Q2 2023 Granite Construction Incorporated Earnings Call
Good morning, My name is Sarah and I will be your conference with facilitator today.
At this time I would like to welcome everyone to the granite construction Investor Relations second quarter 2023 conference call.
This call is being recorded.
All lines have been placed on mute to prevent any background noise.
The Speakers' remarks, there will be a question and answer period.
To ask a question please press star one.
Please note we will take one question and one follow up from each participant.
It is now my pleasure to turn the floor over to your host granite construction incorporated Vice President of Investor Relations, Mike Barker.
Good morning, and thank you for joining us I'm pleased to be here today, with President and Chief Executive Officer, Carlos <unk>, and Executive Vice President and Chief Financial Officer, Lisa Curtis.
Please note that today's earnings presentation will be available on the events and presentations page of our Investor Relations website.
We begin today with a brief discussion regarding forward looking statements and non-GAAP measures.
Some of the discussion today may include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward looking statements are estimates, reflecting the current expectations and best judgment of senior management regarding future events occurrences opportunities targets growth demand strategic plans circumstances activities performance shareholder value outcomes.
Outlook guidance objectives.
<unk> and awarded projects where cap.
And results.
Actual results could differ materially from statements made today.
Please refer to granites, most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these forward looking statements.
The company assumes no obligation to update forward looking statements, except as required by law.
Certain non-GAAP measures may be discussed during today's call and from time to time by the company's executives. These include but are not limited to adjusted EBITDA adjusted EBITDA margin adjusted net income and adjusted earnings per share.
The required disclosures regarding our non-GAAP measures are included as part of our earnings press releases and in company presentations.
Which are available on our website granite construction dot com under Investor Relations.
Now I'd like to turn the call over to color.
Good morning, and welcome to our second quarter Conference call I'll start with a quick recap of some significant accomplishments internet eventful second quarter.
At the beginning of Q2, we closed on the purchase of Coast Mountain resources, our CMO Kory and processing facility that served as a supplier for our Pacific Northwest region.
Our materials business is integral to our home market strategy as discussed in previous calls we perform best in markets featuring a combination of an aggregate and asphalt business with a vertically integrated construction business.
We believe the <unk> acquisition provides our Pacific Northwest region with a competitive advantage.
Acquisition as well as the Q1 purchase of the Brunswick, Canada, Corey Northern Nevada.
Next our commitment to invest in and grow our materials business and.
In addition to these acquisitions, we also continue to invest in Greenfield reserves plant automation and other efficiency projects we.
We are seeing the results of our investment in the materials business and look forward to sharing more as we continue to execute our plan.
We also completed the refinancing of our convertible bonds in May.
This refinancing resulted in a $51 million noncash charge is adjusted in our non-GAAP net income and earnings per share.
The new convertible bonds supplement our credit facility and provide granted with a strong capital structure that bolsters our liquidity position.
Our debt structure provides us with both stability and access to funds as opportunities arise.
Turning to our response to a slow Q1, while we were happy in Q2 to finally stopped talking about atmospheric rivers out west historically wet Q1 weather had a lingering headwind as several of our western businesses dealt with delays caused by historic snow pack and associated runoff.
Despite these impacts I'm encouraged by our team's second quarter performance and ability to overcome the slow start of the year.
Now, let's dive into our construction segment I am excited.
To report the total cap increased $334 million from the first quarter and is up over 1.2 billion year over year to $5 4 billion.
Is an exceptional result for the quarter and a testament to pursuit teams across the company I'm pleased by both the number of wins in the quarter and the opportunities that we see on the horizon.
We're winning our share of high quality public and private work. This should translate to revenue growth in 2023, but even greater impact should be recognized in 2024 and 2025.
I believe current market conditions should allow us to continue building a strong quality cap and the remainder of 2023.
Looking at our operating groups and starting with the California group. It was another stellar quarter for pursuit teams across the state.
A group ended Q2 with another record cap of $2 3 billion, an increase of $432 million or 23% sequentially and $716 million or 44% year over year.
There have been some concerns around California's 2023 to 2020 for budget deficit.
However, the finalized budget package keeps infrastructure investment intact and in fact is up 5% from the previous year.
The state recognizes the need for infrastructure investment and is protected and the latest budget.
In addition, the budget authorizes Caltrans the state Department of transportation to pilot the Progressive design build procurement method. This is an example of an alternative procurement model that we prefer.
