We would not have expected that. So that's encouraging. And then we'll watch the slab side as we get through the rest of this year.

所以有時我們會在十二月底看到它，但如果有假期，它通常要到一月才會開始。再說一次，我們很漂亮——我們對十月份在管道行業看到的開始感到非常高興。我們沒想到會這樣。所以這是令人鼓舞的。然後我們將在今年剩餘的時間裡觀察板坯的情況。

Okay. That's good. Can you talk about top line by segment in Q4? I'm having a little trouble getting to the revenue guidance.

好的。那挺好的。能談談第四季各細分市場的營收情況嗎？我在獲取收入指導方面遇到了一些麻煩。

I think I don't have it broken down by segment in the quarter. I think we'll -- just kind of the math, right, to fill in the blank. Do you have the exact numbers, Sharon, and more detail on that?

我想我沒有按季度細分。我想我們會——只是一種數學，對吧，來填補空白。莎倫，你有確切的數字和更多細節嗎？

I can't provide specific guidance. I think that we continue to look strong in E-Infrastructure as compared to prior year. And likewise -- well, for Transportation, last year had a pretty strong comp. So we probably won't be as strong as in Q4 '24 as we were in Q4 '23. And then Building Solutions remains relatively flat, up a little.

我無法提供具體指導。我認為與去年相比，我們在電子基礎設施方面繼續表現強勁。同樣，對於交通運輸來說，去年的競爭相當強勁。因此，我們可能不會像 24 年第 4 季那樣強大，也不會像 23 年第 4 季那樣強大。然後，建築解決方案保持相對平穩，略有上升。

Which Q3?

哪個Q3？

Comparing to prior year.

與往年相比。

Okay. Got it. And then, Joe, can you just talk high level what you're seeing with, first, data centers? And second, if you could just expand on what you are seeing with the e-commerce distribution centers?

好的。知道了。然後，喬，您能簡單談談您在資料中心方面所看到的情況嗎？其次，您是否可以擴展一下您在電子商務配送中心所看到的情況？

Yes. Yes. So I'll start -- I'll go backwards. We had said, if you remember going back to '22, Amazon, was -- we're discussing '23, we did zero. I was prepared to tell everybody in '24, we did zero. But as of last week, we started Monday. We -- literally, this is a job we got last week on Tuesday, negotiated it final pricing on Wednesday, and we started this Monday.

是的。是的。所以我要開始──我要倒退。我們說過，如果你還記得回到 22 年，亞馬遜，我們正在討論 23 年，我們做了零。我準備在 24 年告訴大家，我們已經做了零。但從上週開始，我們從週一開始。從字面上看，這是我們上週二得到的工作，週三協商了最終定價，週一開始。

For Amazon's first distribution center, they're starting up in the program. We're looking at another one that will kick off either late this year or early next year. So we're encouraged by that. They had told us '25, they were going to start the program back up, and it looks like they're certainly on track and maybe a little bit early than that.

對於亞馬遜的第一個配送中心，他們正在啟動該計畫。我們正在考慮另一項計劃，該計劃將於今年年底或明年初啟動。所以我們對此感到鼓舞。他們告訴我們 25 年，他們將重新啟動該計劃，看起來他們肯定已經步入正軌，而且可能比這早了一點。

So couple that with the rebound that we see happening on the small industrial. Today, if they drop interest rates and drop them again before the end of the year, we think that's going to start coming back. We said second quarter next year. Hopefully, that comes back a little sooner than we anticipated. So we're becoming more bullish on both of those areas.

因此，將其與我們看到的小型工業的反彈結合起來。今天，如果他們降息並在年底前再次降息，我們認為這種情況將會開始回歸。我們說明年第二季。希望這比我們預期的要早一點回來。因此，我們對這兩個領域都變得更加看好。

When it comes to data centers, here's what I'm going to tell you. There are more damp data centers coming our way than we ever anticipated. They are -- these things are falling out of the sky. And every day, we are getting more and more opportunities.

