Q4 2024 Bowman Consulting Group Ltd Earnings Call
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Becky: Good morning. My name is Becky and I'll be your conference operator today.
Speaker Change: At this time, I would like to welcome everyone to the Bowman Cnsltg group fourth quarter and four year twenty twenty four conference call.
Speaker Change: All lines will replace some meat for the presentation portion of the call, with the opportunity for questions and answers at the end.
Speaker Change: Please note that many of the comments made today are considered forward-looking statements under federal security laws.
Speaker Change: As described in the company's filings with the FEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed. And the company is not obligated to publicly update or advise before looking statements. In addition, on today's call, the company will discuss certain non-GAAP financial information such as adjusted EBITAR, adjusted net income and net service billing.
Speaker Change: You can find this information together with the reconciliations of the most directly comparable gap information in the company's earning press release, filed with the SEC and on the company's investor relations website at investors.broman.com. Management will deliver prepared remarks after which they would take questions from research analysts.
Speaker Change: Replace of the call will be available on the company's Investive Relations website. Mr. Bowman, you may begin your prayer for marks.
Bowman: Okay, thank you, Becky. Good morning, everyone. Thanks for joining our fourth quarter and a full year 2024 earnings call.
Bowman: Welcome to all our employees, who are listening to the call today, especially to the newest Bowman employees.
Bowman: I'm going to start today's call with some introductory remarks, and then Bruce will cover our financial performance.
Speaker Change: I'll wrap up the call with closing statements about 2025 before opening it up to Q&A.
Speaker Change: So 2024 was a very successful year for biomarin on multiple fronts.
Speaker Change: We posted record net service billings net income adjusted EBITDA and adjusted EBITDA margin.
Speaker Change: We had the strongest fourth quarter in our history. It has generated as much operating cash flow as we did for all of 2023 and it nearly doubled what we generated in the first nine months of 2024.
Speaker Change: Bookings were especially strong in the second half of the year with a book to burn ratio once again exceeding one point out well.
Speaker Change: We enter 2025 with a record backlog of $399 million and that provides great visibility to our continued revenue growth.
Speaker Change: During the year, we made eight strategic acquisitions that have enabled us to enter new geographies and expand service offerings across all our markets.
Speaker Change: We augmented these acquisitions with new leadership systems and capital to accelerate their growth potential.
Speaker Change: Throughout the company these acquisitions added depth and expertise in practice areas, such as bridge design water and wastewater utilities fire protection and sustainability.
Speaker Change: The addition of <unk> earlier in the year greatly enhanced our technical services was advanced and high altitude Geospatial solutions.
Speaker Change: <unk> as a source of substantial new business in 2024 from both new and returning customers.
Speaker Change: This practice area enables us to achieve incumbency with clients early on in projects and it is a significant generator of cross selling opportunities.
Speaker Change: With that let me turn the call over to Bruce to discuss financial results.
Speaker Change: After which I'll give a little more color on our markets and our positive outlook for 2025 Bruce.
Bruce: Thanks, Gary and welcome everybody today, I'm going to touch on the highlights of the fourth quarter and the fiscal year.
Speaker Change: Okay, let's turn to slide four.
Speaker Change: Gross revenue for the fourth quarter was $113 million. This represents a 22% increase over last year's fourth quarter.
Speaker Change: Net revenue and non-GAAP result was similarly up 23% over last year at $98 6 million.
Speaker Change: These results both exceeded consensus estimates.
Speaker Change: We continue to operate in the high <unk> range in terms of net revenue as a percentage of gross revenue.
Speaker Change: Net income for the quarter increased $13 $6 million to $5 9 million or <unk> 34 per share basic and <unk> 33 diluted.
Speaker Change: This compares to a net loss of $7 7 million or negative <unk> 59 per share both basic and diluted last year.
Speaker Change: During the quarter, our tax benefit was $5 $4 million, resulting from increases in our R&D tax credits windfall tax gains on stock vesting and other UTP related accrual reversals.
Speaker Change: Adjusted EBITDA, another non-GAAP metric was $17 million for the quarter, which represents a $17 two margin on that revenue.
