Q3 2020 Construction Partners Inc Earnings Call
Greetings and welcome to the construction partners incorporated third quarter earnings Conference call.
At this time all participants on in listen only mode.
Brief question answer session will follow the formal presentation.
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It's now my pleasure to introduce your host Ms. Black Black Investor Relations. Thank you Mr. Black you may begin.
Thank you operator, and good morning, everyone. We appreciate you joining us for the construction partners conference call to review third quarter results.
This call is also being webcast. Thank you may access to the audio link on the events <unk> presentations page on the Investor Relations section on construction partners Dot net.
Information recorded on this call speaks only as of today August seven 2020. So please be advised at any time sensitive information may no longer be accurate as of the date of any replay.
Also like to remind you the statements made in today's discussion that are not historical facts, including statements of expectations for future events or future financial performance are considered forward looking statements made pursuant to the safe Harbor provision, but the private Securities Litigation Reform Act of 1995.
We will be making forward looking statements as part of today's call. The by their nature are uncertain and outside of the company's control actual results may differ materially. Please refer to the earnings press release. It was issued today for our disclosure on forward looking statements.
These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.
Management will also refer to non-GAAP measures, including adjusted EBITDA reconciliations to the nearest GAAP measures can be found at the end of our earnings press release construction partners assumes no obligation to publicly update or revise any forward looking statements and now we'd like to turn the call over to construction partner's CEO Charles zones.
Charles Thank you Rick Hi, good morning, everyone.
With me on the call today, our medical I mean, our executive Vice Chairman, Alan Palmer, Our Chief Financial Officer, and Youre Smith, our new Chief operating officer that Weird announced this morning.
We're starting to date by providing an update on the third quarter and then turn the call over the near four few additional comments finally, Alan will review the financial results and outlook before we take your questions.
We are pleased with our strong profitability in the third quarter. Despite lower revenues are solid results were driven primarily by vertical integration synergies lower cost a beautiful effective utilization of crews and equipment I just wasn't quite big bidding strategy.
And pricing of our integrated products.
As a central business, we have continued to operate Tony Cobot not team then they.
Without significant delays the flexibility.
Our employees.
And the effectiveness of our safety protocols have positioned us to affect effectively manage and then related challenges.
And our day to day operations.
Notwithstanding career topline pressure from kozik, not team and their related effects and certain of our markets. We remain optimistic about the long term prospects of our business and industry.
I'd also like to discuss actually announced that we make a day promoting your Samir like senior Vice President.
Our company to the newly created role of Chief operating Officer effective October one.
As a former owner Jewel has continued to lead Brad Smith computing, our North Carolina. Some secret that we acquired in 2011 as Chief operating Officer, Joe would be charged with driving the development of their organization oversee in day to day operations.
He has decades of experience and proven track record as I wish we expected later, where they are not organization and here's community. Joe will have significantly contributed to our senior management team and successfully executed the company strategy and Gulf care.
A lot.
Where are the expansion of our organization.
In recent years, we'd say this position as vital.
Do I feel good growth and success.
This new rose script, that's our organizational structure and allows us to efficiently manage two days business, while focus and executing on our long term growth strategy.
We expect George leadership experience invasion to enhance our organization.
Finally based on the current backlog and near term visibility of the business. We are just staying power all your outlook for that's cool 2020 by raising our projected net income and adjusted EBITDA ranges.
Well I'm, taking a conservative approach to outbreak in new outlet based on core run rate.
Alan will discuss later.
Before turning the call over I would like to thank our leadership team and more than 2300 employees for their commitment dedication and hard work.
That enables us to execute our strategy.
And with that I'll like to turn the call over to our executive Chairman Madeleine they.
Thank you Charles and good morning to everyone. This was an excellent quarter.
This quarter is a great example of our team's strong leadership to successfully manage the business bring these unprecedented times and still deliver impressive profitability.
We have always run the company with a focus of Gordon margins cash flow and therefore value.
