Q1 2020 Earnings Call
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Greetings and welcome to progress reports 2021st quarter results Conference call.
At this time, all participants are in listen only mode.
A brief question answer session will follow the formal presentation.
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Please note today's conference is being recorded.
At this time, we'll turn the conference over to Kate Tholking, Vice President Investor Relations Ms. talking you may now begin.
Thank you Rob.
Well good morning, everyone and thank you for joining us today, our speakers for today will be Tom Mccormick, <unk>, President and Chief Executive Officer, and Ken <unk>, Our executive Vice President and Chief Financial Officer.
In addition to this mornings press release, the Boston posted slides on our website that highlight key points, we plan to discuss on the call you can access them by going to our corporate website www Dot grim Dot Com then selecting investors once on the Investor site, you'll find this slide in the events and presentations section next to the webcast.
Link for today's call.
Before we would again I'd like to remind everyone that statements made during today's call may contain certain forward looking statements, including with regard to the company's future performance words, such as estimate believes expects projects may and future or similar expressions are intended to identify forward looking statement or.
Forward looking statements inherently involve risks and uncertainties, including without limitation those discussed in this mornings press release and those detailed in the risk factor section and other portions in our annual report on form 10-K for the period ending December 31st 2019, and other filings with the Securities and Exchange Commission.
Warrants does not undertake any obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise, except as may be required under applicable securities laws I'd now like turn the call over to our CEO Tom Mccormick.
Thank you Greg.
Good morning, and thank you for joining us today to discuss or first quarter results.
It was a challenging quarter not only for primoris, but for employees or customers in our communities.
The quarter virus pandemic in the shocks to the energy market combined with our usual first quarter slow start along with inclement weather resulted in a perfect storm that at a direct impact on our bottom line.
Although we were not able to work as efficiently as efficiently as we would look like it's important to note that we are a critical infrastructure contractor and we are still working.
We have crews in the field across the country and I want to thank all of our employees for all quickly. They adapted to this new environment following new safety guidelines to protect themselves and others and minimizing any potential spread of cobot night team.
We implemented changes in our offices and at our job sites, such as reducing employee density to allow for social distancing.
Monitoring our employees health and all office locations to ensure that those who are high risk or perhaps not feeling well are working remotely at home, so as not to potentially expose themselves or others as well as performing health checks on our employees before they enter our job sites, the health and safety of our employees our clients in the communities in which we live and work.
As our primary concern and I'm pleased that we've been able to keep our employees healthy what's still giving them the opportunity to earn a paycheck maintaining their health insurance et cetera.
Within the Primoris family of companies, we've had a very low incident rate of cobot 19.
I'm, especially proud of our crews for incorporating these new policies, while maintaining their focus on safety a job sites. Our total recordable incident rate is at a record low and we had zero lost time incidents in the first quarter, we achieved that while working over 6.1 million work hours.
During the quarter, we also looked for ways to conserve cash and maintained strong balance sheet.
Even before cobot 19 hit we have been focused on controlling our SGN, a and that has not changed.
The effective ban on travel clearly had a direct impact on our travel related expenses and we have been impressed with how effective some of our virtual meetings have been.
There are always be a need for per in person face to face interaction, but this experience has taught us that we can do more remotely than we originally thought.
That being said I believe that somebody's travel related cost savings will continue beyond the current environment as we've seen this pandemic as a way to learn and adapt.
Another source of cast comp cash conservation was our spending on equipment real estate facilities. Although we will continue to support our projects in plant expansion efforts with the equipment and facilities. They need we will also continue to minimize our investment. These types of expenditures until we have a clear vision the situation moving forward.
We are a strong healthy company and it is our goal to come out of this crisis, and even better shape better condition than when we entered into it.
We ended the quarter with a very strong backlog of $3.2 billion aided by new projects in the first quarter across all segments.
We're seeing some slow down the new project awards in some segments as some of our customers try to navigate the combination of covert NIE team and the volatile oil market.
We believe this is mainly a timing issue, although we acknowledge that a prolonged period of depressed oil prices could have a greater impact on our project driven not I must say businesses within one or more of our segments.