This is a big improvement from earlier in the year and reflects in part our labor realignment efforts in the third quarter.
Speaker Change: Adjusted earnings per share for the quarter also a non-GAAP metric more than doubled to 72 basic and <unk> 71 diluted as compared to 33, and 31 cents respectively last year.
Speaker Change: Turning to slide five.
Speaker Change: Gross revenue for the full year ended at $426 6 million, our first year over $400 million.
Speaker Change: This represents a 23% increase over last year and sets us up to meet our five year goal of a $500 million run rate.
Speaker Change: Net revenue was up 25% over last year at $379 7 million. These results also exceeded consensus estimates.
Speaker Change: Net income for the year increased by $9 $6 million to a profit of $3 million or <unk> 18 per share basic and <unk> 17 per share diluted.
Speaker Change: This compares to a loss of $6 6 million or negative 53 per share.
Speaker Change: Last year, we committed to restoring GAAP profitability.
He used to be here today reporting a year that was profitable on a GAAP basis.
Speaker Change: Adjusted EBITDA was $59 5 million for the year, which represents a 15, 7% margin on net revenue and 26, 6% year over year increase.
Speaker Change: While we're not at our annual goal of high teens margins. Yet this does represent our fourth consecutive year of margin improvement.
Speaker Change: Adjusted earnings per share for the year was $1 23, basic and $1 20 diluted an increase from $1 12, and $1 three respectively.
Speaker Change: As we look to 2025 I would once again expect GAAP expense associated with noncash stock compensation to be reduced in the absolute and as a percentage of revenue.
Speaker Change: Turning to slide six here, we show the breakdown of gross revenue by market.
Speaker Change: Building infrastructure continued to be our largest market at 51% of gross revenue with commercial residential and municipal representing 23%, 18% and 10% of gross revenue respectively.
Speaker Change: Additional sub market breakdowns for building infrastructure can be seen on this chart on this slide.
Speaker Change: Transportation represented 21% of gross revenue with about two thirds being from public client engagements.
Speaker Change: Power utilities, and energy represented 18% with around 75% being from traditional energy and grid related assignments. The balance is emerging markets, including mining water environmental and this year aerial imaging and mapping beginning.
Speaker Change: Beginning in 2025, we will break aerial imaging and mapping out based on end market application.
Speaker Change: This may cause year over year comparisons with emerging markets to be a bit challenging.
Speaker Change: Let's turn to slide seven orgs.
Speaker Change: Organic growth in net revenue was eight 5% in the quarter and 13% for the year looks.
Speaker Change: Looking at organic growth by market emerging markets led the pack followed by transportation power utilities and energy and then building infrastructure.
Speaker Change: Again, a reminder, that we would expect to see the growth rate for emerging markets moderate as we shift aerial mapping and imagery in 2025.
Speaker Change: Let's now turn to slide eight to review cash flow liquidity and capitalization.
Speaker Change: At year end, we had approximately $7 million of cash on hand, with roughly $60 million available under our $100 million revolver and sufficient access to capex lease financing.
We're currently in the final stages of increasing our revolver limit to $140 million at year end, we had approximately $95 million of net debt and a leverage ratio of one six on trailing 12 months adjusted EBITDA.
Speaker Change: Can say with confidence that we have plenty of capacity to borrow and what we believe will be a market of opportunity to fund strategic growth initiatives technology investments and M&A.
Speaker Change: During the fourth quarter, we turned the corner on cash conversion generating nearly $12 million in cash flows from operating activities.
Speaker Change: In the quarter and over $24 million for the year more than double last year, our cash flow improvement was derived in large part from reductions that AR and unbilled revenue and in our working capital.
Speaker Change: During 2024, we repurchased $34 million of stock was around $11 million purchase from employees to cover taxes associated with vesting and $23 million from open market repurchases under our repurchase authorization.
Speaker Change: Since year end, we purchased an additional $4 million of stock under our repurchase authorization, we now have $11 million remaining under our current authorization.
Given what we know to be the quality of our earnings it's our belief that our equity is highly undervalued as such we intend to continue to allocate a portion of our available capital to the repurchase of our common stock until such time as we feel value has been rebalanced.
