Q1 2021 MDU Resources Group Inc Earnings Call
[music].
Hello, My name is Erica and I will be your.
Conference facilitator.
This time I would like to welcome everyone to the MDU Resources Group 2021 first quarter conference call. All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer period. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key on your telephone keypad. This call will be available for replay beginning at five P. M. Eastern time today through <unk>.
<unk> 59 P. M. Eastern time on May 20, net art may 20th the conference I D number for the replay is 2374997 again the conference I D number for the replay is 2374 at nine nine.
Seven the number to dial for the replay is 185585920564 or 045373406 I would now like to turn the conference over to Jason Vollmer, Vice President and.
Chief Financial Officer of MDU Resources group. Thank you Mr. Vollmer, you may begin your conference.
Thank you Erica and welcome everyone to our first quarter 2021 earnings Conference call. This call is being broadcast live to the public over the Internet and slides will accompany our remarks, if you'd like to view. The slides. Please visit our website at www Dot MDU dot com and go to the events and presentations page under the investors tab.
Our earnings news release is also available on our website.
During this presentation, we will make certain forward looking statements within the meaning of section 20 <unk> of the Securities Exchange Act of 1934.
Although the company believes that its expectations and beliefs are based upon reasonable assumptions actual results may differ materially for a discussion of factors that may cause results to differ refer to item <unk> risk factors in our most recent form 10-K and other filings with the SEC.
We may also reference EBITDA and adjusted gross margin throughout the conference call, which are considered non-GAAP financial measures.
For a reconciliation of EBITDA and adjusted gross margin to net income please refer to the earnings release filed yesterday.
For our call today, I will discuss the key financial highlights and then turn the presentation over to Dave Goodin, President and CEO of MDU resources. After Dave's remarks, we will open the line for questions.
In addition to David myself members of our management team who are available to answer questions today are.
Barney President and CEO of an excuse me president and CEO of Knife River Corporation, Jeff.
Jeff Thiede, President and CEO of MDU construction services group.
Kolka, Misto, president and CEO of our utility group <unk>.
Trevor Hastings, President and CEO of WBI energy, and Stephanie Barth, Vice President Chief Accounting Officer, and controller of MDU resources.
Yesterday, we announced first quarter earnings of $52 1 million or <unk> 26 per share doubling our first quarter 2020 earnings of $25 1 million or <unk> 13 per share.
Our combined utility business performed well throughout the first quarter and reported earnings of $46 9 million up from $43 7 million in the first quarter of 2020.
Our natural gas utility segment reported net income of $36 2 million for the quarter compared to $32 $3 million on the prior year.
Higher adjusted gross margin from approved rate relief weather normalization and decoupling mechanisms as well as a one 8% increase in natural gas retail sales volumes contributed to the increase in earnings.
Higher investment income on certain benefit plans also had a positive impact on earnings partially offsetting the increase were higher operation and maintenance expense and higher depreciation depletion and amortization expense.
And our electric utility segment earnings decreased slightly year over year at $10 7 million for the first quarter compared to $11 4 million in 2020.
This decrease in earnings was largely the result of higher operating expenses, primarily payroll related costs and increased depreciation depletion and amortization expense from electric transmission projects placed into service.
Partially offsetting the decrease in earnings were higher returns on certain benefit plan investments.
Adjusted gross margin also increased during the quarter. The result of higher transmission revenues and increased revenues associated with transmission interconnect upgrades.
Adjusted gross margin was offset by a two 2% decrease in electric sales volumes, primarily to our commercial and industrial customers.
The pipeline business had a record first quarter for earnings of $8 9 million compared to $7 4 million in 2020.
The primary contributors to the increase in earnings were strong customer demand for natural gas storage services as well as higher other income from increased allowance for funds used during construction and higher investment returns on certain benefit plans.
Turning to the construction platform, our construction services business reported record first quarter earnings of $29 8 million compared to $16 8 million in 2020.
And first quarter revenues of $518 5 million up from prior year revenues of $514 7 million.
Construction services saw an increase in outside specialty contracting workloads and margins due to strong demand from its customers in the utility industry.
Inside specialty contracting workloads decreased during the quarter, primarily from lower customer demand for refinery projects.
Customer demand for high Tech projects, However remained very strong throughout the quarter.