I'd like to remind our investors that a significant amount of our revenue and profits come from Amazon. They work, which has been a strategic focus force.
I'll go through each segment and give a little more color on the quarter and our thoughts for the remainder of the year starting with the civil segment.
Over the course of Q1, we have continued to see improving our civil margins.
We no longer have the headwinds of the belden area projects and our so civil segment is performing well.
Our major heavy civil clients continue to plan significant bid lettings for the remainder 2020 with Texas alone predicted to spend over $70 billion over the next decade.
We believe we will win our fair share at least projects, while maintaining our selective bidding approach.
Yeah, I am team executed on both maintenance and capital projects during the quarter.
Much of items work has historically been an industrial facilities and these customers are seeing some impact on global demand from coven 19, as well as the current oil prices. So we have experienced some delays and new awards.
My name is continuing partnership with our renewables in industrial teams provides them with an additional stream of opportunities.
We are awaiting an award on a large petrochemical project currently scheduled for late Q2 early Q3. However, the timing of this project moving forward will most likely be dependent on the status of coven 19.
The power industrial engineering segment had a challenging quarter low oil prices and coven 19 calls many of our customers in western Canada as well as those in the refining industry to post phone or reduce or capital spending reduce scopes on ongoing work into for maintenance.
We have instituted cost reduction measures in response to was expected to be several months of reduced demand.
Our engineering business is experiencing similar impacts as refineries defer capital spending and reduce or curtail production.
Our west Coast industrial business saw most non essential projects with expected delays of only a few months. However, the biofuel refinery market remains a bright spot and we are tracking several large projects in this market.
Another market has remained very strong throughout the first quarters renewable power market, while our large west Texas Solar project, we experienced a slight delay with the delivery of some components, we were able to mitigate that with excellent project execution. The projects. It isn't its final stages and should achieve successful completion in late Q2 early Q3, we.
Already received limited notice to proceed on several new solar projects, which should convert to fully PC contracts in the coming months.
While we have seen a slight delay in the timings of some solar awards due to customer financing issues, we're not seeing project cancellations, we're sticking with our successful strategy of working with customers with a large funnel of projects and developing partner relationships with them.
Our Gulf Coast Industrial team saw improvement the first quarter as a challenging project for the past few quarters is basically 100% complete.
And we are in discussions with the customer on claims recovery.
Thus far we have not experienced any significant project delays due to cover 19 on our current work other than the productivity and efficiency impacts related to health checks prior to entering the respective job sites observing social distancing on the job side. Unlike our other businesses. We are seeing some delays in new awards as our customers try to navigate the current environment.
The electric transmission and distribution segment continues to improve we have continued to reduce cost and are seeing improvement in our revenue productivity and profitability.
Earlier in the quarter, we saw customers begin to return to more normalized spending levels, but the impact of cover 19 has slowed spending slightly the long term effects of this are yet to be known we're taking steps to align our staffing levels and equipment fleet with our customer spending levels, which should lead to continued margin improvement for the segment.
Our gas utilities and distribution segment performed to expectations in the first quarter.
This segment always experiences a seasonal slowdown in the first quarter the year and inclement weather in areas that we try to work year round can exacerbate that.
That was true in the Denver area during the first quarter.
Like our other segments shelter in place and other safety measures have slowed down the release of work in created inefficiencies, while some of our maintenance utility work cannot be postponed several customers in California, Michigan in Pennsylvania did stop operations to the fullest extent possible.
Our utility customers are being hit, particularly hard right now is bars and restaurants that are major natural gas consumers are temporarily closed some of our utility customers have told us they might face reductions to their capital spending plans, depending on the length of the shutdown, which is why our MSC revenue outlook is relatively flat until we see things progress with reopening businesses in state.
Throughout the country.
I'll wrap up with our pipeline in underground segment.
This segment had over $360 million of project awards in the quarter, great start to the year.
No capital projects currently underway have been canceled due to either coven 19, where the volatility in the oil prices and our crews are continuing to work, albeit at a slightly reduced capacity as they follow all necessary safety precautions.