It is accomplished through continuing to drive vertical integration.
Better utilizing technology.
Increased efficiencies throughout the organization, including better you equipment utilization.
Well as employee training among many other things.
My point is that we look at all aspects of the business to increase profitability.
Well, we navigate through this Caribbean uncertain economic environment as a result of the covert 19 pandemic, we believe that cpis well positioned as an essential business with a differentiated and proven strategy that is consistent and profitable.
We will continue to manage the company for the long term in a prudent manner as we advance the business through this unprecedented times.
As Charles mentioned jewels promotion to Chief operating officer, expanses role and responsibility, which advances the organization for Cpis future growth. He is a talented operator and an executive that brings effective leadership skills to this new role as well the deep understanding of our business and growth strategy.
Joining CPR nearly a decade ago. He has led to significant growth within our company. The board has great confidence in him.
Well with our entire senior leadership team to continue to execute our business model as a consolidator and a fragmented industry, while driving long term growth and value creation.
Let me add that it straddles establishing the role as COO, let's step that will not only expand jewels role that creates a structure for ongoing growth and opportunity for other senior management team members. It is important to mention that Charles his leadership and mentor ship of our senior team and really throughout the organization has been and will.
Continue to be a core strength of a team oriented and entrepreneurial culture.
Under Charles was continued leadership the senior team.
We'll proceed with to execute CPR successful strategy I look forward to working with Charles Jewel, Alan and the entire CPR team as we grow the company.
With that I would like to turn the call over to Alan to discuss our third quarter results and they will answer your question Alan.
Thank you Dan and good morning, everyone I won't start by highlighting our key performance metrics in the third quarter.
Revenue for the quarter was $217 million, a decrease of $10.3 million compared to the same quarter last year.
The decrease included a decline of $20 million in our markets that existed at June Thirtyth 20 night thing.
Primarily due to a reduction in the number of projects available or be it in certain of our markets, including North Carolina.
It is also result of efforts to manage the backlog and effectively utilize our workforce in light of the uncertainties caused by the cobot 19 pandemic.
This decrease was offset by $9.7 million revenue attributable to acquisitions completed after June Thirtyth 20 nighttime.
Gross profit for the third quarter was $36.5 million compared to $38.1 million into third quarter last year, primarily as a result of the decrease in third quarter revenues.
General and administrative expenses were $16.9 million on the quarter, essentially flat compared to last quarter and up $900000 compared to the same quarter last year. The increase year over year was primarily the result of cost related to acquisitions completed subsequent to June 30, 20 now.
Acting and increases in payroll benefits and stock based compensation expenses.
Net income for the quarter was $15.7 million compared to $17.2 million for the same quarter last year and diluted earnings per share was 30 cents compared to 33 cents for the same quarter last year. The decrease was primarily a result of lower gross profit and higher general and administrative it.
Expenses.
During the quarter, we recorded a non cash gain of $395000 and other income related to fuel swaps and a noncash charge of $120000 related to interest rate swaps. The value of these instruments was impacted by volatility in the financial in commodities market during the call.
Were due to covert 19, and other macro economic factors.
Adjusted EBITDA increased to $31.9 million compared to $31.3 million are the same quarter last year.
The increase was a result of a higher depreciation depletion and amortization of long lived assets, partially offset by lower gross profit and an increase in general and administrative expenses.
Adjusted EBITDA margin for the third quarter was 14.7% up from 13.8% in the third quarter last year. This was driven by an increase in adjusted EBITDA and a decrease in revenues as discussed earlier.
Turning now to the balance sheet at June Thirtyth, we had $78.7 million, a cash and $19.3 million of availability under our revolving credit facility after reduction for outstanding letters of credit.
As of the ended the quarter our debt to trailing 12 months EBITDA ratio was 0.83.
Since the end of the quarter, we borrowed $30 million in term debt and increase the capacity under our revolving credit facility. The $50 million. This should divisional liquidity provides financial flexibility in today's uncertain economic environment and provides capital for potential future acquisitions.