說到資料中心，我將告訴您以下內容。潮濕的資料中心數量比我們預期的要多。它們是──這些東西是從天上掉下來的。每一天，我們都在獲得越來越多的機會。

The piece, Adam, that I think everybody is missing is this pipeline of work that we have and how much that pipeline grows over the next two quarters. I think it's highly probable that sometime at the end of the first quarter or halfway through the second quarter, we will have $1 billion or more in this pipeline of incremental work on top of our backlog that will hit in '25, '26, and we're starting to put stuff into '27.

亞當，我認為每個人都缺少的是我們現有的工作流程以及該流程在未來兩季的成長量。我認為很有可能在第一季末或第二季中期的某個時候，除了我們的積壓工作之外，我們將在增量工作中獲得10 億美元或更多的資金，這些工作將在25年、26 年和我們開始把東西放進'27。

So I think people are grossly misled right now by what is in our backlog. And I'll give you a perfect example. This Amazon distribution center is roughly a $17 million job. We have $300,000 in our backlog based on how the structure of that contract is laid out.

所以我認為人們現在被我們積壓的內容嚴重誤導了。我會給你一個完美的例子。這個亞馬遜配送中心的工程價值約為 1700 萬美元。根據該合約的結構，我們的積壓訂單中有 30 萬美元。

So we know what we're going to get. Our backlog is very deceiving because we don't -- that's how the contract is written and how we have to put it in. So if I was going to be a betting person, as I always say, I'd like to play cards when I know what my cards are and what others' cards are. We are in very good shape and the activity we are seeing is not only unlike nothing we've seen in the past but continues to exceed our expectations on what we thought would be coming out.

所以我們知道我們會得到什麼。我們的積壓工作非常具有欺騙性，因為我們不這樣做——合約就是這樣寫的，我們也必須這樣寫。因此，如果我要成為一名投注者，就像我常說的那樣，當我知道自己的牌是什麼以及別人的牌是什麼時，我會喜歡玩牌。我們的狀態非常好，我們所看到的活動不僅與我們過去所見過的不同，而且繼續超出了我們對結果的預期。

Well, that only covers E-Infrastructure. I think you also said in the prepared remarks that certain Transportation projects, you have a really low amount in backlog because it only reflects design and not the actual construction. One of my questions was, if you included the actual construction, how much would that add to backlog?

嗯，這僅涵蓋電子基礎設施。我想你在準備好的發言中也說過，某些交通項目的積壓量非常低，因為它只反映了設計而不是實際的施工。我的問題之一是，如果包括實際施工，這會增加多少積壓？

We know it's over $0.5 billion today of total and combined. Most of that's in the Infrastructure. But we will have, as we get through the design phase of some of these large design builds, we'll have multi-hundred million dollars of future phased backlog in Transportation. So when we look at Transportation today, we have roughly two years of backlog. We're working on stuff that's further out.

我們知道今天的總金額和總金額已超過 5 億美元。其中大部分都在基礎設施。但是，當我們完成其中一些大型設計建造的設計階段時，我們將在交通運輸領域獲得數億美元的未來分階段積壓訂單。因此，當我們看看今天的交通運輸時，我們大約有兩年的積壓。我們正在研究更遙遠的事情。

The transportation bill goes for another two years. We anticipated the end of the transportation bill, the IIJA we'll have somewhere between two or maybe even more than two years of backlog at that point in time. So we are -- it's hard to explain to people but we're sitting here looking at what we have and what's coming and what we're locked into, and we feel very, very good.

交通費還持續兩年。我們預計運輸法案的結束，屆時我們將有兩年甚至兩年以上的積壓。所以我們——很難向人們解釋，但我們坐在這裡，看看我們擁有什麼、即將發生什麼以及我們被鎖定的是什麼，我們感覺非常非常好。

Julio Romero, Sidoti & Company.

胡里奧·羅梅羅，西多蒂公司。

You guys talked about this pipeline of work coming your way on the E-Infrastructure side. You mentioned some near-term onshoring projects in '24 and '25 but also the much larger projects on the horizon for '26 and '27. I guess how are you balancing the pace of your bids now versus kind of keeping your capacity open for those '26, '27 mega projects?

