Q2 2021 MYR Group Inc Earnings Call
[music].
Good morning, everyone and welcome to the N Y our group second quarter 2021earnings results Conference call. Today's conference is being recorded at this time for opening remarks, and introductions I would like to turn the conference over to David.
There is a designer.
Corporate services. Please go ahead.
Thank you Teresa and good morning, everyone I'd like to welcome you to the MYR Group conference call to discuss the company's second quarter results for 2021, which were reported yesterday.
Sure.
Joining us on today's call are Rick Swartz, President and Chief Executive Officer.
Any Johnson senior Vice President and Chief Financial Officer Tod.
Tod Cooper Senior Vice President and Chief operating officer of MYR groups' transmission and distribution segment.
<unk> senior Vice President and Chief.
Operating officer of MYR group's commercial and industrial segment.
If you did not receive yesterday's press release, please contact dresner corporate services at 3127 to 630.600, and we will send you a copy or go to the MYR group website, where a copy is available under.
Under the Investor Relations tab.
Also a replay of today's call will be available until Thursday August August 5th 2021.
<unk> am mountain time.
<unk> 855859205 ships or 4043.
<unk> 7.
3406, and entering conference I'd.
6175534.
Before we begin I want to remind you that this discussion may contain forward looking statements.
Any such statements are based upon information available to MYR groups' management as of this day.
And why our group assumes no obligation to update any such forward looking statements.
These forward looking statements involve risks and uncertainties that could cause actual results to differ materially from.
The forward looking statements.
Accordingly. These statements are no guarantee of future performance these risks and.
And uncertainties are discussed in the company's annual report on form 10-K for the year ended December 31, 2020, and in yesterday's press release.
Certain non-GAAP financial information will be discussed on the call today.
A reconciliation of these non-GAAP measures to the most comparable GAAP measures.
At fourth in yesterday's press release.
With that said, let me turn the call over to Rick Swartz.
Thanks, David Good morning, everyone welcome to our second quarter 2021 conference call to discuss financial and operational results I will begin by providing a brief summary of our second quarter results and then will turn.
Betty Johnson, our Chief Financial Officer for a more detailed financial review.
And that he's overview, Tod Cooper, and Jeff Monica, Chief operating officers for our T&D and C&I segments will provide a summary of our segment activity and discuss some of MYR group's opportunities going forward I will then conclude today's call with some.
Some closing remarks and open the call up for your questions.
Our solid second quarter performance reflects strong customer relationships diverse market capabilities and continuous improvement of project delivery.
Our second quarter results include record high net income of $21.2 million or 50.
The 8.5% increase over our second quarter 2020 net income.
Along with record high quarterly revenues gross profit and EBITDA.
Our backlog at the end of the second quarter was $1.5.7 billion.
Reflecting our strength in the markets, we serve and the depth of our customer relationships.
Our T&D and C&I segments are currently experiencing steady bidding and project activity.
Trends in utility Capex budgets show utilities expect to invest heavily in T&D transformation and upgrades.
Renewable energy is a significant driver of infrastructure improvements.
And we are strategically.
<unk> scanning relationships with utilities and developers to capitalize on infrastructure and clean energy project opportunities.
Our C&I market segments continue to remain active through the evolving market conditions market indicators point to continued recovery in the C&I industry, we continue to focus on securing.
<unk> work in our core markets, while expanding customer relationships to maintain and strengthen our competitive position.
Our T&D and C&I segments continue to attract and develop diverse talented and dedicated team members.
Our group values and promotes excellence in safety project delivery and the development.
<unk> of our people.
Collectively we strive everyday to fulfill our mission as an organization and create valuable outcomes for our customers.
We are proud of our second quarter performance and are excited to continue to implement our strategies for generating growth and delivering strong financial results now Betty will provide detail.
On our second quarter 2021 financial results.
Sure.
Thank you Vic and good morning, everyone on today's call I'll be reviewing our quarter over quarter results for the second quarter of 2021 as compared to the second quarter of 2020.
Our second quarter 2000.
'twenty, 1 revenues were $649.6 million, a record high representing an increase of $136.5 million or 26, 6% compared to the same period last year.
Our second quarter T&D revenues were 300.
$6.8 million.
Third high from the T&D segment with an increase of 18, 1% compared to the same period last year.
