Q1 2020 Earnings Call

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Ladies and gentlemen, today's conference is scheduled to begin shortly please continue standby. Thank you for your pieces.

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Hello, My name is making it will be your conference facilitator at this time I would like to welcome everyone to the M.D. Resources Group 20, Twond first quarter conference call.

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After the speaker's remarks will be a question to answer period.

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This call will be available for replay beginning at two PM eastern time today.

Go live in 59, P.M. Eastern on May 20 seconds.

The conference I'd number for the replay is for 981 to four nine again the conference I'd number for the replay is for 981 to four nine the number to dial before the replay is 185585 920.

Slide six or 4045373 406.

I would like to turn the conference over to Jason Bourne, Vice President Chief Financial Officer, and Treasurer of in D. Resources group. Thank you. Mr. Bowman you may begin your conference.

Thank you Mike Good morning, everyone and welcome to our first quarter 2020 earnings Conference call.

I Hope you and your families are safe and I. Thank you for joining us this morning.

This conference calls being broadcast live to the public over the Internet and slides will accompany our remarks did he would like to do this why did you can find them on events and presentations page under the investors tab of our website at Www Dot MD you dotcom.

Earnings release is also available on our website.

During the course of this presentation, we will make certain forward looking statements within the meaning of section 20 wanting you to Securities Exchange Act of 1934.

Although the company believes that its expectations and beliefs are based on reasonable assumptions actual results may differ materially.

For discussion of factors that may cause actual results to differ referred item one a risk factors in our most recent form 10-K, and our form 10-Q, which was filed this morning.

Given the current economic environment, our call this quarter will be slightly different from our previous discussions. In addition to covering our quarterly results. We will also plan to address our response to the cobot 19 goal pandemic.

Our businesses are performing in the current environment and potential impacts that we are monitoring at each of our business lines.

I will start my briefly covering this quarter's earnings results and then turn the presentation over to Dave Goodin, President and CEO of into your resources for an update on our revised guidance and future outlook.

After Dave's remarks, we'll open the line for questions.

In addition to David myself members of our management team, who will be available to answer questions today and dialing in for multiple locations are.

Dave Barney presidency old neighbor Corporation.

Jeff Thiede, President and CEO of them do you construction services group.

Nicole Kivisto, President and CEO of our utility group, Trevor Hastings, President and CEO of WB energy and Stephanie Barth, Vice President Chief Accounting officer in control of MD resources.

Yesterday, we announced first quarter earnings of $25.1 million or 13 cents per share compared to first quarter 2019 earnings of 40.9 million or 21 cents per share.

Our combined utility business reported earnings of 43.7 million down from 52 million in the first quarter of 2019.

The electric utility segment reported earnings of $11.4 million for the quarter compared to 15.5 billion in 2019.

This decrease in earnings was largely the result of a 2.2 million dollar negative impact from lower investment returns on certain benefit plans and a 7.1% decrease in electric sales volumes driven largely by warmer winter weather.

Higher depreciation depletion and amortization expense also contributed to the decrease.

Partially offsetting the decrease was rate recovery in Montana.

Our natural gas utility segment reported net income of 32.3 million for the quarter compared to 36.5 million in the prior year.

Net income was negatively impacted by lower investment returns of $3 million uncertain benefit plans compared to the prior year and a 10.9% decrease in retail sales volumes, which impacted jurisdictions without weather normalization mechanisms in place.

Higher depreciation depletion and amortization expense from increased property plant and equipment balances also contributed to the decrease approved rate recovery in certain jurisdictions, partially offset the decrease.

The pipeline business that earnings of 7.4 million in the first quarter compared to 6.8 million in 2019. This business saw increased transportation volumes and revenues in the quarter, primarily related to organic growth projects previously placed on the service.

And higher transportation rates associated with a FERC rate case that was sold in 2019.

Partially offsetting the increase were higher depreciation depletion and amortization expense from higher depreciation rates in the FERC rate case, and higher property plant and equipment balances.

