Q4 2022 MYR Group Inc Earnings Call

February 23, 2023

Okay.

Good morning, everyone and welcome to the MYR group fourth quarter and full year 2022 earnings 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 Gutierrez of Dresdner Corporate services. Please go ahead David.

Thank you and good morning, everyone.

I'd like to welcome you to the MYR Group conference call to discuss the company's fourth quarter and full year results for 2020, Q, which were reported yesterday.

Joining us on today's call are Rick Swartz, President and Chief Executive Officer Eddie.

Eddie Johnson, Senior Vice President and Chief Financial Officer.

Cooper Senior Vice President and Chief operating officer of MYR, groups' transmission and distribution segment.

Jack <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 41, Q <unk> 630, 600, and we will send you a copy or go.

The MYR group website, where a copy is available under the Investor Relations tab.

Also a webcast replay of today's call will be available for seven days on the investors page of the MYR group website at MYR group Dotcom.

Before we begin I want to remind you that this discussion may contain forward looking statements.

Such statements are based upon information available to MYR group.

Management as of this date.

MYR 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 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 is set forth 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 fourth quarter and full year 2022 conference call to discuss financial and operational results I will begin by providing a summary of our fourth quarter and full year results and then we'll turn the call over to Betty Johnson, Our Chief Financial Officer for a more detailed financial review.

Following Betty's overview, Tod Cooper, and Jeff <unk>, Chief operating officers for our T&D and C&I segments will provide a summary of our segment performance and discuss some of them were groups' opportunities going forward I will then conclude the call with some closing remarks and open the call up for your questions.

We finished 2022 with strong financial performance in the fourth quarter and full year revenues of $3 billion.

Setting a record high for the eighth consecutive year.

Our backlog of $2 5 billion.

At the end of 2022 also represented a record high and reflects continued investment in infrastructure and the growing demand for clean energy transformation projects.

Serving as a strong and nimble partner for our clients, we continue to expand our customer relationships through alliance agreements and master service agreements across our districts.

<unk> seen a healthy bidding activity to capture new work. The 2023 construction outlook released in January by the Dodge construction network projects, an 8% expansion in empower and utility spending.

Up to $56 $4 billion this year as demand on our nation's electrical infrastructure increases and the need for viable clean energy sources growth.

We continue to track these opportunities and seek to intelligently bid and execute projects to position us for future success.

Similarly, our C&I segment continues to execute a solid pipeline of work supported by <unk> strong relationships with our preferred clients and the demand for clean energy sources and integration.

Working closely with our clients on Preconstruction planning and project approach help us to mitigate and navigate potential hurdles are core markets, including data centers health care and transportation continued to provide steady opportunity.

Expansion of our client relationships a commitment to the safety training and development of our dedicated employees and superior execution of projects created the foundation for our accomplishments this year.

An increasing need for grid modernization system hardening and reliability as well as de carbonization goals and legislative funding are the primary drivers. We believe will continue to create numerous opportunities.

<unk> group plays a key role in building the critical infrastructure needed to support the clean energy transformation and improving the electrical system positioning us well for 2023 and beyond now Betty will provide details on our fourth quarter and full year 2022 financial results.

Thank you Rick and good morning, everyone on today's call I'll be reviewing our quarter over quarter results for the fourth quarter of 2022 as compared to the fourth quarter 2021.

Fourth quarter 2022 revenues were $864 million.

Another record high which represents an increase of $218 million or 33, 7%.

Paired to the same period last year.

Our fourth quarter T&D revenues were $513 7 million.

A record high for our T&D segment with an increase of 45, 4% compared to the same period last year.

The breakdown of T&D revenues was $347 $7 million for transmission.

$66 million for distribution.

T&D segment revenues increased primarily due to an increase in revenue on both trends of transmission and distribution projects, including incremental distribution revenues from the acquired power line plus companies.

Approximately 50% of our fourth quarter T&D revenues related to work performed under Master services agreements.

C&I revenues were $353 million a.

A record high for the C&I segment with an increase of 19, 6% compared to the same period last year.

The C&I segment revenues increased primarily due to an increase in revenue on various sized projects in certain geographical areas.

Our gross margin.

The 11, 1% for the fourth quarter 2022, compared to 12, 9% for the same period last year.