The breakdown of 10 day revenue was $210.9 million for transmission and $115.9 million for distribution.
20 of the T&D segment revenues increased primarily due to an increase in revenue on 2 large sized projects associated with the accelerated schedule requirements at the beginning of a project in.
In battery delivery and installation at the close out of another.
Approximately 50% of our second quarter.
T&D revenues related to work performed under Master services agreements.
C&I revenues were $322.7 million.
A record high for our C&I segment with an increase of 36, 6% compared to the same period last year.
The C&I segment revenues increased.
Primarily due to an increase in revenue on various sized project.
An accelerated schedule on 2 projects.
Additionally, revenues during the second quarter of 2020 were negatively impacted by the slight slowdown.
And I work in certain geographic areas relating to the COVID-19 pandemic.
Our gross margin was 12, 5% from the second quarter of 2021 compared to 11, 9% for the same period last year.
The increase in gross margin was primarily due to better than anticipated productivity on certain projects and favorable job closeouts.
Partially offset by labor and equipment efficiency is on certain projects.
SG&A expenses were $51.9 million, an increase of $10.7 million compared to the same period last year.
The increase was primarily due to higher employee incentive compensation costs and contingent compensation.
<unk> expense related to prior acquisitions.
Second quarter 2021, net income was $21.2 million or $1.24 per diluted share.
Both were record highs from MYR.
Compared to $13.4 million.
Or <unk>.
<unk> 10.
Per diluted share for the same period last year.
Total backlog as of June 32021 of $1.57 billion remained consistent with the prior year.
Total backlog as of June 32021 consisted of 600.
$135.1 million for our T&D segment.
$931.6 million for our C&I segment.
Turning to the June 32021 balance sheet, we had approximately $221.5.
$5 million of working capital.
$8.8 million of funded.
<unk> debt and.
And $362.7 million in borrowing availability under our credit facility.
We continue to focus on strengthening our balance sheet and our funded debt to EBITDA leverage has continued to stay strong at less than 1 times leverage as of June 32012.
1.
We believe that our credit facility strong balance sheet and future cash flow from operations.
Low us to meet our working capital needs equipment investments overall growth initiatives and bonding requirements.
I'll now turn the call over to Tod Cooper, who will provide an overview of our transmission.
And distributions segment.
Thanks, Betty and good morning, everyone.
Our G&P segments continue to perform well in the second quarter of 2021.
Our balanced portfolio of small to mid sized projects alliance agreements and large scale projects with.
This resulting.
And effective resource utilization as well as a solid backbone.
Our current bidding activity remains solid on the small to medium sized project.
<unk> from larger transmission high voltage direct tourists.
Utility scale solar projects.
On the regulatory front FERC.
Irrational Association of regulatory utility commissioners.
<unk> the formation of the joint Federal and State Task Force on electric transmission that will work on identifying and realizing transmission benefits, while ensuring fair cost allocation.
This effort is founded on the recognition.
And the efficient development of new transmission infrastructure.
Essential to the transition to clean energy generation.
The task force will be focused on addressing critical issues, including how to plan to pay for new transmission infrastructure.
To navigate regulatory authority and processes with the goal of improving.
Moving coordination and cooperation between state and federal agencies.
Positive outcomes from this task force would be expected to enable MYR group customers to plan and implement infrastructure projects with more ease and certainty.
Good morning, Andrew.
Insight survey Newmar.
And that is energy executives anticipated electric vehicle charging infrastructure.
Representing the largest shift in infrastructure spend in the next 3 to 5 years for their companies.
Proposed American jobs plan includes a $7.5 billion dollar investment to fund the acceleration of electric vehicles.
<unk> can build a national network of charging stations across the country.
Electrification will require significant investments in the transmission and distribution facilities to support the changing landscape of transportation presenting growth opportunities for MYR group companies.
In alignment with our business strategy.
<unk>, our T&D companies continued to strengthen and maintain solid working relationships with valued clients across the United States.
As a full service contractor, we continue to meet our clients' needs through our wide range of capabilities.
<unk> industry knowledge.
But to the energy.
Energy market.
The eastern region of our business experienced an increase in renewable energy projects throughout the second quarter.
We recently secured several projects and our customers continue to voice a growing need for committed and skilled contractors.