Lower investment returns on certain benefit plans were an offset in the quarter.

Our construction services business reported first quarter net income of 16.8 million compared to 20 million in 2019.

And record quarterly revenues of 514.7 million up 22% from first quarter 2019 revenues of 420.9 million.

First quarter net income was negatively impacted by a $6.7 million out of period adjustment.

This adjustment was to correct revenue recognition on a construction contract.

Higher selling general and administrative expenses, primarily office and payroll costs also had a negative impact in the quarter.

This business continued to see increase workloads at both inside and outside specialty contracting lines.

Inside specialty contracting remains very busy with hospitality and high tech work and outside contracting workloads increase from high demand in the utility industry.

Increased outside workloads are partially offset by a decrease in equipment sales and rentals in the quarter.

Our construction materials business reported a seasonal loss of 38.2 million in the first quarter compared to a loss of 34.4 million in the same period of 2019.

And also reported record first quarter revenues of 262.2 million up from first quarter 2019 revenues of 227.2 million.

The increase loss was driven by a 2.4 million dollar negative impact from lower investment returns on certain benefit plans and higher selling general and administrative expense largely the result of increased payroll related costs.

Partially offsetting these impacts were higher construction and materials revenues as well as gross margins due to an earlier start to the construction season in some of our regions.

Now I'd like to switch gears and discuss our corporate liquidity status given the uncertainty surrounding cobot 19, and any potential financial impacts we have made liquidity management a priority for the company.

As of March 31, the company had 116.5 million cash on the balance sheet and $431.8 million of credit facility capacity available to continue to provide essential services to our customers and fund our 2020 capital program.

As noted in the news release shared yesterday, we do not have any revolving credit facilities maturing until 2024 and have no significant long term debt maturities until 2022.

In addition, one of our utility subsidiaries, Montana Dakota utilities entered into a 75 million dollar term loan agreement in early April it was used to repay outstanding borrowings and free up additional credit capacity.

Although there have been disruptions in the commercial paper markets are backstop credit facilities have performed exactly as expected.

From an equity perspective, we mentioned in the release, we have no current plans to issue equity under our ATM program in 2020, given our liquidity position and operating cash flow forecasts.

We pride ourselves and being dedicated to a strong balance sheet and we'll remain disciplined and that approach as we navigate through this current pandemic.

That summarizes the financial highlights for the quarter and now I'd like to turn the call over to Dave for his formal remarks, Dave.

And thank you Jason good morning, everyone.

Let me start by expressing my sincere hope that everyone, who joined US on this call is safe and healthy.

I want to thank you for your interest in EMEA resources.

I'd also like to acknowledge the unprecedented time that we area and say that we have great respect and appreciation for those on the front lines fighting this pandemic and providing care for those who are sick.

I would also recognize those in the workforce like our own employees or providing essential services each and every day. So just keeping the lights on the gas flowing in helping to construct America's infrastructure.

I am honored to be part of an organization that has shown an incredible spirit as strength in the face of this adversity.

Cannot be more proud of our employees and how well our team members have stepped up to help provide a central services to the nation in these challenging circumstances.

Gobain 19 is impacting all of us both professionally and personally.

For those MD resources employees personally affected by the virus, we have implemented supportive policies to predict their pay and benefits that allow them to take care themselves along with their families.

To date, we have nine known cases of cobot 19 affecting our workforce and our thoughts are with these employees and their families as they work to recover.

We continue to assess the safety of our employees and facilities to ensure their wellbeing.

We're very fortunate that our products and services are considered a central to this country and our communities. So operation generally have been permitted to proceed.

Albeit with increased social distancing measures and recognition of other guidelines from the CDC and state and local governments for various workplace settings.

As of March 30, Onest, our employee count was slightly over 14000 up actually 1500 over the same time period compared to 2019.

This allows us to continue building a strong America as we provide the electricity natural gas and construction materials and services that are essential to daily life.

All our businesses remain committed to the health and safety of our employees.