As a reminder, 2021st quarter net income for the construction services business was impacted by a $6 $7 million out of period adjustment after tax.
Our construction materials business reported a seasonal loss of 38 million on the first quarter compared to a loss of $38 2 million for the same period in 2020.
And had record first quarter revenues of $265 $7 million. This year up from 2020 revenues of $262 2 million.
Increased materials pricing and higher contracting margins decreased the seasonal loss.
An early start to the construction season and materials sales season resulted in higher materials revenues higher.
Higher investment returns on certain benefit plans and lower selling general administrative expenses were partially offset by increased payroll related costs.
In addition to the strong earnings performance on the first quarter. Our consolidated EBITDA also grew 29% year over year to $162 2 million compared to $125 3 million from the same period in 2020.
That summarizes the financial highlights from the quarter and now I'd like to turn the call over to Dave for his formal remarks David.
Yeah.
Thank you, Jason and good afternoon, everyone and thank you for joining us here today.
We're off to a very strong start in 2021, doubling our first quarter earnings compared to 2020.
All of our businesses performed well during the quarter with record earnings at construction services and our pipeline group.
Record revenues from an early start to the year at construction materials and our utility continued to provide safe and reliable service to customers even as other areas of the country were impacted by weather related outages.
With this strong first quarter performance, we are narrowing our 2021 earnings per share guidance to a range now of $2 to $2 15.
Raising the low end of the range from $1 95.
I will now walk and talk through each of our business lines to give additional color on our results and update everyone on the opportunities that we see ahead of us for the remainder of 2021 and beyond.
Our combined utility had a very successful first quarter reporting a 7% increase in earnings.
Along with a busy regulatory activity as we continue to work on recovering investments made to strengthen the safety and reliability of both our natural gas and electric systems.
Our outlook for the utility businesses includes plans to invest $328 million this year and approximately $1 6 billion over the next five years with a projected rate base growth of 5% compounded annually.
Throughout the remainder of the year the electric utility business will continue with plans to retire the heskett coal fired stations in early 2022 and.
And is nearing the completion of its integrated resource planning process with an expected release date here in the summer of 2021.
Turning to our pipeline business. They had an excellent first quarter and as I mentioned earlier reported record first quarter earnings.
We own the largest natural gas storage field in North America and demand for our natural gas storage related services contributed strongly to the earnings growth.
Our pipeline group is currently awaiting the final federal Energy Regulatory Commission certificate for its North Bakken expansion project is.
As a reminder, this is a 250 million cubic feet per day expansion project with long term customer commitments that will help decreased natural gas flaring within the Bakken.
PRC approval for this expansion was expected during the first quarter and since it has not yet been received the company is adjusting its construction schedule to reflect this delay.
The in service date, which was previously expected to be in late 2021 will also be impacted by this delay.
With natural gas production levels remaining strong in the Bakken and low natural gas prices, we are experiencing sustained demand for our transportation and storage services and continue to evaluate other organic growth projects across the pipeline on operations.
Now I'd like to turn to our construction platform of businesses.
At construction services here, we reported strong first quarter revenues.
Record first quarter earnings and record first quarter backlog of know at one point to seven 3 billion.
This record backlog really showcases I'll say the success of our diverse operations as well as the bidding environments that we see across our footprint throughout the first quarter.
We are confident that our high quality of service and skilled workforce will continue to be in demand for new jobs.
At construction materials, we reported a lower seasonal loss here.
<unk> favorable weather gave us an early start to the construction and materials sales season, allowing this business to complete projects ahead of schedule and also take advantage of new bidding opportunities for the remainder of the year.
Even with this early start to the season backlog remained strong and was $819 million as of March 31.
As noted in prior news releases.
<unk> completed its first acquisition of 2021 with an aggregates operated operation in the Portland, Oregon area.
The Mt Hood rock acquisition strengthens our position in the Portland Metro area and will also provide an estimated 20 years of aggregate reserves.
Knife River also received a very key permit to expand operations at our Honey Creek aggregate quarry in Texas just outside of Austin.
Combined our construction businesses ended the quarter with nearly $2 1 billion in backlog and we do anticipate construction revenues on a combined basis to be between $4 2 billion and $4 6 billion for 2021.
We are excited about the opportunities in front of US both of our business platforms present.