While our current work continues many of our customers have announced it decreases in their 2020 capital expenditure plans due to depressed oil prices the bidding on new capital projects has slowed down but our strong backlog should carry the segment through the rest of this year.
With regards to our largest pipeline project, we're still expecting a decision from the Supreme Court in late June or early July and are anticipating a possible late third quarter restart.
Our field services work has been slightly more impacted from the oil crisis than our other pipeline work as their business model is more tied to maintenance and small cap spending which is faster response oil prices and spending on long term capital projects.
At the corporate level in unrealized loss on answer freight Swat.
Tip, the balance from what would've been a breakeven quarter and given the challenging operating conditions across our segments I am proud of what we accomplished we continue our focus on how we can grow for Morris, both internally and through acquisitions. The type of market disruptions. We are seeing provides opportunities for disciplined nimble companies like for Morris, our conservative balance sheet unanswered ample.
Acquity will allow us to move quickly when we find the right acquisition.
While I normally would be wary of the message that we're drawing guidance might send to the market. We're living in unusual times our decision to withdraw guiness is not because of underlying concerns with the long term strength of our end markets and opportunities, but due to the uncertainty around the time of timing of work in light of code 19.
Primoris remains a healthy involve a company and we will come out of this crisis, a healthy viable company. Our focus is first and always on the safety of our employees our clients and the communities in which we live and operate.
With that I'll turn it over to can for deeper dive into the numbers.
Thank you Tom and good morning, everyone I'll review, our first quarter results compared to the first quarter of 2019, our balance sheet and cash flows and backlog before we move on to your questions. Our first quarter 2020 revenue was 743.2 million, an increase of $81.7 million or 12.3% compared to the prior year almost.
57 million of the increase was in the pipeline segment as we ramped up on new midstream projects that were announced in Q1.
51 million was in the power segment due to increased work on solar projects and Gulf Coast Industrial projects. This growth. This growth was partially offset by declines in the transmission segment due to the timing of new work being released by our customers and the civil segment due to the timing of some larger projects revenue utility segment was essentially flat for the quarter.
Our largest customer in the quarter was a midstream oil and gas company, which drove some of the pipeline segment increase followed by an electric utility customer into gas utility customer collectively these top three customers accounted for 22.6% of our revenue for the quarter and our top 10 customers accounted for roughly 50% of our revenue which is in line with the prior year.
Gross profit in the first quarter was 47.8 million compared to $52.5 million in the prior year.
Gross margin was 6.4% in the first quarter compared to 7.9% in the prior year.
Part of the decline in gross margin was the impact of Cobot 19, which was felt built across all of our segments.
Tom already mentioned the steps we've taken to ensure our employees are able to continue working safely in light of the pandemic.
However, because the incremental costs were spread across all our jobs and our corporate functions in small in different ways. We are unable to quantify the impact.
In our segments project Closeouts in the prior year in the pipeline utility in power segment had a negative impact on the year over year margin comparison.
The power segment also experienced some margin pressure in the first quarter of 2020 from higher cost on an engineering project and it can to any Canadian tank project, which were partially offset by better gross margins on a solar project.
And we're pleased to see the sustained improvement in gross margins in the civil segment confirming that work under the current leadership is performing to our expectations.
We still have to claim to settle related to the built in area jobs, but these projects are all complete and are no longer creating the margin headwind for the segment.
That's DNA expense in the quarter was 44.4 million up slightly from $42.9 million in the prior year. However, as a percentage of revenue estimate decreased to 6% in the first quarter compared to 6.5% in the prior year as I've said before we believe below 6% range is a good target percentage for SGN a.
Interest expense in the first quarter was unusually high as Tom mentioned at 9.1 million compared to $5.6 million in the prior year.
The current quarter interest expense includes a $5 million unrealized loss on the change in fair value of our interest rate swap compared to only a $1.4 million unrealized loss in the first quarter 2019.
The effective tax rate on income attributable courses, 29% for the first quarter essentially unchanged from last year's first quarter and inline with expectations for the full year 2020.