你們談到了電子基礎設施的工作流程。您提到了 24 和 25 年的一些近期外包項目，以及 26 和 27 年即將推出的更大項目。我想您現在如何平衡投標進度與保持對 26、27 年大型專案的產能開放？

Well, I think the good thing is we can go full board now. And as we see those projects coming, we have plenty of time if we need to build excess or extra capacity to do that, and we would do that. So we're not pulling back on any of these mission-critical jobs. We're loading up the boat as much as we can with them. And when these mega jobs come out, we'll be fine. We're very good at expanding up very rapidly, and we're not concerned about that.

嗯，我認為好處是我們現在可以吃全膳了。當我們看到這些項目即將到來時，如果我們需要建立過剩或額外的產能來做到這一點，我們有足夠的時間，我們會這樣做。因此，我們不會撤回任何這些關鍵任務的工作。我們正在盡可能地裝載它們。當這些巨大的工作機會出現時，我們就會沒事的。我們非常擅長快速擴張，對此我們並不擔心。

Okay. That's helpful. And then I guess, this is fact -- .

好的。這很有幫助。然後我想，這是事實——。

Let me just clarify one thing -- let me clarify one thing on the pipeline, please. -- When we talk about this multiphase pipeline. This isn't work that's out there that we're looking at to bid. This is subsequent work associated with jobs we have. So that's a big difference. I'm not looking at $1 billion, we're looking a lot more than $1 billion of work out there. This is work that we have that will tag on is either incremental contracts or change orders to the existing contract to complete the project.

讓我澄清一件事——請讓我澄清一件事。 ——當我們談論這個多階段管道時。這不是我們正在考慮投標的工作。這是與我們現有工作相關的後續工作。所以這是一個很大的差別。我關注的不是 10 億美元，我們關注的是遠遠超過 10 億美元的工作。我們要做的工作要么是增量合同，要么是對現有合同的變更訂單以完成項目。

So this isn't stuff that we're hopeful on that might happen. This is stuff that has to happen to complete the project. It's more of a contractual structure of the way they do that, that doesn't enable us to book all of that backlog at one time.

所以我們不希望這種情況發生。這是完成該項目必須發生的事情。他們這樣做的方式更像是一種合約結構，這並不能讓我們一次預訂所有積壓的訂單。

I would tell you today that if we were able to do that, our backlog would be up well over $0.5 billion and everybody would be saying, oh my God, look at all this work. Instead, people keep getting confused because our backlog is staying relatively flat, and we know it's really growing, okay? So I just want to make sure that, that's true.

今天我想告訴大家，如果我們能夠做到這一點，我們的積壓訂單將遠遠超過 5 億美元，每個人都會說，天哪，看看所有這些工作。相反，人們總是感到困惑，因為我們的積壓工作保持相對平穩，我們知道它確實在增長，好嗎？所以我只是想確保這是真的。

No, that's very helpful and that gives some context to kind of the sequencing of how you see things going forward. You also mentioned earlier, you said some of these smaller deals in the E-Infrastructure that came back a bit in the third quarter didn't dilute margins. Can you maybe expand on that a bit? Are you doing anything different in terms of the small industrial kind of quick return projects in terms of bid margins or contract terms that are -- .

不，這非常有幫助，並為您如何看待未來的事情的順序提供了一些背景。您之前也提到過，電子基礎設施領域的一些較小交易在​​第三季有所回升，但並未攤薄利潤率。能稍微擴充一下嗎？對於小型工業類型的快速回報項目，您在投標保證金或合約條款方面是否做了任何不同的事情？——。

I think the reality is the smaller projects will carry lower margins, okay? That's not changing. What is changing is the pace and rate of which we're growing these mission-critical projects. And I'll be honest, we're realizing the value we bring to customers is even better than we maybe have priced and put out there in the past.