The discussion surrounding our new federally funded infrastructure package, while not built into any of our forecast for this year is a positive development that could provide substantial longer term growth opportunities for both platforms of businesses.
Our focus here at MDU resources has been to produce significant long term value as we execute our business plans.
Organic growth projects and targeted acquisitions and Thats exactly what were doing.
We continue to maintain a strong balance sheet solid credit ratings are good liquidity position and for the last 83 consecutive years, we provided a competitive dividend to our shareholders.
As always MDU resources is committed to operating with integrity and a focus on safety, while creating superior shareholder value as we contend continue along our tag line of building a strong America I appreciate your interest in and commitment to MDU resources and ask now that we open.
On the line for questions turning it back to you operator.
At this time I would like to remind everyone. If you would like to ask a question. Please press Star then the number one on your telephone keypad.
Your question press the pound key.
If you're on a speakerphone, please pick up your handset before entering.
Your request.
We will pause for just a moment to compile the Q&A.
Sure.
Your first question is from.
With bank of America.
Hey, Jim this is various here good afternoon.
Good afternoon, Derek how are you.
I'm very well.
You for taking my question just wanted to briefly come back to the Bakken expansion project at.
It sounded like clearly there is a delay in the construction schedule.
Scott you didn't say that it may go into 2022 could.
Could you maybe just kind of talk about the puts and takes and potentially any flex in your plan as.
As far as when the in service date May move too.
On a part b to that would be in your queue theres, a little bit of a disclosure about the FERC reforming the way in which it analyzes its greenhouse gas emissions I was wondering if you could sort of tie that into <unk>.
The overall delays that youre experiencing the project to the extent that you can.
Sure.
Darius I'll ask Trevor Hastings, who is the CEO at WBI energy to touch on both parts of your questions. Okay.
Thanks for the question. So the first one just in terms of the delay on timing or our timing on the project will be predicated on when we get our FERC certificate and then ultimately the notice to proceed with construction.
So at this moment in time, if we were to get our certificate at the May meeting and a notice to proceed on the end of June early July we would be able to achieve an in service date by the end of the year or very early in 2022, depending on the weather.
If it delays past that.
Obviously, our project team continues to work on this as we move forward and we would just need to go back and look at it but at this point in time, we could hit on it ended the year early early next year.
Related to the greenhouse gas portion of it.
So with the New administration and chairman Blake at the FERC one of the early things he's done is.
Implemented on greenhouse gas.
<unk>.
First order that it came out on was actually a replacement project.
To do a significance determination so as it relates to the North Bakken project.
The in terms of direct assessment from the project.
Our view would be the direct greenhouse gas emissions are insignificant.
And as it relates to the downstream not knowing fully how FERC is going to do it on an expansion project because we haven't that we.
We haven't seen an order with it in an expansion project, yet, but just looking downstream.
<unk>.
In terms of those impacts were falling into a fault pipe and so our argument would be there really wouldn't be any more.
A material change in terms of downstream emissions and then from the project standpoint. This project.
Running through the heart of the Bakken really helps reduce flaring today and into the future as the Bakken continues to grow.
Areas.
Both parts of your question with that.
Certainly, yes, it very insightful answers. Thank you for that if I can.
Sneak one more in here just wanted to.
Discuss a little bit the composition of your services results.
Two parts to that if you can talk a little bit to how much.
Contribution from storm repair work it sounded like it might have been significant and also the comments about lower demand from refinery and commercial project. That's something that you expect to be temporary or do you expect that to be more of a longer term shift in that obviously.
Look to backfill that with more kind of tech industry type work.
Sure Darius I'll ask Jeff to weigh in on that I'll say storm work, while a portion of our first quarter work wasn't necessarily material to the results. It was certainly helpful, but not material, but Jeff you can add more color to that along with the second part of <unk> question relative to the refining area.
Okay Hello Darius.
We really respect our essential workers and appreciate them responding to the storm work that we had in Q1, we set many crews to Arkansas, Missouri, and Oklahoma and in fact, we still have crews in Arkansas right now our team helped restore power and even communications to homes businesses and services for those in need.
And the storm work contributed to our success, but it was not material to earnings.
So again, we're pleased to be able to respond but it wasn't material to our earnings into Q1.
And then Jeff I think Darius had a second part relative to the refining area.