First quarter net loss attributable promoters was 3.7 million or eight cents per fully diluted share compared to net income of 1.9 million or four cents per fully diluted share in the prior year.
Moving on to cash flow, our first quarter use of cash from operations of only 5.5 million is a significant improvement over the 72.1 million use of cash in the prior year.
In 2019, we had the impact of $33 million delay in payments from utility customer that is going through bankruptcy. In addition to not having that issue in 2020, we have been more disciplined in managing our working capital during our seasonally slow first quarter.
During the first quarter, we spent approximately 9.3 million on capital expenditures, mostly on vehicles and construction equipment. This is lower than the prior year, because we eliminated all non essential capex starting in March as upper caution given the uncertainty around code 19. Once we returned to more normal operations I expect capital expenditures to return to our new normal investing in.
Capex to support new projects and growth.
And for the balance of year, we're expecting capex to be no more than $30 million to $40 million.
During the quarter, we also sold $6.9 million of older underutilized equipment, resulting in net capex of only 2.4 million, we in the quarter much less than the net capex of 10 million in the prior year.
As we continue evaluating our equipment fleet I would expect to see more equipment sales each quarter.
In late February we announced a new $25 million share repurchase authorization during the first quarter. During the first half of March we purchased 461831 shares for 7.4 million.
16, 17.6 million remains under the purchase authorization, which expires December 30 Onest of this year.
While we took advantage of what we saw as the significant undervaluation of our stock in early March any decision to purchase shares under the program also takes into consideration the operating cash needs of the company and the uncertainty of the times, which were living.
With the steps, we took to reduce cash outflows and better manage our working capital. We continue to maintain a strong balance sheet. We had 93.5 million of cash on the balance sheet at quarter end and an additional $160.5 million of borrowing capacity under our revolver.
Our total debt was 343.2 million at quarter end down 8.1 million from year end and net debt was 249.7 million our weighted average interest rate was 3.9% for the quarter.
Fixed backlog at the ended the quarter was 1.9 billion, a 10% increase primarily driven by the new pipeline awards in Q1, and our 12 month MSC backlog was a little under 1.3 billion, a 10% decrease from year end.
This decline was not due to any MSK cancellations. This solely reflects our more conservative forecast at Emmis a revenue for the next 12 months given the uncertainty around cobot 19 and oil prices.
Total backlog was 3.2 billion essentially flat compared to the into 2019.
We expect the during the next four quarters, we will recognize revenue as revenue approximately 73% of our total backlog as Tom said, we are withdrawing our 2020, earning guide earnings guidance due to the uncertainty surrounding cobot 19, and oil prices and with that we can turn it over to your questions Rob.
Thank you will now be conducting the question answer session. If you wanted to ask the question. Please press star one from your telephone keypad and the confirmation total indicate your line is in the question Q.
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One moment, please only poll for questions.
Thank you.
First question is any comes from the line of Leach Agoda with CJS Securities. Please proceed with your question.
Hi, good morning, Paleo more and Lee.
So starting with your comments around some of the Miss a work in utility in Q1, specifically, California, Michigan.
Pennsylvania, basically halting operations are those up and running now and with with additional states having issues at various times what does the current mix of work look like.
No. The most of those states has started issuing work back and it's too we're starting to see that ramp backup is we would typically see at the beginning of the second quarterly Theres still some limitations in some of those states in California, one of them primary clients. There is not only deal with code 19, but also dealing with coming out of bankruptcy. So it's been a little.
But slow there, but there is work being released its a different scopes of work to right. It's not just in gas distribution. So its other utility work. So it has helped us.
And then.
Taking a little longer term utilities or are shifting.
Or I guess are shifting production to to kind of comply with the needs of their customers in terms of.
People working more at home during the day versus in a commercial setting.
Can you speak to whether you're starting to see.
Opportunities from the front from utilities on different kinds of work that might.
Helped them satisfied like the new normal demand. If this is a new normal.
I think it's probably too early for us to speak to what May wait what what we've seen and what we've heard our client size or they're going to have to make adjustments if that becomes the new norm right. So I think just at this stage being a couple of months out from when the start in three months out from when the started I guess, it's a little bit early how thank everybody now is talking about that.
