Q3 2022 Innovate Corp Earnings Call
Good afternoon, and welcome to innovate Corps third quarter 2022 earnings Conference call.
All participants will be in a listen only mode today.
After prepared remarks and presentation there'll be a question and answer session. Please note. This event is being recorded.
I would now like to turn the conference call over to Anthony <unk> with Investor Relations. Please go ahead.
Good afternoon. Thank you for being with US to review <unk> third quarter 2022 earnings results. We're joined today by Abbvie Glaser Chairman of innovate waned bar Junior CEO of innovate and Mike Sena <unk> Chief Financial Officer, we have posted our earnings release and our slide presentation on our website at innovate Corp Dot com.
We will begin our call with prepared remarks to be followed by a Q&A session. This call is also being simulcast and will be archived on our website.
During this call management may make certain statements and assumptions, which are not historical facts will be forward looking and are being made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of $19 95.
Any such forward looking statements involve risks assumptions and uncertainties and are subject to certain assumptions and risk factors that could cause innovate actual results to differ materially from these forward looking statements.
Risk factors that could cause these differences are more fully disclosed in the cautionary statement that is included in our earnings release and the slide presentation and further detailed in our 10-K and other filings with the SEC.
In addition, the forward looking statements included in this conference call are only made as of the date of this call and as stated in our SEC reports innovate disclaims any intent or obligation to update or revise these forward looking statements, except as expressly required by law.
Management will also refer to certain non-GAAP financial measures such as adjusted EBITDA. We believe that these measures provide useful supplemental data that while not a substitute for GAAP measures allow for greater transparency.
Review of our financial and operational performance at this point and it's my pleasure to turn things over to Avi Glaser.
Good afternoon innovated achieved another quarter of strong financial results. We grew both our top and bottom line once again, which we have done every quarter this year.
<unk> revenue for the third quarter grew seven 1%.
Adjusted EBITDA increased 14, 7% over the prior year period.
It is encouraging to see the sustained growth in the first nine months of 2022 in the midst of a weaker macro backdrop.
Infrastructure headline results as that business continues to benefit from a strong construction market and delivered revenue and adjusted growth. While also expanding margins. The backlog also grew in the quarter, which continues to provide visibility and a pathway to future revenue and cash flows.
In life Sciences revenue has grown sequentially each consecutive quarter in 2022 that said, we are navigating challenges in China related to Lockdowns, which has negatively impacted our results in the quarter. Despite the slowdown, but it began and are to continue to make incremental progress in the third quarter or two had 20 years.
<unk> revenue growth as compared to the second quarter. It is now shipped 215 units globally meta begin patient enrollment is 85% complete with its U S. Pivotal study and is expected to finish the study by year end, maybe you can target its final FDA submission in the first half of 2023.
And broadcasting we continue our focus on leveraging the scale of spectrum station group distribution platform and take advantage of the opportunities by optimizing operations I'd.
I'd like to again highlight the resiliency of each of our businesses. We have delivered growth on the top and bottom lines throughout 2022, despite the challenging operating environment and I'm confident our teams in each of the businesses will continue to execute our strategy and drive long term growth and unlock future value with that I'm pleased to turn the call over to Wayne bar.
Thanks, Savi and thank you all for joining us today across our three businesses I am proud of the results we delivered for the third quarter.
By continuing our companywide focus on operations, we achieved year over year growth on a consolidated basis.
I'll now share some third quarter highlights for each of our operating segments.
At DBM Global bankruptcy, all has been a part of GBM for more than a year now and it's clear that the expected benefits from that acquisition continue to unfold.
The expanded scale and footprint has allowed <unk> to capture a larger scale of the revenue opportunities associated with increased demand for large construction projects.
Revenue and adjusted EBITDA grew seven 8% and 13, 1% respectively.
We have mentioned on previous calls we are now starting to see the improved margins as the pandemic related jobs and started to roll off and job sold in the second half of 2021 and are ramping up.
Adjusted EBITDA margin expanded 30 basis points year over year, and 120 basis points sequentially.
GBM continues to generate robust revenue, while also growing its backlog.
Sales into backlog or $843 8 million for the quarter outpacing revenue recognized during that quarter once again.
As you can see rustin and the team have not seen a slowdown in the market at this point and continue to take advantage of the current environment.
Heightened backlog continues to give the business great visibility into 2023 and beyond.