Yes, So we had in 2020, we had a big.
Big project Big opportunity.
And looking at.
That period versus 2021, we were down obviously, but our backlog and our work opportunities within the turnaround services.
Petrochemical refinery customers locations and interest.
Free of capital projects, and even maintenance project is picking up speed and we see it increasing.
Throughout the rest of the year.
Okay, great. Thank you very much from those responses that's it from me.
Thank you Darius.
Okay.
Your next question is from Ryan Levine with Citi.
Hi, everybody.
Ryan to start on.
David.
Maybe just wanted to start off in terms of the construction materials and services business curious if youre seeing any inflation on the cost side or any of that you are able to pass on to customers.
During the quarter and over the last.
A few weeks.
Sure.
I'll start maybe with Dave Barney on the material side, and then we'll shift over to Jeff Thiede on those services relative to your question on inflationary pressures.
Dave.
Yes.
Alright, yes.
<unk> seen some inflationary pressure.
Pressure on.
On steel and other products, but we have been able to pass those costs on and our bids are dead on.
Materials side.
And Ryan this is okay, what about in terms of the.
The actual commodity.
In terms of the AG on ready mix.
Okay. So on any inflation there.
Yes.
Well, we've been raising our prices internally for aggregates and ready mix.
We are seeing.
People David.
Rarely buy from on our aggregate site increase.
Increased aggregate price.
Hum.
But not significant.
And there is no shortage of it right now.
It's going to be tight this year in some areas on area.
We're really busy.
Some parts of our region and it's going to be really tight but.
We will continue to monitor monitor.
Is there a margin expansion opportunity in light of that dynamic.
Yes.
Okay.
Jeff do you want to touch on in services.
You bet.
Availability is also an issue in addition to the price increases that were seeing and there has there has been some impact from steel copper aluminum and PVC products, they've sharply risen over the last six months were timely and proactively notifying our customers. While also working with our suppliers to mitigate the impact.
Two our backlog margins, we've had some success in anticipating these increases.
Also used our purchasing power and our financial strength to bulk purchase wire and some of our markets.
Okay.
On the services side and the existing contracts how did the how did they address that potential issue or there are a lot of pass throughs or does the company have negative margin pressure.
This increase.
Mostly on our GMP.
<unk> they are pass throughs and a lot of our pricing since we started to experience and anticipate working closely with our suppliers, we've identified a certain level of pricing and have qualified.
Our bid proposals with those levels.
Per.
Impacts to our customers to let them know if we wait two months to make this purchase it will impact us by X dollars and so we get them involved in it.
Mitigate those risks and we are mostly being able to pass those costs on to our customers. When we are in the pre construction on our GMP jobs.
Okay, and maybe one follow up in terms of the backlog numbers that you posted for the quarter.
That business mix shift at all in line.
Some of those dynamics.
For service for services.
Backlog.
It's divided up into our outside backlog versus our inside and it's always been about 80% inside and 20%.
Outside it's very close to where it was a year ago.
We are seeing our Vegas group about the same level slightly down by a couple of percentage points, we're seeing some increases in the Pacific northwest and the West Coast. In addition to Ohio and in the Midwest. So having a diversified company has helped strengthen us and help us adjust to be able to capture the <unk>.
<unk> it would be able to build on our Q1 record backlog.
Okay. Ryan did any of your question extend over to materials, then relative to the backlog makeup too.
I mean that would be helpful. David David sure.
Terry.
Yes, Dave Barney.
As far as our backlog.
Brian we're still about 70% public 30% price.
We haven't seen that much change on that over the last couple of years.
Okay and then maybe one question on another question on the pipeline segment in line.
Some of these inflationary pressures given potential pipeline timing delay with the FERC process.
How is the contract structured with your customers to the extent that bell costs were to go up.
Yes first of all as originally budgeted when you filed the application.
Okay.
Okay.
Hey, Ryan this is Trevor.
First of all thinking back that this project would have started in 2019 are.
As we work through the projects schedule, a engineering procurement is a big part of that so at.
At this point in time, we were anticipating.
Mark first quarter certificate order and into construction, so from the procurement side and our main contract side, we're actually fully procured and have all of our contracts in place so as it relates to north Bakken.
It shouldn't be a material issue.