Yeah on us to respond quickly to growth opportunities when they arise.
Cash provided by operating activities was $51.4 million for the nine months ended June Thirtyth 2020, compared to $18 million for the same period last year.
Capex for the third quarter was $7 million compared to $11.9 million in the same quarter last year.
As you recall, we expect capital expenditures for fiscal 2020 to be $40 million to $42 million, excluding the expenditures of $11.5 million in the first quarter of this fiscal year to purchase equipment previously subject to operating leases.
Project backlog at June Thirtyth, 2020 was $651.2 million.
Fair to $579.1 million at March 31st 2020.
$581.1 million at June Thirtyth 29 today.
We strive to maintain a disciplined approach to bidding work as we strategically focus on recurring repair and maintenance projects and seek to maintain six to nine months, some backlog and each of our markets at any given time.
We continue to closely monitor the impact of co with 19 pandemic on all aspects of our business, including its impact on our customers employees suppliers and vendors.
As Charles mentioned, there has not been a material adverse impact on our operating results today.
However, the extent, which our operations may be impacted by the Covidien acting pandemic going forward will depend largely on future developments. These include actions that could be taken by governmental unhelpful authorities and future funding for projects tied to gas tax receipts.
Management remains vigilant in monitoring these developments and their impact on our business and industry.
Taking these factors into account as well as our current backlog, we're revising our fiscal year 2020 outlook by lowering our expected revenue range and raising our expected net income and adjusted EBITDA ranges for the full fiscal 2020 year, We project revenue.
$810 million to $820 million.
Net income of $36 million to $38 million and adjusted EBITDA of 92 to 92.9 $4.5 million.
In summary, we are pleased with our third quarter results and we'll continue to execute our growth strategy in the fourth quarter fiscal 2020.
With that we'll now take questions operator.
Thank you we would now conduct a question answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
Information indicate your line is in a question Q.
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For participants use and speaker equipment and may be necessary to pick up your handset before positive stuff [laughter]. Please ask one question and one follow up question and then we entered the Q4 additional questions one moment well be poll for questions.
Our first question comes from Josh Wilson with Raymond James. Please proceed with your question.
Good morning, congratulations on the quarter and congrats tool on the promotion.
Thank you Josh.
A couple of questions here first as it relates to your backlog or on the last quarterly call you had been concerned about margin pressures given the potential challenging bidding environment.
You're guiding for margins to drop sequentially.
Somewhat but can you give us a flavor of what the margins looked like in the backlog, especially as we look beyond this current quarter.
Ah, Yes, Josh we have seen some pressure on margins some of the reason for the Oh.
Shortfall in revenue in Q3 was.
Objects that were being at extremely low margins that we will not successful and winning but we feel good about the backlog, we have for our fourth quarter and going into 2021.
In most of our markets, we've not seen a substantial reduction in the bid margins that we got on backlog so.
We're real pleased and optimistic about our.
Fourth quarter in 22 anymore.
Good and as it relates to 21 or should we expect the normal seasonal cadence or are there some one offs.
From a pandemic their affecting that.
No I think.
Why we see Atlanta note with the amount of backlog, we've got going into 2021, we should.
We'll see the normal 40% and 60% with only a slight variations. So of course, obviously, we've got to still feel.
At this point about half of our.
Backlog for next year, but part of that will be filled in this fourth quarter.
We feel like will be in.
Really better shape going into 2021 than we were at 2020.
Got it and then can you give us a sense of what the monthly trends were in sales says things. So open back up and into a July and August.
Well our normal.
In the fourth quarter is going be to see month over month sales to increase throughout the quarter.
In June.
By April it really was kind of even throughout all three of those quarters. Some of the book and burn that we thought we would pick up in some markets.
<unk>.
We didn't get so that's why revenue fell short a little bit, but we've got our backlog for fourth quarter fully booked so normally.