Turning now to life Sciences, <unk> now shipped 215 glacial devices and the monthly number of patients treated and has continued to grow.
Additionally, our <unk> implemented a new subscription sales program designed to fuel growth as it continues to explore various clinical initiatives for the glacial products, including psoriasis and other inflammatory conditions.
While these are still early days there appears to be a much greater end market and application for this novel technology.
<unk> U S. Pivotal study has continued to progress well and now has enrolled 85% of its subjects.
Both <unk> and <unk> have been active on the trade show circuit, appearing at various events of sneakers.
Net of Beacon is presenting at the American Society of Nephrology kidney week in Orlando and <unk> will be presenting at two upcoming investor conferences.
Fitzgerald's medical and aesthetic dermatology ophthalmology in Med Tech conference and Jefferies Virtual private Med Tech summit.
Finally at spectrum. The continued challenges in the operating environment had an adverse impact on our results.
During the quarter, we made the strategic decision to exit Azteca America.
Second America experienced sustained declining viewership in high cost for content and postproduction services, making it a very challenging environment for success.
Exhibiting a sector, we will remove a significant portion of variable costs from the spectrum business.
This is part of our strategy.
<unk> operations.
Increased costs and improve overall results spectrum over the long run.
With the pending availability of prime channels on the tech our stations, we have been approached by dozens of programmers looking for carriage. In fact, we have already executed or will be shortly executing contracts to bill over one third of the channels previously occupied by a sector.
While overall revenue will decrease as a result of the closure, we will be replacing unprofitable revenues with profitable revenues, which will have a positive impact on broadcast cash flow and EBITDA.
We are starting to see a reversal of the trend in the overall softness in the TV advertising market. This year, particularly direct response, which has slowed the growth of multicast networks.
Revenue prospects for new network launches on our platform with promising as we move into 2023.
In September we successfully completed the upgrade to <unk> of two of our Fort Wayne, Indiana stations.
This upgrade is in conjunction with the FCC experimental special temporary authority granted to conduct and mobile wireless trial with our LTE TDD spectrum.
The trial will likely commence in early December .
While there is still much work to do we are excited to be at the forefront of exploring the opportunities and expanded capabilities of <unk> three data in conjunction with our current otas linear broadcast and use.
During the quarter, we completed the build out of a new station for licensed <unk> LD in New York City, which was relocated as a result of displacement from the incentive auction.
The new site for the station was one world Trade center, providing a far ranging robust signal to the New York City market.
Outside of our operating segments certain regulatory administrative items have delayed the closing of the HMA sale.
We're still working through the mechanics of selling the 19% ownership in nature men and have encountered administrative regulatory hurdles that we expect to be short term in nature.
Lastly, we recognize the level the stock is trading at currently and are aware of the New York stock exchange listing regulations.
We have been working with the stock exchange and have been very cooperative and are working diligently on the plan to get the stock back over $1 over the next six months.
Overall, we are pleased that the continued resiliency demonstrated by our three businesses this past quarter and year to date. Despite challenging operating environments. Looking ahead, we remain focused on executing our strategy across infrastructure life Sciences and spectrum and believe we are poised for growth in each of our app.
Ratings segments.
With that I'll turn it over to Mike for a review of our financials and capital structure.
Thanks Wayne.
Consolidated total revenue for the third quarter of 2022 was $423 million an increase of seven 1%.
Third to $394 8 million in the prior year period.
The increase was driven by our infrastructure segment led by the contribution from bankers steel.
And increases in infrastructure market demand.
Net loss attributable to common and participating preferred stockholders for the third quarter of 2022, or $6 6 million or <unk> <unk> per share compared to a net loss of $213 million or $2 75 per share in the prior year period.
As a reminder, we recognized a $203 million loss on the sale of the insurance segment in the third quarter of the prior year.
Total adjusted EBITDA, which excludes discontinued operations was $16 4 million in the third quarter of 2022, an increase from an adjusted EBITDA of $14 3 million in the prior year period.
The increase was primarily driven by the infrastructure segment and our investment in <unk>, which was partially offset by a decrease at our spectrum nonoperating corporate and life Sciences segments.
And infrastructure revenue increased seven 8% to $412 7 million from $383 million in the prior year quarter.
As discussed earlier this increase was driven by a banker steel as they are in full swing into the work that 270 Park <unk>.
They also saw an increase in dbm's commercial structural steel fabrication and erection business.
It worked through some of the larger wins from 2021, including Iraq Clippers Arena.