The decrease in gross margin was primarily due to overall cost increases mainly associated with supply chain disruptions and inflation.

Gross margin was also negatively impacted by labor inefficiencies inclement weather experienced on certain projects and an unfavorable change order on our projects.

These margin decreases were partially offset by a favorable change order adjustment better than anticipated productivity on certain projects and a favorable job closeouts.

Yes.

G&A expenses were $58 million.

An increase of $5 4 million compared to the same period last year.

The increase was primarily due to the acquisition of powerline plus companies and an increase in employee related expenses to support the continued growth in our operations.

Fourth quarter 2022 interest expense was $1 3 million, an increase of $1 million compared to the same period last year.

The increase was primarily due to higher outstanding debt associated with the acquisition of the power lines plus companies and increased interest rates during the fourth quarter of 2022 as compared to the same period last year.

Fourth quarter 2022, net income was $24 6 million or $1 46 per diluted diluted share both were record highs for emlen.

Compared to $27 million or $1 20 per diluted share for the same period last year.

Fourth quarter 2022, EBITDA also a record high.

$52 million.

At 241 $4 million for the same period last year.

Total backlog as of December 31, 2022 was $2 5 billion a record high at 39, 8% higher than a year ago.

Total backlog as of December 31, 2022, consistent with $1 1 billion for the T&D segment and $1 4 billion.

For our C&I segment.

Moving to liquidity and our balance sheet, we had approximately $223 $3 million of working capital.

$46 million of funded debt and $349 3 million and borrowing availability under our credit facility as of December 31, 2022.

We have continued to maintain strong funded debt to EBITDA leverage ratios that is two to three times leverage as of December 31 2022.

Partly as a result of a record high quarterly free cash flow of $65 2 million achieved during the fourth quarter of 2022.

We believe that our credit facility strong balance sheet and future cash flow from operations will enable us to meet our working capital needs equipment investments growth initiatives.

Share repurchases.

In summary, we had improvements this quarter in revenue gross profit net income earnings per share EBITDA free cash flow and backlog compared to the prior year.

This strong quarter also enabled us to reach record annual revenues of $3 billion.

With record highs in both our T&D and C&I segments.

For the year ended December 31, 2022, we also reached a record high EBITDA of $175 $8 million and strong free cash flow of $94 million.

I'll now turn the call over to Tod Cooper, who will provide an overview of our transmission and distribution segment.

Thanks, Betty and good morning, everyone.

Our G&P segment experienced solid growth in execution in the fourth quarter and throughout 2022.

Steady bidding activity led to strategic wins, and the expansion of new and existing client relationships.

These trends are forecasted to continue.

We believe the outlook for 2023 and beyond is positive.

Robust investments in system hardening.

Modernization transmission expansion and the integration of clean energy sources were drivers for the T&D segment in the fourth quarter.

The year.

These investments are projected to grow moving forward.

As Rick mentioned, the Dodge construction network outlook for the 2023 construction industry released in January project healthy growth in power and utility spend this year.

For 2022, North American electric distribution forecast by the C. D. C. Three group released in October forecast $248 billion in distribution infrastructure spending by utilities over the next five years.

This investment across the country continues to be driven by system hardening and fire mitigation efforts in key states.

<unk> has a solid market presence as well as a growing customer base.

The stronger focus on system hardening and grid resiliency, along with the demand for more clean energy.

Has the potential to generate additional opportunities for our business moving forward.

Our T&D segment expanded upon existing client relationships through long term extensions of alliance agreements throughout the U S. In 2022.

This includes master service agreements for electric vehicle infrastructure.

As well as transmission and distribution construction projects.

Our longstanding relationships with our largest customers remained strong and could create future opportunities. In addition to the work we currently provide.

Our solid backlog combined with opportunities across all districts in transmission and distribution and large capital projects.

Could provide strong opportunities for additional work in the near and long term.

As evidenced by the recent award award of a large scale solar projects in southeast, Texas with a total project value in excess of $200 million.

This project was not included in our year end backlog.

In summary, our deepening and expanding customer relationships. Thanks to strong project execution and client collaboration combined with new contract wins, and a burgeoning clean energy transformation market position.

Position MYR group, well in the fourth quarter and throughout 2022.