Speaker Change: Turning to slide nine.
Speaker Change: Backlog grew more than 30% during 2024 to just under $400 million at year end.
Speaker Change: This is a $20 million increase from Q3 around 70% of the increase being organically generated as opposed to acquired.
Speaker Change: New orders have started the year strong stronger than usual at over $100 million. So far this quarter, giving us reason to expect continued backlog growth throughout 2025.
Speaker Change: I'll turn the call back over to Gary.
Gary: Thank you Bruce since we went public in 2021, we've increased net revenue at a compound annual growth rate of over 41%.
Speaker Change: We built our backlog up to nearly $400 million.
Speaker Change: And we've more than tripled our adjusted EBITDA, while expanding our margin by 350 basis points from 12, 2% to 15, 5%.
Speaker Change: We've accomplished this through a disciplined growth strategy that is fundamentally focused on customers markets.
Speaker Change: Services and people.
Speaker Change: I am confident that as we continue to develop a cultural leadership throughout the organization.
Speaker Change: Other successes and improved operational excellence will inevitably follow.
Speaker Change: Okay, turning to slide 11 in 2024, we saw solid growth across all end markets.
While 2025 is in its early innings bookings are strong and pacing ahead of plan at this time.
Speaker Change: As we look to 2025, we anticipate the timing of revenue throughout the year to be proportionately similar to what we experienced last year.
Speaker Change: As we've grown we settled into a pattern where in momentum builds through the second and third quarters with growth accelerating mid year before leveling out in the fourth quarter.
Speaker Change: Yeah.
Speaker Change: As I mentioned bookings of new work, thus far in 2025 are strong and they are well distributed across all our markets.
Speaker Change: Transportation power and utilities and datacenter demand continues to be robust.
Speaker Change: And we expect strong contributions from those markets throughout the year and beyond.
Speaker Change: And those interest rate sensitive areas of our business, we see strong anecdotal evidence that customers are revamping projects to adjust to the current environment and consequently, we're seeing a meaningful uptick of new work in those markets.
In response to current market trends, we have made significant additions to our oil and gas expertise, resulting in a critical mass of capacity in that area positioning us well for strong near term growth. We are experiencing in that market, we anticipate that both oil and gas and mining you will see significant positive momentum in 2025 and beyond.
Speaker Change: <unk>.
Speaker Change: In the renewable sector, we successfully redeployed labor away from weakening submarkets, such as wind, which historically is not represented a meaningful part of our business to areas that continue to exhibit growing demand.
Speaker Change: For example, we've increased our capacity with EV charging installations and other high potential energy infrastructure practice areas.
Speaker Change: Grid capacity and resilience continues to be top of mind with our customers.
Speaker Change: Events, such as recent back to back Hurricanes in the Gulf and wildfires in California serve as constant reminders of the extreme fragility of our power infrastructure.
Speaker Change: We expect our power utilities and energy practice to continue to expand independent of the status of the inflation reduction Act.
Speaker Change: Okay now turning to slide 12.
Speaker Change: Going forward, our objective is to make strategic investments in M&A product line expansions and technology tools that will expand our reach increased wallet share with our customers improve the delivery of services and accelerate long term organic growth.
Speaker Change: Our M&A strategy is focused on acquisition candidates that facilitate our pursuit of larger and more impactful customer assignments and that provides synergies, helping us to propel long term organic growth.
Speaker Change: The M&A market remains dynamic and viable as it has ever been and the opportunities there are plentiful.
Speaker Change: Our capacity to acquire and integrate positions us to maintain a positive growth profile.
Speaker Change: Through varying macroeconomic environments.
Speaker Change: Now in terms of our position relative to what's happening in the federal front, we've experienced minimal disruptions to our business.
Speaker Change: Most of our public sector assignments, our state and local in nature with funding that isn't dependent.
Speaker Change: <unk> current federal cuts.
Speaker Change: The size of our operation coupled with the diversification of our markets Submarkets and customers. We serve creates a defensive business model that helps us navigate economic unpredictability and uncertainty.