我認為現實是較小的專案利潤率會較低，好嗎？這並沒有改變。正在改變的是我們發展這些關鍵任務項目的步伐和速度。老實說，我們意識到我們為客戶帶來的價值甚至比我們過去定價和推出的價值還要好。

And then the bigger the projects, we are able to drive much better efficiencies on execution. So we are picking up more points of efficiency on the back end of these projects than we ever have in the past. And that's kudos to our team and the great work they've done.

專案越大，我們就能提高執行效率。因此，我們在這些專案的後端獲得了比過去更多的效率點。這是對我們團隊和他們所做的出色工作的讚揚。

It's also -- we've introduced some things with technology to now where we are. I'll bore you the depth on this call but to see what we're doing with drones in measuring, monitoring, project management, what we can do with drones that can now see down through trees and down through areas that you couldn't get takeoffs accurately in the past. If you miscalculate the amount of dirt by 6 inches over 400 acres that you have to move, it's real money. By being able to dial it into the numbers we're able to dial it in, that's incremental productivity. So there's 100 things like that, that we continue to do, continue to drive and are looking at how do we even do that better as we go forward.

我們也引入了一些技術來達到目前的水平。我會在這次電話會議上向您詳細介紹我們在測量、監控、專案管理方面正在使用無人機做什麼，我們可以使用無人機做什麼，這些無人機現在可以透過樹木和您看不到的區域準確地取得過去的起飛時間。如果您錯誤計算了 400 英畝土地上需要移動的 6 英寸泥土量，那麼這筆錢就是真金白銀。透過能夠撥入我們能夠撥入的號碼，這就是生產力的提升。因此，我們將繼續做 100 件類似的事情，繼續推動並研究如何在前進的過程中做得更好。

Very helpful there. Just last one for me would just be on, you had another great quarter of cash flow. Can you just speak to kind of the drivers of that and how that should trend going forward?

那裡非常有幫助。對我來說，最後一個就剛開始，你還有另一個很棒的季度現金流。您能談談這趨勢的驅動因素以及未來的趨勢嗎？

Yes, it's going to keep going. We've done a great job of working off customers' money. We believe philosophically, we should do that. The way we structure our contracts and our bids help us do that early out of the gate.

是的，它會繼續下去。我們在節省客戶資金方面做得很好。我們從哲學上相信，我們應該這樣做。我們建立合約和投標的方式幫助我們儘早做到這一點。

With these larger projects, we tend to get a higher amount of cash up front, which is nice. I think if you look forward and want to be conservative, our cash flow should always be kind of at that operating income level or better. And we don't see anything changing that would change the dynamics of the cash flow going forward. Our contract terms are the same. Our customer end markets are pretty much the same. That's -- yes, so all positive. We're working hard on what to do with all that cash. So that's the key for us.

對於這些較大的項目，我們往往會預先獲得更多的現金，這很好。我認為，如果你向前看並且想要保守的話，我們的現金流應該始終處於營業收入水平或更好。我們認為沒有任何變化會改變未來現金流的動態。我們的合約條款是一樣的。我們的客戶端市場幾乎相同。那是——是的，所以一切都是積極的。我們正在努力研究如何處理這些現金。這對我們來說是關鍵。

(Operator Instructions) At this time, we have no other questions. Please proceed.

（操作員說明） 目前，我們沒有其他問題。請繼續。

I want to thank everyone again for joining today's call, another exciting quarter for the Sterling team. If you have any follow-up questions or wish to schedule a call directly with us, please contact Noelle Dilts, her information in the press release. So I hope everybody has a great day, and we appreciate it. Thanks.

我想再次感謝大家參加今天的電話會議，這是斯特林團隊又一個令人興奮的季度。如果您有任何後續問題或希望直接與我們通話，請聯絡 Noelle Dilts，她的資訊請見新聞稿。所以我希望每個人都有美好的一天，我們對此表示感謝。謝謝。

Ladies and gentlemen, this concludes the conference. You may now disconnect your lines.

女士們、先生們，本次會議到此結束。現在您可以斷開線路。