We will continue to actively bid and execute projects are very capacity size and complexity across the U S and Canada, while maintaining our consistent focus on safety and the development of our dedicated workforce.

<unk> enable us to take on the important work ahead of us.

I'll now turn the call over to Jeff wanted to so it will provide an overview of our commercial and industrial segment.

Okay.

Thanks, Todd and good morning, everyone.

Our C&I segment saw steady fourth quarter and full year results. Thanks to our diligence throughout 2022.

We experienced positive quarterly bookings this past year, and a 29% year over year increase in backlog. In addition to our positive book to Bill we have numerous projects in the pipeline that are expected to allow continued growth.

Continued inflationary and supply chain disruptions impacted our district offices vendors Pierce and clients in the fourth quarter.

While we are pleased to see inflation cooling interest rates moderating and supply chain disruptions stabilizing we are not yet seeing improved confidence in bringing projects to contract any faster than.

In response to continuing market disruption clients are placing even greater priority on hiring contractors with proven preconstruction services exceptional execution and national buying power to help them navigate this uncertainty all areas of strength for MYR group Collab.

Collaboratively working with our clients and focusing on operational strength and execution enables us to mitigate many of these market constraints.

One of our surge in growth areas continues to be clean energy market.

We're pleased that our portfolio of solar battery storage and each projects continues to flourish in meaningful ways. Nearly every division of C&I has increased its backlog or pursuing opportunities in the clean energy space.

<unk> range in size from small to large projects are located from coast to coast.

Fourth quarter awards were lumpy, but pursuits on new opportunities continued providing optimism on projects that are slated to start construction in 2023.

In addition to our clean Energy Awards healthcare has remained strong and continues to offer attractive projects in several regions, most notably in our Canadian operations, Our subsidiary company Western Pacific Enterprises continues to successfully execute projects in Western Canada and is awaiting contract.

On new hospitals that will begin construction in 2023.

Our healthcare resume in this region is vast leading Canada's largest general contractors to lean on our services.

Healthcare projects remain equally active in the United States as well with notable hospital expansions in southern California, and Colorado.

California subsidiary CSI continues to execute many health care facilities and future opportunities are ample.

Colorado subsidiary Sturgeon electric cease a continued expansion of their health care group with a recent awards across the state our subsidiary companies are leveraging their deep and successful experience in healthcare to place them in leading positions on many exciting projects.

Outside of healthcare Western Canada continues offering desirable opportunities in light rail transit.

Let's turn Pacific Enterprises is well known for its highly skilled personnel, who have built substantial portions of Vancouver in Edmonton Skytrain and coover has ambitious plans to continue expanding the skytrain and WP is engaged in several pursuits that can expand our footprint in transit.

Other exciting opportunities in Canada include water treatment facilities, and electrical upgrades for petroleum facilities.

<unk> projects.

Moving to another consistently strong end market data center activity was robust in many of our locations as clients seek to expand facilities utilizing contractors, who possess deep resources and proven performance.

With substantial operations in key areas. Our mission critical teams remain in high demand in both existing facilities and our new built.

Although high Tech companies have recently announced their plans to make masks layoffs, we have not seen reductions in capital expenditures to build expand and maintain their data center facilities.

We remain optimistic about the long range outlook and our ability for future growth as funding from the infrastructure investment and jobs Act becomes reality.

Clients across the country are excited about the potential to modernize roads bridges.

Rail ports airports and water infrastructure and are starting to step up their partnering efforts in preparation for this firm.

To conclude we are proud of how our employees are responding to the unique challenges facing the industry.

They continue providing the proactive and customer focused communication that we believe will enable the MYR group to maintain our leading position in the markets we serve.

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 we are proud of our fourth quarter and full year 2022 performance, which demonstrated the strength of our sound business strategies and operations across both market segments. We are excited about the role in the clean energy transformation.

Performing the critical work necessary to make clean energy viable sources of power equally important we serve our clients and delivery in the delivery of safe reliable and cost effective power to their customers and facilities.

Our commitment to delivering exceptional value to our clients communities and shareholders, while supporting the success and safety of our talented employees and strategically growing our business through sound investments.

Found the set the foundation for our success.