On July because holiday system, the lowest in three months in August and September the higher revenues. So thats certainly now stacking up right now.
Okay, I'll turn it over to others good luck with quarter.
Thank you.
Thank you. Our next question comes from Andrew Wittmann with Baird. Please [laughter].
Okay. Thanks. Good morning, guys. Thank you for taking my questions I guess I'll just start off by building on some of the last questions around.
Around the backlog it was obviously pretty notable here this quarter and I was just wondering about just given the size of the sequential increase in the backlog if there any larger projects in the backlog today than maybe they were in the last several quarters or if maybe another way of saying that is the duration of this backlog.
Give you a better than average or or worst than average visibility.
I think some commentary on that would be a be helpful. Thank you.
Yeah. This is Alan there's not.
Any real change and the duration of the projects I mean, the majority of those on our backlog are ones that will be completed in less than 12, much. We might have I think maybe one project that's longer than 12 months it got booked but it's not the.
The 2022, there's not amount is not significant so pretty typical because what we're seeing or a lot of the.
Oh repair and maintenance type projects and usually there you know.
Less than 12 months in duration, so just seeing a lot of activity in that and I still seeing strong a private work.
And those are typically not multiyear projects Oh really a lot more just the site.
Got it yeah.
Touches on kind of what I wanted to get into next so if you could expand Alan if you are a little bit on that kind of the mix between private and public you know, it's it's not lost that some of the public budgets are.
Already seeing some price pressures in may possibly see some more as we move forward to this this covet and dynamic.
As a result of that are you continuing to see.
Are you seeing the private sector make up for that is it's too early to say.
And maybe specifically if you could talk about.
Which you are hearing and seeing and expecting from your state cheese as we move forward would be also very helpful.
Yeah, I'll talk about the backlog then I'll I'll, let Charles talked a little bit about the d. and fees, but as far as a backlog, it's pretty similar mix of about.
65.
Percent public and 35% private.
Actually this quarter, we just finished in probably in the next quarter, we'll see.
A little bit higher.
Like because this is when we do a lot of the.
Mill in resurface, which generates higher revenues for that portion of the we're still seeing strong private work.
We're seeing in Alabama, specifically, the cities and counties spending the money.
So that's public but non DMT. So we feel like we will probably stay in that 65 35.
Range going into next year, and though we are.
I think probably the back side of next year. Some of the work, we're hopeful that DMT fees and the other public school picked up the.
The funding programs, they're looking to put in place. So I'll, let Charles Kinda talk about that little bit [laughter] alright. Thank you Alan I ended the.
What we're seeing into markets, where operating in you know we're in 35 different market scattered over.
Of these four or five states and what we see it is a lot of the gas tax revenue coming back and back to where we have our operations, we where were seeing down and gas tax receipts, so little bit less than 10%. So what we say instead.
A lot of a traffic out there on the road in a from a.
Federal standpoint, you know we have fast act this going in and.
Oh Gosh September Thirtyth.
And.
This and it hasn't proposal out there in the house has proposal out there in both of them have a pretty substantial increase compared to what we've been seeing a new year over year. So we think at some point in time.
That there so.
Get this tax so this a increase will take place.
And you know what we don't really anticipate it taken place until maybe after the versus the year, but.
No we very confident that we'll see continuing resolutions.
That will keep everything in place. So we're feeling pretty good about the Deo Tees and I have Jewish Smith.
And call today here in and you know one place we've had a little bit more weakness in other areas has it been in the North Carolina market and so obviously didn't kind of big picture of kind of what North Carolina looks like because we're seeing.
Some of their posh it things right now do okay. Thank you Charles.
Andy The North Carolina audio tapes specifically.
You know there had been in the news the last.
The six months would their funding issues and I think.
It's important to remember that their funding mechanism had has and continues to be healthy. They just simply overspent back in 2018 and so.
We're seeing there.
There funding heal and we hope they've taken.
Some concrete measures over the summer to speed that up and so.
We see the North Carolina, DMT resuming letting this fall and.