<unk> energy services recently advanced discuss.
<unk> with several solar developers with the goal of becoming their exclusive contractor for future projects.
The Western region of our business remains active with significant proposal opportunities and a nice mix of small to medium sized projects.
With the continued success in our long term alliance work.
Utilities.
We are routinely working with customers on emergency prevention and restoration work throughout the Western region, Inc. Currently are pursuing numerous opportunities on the EPC front.
I am also excited to report.
But our Sturgeon electric Colorado District was.
Tied with Osha elite voluntary protection program Star status.
This re certification is a true testament to our commitment to ensuring the health and safety of our employees.
Our Midwest region remains engaged with long term clients such as Centerpoint energy.
Ameren encore.
Midamerican energy to name a few and we continue to meet their demands for consistent reliable service.
In conclusion, our dedication to our clients the health and safety of our employees.
And our operating principles position us well for continued success.
We believe we are well equipped.
Flip to remain an industry leader, while addressing the ever changing industry and market needs.
I will now turn the call over to Jeff <unk>, who will provide an overview of our commercial and industrial segment.
Thanks, Tod and good morning, everyone.
We are pleased that the contracts awarded this quarter.
We're primarily fee based design projects, where our relationship and proven experience weighed heavily in the award.
Although awards slowed somewhat this quarter, which I'll address shortly budgeting and bidding activity remains strong and we are encouraged by the consistent economic improvements in most of our markets.
The dog.
Momentum index and the architectural billing index continued.
Porting improved project planning and design activity, which is expected to generate increased opportunity as we move into the near future.
The counterbalance to this good news is our recent notable disruption to various supply chains material pricing uncertainty.
Dodge and a growing labor shortage impacting various industries.
To assure our continued success, we are focusing our efforts on core markets and key relationships as the industry works its way through these post pandemic challenges, we believe our diligent and measured approach will continue resulting in steady consistent.
Certainty manageable growth.
Our operations in California, and Western Canada are performing nicely, which is creating significant new opportunities in a variety of desirable markets.
These opportunities include healthcare renewables and expansions for social media companies.
Many of these opportunities are.
With existing clients on projects, we have been helping to budget and schedule for many months.
In the mid southwest work has been slower to rebound, but recent pursuits are abundant and high tech manufacturing data centers and water management.
Again, we are pleased that many of these opportunities include a relational.
Component is likely to improve our opportunity when these projects come to market.
In Colorado work is progressing well on the extensive improvements at Denver International Airport and on the transformational Central 70 Highway project.
On bidding front in Colorado transportation data centers.
Terry opportunities are leading the way.
And in the Midwest and northeast bidding activity remains strong in renewable energy and warehousing. Although awards in this region have been hampered by post pandemic uncertainty.
Tod mentioned a couple of interesting items in the T&D segment that are equally excited.
Fighting for the future of C&I.
First being the opportunity presented in the proposed Americans jobs plan to fund the acceleration of electric vehicles and to build a national network of charging stations.
Along with the growth in transmission and distribution facilities to support this agenda I will highlight the size.
No it'll impact this could also have to the commercial building landscape.
Various studies show that large businesses transportation hubs and fleet facilities of all types, we will need to undergo substantial renovation or a complete replacement of their electrical infrastructure to meet these goals. This high tech transformation.
Of the transportation industry is expected to also drive advancements and growth in data centers of all sizes as the network connectivity of a battery powered world create sweeping change. We believe this presents a significant opportunity for C&I growth as we have been positioning our teams to advanced training for several years.
Building teams, who are prepared for these high tech projects, regardless of the outcome of the first plan.
We believe MYR group possesses a unique ability to provide our clients with full suite of EPC services, covering all aspects of project management and construction through our single source this benefit starts and.
The procurement phase or early market intelligence provided with speed and accuracy will benefit our clients. This unique collaboration between T&D and C&I segments is expected to also provide benefit on large scale EPC solar and battery storage projects across the country. We are currently working in joint.
Pursuit of multiple projects under the MYR energy services umbrella.
And finally I'd also like to congratulate our Sturgeon electric Colorado C&I district for their star level Recertification in Osha's voluntary protection program.
Higher level of partnership awarded by Osha only 2.
In 1000 industries demonstrate the commitment to employee health and safety required to win this elite recognition.