The increase was offset in part by the industrial maintenance and repair and construction modeling and detailed businesses.
Due to unreported large projects completed in 2021 in early 2022.
Infrastructure adjusted EBITDA for the third quarter of 2022 increased to $27 6 million from $24 4 million in the prior year period.
The increase was largely driven by a revenue increases previously described combined with an improvement in margin as projects sold in the first half of 2021 and earlier are working their way through the system.
And project subsequently sold in the second half of 2021 are now beginning to ramp up.
The improvements in profit and margin were partially offset by increased selling general and administrative costs to support growth in the business as well as lower contributions from the industrial maintenance and repair and construction modeling and detailed businesses.
As we have previously discussed projects typically take 12 to 18 months to work off through backlog and we are happy to see the jobs in the peak of the pandemic roll off and newer jobs to begin to ramp up.
As of September 2022 reported backlog was $1 9 billion up from $1 6 billion as of December 31, 2021.
Adjusted backlog, which takes into consideration awarded but not yet signed contracts was $2 2 billion compared to $1 9 billion at the end of December 2021.
As Wayne mentioned, we are happy to continue to see a robust market as evidenced by over $840 million of jobs sold into backlog this quarter.
We expect to work through over $1 5 billion of this backlog in the next 12 months, giving great visibility into the next couple of years.
CVR energy ended the quarter with $247 $5 million of debt, which is an increase of $58 9 million from year end <unk>.
Driven by working capital movements, which were at a low at year end combined with top line business growth.
At life Sciences, the slight increase in adjusted EBITDA losses were driven primarily by decrease in gross margin in our two which was primarily due to a change in product mix and an increase in equity method losses recorded from our investment in <unk> as they work through their final pivotal trial.
Yeah.
We discussed last quarter, the $10 million bridge commitment made by I'll answer capital toward two which will be repaid by year end or success.
<unk> equity raise.
The $10 million commitment was fully funded during the third quarter.
At spectrum revenue decreased $1 1 million or 10, 8% to $9 1 million as a result of lower advertising revenue at the <unk> business as a result of a decrease footprint and the declines and paid programming.
Spectrum delivered adjusted EBITDA of $3 3 million in the third quarter compared to adjusted EBITDA of $1 8 million in the prior year quarter.
The decrease was the result of a decline in network or as tech revenues combined with increased content and service costs related to the network business along with to a lesser extent higher station costs as a result of the new build patients.
This was partially offset by a decrease in salaries and benefits and legal expenses.
As you know our spectrum that comes due at the end of the month and consistent with prior years, we plan to extend the debt maturity.
And are far along in our discussions with existing with our existing lenders.
Non operating corporate adjusted EBITDA losses were $5 million for the third quarter of 2022 up from the third quarter of 2021 by $1 2 million driven mostly by accrued severance related to the former chief legal officer as well as increased legal expenses.
At the end of the third quarter. The company had $25 8 million of cash and cash equivalents compared to $45 5 million as of December 31, 2021.
On a standalone basis as of September 32020 to the corporate segment had cash and cash equivalents of $5 one.
$1 million compared to $22 million at the end of 2021.
As of September 32020 to innovate had total principal outstanding indebtedness of $711 5 million up from $80 7 million.
$638 million at the end of 2021, driven primarily by infrastructures increase in its line of credit as a result of working capital movements.
Corporates utilization of the remaining credit line as discussed in the previous quarter and <unk> borrowings from Lance your capital.
Our DB Mg cash continues to be partially tied up in working capital, we expect to meet our upcoming obligations mainly through the DBM tax sharing agreement.
Along with cash on hand, while we work through longer term solutions to support the working capital needs and dividend distributions. During this time of tremendous growth we are experiencing a few bmj.
We navigated the first nine months of 2022, well and look to close out the year strong for each of our operating segments. Our focus is on what is within our control we recognize that each business businesses face unique challenges, but we are proud of all of our employees and the results there.
Artwork is generated to date.
With that.
Operator, we'd now like to open up the call for questions.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question will come from Brian Charles with PW <unk>. Please go ahead.
Hi, good afternoon.
Congratulations on the quarter the infrastructure certainly.
Turning around or turning around materially continues to improve like you as guided earlier.
But I guess I have a quick question about the.
The broadcast business, leaving US taking of America. It looks like your revenue will come down, but you say the net effect on EBITDA should be relatively positive do you have any color on that what kind of scale that can be.