Out what that new normal is going to be but we I don't think any set conversations on a path for and what that will look like will be known until probably later in the second quarter later in the year.
Sure I know won't one more for me quick one and I'll hop back in queue. Just the latest Solar award you announce had sort of an interesting way. It went into backlog an interesting structure can you just kind of give us the.
The reasons why around that and whether we should expect this is sort of the again the new normal.
It's actually been the old norm for solar projects as you can almost every one of our project awards in solar more in the solar market has started with an LNG fee.
So they start to office, starting designed buying components and they're buying there what it was in their scope of supply and then later when they achieve financial approval them. They move forward when they pull the trigger on the project. They move forward with contract award we've seen on down on every project that we've had solar project, we've had and I think thats just the new the norm for these clients.
Okay.
Sounds good. Thank you dilate, thank you nicely.
Our next question comes from the line, if Brent Thielman with D.A. Davidson. Please proceed with your question.
Thank you good morning.
Good morning, Brett how you doing.
Doing well in line. Thank you.
Hey, you guys you bought back from stocking in the quarter, you've got more room under the program in the balance sheet.
Isn't really good shape and other companies out there sort of curtailed send it back from just wanted to get it you how much of the priority that is going forward.
Yes in the immediate near term I don't see it being a priority I think we'll have to kind of get toward Q3, or maybe Q4 before we'll probably reignite conversations with the board about doing more.
As much as we would like to take advantage, where our stock prices right now given the uncertainty as to how much longer cobot 19 is going to last and whether or not as can be any material impact to us I think we're going to be conservative and and just hold off.
Yes, okay.
And then yes, the power and industrial segment kind of a ladder.
Pieces within that and I'm, just trying to think about.
Hi.
The risks related to kind of the drop in oil prices group.
You know maybe Gloomier economic times, how do we how do we think about the.
The risk from lower commodity prices.
But again it tougher economy ahead.
Well I think I think the biggest result for us for sure is in Canada, It's in Western Canada, and we we we reacted quickly when we saw that we're going away. The clients now are releasing work, but it's again, it's it's limited scope has reset reduce scopes theyre doing projects, but at lower.
At lower values.
So we've we've I think we're at the right size up in Canada to be able to manage that work in still micro respectable margins in in California, We've seen some reduction workforce in some work that we were doing for clients on some maintenance work in small capital projects, but we actually see some benefits or opportunities on some biofuels projects.
In one we expect to have they have hear something positive on that here in the coming weeks. So it's been that were probably been able to replace it and new when you start going to our non union part in the Texas South in the southeastern us they have work and probably sufficient work for this year. The the concern there is it with a slowdown.
One of bidding work and click clients pulling back or the contraction of capital spending what's it going to make the ended this year or more so next year look like and I think thats, where the concern is in that market.
It's nice that were so.
Varied and what we do that.
We have other groups that will pick up load NAV work continuing through this this pandemic, but some of these markets will be hurt some of these business units be hurt.
Yes, okay.
I guess my last question you look across the portfolio I mean, how we tend to think utilities in transmission I mean should be pretty resilient.
Three less clear economic times understand.
Some of it the near term kind of cobot disruption.
But as you think about those segments I mean would you would you generally agree with that are you hearing something from your.
The customers in that segment that that might lead you to think otherwise.
No I think you're right, we expect those to continue to do well yes.
Okay.
Okay. Thanks again.
Thanks, Brent Thanks, Brent.
Thank you next questions from the line of Adam Thalhimer with Thompson Davis. Please proceed with your questions Hey, Good morning, guys could you just ask a follow up on that Texas commentary what specifically.
Has you worried kind of late this year next year, which end markets.
Primarily of refining.
Pet Chem I don't think is a problem most of those projects are going through there still there's still work there to bid. It's just it's primarily just in the refining industry.
We've seen our engineering groups to slow down a little bit on some fees. They were doing the refining business I think people, they're primarily just pushing some projects out to wait and see what happens with oil prices.
And how long it takes for all.