I think construction manager general contractor procurement method progressive design build is the best value method that generally provides more successful projects by allowing stakeholders to collaborate throughout the design pre construction and construction process.
Through the first six months of the 2023 calendar year Caltrans awarded $3 4 billion of work, including both traditional bid build and construction manager general contractor procurement types. This total was the highest amount in terms of number of projects and dollars awarded in the last five years or.
Over the past year the dynamics of the state is funding has continued to improve aided.
Aided by the federal infrastructure Bill.
And our California group as capitalize on the numerous opportunities available.
A quick comment on the California emergency work that we discussed in the first quarter.
As a reminder, this work was comprised of approximately $100 million not to exceed contracts year to date through the second quarter. We recognized 43 million in revenue for emergency work, we don't anticipate significantly more revenue from these contracts.
While the California group has the highest cap balanced by group. The Mountain group is our largest group by revenue both in 2022 and through the first half of this year.
At the end of the second quarter cap and the mountain group stood at $1 5 billion, an increase of $52 million or 4% sequentially and an increase of $428 million or 40% year over year.
The cap growth is primarily driven by the Alaska, Nevada, and Utah regions.
The Mountain group is the most seasonal group within granite as several markets are exposed to more intense winter weather and have shorter construction seasons.
With the higher levels of cap in place at the start of this year. The group ramped up quickly as soon as weather allowed and I expect to have a very busy remainder of the year.
Finally in the Central group cap decreased in the quarter by $151 million sequentially, while remaining up $81 million year over year.
Well there was a cap decrease in Q2, the central group was the lowest bidder on several projects, which we reflected in third quarter cap.
$200 million tunnel project in Ohio.
The Central group continues to pursue quality work and is building up its derisked cap portfolio. We expect the group to increase its cap in the third quarter, but the town division in Illinois, and Texas regions, leading the way.
While the Central group has substantially derisked. Its current cap I am disappointed to report that the construction segment was again impacted by the I 64 High rise Bridge project.
While this project continues to move towards final completion, which is now scheduled for early in the fourth quarter. The projects suffered cost increases this.
This resulted in a $21 million impact to gross profit in the quarter with a net impact of granite have $10 million after noncontrolling interest.
Winding down these types of risky projects has been a long journey.
We remain focused on completing the project as soon as possible.
The challenges we have faced on the project are a Stark reminder of why we are intentionally derisked our portfolio away from these types of large complex design build projects, where project risks are shifted to the design builder.
Our experience with these types of projects, which often require five or more years to complete and we are working outside of their home markets has not proved successful.
When we are evaluating larger projects, we have emphasized best value procurement delivery methods such as <unk>.
And best value projects, we are better positioned to address all risks as we work collaboratively with the client to mitigate risk for the project the client and for granted.
Though some best value projects have high total contract values. They are often separated into small work packages, which are then reviewed through multiple project workshops.
This process is a win for the contractor and the owner <unk>.
Projects are generally completed quicker with fewer claims we are constructing more than 60 best value projects and we are very confident in our risk assessment on these types of projects.
Overall, assuming the weather cooperates the last six months of 2023.
I expect the third quarter and second half of the year to be very busy with revenue exceeding the prior year. I also believe we have numerous opportunities to continue to build cap and every group setting the stage for strong growth in 2024.
Moving to the materials segment I am excited about the performance in the second quarter and the momentum we have going into the third quarter and Q1 increment weather slowed construction and drove significant decreases in volumes in.
In Q2, our teams got to work and started to make up ground.
Aggregate sales volumes increased 9% year over year in the quarter, while asphalt volumes were flat.
The materials business has performed well increasing prices both in aggregates and asphalt, resulting in improved revenues and margins. We are investing more in our materials business to maximize production efficiency through multiple automation projects Greenfield reserves standardization and implementation of best practices.
These initiatives are paying off and I believe we will see further benefits as we drive towards our 2024 gross profit margin targets of 15% to 17%.
Now I'll turn it over to Lisa to review, our financial performance for the quarter.
Thank you Paul.
In the second quarter consolidated revenue increased $50 million to 899 million, while gross profit increased 5 million to $103 million.
And the construction segment revenue increased 76 million year over year to $749 million.
The revenue increase was led by the California Am Mountain, Greek, which were up 18% and 4% year over year, respectively.