Thank you to all of our dedicated employees for your hard work this past year to our clients for their continued trust and to our shareholders for your ongoing support.

I would also like to think that FERC contribution to the company and her tenure as CFO as she transitions towards retirement and welcome Kelly Huntington to MYR group as senior Vice President and CFO I look forward to working with you all in 2023 and beyond operator, we are now ready to open the call up for your comments.

Questions.

To ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Please standby, while we compile the Q&A roster.

One moment for our first question.

Our first question will come from the line of Justin Hauke from RW Baird. Your line is open.

Hi.

So.

I guess.

I guess my question is obviously you guys don't give.

Guidance and we understand that.

But.

Here's now with the revenue growth growing solidly in double digit accelerated here in 'twenty two.

And your backlog is up 40% year over year and is up 60% and CND and so I guess, maybe just from a.

Kind of a framework.

<unk> about where our revenue growth next year.

Do you have the capacity to continue to grow at a double digit rate given that your backlog would support that.

I think with everything going on in the marketplace, we've talked about the supply chain disruptions or other issues out there that contain.

We continue to push forward and we have we're not completely out of that at this point.

We've seen some improvements this last quarter, we did see some improvement on kind of the supply chain disruptions with some material coming in a little sooner than we planned.

But I wouldn't anticipate double digit growth.

Barring an acquisition coming into play or something like that but.

We do see continued growth and will continue to push where we can.

Okay.

Fair enough.

And maybe my other question would just be.

You've had some big projects that we're ramping that helped with some of that revenue growth yet solar project, you've had some larger TMT ones.

Is there.

Are some of the larger projects that you bought.

Booked over the last couple of quarters are they still ramping or kind of at a state right now with some of that larger stuff that tends to kind of move things up and down.

On a quarter to quarter basis.

Those larger projects are going to continue to ramp up the newer ones that we've landed those haven't ramped up yet some of the older ones are kind of coming off are burning out.

We add marci, the new Scotland.

Projects will finish up the end of this year the beginning of next year.

We had 670 project on the on the.

C&I side.

Finish up this year and there's a little bit the continues through this through 'twenty, three but with that we've got great opportunities out there and we've got a good backlog of new projects starting.

Okay, I guess I'll leave it there and maybe jump in after.

Thank you.

Thank you. Thank you.

One moment for our next question.

Our next question comes from the line of Nick Breckenridge from Keybanc. Your line is open.

Hi, guys. This is Alex Dwyer for Keybanc.

Hi, Alex.

Hi.

The T&D was a major revenue driver this quarter I think I think you guys had cautioned around potential headwinds from budget constraints.

With certain customers last quarter I'm, just kind of wondering how that played out in <unk> and if you were able to move some crews around to other areas or if there's something else that really drove that surprised in the quarter.

We did see those disruptions in a couple of areas, but we were able to move those crews around.

So that was a positive thing we also had some some good movement on our clean energy side with material coming in which allowed us to move some stuff sub contractors up forward a little ways of what we had planned originally.

So that was kind of that revenue beat and where that kind of accounted for it.

Got it.

And then on the P&I segment, the margin notes nice little uptick here quarter over quarter.

Can you talk about how we should think about these in 2023.

<unk> is still not out of the woods, yet on the supply chain situation.

How has the environment trended in the recent months and maybe if there's anything you guys are doing internally to improve these margins back into that 4% to 6% range.

Well I think last year, we stated that we kind of saw this.

This material impacts in kind of the supply chain disruptions, taking continuing through the first half of this year, we have seen improvements in it and I think we're going to continue to see it through the next two quarters and hopefully.

Stabilized by that third quarter of this year and we're still.

Still seeing that trend and I think we're seeing positive movements that way.

Thank you.

One moment our next question.

Our next question will come from the line of Brian Russo from Sidoti Your line is open.

Hi, good morning.

Good morning, Brian .

Just wanted to follow up on the.

Revenue growth at the T&D over 40% for the.

Sequentially for the SEC.

<unk> quarter in a row, both third quarter and fourth quarter I was just trying to get a sense of.

In addition to what you mentioned I think power line. The initial assumption was about $80 million in revenue.

Annually is that exceeding your expectations, which is whats driving.

Over 30% year over year.

<unk> growth in that sector.