Customers and our communities.

Now I'd like to give some additional color on our first quarter results.

As noted in the news release mild winter weather, ranging from 7% to 21% warmer than last year across our utility service territories.

Had negative impacts on both our electric and natural gas sales volumes in the first quarter.

Our utility business remains committed to providing safe and reliable service throughout this pandemic.

To help ensure the safety of our employees and customers while providing this critical support during this challenging time.

Our utility companies have reduced the types of service orders being performed including discussion in discontinuing Disconnections of service.

Late payment fees were also eliminated effective April onest.

These payment arrangements relate to those experiencing financial difficulties as result of the pandemic.

Moving onto our pipeline business as Jason mentioned earlier this business saw an increase in earnings year over year.

Really largely due to the organic growth projects. This business has put into service in the second half of two any 19.

Currently preparatory turret preparatory work on the north back and expansion project is well underway.

The company filed its FERC application for the project here in February of 2020.

And anticipates FERC approval of the project in early 2021.

Construction is expected to begin in 2021 with the completion date later that year.

Dependent on regulatory along with environmental permitting.

While the decrease in oil prices as slow drilling activity, we continue to benefit from natural gas production in the Bakken and that known low natural gas pricing environment is providing organic growth opportunities for industrial growth projects adjacent to our existing system.

Our construction companies are also a central service providers, while both companies have experienced some inefficiencies as result of social distancing measures and other CDC state and local guidelines.

They have been able to continue their business operations with I will say minimal interruption.

Construction services reported record quarterly revenue of approximately 515 million for the quarter.

Up 22% on a year over year basis, and now stands at an all time record backlog of nearly 1.3 billion as of March 30 Onest.

Begun bidding environments across our footprint have been strong in the first quarter and we're optimistic that our high quality of service and skilled workforce, which actually increased year over year will help us to continue to aid and securing new jobs.

Looking at our operating environment, our crews are still working hard at both inside and outside contracting lines, albeit with necessary changes as a result of this pandemic.

And construction materials, we reported a normal seasonal loss slightly higher than the prior year and backlog that was just shy of last year's record.

With 905 million here standing at the end of the first quarter.

The warmer winter weather that had negative impacts on our utility business in the first quarter allowed our construction material crews to get out and begin work earlier this season.

One of the co bid related risks that we are monitoring at this business.

Is the decrease in fuel consumption.

And the result of many stay at home orders.

Many states cities and counties across the country have also been impacted by lower sales tax and other revenues.

As result of the pandemic.

These decrease tax collections could impact funds available for state infrastructure projects.

As you heard from Jason our first quarter operations were solid, but our earnings were disappointing driven by truck three primary factors.

The one first one being impacts from warmer weather across our utility operational footprint that 7% to 21% warmer than normal.

Two we had an out of period adjustment on a project at construction services group.

Industry, we had much lower investment returns are uncertain benefit plans at all of our businesses.

As we looked ahead due to potential impacts recorded 19 related disruptions combined with a dramatic decrease of the demand and prices for oil and related projects.

And pairing this with our lower than expected first quarter results, we are lowering or a 2020 earnings per share guidance to a range now at a $1.50 to $1.70.

But expect our long term compounded annual earnings per share growth to remain between five and 8%.

As you will note in the capital expenditures section of our news release, we have also decreased our planned capex as a result of economic uncertainties surrounding co bid 19 pandemic.

Looking forward, we are confident better companies will be able to continue providing the company with essential services for the rate of the year and beyond.

We are affirming that construction services group revenue guidance in the range of 1.85 to 2.05 billion enter slightly decreasing the revenue guidance at construction materials to a range of 2.1 to 2.3 billion for the year.

As always we will continue to provide updates to our guidance estimates as we go throughout the year.

In closing, while our backlog at the ended the first quarter is strong we do anticipate that with the uncertainty related to co bid 19, there will be increased pressure on revenues and margins for future work as or economy gradually reopens.

Our workforce levels continue to be quite consistent on a year over year basis.