Revenue increases were partially offset by a 5% year over year decline in the central Greg.
The California and mountain grades entered the quarter with higher levels of cash in the same period in the prior year and they built on that cap during the quarter.
The groups have done a great job of making up for the slow start to the year and I believe they are likely to continue to outpace 2022, and the second half of the year.
The Central group has done an excellent job of transforming and building cap within its home markets over the last year and we expect to see revenue increase as these projects continue to ramp up during 2023.
Construction segment gross profit decreased $1 million year over year to 79 million with a gross profit margin of 11%.
In the second quarter construction gross profit was adversely impacted by a write down on the I 64 High rise Bridge project.
Impact to gross profit in the second quarter was $21 million and the impact after noncontrolling interest was $10 million.
For the six months ended June 32023.
64 impact to gross profit was $32 million and the impact after noncontrolling interest was $16 million.
Impact was primarily due to scheduled delays driven by weather unexpected site conditions and utility conflicts encountered as we work to close the project out.
In the materials segment revenue increased 13 million year over year to 149 million with gross profit increased $1 7 million to 24 million or a gross profit margin of 16%.
The improvement in gross profit margin was primarily due to sales price increases in both asphalt in aggregates and in increased aggregate sales volume over the second quarter of 2022.
Oil and energy cost increases in the first half of 2022 had a significant negative impact Tim materials margins.
In the second quarter of 2023. These costs have moderated and margins are more normalized I expect that we will continue to see improvement and materials segment margins as our investments in this business take effect.
Weather permitting we expect to see continued strong performance by our materials business.
In the second half of the year.
At the end of the second quarter, our cash and marketable securities totaled $251 million.
Historically, our cash decreases in the first half of the year as the construction season ramps up and we generate cash in the second half of the year.
Other impacted first quarter further exacerbated this pattern with project one plants, having a slower start to the year.
This in turn drove higher cash usage and receivable balances.
<unk> that we will see a reversal of this trend in the third quarter in line with our traditional seasonal cash flow pattern.
In May we issued $374 million at 375% convertible notes.
Primary use of the proceeds to retire $199 million of our outstanding to 75% convertible notes.
In a challenging that market I am pleased that we were able to complete this transaction should provide years of capital structure stability and a reasonable net cost to granted.
We also put measures in place through the capped call transactions entered into finding chain you sleep with the issuance of the bonds to protect our shareholders from any dilution from the new convertible bonds until our share price is about $79 83.
We believe it is a great results for granted and all of our stakeholders.
Onto our guidance, we are refining our 2023 guidance for revenue and adjusted EBITDA margin.
Reminder, last quarter, we talked about our expectation.
The hundred million dollar and not to exceed emergency work contracts, which were awarded will allow us to achieve our revenue guidance as we worked to overcome wet weather delays.
We do not expect our clients will utilize all available funding and the emergency work should total approximately $50 million.
Additionally, su projects experienced delayed starch in the California, and central grades and have pushed to the right one.
While we are pleased with the recovery in the second quarter to gain ground following the weather impacted first quarter.
We are revising our guidance for revenue to 335 to 3.45 billion.
We are confident that our record cat has us positioned for predictable and sustainable growth.
Right.
We are also narrowing our adjusted EBITDA margin range to seven five to eight 5%.
New range incorporates the losses already incurred on the I 64 project in the first half of the year.
Our view on 'twenty 'twenty four is unchanged.
Our cap has grown substantially over the last year and there is a higher quality with higher margins that we believe support both our revenue growth and our profitability expectations.
Now ill turn it back over to Kyle.
Thanks, Lisa I'll close with the following points.
Through the second quarter, we are winning work that should allow us to meet our expectations for 2024 and beyond the.
Second quarter represents a second consecutive record cap for the company with the California group, leading the way I.
I'm really pleased with the significant amount of high quality gap that we have in front of us.
Even with the cap growth over the last year I believe the opportunities that we see in front of US support further growth in 2023 when.
When we started talking about the Iga, we said that we thought it would start slowly and ramp up over a number of years.
We are seeing that play out in our markets the opportunities afforded by the <unk> continued to grow as agencies work through the process of bringing more projects to bid.
While the results of our construction segment were negatively impacted by our efforts to close out the I 64 project.
Confident that our direction is clear our momentum is building and our plan is working we're driving toward our 2024 targets lastly, the materials segment is performing very well and the market remains strong we will continue to invest in the business and I expect to see further gains both on the top and bottom lines.