We're very optimistic about.
You know North Carolina moving forward.
But you know the backlog that we've been able to build over 35 market areas is just shows you know.
We're not dependent upon one stage one market area.
Construction partners.
Great.
Thanks, I'm just can do one last quick one and I'm going to jump back into queue, but Alan just given that the gross margins were so strong here in the quarter I was wondering if there's any project closeouts that allowed you to book a little bit more profit as you've closed those out or if there's any moving pieces in inside the gross margins that are notable like that.
Yes, Andy I mean, it really was just a combination of things them the mix of work.
That we've completed during the quarter, we certainly were the beneficiaries of lower.
Diesel fuel prices and asphalt summit, although you know because of the indexes that.
Gave us some headwind to revenue compared to last year. When those indexes were going up and we got a little tailwind, but it really was just a combination of that I think Charles said in his comments the vertical integration with us having the liquid asphalt terminal and.
Seeing benefits out of that and then just being able to.
Now complete the work efficiently and in some markets, we weren't working as much over time.
And that helped US also so really just a combination no one thing as far as any kind of big project or a ride up like that.
Normal business.
Thank you.
Our next question comes from Michael Finger with Bank of America. Please proceed with your question.
Everyone. Thanks for taking my thanks for taking my questions.
The backlog I can just coat.
Hello, Good this quarter I I'm, just curious you mentioned obviously July.
Usually low how I'm I'm kind of curious like as we go through the next few months as you got to build the backlog is there any concerns with the uncertainty around fast Act.
Give me, let's right now with coded there's a big a disagreement about what are they going to help states municipalities are they not.
Or does it feel like the next two months you know, it's kind of in the bag and really the uncertainty has a bigger impact on 2021.
Well certainly for us since our year end September Thirtyth, and we've got 100% of our backlog for the next three months, we won't be impacted in our fiscal 2020.
Oh, and we we have backlog for our fiscal 2021, that's you know would carry us for the first six months of that but.
Through September most of the Deo Tees with the exception that you mentioned with North Carolina or still letting projects.
Based on what was in their fiscal year budget, that's not really tied to this years.
Oh revenue tax collections Charles mentioned, we're already seeing a significant recovery in the states that were in with people getting back to work in the traveling public back out there. So there's been a.
[music].
They're less.
Decline year over year and the tax revenues.
If if nothing has done and the co bid package that backstops the stage, which we're optimistic there might be we feel like the program will still be strong next year.
We said before.
Historically happens is it when there's a shortfall and no state tax revenues they get away from more of the large projects and video to use of certainly signal that the they're going to take care of the roads that they have there's going to be there first priority. So.
We feel very positive that even if there's not a recovery of the tax revenues at the repair and maintenance.
Portion of that budget will continue to be strong and.
Into 2021 in future.
Great that was I was really helpful and.
I'm I'm curious what you're seeing with your competitive environment are you seeing competitors with but some of the project with some the letting some projects coming up for bid.
Is that is it getting more competitive are you seeing pricing really come down a lot and do you think that if we go into next year.
Do you think a lot of each family offices.
I'll tell you something with.
Are they are they willing to maybe you know kind of stuck to that but their hands up for sale don't want to deal with a higher tax rate I'm. Just curious if you kind of give us a little bit more of a background, what you're seeing competitively, but these new projects come up for bid and also maybe on the acquisition side with some of these are there other small.
Our competitors.
Hey, Michael This is Charlie as we're seeing on a competitive bid you know, we're saying a lot up.
Pressure in different markets. So of course, we have 35 different distinct market areas and you know some are little bit more competitive than others, but you know not items, what I call did real great. None of these real bad. So you know, there's just a mixture out there and we've been fortunate enough what our data.
To stick drive discipline, abating, and and making sure that we booked the work that we.
That would need into strong they build the time would go need and as far as our [noise].
Acquisition pipeline, you know we're still seeing.