And as a just last week, our workforce at the services business was actually approximately 4% higher than the same time last year.

And our workforce at our materials business stood at 98% of last years levels.

As for the communities, where employees live and work, we recently announced that MD resources through our foundation donated 500000 to a variety of organizations to support Corona virus relief efforts.

This is in addition to the 2.2 million that the MD resources Foundation had already committed to charitable organizations here in the 2020 calendar year.

I offer my sincere thanks to our employees and our customers for doing their part to stay healthy and safe during this crisis.

Our well being is above all the most important thing.

As always EMEA resources is committed to operating with integrity and a focus on safety, while creating superior shareholder value as we continue to act on our tagline a building a strong America.

I appreciate your interest in and commitment to MD resources and ask now that we opened aligned to questions operator.

At this time I would like to remind everyone. If you would like to ask your question. Please press Star then the number one on your telephone keypad.

She would like to withdraw your question pressed to count on your telephone keypad.

If you are on the speakerphone. Please pick up your handset before entering your request, we will pause for just a moment to compile the keeping cost.

Your first question comes from the line.

Ryan Levine from Citi.

Hi, good morning.

Good morning, Ryan.

How are you.

We're doing fine how are you doing Ryan.

Okay.

Can you talk about North Bakken expansion project and what are the underlying assumptions for your customer contracts there and in light of the lower production outlook for the basin is there any potential to scale back the scope of that project.

Sure Ryan Trevor Hastings, he's with us actually in the small group, we have assembled here in Bismarck I'll turn that over to Trevor.

Thanks, Ryan we we continue to move forward on Norfolk, and as we filed it with FERC.

I think it was middle of February this year.

At this point, we continue to move forward, we are actively monitoring evaluating the impacts on the Bakken as you mentioned as we've seen.

Some oil wells shut ins and gas decreasing but at this point in time, we've got an obligation and to move forward and get that project and service by late 2021.

Okay, and then in that presentation material. It was highlighted that you're looking at tangential areas Jason.

Midstream acquisitions or expansions can you comment around.

The appetite or the opportunities that fit the may be pursuing there.

Sure. So those are not acquisitions are actually just.

We're seeing a number of different industrial customers and look for gas service and and adjacent to our existing service territory. So this would be essentially organic growth opportunities off of our existing system, which is what we've been doing for the last five to 10 years.

And Thats really related to just kind of low price deck on natural gas that we've seen over the last few years as well as just got that continued outlook for low gas prices is one of the main drivers.

Okay, and maybe switching gears to your construction service business.

What percentage or backlog is las Vegas or related to the airport.

The outlook for those markets within the construction services.

GAAP would you take that one.

Absolutely. Thank you and were very busy in Las Vegas, and our backlog is about 25% of our total there.

As a reminder, we've got four companies or electrical mechanical fire protection on the ground utilities and they perform very well we've got one project that's been put on hold but we're expecting is going to ramp back up in this quarter.

And we've got another project has been postponed.

The three airport projects, we have there three different regions. So.

Not quite at 25% of of our backlog of one is the largest Washington, and Oregon and once in Kansas City, and we also have when CVG doing a little bit will work and how CFO.

Take a look at just the Pacific Northwest region, where we have for both companies operating have a similar level of backlog as we do and Las Vegas. In addition to that are outside line backlog is very strong in the Midwest Rocky mountain regions and up and down the West coast.

Those are diversification.

If you look at our record backlog and also.

Demonstrates that we have.

Strong demand from our services and that's due to our proven ability to perform.

He has.

Adjusted to cope with 19.

Just admirably and we are making sure that we're putting people safe work environments and adjusting working with our customers these changing conditions.

And so a follow up on that so in light of the Kobe 19 environment with reduced.

Air Airport activity are you seeing it does that create increased opportunities to enhance margins on those projects in the near term are you seeing.

Any of that backlog starting to slip and light to.

The current environment.