The price water Rachel respectable are reasonable level.
Got it Okay and then.
On the switching to electric I was little surprised that too.
Have already kind of rightsize the operations there I was thinking that customer spend might be a little more resilient.
Particularly short term, but I guess that hasn't been the case, while we've had some areas with just the shift of work a little bit. We just took advantage of the opportunity to right right sized some areas that were probably.
Overstaffed.
And we needed to make some reductions anyway and that gave us the ability to do it we have we have the ability to grow if our club customer start releasing more work in these markets. It's just we needed to do some trimming anyway that gave us the building and the timing was right to do that.
But your biggest electric customer their capex is up I think did they are they are and we're doing again here to someone who had a lot of data we haven't done a reductions for anything any approves that we're doing work for them at all.
[music].
Got it.
And then I guess in question on the gas side I think in gas utility work would hold up better this year than some other markets.
And it is so far it's it just depends on if the if the what we're hearing from those clients is not that they're making cuts to their capital spending programs with that they might if the company country doesn't open bioflo their respective state sum up it up because their biggest consumers of gas our restaurants bars.
You know hotel services that both hotels that have restaurants and bars that type of industry.
So if those demands stay down they may not have the need you're not seeing a lot and you're seeing drops and new housing in some of the so those customers those new customers that they would have there won't be that need there. So let me reductions there as far as replacement or maintenance of existing systems are old systems that works going to continue.
Okay and then the.
Pipeline outlet for 2020 your backlog was way up you had a strong first quarter took on the revenue side what are your thoughts for the rest of the year in light of the oil price decline.
Well again.
I think 2020 is pretty secure.
We of course, we got to weight on the Big project to wait on that I mentioned earlier with respect to the Supreme Court and enrolling on there but were are both of our.
Junior then nonunion pipeline groups are busy through the towards the end of this year. So it's more so my concern would be we're going to have we're going into next year now if a large project that I referred to earlier goes forward. The Rockford will be busy for the next year and a half.
Understood. Okay. Thanks, guys.
Thank you Adam.
Our next question comes from the line of Sean Eastman with Keybanc capital markets. Please proceed with your question.
Hi, Tim Thanks for taking my questions a shape or John.
Good morning, Good morning, everybody I'm personally for me just on the on the guidance.
Totally understandable to withdraw here just curious what.
You guys are waiting to see the is it more a timing.
A new awards or is it more the productivity elements as we move through June Q.
Just kind of curious what.
Kind of the big swing in terms of what you guys are looking at Florida have more visibility for 20 point, Yeah, I don't know Sean I Wonder if theres any one big swing I think it's a little bit of everything right now right. When you got this much going on and potentially this much volatility.
It it just got to be a point, where we looked at all the different models and potential outcomes for the year and the range instead of narrowing for guidance was widening and so when that occurs we just decided to pull back on guidance temporarily in order to let another quarter play out and we're hopeful that by the time you know we get to a announced in Q2 here in late July in early.
August it will be positioned to give you guys guidance again, because some of this will settle down and we'll just have greater clarity, yes, I think their biggest question still is now the these states are opening up in Texas is one of them is how that going to go so if theres not a big resurgence of the the virus and businesses in each state's continuing able to continue to open.
Up and businesses are able to restart and we see that happening I think will be much more comfortable with giving guidance. If there is a resurgence in there as they continue to stay shut down where they revert back to being shutdown. It that's the bigger concern.
Okay got it and then just some more color on kind of bidding activity out of the backlog, how we should expect the backlog to trend.
To the extent you're able to comment its pipeline bookings started the year really strong sounds like that could take a little pause here.
And then there's some.
Big opportunities and solar and CAD Cam just some color on the line of sight there.
You know are these projects definitely moving ahead any any sort of.
Help on.
So on that would be great. Yeah, I can give you a little bit with that I can't think with respect to heavy civil or for some of our civil segment alone there the states, Texas the Otay in Louisiana Department Transportation are still spending money.
As I noted in them in my comments earlier, you know, Texas is spending seven to 9 billion billion dollars a.