Thanks, everyone for your time today I'll now turn the call back over to Rick who will provide us with some closing comments.
Thank you for those updates Betty Tod and Jeff our second quarter 2000.
1 performance illustrates the strength of our core markets.
Clean energy transformation, and our ability to maintain strong customer relationships.
We recognize the importance of grid modernization and take pride in the role MYR group and our subsidiaries play in the renewable energy shift.
We continue to focus on bidding opportunities and projects that closely match, our operating principles and diverse capabilities.
As I previously mentioned, we believe MYR group is strategically positioned to generate growth, while delivering shareholder value I want to thank each of you for your continued support of MYR group, we look forward.
20th pressing our business strategy, while emphasizing our values and client relationships operator, we're now ready to open the call up for your comments and questions.
At this time to ask a question you will need to press star 1 on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Forward to from your first question comes from Sean Eastman with Keybanc capital markets.
Hi, David.
This is Alex on for John This morning, Thanks for taking our collections.
Good morning.
Hi.
Good morning, I'm curious on the accelerated schedule requirements for those 2 large <unk> projects.
I guess, 1 is closing out in the others and it's probably saying more revenue pushed into this year.
Do you think this creates a tough revenue comparison for next year.
Or do you think the T&D backlog and bidding environment supports continued growth next year.
Well, we certainly what we're seeing today it would lead to us saying.
Hopefully the growth continues and we can land a couple of the projects if they come out that are large.
And that trend will continue I think it's pretty normal.
Operating on a large project to have this revenue kind of pushed towards debt first.
First third of the project as we mobilize when we bring in subcontractors and we bring in material. So I would say it was.
Increased cost during this last quarter.
But at a level out after that and continue on through the duration of that project.
Got it that's helpful.
And how does your outlook for the T&D business changed at all over the last couple of months with the increased hurricane and more notably wildfire activity that we've been.
In the West Coast. This year I mean, we saw some some news intra quarter on PGN <unk> yogurt in California, putting out a nice sized capital spending plan.
Including including underground mining just thoughts on this from a transmission versus distribution opportunity would be very helpful.
Sure Todd do you want to start and I'll ask.
Sure.
Seeing the distribution perspective, that's primarily where we see the.
The assistance, we provide utilities with restoration for fire as well as.
As the hurricane season.
We're positioned well to assist them.
When needed if needed we typically perform our.
From our restoration work with with the existing crews that we have just from a quality and safety perspective.
There is an uptick in that from a number of hours worked.
The level of it.
Moving the needle is really dependent upon the size and.
And the resources.
They are required but.
We're optimistic about about the entire industry right now and I think I think you read that within our script.
We're just prepared to assist.
Should we be needed for our restoration efforts.
Got it and if I can just sneak 1 more in on the C&I.
I mean, leading indicators just been really strong and kind of shown in an unprecedented rebound and then the industry forecast we track were up.
Upwardly revised so a week ago, but the revenue growth rates, we have seen in your C&I business are substantially better than the peers in the industry forecast.
Hi, So I was wondering if you could help us understand what's really driving that strong growth is it like more of a specialized geographic presence or.
To less impacted areas or is it more exposure to secular growth end markets and any help there would be great.
We've had a substantial backlog.
For quite a while.
And we're seeing some of that burn at this point so.
Feeling like the markets are good we did talk about the bidding activity has been very strong it looks like it's going to continue to be strong we have seen a little pullback on awards were waiting longer to see those markets or those.
<unk> actually be awarded but as Todd said, we're feeling like there is there's good opportunity out there.
And as we've discussed before on calls as kind of this I think it has to do with the some of the increases on material commodity price increases.
And some of these projects are being pushed out slightly on the award.
<unk> dates and we're seeing it on both sides on the solar side on both sides of our business and on a few adjusted projects I think will that stabilize out and hopefully settles down I think I don't think its not a matter of if the projects are going to be built is when theyre going to be built and there might be a few month delay and thats kind of how we look at it is that commodity.
Projects kind of settles down and comes back and developers that it matches the model they had as far as their financial model then to build the project. So we see that side on Tod side. The only thing I would add to your last question is with some of the heat we seen in areas. We have seen some of our MSA work.
<unk> down during the hot season.
Price in that kind of started.