So the EBIT positive EBITDA.
Yes, we.
Really.
Ed.
Don't give any projections, but if you can kind of take a look historically at how the station group operates the U S.
<unk> cost.
Operation there.
It really is a matter.
Putting additional revenue on those stations and as we exited.
<unk> business that does free up some of the stations that we have previously been using to broadcast status.
And we are in the process.
Monetizing those new stations it shouldnt be at a higher margin than what we've.
We are experiencing by operating on the <unk> network, there and we would expect that that trend will continue as we use up the channels that were previously dedicated to us.
And.
And eliminate some of the variables all of the variable cost associated with the with the operation of Aztec.
Okay. So it's fair to assume that the revenue you're losing with a stinker right now should be replaced as you sign up.
Uh huh.
Yes.
I would just lately with the stations.
Bit of a modification yes.
So I would expect overall revenue to come down.
In the broadcasting segment.
But I would expect that.
We will replace what would be intercompany revenue between.
The network, whereas tech business and the broadcasting business. So in essence, we will add.
Revenue too.
Yes.
The remaining business, but eliminate all the cost associated with.
With the.
With that network business.
Okay.
Are there.
Sure.
Restructuring costs associated with exiting you're sick.
Not anything material.
As you know there was an awful lot of fixed assets there.
And we're working through a couple of.
The obligations.
We will be terminating but there are no significant exit.
Foster wind down costs associated with exiting this business.
Okay fair enough.
One other thing I don't I don't know if you can.
Talk about third quarter, but if you ended the quarter with about $5 1 million of cash at the corporate level.
Can I ask how you pay the coupon of eight 5% notes in August .
We borrowed on the revolver up at the corporate level and Thats, how we pay.
Payment, which we had talked about previously.
Okay that was a drawdown during the third quarter.
Yes, hi.
Interest payments due August one and in February .
Its a semiannual interest payment due in August we brought on the line and towards the end of July .
<unk> mentioned that last quarter in that salary coupon payment.
Okay. Thanks.
And then finally and I'll get back in queue.
Memory is a residual marine services put with HCM in I know, you're talking about that and you made a comment about some regulatory headwinds right now you still expect it to be resolved early in the fourth quarter.
In the fourth quarter.
Yes.
We think that the.
Headwinds that were facing primarily arising out of regulatory issues that are being experienced in China by the purchaser as well as the continued Chinese lockdowns is delayed.
Consummating the sale of that.
There are constantly iterating with the Counterparties, there and trying to get this done as quickly as possible.
We're hopeful that it will be concluded by the end of the year.
Okay. That's good thanks, that's all I got for now.
Very good thank you Brian .
Our next question will come from Brian Reilly with B Riley financial Please go ahead.
Hey, guys, Hey, Wayne Thanks for taking the call.
So I mean, we've been in this forever.
Maybe three years before you saw the rights offering and I've seen the whole process.
Great deal respect to your past its obviously been.
In a challenging investment for all and I guess I wanted to take a second and understand the bigger picture and kind of the bigger thesis as we looked at it.
And make sure that we're not thinking about it incorrectly and then just get any potential thoughts you might have recognizing an insider so.
As I look at the balance sheet simply net debt of $709 million.
And I appreciate that some of that is going to go up and down based on working capital needs.
You've got a subsidiary Thats doing roughly $100 million EBITDA I believe it.
A lot of free cash flow when it's not dealing with supply chain issues and other things that I would imagine it's dealing with now I'd love to hear some thoughts on that but but could trade at a decent multiple I'm not suggesting you're selling it.
Traded at seven times EBITDA multiple you would have all of your all of your deck on again Simplistically and that leaves you with spectrum in life Science.
And spectrum I don't know the value of that business.
We've never been able to really fully underwrite that so no clue, but life sciences for a long time, there's been some really big numbers thrown around not from you guys, but just around.
The potential of that business and that to me represents kind of the.
The call option, if you believe that.
The infrastructure businesses worth seven times, and Youll have no debt and you'll have these assets along the way.
Can you remind me what you're still I heard you guys talking about it but I don't fully understand what you have a global marine I think it's $30 million or something so so thats been in there was 80 million shares or something like that so if those those those life science businesses are worth 500 million plus the J&J call option. It can be meaningful and so thats been a really simplistic way we've thought about it. Unfortunately.
I mean, it hasnt worked.