Versus historically close to 70% on average.

Now power lines pretty close to what we had projected so I'd say it's.

It is.

I guess performing as planned.

So the growth is really from the clean energy side additional trans.

Additional transmission and additional distribution contracts out there.

Okay got it and then just on the T&D segment margins it looks like eight.

8% in the fourth quarter.

It looks like 40 basis points above the third quarter, but still below the fourth quarter 'twenty, one and I know you had some closeouts indoor favorable weather in the year ago quarter, but.

Or are we well within I think it's the seven 5% to 10%.

<unk> range and a lot of the supply chain.

Inflationary headwinds that are going to persist through C&I through the first half.

It's less significant on the T&D side.

Yes. This is Todd on the T&D side.

Related to our growth was obviously the investment in <unk>.

Additional project management additional supervision.

The heavy investment in the training and development of those employees. So.

That probably could be impacting margins slightly but it's with the intent of obviously continuing to improve those margins in the long term.

To get it higher than the 8%.

Push towards the higher end of what we're projecting.

Great.

Can I add just also add that Rick mentioned.

While the rate is growth in T&D came from some of the solar accelerated cost in our solar side, which as a reminder, those margins are like higher than the C&I typical margin, but not at the high end of the range. So that's a little bit on component when it came to the mix of the solar.

The opportunity there.

Still get into the higher range does that mix switches.

Okay, Great and then just again on the TNT.

The utilities that have reported earnings are.

Very optimistic about these MISO tranche, one projects and some are saying that tranche two could be even bigger.

Not to get ahead of ourselves, but I'm curious what type of activity.

Youre seeing with.

With customers or prospective customers on these transmission projects.

When we might see a competitive bidding process begin and when projects might be awarded.

Yes, Brian we are starting to see some some some bids come out on the tranche, one and we expect to start the year and more on tranche. Two later this year, but we're seeing those guys. You know they are spread out over several states.

Some states utilities have first right of refusal and and we'll see those coming out of the woods.

Utilities and then.

A few projects embedded growth in trucks, one that will be.

On the competitive market.

We've seen one of those come out and we expect to.

To continue to see those throughout the next two or three years actually.

Okay, great. Thank you very much.

Thank you.

For next question.

And as a reminder, that says 101 for any questions Star one one.

Our next question will come from the line of Noelle Dilts from Stifel. Your line is open.

Hi, Thank you a couple of question probably for Jeff.

First I was hoping you could expand a little bit on the comment.

You mentioned that you were still seeing.

Projects are customers that were kind of hesitant to contract projects and.

I also was curious of projects or maybe a little bit slow to start with they are awarded.

I was curious if there is any way to maybe quantify that is there are you seeing the engagement of our sales cycle extend.

Any information there would be helpful. Thanks.

Yes, you bet.

We're having a few projects where.

All the contractors are pricing in some inflationary issues and maybe some supply chain delays.

And Thats just keeping those.

Developers and owners from pulling the trigger there projects are starting to exceed maybe what their pro forma was as we see those calmed down we're seeing those projects come back out again and many of those were in a pretty good position.

We continue working with our owners, we continue providing pricing as we see.

The market change.

We're hopeful that those will eventually come to market.

Looks like Theyre going to as soon as they have a bit more confidence around the whole cost of the project.

Okay.

I would add is probably the advantage. We have is we haven't seen anything in our in our backlog slipped at this point so one in our backlog today on the C&I side, it's not moving around a lot. So those projects are are going to be executed as planned at this point.

Okay, Great and then sticking with C&I any notable changes in terms of <unk>.

Vertical to where youre seeing strength or verticals that are weakening and then curious if you could give us an update on how youre thinking about any potential IHA related projects and benefit.

Say around transportation are we thinking that's more about 2024 event. Thanks.

The markets that we have in advertising as a core strength for us they're remaining strong we're not necessarily seeing a big fluctuation.

In any of those.

There is more conversation around funding on some of the big transportation projects, but we haven't yet.

<unk> gotten anything real contextual to price up yet we believe that is probably going to be more out into the future 2024.

Okay, great. Thank you and Betty Congrats on your retirement.

Thank you so much.

Thank you.

And then as a reminder, again our 101 for questions are one one.

One moment for any questions.