To the extent that the pricing were to change the contract we've already locked in the pricing and terms on that supply agreement.
Yeah.
On the yes, so I was speaking to them on the material procurement side on the major.
On sub contractor side to build that project out its covered on that side of it.
And so from the customer side.
Should be covered.
Okay I appreciate the color. Thank you.
Yes, thanks for the questions Ryan It may be just as I think more from a high level relative to your.
Inflationary question on materials and services, we do note in our guidance that we expect margins in those businesses to be either comparable if not slightly increasing on a year over year basis. So while there's many moving parts there skilled labor cost material cost.
Yes.
Good day type of agreement GMP or other cost plus with with the customers.
End of the day, we believe those margin should be comparable to actually slightly increasing on a year over year basis. So.
<unk> the questions Ryan back to you operator.
Your next question is from Chris Allen with Siebert Williams.
Good day, everybody how are you.
Hi, Chris we're doing well how are you doing going on.
Cash.
Trevor Kevin Kim Inc. We go back to the expansion.
And the permit.
It seems to me that the.
The net carbon situation relative to the reduction in flaring is so low.
Airing obvious debt.
I'm not sure I understand what.
On the FERC could be up to them and trying to make sort of a net determination can you elaborate on that a little bit.
Sure.
Give me one second so.
Yes.
This is somewhat tied into historical court cases and outcomes of that so.
Not to dive all the way into the weeds, but there was a court outcome, suggesting that the FERC needed to incorporate greenhouse gas emissions.
Determinations and issuing pipeline certificate orders in the past and so with previously that.
<unk> had been done and then really hadn't been done and then now underneath of the New administration on Chairman Glick.
With the first replacement project I referenced earlier.
They had done the greenhouse gas math too.
To do a significance determination on which they had done other than that project from from January timeframe to today, there haven't been any expansion projects that have.
On Ben on the agenda or any certificate orders issued so were unclear in terms of how exactly the FERC, we will be doing the greenhouse gas significance determination on an expansion project.
So it's related to into that was my earlier response to the Q disclosure around FERC moving on the greenhouse gases so from our project standpoint.
There's kind of a direct.
The upstream and downstream emissions, our view would be.
Obviously, it's not a significant.
<unk> achieve significance determination, but at this point, we don't know how FERC is actually going to apply it to expansion projects.
Okay.
Dave you mentioned something about.
Construction materials bidding having gotten an early start to the construction season.
Maybe Dave can address that.
Are you, suggesting that youre getting in early bidding season, as well and does that.
Uh huh.
How is that helpful to you unnecessarily.
Yes, Dave Barney you want to take that one please.
Yes, Chris.
We really are gaining early bidding season, our bid schedule looks good it's been strong.
But as far as the early build schedule no. We just got out early.
And mainly it was on the aggregates and ready mix side that we benefited from debt getting.
Getting out early.
Most of our construction work goes let's start a little later in the year, except for on the private side, we can get out and David work, but.
Net schedule will really hasnt changed much.
Okay.
Can you just sort of everybody I guess really mostly on the construction side, but maybe also.
This might influence your IRB.
With the buying from.
Pozo.
How do you see.
What the provisions of the guidance plan.
Might bring in terms of opportunity or.
Just sort of what your general thoughts are there provisions in the various areas influence you look like.
Chris that would be relative to the electric generation AARP the <unk>.
Utilities right in the midst of doing currently.
Yes.
It can directly influence your IRB thought process with.
Extensions of tax credits and then obviously the infrastructure.
Bill will influence both of the construction companies. So I just wanted to know if you have any general thoughts on.
Having seen all the provisions at this point.
What youre thinking.
I'll actually start with some kind of overall comments on that Chris.
Certainly.
We're watching very closely and participating as we are able to with the discussion within the.
On the administration and within Washington, We.
We appreciate the added emphasis on infrastructure, certainly and I think thats what Youre part of your question is we're able to.
Participate in that depending on what shape or form that infrastructure becomes whether it's the traditional roads bridges highways airports.
Materials, obviously directly affected with that any of our pre stressed products for bridges and those kinds of things.
And then when you think of renewables and other clean energy sources, and getting that into the grid and grid upgrades and our transmission upgrades.
Those are all right in the wheelhouse of our outside T&D group within services. So I think.
We kind of stand to.