And then the other side that I had never really thought about and contemplate it was the corporation not having enough money to pay the interest, which obviously you had to borrow from our revolver. So what I would love to know number one is what I just laid out does that make any sense to you and does just I'd love to hear your thoughts on when I laid out and then too.
To what happens around.
Is this is this corporate interest payment of $30 million and I guess you have overhead how does that is that that's every six months. So I guess you can make help us understand and get comfortable with that because if we believe the thesis that there is so much incremental value I'm sure you will figure it out and what the options would be and then on the Lancer debt to life Sciences I'd love to understand.
And the equity component because I think a big part of the thesis. If you are an investor with with lands or is that going to that we're going to be treated.
Right by insiders I am certainly are the rights offering is always fair. So a lot to unpack there I'd love to hear your thoughts.
Sure Brian .
He was not able to.
Stay on the phone for the balance of the call we had.
Prior obligation but.
Obviously, we are.
Yes.
We're in touch every day and so at the risk.
Speaking for him, but trying to answer some of your questions from management's perspective.
Your interpretation in your summary of the business is fairly.
Very accurate and as you said you've been that you've been in the name for a while.
The recent things that we've been doing since the new board receded over the course of the last two years was trying to sharpen the focus at the company.
And we've done that by maintaining.
<unk> to operate the three operating segments that quite honestly. This board, which is led by Avi I believe represents very good value.
Obviously, a much more mature companies in both broadcasting and the two entities at spectrum and as a consequence.
The holding company leans on the more mature companies.
Cash flow perspective.
And we'll continue to do that they've had a tremendous run at DBM that team is exceptional at operating their business and selling new business and we would expect that that would continue to be the case.
I think we've seen a little bit of a liquidity constraint which has been.
Driven by just the levels at which the company is able to sell sell new business and we're working through a variety of different ways to help solve that liquidity issue.
But if you take a look at the backlog in particular the way. This business operates which gives you very good visibility into the next 18 to 24 months.
<unk> from GBM and from that perspective, I think you had a fairly good fair.
Fairly good idea as to what this business is worth and.
I think the board in the base truly appreciates the value that <unk> represents not only currently but also going forward.
In the next 24 months or so.
Due to the other two companies as we've indicated.
The other two operating segments need longer runways to realize the value.
All three of the companies that are.
Divided between those two operating segments I believe.
Our working.
Very effectively to try to realize that value.
And we are supporting them in whatever manner, we can I think.
The focus is safety group.
Broadcasting is going to help.
To help tell the story and create value there and both pants and in our two are performing.
In the manner that we're very happy with that at the holding company and we would expect them to continue to move forward. The meadowbank and pivotal is going very well and we would hope that as they move towards filing for FDA approval that the successes that <unk>.
As experienced will continue.
And.
Those are kind of the approaches that this board took when they decided to Dave.
Beyond six in Continental and I think the focus on these three operating segments right now.
And the results kind of.
Speak for themselves this quarter.
This was an accurate way to to move this company forward in light of some of the constraints that it has including including the debt service with you, which you pointed out.
We've been we've been I think diligent in our.
Planning and has put in place a path forward to satisfy the liquidity needs at the parent including the debt service on the bonds and I think we've demonstrated with the last interest payment and some of the additional steps that we're taking that we're going to be able to.
To execute on that path, and we're going to be able to satisfy our liquidity needs going forward.
And this board and management is looking at basically every opportunity that comes our way to continue to generate value here.
The company said that performance is good at each of the companies. We do we do have liquidity constraints that we're working through but again, we have a path forward to solving them and I'm very confident that we're going to be able to do that.
So we'll have an invest in companies like infrastructure business.
I know those can be those can be.
High utilization of cash, especially in a growth mode.
Can you can you tell me what you think on a normalized basis, what the free cash flow conversion is on $100 million EBITDA run rate what would you expect free cash flow to be forgetting the working capital swings in one project might be pushed out but in general how do you think of free cash.
Flow conversion.
Yeah, So I think about it in context. The one they are running call. It 15, historically 15 to 20 million of Capex.
With the banker business on an annual basis their debt load is 12 $7 million to $8 million.
And then outside of outside of that.
That debt amortization that they have which we are one of our slides.
The rest is kind of free cash flow outside of their working capital needs.
Right.
And then in terms of your NOL.
I know that there has been.
<unk> put in place.
To prevent impairment can you just give us the status of that.
Sure so.
The bill expires in February .
In March I believe.