Speaker Change: It's important to remember that no single customer represents more than 4% of our revenue.
Now turning to slide 13.
Given the strong start to the year, so far we're increasing our 2025 guidance modestly recognizing it's still early in the year and there is plenty of time to build on current momentum.
Speaker Change: For the year, we're forecasting net revenues to be in the range of $428 million to $440 million with adjusted EBITDA between 70% and $76 million.
Speaker Change: This would put us in the top tier of peer performance on a margin basis and continue on our journey to sustained high teens margins.
Speaker Change: I want to close by saying, Thank you to all our employees for their capacity to drown out the noise and remain steadfast in their focus on delivering for customers for shareholders and for each other.
Becky: With that I'm going to turn the call back to Becky for questions.
Becky: Thank you if you wish to ask a question. Please press star followed by one on your telephone keypad now.
Becky: Any reason you want to remove your question from the queue. Please press star followed by <unk>.
Speaker Change: I'm just trying to ask a question. Please ensure your devices Amit you directly.
Speaker Change: Our first question is from <unk> <unk> from.
Speaker Change: Craig Hallum. Your line is now open. Please go ahead.
Speaker Change: Yes, good morning, Gary and Bruce Thanks for taking the questions.
Speaker Change: First on the transportation vertical you've obviously seen some nice activity there. It looks like can you just talk a little bit about any.
Speaker Change: Impact from the IHA there as we move kind of forward either in that segment or across the business and then just maybe talk a little bit more about the trends you see there in transportation over the next year or two.
Harry: Thanks, Harry and good morning.
Speaker Change: Where we are.
Speaker Change: Seeing.
Speaker Change: Spending seems to be kicking in it's Ben.
Speaker Change: Uh huh.
Speaker Change: A long while.
For those projects to get started in earnest.
Speaker Change: So we're in we're seeing no adverse impacts.
Speaker Change: Hey.
Speaker Change: And the experts that we talk to the federal government are predicting that that spending should say stay sustained so between <unk> and other state and local funding mechanisms, we're seeing very strong trends in transportation.
Speaker Change: Aaron.
Aaron: Yeah, sorry, thank you for that.
Speaker Change: And then maybe second on.
Speaker Change: Just the backlog and the visibility can you just talk a little bit about how that compares to <unk>.
Speaker Change: Past years.
Speaker Change: And.
Speaker Change: And just how you kind of see the underlying pipeline trending you talked about minimal impact at the federal level. Just curious if youre seeing any kind of lengthening of timelines and you also kind of talked about some opportunities for outsourcing coming out of that as well.
Yes, I'll start with the first part of that Aaron's Bruce and the backlog is generally characteristically similar to where it's been in prior years it at <unk>.
Speaker Change: Any given time, there's just different distributions within backlog just based on timing of orders.
Speaker Change: Generally speaking it still has the same kind of 80% turn profile in.
Speaker Change: In the 12 months period.
Speaker Change: We're not seeing a lot of we're seeing delay in what's in the backlog is work that is contracted and authorized to proceed.
Speaker Change: <unk>.
Speaker Change: We're feeling pretty pretty steady.
In terms of the characteristic of that backlog.
Speaker Change: And Aaron you asked about at sourcing opportunities Thats kind of looking over the horizon.
Speaker Change: But we certainly.
Speaker Change: We do a substantial amount of that sourcing in our business now.
Speaker Change: Agencies into private utilities.
Speaker Change: But when when staff get cut back the mission still has to continue so we typically see in those environments and government sectors look to companies like ours to outsource some of what has traditionally been performed by <unk> has staff.
Speaker Change: Understood. Thanks for that and then maybe last for me you kind of called out some investments in service line expansions and technology tools to just further helped the business can you give a little bit more detail on what that might entail and just how much those investments might be some of the benefits that you see from that.
Speaker Change: Thanks.
Sure Erinn, we're building out a team now.
Speaker Change: Of map out and implement technology investments that will cause our customers to do more with us can ascribe a greater share of the wallet.
Speaker Change: Some examples as we've recently acquired some new generation remote sensors.