Good question have not seen any of those projects and our airport work slip at all and you have is less less activity. There. So you would think with less congestion less access challenges in issues that can only help margins, but then again, we're also seeing additional PPD.

Yes people are going through.

Temperature checks on many of our jobs and.

I also have more faced coverings, and sometimes even say shields.

Protect them to protect their safety. So we have not seen those airport project slowdown at all.

Okay and then last question for me on the utility.

Can you speak to what you're assuming that your with your bad debt expense for for this year in your guidance and.

And regulatory mechanisms that you could potentially get recovery on some of that.

Customer non Pam.

Nicole you, you'll take that one place.

Yes, certainly thanks for the question, yes, although it's early we did take a look at our AD bad debt in the first quarter hearing did make a slight adjustment to our assumption in terms of.

Increasing.

Bad debt expense in the first quarter again, only slightly as we we look to April here, we are seeing some increases in our accounts in arrears.

I would comment, though that our customer experience team is proactively reaching out and assisting customers with payment plans, providing the assistance they need as well as.

Helping them access available funds so as we as we look to the year, we do have that.

Baked into the guidance that we provided and then the other thing that I would comment on it.

Yes, along with that pretty much most of the industry I did provide relief.

With the institution of a moratorium on disconnect and a waiting of late payments.

In terms of filing regulatory mechanisms, we have proceeded with sat colbert related filings.

In four of our state and we'll be doing I should stay today here yet.

Filing and then continuing to look at the remaining three state. So as you bring up certainly we did include in those filings the ability to have the potential to recover some of the increased exposure on bad debt.

Thank you.

Thank you Ryan.

At this time I would like to remind everyone. If you would like to ask your question. Please press Star then the number one on your telephone keypad.

If you like to withdraw your question press the pound key on your telephone keypad.

If you're running speakerphone, please pick up your handset before entering your request.

Next question comes from the line.

Chris Ellinghaus from secret.

Hey, everybody else.

Hi, Chris we're doing fine how are you doing.

Two bad.

Everybody.

Okay.

Jeff The project, it's across the street from the wind is that's the one that's on hold at the moment.

No resorts World is moving.

Very well.

We've got the electrical and mechanical contracts there.

So.

That is not what is the MSG project.

That was being put on hold but we think it's going to start back up.

Okay.

The.

The change in the Capex, Jason can you.

About.

Coming from and why.

Certainly Chris I think.

Taking a look at our earnings release, we a little more detail on their you'll see it really comes out into two of our business lines, it's primarily at the utility.

And then at night Forever. So at the utility it's a you're looking at.

Just some some delays probably given the current environment. The ran some of the shelter in place orders, maybe some changes in growth expectations as we as we look little uncertainty here I think as we look at that were the year will play out as the primary driver for timing. There. Those are really projects that are being pushed into future years, so not changing our forward look on capex here, but really.

Changing some timing and then the other piece would be a knife river in the construction materials side, where it's really.

The timing of fleet replacements, and you know, making some decisions in certain cases to lease versus buy equipment in those types of items. That's the primary drivers are we seeing the capex reduction for 2020.

Okay.

Yep.

Okay.

All right.

The the investment returns.

I assume that's coli product and you gave us sort of the year over year changes, but what was the aggregate I assume it was a loss for the quarter, but was that aggregate numbers.

Company for that for Q1.

Yeah, so that as a.

The coli bride, you're correct so.

Others on the phone, it's a a company owned life insurance products. So it really is a investment returns difference year over year. So we talked about $10.1 million in the release I'm just gonna Ballparking. It was about a 4 million dollar loss this year and compared to about a $6 million gain that we would have seen in the prior year, we talked about that in last year's release as well seeing some above that.

Bridge gains there so.

Thats the net difference about bought 4 million for the quarters. The this year's impact.

Okay, great Thanks and.

Jeff in Vegas.

And what are you hearing about.

Opening up.

How do you anticipate.

What's happened to vegas affecting future projects or future developments.

Much in that in that regard.