Very very end of last quarter, and we see that continuing so.
You are not allowed to work on those right of ways when the extreme heat there because they don't want to have outages. So that that can affect us a little bit going forward into this quarter, but it always it will settle back down after this quarter.
When the heat index really goes back down.
Thank you.
And your next question comes from Justin Hauke with Baird.
Hello, Good morning, everybody.
I was just going to ask just kind of curious philosophically.
Season quickly about the buyback.
Because you Havent bought stock in 4 years or 5 years, I guess, but what you put in a new authorization last October.
Nothing under that yet in the balance sheet now I mean, you're almost at a net cash position. So I'm just curious about.
Your thoughts on that.
How we should interpret that sure.
That was a 1 year stock buyback program, we put it into in place I think.
With our board and our management team, we look at opportunities out there, whether it's acquisition, whether it's organic growth you can see the growth we've had organically and expanding our businesses.
Even without doing an acquisition.
Lasalle continued to push that aside and invest.
I think we continue to look at at.
Buybacks.
We have always been an opportunistic buyer.
And then we weigh it against the opportunities we see out there for organic growth and acquisitions again and.
It's something we have not pulled the trigger on these.
So we now we see other opportunities out there that we may be able to capitalize on.
Okay.
My other 1 I guess more of a technical question, but is there any way you can you can size that accelerated work that kind of came in the quarter here.
I think you said that.
Theres not a sequence.
Sequential downtick, because that's more work will stay steady but.
To the extent you can size the law that would be helpful on the T&D side.
Yes, I can address the T&D market, where we had the increase.
During the quarter.
Our revenue.
Basically that 50 million.
The increase was primarily due to those 2 jobs.
We're not segregating and between the 2 but between those 2.
It's the majority of that $50 million year over year increase.
Okay. That's helpful. Thank you I appreciate it.
And your next question.
Comes from the line of Noelle Dilts.
Stifel.
Hi, guys.
Put in another good quarter.
Well.
I was hoping that you could just expand I know you kind of mentioned some of that but on the labor and equipment inefficiencies that you mentioned in your press release in your 10-Q.
I'm just kind of.
To better understand you know exactly what you're seeing in the market and if you expect us to get you know a little bit better a little bit worse as we look forward over the next couple of quarters.
When you look at the half day labor inefficiencies in the equipment, it's not specific it's not because we can't come up with people.
A lot of it has to do like on the T&D side, where some of our projects. We can't we can't fully work because of the heat I was talking about so we do get asked from stranded equipment cost and that kind of stuff and labor that's not fully productive I mean, it's productive, but theres different times and you've gotta be theres still service the customer if it cools down so I would say that's where that.
Primary and then 1 off weather locate.
You might have on our portfolio of business you might have a 1 off project that's affected by weather, but nothing systemic.
On the C&I front, its really just getting through a couple of what I would call low margin projects that finish up this year and it's really just finishing that side.
That price, we've seen some inefficiencies, but it's it's in certain geographic I.
I would say areas with with a couple of projects that we're getting through right now.
Okay, Great and then I know there's been a there have been quite a few questions on that sorry to beat a dead horse but.
No on C&I, given that you are kind of.
Moving on these.
And that markets and key customers as you sort of you know.
Deal with some of these projects, maybe getting pushed out a little bit of competition in certain markets.
Do you think we could see backlog kind of continue to tick down purchased a couple of quarters here in C&I as you wait for things to settle out or.
Do you think that some of this.
<unk> Corp could start.
Ward could start to pick up in the next before the end of year.
We sure hope that they pick up but it's very hard to tell we have a number of projects that we've been pricing for our clients for a few months now and as Rick mentioned, we're hoping that the volatility.
These materials will settle down a bit and that will give the.
Owners the confidence they need to move forward there are a number of them.
That are out there that were just waiting to hear what the results will be we think we're positioned well, it's very difficult to tell how soon that's going to rebound.
In.
<unk>.
Always lumpy for us I don't get overly alarmed when I see a decline in our backlog. It's really what projects are we bidding what are we chasing what opportunities do we have and as I said earlier, it's not a lot of these projects we're chasing it.
If theyre going to be built because theyre going to be built it's really just a matter of when.
Okay.
Hey.
Really just getting in there and working with the owners and the developers to make sure that.