And we have a follow up from the line of Noelle Dilts from Stifel. Your line is open thanks.

Yes.

One additional question for Todd curious it looks like when you are looking at the transmission market. It seems like there is some more large projects mega projects that are gaining traction again.

I'm curious again, how youre thinking about the timing there or are these more or do you think you could see some pickup in large project bidding opportunity this year or is that more into the out years. Thank you.

This year, we're going to see some some more opportunities on some large project bids.

Like we've talked about in the past the unfortunate part of that is.

The construction activity on several of these projects is at least a year.

Year out if not two years when a couple of them but.

We are actively bidding a couple right now and we see a few more very nice sized projects.

That should be coming out of the second and third quarter. So we're pretty excited about that.

Got it.

Great. Thanks again.

Thank you.

One moment for our next question.

And our next question comes from the line of Jon Braatz from Oppenheimer. Your line is open.

Good morning, everyone.

Good morning morning, Good morning, Jeff.

I think we might have some technical difficulties with John .

John Your line is open.

You might be on mute.

Alright.

And it looks like we have in there.

Are there.

A follow up from Noelle.

Your line is open.

Noelle Dilts from Stifel. Your line is open.

Alright.

And I see no further questions in the queue.

Thank you to turn the call back over to Rick Swartz for any 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 further and we look forward to working with you going forward and speaking with you again on our next conference call until then stay safe.

And this concludes today's conference call. Thank you for participating you may now disconnect everyone have a great day.

The conference will begin shortly to raise and lower Johan during Q&A, you can dial star one one.

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Good morning, everyone and welcome to the MYR group fourth quarter and full year 2022 earnings 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 Gutierrez of Dresner Corporate services. Please go ahead David.

Thank you and good morning, everyone.

I'd like to welcome you to the MYR Group conference call to discuss the company's fourth quarter and full year results for 2020, Q, which were reported yesterday.

Joining us on today's call are Rick Swartz, President and Chief Executive Officer Eddie.

Johnson Senior Vice President and Chief Financial Officer.

Cooper Senior Vice President and Chief operating officer of MYR, groups' transmission and distribution segment and.

And Jeff <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 41 to <unk> 3600, and we will send you a copy.

Go to the MYR group website, where a copy is available under the Investor Relations tab.

Also a webcast replay of today's call will be available for seven days in the investment stage of the MYR group website at MYR group Dot com.

Before we begin I want to remind you that this discussion may contain forward looking statements.

Such statements are based upon information available to MYR group.

<unk> management as of this date.

And MYR 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 uncertainties are discussed in the company's annual report on Form 10-K for the year ended December 31, 2022, 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 is set forth 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 fourth quarter and full year 2022 conference call to discuss financial and operational results.

I will begin by providing a summary of our fourth quarter and full year results and then we'll turn the call over to Betty Johnson, Our Chief Financial Officer for a more detailed financial review.

Embedded overview, Tod Cooper, and Jeff Monica, Chief operating officers for our T&D and C&I segments will provide a summary of our segment performance and discuss some of them were grouped opportunities going forward. I will then conclude the call with some closing remarks and open the call up for your questions.

We finished 2022 with strong financial performance in the fourth quarter and full year revenues of $3 billion.

Adding a record high for the eighth consecutive year.

Our backlog of $2 5 billion at the end of 2022 also represented a record high and reflects continued investment in infrastructure and the growing demand for clean energy transformation projects.

Serving as a strong and nimble partner for our clients, we continue to expand our customer relationships through alliance agreements and Master service agreements across our district, while seeing healthy bidding activity to capture new work. The 2023 construction outlook released in January by the Dodge.

Struction network project, an 8% expansion in power and utility spending up to $56 $4 billion. This year as demand on our nation's electrical infrastructure increases and the need for viable clean energy sources growth.

We continue to track these opportunities and seek to intelligently bid and execute projects to position us for future success.

Similarly, our C&I segment continues to execute a solid pipeline of work supported by strong with strong relationships with our preferred clients and the demand for clean energy sources and integration.

Working closely with our clients on Preconstruction planning and project approach help us to mitigate and navigate potential hurdles are core markets, including data centers healthcare and transportation continue to provide steady opportunity.