Strong pipeline and no were maybe say in a little bit more than we have usually seen and as Alan mentioned known the Oh I want to banking side in our balance sheet that we've made some that we that sum of money available to where we can move quickly on acquisitions Ed.
Not get tied up with the with the banking side, the trying to make things work and we think there's going be a plenty of opportunity going forward from a M&A side.
Perfect. That's really helpful and just lastly on you guys are commenting before about fast Act. How you know the ex exploration to end the September there's different bills you know two to how they approach this.
If we see a one year extension or I see our at the current level, let's be basically DC decides to kind of hunt and say figure it out after after the election is that you know you guys used to have a lot uncertainties. What do you see ours is is the situation with the deal is that.
Better than it was before to handle that type of CR if that if that's the case, we don't get a multiyear extension.
You know, we really don't see Oh Federal Bill passed until next year and you know if you track this business as long as we have in you know that we have never had a bill put in place I don't think when one expires and we've always gone through continuing resolutions.
And so they see artist counter almost a.
Just almost and giving show.
But you know I think one thing that.
May have plus we may we may see a CR didn't so little bit longer than this time and stand up just a short term just so that deo Tees can do a little bit better planning, but a you know I don't think.
Some slow down to process I'll put in a permanent deal in place.
Typically Michael those see ours or at the current funding level or higher.
And though.
We both.
Parties now the house in the Senate has talked about if they do a CR they've got different levels of increases it they're proposing.
We feel very good the the.
Funding level, even with a CR will be higher than what is expiring.
So.
But as Charles said I agree I don't think that there's likely to be replacement of the fast Act.
The election.
Thanks, everyone.
Thank you next question comes from Adam Thalhimer wouldn't Thompson Davis. Please proceed with your question.
Hey, good morning, guys congrats on a great quarter.
Thank you Ed.
I wanted to ask first take what are your high level.
Revenues thoughts for fiscal <unk> 21, do you have any early thoughts.
Well, we have a put anything together, we normally do that closer to our fiscal year in and we do that bye.
Doing it from the ground up with 35 different.
Profit centers and market areas. So we have not begun that process.
You know, we feel like that you know given the backlog.
Going into next year compared to what we had going into this year, we feel a better as I said earlier.
About the prospects and things that Joel mentioned with North Carolina, Diodati getting back on track and certainly.
In the next by September Thirtyth, we'll know whether there's a continuing resolution at what funding level so that will.
Give a lot of clarity for us as to what a 2021 looks like what we feel.
Very optimistic at this time that that's going to.
Present, some good opportunities for.
Okay and then you gave some good color on North Carolina, and Alabama already curious, what you're seeing in Georgia and Florida.
[noise] Hey, Adam.
From a Georgia standpoint, if we looked at if we look back over say for May.
For our safe a March the May look at a gas tax we see each ah.
No we actually see a more a positive trend in Georgia, and Florida, you know, we're seeing a negative trend, but we're seeing a lot of work being led in Florida, Florida.
Some of those market errors in Florida continues to hold up and be strong enough. So you know from the up where we have I asphalt plant and our operations.
From a march through May.
2019 versus 2020 year over year were down about a about 9% regularly about 9% then.
And motor fuel tax revenues. So you know down in our area. They were not locked down and we're moving then.
In the good thing that we're seeing is when you get out into traffic. We're we're seeing gridlock again, and you know what acevedo positive thing by industry, because you know ever one ever one is.
Is that wants to get though from one place to the other and so you know we feel good about.
A new revenue stream coming in.
And Adam Weve as you know with the acquisitions, we made in the last.
18 to 24 months of those have been greatly expanded our footprint in Florida, and we're seeing the that's helpful and having more market areas down there too.
Be it in and some of the synergies of the plants that are now located next to each other being able to share some services and bid on projects that companies that we acquired couldn't before so some of the normal synergies that we see we're certainly seeing that in Florida.
Okay, and just last one.
For me that you said you had a benefit from.
Lower diesel and lower asphalt.