The projects are able to to be built in a lot of that has to do with them just waiting for the commodity market to settle down a little bit.
Okay, perfect and then getting a lot of discussion of sort of the impacts of commodities on on project timing.
C&I in particular are you facing any challenges with.
The cost of materials or passing any of that that through more any slight more direct impacts that you're seeing from them commodity prices.
Those impacts are out there.
With our teams are doing a very good job of managing through those.
Working with our clients.
Various issues to mitigate any increases there. We also talked about on the bidding front that we're very careful in how we propose on projects based on the volatility in the materials.
Materials market now.
It's Ben.
It had been very isolated in small cases, where there's been an impact we don't see anything.
Systemic or impacting the overall industry.
Okay perfect. Thanks very much.
And your next question comes from the line of Brian.
There will be on listen only.
Okay.
Yes, hi, good morning.
Good morning, Brian Good morning.
Thank you.
Maybe talk about the segment operating margins it looks like you've been at the top of that.
About 6% to 9%.
Margin targeted.
For the last several quarters are we entering a entering a period of time, maybe based on the mix of projects that.
Those types of margins are sustainable and then the same thing with.
With.
C&I.
Margin.
Near 5%.
In the first half of this year I think.
Correct me, if I'm wrong, but you mentioned that you're working through some lower margin projects. So so.
Higher end of your your targets.
<unk> looking forward.
Yes, good question Brian.
Let's say that.
We're happy to say.
Based upon the last several quarters.
The results for our T&D segment in <unk>.
Actually above our 6% to 9% operating range that we've quoted for a very long time.
At this point in time, we really believe that that range should be in that 7.2.
At 10, 5%.
So.
You're right, we had been up there and Thats based upon.
The overall market that we see going forward as well as things that we've put in place to improve our overall.
Productivity project management task that mix been talking about the last couple of quarters.
From a C&I perspective.
We still believe the 4% to 6%.
Our range is still reasonable range in that.
He has been CNS.
Come up.
A little bit higher than we have in the last.
The last 2 years.
We feel.
We can we're working towards getting up to the higher end of that range, but nothing to change that at this point.
Okay, Great and then just a follow up on the commentary on electric vehicles.
Infrastructure and charging stations. It seems like you guys are well positioned.
Or are you at all involved with the electric Highway coalition, which is that growing group of utilities that are looking to form.
Asian wide connection of charging stations and does that is that C&I work or is it also T&D work.
It can be either either of our groups, depending on where it is that they work very well together, we've done a lot of overlap between our businesses. So we operate as 1 to the customer kind of what Jeff was referencing a lot of this stuff.
That tied us into the T&D group and it's not just 2 separate operations, we operate as 1 team so in order to service.
Our customers and then we then we divide revenue where it needs to go among the 2 groups. That's the least of our concerns. So so those can benefit both groups.
As far as being a member of the coalition, we're not a member that coalition, but we work closely follow that information and we work directly with a lot of those utilities.
<unk>.
<unk> be able to hopefully in the future be their contractor of choice.
Okay.
Okay, Great and then Carr.
Common theme with utilities, so, but less several quarters, if not years theres been renewables and transmission.
Infrastructure spend.
There is some MISO planning.
<unk>.
<unk> forecast.
Billions and billions of dollars of needed.
Transmission.
I'm just wondering in conversations with your customers or are you getting close to projects.
To add to the backlog or.
<unk> are you just still in discussions and bidding is in early stages.
Longer term projects, which arguably take many years to develop due to permitting.
Et cetera.
Rick This is Tod right now the market is is quite active.
For all types of ore for the reliable.
We're already work on the transmission side that we do the all of the system improvements the interconnects that.
That are out there associated with the renewable projects.
We have several projects that are in the bidding phases right now of all sizes small to medium some large scale projects.
<unk> as well.
Rick always talks about our backlog being lumpy on the T&D side right now we have a couple of large projects that are burning off some some revenue.
But as it stands today.
There are some nice projects that are that are in the hopper that just.
Haven't been.
Liabilities, yet and that's kind of normal from what we see.
Got it and just.
The only thing I would add to that is I think this year you will see a few large projects come out to bid you asked kind of the progress or are they just all in permitting I think some of them. They are working through those permitting issues and I didn't see it probably.