Operator, I'll now turn it back to you for questions.
To ask a question you May press Star one.
Please limit yourself to one question and one follow up question and feel free to jump back in queue. If you have additional questions.
Our first question comes from Brent Thielman with D. A Davidson. Please go ahead.
Hi, Thanks, good morning.
Kyle are Lisa just I guess wanted to pick on that the revenue outlook reduction I mean, you cap that year on year and sequentially.
Sequentially as well.
Concerns come in Indonesia does this shift in.
In terms of the demand environment. So maybe if you could just clarify that.
Why that why the revenue outlook ultimately came down it sounds like maybe some delays in projects, but any color. There I think would be helpful for people.
Yes, good morning, Brent. So so yes, I think the real probably a couple of things that maybe I'll point to first off as we anticipated around $100 million have emergency work to be built.
You're always going in that void I mentioned last quarter between the wet weather in the project starts ultimately those contracts ended up being close around $50 million. They were theyre not to exceed contracts and the owners decided not to complete.
The entire budget allotment and some of that $50 million to come out later and other projects or we could see at some point later in the year next year, So we're expecting that to only be $50 million or $100 million.
The balance of it is really just project restarts in starts certainly impacted by some of the weather that we had in the amount of snow pack we had uncertain.
Certain parts of our business and impacted projects getting ramped back up in the year.
As well as run off and then just some project starts themselves and parts of our business I would.
But $50 million on the emergency work, but the other $50 million and split it between California, and the central groups for project startups.
Got it okay.
I guess my follow up I mean, it looks like you were something over 13% gross margin in the construction segment, if I take out the losses on I 64.
Is that better or worse than your initial plan for this year, maybe just curious how you feel the development of kind of the core construction.
Business is coming along as you've implemented a lot of new initiatives just focused on higher profitability here.
Yeah, I would say it's in line with our plan I mean, certainly we had a wet Q1, which slowed our ramp up of the year. So as you kind of look at Q2 its.
It had a little bit of what would normally be into Q1. So we expect it will we'll continue to ramp up and certainly had a strong Q3.
And finish to the year.
I don't think I don't think where we're headed directionally changing at all when you look at our cap.
Our tap continues to grow both in terms of kind of the size of our cap, but the quality of our cap is getting better too and we consistently are picking up.
More work with higher margins.
And that's really that's really good for our business and even though we've had challenges on I 64, we don't have those those risky projects in our portfolio moving forward.
So the quality of our cap is really really different than what we've had historically so as we look forward into 2024 and beyond we feel really good about where we're headed directionally.
Okay. Thank you.
Thank you. Thank you.
Our next question comes from Brian Russo with Sidoti. Please go ahead.
Hi, good morning.
Good morning, good morning.
Just when I look at the midpoint of your revised <unk>.
Revenue guidance of $3 4 billion and then when I look at.
The 2024 target.
Midpoint of about $3 $75 billion that implies about 10%.
Year over year revenue growth and.
Im just curious it seems like maybe the industry might be growing in the mid <unk>.
Single digits, maybe slightly higher.
How confident are you.
To get to that 2024 midpoint.
Well I think we're feeling really good I mean, our cash balance today is up significantly as I mentioned in the prepared remarks and with branded as.
It is higher quality and certainly in higher higher amount and you can kind of look at the burn it's tough with the best value projects to really look at a burn on a cap consistently but if you look at it from a 40% to 50% range if.
If we continue to pick up work at the pace, we've been picking up work.
We believe that that that 224 revenue number of three six to three nine.
If we continue to do things, we're doing we should be on the higher end of the mid point and then the lower.
Okay, Great got it and then just just to follow up on your cap and backlog profile. The several hundred million dollars of projects that you announced in the second quarter.
Roughly speaking it looks like it could be anywhere between 12.
To 36 months in duration and I know you commented on that early but maybe you could just elaborate on what gives you maybe the C. G.
G C.
Structure et cetera.
What gives you the confidence that you can manage those projects.
And execute them on time and on budget, just given the multi year.
Durations of of some of the projects.
Yes, and those projects I mean, that's what we really appreciate about the best value.
Contracting method, it's really all about collaboration.
And the focus of those jobs is all about managing risks identifying risk and managing risk for for the owner for the project itself and for ourselves and that allows us to really mitigate most of the challenges.