Where we're at the edge of our seats waiting for the Governor to open the state backup so we get customers.

Back into those facilities. So we are daily listening reading.

And and our presidents have real strong connections within the community. So.

Obviously with no work and in many of our customers facilities, mostly our small projects have been postponed not a huge impact but last week on our call with our presidents, we heard that we're going be entering back into some of those facilities do some of the preparatory work.

And we've also.

Been involved and some adjustments to be made for their customers when they do come back to make sure that their facilities are safe. So we're starting to see some.

Some activity in anticipation of the state order being lifted and bring customers back into those facilities as far as larger projects future projects. We we do have a number of them on our on our radar and we are providing estimates in preconstruction.

Cost.

Analysis for those projects and we have not heard.

They're going to be postponed.

And we haven't heard that they're going to start next week. So.

We do think there's certainly a concern over.

Getting people back into Las Vegas, and generating that revenue for our customers, but at this time, we're busy and outlook is strong for this market.

Okay. Thank you very much sort of color appreciate everybody take care.

Thank you Chris I appreciate you get getting on the call.

Your next question comes from the line fill that aside from this point.

Hi, good morning.

Good morning Bill.

Just following up on an earlier question on the North Bakken is.

Is that fully subscribed are fully contracted at the moment.

Oh this is Trevor with WB I.

At this point in time, we have signed contracts for 243000 Mmcf a day.

Not fully subscribed to the design as filed with FERC and.

As we roll forward as we do with every project, we look for ways to de risk at whether that's on the material side and purchase strategy to the contract strategy to just overall scope and schedule and we continued to do that on this project as well.

Okay and then.

If it stays contracted at that level is that enough to go by de and move forward with construction.

Yes.

Okay.

And then I guess.

It's just the FERC application is your next steps beyond that before you would start construction you're only 21.

Well, there's a number of permits that we're required to get whether their state local and federal that were work that we just normally work through.

The FERC application our expectation as we should were scar schedule shows early 2021 to receive the FERC certificate to proceed with the project construction wouldn't commands prior to receipt of the FERC application.

Our the FERC certificate sorry.

And then if you move toward at the current level contracted then you would just sort of have walk up volumes on the open piece and so you're able to contract that future. So how that would work correct yep.

Okay.

Alright, and then just switching gears on the utility side can you speak to what you're seeing on the sales side in terms of the impact.

You know from from the company.

As it relates to residential sales versus cnine.

Yeah and Nicole.

Yep, Yeah sure. Thanks for the question as we look at maybe I'll start with just a corridor as we look to the quarter you heard that Dave commented in the script and then call here. This morning as well as covered in the news release it really when we look at volume impact for the quarter that was largely driven by weather consideration we didn't see much.

Other Colgate impact on March 31st.

Looking at our April volumes.

We look at dollars year over year really on electric side of the business our volumes work, where it really quite comparable to last year and however, as you noted we did see some.

Differences in the split and so as we looked at our electric residential volumes, we saw them pick up compared to last year add to the tune of around 19% and really shine offset there on electric commercial and industrial load, which was down around 8% again. These are on a preliminary basis here, but as we looked at.

The gas side of the business.

We really saw a bit about increase on the gas side in April year over year, and again to see some differences in the load a with at 13% pick up on residential load a around a 2% on commercial and that was offset by a 7% decrease on industrial so high.

We look to the remainder of the year, we are on certain exactly what will happen here about do anticipate to that does some of this trend may continue in terms of higher levels of residential.

Being somewhat offset by commercial industrial.

Okay. So I mean.

Is that a net positive then for you.

Or I mean in terms of the residential being up that much in seen I being down not sure. How the margins work obviously is by emerging on the residential but yeah yep, yeah. So again volumes comparable so again volumes pretty comparable year over year in April but as as you know what we do see higher margin per unit on our residential sales.

Okay, and then and then lastly.

On the guidance reduction.

I know you guided down the revenue at the materials business.

The bulk of of the guide down or is it sort of spread around the other businesses as well.