End of February beginning of March.
And so it was re upped for a shorter period than than the annual re up the last time, but stockholders.
<unk> proved it.
We were able to add to the Nols this quarter through the consolidation of the.
First half of 2021 results.
Consolidated tax return with Continental So I think we added about $63 million to the NOL.
And we continue to think that it's a valuable asset and still being in place I think is that.
Is the right thing to do.
Calculation.
The change of control as you would know pretty convoluted.
Virtually the IRS regulations that.
Yes.
Put that in place.
And the board did analysis.
Got us comfortable that.
There'll be purchases that would roll off by the February March timeframe that would enable us to.
Okay.
Eliminate the pill and not be at risk for.
For having the limitation in the 382 by virtue of the change of control.
I would just say that if.
If you think about phase III.
Changes in ownership.
The 382 change of control is on a three year rolling period, most of our changes will happen in 2020 or at least the big piece of the shift was created.
When you had first rockdale come in in January .
Answer capital in May and then of course in November we had the rights offerings. So those are the.
The biggest causes of the shift in 2023, those will begin to roll off.
At those Timeframes basically.
Got it so so three follow ups and I'll go sorry.
And one comment first of all I think a company like this the perfect way. If you have a shortage to deal with this is through a rights offering to the extent that you have equity holders that believe in the valuation I know you've done that before I think the worst way to deal with it would be an outright equity offering where you kind of pick and choose who participated so I just wanted to I just wanted to point out that <unk>.
Riley financial if there was a need because of the gap because of working capital infrastructure would be a big proponent of not diluting shareholders, who wanted to re up.
When you have this and I'm going to say you're going to need it but I just wanted to point that out so thats one to us.
I forget the global Marine outstanding potential payable and where that goes.
Can you just I thought it was $35 million or something can you what am I you know what I'm talking about.
Yes, So we had we still hold the 19% interest in that equity investment.
That is what we are working on trying to close and transact and set the same valuation that we add when we saw the original 30% or.
So that's a $285 million equity value, 19% is.
$54 million.
There is a local tax call it roughly 10%.
Some transaction related fees attached to that to that deal.
And then we don't own 100%.
The entity that owns that interest so we have about little over 70% interest there.
That we expect to get about $32 million.
Got it and Thats, what you were talking about you were hoping to get by the end of the year.
Correct.
Okay got it and then.
Total answered so one concern you would have if you're outside shareholders that in times of trouble some of the lending to look to other subsidiaries might be owners I don't think thats. The case here, but just to relieve any potential concern can you talk about the lance or debt into the life Sciences business and what that looked like.
Senior secured piece of paper with no equity component.
Awesome, that's great alright, thank you.
Thanks, Brian I appreciate your support.
Again, if you have a question. Please press star then one to join the queue.
Our next question will come from Vincent.
Chatty with papyrus capital. Please go ahead.
Hey, guys can you just looking at the.
A breakdown of the backlog in the Q. It looks like government is still pretty low at $13 million. So just curious when we think about sort of the infrastructure bill the chips at the IRR. When do you think that comes through unless that sort of classified elsewhere in backlog and just generally how you're thinking about sort of that.
I guess the distribution of funds to the states when.
When we think that'll hit the DBS business.
Yes.
Yeah.
Yeah.
The infrastructure.
Yes, yes infrastructure chips all of them.
And we really haven't seen it.
As far as I know any contribution.
The sales that these guys have been making out at DBM that can be attributed to any kind of governmental funding being made available for infrastructure.
It just.
It has happened it hasnt been flag to us.
Okay. Thanks.
Any sense of timing as to when that might hit backlog then.
Not from not from my perspective.
So right now I think you are seeing tremendous growth.
GBS backlog based solely on a reported $3 million into backlog.
Market is quite robust from what we've seen and we haven't seen it slow down we have not seen anything about an infrastructure bill come into the market as Wayne mentioned, that's my understanding also I think to the extent there are projects that.
Come into backlog.
That's down the road so I would say right now we're getting the CBS team is taking advantage of what's in the market and we see that in what's happening with the backlog, which of course has given us.
Really good visibility into the next two years.
Okay. Thank you guys Thats helpful.
Okay.
Thanks, Dan.
This will conclude our question and answer session.
I'd like to turn the call back over to Wayne bar for any closing remarks.
Thanks, Joe.
We appreciate everyone's participation on this earnings call today, and I hope everybody has a nice evening. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.