Project entities with face different stakeholders.
That's really the value of the CPUC process a lot of the projects are broken down into smaller contracts.
On the construction side. So we can take a larger projects like we have in Santa Barbara on that that 101 corridor, that's almost close to about $600 million overall project, but it's broken down into several projects ranging from around $75 million to $150 million and.
And so that allows us to really identify and mitigate risks and the specific segment. It limits. The exposure, we have which allows us to give a better price ultimately to our customer because we don't have to put the risk costs in there necessarily so we have a lot of confidence also because we've done 60 of these types of projects in our company.
And we've done it successfully and we believe that it's really a win for us as a win for our customers and ultimately they don't result in claims and so we that's what gives us the confidence that as we continue to bring in these best value projects. These collaborative contracting type projects that we can execute on them is very different than design build.
On these mega projects I mean, the challenges that we saw and I 64, and even in the last quarter that those those would have been managed differently under CNBC and.
Would have been something that could have been identified mitigated or even risk would have been shifted back over to the owner. So I guess hopefully that answers your question there Brian .
Yeah, Yeah. It does thank you very much.
Yes. Thank you.
Our next.
Question comes from Steven Ramsey with.
Thompson Research group. Please go ahead.
Good morning.
Good morning, Mark.
Yes, good morning wanted to make sure I understand the project completion factors pushing out the revenue I think I understand the emergency work part Thats pretty clear after that is the <unk>.
64 bridge, a part of that push out and then thinking about California in the central groups was that more of a broad.
Pushed out in a number of areas and geographies, where there are certain geographies and project types pushing that out.
Yes, it's really just specific projects a couple of projects in California, a couple of projects in our central group that.
Just pushed to the right a little bit so that work will still take place.
We're not going to get the Permian thought on those projects in 2023.
We will shift into 2024.
So.
Between the two groups is around 25 million per group.
Okay helpful that makes sense, Okay, and then thinking about the quick turn.
Burn work that.
Takes place a lot in the busy season of focus for you guys.
Is there more of that work in hand in 2023, then 2022.
Yes, so on the doughnut charts.
We shared right now our bid build which is which is really 100% designed competitive competitively bid projects right. Now is about 54% last year was around 50%. So we've actually seen the best value.
Pretty consistent we've seen the design build come down it's being replaced with those bid build projects. So that's becoming a bigger part of our portfolio and our cap today.
Okay helpful. And then one more quick one maybe just some clarity on the water vertical strength that youre seeing there if theres any push outs in that vertical.
No the water business is doing well I mean, we continue to see strong market certainly with municipalities and industrials. So yes, no no concerns on the water business, we see plenty of opportunities for that team.
Great. Thank you.
Yes. Thank you. Thank you.
Our next question comes from Michael data play.
Research. Please go ahead.
Good morning, Mike.
Yes, good morning, Hey, good morning.
Okay your materials business.
It could be some pretty good.
Do you think the second half of the year, you share a little bit about what youre seeing in pricing.
On the aggregate front.
Has it been some stickiness.
And on the demand on that front relative to maybe what you expected in the beginning of the year.
Yes, I think it's back to what we expected in the year, obviously as we get past I think the wet weather in Q1, I think we were encouraged by the growth in our aggregate business not surprised by the relatively flat asphalt sales in the quarter typically you would anticipate aggregate to proceed.
Asphalt as you kind of ramp up projects generally.
So that that was in alignment with what we believe we'd see I think the pricing.
Maybe a little bit different everywhere, we are in our geographies, but typically we've seen pricing go up.
We've been able to raise prices in certain markets, which is again encouraging for us as we look towards the back half of the year by naturally last year, we were hindered by liquid asphalt natural gas and diesel in the business I think this year I don't know if I want to say normalize, but I think it is things have normalized to some level.
Versus what certainly what we saw in 2022.
I appreciate the call at least.
As you indicated in your prepared remarks about cash flow certainly seasonally should improve the second half of the year can you maybe share with us remind us, giving you restructure the balance sheet second quarter.
Some of the puts and takes are with the guidance how youre looking at the total year operating cash flow and Capex and free cash flow generation for the full year.
Yeah definitely so.
So for where the activity that we had in the second quarter related just to operating cash flow. That's from an operational perspective is consistent if you look at kind of if you look at our five year average related to operating cash flow.