Yeah Bill this is Dave so.

Well, we lowered guidance both on the top side on the bottom side by by 15 cents.

Some of the some of the drivers there certainly the first quarter on a year over year basis.

Well were up eight cents and we talked about those three items right whether at the utility the investment returns and then the single contract that we talked about it that construction services. So so that plays into part of that the other part is we did lower guidance from a revenue perspective, it knife river by one.

Hundred million.

And.

We mentioned in the in the earlier comments that while we were at record revenues in that business for the first quarter that would indicate our forecast is that we see you know our reload a backlog will have some challenges with it we just it's it's it uncertain at this time, but we're anticipating that with lower.

Consumption taxes, lower gasoline taxes things like that may have an impact the municipalities.

And states thinking about their spend but we're still guiding to 2.1 to 2.3 billion so that would play into that.

We also well it off to a record started construction services you know 520 million at all time quarterly revenue record for the CSG.

We're maintaining our guidance there for the rest of the or so there maybe some implication that why we're off to a great start we may find a that same pace maybe hard to continue the rest of the year again 1.85 to 2.05 billion. So some of it we're viewing is some revenue challenges on the construct.

One side, we did pull our margin guidance because we're uncertain at this point what margins will look like as we next steps here.

I can tell you at the end of the first quarter our margins in our backlog looked comparable on the services side actually margins were up in backlog on the materials side, but it's the uncertainty as we go through the rest of the year and so those were the main factors some in the first quarter, but primarily what.

We're thinking about per the co bit uncertainties. The remainder of the are particularly on the construction site.

Okay, and then just one last follow up there I mean on the backlog for a knife river how much of that is tied to some of these municipalities and things that maybe.

During a lower tax receipts period for for a while here.

Yeah, I'll I'll start that answer, but then I'll turn it over to Dave Barney again, what we have in backlog or actually sign contracts and commitments by the counterparty.

Whether it's a state dura city or federal agency and ourselves. So those are those are signed contracts but.

Dave Barney would you ought to touch on our split between public and private I think that might go to Bill's question.

Yes Bill.

Backlog.

Over 80% is public work.

Don't anticipating it has to be pulled back and.

So.

Backlog looks good we continue to pick up work.

We're busy out there.

So, we'll just see what what happens.

Three months.

I mean is it did they have discretion in terms of the timing I mean, obviously, they're signed contracts, but can they push things out a bit and just say we need more time before we are you sort of.

Hence the broader.

They can do them, we've seen a few private suicide contracts say, let's put on hold and.

Wait wait a month or two to see what shakes out but.

That's been a real modest pullback on most of our work is going forward.

They havent head anybody's say, hey, we're going to cancel this job for sure.

Let's just put on hold for for now.

Okay, great. Thank you semis, mostly on the private side nothing on the folks.

Okay, all right great well. Thank you so much.

Thank you Bill.

Your next question comes from a line of Chris Ellinghaus from secret.

Hey, guys, Jason just ER.

Vis-a-vis the guy.

Obviously coli returns can fluctuate period to period.

When you revised guidance are you, assuming just where you stood at the ended the quarter.

Holding returns without looking into April.

On the rebound.

Yeah, Chris Great question. Thanks, I think as we look at that time, I mean, obviously, we've seen markets perform a little bit more solidly here in April so.

So as we looked at the total impact in the first quarter I will say that we were assuming a little bit of that probably come back coming back in our guidance, but certainly assuming a lower return profile than what we normally would see on those plans. We typically don't plan for a lot in that anyway, it's not an operating item that we focus on its it but it's we certainly are.

Our planning on lower investment returns than last year.

Given the fact that we saw very strong result last year.

Okay. Thank you.

Thank you Chris.

This marks the last call for questions. If you would like to ask a question Press Star then the number one on your telephone keypad.

This call will be available for replay beginning at two PM Eastern time today through 11, 59, P.M. eastern on May 20 seconds.

Conference I'd number for the replay is for nine.