Really amped up from what it was a year ago as far as large project activity.
Okay, and when you say large project you mean similar size as the <unk> power project that was announced.
Back in November, which when you look at the T&D backlog it seems like that might be.
Really the sole driver of.
The year ago backlog versus today on the T&D side.
Yes, yes no.
I think when you look at that side, yes, when I say when you say the.
<unk>.
That project I would reference that though that we look at large projects anything over $100 million. So it's not it doesn't have to be that.
Large, but we're talking projects that are $100 million because a lot of it comes into what subcontractor and material components are are released to us under the contract and each 1 is going to vary. So we always stay at that $100 million Mark to Mark large projects.
And we see that activity being out there.
Your statement about part of our burn.
And in Betty referenced it in her comments back where it was on that Marci, good New Scotland project. So.
That is correct.
Okay, Great and then just lastly and quickly.
Obviously your cash position is building, which is a good problem to have.
To have it seems like.
You've chosen.
Not to buy back stock, but in terms of M&A criteria are and we've seen some.
Assets change hands on the C&I side.
Are you more.
Are you are you more focused on 1 particular segment to grow through selective acquisitions.
<unk> or is it regions or.
Any return criteria, you might be able to provide or any other.
Profile.
Acquisition targets you might be considering.
For us it's going to be what we're looking at is on the T&D and C&I side.
Don't have a preference of 1 over the other it's really finding.
In the right company that has the right fit for us that culturally the culturally the right fit and then be able to buy it at the right price. So everything is got a lineup where patient when it comes to that side.
The good thing is we're in a position where we don't have to buy a company, we don't have to do stock buybacks.
To them as they make sense, but we're also looking organically of how we grow our business and we've continued to do that and we will continue to push that side, especially with the market dynamics that are out there today. So I would say, it's going to be a mixture of all 3 going forward long term.
But again, we're going to assess each opportunity out there and try to capitalize.
Alright, 1.
Okay, great. Thank you very much.
Thank you Brian.
As a reminder to ask a question press star 1 on your telephone.
Our next question is from Jon Braatz, with Kansas City capital.
Good morning, everyone.
Good morning, Jeff Good morning.
Lies on the Rick in your prepared comments, you you referenced expanding relationships within the T&D.
Sector.
And.
I guess my question is.
Does that mean that you're beginning to offer additional services capabilities.
To the T&D utility industry that maybe.
Wasn't available.
You weren't capable of years ago, or a quarter ago, so to speak.
I'll, let tod start and then I'll add to it.
Yes.
If you go back a couple of years you can see that.
Our entry into the to the solar market.
A year and a half ago or nearly 2 years ago is 1 of those areas.
That is an area, where we are really expanding our relationships with the.
Not only the investor owned utilities, but as well the developers that are part of that.
2 though.
Those relationships.
<unk> continued to expand.
Do the relationships when we tried to take our core capabilities throughout all of our areas in the country and what I mean by that is there may be some areas, where we're extremely strong on the transmission front and are doing a lot of transmission work for utility.
<unk> and trying to to continue to work with the utilities on developing.
For instance, the distribution work that we do for other companies and bringing it through best practices to them.
Okay.
Yeah.
How much how much solar business.
You're doing.
Can you give a give us a sense of how big solar is at this time.
We don't disclose that as a company.
It's not 50% of our business sure.
It's climbing every day and we see that as a good opportunity for us to continue to growth.
And as I've said before it touches both sides of our business.
It's the customer relationship side wise, so we do it both on our C&I and T&D side.
And.
It's a growing business and were excited about those opportunities and as I said before we've been in this renewable markets since that 2010.
Growth in 11 timeframe, so it's something it's not new to us.
But the opportunities out there and the growth we're getting through it are good going forward and we're excited about that market. Okay. Thank you much.
We have no further questions on the phone at.
I would like to turn the conference back over to Rick Swartz for closing remarks.
To conclude on behalf of Betty Tod, Jeff and myself I sincerely. Thank you for joining us on the call today I don't have anything for further and we look forward to working with you going forward and speaking with you again on our next conference call until.
Stay safe.
And this concludes today's conference call. Thank you for participating you may now disconnect.
Paul.
[music].
At this time.
[music].
Sure.
Yes.
[music].
Yeah.
[music].
[music].
[music].