With our fixed aerial group that we acquired last year it broadens that reach.
Speaker Change: Enable us to service as an example, a large utility transmission corridors.
Speaker Change: We have developed and are deploying market has received it well it product and our ports and harbors group or a combined lidar and sonar for some asset management.
Speaker Change: And our utilities water and sewer utilities group, we have developed and are deploying some augmented reality and digital digital twinning tools.
Speaker Change: That helps those those entities with their asset management.
Speaker Change: Thanks, Aaron to the extent of the size of it it depends on what becomes rationale relative to revenue generation. So where we are in a position to make the kinds of investments that the opportunistic investments to the extent that we see them having direct revenue.
Speaker Change: Revenue correlation or cost savings synergy in the way, we produce work, but I think one of the ways in the world today to enhance margin long term and to.
Speaker Change: Accelerated organic growth in addition to kind of capital investment we make in M&A is making it internally into systems technologies products and services that that capitalize on on the direction. The world is going and we have the balance sheet to be able to do it to the extent that it is revenue justified.
Speaker Change: Right, Okay that makes sense. Thanks for the color I'll turn it over.
Speaker Change: Thanks Sharon.
Sharon: Thank you.
Speaker Change: Our next question is from Brent Thielman from D. A Davidson your.
Speaker Change: Your line is now open. Please go ahead.
Speaker Change: Hey, guys nice finish to the year.
Speaker Change: Couple of mourning for US here, Brian you made the comment yes, good morning.
Speaker Change: $100 million I think of new orders this quarter sounds like stronger than than usual start maybe you could just talk about what.
Speaker Change: What verticals are driving that and I guess just on the building infrastructure backlog it looks like it's somewhat at the end of the year.
I just wanted to understand.
Speaker Change: And the cross parents, you're experiencing in that vertical and how that sort of embedded in your 2025 outlook.
Speaker Change: Yes, I'll take them one at a time there I think just in terms of order flow. It is.
Speaker Change: As.
Speaker Change: You said, it's over $100 billion, so far in the first quarter. It is.
Speaker Change: Yes.
Speaker Change: Ratably across all all of our different markets.
Speaker Change: All things sort of in connection with the second part of your question.
In terms of building infrastructure that does have a quicker turn order to delivery characteristics. So sometimes you may see periods of time, where there is dips in at a given day in the year that there is a lower backlog than let's say building infrastructure, but I don't think its a characteristically.
Dynamic to order flow and the expectation for building infrastructure, but I would say that it has been across the board positive sales.
Speaker Change: In in all of the markets so far this year.
Speaker Change: Okay, Alright sounds like underlying demand in that business group is pretty healthy notwithstanding that that comparison on background yeah. There.
Speaker Change: There isn't one Darling that's overshadowing the others.
Speaker Change: Weeks and weeks and weeks out you have different.
Speaker Change: Different contracts different different authorities different clients, making decisions, but across the board strength in new orders coming up from the field I'll just echo that.
Speaker Change: As we look at them.
Speaker Change: So prepare.
Speaker Change: Larry is stronger in there.
Speaker Change: Across the board so it's nice to see well diversified.
Speaker Change: Market sectors.
Speaker Change: Yes.
Speaker Change: Yes, it also remembering that spike.
Speaker Change: Hi come.
Speaker Change: Some concentrated in any one leg of the stool.
Speaker Change: Yes.
Speaker Change: Understood.
Speaker Change: My second question just.
Speaker Change: In terms of sort of capital allocation going forward.
Speaker Change: I mean, you've taken a little bit of a step back on the M&A front.
Speaker Change: I guess more recently, obviously you got a few transactions done.
Speaker Change: I guess part one of the question is.
Speaker Change: Thank you.
Speaker Change: Got everything integrated I know you there was some kind of internal work refocusing internally here in the last year or do you feel like youre through that space and I guess second part of the question that buybacks more attractive than M&A here going forward, given where your stock is trading.
Speaker Change: So I would say on the on the integration front, we are in really good continuous effort with integration.
Speaker Change: There are multiple prongs for every integration, but from a systems point of view.