One two or nine again the conference I'd number for the replay is for 981 to four nine.

Your next question comes from the line of Carlo Seligsohn from utility financial.

Hi, there how are you guys hi, Carl we're we're doing well hope you're doing well.

Personally I know, where I've got a little bit of cabin fever, I've been reluctant, but when my wife for.

I don't know a month or so so it's very hard to keep up plus the fact, yeah.

Equipment has broken down so.

Well that's my.

It's understandable, Carl but I'm glad you're staying safe and staying well.

And I expect that ties to very much appreciate it.

Of course, I wish I was that the stock exchange with you guys because that was right. That's always a good maybe.

And Oh I will tell you that I appreciate it.

And.

My.

Question.

Relates to.

The I guess you'd call up the morale of the people who work for you.

What are people, saying and thinking about a very on some of them on my work at home type things and I was.

Just giving up for a while or retiring or what's going on personnel wise.

Carl at a that I mean, I appreciate that question and hopefully you gathered from the comments within my.

Earlier comments about our.

Focus on employees employee well being and obviously the communities that were in and the fed well being it's probably got a reflection on us I can.

I'll share with you Carl that we ramped up if you will have our 14000 employee.

Plus or minus at any given point over about a two week period, we went from having a few hundred folks that were routinely.

You know dialing in or whether its whenever technology happened to be accessing the cloud from their mobile workforce actually 3500 that we ramped that up over about a two week period and.

Really proud and pleased to have the infrastructure that are I T folks, who put together or the ability of the workforce to again, if you could work from home. We've we've we've asked you to go home and just a de risk. If you will the work environment and social distancing and all those kinds of things. So so we're able to occur.

Comedy and I think your other part of your question to what I heard on on general kind of demeanor and more you know what's the what's the.

Our people thinking about I think in general.

I wouldn't say were surprised but we're pleased with our ability to continue move the enterprise board or whether its engineering or accounts payable or treasury services or.

Legal services or project manager.

It is not gone without some some challenges I E, but we're really using technology, Microsoft teams routine meetings.

I mean, you name the kind of software and so.

There there is a concern in the workforce in locations about health and wellbeing and and depending if one has underlying a suit you know health considerations you know were comedy knows in so.

Many different situations to address but I'm like I couldn't be prouder of how we've been able to move the enterprise forward on a on a on a situation you know we've been in you you know 24 hour a day business I utilities for 99.

90, 996 years, I guess I think we're used to responding but this is a cross every business in every state and so we're very pleased with that I have no doubt theres locations like you'd noted about.

You know, maybe a little cabin fever or store crazy this or maybe.

But mind you we've got employees that are home schooling their children than daycares had been affected and still trying to do their work well one parents doing this with the other and so.

That's probably a longer answer than you expected, but it gives you a flavor. If you will that we've held daily meetings with our senior team for about a three week period, just to keep a pulse on the organization I mean, Jason and his team went out and increased some liquidity within the businesses on some term loans.

And you know we've been able to continue again, I'm repeating myself, but to move the organization forward.

Oh, great. They have I think if at all sounds good and I hope It works well for you for your guys come So you've got a great team now and I assume that that will continue.

Thank you for calling in Karl and appreciate the comments and hope you stay well.

Okay.

At this time there are no further questions I would now like to turn the conference back over to Dave Good work final comments.

Thank you operator as I noted earlier, while there is a great deal of uncertainties surrounding economic impacts from the coal that 19 pandemic. Our construction companies are at record levels of combined backlog.

And our workforce remains intact as we anticipate our pipeline and utility businesses was good we will continue with what I'll say is a near normal operations.

We are committed to building a strong America, while ensuring the safety of our nearly 14000 employees, who are providing the essential services our customers need during this challenging time and beyond.

We appreciate your participation in our call today and we do thank you for your continued interest in M. view resources, it with that I'll turn it back to the operator.

This concludes todays MD resources Group conference call. Thank you for your participation you may now disconnect.

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