MYR group plays a key role in building the critical infrastructure needed to support the clean energy transformation and improving the electrical system.

Positioning us well for 2023 and beyond.

Now Betty will provide details on our fourth quarter and full year 2022 financial results.

Thank you Rick and good morning, everyone on today's call I'll be reviewing our quarter over quarter results for the fourth quarter of 2022 as compared to the fourth quarter 2021.

Fourth quarter 2022 revenues were $864 million another record high which represents an increase of $218 million or 33, 7%.

Paired to the same period last year.

Our fourth quarter T&D revenues were $513 7 million.

A record high for our T&D segment with an increase of 45, 4% compared to the same period last year.

The breakdown of T&D revenues was $347 $7 million for transmission.

$66 million for distribution.

T&D segment revenues increased primarily due to an increase in revenue in both transmission and distribution projects, including incremental distribution revenues from the acquired power line plus companies.

Approximately 50% of our fourth quarter T&D revenues related to work performed under Master services agreements.

C&I revenues were $353 million a record high for the C&I segment with an increase of 19, 6% compared to the same period last year.

The C&I segment revenues increased primarily due to an increase in revenue and <unk>.

Various sized projects in certain geographical areas.

Our gross margin was 11, 1% for the fourth quarter 2022, compared to 12, 9% for the same period last year the.

The decrease in gross margin was primarily due to overall cost increases mainly associated with supply chain disruptions and inflation.

Gross margin was also negatively impacted by labor inefficiencies inclement weather experienced on certain projects and an unfavorable change order on a project is.

These margin decreases were partially offset by a favorable change order adjustment better than anticipated productivity on certain projects and a favorable job closeouts.

G&A expenses were $58 million.

An increase of $5 $4 million compared to the same period last year.

The increase was primarily due to the acquisition of powerline plus companies and an increase in employee related expenses to support the continued growth in our operations.

Fourth quarter 2022 interest expense was $1 3 million, an increase of $1 million compared to the same period last year.

Fourth quarter 2022, net income was $24 6 million or $1 46 per diluted diluted share both were record highs for emlen.

Compared to $27 million or $1 20 per diluted share for the same period last year.

Fourth quarter 2022, EBITDA also a record high.

$52 million.

At $241 4 million for the same period last year.

Total backlog as of December 31, 2022 was $2 5 billion a record high at 39, 8% higher than a year ago.

Total backlog as of December 31, 2022 consisted of $1 1 billion for the T&D segment and $1 4 billion for our C&I segment.

Moving to liquidity on our balance sheet, we had approximately $223 $3 million of working capital.

$46 million of funded debt and $349 3 million and borrowing availability under our credit facility as at December 31, 2022.

We have continued to maintain strong funded debt to EBITDA leverage ratios that is two to three times leverage as of December 31 2022.

Partly as a result of a record high quarterly free cash flow of $65 2 million achieved during the fourth quarter of 2022.

We believe that our credit facility strong balance sheet and future cash flow from operations.

Enable us to meet our working capital needs equipment investments growth initiatives.

Share repurchases.

In summary, we had improvements this quarter in revenue gross profit net income earnings per share EBITDA free cash flow and backlog compared to the prior year.

This strong quarter also enabled us to reach record annual revenues of $3 billion.

With record highs in both our T&D and C&I segments.

For the year ended December 31, 2022, we also reached a record high EBITDA of $175 $8 million and strong free cash flow of $94 million.

I'll now turn the call over to Tod Cooper, who will provide an overview of our transmission and distribution segment.

Thanks, Betty and good morning, everyone.

Our <unk> segment experienced solid growth in execution in the fourth quarter and throughout 2022.

Steady bidding activity led to strategic wins, and the expansion of new and existing client relationships.

These trends are forecasted to continue in.

We believe the outlook for 2023 and beyond is positive.

Robust investments in system hardening.

Grid modernization transmission expansion and the integration of clean energy sources were drivers for the T&D segment in the fourth quarter throughout the year.

These investments are projected to grow moving forward.

As Rick mentioned, the Dodge construction network outlook for the 2023 construction industry released in January project healthy growth in power and utility spend this year.

For 2022, North American electric distribution forecast by the D. C. Three group released in October forecast $248 billion in distribution infrastructure spending by utilities over the next five years.