Speaker Change: But a couple.
Speaker Change: Phil.
Speaker Change: All integrated from an operations perspective, everybody is integrated.
Speaker Change: From a branding perspective most of them are are integrated.
Speaker Change: We are.
Speaker Change: So I would say that we're right, where we want to be with integration.
Speaker Change: And continue to be 100% committed to 100% integration of everything we completed the <unk> integration at the end of the year.
Speaker Change: We feel.
Speaker Change: We feel good about about all the big Big heavy rocks getting lifted and put in place where they should be.
Speaker Change: In terms of capital allocation.
Speaker Change: Every day, we get up and we we assess what the best.
Speaker Change: Forward looking allocation of capital is going to be we're increasing our capacity to invest by increasing the line of credit with our bank syndicate of Bofa and TD Bank.
Speaker Change: I appreciate their support for the company and certainly it.
Speaker Change: At where equity values closed.
Speaker Change: We believe that that that's a good place to allocate capital I think we're fortunate enough to be in a position, where it's not an either or decision.
Speaker Change: It's an <unk> decision and so while we look at M&A opportunities. Those are not we don't look at them from the perspective of well if we do buyback we can't do that M&A deal.
Speaker Change: So we're balancing it all and adding to that mix as Gary talked about.
Speaker Change: More a bigger focus on tech investment and in and product line expansion, which is our main akin to acquisition.
Speaker Change: Investing in something that generates substantial revenue.
Speaker Change: Similar to buying revenue. So it's really a mix of those three three parts of the triangle there and we do this regularly.
Understood. Thanks, guys I'll pass it on.
Speaker Change: Thanks, Brian Thank you Brian.
Speaker Change: Thank you. Our next question is from Jeff Martin from Roth Capital Markets. Your line is now open. Please go ahead.
Speaker Change: Thank you good morning, Gary and Bruce did you see a strong close to the year here.
Speaker Change: Im wondering.
Speaker Change: I wondered if you could touch on progress on gaining wallet share on contract sizes and getting involved in.
Speaker Change: Contracts earlier in the process and perhaps providing service more services throughout the life cycle.
Speaker Change: The project.
Speaker Change: Strategically you are doing to continue to improve that position.
Speaker Change: Well, we see.
Speaker Change: The sort of ex acquisition being a good example of increasing our geospatial capacity as we mentioned in the remarks.
Speaker Change: Gets us incumbency early on in the project so too.
Speaker Change: And I mentioned in our technology investments.
Speaker Change: Some of these areas it gets its involved in asset management too.
Speaker Change: Stay involved with the customer throughout the life of the project not just the development of the project.
Speaker Change: And not just the design and construction of the project so.
Speaker Change: Those are areas looking.
Speaker Change: To be able to get in earlier.
Speaker Change: Stay in for a longer duration.
Speaker Change: Our acquisition of FCS with financial analysis and rates studying gets us into enter into new areas of project lifecycle. So those are examples of what we're doing too.
To grab more wallet share one thing Jeff like every good movie series every project has is equal and so when you think about okay. Incumbency also isn't just isn't just about the first iteration of a project. It's the second iteration of our project as well and so a lot of these as Gary was talking about these.
Speaker Change: End of projects.
Speaker Change: Services, we can provide that bridge between the LIFO projects puts you in a position the next time that.
Speaker Change: That project needs, an improvement and upgrade that youre already engaged in and the work with their clients on that effort.
Speaker Change: Okay, and then with everything that's going on in the data center market. Just curious if that's an area you're looking to.
Speaker Change: Pursue more aggressively going forward.
Speaker Change: We continue to pursue it.
Speaker Change: Sure.
Speaker Change: It's still super dynamic market, we have a great presence in the.
Speaker Change: That part of the data centers that site preparation.
Speaker Change: Taking some some active and proactive moves to do more of the lifecycle of the design of the data center getting more inside the data centers. So it's an area of certainly an area of focus for us to continue to grow in and expand our service capabilities.
Speaker Change: And as the requirements for data centers expand meaning that that the available land for a data center is evolving meaning because certain latencies in certain types of data centers are more allowable has it become more of a land planning and land development effort more broadly for us.