Benefit if you will depending on the nature and form of that and you think to have within services.
I mean other forms of clean energy, whether it's photovoltaic we do that kind of work for others, we've done cement.
Utility scale.
PV farms as well so.
I think we stand to benefit from that broadband is another area that we would.
We do that work quite extensively in certain parts of our services group too so.
Cut it depends on your definition of infrastructure and whats all develop their specific to some other the administration's plans relative to the electric.
And natural gas industries, I'm going to turn to Nicole because he's front and center. So far is relative to the ERP and is how we're thinking about that and in short we've we've.
Making transition neutral renewables since 2007.
Clearly there is some accelerated timelines here, but I'll ask Nicole without speaking entirely for here to maybe a little more of the detail that thinking currently on the utility group Nicole.
Sure. Thanks, David.
Thank you.
Hit it on the head here by kind of your overall summary in terms of we've been on net.
On a pathway already in terms of our renewable product progress, but when you start with our overall mission in terms of safe reliable affordable and environmentally friendly energy.
Certainly there's areas that day that clean electricity standard debt is being proposed.
Net wheelhouse I think as we look at this on.
When we think about the timeline on that David mentioned here, we do have maybe some concerns in terms of challenges in meeting the timelines. So again, we've been on a path for <unk>.
Renewables for quite some time as you think about the accelerated time timeline on us along with the industry or are looking at what technology advancements would be needed.
Transmission build out that David already referenced not only to buildup at the permitting of that build out and then just ensuring that we've got the appropriate reliability and what kind of redundancy as needed as you did that.
Our best pathway to 80% clean by 2030, and 100% clean by 2035. So again, we're evaluating the proposals as they stand certainly as you mentioned, Chris you're exactly right, we will be looking at how to address this.
In terms of where it stands by the time, we put out our ERP. So.
It will be a part of our overall mix as we put our integrated resource plan together, but again, it's still in the proposal stages and we continue to evaluate it along with what we currently we're contemplating.
This lady acceleration.
That's not built into our forecast in terms on capital on our rate based projections that you are seeing thus certainly.
Any kind of.
Firm guidance here from legislation here would accelerate on a dollar.
On generation replacement.
So hopefully that answers your questions happy to answer any further if you have a follow up Chris.
Nicole does this also influence the speed at which you want to address our organization as well.
Yes, I think some of this would certainly accelerate.
Some of the things that we were currently contemplating and Thats, where we were trying to ensure that we've got that again back to that balancing act of safe reliable affordable and environmentally friendly.
<unk> tend to make sure that we're trying to evaluate all buckets right and so certainly.
This has some impact on Italy.
Alright.
And the timelines.
Sure.
The.
The FERC process.
Net more a function of theyre changing their various administrative process as opposed to.
Math on carbon is really seems quite simple.
Uh huh.
That's a.
That's a tough one to answer any net.
We're not exactly sure what the delay is on bringing any expansion projects for forward at this point in time, it could be related to the trend.
Figure out and make that.
I'll say policy determination on how that's going to be applied.
To this point.
On Chairman <unk> stated publicly that he doesn't intend to sit on certificate orders for natural gas pipeline projects. So our hope is that he has.
True to his word and we start to see some of these expansion projects in the North Bakken project come forward in some of in the near future Commission meetings.
Okay.
One last thing.
Vis vis the <unk> plan, Jeff do you see.
Or expect a couple of things out of that one.
Do you see maybe a lot more water work for you too.
There is a lot of things that are in the <unk> plan.
Encouraging private particularly manufacturing.
Manufacturing type of investment do you anticipate that maybe the bidding for.
On the manufacturing type.
Construction work.
Turning to be ahead of the curve of where maybe.
Public construction materials type projects, Mike Mike come in after that legislation sort of get some more detail.
Yes, certainly until we see the specifics of the plan.
It's difficult to anticipate but I think we're very well positioned with water work.
Factoring work, which we're doing a lot of.
So mission critical work.
Of course, our outside business with.
<unk> services on the power gas communications.
Turning to our equipment company.
Is going to help us capture the opportunities in our selected markets.
Backlog levels I think will remains strong.
And that will help carry us through bidding opportunities were seeing in the near term.
Our.
Telling us that our services are still in demand.
Humble to say that since 2015.