And that.
Decreased revenue, but increased margin can you just walk us through that dynamic quickly.
Yeah.
I think in our call last.
Quarter.
We said based on where the asphalt cement prices were in diesel prices that we felt like over the next six months it'd be probably a $3 million to $4 million.
Revenue he it.
We're indexes kicked in and we had to give back that.
Revenue that would be in our backlog and actually in the quarter.
This quarter compared to the same quarter last year that was $2.1 million, so or $2.2 million. So we still feel like.
You know that will be $3 million to $4 million over the six months, but what that basically does is as revenue we don't collect but its cost we don't incur so we still have the same margin on that work.
Because you all you get back is the cost savings, so that's where you.
If prices are going down and we're having to refund part of the contract amount or not collected and that's where we see as a percentage our margin is going to go up. So that's that's kind of what we're talking about but that will see amount in this quarter compared to the index adjustment last.
Here is about a 2.2 million dollar variance.
And also during the you know, we're booking and burning a lot of work so.
You know if the index or the price of asphalt cement and diesel it stayed up and we would have been bidding projects with a higher cost so.
In addition to the index give back on existing contracts some of our new contracts that we were bidding had lower cost in there and we might be getting saying margin, but it's on a lower revenue number so that that has a slight impact on the margin percentage.
Understood. Okay. Thanks for the color.
Our next question comes from they'll meet with D.A. Davidson. Please proceed with your question.
Hey, great. Thank you Ed good morning, and agile congrats on that the new position actually had a question for you in that.
Fred that's been a really successful sort of operating subsidiary and the company and I'm curious as you move into this new role if there's some things you can take from your experience there just kind of the other operating subsidiaries just from an operating from an efficiency standpoint really get into the question that you know is there an opportunity to drive that deer Hunter.
That's an end margin improvement in organization.
[noise] well.
Thank you Brett.
You know I think first of all it's been an incredible decade with construction partners and I've learned a tone from Charles as a mentor and I'm looking forward to learn and even more in helping him across you know 35 market areas.
Oh, Fred Smith Company has a great management team and leadership team there and.
You know everything that.
We've done there we're doing in other states and.
I think there's always opportunities to improve and that's going to be part of my role is just to help Charles make sure that operations or.
Running efficiently safely.
And.
You know driving.
I've been profitability throughout so.
No.
The one thing is.
CPR also had just a great management team and leadership team and all the states and I'm looking forward to.
Good to know we tell them at work with them even more closely.
In the coming year.
Okay, Alright, I appreciate that be curious to see how would you guys find I guess second question would be just generally speaking what you guys are seeing in terms of kind of private sector or private commercial work out there in your markets. Thank you.
All right you know what we're looking at the wood disguise quite a bit about the public side and we see that coming back in we are feeling real good about half what direction, that's going in and we do still do a.
Small portion of our business.
Is the residential and what the areas that we're in we're still seeing no residential still holding up pretty strong in these you know when interest rates is that they own 15 30 year mortgages right now I'm. It is just unbelievable.
What what you can get a mortgage for right now, which is I think that big driver and we haven't seen in the market yet we're in that we haven't seen that much of a pullback in residential in our other bucket. We operate out of is our commercial work and the commercial.
Over our 35 different markets. Some we see I'm very little activity and then there's some markets that are still continue to be a there is strong and so right now we we're from a public in residential commercial where we're really not seeing one dish what I'd call. This real.
So weak at this point show, it's I'll look in being a positive.
Okay, great job great quarter best of luck.
Thank you.
Thank you at this time I would like to turn the call back over to management for closing Tommy.
Okay, well I just want to thank everyone for joining the call today and we look forward to speaking with you over the next copper scholars and just be assured that we will continue to focus on our strategy and execute and they are safe manner, and what everyone on the call today to be safe and look.
Forward through the next call. Thank you.
Thank you ladies and gentlemen, today's teleconference. You may disconnect. Your lines at this time and have a great day.