Our year over the next decade, so there's still quite a bit of work from were busy there actually still being very selective about what we bid. So that news civil segment is pretty good shape matter of fact, our I am group, which is part of the Civil segment is waiting on award right now that if that project moves forward.
You know keep them busy for quite awhile from certainly for the balance of this year and they'll continue to bid work as they have other.
Capacity, but it would be that'd be a large project for them. The industrial markets. It's you know we got to find some more for engineering group to do and they're up there already looking at the backend Biofuels and the refinery market is a good market for us and where theres a lot of opportunity. So that that's helping replace some of the slowdowns you see in refineries because although.
Those refineries are slowing down on a per tail production.
They are moving forward with their spending on.
Green projects, so whether its green diesel or or biofuels or biomass fuels. The those projects are moving forward.
We talked about renewables or Theres, a lot of opportunity in solar so there's there's continuing we're continuing to build a lot of work and being selective about what work we bid there and then pipeline I talked about earlier, but I think they are pretty good shape at least for this year and we're waiting on that big job to waiting on the Supreme Court ruling the big job.
Does that help okay answer your question.
Yes that else.
In particular this petrochemical job you guys mentioned in the prepared remarks.
We haven't seen a whole lot of that.
Move forward of late I'm, just wondering kind of at what stage that that project and.
Whether that's kind of a merger.
If not a a when not if type situation for you guys on that particular opportunity and as those projects take pick a number of years to develop right. So there's some of these things have been around forever, but this particular job is right and if I'd and I think they're all indications are that is positive. There just really I think they're really just waiting on cobot 19 to see.
What happens with it as a state reopens is I don't think it'd be appropriate to try to open in star project in the midst of this pandemic.
Okay, alright, thanks, Thanks, Tim I appreciate the time.
You're welcome thank you.
Thank you.
We have time for one additional question today, So I'll turn the comp that line over to Hosni Ramiro with Sidoti. Please proceed with your question.
Hey, good morning, hopefully doing well.
Hey, how are you.
Pretty good just wanted to follow up on an earlier question I guess, we should expect utilities and transmission to be relatively resilient, but.
Could you potentially maybe rank order the remaining segments in terms of how resilient they should be.
You mean care.
[noise] boy the tied behind those two for the rest of the year pipeline and civil should both be very resilient.
Below the industrial segment is the one that kind of has some ups and downs right now well I guess, that's primarily because of you in in the industrial segment you have the renewables group, which is going to do is doing really well and we'll continue to do well.
You also have some of these biofuel projects that are help offset some of the other worked its been delight of retail there and the and reduced work in Canada. So I think it's going to be okay, but thats, probably why that would probably have them the bottom of the five segments.
Okay got it and does the current environment lend itself to you'd be maybe.
Better worse or stay in terms of competitively positioned in your market say a year from now potentially did as maybe some competitors not making it to the other side or kind of any other changes there.
That's a good question I mean, it's going to be interesting to see how what companies come out of this you know healthy and strong and we're but I'm sure. There are number companies you're going to see probably go away or be acquired or merge coming coming out of the smaller companies for sure. So I think it's I think we're going to be in good shape, but I think we have some.
Returns that are well positioned also is going to be interest interest and see everybody else does.
Got it and then.
I think in your prepared remarks, you mentioned still looking for opportunities.
Maybe a long term care that M&A.
This potentially maybe open up opportunities for you to participate in some markets that you're currently not enter or maybe a better.
I have more participation the ones that you see as favorable and along.
The answer the answer that is yes, and we are looking hard for the right opportunity. So there's there's right now there's a number of them everything's kind of from an M&A standpoint.
Oh on pause right now to see which way everything is going to go but we are very active now they're looking.
That's helpful. Thanks for taking the questions in daily now you too thanks.
Thank you at this time I'll the turn the call back to Tom Mccormick for his closing remarks. Thank you Rob before we go I'd like to thank you all again for your support or Primoris. We hope you and your families are safe and healthy and we look forward to seeing you in person wants this is behind us. Thank you.
Thank you.
Conclude today's conference you may disconnect your lines at this time, thank you for your participation.
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