Our field professionals and management professionals have grown our business.
Revenue by 126% and our earnings 362%. So we're going to continue to remain disciplined with our bidding margins.
To build upon our success and we're not yet matched out.
Okay. Thanks, everybody I appreciate the detail.
Thank you Chris I appreciate the questions.
As a reminder, if you would like to ask a question at this time simply press Star then the number one on your telephone keypad.
Our next question is from Andrew Levi with Hite hedge.
Hey, guys how are you.
Hi, good how are you Andy.
Very well thank you Scott.
Thank you again.
Okay.
Knock on wood I don't want to Inc.
Yes, I appreciate you, calling in and I'm sure you get a dozen good questions for us now.
Well I have a couple of COVID-19.
That's a good question before.
Okay.
Yes as summarized on the.
Construction materials and I think you've had a good day.
But I guess I guess net net between.
Let's say inflationary pressure on.
On your supplies from no better way to put it.
Then obviously the ability to pass some of that through weather.
Contract can get probably are not completely debt.
And then on top of that looking at your aggregate business on that.
<unk> two range pricing there because of weather.
On a lumber or aggregate or whatever it may be on the go.
Through the roof right now.
On that on top of that.
Man for construction and general net net at this day.
As youre looking at some kind of mix it all together.
Unintended.
Youre looking at a benefit.
When you called out.
Do the pluses and minus debt what.
We reported David.
Yes, that's what I was trying to kind of.
All the puts and takes of the year I think about our guidance that we believe margins will be comparable to actually slightly increasing year over year with.
Puts and takes on the variables that you mentioned as we think about the businesses absolutely.
Great and then just one other question.
So just get it.
Well I think it was asked around the book.
Just on the binding infrastructure Bill.
It gets done on paper.
Where do you see the biggest benefit.
Two are comfortable.
Alright, MDU and the way that you've structured whether it's on the aggregate side.
Beyond that.
Yes.
I appreciate the softball on that add David because I mean, it really hits the wheelhouse of our two platforms.
Within the construction platform again, we probably typically people think me included infrastructure is kind of roads and bridges and highways and airports well thats obviously.
The materials group wheelhouse, whether it's ready mix, whether its asphalt whether it's pre stressed products or just.
<unk>.
Aggregate material or other other products like that.
But the Biden administration is talking about in addition to that though would be things like broadband things like talking about more infrastructure. So far is outside transmission electric transmission build.
I have very much hits right in the wheelhouse of our services business too and so.
Again, there is many shapes or forms of what infrastructure is to deferring people, but the fact that we have optionality and other skilled labor lines within our construction businesses, certainly fits that and even back to our north Bakken project and you've heard from.
Trevor as to the.
Some some delay with FERC here as we think about that I mean, this was a very environmentally friendly project debt will lessen the flaring in the Bakken and from a downstream perspective, we're displacing gas it's already on a full pipe. So we don't believe there's any downstream effects there too so.
Believe it's an environmentally friendly project as well so.
And we've already touch base, a little bit on the utility and uncertainty. If you think about that from a generation mix certainly a timeline there is of importance to us as we look to decarbonize the fleet over a reasonable period of time. So it really will touch all of our business lines and thankful that we have the two platform.
On that we do.
And then just to follow up on the on the gross margin geographically the way that you're set up.
So getting back to you.
Where we may see the biggest David Smith, and the buyback plan.
Wanted to touch on geographically, where your asset people are relative to what may come out on.
Sure So I'll touch on it and if you want more detail we can dive into the.
Business heads, but we're really in 15 western states with materials, So think of the Mississippi and look west and that includes both Hawaii and also Alaska.
We touch many of those states with our operation so its pretty geographically diversified and thats really by our design that we have differing states with differing economies. So that we have an ability.
Sometimes markets are up or down, but we have a lot of geographic geography with us they're in services.
License to do business in 45, or so different states and so we really cover most of the U S. There that gives us some flexibility to kind of move where the work is best suited for us. So we've got some optionality as it relates to geography as well.
Okay. Thank you very much.
<unk> the questions Andy.
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Right.
Seven.
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Yes.
Thank you operator.
Well as we noted earlier, we're off to a very strong start here in 2021, and certainly we have many opportunities in front of us on all of our lines of business.
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Okay.
Okay.
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