On the Capex side for our with our guidance, we have not changed that component. So.
So for full year. So we're anticipating 102 to 120 million capex expenditures for the full year. So that piece has not changed.
So when we think about free cash flow for the year.
That's that's a component that we've talked about related to our strategic plan.
And remains a focus area to ensure that you know.
Receivables increase that were timely collecting.
Ensuring that our contracts are structured so that the cash flow.
Is managed across the life of the project and then just ensuring as we end the year from a retention perspective that those balances are collected and so for operating cash flow and overall, our internal targets, which we've had.
He started to incentivize based on over the last couple of years. We've discussed is that 5% of revenue for operating cash flow maintenance Capex is anywhere from approximately 2.5% to 3% so.
Our free cash flow.
Currently what we look at is about 2%. So those are the targets that we're striving for in and continue to look at too to increase those actually as we as we move to execute on our strategic plans further.
That's very helpful and just quickly any progress on claims outstanding and some of that fun stuff.
Well I mean, we're working through them I wish I wish we could we could share the progress we're making but.
<unk>.
We're continuing to chase down a lot of the cash that we think we're entitled to I think it's we're going to.
I believe we're going to get that money that we're do it's just a matter of the timing and so we are making progress, but nothing we can report today.
Thanks.
Yes. Thank you. Thank you.
Our next question comes from Jami Rubin with Goldman Sachs. Please go ahead.
Hi, This is Adam on for Jerry today, Thanks for taking my question.
I was wondering if you could just update us a little more on the I 64 project. What's your level of confidence this can be complete by the end of the year and no any visibility.
The challenges there.
Around delays and other issues are behind us.
Yes.
Right now we're looking at the project is scheduled to be complete in mid October .
Thats a slip from where we thought we're going to be in terms of.
The mid mid Q3, so that is.
Slippage for us.
Its really down to a few things its production the productions rates have declined.
Simply when you have a lot of <unk>.
Lot of scope going on the same location or we sell a lot of impacts from from different scopes of work in the same area. So that was one component that there were some weather impacts that delay the project the two things that will be incurred.
As part of our asphalt removal.
Encounter some existing concrete that was underneath the asphalt section it wasn't anticipated.
And the design and so we had to remove that concrete and that set the project back. We also here on Mark wireline.
Cutback, our storm drain crews. So those there are some of the challenges that that project based and the last.
Month or two.
<unk> is contributing to the delay my confidence level of getting done this year is high and I actually met with the project team and our executive team on that project with our joint venture partners.
This week, we discussed the project and our ability to complete and we feel good I think our team is confident that they can meet the October deadline, obviously, there's a lot of work to do.
But we have the resources and capabilities to get it done so.
We are excited to get this thing behind us to a point, where we are working through and everything we have had to get it done because we need to get this job behind us Justice.
Everybody would agree.
That's helpful. And then can you just comment on what Youre seeing out of D. O T Award activity in your markets houses trended year to date and are you seeing growth in perspective.
Projects in that category.
Yes, I mean, I think I think our our market is strong.
Certainly our cap reflects the market that we're in in our minds, we have a really healthy market, we're seeing the iga monies coming through.
The private market is strong too so it's not just all in the public space, we're seeing a really strong market in the private space.
And which is encouraging that's around mining and rail.
Solar and industrial work, so that again thats across all of our geographies and Thats why youre seeing really nice cap improvement certainly.
In California in mountain and we're going to we expect to see cap improvement and our central group with some recent wins. So I think that really tells you. We have an active market. There is a lot of information out there. If you go to the <unk> website American Road Transportation Builders Association that really shows what what the activity looks like even into 2024.
And were encouraged so we expect to continue to be able to build our cap.
You kind of get back to that longer range plan for us around 2024.
We believe we have the market to continue to grow the company.
And a de risked way and so we're excited about the opportunities in front of us.
Great. Thanks, so much.
Yes. Thank you. Thank you.
This is the end of Q&A and I would now like to turn the call back over to Mr. Larkin.
Okay, well, thank you for joining the call today.
As always we want to thank all of our employees for the work they do every day.
We're now in the heart of our season and I know how hard you are working to deliver results for the company.
Setting another record safety year.
Can feel the excitement around the trajectory of our company and every location and I visit our focus on operational excellence is paying off thank.
Thank you for joining the call and your interest in granite, we look forward to speaking with you all soon.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.