Speaker Change: So there's I think there's a lot more opportunity to look at at land use.
Speaker Change: For data center, and we're looking at some areas of broadened our capabilities I mentioned getting inside the data center, but outside the data center some of the power delivery.
Speaker Change: Areas that were taken.
Speaker Change: <unk> taken some some active moves to beef up our capabilities there.
Speaker Change: And then last one from me just curious if you could provide an update on the natural gas pipeline replacement opportunity I think that's something you've been investing pretty significantly for us.
Speaker Change: That's the debt.
Speaker Change: That market is still as active as it's ever been.
Speaker Change: Absolutely.
Speaker Change: So legacy skill of ours.
Speaker Change: Yep.
Speaker Change: One of our largest clients.
Speaker Change: Source of great recurring revenue for us so.
Speaker Change: And we're and we're expanding with that client and looking to add to that client base.
Speaker Change: Thank you.
Speaker Change: Thanks, Jeff Thanks, Jeff.
Speaker Change: Thank you as a reminder to ask a question. It is still followed by one.
Speaker Change: Next question is from Justin Hauke from Robert W. Baird. Your line is now open. Please go ahead.
Speaker Change: Oh great.
Speaker Change: My apologies.
Speaker Change: I jumped on a little bit late but I think I got the gist of what most of the questions have been asked but.
Speaker Change: One question, we've gotten from a couple of people just.
Speaker Change: On your land development business.
Speaker Change: Our impression is that you have.
Speaker Change: Have a fair amount in kind of the D C area and I guess just curious.
Given kind of.
Speaker Change: The local real estate recession, I guess its emerging there.
Speaker Change: If you had any comments on that or quantifying the size of that and maybe maybe that's not.
Speaker Change: Not as big as we thought and just appreciate any perspective on that.
Speaker Change: I'll say going way back in time.
Speaker Change: Where the business was built on and looking back to your 30 years later I'm very thankful, we've diversified the business. So yes.
Speaker Change: It's not insignificant.
Speaker Change: It's a but it's it's we've grown so much and diversified so much it's nowhere nearly as a substantial part of our business is as <unk> as it has been in the past.
Speaker Change: Clearly there are if there is a area of of a real estate, where sensitivities are acute it's around this area, but federal the federal adjustments are they are occurring throughout the country. So it's and in the time I've been in business and I've been in business here My whole life, we've seen tremendous diverse.
Speaker Change: Suffocation of this economy.
Speaker Change: This market has spent 20 years with days on market in the fractions of days.
Speaker Change: As I think is not I wouldn't over characterize it to bet. There's a moment now where supply is increasing in this market, but it's it's a temporary phenomenon here it.
Speaker Change: It isn't a.
Speaker Change: Land developers, who are thinking about a 10 year horizon of of homebuilding.
Speaker Change: Our relatively unfazed by a moment in time when the housing market here is getting a little softer.
Speaker Change: But long term the DC market has a very diverse economic economy, and I think it will be we'll be just fine.
Speaker Change: Okay. I mean do you have any perspective on just I mean, the residential and commercial markets that you have I mean.
Speaker Change: Maybe the legacy ones that was that was really where you were concentrated but I mean is it is it 5% of your total portfolio is kind of the D. C area is it 'twenty I mean, just something to kind of <unk>.
Speaker Change: Perspective on what that is how big it is.
Speaker Change: I would say.
Speaker Change: And in 10 or 15% of our of our of our residential.
Speaker Change: Residential building infrastructure portfolio, our commercial portfolio is spread out throughout.
Speaker Change: A little of our commercial portfolio.
Speaker Change: Fortunately, we're not involved too much in office around here, so as far as our overall portfolio low single digits.
Speaker Change: Okay. Okay.
Speaker Change: That's helpful. I appreciate it thank you.
Speaker Change: Thanks, Justin.
Speaker Change: Thank you.
Speaker Change: We have no further questions. This concludes our question and answer session and Todd today's call. Thank you for joining US you may now disconnect your lines.
Speaker Change: [music].